S-4

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As filed with the Securities and Exchange Commission on June 28, 2004

Registration No.       -            

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

CONCENTRA OPERATING CORPORATION
AND THE GUARANTORS NAMED IN FOOTNOTE (1) BELOW
(exact name of Registrants as specified in their charters)

Nevada (state or jurisdiction of incorporation or organization)	75-2822620 (I.R.S. employer identification no.)
5080 Spectrum Drive Suite 400 West Addison, Texas 75001 (972) 364-8000 (Address, including zip code, and telephone number, including area code, of Registrants' principal executive offices)	Richard A. Parr II 5080 Spectrum Drive Suite 400 West Addison, Texas 75001 (972) 364-8000 (Name, address, including zip code, and telephone number, including area code, of agent for service)

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.

        If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.    o

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Note	Proposed Maximum Aggregate Offering Price	Amount of Registration Fee(2)
91/8% Senior Subordinated Notes Due 2012	$155,000,000	100%	$155,000,000	$19,638.50
Senior Subordinated Note Guarantees(3)	—	—	—	—

(1)

Concentra Preferred Systems, Inc., a Delaware corporation (I.R.S. Employer Identification No. 36-3715258), National Healthcare Resources, Inc., a Delaware corporation (I.R.S. Employer Identification No. 11-3273542), MetraComp, Inc., a Delaware corporation (I.R.S. Employer Identification No. 06-1095987), Concentra Integrated Services Inc., a Massachusetts corporation (I.R.S. Employer Identification No. 04-2658593), First Notice Systems, Inc., a Delaware corporation (I.R.S. Employer Identification No. 04-3373927), Focus Healthcare Management, Inc., a Tennessee corporation (I.R.S. Employer Identification No. 62-1266888), CRA-MCO, Inc., a Nevada corporation (I.R.S. Employer Identification No. 36-4266562), CRA Managed Care of Washington, Inc., a Washington corporation (I.R.S. Employer Identification No. 91-1374650), Concentra Health Services, Inc., a Nevada corporation (I.R.S. Employer Identification No. 75-2510547), OCI Holdings, Inc. a Nevada corporation (I.R.S. Employer Identification No. 75-2679204), Concentra Management Services, Inc., a Nevada corporation (I.R.S. Employer Identification No. 93-1187448), Concentra Laboratory, LLC, a Delaware limited liability company (I.R.S. Employer Identification No. 76-0546504), HealthNetwork Systems LLC, a Delaware limited liability company (I.R.S. Employer Identification No. 36-4285919), Medical Network Systems LLC, a Delaware limited liability company (I.R.S. Employer Identification No. (N/A), OccuCenters I, L.P., a Texas limited partnership (I.R.S. Employer Identification No. 75-2678146), CPS Business Corporation, a Delaware corporation (I.R.S. Employer Identification No. 74-3024282), CISI Business Corporation, a Delaware corporation (I.R.S. Employer Identification No. 04-3449352), and FHM Business Corporation, a Delaware corporation (I.R.S. Employer Identification No. 74-3024280).

(2)

Registration fee calculated pursuant to Rule 457(f)(2) under the Securities Act of 1933 (the "Securities Act").

(3)

The 9¹/8% Senior Subordinated Notes due 2012 are guaranteed by the Co-Registrants on a senior subordinated basis. No separate consideration will be paid in respect of the guarantees. Pursuant to Rule 457(n) under the Securities Act, no filing fee is required.

The Registrants hereby amend this Registration Statement on such dates as may be necessary to delay its effective date until the Co-Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, dated                        , 2004

Prospectus

Offer to Exchange up to
$155,000,000 9¹/8% Senior Subordinated Notes due 2012

for

$155,000,000 9¹/8% Senior Subordinated Notes due 2012
that have been Registered under the Securities Act of 1933

Terms of the Exchange Offer

•

We are offering to exchange up to $155,000,000 of our outstanding 9¹/8% Senior Subordinated Notes due 2012, which we refer to herein as the "old notes," for up to $155,000,000 of new 9¹/8% Senior Subordinated Notes due 2012, which we refer to herein as the "new notes," with substantially identical terms that have been registered under the Securities Act and are freely tradable.

•

We will exchange all outstanding old notes that you validly tender and do not validly withdraw before the exchange offer expires for an equal principal amount of new notes.

•

The exchange offer expires at 5:00 p.m., New York City time, on                        , 2004, unless extended. We do not currently intend to extend the exchange offer.

•

Tenders of outstanding old notes may be withdrawn at any time prior to the expiration of the exchange offer.

•

The exchange of outstanding old notes for new notes will not be a taxable event for U.S. federal income tax purposes.

•

We will not receive any proceeds from the exchange offer.

Terms of the New 9¹/8% Senior Subordinated Notes Offered in the Exchange Offer

Maturity

•

The new notes will mature on June 1, 2012.

Interest

•

Interest on the new notes is payable on June 1 and December 1 of each year, beginning December 1, 2004.

•

Interest will accrue from June 8, 2004.

Redemption

•

We may redeem the new notes, in whole or in part, on or after June 1, 2008 at the redemption prices described in this prospectus. We may redeem the new notes in whole prior to that date pursuant to the make-whole provisions described in this prospectus.

•

In addition, prior to June 1, 2007, we may redeem up to $54.25 million of the new notes using the net proceeds of one or more qualified equity offerings.

Change of Control

•

Upon a change of control, you may require us to repurchase all or a portion of your notes at a purchase price of 101% of their principal amount, plus accrued and unpaid interest.

Ranking

•

The new notes and the guarantees will be our and the applicable guarantors' unsecured senior subordinated obligations.

•

The new notes will rank junior to all of our and the guarantors' existing and future senior indebtedness. The new notes will be guaranteed on a senior subordinated basis by certain of our current and future restricted domestic subsidiaries.

See "Risk Factors" beginning on page 14 for a discussion of factors you should consider before investing in the new notes.

These securities have not been approved or disapproved by the Securities and Exchange Commission or any state securities commission nor has the Securities and Exchange Commission passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

        Each broker-dealer that receives the new notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such new notes. The letter of transmittal accompanying this prospectus states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for the old notes where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that, for a period of 180 days after the expiration date of this exchange offer, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution."

The date of this prospectus is                        , 2004

TABLE OF CONTENTS

	Page
FORWARD-LOOKING STATEMENTS	ii
INDUSTRY AND MARKET DATA	iii
PROSPECTUS SUMMARY	1
RISK FACTORS	14
EXCHANGE OFFER	30
USE OF PROCEEDS	39
CAPITALIZATION	40
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA	41
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	43
BUSINESS	72
MANAGEMENT	94
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	104
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	108
DESCRIPTION OF OTHER INDEBTEDNESS	112
DESCRIPTION OF THE NEW NOTES	117
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS	164
PLAN OF DISTRIBUTION	165
LEGAL MATTERS	166
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	166
WHERE YOU CAN FIND MORE INFORMATION	167
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES	F-1
LETTER OF TRANSMITTAL	ANNEX A

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FORWARD-LOOKING STATEMENTS

        This prospectus contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). Forward-looking statements give our current expectations or forecasts of future events. All statements other than statements of current or historical fact contained in this prospectus, including statements regarding our future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. Whenever possible, we have identified these forward-looking statements by words and phrases such as "anticipate," "believe," "continue," "estimate," "expect," "intend," "may," "plan," "will" and similar expressions.

        Although we believe that these forward-looking statement reasonably reflect our plans, intentions and expectations, we can give no assurance that we will achieve these plans, intentions and expectations. Any or all forward-looking statements in this prospectus may turn out to be wrong. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. They can be affected by inaccurate assumptions we might make or by known or unknown risks, uncertainties and assumptions, including risks, uncertainties and assumptions described in "Risk Factors" herein, and relating to the following:

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our significant indebtednesses and ability to incur substantially more debt;



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our future cash flow and earnings;



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our ability to meet our debt obligations;



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our ability to increase our market share;



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our ability to retain our significant customers;



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our ability to identify suitable acquisition candidates or joint venture relationships for expansion, to consummate these transactions on favorable terms and to achieve satisfactory operating results from the acquired businesses;



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our ability to avoid unforeseen material liabilities as a result of acquiring new companies;



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our ability to manage business growth and diversification and the effectiveness of our information systems;



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our ability to process data and enhance our information systems to deliver streamlined patient care and outcome reporting;



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our ability to compete in our industry;



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possible litigation;



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the effects of increased costs of professional and general liability insurance;



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our ability to attract and retain qualified management personnel;



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the effects of general industry and economic conditions, including declines in nationwide employment levels and rates of workforce injuries;



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the impact of changes in, and restrictions imposed by, laws and regulations affecting the workers' compensation, insurance and healthcare industries;



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the effects of significant negative publicity regarding the managed care industry;



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the impact of any reduction of costs associated with workers' compensation claims; and

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performance of early intervention services and other future cost containment initiatives undertaken by state workers' compensation commissions and other third-party payors.

        In light of these risks, uncertainties and assumptions, the forward-looking statements in this prospectus may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. When you consider these forward-looking statements, you should keep in mind these risks, uncertainties and assumptions and other cautionary statements in this prospectus.

        Our forward-looking statements speak only as of the date made. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

INDUSTRY AND MARKET DATA

        Industry and market data used throughout this prospectus were obtained from our own research, studies conducted by third parties and industry and general publications published by third parties and, in some cases, were derived from management estimates based on its knowledge of the industry and other knowledge. We have not independently verified market and industry data from third-party sources and we make no representations as to the accuracy of such information. While we believe internal company estimates are reliable and market definitions appropriate, they have not been verified by any independent sources and we make no representations as to the accuracy of such estimates.

iii

PROSPECTUS SUMMARY

This summary highlights information about us and the offering of the new notes contained elsewhere in this prospectus and is qualified in its entirety by the more detailed information and consolidated financial statements and other financial data included elsewhere in this prospectus. This summary is not complete and may not contain all of the information that you should consider before deciding to exchange your old notes for new notes. You should read this entire prospectus carefully, including the "Risk Factors" section and the consolidated financial statements included in this prospectus. Unless the context otherwise requires, references to "we," "us," or "our" refer to Concentra Operating Corporation and its subsidiaries.

Our Company

        We are a leading provider of workers' compensation and other occupational healthcare services in the United States. We offer our customers a broad range of services designed to improve patient recovery and to reduce the total costs of healthcare. In 2003, we serviced over five million patient visits, reviewed and repriced over $12.0 billion in medical bills and managed or reviewed over 313,000 cases. Our initial treatment of workplace injuries and illnesses accounts for approximately 7% of total reported workplace injuries in the United States. The knowledge we have developed in improving workers' compensation results for our customers has enabled us to expand successfully into other industries, such as group health and auto insurance, where payors of healthcare and insurance benefits are also seeking to reduce costs. For the twelve months ended March 31, 2004, we generated revenue of $1,070.4 million.

        We believe we are the largest outsource provider of occupational healthcare improvement and cost containment services in the nation. Through our nationwide network of occupational healthcare centers, we serve employers who have more than 123,200 locations. We also provide services to over 3,500 insurance companies, group health plans, third-party administrators and other healthcare payors. These payors and our employer customers provide virtually all of our revenue, with less than 0.1% of our revenue derived from Medicare or Medicaid reimbursement.

        We provide our services through three operating segments: Health Services, Network Services and Care Management Services. Through our Health Services segment we treat workplace injuries and perform other occupational healthcare services. We provide these services through our 250 owned and managed centers, which, as of March 31, 2004, were located in 81 markets within 34 states. Our services at these centers are performed by approximately 570 affiliated primary care physicians, as well as affiliated physical therapists, nurses and other healthcare providers. Our Network Services segment offers services designed to assist insurance companies and other payors in the review and reduction of the bills they receive from medical providers. During 2003, we estimate that this segment enabled our customers to eliminate approximately $2.1 billion in excess costs. Our Care Management Services segment offers services designed to monitor cases and facilitate the return to work of injured employees who have been out of work for an extended period of time due primarily to a work-related illness or injury.

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        The following chart provides an overview of our services and customer markets:

        Workers' Compensation and Other Occupational Healthcare.    Workers' compensation legislation in the United States generally requires employers, either directly or indirectly through the use of insurance, to fund the total costs of an employee's medical treatment and all lost wages, legal fees and other costs associated with a work-related injury or illness. In addition, workers' compensation programs vary among jurisdictions, making it difficult for insurance companies and multi-state employers to adopt uniform policies to administer, manage and control the costs of benefits across states. As a result, managing the cost of workers' compensation requires approaches that are tailored to the specific regulatory environments in which the employer operates. As distinguished from providers who do not specialize in workers' compensation and occupational healthcare services, we believe our focus on these services enables us to more efficiently manage the regulatory complexities and cost-saving interests of employers and payors.

        According to the National Safety Council, total workers' compensation costs to employers in the United States exceeded $146.6 billion in 2003. In recent years, premiums paid by employers for workers' compensation insurance have risen significantly. Although total U.S. workers' compensation costs have increased, work-related injury rates have decreased in past years due to improvements in workplace safety and general shifts in job composition toward less physical work activities. Historically, steady increases in the overall size of the workforce have partially offset these lower injury rates. We believe the market for workers' compensation and occupational healthcare will grow in future years due primarily to the following factors:

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premium increases for workers' compensation insurance;



•

broader definitions of work-related injuries and illnesses covered by workers' compensation laws;



•

the shifting of medical costs from group health plans to the workers' compensation system as the result of an increase in the number of uninsured individuals and the first dollar coverage provided in workers' compensation programs;



•

an aging work force;



•

medical cost inflation;



•

the under-utilization to date of comprehensive cost containment programs in the workers' compensation industry; and

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the recovery of employment growth rates within the United States.

        Non-injury occupational healthcare services include physical examinations, drug and alcohol testing, functional capacity testing and other related programs designed to meet specific employer or regulatory requirements. Non-injury occupational healthcare services also include programs to assist employers in complying with certain federal and state health and safety requirements.

        Group Health and Auto Injury.    In recent years, we have leveraged our extensive workers' compensation experience to successfully expand our services into the group health and auto injury markets. According to the Centers for Medicare and Medicaid Services, private health insurance expenditures for personal healthcare in the United States were estimated to total over $607.0 billion in 2003. Healthcare payors are exposed to high costs in particular when medical care under a group health plan is delivered outside of a healthcare payor's geographic coverage area or outside their network of providers. Out-of-network healthcare claims experience a greater incidence of over-utilization of care, excessive charges for care and billing errors than contracted or in-network claims. As a result of these trends, payors are increasingly seeking ways to reduce their exposure to these adverse costs. We provide our cost containment services to group health customers by analyzing and applying cost savings techniques to such claims. Similarly, auto insurance carriers have experienced increased costs associated with the reimbursement of medical expenses, lost wages and other essential services associated with personal injury protection coverage. In most states, independent medical examinations and peer reviews are the primary mechanisms used to manage the care rendered to individuals injured in auto accidents. We provide these and other cost containment services to our auto insurance customers.

Our Competitive Strengths

        We believe that we are distinguished by the following competitive strengths:

        Leadership in Workers' Compensation and Occupational Healthcare.    We believe we are the nation's largest provider specializing in the treatment of workplace injuries and other occupational healthcare needs. In 2003, we serviced over five million patient visits, accounting for approximately 7% of total workplace injuries in the United States, reviewed and repriced over $12.0 billion in medical bills and managed or reviewed over 313,000 cases. Our extensive treatment, bill review and care management experience, as well as our clinicians' principal focus on occupational healthcare, enable us to deliver high-quality results and reduce workers' compensation costs for our customers.

        Demonstrated Superior Clinical Expertise and Outcomes.    We have developed a comprehensive set of clinical protocols for occupational injuries by collecting and analyzing data regarding treatment methodologies and outcomes achieved. By applying these clinical protocols consistently across our organization, we have produced superior patient outcomes and generated significant cost savings for our customers. For example, workplace injury patients we treated in 2001 were able to return to work in an average of 17 days, versus the national average of 23 days, as reported by the National Safety Council in 2001. Our track record of superior clinical outcomes allows us to demonstrate the value of our services to our current and prospective customers.

        National Service Network.    As of March 31, 2004, we operated 250 dedicated occupational healthcare centers across the United States, which we believe is the broadest national network of centers in the workers' compensation industry. As of March 31, 2004, we had operations in 34 states, giving us a regional presence in 81 markets. In addition, to address the needs of large employers whose workforce extends beyond the geographic coverage of our centers, we expand the reach of our service offerings by giving these employers access to an additional network of select occupational healthcare providers. These providers use our proprietary software to benchmark treatment methodologies and outcomes achieved, thereby extending the delivery of consistent, high quality health services to our

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customers. We believe that our numerous centers and our broad geographic reach provide us with an advantage in serving national customers over single-market or regional service providers.

        Comprehensive Scope of Services.    Our broad service offerings enable us to offer our customers a single source for workers' compensation, group health and auto injury outcomes improvement and cost containment services. Our product offerings cover the continuum of services required to process a healthcare claim from the initial incident through its final resolution. For example, our Health Services segment provides services at the outset of a claim, including initial treatment and follow-up care. Through our Network Services segment we review healthcare bills to recover excess costs incurred on patient care, including cases in which a patient is treated by an out-of-network provider or a provider with whom the insurance company does not have a negotiated billing rate. Our Care Management Services segment helps our customers minimize the costs associated with workers' compensation cases where workplace injuries or illnesses prevent employees from returning to work for an extended period of time. During 2003, we estimate that we enabled our customers to eliminate more than $2.1 billion in excess costs by using our combined service offerings.

        Effective Use of Technology.    We have developed and maintain sophisticated information systems and an extensive, proprietary database of patient outcomes, disability management information, treatment protocols and complex regulatory provisions governing the workers' compensation market. These resources currently enable us to generate cost savings for our customers by promptly identifying and addressing care being provided outside of recommended treatment parameters and generally reducing medical and administrative costs. In addition, our information systems enable us to automate certain administrative complexities in the markets we serve and allow our customers to more easily access the range of products and services we offer. These and other uses of technology enable us to deliver superior service quality and cost savings to our customers, as well as optimize our own operating efficiencies.

        Established Base of Blue Chip Customers.    Through our nationwide network of centers, we serve employers that have a total of over 123,200 locations. We also provide services to over 3,500 insurance companies, group health plans, third party administrators and other healthcare payors. Nevertheless, no single customer represents more than 5% of our total annual revenue. We believe that we have been able to establish our strong customer base and achieve a solid rate of customer retention due to the significant name recognition that Concentra has achieved in the marketplace and due to our high quality performance.

