SELECT MEDICAL HOLDINGS CORP (Form: 10-Q, Received: 10/30/2014 16:37:53)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended September 30, 2014

o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition Period From to .

Commission File Number: 001 – 34465 and 001 – 31441

SELECT MEDICAL HOLDINGS CORPORATION

SELECT MEDICAL CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware

(State or other jurisdiction of
incorporation or organization)

20-1764048

23-2872718

(I.R.S. employer identification
number)

4714 Gettysburg Road, P.O. Box 2034, Mechanicsburg, Pennsylvania 17055

(Address of principal executive offices and zip code)

(717) 972-1100

(Registrants’ telephone number, including area code)

Indicate by check mark whether the Registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods as such Registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. YES x NO o

Indicate by check mark whether the Registrants have submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrants were required to submit and post such files). YES x NO o

Indicate by check mark whether the Registrants are large accelerated filers, accelerated filers, non-accelerated filers, or smaller reporting companies. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer x Non-accelerated filer o

Smaller reporting company o

Indicate by check mark whether the Registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act). YES o NO x

As of September 30, 2014, Select Medical Holdings Corporation had outstanding 130,925,584 shares of common stock.

This Form 10-Q is a combined quarterly report being filed separately by two Registrants: Select Medical Holdings Corporation and Select Medical Corporation. Unless the context indicates otherwise, any reference in this report to “Holdings” refers to Select Medical Holdings Corporation and any reference to “Select” refers to Select Medical Corporation, the wholly-owned operating subsidiary of Holdings. References to the “Company,” “we,” “us” and “our” refer collectively to Holdings and Select.

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TABLE OF CO NTENTS

PART I	FINANCIAL INFORMATION	3

ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Condensed consolidated balance sheets	3

	Condensed consolidated statements of operations	4

	Condensed consolidated statements of changes in equity and income	6

	Condensed consolidated statements of cash flows	7

	Notes to condensed consolidated financial statements	8

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	31

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	55

ITEM 4.	CONTROLS AND PROCEDURES	56

PART II	OTHER INFORMATION	56

ITEM 1.	LEGAL PROCEEDINGS	56

ITEM 1A.	RISK FACTORS	58

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	58

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	58

ITEM 4.	MINE SAFETY DISCLOSURES	58

ITEM 5.	OTHER INFORMATION	58

ITEM 6.	EXHIBITS	58

SIGNATURES

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PART I FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except share and per share amounts)

	Select Medical Holdings Corporation				Select Medical Corporation
	December 31,		September 30,		December 31,			September 30,
	2013		2014		2013			2014

ASSETS
Current Assets:
Cash and cash equivalents	$	4,319	$	11,029	$	4,319		$	11,029
Accounts receivable, net of allowance for doubtful accounts of $40,815 and $43,827 at 2013 and 2014, respectively	391,319		411,502		391,319			411,502
Current deferred tax asset	17,624		13,366		17,624			13,366
Prepaid income taxes	—		4,220		—			4,220
Other current assets	41,140		43,955		41,140			43,955
Total Current Assets	454,402		484,072		454,402			484,072

Property and equipment, net	509,102		524,843		509,102			524,843
Goodwill	1,642,633		1,641,228		1,642,633			1,641,228
Other identifiable intangibles	71,907		72,247		71,907			72,247
Other assets	139,578		139,687		139,578			139,687

Total Assets	$	2,817,622	$	2,862,077	$	2,817,622		$	2,862,077

LIABILITIES AND EQUITY
Current Liabilities:
Bank overdrafts	$	12,506	$	22,810	$	12,506		$	22,810
Current portion of long-term debt and notes payable	17,565		9,289		17,565			9,289
Accounts payable	88,285		90,611		88,285			90,611
Accrued payroll	90,011		88,256		90,011			88,256
Accrued vacation	59,730		61,344		59,730			61,344
Accrued interest	12,297		22,034		12,297			22,034
Accrued other	90,508		81,190		90,508			81,190
Income taxes payable	622		—		622			—
Total Current Liabilities	371,524		375,534		371,524			375,534

Long-term debt, net of current portion	1,427,710		1,525,730		1,427,710			1,525,730
Non-current deferred tax liability	96,287		94,873		96,287			94,873
Other non-current liabilities	91,875		91,530		91,875			91,530

Total Liabilities	1,987,396		2,087,667		1,987,396			2,087,667

Redeemable non-controlling interests	11,584		10,704		11,584			10,704

Stockholders’ Equity:
Common stock of Holdings, $0.001 par value, 700,000,000 shares authorized, 140,260,968 shares and 130,925,584 shares issued and outstanding at 2013 and 2014, respectively	140		131		—			—
Common stock of Select, $0.01 par value, 100 shares issued and outstanding	—		—		0			0
Capital in excess of par	474,729		413,349		869,576			884,104
Retained earnings (accumulated deficit)	311,365		313,626		(83,342		)	(156,998		)
Total Select Medical Holdings Corporation and Select Medical Corporation Stockholders’ Equity	786,234		727,106		786,234			727,106
Non-controlling interest	32,408		36,600		32,408			36,600
Total Equity	818,642		763,706		818,642			763,706

Total Liabilities and Equity	$	2,817,622	$	2,862,077	$	2,817,622		$	2,862,077

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except per share amounts)

	Select Medical Holdings Corporation						Select Medical Corporation
	For the Three Months Ended September 30,						For the Three Months Ended September 30,
	2013			2014			2013			2014

Net operating revenues	$	722,845		$	758,069		$	722,845		$	758,069

Costs and expenses:
Cost of services	617,281			644,392			617,281			644,392
General and administrative	17,740			19,719			17,740			19,719
Bad debt expense	9,262			10,357			9,262			10,357
Depreciation and amortization	16,163			17,584			16,163			17,584
Total costs and expenses	660,446			692,052			660,446			692,052

Income from operations	62,399			66,017			62,399			66,017

Other income and expense:
Equity in earnings (losses) of unconsolidated subsidiaries	(179		)	1,988			(179		)	1,988
Interest expense	(21,252		)	(21,753		)	(21,252		)	(21,753		)

Income before income taxes	40,968			46,252			40,968			46,252

Income tax expense	15,761			17,956			15,761			17,956

Net income	25,207			28,296			25,207			28,296

Less: Net income attributable to non-controlling interests	1,935			1,766			1,935			1,766

Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation	$	23,272		$	26,530		$	23,272		$	26,530

Income per common share:
Basic	$	0.17		$	0.20
Diluted	$	0.17		$	0.20

Dividends per share	$	0.10		$	0.10

Weighted average shares outstanding:
Basic	136,646			126,639
Diluted	136,793			127,029

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except per share amounts)

	Select Medical Holdings Corporation						Select Medical Corporation
	For the Nine Months Ended September 30,						For the Nine Months Ended September 30,
	2013			2014			2013			2014

Net operating revenues	$	2,229,473		$	2,293,409		$	2,229,473		$	2,293,409

Costs and expenses:
Cost of services	1,867,915			1,926,037			1,867,915			1,926,037
General and administrative	53,065			57,219			53,065			57,219
Bad debt expense	27,429			32,490			27,429			32,490
Depreciation and amortization	47,872			51,009			47,872			51,009
Total costs and expenses	1,996,281			2,066,755			1,996,281			2,066,755

Income from operations	233,192			226,654			233,192			226,654

Other income and expense:
Loss on early retirement of debt	(18,747		)	(2,277		)	(17,788		)	(2,277		)
Equity in earnings of unconsolidated subsidiaries	1,447			4,135			1,447			4,135
Interest expense	(66,614		)	(64,032		)	(64,204		)	(64,032		)

Income before income taxes	149,278			164,480			152,647			164,480

Income tax expense	57,391			63,823			58,570			63,823

Net income	91,887			100,657			94,077			100,657

Less: Net income attributable to non-controlling interests	6,417			5,742			6,417			5,742

Net income attributable to Select Medical Holdings Corporation and Select Medical Corporation	$	85,470		$	94,915		$	87,660		$	94,915

Income per common share:
Basic	$	0.61		$	0.71
Diluted	$	0.61		$	0.71

Dividends per share	$	0.20		$	0.30

Weighted average shares outstanding:
Basic	136,879			129,706
Diluted	137,040			130,177

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Condensed Consolidated Statement of Changes in Equity and Income

(unaudited)

(in thousands)

						Select Medical Holdings Corporation Stockholders
	Comprehensive Income		Total			Common Stock Issued		Common Stock Par Value			Capital in Excess of Par			Retained Earnings			Non- controlling Interests
Balance at December 31, 2013			$	818,642		140,261		$	140		$	474,729		$	311,365		$	32,408
Net income	$	99,916	99,916											94,915			5,001
Net income - attributable to redeemable non-controlling interests	741
Total comprehensive income	$	100,657
Dividends paid to common stockholders			(40,257		)									(40,257		)
Issuance and vesting of restricted stock			8,391			1,295		1			8,390
Repurchase of common shares			(129,057		)	(11,403	)	(11		)	(75,906		)	(53,140		)
Stock option expense			592								592
Exercise of stock options			5,545			773		1			5,544
Distributions to non-controlling interests			(2,241		)												(2,241		)
Sale of non-controlling interest in subsidiary			1,693														1,693
Other			482											743			(261		)
Balance at September 30, 2014			$	763,706		130,926		$	131		$	413,349		$	313,626		$	36,600

						Select Medical Corporation Stockholders
	Comprehensive Income		Total			Common Stock Issued	Common Stock Par Value		Capital in Excess of Par		Accumulated Deficit			Non- controlling Interests
Balance at December 31, 2013			$	818,642		0	$	0	$	869,576	$	(83,342	)	$	32,408
Net income	$	99,916	99,916								94,915			5,001
Net income - attributable to redeemable non-controlling interests	741
Total comprehensive income	$	100,657
Additional investment by Holdings			5,545						5,545
Dividends declared and paid to Holdings			(169,314		)						(169,314		)
Contribution related to restricted stock awards and stock option issuances by Holdings			8,983						8,983
Distributions to non-controlling interests			(2,241		)									(2,241		)
Sale of non-controlling interest in subsidiary			1,693											1,693
Other			482								743			(261		)
Balance at September 30, 2014			$	763,706		0	$	0	$	884,104	$	(156,998	)	$	36,600

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

	Select Medical Holdings Corporation						Select Medical Corporation
	For the Nine Months Ended September 30,						For the Nine Months Ended September 30,
	2013			2014			2013			2014

Operating activities
Net income	$	91,887		$	100,657		$	94,077		$	100,657
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	47,872			51,009			47,872			51,009
Provision for bad debts	27,429			32,490			27,429			32,490
Equity in earnings of unconsolidated subsidiaries	(1,447		)	(4,135		)	(1,447		)	(4,135		)
Loss on early retirement of debt	18,747			2,277			17,788			2,277
Gain from sale of assets and businesses	(93		)	(1,236		)	(93		)	(1,236		)
Non-cash stock compensation expense	5,403			7,391			5,403			7,391
Amortization of debt discount, premium and issuance costs	6,507			5,651			6,418			5,651
Deferred income taxes	3,854			2,844			3,854			2,844
Changes in operating assets and liabilities, net of effects from acquisition of businesses:
Accounts receivable	(89,237		)	(52,924		)	(89,237		)	(52,924		)
Other current assets	(7,642		)	491			(7,642		)	491
Other assets	(3,211		)	(2,267		)	(3,211		)	(2,267		)
Accounts payable	6,798			2,276			6,798			2,276
Accrued expenses	7,678			(17		)	10,936			(17		)
Income taxes	560			(4,203		)	1,739			(4,203		)
Net cash provided by operating activities	115,105			140,304			120,684			140,304

Investing activities
Purchases of property and equipment	(45,331		)	(73,350		)	(45,331		)	(73,350		)
Proceeds from sale of assets	518			—			518			—
Investment in businesses	(32,430		)	(3,135		)	(32,430		)	(3,135		)
Distributions from unconsolidated subsidiaries	—			11,939			—			11,939
Acquisition of businesses, net of cash acquired	(848		)	(1,211		)	(848		)	(1,211		)
Net cash used in investing activities	(78,091		)	(65,757		)	(78,091		)	(65,757		)

Financing activities
Borrowings on revolving credit facility	580,000			675,000			580,000			675,000
Payments on revolving credit facility	(645,000		)	(655,000		)	(645,000		)	(655,000		)
Borrowings on credit facility term loans, net of discount	298,500			—			298,500			—
Payments on credit facility term loans	(594,668		)	(33,994		)	(594,668		)	(33,994		)
Issuance of 6.375% senior notes, includes premium	600,000			111,650			600,000			111,650
Repurchase of senior floating rate notes	(167,300		)	—			—			—
Repurchase of 7 5/8% senior subordinated notes	(70,000		)	—			(70,000		)	—
Borrowings of other debt	9,238			7,036			9,238			7,036
Principal payments on other debt	(7,467		)	(11,696		)	(7,467		)	(11,696		)
Debt issuance costs	(18,820		)	(4,434		)	(18,820		)	(4,434		)
Dividends paid to common stockholders	(27,929		)	(40,257		)	—			—
Dividends paid to Holdings	—			—			(211,754		)	(169,314		)
Repurchase of common stock	(10,946		)	(129,057		)	—			—
Proceeds from issuance of common stock	—			5,545			—			—
Equity investment by Holdings	—			—			—			5,545
Proceeds from (repayment of) bank overdrafts	(10,401		)	10,304			(10,401		)	10,304
Proceeds from issuance of non-controlling interests	—			185			—			185
Distributions to non-controlling interests	(3,072		)	(3,119		)	(3,072		)	(3,119		)
Net cash used in financing activities	(67,865		)	(67,837		)	(73,444		)	(67,837		)

Net increase (decrease) in cash and cash equivalents	(30,851		)	6,710			(30,851		)	6,710

Cash and cash equivalents at beginning of period	40,144			4,319			40,144			4,319
Cash and cash equivalents at end of period	$	9,293		$	11,029		$	9,293		$	11,029

Supplemental Cash Flow Information
Cash paid for interest	$	60,439		$	47,782		$	54,860		$	47,782
Cash paid for taxes	$	52,977		$	65,184		$	52,977		$	65,184

The accompanying notes are an integral part of these condensed consolidated financial statements.

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SELECT MEDICAL HOLDINGS CORPORATION AND SELECT MEDICAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of Presentation

The unaudited condensed consolidated financial statements of Select Medical Holdings Corporation (“Holdings”) and Select Medical Corporation (“Select”) as of September 30, 2014 and for the three and nine month periods ended September 30, 2013 and 2014 have been prepared in accordance with generally accepted accounting principles (“GAAP”). In the opinion of management, such information contains all adjustments, which are normal and recurring in nature, necessary for a fair statement of the financial position, results of operations and cash flow for such periods. All significant intercompany transactions and balances have been eliminated. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2014. Holdings and Select and their subsidiaries are collectively referred to as the “Company.” The condensed consolidated financial statements of Holdings include the accounts of its wholly-owned subsidiary Select. Holdings conducts substantially all of its business through Select and its subsidiaries.

Certain information and disclosures normally included in the notes to consolidated financial statements have been condensed or omitted consistent with the rules and regulations of the Securities and Exchange Commission (the “SEC”), although the Company believes the disclosure is adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2013 contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 25, 2014.

2. Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers , which supersedes most of the current revenue recognition requirements. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. This guidance is effective for the Company in the first quarter of 2017 and early application is not permitted. Entities must adopt the new guidance using one of two retrospective application methods. The Company is currently evaluating the standard to determine the impact of its adoption on the consolidated financial statements.

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a discontinued operation is defined as a disposal of a component or group of components that represents a strategic shift that has, or will have, a major effect on an entity’s operations and financial results. The revised guidance is effective for annual fiscal periods beginning after December 15, 2014. Early adoption is permitted and the Company intends to prospectively adopt ASU No. 2014-08, as applicable.

3. Intangible Assets

The gross carrying amounts of the Company’s indefinite-lived intangible assets consist of the following:

	December 31, 2013		September 30, 2014
	(in thousands)

Goodwill	$	1,642,633	$	1,641,228
Trademarks	57,709		57,709
Certificates of need	12,115		12,455
Accreditations	2,083		2,083
Total	$	1,714,540	$	1,713,475

The Company’s accreditations and trademarks have renewal terms. The costs to renew these intangibles are expensed as incurred. At September 30, 2014, the accreditations and trademarks have a weighted average time until next renewal of approximately 1.5 years and 5.7 years, respectively.

The changes in the carrying amount of goodwill for the Company’s reportable segments for the nine months ended September 30, 2014 are as follows:

	Specialty Hospitals			Outpatient Rehabilitation			Total
	(in thousands)
Balance as of December 31, 2013	$	1,334,615		$	308,018		$	1,642,633
Goodwill acquired during the period	—			1,011			1,011
Goodwill allocated to contributed business	—			(2,406		)	(2,406		)
Purchase accounting adjustment	(10		)	—			(10		)
Balance as of September 30, 2014	$	1,334,605		$	306,623		$	1,641,228

4. Share Repurchase

Holdings’ board of directors has authorized a common stock repurchase program to repurchase up to $500.0 million worth of shares of its common stock. The program will remain in effect until December 31, 2016, unless extended by the board of directors. Holdings repurchased 11,285,714 shares of common stock at a total cost of $127.5 million, or an average of $11.30 per share, during the nine months ended September 30, 2014. The shares were repurchased from Welsh, Carson, Anderson & Stowe IX, L.P. and WCAS Capital Partners IV, L.P. pursuant to stock purchase agreements dated February 26, 2014 and May 5, 2014. The common stock repurchase program has available capacity of $198.9 million as of September 30, 2014.

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5. Indebtedness

The components of long-term debt and notes payable are as follows:

	December 31, 2013		September 30, 2014
	(in thousands)

6.375% senior notes (1)	$	600,000	$	711,522
Senior secured credit facilities:
Revolving loan	20,000		40,000
Term loans (2)	807,815		775,662
Other	17,460		7,835
Total debt	1,445,275		1,535,019
Less: current maturities	17,565		9,289
Total long-term debt	$	1,427,710	$	1,525,730

(1) Includes unamortized premium of $1.5 million at September 30, 2014.

(2) Includes unamortized discounts of $6.3 million and $4.5 million at December 31, 2013 and September 30, 2014, respectively.

Senior Secured Credit Facilities

On June 1, 2011, Select entered into its existing senior secured credit agreement that provided for $1.15 billion in senior secured credit facilities. The following discussion summarizes amendments and significant transactions affecting its senior secured credit facilities.

On August 13, 2012, Select entered into an additional credit extension amendment to its senior secured credit facilities providing for a $275.0 million series A term loan at the same interest rate and with the same term as the original term loan.

On February 20, 2013, Select entered into a credit extension amendment to its senior secured credit facilities providing for a $300.0 million series B term loan. Select used the borrowings under the series B term loan to redeem all of its outstanding 7 5/8% senior subordinated notes due 2015 on March 22, 2013, to finance Holdings’ redemption of all of its senior floating rate notes due 2015 on March 22, 2013 and to repay a portion of the balance outstanding under Select’s revolving credit facility.

On May 28, 2013, Select issued and sold $600.0 million aggregate principal amount of 6.375% senior notes due June 1, 2021. Select used the proceeds of the 6.375% senior notes to pay a portion of the amounts then outstanding on the original term loan and the series A term loan and to pay related fees and expenses.

On June 3, 2013, Select amended its existing senior secured credit facilities in order to, among other things:

· extend the maturity date on $293.3 million of its $300.0 million revolving credit facility from June 1, 2016 to March 1, 2018;

· convert the remaining original term loan and series A term loan to a new series C term loan, and lower the interest rate payable on the series C term loan from Adjusted LIBO plus 3.75%, or Alternate Base Rate plus 2.75%, to Adjusted LIBO plus 3.00%, or Alternate Base Rate plus 2.00%, and amend the

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provision of the series C term loan from providing that Adjusted LIBO will at no time be less than 1.75% to providing that Adjusted LIBO will at no time be less than 1.00%;

· lower the interest rate payable on the series B term loan from Adjusted LIBO plus 3.75%, or Alternate Base Rate plus 2.75%, to Adjusted LIBO plus 3.25%, or Alternate Base Rate plus 2.25%;

· amend the restrictive covenants governing the senior secured credit facilities in order to allow for unlimited restricted payments so long as there is no event of default under the senior secured credit facilities and the total pro forma ratio of total indebtedness to Consolidated EBITDA (as defined in the senior secured credit facilities) is less than or equal to 2.75 to 1.00; and

· amend the definition of ‘‘Available Amount’’ in a manner the effect of which was to increase the amount available for investments, restricted payments and payment of specified indebtedness.

On March 4, 2014, Select made a principal prepayment of $34.0 million associated with its term loans in accordance with the provision in its senior secured credit facilities agreement that requires mandatory prepayments of term loans resulting from excess cash flow as defined in the senior secured credit facilities.

On March 4, 2014, Select amended its senior secured credit facilities in order to, among other things:

· convert the remaining series B term loan to a new series D term loan, and lower the interest rate payable on the series D term loan from Adjusted LIBO plus 3.25%, or Alternate Base Rate plus 2.25%, to Adjusted LIBO plus 2.75%, or Alternate Base Rate plus 1.75%;

· set the maturity date of the series D term loan at December 20, 2016;

· convert the remaining series C term loan to a new series E term loan, and lower the interest rate payable on the series E term loan from Adjusted LIBO plus 3.00% (subject to an Adjusted LIBO rate floor of 1.00%), or Alternate Base Rate plus 2.00%, to Adjusted LIBO plus 2.75% (subject to an Adjusted LIBO rate floor of 1.00%), or Alternate Base Rate plus 1.75%;

· set the maturity date of the series E term loan at June 1, 2018;

· beginning with the quarter ending March 31, 2014, increase the quarterly compliance threshold set forth in the leverage ratio financial maintenance covenant to a level of 5.00 to 1.00 from 4.50 to 1.00;

· provide for a prepayment premium of 1.00% if the senior secured credit facilities are amended at any time prior to March 4, 2015 in the case of the series E term loans and such amendment reduces the yield applicable to such loans; and

· amend the definition of “Available Amount” in a manner the effect of which was to increase the amount available for investments, restricted payments and the payment of specified indebtedness.

At September 30, 2014, Select’s senior secured credit facilities provide for senior secured financing consisting of:

· a $300.0 million, revolving credit facility, $293.3 million of which matures on March 1, 2018 and the remaining $6.7 million maturing on June 1, 2016, including a $75.0 million sublimit for the issuance of standby letters of credit and a $25.0 million sublimit for swingline loans;

· a $284.6 million series D term loan, maturing on December 20, 2016; and

· a $495.6 million series E term loan, maturing on June 1, 2018.

All borrowings under Select’s senior secured credit facilities are subject to the satisfaction of required conditions, including the absence of a default at the time of and after giving effect to such borrowing and the accuracy of the representations and warranties of the borrowers.

The interest rates per annum applicable to borrowings under Select’s senior secured credit facilities are, at its option, equal to either an Alternate Base Rate or an Adjusted LIBO rate for a one, two, three or six month

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interest period, or a nine or twelve month period if available, in each case, plus an applicable margin percentage. The Alternate Base Rate is the greatest of (1) JPMorgan Chase Bank, N.A.’s prime rate, (2) one-half of 1% over the weighted average of rates on overnight Federal funds as published by the Federal Reserve Bank of New York and (3) the Adjusted LIBO rate from time to time for an interest period of one month, plus 1.00%. The Adjusted LIBO rate is, with respect to any interest period, the London interbank offered rate for such interest period, adjusted for any applicable statutory reserve requirements.

Borrowings under the series D term loan bear interest at a rate equal to Adjusted LIBO plus 2.75%, or Alternate Base Rate plus 1.75%. Borrowings under the series E term loan bear interest at a rate equal to Adjusted LIBO plus 2.75%, or Alternate Base Rate plus 1.75%. The Adjusted LIBO for the series E term loan will at no time be less than 1.00%.

Borrowings under the revolving credit facility bear interest at a rate equal to Adjusted LIBO plus a percentage ranging from 2.75% to 3.75%, or Alternate Base Rate plus a percentage ranging from 1.75% to 2.75%, in each case based on Select’s ratio of total indebtedness to Consolidated EBITDA (as defined in the senior secured credit facilities).

On the last day of each calendar quarter Select is required to pay each lender a commitment fee in respect of any unused commitments under the revolving credit facility, which is currently 0.50% per annum subject to adjustment based upon the ratio of Select’s total indebtedness to Consolidated EBITDA (as defined in the senior secured credit facilities).

Subject to exceptions, Select’s senior secured credit facilities require mandatory prepayments of term loans in amounts equal to:

· 50% (as may be reduced based on Select’s ratio of total indebtedness to Consolidated EBITDA (as defined in the senior secured credit facilities)) of Select’s annual excess cash flow;

· 100% of the net cash proceeds from non-ordinary course asset sales or other dispositions, or as a result of a casualty or condemnation event, subject to reinvestment rights and certain other exceptions; and

· 100% of the net cash proceeds from certain incurrences of debt.

Beginning on March 31, 2015, the senior secured credit facilities principal amount will amortize as follows:

· the series D term loan has quarterly principal repayment requirements of $0.7 million until maturity, at which time the remaining balance of $279.5 million is due on December 20, 2016; and

· the series E term loan has quarterly principal repayment requirements of $1.3 million until maturity, at which time the remaining balance of $479.2 million is due on June 1, 2018.

Select’s senior secured credit facilities are guaranteed by Holdings, Select and substantially all of its current subsidiaries, and will be guaranteed by substantially all of Select’s future subsidiaries and secured by substantially all of Select’s existing and future property and assets and by a pledge of its capital stock and the capital stock of its subsidiaries.

Select’s senior secured credit facilities require that it comply on a quarterly basis with certain financial covenants, including a maximum leverage ratio test.

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In addition, Select’s senior secured credit facilities include negative covenants, subject to significant exceptions, restricting or limiting its ability and the ability of Holdings and Select’s restricted subsidiaries, to, among other things:

· incur, assume, permit to exist or guarantee additional debt and issue or sell or permit any subsidiary to issue or sell preferred stock;

· amend, modify or waiver any rights under the certificate of indebtedness, credit agreements, certificate of incorporation, bylaws or other organizational documents which would be materially adverse to the creditors;

· pay dividends or other distributions on, redeem, repurchase, retire or cancel capital stock;

· purchase or acquire any debt or equity securities of, make any loans or advances to, guarantee any obligation of, or make any other investment in, any other company;

· incur or permit to exist certain liens on property or assets owned or accrued or assign or sell any income or revenues with respect to such property or assets;

· sell or otherwise transfer property or assets to, purchase or otherwise receive property or assets from, or otherwise enter into transactions with affiliates;

· merge, consolidate or amalgamate with another company or permit any subsidiary to merge, consolidate or amalgamate with another company;

· sell, transfer, lease or otherwise dispose of assets, including any equity interests;

· repay, redeem, repurchase, retire or cancel any subordinated debt;

· incur capital expenditures;

· engage to any material extent in any business other than business of the type currently conducted by Select or reasonably related businesses; and

· incur obligations that restrict the ability of its subsidiaries to incur or permit to exist any liens on Select’s property or assets or to make dividends or other payments to Select.

Select’s senior secured credit facilities also contain certain representations and warranties, affirmative covenants and events of default. The events of default include payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy, certain events under ERISA, material judgments, actual or asserted failure of any guaranty or security document supporting Select’s senior secured credit facilities to be in full force and effect and any change of control. If such an event of default occurs, the lenders under Select’s senior secured credit facilities will be entitled to take various actions, including the acceleration of amounts due under the senior secured credit facilities and all actions permitted to be taken by a secured creditor.

At September 30, 2014, Select had outstanding borrowings of $780.2 million (excluding unamortized original issue discounts of $4.5 million) under the term loans and borrowings of $40.0 million (excluding letters of credit) under the revolving loan portion of the senior secured credit facilities. Select had $219.7 million of availability under its revolving credit facility (after giving effect to $40.3 million of outstanding letters of credit) at September 30, 2014.

The applicable margin percentage for borrowings under Select’s revolving loan is subject to change based upon the ratio of Select’s leverage ratio (as defined in the senior secured credit facility). The applicable interest rate for revolving loans as of September 30, 2014 was (1) Alternate Base plus 2.75% for alternate base rate loans and (2) LIBO plus 3.75% for adjusted LIBO rate loans.

Select’s senior secured credit facility requires it to maintain certain leverage ratios (as defined in the senior secured credit facility). For the four consecutive fiscal quarters ended September 30, 2014, Select was

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required to maintain its leverage ratio (its ratio of total indebtedness to consolidated EBITDA) at less than 5.00 to 1.00. Select’s leverage ratio was 4.03 to 1.00 as of September 30, 2014.

Senior Notes

O n March 11, 2014, Select issued and sold $110.0 million aggregate principal amount of additional 6.375% senior notes due June 1, 2021 (the “Additional Notes”), at 101.50% of the aggregate principal amount resulting in gross proceeds of $111.7 million. The notes were issued as additional notes under the indenture pursuant to which it previously issued $600.0 million of 6.375% senior notes due June 1, 2021 (the “Existing Notes” and, together with the Additional notes, the “Notes”) . The Additional Notes are treated as a single series with the Existing Notes and have the same terms as those of the Existing Notes.

Interest on the Notes accrues at the rate of 6.375% per annum and is payable semi-annually in cash in arrears on June 1 and December 1 of each year. The Notes are Select’s senior unsecured obligations and rank equally in right of payment with all of its other existing and future senior unsecured indebtedness and senior in right of payment to all of its existing and future subordinated indebtedness. The Notes are fully and unconditionally guaranteed by all of Select’s wholly owned subsidiaries. The Notes are guaranteed, jointly and severally, by Select’s direct or indirect existing and future domestic restricted subsidiaries other than certain non-guarantor subsidiaries.

Select may redeem some or all of the Notes prior to June 1, 2016 by paying a “make-whole” premium. Select may redeem some or all of the Notes on or after June 1, 2016 at specified redemption prices. In addition, prior to June 1, 2016, Select may redeem up to 35% of the Notes with the net proceeds of certain equity offerings at a price of 106.375% plus accrued and unpaid interest, if any. Select is obligated to offer to repurchase the Notes at a price of 101% of their principal amount plus accrued and unpaid interest, if any, as a result of certain change of control events. These restrictions and prohibitions are subject to certain qualifications and exceptions.

The indenture relating to the Notes contains covenants that, among other things, limit Select’s ability and the ability of certain of its subsidiaries to (i) grant liens on its assets, (ii) make dividend payments, other distributions or other restricted payments, (iii) incur restrictions on the ability of Select’s restricted subsidiaries to pay dividends or make other payments, (iv) enter into sale and leaseback transactions, (v) merge, consolidate, transfer or dispose of substantially all of their assets, (vi) incur additional indebtedness, (vii) make investments, (viii) sell assets, including capital stock of subsidiaries, (ix) use the proceeds from sales of assets, including capital stock of restricted subsidiaries, and (x) enter into transactions with affiliates. In addition, the Indenture requires, among other things, Select to provide financial and current reports to holders of the Notes or file such reports electronically with the SEC. These covenants are subject to a number of exceptions, limitations and qualifications set forth in the Indenture.

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Maturities of Long-Term Debt and Notes Payable

Maturities of the Company’s long-term debt for the period from October 1, 2014 through December 31, 2014 and the years after 2014 are approximately as follows and are presented including the discounts on the senior secured credit facility term loans and premium on the senior notes (in thousands):

October 1, 2014 – December 31, 2014	$	1,967
2015	9,603
2016	287,025
2017	4,277
2018	520,216
2019 and beyond	711,931

Loss on Early Retirement of Debt

On March 4, 2014, Select amended its term loans under its senior secured credit facilities. During the nine months ended September 30, 2014, the Company recognized a loss of $2.3 million for unamortized debt issuance costs, unamortized original issue discount, and certain fees incurred related to term loan modifications.

On May 28, 2013, Select repaid a portion of its original term loan and series A term loan under its senior secured credit facilities, and on June 3, 2013, Select amended its existing senior secured credit facilities. During the nine months ended September 30, 2013, the Company recognized a loss of $17.3 million for unamortized debt issuance costs, unamortized original issue discount and certain debt issuance costs associated with refinancing activities.

On March 22, 2013, the Company redeemed Select’s 7 5/8% senior subordinated notes due 2015 and redeemed Holdings’ senior floating rate notes due 2015. During the three months ended March 31, 2013, the Company recognized a loss on early retirement of debt of $1.5 million for unamortized debt issuance costs of which approximately $0.5 million was associated with Select’s redemption of its 7 5/8% senior subordinated notes due 2015 and approximately $1.0 million was associated with Holdings’ redemption of its senior floating rate notes due 2015.

6. Fair Value

Financial instruments include cash and cash equivalents, notes payable and long-term debt. The carrying amount of cash and cash equivalents approximates fair value because of the short-term maturity of these instruments.

The carrying value of Select’s senior secured credit facilities was $827.8 million and $815.7 million at December 31, 2013 and September 30, 2014, respectively. The fair value of Select’s senior secured credit facilities was $834.7 million and $807.6 million at December 31, 2013 and September 30, 2014, respectively. The fair value of Select’s senior secured credit facilities was based on quoted market prices for this debt in the syndicated loan market.

The carrying value of Select’s 6.375% senior notes was $600.0 million and $711.5 million at December 31, 2013 and September 30, 2014, respectively. The fair value of Select’s 6.375% senior notes was $586.5 million and $713.3 million at December 31, 2013 and September 30, 2014, respectively. The fair value of this debt was based on quoted market prices.

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The Company considers the inputs in the valuation process of its senior secured credit facility and 6.375% senior notes to be Level 2 in the fair value hierarchy. Level 2 in the fair value hierarchy is defined as inputs that are observable for the asset or liability, either directly or indirectly which includes quoted prices for identical assets or liabilities in markets that are not active.

7. Segment Information

The Company’s reportable segments consist of (i) specialty hospitals and (ii) outpatient rehabilitation. Other activities include the Company’s corporate services and certain other non-consolidating joint ventures and minority investments in other healthcare related businesses. The outpatient rehabilitation reportable segment has two operating segments: outpatient rehabilitation clinics and contract therapy. These operating segments are aggregated for reporting purposes as they have common economic characteristics and provide a similar service to a similar patient base. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance of the segments based on Adjusted EBITDA. Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization, gain (loss) on early retirement of debt, stock compensation expense, equity in earnings (losses) of unconsolidated subsidiaries and other income (expense).

The following tables summarize selected financial data for the Company’s reportable segments. The segment results of Holdings are identical to those of Select.

	Three Months Ended September 30, 2013
	Specialty Hospitals		Outpatient Rehabilitation		Other			Total
	(in thousands)

Net operating revenues	$	532,610	$	190,223	$	12		$	722,845
Adjusted EBITDA	75,280		21,619		(16,471		)	80,428
Total assets	2,232,756		502,815		106,853			2,842,424
Capital expenditures	14,157		2,802		410			17,369

	Three Months Ended September 30, 2014
	Specialty Hospitals		Outpatient Rehabilitation		Other			Total
	(in thousands)

Net operating revenues	$	556,335	$	201,720	$	14		$	758,069
Adjusted EBITDA	80,950		23,012		(17,162		)	86,800
Total assets	2,223,808		531,285		106,984			2,862,077
Capital expenditures	18,167		3,430		1,260			22,857

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	Nine Months Ended September 30, 2013
	Specialty Hospitals		Outpatient Rehabilitation		Other			Total
	(in thousands)

Net operating revenues	$	1,649,747	$	579,404	$	322		$	2,229,473
Adjusted EBITDA	265,020		70,506		(49,059		)	286,467
Total assets	2,232,756		502,815		106,853			2,842,424
Capital expenditures	35,257		8,646		1,428			45,331

	Nine Months Ended September 30, 2014
	Specialty Hospitals		Outpatient Rehabilitation		Other			Total
	(in thousands)

Net operating revenues	$	1,678,793	$	614,368	$	248		$	2,293,409
Adjusted EBITDA	261,788		74,433		(51,239		)	284,982
Total assets	2,223,808		531,285		106,984			2,862,077
Capital expenditures	59,465		9,606		4,279			73,350

A reconciliation of Adjusted EBITDA to income before income taxes is as follows:

	Three Months Ended September 30, 2013
	Specialty Hospitals			Outpatient Rehabilitation			Other
	(in thousands)
Adjusted EBITDA	$	75,280		$	21,619		$	(16,471	)
Depreciation and amortization	(12,267		)	(2,979		)	(917		)
Stock compensation expense	—			—			(1,866		)

										Select Medical Holdings Corporation			Select Medical Corporation
Income (loss) from operations	$	63,013		$	18,640		$	(19,254	)	$	62,399		$	62,399
Equity in losses of unconsolidated subsidiaries										(179		)	(179		)
Interest expense										(21,252		)	(21,252		)
Income before income taxes										$	40,968		$	40,968

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	Three Months Ended September 30, 2014
	Specialty Hospitals			Outpatient Rehabilitation			Other
	(in thousands)
Adjusted EBITDA	$	80,950		$	23,012		$	(17,162	)
Depreciation and amortization	(13,445		)	(3,210		)	(929		)
Stock compensation expense	—			—			(3,199		)

										Select Medical Holdings Corporation			Select Medical Corporation
Income (loss) from operations	$	67,505		$	19,802		$	(21,290	)	$	66,017		$	66,017
Equity in earnings of unconsolidated subsidiaries										1,988			1,988
Interest expense										(21,753		)	(21,753		)
Income before income taxes										$	46,252		$	46,252

	Nine Months Ended September 30, 2013
	Specialty Hospitals			Outpatient Rehabilitation			Other
	(in thousands)
Adjusted EBITDA	$	265,020		$	70,506		$	(49,059	)
Depreciation and amortization	(36,061		)	(8,949		)	(2,862		)
Stock compensation expense	—			—			(5,403		)

										Select Medical Holdings Corporation			Select Medical Corporation
Income (loss) from operations	$	228,959		$	61,557		$	(57,324	)	$	233,192		$	233,192
Loss on early retirement of debt										(18,747		)	(17,788		)
Equity in earnings of unconsolidated subsidiaries										1,447			1,447
Interest expense										(66,614		)	(64,204		)
Income before income taxes										$	149,278		$	152,647

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	Nine Months Ended September 30, 2014
	Specialty Hospitals			Outpatient Rehabilitation			Other
	(in thousands)
Adjusted EBITDA	$	261,788		$	74,433		$	(51,239	)
Depreciation and amortization	(38,607		)	(9,647		)	(2,755		)
Stock compensation expense	—			—			(7,319		)

										Select Medical Holdings Corporation			Select Medical Corporation
Income (loss) from operations	$	223,181		$	64,786		$	(61,313	)	$	226,654		$	226,654
Loss on early retirement of debt										(2,277		)	(2,277		)
Equity in earnings of unconsolidated subsidiaries										4,135			4,135
Interest expense										(64,032		)	(64,032		)
Income before income taxes										$	164,480		$	164,480

8. Income per Common Share

Holdings applies the two-class method for calculating and presenting income per common share. The two-class method is an earnings allocation formula that determines earnings per share for each class of stock participation rights in undistributed earnings. The following table sets forth for the periods indicated the calculation of income per common share in Holdings’ consolidated statement of operations and the differences between basic weighted average shares outstanding and diluted weighted average shares outstanding used to compute basic and diluted income per common share, respectively:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2013		2014		2013		2014
	(in thousands, except per share amounts)
Numerator:
Net income attributable to Select Medical Holdings Corporation	$	23,272	$	26,530	$	85,470	$	94,915
Less: Earnings allocated to unvested restricted stockholders	497		808		1,802		2,519
Net income available to common stockholders	$	22,775	$	25,722	$	83,668	$	92,396

Denominator:
Weighted average shares — basic	136,646		126,639		136,879		129,706
Effect of dilutive securities:
Stock options	147		390		161		471
Weighted average shares — diluted	136,793		127,029		137,040		130,177

Basic income per common share	$	0.17	$	0.20	$	0.61	$	0.71
Diluted income per common share	$	0.17	$	0.20	$	0.61	$	0.71

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The following share amounts are shown here for informational and comparative purposes only since their inclusion would be anti-dilutive:

	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2013	2014	2013	2014
	(in thousands)
Stock options	1,477	—	1,528	—

9. Commitments and Contingencies

Litigation

The Company is a party to various legal actions, proceedings and claims (some of which are not insured), and regulatory and other governmental audits and investigations in the ordinary course of its business. The Company cannot predict the ultimate outcome of pending litigation, proceedings and regulatory and other governmental audits and investigations. These matters could potentially subject the Company to sanctions, damages, recoupments, fines and other penalties. The Department of Justice, Centers for Medicare & Medicaid Services (“CMS”) or other federal and state enforcement and regulatory agencies may conduct additional investigations related to the Company’s businesses in the future that may, either individually or in the aggregate, have a material adverse effect on the Company’s business, financial position, results of operations and liquidity.

To address claims arising out of the operations of the Company’s specialty hospitals and outpatient rehabilitation facilities, the Company maintains professional malpractice liability insurance and general liability insurance, subject to self-insured retention of $2.0 million per medical incident for professional liability claims and $2.0 million per occurrence for general liability claims. The Company also maintains umbrella liability insurance covering claims which, due to their nature or amount, are not covered by or not fully covered by the Company’s other insurance policies. These insurance policies also do not generally cover punitive damages and are subject to various deductibles and policy limits. Significant legal actions, as well as the cost and possible lack of available insurance, could subject the Company to substantial uninsured liabilities. In the Company’s opinion, the outcome of these actions, individually or in the aggregate, will not have a material adverse effect on its financial position, results of operations, or cash flows.

Healthcare providers are subject to lawsuits under the qui tam provisions of the federal False Claims Act. Qui tam lawsuits typically remain under seal (hence, usually unknown to the defendant) for some time while the government decides whether or not to intervene on behalf of a private qui tam plaintiff (known as a relator) and take the lead in the litigation. These lawsuits can involve significant monetary damages and penalties and award bounties to private plaintiffs who successfully bring the suits. The Company has been a defendant in these cases in the past, and may be named as a defendant in similar cases from time to time in the future.

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identified the relators by fictitious pseudonyms, on March 28, 2013, the relators filed a Notice identifying themselves as the former CEO at the Company’s long term acute care hospital in Evansville, Indiana (“SSH-Evansville”) and two former case managers at SSH-Evansville. The named defendants include the Company, SSH-Evansville, and two physicians who have practiced at SSH-Evansville. On March 26, 2013, the defendants, relators and the United States filed a joint motion seeking a stay of the proceedings, in which the United States notified the court that its investigation has not been completed and therefore it is not yet able to decide whether or not to intervene, and on March 29, 2013, the magistrate judge granted the motion and stayed all deadlines in the case for 90 days. The court has subsequently granted additional motions filed by the United States to continue the stay, and the current stay extends through December 15, 2014.

As previously disclosed, the Company and SSH-Evansville produced documents in response to various government subpoenas and demands relating to SSH-Evansville. In September 2014, representatives of the United States Attorney’s Office for the Southern District of Indiana and the Department of Justice informed the Company that, while the United States has not yet decided whether to intervene in the case, its investigation is continuing concerning the allegation that SSH-Evansville admitted patients for whom long-term acute care was not medically necessary. The Company intends to fully cooperate with this governmental investigation and is involved in ongoing discussions with the government regarding this matter. At this time, the Company is unable to predict the timing and outcome of this matter.

Construction Commitments

At September 30, 2014, the Company had outstanding commitments under construction contracts related to new construction, improvements and renovations at the Company’s long term acute care properties and inpatient rehabilitation facilities totaling approximately $14.5 million.

10. Subsequent Events

On October 23, 2014, Select, Holdings, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent and the lender named therein entered into an Additional Credit Extension Amendment (the “Revolver Extension Amendment”) to Select’s senior secured credit facility with a group of lenders and JPMorgan Chase Bank, N.A. as administrative agent. Pursuant to the terms and conditions of the Revolver Extension Amendment, the lender will extend the maturity date on $6.75 million in aggregate principal of revolving commitments from June 1, 2016 to March 1, 2018.

On October 23, 2014, Select, Holdings, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent and the additional lender named therein entered into an Additional Credit Extension Amendment (the “Revolver Incremental Amendment”) to Select’s senior secured credit facility with a group of lenders and JPMorgan Chase Bank, N.A. as administrative agent. Pursuant to the terms and conditions of the Revolver Incremental Amendment, the lender named therein will commit $50.0 million in incremental revolving commitments that mature on March 1, 2018.

On October 29, 2014, Holdings’ board of directors declared a cash dividend of $0.10 per share. The dividend will be payable on or about December 1, 2014 to stockholders of record as of the close of business on November 19, 2014.

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11. Financial Information for Subsidiary Guarantors and Non-Guarantor Subsidiaries under Select’s 6.375% Senior Notes

Select’s 6.375% senior notes are fully and unconditionally guaranteed, except for customary limitations, on a senior basis by all of Select’s wholly-owned subsidiaries (the “Subsidiary Guarantors”) which is defined as a subsidiary where Select or a subsidiary of Select holds all of the outstanding ownership interests. Certain of Select’s subsidiaries did not guarantee the 6.375% senior notes (the “Non-Guarantor Subsidiaries”).

Select conducts a significant portion of its business through its subsidiaries. Presented below is condensed consolidating financial information for Select, the Subsidiary Guarantors and the Non-Guarantor Subsidiaries at December 31, 2013 and September 30, 2014 and for the three and nine months ended September 30, 2013 and 2014.

The equity method has been used by Select with respect to investments in subsidiaries. The equity method has been used by Subsidiary Guarantors with respect to investments in Non-Guarantor Subsidiaries. Separate financial statements for Subsidiary Guarantors are not presented.

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Select Medical Corporation

Condensed Consolidating Balance Sheet

	September 30, 2014
	(unaudited)
	Select Medical Corporation (Parent Company Only)			Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	( in thousands)
Assets
Current Assets:
Cash and cash equivalents	$	8,070		$	2,110	$	849	$	—		$	11,029
Accounts receivable, net	—			350,793		60,709		—			411,502
Current deferred tax asset	6,240			3,220		3,906		—			13,366
Prepaid income taxes	4,220			—		—		—			4,220
Intercompany receivables	—			1,681,458		121,934		(1,803,392		)(a)	—
Other current assets	8,381			29,892		5,682		—			43,955
Total Current Assets	26,911			2,067,473		193,080		(1,803,392		)	484,072

Property and equipment, net	16,849			446,914		61,080		—			524,843
Investment in affiliates	3,698,437			89,600		—		(3,788,037		)(b)(c)	—
Goodwill	—			1,641,228		—		—			1,641,228
Non-current deferred tax asset	10,082			—		—		(10,082		)(d)	—
Other identifiable intangibles	—			72,247		—		—			72,247
Other assets	31,830			107,043		814		—			139,687

Total Assets	$	3,784,109		$	4,424,505	$	254,974	$	(5,601,511	)	$	2,862,077

Liabilities and Equity
Current Liabilities:
Bank overdrafts	$	22,810		$	—	$	—	$	—		$	22,810
Current portion of long-term debt and notes payable	6,231			2,060		998		—			9,289
Accounts payable	6,749			69,752		14,110		—			90,611
Intercompany payables	1,802,279			1,113		—		(1,803,392		)(a)	—
Accrued payroll	13,142			74,775		339		—			88,256
Accrued vacation	4,839			48,257		8,248		—			61,344
Accrued interest	21,921			113		—		—			22,034
Accrued other	39,951			33,033		8,206		—			81,190
Total Current Liabilities	1,917,922			229,103		31,901		(1,803,392		)	375,534

Long-term debt, net of current portion	1,089,398			365,640		70,692		—			1,525,730
Non-current deferred tax liability	—			96,890		8,065		(10,082		)(d)	94,873
Other non-current liabilities	49,683			36,909		4,938		—			91,530

Total Liabilities	3,057,003			728,542		115,596		(1,813,474		)	2,087,667

Redeemable non-controlling interests	—			—		10,704		—			10,704

Stockholder’s Equity:
Common stock	0			—		—		—			0
Capital in excess of par	884,104			—		—		—			884,104
Retained earnings (accumulated deficit)	(156,998		)	1,017,546		11,699		(1,029,245		)(c)	(156,998		)
Subsidiary investment	—			2,678,417		80,375		(2,758,792		)(b)	—
Total Select Medical Corporation Stockholders’ Equity	727,106			3,695,963		92,074		(3,788,037		)	727,106

Non-controlling interests	—			—		36,600		—			36,600
Total Equity	727,106			3,695,963		128,674		(3,788,037		)	763,706

Total Liabilities and Equity	$	3,784,109		$	4,424,505	$	254,974	$	(5,601,511	)	$	2,862,077

(a) Elimination of intercompany.

(b) Elimination of investments in consolidated subsidiaries.

(d) Reclass of non-current deferred tax asset to report net non-current deferred tax liability in consolidation.

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Select Medical Corporation

Condensed Consolidating Statement of Operations

	For the Three Months Ended September 30, 2014
	(unaudited)
	Select Medical Corporation (Parent Company Only)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)

Net operating revenues	$	14		$	639,693		$	118,362		$	—		$	758,069

Costs and expenses:
Cost of services	549			540,170			103,673			—			644,392
General and administrative	19,790			(71		)	—			—			19,719
Bad debt expense	—			8,753			1,604			—			10,357
Depreciation and amortization	926			13,887			2,771			—			17,584
Total costs and expenses	21,265			562,739			108,048			—			692,052

Income (loss) from operations	(21,251		)	76,954			10,314			—			66,017

Other income and expense:
Intercompany interest and royalty fees	(272		)	269			3			—			—
Intercompany management fees	33,492			(27,644		)	(5,848		)	—			—
Equity in earnings of unconsolidated subsidiaries	—			1,961			27			—			1,988
Interest expense	(14,597		)	(5,983		)	(1,173		)	—			(21,753		)

Income (loss) from operations before income taxes	(2,628		)	45,557			3,323			—			46,252

Income tax expense (benefit)	(492		)	17,782			666			—			17,956
Equity in earnings of subsidiaries	28,666			1,126			—			(29,792		)(a)	—

Net income	26,530			28,901			2,657			(29,792		)	28,296

Less: Net income attributable to non-controlling interests	—			—			1,766			—			1,766

Net income attributable to Select Medical Corporation	$	26,530		$	28,901		$	891		$	(29,792	)	$	26,530

(a) Elimination of equity in earnings of consolidated subsidiaries.

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Select Medical Corporation

Condensed Consolidating Statement of Operations

	For the Nine Months Ended September 30, 2014
	(unaudited)
	Select Medical Corporation (Parent Company Only)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)

Net operating revenues	$	248		$	1,957,326		$	335,835		$	—		$	2,293,409

Costs and expenses:
Cost of services	1,479			1,635,151			289,407			—			1,926,037
General and administrative	58,433			(1,214		)	—			—			57,219
Bad debt expense	—			27,579			4,911			—			32,490
Depreciation and amortization	2,753			40,348			7,908			—			51,009
Total costs and expenses	62,665			1,701,864			302,226			—			2,066,755

Income (loss) from operations	(62,417		)	255,462			33,609			—			226,654

Other income and expense:
Intercompany interest and royalty fees	(820		)	812			8			—			—
Intercompany management fees	107,159			(90,797		)	(16,362		)	—			—
Equity in earnings of unconsolidated subsidiaries	—			4,074			61			—			4,135
Loss on early retirement of debt	(2,277		)	—			—			—			(2,277		)
Interest expense	(42,919		)	(17,819		)	(3,294		)	—			(64,032		)

Income (loss) from operations before income taxes	(1,274		)	151,732			14,022			—			164,480

Income tax expense	773			61,937			1,113			—			63,823
Equity in earnings of subsidiaries	96,962			7,057			—			(104,019		)(a)	—

Net income	94,915			96,852			12,909			(104,019		)	100,657

Less: Net income attributable to non-controlling interests	—			—			5,742			—			5,742

Net income attributable to Select Medical Corporation	$	94,915		$	96,852		$	7,167		$	(104,019	)	$	94,915

(a) Elimination of equity in earnings of consolidated subsidiaries.

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Select Medical Corporation

Condensed Consolidating Statement of Cash Flows

	For the Nine Months Ended September 30, 2014
	(unaudited)
	Select Medical Corporation (Parent Company Only)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)

Operating activities
Net income	$	94,915		$	96,852		$	12,909		$	(104,019	)(a)	100,657
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,753			40,348			7,908			—			51,009
Provision for bad debts	—			27,579			4,911			—			32,490
Equity in earnings of unconsolidated subsidiaires	—			(4,074		)	(61		)	—			(4,135		)
Loss on early retirement of debt	2,277			—			—			—			2,277
Loss (gain) from sale of assets and businesses	—			(1,351		)	115			—			(1,236		)
Non-cash stock compensation expense	7,391			—			—			—			7,391
Amortization of debt discount, premium and issuance costs	5,651			—			—			—			5,651
Deferred income taxes	2,844			—			—			—			2,844
Changes in operating assets and liabilities, net of effects from acquisition of businesses:
Equity in earnings of subsidiaries	(96,962		)	(7,057		)	—			104,019		(a)	—
Accounts receivable	—			(41,756		)	(11,168		)	—			(52,924		)
Other current assets	1,364			(41		)	(832		)	—			491
Other assets	3,444			(5,505		)	(206		)	—			(2,267		)
Accounts payable	—			1,128			1,148			—			2,276
Accrued expenses	3,742			(4,463		)	704			—			(17		)
Income taxes	(4,203		)	—			—			—			(4,203		)
Net cash provided by operating activities	23,216			101,660			15,428			—			140,304

Investing activities
Purchases of property and equipment	(4,279		)	(60,022		)	(9,049		)	—			(73,350		)
Investment in businesses	—			(3,135		)	—			—			(3,135		)
Distributions from unconsolidated subsidiaries	—			11,890			49			—			11,939
Acquisition of businesses, net of cash acquired	—			(397		)	(814		)	—			(1,211		)
Net cash used in investing activities	(4,279		)	(51,664		)	(9,814		)	—			(65,757		)

Financing activities
Borrowings on revolving credit facility	675,000			—			—			—			675,000
Payments on revolving credit facility	(655,000		)	—			—			—			(655,000		)
Payments on credit facility term loans	(33,994		)	—			—			—			(33,994		)
Issuance of 6.375% senior notes, includes premium	111,650			—			—			—			111,650
Borrowings of other debt	6,111			—			925			—			7,036
Principal payments on other debt	(7,452		)	(1,424		)	(2,820		)	—			(11,696		)
Debt issuance costs	(4,434		)	—			—			—			(4,434		)
Proceeds from bank overdrafts	10,304			—			—			—			10,304
Equity investment by Holdings	5,545			—			—			—			5,545
Dividends paid to Holdings	(169,314		)	—			—			—			(169,314		)
Intercompany	50,646			(49,560		)	(1,086		)	—			—
Proceeds from issuance of non-controlling interests	—			—			185			—			185
Distributions to non-controlling interests	—			—			(3,119		)	—			(3,119		)
Net cash used in financing activities	(10,938		)	(50,984		)	(5,915		)	—			(67,837		)

Net increase (decrease) in cash and cash equivalents	7,999			(988		)	(301		)	—			6,710

Cash and cash equivalents at beginning of period	71			3,098			1,150			—			4,319
Cash and cash equivalents at end of period	$	8,070		$	2,110		$	849		$	—		$	11,029

(a) Elimination of equity in earnings of consolidated subsidiaries.