        Strong Cash Flow Generation.    We believe our strong operating cash flow substantially enhances our competitive position in the markets we serve. Our margins are primarily a result of our focus on superior clinical care and outcomes, our economies of scale and our advanced information systems. In addition, we believe our strong operating cash flow strengthens our ability to fund organic and external growth initiatives, which enhances our competitiveness relative to our smaller, regional competitors.

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Our Business Strategy

        Our goal is to further establish ourselves as a leading provider of healthcare outcomes improvement and cost containment services. We intend to achieve this goal by pursuing the following strategies:

        Actively Target New Health Services Customers.    We intend to continue to expand our Health Services operations by utilizing advanced database research techniques to identify potential new customers and new locations for our facilities. Qualified customers that could benefit from the services offered by one of our existing facilities are called on by one of our 230-person Health Services sales force. We also have a dedicated business development team that will continue to build and selectively acquire facilities in identified new and existing markets. By giving new customers access to high quality physicians employed by our affiliated physician groups, highly trained personnel and experience-based protocols, we intend to grow our patient visits and enhance our industry-leading position in occupational healthcare services.

        Intensify the Marketing of Our Network Services and Care Management Services.    We believe that multi-state insurance carriers, third party administrators and self-funded employers will continue to seek innovative ways to address rising healthcare and workers' compensation costs, and will increasingly seek to outsource outcomes improvement and cost containment services to third parties. Across our three business segments, we have built a continuum of services that responds to these outsourcing needs. We intend to build on our reputation as a leading provider of workers' compensation services to expand our network services and care management services by intensifying our marketing of these services to payors in the group health marketplace. We believe that our size and experience in the workers' compensation industry has allowed us to build awareness and credibility with this customer base. In addition, we believe that our significant visibility among key decision makers within these organizations will enhance our ability to expand the services we provide these current and potential customers through our Network Services and Care Management Services segments. We believe that our growth will be further enhanced as our multi-state customers, in turn, gain market share, due in part to the outcomes and efficiencies they enjoy by using our services.

Continue Investing in Technology To Broaden Our Service Offerings and Increase Profitability. We have used technology effectively to deliver and demonstrate better outcomes at a more efficient cost. We intend to continue to invest in technology to identify and deliver further improvements in the treatment, management and administrative oversight of medical cases, thereby creating additional revenue opportunities for us from this proprietary resource. We also intend to continue building electronic interfaces with payors in an effort to reduce their administrative burdens and reduce our operating expenses. We are currently evaluating strategies to provide our customers with fully outsourced document management and mailroom management solutions that would provide a single electronic storage location for all documents related to a claim. Our objective is to reduce our customers' costs related to claim and bill administration by combining this single electronic storage location with a proprietary web-based tool set that would allow easy entry of referrals, queries, and other requests for services and access to all documentation including reports, bills and claims.

        Profitably Expand Our Outsourcing Services into the Group Health Market.    We intend to expand our presence in the group health industry. Historically, our focus in this industry has been in services designed to reduce and limit out-of-network medical costs. We believe that we are the largest outsource provider of these services in the nation today, managing over $5.7 billion annually in medical claim volume. We recently expanded the services we perform for this industry to include network management services, consisting of processes required to maintain numerous preferred provider and other managed care networks. Our services enable payors to outsource components of the network management function, namely contract repricing and provider file management, in order to improve payment accuracy and cycle times, eliminate redundant costs and improve network management

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efficiency. We also provide complementary services that reduce the medical and administrative costs associated with network and out-of-network medical care and assist our customers in meeting automatic claim-adjudication objectives. We believe we are uniquely positioned to capture greater market share as demand for such strategic outsourcing services grows.

The Exchange Offer

On June 8, 2004, we completed a private offering of the old notes. We entered into a registration rights agreement with the initial purchasers in the private offering in which we agreed to effect this exchange offer.

Exchange Offer	We are offering to exchange new notes for old notes.
Expiration Date	The exchange offer will expire at 5:00 p.m. New York City time, on                        , 2004, unless we decide to extend it. We do not currently intend to extend the exchange offer.
Condition to the Exchange Offer	The registration rights agreement does not require us to accept old notes for exchange if the exchange offer or the making of any exchange by a holder of the old notes would violate any applicable law or interpretation of the staff of the Securities and Exchange Commission (the "SEC"). A tender of a minimum aggregate principal amount of old notes is not a condition to the exchange offer.
Procedures for Tendering Old Notes	To participate in the exchange offer, you must follow the procedures established by The Depository Trust Company, which we call "DTC," for tendering notes held in book-entry form. These procedures, which we call "ATOP," require that the exchange agent receive, prior to the expiration date of the exchange offer, a computer generated message known as an "agent's message" that is transmitted through DTC's automated tender offer program and that DTC confirm that:
	• DTC has received your instructions to exchange your notes, and
	• you agree to be bound by the terms of the letter of transmittal.
	For more details, please read "Exchange Offer—Terms of the Exchange Offer" and "—Procedures for Tendering."
Guaranteed Delivery Procedures	None.
Withdrawal of Tenders	You may withdraw your tender of old notes at any time prior to 5:00 p.m., New York City time, on the expiration date. To withdraw, you must have delivered a written or facsimile transmission notice of withdrawal, in compliance with the requirements of Rule 14d-7 of the Exchange Act, to the exchange agent at its address indicated on the cover page of the letter of transmittal before 5:00 p.m., New York City time, on the expiration date of the exchange offer.

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Acceptance of Old Notes and Delivery of New Notes	If you fulfill all conditions required for proper acceptance of old notes, we will accept any and all old notes that you properly tender in the exchange offer on or before 5:00 p.m. New York City time on the expiration date. We will return any old notes that we do not accept for exchange to you without expense as promptly as practicable after the expiration date. We will deliver the new notes as promptly as practicable after the expiration date and acceptance of the old notes for exchange. Please refer to the section in this prospectus entitled "Exchange Offer—Terms of the Exchange Offer."
Accrued Interest on New Notes and Old Notes	The new notes will bear interest from June 8, 2004. Holders of old notes whose old notes are accepted for exchange will be deemed to have waived the right to receive any payment in respect of interest on such old notes accrued from June 8, 2004 to the date of the issuance of the new notes. Consequently, holders who exchange their old notes for new notes will receive the same interest payment on December 1, 2004 (the first interest payment date with respect to the old notes and the new notes) that they would have received had they not accepted the exchange offer.
Resale	We believe that the new notes issued pursuant to the exchange offer may be offered for resale, resold and otherwise transferred by you (unless you are an "affiliate" of ours within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, so long as you are acquiring the new notes in the ordinary course of your business and you have not engaged in, do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of the new notes.

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	Each participating broker-dealer that receives new notes for its own account under the exchange offer in exchange for old notes that were acquired by the broker-dealer as a result of market-making or other trading activity must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. See "Plan of Distribution."
	Any holder of old notes who:
	• is our affiliate;
	• does not acquire new notes in the ordinary course of its business; or
	• exchanges old notes in the exchange offer with the intention to       participate, or for the purpose of participating, in a distribution       of new notes
	must, in the absence of an exemption, comply with the registration and prospectus delivery requirements of the Securities Act in connection with the resale of the new notes.
Fees and Expenses	We will bear all expenses related to the exchange offer. Please refer to the section in this prospectus entitled "Exchange Offer—Fees and Expenses."
Use of Proceeds	The issuance of the new notes will not provide us with any new proceeds. We are making this exchange offer solely to satisfy our obligations under our registration rights agreement. Please refer to the sections entitled "Use of Proceeds" and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" for a discussion of our use of the proceeds from the issuance of the old notes.
Consequences of Failure to Exchange Old Notes	If you do not exchange your old notes in this exchange offer, you will no longer be able to require us to register the old notes under the Securities Act except in the limited circumstances provided under our registration rights agreement. In addition, you will not be able to resell, offer to resell or otherwise transfer the old notes unless we have registered the old notes under the Securities Act, or unless you resell, offer to resell or otherwise transfer them under an exemption from the registration requirements of, or in a transaction not subject to, the Securities Act.
United States Federal Income Tax Considerations	The exchange of new notes for old notes in the exchange offer will not be a taxable event for U.S. federal income tax purposes. Please read "United States Federal Income Tax Considerations."
Exchange Agent	We have appointed The Bank of New York as exchange agent for the exchange offer. You should direct requests for assistance and requests for additional copies of this prospectus (including the letter of transmittal) to the exchange agent addressed as follows: The Bank of New York, Corporate Trust Operations Reorganization Unit, 101 Barclay Street, 7 East, New York, New York 10286, Attention: Corporate Trust Operations Reorganization Unit. Eligible institutions may make requests by facsimile at 212-298-1915.

8

Terms of the New Notes

The new notes will be identical to the old notes except that the new notes are registered under the Securities Act and will not have restrictions on transfer, registration rights or provisions for additional interest and will contain different administrative terms. The new notes will evidence the same debt as the old notes, and the same indenture will govern the new notes and the old notes.

The following summary contains basic information about the new notes and is not intended to be complete. It does not contain all the information that is important to you. For a more complete understanding of the new notes, please refer to the section of this document entitled "Description of the New Notes."

Issuer	Concentra Operating Corporation.
Notes Offered	$155,000,000 aggregate principal amount of 91/8% Senior Subordinated Notes due 2012.
Maturity Date	June 1, 2012.
Interest Payment Dates	June 1 and December 1 of each year, commencing on December 1, 2004.
Guarantees	The new notes will be guaranteed, jointly and severally, on a senior subordinated basis by certain of our current and future domestic subsidiaries. Any future foreign subsidiaries or receivables entities will not guarantee the new notes unless they guarantee other debt of ours or any of our domestic subsidiaries. For the year ended December 31, 2003 and the three months ended March 31, 2004, our non- guarantor subsidiaries generated approximately 8.1% and 8.8% of our consolidated revenue, respectively.
Ranking	The new notes and the guarantees will be our and the applicable guarantors' unsecured senior subordinated obligations. The new notes and the guarantees will rank:
	•	junior to all of our and the guarantors' existing and future senior indebtedness, including the indebtedness under our amended credit facility;
	•	equally with all of our and the guarantors' existing and future senior subordinated indebtedness, including our existing 13% senior subordinated notes and 91/2% senior subordinated notes; and
	•	senior to all of our and the guarantors' existing and future subordinated indebtedness.
	In addition, the new notes will be effectively subordinated to the existing and future liabilities of our subsidiaries that are not providing guarantees.

9

	As of March 31, 2004, after giving pro forma effect to the Transactions (as defined in "Use of Proceeds"), including the borrowing of $70.0 million in term loans in connection with the amendment to our existing credit facility and the use of proceeds thereof, the new notes would have ranked junior to approximately $402.6 million of senior indebtedness, all of which would have been secured, and our non-guarantor subsidiaries would have had approximately $4.6 million of liabilities (excluding intercompany liabilities) that would have been structurally senior to the new notes. See "Description of the New Notes—Subordination."
Optional Redemption	We may redeem all or a portion of the new notes at any time on or after June 1, 2008, at the redemption prices described in this prospectus, plus accrued and unpaid interest to the date of redemption.
	We may redeem all of the new notes at any time prior to June 1, 2008, at a redemption price equal to 100% of the principal amount of the new notes, plus the applicable premium described in this prospectus, plus accrued and unpaid interest to the date of redemption.
	In addition, at any time prior to June 1, 2007, we may redeem up to 35% of the aggregate principal amount of the new notes with the net proceeds of certain equity offerings at the redemption price described in this prospectus, plus accrued and unpaid interest to the date of redemption.
Change of Control	If we experience a change of control, we will be required to make an offer to repurchase the new notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase.
Restrictive Covenants	The indenture governing the new notes will contain covenants that limit our ability, and the ability of our restricted subsidiaries, to:
	•	incur or guarantee additional indebtedness and issue certain preferred stock;
	•	pay dividends or make distributions to our stockholders;
	•	repurchase or redeem capital stock or subordinated indebtedness;
	•	make investments;
	•	create liens;
	•	incur restrictions on the ability of our subsidiaries to pay dividends or to make other payments to us;
	•	enter into transactions with our affiliates; and
	•	merge or consolidate with other companies or transfer all or substantially all of our assets.
	These covenants are subject to important exceptions and qualifications, which are described under "Description of the New Notes—Certain Covenants."
Transfer Restrictions; Absence of a Public Market for the New Notes	The new notes generally will be freely transferable, but will also be new securities for which there will not initially be a market. There can be no assurance as to the development or liquidity of any market for the new notes. We do not intend to apply for a listing of the new notes on any securities exchange or any automated dealer quotation system.

10

Risk Factors

        You should consider carefully the information set forth under the caption "Risk Factors" and all other information set forth in this prospectus before deciding whether to participate in the exchange offer.

Corporate Information

        Our headquarters are located at 5080 Spectrum Drive, Suite 400, West Tower, Addison, Texas 75001 and our telephone number is 1-800-232-3550. Concentra Operating Corporation is a Nevada corporation formed in 1999.

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Summary Consolidated Financial Data

        The following table provides a summary of certain historical consolidated financial data of Concentra Operating Corporation and its subsidiaries. The summary historical consolidated financial data as of and for each of the years ended December 31, 2001, 2002 and 2003 have been derived from our audited consolidated financial statements. The summary historical consolidated financial data as of and for the three months ended March 31, 2003 and 2004 have been derived from our unaudited consolidated condensed financial statements, which were prepared on the same basis as our audited consolidated financial statements and, in the opinion of management, include all adjustments considered necessary for a fair presentation of our financial position and results of operations as of such dates and for such periods. The summary financial data for the twelve months ended March 31, 2004 were derived by adding our financial data for the year ended December 31, 2003 to our unaudited financial data for the three months ended March 31, 2004, and subtracting our unaudited financial data for the three months ended March 31, 2003. We included the summary consolidated financial data for the twelve months ended March 31, 2004 because we believe it provides useful information to investors regarding our current financial trends, which have been impacted by recent changes in general industry and economic conditions, certain increases in our market share and the integration of our recent acquisitions. The results from any interim period are not necessarily indicative of the results that may be expected for a full fiscal year. Historical results are not necessarily indicative of the results to be expected in the future.

        The information presented below should be read in conjunction with "Use of Proceeds," "Capitalization," "Selected Historical Consolidated Financial Data," "Management's Discussion and

12

Analysis of Financial Condition and Results of Operations" and the historical consolidated financial statements included elsewhere in this prospectus.

												Three Months Ended March 31,
			Years Ended December 31,
																		Twelve Months Ended March 31, 2004
			2001			2002			2003			2003			2004
			(dollars in thousands)
Statement of Operations Data:
Revenue:
	Health Services		$	443,321		$	471,968		$	511,387		$	118,521		$	134,257		$	527,123
	Network Services			185,267			230,299			260,159			61,730			73,013			271,442
	Care Management Services			228,315			296,783			279,142			71,900			64,623			271,865
		Total revenue		856,903			999,050			1,050,688			252,151			271,893			1,070,430
Cost of services:
	Health Services			375,565			406,164			421,663			101,373			111,493			431,783
	Network Services			110,187			138,218			147,350			34,767			41,552			154,135
	Care Management Services			200,166			267,054			248,312			63,666			57,128			241,774
		Total cost of services		685,918			811,436			817,325			199,806			210,173			827,692
Gross profit				170,985			187,614			233,363			52,345			61,720			242,738
General and administrative expenses				81,631			106,222			122,949			28,538			32,038			126,449
Amortization of intangibles				15,746			3,776			3,933			1,035			850			3,748
Unusual charges (gains)				546			(1,200	)		—			—			—			—
Charges for acquisition of affiliate				5,519			—			—			—			—			—
Operating income				67,543			78,816			106,481			22,772			28,832			112,541
Interest expense, net				66,398			63,582			56,318			14,544			13,919			55,693
(Gain) loss on change in fair value of hedging arrangements				13,602			7,589			(9,869	)		(2,187	)		—			(7,682	)
Loss on early retirement of debt				—			7,894			7,837			—			—			7,837
Loss of acquired affiliate, net of tax				5,833			—			—			—			—			—
Other, net				(3,640	)		(1,275	)		2,692			647			821			2,866
Income (loss) before taxes and cumulative effect of accounting change				(14,650	)		1,026			49,503			9,768			14,092			53,827
Provision for income taxes				3,757			10,634			6,214			2,895			5,919			9,238
Income (loss) before cumulative effect of accounting change				(18,407	)		(9,608	)		43,289			6,873			8,173			44,589
Cumulative effect of accounting change, net of tax				—			—			—			—			—			—
Net income (loss)			$	(18,407	)	$	(9,608	)	$	43,289		$	6,873		$	8,173		$	44,589
Other Financial Data:
Cash flows provided by (used in):
	Operating activities		$	79,451		$	55,966		$	113,588		$	(648	)	$	(1,662	)	$	112,574
	Investing activities			(151,908	)		(36,285	)		(35,885	)		(7,154	)		(5,332	)		(34,063	)
	Financing activities			66,325			(9,629	)		(54,084	)		(1,862	)		(2,497	)		(54,719	)

	At December 31,						At March 31, 2004
	2001		2002		2003		Actual		As Adjusted(1)
	(dollars in thousands)
Balance Sheet Data:
Working capital	$	80,747	$	102,459	$	117,427	$	135,540	$	97,783
Total assets		853,227		850,691		874,992		862,413		837,650
Total debt		562,481		479,826		659,234		656,980		737,330
Total stockholder's equity (deficit)		86,705		170,716		44,010		52,563		(61,380	)

(1)

This balance sheet data has been adjusted to give effect to the Transactions as if they had occurred on March 31, 2004. The adjusted balance sheet data is unaudited and has been derived from our consolidated balance sheet, and, in the opinion of management, includes all adjustments considered necessary for a fair presentation of the adjusted balance sheet data. The adjustments are based upon available information and certain assumptions we believe are reasonable. The adjusted balance sheet data is presented for informational purposes only and does not purport to represent what our financial condition actually would have been had the Transactions occurred on March 31, 2004 or to project our financial position as of any future date.

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RISK FACTORS

The value of an investment in the new notes will be subject to the significant risks inherent in our business. You should carefully consider the risks and uncertainties described below and other information included in this prospectus before deciding whether to participate in the exchange offer. If any of the events described below occur, our business and financial results and our ability to make payment obligations pursuant to the new notes could be adversely affected in a material way. Additional risks and uncertainties, including those that are not yet identified or that we currently believe are immaterial, may also adversely affect our business, financial condition or results of operations.

Risks Relating to Our Indebtedness

Our significant indebtedness could limit our ability to successfully operate our business and prevent us from fulfilling our obligations under the new notes.

        We are substantially leveraged and will continue to have significant indebtedness following this offering. As of March 31, 2004, on a pro forma basis after giving effect to the Transactions, we would have had total debt outstanding of approximately $737.3 million, or approximately 109.1% of our total capitalization. In addition, we would have had approximately $18.1 million of letters of credit outstanding and approximately $81.9 million of additional revolving loan availability under our amended credit facility.

        Our substantial level of indebtedness increases the possibility that we may not generate cash sufficient to pay, when due, interest on or other amounts due in respect of our indebtedness. The degree to which we are leveraged could have other important consequences to you, including the following:

•

we must dedicate a substantial portion of our cash flows from operations to the payment of our indebtedness, reducing the funds available for our operations or to pursue other opportunities;



•

some of our borrowings are, and will continue to be, at variable rates of interest, which may result in higher interest expense in the event of increases in interest rates;



•

we may be more highly leveraged than some of our competitors, which could place us at a competitive disadvantage;



•

our degree of leverage may make us more vulnerable to a downturn in our business or the economy generally;



•

our debt level could limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and



•

our leverage may impair our ability to borrow money in the future.

Despite our current levels of indebtedness, we still may be able to incur substantially more debt. This could further increase the risks described above.

        We may be able to incur substantial additional indebtedness in the future. Although the terms of our financing arrangements, including the indentures governing the new notes, the old notes and our existing 9¹/2% senior subordinated notes, our amended credit facility and our parent's bridge loan facility, contain restrictions on the incurrence of indebtedness, these restrictions are subject to a number of qualifications and exceptions, and we could incur substantial indebtedness in compliance with these restrictions. Furthermore, these restrictions do not prevent us from incurring obligations that do not constitute indebtedness, as defined in the applicable agreement. If new debt is added to our current debt levels, the risks described above could intensify. See "Capitalization," "Selected Historical

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Consolidated Financial Data," "Description of Other Indebtedness" and "Description of the New Notes."

To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control.

        Our ability to make payments on and refinance our indebtedness, including the new notes, and to fund planned capital expenditures will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. As of March 31, 2004, on a pro forma basis after giving effect to the Transactions, we would have had a ratio of earnings to fixed charges of 1.8x. We cannot assure you that our business will generate sufficient cash flow from operations, that we will realize operating improvements on schedule or that future borrowings will be available to us under our new credit facility in an amount sufficient to enable us to pay our indebtedness, including the new notes, or to fund our other liquidity needs. If we are unable to satisfy our debt obligations, we may have to undertake alternative financing plans, such as refinancing or restructuring our indebtedness, selling assets, reducing or delaying capital investments or seeking to raise additional capital. We cannot assure you that any refinancing or restructuring would be possible, that any assets could be sold or, if sold, the timing of the sales and the amount of proceeds realized from those sales, or that additional financing could be obtained on acceptable terms.

Risks Relating to the Exchange Offer and the New Notes

If you do not properly tender your old notes, you will continue to hold unregistered old notes and your ability to transfer old notes will be adversely affected.

        We will only issue new notes in exchange for old notes that you timely and properly tender. Therefore, you should allow sufficient time to ensure timely tender of the old notes and carefully follow the instructions on how to tender your old notes. Neither we nor the exchange agent are required to tell you of any defects or irregularities with respect to your tender of the old notes.

        If you do not exchange your old notes for the new notes pursuant to the exchange offer, the old notes you hold will continue to be subject to the existing transfer restrictions. In general, you may not offer or sell the old notes except under an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. We do not plan to register old notes under the Securities Act unless our registration rights agreement with the initial purchasers of the old notes requires us to do so. Further, if you continue to hold any old notes after the exchange offer is consummated, you may not be able to sell the old notes because there will be fewer old notes outstanding.

Your right to receive payments on the new notes is junior to most of our existing indebtedness and possibly most of our future borrowings. Further, the subsidiary guarantees will be junior to most of the subsidiary guarantors' existing indebtedness and possibly to all of their future borrowings. Additionally, claims of creditors of our non-guarantor subsidiaries will generally have priority with respect to the assets and earnings of those subsidiaries over claims of holders of the new notes.

        The new notes and the subsidiary guarantees will be subordinated to the prior payment in full of our and the subsidiary guarantors' current and future senior debt. As of March 31, 2004, on a pro forma basis after giving effect to the Transactions, we would have had approximately $402.6 million of senior debt outstanding and would have had approximately $81.9 million of additional revolving loan availability under our amended credit facility. Because the new notes are unsecured and because of the subordination provisions of the new notes, upon any distribution to our creditors or the creditors of any of our subsidiary guarantors in a bankruptcy or similar proceeding relating to us or any subsidiary guarantor, the holders of our senior indebtedness and the senior indebtedness of our subsidiary

15

guarantors will be entitled to be paid in full in cash before any payment may be made with respect to the new notes or any subsidiary guarantees. We cannot assure you that sufficient assets will remain after all these payments have been made to make any payments on the new notes, including payments of interest. Also, because of these subordination provisions, you may recover less ratably than our other creditors in a bankruptcy or similar proceeding, including trade creditors. In addition, all payments on the new notes and any subsidiary guarantees will be blocked in the event of a payment default on Designated Senior Indebtedness (as defined in "Description of the New Notes—Certain Definitions"), which includes borrowings under our amended credit facility, and may be prohibited for up to 179 consecutive days each year in the event of certain non-payment defaults on Designated Senior Indebtedness. See "Description of the New Notes—Subordination."

        In addition, not all of our subsidiaries are guaranteeing the new notes, and these non-guarantor subsidiaries are permitted to incur additional indebtedness under the indenture. Claims of creditors of our non-guarantor subsidiaries, including trade creditors, secured creditors and creditors holding indebtedness or guarantees issued by those subsidiaries, will generally have priority with respect to the assets and earnings of those subsidiaries over the claims of our creditors, including holders of the new notes, even if the obligations of those subsidiaries do not constitute senior indebtedness. As of March 31, 2004, on a pro forma basis after giving effect to the Transactions, our non-guarantor subsidiaries would have had approximately $4.6 million of liabilities (excluding intercompany liabilities) and would have held approximately 6.7% of our consolidated assets. For the year ended December 31, 2003 and the three months ended March 31, 2004, our non-guarantor subsidiaries generated approximately 8.1% and 8.8% of our consolidated revenue, respectively.

        Our historical consolidated financial information included in this prospectus, our pro forma financial information included in this prospectus and our historical financial statements included in this prospectus and filed with the SEC as part of our quarterly and annual reports are presented on a consolidated basis, including both our guarantor and non-guarantor subsidiaries.

The new notes are not secured by our assets nor those of our subsidiary guarantors, and the lenders under our amended credit facility will be entitled to remedies available to a secured lender, which gives them priority over you to collect amounts they are due.

        In addition to being subordinated to all our existing and future senior debt, the new notes and the subsidiary guarantees will not be secured by any of our assets. Our obligations under our amended credit facility are secured by, among other things, substantially all of the personal property assets of each of our existing and subsequently acquired or organized material domestic subsidiaries (and, to the extent no adverse tax consequences will result, foreign subsidiaries). If we become insolvent or are liquidated, or if there is a default under our amended credit facility, the lenders under our amended credit facility will be entitled to exercise the remedies available to a secured lender under applicable law (in addition to any remedies that may be available under documents pertaining to our amended credit facility). Upon the occurrence of any default under our amended credit facility (and even without accelerating the indebtedness under our amended credit facility), the lenders may be able to prohibit the payment of the new notes and subsidiary guarantees either by limiting our ability to access our cash flow or under the subordination provisions contained in the indenture governing the new notes. Moreover, the assets that secure our amended credit facility or any other secured debt will not be available to you in the event of a bankruptcy, liquidation or similar circumstance of the related obligor until we have fully repaid all amounts due under our secured debt. See "Description of Other Indebtedness" and "Description of the New Notes."

The terms of our amended credit facility, our parent's bridge loan agreement and the indentures, governing our 9¹/2% senior subordinated notes, the old notes and the new notes impose many restrictions on us.

        The terms of our amended credit facility, our parent's bridge loan agreement and the indentures governing our 9¹/2% senior subordinated notes, the old notes and the new notes contain, and any future

16

indebtedness of ours would likely contain, a number of restrictive covenants that will impose significant operating and financial restrictions on us, including restrictions on our ability to, among other things:

•

incur or guarantee additional indebtedness or issue certain preferred stock;



•

pay dividends or make distributions to our stockholders;



•

repurchase or redeem capital stock or subordinated indebtedness;



•

make investments;



•

create liens;



•

enter into transactions with our affiliates;



•

enter into sale and leaseback transactions; and



•

merge or consolidate with other companies or transfer all or substantially all of our assets.

        Our amended credit facility and our parent's bridge loan agreement require us to maintain certain financial ratios, which become more restrictive over time. As a result of these covenants and ratios, we are limited in the manner in which we conduct our business, and may be unable to engage in favorable business activities or finance future operations or capital needs. Accordingly, these restrictions may limit our ability to successfully operate our business and prevent us from fulfilling our obligations under the new notes.

        A failure to comply with the covenants or financial ratios contained in our amended credit facility and our parent's bridge loan agreement could lead to an event of default. In the event of any default under our amended credit facility or our parent's bridge loan agreement, the lenders under our amended credit facility and our parent's bridge loan agreement are not required to lend any additional amounts to us and could elect to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be due and payable, require us to apply all of our available cash to repay these borrowings or prevent us from making debt service payments on our new notes, any of which could result in an event of default under the new notes. An acceleration of indebtedness under the amended credit facility or our parent's bridge loan agreement would also likely result in an event of default under the terms of any other financing arrangement we had outstanding at the time, including with respect to these notes and our existing 9¹/2% senior subordinated notes. If any or all of our debt were to be accelerated, there can be no assurance that our assets would be sufficient to repay such indebtedness in full. See "Description of Other Indebtedness" and "Description of the New Notes."

        Consummation of the Transactions and the application of net proceeds therefrom as described under "Use of Proceeds" substantially depleted the accumulated basket for restricted payments under our existing indentures. Accordingly, our ability to pay dividends, repurchase our capital stock and make certain other restricted payments, including investments in minority interests, will be limited until we accumulate additional availability under the terms of the covenants governing restricted payments under our indentures. However, over time we may accumulate a meaningful basket for such restricted payments, including the payment of dividends. For example, the dividend paid to our parent, Concentra Inc., in connection with the Transactions was allowed under the terms of the indenture governing our existing 9¹/2% senior subordinated notes pursuant to an accumulated basket that resulted primarily from capital contributions from our parent of cash and other property (specifically, acquired businesses and deferred tax benefits), as well as from cumulative net income and net cash proceeds from the sale of our common stock. In the future, if we accumulate such a basket and otherwise receive the necessary consents from the lenders under our amended credit facility, we may be able to make material restricted payments.

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We may be unable to repay or repurchase the new notes.

        At maturity of the new notes, the entire outstanding principal amount of the new notes, together with accrued and unpaid interest, will become due and payable and we may not have the funds to fulfill these obligations or the ability to arrange for additional financing. If the maturity date occurs at a time when other arrangements prohibit us from repaying the new notes, we would try to obtain waivers of such prohibitions from the lenders under those arrangements, or we could attempt to refinance the borrowings that contain the restrictions. If we could not obtain the waivers or refinance these borrowings, we would be unable to repay the new notes.

        Further, if we experience a change of control, we will be required to make a change of control offer to repurchase the new notes. A change of control would also constitute an event of default under our amended credit facility, providing the lenders under our amended credit facility with the right to accelerate our borrowings under the facility and to prevent payments in respect of the new notes until outstanding borrowings under our amended credit facility were repaid in full. In the event of a change of control, we may not have sufficient funds to purchase all the new notes and to repay the amounts outstanding under our amended credit facility.

A financial failure by us or any subsidiary guarantor may hinder the receipt of payment on the new notes, as well as the enforcement of remedies under the subsidiary guarantees.

        An investment in the new notes, as in any type of security, involves insolvency and bankruptcy considerations that investors should carefully consider. If we or any of our subsidiary guarantors become a debtor subject to insolvency proceedings under the bankruptcy code, it is likely to result in delays in the payment of the new notes and in the exercise of enforcement remedies under the new notes or the subsidiary guarantees. Provisions under the bankruptcy code or general principles of equity that could result in the impairment of your rights include the automatic stay, avoidance of preferential transfers by a trustee or debtor-in-possession, substantive consolidation, limitations on collectibility of unmatured interest or attorneys' fees and forced restructuring of the new notes.

A financial failure by us, our parent, our subsidiaries or any other entity in which we have an interest may result in the assets of any or all of those entities becoming subject to the claims of all creditors of those entities.

        A financial failure by us, our parent, our subsidiaries or any other entity in which we have an interest could affect payment of the new notes if a bankruptcy court were to "substantively consolidate" us, our parent and our subsidiaries, including entities in which we have an interest but whose financial statements are not consolidated with ours. If a bankruptcy court substantively consolidated us, our parent and our subsidiaries, including entities in which we have an interest but whose financial statements are not consolidated with ours, the assets of each entity would be subject to the claims of creditors of all entities. This would expose holders of the new notes not only to the usual impairments arising from bankruptcy, but also to potential dilution of the amount ultimately recoverable because of the larger creditor base. The indenture does not limit the ability of entities whose financial statements are not consolidated with ours to incur debt, which could increase this risk. Furthermore, forced restructuring of the new notes could occur through the "cram-down" provision of the bankruptcy code. Under this provision, the new notes could be restructured over your objections as to their general terms, primarily interest rate and maturity.

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The interests of Welsh Carson, which owns a large percentage of the common stock of our parent, may not be aligned with the interests of the holders of the new notes.

        Currently, Welsh, Carson, Anderson & Stowe VIII, L.P. and its affiliated entities beneficially own approximately 64% of the outstanding common stock of our parent, Concentra Inc. Accordingly, Welsh Carson will be able to exert significant influence over:

•

the election of our parent's board of directors;



•

our parent's management and policies; and



•

the outcome of any corporate transaction or other matter submitted to the stockholders of our parent for approval, including mergers, consolidations and the sale of all or substantially all of our parent's assets.

        These stockholders will also be able to exert significant influence over a change in control of our parent or an amendment to its certificate of incorporation or bylaws. Their interests may conflict with the interests of the holders of the notes, and they may take actions affecting us with which you disagree. See "Security Ownership of Certain Beneficial Owners and Management."

Federal and state statutes allow courts, under specific circumstances, to void subsidiary guarantees and require holders of the new notes to return payments received from subsidiary guarantors.

        Certain of our existing and future domestic subsidiaries will guarantee our obligations under the new notes. Under the federal bankruptcy law and comparable provisions of state fraudulent transfer laws, a subsidiary guarantee could be voided or claims in respect of a subsidiary guarantee could be subordinated to all other debts of that subsidiary guarantor. A court might do so if it found that when the subsidiary entered into its guarantee or, in some states, when payments became due under the guarantee, the subsidiary received less than reasonably equivalent value or fair consideration and either:

•

was insolvent or rendered insolvent by reason of the incurrence;



•

was engaged in a business or transaction for which the subsidiary guarantor's remaining assets constituted unreasonably small capital; or



•

intended to incur, or believed that it would incur, debts beyond its ability to pay the debts as they mature.

        The court might also void a subsidiary guarantee, without regard to the above factors, if the court found that the subsidiary entered into its guarantee with the actual intent to hinder, delay or defraud its creditors.

        A court would likely find that a subsidiary guarantor did not receive reasonably equivalent value or fair consideration for its guarantee if the subsidiary guarantor did not substantially benefit directly or indirectly from the issuance of the new notes. If a court were to void a subsidiary guarantee, holders of the new notes would no longer have a claim against the subsidiary guarantor. Sufficient funds to repay the new notes may not be available from other sources, including the remaining subsidiary guarantors, if any. In addition, the court might direct holders of the new notes to repay any amounts that they already received from the subsidiary guarantor.

        The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a subsidiary guarantor would be considered insolvent if:

•

the sum of its debts, including contingent liabilities, were greater than the fair saleable value of all of its assets;

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•

the present fair saleable value of its assets were less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or



•

it could not pay its debts as they become due.

        Each subsidiary guarantee contains a provision intended to limit the subsidiary guarantor's liability to the maximum amount that it could incur without causing the incurrence of obligations under its subsidiary guarantee to be a fraudulent transfer. This provision may not be effective to protect the subsidiary guarantees from being voided under fraudulent transfer law.

If an active trading market does not develop for the new notes, you may be unable to sell the new notes or to sell the new notes at a price that you deem sufficient.

        The new notes will be new securities for which there currently is no established trading market. Although we will register the new notes under the Securities Act, we do not intend to apply for listing of the new notes on any securities exchange or for quotation of the new notes in any automated dealer quotation system. In addition, although the initial purchasers of the old notes have informed us that they intend to make a market in the new notes after the exchange offer, the initial purchasers may stop making a market at any time. Finally, if a large number of holders of old notes do not tender old notes or tender old notes improperly, the limited amount of new notes that would be issued and outstanding after we consummate the exchange offer could adversely affect the development of a market for these new notes. We do not presently intend to list the new notes on any securities exchange.

Risks Related to Our Business

If we are unable to increase our market share among national and regional insurance carriers and large, self-funded employers, our results may be adversely affected.

        Our business strategy and future success depend in part on our ability to capture market share with our cost containment services as national and regional insurance carriers and large, self-funded employers look for ways to achieve cost savings. We cannot assure you that we will successfully market to these insurance carriers and employers or that they will not resort to other means to achieve cost savings. Additionally, our ability to capture additional market share may be adversely affected by the decision of potential customers to perform services offered by us internally instead of outsourcing the provision of such services. Furthermore, we may not be able to demonstrate sufficient cost savings to potential or current customers to induce them not to provide comparable services internally or to accelerate efforts to provide such services internally. If the demand for our cost containment services does not increase, our results may be adversely affected.

If we lose a significant customer, our results may be adversely affected.

        Our results may decline if we lose one or more significant customers. Most of our customer contracts permit either party to terminate without cause. If one or more significant customers terminates, or does not renew or extend, their contract with us we could be adversely affected. Many organizations in the insurance industry are consolidating, which could result in the loss of one or more of our significant customers through a merger or acquisition. Several large insurers have commenced bankruptcy proceedings in the past few years, and one or more of our significant customers could file for bankruptcy. Additionally, we could lose significant customers due to competitive pricing pressures or other reasons. In particular, we have a number of significant customers in our network services business segment. Due to the significant fixed costs in this business segment, the loss of a significant customer could cause a material decline in our profitability and operating performance. In 2003, our two largest customers provided approximately 4.5% and 3.8%, respectively, of our total consolidated revenue.