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Select Medical Corporation

Condensed Consolidating Balance Sheet

	December 31, 2013
	(unaudited)
	Select Medical Corporation (Parent Company Only)			Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	( in thousands)
Assets
Current Assets:
Cash and cash equivalents	$	71		$	3,098	$	1,150	$	—		$	4,319
Accounts receivable, net	—			337,517		54,452		(650		)(a)	391,319
Current deferred tax asset	7,965			5,214		4,445		—			17,624
Intercompany receivables	—			1,079,736		105,028		(1,184,764		)(b)	—
Other current assets	9,745			26,545		4,850		—			41,140
Total Current Assets	17,781			1,452,110		169,925		(1,185,414		)	454,402

Property and equipment, net	15,624			434,040		59,438		—			509,102
Investment in affiliates	3,059,581			83,012		—		(3,142,593		)(c)(d)	—
Goodwill	—			1,642,633		—		—			1,642,633
Non-current deferred tax asset	7,662			—		—		(7,662		)(e)	—
Other identifiable intangibles	—			71,907		—		—			71,907
Other assets	35,274			103,696		608		—			139,578

Total Assets	$	3,135,922		$	3,787,398	$	229,971	$	(4,335,669	)	$	2,817,622

Liabilities and Equity
Current Liabilities:
Bank overdrafts	$	12,506		$	—	$	—	$	—		$	12,506
Current portion of long-term debt and notes payable	9,107			7,317		1,141		—			17,565
Accounts payable	6,749			68,574		12,962		—			88,285
Intercompany payables	1,184,764			—		—		(1,184,764		)(b)	—
Accrued payroll	1,167			88,599		245		—			90,011
Accrued vacation	4,619			47,682		7,429		—			59,730
Accrued interest	11,076			1,221		—		—			12,297
Accrued other	59,249			23,494		8,415		(650		)(a)	90,508
Income taxes payable	622			—		—		—			622
Total Current Liabilities	1,289,859			236,887		30,192		(1,185,414		)	371,524

Long-term debt, net of current portion	1,006,201			364,060		57,449		—			1,427,710
Non-current deferred tax liability	—			96,111		7,838		(7,662		)(e)	96,287
Other non-current liabilities	53,628			33,123		5,124		—			91,875

Total Liabilities	2,349,688			730,181		100,603		(1,193,076		)	1,987,396

Redeemable non-controlling interests	—			—		11,584		—			11,584

Stockholder’s Equity:
Common stock	0			—		—		—			0
Capital in excess of par	869,576			—		—		—			869,576
Retained earnings	(83,342		)	920,694		21,186		(941,880		)(d)	(83,342		)
Subsidiary investment	—			2,136,523		64,190		(2,200,713		)(c)	—
Total Select Medical Corporation Stockholders’ Equity	786,234			3,057,217		85,376		(3,142,593		)	786,234

Non-controlling interests	—			—		32,408		—			32,408
Total Equity	786,234			3,057,217		117,784		(3,142,593		)	818,642

Total Liabilities and Equity	$	3,135,922		$	3,787,398	$	229,971	$	(4,335,669)		$	2,817,622

(a) Reclass portion of accrued other to accounts receivable net in consolidation.

(b) Elimination of intercompany.

(d) Elimination of investments in consolidated subsidiaries’ earnings.

(e) Reclass of non-current deferred tax asset to report net non-current deferred tax liability in consolidation.

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Select Medical Corporation

Condensed Consolidating Statement of Operations

	For the Three Months Ended September 30, 2013
	(unaudited)
	Select Medical Corporation (Parent Company Only)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Net operating revenues	$	12		$	617,415		$	105,418		$	—		$	722,845

Costs and expenses:
Cost of services	608			526,198			90,475			—			617,281
General and administrative	17,696			44			—			—			17,740
Bad debt expense	—			7,563			1,699			—			9,262
Depreciation and amortization	917			12,831			2,415			—			16,163
Total costs and expenses	19,221			546,636			94,589			—			660,446

Income (loss) from operations	(19,209		)	70,779			10,829			—			62,399

Other income and expense:
Intercompany interest and royalty fees	(278		)	310			(32		)	—			—
Intercompany management fees	32,621			(27,386		)	(5,235		)	—			—
Equity in earnings (losses) of unconsolidated subsidiaries	—			(196		)	17			—			(179		)
Interest expense	(14,192		)	(6,031		)	(1,029		)	—			(21,252		)

Income (loss) from operations before income taxes	(1,058		)	37,476			4,550			—			40,968

Income tax expense	44			15,218			499			—			15,761
Equity in earnings of subsidiaries	24,374			1,952			—			(26,326		)(a)	—

Net income	23,272			24,210			4,051			(26,326		)	25,207

Less: Net income attributable to non-controlling interests	—			—			1,935			—			1,935
Net income attributable to Select Medical Corporation	$	23,272		$	24,210		$	2,116		$	(26,326	)	$	23,272

(a) Elimination of equity in earnings of consolidated subsidiaries.

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Select Medical Corporation

Condensed Consolidating Statement of Operations

	For the Nine Months Ended September 30, 2013
	(unaudited)
	Select Medical Corporation (Parent Company Only)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)

Net operating revenues	$	322		$	1,913,597		$	315,554		$	—		$	2,229,473

Costs and expenses:
Cost of services	1,718			1,599,493			266,704			—			1,867,915
General and administrative	52,915			150			—			—			53,065
Bad debt expense	—			22,485			4,944			—			27,429
Depreciation and amortization	2,862			37,856			7,154			—			47,872
Total costs and expenses	57,495			1,659,984			278,802			—			1,996,281

Income (loss) from operations	(57,173		)	253,613			36,752			—			233,192

Other income and expense:
Intercompany interest and royalty fees	(1,033		)	1,051			(18		)	—			—
Intercompany management fees	114,597			(100,005		)	(14,592		)	—			—
Loss on early retirement of debt	(17,788		)	—			—			—			(17,788		)
Equity in earnings of unconsolidated subsidiaries	—			1,375			72			—			1,447
Interest expense	(44,345		)	(16,800		)	(3,059		)	—			(64,204		)

Income (loss) from operations before income taxes	(5,742		)	139,234			19,155			—			152,647

Income tax expense	1,956			55,900			714						58,570
Equity in earnings of subsidiaries	95,358			12,073			—			(107,431		)(a)	—

Net income	87,660			95,407			18,441			(107,431		)	94,077

Less: Net income attributable to non-controlling interests	—			—			6,417			—			6,417

Net income attributable to Select Medical Corporation	$	87,660		$	95,407		$	12,024		$	(107,431	)	$	87,660

(a) Elimination of equity in earnings of consolidated subsidiaries.

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Select Medical Corporation

Condensed Consolidating Statement of Cash Flows

	For the Nine Months Ended September 30, 2013
	(unaudited)
	Select Medical Corporation (Parent Company Only)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)

Operating activities
Net income	$	87,660		$	95,407		$	18,441		$	(107,431	)(a)	$	94,077
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,862			37,856			7,154			—			47,872
Provision for bad debts	—			22,485			4,944			—			27,429
Equity in earnings of unconsolidated subsidiaries	—			(1,375		)	(72		)	—			(1,447		)
Loss on early retirement of debt	17,788			—			—			—			17,788
Loss (gain) from disposal of assets	—			25			(118		)	—			(93		)
Non-cash stock compensation expense	5,403			—			—			—			5,403
Amortization of debt discount and issuance costs	6,418			—			—			—			6,418
Deferred income taxes	3,854			—			—			—			3,854
Changes in operating assets and liabilities, net of effects from acquisition of businesses:
Equity in earnings of subsidiaries	(95,358		)	(12,073		)	—			107,431		(a)	—
Accounts receivable	—			(75,295		)	(13,942		)	—			(89,237		)
Other current assets	(2,725		)	(6,620		)	1,703			—			(7,642		)
Other assets	(7,829		)	4,519			99			—			(3,211		)
Accounts payable	2,880			3,224			694			—			6,798
Accrued expenses	(3,211		)	12,759			1,388			—			10,936
Income taxes	1,739			—			—			—			1,739
Net cash provided by operating activities	19,481			80,912			20,291			—			120,684

Investing activities
Purchases of property and equipment	(1,428		)	(39,101		)	(4,802		)	—			(45,331		)
Proceeds from sale of assets	—			62			456			—			518
Investment in businesses, net of distributions	—			(32,430		)	—			—			(32,430		)
Acquisition of businesses, net of cash acquired	—			(848		)	—			—			(848		)
Net cash used in investing activities	(1,428		)	(72,317		)	(4,346		)	—			(78,091		)

Financing activities
Borrowings on revolving credit facility	580,000			—			—			—			580,000
Payments on revolving credit facility	(645,000		)	—			—			—			(645,000		)
Borrowings on credit facility term loans, net of discount	298,500			—			—			—			298,500
Payments on credit facility term loans	(594,668		)	—			—			—			(594,668		)
Issuance of 6.375% senior notes	600,000			—			—			—			600,000
Repurchase of 7 5/8% senior subordinated notes	(70,000		)	—			—			—			(70,000		)
Borrowings of other debt	8,154			—			1,084			—			9,238
Principal payments on other debt	(5,971		)	(521		)	(975		)	—			(7,467		)
Debt issuance costs	(18,820		)	—			—			—			(18,820		)
Dividends paid to Holdings	(211,754		)	—			—			—			(211,754		)
Repayments of bank overdrafts	(10,401		)	—			—			—			(10,401		)
Intercompany	21,889			(8,812		)	(13,077		)	—			—
Distributions to non-controlling interests	—			—			(3,072		)	—			(3,072		)
Net cash used in financing activities	(48,071		)	(9,333		)	(16,040		)	—			(73,444		)

Net decrease in cash and cash equivalents	(30,018		)	(738		)	(95		)	—			(30,851		)

Cash and cash equivalents at beginning of period	35,070			3,734			1,340			—			40,144
Cash and cash equivalents at end of period	$	5,052		$	2,996		$	1,245		$	—		$	9,293

(a) Elimination of equity in earnings of consolidated subsidiaries.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT S OF OPERATIONS

You should read this discussion together with our unaudited condensed consolidated financial statements and accompanying notes.

Forward-Looking Statements

This report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “target,” “estimate,” “project,” “intend” and similar expressions. These statements include, among others, statements regarding our expected business outlook, anticipated financial and operating results, our business strategy and means to implement our strategy, our objectives, the amount and timing of capital expenditures, the likelihood of our success in expanding our business, financing plans, budgets, working capital needs and sources of liquidity.

Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding our services, the expansion of our services, competitive conditions and general economic conditions. These assumptions could prove inaccurate. Forward-looking statements also involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict. Such factors include, but are not limited to, the following:

· changes in government reimbursement for our services due to the implementation of healthcare reform legislation, deficit reduction measures, and/or new payment policies (including, for example, the expiration of the moratorium limiting the full application of the 25 Percent Rule that would reduce our Medicare payments for those patients admitted to a long term acute care hospital from a referring hospital in excess of an applicable percentage admissions threshold) may result in a reduction in net operating revenues, an increase in costs and a reduction in profitability;

· the impact of the Bipartisan Budget Act of 2013, which establishes new payment limits for Medicare patients who do not meet specified criteria, may result in a reduction in net operating revenues and profitability of our long term acute care hospitals;

· the failure of our specialty hospitals to maintain their Medicare certifications may cause our net operating revenues and profitability to decline;

· the failure of our facilities operated as ‘‘hospitals within hospitals’’ to qualify as hospitals separate from their host hospitals may cause our net operating revenues and profitability to decline;

· a government investigation or assertion that we have violated applicable regulations may result in sanctions or reputational harm and increased costs;

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· acquisitions or joint ventures may prove difficult or unsuccessful, use significant resources or expose us to unforeseen liabilities;

· private third-party payors for our services may undertake future cost containment initiatives that limit our future net operating revenues and profitability;

· the failure to maintain established relationships with the physicians in the areas we serve could reduce our net operating revenues and profitability;

· shortages in qualified nurses or therapists could increase our operating costs significantly;

· competition may limit our ability to grow and result in a decrease in our net operating revenues and profitability;

· the loss of key members of our management team could significantly disrupt our operations;

· the effect of claims asserted against us could subject us to substantial uninsured liabilities; and

· other factors discussed from time to time in our filings with the Securities and Exchange Commission (the “SEC”), including factors discussed under the heading “Risk Factors” for the year ended December 31, 2013 contained in our annual report on Form 10-K filed with the SEC on February 25, 2014.

Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, we are under no obligation to publicly update or revise any forward-looking statements, whether as a result of any new information, future events or otherwise. You should not place undue reliance on our forward-looking statements. Although we believe that the expectations reflected in forward-looking statements are reasonable, we cannot guarantee future results or performance.

Investors should also be aware that while we do, from time to time, communicate with securities analysts, it is against our policy to disclose to securities analysts any material non-public information or other confidential commercial information. Accordingly, stockholders should not assume that we agree with any statement or report issued by any securities analyst irrespective of the content of the statement or report. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not the responsibility of the Company.

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Overview

We began operations in 1997, and we believe that we are one of the largest operators of both specialty hospitals and outpatient rehabilitation clinics in the United States based on number of facilities. As of September 30, 2014, we operated 113 long term acute care hospitals, or “LTCHs,” and 16 inpatient rehabilitation facilities, or “IRFs,” in 28 states, and 1,023 outpatient rehabilitation clinics in 32 states and the District of Columbia. We also provide medical rehabilitation services on a contract basis to nursing homes, hospitals, assisted living and senior care centers, schools and work sites. As of September 30, 2014 we had operations in 44 states and the District of Columbia.

We manage our Company through two business segments, our specialty hospital segment and our outpatient rehabilitation segment. We had net operating revenues of $2,293.4 million for the nine months ended September 30, 2014. Of this total, we earned approximately 73% of our net operating revenues from our specialty hospital segment and approximately 27% from our outpatient rehabilitation segment. Our specialty hospital segment consists of hospitals designed to serve the needs of long term stay acute patients and hospitals designed to serve patients that require intensive medical rehabilitation care. Our outpatient rehabilitation segment consists of clinics and contract therapy locations that provide physical, occupational and speech rehabilitation services.

Significant Events

Dividend Payments

On March 10, 2014, May 28, 2014 and August 29, 2014 Holdings paid cash dividends totaling $14.1 million, $13.1 million and $13.1 million, respectively.

Stock Repurchase Program

The Company’s board of directors has authorized a common stock repurchase program to repurchase up to $500.0 million worth of shares of its common stock. The program will remain in effect until December 31, 2016, unless extended by the board of directors. During the nine months ended September 30, 2014, the Company repurchased a total of 11,285,714 shares of common stock at a total cost of $127.5 million, or $11.30 per share. The shares were repurchased from Welsh, Carson, Anderson & Stowe IX, L.P. and WCAS Capital Partners IV, L.P. See the section titled “Capital Resources” for additional discussion related to our stock repurchase program.

Financing Transactions

Senior Secured Credit Facilities

On March 4, 2014, Select amended its senior secured credit facilities in order to, among other things:

· set the maturity date of the series D term loan at December 20, 2016;

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· set the maturity date of the series E term loan at June 1, 2018;

· amend the definition of “Available Amount” in a manner the effect of which was to increase the amount available for investments, restricted payments and the payment of specified indebtedness.

Senior Notes

On March 11, 2014 Select issued $110.0 million of 6.375% senior notes due June 1, 2021, at 101.50% of the aggregate principal amount resulting in the receipt of gross proceeds of $111.7 million.

See the section titled “Capital Resources” for additional discussion related to our financing activities.

Summary Financial Results

Three Months Ended September 30, 2014

For the three months ended September 30, 2014, our net operating revenues increased 4.9% to $758.1 million, compared to $722.8 million for the three months ended September 30, 2013. We had income from operations of $66.0 million for the three months ended September 30, 2014, compared to $62.4 million for the three months ended September 30, 2013. Net income attributable to Holdings was $26.5 million for the three months ended September 30, 2014, compared to $23.3 million for the three months ended September 30, 2013. Our Adjusted EBITDA for the three months ended September 30, 2014 was $86.8 million, compared to $80.4 million for the three months ended September 30, 2013 and our Adjusted EBITDA margin was 11.5% for the three months ended September 30, 2014, compared to 11.1% for the three months ended September 30, 2013. See the section titled “ Results of Operations ” for a reconciliation of net income to Adjusted EBITDA.

Nine Months Ended September 30, 2014

For the nine months ended September 30, 2014, our net operating revenues increased 2.9% to $2,293.4 million compared to $2,229.5 million for the nine months ended September 30, 2013. We had income from operations of $226.7 million compared to $233.2 million for the nine months ended September 30, 2013. Net income attributable to Holdings was $94.9 million for the nine months ended September 30, 2014, compared to $85.5 million for the nine months ended September 30, 2013. Our Adjusted EBITDA for the nine months ended September 30, 2014 was $285.0 million, compared to $286.5 million for the nine months ended September 30, 2013 and our Adjusted EBITDA margin was 12.4% for the nine months ended September 30, 2014, compared to 12.8% for the nine months ended September 30, 2013. See the section titled “ Results of Operations ” for a reconciliation of net income to Adjusted EBITDA.

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Regulatory Changes

In the past few years, there have been significant regulatory changes that have affected our net operating revenues and, in some cases, caused us to change our operating models and strategies. The following is a discussion of recent regulatory changes that have affected our results of operations in 2014 or may have an effect on our future results of operations. Our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC on February 25, 2014 contains a more detailed discussion of the regulations that affect our business in Part I — Business — Government Regulations, and the information below should be read in connection with that more detailed discussion.

Budget Control Act of 2011

The Budget Control Act of 2011 increased the federal debt ceiling in connection with deficit reductions over the next ten years. On April 1, 2013, a 2% reduction to Medicare payments (the “Sequestration Reduction”) was implemented. For the nine months ended September 30, 2014, the Sequestration Reduction has reduced both our net operating revenues and income from operations by approximately $22.6 million, of which approximately $21.3 million was related to our specialty hospitals and $1.3 million was related to our outpatient rehabilitation segment. For the nine months ended September 30, 2013, the Sequestration Reduction reduced both our net operating revenues and income from operations by approximately $16.6 million, of which approximately $15.9 million was related to our specialty hospitals and $0.7 million was related to our outpatient rehabilitation segment.

Improving Medicare Post-Acute Care Transformation Act of 2014

The Improving Medicare Post-Acute Care Transformation Act of 2014, signed by President Obama on October 6, 2014, requires our LTCHs and IRFs to collect and report additional patient assessment data and clinical measures on each Medicare beneficiary who receives inpatient services in our facilities. LTCHs and IRFs must begin reporting this data no later than October 1, 2018. Within two years after that, CMS will begin making this data available to the public. Facilities that fail to report the required data will be subject to a 2% reduction in their annual market basket update. The reduction may result in a market basket update of less than zero. However, any reduction is limited to the applicable fiscal year and is not cumulative. We expect CMS to publish additional regulations and guidance implementing this new law.

Medicare Payment of Long Term Acute Care Hospital Services (“LTCH-PPS”)

Medicare Payment of Long Term Acute Care Hospitals during Fiscal Year 2014

On August 19, 2013, CMS published the final rule updating policies and payment rates for LTCH-PPS for fiscal year 2014 (affecting discharges and cost reporting periods beginning on or after October 1, 2013 through September 30, 2014). The standard federal rate was set at $40,607, an increase from the standard federal rate applicable during the period from December 29, 2012 through September 30, 2013 of $40,398. The update to the standard federal rate for fiscal year 2014 includes a market basket increase of 2.5%, less a productivity adjustment of 0.5%, less a reduction of 0.3% mandated by the Patient Protection and Affordable Care Act, or the “PPACA,” and less a budget neutrality adjustment of 1.266%, as discussed below. The fixed-loss amount for high cost outlier cases was set at $13,314, which is a decrease from the fixed-loss amount in the 2013 fiscal year of $15,408.

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Medicare Payment of Long Term Acute Care Hospitals during Fiscal Year 2015

On August 22, 2014, CMS published the final rule updating policies and payment rates for LTCH-PPS for fiscal year 2015 (affecting discharges and cost reporting periods beginning on or after October 1, 2014 through September 30, 2015). The standard federal rate is set at $41,044, an increase from the standard federal rate applicable during fiscal year 2014 of $40,607. The update to the standard federal rate for fiscal year 2015 includes a market basket increase of 2.9%, less a productivity adjustment of 0.5%, less an additional reduction of 0.2% mandated by the PPACA, and less a budget neutrality adjustment of 1.266%, as discussed below. The fixed-loss amount for high cost outlier cases is set at $14,972, which is an increase from the fixed-loss amount in the 2014 fiscal year of $13,314.

25 Percent Rule

The 25 Percent Rule is a downward payment adjustment that applies if the percentage of Medicare patients discharged from LTCHs who were admitted from an individual hospital (regardless of whether the LTCH or LTCH satellite is co-located with the referring hospital) exceeds the applicable percentage admissions thresholds during a particular cost reporting period. The Bipartisan Budget Act of 2013 delays, and in some cases permanently suspends, the application of the 25 Percent Rule. After the expiration of the delay, many of our LTCHs will be subject to a downward payment adjustment for any Medicare patients who were admitted from a co-located or a non-co-located hospital and that exceed the applicable percentage admissions threshold of all Medicare patients discharged from the LTCH during the cost reporting period. This regulatory change will have an adverse financial impact on the net operating revenues and profitability of many of our LTCH hospitals for cost reporting periods beginning on or after July 1, 2016 or October 1, 2016, depending on the specific classification of LTCH.

One-Time Budget Neutrality Adjustment

The regulations governing LTCH-PPS authorizes CMS to make a one-time adjustment to the standard federal rate to correct any “significant difference between actual payments and estimated payments for the first year” of LTCH-PPS. In the update to the Medicare policies and payment rates for fiscal year 2013, CMS adopted a one-time budget neutrality adjustment that results in a permanent negative adjustment of 3.75% to the LTCH base rate. CMS is implementing the adjustment over a three-year period by applying a factor of 0.98734 to the standard federal rate in fiscal years 2013, 2014 and 2015.

Medicare Market Basket Adjustments for Long Term Acute Care Hospitals

The PPACA instituted a market basket payment adjustment to LTCHs. In fiscal year 2014, the market basket update was reduced by 0.3%. In fiscal years 2015 and 2016, the market basket update will be reduced by 0.2%. Finally, in fiscal years 2017-2019, the market basket update will be reduced by 0.75%. The PPACA specifically allows these market basket reductions to result in less than a 0% payment update and payment rates that are less than the prior year.

Moratorium on New LTCHs and New LTCH Beds

The Bipartisan Budget Act of 2013 reinstated a moratorium on the establishment and classification of new LTCHs or LTCH satellite facilities, and on the increase of LTCH beds in existing LTCHs or satellite facilities, beginning January 1, 2015 through September 30, 2017. The Protecting Access to Medicare Act of 2014 (the “PAMA”) advanced the commencement date of the new moratorium from January 1, 2015 to April 1, 2014. The PAMA includes exceptions to the moratorium that are applicable to the establishment and classification of

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new LTCHs or LTCH satellites facilities currently under development. The new moratorium will not apply to LTCHs or LTCH satellites facilities that: (1) began their qualifying period to become an LTCH on or before April 1, 2014; (2) have a binding written agreement as of April 1, 2014 with an unrelated party for construction, renovation, or lease for an LTCH and have expended, before April 1, 2014, at least 10% of the estimated cost of the project (or, if less, $2,500,000); or (3) have obtained a certificate of need on or before April 1, 2014. The new moratorium provides no exceptions for increases in the number of certified beds in existing LTCHs and LTCH satellites. Further, in accordance with the requirements of guidance issued on October 10, 2014 by the Survey and Certification Group at CMS’s Central Office, any LTCH that establishes a new satellite, based upon meeting the criteria for an exception to the moratorium, must reduce beds elsewhere in the LTCH in order to operate beds in the new satellite location.

Termination of the 5 Percent Readmissions Policy

CMS eliminated the “5 percent readmissions” policy for patients discharged on or after October 1, 2014. Under this policy, readmissions from co-located providers in excess of 5 percent are paid a single LTCH payment rather than two payments (one for both the admission and readmission). In eliminating this policy, CMS indicated that the new statutory revisions to the LTCH-PPS, which will be implemented for discharges beginning on or after October 1, 2015 (establishing clinical criteria for standard LTCH-PPS payments) will negate the need for the 5 percent policy.

Medicare Payment of Inpatient Rehabilitation Facility Services (“IRF-PPS”)

Medicare Payment of Inpatient Rehabilitation Facilities during Fiscal Year 2014

On August 6, 2013, CMS published the final rule updating policies and payment rates for IRF-PPS for fiscal year 2014 (affecting discharges and cost reporting periods beginning on or after October 1, 2013 through September 30, 2014). The standard payment conversion factor for discharges for fiscal year 2014 is $14,846, which is an increase from the fiscal year 2013 standard payment conversion factor of $14,343. The update to the standard payment conversion factor for fiscal year 2014 includes a market basket increase of 2.6%, less a productivity adjustment of 0.5%, less an additional reduction of 0.3% as mandated by the PPACA. CMS decreased the outlier threshold amount for fiscal year 2014 to $9,272 from $10,466 established in the final rule for fiscal year 2013.

Medicare Payment of Inpatient Rehabilitation Facilities during Fiscal Year 2015

On August 6, 2014, CMS published the final rule updating policies and payment rates for IRF-PPS for fiscal year 2015 (affecting discharges and cost reporting periods beginning on or after October 1, 2014 through September 30, 2015). The standard payment conversion factor for discharges for fiscal year 2015 is $15,198, which is an increase from the fiscal year 2014 standard payment conversion factor of $14,846. The update to the standard payment conversion factor for fiscal year 2015 includes a market basket increase of 2.9%, less a productivity adjustment of 0.5%, less an additional reduction of 0.2% as mandated by the PPACA. CMS decreased the outlier threshold amount for fiscal year 2015 to $8,848 from $9,272 established in the final rule for fiscal year 2014.

Classification Criteria for Inpatient Rehabilitation Facilities

In order to be excluded from the hospital inpatient PPS and be paid at the higher IRF-PPS rates, an inpatient hospital must demonstrate that at least 60 percent of its patients meet the criteria specified in the regulations, including the need for intensive inpatient rehabilitation services for one or more of the 13 listed conditions,

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representing a presumptive need for intensive inpatient rehabilitation. Compliance is demonstrated through either medical review or the “presumptive” method, in which a patient’s diagnosis codes are compared to a “presumptive compliance” list.

CMS has announced that it will remove a number of diagnosis codes from the presumptive compliance list including diagnosis codes in the following categories: non-specific diagnosis codes, arthritis diagnosis codes, unilateral upper extremity amputations diagnosis, amputation status codes, prosthetic fitting and adjustment codes, some congenital anomalies diagnosis codes, and other miscellaneous diagnosis codes. According to CMS, these conditions do not demonstrate the need for intensive inpatient rehabilitation services in the absence of additional facts that would have to be pulled from a patient’s medical record. These diagnosis codes are scheduled to be removed from the presumptive compliance list beginning October 1, 2015.

Medicare Market Basket Adjustments for Inpatient Rehabilitation Facilities

The PPACA instituted a market basket payment adjustment for IRFs. In fiscal year 2014, the market basket update was reduced by 0.3%. In fiscal years 2015 and 2016, the market basket update will be reduced by 0.2%. Finally, in fiscal years 2017-2019, the market basket update will be reduced by 0.75%. The PPACA specifically allows these market basket reductions to result in less than a 0% payment update and payment rates that are less than the prior year.

Medicare Payment of Outpatient Rehabilitation Services

Medicare Physician Fee Schedule and Sustainable Growth Rate Update

The Medicare program reimburses outpatient rehabilitation providers based on the Medicare physician fee schedule. The Medicare physician fee schedule rates are automatically updated annually based on the sustainable growth rate (“SGR”) formula contained in legislation. The SGR formula has resulted in automatic reductions in rates in every year since 2002; however, for each year through April 1, 2015 CMS or Congress has taken action to prevent the SGR formula reductions. On December 10, 2013, CMS estimated a 20.1% reduction in the Medicare physician fee schedule payment rates for calendar year 2014 as a result of the SGR formula. The Bipartisan Budget Act of 2013 prevented the 20.1% reduction for services provided through March 31, 2014. The PAMA temporarily blocks this reduction through March 31, 2015 and replaces it with a 0.5% payment increase for services provided through December 31, 2014 and a 0% payment update from January 1, 2015 through March 31, 2015. Automatic reductions in the Medicare physician fee schedule payment rates will commence on April 1, 2015, unless Congress again takes legislative action to prevent the SGR formula reductions from going into effect. On July 3, 2014, CMS released the proposed 2015 Medicare Physician Fee Schedule Rule. CMS estimates a 20.9% reduction in the Medicare physician fee schedule payment rates beginning April 1, 2015, unless Congress again takes legislative action to prevent the SGR formula reductions from going into effect. If the 20.9% cut is averted by Congress, the projected impact of other changes in the rule on outpatient physical therapy services in aggregate would be a positive 1% in 2015. The PAMA also amended the law to expand the categories of services that CMS is directed to examine for the purpose of identifying potentially misvalued codes. The proposed 2015 Medicare Physician Fee Schedule Rule listed several CPT codes billed by physical therapists that CMS intends to review to ensure they remain accurately valued.

Therapy Caps

Beginning on January 1, 1999, the Balanced Budget Act of 1997 subjected certain outpatient therapy providers reimbursed under the Medicare physician fee schedule to annual limits for therapy expenses.

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Effective January 1, 2014, the annual limit on outpatient therapy services is $1,920 for combined physical and speech language pathology services and $1,920 for occupational therapy services. The per beneficiary caps were $1,900 for calendar year 2013. Reimbursements in excess of the per beneficiary caps are available if the excess is approved through the exceptions process. The Middle Class Tax Relief and Job Creation Act of 2012, in addition to extending the exceptions process, required CMS to conduct manual medical reviews of requests for exceptions for therapy services provided on or after October 1, 2012, over an annual threshold of $3,700. The medical review threshold is $3,700 for combined physical and speech language pathology services and $3,700 for occupational therapy services. However, CMS is not precluded from conducting manual medical reviews for therapy services below these annual limits and thresholds.

The annual limits for therapy expenses and the manual medical review thresholds historically did not apply to services furnished and billed by outpatient hospital departments. However, the PAMA, and prior legislation, extended the annual limits on therapy expenses and the manual medical review thresholds to services furnished in hospital outpatient department settings through March 31, 2015. The application of annual limits to hospital outpatient department settings will sunset on March 31, 2015 unless Congress extends it.

In the Deficit Reduction Act of 2005, Congress implemented an exceptions process to the annual limit for therapy expenses. Under this process, a Medicare enrollee (or person acting on behalf of the Medicare enrollee) is able to request an exception from the therapy caps if the provision of therapy services was deemed to be medically necessary. Therapy cap exceptions have been available automatically for certain conditions and on a case-by-case basis upon submission of documentation of medical necessity. The PAMA extends the exceptions process for outpatient therapy caps and related manual medical review process through March 31, 2015. Unless Congress extends the exceptions process, the therapy caps will apply to all outpatient therapy services beginning April 1, 2015, except those services furnished and billed by outpatient hospital departments.

Multiple Procedure Payment Reduction

CMS adopted a multiple procedure payment reduction (“MPPR Reduction”) for therapy services in the final update to the Medicare physician fee schedule for calendar year 2011. This MPPR Reduction policy became effective January 1, 2011 and applies to all outpatient therapy services paid under Medicare Part B. The MPPR Reduction policy applies across all therapy disciplines — occupational therapy, physical therapy and speech-language pathology. Under the policy, the Medicare program pays 100% of the practice expense component of the therapy procedure or unit of service with the highest Relative Value Unit, and then reduces the payment for the practice expense component for the second and subsequent therapy procedures or units of service furnished during the same day for the same patient, regardless of whether those therapy services are furnished in separate sessions. In 2011 and 2012, the second and subsequent therapy service furnished during the same day for the same patient was reduced by 20% in office and other non-institutional settings and by 25% in institutional settings. The American Taxpayer Relief Act of 2012 increased the payment reduction in either setting to 50% effective April 1, 2013 for all outpatient therapy services. Our outpatient rehabilitation therapy services are primarily offered in institutional settings and, as such, were subject to the applicable 25% payment reduction in the practice expense component for the second and subsequent therapy services furnished by us to the same patient on the same day until April 1, 2013 when the payment reduction was increased to 50%. For the nine months ended September 30, 2014, the MPPR Reduction reduced both our net operating revenues and income from operations by approximately $6.9 million in our outpatient rehabilitation segment. For the nine months ended September 30, 2013, the MPPR Reduction reduced both our net operating revenues and income from operations by approximately $3.6 million in our outpatient rehabilitation segment.

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Operating Statistics

The following tables set forth operating statistics for our specialty hospitals and our outpatient rehabilitation clinics for each of the periods presented. The data in the tables reflect the changes in the number of specialty hospitals and outpatient rehabilitation clinics we operate that resulted from acquisitions, start-up activities, closures and sales. The operating statistics reflect data for the period of time these operations were managed by us.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2014			2013			2014
Specialty hospital data(1):
Number of hospitals owned - start of period	116			119			116			115
Number of hospitals acquired	—			1			1			1
Number of hospital start-ups	—			2			—			6
Number of hospitals closed/sold	(1		)	(2		)	(2		)	(2		)
Number of hospitals owned - end of period	115			120			115			120
Number of hospitals managed - end of period	8			9			8			9
Total number of hospitals (all) - end of period	123			129			123			129
Long term acute care hospitals	108			113			108			113
Rehabilitation hospitals	15			16			15			16
Available licensed beds (2)	5,172			5,311			5,172			5,311
Admissions (2)	13,778			13,787			41,740			41,524
Patient days (2)	336,120			332,120			1,017,157			1,004,049
Average length of stay (days) (2)	24			24			24			24
Net revenue per patient day (2)(3)	$	1,471		$	1,543		$	1,516		$	1,546
Occupancy rate (2)	71		%	68		%	72		%	70		%
Percent patient days - Medicare (2)	64		%	62		%	64		%	63		%

Outpatient rehabilitation data:
Number of clinics owned - start of period	872			901			867			885
Number of clinics acquired	1			2			1			14
Number of clinic start-ups	7			7			18			16
Number of clinics closed/sold	(4		)	(27		)	(10		)	(32		)
Number of clinics owned - end of period	876			883			876			883
Number of clinics managed - end of period	121			140			121			140
Total number of clinics (all) - end of period	997			1,023			997			1,023
Number of visits (2)	1,196,893			1,239,932			3,577,114			3,704,504
Net revenue per visit (2)(4)	$	103		$	103		$	104		$	104

(1) Specialty hospitals consist of long term acute care hospitals and inpatient rehabilitation facilities.

(2) Data excludes specialty hospitals and outpatient clinics managed by the Company.

(3) Net revenue per patient day is calculated by dividing specialty hospital direct patient service revenues by the total number of patient days.

(4) Net revenue per visit is calculated by dividing outpatient rehabilitation clinic direct patient service revenue by the total number of visits. For purposes of this computation, outpatient rehabilitation direct patient service clinic revenue does not include contract services revenue.

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Results of Operations

The following table outlines, for the periods indicated, selected operating data as a percentage of net operating revenues:

	Select Medical Holdings Corporation				Select Medical Corporation
	Three Months Ended September 30,				Three Months Ended September 30,
	2013		2014		2013		2014
Net operating revenues	100.0	%	100.0	%	100.0	%	100.0	%
Cost of services(1)	85.4		85.0		85.4		85.0
General and administrative	2.5		2.6		2.5		2.6
Bad debt expense	1.3		1.4		1.3		1.4
Depreciation and amortization	2.2		2.3		2.2		2.3
Income from operations	8.6		8.7		8.6		8.7
Equity in earnings (losses) of unconsolidated subsidiaries	(0.0	)	0.3		(0.0	)	0.3
Interest expense	(2.9	)	(2.9	)	(2.9	)	(2.9	)
Income before income taxes	5.7		6.1		5.7		6.1
Income tax expense	2.2		2.4		2.2		2.4
Net income	3.5		3.7		3.5		3.7
Net income attributable to non-controlling interests	0.3		0.2		0.3		0.2
Net income attributable to Holdings and Select	3.2	%	3.5	%	3.2	%	3.5	%

	Select Medical Holdings Corporation				Select Medical Corporation
	Nine Months Ended September 30,				Nine Months Ended September 30,
	2013		2014		2013		2014
Net operating revenues	100.0	%	100.0	%	100.0	%	100.0	%
Cost of services(1)	83.8		84.0		83.8		84.0
General and administrative	2.4		2.5		2.4		2.5
Bad debt expense	1.2		1.4		1.2		1.4
Depreciation and amortization	2.1		2.2		2.1		2.2
Income from operations	10.5		9.9		10.5		9.9
Loss on early retirement of debt	(0.8	)	(0.1	)	(0.8	)	(0.1	)
Equity in earnings of unconsolidated subsidiaries	0.0		0.2		0.0		0.2
Interest expense	(3.0	)	(2.8	)	(2.9	)	(2.8	)
Income before income taxes	6.7		7.2		6.8		7.2
Income tax expense	2.6		2.8		2.6		2.8
Net income	4.1		4.4		4.2		4.4
Net income attributable to non-controlling interests	0.3		0.3		0.3		0.3
Net income attributable to Holdings and Select	3.8	%	4.1	%	3.9	%	4.1	%

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The following tables summarize selected financial data by business segment, for the periods indicated:

	Three Months Ended September 30,								Nine Months Ended September 30,
	2013			2014			% Change		2013			2014			% Change
	(in thousands)								(in thousands)
Net operating revenues:
Specialty hospitals	$	532,610		$	556,335		4.5	%	$	1,649,747		$	1,678,793		1.8	%
Outpatient rehabilitation	190,223			201,720			6.0		579,404			614,368			6.0
Other(2)	12			14			16.7		322			248			(23.0	)
Total company	$	722,845		$	758,069		4.9	%	$	2,229,473		$	2,293,409		2.9	%

Income (loss) from operations:
Specialty hospitals	$	63,013		$	67,505		7.1	%	$	228,959		$	223,181		(2.5	)%
Outpatient rehabilitation	18,640			19,802			6.2		61,557			64,786			5.2
Other(2)	(19,254		)	(21,290		)	(10.6	)	(57,324		)	(61,313		)	(7.0	)
Total company	$	62,399		$	66,017		5.8	%	$	233,192		$	226,654		(2.8	)%

Adjusted EBITDA:(3)
Specialty hospitals	$	75,280		$	80,950		7.5	%	$	265,020		$	261,788		(1.2	)%
Outpatient rehabilitation	21,619			23,012			6.4		70,506			74,433			5.6
Other(2)	(16,471		)	(17,162		)	(4.2	)	(49,059		)	(51,239		)	(4.4	)
Total company	$	80,428		$	86,800		7.9	%	$	286,467		$	284,982		(0.5	)%

Adjusted EBITDA margin:(3)
Specialty hospitals	14.1		%	14.6		%			16.1		%	15.6		%
Outpatient rehabilitation	11.4			11.4					12.2			12.1
Other(2)	N/M			N/M					N/M			N/M
Total company	11.1		%	11.5		%			12.8		%	12.4		%

Total assets:
Specialty hospitals	$	2,232,756		$	2,223,808				$	2,232,756		$	2,223,808
Outpatient rehabilitation	502,815			531,285					502,815			531,285
Other(2)	106,853			106,984					106,853			106,984
Total company	$	2,842,424		$	2,862,077				$	2,842,424		$	2,862,077

Purchases of property and equipment:
Specialty hospitals	$	14,157		$	18,167				$	35,257		$	59,465
Outpatient rehabilitation	2,802			3,430					8,646			9,606
Other(2)	410			1,260					1,428			4,279
Total company	$	17,369		$	22,857				$	45,331		$	73,350

N/M — Not Meaningful

(1) Cost of services includes salaries, wages and benefits, operating supplies, lease and rent expense and other operating costs.

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(2) Other includes our corporate services and certain other non-consolidating joint ventures and minority investments in other healthcare related businesses.

(3) We define Adjusted EBITDA as net income before interest, income taxes, depreciation and amortization, gain (loss) on early retirement of debt, stock compensation expense, equity in earnings (losses) of unconsolidated subsidiaries, and other income (expense). We believe that the presentation of Adjusted EBITDA is important to investors because Adjusted EBITDA is commonly used as an analytical indicator of performance by investors within the healthcare industry. Adjusted EBITDA is used by management to evaluate financial performance and determine resource allocation for each of our operating units. Adjusted EBITDA is not a measure of financial performance under generally accepted accounting principles. Items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because Adjusted EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies.

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Following is a reconciliation of net income to Adjusted EBITDA as utilized by us in reporting our segment performance:

	Select Medical Holdings Corporation						Select Medical Corporation
	Three Months Ended September 30,						Three Months Ended September 30,
	2013			2014			2013			2014
	(in thousands)						(in thousands)
Net income	$	25,207		$	28,296		$	25,207		$	28,296
Income tax expense	15,761			17,956			15,761			17,956
Interest expense	21,252			21,753			21,252			21,753
Equity in losses (earnings) of unconsolidated subsidiaries	179			(1,988		)	179			(1,988		)
Stock compensation expense:
Included in general and administrative	1,258			2,650			1,258			2,650
Included in cost of services	608			549			608			549
Depreciation and amortization	16,163			17,584			16,163			17,584
Adjusted EBITDA	$	80,428		$	86,800		$	80,428		$	86,800

	Select Medical Holdings Corporation						Select Medical Corporation
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2013			2014			2013			2014
	(in thousands)						(in thousands)
Net income	$	91,887		$	100,657		$	94,077		$	100,657
Income tax expense	57,391			63,823			58,570			63,823
Interest expense	66,614			64,032			64,204			64,032
Loss on early retirement of debt	18,747			2,277			17,788			2,277
Equity in earnings of unconsolidated subsidiaries	(1,447		)	(4,135		)	(1,447		)	(4,135		)
Stock compensation expense:
Included in general and administrative	3,685			5,840			3,685			5,840
Included in cost of services	1,718			1,479			1,718			1,479
Depreciation and amortization	47,872			51,009			47,872			51,009
Adjusted EBITDA	$	286,467		$	284,982		$	286,467		$	284,982

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Three Months Ended September 30, 2014 Compared to Three Months Ended September 30, 2013

In the following discussion, we discuss our results of operations related to net operating revenues, operating expenses, Adjusted EBITDA, income from operations, equity in earnings (losses) of unconsolidated subsidiaries, interest expense, income taxes and non-controlling interest, which are the same for Holdings and Select for both of the three month periods ended September 30, 2014 and 2013.

Net Operating Revenues

Our net operating revenues increased by 4.9% to $758.1 million for the three months ended September 30, 2014 compared to $722.8 million for the three months ended September 30, 2013. The effects of the Sequestration Reduction and the MPPR Reduction are reflected in our results for both of the three month periods ended September 30, 2014 and September 30, 2013.

Specialty Hospitals. Our specialty hospital net operating revenues increased by 4.5% to $556.3 million for the three months ended September 30, 2014 compared to $532.6 million for the three months ended September 30, 2013. Net operating revenues in our specialty hospital segment are comprised primarily of the revenues associated with performing patient services in our hospitals and revenues from contracted labor services provided to certain of our non-consolidated joint ventures. The increase in net operating revenues is due principally to growth in patient services revenues in our hospitals. Patient services revenues increased primarily due to increases in our average net revenue per patient day, offset in part by a decrease in patient days. Our average net revenue per patient day increased to $1,543 for the three months ended September 30, 2014 compared to $1,471 for the three months ended September 30, 2013. Our patient days decreased 1.2% to 332,120 days for the three months ended September 30, 2014 as compared to 336,120 days for the three months ended September 30, 2013. Our occupancy percentage was 68% for the three months ended September 30, 2014 compared to 71% for the three months ended September 30, 2013.

Outpatient Rehabilitation. Our outpatient rehabilitation segment net operating revenues increased 6.0% to $201.7 million for the three months ended September 30, 2014 compared to $190.2 million for the three months ended September 30, 2013. This increase resulted from growth in patient visits, expansion of contracted management services in our outpatient rehabilitation clinic business and growth in our contract therapy business. The net operating revenues generated in our outpatient rehabilitation clinic business for the three months ended September 30, 2014 increased 4.7% compared to the three months ended September 30, 2013. Growth in our outpatient rehabilitation clinic business net operating revenues was principally due to a 3.6% increase in visits to 1,239,932 visits at our owned clinics and additional contracted management service revenue at our managed clinics for the three months ended September 30, 2014 compared to the three months ended September 30, 2013. The growth in visits resulted primarily from an increase in the visits at our existing clinics. Net revenue per visit in our owned outpatient rehabilitation clinics was $103 for both the three months ended September 30, 2014 and 2013. Our contract therapy business experienced an increase in net operating revenues of $4.5 million compared to the three months ended September 30, 2013, which principally resulted from new contracts and expansion of services of existing contracts, which more than offset reductions from terminated contracts.

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Operating Expenses

Our operating expenses include our cost of services, general and administrative expense and bad debt expense. Our operating expenses increased by $30.2 million to $674.5 million, or 89.0% of net operating revenues for the three months ended September 30, 2014 compared to $644.3 million, or 89.2% of net operating revenues for the three months ended September 30, 2013. Our cost of services, a major component of which is labor expense, was $644.4 million, or 85.0% of net operating revenues for the three months ended September 30, 2014 compared to $617.3 million, or 85.4% of net operating revenues for the three months ended September 30, 2013. Our cost of services increased as a result of incremental start-up costs associated with new specialty hospitals, increases in contract management services provided to our joint ventures, and growth in services provided by our outpatient rehabilitation segment. Facility rent expense, a component of cost of services, was $32.5 million for the three months ended September 30, 2014 compared to $31.2 million for the three months ended September 30, 2013. Our general and administrative expenses were 2.6% of net operating revenues or $19.7 million for the three months ended September 30, 2014 compared to 2.5% of net operating revenues or $17.7 million for the three months ended September 30, 2013. The growth in general and administrative expenses as a percentage of net operating revenues resulted primarily from increased stock compensation expense. Our bad debt expense was $10.4 million or 1.4% of net operating revenues for the three months ended September 30, 2014 compared to $9.3 million or 1.3% of net operating revenues for the three months ended September 30, 2013. The increase in bad debt expense was principally due to increased bad debts at our contract therapy business as a result of a customer bankruptcy.

Adjusted EBITDA

Specialty Hospitals . Adjusted EBITDA for our specialty hospitals increased 7.5% to $81.0 million for the three months ended September 30, 2014 compared to $75.3 million for the three months ended September 30, 2013. Our Adjusted EBITDA margin for the segment increased to 14.6% for the three months ended September 30, 2014 from 14.1% for the three months ended September 30, 2013. The increase in Adjusted EBITDA and Adjusted EBITDA margin for our specialty hospitals was principally the result of increases in patient services revenues as discussed above under “ Net Operating Revenues, ” offset in part by incremental start-up costs associated with new specialty hospitals.

Outpatient Rehabilitation . Our Adjusted EBITDA for our outpatient rehabilitation segment increased 6.4% to $23.0 million, for the three months ended September 30, 2014 compared to $21.6 million for the three months ended September 30, 2013. Our Adjusted EBITDA margin for the outpatient rehabilitation segment was 11.4% for both of the three months ended September 30, 2014 and 2013. The Adjusted EBITDA in our outpatient rehabilitation clinics increased by $1.8 million for the three months ended September 30, 2014 compared to the three months ended September 30, 2013. Our Adjusted EBITDA margin for our outpatient rehabilitation clinics was 13.6% for the three months ended September 30, 2014 compared to 13.0% for the three months ended September 30, 2013. The increase in Adjusted EBITDA and Adjusted EBITDA margin for our outpatient rehabilitation clinics was principally the result of growth in our net operating revenues, as discussed above under “Net Operating Revenues” without a corresponding increase in costs. Our contract therapy business experienced a decrease in Adjusted EBITDA of $0.4 million compared to the three months ended September 30, 2013, which resulted primarily from an increase in bad debt expense, as discussed above under “Operating Expenses.”

Other . The Adjusted EBITDA loss was $17.2 million for the three months ended September 30, 2014 compared to an Adjusted EBITDA loss of $16.5 million for the three months ended September 30, 2013, and resulted from the increase in our general and administrative expenses.

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Income from Operations

For the three months ended September 30, 2014, we had income from operations of $66.0 million compared to $62.4 million for the three months ended September 30, 2013. The increase in our income from operations resulted principally from the improved profitability of our specialty hospitals and outpatient clinics as discussed above, offset by an increase in depreciation resulting primarily from new hospital development and expansion in our specialty hospital segment.

Equity in Earnings (Losses) of Unconsolidated Subsidiaries

For the three months ended September 30, 2014, we had equity in earnings of unconsolidated subsidiaries of $2.0 million compared to equity in losses of unconsolidated subsidiaries of $0.2 million for the three months ended September 30, 2013. The principal increase in our equity in earnings of unconsolidated subsidiaries resulted from our Baylor Institute for Rehabilitation (“BIR”) and Ohio Health investments.

Interest Expense

Interest expense was $21.8 million for the three months ended September 30, 2014 compared to $21.3 million for the three months ended September 30, 2013. The increase in interest expense was principally due to an increase in the average debt outstanding during the three months ended September 30, 2014, as compared to the three months ended September 30, 2013.

Income Taxes

We recorded income tax expense of $18.0 million for the three months ended September 30, 2014. The expense represented an effective tax rate of 38.8%. We recorded income tax expense of $15.8 million for the three months ended September 30, 2013. The expense represented an effective tax rate of 38.5%.

Our quarterly effective income tax rate is derived from our full year estimated effective income tax rate and can be impacted by discreet items and quarterly changes in our full year tax provision estimate. See our following discussion of “Income Taxes” for the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013 for additional information.

Non-controlling Interests

Non-controlling interests in consolidated earnings were $1.8 million for the three months ended September 30, 2014 compared to $1.9 million for the three months ended September 30, 2013. These amounts represent the minority owner’s share of income and losses for these consolidated entities.

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Nine Months Ended September 30, 2014 Compared to Nine Months Ended September 30, 2013

In the following section, we discuss our results of operations related to net operating revenues, operating expenses, Adjusted EBITDA, income from operations, equity in earnings of unconsolidated subsidiaries and non-controlling interest. These are the same for Holdings and Select. In addition, we discuss separately for Holdings and Select, changes related to loss on early retirement of debt, interest expense and income taxes.

Net Operating Revenues

Our net operating revenues increased by 2.9% to $2,293.4 million for the nine months ended September 30, 2014 compared to $2,229.5 million for the nine months ended September 30, 2013.

Specialty Hospitals. Our specialty hospital net operating revenues increased by 1.8% to $1,678.8 million for the nine months ended September 30, 2014 compared to $1,649.7 million for the nine months ended September 30, 2013. The increase in our net operating revenues is due principally to increases in our patient services revenues in our hospitals and the expansion of contracted labor services provided to certain of our non-consolidated joint ventures. Our patient services revenues increased principally due to an increase in our average net revenue per patient day, offset in part by a decrease in patient days. Our average net revenue per patient day increased to $1,546 for the nine months ended September 30, 2014 compared to $1,516 for the nine months ended September 30, 2013, despite a reduction in our Medicare net operating revenue due to the Sequestration Reduction of $21.3 million for the nine months ended September 30, 2014 compared to $15.9 million for the nine months ended September 30, 2013. Our patient days decreased 1.3% to 1,004,049 days for the nine months ended September 30, 2014 as compared to 1,017,157 days for the nine months ended September 30, 2013. Our occupancy percentage was 70% for the nine months ended September 30, 2014 compared to 72% for the nine months ended September 30, 2013.

Outpatient Rehabilitation. Our outpatient rehabilitation segment net operating revenues increased 6.0% to $614.4 million for the nine months ended September 30, 2014 compared to $579.4 million for the nine months ended September 30, 2013. This increase resulted from a growth in patient visits and the expansion of contracted management services in our outpatient rehabilitation clinic business and growth in our contract therapy business. The net operating revenues generated by our outpatient rehabilitation clinics for the nine months ended September 30, 2014 increased 4.7% compared to the nine months ended September 30, 2013. Our growth was principally due to a 3.6% increase in visits to 3,704,504 at our owned clinics and additional contracted management service revenue at our managed clinics for the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013. Net revenue per visit in our owned outpatient rehabilitation clinics was $104 for both the nine months ended September 30, 2014 and 2013. Our contract therapy business experienced an increase in net operating revenues of $14.3 million compared to the nine months ended September 30, 2013, which principally resulted from new contracts and expansion of services of existing contracts, which more than offset reductions from terminated contracts. Growth at our outpatient rehabilitation segment was offset in part by a reduction in our net operating revenues caused by the Sequestration Reduction of $1.3 million and the MPPR Reduction of $6.9 million for the nine months ended September 30, 2014 compared to a Sequestration Reduction of $0.7 million and the MPPR Reduction of $3.6 million for the nine months ended September 30, 2013.

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Operating Expenses

Our operating expenses include our cost of services, general and administrative expense and bad debt expense. Our operating expenses increased by $67.3 million to $2,015.7 million, or 87.9% of net operating revenues for the nine months ended September 30, 2014 compared to $1,948.4 million, or 87.4% of net operating revenues for the nine months ended September 30, 2013. We experienced increases in cost of services in both our specialty hospital and outpatient rehabilitation segments. Our cost of services, a major component of which is labor expense, was $1,926.0 million, or 84.0% of net operating revenues for the nine months ended September 30, 2014 compared to $1,867.9 million, or 83.8% of net operating revenues for the nine months ended September 30, 2013. The principal causes of the increases in cost of services as a percentage of net operating revenues resulted from an increase in labor costs to provide contracted services to certain of our non-consolidated joint ventures and incremental start-up costs associated with new and recently expanded specialty hospitals. Facility rent expense, a component of cost of services, was $96.1 million for the nine months ended September 30, 2014 compared to $92.5 million for the nine months ended September 30, 2013. General and administrative expenses were $57.2 million for the nine months ended September 30, 2014 compared to $53.1 million for the nine months ended September 30, 2013 and as a percentage of net operating revenues were 2.5% and 2.4% for the nine months ended September 30, 2014 and 2013, respectively. The growth in general and administrative expenses as a percentage of net operating revenues resulted primarily from increased stock compensation expense. Our bad debt expense was $32.5 million or 1.4% of net operating revenues for the nine months ended September 30, 2014 compared to $27.4 million or 1.2% of net operating revenues for the nine months ended September 30, 2013. The increase in bad debt expense occurred principally in our specialty hospital segment.

Adjusted EBITDA

Specialty Hospitals . Adjusted EBITDA for our specialty hospitals decreased 1.2% to $261.8 million for the nine months ended September 30, 2014 compared to $265.0 million for the nine months ended September 30, 2013. Our Adjusted EBITDA margin for the segment decreased to 15.6% for the nine months ended September 30, 2014 from 16.1% for the nine months ended September 30, 2013. The decrease in Adjusted EBITDA and Adjusted EBITDA margin for our specialty hospitals was principally the result of the Sequestration Reduction, as discussed above under “ Net Operating Revenues, ” incremental start-up costs associated with new and recently expanded specialty hospitals and an increase in bad debt expense, discussed above under “Operating Expenses.”