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If we are unable to acquire or develop occupational healthcare centers in new markets, our results may be adversely affected.

        If we are not successful in our acquisition and development of occupational healthcare centers, we may miss opportunities to expand our health services segment or to cross-sell our network and care management services. Our ability to acquire additional occupational healthcare centers may be limited by a lack of attractive acquisition opportunities, a shortage of acceptable properties for such use, an inability to buy or lease such properties at an acceptable price or a shortage of qualified medical personnel to staff new facilities in any particular location. In addition, if we fail to expand the reach of our provider network, we will be at a competitive disadvantage and our results may suffer.

Future acquisitions and joint ventures may use significant resources or be unsuccessful.

        As part of our business strategy, we intend to pursue acquisitions of companies providing services that are similar or complementary to those that we provide in our business, and we may enter into joint ventures to operate occupational healthcare centers. These acquisitions and joint venture activities may involve:

•

significant cash expenditures;



•

additional debt incurrence;



•

additional operating losses;



•

increases in intangible assets relating to goodwill of acquired companies; and



•

significant acquisition and joint venture related expenses, all of which could have a material adverse effect on our financial condition and results of operations.

        Additionally, a strategy of growth by acquisitions and joint ventures involves numerous risks, including:

•

difficulties integrating acquired personnel and harmonizing distinct corporate cultures into our current businesses;



•

diversion of our management's time from existing operations; and



•

potential losses of key employees or customers of acquired companies.

        We cannot assure you that we will be able to identify suitable candidates or negotiate and consummate suitable acquisitions or joint ventures. Also, we cannot assure you that we will succeed in obtaining financing for any future acquisitions or joint ventures at a reasonable cost, or that such financing will not contain restrictive covenants that limit our operating flexibility or other unfavorable terms. Even if we are successful in consummating acquisitions or joint ventures, we may not succeed in developing and achieving satisfactory operating results for the acquired businesses. Further, the acquired businesses may not produce returns that justify our related investment. If our acquisitions or joint ventures are not successful, our ability to increase revenue, cash flows and earnings through future growth may be impaired.

If we incur material liabilities as a result of acquiring companies, our operating results could be adversely affected.

        We may acquire companies that have material liabilities for failure to comply with healthcare laws and regulations or for other past activities. Although we maintain various types of business insurance, we do not currently maintain insurance specifically covering any unknown or contingent liabilities that may occur after the acquisition of businesses. In addition, any indemnification provisions we obtain in connection with such acquisitions may not be adequate to protect us, either because of limits or deductibles, or because of the credit quality of the indemnitor. If we incur these liabilities and are not

21

adequately indemnified or insured for them, our operating results and financial condition could be adversely affected.

We are subject to risks associated with acquisitions of intangible assets.

        Our acquisition of occupational healthcare centers and other businesses may result in significant increases in our intangible assets relating to goodwill. We regularly evaluate whether events and circumstances have occurred indicating that any portion of our goodwill may not be recoverable. When factors indicate that goodwill should be evaluated for possible impairment, we may be required to reduce the carrying value of these assets.

If we are unable to manage growth, we may be unable to achieve our expansion strategy.

        The success of our business strategy depends in part on our ability to expand our operations in the future. Our growth has placed, and will continue to place, increased demands on our management, our operational and financial information systems and other resources. Further expansion of our operations will require substantial financial resources and management attention. To accommodate our past and anticipated future growth, and to compete effectively, we will need to continue to implement and improve our management, operational and financial information systems and to expand, train, manage and motivate our workforce. Our personnel, systems, procedures or controls may not be adequate to support our operations in the future. Further, focusing our financial resources and management's attention on the expansion of our operations may negatively impact our financial results. Any failure to implement and improve our management, operational and financial information systems, or to expand, train, manage or motivate our workforce, could reduce or prevent our growth.

If we are unable to leverage our information systems to enhance our outcome-driven service model, our results may be adversely affected.

        To leverage our knowledge of workplace injuries, treatment protocols, outcomes data and complex regulatory provisions related to the workers' compensation market, we must continue to implement and enhance information systems that can analyze our data related to the workers' compensation industry. We are currently engaged in comprehensive technology transformation projects for our operating segments. We have detailed implementation schedules for these projects that require extensive involvement from our operations, technology and finance personnel. Delays or other problems we might encounter in implementation of these projects could adversely affect our ability to deliver streamlined patient care and outcome reporting to our customers.

If our data processing is interrupted or our licenses to use software are revoked, our ability to operate our business could be adversely affected.

        Many aspects of our business are dependent upon our ability to store, retrieve, process and manage data and to maintain and upgrade our data processing capabilities. Interruption of data processing capabilities for any extended length of time, loss of stored data, programming errors or other technological problems could impair our ability to provide certain services. Some of the software that we use in our medical bill review operation is licensed from an independent third-party software company under a nonexclusive license. Termination of this license could disrupt, and could result in our inability to operate, certain aspects of our business, including our ability to review medical bills effectively, thereby adversely affecting our revenue and overall profitability. In addition, there can be no assurance that we would be able to obtain and successfully integrate any replacement software.

If competition increases, our growth and profits may decline.

        The market to provide occupational healthcare services is highly fragmented and competitive. Historically, our primary competitors have typically been independent physicians, hospital emergency departments and hospital-owned or hospital-affiliated medical facilities. As managed care techniques

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continue to gain acceptance in the occupational healthcare marketplace, however, we believe that our competitors will increasingly consist of nationally-focused workers' compensation managed care service companies, specialized provider groups, insurance companies, health management organizations and other significant providers of managed care products. These organizations may be significantly larger than us and have greater financial and marketing resources than we do. We cannot assure you that we will be able to compete effectively against these organizations in the future.

        Because we believe the barriers to entry in our geographic markets are not substantial and our current customers have the flexibility to move easily to new healthcare service providers, the addition of new competitors may occur relatively quickly. Some of our contracted physicians and other healthcare providers may elect to compete with us by offering their own products and services to our customers. In addition, significant merger and acquisition activity has occurred in our industry as well as in industries that supply products to us, such as the hospital, physician, pharmaceutical, medical device and health information systems industries. If competition within our industry intensifies, our ability to retain customers or physicians, or maintain or increase our revenue growth, pricing flexibility, control over medical cost trends and marketing expenses may be compromised.

        The market for our network services and care management services is also fragmented and competitive. Our competitors include national managed care providers, preferred provider networks, smaller independent providers and insurance companies. Companies that offer one or more workers' compensation managed care services on a national basis are our primary competitors. We also compete with many smaller vendors that generally provide unbundled services on a local level, particularly companies that have an established relationship with a local insurance company adjuster. In addition, several large workers' compensation insurance carriers offer managed care services for their customers, either by performance of the services in-house or by outsourcing to organizations like ours. If these carriers increase their performance of these services in-house, our business could be adversely affected. In addition, consolidation in the industry could result in carriers performing more of such services in-house.

If lawsuits against us are successful, we may incur significant liabilities.

        Our affiliated physician associations and some of our employees are involved in the delivery of healthcare services to the public. We charge our customers for these services on a fee-for-service basis. In providing these services, the physicians in our affiliated physician associations, our employees and, consequently, our company are exposed to the risk of professional liability claims. Claims of this nature, if successful, could result in significant liabilities that may exceed our insurance coverage and the financial ability of our affiliated physician associations to indemnify us. Further, plaintiffs have proposed expanded theories of liability against managed care companies as well as against employers who use managed care in workers' compensation cases that, if established and successful, could discourage the use of managed care in workers' compensation cases and reduce the cases referred to us for treatment or the rates we charge for our services.

        Through our network services and care management services, we make recommendations about the appropriateness of providers' proposed medical treatment plans for patients throughout the country. As a result, we could be subject to charges arising from any adverse medical consequences. Although plaintiffs have not to date subjected us to any claims or litigation related to the grant or denial of claims for payment of benefits or allegations that we engage in the practice of medicine or the delivery of medical services, we cannot assure you that plaintiffs will not make those types of claims in future litigation. We cannot assure you that our insurance will provide sufficient coverage or that insurance companies will make insurance available at a reasonable cost to protect us from significant future liability.

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The increased costs of professional and general liability insurance could have an adverse effect on our profitability.

        The cost of commercial professional and general liability insurance coverage has risen significantly in the past several years, and this trend could continue. In addition, if we were to suffer a material loss, our costs could increase over and above the general increases in the industry. In an effort to contain the costs associated with our professional liability coverage, we are considering future use of a captive insurance program. Under this program we would retain more risk for professional liability costs, including settlements and claims expenses, than under our current third party coverage. If the costs associated with insuring our business continue to increase, it could adversely affect our business.

Our senior management has been key to our growth, and we may be adversely affected if we lose any member of our senior management.

        We are highly dependent on our senior management. Although we have employment agreements with each member of our senior management, we do not maintain "key man" life insurance policies on any of them. Because our senior management has contributed greatly to our growth, the loss of key management personnel or our inability to attract, retain and motivate sufficient numbers of qualified management personnel could have a material adverse effect on us.

Risks Related to Our Industry

If the average annual growth in nationwide employment does not offset declines in the frequency of workplace injuries and illnesses, then the size of our market may decline and adversely affect our ability to grow.

        Approximately 65% of our revenue in 2003 was generated from the treatment or review of workers' compensation claims. The rate of injuries that occur in the workplace has decreased over time. Although the overall number of people employed in the workplace has generally increased over time, this increase has only partially offset the declining rate of injuries and illnesses. Our business model is based, in part, on our ability to expand our relative share of the market for the treatment and review of claims for workplace injuries and illnesses. If nationwide employment does not increase or experiences periods of decline, our ability to expand our revenue and earnings could be adversely affected. Additionally, if workplace injuries and illnesses continue to decline at a greater rate than the increase in total employment, the number of claims in the workers' compensation market will decrease and could adversely affect our business.

We operate in an industry that is subject to extensive federal, state and local regulation, and changes in law and regulatory interpretations could reduce our revenue and profitability.

        The healthcare industry is subject to extensive federal, state and local laws, rules and regulations relating to, among others:

•

payment for services;



•

conduct of operations, including fraud and abuse, anti-kickback prohibitions, physician self-referral prohibitions and false claims;



•

operation of provider networks and provision of case management services;



•

protection of patient information;



•

business, facility and professional licensure, including surveys, certification and recertification requirements;



•

corporate practice of medicine and fee splitting prohibitions;



•

ERISA health benefit plans; and

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•

medical waste disposal and environmental protection.

        In recent years, Congress and some state legislatures have introduced an increasing number of proposals to make significant changes in the healthcare system. Changes in law and regulatory interpretations could reduce our revenue and profitability, restrict our existing operations, limit the expansion of our business or impose new compliance requirements on our industry.

        Recently, both federal and state government agencies have increased civil and criminal enforcement efforts relating to the healthcare industry. This heightened enforcement activity increases our potential exposure to damaging lawsuits, investigations and other enforcement actions. Any such action could distract our management and adversely affect our business reputation and profitability.

        In the future, different interpretations or enforcement of laws, rules and regulations governing the healthcare industry could subject our current business practices to allegations of impropriety or illegality or could require us to make changes in our facilities, equipment, personnel, services and capital expenditure programs, increase our operating expenses and distract our management. If we fail to comply with these extensive laws and government regulations, we could become ineligible to receive government program payments, suffer civil and criminal penalties or be required to make significant changes to our operations. In addition, we could be forced to expend considerable resources to respond to an investigation or other enforcement action under these laws or regulations.

Healthcare providers are becoming increasingly resistant to the application of certain healthcare cost containment techniques, which could cause revenue from our cost containment operations to decrease.

        Healthcare providers have become more active in their efforts to minimize the use of certain cost containment techniques and are engaging in litigation to avoid application of certain cost containment practices. Recent litigation between healthcare providers and insurers has challenged certain insurers' claims adjudication and reimbursement decisions. Although these lawsuits do not directly involve us or any services we provide, these cases could affect the use by insurers of certain cost containment services that we provide and could result in a decrease in revenue from our cost containment business.

Federal regulators have increased their antitrust enforcement activity with respect to certain provider relationships, which could adversely affect our network services operations.

        Healthcare providers often designate an independent third party to handle communications with healthcare payors regarding provider contracts, commonly referred to as a "messenger model." Inappropriate uses of the "messenger model" have recently been the subject of increased antitrust enforcement activity by the Federal Trade Commission and the U.S. Department of Justice. While we are not involved in any enforcement or other action regarding our use of the messenger model, and while we believe that our use of the messenger model complies with applicable law, these enforcement actions could adversely affect our network services operations.

The managed care industry receives significant negative publicity, which could adversely affect our profitability.

        The managed care industry receives significant negative publicity and has been the subject of large jury awards. This publicity has been accompanied by increased litigation, legislative activity, regulation and governmental review of industry practices. These factors may:

•

adversely affect our ability to market our products or services;



•

require us to change our products and services; or



•

increase the regulatory burdens under which we operate.

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If healthcare reform intensifies competition and reduces the costs associated with workers' compensation claims, the rates we charge for our services could decrease, which could negatively impact our financial performance.

        Within the past few years, several states have experienced a decrease in the number of workers' compensation claims and the total value of claims, which we primarily attribute to:

•

improvements in workplace safety;



•

changes in the type and composition of jobs;



•

intensified efforts by payors to manage and control claim costs;



•

improved risk management by employers; and



•

legislative reforms that have resulted in a corresponding reduction in workers' compensation insurance premiums.

        Future healthcare reform could decrease the number of claims, further increase competition or decrease the size of the market, forcing us to reduce the rates we charge for our services to compete effectively. Any rate reductions would have an adverse effect on our revenue and profitability.

If the utilization by healthcare payors of early intervention services, including our occupational healthcare, first notice of loss or injury and telephonic case management services, continues to increase, the revenue from our later stage network and care management services may be adversely affected.

        The performance of early intervention services, including injury occupational healthcare, first notice of loss or injury and telephonic case management services, often results in a decrease in the average length of, and the total costs associated with, a healthcare claim. By successfully intervening at an early stage in a claim, the need for additional cost containment services for that claim can often be reduced or even eliminated. As healthcare payors continue to increase their utilization of early intervention services, the revenue from our later stage network and care management services may decrease.

Future cost containment initiatives undertaken by state workers' compensation commissions and other third-party payors may adversely affect our financial performance.

        Initiatives undertaken by state workers' compensation commissions, major insurance companies and other payors to contain both workers' compensation and non-injury occupational healthcare costs may adversely affect the financial performance of our occupational healthcare centers. State workers' compensation commissions seek to control healthcare costs by reducing prescribed rates of reimbursements. Insurance companies and other third-party payors contract with hospitals and other healthcare providers to obtain services on a discounted basis. We believe that these cost containment measures may continue and, if so, would limit reimbursements for healthcare services that we provide to our customers. If state workers' compensation commissions or payors from whom we receive payments reduce the amounts that they pay us for healthcare services, our revenue, profitability and financial condition could be adversely affected.

Workers' compensation reform legislation in California may adversely affect our financial performance.

        As part of a larger workers' compensation reform package, effective January 1, 2005, California will allow parties who participate in collectively bargained alternative dispute resolution programs to provide twenty-four hour integrated healthcare, in which the coverage of traditional employer-sponsored health plans is combined with workers' compensation coverage to provide a single insurance plan and point of entry for work-related and non-work-related health problems. Incorporating workers' compensation coverage into conventional health plans may adversely affect the market for our services and increase the number of our competitors.

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Changes in state laws, rules and regulations, including those governing the corporate practice of medicine, fee splitting, workers' compensation and insurance laws, rules and regulations, may affect our ability to expand all of our operations into other states and, therefore, our profitability.

        State laws, rules and regulations relating to our business vary widely from state to state, and courts and regulatory agencies have seldom interpreted them in a way that provides guidance with respect to our business operations. Changes in these laws, rules and regulations may adversely affect our profitability. In addition, the application of these laws, rules and regulations may affect our ability to expand all of our operations into new states.

        Workers' compensation laws, rules and regulations are complex and vary from state to state. These laws, among other things, establish requirements for physicians providing care to workers' compensation patients, set reimbursement levels for healthcare providers, limit or restrict the rights of employers to direct an injured employee to a specific provider and require licensing of businesses that provide medical review services. Changes in these laws, rules and regulations could adversely affect our profitability and our ability to expand our operations into new markets.

        Most states limit the practice of medicine to licensed individuals or professional organizations comprised of licensed individuals. Many states also limit the scope of business relationships between business entities like us and licensed professionals and professional organizations, particularly with respect to fee splitting between a licensed professional or professional organization and an unlicensed person or entity. Although we believe that our arrangements with our affiliated physicians and physician associations comply with applicable laws, a government agency charged with enforcement of these laws, or a private party, might assert a contrary position. If our arrangements with these physicians and physician associations were deemed to violate state corporate practice of medicine or fee splitting laws, or if new laws are enacted rendering our arrangements illegal, we and/or our affiliated physician groups would be subject to penalties and/or we could be required to restructure these arrangements, which could result in significant costs to us and affect our profitability.

        In addition, state agencies regulate the managed care, auto insurance and workers' compensation industries. Many states have enacted laws that require:

•

licensing, certification and approval of businesses that provide medical review and utilization review services;



•

certification of managed care plans;



•

managed care entities to provide reasonable access and availability of specified types of healthcare providers, care management and utilization review, return-to-work programs, quality assurance programs, the use of treatment guidelines and grievance procedures;



•

licensing of provider networks; and



•

the prompt payment of claims.

Changes in these laws, rules and regulations may also adversely affect our business and profitability.

New federal and state legislative and regulatory initiatives relating to patient privacy and new federal legislative and regulatory initiatives relating to the use of standard transaction code sets have required us and will continue to require us to expend substantial sums of money on the acquisition and implementation of new information systems, which could negatively impact our profitability.

        There are currently numerous legislative and regulatory initiatives at both the state and federal levels that address patient privacy concerns. In particular, the Health Insurance Portability and Accountability Act of 1996, commonly referred to as "HIPAA," contains provisions that may require us to implement expensive new computer systems and business procedures designed to protect the privacy and security of each of our patient's individual health information. Compliance with the privacy

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standards was required by April 14, 2003. The privacy standards require covered entities to implement certain procedures to govern the use and disclosure of protected health information and to safeguard such information from inappropriate access, use or disclosure. Protected health information includes individually identifiable health information, such as an individual's medical records, transmitted or maintained in any format, including paper and electronic records.

        The final security rule was effective on April 21, 2003, and compliance with the security standards is required by April 21, 2005. This rule establishes security standards that apply to covered entities. The security standards are designed to protect health information against reasonably anticipated threats or hazards to the security or integrity of the information and to protect the information against unauthorized use or disclosure.

        The administrative simplification provisions of HIPAA require the use of uniform electronic data transmission standards for healthcare claims and payment transactions submitted or received electronically. We believe that we were in substantial compliance with the transaction and code set standards as of the applicable date for our compliance, October 16, 2003. The transaction standards require us to use standard code sets when we transmit health information in connection with certain transactions, including health claims and health payment and remittance advice.

        Compliance with these standards has required significant commitment and action by us and we expect that it will continue to do so. Because the final regulations for the privacy standards have been effective for less than one year and final regulations for the security standards have only recently been issued, we cannot predict the total financial impact of the regulations on our operations.

Demand for our network services could be adversely affected if our prospective network services clients are unable to implement the transaction and security standards required under HIPAA.

        For some of our network services, we routinely implement electronic data connections to our customers' locations that enable the exchange of information on a computerized basis. To the extent that our clients do not have sufficient personnel to implement the transaction and security standards required by HIPAA or to work with our information technology personnel in the implementation of our electronic interfaces, the demand for our network services could be adversely affected.

Changes in the federal Anti-Kickback Statute and Stark Law and/or similar state laws, rules and regulations could adversely affect our profitability and ability to expand our operations.

        The federal Anti-Kickback Statute prohibits the offer, payment, solicitation or receipt of any form of remuneration in return for referring items or services payable by Medicare, Medicaid or any other federally funded healthcare program. Additionally, the Anti-Kickback Statute prohibits any form of remuneration in return for purchasing, leasing or ordering or arranging for or recommending the purchasing, leasing or ordering of items or services payable by Medicare, Medicaid or any other federally funded healthcare program. The Anti-Kickback Statute is very broad in scope and existing case law and regulations have not uniformly or definitively interpreted many of its provisions. Violations of the Anti-Kickback Statute may result in substantial civil or criminal penalties, including imprisonment of up to five years, criminal fines of up to $25,000, civil monetary penalties of up to $50,000 for each violation plus three times the remuneration involved or the amount claimed and exclusion from participation in the Medicare and Medicaid programs.

        The federal physician self-referral law, commonly referred to as the Stark Law, prohibits, subject to certain exceptions, a physician from making a referral of a Medicare or Medicaid beneficiary for a "designated health service" to an entity if the physician or an immediate family member has a financial relationship with the entity. Some of the services our affiliated physicians and physician associations provide include designated health services. A violation of the Stark Law could result in repayment of amounts collected for services furnished pursuant to an unlawful referral, the imposition of civil monetary penalties and exclusion from participation in the Medicare and Medicaid programs.

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        Many states have enacted laws similar to the federal Anti-Kickback Statute and, to a lesser degree, the Stark Law. These laws generally apply to both government and non-government health programs. These laws vary from state to state and have infrequently been the subject of judicial or regulatory interpretation.

        Other federal healthcare fraud and abuse laws prohibit healthcare-related fraud, theft or embezzlement, false statements, obstruction of criminal investigations and money laundering. These laws apply to all healthcare programs regardless of whether such programs are funded in whole or in part with federal funds. Violations of these provisions constitute felony criminal offenses, and potential sanctions for such violations include imprisonment and/or substantial fines.

        Although our operations and arrangements with our affiliated physicians and physician associations have been structured in an attempt to comply with the federal Anti-Kickback Statute or the Stark Law or similar state laws, a government agency or a private party could assert a contrary position. Additionally, new federal or state laws may be enacted that would cause our arrangements with our affiliated physicians and physician associations to be illegal or result in the imposition of fines and penalties against us.

        Several class action lawsuits are currently pending that involve claims by certain groups of participating providers that the named insurers have conspired together in breaching their provider contracts and violating certain prompt pay laws. The claims in the lawsuits focus on the payment practices of the insurers and allege that the use of certain cost containment techniques by the insurers is wrongful.

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EXCHANGE OFFER

Purpose and Effect of the Exchange Offer

        In connection with the issuance of the old notes, we entered into a registration rights agreement under which we agreed to:

•

within 90 days after (or if the 90th day is not a business day, the first business day thereafter) the issue date, file a registration statement with the SEC with respect to a registered offer to exchange the old notes for new notes of ours having terms substantially identical in all material respects to the old notes except with respect to transfer restrictions;



•

use our reasonable best efforts to cause the registration statement to be declared effective under the Securities Act within 180 days after (or if the 180th day is not a business day, the first business day thereafter) the issue date;



•

as soon as practicable after the effectiveness of the registration statement, offer the new notes in exchange for surrender of the old notes; and



•

keep the exchange offer open for not less than 30 days (or longer if required by applicable law) after the date notice of the exchange offer is mailed to the holders of the old notes.

        For each old note tendered to us pursuant to the exchange offer, we will issue to the holder of such old note a new note having a principal amount equal to that of the surrendered old note. Interest on each new note will accrue from the last interest payment date on which interest was paid on the old note surrendered in exchange therefor, or, if no interest has been paid on such old note, from the date of its original issue.

        Under existing SEC interpretations, the new notes will be freely transferable by holders other than our affiliates after the exchange offer without further registration under the Securities Act if the holder of the new notes represents to us in the exchange offer that it is acquiring the new notes in the ordinary course of its business, that it has no arrangement or understanding with any person to participate in the distribution of the new notes and that it is not our affiliate, as such terms are interpreted by the SEC; provided, however, that broker-dealers receiving new notes in the exchange offer will have a prospectus delivery requirement with respect to resales of such new notes. The SEC has taken the position that participating broker-dealers may fulfill their prospectus delivery requirements with respect to new notes (other than a resale of an unsold allotment from the original sale of the old notes) with the prospectus contained in the registration statement. Each broker-dealer that receives new notes for its own account in exchange for old notes, where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such new notes. See "Plan of Distribution."

        Under the registration rights agreement, we are required to allow participating broker-dealers and other persons, if any, with similar prospectus delivery requirements to use the prospectus contained in the registration statement in connection with the resale of the new notes for 180 days following the effective date of such registration statement (or such shorter period during which participating broker-dealers are required by law to deliver such prospectus).

        A holder of old notes (other than certain specified holders) who wishes to exchange old notes for new notes in the exchange offer will be required to represent that any new notes to be received by it will be acquired in the ordinary course of its business and that at the time of the commencement of the exchange offer it has no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of the new notes and that it is not our "affiliate," as defined in Rule 405 of the Securities Act, or if it is an affiliate, that it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable.

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        In the event that:

        (1)   any change in law or in applicable interpretations thereof by the staff of the SEC do not permit us to effect an exchange offer; or

        (2)   for any other reason we do not consummate the exchange offer within 220 days of the issue date; or

        (3)   an initial purchaser of the old notes notifies us following consummation of the exchange offer that old notes held by it are not eligible to be exchanged for new notes in the exchange offer; or

        (4)   certain holders are prohibited by law or SEC policy from participating in the exchange offer or may not resell the new notes acquired by them in the exchange offer to the public without delivering a prospectus, and the prospectus contained in the registration statement is not appropriate or available for such resales by it,

then we will, subject to certain exceptions:

        (1)   promptly file a shelf registration statement with the SEC covering resales of the old notes or the new notes, as the case may be;

        (2)   (A) in the case of clause (1) above, use our reasonable best efforts to cause the shelf registration statement to be declared effective under the Securities Act on or prior to the 180th day after the issue date and (B) in the case of clauses (2), (3) or (4) above, use our reasonable best efforts to cause the shelf registration statement to be declared effective under the Securities Act on or prior to the 60th day after the date on which the shelf registration statement is required to be filed; and

        (3)   use our reasonable best efforts to keep the shelf registration statement effective until the earliest of (A) the time when the old or new notes covered by the shelf registration statement can be sold pursuant to Rule 144 without any limitations under clauses (c), (e), (f) and (h) of Rule 144, (B) two years from the issue date and (C) the date on which all old or new notes registered under the shelf registration statement are disposed of in accordance with the shelf registration statement.

        We will, in the event the shelf registration statement is filed, among other things, provide to each holder for whom the shelf registration statement was filed copies of the prospectus which is a part of the shelf registration statement, notify each holder when the shelf registration statement has become effective and take other actions as are required to permit unrestricted resales of the old notes or the new notes, as the case may be. A holder selling old notes or new notes pursuant to the shelf registration statement generally would be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with those sales and will be bound by the provisions of the registration rights agreement that are applicable to the holder (including certain indemnification obligations).

        We may require each holder requesting to be named as a selling security holder to furnish to us such information regarding the holder and the distribution of the new notes or the old notes by the holder as we may from time to time reasonably require for the inclusion of the holder in the shelf registration statement, including requiring the holder to properly complete and execute such selling security holder notice and questionnaires, and any amendments or supplements thereto, as we may reasonably deem necessary or appropriate. We may refuse to name any holder as a selling security holder that fails to provide us with such information.

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        We will pay additional cash interest on the applicable old notes and new notes, subject to certain exceptions:

        (1)   if we fail to file the registration statement with the SEC on or prior to the 90th day after the issue date of the old notes;

        (2)   if the registration statement of which this prospectus forms a part is not declared effective by the SEC on or prior to the 180th day after the issue date of the old notes or if filing the shelf registration statement in the circumstances referenced in clause 2(A) above, the shelf registration statement is not declared effective by the SEC on or prior to the 180th day after the issue date of the old notes;

        (3)   if the exchange offer is not consummated on or before the 40th day after the registration statement is declared effective;

        (4)   if filing the shelf registration statement in the circumstances referenced in clause 2(B) above, we fail to file the shelf registration statement with the SEC on or prior the 60th day after the date on which the obligation to file a shelf registration statement arises;

        (5)   if filing the shelf registration statement in the circumstances referenced in clause 2(B), the shelf registration statement is not declared effective by the SEC on or prior to the 60th day after the date on which the obligation to file the shelf registration statement arises; or

        (6)   after the registration statement or the shelf registration statement, as the case may be, is declared effective, that registration statement ceases to be effective or usable (subject to certain exceptions);

from and including the date on which any registration default shall occur to but excluding the date on which all registration defaults have been cured.

        The rate of the additional interest will be 0.25% per annum for the first 90-day period immediately following the occurrence of a registration default, and this rate will increase by an additional 0.25% per annum with respect to each subsequent 90-day period until all registration defaults have been cured, up to a maximum additional interest rate of 2.0% per annum. We will pay additional interest on regular interest payment dates. The additional interest will be in addition to any other interest payable from time to time with respect to the old notes and the new notes.

        All references in the indenture, in any context, to any interest or other amount payable on or with respect to the old notes or new notes shall be deemed to include any additional interest pursuant to the registration rights agreement.

        If we effect the exchange offer, we will be entitled to close the exchange offer 40 days after its commencement, provided, that we have accepted all old notes theretofore validly tendered in accordance with the terms of the exchange offer.

Resale of New Notes

        Based on no action letters of the SEC staff issued to third parties, we believe that new notes may be offered for resale, resold and otherwise transferred by you without further compliance with the registration and prospectus delivery provisions of the Securities Act if:

•

you are not our "affiliate" within the meaning of Rule 405 under the Securities Act;



•

such new notes are acquired in the ordinary course of your business; and



•

you do not intend to participate in the distribution of such new notes.

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        The SEC, however, has not considered the exchange offer for the new notes in the context of a no action letter, and the SEC may not make a similar determination as in the no action letters issued to these third parties.

        If you tender in the exchange offer with the intention of participating in any manner in a distribution of the new notes:

•

you cannot rely on such interpretations by the SEC staff; and



•

you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction.

        Unless an exemption from registration is otherwise available, any security holder intending to distribute new notes should be covered by an effective registration statement under the Securities Act. This registration statement should contain the selling security holder's information required by Item 507 of Regulation S-K under the Securities Act. This prospectus may be used for an offer to resell, resale or other retransfer of new notes only as specifically described in this prospectus. Only broker-dealers that acquired the old notes as a result of market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives new notes for its own account in exchange for old notes, where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the new notes. Please read the section captioned "Plan of Distribution" for more details regarding the transfer of new notes.

Terms of the Exchange Offer

        Subject to the terms and conditions described in this prospectus and in the letter of transmittal, we will accept for exchange any old notes properly tendered and not withdrawn prior to the expiration date. We will issue new notes in principal amount equal to the principal amount of old notes surrendered under the exchange offer. Old notes may be tendered only for new notes and only in integral multiples of $1,000.

        The exchange offer is not conditioned upon any minimum aggregate principal amount of old notes being tendered for exchange.

        As of the date of this prospectus, $155,000,000 aggregate principal amount of the old notes is outstanding. This prospectus and the letter of transmittal are being sent to all registered holders of old notes. There will be no fixed record date for determining registered holders of old notes entitled to participate in the exchange offer.

        We intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement, the applicable requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC. Old notes not tendered for exchange in the exchange offer will remain outstanding and continue to accrue interest. These old notes will be entitled to the rights and benefits of the holders under the indenture relating to the notes and the registration rights agreement.

        We will be deemed to have accepted for exchange properly tendered old notes when we have given oral or written notice of the acceptance to the exchange agent and complied with the applicable provisions of the registration rights agreement. The exchange agent will act as agent for the tendering holders for the purposes of receiving the new notes from us.

        If you tender old notes in the exchange offer, you will not be required to pay brokerage commissions or fees or, subject to the letter of transmittal, transfer taxes with respect to the exchange of old notes. We will pay all charges and expenses, other than certain applicable taxes described below, in connecting with the exchange offer. It is important that you read the section labeled "—Fees and Expenses" for more details regarding fees and expenses incurred in the exchange offer.

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        We will return any old notes that we do not accept for exchange for any reason without expense to their tendering holder as promptly as practicable after the expiration or termination of the exchange offer.

        Each broker-dealer that receives new notes for its own account in exchange for old notes, where such old notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such new notes. See "Plan of Distribution."

Expiration Date

        The exchange offer will expire at 5:00 p.m. New York City time on                        , 2004, unless, in our sole discretion, we extend it.

Extensions, Delays in Acceptance, Termination or Amendment

        We expressly reserve the right, at any time or various times, to extend the period of time during which the exchange offer is open. We may delay acceptance of any old notes by giving oral or written notice of such extension to their holders. During any such extensions, all old notes previously tendered will remain subject to the exchange offer, and we may accept them for exchange.

        In order to extend the exchange offer, we will notify the exchange agent orally or in writing of any extension. We will notify the registered holders of old notes of the extension no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration date.

        If any of the conditions described below under "-Conditions to the Exchange Offer" have not been satisfied, we reserve the right, in our sole discretion

•

to delay accepting for exchange any old notes,



•

to extend the exchange offer, or



•

to terminate the exchange offer,

by giving oral or written notice of such delay, extension or termination to the exchange agent. Subject to the terms of the registration rights agreement, we also reserve the right to amend the terms of the exchange offer in any manner.

        Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice thereof to the registered holders of old notes. If we amend the exchange offer in a manner that we determine to constitute a material change, we will promptly disclose such amendment by means of a prospectus supplement. The supplement will be distributed to the registered holders of the old notes. Depending upon the significance of the amendment and the manner of disclosure to the registered holders, we will extend the exchange offer if the exchange offer would otherwise expire during such period.

Conditions to the Exchange Offer

        We will not be required to accept for exchange, or exchange any new notes for, any old notes if the exchange offer, or the making of any exchange by a holder of old notes, would violate applicable law or any applicable interpretation of the staff of the SEC. Similarly, we may terminate the exchange offer as provided in this prospectus before accepting old notes for exchange in the event of such a potential violation.

        In addition, we will not be obligated to accept for exchange the old notes of any holder that has not made to us the representations described under "-Purpose and Effect of the Exchange Offer," "-Procedures for Tendering" and "Plan of Distribution" and such other representations as may be

34

reasonably necessary under applicable SEC rules, regulations or interpretations to allow us to use an appropriate form to register the new notes under the Securities Act.

        We expressly reserve the right to amend or terminate the exchange offer, and to reject for exchange any old notes not previously accepted for exchange, upon the occurrence of any of the conditions to the exchange offer specified above. We will give oral or written notice of any extension, amendment, non-acceptance or termination to the holders of the old notes as promptly as practicable.

        These conditions are for our sole benefit, and we may assert them or waive them in whole or in part at any time or at various times in our sole discretion. If we fail at any time to exercise any of these rights, this failure will not mean that we have waived our rights. Each such right will be deemed an ongoing right that we may assert at any time or at various times.

        In addition, we will not accept for exchange any old notes tendered, and will not issue new notes in exchange for any such old notes, if at such time any stop order has been threatened or is in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture relating to the notes under the Trust Indenture Act of 1939.

Procedures for Tendering

        In order to participate in the exchange offer, you must properly tender your old notes to the exchange agent as described below. It is your responsibility to properly tender your notes. We have the right to waive any defects. However, we are not required to waive defects and are not required to notify you of defects in your exchange.

        If you have any questions or need help in exchanging your notes, please call the exchange agent whose address is set forth in "Prospectus Summary—The Exchange Offer—Exchange Agent."

        All of the old notes were issued in book-entry form, and all of the old notes are currently represented by global certificates held for the account of DTC. We have confirmed with DTC that the old notes may be tendered using the Automated Tender Offer Program ("ATOP") instituted by DTC. The exchange agent will establish an account with DTC for purposes of the exchange offer promptly after the commencement of the exchange offer and DTC participants may electronically transmit their acceptance of the exchange offer by causing DTC to transfer their old notes to the exchange agent using the ATOP procedures. In connection with the transfer, DTC will send an "agent's message" to the exchange agent. The agent's message will state that DTC has received instructions from the participant to tender old notes and that the participant agrees to be bound by the terms of the letter of transmittal.

        By using the ATOP procedures to exchange old notes, you will not be required to deliver a letter of transmittal to the exchange agent. However, you will be bound by its terms just as if you had signed it.

        There is no procedure for guaranteed late delivery of the notes.