Outpatient Rehabilitation . Our Adjusted EBITDA for our outpatient rehabilitation segment increased 5.6% to $74.4 million for the nine months ended September 30, 2014 compared to $70.5 million for the nine months ended September 30, 2013. Our Adjusted EBITDA margin for the outpatient rehabilitation segment was 12.1% for the nine months ended September 30, 2014 compared to 12.2% for the nine months ended September 30, 2013. The Adjusted EBITDA in our outpatient rehabilitation clinics increased by $2.4 million for the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013. Our Adjusted EBITDA margin for our outpatient rehabilitation clinics was 13.7% for the nine months ended September 30, 2014 compared to 13.8% for the nine months ended September 30, 2013. The decrease in Adjusted EBITDA margin for our outpatient rehabilitation clinics was principally the result of lost net operating revenues caused by the Sequestration Reduction and the MPPR Reduction, which reductions were accompanied by no relative offsetting reduction in costs as discussed above under “ Net Operating Revenues .” Our contract therapy business experienced an increase in Adjusted EBITDA of $1.6 million compared to the nine months ended September 30, 2013, which principally resulted from revenue growth, as discussed above under “Net Operating Revenues.”

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Other . The Adjusted EBITDA loss was $51.2 million for the nine months ended September 30, 2014 compared to an Adjusted EBITDA loss of $49.1 million for the nine months ended September 30, 2013, and resulted from the increase in our general and administrative expenses.

Income from Operations

For the nine months ended September 30, 2014, we had income from operations of $226.7 million compared to $233.2 million for the nine months ended September 30, 2013. The decrease in our income from operations resulted principally from the Sequestration Reduction, as discussed above under “ Net Operating Revenues, ” incremental start-up costs associated with new and recently expanded specialty hospitals and an increase in bad debt expense, discussed above under “Operating Expenses.”

Loss on Early Retirement of Debt

Select Medical Corporation. On March 4, 2014, we amended Select’s term loans under its senior secured credit facilities. During the nine months ended September 30, 2014, we recognized a loss of $2.3 million for unamortized debt issuance costs, unamortized original issue discount and certain fees incurred related to term loan modifications.

On May 28, 2013, we repaid a portion of Select’s original term loan and series A term loan under its senior secured credit facilities, and on June 3, 2013, we amended Select’s existing senior secured credit facilities. During the nine months ended September 30, 2013, we recognized a loss of $17.3 million for unamortized debt issuance costs, unamortized original issue discount and certain debt issuance costs associated with these refinancing activities.

On March 22, 2013, we redeemed Select’s 7 5/8% senior subordinated notes due 2015. During the nine months ended September 30, 2013, we recognized a loss on early retirement of debt of $0.5 million for unamortized debt issuance costs associated with Select’s redemption of its 7 5/8% senior subordinated notes due 2015.

Select Medical Holdings Corporation. On March 4, 2014, we amended Select’s term loans under its senior secured credit facilities. During the nine months ended September 30, 2014, we recognized a loss of $2.3 million for unamortized debt issuance costs, unamortized original issue discount and certain fees incurred related to term loan modifications.

On March 22, 2013, we redeemed Select’s 7 5/8% senior subordinated notes due 2015 and redeemed Holdings’ senior floating rate notes due 2015. During the nine months ended September 30, 2013, we recognized a loss on early retirement of debt of $1.5 million for unamortized debt issuance costs of which approximately $0.5 million was associated with Select’s redemption of its 7 5/8% senior subordinated notes due 2015 and approximately $1.0 million was associated with Holdings’ redemption of its senior floating rate notes due 2015.

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Equity in Earnings of Unconsolidated Subsidiaries

For the nine months ended September 30, 2014, we had equity in earnings of unconsolidated subsidiaries of $4.1 million compared to equity in earnings of unconsolidated subsidiaries of $1.4 million for the nine months ended September 30, 2013. The principal increase in our equity in earnings of unconsolidated subsidiaries resulted from the earnings associated with our BIR and Ohio Health investments.

Interest Expense

Select Medical Corporation. Interest expense was $64.0 million for the nine months ended September 30, 2014 compared to $64.2 million for the nine months ended September 30, 2013. The decrease in interest expense was principally due to lower interest rates on borrowings during the nine months ended September 30, 2014.

Select Medical Holdings Corporation. Interest expense was $64.0 million for the nine months ended September 30, 2014 compared to $66.6 million for the nine months ended September 30, 2013. The decrease in interest expense was principally due to lower interest rates on borrowings during the nine months ended September 30, 2014.

Income Taxes

Select Medical Corporation. We recorded income tax expense of $63.8 million for the nine months ended September 30, 2014. The expense represented an effective tax rate of 38.8%. We recorded income tax expense of $58.6 million for the nine months ended September 30, 2013. The expense represented an effective tax rate of 38.4%. Select is part of the consolidated federal tax return for Holdings. We allocate income taxes between Select and Holdings for purposes of financial statement presentation. Because Holdings is a passive investment company incorporated in Delaware, it does not incur any state income tax expense or benefit on its specific income or loss and, as such, receives a tax allocation equal to the federal statutory rate of 35% on its specific income or loss. Based upon the relative size of Holdings’ income or loss, this can cause the effective tax rate for Select to differ from the effective tax rate for the consolidated company.

Select Medical Holdings Corporation. We recorded income tax expense of $63.8 million for the nine months ended September 30, 2014, which represented an effective tax rate of 38.8%. We recorded income tax expense of $57.4 million for the nine months ended September 30, 2013, which represented an effective tax rate of 38.4%. The increase in the effective tax rate has resulted from a decrease in earnings of our consolidated subsidiaries where we have less than a 100% ownership interest that are taxed as pass-through entities in which we only record income taxes on our share of the income.

Non-controlling Interests

Non-controlling interests in consolidated earnings were $5.7 million for the nine months ended September 30, 2014 and $6.4 million for the nine months ended September 30, 2013. These amounts represent the minority owner’s share of income and losses for these consolidated entities.

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Liquidity and Capital Resources

Cash Flows for the Nine Months Ended September 30, 2014 and Nine Months Ended September 30, 2013

	Select Medical Holdings Corporation						Select Medical Corporation
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2013			2014			2013			2014
	(in thousands)						(in thousands)

Cash provided by operating activities	$	115,105		$	140,304		$	120,684		$	140,304
Cash used in investing activities	(78,091		)	(65,757		)	(78,091		)	(65,757		)
Cash used in financing activities	(67,865		)	(67,837		)	(73,444		)	(67,837		)
Increase (decrease) in cash and equivalents	(30,851		)	6,710			(30,851		)	6,710
Cash and equivalents at beginning of period	40,144			4,319			40,144			4,319
Cash and equivalents at end of period	$	9,293		$	11,029		$	9,293		$	11,029

Operating activities for Holdings and Select provided $140.3 million of cash flows for the nine months ended September 30, 2014. Operating activities for Holdings provided $115.1 million and for Select provided $120.7 million of cash flows for the nine months ended September 30, 2013. For the nine months ended September 30, 2013, the operating cash flows of Select exceeded the operating cash flows of Holdings by $5.6 million principally due to interest payments on Holdings’ indebtedness. The increase in operating cash flows for both Holdings and Select in the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013 is principally due to improvement in the turnover of our accounts receivable.

Investing activities used $65.8 million of cash flow for the nine months ended September 30, 2014. The principal use of cash was for $73.4 million related to the purchase of property, plant and equipment, offset in part by $11.9 million related to distributions from unconsolidated subsidiaries. Investing activities used $78.1 million of cash flow for the nine months ended September 30, 2013, which included $45.3 million related to the purchase of property and equipment and $32.4 million related principally to investments in unconsolidated businesses.

Financing activities for Select used $67.8 million of cash flow for the nine months ended September 30, 2014. Cash was provided by $20.0 million in net borrowings on our revolving credit facility, $111.7 million from the issuance of additional 6.375% senior notes due June 1, 2021, offset in part by a $34.0 million mandatory prepayment of term loans under our senior secured credit facility and $169.3 million of dividends paid to Holdings in the aggregate that were used to repurchase shares of common stock and pay dividends to common stockholders.

Financing activities for Select used $73.4 million of cash flow for the nine months ended September 30, 2013. Refinancing activities provided Select $600.0 million of proceeds from the 6.375% senior notes and $298.5 million in term loan proceeds under the senior secured credit facility that was used in part to redeem $70.0 million principal amount of Select’s 7 5/8% senior subordinated notes, pay $18.8 million of debt issuance costs related to the refinancing activities, and pay $211.8 million in dividends to Holdings for the purpose of repurchasing $167.3 million of its senior floating rate notes, payment of $27.9 million of dividends to common stockholders, repurchase of $10.9 million of common stock and paying $5.6 million of interest payments on

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Holdings’ indebtedness. Additionally, we made $65.0 million of net repayments on our revolving loans under our senior secured credit facility in the nine months ended September 30, 2013.

The difference in cash flows provided by financing activities of Holdings compared to Select of $5.6 million for the nine months ended September 30, 2013 related to dividends paid by Select to Holdings to service Holdings’ interest obligations related to its indebtedness.

Capital Resources

Working capital - We had net working capital of $108.5 million at September 30, 2014 compared to net working capital of $82.9 million at December 31, 2013. The increase in net working capital is primarily due to an increase in our accounts receivable. Our days sales outstanding were 50 days at September 30, 2014 compared to 48 days at December 31, 2013 and 54 days at September 30, 2013.

Senior secured credit facilities - On March 4, 2014, Select made a principal prepayment of $34.0 million associated with our term loans in accordance with the provision in our senior secured credit facilities agreement that requires mandatory prepayments of term loans resulting from excess cash flow as defined in the senior secured credit facilities.

On March 4, 2014, Select amended its senior secured credit facilities in order to, among other things:

· set the maturity date of the series D term loan at December 20, 2016;

· set the maturity date of the series E term loan at June 1, 2018;

· amend the definition of “Available Amount” in a manner the effect of which was to increase the amount available for investments, restricted payments and the payment of specified indebtedness.

At September 30, 2014, our senior secured credit facilities consist of:

· a $284.6 million series D term loan, maturing on December 20, 2016; and

· a $495.6 million series E term loan, maturing on June 1, 2018.

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Beginning on March 31, 2015 the principal amount will amortize as follows:

· the series D term loan has quarterly principal repayment requirements of $0.7 million until maturity, at which time the remaining balance of $279.5 million is due on December 20, 2016; and

· the series E term loan has quarterly principal repayment requirements of $1.3 million until maturity, at which time the remaining balance of $479.2 million is due on June 1, 2018.

At September 30, 2014, we had outstanding borrowings of $780.2 million (excluding unamortized original issue discounts of $4.5 million) under the term loans and borrowings of $40.0 million (excluding letters of credit) under the revolving loan portion of our senior secured credit facilities. We had $219.7 million of availability under our revolving credit facility (after giving effect to $40.3 million of outstanding letters of credit) at September 30, 2014.

The applicable margin percentage for borrowings under our revolving loan is subject to change based upon the ratio of Select’s leverage ratio (as defined in our senior secured credit facility). The applicable interest rate for revolving loans as of September 30, 2014 was (1) Alternate Base plus 2.75% for alternate base rate loans and (2) LIBO plus 3.75% for adjusted LIBO rate loans.

Our senior secured credit facility requires Select to maintain certain leverage ratios (as defined in our senior secured credit facility). For the four consecutive fiscal quarters ended September 30, 2014, Select was required to maintain its leverage ratio (its ratio of total indebtedness to consolidated EBITDA) at less than 5.00 to 1.00. Select’s leverage ratio was 4.03 to 1.00 as of September 30, 2014.

6.375% Senior Notes due 2021 - O n March 11, 2014, Select issued and sold $110.0 million aggregate principal amount of additional 6.375% senior notes due June 1, 2021, at 101.50% of the aggregate principal amount resulting in gross proceeds of $111.7 million. The notes were issued as Additional Notes under the indenture pursuant to which it previously issued $600.0 million of 6.375% senior notes due June 1, 2021 .

Stock Repurchase Program — Holdings’ board of directors has authorized a common stock repurchase program to repurchase up to $500.0 million worth of shares of its common stock. The program will remain in effect until December 31, 2016, unless extended by the board of directors. Stock repurchases under this program may be made in the open market or through privately negotiated transactions, and at times and in such amounts as Holdings deems appropriate. Holdings is funding this program with cash on hand and borrowings under Select’s revolving credit facility. Holdings did not repurchase shares during the three months ended September 30, 2014. Holdings repurchased a total of 11,285,714 shares at a total cost of $127.5 million, or $11.30 per share, during the nine months ended September 30, 2014. Since the inception of the program through September 30, 2014, Holdings has repurchased 34,891,794 shares at a cost of approximately $301.1 million, or $8.63 per share, which includes transaction costs.

Liquidity - We believe our internally generated cash flows and borrowing capacity under our senior secured credit facility will be sufficient to finance operations over the next twelve months. We may from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, tender offers or otherwise. Such repurchases or exchanges, if any, may be funded from operating cash flows or other sources and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

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Use of Capital Resources - We may from time to time pursue opportunities to develop new joint venture relationships with significant health systems and other healthcare providers, and from time to time we may also develop new inpatient rehabilitation hospitals. We are currently adding new LTCHs, although the Bipartisan Budget Act of 2013 reinstated a moratorium on new LTCHs and new LTCH beds. See section titled “ Moratorium on New LTCHs and New LTACH Beds ” under Regulatory Changes. We also intend to open new outpatient rehabilitation clinics in local areas that we currently serve where we can benefit from existing referral relationships and brand awareness to produce incremental growth. In addition to our development activities, we may grow our network of specialty hospitals through opportunistic acquisitions.

Dividend

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which supersedes most of the current revenue recognition requirements. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. This guidance is effective in the first quarter of 2017 and early application is not permitted. Entities must adopt the new guidance using one of two retrospective application methods. We are currently evaluating the standard to determine the impact of its adoption on the consolidated financial statements.

In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity , which changes the criteria for determining which disposals can be presented as discontinued operations and modifies the related disclosure requirements. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that represents a strategic shift that has, or will have, a major effect on an entity’s operations and financial results. The revised guidance is effective for annual fiscal periods beginning after December 15, 2014. Early adoption is permitted and we intend to prospectively adopt ASU No. 2014-08, as applicable.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and Qualitative Disclosures about Market Risk

We are subject to interest rate risk in connection with our long-term indebtedness. Our principal interest rate exposure relates to the loans outstanding under our senior secured credit facility. As of September 30, 2014, we had $780.2 million (excluding unamortized original issue discount) in term loans outstanding under our senior secured credit facility and $40.0 million in revolving loans outstanding under our senior secured credit facility, which bear interest at variable rates. Each eighth point change in interest rates on the variable rate portion of our long-term indebtedness would result in a $1.0 million annual change in interest expense. However, because the variable interest rate for an aggregate $495.6 million in series E term loan is subject to an Adjusted LIBO Rate floor of 1.00% until the Adjusted LIBO Rate exceeds 1.00%, our interest rate on this indebtedness is currently effectively fixed at 3.75%.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered in this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures, including the accumulation and communication of disclosure to our principal executive officer and principal financial officer as appropriate to allow timely decisions regarding disclosure, are effective as of September 30, 2014 to provide reasonable assurance that material information required to be included in our periodic SEC reports is recorded, processed, summarized and reported within the time periods specified in the relevant SEC rules and forms.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934) identified in connection with the evaluation required by Rule 13a-15(d) of the Securities Exchange Act of 1934 that occurred during the third quarter ended September 30, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there is only reasonable assurance that our controls will succeed in achieving their goals under all potential future conditions.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Litigation

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insurance covering claims which, due to their nature or amount, are not covered by or not fully covered by the Company’s other insurance policies. These insurance policies also do not generally cover punitive damages and are subject to various deductibles and policy limits. Significant legal actions, as well as the cost and possible lack of available insurance, could subject the Company to substantial uninsured liabilities. In the Company’s opinion, the outcome of these actions, individually or in the aggregate, will not have a material adverse effect on its financial position, results of operations, or cash flows.

On January 8, 2013, a federal magistrate judge unsealed an Amended Complaint in United States of America and the State of Indiana, ex rel. Doe I, Doe II and Doe III v. Select Medical Corporation, Select Specialty Hospital-Evansville, Evansville Physician Investment Corporation, Dr. Richard Sloan and Dr. Jeffrey Selby. The Amended Complaint, which was served on the Company on February 15, 2013, is a civil action filed under seal on September 28, 2012 in the United States District Court for the Southern District of Indiana by private plaintiff-relators on behalf of the United States and the State of Indiana under the federal False Claims Act and Indiana False Claims and Whistleblower Protection Act. Although the Amended Complaint identified the relators by fictitious pseudonyms, on March 28, 2013, the relators filed a Notice identifying themselves as the former CEO at the Company’s long term acute care hospital in Evansville, Indiana (“SSH-Evansville”) and two former case managers at SSH-Evansville. The named defendants include the Company, SSH-Evansville, and two physicians who have practiced at SSH-Evansville. On March 26, 2013, the defendants, relators and the United States filed a joint motion seeking a stay of the proceedings, in which the United States notified the court that its investigation has not been completed and therefore it is not yet able to decide whether or not to intervene, and on March 29, 2013, the magistrate judge granted the motion and stayed all deadlines in the case for 90 days. The court has subsequently granted additional motions filed by the United States to continue the stay, and the current stay extends through December 15, 2014.

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ITEM 1A. RISK FACTORS

There have been no material changes from our risk factors as previously reported in our Annual Report on Form 10-K for the year ended December 31, 2013.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

On October 29, 2014, Holdings’ board of directors amended and restated Holdings’ bylaws in their entirety, which became effective upon their adoption by the board of directors. The amendment to the bylaws adds a new Section 8.11 to designate the state courts of the State of Delaware in and for New Castle County (or if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware) as the sole and exclusive forum for: (i) derivative actions brought on behalf of Holdings, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of Holdings to Holdings or its stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or Holdings’ certificate of incorporation or bylaws, (iv) any action seeking to interpret, apply, enforce or determine the validity of the Holdings’ certificate of incorporation or bylaws, or (v) any action asserting a claim against Holdings or any director, officer or other employee of Holdings governed by the internal affairs doctrine.

On October 29, 2014, Select’s board of directors amended and restated Select’s bylaws in their entirety, which became effective upon their adoption by the board of directors. The amendment to the bylaws adds a new Section 4 to Article VII to designate the state courts of the State of Delaware in and for New Castle County (or if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware) as the sole and exclusive forum for: (i) derivative actions brought on behalf of Select, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of Select to Select or its stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or Select’s certificate of incorporation or bylaws, (iv) any action seeking to interpret, apply, enforce or determine the validity of the Select’s certificate of incorporation or bylaws, or (v) any action asserting a claim against Select or any director, officer or other employee of Select governed by the internal affairs doctrine.

ITEM 6. EXHIBITS

The exhibits to this report are listed in the Exhibit Index appearing on page 60 hereof.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this Report to be signed on their behalf by the undersigned, thereunto duly authorized.

	SELECT MEDICAL CORPORATION


	By:	/s/	Martin F. Jackson
			Martin F. Jackson
		Executive Vice President and Chief Financial Officer
		(Duly Authorized Officer)

	By:	/s/	Scott A. Romberger
			Scott A. Romberger
		Senior Vice President, Chief Accounting Officer and Controller
		(Principal Accounting Officer)
Dated: October 30, 2014


	SELECT MEDICAL HOLDINGS CORPORATION


	By:	/s/	Martin F. Jackson
			Martin F. Jackson
		Executive Vice President and Chief Financial Officer
		(Duly Authorized Officer)

	By:	/s/	Scott A. Romberger
			Scott A. Romberger
		Senior Vice President, Chief Accounting Officer and Controller
		(Principal Accounting Officer)
Dated: October 30, 2014

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EXHIBIT INDEX

Exhibit		Description

3.1		Amended and Restated Bylaws of Select Medical Corporation.

3.2		Amended and Restated Bylaws of Select Medical Holdings Corporation.

10.1		Amendment No. 5 to Credit Agreement, dated as of March 4, 2014, among Select Medical Holdings Corporation, Select Medical Corporation and JPMorgan Chase Bank, N.A.

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Executive Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Chief Executive Officer, and Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2014 and 2013, (ii) Condensed Consolidated Balance Sheets as September 30, 2014 and December 31, 2013, (iii) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013, (iv) Condensed Consolidated Statements of Changes in Equity and Income for the nine months ended September 30, 2014 and (v) Notes to Condensed Consolidated Financial Statements.*

* XBRL information is furnished and not filed herewith, is not part of a registration statement or prospectus for purposes of section 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

Exhibit 3.1

SELECT MEDICAL HOLDINGS CORPORATION

AMENDED AND RESTATED BYLAWS

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ARTICLE I STOCKHOLDERS	1
Section 1.1 Annual Meetings	1
Section 1.2 Special Meetings	1
Section 1.3 Notice of Meetings; Waiver	1
Section 1.4 Quorum	2
Section 1.5 Voting	2
Section 1.6 Voting by Ballot	2
Section 1.7 Adjournment	2
Section 1.8 Proxies	3
Section 1.9 Notice of Stockholder Business and Nominations	3
Section 1.10 Organization; Procedure	5
Section 1.11 Inspectors of Elections	5
Section 1.12 Opening and Closing of Polls	6
Section 1.13 No Stockholder Action by Written Consent or Telephone Conference	6

ARTICLE II BOARD OF DIRECTORS	6
Section 2.1 General Powers	6
Section 2.2 Number and Term of Office	7
Section 2.3 Election of Directors	7
Section 2.4 Annual and Regular Meetings	7
Section 2.5 Special Meetings; Notice	8
Section 2.6 Quorum; Voting	8
Section 2.7 Adjournment	8
Section 2.8 Action Without a Meeting	8
Section 2.9 Regulations; Manner of Acting	9
Section 2.10 Resignations	9
Section 2.11 Removal of Directors	9
Section 2.12 Vacancies and Newly Created Directorships	9
Section 2.13 Reliance on Accounts and Reports, etc	10

ARTICLE III COMMITTEES OF DIRECTORS AND ADVISORY BOARD	10
Section 3.1 Committees of Directors	10
Section 3.2 Proceedings	10
Section 3.3 Quorum and Manner of Acting	10
Section 3.4 Action by Telephonic Communications	11
Section 3.5 Absent or Disqualified Members	11
Section 3.6 Resignations	11
Section 3.7 Removal	11
Section 3.8 Vacancies	11

ARTICLE IV OFFICERS	11
Section 4.1 Number	11
Section 4.2 Election	11
Section 4.3 Compensation	12
Section 4.4 Removal and Resignation; Vacancies	12
Section 4.5 Authority and Duties of Officers	12
Section 4.6 Chairman of the Board	12
Section 4.7 Vice Chairman of the Board	12
Section 4.8 Chief Executive Officer	13
Section 4.9 President	13
Section 4.10 Vice Presidents	13
Section 4.11 Secretary	13
Section 4.12 Assistant Secretary	14
Section 4.13 Treasurer	14
Section 4.14 Additional Officers	14
Section 4.15 Security	14

ARTICLE V CAPITAL STOCK	15
Section 5.1 Uncertificated Shares	15
Section 5.2 Signatures; Facsimile	15
Section 5.3 Lost, Stolen or Destroyed Certificates	15
Section 5.4 Transfer of Stock	15
Section 5.5 Record Date	15
Section 5.6 Registered Stockholders	16
Section 5.7 Transfer Agent and Registrar	16

ARTICLE VI INDEMNIFICATION	16
Section 6.1 Nature of Indemnity	16
Section 6.2 Successful Defense	17
Section 6.3 Determination that Indemnification is Proper	17
Section 6.4 Advance Payment of Expenses	18
Section 6.5 Procedure for Indemnification of Directors and Officers	18
Section 6.6 Survival; Preservation of Other Rights	19
Section 6.7 Insurance	19
Section 6.8 Severability	19
Section 6.9 Limitation on Liability	19
Section 6.10 Appearance as a Witness	20
Section 6.11 Indemnification of Employees and Agents	20

ARTICLE VII OFFICES	20
Section 7.1 Registered Office and Agent	20
Section 7.2 Other Offices	20

ARTICLE VIII GENERAL PROVISIONS	20
Section 8.1 Dividends	20
Section 8.2 Reserves	20
Section 8.3 Execution of Instruments	21
Section 8.4 Deposits	21
Section 8.5 Checks	21
Section 8.6 Sale, Transfer, etc. of Securities	21
Section 8.7 Voting as Stockholder	21
Section 8.8 Fiscal Year	21
Section 8.9 Seal	22
Section 8.10 Books and Records; Inspection	22
Section 8.11 Venue	22

ARTICLE IX AMENDMENT OF BYLAWS	22
Section 9.1 Amendment	22

ARTICLE X CONSTRUCTION	22
Section 10.1 Construction	22

iii

ARTICLE I

STOCKHOLDERS

Section 1.1 Annual Meetings . The annual meeting of the stockholders of the Corporation for the election of Directors and for the transaction of such other business as properly may come before such meeting, including, without limitation, for the purpose of the delivery of an annual report of the Board of Directors, shall be held at such place, within or without the State of Delaware, such date, and such time as designated by the Board of Directors and set forth in the notice or waiver of notice of the meeting.

Section 1.2 Special Meetings . Special meetings of the stockholders for any proper purpose or purposes may be called at any time by the Chief Executive Officer, or pursuant to a resolution approved by a majority of the entire Board of Directors. Such special meetings of the stockholders shall be held at such places, within or without the State of Delaware, as shall be specified in the respective notices or waivers of notice thereof. Only business within the purpose or purposes described in the notice or waiver thereof required by these Bylaws may be conducted at a special meeting of the stockholders. No stockholder shall have the power to require that a meeting of the stockholders be held or that any matter be voted on by the stockholders at any special meeting, except as required by law.

Section 1.3 Notice of Meetings; Waiver .

(a) Written or printed notice of the place, date and hour of the meeting of the stockholders, and, in the case of a special meeting, the purpose or purposes for which such meeting is called, shall be delivered not less than ten nor more than sixty days prior to the meeting, either personally or by mail, by or at the direction of the Board of Directors or person calling the meeting, to each stockholder of record entitled to vote at such meeting. If such notice is mailed, it shall be deemed to have been delivered to a stockholder on the third day after it is deposited in the United States mail, postage prepaid, addressed to the stockholder at his or her address as it appears on the record of stockholders of the Corporation, or, if he or she shall have filed with the Secretary of the Corporation a written request that notices to him or her be mailed to some other address, then directed to him or her at such other address. Such further notice shall be given as may be required by law or otherwise by these Bylaws.

(b) No notice of any meeting of stockholders need be given to any stockholder who submits a signed waiver of notice, whether before or after the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in a written waiver of notice. The attendance of any stockholder at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting is not lawfully called or convened.

Section 1.4 Quorum . Except as otherwise required by law or by the Restated Certificate of Incorporation, a quorum shall be present at a meeting of stockholders if the holders of record of more than 50% of the then outstanding shares entitled to vote at a meeting of the stockholders are represented at the meeting in person or by proxy.

Section 1.5 Voting . If, pursuant to Section 5.5 of these Bylaws, a record date has been fixed, every holder of record of shares entitled to vote at a meeting of stockholders shall be entitled to one vote, or such other number of votes as may be prescribed in a Preferred Stock Certificate of Designation (as such term is defined in the Restated Certificate of Incorporation), for each share outstanding in his or her name on the books of the Corporation at the close of business on such record date. If no record date has been fixed, then every holder of record of shares entitled to vote at a meeting of stockholders shall be entitled to one vote, or such other number of votes as may be prescribed in a Preferred Stock Certificate of Designation, for each share of stock standing in his or her name on the books of the Corporation at the close of business on the business day next preceding the day on which notice of the meeting is given, or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held. Except as otherwise required by law or by the Restated Certificate of Incorporation or by these Bylaws, the vote of a majority of the shares represented in person or by proxy at any meeting at which a quorum is present shall be sufficient for the transaction of any business at such meeting.

Section 1.6 Voting by Ballot . No vote of the stockholders need be taken by written ballot unless otherwise required by law. Any vote which need not be taken by ballot may be conducted in any manner approved by the chairman of the meeting.

Section 1.7 Adjournment . The chairman of the meeting or the holders of record of more than 50% of the then outstanding shares entitled to vote at a meeting of the stockholders shall have the power to adjourn such meeting from time to time, without any notice other than announcement at the meeting of the time and place of the holding of the adjourned meeting, provided that if the adjournment is for more than thirty days, or if after the adjournment a new record date for the adjourned meeting is fixed pursuant to Section 5.5 of these Bylaws, a notice of the adjourned meeting, conforming to the requirements of Section 1.3 of these Bylaws, shall be given to each stockholder of record entitled to vote at such meeting. If such meeting is adjourned by the stockholders, the resumption of such meeting shall occur at such time and place as shall be determined by a vote of the holders of record of more than 50% of the then outstanding shares entitled to vote at such meeting of the stockholders. Upon the resumption of such adjourned meeting, any business may be transacted that might have been transacted at the meeting as originally called.

Section 1.8 Proxies . Any stockholder entitled to vote at any meeting of the stockholders or to express consent to or dissent from corporate action in writing without a meeting may vote in person or may authorize another person or persons to vote at any such meeting and express such consent or dissent for him or her by proxy executed in writing by the stockholder. A stockholder may authorize a valid proxy by executing a written instrument signed by such stockholder, or by causing his or her signature to be affixed to such writing by any reasonable means, including, but not limited to, by facsimile signature or photographic, photostatic, or similar reproduction or by transmitting or authorizing the transmission of a telegram or any other means of electronic communication that results in a writing to the person designated as the holder of the proxy, a proxy solicitation firm or a like authorized agent. No such proxy shall be voted or acted upon after the expiration of three years from the date of such proxy unless such proxy provides for a longer period. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by filing another duly executed proxy bearing a later date with the Secretary. Proxies by telegram or other electronic communication must either set forth or be submitted with information from which it can be determined that the telegram or other electronic communication was authorized by the stockholder. Any copy, facsimile telecommunication or other reliable reproduction of a writing or transmission created pursuant to this section may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

Section 1.9 Notice of Stockholder Business and Nominations .

(a) Annual Meetings of Stockholders.

(1) Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders (i) by or at the direction of the Board of Directors or the Chairman of the Board or (ii) by any stockholder of the Corporation who is entitled to vote at the meeting, who complies with the notice procedures set forth in clauses (2) and (3) of this paragraph and who was a stockholder of record at the time such notice is delivered to the Secretary or any Assistant Secretary of the Corporation.

(2) For nominations or other business to be properly brought before an annual meeting by a stockholder, pursuant to clause (ii) of paragraph (A)(1) of this Bylaw, the stockholder must have given timely notice thereof in writing to the Secretary or any Assistant Secretary of the Corporation. To be timely, a stockholder’s notice shall be delivered to the Secretary or any Assistant Secretary at the principal executive offices of the Corporation not less than ninety days nor more than one hundred and twenty days prior to the first anniversary of the preceding year’s annual meeting; provided, that if the date of the annual meeting is advanced by more than twenty days or delayed by more than seventy days from such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than one hundred and twenty days prior to such annual meeting and not later than the close of business on the later of the ninetieth day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made. In no event shall the adjournment of an annual meeting commence a new time period for the giving of a stockholder’s notice as described above. Such stockholder’s notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a Director all information relating to such person that is required to be disclosed in

solicitations of proxies for election of Directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 14a-3 thereunder, in each case including any successor Rule or Regulation thereto, including such person’s written consent to being named in the proxy statement as a nominee and to serving as a Director if elected; (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and of any beneficial owner on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and any beneficial owner on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner and (ii) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner.

(3) Notwithstanding anything in the second sentence of paragraph (A)(2) of this Bylaw to the contrary, in the event that the number of Directors to be elected to the Board of Directors is increased and there is no public announcement naming all of the nominees for Director or specifying the size of the increased Board of Directors made by the Corporation at least one hundred days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice under this paragraph shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth day following the day on which such public announcement is first made by the Corporation.

(b) Special Meetings of Stockholders . Only such business as shall have been brought before the special meeting of the stockholders pursuant to the Corporation’s notice of meeting pursuant to Section 1.3 of these Bylaws shall be conducted at such meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which Directors are to be elected pursuant to the Corporation’s notice of meeting (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation who is entitled to vote at the meeting, who complies with the notice procedures set forth in this Bylaw and who is a stockholder of record at the time such notice is delivered to the Secretary of the Corporation. Nominations by stockholders of persons for election to the Board of Directors may be made at such special meeting of stockholders if the stockholder’s notice as required by paragraph (A)(2) of this Bylaw shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the one hundred and twentieth day prior to such special meeting and not later than the close of business on the later of the ninetieth day prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the adjournment of a special meeting commence a new time period for the giving of a stockholder’s notice as described above.

(1) Only persons who are nominated in accordance with the procedures set forth in this Bylaw shall be eligible to serve as Directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Bylaw. Except as otherwise provided by law, the Restated Certificate of Incorporation or these Bylaws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in this Bylaw and, if any proposed nomination or business is not in compliance with this Bylaw, to declare that such defective proposal or nomination shall be disregarded.

(2) For purposes of this Bylaw, “public announcement” shall mean disclosure in a press release reported by PR Newswire, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(3) Notwithstanding the foregoing provisions of this Bylaw, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw. Nothing in this Bylaw shall be deemed to affect any right of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

Section 1.10 Organization; Procedure . At every meeting of stockholders the presiding officer shall be the chairman of the meeting, who shall be a Director (or representative thereof) designated by a majority of the Board of Directors. The order of business and all other matters of procedure at every meeting of stockholders, including the regulation of the manner of voting and the conduct of discussion as seem to him or her in order, shall be determined by such presiding officer. All meetings of the stockholders shall be held at the principal place of business of the Corporation or at such other place within or without the State of Delaware as shall be specified or fixed in the notices or waivers of notice thereof.

Section 1.11 Inspectors of Elections . Preceding any meeting of the stockholders, the Board of Directors shall appoint one or more persons to act as inspectors of elections, and may designate one or more alternate inspectors. In the event no inspector or alternate is able to act, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of the duties of an inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspector shall:

(a) ascertain the number of shares outstanding and the voting power of each,

(b) determine the shares represented at a meeting and the validity of proxies and ballots, count all votes and ballots,

(c) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and

(d) certify his or her determination of the number of shares represented at the meeting, and his or her count of all votes and ballots.

The inspector may appoint or retain other persons or entities to assist in the performance of the duties of inspector.

When determining the shares represented and the validity of proxies and ballots, the inspector shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in accordance with Section 1.8 of these Bylaws, ballots and the regular books and records of the Corporation. The inspector may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers or their nominees or a similar person which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the stockholder holds of record. If the inspector considers other reliable information as outlined in this section, the inspector, at the time of his or her certification pursuant to clause (d) of this section, shall specify the precise information considered, the person or persons from whom the information was obtained, when this information was obtained, the means by which the information was obtained, and the basis for the inspector’s belief that such information is accurate and reliable.

Section 1.12 Opening and Closing of Polls . The date and time for the opening and the closing of the polls for each matter to be voted upon at a stockholder meeting shall be announced at the meeting. The inspector of the election shall be prohibited from accepting any ballots, proxies or votes or any revocations thereof or changes thereto after the closing of the polls, unless the Court of Chancery upon application by a stockholder shall determine otherwise.

Section 1.13 No Stockholder Action by Written Consent or Telephone Conference .

Any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of the stockholders of the Corporation, and the ability of the stockholders to consent in writing or by telephone to the taking of any action is specifically denied.

ARTICLE II

BOARD OF DIRECTORS

Section 2.1 General Powers . Except as may otherwise be provided by law, by the Restated Certificate of Incorporation or by these Bylaws, the property, affairs and business of the Corporation shall be managed by or under the direction of the Board of Directors and the Board of Directors may exercise all the powers of the Corporation and may make all decisions and take all actions for the Corporation. The powers of the Corporation which may be exercised by the Directors without the approval of the stockholders shall include, without limitation, the power to purchase, hold and sell investments; to borrow and loan funds and provide guarantees of the obligations of others; and to acquire other companies in the ordinary course of business.

Section 2.2 Number and Term of Office . The number of Directors shall be fixed from time to time exclusively pursuant to a resolution adopted by a majority of the entire Board of Directors, but shall consist of not less than five (5) Directors nor more than eleven (11) Directors. The Directors, other than those who may be elected by the holders of any series of Preferred Stock, if any, shall be divided into three classes, designated as Classes I, II and III, which shall be as nearly equal in number as possible. Directors of Class I shall be elected to hold office for a term expiring at the annual meeting of stockholders to be held in 2010, Directors of Class II shall be elected to hold office for a term expiring at the annual meeting of stockholders to be held in 2011 and Directors of Class III shall be elected to hold office for a term expiring at the annual meeting of stockholders to be held in 2012. At each succeeding annual meeting of stockholders following such initial classification and election, the respective successors of each class shall be elected for three year terms. Each Director (whenever elected) shall hold office until his or her successor has been duly elected and qualified, or until his or her earlier death, insanity, retirement, resignation or removal from office. Directors need not be residents of the State of Delaware.

Section 2.3 Election of Directors . Except as otherwise provided in Sections 2.11 and 2.12 of these Bylaws, the Directors shall be elected at each annual meeting of the stockholders. If the annual meeting for the election of Directors is not held on the date designated therefor, the Directors shall cause the meeting to be held as soon thereafter as convenient. At each meeting of the stockholders for the election of Directors, provided a quorum is present, the Directors shall be elected by a plurality of the votes validly cast in such election.

Section 2.4 Annual and Regular Meetings . The annual meeting of the Board of Directors for the purpose of electing officers and for the transaction of such other business as may come before the meeting shall be held as soon as possible following adjournment of the annual meeting of the stockholders at the place of such annual meeting of the stockholders. Notice of such annual meeting of the Board of Directors need not be given. The Board of Directors may from time to time provide by resolution for the holding of regular meetings and fix the place (which may be within or without the State of Delaware) and the date and hour of such meetings, provided that such meetings shall be held no less frequently than quarterly. Notice of regular meetings need not be given, provided, however, that if the Board of Directors shall fix or change the time or place of any regular meeting, notice of such action shall be mailed promptly, or sent by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, telegraph, facsimile, electronic mail or other electronic means to each Director who shall not have been present at the meeting at which such action was taken, addressed to him or her at his or her usual place of business, or shall be delivered to him or her personally.

Section 2.5 Special Meetings; Notice . Special meetings of the Board of Directors shall be held whenever called by the Chairman of the Board or the Chief Executive Officer, or by a majority of the Directors, date and hour as may be specified in the respective notices or waivers of notice of such meetings. Special meetings of the Board of Directors may be called on at least twenty-four hours’ notice to each other Director, if notice is given to each Director personally or by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, telegraph, facsimile, electronic mail or other electronic means or on five days’ notice from the official date of deposit in the mail if notice is mailed to each Director, addressed to him or her at his or her usual place of business. Such notice need not state the purpose or purposes of, nor the business to be transacted at, such meeting, except as may otherwise be required by law or provided for by the Restated Certificate of Incorporation.

Section 2.6 Quorum; Voting . Unless otherwise required by law or provided in the Restated Certificate of Incorporation, at all meetings of the Board of Directors, the presence of a majority of the total number of Directors then in office shall constitute a quorum for the transaction of business of the Directors. Except as otherwise required by law, or except as provided herein or in the Restated Certificate of Incorporation, the act or vote of a majority of Directors present at a meeting at which a quorum is present shall be the act or vote of the Board of Directors. A Director who is present at a meeting of the Directors at which action on any matter of the Corporation is taken shall be presumed to have assented to the action unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as secretary of the meeting before the adjournment thereof or shall deliver such dissent to the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action.

Section 2.7 Adjournment . A majority of the Directors present, whether or not a quorum is present, may adjourn any meeting of the Board of Directors to another time or place. No notice need be given of any adjourned meeting unless the time and place of the adjourned meeting are not announced at the time of adjournment, in which case notice conforming to the requirements of Section 2.5 of these Bylaws shall be given to each Director.

Section 2.8 Action Without a Meeting . Any action permitted or required by law, the Restated Certificate of Incorporation or these Bylaws to be taken at a meeting of the Directors or of any committee designated by the Directors may be taken without a meeting if a consent in writing, setting forth the action to be taken, is signed by all the Directors or members of such committee, as the case may be, provided that the writing or writings are filed with the minutes of proceedings of the Board of Directors or such committee. Such consent shall have the same force and effect as a unanimous vote at a meeting and may be stated as such in any document or instrument filed with the Secretary of State of Delaware, and the execution of such consent shall constitute attendance or presence in person at a meeting of the Board of Directors or any such committee, as the case may be. Subject to the requirements of law, the Restated Certificate of Incorporation or these Bylaws for notice of meetings, Directors, or members of any committee designated by the Board of Directors, may participate in and hold a meeting of the Board of Directors or any committee of Directors, as the case may be, by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in such meeting shall constitute attendance and presence in person at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

Section 2.9 Regulations; Manner of Acting . Meetings of the Board of Directors may be held at such place or places as shall be determined from time to time by resolution of the Directors. At all meetings of the Board of Directors, business shall be transacted in such order as shall from time to time be determined by resolution of the Directors to the extent consistent with applicable law, the Restated Certificate of Incorporation and these Bylaws. The Board of Directors may adopt such other rules and regulations for the conduct of meetings of the Board of Directors and for the management of the property, affairs and business of the Corporation as the Board of Directors may deem appropriate. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting, except where a Director attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. The Directors shall act only as a Board, and the individual Directors shall have no power as such.

Section 2.10 Resignations . Any Director may resign at any time. Such resignation shall be made in writing, signed by such Director, to the Corporation and shall take effect at the time specified therein, or if no time be specified, at the time of its receipt by the Chairman of the Board or the Secretary. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

Section 2.11 Removal of Directors . Any Director may be removed at any time, but only for cause upon the affirmative vote of the holders of a majority of the combined voting power of the then outstanding stock of the Corporation entitled to vote generally in the election of Directors at any meeting of such stockholders, including meetings called expressly for that purpose, and at which a quorum of stockholders is present. Subject to the rights of the holders of any series of preferred stock of the Corporation, any vacancy in the Board of Directors caused by any such removal shall be filled at such meeting by the stockholders entitled to vote for the election of the Director so removed.

Section 2.12 Vacancies and Newly Created Directorships . Subject to the rights of the holders of any series of preferred stock of the Corporation and except as provided in Section 2.11, if any vacancies occur in the Board of Directors, by reason of death, resignation, removal or otherwise, or if the authorized number of Directors shall be increased, the Directors then in office shall continue to act and such vacancies and newly created Directorships may be filled by a majority of the Directors then in office, although less than a quorum. A Director elected to fill a vacancy or a newly created Directorship shall hold office until the next election of the class of Directors for which such Director has been chosen and until his or her successor has been elected and qualified or until his or her earlier death, resignation or removal.

Section 2.13 Reliance on Accounts and Reports, etc. A Director, or a member of any committee designated by the Board of Directors shall, in the performance of his or her duties, be fully protected in relying in good faith upon the records of the Corporation and upon information, opinions, reports or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees designated by the Board of Directors, or by any other person as to the matters the Director or member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

ARTICLE III

COMMITTEES OF DIRECTORS AND ADVISORY BOARD

Section 3.1 Committees of Directors . The Board of Directors may designate one or more committees, each such committee to consist of one or more Directors, as fixed from time to time by the Board of Directors. The Board of Directors may designate one or more Directors as alternate members of any such committee, who may replace any absent or disqualified member or members at any meeting of such committee. Thereafter, members (and alternate members, if any) of each such committee may be designated at the annual meeting of the Board of Directors. Any such committee may be dissolved or re-designated from time to time by the Board of Directors. Each member (and each alternate member) of any such committee (whether designated at an annual meeting of the Board of Directors or to fill a vacancy or otherwise) shall hold office until his or her successor shall have been designated or until he or she shall cease to be a Director, or until his or her earlier death, resignation or removal.

Section 3.2 Proceedings . Any such committee may fix its own rules of procedure and may meet at such place (within or without the State of Delaware), at such time and upon such notice, if any, as it shall determine from time to time. Any such committee shall keep regular minutes of its meetings and report the same to the Board of Directors at the next meeting of the Board following such committee meeting, except that when the Board meeting is held within two days after the committee meeting, such report shall, if not made at the first meeting, be made to the Board of Directors at its second meeting following such committee meeting.

Section 3.3 Quorum and Manner of Acting . Except as may be otherwise provided in the resolution creating such committee, at all meetings of any committee the presence of members (or alternate members) constituting a majority of the total authorized membership of such committee shall constitute a quorum for the transaction of business. The act of the majority of the members present at any meeting at which a quorum is present shall be the act of such committee. Any action required or permitted to be taken at any meeting of any such committee may be taken without a meeting if all members of such committee shall consent to such action in writing and such writing or writings are filed with the minutes of the proceedings of the committee. The members of any such committee shall act only as a committee, and the individual members of such committee shall have no power as such.

Section 3.4 Action by Telephonic Communications . Members of any committee designated by the Board of Directors may participate in a meeting of such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting.

Section 3.5 Absent or Disqualified Members . In the absence or disqualification of a member of any committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.

Section 3.6 Resignations . Any member (and any alternate member) of any committee may resign at any time by delivering a written notice of resignation, signed by such member, to the Chairman of the Board, the Chief Executive Officer or any President. Unless otherwise specified therein, such resignation shall take effect upon delivery.

Section 3.7 Removal . Any member (and any alternate member) of any committee may be removed from his or her position as a member (or alternate member, as the case may be) of such committee at any time, either for or without cause, by resolution adopted by a majority of the whole Board of Directors.

Section 3.8 Vacancies . If any vacancy shall occur in any committee, by reason of disqualification, death, resignation, removal or otherwise, the remaining members (and any alternate members) shall continue to act, and any such vacancy may be filled by the Board of Directors.

ARTICLE IV

OFFICERS

Section 4.1 Number . The officers of the Corporation shall be designated by the Board of Directors and shall include such officers as the Directors may from time to time determine, which officers may (but need not) include a Chairman of the Board (who may or may not be an Executive Chairman), a Vice Chairman of the Board, a Chief Executive Officer, one or more Presidents (and in the case of each such President, with such descriptive title, if any, as the Directors shall deem appropriate), one or more Vice Presidents (and in the case of each such Vice President, with such descriptive title, if any, as the Directors shall deem appropriate), a Secretary, an Assistant Secretary and a Treasurer. The Board of Directors also may elect one or more other officers as the Board of Directors may determine. Any number of offices may be held by the same person. No officer need be a Director of the Corporation.

Section 4.2 Election . Officers shall be chosen in such manner and shall hold their offices for such terms as determined by the Board of Directors. Each officer shall hold office until his or her successor has been elected and qualified in his stead, or until his or her earlier death, resignation, retirement, disqualification or removal from office.

Section 4.3 Compensation . The Corporation shall have the authority to pay and provide compensation and other benefits to its officers and employees. The compensation and benefits of all officers of the Corporation shall be fixed from time to time by the Board of Directors, unless otherwise delegated by the Board of Directors to a particular committee or officer.

Section 4.4 Removal and Resignation; Vacancies . Any officer may be removed for or without cause at any time by the Board of Directors, or by the Chief Executive Officer or any President if such powers of removal have been expressly conferred to such individuals by the Board of Directors, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Designation of an officer shall not itself create contract rights. Any officer may resign at any time by delivering a written notice of resignation, signed by such officer, to the Chairman of the Board, the Chief Executive Officer or any President. Unless otherwise specified therein, such resignation shall take effect immediately upon delivery. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise, shall be filled by the Board of Directors. The Board of Directors may abolish any office at any time unless prohibited by law or statute.

Section 4.5 Authority and Duties of Officers . In addition to any specifically enumerated duties, services and powers, the officers of the Corporation shall have such authority and shall exercise such powers and perform such duties as may be specified by law or statute, by the Restated Certificate of Incorporation or these Bylaws, or as the Board of Directors may from time to time determine or as may be assigned to such officers by any competent superior officer. The Board of Directors may also at any time limit or circumvent the enumerated duties, services and powers of any officer. In addition to the designation of officers and the enumeration of their respective duties, services and powers, the Board of Directors may grant powers of attorneys to individuals to act as agent for or on behalf of the Corporation, to do any act which would be binding on the Corporation, to incur any expenditures on behalf of or for the Corporation, or to execute, deliver and perform any agreements, acts, transactions or other matters on behalf of the Corporation. Such powers of attorney may be revoked or modified as deemed necessary by the Board of Directors.

Section 4.6 Chairman of the Board . The Chairman of the Board shall, if one is designated by the Board of Directors and is present, preside at all meetings of the stockholders and of the Board of Directors and exercise and perform such other powers and duties as may be assigned from time to time by the Board of Directors. He shall also assist the Directors in the formulation of the policies of the Corporation, and shall be available to other officers on a reasonable basis for consultation and advice.

Section 4.7 Vice Chairman of the Board . The Vice Chairman of the Board, if one is designated by the Board of Directors, shall, in the absence of the Chairman of the Board, preside at all meetings of the stockholders and of the Board of Directors and exercise and perform such other powers and duties as may be from time to time assigned by the Board of Directors.

Section 4.8 Chief Executive Officer . The Chief Executive Officer shall have day-to-day supervision of the affairs of the Corporation, such powers and duties subject at all times to the authority of the Board of Directors. In the absence or disability of the Chairman of the Board and the Vice Chairman of the Board, the Chief Executive Officer shall exercise the powers and perform the duties of the Chairman of the Board.

Section 4.9 President . Each President that is designated by the Board of Directors shall generally assist the Chief Executive Officer and shall have such powers and perform such duties and services as shall from time to time be prescribed or delegated to him or her by the Chief Executive Officer or the Board of Directors. In the absence or disability of the Chief Executive Officer, the Board of Directors shall appoint one President to exercise the powers and perform the duties of the Chief Executive Officer.

Section 4.10 Vice Presidents . Each Vice President that is designated by the Board of Directors shall generally assist one or more Presidents and shall have such powers and perform such duties and services as shall from time to time be prescribed or delegated to him or her by one or more Presidents or the Board of Directors.

Section 4.11 Secretary . The Secretary, if one is designated by the Board of Directors, shall have the following powers and duties:

(a) He or she shall keep or cause to be kept a record of all the proceedings of the meetings of the stockholders and of the Board of Directors in books provided for that purpose.

(b) He or she shall cause all notices to be duly given in accordance with the provisions of these Bylaws and as required by law.

(c) Whenever any committee shall be appointed pursuant to a resolution of the Board of Directors, he or she shall furnish a copy of such resolution to the members of such committee.

(d) He or she shall be the custodian of the records and of the seal of the Corporation and cause such seal (or a facsimile thereof) to be affixed to all certificates representing shares of the Corporation prior to the issuance thereof and to all instruments the execution of which on behalf of the Corporation under its seal shall have been duly authorized in accordance with these Bylaws, and when so affixed he or she may attest the same.

(e) He or she shall properly maintain and file all books, reports, statements, certificates and all other documents and records required by law, the Restated Certificate of Incorporation or these Bylaws.

(f) He or she shall have charge of the stock books and ledgers of the Corporation and shall cause the stock and transfer books to be kept in such manner as to show at any time the number of shares of stock of the Corporation of each class issued and outstanding, the names (alphabetically arranged) and the addresses of the holders of record of such shares, the number of shares held by each holder and the date as of which each became such holder of record.

(g) He or she shall sign (unless the Treasurer, an Assistant Treasurer or an Assistant Secretary shall have signed) certificates representing shares of the Corporation the issuance of which shall have been authorized by the Board of Directors.

(h) He or she shall perform, in general, all duties incident to the office of Secretary and such other duties as may be specified in these Bylaws or as may be assigned to him or her from time to time by the Board of Directors, the Chief Executive Officer or any President.

Section 4.12 Assistant Secretary . The Assistant Secretary, if one is designated by the Board of Directors, shall generally assist the Secretary.

Section 4.13 Treasurer . The Treasurer, if one is designated by the Board of Directors, or such other officer as may be designated by the Board of Directors, shall be the chief accounting and financial officer of the Corporation and have custody of all the funds, securities and other valuables of the Corporation which may have or shall come into his or her hands. The Treasurer shall have active control of and shall be responsible for all matters pertaining to the accounts and finances of the Corporation and shall have such powers and perform such duties as may be prescribed by the Chief Executive Officer, any President, the Board of Directors or elsewhere in these Bylaws.

Section 4.14 Additional Officers . The Board of Directors may appoint such other officers and agents as it may deem appropriate, and such other officers and agents shall hold their offices for such terms and shall exercise such powers and perform such duties as may be determined from time to time by the Board of Directors. The Board of Directors from time to time may delegate to the Chief Executive Officer or any President the power to appoint subordinate officers or agents and to prescribe their respective rights, terms of office, authorities and duties. Any such officer or agent may remove any such subordinate officer or agent appointed by him or her, for or without cause.

Section 4.15 Security . The Board of Directors may require any officer, agent or employee of the Corporation to provide security for the faithful performance of his or her duties, in such amount and of such character as may be determined from time to time by the Board of Directors.

ARTICLE V

CAPITAL STOCK

Section 5.1 Uncertificated Shares . Except as otherwise provided in a resolution approved by the Board, all shares of capital stock of the Corporation issued after the date hereof shall be uncertificated shares. In the event that the Board elects to provide in a resolution that certificates shall be issued to represent any shares of capital stock of the Corporation, holders of such shares (and upon request every holder of uncertificated shares) shall be entitled to have a certificate signed by, or in the name of the Corporation, by the Chairman of the Board or a Vice Chairman of the Board, any President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, representing the number of shares registered in certificate form. Such certificate shall be in such form as the Board may determine, to the extent consistent with applicable law, the Restated Certificate of Incorporation and these Bylaws.

Section 5.2 Signatures; Facsimile . All of such signatures on the certificate referred to in Section 5.1 of these Bylaws may be a facsimile, engraved or printed, to the extent permitted by law. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.

Section 5.3 Lost, Stolen or Destroyed Certificates . The Corporation may direct that a new certificate be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon delivery to the Corporation of an affidavit of the owner or owners of such certificate, setting forth such allegation. The Corporation may require the owner of such lost, stolen or destroyed certificate, or his or her legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of any such new certificate.

Section 5.4 Transfer of Stock . Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares, duly endorsed or accompanied by appropriate evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Within a reasonable time after the transfer of uncertificated stock, the Corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to Sections 151, 156, 202(a) or 218(a) of the Delaware General Corporation Law. Subject to the provisions of the Restated Certificate of Incorporation and these Bylaws, the Board of Directors may prescribe such additional rules and regulations as it may deem appropriate relating to the issue, transfer and registration of shares of the Corporation.

Section 5.5 Record Date . In order to determine the stockholders entitled to notice of, or entitled to vote at, any meeting of stockholders or any adjournment thereof, the Board of Directors may fix in advance a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted by the Board of Directors, and which shall not be more than sixty nor less than ten days before the date of such meeting. A determination of stockholders of record entitled to notice of or entitled to vote at a meeting of stockholders shall apply to any adjournment of the meeting, provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights of the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 5.6 Registered Stockholders . Prior to due surrender of a certificate for registration of transfer, the Corporation may treat the registered owner as the person exclusively entitled to receive dividends and other distributions, to vote, to receive notice and otherwise to exercise all the rights and powers of the owner of the shares represented by such certificate, and the Corporation shall not be bound to recognize any equitable or legal claim to or interest in such shares on the part of any other person, whether or not the Corporation shall have notice of such claim or interests. Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer or uncertificated shares are requested to be transferred, both the transferor and transferee request the Corporation to do so.

Section 5.7 Transfer Agent and Registrar . The Board of Directors may appoint one or more transfer agents and one or more registrars, and may require all certificates representing shares to bear the signature of any such transfer agents or registrars.

ARTICLE VI

INDEMNIFICATION

Section 6.1 Nature of Indemnity . The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (a “Proceeding”), whether civil, criminal, administrative, arbitrative or investigative, or any appeal in such a Proceeding or any inquiry or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf in connection with such action, suit or proceeding and any appeal therefrom, provided that he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding had no reasonable cause to believe his or her conduct was

unlawful. The indemnification provided in this Article VI could involve indemnification for negligence or under theories of strict liability. In the case of an action or suit by or in the right of the Corporation to procure a judgment in its favor (1) the indemnification of a Director or officer shall be limited to expenses (including attorneys’ fees) actually and reasonably incurred by such person in the defense or settlement of such action or suit, and (2) no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper. Notwithstanding the foregoing, but subject to Section 6.5 of these Bylaws, the Corporation shall not be obligated to indemnify a Director or officer of the Corporation in respect of a Proceeding (or part thereof) instituted by such Director or officer, unless such Proceeding (or part thereof) has been authorized by the Board of Directors.

The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

The rights granted pursuant to this Article VI shall be deemed contract rights. No amendment, modification or repeal of this Article VI shall have the effect of limiting or denying any such rights with respect to actions taken or Proceedings arising prior to any such amendment, modification or repeal.

Section 6.2 Successful Defense . To the extent that a present or former Director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 6.1 of these Bylaws or in defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection therewith.

Section 6.3 Determination that Indemnification is Proper . Any indemnification of a present or former Director or officer of the Corporation under Section 6.1 of these Bylaws (unless ordered by a court) shall be made by the Corporation unless a determination is made that indemnification of the Director or officer is not proper in the circumstances because he or she has not met the applicable standard of conduct set forth in Section 6.1 of these Bylaws. Any such determination shall be made (1) by a majority vote of the Directors who are not parties to such action, suit or proceeding, even though less than a quorum, (2) by a committee of such Directors designated by majority vote of such Directors, even though less than a quorum, (3) if there are no such Directors, or if such Directors so direct, by independent legal counsel in a written opinion or (4) by the stockholders.

Section 6.4 Advance Payment of Expenses . The right to indemnification conferred in this Article VI shall include the right to be paid or reimbursed by the Corporation the reasonable expenses incurred by a person of the type entitled to be indemnified under Sections 6.1, 6.2, and 6.3 who was, is, or is threatened to be made a named defendant or respondent in a Proceeding in advance of the final disposition of the Proceeding and without any determination as to the person’s ultimate entitlement to indemnification; provided, however, that the payment of such expenses incurred by any such person in advance of the final disposition of a Proceeding shall be made only upon delivery to the Corporation of a written affirmation by such person of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification under this Article VI and a written undertaking, by or on behalf of such person, to repay all amounts so advanced if it shall ultimately be determined that such person is not entitled to be indemnified under this Article VI or otherwise. The Board of Directors may authorize the Corporation’s counsel to represent such present or former Director or officer in any action, suit or proceeding, whether or not the Corporation is a party to such action, suit or proceeding.

Section 6.5 Procedure for Indemnification of Directors and Officers . Any indemnification of a Director or officer of the Corporation under Sections 6.1, 6.2, and 6.3 of these Bylaws, or advance of costs, charges and expenses to a Director or officer under Section 6.4 of these Bylaws, shall be made promptly, and in any event within thirty days, upon the written request of such person. If a determination by the Corporation that the Director or officer is entitled to indemnification pursuant to this Article is required, and the Corporation fails to respond within sixty days to a written request for indemnity, the Corporation shall be deemed to have approved such request. If the Corporation denies a written request for indemnity or advancement of expenses, in whole or in part, or if payment in full pursuant to such request is not made within thirty days, the right to indemnification or advances as granted by this Article shall be enforceable by the Director or officer in any court of competent jurisdiction. Such person’s costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses under Section 6.4 of these Bylaws where the required undertaking, if any, has been received by or tendered to the Corporation) that the claimant has not met the standard of conduct set forth in Section 6.1 of these Bylaws, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Section 6.1 of these Bylaws, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to such action or create a presumption that the claimant has not met the applicable standard of conduct.

Section 6.6 Survival; Preservation of Other Rights . The foregoing indemnification provisions shall be deemed to be a contract between the Corporation and each Director or officer who serves in any such capacity at any time while these provisions are in effect and any repeal or modification thereof shall not affect any right or obligation then existing with respect to any state of facts then or previously existing or any action, suit or proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts. Such a “contract right” may not be modified retroactively without the consent of such Director or officer.

The indemnification and the advancement and payment of expenses provided by this Article VI shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, common or statutory law, provision of the Restated Certificate of Incorporation, agreement, vote of stockholders or disinterested Directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a Director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.

Section 6.7 Insurance . The Corporation shall purchase and maintain insurance, at its expense, to protect the Corporation and any person who is or was or has agreed to become a Director or officer, or is or was serving at the request of the Corporation as a Director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, limited liability company, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise against any expense, liability, or loss asserted against him or her or incurred by him or her or on his or her behalf in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against such liability under the provisions of this Article, provided that such insurance is available on acceptable terms, which determination shall be made by a vote of a majority of the entire Board of Directors.

Section 6.8 Severability . If this Article VI or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify and hold harmless each Director or officer or any other person indemnified pursuant to this Article VI as to costs, charges and expenses (including reasonable attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative to the full extent permitted by any applicable portion of this Article VI that shall not have been invalidated and to the fullest extent permitted by applicable law.

Section 6.9 Limitation on Liability . No Director or officer shall be personally liable, as such, for any action taken or omitted from being taken unless: (i) such Director or officer breached or failed to perform the duties of his office and (ii) the breach or failure to perform constituted recklessness, self-dealing or willful misconduct. The foregoing shall not apply to any responsibility or liability under a criminal statute or liability for the payment of taxes under Federal, state or local law.

Section 6.10 Appearance as a Witness . Notwithstanding any other provision of this Article VI, the Corporation shall pay or reimburse expenses incurred by a Director or officer in connection with his appearance as a witness or other participation in a Proceeding at a time when he is not a named defendant or respondent in the Proceeding.

Section 6.11 Indemnification of Employees and Agents . The Corporation, by adoption of a resolution of the Board of Directors, may indemnify and advance expenses to an employee or agent of the Corporation to the same extent and subject to the same conditions under which it may indemnify and advance expenses to Directors and officers under this Article VI; and, the Corporation may indemnify and advance expenses to persons who are not or were not Directors, officers, employees or agents of the Corporation but who are or were serving at the request of the Corporation as director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, limited liability company, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise against any liability asserted against him or her and incurred by him or her in such a capacity or arising out of his or her status as such a person to the same extent that it may indemnify and advance expenses to Directors and officers of the Corporation under this Article VI.

ARTICLE VII

OFFICES

Section 7.1 Registered Office and Agent . The registered agent and office of the Corporation in the State of Delaware shall be the Corporation Trust Company, located at 1209 Orange Street in the City of Wilmington, County of New Castle (19801) or such other agent and office (which need not be a place of business of the Corporation) as the Board of Directors may designate from time to time in the manner provided by law.

Section 7.2 Other Offices . The Corporation may maintain offices or places of business at such other locations within or without the State of Delaware as the Board of Directors may from time to time determine or as the business of the Corporation may require.

ARTICLE VIII

GENERAL PROVISIONS

Section 8.1 Dividends . Subject to any applicable provisions of law and the Restated Certificate of Incorporation, dividends upon the shares of the Corporation may be declared by the Board of Directors at any regular or special meeting of the Board of Directors and any such dividend may be paid in cash, property or shares of the Corporation’s capital stock.

Section 8.2 Reserves . There may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, thinks proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall think conducive to the interest of the Corporation, and the Board of Directors may similarly modify or abolish any such reserve.

Section 8.3 Execution of Instruments . The Chief Executive Officer, any President, any Vice President, the Secretary or the Treasurer may enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. The Board of Directors, the Chief Executive Officer or the President may authorize any other officer or agent to enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. Any such authorization may be general or limited to specific contracts or instruments.

Section 8.4 Deposits . Any funds of the Corporation may be deposited from time to time in such banks, trust companies or other depositories as may be determined by the Board of Directors, the Chief Executive Officer or any President, or by such officers or agents as may be authorized by the Board of Directors, the Chief Executive Officer or the President to make such determination.

Section 8.5 Checks . All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such agent or agents of the Corporation, and in such manner, as the Board of Directors or the Chief Executive Officer or any President from time to time may determine.

Section 8.6 Sale, Transfer, etc. of Securities . To the extent authorized by the Board of Directors or by the Chief Executive Officer, any President, any Vice President, the Secretary or the Treasurer or any other officers designated by the Board of Directors, the Chief Executive Officer or any President may sell, transfer, endorse, and assign any shares of stock, bonds or other securities owned by or held in the name of the Corporation, and may make, execute and deliver in the name of the Corporation, under its corporate seal, any instruments that may be appropriate to effect any such sale, transfer, endorsement or assignment.

Section 8.7 Voting as Stockholder . Unless otherwise determined by resolution of the Board of Directors, the Chief Executive Officer or any President or any Vice President shall have full power and authority on behalf of the Corporation to attend any meeting of stockholders of any corporation in which the Corporation may hold stock and to act, vote (or execute proxies to vote) and exercise in person or by proxy all other rights, powers and privileges incident to the ownership of such stock. Such officers acting on behalf of the Corporation shall have full power and authority to execute any instrument expressing consent to or dissent from any action of any such corporation without a meeting. The Board of Directors may by resolution from time to time confer such power and authority upon any other person or persons.

Section 8.8 Fiscal Year . The fiscal year of the Corporation shall commence on the first day of January of each year (except for the Corporation’s first fiscal year which shall commence on the date of incorporation) and shall terminate in each case on December 31.

Section 8.9 Seal . The seal of the Corporation shall be circular in form, and shall contain the name of the Corporation, the year of its incorporation and the words “Corporate Seal” and “Delaware.” The form of such seal shall be subject to alteration by the Board of Directors. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or reproduced, or may be used in any other lawful manner.

Section 8.10 Books and Records; Inspection . Except to the extent otherwise required by law, the books and records of the Corporation shall be kept at such place or places within or without the State of Delaware as may be determined from time to time by the Board of Directors.

Section 8.11 Venue . Unless the Corporation consents in writing to the selection of an alternate forum, the state courts of the State of Delaware in and for New Castle County (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware) shall be the sole and exclusive forum, to the fullest extent permitted by law, for (a) any derivative action or proceeding brought on behalf of the Corporation; (b) any action asserting a claim of a breach of fiduciary duty owed by any Director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders; (c) any action asserting a claim against the Corporation arising pursuant to any provision of the Delaware General Corporation Law or the Certificate of Incorporation or these Bylaws (in each case, as they may be amended from time to time); (d) any action seeking to interpret, apply, enforce or determine the validity of the Certificate of Incorporation or the Bylaws of the Corporation (in each case, as they may be amended from time to time); or (e) any action asserting a claim against the Corporation or any Director or officer or other employee of the Corporation governed by the internal affairs doctrine.

ARTICLE IX

AMENDMENT OF BYLAWS

Section 9.1 Amendment . Subject to any express provision in the Restated Certificate of Incorporation to the contrary, these Bylaws may be amended, altered or repealed:

(a) by resolution adopted by a majority of the Board of Directors at any special or regular meeting of the Board of Directors without the assent or vote of the stockholders of the Corporation if, in the case of such special meeting only, notice of such amendment, alteration or repeal is contained in the notice or waiver of notice of such meeting; or

(b) at any regular or special meeting of the stockholders upon the affirmative vote of not less than two-thirds (66 2 / 3 %) of the holders of the combined voting power of the outstanding shares of the Corporation entitled to vote generally in the election of Directors if, in the case of such special meeting only, notice of such amendment, alteration or repeal is contained in the notice or waiver of notice of such meeting.

ARTICLE X

CONSTRUCTION

Section 10.1 Construction . In the event of any conflict between the provisions of these Bylaws as in effect from time to time and the provisions of the Restated Certificate of Incorporation of the Corporation as in effect from time to time, the provisions of such Restated Certificate of Incorporation shall be controlling.

Exhibit 3.2

AMENDED AND RESTATED BYLAWS

SELECT MEDICAL CORPORATION

(a Delaware corporation and successor by merger to EGL Acquisition Corp.)

ARTICLE I.

OFFICES

The registered office of the Corporation in the State of Delaware shall be located in the City of Wilmington, County of New Castle. The Corporation may establish or discontinue, from time to time, such other offices within or without the State of Delaware as may be deemed proper for the conduct of the Corporation’s business.

ARTICLE II.

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meetings . All meetings of stockholders shall be held at such place or places, within or without the State of Delaware, as may from time to time be fixed by the Board of Directors, or as shall be specified in the respective notices, or waivers of notice, thereof.

Section 2. Annual Meeting . The annual meeting of stockholders for the election of Directors and the transaction of other business shall be held on such date and at such place as may be designated by the Board of Directors. At each annual meeting the stockholders entitled to vote shall elect a Board of Directors and may transact such other proper business as may come before the meeting.

Section 3. Special Meetings . A special meeting of the stockholders, or of any class thereof entitled to vote, for any purpose or purposes, may be called at any time by the Chairman of the Board of Directors, if any, or the Chief Executive Officer or by order of the Board of Directors and shall be called by the Secretary upon the written request of stockholders holding of record such number of the outstanding shares of stock of the Corporation representing at least 50% of the total number of votes entitled to be voted at such meeting. Such written request shall state the purpose or purposes for which such meeting is to be called.

Section 4. Notice of Meetings . Except as otherwise provided by law, written notice of each meeting of stockholders, whether annual or special, stating the place, date and hour of the meeting shall be given not less than ten days or more than 60 days before the date on which the meeting is to be held to each stockholder of record entitled to vote thereat by delivering a notice thereof to him personally or by mailing such notice in a postage prepaid envelope directed to him at his address as it appears on the records of the Corporation, unless he shall have filed with the Secretary of the Corporation a written request that notices intended for him be directed to another address, in which case such notice shall be directed to him at the address designated in such request. Notice shall not be required to be given to any stockholder who shall waive such notice in writing, whether prior to or after such meeting, or who shall attend such meeting in person or by proxy unless such attendance is for the express purpose of objecting, at the beginning of such meeting, to the transaction of any business because the meeting is not lawfully called or convened. Every notice of a special meeting of the stockholders, besides the time and place of the meeting, shall state briefly the objects or purposes thereof.

Section 5. List of Stockholders . It shall be the duty of the Secretary or other officer of the Corporation who shall have charge of the stock ledger to prepare and make, at least ten days before every meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in his name. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall be kept and produced at the time and place of the meeting during the whole time thereof and subject to the inspection of any stockholder who may be present. The original or duplicate ledger shall be the only evidence as to who are the stockholders entitled to examine such list or the books of the Corporation or to vote in person or by proxy at such meeting.

Section 6. Quorum . At each meeting of the stockholders, the holders of record of such number of the issued and outstanding shares of stock of the Corporation representing at least 50% of the total number of votes entitled to be voted at such meeting, present in person or by proxy, shall constitute a quorum for the transaction of business, except where otherwise provided by law, the Certificate of Incorporation of the Corporation or these Bylaws. In the absence of a quorum, any officer entitled to preside at, or act as secretary of, such meeting shall have the power to adjourn the meeting from time to time until a quorum shall be constituted.

Section 7. Voting . Unless otherwise provided in the Certificate of Incorporation of the Corporation, every stockholder of record who is entitled to vote shall at every meeting of the stockholders be entitled to one vote for each share of stock held by him on the record date; provided, that shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held by the Corporation, shall neither be entitled to vote nor counted for quorum purposes. Nothing in this section shall be construed as limiting the right of the Corporation to vote its own stock held by it in a fiduciary capacity. At all meetings of the stockholders, a quorum being present, all matters shall be decided by majority of the number of votes with respect to the shares of stock held by stockholders present in person or by proxy, except as otherwise required by law or the Certificate of Incorporation of the Corporation. Unless demanded by a stockholder of the Corporation present in person or by proxy at any meeting of the stockholders and entitled to vote thereat or so directed by the chairman of the meeting or required by law, the vote thereat on any question need not be by written ballot. On a vote by written ballot, each ballot shall be signed by the stockholder voting, or in his name by his proxy, if there be such proxy, and shall state the number of shares voted by him and the number of votes to which each share is entitled.

Section 8. Proxies . Each stockholder entitled to vote at a meeting of stockholders or to express consent to corporate action in writing without a meeting may authorize another person or persons to act for him by proxy. A proxy acting for any stockholder shall be duly appointed by an instrument in writing subscribed by such stockholder. No proxy shall be valid after the expiration of three years from the date thereof unless the proxy provides for a longer period.

Section 9. Action Without a Meeting . Any action required to be taken at any annual or special meeting of stockholders or any action which may be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent in writing setting forth the action so taken shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing, it being understood that any such action so taken by written consent shall be effective upon the execution and delivery of such consent by the requisite holders described above.

ARTICLE III.

BOARD OF DIRECTORS

Section 1. Powers . The business and affairs of the Corporation shall be managed under the direction of the Board of Directors.

Section 2. Election and Term . Except as otherwise provided in the Certificate of Incorporation of the Corporation or as otherwise provided by law, Directors shall be elected at the annual meeting of stockholders and shall hold office until the next annual meeting of stockholders and until their successors are elected and qualify, or until they sooner die, resign or are removed. Except as otherwise provided in the Certificate of Incorporation of the Corporation, at each annual meeting of stockholders, at which a quorum is present, the persons receiving a plurality of the votes cast shall be the Directors. Acceptance of the office of Director may be expressed orally or in writing, and attendance at the organization meeting shall constitute such acceptance.

Section 3. Number . The number of Directors shall be such number as shall be determined from time to time by the Board of Directors and shall be not less than two (2) and not greater than twelve (12).

Section 4. Quorum and Manner of Acting . Unless otherwise provided by law, the presence of 50% of the whole Board of Directors (or any committee thereof) shall be necessary to constitute a quorum for the transaction of business. In the absence of a quorum, a majority of the Directors present may adjourn the meeting from time to time until a quorum shall be present. Notice of any adjourned meeting need not be given. At all meetings of the Board of Directors (or any committee thereof), a quorum being present, all matters shall be decided by the affirmative vote of a majority of the Directors present, except as otherwise required by law. The Board of Directors (or any committee thereof) may hold its meetings at such place or places within or without the State of Delaware as the Board of Directors (or such committee) may from time to time determine or as shall be specified in the respective notices, or waivers of notice, thereof.

Section 5. Organization Meeting . Immediately after each annual meeting of stockholders for the election of Directors, the Board of Directors shall meet at the place of the annual meeting of stockholders for the purpose of organization, the election of officers and the transaction of other business. Notice of such meeting need not be given. If such meeting is held at any other time or place, notice thereof must be given as hereinafter provided for special meetings of the Board of Directors, subject to the execution of a waiver of the notice thereof signed by, or the attendance at such meeting of, all Directors who may not have received such notice.

Section 6. Regular Meetings . Regular meetings of the Board of Directors (or any committee thereof) may be held at such place, within or without the State of Delaware, as shall from time to time be determined by the Board of Directors (or such committee). After there has been such determination, and notice thereof has been once given to each member of the Board of Directors (or such committee) as hereinafter provided for special meetings, regular meetings may be held without further notice being given.

Section 7. Special Meetings; Notice . Special meetings of the Board of Directors (or any committee thereof) shall be held whenever called by the Chairman of the Board of Directors (or such committee), if any, the Chief Executive Officer or by any two Directors. Notice of each such meeting shall be mailed to each Director, addressed to him at his residence or usual place of business, at least five days before the date on which the meeting is to be held, or shall be sent to him at such place by e-mail or facsimile, or be delivered personally or by telephone, not later than the day before the day on which such meeting is to be held. Each such notice shall state the time and place of the meeting and, as may be required, the purposes thereof. Notice of any meeting of the Board of Directors (or any committee thereof) need not be given to any Director if he shall sign a written waiver thereof either before or after the time stated therein for such meeting, or if he shall be present at the meeting. Unless limited by law, the Certificate of Incorporation of the Corporation, these Bylaws or the terms of the notice thereof, any and all business may be transacted at any meeting without the notice thereof having specifically identified the matters to be acted upon.

Section 8. Removal of Directors . Except as otherwise provided in the Certificate of Incorporation of the Corporation, any Director or the entire Board of Directors may be removed, with or without cause, at any time, by action of the holders of record of the issued and outstanding stock of the Corporation representing a majority of the number of votes of all issued and outstanding

stock of the Corporation (a) present in person or by proxy at a meeting of holders of such stock and entitled to vote thereon or (b) by a consent in writing in the manner contemplated in Section 9 of Article II, and the vacancy or vacancies in the Board of Directors caused by any such removal may be filled by action of such a majority at such meeting or at any subsequent meeting or at any time by consent.

Section 9. Resignations . Any Director of the Corporation may resign at any time by giving written notice to the Chairman of the Board of Directors, if any, the Chief Executive Officer, any President, any Vice President or the Secretary of the Corporation. The resignation of any Director shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 10. Vacancies . Except as otherwise provided in the Certificate of Incorporation of the Corporation, any newly created directorships and vacancies occurring in the Board of Directors by reason of death, resignation, retirement, disqualification or removal, with or without cause, may only be filled by the action of the holders of record of issued and outstanding stock of the Corporation representing a majority of the number of votes of all issued and outstanding stock of the Corporation (a) present in person or by proxy at a meeting of holders of such stock and entitled to vote thereon or (b) by a consent in writing in the manner contemplated in Section 9 of Article II. The Director so chosen, whether selected to fill a vacancy or elected to a new directorship, shall hold office until the next meeting of stockholders at which the election of Directors is in the regular order of business, and until his successor has been elected and qualifies, or until he sooner dies, resigns or is removed.

Section 11. Action Without a Meeting . Any action required or permitted to be taken at any meeting of the Board of Directors (or any committee thereof) may be taken without a meeting if a written consent thereto is signed by all members of the Board of Directors (or any committee thereof), and such written consent is filed with the minutes or proceedings of the Board of Directors.

Section 12. Telephonic Participation in Meetings . Members of the Board of Directors (or any committee thereof) may participate in a meeting of the Board of Directors (or any committee thereof) by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting.

Section 13. Committees . The Board of Directors may appoint such committees of the Board of Directors as it may deem appropriate, and such committees shall exercise the authority delegated to them. The membership of any such committee shall consist of such Directors as the Board of Directors may deem advisable from time to time to serve. The Board of Directors may fill any vacancies on any committee as they occur. Each committee shall meet as often as its business may require.

ARTICLE IV

OFFICERS

Section 1. Number . The officers of the Corporation shall be designated by the Board of Directors and shall include such officers as the Directors may from time to time determine, which officers may (but need not) include a Chairman of the Board, a Vice Chairman of the Board, a Chief Executive Officer, one or more Presidents (and in the case of each such President, with such descriptive title, if any, as the Directors shall deem appropriate), one or more Vice Presidents (and in the case of each such Vice President, with such descriptive title, if any, as the Directors shall deem appropriate), a Secretary, an Assistant Secretary, and a Treasurer. The Board of Directors also may elect one or more other officers as the Board of Directors may determine. Any number of offices may be held by the same person. No officer need be a Director of the Corporation.

Section 2. Election . Officers shall be chosen in such manner and shall hold their offices for such terms as determined by the Board of Directors. Each officer shall hold office until his or her successor has been elected and qualified in his stead, or until his or her earlier death, resignation, retirement, disqualification, or removal from office.

Section 3. Compensation . The Corporation shall have the authority to pay and provide compensation and other benefits to its officers and employees. The compensation and benefits of all officers of the Corporation shall be fixed from time to time by the Board of Directors, unless otherwise delegated by the Board of Directors to a particular committee or officer.

Section 4. Removal and Resignation; Vacancies . Any officer may be removed for or without cause at any time by the Board of Directors, the Chief Executive Officer or any President, if such powers of removal have been expressly conferred by the Board of Directors, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Designation of an officer shall not itself create contract rights. Any officer may resign at any time by delivering a written notice of resignation, signed by such officer, to the Board of Directors, the Chief Executive Officer or any President. Unless otherwise specified therein, such resignation shall take effect upon delivery. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise, shall be filled by the Board of Directors. The Board of Directors may abolish any office at any time unless prohibited by law or statute.

Section 5. Authority and Duties of Officers . In addition to any specifically enumerated duties, services, and powers, the officers of the Corporation shall have such authority and shall exercise such powers and perform such duties as may be specified by law or statute, by the Certificate of Incorporation, and by these Bylaws, or as the Board of Directors may from time to time determine or as may be assigned to such officers by any competent superior officer. The Board of Directors may also at any time limit or circumvent the enumerated duties, services and powers of any officer. In addition to the designation of officers and the enumeration of their respective duties, services and powers, the Board of Directors may grant powers of attorneys to individuals to act as agent for or on behalf of the Corporation, to do any act which would be binding on the Corporation, to incur any expenditures on behalf of or for the Corporation, or to execute, deliver and perform any agreements, acts, transactions or other matters on behalf of the Corporation. Such powers of attorney may be revoked or modified as deemed necessary by the Board of Directors.

Section 6. Chairman of the Board . The Chairman of the Board shall, if one is designated by the Board of Directors and if present, preside at all meetings of the stockholders and of the Board of Directors and exercise and perform such other powers and duties as may be from time to time assigned by the Board of Directors. He shall assist the Directors in the formulation of the policies of the Corporation, and shall be available to other officers for consultation and advice.

Section 7. Vice Chairman of the Board . The Vice Chairman of the Board, if one is designated by the Board of Directors, shall, in the absence of the Chairman of the Board, preside at all meetings of the stockholders and of the Board of Directors and exercise and perform such other powers and duties as may be from time to time assigned by the Board of Directors.

Section 8. Chief Executive Officer . The Chief Executive Officer shall have day-to-day supervision of the affairs of the Corporation, such powers and duties subject at all times to the authority of the Board of Directors. In the absence or disability of the Chairman of the Board and the Vice Chairman of the Board, the Chief Executive Officer shall exercise the powers and perform the duties of the Chairman of the Board.

Section 9. Presidents . Each President that is designated by the Board of Directors shall generally assist the Chief Executive Officer and shall have such powers and perform such duties and services as shall from time to time be prescribed or delegated to him or her by the Chief Executive Officer or the Board of Directors. In the absence or disability of the Chief Executive Officer, the Board of Directors shall appoint one President to exercise the powers and perform the duties of the Chief Executive Officer.

Section 10. Vice Presidents . Each Vice President that is designated by the Board of Directors shall generally assist one or more Presidents and shall have such powers and perform such duties and services as shall from time to time be prescribed or delegated to him or her by one or more of the Presidents or the Board of Directors.

Section 11. Secretary . The Secretary, if one is designated by the Board of Directors, shall have the following powers and duties:

(a) He or she shall keep or cause to be kept a record of all the proceedings of the meetings of the stockholders and of the Board of Directors in books provided for that purpose.

(b) He or she shall cause all notices to be duly given in accordance with the provisions of these Bylaws and as required by law.

(c) Whenever any committee shall be appointed pursuant to a resolution of the Board of Directors, he or she shall furnish a copy of such resolution to the members of such committee.

(e) He or she shall properly maintain and file all books, reports, statements, certificates and all other documents and records required by law, the Certificate of Incorporation or these Bylaws.

Section 12. Assistant Secretary . The Assistant Secretary, if one is designated by the Board of Directors, shall generally assist the Secretary.

Section 13. Treasurer . The Treasurer, if one is designated by the Board of Directors, or such other officer as may be designated by the Board of Directors, shall be the chief accounting and financial officer of the Corporation and have custody of all the funds, securities and other valuables of the Corporation which may have or shall come into his or her hands. The Treasurer shall have active control of and shall be responsible for all matters pertaining to the accounts and finances of the Corporation and shall have such powers and perform such duties as may be prescribed by the Chief Executive Officer, any President, the Board of Directors or elsewhere in these Bylaws.

Section 14. Additional Officers . The Board of Directors may appoint such other officers and agents as it may deem appropriate, and such other officers and agents shall hold their offices for such terms and shall exercise such powers and perform such duties as may be determined from time to time by the Board of Directors. The Board of Directors from time to time may delegate to the Chief Executive Officer or any President the power to appoint subordinate officers or agents and to prescribe their respective rights, terms of office, authorities and duties. Any such officer or agent may remove any such subordinate officer or agent appointed by him or her, for or without cause.

Section 15. Security . The Board of Directors may require any officer, agent or employee of the Corporation to provide security for the faithful performance of his or her duties, in such amount and of such character as may be determined from time to time by the Board of Directors.

ARTICLE V

INDEMNIFICATION OF OFFICERS AND DIRECTORS

Section 1. Nature of Indemnity . The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (a Proceeding), whether civil, criminal, administrative, arbitrative, or investigative, or any appeal in such a Proceeding or any inquiry or investigation that could lead to such a Proceeding, by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was or has agreed to become a Director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another foreign or domestic corporation, limited liability company, partnership, joint venture, sole proprietorship, trust, employee benefit plan, or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her or on his or her behalf in connection with such action, suit or proceeding and any appeal therefrom, provided that he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding had no reasonable cause to believe his or her conduct was unlawful. The indemnification provided in this Article V could involve indemnification for negligence or under theories of strict liability. In the case of an action or suit by or in the right of the Corporation to procure a judgment in its favor (1) the indemnification of a Director or officer shall be limited to expenses (including attorneys’ fees) actually and reasonably incurred by such person in the defense or settlement of such action or suit, and (2) no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper. Notwithstanding the foregoing, but subject to Section 5 of this Article V, the Corporation shall not be obligated to indemnify a Director or officer of the Corporation in respect of a Proceeding (or part thereof) instituted by such Director or officer, unless such Proceeding (or part thereof) has been authorized by the Board of Directors.

The rights granted pursuant to this Article V shall be deemed contract rights. No amendment, modification or repeal of this Article V shall have the effect of limiting or denying any such rights with respect to actions taken or Proceedings arising prior to any such amendment, modification or repeal.

Section 2. Successful Defense . To the extent that a present or former Director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 1 of this Article V or in defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection therewith.

Section 3. Determination that Indemnification is Proper . Any indemnification of a present or former Director or officer of the Corporation under Section 1 of this Article V (unless ordered by a court) shall be made by the Corporation unless a determination is made that indemnification of the Director or officer is not proper in the circumstances because he or she has not met the applicable standard of conduct set forth in Section 1 of this Article V. Any such determination shall be made (1) by a majority vote of the Directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such Directors, or if such Directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.

Section 4. Advance Payment of Expenses . The right to indemnification conferred in this Article V shall include the right to be paid or reimbursed by the Corporation the reasonable expenses incurred by a person of the type entitled to be indemnified under Sections 1, 2, and 3 of this Article V who was, is, or is threatened to be made a named defendant or respondent in a Proceeding in advance of the final disposition of the Proceeding and without any determination as to the person’s ultimate entitlement to indemnification; provided, however, that the payment of such expenses incurred by any such person in advance of the final disposition of a Proceeding shall be made only upon delivery to the Corporation of a written affirmation by such person of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification under this Article V and a written undertaking, by or on behalf of such person, to repay all amounts so advanced if it shall ultimately be determined that such person is not entitled to be indemnified under this Article V or otherwise. The Board of Directors may authorize the Corporation’s counsel to represent such present or former Director or officer in any action, suit or proceeding, whether or not the Corporation is a party to such action, suit or proceeding.

Section 5. Procedure for Indemnification of Directors and Officers . Any indemnification of a Director or officer of the Corporation under Sections 1, 2, and 3 of this Article V, or advance of costs, charges and expenses to a Director or officer under Section 4 of this Article V, shall be made promptly, and in any event within thirty days, upon the written request of such person. If a determination by the Corporation that the Director or officer is entitled to indemnification pursuant to this Article V is required, and the Corporation fails to respond within sixty days to a written request for indemnity, the Corporation shall be deemed to have approved such request. If the Corporation denies a written request for indemnity or advancement of expenses, in whole or in part, or if payment in full pursuant to such request is not made within thirty days, the right to indemnification or advances as granted by this Article V shall be enforceable by the Director or officer in any court of competent jurisdiction. Such person’s costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses under Section 4 of this Article V where the required undertaking, if any, has been received by or tendered to the Corporation) that the claimant has not met the standard of conduct set forth in Section 1 of this Article V, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Section 1 of this Article V, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to such action or create a presumption that the claimant has not met the applicable standard of conduct.

Section 6. Survival; Preservation of Other Rights . The foregoing indemnification provisions shall be deemed to be a contract between the Corporation and each Director or officer who serves in any such capacity at any time while these provisions are in effect and any repeal or modification thereof shall not affect any right or obligation then existing with respect to any state of facts then or previously existing or any action, suit or proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts. Such a contract right may not be modified retroactively without the consent of such Director or officer.

The indemnification and the advancement and payment of expenses provided by this Article V shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, common or statutory law, provision of the Certificate of Incorporation, agreement, vote of stockholders or disinterested Directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a Director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.

Section 7. Insurance . The Corporation shall purchase and maintain insurance, at its expense, to protect the Corporation and any person who is or was or has agreed to become a Director or officer, or is or was serving at the request of the Corporation as a Director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another foreign or domestic corporation, limited liability company, partnership, joint venture, sole proprietorship, trust, employee benefit plan, or other enterprise against any expense, liability, or loss asserted against him or her or incurred by him or her or on his or her behalf in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against such liability under the provisions of this Article V, provided that such insurance is available on acceptable terms, which determination shall be made by a vote of a majority of the entire Board of Directors.

Section 8. Severability . If this Article V or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify and hold harmless each Director or officer or any other person indemnified pursuant to this Article V as to costs, charges and expenses (including reasonable attorneys’ fees), judgments, fines

and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative to the full extent permitted by any applicable portion of this Article V that shall not have been invalidated and to the fullest extent permitted by applicable law.

Section 9. Limitation on Liability . No Director or officer shall be personally liable, as such, for any action taken or omitted from being taken unless: (i) such Director or officer breached or failed to perform the duties of his office; and (ii) the breach or failure to perform constituted recklessness, self-dealing or willful misconduct. The foregoing shall not apply to any responsibility or liability under a criminal statute or liability for the payment of taxes under Federal, state, or local law.

Section 10. Appearance as a Witness . Notwithstanding any other provision of this Article V, the Corporation shall pay or reimburse expenses incurred by a Director or officer in connection with his appearance as a witness or other participation in a Proceeding at a time when he is not a named defendant or respondent in the Proceeding.

Section 11. Indemnification of Employees and Agents . The Corporation, by adoption of a resolution of the Board of Directors, may indemnify and advance expenses to an employee or agent of the Corporation to the same extent and subject to the same conditions under which it may indemnify and advance expenses to Directors and officers under this Article V; and, the Corporation may indemnify and advance expenses to persons who are not or were not Directors, officers, employees or agents of the Corporation but who are or were serving at the request of the Corporation as director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, limited liability company, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise against any liability asserted against him or her and incurred by him or her in such a capacity or arising out of his or her status as such a person to the same extent that it may indemnify and advance expenses to Directors and officers of the Corporation under this Article.

ARTICLE VI.

SHARES AND THEIR TRANSFER

Section 1. Certificate for Stock . Every stockholder of the Corporation shall be entitled to a certificate or certificates, to be in such form as the Board of Directors shall prescribe, certifying the number of shares of the capital stock of the Corporation owned by him. No certificate shall be issued for partly paid shares.

Section 2. Stock Certificate Signature . The certificates for such stock shall be numbered in the order in which they shall be issued and shall be signed by the Chairman of the Board of Directors, if any, or the Chief Executive Officer or any Vice President and by the Secretary or an Assistant Secretary or the Treasurer of the Corporation, and its seal shall be affixed thereto. If such certificate is countersigned (1) by a transfer agent other than the Corporation or its employee, or, (2) by a registrar other than the Corporation or its employee, the signatures of such officers of the Corporation may be facsimiles. In case any officer of the Corporation who has signed, or whose facsimile signature has been placed upon, any such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of issue.

Section 3. Stock Ledger . A record shall be kept by the Secretary or by any other officer, employee or agent designated by the Board of Directors of the name of each person, firm or corporation holding capital stock of the Corporation, the number of shares represented by, and the respective dates of, each certificate for such capital stock, and in case of cancellation of any such certificate, the respective dates of cancellation.

Section 4. Cancellation . Every certificate surrendered to the Corporation for exchange or registration of transfer shall be canceled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so canceled, except, subject to Section 7 of this Article VI, in cases provided for by applicable law.

Section 5. Registrations of Transfers of Stock . Registrations of transfers of shares of the capital stock of the Corporation shall be made on the books of the Corporation by the registered holder thereof, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the Corporation or with a transfer clerk or a transfer agent appointed as in Section 6 of this Article VI provided, and on surrender of the certificate or certificates for such shares properly endorsed and the payment of all taxes thereon. The person in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation; provided, that whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and the transferee request the Corporation to do so.

Section 6. Regulations . The Board of Directors may make such rules and regulations as it may deem expedient, not inconsistent with the Certificate of Incorporation of the Corporation or these Bylaws, concerning the issue, transfer and registration of certificates for shares of the stock of the Corporation. It may appoint, or authorize any principal officer or officers to appoint, one or more transfer clerks or one or more transfer agents and one or more registrars, and may require all certificates of stock to bear the signature or signatures of any of them.

Section 7. Lost, Stolen, Destroyed or Mutilated Certificates . Before any certificates for stock of the Corporation shall be issued in exchange for certificates which shall become mutilated or shall be lost, stolen or destroyed, proper evidence of such loss, theft, mutilation or destruction shall be procured for the Board of Directors, and a sufficient indemnity bond in favor of the Corporation shall be provided by the applicable stockholder, in each case, if it so requires.

Section 8. Record Dates . For the purpose of determining the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a date as a record date for any such determination of stockholders. Such record date shall not be more than sixty or less than ten days before the date of such meeting, or more than sixty days prior to any other action. If a record date is not fixed by the Board of Directors as aforesaid, (i) the date for determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the day next preceding the day on which notice is given, or if no notice is given, the day next preceding the day on which the meeting is held, and (ii) the record date for determining stockholders for any purpose other than that specified in clause (i) shall be the close of business on the day on which the resolution of the Board of Directors relating thereto is adopted.

ARTICLE VII.

MISCELLANEOUS PROVISIONS

Section 1. Corporate Seal . The Board of Directors shall authorize a corporate seal, which shall be in such form as the Board of Directors may decide. The Secretary shall be the custodian of the seal. The Board of Directors may authorize a duplicate seal to be kept and used by any other officer.

Section 2. Voting of Stocks Owned by the Corporation . The Board of Directors may authorize any person on behalf of the Corporation to attend, vote and grant proxies to be used at any meeting of stockholders of any corporation (except the Corporation) in which the Corporation may hold stock.

Section 3. Dividends . Subject to the provisions of the Certificate of Incorporation of the Corporation, the Board of Directors may, out of funds legally available therefor, at any regular or special meeting declare dividends upon the capital stock of the Corporation as and when they deem expedient. Before declaring any dividend there may be set apart out of any funds of the Corporation available for dividends such sum or sums as the Directors from time to time in their discretion deem proper for working capital or as a reserve fund to meet contingencies or for equalizing dividends or for such other purpose as the Board of Directors shall deem conducive to the interests of the Corporation.

Section 4 Venue . Unless the Corporation consents in writing to the selection of an alternate forum, the state courts of the State of Delaware in and for New Castle County (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware) shall be the sole and exclusive forum, to the fullest extent permitted by law, for (a) any derivative action or proceeding brought on behalf of the Corporation; (b) any action asserting a claim of a breach of fiduciary duty owed by any Director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders; (c) any action asserting a claim against the Corporation arising pursuant to any provision of the Delaware General Corporation Law or the Certificate of Incorporation or these Bylaws (in each case, as they may be amended from time to time); (d) any action seeking to interpret, apply, enforce or determine the validity of the Certificate of Incorporation or the Bylaws of the Corporation (in each case, as they may be amended from time to time); or (e) any action asserting a claim against the Corporation or any Director or officer or other employee of the Corporation governed by the internal affairs doctrine.

ARTICLE VIII.

AMENDMENTS

These Bylaws may be altered, amended or repealed by the Board of Directors at any regular or special meeting of the Board of Directors or by the affirmative vote of the holders of record of the issued and outstanding stock of the Corporation representing a majority of the number of votes of all issued and outstanding shares of the Corporation (i) present in person or by proxy at a meeting of holders of such stock or (ii) by a consent in writing in the manner contemplated in Section 9 of Article II; provided, that notice of the proposed alteration, amendment or repeal is contained in the notice of such meeting. Bylaws, whether made or altered by the stockholders or by the Board of Directors, shall be subject to alteration or repeal by the stockholders as in this Article VIII above provided.

Exhibit 10.1

EXECUTION VERSION

AMENDMENT NO. 5

AMENDMENT NO. 5 (this “ Amendment No. 5 ”), dated as of March 4, 2014, to that certain Credit Agreement, dated as of June 1, 2011 and as amended by Amendment No. 1 dated as of August 8, 2012, the Additional Credit Extension Amendment dated as of August 13, 2012, Amendment No. 2 dated as of November 6, 2012, Amendment No. 3 dated as of February 15, 2013, the Additional Credit Extension Amendment dated as of February 20, 2013 and Amendment No. 4 dated as of June 3, 2013, as amended, supplemented and in effect from time to time (the “ Credit Agreement ”; capitalized terms used herein and not defined shall have the meanings set forth in the Credit Agreement), among SELECT MEDICAL HOLDINGS CORPORATION (“ Holdings ”), SELECT MEDICAL CORPORATION (the “ Borrower ”), JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral Agent (the “ Administrative Agent ” and the “ Collateral Agent ,” respectively), MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED and GOLDMAN SACHS BANK USA, as Co-Syndication Agents, MORGAN STANLEY SENIOR FUNDING, INC. and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Co-Documentation Agents, and the several banks and other financial institutions from time to time party thereto as lenders (the “ Lenders ”).

W I T N E S S E T H :

WHEREAS, Section 9.02 of the Credit Agreement permits the Credit Agreement to be amended from time to time;

WHEREAS, (i) each Amendment No. 5 Consenting Lender (as defined in Exhibit A) has agreed, on the terms and conditions set forth herein, (x) to have the entire principal amount (or such lesser amount as permitted by the Borrower in consultation with the Arrangers) of its outstanding Series B Tranche B Term Loans, if any, converted into a like principal amount of a Series D Tranche B Term Loan or a Series E Tranche B Term Loan (each as defined in Exhibit A) effective as of the Amendment No. 5 Effective Date (as defined below) and (y) to have the entire principal amount (or such lesser amount as permitted by the Borrower in consultation with the Arrangers) of its outstanding Series C Tranche B Term Loans, if any, converted into a like principal amount of a Series D Tranche B Term Loan or a Series E Tranche B Term Loan effective as of the Amendment No. 5 Effective Date (as defined below) and (ii) if not all Tranche B Lenders are Amendment No. 5 Consenting Lenders, (x) the Additional Series D Tranche B Term Lender has agreed to make an additional Series D Tranche B Term Loan in a principal amount equal to the outstanding principal amount of Series B Tranche B Term Loans held on the Amendment No. 5 Effective Date by Lenders that are not Amendment No. 5 Consenting Lenders, the proceeds of which shall be applied to repay in full the Series B Tranche B Term Loans of such non-consenting Lenders and (y) the Additional Series E Tranche B Term Lender has agreed to make an additional Series E Tranche B Term Loan in a principal amount equal to the outstanding principal amount of Series C Tranche B Term Loans held on the Amendment No. 5 Effective Date by Lenders that are not Amendment No. 5 Consenting Lenders, the proceeds of which shall be applied to repay in full the Series C Tranche B Term Loans of such non-consenting Lenders;

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION ONE. Amendments . The Credit Agreement is, effective as of the Amendment No. 5 Effective Date (as defined below), hereby amended to delete the stricken text (indicated textually in the same manner as the following example: ~~stricken text~~ ) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text ) as set forth in the pages of the Credit Agreement attached as Exhibit A hereto. The Lenders hereby also consent to such

amendments to the Security Documents as are contemplated by the Credit Agreement (as amended hereby). Any previously issued Notes, if any, evidencing (x) Converted Series B Tranche B Term Loans are amended to reflect the terms and conditions evidencing the Series D Tranche B Term Loans or Series E Tranche B Term Loans, as applicable, and (y) Converted Series C Tranche B Term Loans are amended to reflect the terms and conditions evidencing the Series D Tranche B Term Loans or the Series E Tranche B Term Loans, as applicable.

SECTION TWO. Conditions to Effectiveness . This Amendment No. 5 shall become effective as of the date (the “ Amendment No. 5 Effective Date ”) when, and only when, the following conditions have been satisfied:

(i) this Amendment No. 5 shall have been executed and delivered by the Borrower, Holdings, the other Loan Parties, the Required Lenders and the Administrative Agent;

(ii) (x) the Administrative Agent, the Borrower and the Additional Series D Tranche B Term Lender (as defined in Exhibit A) shall have entered into the Additional Series D Tranche B Term Joinder Agreement and (y) the Administrative Agent, the Borrower and the Additional Series E Tranche B Term Lender (as defined in Exhibit A) shall have entered into the Additional Series E Tranche B Term Joinder Agreement;

(iii) the Administrative Agent shall have received copies of the resolutions of the board of directors (or authorized committee thereof) of (x) Holdings, (y) the Borrower and (z) each Subsidiary Loan Party approving and authorizing the execution, delivery and performance of this Amendment No. 5, certified as of the Amendment No. 5 Effective Date by the corporate secretary or an assistant secretary thereof as being in full force and effect without modification or amendment;

(iv) the Administrative Agent shall have received a legal opinion dated the Amendment No. 5 Effective Date from Dechert LLP in form and substance reasonably satisfactory to the Arrangers and the Administrative Agent;

(v) the representations and warranties set forth in Article III of the Credit Agreement and in each other Loan Document shall be true and correct in all material respects (except to the extent any such representation or warranty is qualified by “materially,” “Material Adverse Effect” or a similar term, in which case such representation and warranty shall be true and correct in all respects) on and as of the date hereof (both before and after giving effect to the effectiveness of Amendment No. 5) with the same effect as though made on and as of the date hereof, except to the extent such representations and warranties expressly relate to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date ( provided that the sol vency representation will be deemed to have been made on the Amendment No. 5 Effective Date after giving effect to the effectiveness of Amendment No. 5);

(vi) to the extent not previously delivered, each Additional Series D Tranche B Term Lender, each Additional Series E Tranche B Term Lender and the Administrative Agent shall have received at least 3 business days prior to the date hereof all documentation and other information about the Borrower and the Subsidiary Loan Parties required under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act that has been requested in writing at least 5 business days prior to the date hereof;

(vii) the Administrative Agent shall have received a Borrowing Request in respect of (x) the Series D Tranche B Term Loans and (y) the Series E Tranche B Term Loans, in each case as required by Section 2.03 of the Credit Agreement;

(viii) immediately prior to and after giving effect to the effectiveness of Amendment No. 5, no Default has occurred or is continuing or shall result from the effectiveness of Amendment No. 5;

(ix) the Administrative Agent shall have received payment of all fees and out-of-pocket expenses required to be paid or reimbursed by Borrower as separately agreed by Borrower and J.P. Morgan Securities LLC (“ J.P. Morgan ”) and Goldman Sachs Lending Partners LLC (“ Goldman ”), Merrill Lynch, Pierce, Fenner & Smith Incorporated (“ ML ”), Morgan Stanley Senior Funding, Inc. (“ MS ”), Wells Fargo Securities, LLC (“ Wells ”) and RBC Capital Markets, LLC (“ RBC ” and together with J.P. Morgan, Goldman, ML, MS and Wells, collectively, the “ Arrangers ”), and reimbursement or payment of all reasonable out-of-pocket expenses (including the reasonable fees, charges and disbursements of Cahill Gordon & Reindel LLP) required to be reimbursed or paid by any Loan Party hereunder or under any other Loan Document, in each case to the extent such out-of-pocket expenses have been invoiced; and

(x) to the extent not previously delivered, (i) the Administrative Agent shall have received a completed “Life-of-Loan” Federal Emergency Management Agency Standard Flood Hazard Determination with respect to each Mortgaged Property (together with a notice about special flood hazard area status and flood disaster assistance, if applicable, duly executed by the Borrower and each Loan Party relating thereto) and (ii) the Administrative Agent shall have received a copy of, or a certificate as to coverage under, the insurance policies required by Section 5.07 of the Credit Agreement including, without limitation, flood insurance policies (to the extent required in order to comply with applicable law) and the applicable provisions of the Security Documents, each of which shall be endorsed or otherwise amended to include a “standard” or “New York” lender’s loss payable or mortgagee endorsement (as applicable) and shall name the Collateral Agent, on behalf of the Secured Parties, as additional insured, in form and substance reasonably satisfactory to the Administrative Agent;

SECTION THREE. Representations and Warranties . In order to induce the Lenders and the Administrative Agent to enter into this Amendment No. 5, the Borrower represents and warrants to each of the Lenders and the Administrative Agent that, after giving effect to this Amendment No. 5, and both before and after giving effect to the transactions contemplated by this Amendment No. 5:

(a) no Default or Event of Default has occurred and is continuing;

(b) the entry into this Amendment No. 5 by (x) Holdings, (y) the Borrower and (z) each other Loan Party has been duly authorized by all necessary corporate or other action of each such entity; and

(c) each of the representations and warranties made by each of the Loan Parties in or pursuant to the Loan Documents is true and correct in all material respects on and as of the date hereof as if made on the date hereof (or, if any such representation or warranty is expressly stated to have been made as of a specific date, in all material respects as of such specific date).

SECTION FOUR. Post-Closing Covenant . Subject to the provisions of the Collateral and Guarantee Requirement and any applicable limitations in any Loan Document, Borrower hereby agrees with the Administrative Agent to deliver, on or before the date that is:

i. 30 days after the Amendment No. 5 Effective Date (or such longer period of time as may be agreed by the Administrative Agent in its sole discretion), with respect to each Mortgaged Property:

(A) an amendment to each existing Mortgage (each, a “ Mortgage Amendment ”) duly executed and acknowledged by the applicable Loan Party and in form for recording in the recording office where such Mortgage was recorded, together with such certificates, affidavits, questionnaires or returns as shall be required in connection with the recording or filing thereof under applicable law, in each case in form and substance reasonably satisfactory to the Administrative Agent and otherwise approved by the applicable local counsel for filing in the appropriate jurisdiction; and

(B) with respect to each Mortgage Amendment, a datedown endorsement to each existing mortgage title policy (if such endorsement is not available in the jurisdiction, a title search and modification endorsement in lieu thereof) (each, a “ Datedown Endorsement ,” collectively, the “ Datedown Endorsements ”) relating to the Mortgaged Property subject to such Mortgage insuring the Administrative Agent that such Mortgage, as amended by such Mortgage Amendment is a valid and enforceable first priority lien on such Mortgaged Property in favor of the Collateral Agent for the benefit of the Secured Parties and that there are no Liens of record in violation of the provisions of the Loan Documents, and such Datedown Endorsement shall otherwise be in form and substance reasonably satisfactory to the Administrative Agent.

SECTION FIVE. Reference to and Effect on the Loan Documents . On and after the Amendment No. 5 Effective Date, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof” or words of like import referring the Credit Agreement, and each reference in the Notes and each of the other Loan Documents to “the Credit Agreement,” “thereunder,” “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement, as amended by this Amendment No. 5. The Credit Agreement, the Notes and each of the other Loan Documents, as specifically amended by this Amendment No. 5, are and shall continue to be in full force and effect. The execution, delivery and effectiveness of this Amendment No. 5 shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or any Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.

SECTION SIX. Reaffirmation . Each Loan Party (x) hereby expressly acknowledges the terms of this Amendment and reaffirms, as of the date hereof, the covenants and agreements contained in each Loan Document to which it is a party, including, in each case, such covenants and agreements as in effect immediately after giving effect to this Amendment No. 5 and the transactions contemplated hereby, (y) by its signature below, hereby affirms and confirms (a) its obligations under each of the Loan Documents to which it is a party, and (b) the pledge of and/or grant of a security interest in its assets which are Collateral to secure such Obligations, all as provided in the Security Documents as originally executed, and acknowledges and agrees that such guarantee, pledge and/or grant shall continue in full force and effect in respect of, and to secure, such Obligations under the Credit Agreement and the other Loan Documents and (z) acknowledges and agrees that each of the Loan Documents in existence as of the date hereof shall be henceforth read and construed in accordance with and so as to give full force and effect to the ratifications, confirmations, acknowledgements and agreements made herein.

SECTION SEVEN. Costs, Expenses and Taxes . The Borrower agrees to pay all reasonable out-of-pocket expenses incurred by the Administrative Agent in connection with the preparation, execution and delivery of this Amendment No. 5 and the other instruments and documents to be delivered hereunder, if any (including, without limitation, the reasonable fees, charges and disbursements of Cahill Gordon & Reindel LLP, counsel to the Administrative Agent) in accordance with the terms of Section 9.03 of the Credit Agreement.

SECTION EIGHT. Execution in Counterparts . This Amendment No. 4 may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page to this Amendment No. 5 by telecopy or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Amendment No. 5.

SECTION NINE. Governing Law . THIS AMENDMENT NO. 5 AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT NO. 5 SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

[Signature Pages Follow]

SELECT MEDICAL CORPORATION,
as the Borrower


By:	/s/ Joel T. Veit
	Name:	Joel T. Veit
	Title:	Senior Vice President and Treasurer


SELECT MEDICAL HOLDINGS CORPORATION


By:	/s/ Joel T. Veit
	Name:	Joel T. Veit
	Title:	Senior Vice President and Treasurer


EACH OF THE SUBSIDIARIES LISTED ON SCHEDULE I HERETO


By:	/s/ Joel T. Veit
	Name:	Joel T. Veit
	Title:	Vice President

S-1

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent


By:	/s/ Dawn Lee Lum
	Name:	Dawn Lee Lum
	Title:	Executive Director

S-2

SCHEDULE I
TO AMENDMENT NO. 5

SUBSIDIARY LOAN PARTIES

Group 1

	1.	Advantage Rehabilitation Clinics, Inc.
	2.	American Transitional Hospitals, Inc.
	3.	Baseline Rehabilitation, Inc.
	4.	C.E.R. - West, Inc.
	5.	Community Rehab Centers of Massachusetts, Inc.
	6.	Crowley Physical Therapy Clinic, Inc.
	7.	Dade Prosthetics & Orthotics, Inc.
	8.	Douglas Avery & Associates, Ltd.
	9.	Eagle Rehab Corporation
	10.	Fine, Bryant & Wah, Inc.
	11.	Georgia Physical Therapy, Inc.
	12.	Gulf Breeze Physical Therapy, Inc.
	13.	Hospital Holdings Corporation
	14.	Indianapolis Physical Therapy and Sports Medicine, Inc.
	15.	Intensiva Healthcare Corporation
	16.	Intensiva Hospital of Greater St. Louis, Inc.
	17.	Johnson Physical Therapy, Inc.
	18.	Joyner Sportsmedicine Institute, Inc.
	19.	Kentucky Rehabilitation Services, Inc.
	20.	Kessler Institute for Rehabilitation, Inc.
	21.	Kessler Orthotic & Prosthetic Services, Inc.
	22.	Kessler Rehab Centers, Inc.
	23.	Kessler Rehabilitation Corporation
	24.	Kessler Rehabilitation Services, Inc.
	25.	Madison Rehabilitation Center, Inc.
	26.	Metro Rehabilitation Services, Inc.
	27.	Metro Therapy, Inc.
	28.	New England Rehabilitation Center of Southern New Hampshire, Inc.
	29.	NovaCare Occupational Health Services, Inc.