Determinations under the exchange offer

        We will determine in our sole discretion all questions as to the validity, form, eligibility, time of receipt, acceptance of tendered old notes and withdrawal of tendered old notes. Our determination will be final and binding. We reserve the absolute right to reject any old notes not properly tendered or any old notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular old notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, all defects or irregularities in connection with tenders of old notes must be cured within such time as we shall determine. Although

35

we intend to notify holders of defects or irregularities with respect to tenders of old notes, neither we, the exchange agent nor any other person will incur any liability for failure to give such notification. Tenders of old notes will not be deemed made until such defects or irregularities have been cured or waived. Any old notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned to the tendering holder, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date.

When we will issue new notes

        In all cases, we will issue new notes for old notes that we have accepted for exchange under the exchange offer only after the exchange agent receives, prior to 5:00 p.m., New York City time, on the expiration date:

•

a book-entry confirmation of such old notes into the exchange agent's account at DTC; and



•

a properly transmitted agent's message.

Return of old notes not accepted or exchanged

        If we do not accept any tendered old notes for exchange or if old notes are submitted for a greater principal amount than the holder desires to exchange, the unaccepted or non-exchanged old notes will be returned without expense to their tendering holder. Such non-exchanged old notes will be credited to an account maintained with DTC. These actions will occur as promptly as practicable after the expiration or termination of the exchange offer.

Your representations to us

        By signing or agreeing to be bound by the letter of transmittal, you will represent to us that, among other things:

•

any new notes that you receive will be acquired in the ordinary course of your business;



•

you have no arrangement or understanding with any person or entity to participate in the distribution of the new notes within the meaning of the Securities Act;



•

if you are not a broker-dealer that you are not engaged in and do not intend to engage in the distribution of the new notes;



•

if you are a broker-dealer that will receive new notes for your own account in exchange for old notes, you acquired those notes as a result of market-making activities or other trading activities and you will deliver a prospectus, as required by law, in connection with any resale of such new notes; and



•

you are not our "affiliate," as defined in Rule 405 of the Securities Act, or if you are our "affiliate" that you will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable.

Withdrawal of Tenders

        Except as otherwise provided in this prospectus, you may withdraw your tender at any time prior to 5:00 p.m., New York City time, on the expiration date. For a withdrawal to be effective you must comply with the appropriate procedures of DTC's ATOP system. Any notice of withdrawal must specify the name and number of the account at DTC to be credited with withdrawn old notes and otherwise comply with the procedures of DTC.

36

        We will determine all questions as to the validity, form, eligibility and time of receipt of notices of withdrawal. Our determination shall be final and binding on all parties. We will deem any old notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer.

        Any old notes that have been tendered for exchange but that are not exchanged for any reason will be credited to an account maintained with DTC for the old notes. This return or crediting will take place as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. You may retender properly withdrawn old notes by following one of the procedures described under "—Procedures for Tendering" above at any time on or prior to the expiration date.

Fees and Expenses

        We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, we may make additional solicitation by telegraph, telephone or in person by our officers and regular employees and those of our affiliates.

        We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to broker-dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and reimburse it for its related reasonable out-of-pocket expenses.

        We will pay the cash expenses to be incurred in connection with the exchange offer. They include:

•

SEC registration fees;



•

fees and expenses of the exchange agent and trustee;



•

accounting and legal fees and printing costs; and



•

related fees and expenses.

Transfer Taxes

        We will pay all transfer taxes, if any, applicable to the exchange of old notes under the exchange offer. The tendering holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if a transfer tax is imposed for any reason other than the exchange of old notes under the exchange offer.

Consequences of Failure to Exchange

        If you do not exchange new notes for your old notes under the exchange offer, you will remain subject to the existing restrictions on transfer of the old notes. In general, you may not offer or sell the old notes unless they are registered under the Securities Act or unless the offer or sale is exempt from the registration under the Securities Act of 1933 and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the old notes under the Securities Act.

Accounting Treatment

        We will record the new notes in our accounting records at the same carrying value as the old notes. The carrying value of the old notes is $152,850,150, which reflects the $2,149,850 discount deducted from the proceeds we received when we issued the $155,000,000 face amount of the old notes. Accordingly, we will not recognize any gain or loss for accounting purposes in connection with the exchange offer. The expenses of the exchange offer will be amortized over the term of the new notes.

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Other

        Participation in the exchange offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your own decision on what action to take.

        We may in the future seek to acquire untendered old notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any old notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered old notes.

        Each broker-dealer that receives new notes for its own account in exchange for old notes, where such were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such new notes. See "Plan of Distribution."

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USE OF PROCEEDS

        The exchange offer is intended to satisfy our obligations under the registration rights agreement. We will not receive any cash proceeds from the issuance of the new notes in the exchange offer. In consideration for issuing the new notes as contemplated by this prospectus, we will receive old notes in a like principal amount. The form and terms of the new notes are identical in all respects to the form and terms of the old notes, except the new notes are registered under the Securities Act and will not have restrictions on transfer, registration rights or provisions for additional interest. Old notes surrendered in exchange for the new notes will be retired and cancelled and will not be reissued. Accordingly, the issuance of the new notes will not result in any increase in our outstanding indebtedness.

        On June 8, 2004, we completed a series of transactions that included the issuance of $155.0 million aggregate principal amount of the old notes and borrowing an additional $70.0 million under our amended credit facility (together, the "Financing Transactions"). The proceeds from the Financing Transactions, along with cash on hand, were used, or will be used, to (1) purchase $114.9 million of principal amount of our 13% senior subordinated notes that were tendered in the tender offer for these notes, pay $4.7 million of accrued and unpaid interest to the purchase date and pay $9.8 million in tender offer premiums and consent payments, (2) declare a dividend of $97.3 million to our parent, Concentra Inc., approximately $96.0 million of which was paid following the consummation of the Financing Transactions and approximately $1.3 million of which will be paid on a deferred basis to the holders of our parent's deferred share units, (3) on or about August 16, 2004, redeem the $27.6 million in principal amount of the 13% senior subordinated notes not tendered in the tender offer, pay approximately $1.8 million of accrued interest thereon and pay approximately $1.8 million in redemption premiums, (4) pay $0.6 million to holders of "in-the-money" options to purchase shares of common stock of our parent, (5) pay $1.9 million in aggregate cash bonuses to our management and (6) pay aggregate fees and expenses of approximately $7.3 million. The Financing Transactions and use of net proceeds therefrom and cash on hand as discussed above are referred to as the "Transactions."

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CAPITALIZATION

        The table below sets forth our cash and capitalization at March 31, 2004 on an actual basis and as adjusted to give effect to the Transactions. The adjusted information is unaudited and presented for informational purposes only and is not necessarily indicative of what our financial position would have been had the Transactions actually occurred on the date indicated. The table below should be read in conjunction with "Use of Proceeds," "Selected Historical Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Description of Other Indebtedness" and our historical consolidated financial statements, all included elsewhere in this prospectus.

			At March 31, 2004
			Actual		As Adjusted
			(in thousands)
Cash			$	33,130	$	3,679
Debt, including current portion:
	Existing credit facility:
		Revolving loan	$	—	$	—
		Term loans due 2009(1)		332,487		402,487
	Existing 13% senior subordinated notes due 2009(2)			142,500		—
	Existing 91/2% senior subordinated notes due 2010(3)			181,846		181,846
	91/8% senior subordinated notes due 2012 offered hereby(4)			—		152,850
	Other debt (including capitalized leases)			147		147
Total debt				656,980		737,330
Stockholder's equity (deficit)(5)				52,563		(61,380	)
	Total capitalization		$	709,543	$	675,950

(1)

Under our amended credit facility, we have an additional $70.0 million in principal amount of term loans.

(2)

We expect to redeem the $27.6 million principal amount of 13% senior subordinated notes not tendered in the tender offer on or about August 16, 2004. If the untendered 13% senior subordinated notes were redeemed on August 16, 2004, we would be required to pay an aggregate amount of approximately $29.4 million to redeem the 13% senior subordinated notes and $1.8 million to pay accrued and unpaid interest thereon.

(3)

The 9¹/2% senior subordinated notes amount consists of $180.0 million of aggregate principal amount and approximately $1.8 million of unamortized premium.

(4)

The 9¹/8% senior subordinated notes were issued below the $155.0 million face value, and as a result the "As Adjusted" amount of $152.9 million reflects a discount of approximately $2.2 million.

(5)

Stockholder's equity has been adjusted to reflect (i) the declaration of a $97.3 million dividend to our parent, Concentra Inc., $96.0 million of which was paid upon the consummation of the Financing Transactions, and approximately $1.3 million of which will be paid on a deferred basis to holders of our parent's deferred share units, (ii) a $2.6 million write-off of deferred financing fees and $9.8 million in tender premiums and consent payments associated with the purchase of the $114.9 million principal amount of the 13% senior subordinated notes in the tender offer and $1.8 million in redemption premiums associated with the $27.6 million principal amount of 13% senior subordinated notes not tendered in the tender offer and (iii) $2.5 million of fees and expenses consisting of $1.9 million in management bonuses and $0.6 million in payments to holders of "in-the-money" options to purchase shares of common stock of our parent.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

        The following table provides selected historical consolidated financial data of Concentra Operating Corporation and its subsidiaries. The selected historical consolidated financial data as of and for each of the years ended December 31, 1999, 2000, 2001, 2002 and 2003 have been derived from our audited consolidated financial statements. The selected historical consolidated financial data as of and for the three months ended March 31, 2003 and 2004 have been derived from our unaudited consolidated condensed financial statements, which were prepared on the same basis as our audited consolidated financial statements and, in the opinion of management, include all adjustments considered necessary for a fair presentation of our financial position and results of operations for such periods. The results from any interim period are not necessarily indicative of the results that may be expected for a full fiscal year. Historical results are not necessarily indicative of the results to be expected in the future.

        The information presented below should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical consolidated financial statements and other financial data included elsewhere in this prospectus.

			Years Ended December 31,															Three Months Ended March 31,
			1999			2000			2001			2002			2003			2003			2004
			(dollars in thousands)
Statement of Operations Data:
Revenue:
	Health Services		$	339,343		$	409,738		$	443,321		$	471,968		$	511,387		$	118,521		$	134,257
	Network Services			158,022			162,596			185,267			230,299			260,159			61,730			73,013
	Care Management Services			193,326			189,905			228,315			296,783			279,142			71,900			64,623
		Total revenue		690,691			762,239			856,903			999,050			1,050,688			252,151			271,893
Cost of Services:
	Health Services			274,362			335,939			375,565			406,164			421,663			101,373			111,493
	Network Services			95,734			100,741			110,187			138,218			147,350			34,767			41,552
	Care Management Services			173,672			170,899			200,166			267,054			248,312			63,666			57,128
		Total cost of services		543,768			607,579			685,918			811,436			817,325			199,806			210,173
Gross profit				146,923			154,660			170,985			187,614			233,363			52,345			61,720
General and administrative expenses				65,291			66,491			81,631			106,222			122,949			28,538			32,038
Amortization of intangibles				12,960			14,628			15,746			3,776			3,933			1,035			850
Unusual charges (gains)				54,419			—			546			(1,200	)		—			—			—
Charges for acquisition of affiliate				—			—			5,519			—			—			—			—
Operating income				14,253			73,541			67,543			78,816			106,481			22,772			28,832
Interest expense, net				32,879			67,984			66,398			63,582			56,318			14,544			13,919
(Gain) loss on change in fair value of hedging arrangements				—			9,586			13,602			7,589			(9,869	)		(2,187	)		—
Loss on early retirement of debt				—			—			—			7,894			7,837			—			—
(Income) loss on acquired affiliate, net of tax				(723	)		262			5,833			—			—			—			—
Other, net				(391	)		(1,931	)		(3,640	)		(1,275	)		2,692			647			821
Income (loss) before taxes and cumulative effect of accounting change				(17,512	)		(2,360	)		(14,650	)		1,026			49,503			9,768			14,092
Provision for income taxes				8,269			4,362			3,757			10,634			6,214			2,895			5,919
Income (loss) before cumulative effect of accounting change				(25,781	)		(6,722	)		(18,407	)		(9,608	)		43,289			6,873			8,173
Cumulative effect of accounting change, net of tax				—			2,817			—			—			—			—			—
Net income (loss)			$	(25,781	)	$	(9,539	)	$	(18,407	)	$	(9,608	)	$	43,289		$	6,873		$	8,173
Other Financial Data:
Ratio of earnings to fixed charges(1)				0.6x			1.0x			0.8x			1.0x			1.7x			1.6x			1.8x

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	As of December 31,												As of March 31,
	1999			2000			2001		2002		2003		2003		2004
	(dollars in thousands)
Balance Sheet Data:
Working capital	$	109,711		$	119,649		$	80,747	$	102,459	$	117,427	$	112,517	$	135,540
Total assets		680,180			676,703			853,227		850,691		874,992		847,106		862,413
Total debt		567,747			561,562			562,481		479,826		659,234		480,191		656,980
Total stockholder's equity (deficit)		(13,197	)		(5,329	)		86,705		170,716		44,010		178,062		52,563

(1)

For purposes of determining the ratio of earnings to fixed charges, earnings include income from continuing operations before income taxes, adjusted for fixed charges and equity in earnings of unconsolidated subsidiaries and related distributions. Fixed charges consist of cash and non-cash interest on debt, including amortization of debt issuance costs, and 33% of rent expenses, which we estimate as the interest component of such rentals. Our earnings were insufficient to cover fixed charges for the years ended December 31, 1999, 2000 and 2001 by $18.0 million, $3.6 million and $17.7 million, respectively.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis highlights information contained in this prospectus and is qualified in its entirety by the more detailed information and consolidated financial statements included elsewhere in this prospectus. This discussion and analysis is not complete and may not contain all of the information that you should consider before deciding whether to participate in the exchange offer. You should read this entire prospectus carefully, including "Risk Factors," "Selected Historical Consolidated Financial Data," "Selected Consolidated Financial and Other Data" and our consolidated financial statements included in this prospectus.

Executive Summary

        During 2003, our results continued to be affected by the general downturn in the national economic and business conditions present in the United States since 2001. However, during the course of the year, we experienced improved operating trends that assisted us in re-establishing revenue and earnings growth as compared to prior years. During the first quarter of 2004, due in part to improving national employment trends and increased volumes from new clients, we achieved revenue and earnings growth as compared to the same quarter of 2003. Due to the high concentration of our services that relate to the nation's employed workforce, changes in employment can have a direct influence on the underlying demand for our services.

        We achieved an overall revenue growth of 5.2% and 7.8% during 2003 and the first quarter of 2004 from the same prior year periods, respectively, due to growth in our Health Services and Network Services business segments, partially offset by a decline in the revenue in our Care Management business segment. Our Health Services segment grew primarily due to gradual improvements in the relative number of visits to our centers in 2003, increased visits to our centers in the first quarter of 2004, and increases in our ancillary services. Revenue in our Network Services segment grew in 2003 due to an increase in the dollar value of gross charges being reviewed and the addition of new customer accounts and business volumes, and grew in the first quarter of 2004 primarily due to higher comparative group health and workers' compensation bill review volumes. Revenue in our Care Management Services segment continued to decline in 2003 and the first quarter of 2004 due in part to the effects of past declines in the national employment rate and the related decline in the number of workplace injuries. Additionally, we experienced revenue declines in our independent medical exams and case management services associated with client referral volume decreases due to integration of acquired operations with our own, increased competition on a regional level, and potentially due to a trend by certain insurance company clients to lengthen the amount of time prior to referring cases for independent medical exams and case management services.

        Our Health Services and Network Services business segments provide higher gross and operating margins than does our Care Management Services business segment. As such, during 2003, our operating profits increased at a greater rate than our revenue growth due to the increases in our revenue from these higher margin segments and due to significant reductions in our personnel and other costs that we undertook during the fourth quarter of 2002 and early 2003. During the first quarter of 2004, our operating profits increased at a greater rate than our revenue growth due to the increases in our revenue from these higher margin segments and due to an increase in the comparative margins of our Health Services business segment. This increase in our Health Services profit margins related primarily to our having higher visit volumes with which to recover our fixed costs. While we will continue to seek measures that will minimize our costs of doing business, in future periods our growth in operating earnings may become increasingly dependent on our ability to increase revenue.

        During 2003 we also intensified our focus on working capital management and on reducing our overall cost of indebtedness, which was continued into the first quarter of 2004. We produced

43

$113.6 million in cash flow from operating activities in 2003, reduced our days sales outstanding on accounts receivable ("DSO") to 58 days and successfully completed a series of refinancing transactions that included issuing $180.0 million aggregate principal amount of 9¹/2% senior subordinated notes and entering into a new $435.0 million senior secured term credit facility. We used $1.7 million in cash flow from operating activities in the first three months of 2004, which was primarily a result of $17.9 million of semi-annual interest payments on our 9¹/2% and 13% senior subordinated notes and the seasonal nature of our workers' compensation related revenue and payments of annual incentive bonuses, partially offset by our positive operating results. Additionally, we reduced our DSO to 60 days as compared to 62 days at the same time in the prior year.

Overview

        We are a leading provider of workers' compensation and other occupational healthcare services in the United States. We offer our customers a broad range of services designed to improve patient recovery and to reduce the total costs of healthcare. In 2003, we serviced over five million patient visits, reviewed and repriced over $12.0 billion in medical bills and managed or reviewed over 313,000 cases. Our initial treatment of workplace injuries and illnesses accounts for approximately 7% of total reported workplace injuries in the United States. The knowledge we have developed in improving workers' compensation results for our customers has enabled us to expand successfully into other industries, such as group health and auto insurance, where payors of healthcare and insurance benefits are also seeking to reduce costs.

        We believe we are the largest outsource provider of occupational healthcare improvement and cost containment services in the nation. Through our nationwide network of occupational healthcare centers, we serve employers who have more than 123,200 locations. We also provide services to over 3,500 insurance companies, group health plans, third party administrators and other healthcare payors. These payors and our employer customers provide virtually all of our revenue, with less than 0.1% of our revenue derived from Medicare or Medicaid reimbursement.

        We were formed in 1997 by the merger of CRA Managed Care, Inc. and Occusystems, Inc. The name of our parent company after the merger was Concentra Managed Care, Inc., which we subsequently changed to Concentra Inc. In 1999, Concentra Inc. was recapitalized in a transaction, which we call the 1999 recapitalization, valued at approximately $1.1 billion and led by Welsh, Carson, Anderson & Stowe, or WCAS. Immediately following the 1999 recapitalization, 86% of Concentra Inc.'s common stock was held by WCAS, 7% of Concentra Inc.'s common stock was held by funds managed by Ferrer Freeman and Company, LLC, or FFC, and 7% of Concentra Inc.'s common stock was held by other investors. In order to finance the 1999 recapitalization and to effect the repurchase of all of Concentra Inc.'s then outstanding publicly-held shares, WCAS, FFC and the other investors contributed approximately $423.7 million in equity financing and raised $110.0 million of 14% senior discount debentures, $190.0 million of senior subordinated notes and $375.0 million of senior term debt. Concurrent with the 1999 recapitalization, Concentra Inc. retired $327.7 million of previously outstanding convertible subordinated notes and contributed all of its operating assets, liabilities and shares in its subsidiaries, with the exception of the previously outstanding 14% senior discount debentures (which were redeemed in 2003), to us in exchange for all of our common stock. Our parent's debt is not guaranteed by us. The 1999 recapitalization was accounted for as a recapitalization transaction, with no changes to the historical cost basis of our parent's or our assets or liabilities.