	30.	NovaCare Outpatient Rehabilitation East, Inc.
	31.	NovaCare Outpatient Rehabilitation, Inc.
	32.	NovaCare Rehabilitation of Ohio, Inc.
	33.	NovaCare Rehabilitation, Inc.
	34.	Pacific Rehabilitation & Sports Medicine, Inc.
	35.	PR Acquisition Corporation
	36.	Pro Active Therapy of North Carolina, Inc.
	37.	Pro Active Therapy of South Carolina, Inc.
	38.	Pro Active Therapy of Virginia, Inc.
	39.	Pro Active Therapy, Inc.
	40.	Professional Sports Care Management, Inc.
	41.	Professional Therapeutic Services, Inc.
	42.	Professional Therapy Systems, Inc.
	43.	PTSMA, Inc.
	44.	RCI (Michigan), Inc.
	45.	RCI (WRS), Inc.
	46.	Regency Management Company, Inc.
	47.	Rehab Provider Network - East I, Inc.
	48.	Rehab Provider Network - East II, Inc.
	49.	Rehab Provider Network - Indiana, Inc.
	50.	Rehab Provider Network - New Jersey, Inc.
	51.	Rehab Provider Network - Pennsylvania, Inc.
	52.	Rehab Provider Network of Colorado, Inc.
	53.	Rehab Provider Network of Florida, Inc.
	54.	Rehab Provider Network of New Mexico, Inc.
	55.	Rehab Provider Network of North Carolina, Inc.
	56.	Rehab Provider Network of South Carolina, Inc.
	57.	Rehab Provider Network of Texas, Inc.
	58.	Rehab Provider Network of Virginia, Inc.
	59.	Rehab Provider Network-Michigan, Inc.
	60.	Rehab Provider Network-Ohio, Inc.
	61.	RehabClinics (GALAXY), Inc.
	62.	RehabClinics (PTA), Inc.
	63.	RehabClinics (SPT), Inc.
	64.	RehabClinics, Inc.

I-2

	65.	Rehabilitation Center of Washington, D.C., Inc.
	66.	RPN of NC, Inc.
	67.	S.T.A.R.T., Inc.
	68.	Select Employment Services, Inc.
	69.	Select Hospital Investors, Inc.
	70.	Select Medical of Kentucky, Inc.
	71.	Select Medical of Maryland, Inc.
	72.	Select Medical of New York, Inc.
	73.	Select Medical Rehabilitation Clinics, Inc.
	74.	Select Medical Rehabilitation Services, Inc.
	75.	Select NovaCare - KOP, Inc.
	76.	Select NovaCare - PBG, Inc.
	77.	Select NovaCare - PIT, Inc.
	78.	Select Physical Therapy Holdings, Inc.
	79.	Select Physical Therapy Network Services, Inc.
	80.	Select Physical Therapy of Chicago, Inc.
	81.	Select Physical Therapy Orthopedic Services, Inc.
	82.	Select Provider Networks, Inc.
	83.	Select Rehabilitation Hospital - Hershey, Inc.
	84.	Select Specialty Hospital - Ann Arbor, Inc.
	85.	Select Specialty Hospital - Arizona, Inc.
	86.	Select Specialty Hospital - Augusta, Inc.
	87.	Select Specialty Hospital - Beech Grove, Inc.
	88.	Select Specialty Hospital - Charleston, Inc.
	89.	Select Specialty Hospital - Cincinnati, Inc.
	90.	Select Specialty Hospital - Colorado Springs, Inc.
	91.	Select Specialty Hospital - Columbus, Inc.
	92.	Select Specialty Hospital - Conroe, Inc.
	93.	Select Specialty Hospital - Dallas, Inc.
	94.	Select Specialty Hospital - Danville, Inc.
	95.	Select Specialty Hospital - Denver, Inc.
	96.	Select Specialty Hospital - Durham, Inc.
	97.	Select Specialty Hospital - Erie, Inc.
	98.	Select Specialty Hospital - Evansville, Inc.
	99.	Select Specialty Hospital - Flint, Inc.

I-3

	100.	Select Specialty Hospital - Fort Smith, Inc.
	101.	Select Specialty Hospital - Fort Wayne, Inc.
	102.	Select Specialty Hospital - Gainesville, Inc.
	103.	Select Specialty Hospital - Greensboro, Inc.
	104.	Select Specialty Hospital - Grosse Pointe, Inc.
	105.	Select Specialty Hospital - Jackson, Inc.
	106.	Select Specialty Hospital - Johnstown, Inc.
	107.	Select Specialty Hospital - Kalamazoo, Inc.
	108.	Select Specialty Hospital - Kansas City, Inc.
	109.	Select Specialty Hospital - Knoxville, Inc.
	110.	Select Specialty Hospital - Laurel Highlands, Inc.
	111.	Select Specialty Hospital - Lexington, Inc.
	112.	Select Specialty Hospital - Little Rock, Inc.
	113.	Select Specialty Hospital - Longview, Inc.
	114.	Select Specialty Hospital - Macomb County, Inc.
	115.	Select Specialty Hospital - Madison, Inc.
	116.	Select Specialty Hospital - McKeesport, Inc.
	117.	Select Specialty Hospital - Memphis, Inc.
	118.	Select Specialty Hospital - Midland, Inc.
	119.	Select Specialty Hospital - Milwaukee, Inc.
	120.	Select Specialty Hospital - Nashville, Inc.
	121.	Select Specialty Hospital - North Knoxville, Inc.
	122.	Select Specialty Hospital - Northeast New Jersey, Inc.
	123.	Select Specialty Hospital - Northeast Ohio, Inc.
	124.	Select Specialty Hospital - Northwest Detroit, Inc.
	125.	Select Specialty Hospital - Oklahoma City, Inc.
	126.	Select Specialty Hospital - Omaha, Inc.
	127.	Select Specialty Hospital - Orlando, Inc.
	128.	Select Specialty Hospital - Palm Beach, Inc.
	129.	Select Specialty Hospital - Panama City, Inc.
	130.	Select Specialty Hospital - Pensacola, Inc.
	131.	Select Specialty Hospital - Phoenix, Inc.
	132.	Select Specialty Hospital - Pittsburgh/UPMC, Inc.
	133.	Select Specialty Hospital - Pontiac, Inc.
	134.	Select Specialty Hospital - Quad Cities, Inc.

I-4

	135.	Select Specialty Hospital - Saginaw, Inc.
	136.	Select Specialty Hospital - San Antonio, Inc.
	137.	Select Specialty Hospital - Savannah, Inc.
	138.	Select Specialty Hospital - Sioux Falls, Inc.
	139.	Select Specialty Hospital - South Dallas, Inc.
	140.	Select Specialty Hospital - Springfield, Inc.
	141.	Select Specialty Hospital - Tallahassee, Inc.
	142.	Select Specialty Hospital - Topeka, Inc.
	143.	Select Specialty Hospital - TriCities, Inc.
	144.	Select Specialty Hospital - Tulsa, Inc.
	145.	Select Specialty Hospital - Western Michigan, Inc.
	146.	Select Specialty Hospital - Western Missouri, Inc.
	147.	Select Specialty Hospital - Wichita, Inc.
	148.	Select Specialty Hospital - Wilmington, Inc.
	149.	Select Specialty Hospital - Winston-Salem, Inc.
	150.	Select Specialty Hospital - Youngstown, Inc.
	151.	Select Specialty Hospital - Zanesville, Inc.
	152.	Select Specialty Hospitals, Inc.
	153.	Select Subsidiaries, Inc.
	154.	Select Synergos, Inc.
	155.	Select Transport, Inc.
	156.	Select Unit Management, Inc.
	157.	SemperCare, Inc.
	158.	Sports & Orthopedic Rehabilitation Services, Inc.
	159.	The Rehab Group, Inc.
	160.	Theraworks, Inc.
	161.	Victoria Healthcare, Inc.
	162.	OHRH ES, Inc.
	163.	GRSH ES, Inc.
	164.	Select Specialty Hospital — Daytona Beach, Inc.
	165.	Select Specialty Hospital — Melbourne, Inc.
	166.	GH General — San Antonio, LLC
	167.	GR General — Scottsdale, LLC

I-5

Group 2

	168.	SelectMark, Inc.
	169.	SLMC Finance Corporation

Group 3

	170.	Select Physical Therapy of Albuquerque, Ltd.
	171.	Select Physical Therapy of Birmingham, Ltd.
	172.	Select Physical Therapy of Blue Springs Limited Partnership
	173.	Select Physical Therapy of Cave Springs Limited Partnership
	174.	Select Physical Therapy of Colorado Springs Limited Partnership
	175.	Select Physical Therapy of Connecticut Limited Partnership
	176.	Select Physical Therapy of Denver, Ltd.
	177.	Select Physical Therapy of Green Bay Limited Partnership
	178.	Select Physical Therapy of Illinois Limited Partnership
	179.	Select Physical Therapy of Kendall, Ltd.
	180.	Select Physical Therapy of Knoxville Limited Partnership
	181.	Select Physical Therapy of Lorain Limited Partnership
	182.	Select Physical Therapy of Louisville, Ltd.
	183.	Select Physical Therapy of Portola Valley Limited Partnership
	184.	Select Physical Therapy of Scottsdale Limited Partnership
	185.	Select Physical Therapy of St. Louis Limited Partnership
	186.	Select Physical Therapy of West Denver Limited Partnership
	187.	Select Physical Therapy Texas Limited Partnership

Group 4

	188.	Select Physical Therapy of Ohio Limited Partnership
	189.	Select Physical Therapy Limited Partnership for Better Living

Group 5

	190.	Regency Hospital of Odessa, LLLP

Group 6

	191.	Regency Hospital Company of Macon, L.L.C.
	192.	Regency Hospital Company of Meridian, L.L.C.
	193.	Regency Hospital Company of South Atlanta, L.L.C.
	194.	Regency Hospital Company of South Carolina, L.L.C.

I-6

	195.	Regency Hospital of Cincinnati, LLC
	196.	Regency Hospital of Columbus, LLC
	197.	Regency Hospital of Covington, LLC
	198.	Regency Hospital of Greenville, LLC
	199.	Regency Hospital of Jackson, LLC
	200.	Regency Hospital of Minneapolis, LLC
	201.	Regency Hospital of North Central Ohio, LLC
	202.	Regency Hospital of North Dallas Holdings, LLC
	203.	Regency Hospital of Northwest Arkansas, LLC
	204.	Regency Hospital of Northwest Indiana, LLC
	205.	Regency Hospital of Southern Mississippi, LLC
	206.	Regency Hospital of Toledo, LLC
	207.	Regency Hospital of Odessa Limited Partner, LLC
	208.	Regency Hospital of Fort Worth Holdings, LLC

Group 7

	209.	Kessler Professional Services, LLC
	210.	Argosy Health, LLC
	211.	Select Medical Property Ventures, LLC
	212.	Select Specialty Hospital — Northern Kentucky, LLC
	213.	Select Specialty Hospital — Tulsa/Midtown, LLC
	214.	West Gables Rehabilitation Hospital, LLC
	215.	GP Therapy, L.L.C.
	216.	The Rehab Group — Murfreesboro, LLC
	217.	Regency Hospital Company, L.L.C.
	218.	Regency Hospitals, LLC

I-7

Exhibit A

AMENDED AND RESTATED CREDIT AGREEMENT

consisting of a

$284,599,138.00
Series D Tranche B Term Loan Facility

$495,561,393.25
Series E Tranche B Term Loan Facility

and a

$300,000,000.00
Revolving Credit Facility

dated as of

March 4, 2014,

among

SELECT MEDICAL HOLDINGS CORPORATION,
as Holdings

SELECT MEDICAL CORPORATION,
as the Borrower

The Lenders Party Hereto from Time to Time

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent and Collateral Agent

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, and
GOLDMAN SACHS BANK USA,
as Co-Syndication Agents

and

MORGAN STANLEY SENIOR FUNDING, INC., and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Co-Documentation Agents

J.P. MORGAN SECURITIES LLC,
GOLDMAN SACHS LENDING PARTNERS LLC,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
MORGAN STANLEY SENIOR FUNDING, INC.
WELLS FARGO SECURITIES, LLC, and

RBC CAPITAL MARKETS, LLC,
as Joint Lead Arrangers and Joint Bookrunners

TABLE OF CONTENTS

		Page

ARTICLE I

Definitions

SECTION 1.01.	Defined Terms	1
SECTION 1.02.	Classification of Loans and Borrowings	32
SECTION 1.03.	Terms Generally	32
SECTION 1.04.	Accounting Terms; GAAP	32
SECTION 1.05.	Specified Transactions	33
SECTION 1.06.	Effect of this Agreement on the Original Credit Agreement and the Other Existing Loan Documents	33

ARTICLE II

The Credits

SECTION 2.01.	Commitments and Extension Requests	33
SECTION 2.02.	Loans and Borrowings	34
SECTION 2.03.	Requests for Borrowings	34
SECTION 2.04.	Swingline Loans	35
SECTION 2.05.	Letters of Credit	36
SECTION 2.06.	Funding of Borrowings	40
SECTION 2.07.	Interest Elections	40
SECTION 2.08.	Termination and Reduction of Commitments	42
SECTION 2.09.	Repayment of Loans; Evidence of Debt	42
SECTION 2.10.	Amortization of Tranche B Term Loans	43
SECTION 2.11.	Prepayment of Loans	44
SECTION 2.12.	Fees	46
SECTION 2.13.	Interest	48
SECTION 2.14.	Alternate Rate of Interest; Illegality	48
SECTION 2.15.	Increased Costs	49
SECTION 2.16.	Break Funding Payments	50
SECTION 2.17.	Taxes	51
SECTION 2.18.	Payments Generally; Pro Rata Treatment; Sharing of Setoffs	53
SECTION 2.19.	Mitigation Obligations; Replacement of Lenders	54
SECTION 2.20.	Incremental Extensions of Credit	55
SECTION 2.21.	Extended Term Loans and Extended Revolving Commitments	56
SECTION 2.22.	Defaulting Lenders	58

ARTICLE III

Representations and Warranties

SECTION 3.01.	Organization; Power	60
SECTION 3.02.	Authorization; Enforceability	60
SECTION 3.03.	Governmental Approvals; No Conflicts	60
SECTION 3.04.	Financial Condition; No Material Adverse Change	61

		Page

SECTION 3.05.	Properties	61
SECTION 3.06.	Litigation and Environmental Matters	61
SECTION 3.07.	Compliance with Laws and Agreements	62
SECTION 3.08.	Investment and Holding Company Status	62
SECTION 3.09.	Taxes	62
SECTION 3.10.	ERISA	62
SECTION 3.11.	Disclosure	62
SECTION 3.12.	Subsidiaries	63
SECTION 3.13.	Insurance	63
SECTION 3.14.	Labor Matters	63
SECTION 3.15.	Solvency	63
SECTION 3.16.	Federal Reserve Regulations	63
SECTION 3.17.	Reimbursement from Third Party Payors	63
SECTION 3.18.	Fraud and Abuse	64
SECTION 3.19.	USA PATRIOT Act, Etc.	64

ARTICLE IV

Conditions

SECTION 4.01.	[Reserved]	65
SECTION 4.02.	Each Credit Event	65

ARTICLE V

Affirmative Covenants

SECTION 5.01.	Financial Statements and Other Information	65
SECTION 5.02.	Notices of Material Events	67
SECTION 5.03.	Information Regarding Collateral	68
SECTION 5.04.	Existence; Conduct of Business	68
SECTION 5.05.	Payment of Obligations	68
SECTION 5.06.	Maintenance of Properties	68
SECTION 5.07.	Insurance	69
SECTION 5.08.	Casualty and Condemnation	69
SECTION 5.09.	Books and Records; Inspection and Audit Rights	69
SECTION 5.10.	Compliance with Laws	69
SECTION 5.11.	Use of Proceeds and Letters of Credit	69
SECTION 5.12.	Additional Subsidiaries; Succeeding Holdings	70
SECTION 5.13.	Further Assurances	70
SECTION 5.14.	Post-Closing Matters	70

ARTICLE VI

Negative Covenants

SECTION 6.01.	Indebtedness; Certain Equity Securities	71
SECTION 6.02.	Liens	73
SECTION 6.03.	Fundamental Changes	74
SECTION 6.04.	Investments, Loans, Advances, Guarantees and Acquisitions	75
SECTION 6.05.	Asset Sales	77

		Page

SECTION 6.06.	Sale and Leaseback Transactions	78
SECTION 6.07.	Swap Agreements	78
SECTION 6.08.	Restricted Payments; Certain Payments of Indebtedness	78
SECTION 6.09.	Transactions with Affiliates	81
SECTION 6.10.	Restrictive Agreements	82
SECTION 6.11.	Amendment of Material Documents	83
SECTION 6.12.	[Reserved]	83
SECTION 6.13.	Leverage Ratio	83
SECTION 6.14.	Maximum Capital Expenditures	84

ARTICLE VII

Events of Default

SECTION 7.01.	Events of Default	85
SECTION 7.02.	Borrower’s Right to Cure	87
SECTION 7.03.	Exclusion of Immaterial Subsidiaries	88

ARTICLE VIII

The Agents

SECTION 8.01.	The Agents	88

ARTICLE IX

Miscellaneous

SECTION 9.01.	Notices	90
SECTION 9.02.	Waivers; Amendments	91
SECTION 9.03.	Expenses; Indemnity; Damage Waiver	94
SECTION 9.04.	Successors and Assigns	95
SECTION 9.05.	Survival	98
SECTION 9.06.	Counterparts; Integration; Effectiveness	98
SECTION 9.07.	Severability	99
SECTION 9.08.	Right of Setoff	99
SECTION 9.09.	Governing Law; Jurisdiction; Consent to Service of Process	99
SECTION 9.10.	WAIVER OF JURY TRIAL	100
SECTION 9.11.	Headings	100
SECTION 9.12.	Confidentiality	100
SECTION 9.13.	Interest Rate Limitation	101
SECTION 9.14.	USA Patriot Act	101
SECTION 9.15.	Release of Collateral	101
SECTION 9.16.	No Fiduciary Duty	101

iii

SCHEDULES :

Schedule 1.01 — Mortgaged Property

Schedule 2.01 — Commitments

Schedule 2.05 — Existing Letters of Credit

Schedule 3.05 — Real Property

Schedule 3.06 — Litigation and Environmental Matters

Schedule 3.12 — Subsidiaries

Schedule 3.13 — Insurance

Schedule 4.01 — Local Counsel Jurisdictions

Schedule 5.14 — Post-Closing Matters

Schedule 6.01 — Existing Indebtedness

Schedule 6.02 — Existing Liens

Schedule 6.04 — Existing Investments

Schedule 6.05 — Asset Sales

Schedule 6.09 — Existing Transactions with Affiliates

Schedule 6.10 — Existing Restrictions

EXHIBITS :

Exhibit A — Form of Assignment and Assumption

Exhibit B-1 — Form of Opinion of Dechert LLP

Exhibit B-2 — Form of Opinion of Local Counsel

Exhibit C — Form of Collateral Agreement

Exhibit D — Form of Perfection Certificate

Exhibit E — Form of Borrowing Request

Exhibit F — Form of Interest Election Request

Exhibit G — Form of First Lien Intercreditor Agreement

Exhibit H — Form of IRPTL Waiver and Certificate

AMENDED AND RESTATED CREDIT AGREEMENT dated as of March 4, 2014, among SELECT MEDICAL HOLDINGS CORPORATION, a Delaware corporation, SELECT MEDICAL CORPORATION, a Delaware corporation, the LENDERS party hereto from time to time and JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral Agent.

The Borrower, Holdings, the Lenders, the Administrative Agent and the Collateral Agent are party to a credit agreement dated as of June 1, 2011 (as amended by Amendment No. 1 dated as of August 8, 2012, the Additional Credit Extension Amendment dated as of August 13, 2012, Amendment No. 2 dated as of November 6, 2012, Amendment No. 3 dated as of February 15, 2013, the Additional Credit Extension Amendment dated as of February 20, 2013 and Amendment No. 4 dated as of June 3, 2013, the “ Original Credit Agreement ”).

Pursuant to Amendment No. 5, dated as of the date hereof (“ Amendment No. 5 ”), the parties thereto have agreed to amend and restate in its entirety the Original Credit Agreement and replace it in its entirety with this Agreement.

The Lenders are willing to extend such credit to the Borrower, and the Issuing Bank is willing to issue Letters of Credit for the account of the Borrower, on the terms and subject to the conditions set forth herein. Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Defined Terms . As used in this Agreement, the following terms have the meanings specified below:

“ 2018 Extended Revolving Availability Period ” means the period from and including the Amendment No. 4 Effective Date to but excluding the earlier of (a) the 2018 Extended Revolving Maturity Date and (b) the date of termination of the 2018 Extended Revolving Commitments.

“ 2018 Extended Revolving Commitment ” means, with respect to each Lender, the commitment, if any, of such Lender to make 2018 Extended Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder on or after the Amendment No. 4 Effective Date, expressed as an amount representing the maximum possible aggregate amount of such Lender’s 2018 Extended Revolving Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The aggregate amount of the Lenders’ 2018 Extended Revolving Commitments on the Restatement Effective Date is set forth on Schedule 2.01 .

“ 2018 Extended Revolving Exposure ” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s 2018 Extended Revolving Loans and its LC Exposure and Swingline Exposure at such time.

“ 2018 Extended Revolving Lender ” means a Lender with a 2018 Extended Revolving Commitment or, if the 2018 Extended Revolving Commitments have terminated or expired, a Lender with 2018 Extended Revolving Exposure.

“ 2018 Extended Revolving Loan ” means a Loan made pursuant to clause (c) of Section 2.01.

“ 2018 Extended Revolving Maturity Date ” means March 1, 2018.

“ ABR ,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

“ Additional Credit Extension Amendment ” means an amendment to this Agreement (which may, at the option of the Administrative Agent, be in the form of an amendment and restatement of this Agreement) and any other applicable Loan Document providing for any Incremental Term Loans, Replacement Term Loans, Extended Term Loans or Extended Revolving Commitments which shall be consistent with the applicable provisions of this Agreement relating to Incremental Term Loans, Replacement Term Loans, Extended Term Loans or Extended Revolving Commitments and otherwise satisfactory to the Administrative Agent.

“ Additional Lender ” has the meaning set forth in Section 2.20.

“ Additional Series D Tranche B Term Loan Commitment ” means, with respect to the Additional Series D Tranche B Term Lender, its commitment to make a Series D Tranche B Term Loan on the Amendment No. 5 Effective Date in an amount equal to $284,599,138.00 minus the aggregate principal amount of Converted Series B Tranche B Term Loans of all Lenders.

“ Additional Series D Tranche B Term Joinder Agreement ” means the joinder agreement dated as of the Amendment No. 5 Effective Date by and among the Borrower, the Administrative Agent and the Additional Series D Tranche B Term Lender.

“ Additional Series D Tranche B Term Lender ” means the person identified as such in the Additional Series D Tranche B Term Joinder Agreement.

“ Additional Series E Tranche B Term Loan Commitment ” means, with respect to the Additional Series E Tranche B Term Lender, its commitment to make a Series E Tranche B Term Loan on the Amendment No. 5 Effective Date in an amount equal to $495,561,393.25 minus the aggregate principal amount of Converted Series C Tranche B Term Loans of all Lenders.

“ Additional Series E Tranche B Term Joinder Agreement ” means the joinder agreement dated as of the Amendment No. 5 Effective Date by and among the Borrower, the Administrative Agent and the Additional Series E Tranche B Term Lender.

“ Additional Series E Tranche B Term Lender ” means the person identified as such in the Additional Series E Tranche B Term Joinder Agreement.

“ Adjusted LIBO Rate ” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for the applicable Class of Loans for such Interest Period multiplied by (b) the Statutory Reserve Rate.

“ Administrative Agent ” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders under the Loan Documents.

“ Administrative Questionnaire ” means an administrative questionnaire in a form supplied by the Administrative Agent.

“ Affiliate ” means, with respect to a specified Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with the Person specified.

“ Agents ” means the Administrative Agent, the Collateral Agent, the Arrangers, the Co-Syndication Agents and the Co-Documentation Agents.

“ Agreement ” means this Amended and Restated Credit Agreement, as the same may be renewed, extended, modified, supplemented, amended or amended and restated from time to time.

“ Alternate Base Rate ” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate for the applicable Class of Loans (after giving effect to any applicable minimum rate set forth therein) for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, provided that, for the avoidance of doubt (subject to any minimum rate specified in such definition), the Adjusted LIBO Rate for any day shall be based on the rate appearing on the Reuters Screen LIBOR01 Page (or on any successor or substitute page of such page) at approximately 11:00 a.m. London time on such day. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

“ Amendment No. 1 ” means that certain Amendment No. 1 to the Original Credit Agreement, dated as of the Amendment No. 1 Effective Date, by and among the Borrower, Holdings, the Administrative Agent and the Collateral Agent, and the other parties thereto.

“ Amendment No. 1 Effective Date ” means August 8, 2012, the date on which each of the conditions set forth in Section 2 of Amendment No. 1 was satisfied in accordance with its terms.

“ Amendment No. 2 ” means that certain Amendment No. 2 to the Original Credit Agreement, dated as of the Amendment No. 2 Effective Date, by and among the Borrower, Holdings, the Administrative Agent and the Collateral Agent, and the other parties thereto.

“ Amendment No. 2 Effective Date ” means November 6, 2012, the date on which each of the conditions set forth in Section 2 of Amendment No. 2 was satisfied in accordance with its terms.

“ Amendment No. 3 ” means that certain Amendment No. 3 to the Original Credit Agreement, dated as of the Amendment No. 3 Effective Date, by and among the Borrower, Holdings, the Administrative Agent and the Collateral Agent, and the other parties thereto.

“ Amendment No. 3 Effective Date ” means February 15, 2013, the date on which each of the conditions set forth in Section 2 of Amendment No. 3 was satisfied in accordance with its terms.

“ Amendment No. 4 ” means that certain Amendment No. 4 to the Original Credit Agreement, dated as of the Amendment No. 4 Effective Date, by and among the Borrower, Holdings, the Administrative Agent and the Collateral Agent, and the other parties thereto.

“ Amendment No. 4 Effective Date ” means June 3, 2013, the date on which each of the conditions in Section 2 of Amendment No. 4 was satisfied in accordance with its terms.

“ Amendment No. 5 ” has the meaning set forth in the preamble to this Agreement.

“ Amendment No. 5 Consenting Lender ” means each Lender that provided the Administrative Agent with a counterpart to Amendment No. 5 executed by such Lender.

“ Amendment No. 5 Effective Date ” has the meaning set forth in Amendment No. 5.

“ Applicable Percentage ” means, with respect to any Revolving Lender or 2018 Extended Revolving Lender, the percentage of the aggregate Revolving Commitments or 2018 Extended Revolving Commitments represented by such Lender’s Revolving Commitment or 2018 Extended Revolving Commitments; provided that in the case of Section 2.22 when a Defaulting Lender shall exist, “Applicable Percentage” shall mean, with respect to any Revolving Lender or 2018 Extended Revolving Lender, the percentage of the total Revolving Commitments or 2018 Extended Revolving Commitments (disregarding any Defaulting Lender’s Revolving Commitment or 2018 Extended Revolving Commitments) represented by such Revolving Lender’s or 2018 Extended Revolving Lender’s Revolving Commitment or 2018 Extended Revolving Commitments. If the Revolving Commitments or 2018 Extended Revolving Commitments have terminated or expired, the Applicable Percentage of the Revolving Commitments or 2018 Extended Revolving Commitments shall be determined based upon the Revolving Commitments or 2018 Extended Revolving Commitments, as applicable, most recently in effect, giving effect to any assignments that occur thereafter and to any Revolving Lender’s or 2018 Extended Revolving Lender status as a Defaulting Lender at the time of determination.

“ Applicable Rate ” means, for any day with respect to (a) any ABR Loan or Eurodollar Loan that is a Revolving Loan or 2018 Extended Revolving Loan or (b) the commitment fees payable hereunder in respect of the Revolving Commitments or 2018 Extended Revolving Commitments, as applicable, the applicable rate per annum set forth below under the caption “Revolving Loan ABR Spread,” “Revolving Loan Eurodollar Spread” or “Commitment Fee Rate,” as applicable, in each case, based upon the Leverage Ratio as of the most recent determination date:

Leverage Ratio	Revolving Loan ABR Spread		Revolving Loan Eurodollar Spread		Commitment Fee Rate
Category 1 > 3.5x	2.75	%	3.75	%	0.50	%
Category 2 > 3.0x and < 3.5x	2.50	%	3.50	%	0.50	%
Category 3 > 2.5x and < 3.0x	2.25	%	3.25	%	0.50	%
Category 4 > 2.0x and < 2.5x	2.00	%	3.00	%	0.50	%
Category 5 < 2.0x	1.75	%	2.75	%	0.375	%

The Applicable Rate for Series D Tranche B Term Loans shall at all times be 2.75% per annum for Eurodollar Loans and 1.75% per annum for ABR Loans.

The Applicable Rate for Series E Tranche B Term Loans shall at all times be 2.75% per annum for Eurodollar Loans and 1.75% per annum for ABR Loans.

For purposes of the foregoing, (a) the Leverage Ratio shall be determined on a Pro Forma Basis as of the end of each fiscal quarter of Holdings based upon Holdings’ consolidated financial statements delivered pursuant to Section 5.01(a) or (b), and (b) each change in the Applicable Rate resulting from a change in the Leverage Ratio shall be effective during the period commencing on and including the date of delivery to the Administrative Agent of such consolidated financial statements indicating such change and ending on the date immediately preceding the effective date of the next such change, provided that the Leverage Ratio, for purposes of determining the Applicable Rate, shall be deemed to be in Category 1 (i) at any time that an Event of Default has occurred and is continuing or (ii) at the option of the Administrative Agent or at the request of the Required Lenders if the Borrower fails to deliver the consolidated financial statements required to be delivered by it pursuant to Section 5.01(a) or (b), during the period from the expiration of the time for delivery thereof until such consolidated financial statements are delivered.

“ Approved Fund ” has the meaning assigned to such term in Section 9.04(b).

“ Arrangers ” means J.P. Morgan Securities LLC, Goldman Sachs Lending Partners LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley Senior Funding, Inc., Wells Fargo Securities, LLC and RBC Capital Markets, LLC.

“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04) and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

“ Available Amount ” means, the sum, without duplication, of:

(a) the sum (determined on a cumulative basis and in no event less than zero) of the Borrower’s Portion of Excess Cash Flow for (i) the period from January 1, 2014 through March 31, 2014 and (ii) all fiscal quarters ending after April 1, 2014; plus

(b) the amount of Net Proceeds actually received by the Borrower from the issuance by Holdings of any Equity Interests (or capital contribution in respect thereof) after the Original Effective Date) other than pursuant to the Cure Right or to the extent Otherwise Applied; plus

(c) the amount of Net Proceeds actually received by the Borrower from the issuance after the Original Effective Date of Qualified Holdings Discount Debt; plus

(d) an amount equal to any returns (including dividends, interest, distributions, returns of principal and profits on sale) actually received by the Borrower or any of the Borrower’s Subsidiaries in cash in respect of any Investments made after the Original Effective Date pursuant to Section 6.04(xviii); plus

(e) as of the Restatement Effective Date, $100.0 million; minus

(f) the sum of (i) the aggregate amount of Investments made after the Restatement Effective Date pursuant to Section 6.04(xviii), (ii) the aggregate amount of Restricted Payments made after the Restatement Effective Date pursuant to Section 6.08(a)(x) and (iii) the aggregate amount of payments made after the Restatement Effective Date pursuant to Section 6.08(b)(iii).

For the avoidance of doubt, any Investments pursuant to Section 6.04(xviii), Restricted Payments pursuant to Section 6.08(a)(x) and payments pursuant to Section 6.08(b)(iii) made prior to the Restatement Effective

Date in reliance on the definition of “Available Amount” then in effect are permitted hereunder and are not included in the calculation of the Available Amount set forth above.

“ Bankruptcy Event ” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided , further , that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

“ Board ” means the Board of Governors of the Federal Reserve System of the United States of America.

“ Borrower ” has the meaning set forth in the preamble to this Agreement.

“ Borrower’s Portion of Excess Cash Flow ” means, (i) on any date after January 1, 2012 and prior to January 1, 2013, the portion of Excess Cash Flow for the period from July 1, 2011 to December 31, 2011 for which financial statements have been delivered pursuant to Section 5.01 and (ii) on any date after January 1, 2013, the portion of Excess Cash Flow for the immediately preceding full fiscal year of the Borrower for which financial statements have been delivered pursuant to Section 5.01, in each case, that has not been, or is not required to be, applied to prepay Loans pursuant to Section 2.11(d).

“ Borrowing ” means (a) Loans of the same Class and Type made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect, or (b) a Swingline Loan.

“ Borrowing Request ” means a request by the Borrower for a Borrowing in accordance with Section 2.03, provided that a written Borrowing Request shall be substantially in the form of Exhibit E , or such other form as shall be approved by the Administrative Agent.

“ Business Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed, provided that when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

“ Capital Expenditures ” means, for any period (and without duplication), (a) the additions to property, plant and equipment and other capital expenditures of the Borrower and any of the Subsidiaries that are (or would be) set forth in a consolidated statement of cash flows of the Borrower for such period prepared in accordance with GAAP and (b) Capital Lease Obligations incurred by the Borrower and the Subsidiaries during such period; provided that Capital Expenditures shall not include (i) expenditures to the extent they are made with the Net Proceeds of the issuance by Holdings of Equity Interests (or capital contributions in respect thereof) after the Original Effective Date to the extent not Otherwise Applied or Qualified Holdings Discount Debt, (ii) investments that constitute a portion of the purchase price of a Permitted Acquisition, (iii) expenditures that constitute a reinvestment of the Net Proceeds of any event described in clause (a) or (b) of the definition of the term “Prepayment Event,” to the extent permitted by

Section 2.11(c), and (iv) the purchase price of equipment purchased during such period to the extent the consideration therefor consists of any combination of (x) used or surplus equipment traded in at the time of such purchase and (y) the proceeds of a concurrent sale of used or surplus equipment.

“ Capital Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“ Cash Management Bank ” means any Person that was a Lender or an Affiliate of a Lender (i) on the Original Effective Date and to whom Cash Management Obligations are then owed, (ii) at the time it enters into an agreement with Parent or any Subsidiary with respect to Cash Management Obligations or (iii) at the time the Borrower notifies the Administrative Agent that such Lender and its Affiliates are “Cash Management Banks” hereunder.

“ Cash Management Obligations ” means obligations owed by Holdings or any Subsidiary to any Lender or any Affiliate of a Lender in respect of (1) any overdraft and related liabilities arising from treasury, depository and cash management services or any automated clearing house transfers of funds and (2) Holdings’ or any Subsidiary’s participation in commercial (or purchasing) card programs at the Lender or any Affiliate (“ card obligations ”).

“ CFC ” means (i) a “controlled foreign corporation” within the meaning of Section 957(a) of the Code, (ii) any direct subsidiary of an entity described in clause (i) of this definition or (iii) any entity that wholly-owns the Equity Interests of an entity described in clause (i) of this definition and which is disregarded for United States federal income tax purposes as an entity that is separate from its owner, but only so long as such entity has no assets other than the Equity Interests of a CFC and de minimis assets.

“ Change in Control ” means:

(a) the acquisition of record ownership by any Person other than Holdings of any Equity Interests in the Borrower,

(b) (i) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934, as amended, and the rules of the SEC thereunder as in effect on the Original Effective Date) other than one or more Permitted Investors of Equity Interests in Holdings representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests in Holdings and (ii) the ownership, directly or indirectly, beneficially or of record, by the Permitted Investors of Equity Interests in Holdings representing in the aggregate a lesser percentage of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests in Holdings than such Person or group,

(c) occupation of a majority of the seats (other than vacant seats) on the Board of Directors of Holdings by Persons who were not (i) nominated by the Board of Directors of Holdings, (ii) appointed by directors so nominated or (iii) nominated by the Permitted Investors or

(d) the occurrence of a “Change of Control,” as defined in any indenture or other instrument, agreement or other document evidencing or governing any Qualified Holdings Discount Debt or Permitted Debt Securities or any certificate of designations relating to the Qualified Preferred Stock, in each case to the extent then in effect.

“ Change in Law ” means (a) the adoption of any law, rule or regulation after the Original Effective Date, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the Original Effective Date or (c) compliance by any Lender or any Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s or such Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the Original Effective Date; provided that, notwithstanding anything herein to the contrary, the Dodd-Frank Wall Street Reform and Consumer Protection Act and Basel III and all requests, rules, guidelines or directives thereunder or issued in connection therewith shall be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.

“ Charges ” has the meaning set forth in Section 9.13.

“ Class ,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, 2018 Extended Revolving Loans, Tranche B Term Loans, Incremental Term Loans of any series, Extended Term Loans of any series, Replacement Term Loans of any series or Swingline Loans and, when used in reference to any Commitment, refers to whether such Commitment is a Revolving Commitment, a 2018 Extended Revolving Commitment, a Tranche B Commitment or a Commitment in respect of an Incremental Extension of Credit.

“ CLO ” has the meaning assigned to such term in Section 9.04(b).

“ Code ” means the Internal Revenue Code of 1986 and the rules and regulations promulgated thereunder, as amended from time to time.

“ Collateral ” means any and all “Collateral,” as defined in any applicable Security Document.

“ Collateral Agent ” means JPMorgan Chase Bank, N.A., in its capacity as collateral agent for the Lenders under this Agreement and any Security Document.

“ Collateral Agreement ” means the Guarantee and Collateral Agreement among the Loan Parties and the Collateral Agent, substantially in the form of Exhibit C .

“ Collateral and Guarantee Requirement ” means the requirement that:

(a) the Collateral Agent shall have received from each Loan Party either (i) a counterpart of the Collateral Agreement duly executed and delivered on behalf of such Loan Party or (ii) in the case of any Person that becomes a Loan Party after the Original Effective Date, a supplement to the Collateral Agreement, in the form specified therein, duly executed and delivered on behalf of such Loan Party;

(b) all outstanding Equity Interests of (i) the Borrower and (ii) each Subsidiary owned directly by any Loan Party shall have been pledged pursuant to the Collateral Agreement (except that the Loan Parties shall not be required to pledge more than 65% of the outstanding voting Equity Interests of any Foreign Subsidiary) and the Collateral Agent shall have received certificates or other instruments representing all such Equity Interests, together with undated stock powers or other instruments of transfer with respect thereto endorsed in blank;

(c) all Indebtedness of Holdings, the Borrower and each Subsidiary that is owing to any Loan Party shall be evidenced by a promissory note and shall have been pledged pursuant to

the Collateral Agreement, and the Collateral Agent shall have received all such promissory notes, together with undated instruments of transfer with respect thereto endorsed in blank;

(d) all documents and instruments, including Uniform Commercial Code financing statements, required by law or reasonably requested by the Collateral Agent to be filed, registered or recorded to create the Liens intended to be created by the Collateral Agreement and perfect such Liens to the extent required by the Collateral Agreement, shall have been executed, filed, registered or recorded or delivered to the Collateral Agent for filing, registration or recording;

(e) the Collateral Agent shall have received (i) counterparts of a Mortgage with respect to each Mortgaged Property duly executed and delivered by the record owner of such Mortgaged Property, (ii) a policy or policies of title insurance issued by a nationally recognized title insurance company insuring the Lien of each such Mortgage as a valid first-priority Lien on the Mortgaged Property described therein, free of any other Liens except as expressly permitted by Section 6.02 in amounts reasonably acceptable to the Collateral Agent (not to exceed 100% of the Fair Market Value of such Mortgaged Property in jurisdictions that impose mortgage recording taxes or 110% otherwise), together with such endorsements, coinsurance and reinsurance as the Collateral Agent or the Required Lenders may reasonably request, and such surveys, appraisals, legal opinions and other documents as the Collateral Agent or the Required Lenders may reasonably request with respect to any such Mortgage or Mortgaged Property; and

(f) each Loan Party shall have obtained all material consents and approvals required to be obtained by it in connection with the execution and delivery of all Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder.

Notwithstanding anything to the contrary in this Agreement or any Security Document, no Loan Party shall be required to pledge or grant security interests (i) in particular assets if, in the reasonable judgment of the Administrative Agent or the Collateral Agent, the costs of creating or perfecting such pledges or security interests in such assets (including any mortgage, mortgage recording, stamp, intangibles or other tax) are excessive in relation to the benefits to the Lenders therefrom, (ii) in any owned real property other than Material Real Property or (iii) in any leasehold interests.

“ Commitment ” means a Revolving Commitment, a 2018 Extended Revolving Commitment, a Tranche B Commitment, any Commitment in respect of an Incremental Extension of Credit or any combination thereof (as the context requires).

“ Commodity Exchange Act ” means the Commodity Exchange Act (7 U.S.C. § 1 et seq .), as amended from time to time, and any successor statute.

“ Consolidated EBITDA ” means, for any period, Consolidated Net Income for such period plus

(a) without duplication and to the extent deducted in determining such Consolidated Net Income for such period, the sum of: (i) consolidated interest expense of the Borrower and its subsidiaries, for such period, (ii) (A) consolidated income tax expense of the Borrower and its subsidiaries for such period and (B) income tax expense of Holdings for such period to the extent paid in such period using the proceeds of Restricted Payments made by the Borrower pursuant to clause (v) of Section 6.08(a), (iii) all amounts attributable to depreciation and amortization expense of the Borrower and its subsidiaries for such period, (iv) any non-cash charges for such period (but excluding (A) any non-cash charge in respect of an item that was included in Consolidated

Net Income in a prior period and (B) any non-cash charge that relates to the write-down or write-off of inventory), (v) any non-recurring fees, cash charges and other cash expenses (A) made or incurred by the Borrower and its subsidiaries in connection with any Permitted Acquisition, including severance, relocation and facilities closing costs, that are paid, accrued or reserved for within 180 days of such transaction or (B) incurred in connection with the issuance of Equity Interests or Indebtedness or the extinguishment of Indebtedness, (vi) [reserved], (vii) other cash expenses incurred during such period in connection with a Permitted Acquisition to the extent that such expenses are reimbursed in cash during such period pursuant to indemnification provisions of any agreement relating to such transaction, (viii) fees paid to any Sponsor or Sponsor Affiliate under Section 6.09(h), (ix) Consolidated Net Income attributable to non-controlling interests of a subsidiary (less the amount of any mandatory cash distribution with respect to any non-controlling interest other than in connection with a proportionate discretionary cash distribution with respect to the interest held by the Borrower or any subsidiary), (x) start-up losses attributable to LTACHs paid under acute care MS-DRGs during their LTACH qualification period in connection with health care facilities acquired in any Permitted Acquisition, not to exceed $10,000,000 in any single acquisition or group of related acquisitions and $15,000,000 in any fiscal year, and (xi) cash expenses incurred during such period in connection with extraordinary casualty events to the extent such expenses are reimbursed in cash by insurance during such period, minus

(b) without duplication and to the extent included in determining such Consolidated Net Income, (i) any cash payments made during such period in respect of non-cash charges described in clause (a)(iv) taken in a prior period and (ii) any non-cash items of income for such period, all determined on a consolidated basis in accordance with GAAP, and

(c) (without duplication) plus unrealized losses and minus unrealized gains in each case in respect of Swap Agreements, as determined in accordance with GAAP.

Consolidated EBITDA for the fiscal quarters ended June 30, 2010, September 30, 2010, December 31, 2010 and March 31, 2011 shall be $95,716,000, $63,857,000, $72,796,000 and $104,178,000, respectively.

“ Consolidated Net Income ” means, for any period, the net income or loss of the Borrower and its subsidiaries for such period determined on a consolidated basis in accordance with GAAP, provided that there shall be excluded from Consolidated Net Income (a) the income of any subsidiary (other than a Consolidated Practice) to the extent that the declaration or payment of dividends or other distributions by such subsidiary of that income is not at the time permitted by a Requirement of Law or any agreement or instrument applicable to such subsidiary, except to the extent of the amount of cash dividends or other cash distributions actually paid to the Borrower or any subsidiary during such period (unless the income of any subsidiary receiving such dividend or distribution would be excluded from Consolidated Net Income pursuant to this proviso), and (b) any gains or losses attributable to sales of assets out of the ordinary course of business and any extraordinary losses or gains. Notwithstanding the foregoing, (1) the income of any Permitted Joint Venture that is not a subsidiary shall be included in Consolidated Net Income during any four-quarter period only to the extent of the amount of cash dividends or other cash distributions of such income actually paid to the Borrower or any subsidiary prior to the date financial statements are required to be delivered pursuant to Section 5.01(a) or (b) for the most recent fiscal period (unless the income of the subsidiary receiving such dividend or distribution would be excluded from Consolidated Net Income pursuant to this definition) and (2) for purposes of calculating the “Available Amount,” Consolidated Net Income shall be increased (without duplication) by the amount of cash dividends or other cash distributions actually paid to the Borrower or any subsidiary (unless the income of the subsidiary receiving such dividend or distribution would be excluded from Consolidated Net Income pursuant to this definition) since the Original Effective Date, to the extent not previously included therein.

“ Consolidated Practice ” means any therapist- or physician-owned professional organization, association or corporation that employs or contracts with physicians and has entered into a management services agreement with the Borrower or any other Subsidiary, the accounts of which are consolidated with the Borrower and its subsidiaries in accordance with GAAP.

“ Consolidated Tangible Assets ” means, as of any date, the total assets of the Borrower and its subsidiaries determined in accordance with GAAP (less, to the extent not deducted in the determination of total assets, accumulated depreciation and amortization, allowances for doubtful receivables, other applicable reserves and other properly deductible items) after giving effect to purchase accounting and, after deducting therefrom, to the extent otherwise included, the amounts of (without duplication): (a) the excess of cost over fair market value of real property; (b) any revaluation or other write-up in book value of assets subsequent to the last day of the fiscal quarter of the Borrower immediately preceding the Original Effective Date as a result of any change in the method of valuation in accordance with GAAP; (c) unamortized debt discount and expenses and other unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, licenses, organization or developmental expenses and other intangible items as to which Statement of Financial Accounting Standards No. 142 (“Goodwill and Other Intangible Assets”) applies; (d) non-controlling interests in subsidiaries held by Persons other than the Borrower or any subsidiary; (e) treasury stock; (f) cash or securities set aside and held in a sinking or other analogous fund established for the purpose of redemption or other retirement of Equity Interests; (g) investments in (and, for the avoidance of doubt, assets of) Permitted Joint Ventures; and (h) non-current deferred tax assets.

“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.

“ Converted Series B Tranche B Term Loan ” means each Series B Tranche B Term Loan held by an Amendment No. 5 Consenting Lender on the Amendment No. 5 Effective Date immediately prior to the effectiveness of Amendment No. 5.

“ Converted Series C Tranche B Term Loan ” means each Series C Tranche B Term Loan held by an Amendment No. 5 Consenting Lender on the Amendment No. 5 Effective Date immediately prior to the effectiveness of Amendment No. 5.

“ Default ” means any event or condition that constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“ Defaulting Lender ” means any Revolving Lender or 2018 Extended Revolving Lender that (a) has failed, within three Business Days of the date required to be funded or paid, to (i) fund any portion of its Revolving Loans or 2018 Extended Revolving Loans, as applicable, (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to the Administrative Agent, any Issuing Bank, the Swingline Lender or any other Lender any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Revolving Lender or 2018 Extended Revolving Lender notifies the Administrative Agent in writing that such failure is the result of such Revolving Lender’s or 2018 Extended Revolving Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or the Administrative Agent, any Issuing Bank, the Swingline Lender or any other Lender in writing, or has made a public statement to the effect, that it does not intend or expect to comply with (i) any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Revolving Lender’s or 2018 Extended Revolving Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any)

to funding a loan under this Agreement cannot be satisfied) or (ii) its funding obligations generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after written request by the Administrative Agent, acting in good faith, to provide a certification in writing from an authorized officer of such Revolving Lender or 2018 Extended Revolving Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Revolving Loans or 2018 Extended Revolving Loans, as applicable, and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Revolving Lender or 2018 Extended Revolving Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Loan Party’s receipt of such certification in form and substance reasonably satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.

“ dollars ” or “ $ ” refers to lawful money of the United States of America.

“ Domestic Subsidiary ” means any Subsidiary incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia, other than a Subsidiary that is a CFC.

“ Environmental Laws ” means all laws (including the common law), rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by or with any Governmental Authority, relating in any way to the environment, preservation or reclamation of or damage to natural resources, the presence, management, storage, treatment, transports, exposure to, Release or threatened Release of any Hazardous Material, or to health and safety matters.

“ Environmental Liability ” means liabilities, obligations, damages, claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and costs (including administrative oversight costs, natural resource damages and medical monitoring, investigation or remediation costs), whether contingent or otherwise, arising out of or relating to (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation, storage or treatment of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest from the issuer thereof.

“ ERISA ” means the Employee Retirement Income Security Act of 1974 and the regulations promulgated thereunder, as amended from time to time.

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414 of the Code.

“ ERISA Event ” means (a) any “reportable event,” as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30 day notice period is waived), (b) a failure to satisfy the minimum funding standard under Section 412 of the Code or Section 302 of ERISA, whether or not waived, (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan or Multiemployer Plan, (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan, (e) the

receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Multiemployer Plan or to appoint a trustee to administer any Plan or Multiemployer Plan, (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan, (g) the withdrawal of the Borrower or any of its ERISA Affiliates from a Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA, or (h) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA or that a Multiemployer Plan is in “critical” status (within the meaning of Section 432 of the Code or Section 305 of ERISA) or (i) the occurrence of a non-exempt prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan.

“ Eurodollar ,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

“ Event of Default ” has the meaning assigned to such term in Section 7.01.

“ Excess Cash Flow ” means, for any Excess Cash Flow Period, the sum (without duplication) of:

(a) Consolidated Net Income for such Excess Cash Flow Period, adjusted to exclude any gains or losses attributable to Prepayment Events; plus

(b) depreciation, amortization and other non-cash charges or losses (including deferred income taxes) deducted in determining such Consolidated Net Income for such Excess Cash Flow Period; plus

(c) the amount, if any, by which Net Working Capital decreased during such Excess Cash Flow Period (except as a result of reclassification of items from short-term to long-term); minus

(d) the sum of (i) any non-cash gains or non-cash items of income included in determining Consolidated Net Income for such Excess Cash Flow Period plus (ii) the amount, if any, by which Net Working Capital increased during such Excess Cash Flow Period (except as a result of reclassification of items from long-term to short-term); minus

(e) the greater of (x) the amount of Capital Expenditures of the Borrower and its subsidiaries in such Excess Cash Flow Period (except to the extent attributable to the incurrence of Capital Lease Obligations or otherwise financed by incurring Long-Term Indebtedness) and (y) the amount of Capital Expenditures budgeted by the Borrower and its subsidiaries for the next succeeding Excess Cash Flow Period; minus

(f) the aggregate principal amount of Long-Term Indebtedness repaid or prepaid by the Borrower and its subsidiaries during such Excess Cash Flow Period, excluding (i) Indebtedness in respect of Revolving Loans, 2018 Extended Revolving Loans and Letters of Credit (unless there is a corresponding reduction in the aggregate Revolving Commitments or 2018 Extended Revolving Commitments, as applicable), (ii) Tranche B Term Loans prepaid pursuant to

Section 2.11(a), (c) or (d), and (iii) repayments or prepayments of Long-Term Indebtedness financed by the incurrence of other Long-Term Indebtedness by a Parent or any Loan Party or the issuance of Equity Interests (or capital contributions in respect thereof) after the Original Effective Date to the extent not Otherwise Applied; minus

(g) the amount of Restricted Payments made by a Loan Party in such Excess Cash Flow Period pursuant to clause (iii) of Section 6.08(a); minus

(h) cash Taxes paid in such Excess Cash Flow Period that did not reduce Consolidated Net Income for such Excess Cash Flow Period; minus

(i) cash payments made during such Excess Cash Flow Period in respect of non-cash charges that increased Excess Cash Flow in any prior Excess Cash Flow Period.

“ Excess Cash Flow Period ” means (i) for purposes of calculating the Available Amount, (A) the period from July 1, 2011 to December 31, 2011, (B) the period from January 1, 2012 to December 31, 2012 and (C) each full fiscal quarter ending after January 1, 2013 and (ii) for purposes of Section 2.11(d), any fiscal year.

“ Excluded Swap Obligation ” means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Loan Party of, or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder (determined after giving effect to Section 2.11 of the Collateral Agreement, any other keepwell, support or other agreement for the benefit of such Loan Party and any and all guarantees of such Loan Party’s Swap Obligations by other Loan Parties) at the time the Guarantee of such Loan Party or the grant of such security interest becomes effective with respect to such Swap Obligation but for such Loan Party’s failure to constitute an “eligible contract participant” at such time. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal in accordance with the first sentence of this definition.

“ Excluded Taxes ” means, with respect to the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower or any Loan Party hereunder, (a) income taxes imposed on (or measured by) its net income (however denominated) (including any backup withholding with respect thereto) and franchise taxes imposed on it (in lieu of net income taxes) (i) by the United States of America, (ii) by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or (iii) by any other jurisdiction as a result of a present or former connection between the Administrative Agent, the Lender or the Issuing Bank, as applicable, and the jurisdiction imposing such tax (other than a connection arising by such Person having become a party to, performed its obligations or received payments under, or enforced, any Loan Document), (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction described in clause (a) above, (c) in the case of a Foreign Lender, any withholding tax imposed on amounts payable to or for the account of such Foreign Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Foreign Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.19(b)) or (ii) such Foreign Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.17(a), amounts with respect to such Taxes were payable

either to such Foreign Lender’s assignor immediately before such Foreign Lender became a party hereto or to such Foreign Lender immediately before it changed its lending office; provided that this clause (c) shall be limited solely to U.S. federal withholding tax in respect of any amount payable by a “United States person” as defined in Section 7701(a)(30) of the Code, (d) any withholding tax that is attributable to a Lender’s failure to comply with Section 2.17(e) and (e) any taxes under FATCA.

“ Existing Lender ” has the meaning assigned to such term in Section 2.20.

“ Existing Letter of Credit ” means each letter of credit previously issued for the account of the Borrower that (a) was outstanding on the Original Effective Date and (b) is listed on Schedule 2.05 .

“ Existing Subordinated Notes ” means the Borrower’s 7-5/8% Senior Subordinated Notes due 2015.

“ Extended Revolving Commitments ” means revolving credit commitments established pursuant to Section 2.21 that are substantially identical to the Revolving Commitments or 2018 Extended Revolving Commitments except that such extended revolving commitments may have a later maturity date and different provisions with respect to interest rates and fees than those applicable to the Revolving Commitments or 2018 Extended Revolving Commitments, as applicable.

“ Extended Term Loans ” has the meaning provided in Section 2.21(a).

“ Extending Term Lender ” has the meaning provided in Section 2.21(c).

“ Extension Election ” has the meaning provided in Section 2.21(c).

“ Extension Request ” has the meaning provided in Section 2.21(a).

“ Fair Market Value ” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board of Directors, chief executive officer or chief financial officer of the Borrower.

“ FATCA ” means Sections 1471 through 1474 of the Code as of the date hereof (and any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the current Code (or any amended or successor version described above) and any applicable law or regulation pursuant to an intergovernmental agreement entered into to implement the foregoing.

“ Federal Funds Effective Rate ” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“ Financial Officer ” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower, in each case in his or her capacity as such.

“ Financial Performance Covenant ” means the covenant of the Borrower set forth in Section 6.13.

“ First Lien Intercreditor Agreement ” means an Intercreditor Agreement, substantially in the form of Exhibit G (with such changes thereto as are reasonably acceptable to the Administrative Agent), by and between the Administrative Agent and the collateral agent for one or more classes of Permitted Secured Notes that are intended to be secured by Liens ranking pari passu with the Liens securing the Obligations.

“ Flood Insurance Laws ” means, collectively (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statute thereto, (iii) the National Flood Insurance Reform Act of 1994 as now or hereafter in effect or any successor statute thereto and (iv) the Flood Insurance Reform Act of 2004 as now or hereafter in effect or any successor statute thereto.

“ Foreign Lender ” means any Lender that is not a United States person within the meaning of Section 7701(a)(30) of the Code.

“ Foreign Subsidiary ” means any Subsidiary that is not a Domestic Subsidiary.

“ GAAP ” means generally accepted accounting principles in the United States of America, as in effect from time to time.

“ Government Programs ” means (i) the Medicare and Medicaid Programs, (ii) the United States Department of Defense Civilian Health Program for Uniformed Services and (iii) other similar foreign or domestic Federal, state or local reimbursement or governmental health care programs.

“ Governmental Authority ” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party or applicant in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation, provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which the Guarantee is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee.

“ Hazardous Materials ” means all explosive, radioactive, infectious, chemical, biological, medical, hazardous or toxic materials, substances, wastes or other pollutants or contaminants, including

petroleum or petroleum byproducts, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas and all other materials, substances or wastes of any nature regulated pursuant to any Environmental Law.

“ Holdings ” means (A) Select Medical Holdings Corporation, a Delaware corporation, or (B) any other entity (such entity, a “ Succeeding Holdings ”) that becomes the immediate parent of the Borrower .

“ Holdings Leverage Ratio ” has the same meaning as “Leverage Ratio,” but for purposes of determining Total Indebtedness, substituting “Holdings” for “Borrower.”

“ Inactive Subsidiary ” means a Subsidiary that (a) conducts no business operations, (b) has total assets with a fair market value of not more than $500,000 individually and not more than $5,000,000 in the aggregate and (c) has no Indebtedness outstanding.

“ Incremental Extensions of Credit ” has the meaning set forth in Section 2.20.

“ Incremental Facility Closing Date ” has the meaning set forth in Section 2.20.

“ Incremental Revolver Commitments ” has the meaning set forth in Section 2.20.

“ Incremental Term Loans ” has the meaning set forth in Section 2.20.

“ Indebtedness ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding trade accounts payable and accrued obligations incurred in the ordinary course of business), (f) all obligations of others secured by (or for which the holder of such obligations has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, but limited, in the event such secured obligations are nonrecourse to such Person, to the fair value of such property, (g) all Guarantees by such Person of the obligations of any other Person, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party or applicant in respect of letters of credit and letters of guaranty and (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. Notwithstanding the foregoing, the term “Indebtedness” shall not include post-closing payment adjustments, earn-outs or non-compete payments to which the seller in any Permitted Acquisition is or may become entitled or amounts that any member of management, the employees or consultants of Holdings, the Borrower or any of the Subsidiaries may become entitled to under any cash incentive plan in existence from time to time.

“ Indemnified Taxes ” means Taxes other than Excluded Taxes.

“ Indemnitee ” has the meaning set forth in Section 9.03(b).

“ Information ” has the meaning set forth in Section 9.12.

“ Insurance Subsidiary ” means a subsidiary of the Borrower established for the sole purpose of providing insurance benefits to the Borrower and its subsidiaries.

“ Interest Election Request ” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.07, provided that a written Interest Election Request shall be substantially in the form of Exhibit F , or such other form as shall be approved by the Administrative Agent.

“ Interest Payment Date ” means (a) with respect to any ABR Loan (including a Swingline Loan), the last day of each March, June, September and December and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.

“ Interest Period ” means, with respect to any Eurodollar Borrowing, with respect to Revolving Loans, 2018 Extended Revolving Loans and Tranche B Term Loans, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter (or such other period as may be agreed by the Borrower, the Administrative Agent and all Lenders participating therein) and, in each case as the Borrower may elect, provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, and (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“ Issuing Bank ” means (a) JPMorgan Chase Bank, N.A. or such other Lender designated as an “Issuing Bank” pursuant to Section 2.05(k) and (b) with respect to the Existing Letters of Credit only, JPMorgan Chase Bank, N.A. The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

“ LC Disbursement ” means a payment made by the Issuing Bank pursuant to a Letter of Credit.

“ LC Exposure ” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any 2018 Extended Revolving Lender at any time shall be its Applicable Percentage of the aggregate LC Exposure at such time.

“ Lenders ” means each Person that was a lender on the Restatement Effective Date and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption or an Additional Credit Extension Amendment, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.

“ Letter of Credit ” means any letter of credit issued or deemed issued pursuant to this Agreement (including each Existing Letter of Credit).

“ Leverage Ratio ” means, on any date, the ratio of (a) Total Indebtedness on such date ( minus up to $75,000,000 of unrestricted cash and Permitted Investments held, on such date, by the Borrower and the Subsidiary Loan Parties on such date) to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter of the Borrower most recently ended prior to such date).

“ LIBO Rate ” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page on such screen) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits in the London interbank market with a maturity comparable to such Interest Period. In the event that such rate does not appear on such page (or on any such successor or substitute page), the “LIBO Rate” shall be determined by reference to such other publicly available service for displaying interest rates for dollar deposits in the London interbank market as may be selected by the Administrative Agent or, in the absence of such availability, by reference to the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period. Notwithstanding anything to the contrary set forth in the foregoing, to the extent the LIBO Rate for any Interest Period for the Series E Tranche B Term Loans would be less than 1.00%, then the LIBO Rate for the Series E Tranche B Term Loans for such Interest Period shall instead be 1.00%.

“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset or other arrangement to provide priority or preference with respect to such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party (other than customary rights of first refusal and tag, drag and similar rights in joint venture agreements (other than any such agreement in respect of any Subsidiary)) with respect to such securities.

“ Limitation ” means a revocation, suspension, termination, impairment, probation, limitation, nonrenewal, forfeiture, declaration of ineligibility, loss of status as a participating provider in any Third Party Payor Arrangement, and the loss of any other rights.

“ Loan Document Obligations ” means (a) the due and punctual payment by the Borrower of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) each payment required to be made by the Borrower under this Agreement in respect of any Letter of Credit, when and as due, including payments in respect of reimbursement of disbursements, interest thereon (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) and obligations to provide cash collateral, and (iii) all other monetary obligations of the Borrower to any of the Secured Parties under this Agreement and each other Loan Document, including obligations to pay fees, expense reimbursement obligations and indemnification obligations, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations

incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), (b) the due and punctual performance of all other obligations of the Borrower under or pursuant to this Agreement and each other Loan Document, and (c) the due and punctual payment and performance in full of all the obligations of each other Loan Party under or pursuant to the Collateral Agreement and each other Loan Document.

“ Loan Documents ” means this Agreement, the promissory notes, if any, executed and delivered pursuant to Section 2.09(e), any Additional Credit Extension Amendment, the Collateral Agreement and the other Security Documents.

“ Loan Parties ” means Holdings, the Borrower, the Subsidiary Loan Parties and each Permitted Joint Venture Loan Party.

“ Loans ” means the loans made by the Lenders to the Borrower pursuant to this Agreement or an Additional Credit Extension Amendment.

“ Long-Term Indebtedness ” means any Indebtedness that, in accordance with GAAP, constitutes (or, when incurred, constituted) a long-term liability.

“ LTACH ” means (a) a long-term hospital as defined in Volume 42, Section 412.23 of the Code of Federal Regulations (or any successor definition) or (b) any long-term hospital that is in development to achieve such status.

“ Material Adverse Effect ” means a material adverse effect on (a) the business, operations, assets, liabilities, financial condition or results of operations of Holdings, the Borrower and the Subsidiaries, taken as a whole, (b) the ability of any Loan Party to perform any obligation under any Loan Document or (c) the rights of or benefits available to the Lenders under any Loan Document.

“ Material Disposition ” means the sale by the Borrower or any Subsidiary of assets (including the capital stock of a Subsidiary or a business unit) for aggregate consideration (including amounts received in connection with post-closing payment adjustments, earn-outs and noncompete payments) of at least $35,000,000.

“ Material Indebtedness ” means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of Holdings, the Borrower and the Subsidiaries in an aggregate principal amount exceeding $50,000,000. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

“ Material Real Property ” means a real property with a gross book value of at least $10,000,000, as reasonably determined by the Borrower in good faith.

“ Maximum Rate ” has the meaning set forth in Section 9.13.

“ Medicare and Medicaid Programs ” means the programs established under Title XVIII and XIX of the Social Security Act and any successor programs performing similar functions.

“ Moody’s ” means Moody’s Investors Service, Inc.

“ Mortgage ” means a mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure the Obligations. Each Mortgage shall be reasonably satisfactory in form and substance to the Collateral Agent.

“ Mortgaged Property ” means, initially, each Material Real Property identified on Schedule 1.01 and includes each other Material Real Property with respect to which a Mortgage is granted pursuant to Section 5.12 or 5.13.

“ MS-DRG ” means a medical severity diagnosis related group.

“ Multiemployer Plan ” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“ Net Proceeds ” means, with respect to any event, (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and when received, (ii) in the case of a casualty, insurance proceeds and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made as a result of such event to repay Indebtedness (other than Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event and (iii) the amount of all taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the next succeeding year and that are directly attributable to such event (as determined reasonably and in good faith by a Financial Officer), provided that no net proceeds calculated in accordance with the foregoing of less than $2,500,000 realized in a single transaction or series of related transactions shall constitute Net Proceeds.

“ Net Working Capital ” means, at any date, (a) the consolidated current assets of the Borrower and its subsidiaries as of such date (excluding cash and Permitted Investments) minus (b) the consolidated current liabilities of the Borrower and its subsidiaries as of such date (excluding current liabilities in respect of Indebtedness). Net Working Capital at any date may be a positive or negative number. Net Working Capital increases when it becomes more positive or less negative and decreases when it becomes less positive or more negative.

“ Non-Consenting Lender ” has the meaning set forth in Section 9.02(b).

“ Obligations ” means (a) Loan Document Obligations, (b) the due and punctual payment and performance in full of all obligations of each Loan Party under each Swap Agreement that (i) is in effect on the Original Effective Date with a counterparty that is a Lender or an Affiliate of a Lender as of the Original Effective Date or (ii) is entered into after the Original Effective Date with any counterparty that is a Lender or an Affiliate of a Lender at the time such Swap Agreement is entered into and (c) Cash Management Obligations; provided that the “Obligations” shall in no event include any Excluded Swap Obligations.

“ Original Credit Agreement ” has the meaning set forth in the preamble to this Agreement.

“ Original Effective Date ” means the date on which the conditions specified in Section 4.01 were satisfied (or waived), which date was June 1, 2011.

“ Other Taxes ” means any and all present or future recording, stamp, documentary, excise, transfer, sales, property or similar taxes, charges or levies of the United States or any political subdivision thereof arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or from the filing or recording of or otherwise with respect to the exercise by the Administrative Agent or the Lenders of their rights under, any Loan Document.

“ Otherwise Applied ” means, with respect to any Net Proceeds, the amount of such Net Proceeds that was (i) required to prepay the Loans pursuant to Section 2.11 or (ii) otherwise previously applied under the Loan Documents.

“ Parent ” means any direct or indirect parent of which Holdings is a wholly owned subsidiary.

“ Participant ” has the meaning set forth in Section 9.04(c).

“ Patriot Act ” has the meaning set forth in Section 9.14.

“ PBGC ” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“ Perfection Certificate ” means a certificate in the form of Exhibit D or any other form approved by the Collateral Agent.

“ Permitted Acquisitions ” means any acquisition by the Borrower or any Subsidiary Loan Party at least 80% of all outstanding Equity Interests (other than directors’ qualifying shares or shares issued to foreign nationals to the extent required by applicable law) in, all or substantially all the assets of, or all or substantially all the assets constituting a division or line of business of, a Person if (a) no Default has occurred and is continuing or would result therefrom, (b) after giving effect to such acquisition, the Borrower and the Subsidiary Loan Party shall have aggregate unused and available Revolving Commitments, 2018 Extended Revolving Commitments and unrestricted cash and Permitted Investments of not less than $40,000,000, (c) after giving effect to such acquisition, the aggregate Consolidated Tangible Assets acquired in all Permitted Acquisitions consummated since the Original Effective Date (excluding acquisitions resulting in a newly formed Domestic Subsidiary or otherwise related to assets substantially located in the United States of America) does not exceed 5% of Consolidated Tangible Assets, (d) such acquisition and all transactions related thereto are consummated in accordance in all material respects with all applicable laws, (e) all actions required to be taken with respect to such acquired or newly formed Subsidiary (if a Domestic Subsidiary) or assets (if held by a Domestic Subsidiary) to cause such Person to become a Loan Party under Sections 5.12 and 5.13 shall have been taken (or shall be taken promptly thereafter), (f) on a Pro Forma Basis the Leverage Ratio recomputed as of the last day of the most recently ended fiscal quarter of the Borrower for which financial statements are available does not exceed 5.25 to 1.00, and (g) the Borrower has delivered to the Administrative Agent an officer’s certificate to the effect set forth in clauses (a), (b), (c), (d), (e) and (f) above, together with all relevant financial information for the Person or assets to be acquired.

“ Permitted Debt Securities ” means any Indebtedness consisting of notes or loans under credit agreements, indentures or other similar agreements or instruments incurred or Guaranteed by Loan Parties following the Original Effective Date; provided that (i) such Indebtedness does not mature or have scheduled amortization or scheduled payments of principal and is not subject to mandatory redemption,

repurchase, prepayment or sinking fund obligation (other than customary offers to repurchase upon a change of control, asset sale or casualty event and customary acceleration rights after an event of default) prior to the 181st day after the Tranche B Maturity Date, (ii) shall be unsecured, except as permitted by Section 6.02(xii), (iii) such Indebtedness is not incurred or guaranteed by any Subsidiaries that are not Loan Parties, and (iv) the other terms and conditions relating to such debt securities or loans (other than interest rates, call protection and other pricing terms) are not in the aggregate more restrictive to the Borrower and its Subsidiaries than the terms of this Agreement as determined in good faith by the Borrower.

“ Permitted Encumbrances ” means:

(a) Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.05;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.05;

(c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

(d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature;

(e) judgment liens in respect of judgments that do not constitute an Event of Default under paragraph (k) of Section 7.01;

(f) easements, zoning restrictions, rights-of-way, minor defects or irregularities of title and other similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not either detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary, in each case in any material respect;

(g) landlords’ and lessors’ and other like Liens in respect of rent not in default;

(h) any Liens shown on the title insurance policies in favor of the Collateral Agent insuring the Liens of the Mortgages; and

(i) leases or subleases which are subordinate to the Lien of any Mortgage,

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

“ Permitted Investments ” means:

(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

(b) investments in commercial paper maturing within 365 days from the date of acquisition thereof and having, at such date of acquisition, a credit rating from S&P or Moody’s of at least A2 or P2, respectively;

(c) investments in certificates of deposit, banker’s acceptances and time deposits maturing within 365 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000;

(d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and

(e) investments in money market funds that comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, substantially all of whose assets are invested in investments of the type described in clauses (a) through (d) above.

“ Permitted Investors ” means (A) Welsh, Carson, Anderson & Stowe IX, L.P., WCAS Capital Partners IV, L.P., Thoma Cressey Fund VI, L.P., Thoma Cressey Fund VII, L.P., and their respective Sponsor Affiliates and (B) (i) Rocco A. Ortenzio, Robert A. Ortenzio and each of the other directors, officers and employees of the Borrower who owned capital stock of Holdings on the first date the Borrower became a wholly owned subsidiary of Holdings; (ii) the spouses, ancestors, siblings, descendants (including children or grandchildren by adoption) and the descendants of any of the siblings of the Persons referred to in clause (i); (iii) in the event of the incompetence or death of any of the Persons described in clauses (i) or (ii), such Person’s estate, executor, administrator, committee or other personal representative, in each case who at any particular date shall be the beneficial owner or have the right to acquire, directly or indirectly, capital stock of the Borrower or Holdings (or any other direct or indirect parent company of the Borrower); (iv) any trust created for the benefit of the Persons described in any of clauses (i) through (iii) or any trust for the benefit of any such trust; or (v) any Person Controlled by any of the Persons described in any of clauses (i) through (iv); or (C) any “group” within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act or any successor provision) of which any of the foregoing are members; provided that in the case of such “group” and without giving effect to the existence of such “group” or any other “group,” such Persons specified in clauses (A) or (B) above, collectively, have beneficial ownership, directly or indirectly of more than 50% of the total voting power of the voting Equity Interests of Holdings or any of its direct or indirect parent entities held by such “group.”

“ Permitted Joint Venture ” means any investment by which the Borrower or any Subsidiary Loan Party acquires at least 10% but not more than 99% of the Equity Interests of any Person, provided that the primary business of such Person is (x) to own, lease or operate facilities which provide health care related services including long-term acute care services or rehabilitation services or (y) to provide health care related services including long-term acute care services or rehabilitation services or any related services to a hospital or other health care facility.

“ Permitted Joint Venture Loan Party ” means any Permitted Joint Venture which (x) is a subsidiary of the Borrower or any Subsidiary Loan Party and (y) satisfies the terms of the Collateral and Guarantee Requirement.

“ Permitted Liens ” has the meaning set forth in Section 6.02.

“ Permitted Real Estate Joint Venture ” means any Permitted Joint Venture which is a subsidiary and owns real property used in the business of the Borrower or any Subsidiary, provided that such Permitted Real Estate Joint Venture is not engaged in any business or activity other than the ownership of such real property and activities incidental thereto.

“ Permitted Secured Notes ” means (i) Refinancing Debt Securities and (ii) any Refinancing Indebtedness in respect of such Refinancing Debt Securities, in each case, that are secured by a Lien permitted by Section 6.02(xii).

“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“ Plan ” means any “employee pension benefit plan” (as defined in Section 3(2) of ERISA) that is subject to the provisions of Title IV or Section 302 of ERISA or Section 412 of the Code, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“ Prepayment Event ” means:

(a) any sale, transfer or other disposition (excluding pursuant to a sale and leaseback transaction permitted under Section 6.06) of any property or asset of Holdings, the Borrower or any Subsidiary in excess of $5,000,000 in any fiscal year, other than dispositions described in clauses (a), (b), (c) and (d) of Section 6.05; or

(b) any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of Holdings, the Borrower or any Subsidiary with a fair value immediately prior to such event equal to or greater than $2,500,000; or

(c) the incurrence by Holdings, the Borrower or any Subsidiary of (x) any Refinancing Indebtedness or (y) any Indebtedness not permitted under Section 6.01.

“ Prime Rate ” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect for dollars at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

“ Pro Forma Basis ” means, for purposes of calculating the Leverage Ratio, the Holdings Leverage Ratio or the Secured Leverage Ratio for any period, that any Specified Transaction that has been consummated in such period and the following transactions in connection therewith shall be deemed to have occurred as of the first day of such period:

(a) income statement items (whether positive or negative) attributable to the property or Person subject to such Specified Transaction, in the case of a Permitted Acquisition,

(b) any retirement of Indebtedness, and

(c) any Indebtedness incurred or assumed by Holdings, the Borrower or any of their subsidiaries in connection therewith (or in any Specified Transaction);

provided that the foregoing pro forma adjustments may be applied to any such test solely to the extent that such adjustments are consistent with the definition of “Consolidated EBITDA” and give effect to events (including cost savings) to the extent they (i) would be permitted to be reflected in pro forma financial information complying with the requirements of GAAP and Article XI of Regulation S-X under the Securities Act of 1933, as amended, as interpreted by the Staff of the SEC; (ii) were actually implemented by the business that was the subject of the applicable Permitted Acquisition or Material Disposition, as the

case may be, within 12 months after the date of such transaction, and are supportable and quantifiable by the underlying accounting records of such business or (iii) for all purposes other than determining the “Applicable Rate,” relate to the business that is the subject of such Specified Transaction, and are reasonably determined by the Borrower to be probable based upon specifically identifiable actions to be taken within 12 months after the date of such Specified Transaction, and, in each case are certified by a Financial Officer (accompanied by reasonably detailed supporting evidence).

“ Proposed Change ” has the meaning set forth in Section 9.02(b).

“ Qualified Holdings Discount Debt ” means unsecured Indebtedness of Holdings or a Parent that (a) is not subject to any Guarantee by the Borrower or any Subsidiary Loan Party, (b) does not mature prior to the date that is 180 days after the Tranche B Maturity Date, (c) has no scheduled amortization or payments of principal prior to such 180th day (except to the extent required to prevent such Indebtedness from being treated as an “Applicable High Yield Discount Obligation” within the meaning of Section 163(i)(1) of the Internal Revenue Code of 1986, as amended; provided that any such payment obligation of Holdings shall be subordinated in right of payment to the Obligations), (d) does not require any payments in cash of interest or other amounts in respect of the principal thereof for at least four (4) years from the date of issuance or incurrence thereof and (e) has mandatory prepayment, repurchase or redemption, covenant, default and remedy provisions customary for senior discount notes of an issuer that is the parent of a borrower under senior secured credit facilities and in any event, with respect to default and remedy provisions customary for senior discount notes of a holding company.

“ Qualified Preferred Stock ” means preferred stock of Holdings that (a) does not require the payment of cash dividends (it being understood that cumulative dividends shall be permitted), (b) is not mandatorily redeemable pursuant to a sinking fund obligation or otherwise prior to the date that is 180 days after the Tranche B Maturity Date (other than upon an event of default or change in control, provided that any such payment is subordinated (whether by contract or pursuant to Holdings’ charter or the certificate of designations of such preferred stock) in right of payment to the Obligations on the terms set forth in the certificate of incorporation of Holdings in existence on the Original Effective Date or such other terms reasonably satisfactory to the Administrative Agent), (c) contains no maintenance covenants, other covenants materially adverse to the Lenders or remedies (other than voting rights) and (d) is convertible only into common equity of Holdings or securities that would constitute Qualified Preferred Stock.

“ Refinanced Term Loans ” has the meaning assigned to such term in Section 9.02.

“ Refinancing Debt Securities ” means any Permitted Debt Securities that are designated as “Refinancing Debt Securities” in a certificate of a Responsible Officer of the Borrower delivered to the Administrative Agent on or prior to the date such Permitted Debt Securities are incurred.

“ Refinancing Indebtedness ” means (i) any Refinancing Term Loans and (ii) any Refinancing Debt Securities.

“ Refinancing Term Loans ” means Incremental Term Loans that are designated by a Responsible Officer of the Borrower as “Refinancing Term Loans” in a certificate of a Responsible Officer of the Borrower delivered to the Administrative Agent on or prior to the date of incurrence.

“ Register ” has the meaning set forth in Section 9.04(b).

“ Reimbursement Approvals ” means, with respect to all Government Programs, any and all certifications, provider numbers, provider agreements, participation agreements, accreditations and any other similar agreements with or approvals by any Governmental Authority or other Person.

“ Related Parties ” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents, trustees and advisors of such Person and such Person’s Affiliates.

“ Release ” means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment or within, into or from any building, structure, facility or fixture.

“ Replacement Term Loans ” has the meaning assigned to such term in Section 9.02.

“ Required 2018 Extended Revolving Lenders ” means, at any time, Lenders having 2018 Extended Revolving Exposures and unused 2018 Extended Revolving Commitments representing more than 50% of the sum of the aggregate 2018 Extended Revolving Exposures and unused 2018 Extended Revolving Commitments at such time (disregarding any of the foregoing of a Defaulting Lender).

“ Required Lenders ” means, at any time, Lenders having Revolving Exposures, 2018 Extended Revolving Exposures, Tranche B Term Loans, Loans in respect of Incremental Extensions of Credit, if any, and unused Commitments representing more than 50% of the aggregate Revolving Exposures, 2018 Extended Revolving Exposures, outstanding Tranche B Term Loans, outstanding Loans in respect of Incremental Extensions of Credit, if any, and unused Commitments at such time (disregarding any of the foregoing of a Defaulting Lender).

“ Required Revolving Lenders ” means, at any time, Lenders having Revolving Exposures and unused Revolving Commitments representing more than 50% of the sum of the aggregate Revolving Exposures and unused Revolving Commitments at such time (disregarding any of the foregoing of a Defaulting Lender).

“ Requirement of Law ” means, with respect to any Person, (i) the charter, articles or certificate of organization or incorporation and bylaws or other organizational or governing documents of such Person and (ii) any statute, law, treaty, rule, regulation, order, decree, writ, injunction or determination of any arbitrator or court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“ Restatement Effective Date ” means the Amendment No. 5 Effective Date.

“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in Holdings, the Borrower or any Subsidiary, or any payment thereon (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests in Holdings, the Borrower or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in Holdings, the Borrower or any Subsidiary.

“ Revolving Availability Period ” means the period from and including the Original Effective Date to but excluding the earlier of (a) the Revolving Maturity Date and (b) the date of termination of the Revolving Commitments.

“ Revolving Commitment ” means, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Loans hereunder, expressed as an amount representing the maximum possible aggregate amount of such Lender’s Revolving Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The aggregate amount of the Lenders’ Revolving Commitments on the Restatement Effective Date is set forth on Schedule 2.01 .

“ Revolving Exposure ” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans at such time.

“ Revolving Lender ” means a Lender with a Revolving Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving Exposure.

“ Revolving Loan ” means a Loan made pursuant to clause (b) of Section 2.01.

“ Revolving Maturity Date ” means June 1, 2016.

“ S&P ” means Standard & Poor’s Ratings Group, Inc.

“ SEC ” means the Securities and Exchange Commission or any Governmental Authority succeeding to any of its principal functions.

“ Second Lien Intercreditor Agreement ” means an Intercreditor Agreement, in form reasonably acceptable to the Administrative Agent, by and between the Administrative Agent and the collateral agent for one or more classes of Permitted Secured Notes that are intended to be secured by Liens ranking junior to the Liens securing the Obligations providing that, inter alia, (i) the Liens securing Obligations rank prior to the Liens securing the Permitted Secured Notes, (ii) all amounts received in connection with any enforcement action with respect to any Collateral or in connection with any United States or foreign bankruptcy, liquidation or insolvency proceeding shall first be applied to repay all Obligations (whether or not allowed in any such proceeding) prior to being applied to the obligations in respect of the Permitted Secured Notes and (iii) until the repayment of the Obligations in full and termination of commitments hereunder (subject to customary limitations with respect to contingent obligations and other customary qualifications) the Administrative Agent shall have the sole right to take enforcement actions with respect to the Collateral.

“ Secured Indebtedness ” at any date shall mean the aggregate principal amount of Total Indebtedness outstanding at such date that consists of Indebtedness that in each case is then secured by Liens on any property or assets of Borrower or its Subsidiaries.

“ Secured Leverage Ratio ” means, on any date, the ratio of (a) Secured Indebtedness ( minus up to $175,000,000 of unrestricted cash and Permitted Investments held, on such date, by the Borrower and the Subsidiary Loan Parties on such date) on such date to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter of the Borrower most recently ended prior to such date).

“ Secured Parties ” means (a) the Lenders, (b) the Collateral Agent, (c) the Administrative Agent, (d) the Issuing Bank, (e) each counterparty that is a Lender or an Affiliate of a Lender to any Swap Agreement with a Loan Party the obligations under which constitute Obligations, (f) each Cash Management Bank and (g) the successors and assigns of each of the foregoing.

“ Securities Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“ Security Documents ” means the Collateral Agreement, the Mortgages and each other security agreement or other instrument or document executed and delivered pursuant to Section 5.12 or 5.13 to secure any of the Obligations.

“ series ” means, with respect to any Extended Term Loans, Incremental Term Loans or Replacement Term Loans, all such Term Loans that have the same maturity date, amortization and interest rate provisions and that are designated as part of such “series” pursuant to the applicable Additional Credit Extension Amendment.

“ Series B Deadline ” means the date that is six months after the Amendment No. 3 Effective Date.

“ Series B Tranche B Term Loans ” means the Incremental Term Loans made pursuant to the Additional Credit Extension Amendment attached as Annex I to Amendment No. 3; provided , for the avoidance of doubt, that there shall be only one incurrence of Series B Tranche B Term Loans.

“ Series C Tranche B Term Loans ” means the Tranche B Term Loans (other than any Series B Tranche B Term Loans) outstanding as of the Amendment No. 4 Effective Date.

“ Series D Tranche B Maturity Date ” means December 20, 2016.

“ Series E Tranche B Maturity Date ” means June 1, 2018.

“ Series D Tranche B Term Loans ” means the Tranche B Term Loans designated as Series D Tranche B Term Loans and outstanding as of the Restatement Effective Date.

“ Series E Tranche B Term Loans ” means the Tranche B Term Loans designated as Series E Tranche B Term Loans and outstanding as of the Restatement Effective Date.

“ Specified Indebtedness ” has the meaning set forth in Section 6.08(b).

“ Specified Transactions ” means (a) any Permitted Acquisition, (b) any Material Disposition and (c) any proposed incurrence of Indebtedness in respect of which the Leverage Ratio, the Secured Leverage Ratio or Holdings Leverage Ratio is by the terms of this Agreement required to be calculated on a Pro Forma Basis.

“ Sponsor ” means (A) Welsh, Carson, Anderson & Stowe IX, L.P. and (B) Thoma Cressey Equity Partners.

“ Sponsor Affiliate ” means (i) each Affiliate of the Sponsor that is neither an operating company nor a company controlled by an operating company, (ii) each partner, officer, director, principal or member of the Sponsor or any Sponsor Affiliate and (iii) any spouse, parent or lineal descendant (including by adoption) of any of the foregoing who are natural persons and any trust for the benefit of such persons.

“ Statutory Reserve Rate ” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves)

expressed as a decimal established by the Board to which the bank serving as the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“ Subordinated Indebtedness ” means Indebtedness of Holdings, the Borrower or any Subsidiary that is contractually subordinated to the Obligations.

“ subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held.

“ Subsidiary ” means any subsidiary of the Borrower, other than any Permitted Joint Venture that is not a Permitted Joint Venture Loan Party.

“ Subsidiary Loan Party ” means any Domestic Subsidiary (other than (a) any Inactive Subsidiary for which the Borrower has not satisfied the Collateral and Guarantee Requirement, (b) any Consolidated Practice and (c) any Insurance Subsidiary).

“ Succeeding Holdings ” has the meaning set forth in the definition of “Holdings.”

“ Swap Agreement ” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions, provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.

“ Swap Obligation ” means, with respect to any Loan Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

“ Swingline Exposure ” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall be its Applicable Percentage of the aggregate Swingline Exposure at such time.

“ Swingline Lender ” means JPMorgan Chase Bank, N.A., in its capacity as lender of Swingline Loans hereunder, together with its successors in such capacity.

“ Swingline Loan ” means a Loan made pursuant to Section 2.04.

“ Taxes ” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

“ Term Loans ” means the Tranche B Term Loans, the Incremental Term Loans of each series, the Extended Term Loans of each series, collectively.

“ Third Party Payor ” means any Government Program and any quasipublic agency, Blue Cross, Blue Shield and any managed care plans and organizations, including health maintenance organizations and preferred provider organizations and private commercial insurance companies and any similar third party arrangements, plans or programs for payment or reimbursement in connection with health care services, products or supplies.

“ Third Party Payor Arrangement ” means any arrangement, plan or program for payment or reimbursement by any Third Party Payor in connection with the provision of healthcare services, products or supplies.

“ Total Indebtedness ” means, as of any date, the aggregate principal amount of Indebtedness of the Borrower and the Subsidiaries outstanding as of such date, in the amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP.

“ Tranche B Commitment ” means, with respect to each Lender, the commitment, if any, of such Lender to make a Tranche B Term Loan hereunder on the Original Effective Date, the Amendment No. 4 Effective Date or the Restatement Effective Date, as applicable, expressed as an amount representing the maximum principal amount of the Tranche B Term Loan to be made by such Lender hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04.

“ Tranche B Lender ” means a Lender with a Tranche B Commitment or an outstanding Tranche B Term Loan.

“ Tranche B Maturity Date ” means the Series D Tranche B Maturity Date or the Series E Tranche B Maturity Date, as applicable.

“ Tranche B Term Loan ” means (x) a Loan made pursuant to clause (a) of Section 2.01, (y) unless otherwise indicated, any Series D Tranche B Term Loan or Series E Tranche B Term Loan outstanding as of the Restatement Effective Date.

“ Type ,” when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

“ wholly owned ” means with respect to any Person, a subsidiary of such Person all the outstanding Equity Interests of which (other than (x) directors’ qualifying shares and (y) shares issued to foreign nationals to the extent required by applicable law) are owned by such Person and/or by one or more wholly owned subsidiaries of such Person.

“ Withdrawal Liability ” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in ERISA.

“ Yield ” for any Indebtedness on any date of determination will be determined by the Administrative Agent utilizing (a) if applicable, any “LIBOR floor” applicable to such Indebtedness on such date; (b) the interest margin for such Indebtedness on such date; and (c) the issue price of such Indebtedness (after giving effect to any original issue discount (with original issue discount being equated to interest based on an assumed four-year life to maturity) or upfront fees (which shall be deemed to constitute like amounts of original issue discount) paid to the market in respect of such Indebtedness but excluding customary arranger, underwriting and commitment fees not paid to the lenders providing such Indebtedness generally).

SECTION 1.02. Classification of Loans and Borrowings . For purposes of this Agreement, Loans may be classified and referred to by Class ( e.g ., a “Revolving Loan”) or by Type ( e.g ., a “Eurodollar Loan”) or by Class and Type ( e.g ., a “Eurodollar Revolving Loan”). Borrowings also may be classified and referred to by Class ( e.g ., a “Revolving Borrowing”) or by Type ( e.g ., a “Eurodollar Borrowing”) or by Class and Type ( e.g ., a “Eurodollar Revolving Borrowing”).

SECTION 1.03. Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented, amended and restated or otherwise modified (subject to any restrictions on such amendments, supplements, amendment and restatements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 1.04. Accounting Terms; GAAP . Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP as in effect from time to time, provided that if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision (including any definition) hereof to eliminate the effect of any change occurring after the Original Effective Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision (including any definition) hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. In addition, notwithstanding any other provision contained herein, (i) the definitions set forth in the Loan Documents and any financial calculations required by the Loan Documents shall be computed to exclude any change to lease accounting rules from those in effect pursuant to Financial Accounting Standards Board Accounting Standards Codification 840 (Leases) and other related lease accounting guidance as in effect on the Original Effective Date and (ii) all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Financial Accounting Standards Board Accounting Standards Codification 825 (or any other Financial Accounting Standard having a similar result

or effect) to value any Indebtedness or other liabilities of the Parent, the Borrower or any Subsidiary at “fair value,” as defined therein.

SECTION 1.05. Specified Transactions . Notwithstanding anything to the contrary herein, solely for purposes of determining the Leverage Ratio, Secured Leverage Ratio and Holdings Leverage Ratio, with respect to any period during which any Specified Transaction occurs, such ratios shall be calculated with respect to such period and such Specified Transaction (and all other Specified Transactions that have been consummated during such period) on a Pro Forma Basis.

SECTION 1.06. Effect of this Agreement on the Original Credit Agreement and the Other Existing Loan Documents . Upon satisfaction of the conditions precedent to the effectiveness of this Agreement set forth in Amendment No. 5, this Agreement shall be binding on the Borrower, Holdings, the Agents, the Lenders and the other parties hereto regardless of the fact that any may not have signed this Agreement itself, and the Original Credit Agreement and the provisions thereof shall be replaced in their entirety by this Agreement and the provisions hereof; provided that for the avoidance of doubt (a) the Obligations (as defined in the Original Credit Agreement) of the Borrower, Holdings and the other Loan Parties under the Original Credit Agreement and the other Loan Documents that remain unpaid and outstanding as of the date of this Agreement shall continue to exist under and be evidenced by this Agreement and the other Loan Documents, (b) all Letters of Credit under and as defined in the Original Credit Agreement shall continue as Letters of Credit under this Agreement and (c) the Collateral and the Loan Documents shall continue to secure, guarantee, support and otherwise benefit the Obligations on the same terms as prior to the effectiveness hereof. Upon the effectiveness of this Agreement, each Loan Document that was in effect immediately prior to the date of this Agreement shall continue to be effective on its terms unless otherwise expressly stated herein.

ARTICLE II

The Credits

SECTION 2.01. Commitments and Extension Requests . Subject to the terms and conditions set forth herein, (x) each Lender agrees (a) to make a Tranche B Term Loan to the Borrower on the Original Effective Date in a principal amount not exceeding its Tranche B Commitment, (b) to make Revolving Loans to the Borrower from time to time during the Revolving Availability Period in an aggregate principal amount that will not result in such Lender’s Revolving Exposure exceeding such Lender’s Revolving Commitment and (c) to make 2018 Extended Revolving Loans to the Borrower from time to time during the 2018 Extended Revolving Availability Period in an aggregate principal amount that will not result in such Lender’s 2018 Extended Revolving Exposure exceeding such Lender’s 2018 Extended Revolving Commitment, (y) (i) the Additional Series D Tranche B Term Lender agrees to make a Series D Tranche B Term Loan to the Borrower on the Amendment No. 5 Effective Date in an amount not to exceed the Additional Series D Tranche B Term Loan Commitment and (ii) each Converted Series B Tranche B Term Loan of each Amendment No. 5 Consenting Lender shall be converted into a Series D Tranche B Term Loan of such Lender as of the Amendment No. 5 Effective Date in a principal amount equal to the principal amount of such Lender’s Converted Series B Tranche B Term Loan immediately prior to such conversion and (z) (i) the Additional Series E Tranche B Term Lender agrees to make a Series E Tranche B Term Loan to the Borrower on the Amendment No. 5 Effective Date in an amount not to exceed the Additional Series E Tranche B Term Loan Commitment and (ii) each Converted Series C Tranche B Term Loan of each Amendment No. 5 Consenting Lender shall be converted into a Series E Tranche B Term Loan of such Lender as of the Amendment No. 5 Effective Date in a principal amount equal to the principal amount of such Lender’s Converted Series C Tranche B Term Loan immediately prior to such conversion. For the avoidance of doubt, no such conversion shall constitute a novation of any interest owing to any Amendment No. 5 Consenting Lender and each Amendment No. 5 Consenting

Lender shall continue to be entitled to receive all accrued and unpaid interest owing to it from the Borrower through but not including the Amendment No. 5 Effective Date with respect to its Converted Series B Tranche B Term Loans and Converted Series C Tranche B Term Loans. The Borrower shall designate in the relevant Borrowing Request whether each Borrowing will be maintained as a Eurodollar Loan or an ABR Loan and, if such Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect thereto. Amounts repaid or prepaid in respect of Tranche B Term Loans may not be reborrowed.

SECTION 2.02. Loans and Borrowings .

(a) Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Commitments of the applicable Class. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder, provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.

(b) Subject to Section 2.14, each Revolving Borrowing, 2018 Extended Revolving Borrowing and Tranche B Term Loan Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith.

(c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $2,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $1,000,000. Borrowings of more than one Type and Class may be outstanding at the same time. There shall not at any time be more than a total of 20 Eurodollar Borrowings outstanding. Notwithstanding anything to the contrary herein, (1) an ABR Revolving Borrowing may be in an aggregate amount that is equal to the entire unused balance of the aggregate Revolving Commitments, (2) an ABR 2018 Extended Revolving Borrowing may be in an aggregate amount that is equal to the entire unused balance of the aggregate 2018 Extended Revolving Commitments and (3) subject to Section 2.04(a), a Swingline Loan may be in an aggregate amount (i) that is equal to the entire unused balance of the aggregate 2018 Extended Revolving Commitments or (ii) that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.05(e).

(d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Revolving Maturity Date, the 2018 Extended Revolving Maturity Date, the Series D Tranche B Maturity Date, the Series E Tranche B Maturity Date or the Tranche B Maturity Date, as applicable.

SECTION 2.03. Requests for Borrowings . To request a Revolving Borrowing, 2018 Extended Revolving Borrowing or Tranche B Term Loan Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time, one Business Day before the date of the proposed Borrowing, provided that any such notice of an ABR 2018 Extended Revolving Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.05(e) may be given not later than 10:00 a.m., New York City time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request signed by the Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:

(i) whether the requested Borrowing is to be a Revolving Borrowing, 2018 Extended Revolving Borrowing or a Tranche B Term Loan Borrowing;

(ii) the aggregate amount of such Borrowing;

(iii) the date of such Borrowing, which shall be a Business Day;

(iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

(v) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and

(vi) the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.06.

Until the Revolving Maturity Date, each requested Revolving Borrowing and 2018 Extended Revolving Borrowing (other than any Swingline Loan Borrowing) shall be allocated ratably among the combined amount of outstanding Revolving Commitments and 2018 Extended Revolving Commitments, taken as a whole.

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section 2.03, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04. Swingline Loans .

(a) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from time to time during the 2018 Extended Revolving Availability Period, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $25,000,000 or (ii) the aggregate 2018 Extended Revolving Exposures exceeding the aggregate 2018 Extended Revolving Commitments, provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.

(b) To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request by telephone (confirmed by telecopy), not later than 2:00 p.m., New York City time, on the day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower. The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to the general deposit account of the Borrower maintained with the Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(e), by remittance to the Issuing Bank) by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.

(c) The Swingline Lender may by written notice given to the Administrative Agent not later than 12:00 noon, New York City time, on any Business Day require the 2018 Extended Revolving

Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which 2018 Extended Revolving Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each 2018 Extended Revolving Lender, specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan or Swingline Loans. Each 2018 Extended Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan or Swingline Loans. Each 2018 Extended Revolving Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the 2018 Extended Revolving Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each 2018 Extended Revolving Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis , to the payment obligations of the 2018 Extended Revolving Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the 2018 Extended Revolving Lenders. The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the 2018 Extended Revolving Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear, provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the Borrower for any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof.

SECTION 2.05. Letters of Credit .

(a) General . Upon satisfaction of the conditions specified in Section 4.01 on the Original Effective Date, each Existing Letter of Credit will, automatically and without any action on the part of any Person, be deemed to be a Letter of Credit issued hereunder for all purposes of this Agreement and the other Loan Documents. On and after the Amendment No. 4 Effective Date, each Letter of Credit then outstanding was, automatically and without any action on the part of any Person, deemed to be a Letter of Credit issued under the 2018 Extended Revolving Commitments hereunder for all purposes of this Agreement and the other Loan Documents. In addition, subject to the terms and conditions set forth herein, the Borrower may request the issuance of additional Letters of Credit for its own account (or for the account of any of its subsidiaries so long as the Borrower is a co-applicant), in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the 2018 Extended Revolving Availability Period. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions . To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank (except that the

Issuing Bank in respect of Existing Letters of Credit shall not issue additional Letters of Credit and shall not be required to renew or extend an Existing Letter of Credit unless agreed by it) and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section 2.05), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, the Borrower also shall submit a letter of credit application on the Issuing Bank’s standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension, the LC Exposure shall not exceed $75,000,000.

(c) Expiration Date . Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date that is one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five Business Days prior to the 2018 Extended Revolving Maturity Date.

(d) Participations . (i) With respect to each Letter of Credit outstanding on the Amendment No. 4 Effective Date and (ii) by the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each 2018 Extended Revolving Lender, and each 2018 Extended Revolving Lender hereby acquires from the Issuing Bank, a participation in any such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under any such Letter of Credit. In consideration and in furtherance of the foregoing, each 2018 Extended Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such 2018 Extended Revolving Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section 2.05, or of any reimbursement payment required to be refunded to the Borrower for any reason. Each 2018 Extended Revolving Lender acknowledges and agrees that its obligation to assume and acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. For the avoidance of doubt, after the Amendment No. 4 Effective Date no Revolving Lender shall be considered to hold a participation pursuant to this paragraph in respect of any Letter of Credit.

(e) Reimbursement . If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon, New York City time, on (i) the date that such LC Disbursement is made, if the Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than 12:00 noon, New York City time, on the Business Day that the Borrower receives such notice, if such notice is received prior to 10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time on the day of receipt; provided that, if such LC Disbursement is not less than $2,000,000, the Borrower may, subject to the conditions to borrowing set forth herein, request (and, if the Borrower fails to reimburse such LC

Disbursement when due, the Borrower shall be deemed to have requested) in accordance with Section 2.03 or 2.04 that such LC Disbursement be financed with an ABR 2018 Extended Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR 2018 Extended Revolving Borrowing or Swingline Loan (and the time for reimbursement of such LC Disbursement shall automatically be extended to the Business Day following such request or deemed request). If the Borrower fails to make such payment when due, the Administrative Agent shall notify each 2018 Extended Revolving Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such 2018 Extended Revolving Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each 2018 Extended Revolving Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.06 with respect to Loans made by such 2018 Extended Revolving Lender (and Section 2.06 shall apply, mutatis mutandis , to the payment obligations of the 2018 Extended Revolving Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the 2018 Extended Revolving Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that 2018 Extended Revolving Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such 2018 Extended Revolving Lenders and the Issuing Bank as their interests may appear. Any payment made by a 2018 Extended Revolving Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.

(f) Obligations Absolute . The Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section 2.05 shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.05, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank, provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented that appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents

without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

(g) Disbursement Procedures . The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder, provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the 2018 Extended Revolving Lenders with respect to any such LC Disbursement in accordance with paragraph (e) of this Section 2.05.

(h) Interim Interest . If the Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR 2018 Extended Revolving Loans, provided that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section 2.05, then Section 2.13(c) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any 2018 Extended Revolving Lender pursuant to paragraph (e) of this Section 2.05 to reimburse the Issuing Bank shall be for the account of such 2018 Extended Revolving Lender to the extent of such payment.

(i) Replacement of the Issuing Bank . The Issuing Bank may be replaced at any time by written agreement among the Borrower, the Administrative Agent and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement of the Issuing Bank. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b). From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of the Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

(j) Cash Collateralization . If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, 2018 Extended Revolving Lenders with LC Exposure representing greater than 50% of the aggregate LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account with the Collateral Agent, in the name of the Collateral Agent and for the benefit of the Lenders, an amount in cash equal to 105% the LC Exposure as of such date plus any accrued and unpaid interest thereon, provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in paragraph (h) or (i) of Section 7.01. The Borrower also shall deposit cash collateral pursuant to this paragraph as and to the extent required by Section 2.11(b) and Section 2.22. Each such deposit shall be held by the Collateral Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Collateral Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account.

Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of 2018 Extended Revolving Lenders with LC Exposure representing greater than 50% of the aggregate LC Exposure), be applied to satisfy other obligations of the Borrower under this Agreement. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived.

(k) Additional Issuing Banks . The Borrower may at any time, and from time to time, designate one or more additional Lenders to act as an issuing bank under this Agreement with the consent of the Administrative Agent (which consent shall not be unreasonably withheld) and such Lender. Any Lender designated as an issuing bank pursuant to this Section 2.05(k) shall be deemed to be and shall have all the rights and obligations of an “Issuing Bank” hereunder.

SECTION 2.06. Funding of Borrowings .

(a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:00 noon, New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders, provided that Swingline Loans shall be made as provided in Section 2.04. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received in like funds, to an account of the Borrower maintained with the Administrative Agent in New York City and designated by the Borrower in the applicable Borrowing Request, provided that ABR 2018 Extended Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be remitted by the Administrative Agent to the Issuing Bank.

(b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section 2.06 and may, in reliance upon such assumption and in its sole discretion, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

SECTION 2.07. Interest Elections .

(a) Each Revolving Borrowing, 2018 Extended Revolving Borrowing and Tranche B Term Loan Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing

Request or as designated by Section 2.03. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section 2.07. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section 2.07 shall not apply to Swingline Borrowings, which may not be converted or continued.

(b) To make an election pursuant to this Section 2.07, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Revolving Borrowing or 2018 Extended Revolving Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request signed by the Borrower.

(c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:

(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period.”

If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e) If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing.

(f) Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing, (i) no outstanding Borrowing may be

converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.08. Termination and Reduction of Commitments .

(a) Unless previously terminated, (i) the Tranche B Commitments shall terminate at 5:00 p.m., New York City time, on the Restatement Effective Date, (ii) the Revolving Commitments shall terminate on the Revolving Maturity Date and (iii) the 2018 Extended Revolving Commitments shall terminate on the 2018 Extended Revolving Maturity Date.

(b) The Borrower may at any time terminate, or from time to time reduce, the Commitments of any Class, provided that (i) each reduction of the Commitments of any Class shall be in an amount that is an integral multiple of $500,000 and not less than $5,000,000, (ii) the Borrower shall not terminate or reduce the Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.11, the aggregate Revolving Exposures would exceed the aggregate Revolving Commitments and (iii) the Borrower shall not terminate or reduce the 2018 Extended Revolving Commitments if, after giving effect to any concurrent prepayment of the 2018 Extended Revolving Loans in accordance with Section 2.11, the aggregate 2018 Extended Revolving Exposures would exceed the aggregate 2018 Extended Revolving Commitments.

(c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section 2.08 at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section 2.08 shall be irrevocable, provided that a notice of termination of the Revolving Commitments or 2018 Extended Revolving Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities or the closing of a refinancing transaction, a sale of all or substantially all of the assets of the Borrower and its Subsidiaries or a Change in Control, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments of any Class shall be permanent. Each reduction of the Commitments of any Class shall be made ratably among the Lenders in accordance with their respective Commitments of such Class.

SECTION 2.09. Repayment of Loans; Evidence of Debt .

(a) The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Loan of such Lender on the Revolving Maturity Date, (ii) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each 2018 Extended Revolving Loan of such Lender on the 2018 Extended Revolving Maturity Date, (iii) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Tranche B Term Loan of such Lender as provided in Section 2.10 and (iv) the then unpaid principal amount of each Swingline Loan on the earlier of the 2018 Extended Revolving Maturity Date and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least two Business Days after such Swingline Loan is made; provided that on each date that a 2018 Extended Revolving Borrowing is made, the Borrower shall repay all Swingline Loans then outstanding.

(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by

such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section 2.09 shall be prima facie evidence of the existence and amounts of the obligations recorded therein, provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.

(e) Any Lender may request that Loans of any Class made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).

SECTION 2.10. Amortization of Tranche B Term Loans .

(a) Subject to adjustment pursuant to paragraph (c) of this Section 2.10, the Borrower shall repay Tranche B Term Loan Borrowings on each date set forth below in the aggregate principal amount set forth opposite such date (as adjusted from time to time pursuant to Section 2.10(c)):

Series D Tranche B Term Loans:

Amortization Date		Series D Tranche B Term Loan Installments
March 31, 2014		0.25%
June 30, 2014		0.25%
September 30, 2014		0.25%
December 31, 2014		0.25%
March 31, 2015		0.25%
June 30, 2015		0.25%
September 30, 2015		0.25%
December 31, 2015		0.25%
March 31, 2016		0.25%
June 30, 2016		0.25%
September 30, 2016		0.25%
Series B Tranche B Maturity Date		Remaining Balance

Series E Tranche B Term Loans:

Amortization Date		Series E Tranche B Term Loan Installments
March 31, 2014		0.25%
June 30, 2014		0.25%
September 30, 2014		0.25%
December 31, 2014		0.25%
March 31, 2015		0.25%
June 30, 2015		0.25%
September 30, 2015		0.25%
December 31, 2015		0.25%
March 31, 2016		0.25%
June 30, 2016		0.25%
September 30, 2016		0.25%
December 31, 2016		0.25%
March 31, 2017		0.25%
June 30, 2017		0.25%
September 30, 2017		0.25%
December 31, 2017		0.25%
March 31, 2018		0.25%
Series E Tranche B Maturity Date		Remaining Balance

(b) To the extent not previously paid, (x) all Series D Tranche B Term Loans shall be due and payable on the Series D Tranche B Maturity Date and (y) all Series E Tranche B Term Loans shall be due and payable on the Series E Tranche B Maturity Date.

(c) Any prepayment of a Tranche B Term Loan Borrowing pursuant to clause (c) or (d) of Section 2.11 shall be applied (i) first , to reduce, in the direct order of maturity, the scheduled repayments of the Tranche B Term Loan Borrowings to be made pursuant to this Section 2.10 on the four consecutive scheduled payment dates next following the date of such prepayment unless and until each such scheduled repayment has been eliminated as a result of reductions hereunder; and (ii) second , to reduce ratably the remaining scheduled repayments of the Tranche B Term Loan Borrowings. Any prepayment of a Tranche B Term Loan Borrowing pursuant to Section 2.11(a) shall be applied to reduce scheduled repayment amounts of the Tranche B Term Loans as directed by the Borrower.

SECTION 2.11. Prepayment of Loans .

(a) The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to the requirements of this Section 2.11. Any such prepayment (other than a prepayment of a Revolving Borrowing, a 2018 Extended Revolving Borrowing or a Swingline Borrowing) made when any Term Loan is outstanding shall be applied entirely to Term Loan Borrowings. Until the Revolving Maturity Date, any prepayment of a Revolving Borrowing or 2018 Extended Revolving Borrowing shall be allocated ratably among the combined amount of outstanding Revolving Loans and 2018 Extended Revolving Loans, taken as a whole; provided , that, in connection with the Borrower’s termination of all outstanding Revolving Commitments, the Borrower may apply such prepayment to Revolving Borrowings only.

(b) In the event and on such occasion that (i) the aggregate Revolving Exposures exceed the aggregate Revolving Commitments, the Borrower shall prepay Revolving Borrowings or (ii) the

aggregate 2018 Extended Revolving Exposures exceed the aggregate 2018 Extended Revolving Commitments, the Borrower shall prepay 2018 Extended Revolving Borrowings or Swingline Borrowings (or, if no such Borrowings are outstanding, deposit cash collateral in an account with the Collateral Agent pursuant to Section 2.05(j)) in an aggregate amount equal to such excess).

(c) In the event and on each occasion that any Net Proceeds are received by or on behalf of Holdings, the Borrower or any Subsidiary in respect of any Prepayment Event, the Borrower shall, promptly after such Net Proceeds are received by Holdings, the Borrower or such Subsidiary (and in any event not later than the fifth Business Day after such Net Proceeds are received), prepay Term Loan Borrowings in an amount equal to 100% of such Net Proceeds; provided that to the extent required by the terms of any Permitted Secured Notes that are secured by Liens subject to the First Lien Intercreditor Agreement, the Borrower may, in lieu of prepaying Term Loans with such portion of the Net Proceeds of any prepayment event described in clause (a) or clause (b) of the definition of “Prepayment Event,” apply a portion of such Net Proceeds (based on the respective principal amounts at such time of (A) such Permitted Secured Notes that are secured by Liens subject to the First Lien Intercreditor Agreement and (B) the Term Loans) to repurchase or redeem Permitted Secured Notes that are secured by Liens subject to the First Lien Intercreditor Agreement, provided further that in the case of any event described in clause (a) or (b) of the definition of the term “Prepayment Event,” if the Borrower shall deliver to the Administrative Agent a certificate of a Financial Officer to the effect that the Borrower and the Subsidiaries intend to apply the Net Proceeds from such event (or a portion thereof specified in such certificate), within 360 days after receipt of such Net Proceeds, to acquire or replace real property, equipment or other tangible assets (excluding inventory) to be used in the business of the Borrower and the Subsidiaries, and certifying that no Default has occurred and is continuing, then no prepayment shall be required pursuant to this paragraph in respect of the Net Proceeds specified in such certificate, except to the extent of any such Net Proceeds therefrom that have not been so applied or contractually committed in writing by the end of such 360-day period (and, if so contractually committed in writing but not applied prior to the end of such 360-day period, applied within 90 days of the end of such period), promptly after which time a prepayment shall be required in an amount equal to such Net Proceeds that have not been so applied.