        On August 13, 2003, we completed a series of refinancing transactions (the "2003 refinancing transactions") that included issuing $150.0 million aggregate principal amount of 9¹/2% senior subordinated notes and entering into a $435.0 million senior secured credit facility. The credit facility consisted of a $335.0 million term loan facility and a $100.0 million revolving loan facility. We used the proceeds from the 9¹/2% senior subordinated notes offering, together with borrowings under our credit

44

facility, and cash on hand to (1) repay the $335.2 million of outstanding indebtedness under our previous credit facility, (2) terminate previously existing hedging arrangements valued at $23.6 million, (3) transfer $141.2 million of cash proceeds to our parent, Concentra Inc., to enable it to redeem a portion of its 14% senior subordinated debentures, (4) pay $4.6 million of accrued interest on the previous credit facility and hedging arrangements and (5) pay approximately $11.4 million of related fees and expenses. In connection with the termination of the previous credit facility as part of the 2003 refinancing transactions, we recorded approximately $7.8 million of debt extinguishment costs in the third quarter of 2003 for the write-off of related deferred financing fees and other expenses. On October 14, 2003, we completed an exchange offer in which we exchanged the 9¹/2% senior subordinated notes for notes that were registered under the Securities Act.

        On November 20, 2003, we issued an additional $30.0 million aggregate principal amount of our 9¹/2% senior subordinated notes. These notes were issued at 106.5% of their face value, resulting in the receipt of $2.0 million in additional gross proceeds. We used these proceeds together with cash on hand to (1) transfer $52.8 million of cash proceeds to our parent, Concentra Inc., to enable it to redeem all of its remaining outstanding 14% senior discount debentures and (2) pay approximately $1.8 million of related fees and expenses. Additionally, Concentra Inc. extended the maturity of its $55.0 million bridge loan from June 24, 2004 to March 31, 2005.

        On June 8, 2004, we completed a series of transactions that included the Financing Transactions. The proceeds from the Financing Transactions, along with cash on hand, were used, or will be used, to (1) purchase $114.9 million of principal amount of our 13% senior subordinated notes that were tendered in the tender offer for these notes, pay $4.7 million of accrued and unpaid interest to the purchase date and pay $9.8 million in tender offer premiums and consent payments, (2) declare a dividend of $97.3 million to our parent, Concentra Inc., approximately $96.0 million of which was paid following the consummation of the Financing Transactions and approximately $1.3 million of which will be paid on a deferred basis to the holders of our parent's deferred share units, (3) on or about August 16, 2004, redeem the $27.6 million in principal amount of the 13% senior subordinated notes not tendered in the tender offer, pay approximately $1.8 million of accrued interest thereon and pay approximately $1.8 million in redemption premiums, (4) pay $0.6 million to holders of "in-the-money" options to purchase shares of common stock of our parent, (5) pay $1.9 million in aggregate cash bonuses to our management and (6) pay aggregate fees and expenses of approximately $7.3 million.

Business Segments

        We provide our services through three operating segments: Health Services, Network Services and Care Management Services. Through our Health Services segment we treat workplace injuries and perform other occupational healthcare services. We provide these services through our 250 owned and managed centers, located in 81 markets within 34 states. Approximately 570 affiliated primary care physicians, as well as affiliated physical therapists, nurses and other healthcare providers, perform professional services at our centers. Our Network Services segment assists insurance companies and other payors in the review and reduction of the bills they receive from medical providers. During 2003, this segment enabled our customers to eliminate an estimated $2.1 billion in excess costs. Our Care Management Services segment offers services designed to monitor cases and facilitate the return to work of injured employees who have been out of work for an extended period of time due primarily to a work-related illness or injury.

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        The following table provides certain information concerning our occupational healthcare centers:

	Year Ended December 31,
				Three Months Ended March 31, 2004
	2001	2002	2003
Centers at the end of the period(1)	244	244	250	250
Centers acquired during the period(2)	15	3	6	—
Centers developed during the period(3)	12	1	—	—

(1)

Does not include the assets of the centers that were acquired and subsequently divested or consolidated into existing centers within the same market during the period. The service locations at December 31, 2001 have been restated to include the 12 centers acquired from OccMed Systems, Inc. in December 2002, as our financial results have been restated to include the results of OccMed Systems, Inc. in 2001 and 2002.

(2)

Represents centers that were acquired during each period presented and not subsequently divested or consolidated into existing centers within the same market during the period. We acquired six centers, four centers and 12 centers that were subsequently consolidated into existing centers during the years ended December 31, 2003, 2002 and 2001, respectively. We did not acquire any centers during the three months ended March 31, 2004.

(3)

Includes the 12 centers developed by OccMed Systems, Inc. in 2001.

Significant Acquisitions

        In December 2002, we acquired Em3 Corporation, a privately-held company located in Addison, Texas, in a transaction valued at $30.7 million. Following its inception in 2000, Em3 established a nationwide network of primary care physicians specializing in occupational healthcare, and its proprietary information systems and approach to the integration and management of workers' compensation care attracted several large national employers as its clients. Em3's business is complementary in nature to our businesses. Under the terms of the transaction, our parent issued approximately $30.1 million of its common stock to Em3's equity holders through an exchange of its common stock for substantially all of the assets and liabilities of Em3. Concurrently with the closing of the acquisition, our parent contributed the assets and liabilities of Em3 to us and we subsequently repaid $0.6 million of Em3's indebtedness to its largest stockholder, WCAS. The repayment of this indebtedness was financed through the use of cash on hand and by drawing down our existing revolving credit line.

        In December 2002, we also acquired OccMed Systems, Inc., a privately-held company located in Addison, Texas, in a transaction valued at $16.6 million. OccMed, established in 2001, developed 12 occupational healthcare centers across six geographic markets in the United States. Under the terms of the transaction, our parent issued approximately $12.8 million of its common stock for OccMed's assets and liabilities. Concurrent with this acquisition, our parent contributed the OccMed assets and liabilities to us, and we repaid $1.0 million of OccMed's indebtedness to its largest stockholder, WCAS, and $2.8 million of other indebtedness. This repayment was financed through the use of cash on hand and by drawing down our existing revolving credit line.

        Because we are controlled by our primary stockholder, WCAS, and because WCAS also owned approximately 66% of Em3 and 69% of OccMed, the acquisition accounting for both acquisitions was viewed as a reorganization of entities under common control. Accordingly, the historical costs of Em3's and OccMed's assets and liabilities have been utilized as if WCAS contributed its 66% and 69% respective interests in Em3 and OccMed to us at their historical cost. We accounted for the remaining 34% of Em3 and 31% of OccMed under the purchase method of accounting, whereby assets and

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liabilities were "stepped-up" to fair value with the remainder allocated to goodwill. The effective date of these acquisitions was December 1, 2002.

        In accordance with existing accounting requirements, we accounted for these acquisitions in a manner similar to a pooling, whereby we retroactively restated our historical financial statements to consolidate the historical results of Em3 and OccMed beginning with the periods the entities were under the control of WCAS, which was 2000 for Em3 and 2001 for OccMed. The equity interests of other investors, which was 34% for Em3 and 31% for OccMed, has been reflected as a "minority interest" in our financial statements for periods prior to the date of the acquisitions. In connection with the Em3 acquisition, we expensed approximately $0.1 million in restructuring costs primarily associated with employee severance and facilities consolidation costs. This amount was expensed pursuant to the standards of entities under common control accounting, and is reflective of the proportionate ownership percentage of WCAS as applied to the total amount of restructuring liabilities that occurred in connection with the acquisition.

        During 2003, we began integrating the operations and information systems of Em3 and OccMed within Health Services. This integration involves both the primary operational activities and systems associated with the provision of Em3's and OccMed's services, as well as the general and administrative processes of these acquired companies, including their billing and accounts receivable systems. We currently believe that there will be no appreciable reductions in the overall combined costs of our services and in our general and administrative expenses as a result of this integration process.

        In November 2001, we acquired all of the outstanding shares of capital stock of National Healthcare Resources, Inc., or NHR, a privately held company located in New York, New York, in a transaction valued at $141.8 million. NHR, founded in 1992, provided care management and network services to the workers' compensation and auto insurance industries nationwide. NHR's businesses were complementary in nature to and significantly expanded our Care Management Services and Network Services businesses. In connection with this acquisition, Concentra Inc. paid $84.0 million to NHR's equity and option holders through cash payments totaling $1.0 million and an exchange of approximately 3.8 million shares of its common stock for all of the outstanding shares and share equivalents of NHR. Concurrently with the closing of the acquisition, our parent contributed the capital stock and share equivalents of NHR to our capital, and NHR repaid $57.8 million of its indebtedness. Of this $57.8 million, (1) $19.5 million was financed through our parent's sale of new common stock and warrants, the proceeds of which were subsequently contributed to our capital and (2) the remainder was financed through the use of cash on hand and by drawing down our then-existing revolving credit line. Because our controlling stockholder, WCAS, owned approximately 48% of the common voting equity in NHR, the acquisition was accounted for as a reorganization of entities under common control. Accordingly, the historical costs of NHR's assets and liabilities were utilized to the extent of WCAS's proportionate ownership interest in NHR and the remainder of the acquisition was accounted for under the purchase method of accounting, whereby assets and liabilities are "stepped-up" to fair value with the remainder allocated to goodwill. We recognized NHR's historical net income and loss as a non-operating item in proportion to WCAS's investment in NHR utilizing the equity method of accounting from August 17, 1999 through October 31, 2001. NHR's full results of operations were consolidated after November 1, 2001, the effective date of the acquisition.

        In connection with the NHR acquisition, we recorded $6.0 million in asset write-downs and $6.8 million in restructuring costs, which were primarily associated with employee severance and facilities consolidation costs. Of this $12.8 million, $5.5 million was recognized in 2001 as a charge for the acquisition of an affiliate and reflects WCAS's proportionate ownership percentage in NHR as applied to the total amount of asset write-downs and restructuring liabilities that occurred in connection with the acquisition. We recorded unusual charges of $0.5 million to reflect employee severance and facility consolidation costs associated with our facilities. We recorded the remaining $6.8 million, which was reflective of the remaining non-WCAS proportionate ownership percentage in

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NHR as applied to the total amount of asset write-downs and restructuring liabilities that occurred in connection with the acquisition, under the purchase method of accounting. In the last half of 2002, we recorded an additional $0.6 million to the restructuring cost accrual due primarily to increased estimates for personnel and facility termination costs.

        During 2002 and 2003, we integrated the operations and information systems of NHR with our Network Services and Care Management Services segments. This integration involves both the primary operational activities and systems associated with the provision of NHR's network and care management services, as well as the general and administrative processes of this acquired company, including its billing and accounts receivable systems.

        In November 2001, we acquired all of the outstanding capital stock of HealthNetwork Systems LLC, or HNS, a privately held company located in Naperville, Illinois, in a transaction valued at approximately $30.9 million. HNS, founded in 1999, provides network management services such as provider bill repricing and provider data management for health plans and other payors working with multiple preferred provider organization networks. These services are complementary to our existing services. We financed this acquisition primarily through the sale of our parent's equity. Our parent exchanged this cash and other consideration for all of HNS's capital stock. Concurrent with the closing of the acquisition, our parent contributed the capital stock of HNS and $0.8 million of cash to us, and we repaid approximately $0.8 million of HNS's indebtedness. Steven E. Nelson, one of our directors, was the President and Chief Executive Officer of HNS at the time of the acquisition. Mr. Nelson and certain other of our directors and management owned approximately 46.1% of the equity in HNS. All of HNS's assets, including its contracts, equipment, intangibles and goodwill, as well as all of its liabilities, were transferred to us and were recorded at fair value under the purchase method of accounting.

Critical Accounting Policies

        A "critical accounting policy" is one that is both important to the portrayal of the company's financial condition and results and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The process of preparing financial statements in conformity with accounting principles generally accepted in the United States requires us to use estimates and assumptions to determine certain of our assets, liabilities, revenue and expenses. Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. We base these determinations upon the best information available to us during the period in which we are accounting for our results. Our estimates and assumptions could change materially as conditions within and beyond our control change or as further information becomes available. Further, these estimates and assumptions are affected by management's application of accounting policies. Changes in our estimates are recorded in the period the change occurs. Our critical accounting policies include:

•

revenue recognition;



•

contractual and bad debt allowances;



•

deferred income tax asset valuation allowance;



•

goodwill and other intangible assets;



•

professional liability insurance claims; and



•

acquired assets and liabilities.

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        The following is a discussion of our critical accounting policies and the related management estimates and assumptions necessary in determining the value of related assets or liabilities. A full description of all of our significant accounting policies is included in note 2 to our audited consolidated financial statements included elsewhere in this prospectus.

Revenue Recognition

        We generally recognize revenue when there is persuasive evidence of an arrangement, the services have been provided to the customer, the sales price is fixed or determinable and collectibility is reasonably assured. We reduce revenue for estimated contractual allowances and record any amounts invoiced to the customer in advance of service performance as deferred revenue. We recognize this revenue as the services are performed. The amount of deferred revenue, which is included in accrued liabilities, was $7.3 million and $0.2 million as of December 31, 2003 and 2002 respectively. In addition to the aforementioned general policy, the following are the specific revenue recognition policies of each segment of our operations.

        Health Services.    Health Services consists of two primary components: (1) workers' compensation injury care and related services; and (2) non-injury healthcare services related to employer needs or statutory requirements. We recognize revenue for both of these services as the services are performed. The provider reimbursement methods for workers' compensation injury care and related services vary on a state-by-state basis. Currently, 40 states have fee schedules pursuant to which all healthcare providers are uniformly reimbursed. The fee schedules are determined by each state and generally prescribe the maximum amounts that may be reimbursed for a designated procedure. In the states without fee schedules, healthcare providers are reimbursed based on usual, customary and reasonable fees charged in the particular state in which the services are provided. We include billings for services in states with fee schedules in revenue net of allowance for estimated differences between list prices and allowable fee schedule rates. We record adjustments to the allowance based on final payment from the states upon settlement. We record the net revenue amount as accounts receivable.

        Network Services.    We derive a significant portion of our Network Services' revenue from the review and repricing of provider invoices to determine the appropriate amount of reimbursement to be paid by insurers, third-party administrators and other payors of healthcare costs. Our fees are normally based on the number of charges reviewed, or a percentage of the discounts from original invoiced amounts that we determine. We recognize this portion of our Network Services revenue as the services are performed and we record contractual allowances to reduce the revenue recorded for these services based upon an estimate of credits and chargebacks. A smaller portion of Network Services revenue relates to retrospective, or post-payment, bill review services. We recognize revenue from our post-payment bill review services when cash is collected because that is when our sales price becomes determinable.

        Care Management Services.    We recognize revenue for our case management and independent medical examinations businesses as the services are performed.

Contractual and Bad Debt Allowances

        We estimate potential contractual and bad debt allowances relative to current period service revenue. We analyze historical collection adjustment experience when evaluating the adequacy of the contractual and bad debt allowances. We must make significant management judgments and estimates in determining contractual and bad debt allowances in any accounting period. One significant uncertainty inherent in our analysis is whether our past experience will be indicative of future periods. Although we consider future projections when estimating contractual and bad debt allowances, we ultimately make our decisions based on the best information available to us at that time. Our provision for contractual and bad debt allowances amounted to $76.6 million and $69.6 million in 2003 and 2002,

49

respectively. The increase in our provision for contractual and bad debt allowances was due to growth in revenue, and allowances related to the liquidity and recoverability concerns related to certain customers. Our accounts receivable balance was $170.4 million, net of contractual and bad debt allowances of $46.2 million as of December 31, 2003.

Deferred Income Tax Asset Valuation Allowance

        Deferred income tax assets are recognized for deductible temporary differences, net operating loss carryforwards and credit carryforwards if it is more likely than not that the tax benefits will be realized. Realization of our deferred income tax assets is dependent on generating sufficient future taxable income prior to the expiration of the loss and tax credit carryforwards. We evaluate the recoverability of the deferred income tax assets and associated valuation allowance on a regular basis. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We evaluate a variety of factors on a regular basis to determine the amount of deferred income tax assets to recognize in the financial statements, including our recent earnings history, projected future taxable income, the number of years our net operating loss and tax credits can be carried forward, the existence of taxable temporary differences and available tax planning strategies. Based upon our recent operating history and other factors, management determined that it is more likely than not that certain deferred income tax assets will not be realized. Accordingly, the valuation allowance recorded for deferred income tax assets was no longer required as of December 31, 2003.

Goodwill and Other Intangible Assets

        We assess the impairment of intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Important factors that could trigger an impairment review include:

•

significant underperformance relative to expected historical or projected future operating results;



•

significant changes in the manner of our use of the acquired assets or the strategy for our overall business;



•

significant negative industry or economic trends;



•

a significant decline in our public bond price for a sustained period; and



•

a significant decline in our estimated market capitalization relative to net book value.

        Under generally accepted accounting principles, we are required to write down our intangible assets if they are determined to be impaired. Under current accounting standards, an impairment of an intangible asset is considered to have occurred when the estimated undiscounted future cash flows related to the assets are less than the carrying value of the asset. Estimates of future cash flows involve consideration of numerous factors, depending upon the specific asset being assessed. Relevant factors in this assessment include estimates of future market growth rates, service acceptance and lifecycles, selling prices and volumes, responses by competitors, service delivery costs and assumptions as to other operating expenses. When we determine that the carrying value of intangible assets may not be recoverable based upon the existence of one or more of the above indicators of impairment, we measure any impairment based on a projected discounted cash flow method using a discount rate determined by our management to be commensurate with the risk inherent in our current business model. The value of these projected discounted cash flows could be subject to change based on differences in the assumptions noted above. Our net identifiable intangible assets and goodwill amounted to $483.8 million as of December 31, 2003.