(d) Following the end of each fiscal year of the Borrower, commencing with the fiscal year ending December 31, 2011, the Borrower shall prepay Term Loan Borrowings in an amount equal to:

(x) the excess of (A) 50% of Excess Cash Flow over (B) the amount of prepayments of Term Loans under Section 2.11(a) during such fiscal year for any fiscal year for which the Leverage Ratio at the end of such fiscal year is greater than 3.75 to 1.00,

(y) the excess of (A) 25% of Excess Cash Flow over (B) the amount of prepayments of Term Loans under Section 2.11(a) during such fiscal year for any fiscal year for which the Leverage Ratio at the end of such fiscal year is less than or equal to 3.75 to 1.00 and greater than 3.25 to 1.00, and

(z) none of Excess Cash Flow for any fiscal year for which the Leverage Ratio at the end of such fiscal year is less than or equal to 3.25 to 1.00.

Each prepayment pursuant to this paragraph shall be made within five Business Days of the date on which financial statements are delivered pursuant to Section 5.01 with respect to the fiscal year for which Excess Cash Flow is being calculated (and in any event within 95 days after the end of such fiscal year).

(e) Prior to any optional or mandatory prepayment of Borrowings hereunder, the Borrower shall determine in accordance with Section 2.10(c) and clauses (a), (c) and (d) of this Section 2.11 the Borrowing or Borrowings to be prepaid and shall specify such determination in the notice of such prepayment pursuant to paragraph (f) of this Section 2.11.

(f) The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than 12:00 noon, New York City time, one Business Day before the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 2:00 p.m., New York City time, on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date, the principal amount of each Borrowing or portion thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment, provided that, (i) if a notice of optional prepayment is given in connection with a conditional notice of termination of the Revolving Commitments or 2018 Extended Revolving Commitments as contemplated by Section 2.08, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.08 and (ii) otherwise if a notice of optional prepayment is given under this Section 2.11, such notice of prepayment may be conditioned upon the effectiveness of other credit facilities or the closing of a refinancing transaction, a sale of all or substantially all of the assets of the Borrower and its Subsidiaries or a Change in Control and such notice of prepayment may be revoked if such condition is not satisfied. Promptly following receipt of any such notice (other than a notice relating solely to Swingline Loans), the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13 but shall in no event include premium or penalty.

SECTION 2.12. Fees .

(a) The Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee, which shall accrue at the Applicable Rate on the average daily unused amount of each 2018 Extended Revolving Commitment of such Lender during the period from and including the Original Effective Date to but excluding the date on which the aggregate 2018 Extended Revolving Commitments terminate. The Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee, which shall accrue at the Applicable Rate on the average daily unused amount of each Revolving Commitment of such Lender during the period from and to but excluding the date on which the aggregate Revolving Commitments terminate. Accrued commitment fees shall be payable in arrears in respect of the Revolving Commitments or 2018 Extended Revolving Commitments on the last Business Day of March, June, September and December of each year and on the date on which the Revolving Commitments or 2018 Extended Revolving Commitments terminate, as applicable. All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). For purposes of computing commitment fees with respect to Revolving Commitments, a Revolving Commitment of a Lender shall be deemed to be used to the extent of the outstanding Revolving Loans. For purposes of computing commitment fees with respect to 2018 Extended Revolving Commitments, a 2018 Extended Revolving Commitment of a Lender shall be deemed to be used to the extent of the outstanding 2018 Extended Revolving Loans and LC Exposure of such Lender (and the Swingline Exposure of such Lender shall be disregarded for such purpose).

(b) The Borrower agrees to pay (i) to the Administrative Agent for the account of each 2018 Extended Revolving Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the same Applicable Rate used to determine the interest rate applicable to Eurodollar 2018 Extended Revolving Loans on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the date of issuance of any Letter of Credit to but excluding the later of the date on which such Lender’s 2018 Extended Revolving Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at a rate equal to 0.125% per annum on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Original Effective Date to but excluding the later of the date of termination of the 2018 Extended Revolving Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees shall be payable on the last Business Day of March, June, September and December of each year, commencing on the first such date to occur after the Original Effective Date, provided that all such fees shall be payable on the date on which the 2018 Extended Revolving Commitments terminate and any such fees accruing after the date on which the 2018 Extended Revolving Commitments terminate shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(c) All prepayments of the Series D Tranche B Term Loans effected on or prior to September 4, 2014 with the proceeds of a substantially concurrent issuance or incurrence of new term loans (including with the proceeds of Refinancing Term Loans or Replacement Term Loans and excluding a refinancing of all the facilities outstanding under this Agreement in connection with another transaction not permitted by this Agreement (as determined prior to giving effect to any amendment or waiver of this Agreement being adopted in connection with such transaction)), shall be accompanied by a prepayment fee equal to 1.00% of the aggregate principal amount of such prepayments if the Yield applicable to such new term loans is less than the Yield applicable to the Series D Tranche B Term Loans on the Restatement Effective Date. All prepayments of the Series E Tranche B Term Loans effected on or prior to March 4, 2015 with the proceeds of a substantially concurrent issuance or incurrence of new term loans (including with the proceeds of Refinancing Term Loans or Replacement Term Loans and excluding a refinancing of all the facilities outstanding under this Agreement in connection with another transaction not permitted by this Agreement (as determined prior to giving effect to any amendment or waiver of this Agreement being adopted in connection with such transaction)), shall be accompanied by a prepayment fee equal to 1.00% of the aggregate principal amount of such prepayments if the Yield applicable to such new term loans is less than the Yield applicable to the Series E Tranche B Term Loans on the Restatement Effective Date.

(d) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent.

(e) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders entitled thereto. Fees paid shall not be refundable under any circumstances.

SECTION 2.13. Interest .

(a) The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.

(b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

(c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section 2.13 or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Revolving Loans or ABR 2018 Extended Revolving Loans as provided in paragraph (a) of this Section 2.13.

(d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and, in the case of Revolving Loans and 2018 Extended Revolving Loans, upon termination of the Revolving Commitments and 2018 Extended Revolving Commitments, respectively, provided that (i) interest accrued pursuant to paragraph (c) of this Section 2.13 shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan or ABR 2018 Extended Revolving Loan prior to the end of the Revolving Availability Period or 2018 Extended Revolving Availability Period, as applicable), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

(e) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate or Federal Funds Effective Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

SECTION 2.14. Alternate Rate of Interest; Illegality .

(a) If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

(x) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that (i) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Borrowing or (ii) adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or

(y) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower

and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.

(b) If any Lender determines that any law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender to make, maintain or fund Loans whose interest is determined by reference to the LIBO Rate, or to determine or charge interest rates based upon the LIBO Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, (i) any obligation of such Lender to make or continue Eurodollar Loans or to convert ABR Loans to Eurodollar Loans shall be suspended, and (ii) if such notice asserts the illegality of such Lender making or maintaining ABR Loans the interest rate on which is determined by reference to the Adjusted LIBO Rate component of the Alternate Base Rate, the interest rate on which ABR Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Adjusted LIBO Rate component of the Alternate Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (x) the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Loans of such Lender to ABR Loans (the interest rate on which ABR Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Adjusted LIBO Rate component of the Alternate Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Loans and (y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Adjusted LIBO Rate, the Administrative Agent shall during the period of such suspension compute the Alternate Base Rate applicable to such Lender without reference to the Adjusted LIBO Rate component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the LIBO Rate. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.

SECTION 2.15. Increased Costs .

(a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or

(ii) impose on any Lender or the Issuing Bank or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender or the Issuing

Bank, as applicable, such additional amount or amounts as will compensate such Lender or the Issuing Bank, as applicable, for such additional costs incurred or reduction suffered.

(b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as applicable, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.

(c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as applicable, as specified in paragraph (a) or (b) of this Section 2.15 shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender or the Issuing Bank, as applicable, the amount shown as due on any such certificate within 10 days after receipt thereof.

(d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section 2.15 shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section 2.15 for any increased costs or reductions incurred more than 270 days prior to the date that such Lender or the Issuing Bank, as applicable, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor, provided , further , that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.16. Break Funding Payments . In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Revolving Loan, 2018 Extended Revolving Loan or Tranche B Term Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.11(f) and is revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest that would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan (excluding any “floor” applicable pursuant to the definition of Adjusted LIBO Rate), for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate that such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section 2.16 shall be delivered

to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof. Notwithstanding the foregoing, no additional amounts shall be due and payable pursuant to this Section 2.16 to the extent that on the relevant due date the Borrower deposits in a Prepayment Account an amount equal to any payment of Eurodollar Loans otherwise required to be made on a date that is not the last day of the applicable Interest Period; provided that on the last day of the applicable Interest Period, the Administrative Agent shall be authorized, without any further action by or notice to or from the Borrower or any other Loan Party, to apply such amount to the prepayment of such Eurodollar Loans. For purposes of this Agreement, the term “Prepayment Account” shall mean a non-interest bearing account established by the Borrower with the Administrative Agent and over which the Administrative Agent shall have exclusive dominion and control, including the right of withdrawal for application in accordance with this Section 2.16.

SECTION 2.17. Taxes .

(a) Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes, provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.17) the Administrative Agent, Lender or Issuing Bank (as applicable) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c) The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank, within 30 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as applicable, on or with respect to any payment by or on account of any obligation of the Borrower hereunder or under any other Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 2.17) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, if any, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e) (i) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), on or prior to the Original Effective Date in the case of each Foreign Lender that is a signatory hereto, and on the date of assignment pursuant to which it becomes a Lender in the case of each other Lender and from time to time thereafter as reasonably requested by either

of the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Borrower (including any documentation demonstrating that such Lender or any Agent has complied with its obligations under FATCA) as will permit such payments to be made without withholding or at a reduced rate, provided that such Foreign Lender has received written notice from the Borrower advising it of the availability of such exemption or reduction and supplying all applicable documentation.

(ii) Without limiting the generality of the foregoing:

(A) each Lender that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to the requesting party two duly completed and executed original copies of Internal Revenue Service Form W-9;

(B) each Foreign Lender shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon request of the Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

(iii) duly completed and executed original copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party;

(iv) duly completed and executed original copies of Internal Revenue Service Form W-8ECI;

(v) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (y) duly completed and executed original copies of Internal Revenue Service Form W-8BEN; or

(vi) any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower to determine the withholding or deduction required to be made.

(f) Each Lender shall promptly notify the Borrower (or, in the case of a Participant, the Lender granting the participation only), in writing, of any change in circumstances that, to the knowledge such Lender, would modify or render invalid any claimed exemption or reduction.

(g) If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund (whether in cash or by offset against taxes otherwise due) of any Indemnified Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.17, it shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.17 with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower ( plus any penalties, interest or other charges imposed by the relevant Governmental

Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This Section 2.17 shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Setoffs .

(a) The Borrower shall make each payment required to be made by it hereunder or under any other Loan Document (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) at or prior to the time expressly required hereunder or under such other Loan Document for such payment (or, if no such time is expressly required, prior to 3:00 p.m., New York City time), on the date when due, in immediately available funds, without setoff or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 1111 Fannin Street, 10th Floor, Houston, Texas 77002, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Persons specified therein. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment under any Loan Document shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments under each Loan Document shall be made in dollars.

(b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties.

(c) If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Revolving Loans, 2018 Extended Revolving Loans, Tranche B Term Loans or participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Revolving Loans, 2018 Extended Revolving Loans, Tranche B Term Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Revolving Loans, 2018 Extended Revolving Loans, Tranche B Term Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Loans, 2018 Extended Revolving Loans, Tranche B Term Loans and participations in LC Disbursements and Swingline Loans, provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to the Borrower

or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

(d) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption and in its sole discretion, distribute to the Lenders or the Issuing Bank, as applicable, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as applicable, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(e) If any Tranche B Lender, Revolving Lender or 2018 Extended Revolving Lender shall fail to make any payment required to be made by it pursuant to Section 2.06(a), 2.18(d) or 9.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid. If any Revolving Lender or 2018 Extended Revolving Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(a), 2.18(d) or 9.03(c), then the Administrative Agent may, in its discretion and notwithstanding any contrary provision hereof, (i) apply any amounts thereafter received by the Administrative Agent for the account of such Revolving Lender or 2018 Extended Revolving Lender and for the benefit of the Administrative Agent, the Swingline Lender or the Issuing Bank to satisfy such Revolving Lender or 2018 Extended Revolving Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid, and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Revolving Lender or 2018 Extended Revolving Lender under such Sections; in the case of each of (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion.

SECTION 2.19. Mitigation Obligations; Replacement of Lenders .

(a) If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as applicable, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b) If any Lender is affected in the manner described in Section 2.14(b) and as a result thereof any of the actions described in such Section is required to be taken, or if any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or if any Lender defaults in its obligation to fund Loans hereunder, then the Borrower may, at its sole expense and

effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a material reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

SECTION 2.20. Incremental Extensions of Credit . At any time during the 2018 Extended Revolving Availability Period, subject to the terms and conditions set forth herein, the Borrower may at any time and from time to time, by notice to the Administrative Agent (whereupon the Administrative Agent shall promptly deliver a copy to each of the Lenders), request to add additional term loans (the “ Incremental Term Loans ”) or additional Revolving Commitments, 2018 Extended Revolving Commitments or Extended Revolving Commitments (the “ Incremental Revolver Commitments ” and together with the Incremental Term Loans, the “ Incremental Extensions of Credit ”) in minimum principal amounts of $25,000,000; provided that such amount may be less than $25,000,000 if such amount represents all the remaining availability under the aggregate principal amount set forth below; provided , further , that (x) immediately prior to and after giving effect to any Additional Credit Extension Amendment (as defined below), no Default has occurred or is continuing or shall result therefrom, (y) the Borrower shall be in compliance on a Pro Forma Basis with the Financial Performance Covenant recomputed as of the last day of the most recently ended fiscal quarter of the Borrower for which financial statements are available and (z) other than with respect to the incurrence of Series B Tranche B Term Loans incurred prior to the Series B Deadline, on a Pro Forma Basis after giving effect to any such Incremental Extension of Credit the Secured Leverage Ratio of Borrower would be less than or equal to 3.50 to 1.00 as of the last day of the most recent fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 5.01(a) or (b). The Incremental Extensions of Credit:

(a) shall be in aggregate principal amount not exceeding $500,000,000 (exclusive of (x) any Refinancing Term Loans and (y) Series B Tranche B Term Loans incurred prior to the Series B Deadline)

(b) shall rank pari passu in right of payment and right of security in respect of the Collateral with the Revolving Loans and Tranche B Term Loans, and

(c) (i) that are Incremental Term Loans, shall have the same terms other than amortization, pricing or maturity date, as the Tranche B Term Loans existing immediately prior to the effectiveness of such Additional Credit Extension Amendment (the “ Existing Term Loans ”) and (ii) that are Incremental Revolver Commitments shall have the same terms as the Revolving Commitments, 2018 Extended Revolving Commitments or Extended Revolving Commitments existing immediately prior to the effectiveness of such Additional Credit Extension Amendment; provided that (i) if the Yield relating to any Incremental Term Loans (other than Refinancing Term Loans) exceeds the Yield relating to the Tranche B Term Loans, by more than 0.50%, the Applicable Rate relating to the Tranche B Term Loans shall be increased to the extent necessary so that the Yield of the Tranche B Term Loans is equal to the Yield of such Incremental Term

Loans minus 0.50%, (ii) other than with respect to Series B Tranche B Term Loans incurred prior to the Series B Deadline, the Incremental Term Loans shall not have a final maturity date earlier than the Tranche B Maturity Date, (iii) other than with respect to Series B Tranche B Term Loans incurred prior to the Series B Deadline, the Incremental Term Loans shall not have a weighted average life to maturity that is shorter than that of the then-remaining weighted average life of the Tranche B Term Loans, and (iv) the Incremental Revolving Commitments shall not require any mandatory commitment reductions, mandatory prepayments or scheduled payments other than those applicable to the Revolving Loans and Revolving Commitments. The Borrower shall by written notice offer each Lender providing Existing Extensions of Credit (an “ Existing Lender ”) the opportunity for no less than three (3) Business Days after delivery of the notice to commit to provide its pro rata portion (based on the amount of its outstanding Tranche B Term Loans or outstanding Revolving Loans or 2018 Extended Revolving Loans and unused Revolving Commitments or 2018 Extended Revolving Commitments, as applicable, on the date of such notice) of any requested Incremental Extension of Credit, provided that no Existing Lender shall be obligated to provide any Incremental Extension of Credit unless it so agrees. Any additional bank, financial institution, Existing Lender or other Person that elects to extend Incremental Extensions of Credit shall be reasonably satisfactory to the Borrower and the Administrative Agent and, in the case of Incremental Extensions of Credit in the form of Incremental Revolving Commitments, the Issuing Bank (any such bank, financial institution, Existing Lender or other Person being called an “ Additional Lender ”) and shall become a Lender under this Agreement pursuant to an Additional Credit Extension Amendment giving effect to the modifications permitted by this Section 2.20 and, as appropriate, the other Loan Documents and executed by the Borrower, each Additional Lender and the Administrative Agent. Commitments in respect of Incremental Extensions of Credit shall be Commitments under this Agreement. An Additional Credit Extension Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 2.20 (including voting provisions applicable to the Additional Lenders comparable to the provisions of clause (B) of the second proviso of Section 9.02(b)). The effectiveness of any Additional Credit Extension Amendment shall be subject to the satisfaction on the date thereof (each, an “ Incremental Facility Closing Date ”) of each of the conditions set forth in Section 4.02 (it being understood that all references to “the date of such Borrowing” in such Section 4.02 shall be deemed to refer to the Incremental Facility Closing Date). The proceeds of the Incremental Extensions of Credit shall be used for working capital and general corporate purposes (including Permitted Acquisitions). The provisions of this Section 2.20 shall override any provision of Section 9.02 to the contrary.

SECTION 2.21. Extended Term Loans and Extended Revolving Commitments .

(a) The Borrower may at any time and from time to time request that all or a portion of the Term Loans of any Class (an “ Existing Term Loan Class ”) be converted to extend the scheduled maturity date(s) of any payment of principal with respect to all or a portion of any principal amount of such Term Loans (any such Term Loans which have been so converted, “ Extended Term Loans ”) and to provide for other terms consistent with this Section 2.21. In order to establish any Extended Term Loans, the Borrower shall provide a notice to the Administrative Agent (who shall provide a copy of such notice to each of the Lenders under the Existing Term Loan Class) (an “ Extension Request ”) setting forth the proposed terms of the Extended Term Loans to be established, which shall be consistent with the Term Loans under the Existing Term Loan Class from which such Extended Term Loans are to be converted except that:

(i) all or any of the scheduled amortization payments of principal of the Extended Term Loans may be delayed to later dates than the scheduled amortization payments of principal

of the Term Loans of such Existing Term Loan Class to the extent provided in the applicable Additional Credit Extension Amendment;

(ii) the interest margins with respect to the Extended Term Loans may be different than the Applicable Rate for the Term Loans of such Existing Term Loan Class and upfront fees may be paid to the Extending Term Lenders to the extent provided in the applicable Additional Credit Extension Amendment; and

(iii) the Additional Credit Extension Amendment may provide for other covenants and terms that apply only after the Tranche B Maturity Date.

(b) Any Extended Term Loans converted pursuant to any Extension Request shall be designated a series of Extended Term Loans for all purposes of this Agreement; provided that, subject to the limitations set forth in clause (a) above, any Extended Term Loans converted from an Existing Term Loan Class may, to the extent provided in the applicable Additional Credit Extension Amendment and consistent with the requirements set forth above, be designated as an increase in any previously established Class of Term Loans.

(c) The Borrower shall provide the applicable Extension Request at least five (5) Business Days prior to the date on which Lenders under the applicable Existing Term Loan Class are requested to respond. No Lender shall have any obligation to agree to have any of its Term Loans of any Existing Term Loan Class converted into Extended Term Loans pursuant to any Extension Request. Any Lender wishing to have all or a portion of its Term Loans under the Existing Term Loan Class subject to such Extension Request (such Lender an “ Extending Term Lender ”) converted into Extended Term Loans shall notify the Administrative Agent (an “ Extension Election ”) on or prior to the date specified in such Extension Request of the amount of its Term Loans under the Existing Term Loan Class which it has elected to request be converted into Extended Term Loans (subject to any minimum denomination requirements reasonably imposed by the Administrative Agent and acceptable to the Borrower). In the event that the aggregate amount of Term Loans under the Existing Term Loan Class subject to Extension Elections exceeds the amount of Extended Term Loans requested pursuant to an Extension Request, Term Loans of the Existing Term Loan Class subject to Extension Elections shall be converted to Extended Term Loans on a pro rata basis based on the amount of Term Loans included in each such Extension Election (subject to any minimum denomination requirements reasonably imposed by the Administrative Agent and acceptable to the Borrower).

(d) The Borrower may, with the consent of each Person providing an Extended Revolving Commitment, the Administrative Agent and any Person acting as swingline lender or issuing bank under such Extended Revolving Commitments, amend this Agreement pursuant to an Additional Credit Extension Amendment to provide for Extended Revolving Commitments and to incorporate the terms of such Extended Revolving Commitments into this Agreement on substantially the same basis as provided with respect to the Revolving Commitments or the 2018 Extended Revolving Commitments; provided that (i) the establishment of any such Extended Revolving Commitments shall be accompanied by a corresponding reduction in the Revolving Commitments or 2018 Extended Revolving Commitments, as applicable, and (ii) any reduction in the Revolving Commitments or 2018 Extended Revolving Commitments, as applicable, may, at the option of the Borrower, be directed to a disproportional reduction of the Revolving Commitments or 2018 Extended Revolving Commitments of any Lender providing an Extended Revolving Commitment.

(e) Extended Term Loans and Extended Revolving Commitments shall be established pursuant to an Additional Credit Extension Amendment to this Agreement among the Borrower, the Administrative Agent and each Extending Term Lender or Lender providing an Extended Revolving

Commitment which shall be consistent with the provisions set forth above (but which shall not require the consent of any other Lender other than those consents provided in this Section 2.21). Each Additional Credit Extension Amendment shall be binding on the Lenders, the Loan Parties and the other parties hereto. In connection with any Additional Credit Extension Amendment, the Loan Parties and the Administrative Agent shall enter into such amendments to the Collateral Documents as may be reasonably requested by the Administrative Agent (which shall not require any consent from any Lender other than those consents provided pursuant to this Agreement) in order to ensure that the Extended Term Loans or Extended Revolving Commitments are provided with the benefit of the applicable Collateral Documents and shall deliver such other documents, certificates and opinions of counsel in connection therewith as may be reasonably requested by the Administrative Agent.

(f) The provisions of this Section 2.21 shall override any provision of Section 9.02 to the contrary.

SECTION 2.22. Defaulting Lenders .

(a) Notwithstanding any provision of this Agreement to the contrary, if any Revolving Lender or 2018 Extended Revolving Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(i) fees shall cease to accrue on the unfunded portion of the Revolving Commitment or 2018 Extended Revolving Commitment of such Defaulting Lender pursuant to Section 2.12(a);

(ii) the Revolving Commitment, 2018 Extended Revolving Commitments, Revolving Exposure, 2018 Extended Revolving Exposure, LC Exposure or Swingline Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 9.02); provided that this clause (ii) shall not apply to the vote of a Defaulting Lender, except to the extent the consent of such Lender would be required under clause (i), (ii), (iii) or (iv) in the proviso to the first sentence of Section 9.02(b);

(iii) if any Swingline Exposure or LC Exposure exists at the time such Lender becomes a Defaulting Lender then:

(1) so long as no Event of Default has occurred and is continuing as to which the Administrative Agent has received written notice from the Borrower or a 2018 Extended Revolving Lender, all or any part of the Swingline Exposure and LC Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the extent that the sum of all non-Defaulting Lenders’ Revolving Credit Exposures and 2018 Extended Revolving Exposure plus such Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the total of all non-Defaulting Lenders’ Revolving Commitments and 2018 Extended Revolving Commitments;

(2) if the reallocation described in clause (1) above cannot, or can only partially, be effected, the Borrower shall within one Business Day following notice by the Administrative Agent (x) first , prepay such Swingline Exposure and (y) second , cash collateralize, for the benefit of the Issuing Bank only, the Borrower’s obligations corresponding to such Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (1) above) in accordance with the procedures set forth in Section 2.05(j) for so long as such LC Exposure is outstanding;

(3) if the Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to clause (2) above, the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;

(4) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (1) above, then the fees payable to the Lenders pursuant to Section 2.12(a) and Section 2.12(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; and

(5) if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to clause (1) or (2) above, then, without prejudice to any rights or remedies of the Issuing Bank or any other Lender hereunder, all fees that otherwise would have been payable to such Defaulting Lender (solely with respect to the portion of such Defaulting Lender’s 2018 Extended Revolving Commitment that was utilized by such LC Exposure) and letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until and to the extent that such LC Exposure is reallocated and/or cash collateralized; and

(iv) so long as such Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure and the Defaulting Lender’s then outstanding LC Exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.22(a)(iii), and participating interests in any newly made Swingline Loan or any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.22(a)(iii)(1) (and such Defaulting Lender shall not participate therein).

(b) If (i) a Bankruptcy Event with respect to a parent entity of any Lender shall occur following the Original Effective Date and for so long as such event shall continue or (ii) the Swingline Lender or the Issuing Bank has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless the Swingline Lender or the Issuing Bank, as the case may be, shall have entered into arrangements with the Borrower or such Lender, satisfactory to the Swingline Lender or the Issuing Bank, as the case may be, to defease any risk to it in respect of such Lender hereunder.

(c) In the event that the Administrative Agent, the Borrower, the Swingline Lender and the Issuing Bank each agrees that a Defaulting Lender that is a 2018 Extended Revolving Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the 2018 Extended Revolving Lenders shall be readjusted to reflect the inclusion of such Lender’s 2018 Extended Revolving Commitment and on such date such Lender shall purchase at par such of the 2018 Extended Revolving Loans of the other 2018 Extended Revolving Lenders as the Administrative Agent shall determine may be necessary in order for such Lender to hold 2018 Extended Revolving Loans in accordance with its Applicable Percentage (whereupon such Lender shall cease to be a Defaulting Lender).

ARTICLE III

Representations and Warranties

The Borrower represents and warrants to the Lenders that:

SECTION 3.01. Organization; Power . Each of Holdings, the Borrower and the Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the power and authority and all governmental rights, qualifications, approvals, authorizations, permits, accreditations, Reimbursement Approvals, licenses and franchises material to the business of the Borrower and the Subsidiaries taken as a whole that are necessary to own its assets, to carry on its business as now conducted and as proposed to be conducted and to execute, deliver and perform its obligations under each Loan Document to which it is a party and (c) except where the failure to do so, individually or in the aggregate, is not reasonably likely to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

SECTION 3.02. Authorization; Enforceability This Agreement has been duly executed and delivered by each of Holdings and the Borrower and constitutes, and each other Loan Document to which any Loan Party is to be a party, when executed and delivered by such Loan Party, will constitute, a legal, valid and binding obligation of Holdings, the Borrower or such Loan Party, as applicable, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03. Governmental Approvals; No Conflicts . The execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party, the borrowing of the Series D Tranche B Term Loans and the Series E Tranche B Term Loans and the use of proceeds thereof and the issuance of Letters of Credit hereunder (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except filings necessary to perfect Liens created under the Loan Documents, (b) will not violate any Requirement of Law applicable to Holdings, the Borrower or any of the Subsidiaries, as applicable, (c) will not violate or result in a default under any indenture or other material agreement or instrument binding upon Holdings, the Borrower or any of the Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by Holdings, the Borrower or any of the Subsidiaries or give rise to a right of, or result in, termination, cancellation or acceleration of any material obligation thereunder, (d) will not result in a Limitation on any right, qualification, approval, permit, accreditation, authorization, Reimbursement Approval, license or franchise or authorization granted by any Governmental Authority, Third Party Payor or other Person applicable to the business, operations or assets of the Borrower or any of the Subsidiaries or adversely affect the ability of the Borrower or any of the Subsidiaries to participate in any Third Party Payor Arrangement except for Limitations, individually or in the aggregate, that are not material to the business of the Borrower and the Subsidiaries, taken as a whole, and (e) will not result in the creation or imposition of any Lien on any asset of Holdings, the Borrower or any of the Subsidiaries, except Liens created under the Loan Documents. There is no pending or, to the knowledge of the Borrower, threatened Limitation by any Governmental Authority, Third Party Payor or any other Person of any right, qualification, approval, permit, authorization, accreditation, Reimbursement Approval, license or franchise of the Borrower, or any Subsidiary, except for such Limitations, individually or in the aggregate, as are not reasonably likely to result in a Material Adverse Effect. No certifications by any Governmental Authority or any Third Party Payor are required for operation of the business of the Borrower and the Subsidiaries that are not in place, except for such certifications or agreements, the absence of which do not materially and adversely affect the operation of the business.

SECTION 3.04. Financial Condition; No Material Adverse Change .

(a) The Borrower has heretofore furnished to the Lenders its consolidated balance sheet and consolidated statements of operations and comprehensive income, stockholders’ equity and cash flows as of and for the fiscal years ended December 31, 2008, December 31, 2009, and December 31, 2010, reported on by PricewaterhouseCoopers LLP, independent public accountants. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and the Subsidiaries as of such dates and for such periods in accordance with GAAP consistently applied.

(b) [Reserved].

(c) Except as disclosed in the financial statements referred to above or the notes thereto, after giving effect to the borrowing of the Loans and the debt repayment that occurred on the Original Effective Date, none of the Borrower or its Subsidiaries has, as of the Original Effective Date, any material direct or contingent liabilities.

(d) No event, change or condition has occurred that has had, or is reasonably likely to have, a material adverse effect on the business, operations, assets, liabilities, financial condition or results of operations of Holdings, the Borrower and the Subsidiaries, taken as a whole, since December 31, 2010.

SECTION 3.05. Properties .

(a) Each of Holdings, the Borrower and the Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business (including its Mortgaged Properties), free and clear of all Liens, except for Permitted Liens and minor defects in title that do not interfere in any material respect with its ability to conduct its business or to utilize such properties for their intended purposes.

(b) Each of Holdings, the Borrower and the Subsidiaries owns, licenses or possesses the right to use all trademarks, trade names, copyrights, patents and other intellectual property material to its business. The conduct of the businesses of Holdings, the Borrower and the Subsidiaries does not infringe upon the intellectual property rights of any other Person, except for any such infringements that, individually or in the aggregate, are not reasonably likely to result in a Material Adverse Effect.

(c) Schedule 3.05 sets forth the address of each real property that is owned or leased by Holdings, the Borrower or any of the Subsidiaries as of the Original Effective Date.

(d) As of the Original Effective Date, neither Holdings or the Borrower nor any of the Subsidiaries has received written notice of, or has knowledge of, any pending or contemplated condemnation proceeding affecting any Mortgaged Property or any sale or disposition thereof in lieu of condemnation. As of the Original Effective Date, except as set forth on Schedule 3.05 , neither any Mortgaged Property nor any interest therein is subject to any right of first refusal, option or other contractual right to purchase such Mortgaged Property or interest therein.

SECTION 3.06. Litigation and Environmental Matters .

(a) Except as set forth on Schedule 3.06 , there are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of Holdings, the Borrower or any Subsidiary, threatened against or affecting Holdings, the Borrower or any Subsidiary,

including any relating to any Environmental Law, that are reasonably likely to (i) have a Material Adverse Effect or (ii) adversely affect in any material respect the ability of the Loan Parties to consummate the transactions contemplated hereby.

(b) Except with respect to any other matters that, individually or in the aggregate, are not reasonably likely to result in a Material Adverse Effect, (A) neither Holdings, the Borrower nor any Subsidiary (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) knows of any basis for any Environmental Liability or (iv) has received any written claim or notice of violation or of potential responsibility regarding any alleged violation of or liability under any Environmental Law; and (B)(i) there has been no Release of Hazardous Materials at, on, under or from any property currently, or to the knowledge of Holdings, the Borrower or any of the Subsidiaries, formerly owned, leased or operated by any of them which could reasonably be expected to result in liability under any Environmental Law on the part of any of them, and (ii) all Hazardous Materials generated, used or stored at, or transported for treatment or disposal from, any properties currently, or to the knowledge of Holdings, Borrower and the Subsidiaries, formerly owned, leased or operated by Holdings, the Borrower or any of the Subsidiaries have been disposed of in a manner that could not reasonably be expected to result in liability under any Environmental Law on the part of any of them.

SECTION 3.07. Compliance with Laws and Agreements . Except with respect to any matters that, individually or in the aggregate, are not material to the business of the Borrower and the Subsidiaries, taken as a whole, each of Holdings, the Borrower and the Subsidiaries is in compliance with all material Requirements of Law applicable to it or its property or operations and all material indentures, agreements and other instruments binding upon it or its property.

SECTION 3.08. Investment and Holding Company Status . Neither Holdings, the Borrower nor any Subsidiary is (a) an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended or (b) a “holding company” as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935, as amended.

SECTION 3.09. Taxes . Each of Holdings, the Borrower and the Subsidiaries has timely filed or caused to be filed all Federal and other material Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) any Taxes that are being contested in good faith by appropriate proceedings and for which Holdings, the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves in accordance with GAAP or (b) to the extent that the failure to do so is not reasonably likely to result in a Material Adverse Effect.

SECTION 3.10. ERISA . No ERISA Event has occurred or is reasonably likely to occur that, when taken together with all other such ERISA Events for which liability is reasonably likely to occur, is reasonably likely to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair value of the assets of such Plan, except as would not reasonably be likely to result in a Material Adverse Effect.

SECTION 3.11. Disclosure . None of the reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light

of the circumstances under which they were made, not misleading, provided that the foregoing shall not apply to any projected financial information, and with respect to such projected financial information, Holdings and the Borrower represent only that such information was prepared in good faith based upon assumptions believed by them to be reasonable at the time delivered and as of the Original Effective Date.

SECTION 3.12. Subsidiaries . Holdings does not have any subsidiaries other than the Borrower and the Subsidiaries, Permitted Joint Ventures and Inactive Subsidiaries listed on Schedule 3.12 . Schedule 3.12 sets forth the name of, and the ownership or beneficial interest of Holdings in, each subsidiary, including the Borrower, and identifies each Subsidiary that is a Subsidiary Loan Party, in each case as of the Original Effective Date.

SECTION 3.13. Insurance . Schedule 3.13 sets forth a description of all insurance maintained by or on behalf of Holdings, the Borrower and the Subsidiaries as of the Original Effective Date. As of the Original Effective Date, all premiums in respect of such insurance have been paid. Holdings and the Borrower believe that the insurance maintained by or on behalf of the Borrower and the Subsidiaries is adequate.

SECTION 3.14. Labor Matters . As of the Original Effective Date, there are no strikes, lockouts or slowdowns against Holdings, the Borrower or any Subsidiary pending or, to the knowledge of Holdings or the Borrower, threatened. The hours worked by and payments made to employees of the Borrower and the Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters. All payments due from Holdings, the Borrower or any Subsidiary, or for which any claim may be made against Holdings, the Borrower or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of Holdings, the Borrower or such Subsidiary. The borrowing of the Loans and the debt repayment that occurred on the Original Effective Date will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which Holdings, the Borrower or any Subsidiary is bound.

SECTION 3.15. Solvency . As of the Restatement Effective Date, (a) the fair value of the assets of each Loan Party, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise, (b) the present fair saleable value of the property of each Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured, (c) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured, and (d) no Loan Party will have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted following the Restatement Effective Date, in each case after giving effect to any rights of indemnification, contribution or subrogation arising among the Subsidiary Loan Parties pursuant to the Collateral Agreement or by law.

SECTION 3.16. Federal Reserve Regulations . No part of the proceeds of any Loan have been used or will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X. Neither Holdings nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying margin stock (as defined in Regulation U).

SECTION 3.17. Reimbursement from Third Party Payors . The accounts receivable of Holdings, the Borrower and the Subsidiaries have been and will continue to be adjusted to reflect the reimbursement policies required by all applicable Requirements of Law and other Third Party Payor Arrangements to which Holdings, the Borrower or such Subsidiary is subject, and do not exceed in any material

respect amounts the Borrower or such Subsidiary is entitled to receive under any capitation arrangement, fee schedule, discount formula, cost-based reimbursement or other adjustment or limitation to usual charges. All billings by Holdings, the Borrower and each Subsidiary pursuant to any Third Party Payor Arrangements have been made in compliance with all applicable Requirements of Law, except where failure to comply would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect. There has been no intentional or material over-billing or over-collection by the Borrower or any Subsidiary pursuant to any Third Party Payor Arrangements, other than as created by routine adjustments and disallowances made in the ordinary course of business by the Third Party Payors with respect to such billings.

SECTION 3.18. Fraud and Abuse . None of Holdings, the Borrower or any Subsidiary, nor any of their respective partners, members, stockholders, officers or directors, acting on behalf of Holdings, the Borrower or any Subsidiary, have engaged on behalf of Holdings, the Borrower or any Subsidiary in any activities that are prohibited under 42 U.S.C. § 1320a-7, 42 U.S.C. § 1320a-7a, 42 U.S.C. § 1320a-7b, 42 U.S.C. § 1395nn, 31 U.S.C. § 3729 et seq ., or the regulations promulgated thereunder, or related Requirements of Law, or under any similar state law or regulation, or that are prohibited by binding rules of professional conduct, including to the extent prohibited by such laws (a) knowingly and willfully making or causing to be made a false statement or misrepresentation of a material fact in any application for any benefit or payment, (b) knowingly and willfully making or causing to be made any false statement or misrepresentation of a material fact for use in determining rights to any benefit or payment, (c) failing to disclose knowledge by a claimant of the occurrence of any event affecting the initial or continued right to any benefit or payment on its own behalf or on behalf of another, with intent to secure such benefit or payment fraudulently, (d) knowingly and willfully soliciting or receiving any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, or offering to pay or receive such remuneration (i) in return for referring an individual to a Person for the furnishing or arranging for the furnishing of any item or service for which payment may be made, in whole or in part, pursuant to any Third Party Payor Arrangement to which the foregoing rules and regulations apply or (ii) in return for purchasing, leasing or ordering or arranging for or recommending purchasing, leasing or ordering any good, facility, service or item for which payment may be made, in whole or in part, pursuant to any Third Party Payor Arrangement to which the foregoing rules and regulations apply and (e) making any prohibited referral for designated health services, or presenting or causing to be presented a claim or bill to any individual, Third Party Payor or other entity for designated health services furnished pursuant to a prohibited referral. Neither Holdings, the Borrower nor any Subsidiary shall be considered to be in breach of this Section 3.18 so long as (a) it shall have taken such actions (including implementation of appropriate internal controls) as may be reasonably necessary to prevent such prohibited actions and (b) such prohibited actions as have occurred, individually or in the aggregate, are not reasonably likely to have a Material Adverse Effect.

SECTION 3.19. USA PATRIOT Act, Etc . Holdings and each of its Subsidiaries is in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R. Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto and (ii) the USA PATRIOT Act. No part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

ARTICLE IV

Conditions

SECTION 4.01. [ Reserved ].

SECTION 4.02. Each Credit Event . The obligation of each Lender to make any Loan and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit is subject to receipt of the request therefor in accordance herewith and to the satisfaction of the following conditions:

(a) The representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (except to the extent any such representation or warranty is qualified by “materially,” “Material Adverse Effect” or a similar term, in which case such representation and warranty shall be true and correct in all respects) on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct (or true and correct in all material respects, as the case may be) as of such earlier date).

(b) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.

Each Borrowing ( provided that a conversion or continuation of a Borrowing shall not constitute a “Borrowing” for purposes of this Section 4.02) and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by Holdings and the Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section 4.02.

ARTICLE V

Affirmative Covenants

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees, expenses and other amounts payable under any Loan Document shall have been paid in full and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, each of Holdings and the Borrower covenants and agrees with the Lenders that:

SECTION 5.01. Financial Statements and Other Information . The Borrower will furnish to the Administrative Agent (for distribution to each Lender):

(a) within 90 days (or such shorter period as the SEC shall specify for the filing of annual reports on Form 10-K) after the end of each fiscal year of Holdings commencing with the fiscal year ended December 31, 2011, (i) its audited consolidated balance sheet and consolidated statements of operations and comprehensive income, stockholders’ equity and cash flows as of the end of and for such fiscal year, and the related notes thereto, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of Holdings and the Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, and (ii) if at any time Holdings is not subject to the reporting

requirements of Section 13 or 15(d) of the Exchange Act, a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that describes the financial condition and results of operations of Holdings and its consolidated Subsidiaries;

(b) within 45 days (or such shorter period as the SEC shall specify for the filing of quarterly reports on Form 10-Q) after the end of each of the first three fiscal quarters of each fiscal year of Holdings commencing with the fiscal quarter ending June 30, 2011, its consolidated balance sheet and consolidated statements of operations and comprehensive income, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then-elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer as presenting fairly in all material respects the financial condition and results of operations of Holdings and the Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

(c) concurrently with any delivery of financial statements under paragraph (a) or (b) above, a certificate of a Financial Officer (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth (A) reasonably detailed calculations demonstrating compliance with Sections 6.13 and 6.14 (including (x) any prepayment of the Loans as set forth in the definition of “Leverage Ratio” and (y) any exercise of the rights set forth in Section 7.02) and (B) in the case of financial statements delivered under paragraph (a) above beginning in 2012 with respect to fiscal year 2011, reasonably detailed calculations of Excess Cash Flow, (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the Borrower’s audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate, and (iv) certifying as to the calculation of Consolidated EBITDA on a Pro Forma Basis for the four fiscal quarter period ending on the date of such financial statements and accompanied by reasonably detailed supporting evidence, it being understood that each of the calculations described in this paragraph (c) shall provide a reconciliation to the financial statements delivered under paragraphs (a) and (b) above;

(d) commencing with the delivery of audited financial statements of Holdings for the fiscal year ended December 31, 2011, concurrently with any delivery of financial statements under paragraph (a) above, a certificate of the accounting firm that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default and, if such knowledge has been obtained, describing such Default (which certificate may be limited to the extent required by accounting rules or guidelines);

(e) concurrently with the issuance of any Indebtedness permitted by Sections 6.01(a)(xii), or a Restricted Payment permitted by Section 6.08(a)(x), a certificate of a Financial Officer certifying as to (i) the Holdings Leverage Ratio or Leverage Ratio, as the case may be, accompanied by reasonably detailed supporting evidence, (ii) the use of proceeds from such issuance and (iii) whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, it being understood that each of the calculations described in this paragraph (e) shall provide a reconciliation to the financial statements delivered under paragraphs (a) and (b) above;

(f) within 30 days after the commencement of each fiscal year of Holdings, a detailed consolidated budget for such fiscal year (including a projected consolidated balance sheet

and consolidated statements of projected operations and cash flows as of the end of and for such fiscal year) and, promptly when available, any significant revisions of such budget;

(g) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any Subsidiary with the SEC or with any national securities exchange, as applicable; and

(h) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of Holdings, the Borrower or any Subsidiary or any Plan, or compliance with the terms of any Loan Document, as the Administrative Agent or any Lender may reasonably request.

Documents required to be delivered pursuant to subsection 5.01(a), (b), (d) or (g) may at the Borrower’s option be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s (or Holdings’ or any Parent’s) website on the Internet at the website address previously provided to the Administrative Agent in writing (or such other website address as the Borrower may specify by written notice to the Administrative Agent from time to time); or (ii) on which such documents are posted on the Borrower’s (or Holdings’ or any Parent’s) behalf on an Internet or intranet website to which each Lender, the Administrative Agent and the Collateral Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that (i) upon the reasonable request of the Administrative Agent or the Collateral Agent with respect to any specific document so delivered electronically, the Borrower shall promptly deliver a physical copy of such document and (ii) the Borrower shall notify (which notice may be by facsimile or electronic mail) the Administrative Agent of the posting by the Borrower of any such documents on any such website (other than a website maintained for or sponsored by the Administrative Agent) and the electronic location at which such documents may be accessed.

SECTION 5.02. Notices of Material Events . Holdings and the Borrower will furnish to the Administrative Agent (for distribution to each Lender), through the Administrative Agent, written notice of the following promptly after obtaining knowledge thereof:

(a) the occurrence of any Default;

(b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting Holdings, the Borrower or any Subsidiary that, if adversely determined, is reasonably likely to result in a Material Adverse Effect;

(c) the occurrence of any ERISA Event that alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and the Subsidiaries in an aggregate amount exceeding $20,000,000;

(d) the receipt by Holdings, the Borrower or any Subsidiary of (i) any notice of any loss of (A) accreditation from the Joint Commission on Accreditation of Healthcare Organizations or (B) any governmental right, qualification, permit, accreditation, approval, authorization, Reimbursement Approval, license or franchise or (ii) any notice, compliance order or adverse report issued by any Governmental Authority or Third Party Payor that, if not promptly complied with or cured, could result in (A) the suspension or forfeiture of any material governmental right, qualification, permit, accreditation, approval, authorization, Reimbursement Approval, license or franchise necessary for the Borrower or any Subsidiary to carry on its business as now conducted or as proposed to be conducted or (B) any other material Limitation imposed upon the Borrower or any Subsidiary;

(e) any Change in Law of the type described in clause (a) or (b) of such definition relating to any Third Party Payor Arrangement that could reasonably be expected to have a material and adverse effect on the ability of the Borrower or any Subsidiary to carry on its business as now conducted or as proposed to be conducted; and

(f) any other development that results in, or is reasonably likely to result in, a Material Adverse Effect.

Each notice delivered under this Section 5.02 shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

SECTION 5.03. Information Regarding Collateral .

(a) The Borrower will furnish to the Collateral Agent prompt written notice (but in no event later than 90 days) of any change (i) in any Loan Party’s corporate name, (ii) in the jurisdiction of incorporation or organization of any Loan Party or (iii) in any Loan Party’s organizational identification number. The Borrower agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral. The Borrower also agrees promptly to notify the Collateral Agent if any material portion of the Collateral is damaged or destroyed.

(b) Each year, at the time of delivery of annual financial statements pursuant to Section 5.01(a), the Borrower shall deliver to the Collateral Agent a certificate executed by a Financial Officer and the chief legal officer of the Borrower setting forth the information required pursuant to the Perfection Certificate or confirming that there has been no change in such information since the date of the Perfection Certificate delivered on the Original Effective Date or the date of the most recent certificate delivered pursuant to this Section.

SECTION 5.04. Existence; Conduct of Business . Each of Holdings and the Borrower will, and will cause each of the Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, qualifications, permits, approvals, accreditations, authorizations, Reimbursement Approvals, licenses, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03.

SECTION 5.05. Payment of Obligations . Each of Holdings and the Borrower will, and will cause each of the Subsidiaries to, pay its Tax liabilities, before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) Holdings, the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP, (c) such contest effectively suspends the enforcement of any Lien securing such obligation and (d) the failure to make payment pending such contest is not reasonably likely to result in a Material Adverse Effect.

SECTION 5.06. Maintenance of Properties . Each of Holdings and the Borrower will, and will cause each of the Subsidiaries to, keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted.

SECTION 5.07. Insurance .

(i) Each of Holdings and the Borrower will, and will cause each of the Subsidiaries to, maintain, with financially sound and reputable insurance companies (which may include self-insurance), (a) insurance in such amounts (with no greater risk retention) and against such risks as are customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations and (b) all insurance required to be maintained pursuant to the Security Documents. The Borrower will furnish to the Lenders, upon request of the Administrative Agent, information in reasonable detail as to the insurance so maintained.

(ii) If any portion of any Mortgaged Property is at any time located in an area identified by the Federal Emergency Management Agency (or any successor agency) as a special flood hazard area with respect to which flood insurance has been made available under the National Flood Insurance Act of 1968 (as now or hereafter in effect or any successor statute thereto), then Holdings and the Borrower shall, or shall cause each Loan Party to (x) maintain, or cause to be maintained, with a financially sound and reputable insurer, flood insurance in an amount and otherwise sufficient to comply with all applicable rules and regulations promulgated pursuant to the Flood Insurance Laws and (y) deliver to the Administrative Agent evidence of such compliance in form and substance reasonably acceptable to the Administrative Agent.

SECTION 5.08. Casualty and Condemnation . The Borrower (a) will furnish to the Administrative Agent and the Lenders prompt written notice of any casualty or other insured damage to any material portion of the Collateral or the commencement of any action or proceeding for the taking of any material portion of the Collateral or interest therein under power of eminent domain or by condemnation or similar proceeding and (b) will ensure that the Net Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or otherwise) are collected and applied in accordance with the applicable provisions of this Agreement and the Security Documents.

SECTION 5.09. Books and Records; Inspection and Audit Rights . Each of Holdings and the Borrower will, and will cause each of the Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. Each of Holdings and the Borrower will, and will cause each of the Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties during normal business hours, to examine and make extracts from its books and records, including environment assessment reports and Phase I or Phase II studies, and to discuss its affairs, finances and condition with its officers and independent accountants ( provided that the Borrower shall be provided the opportunity to participate in any such discussions with its independent accountants), all at such reasonable times and as often as reasonably requested.

SECTION 5.10. Compliance with Laws . Each of Holdings and the Borrower will cause each of the Subsidiaries to comply with all Requirements of Law, including Environmental Laws, applicable to it or its property, except where the failure to do so, individually or in the aggregate, is not reasonably likely to result in a Material Adverse Effect.

SECTION 5.11. Use of Proceeds and Letters of Credit . The proceeds of the Series D Tranche B Term Loans and Series E Tranche B Term Loans borrowed on the Restatement Effective Date will be used by the Borrower on the Restatement Effective Date solely to refinance the Series B Tranche B Term Loans and Series C Tranche B Term Loans under the Original Credit Agreement and to pay related fees and expenses. The proceeds of Revolving Loans or 2018 Extended Revolving Loans, Swingline Loans and Letters of Credit will be used by the Borrower for working capital and general corporate purposes (including Permitted Acquisitions). No part of the proceeds of any Loan and no Letter of Credit

will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.

SECTION 5.12. Additional Subsidiaries; Succeeding Holdings .

(a) If any additional Subsidiary (other than a Consolidated Practice) is formed or acquired after the Original Effective Date (or if (x) any Inactive Subsidiary that is not a Subsidiary Loan Party ceases to qualify as an Inactive Subsidiary or (y) a Permitted Joint Venture that is not otherwise a Permitted Joint Venture Loan Party becomes a wholly owned Subsidiary of the Borrower), the Borrower will, promptly after such Subsidiary is formed or acquired, notify the Collateral Agent and the Lenders (through the Administrative Agent) thereof and promptly cause the Collateral and Guarantee Requirement to be satisfied with respect to such Subsidiary (if it is a Subsidiary Loan Party) and with respect to any Equity Interest in or Indebtedness of such Subsidiary owned by or on behalf of any Loan Party.

(b) Upon the addition of a Succeeding Holdings, the Borrower will notify the Collateral Agent and the Lenders (through the Administrative Agent) thereof and promptly cause the Collateral and Guarantee Requirement to be satisfied with respect to the Succeeding Holdings.

SECTION 5.13. Further Assurances .

(a) Each of Holdings, each Succeeding Holdings and the Borrower will, and will cause each Subsidiary Loan Party to, execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust and other documents), which may be required under any applicable law, or which the Administrative Agent or the Required Lenders may reasonably request, to cause the Collateral and Guarantee Requirement to be and remain satisfied, all at the expense of the Loan Parties. Each of Holdings and the Borrower also agrees to provide to the Collateral Agent, from time to time upon reasonable request, evidence reasonably satisfactory to the Administrative Agent as to the perfection and priority of the Liens created or intended to be created by the Security Documents.

(b) If any material assets (including any real property (other than any leased real property) which constitutes a Material Real Property) are acquired by the Borrower or any Subsidiary Loan Party after the Original Effective Date (other than assets constituting Collateral under the Collateral Agreement that become subject to the Lien in favor of the Collateral Agreement upon acquisition thereof), the Borrower will notify the Administrative Agent and the Lenders thereof and, if requested by the Administrative Agent or the Required Lenders, the Borrower will cause such assets to be subjected to a Lien securing the Obligations and will take, and cause the Subsidiary Loan Parties to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions described in paragraph (a) of this Section 5.13, all at the expense of the Loan Parties, provided that the Collateral Agent may, in its reasonable judgment, grant extensions of time for compliance or exceptions with the provisions of this paragraph by any Loan Party.

SECTION 5.14. Post-Closing Matters . Execute and deliver the documents and complete the tasks set forth on Schedule 5.14 , in each case within the time limits specified on such schedule; provided that the Administrative Agent or Collateral Agent, as applicable, may in its reasonable judgment, grant extensions of time for compliance or exceptions with the provisions of this paragraph.

ARTICLE VI

Negative Covenants

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees, expenses and other amounts payable under any Loan Document have been paid in full and all Letters of Credit have expired or terminated and all LC Disbursements shall have been reimbursed, each of Holdings and the Borrower covenants and agrees with the Lenders that:

SECTION 6.01. Indebtedness; Certain Equity Securities .

(a) Neither Holdings nor the Borrower will, nor will they permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:

(i) Indebtedness created under the Loan Documents;

(ii) [reserved];

(iii) [reserved];

(iv) Indebtedness existing on the Original Effective Date and set forth in Schedule 6.01 and extensions, renewals and replacements of any such Indebtedness, provided that such extending, renewal or replacement Indebtedness (A) shall not be in a principal amount that exceeds the principal amount of the Indebtedness being extended, renewed or replaced ( plus accrued interest and premium thereon), (B) shall not have an earlier maturity date or a decreased weighted average life than the Indebtedness being extended, renewed or replaced, (C) shall be subordinated to the Obligations on the same terms (or, from a Lender’s perspective, better terms) as the Indebtedness being extended, renewed or replaced and (D) there is no obligor of such Indebtedness that is not either (x) an obligor of such Indebtedness on the Original Effective Date or (y) otherwise permitted to incur such Indebtedness by another clause of this Section 6.01;

(v) Indebtedness of the Borrower owed to any Subsidiary and of any Subsidiary owed to the Borrower or any other Subsidiary, provided that Indebtedness of the Borrower owed to any Subsidiary and Indebtedness of any Subsidiary Loan Party owed to the Borrower or any other Subsidiary shall be subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent; provided further that, (A) Indebtedness owed to any Insurance Subsidiary by the Borrower or any other Subsidiary shall be limited in principal amount to the aggregate amount of Investments made in such Insurance Subsidiary pursuant to Section 6.04(xx) and (B) notwithstanding the first proviso above, such Indebtedness shall only be subordinated to the extent permitted by applicable laws or regulations;

(vi) Guarantees by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary, provided that (A) the Indebtedness so Guaranteed is permitted by this Section 6.01, (B) Guarantees permitted under this clause (vi) shall be subordinated to the Obligations of the Borrower or the applicable Subsidiary to the same extent and on the same terms as the Indebtedness so Guaranteed is subordinated to the Obligations and (C) except in the case of Foreign Subsidiaries that provide Guarantees of Indebtedness of other Foreign Subsidiaries, no Subsidiary shall Guarantee any Indebtedness unless it is a Subsidiary Loan Party;

(vii) Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations, and any Indebtedness assumed by the Borrower or any Subsidiary in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof (including the principal and any accrued but unpaid interest or premium in respect thereof), provided that (A) such Indebtedness is incurred prior to or within 120 days after such acquisition or the completion of such construction or improvement and (B) the aggregate principal amount of Indebtedness permitted by this clause (vii) shall not exceed at any time outstanding the greater of (x) $60,000,000 and (y) 6.0% of Consolidated Tangible Assets as of the end of the immediately preceding fiscal quarter;

(viii) (A) Indebtedness of any Person that becomes a Subsidiary after the Original Effective Date, provided that (1) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (2) the aggregate amount of Indebtedness permitted by this clause (viii) (including subclause (B)) shall not exceed $50,000,000 at any time outstanding, and (B) any refinancings, renewals and replacements of any such Indebtedness pursuant to the preceding clause (A) that do not increase the outstanding principal amount ( plus accrued interest and premium) thereof;

(ix) Indebtedness owed to any Person (including obligations in respect of letters of credit for the benefit of such Person) providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;

(x) Indebtedness of the Borrower or any Subsidiary in respect of performance bonds, bid bonds, appeal bonds, surety bonds, performance and completion guarantees and similar obligations, in each case provided in the ordinary course of business;

(xi) Indebtedness of any Loan Party pursuant to Swap Agreements permitted by Section 6.07;

(xii) with respect to Holdings, Qualified Holdings Discount Debt; provided that other than with respect to any additional principal amounts resulting from the accrual of pay-in-kind interest, (A) such Indebtedness may only be issued or incurred to the extent that after giving effect to the incurrence of such additional Indebtedness on a Pro Forma Basis, the Holdings Leverage Ratio would be less than 5.50 to 1.00 and (B) no Default has occurred and is continuing or would result therefrom;

(xiii) [reserved];

(xiv) Indebtedness representing deferred compensation to employees of the Borrower and the Subsidiaries incurred in the ordinary course of business;

(xv) Indebtedness in respect of promissory notes issued to physicians, consultants, employees or directors or former employees, consultants or directors in connection with repurchases of Equity Interests permitted by Section 6.08(a)(iii);

(xvi) Indebtedness of any Foreign Subsidiary or any Subsidiary of the Borrower that is not a Loan Party in an amount not to exceed $50,000,000 at any time outstanding;

(xvii) (x) Permitted Debt Securities so long as no Default or Event of Default has occurred and is continuing or would arise after giving effect thereto and, except in the case of Refinancing Debt Securities, on a Pro Forma Basis the Leverage Ratio is less than or equal to 5.25 to 1.00 as of the last day of the most recent fiscal quarter for which financial statements have been delivered pursuant to Section 5.01(a) or (b) prior to the incurrence of such Permitted Debt Securities and (y) any Refinancing Indebtedness in respect of Indebtedness permitted by this clause 6.09(a)(xvii);

(xviii) other Indebtedness of the Borrower or any Subsidiary in an aggregate principal amount not exceeding $200,000,000 at any time outstanding;

(xix) [reserved]; and

(xx) Cash Management Obligations.

(b) The Borrower will not, and Holdings and the Borrower will not permit any Subsidiary to, issue any preferred Equity Interests.

SECTION 6.02. Liens . Neither Holdings nor the Borrower will, nor will they permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except (collectively, “ Permitted Liens ”):

(i) Liens created by the Loan Documents;

(ii) Permitted Encumbrances;

(iii) any Lien on any property or asset of the Borrower or any Subsidiary existing on the Original Effective Date and set forth in Schedule 6.02 ; provided that (A) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (B) such Lien shall secure only those obligations which it secures on the Original Effective Date and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof ( plus accrued interest and premium thereon);

(iv) any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the Original Effective Date prior to the time such Person becomes a Subsidiary, provided that (A) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as applicable, (B) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (C) such Lien shall secure only those obligations that it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as applicable, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof ( plus accrued interest and premium thereon);

(v) Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any Subsidiary, provided that (A) such security interests secure Indebtedness permitted by clause (vii) of Section 6.01(a), (B) such security interests and the Indebtedness secured thereby are incurred prior to or within 120 days after such acquisition or the completion of such construction

or improvement, (C) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring, constructing or improving such fixed or capital assets and (D) such security interests shall not apply to any other property or assets of the Borrower or any Subsidiary;

(vi) Liens of a collecting bank arising in the ordinary course of business under Section 4-208 of the Uniform Commercial Code in effect in the relevant jurisdiction covering only the items being collected upon;

(vii) Liens arising out of sale and leaseback transactions permitted by Section 6.06;

(viii) Liens granted by a Subsidiary that is not a Loan Party in favor of the Borrower or another Loan Party in respect of Indebtedness owed by such Subsidiary;

(ix) licenses, sublicenses, leases or subleases granted to others not interfering in any material respect with the business of the Borrower or any Subsidiary;

(x) Liens on assets of any Foreign Subsidiary securing Indebtedness (and related obligations) permitted by Section 6.01(a)(xvi);

(xi) Liens on assets of the Borrower or the Subsidiaries not otherwise permitted by this Section 6.02, so long as neither (i) the aggregate outstanding principal amount of the obligations secured thereby nor (ii) the aggregate fair value (determined as of the date such Lien is incurred) of the assets subject thereto exceeds $25,000,000 at any time outstanding, provided that in no event shall Holdings, the Borrower or any Subsidiary create, incur, assume or permit to exist any Lien on any Equity Interests of the Borrower or any Subsidiary; and

(xii) Liens on the Collateral securing Permitted Secured Notes; provided that the holders thereof (or the collateral agent for such holders) shall have entered into the First Lien Intercreditor Agreement or the Second Lien Intercreditor Agreement, as applicable.

SECTION 6.03. Fundamental Changes .

(a) Neither Holdings nor the Borrower will, nor will they permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing, (i) any Person may merge into the Borrower in a transaction in which the surviving entity is a Person organized or existing under the laws of the United States of America, any State thereof or the District of Columbia and, if such surviving entity is not the Borrower, such Person expressly assumes, in writing, all the obligations the Borrower under the Loan Documents, (ii) any Person may merge into any Subsidiary in a transaction in which the surviving entity is a Subsidiary and, if any party to such merger is a Subsidiary Loan Party, is or becomes a Subsidiary Loan Party concurrently with such merger, (iii) any Subsidiary (other than a Subsidiary Loan Party) may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders and (iv) any asset sale permitted by Section 6.05(g) may be effected through the merger of a subsidiary of the Borrower with a third party, provided that any such merger referred to in clauses (i), (ii) or (iv) above involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04.

(b) The Borrower will not, and Holdings and the Borrower will not permit any Subsidiary to, engage to any material extent in any business other than businesses of the type conducted by

the Borrower and the Subsidiaries on the Original Effective Date and businesses reasonably related or incidental thereto.

(c) Holdings will not engage in any business or activity other than the ownership of all the outstanding shares of capital stock of the Borrower and engaging in corporate and administrative functions and other activities incidental thereto. Holdings will not own or acquire any assets (other than Equity Interests of the Borrower and the cash proceeds of any Restricted Payments permitted by Section 6.08 or proceeds of any issuance of Indebtedness or Equity Interests permitted by this Agreement pending application as required by this Agreement) or incur any liabilities (other than liabilities under and permitted to be incurred under the Loan Documents and liabilities reasonably incurred in connection with its maintenance of its existence and activities incidental thereto). Notwithstanding the foregoing, Holdings shall be permitted to enter into transactions, engage in activities and maintain assets or incur liabilities in respect of Swap Agreements related to Indebtedness of Holdings permitted hereunder.

SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions . Neither Holdings nor the Borrower will, nor will they permit any Subsidiary to, purchase or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any Equity Interests in or evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make any loans or advances to, Guarantee any obligations of, or make any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (collectively, “ Investments ”), except:

(i) Permitted Acquisitions;

(ii) Permitted Investments;

(iii) Investments set forth on Schedule 6.04 ;

(iv) Investments by Holdings in the Borrower and by the Borrower and the Subsidiaries in Equity Interests in their respective Subsidiaries, provided that (A) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Collateral Agreement (subject to the limitations applicable to common stock of a Foreign Subsidiary referred to in the definition of “Collateral and Guarantee Requirement”) and (B) the aggregate amount of investments (other than investments set forth on Schedule 6.04 ) by Loan Parties in Subsidiaries that are not Loan Parties (together with outstanding intercompany loans permitted under clause (B) to the proviso to Section 6.04(v) and outstanding Guarantees permitted to be incurred under clause (B) to the proviso to Section 6.04(vi)) shall not exceed $15,000,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs);

(v) loans or advances made by the Borrower to any Subsidiary and made by any Subsidiary to the Borrower or any other Subsidiary, provided that (A) any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged pursuant to the Collateral Agreement and (B) the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties (together with outstanding investments permitted under clause (B) to the proviso to Section 6.04(iv) and outstanding Guarantees permitted under clause (B) to the proviso to Section 6.04(vi)) shall not exceed $15,000,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs);

(vi) Guarantees constituting Indebtedness permitted by Section 6.01, provided that (and without limiting the foregoing) the aggregate principal amount of Indebtedness of Subsidiaries

that are not Loan Parties that is Guaranteed by any Loan Party (together with outstanding investments permitted under clause (B) to the proviso to Section 6.04(iv) and outstanding intercompany loans permitted under clause (B) to the proviso to Section 6.04(v)) shall not exceed $15,000,000 at any time outstanding (in each case determined without regard to any write-downs or write-offs);

(vii) receivables or other trade payables owing to the Borrower or any Subsidiary if created or acquired in the ordinary course of business consistent with past practice and payable or dischargeable in accordance with customary trade terms, provided that such trade terms may include such concessionary trade terms as the Borrower or any such Subsidiary deems reasonable under the circumstances;

(viii) Investments consisting of Equity Interests, obligations, securities or other property received in settlement of delinquent accounts of and disputes with customers and suppliers in the ordinary course of business and owing to the Borrower or any Subsidiary or in satisfaction of judgments;

(ix) Investments by the Borrower or any Subsidiary in payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;

(x) loans or advances by the Borrower or any Subsidiary to employees and other individual service providers made in the ordinary course of business (including travel, entertainment and relocation expenses) of the Borrower or any Subsidiary not exceeding $2,500,000 in the aggregate at any time outstanding (determined without regard to any write-downs or write-offs of such loans or advances);

(xi) Investments in the form of Swap Agreements permitted by Section 6.07;

(xii) Investments of any Person existing at the time such Person becomes a Subsidiary of the Borrower or consolidates or merges with the Borrower or any of the Subsidiaries (including in connection with a Permitted Acquisition) so long as such investments were not made in contemplation of such Person becoming a Subsidiary or of such consolidation or merger;

(xiii) Investments received in connection with the dispositions of assets permitted by Section 6.05;

(xiv) Investments constituting deposits described in clauses (c) and (d) of the definition of the term “Permitted Encumbrances”;

(xv) Investments in Permitted Joint Ventures; provided that, if at the time of any such Investment pursuant to this Section 6.04(xv), on a Pro Forma Basis, the Secured Leverage Ratio of the Borrower equals or exceeds 2.50 to 1.00, the aggregate amount of Investments in Permitted Joint Ventures (together with the aggregate amount of Investments in Permitted Real Estate Joint Ventures permitted under Section 6.04(xvi)) shall not exceed $250,000,000 outstanding at any time plus an amount equal to any returns (including dividends, interest, distributions, returns of principal and profits on sale) actually received in cash in respect of any such Investments (which amount shall not exceed the amount of such Investment valued at cost at the time such Investment was made);

(xvi) Investments in Permitted Real Estate Joint Ventures; provided that, if at the time of any such Investment pursuant to this Section 6.04(xvi), on a Pro Forma Basis, the Secured Leverage Ratio of the Borrower equals or exceeds 2.50 to 1.00, the aggregate amount of Investments in Permitted Real Estate Joint Ventures (together with the aggregate amount of Investments in Permitted Joint Ventures permitted under Section 6.04(xv)) shall not exceed $250,000,000 outstanding at any time plus an amount equal to any returns (including dividends, interest, distributions, returns of principal and profits on sale) actually received in cash in respect of any such Investments (which amount shall not exceed the amount of such Investment valued at cost at the time such Investment was made);

(xvii) payments, loans, advances to, and investments in, Consolidated Practices in the ordinary course of business and consistent with past practice in satisfaction of their obligations under any management services agreements;

(xviii) Investments by the Borrower or any Subsidiary (including Investments in Permitted Joint Ventures) in an aggregate amount, as valued at cost at the time each such Investment is made and including all related commitments for future advances, not exceeding the Available Amount immediately prior to the time of the making of any such Investment;

(xix) Investments by the Borrower or any Subsidiary (including Investments in Permitted Joint Ventures) in an aggregate amount not to exceed the sum of (A) $100,000,000 and (B) an amount equal to any returns (including dividends, interest, distributions, returns of principal and profits on sale) actually theretofore received in cash in respect of any such investment, loan or advance (which amount shall not exceed the amount of such Investment valued at cost at the time such Investment was made); and

(xx) Investments, loans and advances by the Borrower or any Subsidiary to any Insurance Subsidiary in an amount equal to (A) the capital required under the applicable laws or regulations of the jurisdiction in which such Insurance Subsidiary is formed or determined by independent actuaries as prudent and necessary capital to operate such Insurance Subsidiary plus (B) any reasonable general corporate and overhead expenses of such Insurance Subsidiary.

SECTION 6.05. Asset Sales . Neither Holdings nor the Borrower will, nor will they permit any Subsidiary to, sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will the Borrower permit any Subsidiary to issue any additional Equity Interest in such Subsidiary (other than to the Borrower or another Subsidiary in compliance with Section 6.04), except:

(a) sales, transfers and dispositions of (i) inventory in the ordinary course of business and (ii) used, obsolete, worn out or surplus equipment or property in the ordinary course of business;

(b) sales, transfers and dispositions to the Borrower or any Subsidiary, provided that any such sales, transfers or dispositions involving a Subsidiary that is not a Loan Party shall be made in compliance with Section 6.09;

(c) sales, transfers and dispositions of accounts receivable in connection with the compromise, settlement or collection thereof consistent with past practice;

(d) sales, transfers and dispositions of property to the extent such property constitutes an investment permitted by clauses (ii), (viii), (xii) and (xiv) of Section 6.04;

(e) sale and leaseback transactions permitted by Section 6.06;

(f) dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Borrower or any Subsidiary;

(g) sales, transfers and other dispositions of assets (other than Equity Interests in a Subsidiary unless all Equity Interests in such Subsidiary are sold) that are not permitted by any other paragraph of this Section 6.05, provided that the aggregate fair value of all assets sold, transferred or otherwise disposed of in reliance upon this paragraph (g) shall not exceed $200,000,000 during the term of this Agreement (excluding any single transaction or series of related transactions that involves assets having a Fair Market Value of less than $2,500,000);

(h) exchanges of property for similar replacement property for fair value; and

(i) assets set forth on Schedule 6.05 ;

provided that all sales, transfers, leases and other dispositions permitted hereby (other than those permitted by paragraphs (b), (c) and (f) above) shall be made for fair value and (other than those permitted by paragraphs (b), (d) and (h) above) for at least 75% cash consideration; plus (for all such sales, transfers, leases and other dispositions permitted hereby) an aggregate additional amount of non-cash consideration in the amount of $35,000,000 (it being understood that for purposes of paragraph (a) above, accounts receivable received in the ordinary course and any property received in exchange for used, obsolete, worn out or surplus equipment or property and any non-cash consideration that was actually converted into cash within 6 months following the applicable sale, transfer, lease or other disposition by the Borrower or any of its Subsidiaries shall be deemed to constitute cash consideration).

SECTION 6.06. Sale and Leaseback Transactions . Neither Holdings nor the Borrower will, nor will they permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, except for (x) any such sale of any fixed or capital assets by the Borrower or any Subsidiary that is made for cash consideration in an amount not less than the fair value of such fixed or capital asset and is consummated within 120 days after the Borrower or such Subsidiary acquires or completes the construction of such fixed or capital asset or (y) sale and leaseback transactions with respect to properties acquired after the Original Effective Date, where the Fair Market Value of such properties in the aggregate does not to exceed $50,000,000.

SECTION 6.07. Swap Agreements . Neither Holdings nor the Borrower will, nor will they permit any Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which the Borrower or any Subsidiary has actual exposure (other than those in respect of Equity Interests of the Borrower or any of the Subsidiaries) and (b) Swap Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of Holdings, the Borrower or any Subsidiary.

SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness .

(a) Neither Holdings nor the Borrower will, nor will they permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:

(i) each of Holdings and the Borrower may declare and pay dividends with respect to its common stock payable solely in additional shares of its common stock, and, with respect to its preferred stock, payable solely in additional shares of such preferred stock or in shares of its common stock;

(ii) Subsidiaries may declare and pay dividends ratably with respect to their capital stock, membership or partnership interests or other similar Equity Interests;

(iii) Holdings may (or may make Restricted Payments to allow a Parent to) purchase or redeem (and the Borrower may declare and pay dividends or make other distributions to Holdings, the proceeds of which are used by Holdings or a Parent to purchase or redeem) Equity Interests of Holdings or a Parent (x) acquired by employees, consultants or directors of Holdings, the Borrower or any Subsidiary upon such Person’s death, disability, retirement or termination of employment, provided that the aggregate amount of such purchases or redemptions under this clause (iii)(x) shall not exceed $15,000,000 in any fiscal year (and, to the extent that the aggregate amount of purchases or redemptions made in any fiscal year pursuant to this clause (iii)(x) is less than $15,000,000, the amount of such difference may be carried forward and used for such purpose in the following fiscal year) and $40,000,000 in the aggregate and (y) in connection with Holdings’ stock repurchase program announced prior to the Original Effective Date authorizing the repurchase shares of Holdings’ common stock for aggregate consideration not to exceed $55,000,000;

(iv) the Borrower may make Restricted Payments to Holdings to be used by Holdings solely to pay (or to make Restricted Payments to allow a Parent to pay) its franchise taxes and other fees required to maintain its corporate existence and to pay for general corporate and overhead expenses (including salaries and other compensation of employees) and other expenses in its capacity as the parent of Borrower incurred by Holdings or a Parent in the ordinary course of its business, provided that such Restricted Payments shall not exceed $5,000,000 in any fiscal year;

(v) the Borrower may make Restricted Payments to Holdings in an amount necessary to enable Holdings to pay (or make Restricted Payments to allow a Parent to pay) the Taxes directly attributable to (or arising as a result of) the operations of a Parent, Holdings, the Borrower and the Subsidiaries, provided that (A) the amount of any such Restricted Payments pursuant to this clause (v) shall not exceed the amount of such Taxes that Borrower and/or its Subsidiaries, as applicable, would have paid had Borrower and/or its Subsidiaries, as applicable, been a stand-alone taxpayer (or a stand-alone group) and (B) all Restricted Payments made to Holdings or a Parent pursuant to this clause (v) are used by Holdings or a Parent for the purposes specified herein within 90 days of the receipt thereof;

(vi) cashless repurchases of Equity Interests of Holdings deemed to occur upon exercise of stock options or warrants or upon vesting of common stock, if such Equity Interests represent a portion of the exercise price or withholding obligations of such options, warrants or common stock;

(vii) [reserved];

(viii) the Borrower may make Restricted Payments to Holdings to pay management, consulting and advisory fees to any Sponsor or Sponsor Affiliate to the extent permitted by Section 6.09;

(ix) the Borrower may make Restricted Payments to Holdings in an amount necessary to permit Holdings to pay (or to make Restricted Payments to allow a Parent to pay) interest in cash (including interest previously paid “in kind” or added to the principal amount thereof) and, with respect to subclause (x) of this Section 6.08(a)(ix) only, principal in cash on (x) [reserved] or (y) additional Qualified Holdings Discount Debt, but, in the case of this clause (y), only to the extent the proceeds (together with a pro rata portion of related transaction expenses paid from such proceeds) of such additional Qualified Holdings Discount Debt were used to make Capital Expenditures (without giving effect to the proviso in the definition of the term “Capital Expenditures”), prepay Tranche B Term Loans, make Investments pursuant to Section 6.04(xvii) or repay, redeem, defease or otherwise refinance any Qualified Holdings Discount Debt previously issued hereunder or were Otherwise Applied, provided that (A) no Default has occurred and is continuing or would result therefrom and (B) all Restricted Payments made pursuant to this clause (ix) are used by Holdings or a Parent for the purposes specified herein within 20 days of receipt thereof;

(x) the Borrower and the Subsidiaries may make additional Restricted Payments (and Holdings may make Restricted Payments with such amounts received from the Borrower) in an aggregate amount not exceeding the Available Amount immediately prior to the time of the making of such Restricted Payment; provided that (A) immediately prior to and after giving effect to such Restricted Payment, the Borrower is in compliance with the Financial Performance Covenant and (B) no Default has occurred and is continuing or would result therefrom;

(xi) the Borrower may make Restricted Payments to Holdings to pay any non-recurring fees, cash charges and cost expenses incurred in connection with the issuance of Equity Interests or Indebtedness, in each case only to the extent that such transaction is not consummated;

(xii) the Borrower and its Subsidiaries may make additional Restricted Payments (and Holdings may make Restricted Payments with such amounts received from the Borrower) in an aggregate amount not to exceed $50,000,000; provided that no Default or Event of Default has occurred and is continuing or would result therefrom;

(xiii) Holdings may make Restricted Payments with the Net Proceeds received by Holdings from any issuance of any Equity Interests (or capital contribution in respect thereof) or Qualified Holdings Discount Debt to the extent such Net Proceeds are not contributed or otherwise received by the Borrower or any of the Subsidiaries; provided that no Default or Event of Default has occurred and is continuing or would result therefrom; and

(xiv) the Borrower and its Subsidiaries may make additional Restricted Payments (and Holdings may make Restricted Payments with such amounts received from the Borrower); provided that (x) no Default or Event of Default has occurred and is continuing or would result therefrom and (y) on a Pro Forma Basis, after giving effect to any such Restricted Payment pursuant to this clause (xiv), the Leverage Ratio does not exceed 2.75 to 1.00.

(b) The Borrower will not nor will it permit any Subsidiary to, make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of, any Subordinated Indebtedness (other than intercompany loans among Subsidiaries and the Borrower) or Permitted Debt Securities issued pursuant to Section 6.01(xvii) (other than Permitted Secured Notes (x) that are secured by Liens subject to the First Lien Intercreditor

Agreement or (y) the proceeds of which are used to repay Term Loans) (“ Specified Indebtedness ”), except:

(i) payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness, other than, in the case of Subordinated Indebtedness, as prohibited by the subordination provisions thereof;

(ii) the conversion or exchange of any Specified Indebtedness into, or redemption, repurchase, prepayment, defeasance or other retirement of any such Indebtedness with the Net Proceeds of the issuance by Holdings or a Parent of, (A) Equity Interests (or capital contributions in respect thereof) of Holdings or a Parent after the Original Effective Date to the extent not Otherwise Applied or (B) Qualified Holdings Discount Debt, plus any fees and expenses in connection with such conversion, exchange, redemption, repurchase, prepayment, defeasance or other retirement;

(iii) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, the prepayment, redemption, defeasance, repurchase or other retirement of Specified Indebtedness for an aggregate purchase price not to exceed the Available Amount; and

(iv) refinancings of Indebtedness to the extent the Indebtedness being incurred in connection with such refinancing is permitted by Section 6.01.

SECTION 6.09. Transactions with Affiliates . Neither Holdings nor the Borrower will, nor will they permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except

(a) transactions that are at prices and on terms and conditions not less favorable to Holdings, the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties,

(b) (i) transactions between or among the Borrower and the Subsidiary Loan Parties, and (ii) transactions between or among the Borrower and its Subsidiaries in the ordinary course of business,

(d) any Indebtedness permitted under Section 6.01(a)(v) and Section 6.01(a)(xii),

(e) any Restricted Payment permitted under Section 6.08,

(f) loans or advances to employees permitted under Section 6.04,

(g) any lease entered into between the Borrower or any Subsidiary, as lessee, and any of the Affiliates (as of the Original Effective Date) of the Borrower or entity controlled by such Affiliates, as lessor, which is approved in good faith by a majority of the disinterested members of the Board of Directors of the Borrower,

(h) so long as no Default described in Section 7.01(b) and no Event of Default has occurred and is continuing, the Borrower may pay, or may pay cash dividends to enable Holdings

to pay, (A) customary management, consulting, monitoring or advisory fees to the Sponsor or any Sponsor Affiliates in an aggregate amount not greater than $2,500,000 during any fiscal year (plus any unpaid management, consulting, monitoring or advisory fees within such amount accrued in any prior year) and (B) fees in respect of any financings, acquisitions or dispositions with respect to which the Sponsor or any Sponsor Affiliate acts as an adviser to Holdings, the Borrower or any Subsidiary in an amount not to exceed 2.0% of the value of any such transaction,

(i) any contribution to the capital of Holdings directly or indirectly by the Permitted Investors or any purchase of Equity Interests of Holdings by the Permitted Investors not prohibited by this Agreement,

(j) the payment of reasonable fees to directors of Holdings, the Borrower or any Subsidiary who are not employees of Holdings, the Borrower or any Subsidiary, and compensation and employee benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of Holdings, the Borrower or any Subsidiary in the ordinary course of business,

(k) any issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans approved by the Borrower’s or Holdings’ Board of Directors (or a committee thereof),

(l) transactions pursuant to agreements set forth on Schedule 6.09 and any amendments thereto to the extent such amendments are not materially less favorable to the Borrower or such Subsidiary Loan Party than those provided for in the original agreements,

(m) employment, change in control and severance arrangements entered into in the ordinary course of business and approved by the Borrower’s or Holdings’ Board of Directors (or a committee thereof) between a Parent, Holdings, the Borrower or any Subsidiary and any employee thereof, and

(n) payments by the Borrower or any of its Subsidiaries of reasonable insurance premiums to, and any borrowings or dividends received from, any Insurance Subsidiary.

SECTION 6.10. Restrictive Agreements .

(a) Subject to clauses (b) through (d) below, neither Holdings nor the Borrower will, nor will they permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (i) the ability of Holdings, the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets or (ii) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary.

(b) The foregoing clause (a) shall not apply to restrictions and conditions (i) imposed by law or by any Loan Document, Qualified Holdings Discount Debt or documentation governing any Permitted Debt Securities, or Indebtedness of a Foreign Subsidiary permitted to be incurred under this Agreement ( provided that such restrictions shall apply only to such Foreign Subsidiary), (ii) existing on the Original Effective Date identified on Schedule 6.10 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions

apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) imposed on any Consolidated Practice by (and for the benefit of) any Loan Party and (v) imposed by any customary provisions restricting assignment of any agreement entered into the ordinary course of business.

(c) The foregoing clause (a)(i) shall not apply to restrictions or conditions (i) imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and (ii) imposed by customary provisions in leases restricting the assignment thereof.

(d) The foregoing clause (a)(ii) shall not apply to customary provisions in joint venture agreements relating to purchase options, rights of first refusal or call or similar rights of a third party that owns Equity Interests in such joint venture.

SECTION 6.11. Amendment of Material Documents . Neither Holdings nor the Borrower will, nor will they permit any Subsidiary to, amend, modify or waive any of its rights under (a) [reserved], (b) the documentation governing any Permitted Debt Securities or (c) its certificate of incorporation, by-laws or other organizational documents, in each case to the extent such amendment, modification or waiver would be materially adverse to the Lenders.

SECTION 6.12. [ Reserved ].

SECTION 6.13. Leverage Ratio . The Borrower will not permit the Leverage Ratio as of any date set forth below to exceed the ratio set forth opposite such date:

Date		Ratio
June 30, 2011		6.00 to 1.00
September 30, 2011		6.00 to 1.00
December 31, 2011		5.75 to 1.00
March 31, 2012		5.50 to 1.00
June 30, 2012		5.25 to 1.00
September 30, 2012		5.00 to 1.00
December 31, 2012		4.75 to 1.00
March 31, 2013		4.50 to 1.00
June 30, 2013		4.50 to 1.00
September 30, 2013		4.50 to 1.00
December 31, 2013		4.50 to 1.00
March 31, 2014		5.00 to 1.00
June 30, 2014		5.00 to 1.00

Date		Ratio
September 30, 2014		5.00 to 1.00
December 31, 2014		5.00 to 1.00
March 31, 2015		5.00 to 1.00
June 30, 2015		5.00 to 1.00
September 30, 2015		5.00 to 1.00
December 31, 2015		5.00 to 1.00
March 31, 2016		5.00 to 1.00
June 30, 2016		5.00 to 1.00
September 30, 2016		5.00 to 1.00
December 31, 2016		5.00 to 1.00
March 31, 2017		5.00 to 1.00
June 30, 2017		5.00 to 1.00
September 30, 2017		5.00 to 1.00
December 31, 2017		5.00 to 1.00
March 31, 2018		5.00 to 1.00

SECTION 6.14. Maximum Capital Expenditures .

(a) The Borrower will not, nor will it permit any Subsidiary to, incur or make any Capital Expenditures except and as set forth below:

Fiscal Year		Maximum Capital Expenditures
2011		$125.0 million
2012		$125.0 million
2013		$125.0 million
2014		$125.0 million
2015		$125.0 million
2016		$125.0 million

Fiscal Year		Maximum Capital Expenditures
2017		$125.0 million
2018		$125.0 million

; provided that if the aggregate amount of Capital Expenditures made in any fiscal year shall be less than the maximum amount of Capital Expenditures permitted under this Section 6.14 for such fiscal year (including any carryover), then an amount of such shortfall not exceeding 50% of such maximum amount (not including any carryover) may be added to the amount of Capital Expenditures permitted under this Section 6.14 for the immediately succeeding (but not any other) fiscal year.

ARTICLE VII

Events of Default

SECTION 7.01. Events of Default . If any of the following events (any such event, an “ Event of Default ”) shall occur:

(a) the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

(b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in paragraph (a) of this Section 7.01) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three Business Days;

(c) any representation or warranty made or deemed made by or on behalf of Holdings, the Borrower or any Subsidiary in or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect (except to the extent any such representation or warranty is qualified by “materially,” “Material Adverse Effect” or a similar term, in which case such representation or warranty shall prove to have been incorrect in any respect) when made or deemed made;

(d) Holdings or the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.03, 5.04 (with respect to the existence of Holdings and the Borrower), 5.11 or in Article VI;

(e) Holdings, the Borrower or any Subsidiary Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other than those specified in paragraph (a), (b) or (d) of this Section 7.01), and such failure shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender);

(f) Holdings, the Borrower or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable (after giving effect to any applicable grace period);

(g) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity, provided that this paragraph (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets (to the extent not prohibited under this Agreement) securing such Indebtedness;

(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of Holdings, the Borrower or any Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Holdings, the Borrower or any Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

(i) Holdings, the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in paragraph (h) of this Section 7.01, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Holdings, the Borrower or any Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any formal action for the purpose of effecting any of the foregoing;

(j) Holdings, the Borrower or any Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;

(k) one or more judgments for the payment of money (to the extent not paid or covered by insurance provided by a carrier that has acknowledged its obligation to pay such claim in writing and that has a credit rating of at least “A” by A.M. Best Company, Inc.) in an aggregate amount in excess of $50,000,000 shall be rendered against Holdings, the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of Holdings, the Borrower or any Subsidiary to enforce any such judgment;

(l) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and the Subsidiaries in an aggregate amount exceeding $50,000,000 for all periods;

(m) any Lien purported to be created under any Security Document shall cease to be, or shall be asserted by any Loan Party not to be, a valid and perfected Lien on any Collateral with a fair value in excess of $5,000,000, with the priority required by the applicable Security Document, except (i) as a result of the sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents or (ii) as a result of the Administrative Agent’s failure

to maintain possession of any stock certificates, promissory notes or other instruments delivered to it under the Collateral Agreement;

(n) any Loan Document shall for any reason be asserted by any Loan Party not to be a legal, valid and binding obligation of any party thereto;

(o) the Guarantees of the Obligations by Holdings and the Subsidiary Loan Parties pursuant to the Collateral Agreement shall cease to be in full force and effect (other than in accordance with the terms of the Loan Documents) or shall be asserted by Holdings, the Borrower or any Subsidiary Loan Party not to be in effect or not to be legal, valid and binding obligations; or

(p) a Change in Control shall occur;

then, and in every such event (other than an event with respect to the Borrower described in paragraph (h) or (i) of this Section 7.01), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in paragraph (h) or (i) of this Section 7.01, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

SECTION 7.02. Borrower’s Right to Cure .

(a) Notwithstanding anything to the contrary contained in Section 7.01, in the event that the Borrower fails to comply with the requirements of the Financial Performance Covenant for any Fiscal Quarter, from the first day of such Fiscal Quarter until the date that is ten days subsequent to the date on which financial statements with respect to the fiscal period for such Financial Performance Covenant is being measured are required to be delivered pursuant to Section 5.01, Holdings shall have the right to issue Permitted Securities, the proceeds of which Holdings will contribute in cash to the Borrower as common equity (collectively, the “ Cure Right ”); provided that at the Borrower’s option, the Borrower may elect to exercise such Cure Right prior to the date of the delivery of the applicable financial statements if the Borrower reasonably determines that it will fail to comply with the requirements of the Financial Performance Covenant upon the delivery of such financial statements, and upon the receipt by the Borrower of such cash (the “ Cure Amount ”) pursuant to the exercise by the Borrower of such Cure Right the Financial Performance Covenant shall be recalculated giving effect to the following pro forma adjustments:

(i) Consolidated EBITDA shall be increased, solely for the purpose of measuring the Financial Performance Covenant at the end of the applicable Fiscal Quarter and applicable subsequent periods which include such Fiscal Quarter and not for any other purpose under this Agreement, by an amount equal to the Cure Amount; and

(ii) if, after giving effect to the foregoing recalculations, the Borrower shall then be in compliance with the requirements of the Financial Performance Covenant, the Borrower shall be deemed to have satisfied the requirements of the Financial Performance Covenant as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of the Financial Performance Covenant that had occurred shall be deemed cured for the purposes of this Agreement.

(b) Notwithstanding anything herein to the contrary, (a) in each four-Fiscal-Quarter period there shall be at least two Fiscal Quarters in which the Cure Right is not exercised and no more than five Cure Rights shall be exercised during the term of this Agreement, (b) the Cure Amount shall be no greater than the amount required for purposes of complying with the Financial Performance Covenant and (c) the Cure Amount shall be set forth in an Officer’s Certificate delivered to the Administrative Agent.

SECTION 7.03. Exclusion of Immaterial Subsidiaries . Solely for the purposes of determining whether a Default has occurred under clause (h) or (i) of Section 7.01, any reference in any such clause to any Subsidiary shall be deemed not to include any Subsidiary affected by any event or circumstance referred to in any such clause that did not, as of the last day of the fiscal quarter of the Borrower most recently ended, have assets with a value in excess of 5% of the consolidated total assets of the Borrower and the Subsidiaries or 5% of the total revenues of the Borrower and the Subsidiaries as of such date; provided that if it is necessary to exclude more than one Subsidiary from clause (h) or (i) of Section 7.01 pursuant to this Section 7.03 in order to avoid an Event of Default thereunder, all excluded Subsidiaries shall be considered to be a single consolidated Subsidiary for purposes of determining whether the condition specified above is satisfied.

ARTICLE VIII

The Agents

SECTION 8.01. The Agents . Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto. For purposes of this Article VIII, all references to the Administrative Agent shall be deemed to be references to both the Administrative Agent and the Collateral Agent.

The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.

The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 2.05(j) and Section 9.02), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for

the failure to disclose, any information relating to Holdings, the Borrower or any of the Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by Holdings, the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more subagents appointed by the Administrative Agent. The Administrative Agent and any such subagent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such subagent and to the Related Parties of each Administrative Agent and any such subagent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

The Administrative Agent may resign at any time by notifying the Lenders, the Issuing Bank and the Borrower. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its subagents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.

Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed

appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or related agreement or any document furnished hereunder or thereunder. The Lenders identified in this Agreement as a Syndication Agent and a Documentation Agent shall not have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders. Without limiting the foregoing, no Syndication Agent nor any Documentation Agent shall have or be deemed to have a fiduciary relationship with any Lender.

Each Lender irrevocably agrees that the Administrative Agent may enter into the First Lien Intercreditor Agreement and the Second Lien Intercreditor agreement, without any further consent from any Secured Party, in connection with any incurrence by the Borrower of Permitted Debt Securities and bind the Secured Parties thereby.

ARTICLE IX

Miscellaneous

SECTION 9.01. Notices .

(a) Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:

(i) if to the Borrower, to Select Medical Corporation, 4716 Old Gettysburg Road, P.O. Box 2034, Mechanicsburg, PA 17055, Attention: Michael E. Tarvin (Telecopy No. (717) 975-9981);

(ii) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., 270 Park Avenue, 4th Floor, New York, New York 10017, Attention of Dawn Lee Lum (Telecopy No. (212) 270-2472), with a copy to JPMorgan Chase Bank, N.A., Loan and Agency Services, 1111 Fannin Street, 10th Floor, Houston, TX 77002, Attention: John Ngo (Telecopy No. (713) 750-2931);

(iii) if to the Issuing Bank, to JPMorgan Chase Bank, N.A., Loan and Agency Services, 1111 Fannin Street, 10th Floor, Houston, TX 77002, Attention: John Ngo (Telecopy No. (713) 750-2931);

(iv) if to the Swingline Lender, to JPMorgan Chase Bank, N.A., Loan and Agency Services, 1111 Fannin Street, 10th Floor, Houston, TX 77002, Attention: John Ngo (Telecopy No. (713) 750-2931);

(v) if to the Collateral Agent, to JPMorgan Chase Bank, N.A., Loan and Agency Services, 1111 Fannin Street, 10th Floor, Houston, TX 77002, Attention: John Ngo (Telecopy No. (713) 750-2931); and

(vi) if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.

(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

(c) Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the Administrative Agent (and, in the case of the Administrative Agent, by written notice to the Borrower). All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

SECTION 9.02. Waivers; Amendments .

(a) No failure or delay by the Administrative Agent, the Issuing Bank, the Collateral Agent, the Swingline Lender or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Bank, the Collateral Agent, the Swingline Lender and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 9.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender, the Collateral Agent, the Swingline Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.

(b) Except as provided in Section 2.20 with respect to an Additional Credit Extension Amendment (or to give effect to any restatement of this Agreement, the substantive terms of which are otherwise permitted hereby), neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by Holdings, the Borrower and the Required Lenders or, in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto, in each case with the consent of the Required Lenders; provided that no such agreement shall

(i) increase the Commitment of any Lender without the written consent of such Lender,

(ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby,

(iii) postpone the maturity of any Loan, or any scheduled date of payment of the principal amount of any Tranche B Term Loan under Section 2.10, the required date of reimbursement of any LC Disbursement, or any date for the payment of any interest or fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled

date of expiration of any Commitment, without the written consent of each Lender affected thereby,

(iv) change Section 2.18(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender adversely affected thereby,

(v) change any of the provisions of this Section 9.02 or the percentage set forth in the definition of “Required Lenders,” “Required Revolving Lenders,” “Required 2018 Extended Revolving Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders (or Lenders of any Class) required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (or each Lender of such Class, as applicable),

(vi) release Holdings or any Subsidiary Loan Party from its Guarantee under the Collateral Agreement (except as provided in Section 9.15 or in the Collateral Agreement) or limit its liability in respect of such Guarantee, without the written consent of each Lender,

(vii) release all or substantially all the Collateral from the Liens of the Security Documents (except as provided in Section 9.15 or in the Collateral Agreement), without the written consent of each Lender,

(viii) change any provisions of any Loan Document in a manner that by its terms adversely affects the rights in respect of payments due to Lenders holding Loans of any Class differently than those holding Loans of any other Class, without the written consent of Lenders holding a majority in interest of the outstanding Loans and unused Commitments of each adversely affected Class, or

(ix) expressly change or waive any condition precedent in Section 4.02 to any Revolving Borrowing or 2018 Extended Revolving Borrowing, including, without limitation, the related defined terms therein to the extent applicable to such section, without the written consent of the Required Revolving Lenders or Required 2018 Extended Revolving Lenders, as applicable,

provided , further , that (A) no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender without the prior written consent of the Administrative Agent, the Issuing Bank or the Swingline Lender, as applicable, and (B) any waiver, amendment or modification of this Agreement that by its terms affects the rights or duties under this Agreement of the Revolving Lenders or the 2018 Extended Revolving Lenders (but not the Tranche B Lenders) or the Tranche B Lenders (but not the Revolving Lenders or 2018 Extended Revolving Lenders) or the Revolving Lenders (but not the 2018 Extended Revolving Lenders or Tranche B Lenders) or the 2018 Extended Revolving Lenders (but not the Revolving Lenders or the Tranche B Lenders) may be effected by an agreement or agreements in writing entered into by Holdings, the Borrower and requisite percentage in interest of the affected Class of Lenders that would be required to consent thereto under this Section 9.02(b) if such Class of Lenders were the only Class of Lenders hereunder at the time. In connection with any proposed amendment, modification, waiver or termination (a “ Proposed Change ”) requiring the consent of all affected Lenders, if the consent of the Required Lenders to such Proposed Change is obtained, but the consent to such Proposed Change of other Lenders whose consent is required is not obtained (any such Lender whose consent is not obtained as described in this Section 9.02(b) being referred to as a “ Non-Consenting Lender ”), then, so long as the Lender that is acting as the Administrative Agent is not a Non-Consenting Lender, at the Borrower’s request, any assignee that is acceptable to the Administrative Agent shall have the right, with the Administrative Agent’s consent, to purchase from such Non-

Consenting Lender, and such Non-Consenting Lender agrees that it shall, upon the Borrower’s request, sell and assign to such assignee, at no expense to such Non-Consenting Lender, all the Commitments, Tranche B Term Loans and Revolving Exposure or 2018 Extended Revolving Exposure of such Non-Consenting Lender for an amount equal to the principal balance of all Tranche B Term Loans and Revolving Loans or 2018 Extended Revolving Loans (and funded participations in Swingline Loans and unreimbursed LC Disbursements) held by such Non-Consenting Lender and all accrued interest and fees with respect thereto through the date of sale (including amounts under Sections 2.15, 2.16 and 2.17), such purchase and sale to be consummated pursuant to an executed Assignment and Assumption in accordance with Section 9.04(b) (which Assignment and Assumption need not be signed by such Non-Consenting Lender).

(c) Notwithstanding the provisions of clause (b), this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent, Holdings and the Borrower (i) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Tranche B Term Loans, the Revolving Loans and the 2018 Extended Revolving Loans and the accrued interest and fees in respect thereof, and (ii) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders. In addition, this Agreement may be amended with the written consent of the Administrative Agent, Holdings, the Borrower and the Lenders providing the relevant Replacement Term Loans (as defined below) to permit the refinancing of all outstanding Tranche B Term Loans (the “ Refinanced Term Loans ”) with a replacement term loan tranche hereunder (the “ Replacement Term Loans ”); provided that (i) the aggregate principal amount of such Replacement Term Loans shall not exceed the aggregate principal amount of such Refinanced Term Loans, (ii) the Applicable Rate for such Replacement Term Loans shall not be higher than the Applicable Rate for such Refinanced Term Loans, (iii) the weighted average life to maturity of such Replacement Term Loans shall not be shorter than the weighted average life to maturity of such Refinanced Term Loans at the time of such refinancing (except to the extent of nominal amortization for periods where amortization has been eliminated as a result of prepayment of the Tranche B Term Loans) and (iv) all other terms applicable to such Replacement Term Loans shall be substantially identical to, or less favorable to the Lenders providing such Replacement Term Loans than, those applicable to such Refinanced Term Loans, except to the extent necessary to provide for covenants and other terms applicable to any period after the latest final maturity of the Tranche B Term Loans in effect immediately prior to such refinancing.

(d) Notwithstanding anything in this Section 9.02 to the contrary, (a) technical and conforming modifications to the Loan Documents may be made with the consent of the Borrower and the Administrative Agent to the extent necessary (i) to integrate any Incremental Term Loans, any Incremental Revolving Commitments, any Extended Term Loans or any Extended Revolving Commitments or (ii) to cure any ambiguity, omission, defect or inconsistency and (b) without the consent of any Lender or Issuing Bank, the Loan Parties and the Administrative Agent or any collateral agent may (in their respective sole discretion, or shall, to the extent required by any Loan Document) enter into (x) any amendment, modification or waiver of any Loan Document, or enter into any new agreement or instrument, to effect the granting, perfection, protection, expansion or enhancement of any security interest in any Collateral or additional property to become Collateral for the benefit of the Secured Parties or as required by local law to give effect to, or protect any security interest for benefit of the Secured Parties, in any property or so that the security interests therein comply with applicable law or this Agreement or in each case to otherwise enhance the rights or benefits of any Lender under any Loan Document or (y) any First Lien Intercreditor Agreement and/or Second Lien Intercreditor Agreement with the holders of Permitted Debt Securities (or any amendment or supplement thereto with respect to additional Permitted Debt Securities).

(e) In the event that this Agreement is amended at any time on or prior to September 4, 2014 and such amendment to this Agreement reduces the Yield applicable to the Series D Tranche B Term Loans on the Restatement Effective Date, the Borrower agrees to pay to the Administrative Agent for the account of each Lender (whether or not such Lender consents to such amendment) a fee in an amount equal to 1.00% of such Lender’s Series D Tranche B Term Loans outstanding on the effective date of such amendment; provided that no such fee shall be payable if a prepayment fee is payable in accordance with Section 2.12(c) related to such amendment. In the event that this Agreement is amended at any time on or prior to March 4, 2015 and such amendment to this Agreement reduces the Yield applicable to the Series E Tranche B Term Loans on the Restatement Effective Date, the Borrower agrees to pay to the Administrative Agent for the account of each Lender (whether or not such Lender consents to such amendment) a fee in an amount equal to 1.00% of such Lender’s Series E Tranche B Term Loans outstanding on the effective date of such amendment; provided that no such fee shall be payable if a prepayment fee is payable in accordance with Section 2.12(c) related to such amendment. Notwithstanding the provisions of Section 9.02, this Section 9.02(e) shall not be waived, amended or modified without the written consent of each Lender adversely affected thereby.

SECTION 9.03. Expenses; Indemnity; Damage Waiver .

(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Agents and their respective Affiliates, including the reasonable fees, charges and disbursements of counsel for the Agents, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of the Loan Documents or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the reasonable fees, charges and disbursements of any counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in connection with the Loan Documents, including its rights under this Section 9.03, or in connection with the Loans made or Letters of Credit issued hereunder, including all such reasonable out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

(b) The Borrower shall indemnify the Administrative Agent, the Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”), and hold each Indemnitee harmless, from and against any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any other agreement or instrument contemplated hereby, the performance by the parties to the Loan Documents of their respective obligations thereunder or the consummation of the transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or Release or threat of Release of Hazardous Materials on, at, under or from any Mortgaged Property or any other property currently or formerly owned, leased or operated by the Borrower or any of its Subsidiaries, or any actual or alleged Environmental Liability related in any way to the Borrower or any of its Subsidiaries or their respective properties or operations, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are finally judicially

determined by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnitee.

(c) To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent, the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section 9.03, each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the Swingline Lender, as applicable, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as applicable, was incurred by or asserted against the Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity as such. For purposes hereof, a Lender’s “ pro rata share” shall be determined based upon its share of the aggregate Revolving Exposures, 2018 Extended Revolving Exposures, outstanding Tranche B Term Loans and unused Commitments at the time.

(d) To the extent permitted by applicable law, neither Holdings nor the Borrower shall assert, and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, any Loan or Letter of Credit or the use of the proceeds thereof.

(e) All amounts due under this Section 9.03 shall be payable not later than three days after written demand therefor.

SECTION 9.04. Successors and Assigns .

(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, express or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section 9.04) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:

(1) the Borrower; provided that the Borrower shall be deemed to have consented to an assignment unless it shall have objected thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof; provided further that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund (as defined below) or, if an Event of Default has occurred and is continuing, any other assignee;

(2) the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment of all or any portion of a Tranche B Term Loan to a Lender, an Affiliate of a Lender or an Approved Fund; and

(3) the Issuing Bank, provided that no consent of the Issuing Bank shall be required for an assignment of all or any portion of a Tranche B Term Loan.

(ii) Assignments shall be subject to the following conditions:

(1) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 or, in the case of a Tranche B Term Loan, $1,000,000, unless each of the Borrower and the Administrative Agent otherwise consents; provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;

(2) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement; provided that this clause shall not be construed to prohibit assignment of a proportionate part of all the assigning Lender’s rights and obligations in respect of one Class of Commitments or Loans;

(3) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; and

(4) the assignee, if it is not already a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

For purposes of this Section 9.04(b):

“ Approved Fund ” means (a) a CLO and (b) with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

“ CLO ” means any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course and is administered or managed by a Lender or an Affiliate of such Lender.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section 9.04, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply

with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section 9.04.

(iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount and stated interest of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Banks and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower, the Issuing Banks and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section 9.04 and any written consent to such assignment required by paragraph (b) of this Section 9.04, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c) (i) Any Lender may, without the consent of the Borrower, the Administrative Agent, the Issuing Banks or the Swingline Lender, sell participations to one or more banks or other entities (a “ Participant ”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it), provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent, the Issuing Banks and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement, provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant.

(ii) Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and related interest amounts) of each participant’s interest in the Loans or other obligations under this Agreement (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any participant or any information relating to a participant’s interest in any Commitments, Loans or its other obligations under this Agreement) except to the extent that the relevant parties, acting reasonably and in good faith, determine that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. Unless otherwise required by the Internal Revenue Service (“IRS”), any disclosure required by the foregoing sentence shall be made by the relevant Lender directly and solely to the IRS. The entries in the Participant Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and each Lender shall treat each person whose name is recorded in the Participant Register as the owner of the participation in question for all purposes of this Agreement notwithstanding any notice to the contrary .

(iii) Subject to paragraph (c)(ii) of this Section 9.04, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section 9.04; provided that a Participant shall not be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(c) as though it were a Lender. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.17(e) as though it were a Lender.

(iv) Any Lender may at any time pledge, assign or grant a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge, assignment or grant to secure obligations to a Federal Reserve Bank, and this Section 9.04 shall not apply to any such pledge, assignment or grant of a security interest, provided that no such pledge, assignment or grant of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledge or assignee for such Lender as a party hereto.

(v) Notwithstanding any other provision of this Agreement, no Lender will assign its rights and obligations under this Agreement, or sell participations in its rights and/or obligations under this Agreement, to any Person who is (i) listed on the Specially Designated Nationals and Blocked Persons List maintained by the U.S. Department of Treasury Office of Foreign Assets Control (“ OFAC ”) and/or on any other similar list maintained by OFAC pursuant to any authorizing statute, executive order or regulation or (ii) either (A) included within the term “designated national” as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515 or (B) designated under Section 1(a), 1(b), 1(c) or 1(d) of Executive Order No. 13224, 66 Fed. Reg. 49079 (published September 25, 2001) or similarly designated under any related enabling legislation or any other similar executive orders.

SECTION 9.05. Survival . All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall have independent significance and be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.

SECTION 9.06. Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof

and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

SECTION 9.07. Severability . Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 9.08. Right of Setoff . If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The applicable Lender shall notify the Borrower and the Administrative Agent of such setoff or application, provided that any failure to give or any delay in giving such notice shall not affect the validity of any such setoff or application under this Section 9.08. The rights of each Lender under this Section 9.08 are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process .

(a) This Agreement shall be construed in accordance with and governed by the law of the State of New York.

(b) Each of Holdings and the Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against Holdings, the Borrower or their respective properties in the courts of any jurisdiction.

(c) Each of Holdings and the Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section 9.09. Each of

the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 9.10. WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.10.

SECTION 9.11. Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 9.12. Confidentiality . Each of the Administrative Agent, the Issuing Banks and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority or self-regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section 9.12, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section 9.12 or (ii) becomes available to the Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis from a source other than Holdings or the Borrower, provided that such source is not actually known by such disclosing party to be bound by an agreement containing provisions substantially the same as those contained in this Section 9.12. For the purposes of this Section 9.12, the term “ Information ” means all information received from Holdings or the Borrower relating to Holdings or the Borrower or its business, other than any such information that is available to the Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by Holdings or the Borrower, provided that, in the case of information received from Holdings, the Borrower or any Subsidiary after the Original Effective Date, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section 9.12 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

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SECTION 9.13. Interest Rate Limitation . Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts that are treated as interest on such Loan under applicable law (collectively, the “ Charges ”), shall exceed the maximum lawful rate (the “ Maximum Rate ”) that may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section 9.13 shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

SECTION 9.14. USA Patriot Act . Each Lender hereby notifies each Loan Party that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Patriot Act ”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of each Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the Patriot Act.

SECTION 9.15. Release of Collateral .

(a) Upon any sale or other transfer by any Loan Party of any Collateral that is permitted under this Agreement, or upon the effectiveness of any written consent to the release of the security interest granted hereby in any Collateral pursuant to Section 9.02 of this Agreement, the security interest in such Collateral shall be automatically released.

(b) Upon the addition of a Succeeding Holdings and satisfaction by such Succeeding Holdings of the Collateral and Guarantee Requirement, the prior Holdings shall be automatically released from all of its obligations under the Security Documents.

SECTION 9.16. No Fiduciary Duty . In connection with all aspects of each transaction contemplated by this Agreement, the Borrower acknowledges and agrees, and acknowledges the other Loan Parties’ understanding, that (i) each transaction contemplated by this Agreement is an arm’s-length commercial transaction between the Loan Parties, on the one hand, and the Administrative Agent and the Lenders, on the other hand, (ii) in connection with each such transaction and the process leading thereto, the Administrative Agent and the Lenders will act solely as principals and not as agents or fiduciaries of the Loan Parties or any of their stockholders, affiliates, creditors, employees or any other party, (iii) neither the Administrative Agent nor any Lender will assume an advisory or fiduciary responsibility in favor of the Borrower or any of its Affiliates with respect to any of the transactions contemplated hereby or the process leading thereto (irrespective of whether the Administrative Agent or any Lender has advised or is currently advising any Loan Party on other matters) and neither the Administrative Agent nor any Lender will have any obligation to any Loan Party or any of its Affiliates with respect to the transactions contemplated in this Agreement except the obligations expressly set forth herein, (iv) the Administrative Agent and each Lender may be engaged in a broad range of transactions that involve interests that differ from those of the Loan Parties and their affiliates, and (v) neither the Administrative Agent nor any Lender has provided or will provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby and the Loan Parties have consulted and will consult their own legal, accounting, regulatory, and tax advisors to the extent it deems appropriate. The matters set forth in this Agreement and the other Loan Documents reflect an arm’s-length commercial transaction between the Loan Parties, on the one hand, and the Administrative Agent and the Lenders, on the other hand. The Borrower

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agrees that the Loan Parties shall not assert any claims that any Loan Party may have against the Administrative Agent or any Lender based on any breach or alleged breach of fiduciary duty.

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EXHIBIT 31.1

SELECT MEDICAL HOLDINGS CORPORATION AND

SELECT MEDICAL CORPORATION

CERTIFICATIONS PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, David S. Chernow, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Select Medical Holdings Corporation and Select Medical Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 30, 2014	/s/ David S. Chernow
	David S. Chernow
	President and Chief Executive Officer

EXHIBIT 31.2

SELECT MEDICAL HOLDINGS CORPORATION AND
SELECT MEDICAL CORPORATION
CERTIFICATIONS PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Martin F. Jackson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Select Medical Holdings Corporation;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 30, 2014	/s/ Martin F. Jackson
	Martin F. Jackson
	Executive Vice President and Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Select Medical Holdings Corporation and Select Medical Corporation (the “Company”) for the period ended September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, David S. Chernow and Martin F. Jackson, Chief Executive Officer and Chief Financial Officer, respectively, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to our knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

October 30, 2014

/s/ David S. Chernow
David S. Chernow
President and Chief Executive Officer


/s/ Martin F. Jackson
Martin F. Jackson
Executive Vice President and Chief Financial Officer