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        In 2002, Statement of Financial Accounting Standards No. ("SFAS") 142, Goodwill and Other Intangible Assets, became effective and, as a result, we ceased amortizing our goodwill. We recorded approximately $14.8 million of amortization on these amounts during 2001. In lieu of amortization, we were required to perform an initial impairment review of our goodwill in 2002 and an annual impairment review thereafter. Under SFAS 142, we were required to test all existing goodwill and indefinite life intangibles for impairment on a reporting unit basis. A reporting unit is the operating segment unless, at businesses one level below that operating segment (the component level), discrete financial information is prepared and regularly reviewed by management, and the businesses are not otherwise aggregated due to having certain common characteristics, in which case such component is the reporting unit. We use a fair value approach to test goodwill and indefinite life intangibles for impairment. We recognize an impairment charge for the amount, if any, by which the carrying amount of goodwill and indefinite life intangibles exceeds its fair value. We established fair values using projected cash flows. When available and as appropriate, we used comparative market multiples to corroborate projected cash flow results. We completed our annual impairment test in the third quarter of 2002 and 2003. We did not record an impairment charge upon completion of this review. However, the fair value of Care Management Services exceeded its carrying value by approximately 22% for the third quarter of 2003 impairment test, due primarily to this reporting unit's recent performance trends. Although current financial forecasts and operating trends continue to indicate that no impairment is required at March 31, 2004, a non-cash goodwill impairment charge to income may be incurred for this reporting unit in a future period if there is a modest decrease in future earnings.

Professional Liability Insurance Claims

        We operate, along with virtually all healthcare providers, in an environment with medical malpractice and professional liability risks. The entire primary care segment of the healthcare industry is experiencing a dramatic increase in professional liability costs because of the volume of claims and the large legal settlements based on alleged negligence in providing healthcare. Allowances for professional liability risks were $6.1 million at December 31, 2003. We base our provisions for losses related to professional liability risks upon actuarially determined estimates that incorporate appropriate discount rates. Loss and loss expense allowances represent the present value of estimated ultimate net cost of all reported and unreported losses incurred. We estimate the allowances for unpaid losses and loss expenses using individual case-basis valuations and statistical analyses. Trends in loss severity and frequency affect these estimates. We continually review and record adjustments for these estimates as experience develops or new information becomes known. Current operating results include the changes to the estimated allowances. Due to the considerable variability that is inherent in such estimates, there can be no assurance that the ultimate liability will not exceed our estimates.

Acquired Assets and Liabilities

        Our business has grown in part through several strategic acquisitions over the last few years. During 2002 and 2003, we acquired a total of nine occupational healthcare centers, Em3 and OccMed. Except as discussed in "Note 4, Recent Acquisitions and Unusual Charges," in our audited consolidated financial statements included elsewhere in this prospectus, the individual assets and liabilities of each acquired company were recorded at fair value, reflecting amounts for tangible assets and liabilities and intangible assets.

        In many cases, we prepare our own internal purchase price allocations and determine the lives of the acquired assets. However, we may also use independent appraisers to assist us in these efforts for our larger or more complex acquisitions. We use several valuation techniques in order to estimate fair values, including discounted cash flow analysis, replacement cost analysis and market comparables. These methods require significant assumptions regarding market conditions, operational integration issues and the utilization of the underlying assets, which could change in the future and result in a

51

significant impact on our earnings. Additionally, we are required to make estimates of restructuring liabilities incurred in connection with these assets. These estimates involve assumptions relating to the timing and cost of personnel reductions, facility lease charges and other related exit costs. Because of the inherent nature of these assumptions and techniques, we could experience changes in estimated values that could be material to our earnings.

Recent Accounting Pronouncements

        In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS 143, Accounting for Asset Retirement Obligations. SFAS 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The statement requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred and capitalized as part of the carrying amount of the long-lived asset. We adopted SFAS 143 on January 1, 2003. The adoption did not have a material impact on our consolidated financial position, results of operations or cash flows.

        In October 2001, the FASB issued SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets, which supersedes SFAS 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of. The statement provides a single accounting model for long-lived assets to be disposed of. We adopted SFAS 144 on January 1, 2002. The adoption did not have a material impact on our consolidated financial position, results of operations or cash flows.

        In April 2002, the FASB issued SFAS 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections. SFAS 145 concludes that gains or losses from debt extinguishments used as part of a company's risk management strategy should not be classified as an extraordinary item, effective for fiscal years beginning after May 15, 2002 with early adoption encouraged. SFAS 145 also requires sale-leaseback accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions, effective for transactions occurring after May 15, 2002. This statement also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings or describe their applicability under changed conditions, effective for financial statements issued on or after May 15, 2002. We adopted the provisions of this pronouncement for all related transactions in the second quarter of 2002. This adoption did not have a significant impact on our consolidated financial statements. We redeemed $47.5 million of our existing 13% senior subordinated notes in July 2002 and prepaid $25.0 million of our senior term indebtedness in November 2002. Additionally, we terminated our previous credit facility in the third quarter of 2003. In accordance with SFAS 145, the related losses from debt extinguishment were included in income from continuing operations in the respective periods of 2002 and 2003. For a further discussion, see note 5 in our audited consolidated financial statements included elsewhere in this prospectus.

        In June 2002, the FASB issued SFAS 146, Accounting for Costs Associated with Exit or Disposal Activities. SFAS 146 addresses the accounting for costs to terminate a contract that is not a capital lease, costs to consolidate facilities and relocate employees, and involuntary termination benefits under one-time benefit arrangements that are not an ongoing benefit program or an individual deferred compensation contract. A liability for contract termination costs should be recognized and measured at fair value when either the contract is terminated or when the entity ceases to use the right conveyed by the contract. A liability for one-time termination benefits should be recognized and measured at fair value at the communication date if the employee would not be retained beyond a minimum retention period (i.e., either a legal notification period or 60 days, if no legal requirement exists). For employees who will be retained beyond the minimum retention period, a liability should be accrued ratably over the future service period. We adopted SFAS 146 on January 1, 2003. The adoption did not have a material impact on our consolidated financial position, results of operations or cash flows.

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        In November 2002, the FASB issued Interpretation No. 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. FIN 45 elaborates on the existing disclosure requirements for most guarantees, including residual value guarantees issued in conjunction with operating lease agreements. It also clarifies that at the time a company issues a guarantee, the company must recognize an initial liability for the fair value of the obligation it assumes under that guarantee and must disclose that information in its interim and annual financial statements. The initial recognition and measurement provisions apply on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements are effective for financial statements of interim or annual periods ending after December 15, 2002. Our adoption of FIN 45 did not have a material impact on our results of operations and financial position, as our previous credit agreement largely prohibited, and our amended credit facility largely prohibits, these types of guarantees.

        In December 2002, the FASB issued SFAS 148, Accounting for Stock-Based Compensation—Transition and Disclosure. SFAS 148 amends SFAS 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require more prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The additional disclosure requirements of SFAS 148 are effective for fiscal years ending after December 15, 2002. We have elected to continue to follow the intrinsic value method of accounting as prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, to account for employee stock options. For the disclosures required by SFAS 148, see note 10 in our audited consolidated financial statements included elsewhere in this prospectus.

        In April 2003, the FASB issued SFAS 149, Amendment of Statement of 133 on Derivative Instruments and Hedging Activities. SFAS 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS 133, Accounting for Derivative Instruments and Hedging Activities. SFAS 149 is generally effective for contracts entered into or modified after June 30, 2003 and did not have any impact on our financial statements.

        In May 2003, the FASB issued SFAS 150, Accounting for Certain Instruments with Characteristics of Both Liability and Equity. SFAS 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS 150 requires that an issuer classify a financial instrument that is within its scope, which may have previously been reported as equity, as a liability. This statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. SFAS 150 did not have any impact on our financial statements.

        In December 2003, FASB issued a revised Interpretation No. 46, Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51 ("FIN46R"), replacing the original interpretation issued in January 2003. FIN46R requires certain entities to be consolidated by enterprises that lack majority voting interest when equity investors of those entities have insignificant capital at risk or they lack voting rights, the obligation to absorb expected losses, or the right to receive expected returns. Entities identified with these characteristics are called variable interest entities and the interests that enterprises have in these entities are called variable interests. These interests can derive from certain guarantees, leases, loans or other arrangements that result in risks and rewards that are disproportionate to the voting interests in the entities. The provisions of FIN46R must be immediately applied for variable interest entities created after January 31, 2003 and for variable interests in entities commonly referred to as "special purpose entities." For all other variable interest entities, implementation is required by March 31, 2004. We do not have any variable interest entities.

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Results of Operations

Three Months Ended March 31, 2004 Compared to Three Months Ended March 31, 2003

        The following table provides the results of operations for the three months ended March 31, 2004 and 2003 ($ in millions):

			Three Months Ended
									Change
			March 31, 2003			March 31, 2004
									$			%
Revenue:
	Health Services		$	118.5		$	134.3		$	15.8		13.3	%
	Network Services			61.8			73.0			11.2		18.3
	Care Management Services			71.9			64.6			(7.3	)	(10.1	)
		Total revenue	$	252.2		$	271.9		$	19.7		7.8	%
Cost of services:
	Health Services		$	101.4		$	111.5		$	10.1		10.0	%
	Network Services			34.8			41.6			6.8		19.5
	Care Management Services			63.6			57.1			(6.5	)	(10.3	)
		Total cost of services	$	199.8		$	210.2		$	10.4		5.2	%
Gross profit:
	Health Services		$	17.1		$	22.8		$	5.7		32.8	%
	Network Services			27.0			31.4			4.4		16.7
	Care Management Services			8.2			7.5			(0.7	)	(9.0	)
		Total gross profit	$	52.3		$	61.7		$	9.4		17.9	%
Gross profit margin:
	Health Services			14.5	%		17.0	%				2.5	%
	Network Services			43.7			43.1					(0.6	)
	Care Management Services			11.5			11.6					0.1
		Total gross profit margin		20.8	%		22.7	%				1.9	%

Revenue

        The increase in revenue in 2004 was primarily due to growth in our Health Services and Network Services businesses, partially offset by decreased volumes in our Care Management Services business. Total contractual allowances offset against revenue during the quarters ended March 31, 2004 and 2003 were $18.5 million and $14.2 million, respectively. The increase was primarily due to revenue growth in our Health Services and Network Services businesses.

        Health Services.    Health Services' revenue increased primarily due to growth in visits to our centers. Increases in ancillary services also contributed significantly to this segment's revenue growth. The number of total patient visits per day to our centers in the first quarter of 2004 increased 10.6% as compared to the first quarter of 2003 and increased 8.8% on a same-center basis. Our "same-center" comparisons represent all centers that Health Services has operated for the previous two full years and includes the effects of any centers acquired and subsequently consolidated into existing centers. The increase in same-center visits for the first quarter of 2004 relates primarily to increases in non-injury and non-illness related visits, as well as increases in work-related injuries and illness visits. We believe these trends are a result of the improving national employment trends during the first quarter of 2004 and the last half of 2003, as well as the efforts of our sales and account management teams. For the first quarters of 2004 and 2003, Health Services derived 71.7% and 72.7%, respectively, of its

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comparable same-center net revenue from the treatment of work-related injuries and illnesses, and 28.3% and 27.3%, respectively, of its net revenue from non-injury and non-illness related medical services. Excluding on-site and ancillary services, injury-related visits constituted 48.7% and 51.0% of same-center visits in the first quarters of 2004 and 2003, respectively. On a same-center basis, average revenue per visit decreased 1.5% in the first quarter of 2004 as compared to the same quarter of the prior year, primarily due to a higher percentage of our visits in 2004 being related to pre-employment physical exams, drug screens and other non-injury related visits, as compared to injury-related visits. Our fees for these non-injury services are usually lower than those charged for injury-related services, and as such, our average revenue per visit decreased in the first quarter due primarily to this change in visit mix. As hiring trends continue and national employment levels grow, we expect a gradual shift in the growth trends towards work-related injuries and illnesses later in the year. Same-center revenue was $117.6 million and $108.1 million for the first three months of 2004 and 2003, respectively, while revenue from acquired and developed centers and ancillary services was $16.7 million and $10.5 million for the same respective periods.

        Network Services.    This segment's revenue increased due to growth in billings for services we provide to payors of workers' compensation insurance as well as to payors of group health insurance. Increases in our workers' compensation-based provider bill repricing and review services were the primary contributor to growth in this business segment. These increases related primarily to the addition of new customer accounts, as well as increased business volumes with existing customers for these lines of business. Additionally, our out-of-network medical providers' bill review services contributed significantly to this segment's increased revenue due to growth in the amount of gross charges reviewed as compared to the prior year and the amount of savings achieved through our review of medical charges. Although we currently believe this segment will provide comparatively higher rates of growth during coming periods than our other two segments, these rates of growth could decrease depending on our ability to maintain new customer and volume additions at current levels, due to increased price competition and as a result of the recent workers' compensations fee schedule decreases enacted in the State of California. Growth in our revenue from Network Services could be offset by approximately $5.0 to $7.0 million in the current year due to these fee schedule changes.

        Care Management Services.    Revenue for our Care Management Services segment decreased due to lower billings. The billing decrease was due primarily to referral declines in our case management and independent medical exams services.

        Like our other business segments, we provide a majority of our Care Management Services to clients in the workers' compensation market. We have experienced declines in referral trends, which we believe primarily relate to the overall drop in nationwide employment and related rates of workplace injuries. Generally, Health Services is the first segment affected by economic downturns and upturns since it sees patients at the time of initial injury. Network Services is the second segment affected because it involves the review of bills generated from injury-related visits. Care Management Services is the final segment to experience the effects of changing injury trends since it generally receives referrals for service a number of months after the initial injury occurs. Accordingly, we believe a primary cause of the decline in revenue experienced in Care Management Services in the first quarter of 2004 from the same quarter of 2003 relates to the effects of declines in workplace injuries that we experienced in our Health Services business during the first three quarters of 2003. As we are currently seeing gradual improvements in the relative visit amounts in our Health Services segment, we anticipate that we could experience a similar future recovery in the rates of referrals in Case Management Services based on the degree to which employment trends continue to improve and return to historical rates of growth.

        In addition to the economic effects described above, we have also encountered revenue declines in our independent medical exams and case management services associated with client referral volume decreases due to integration of acquired operations with our own, increased local competition and

55

potentially due to a trend by certain insurance company clients to lengthen the amount of time prior to referring cases for case management services and independent medical exams.

Cost of Services

        Total cost of services increased due to higher expenses in Health Services and Network Services, partially offset by decreased costs in Care Management Services. The increases in expenses relate primarily to an increase in the number of visits to our health centers and increased business volumes in our workers' compensation-based provider bill repricing and review services. The decrease in expenses in our Care Management Services business segment relates primarily to decreased personnel headcounts from cost reduction initiatives and continued focus on expense management. While we will continue to seek ways to minimize our costs in future periods, our prospective cost of services will likely grow in a manner commensurate with our growth in revenue.

Gross Profit

        Due primarily to growth in the higher margin Health Services and Network Services business segments, and a comparative increase in the margin of our Health Services business, we had a significant increase in gross profit and gross profit margin in the first quarter of 2004 as compared to the same quarter of 2003.

        Health Services.    The primary factors in Health Services' gross profit and gross profit margin increases were higher visits, increases in ancillary services and our corresponding utilization of the fixed nature of expenses for our existing center facilities. Additionally, Health Services has benefited from other decreased costs.

        Network Services.    Network Services' gross profit increased in the first quarter of 2004 from the first quarter of 2003 primarily due to revenue growth and the relatively fixed nature of this segment's expenses. In coming quarters, we believe that our gross margin percentage for these services will decrease slightly due to the fact that our newer workers' compensation clients and bill volumes have generally related to our relatively lower margin bill review services and as a result of the change in the California workers' compensation fee schedule.

        Care Management Services.    The decrease in the first quarter 2004 gross profit was due to reductions in revenue in excess of the declines in costs.

General and Administrative Expenses

        General and administrative expenses increased 12.3% in the first quarter of 2004 to $32.0 million from $28.5 million in the first quarter of 2003, or 11.8% and 11.3% as a percentage of revenue for the first quarters of 2004 and 2003, respectively. The increase in general and administrative expenses during 2004 was primarily due to increased compensation and benefits costs, as well as higher costs associated with property and casualty insurance.

Interest Expense, Net

        Interest expense decreased $0.6 million in the first three months of 2004 to $13.9 million from $14.5 million in the same period of 2003. This decrease was primarily due to the termination of our interest rate collars in August 2003 and lower interest rates on borrowings under our amended credit facility, partially offset by the additional $180.0 million of 9¹/2% senior subordinated notes issued in the last half of 2003. As of March 31, 2004, approximately 50.6% of our debt contained floating rates. Rising interest rates would negatively impact our results. See "—Liquidity and Capital Resources."

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Interest Rate Hedging Arrangements

        In 2003 we used interest rate collars to reduce our exposure to variable interest rates and because our previous credit agreement required them. These collars generally provided for certain ceilings and floors on interest payments as the three-month LIBOR rate increased and decreased, respectively. The changes in fair value of this combination of ceilings and floors were recognized each period in earnings. We recorded a gain of $2.2 million in the first quarter of 2003 related to the change in the fair value of these interest rate collars. The computation of gains and losses was based upon the change in the fair value of our interest rate collar agreements. The earnings impact from the gains and losses resulted in non-cash charges or credits and did not impact cash flows from operations or operating income. There had been periods with significant non-cash increases or decreases to our earnings relating to the change in the fair value of the interest rate collars. In August 2003, we completed a series of refinancing transactions, which included terminating our hedging arrangements. Accordingly, no gains or losses related to hedging arrangements were recorded in the first quarter of 2004.

Provision for Income Taxes

        We recorded tax provisions of $5.9 million and $2.9 million in the first quarters of 2004 and 2003, respectively, which reflected effective tax rates of 42.0% and 29.6%, respectively. The effective rate differed from the statutory rate primarily due to the impact of state income taxes and the release of the deferred income tax valuation allowance. Due to our current relationship of taxable income as compared to net income, our effective tax rate can vary significantly from one period to the next depending on relative changes in net income. As such, we currently expect further variation in our effective tax rate in the last three quarters of 2004.

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Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

        The following table provides the results of operations for years ended December 31, 2002 and 2003 ($ in millions):

			Years Ended December 31,						Change
			2002			2003			$			%
Revenue:
	Health Services		$	472.0		$	511.4		$	39.4		8.4	%
	Network Services			230.3			260.2			29.9		13.0
	Care Management Services			296.8			279.1			(17.7	)	(5.9	)
		Total revenue	$	999.1		$	1,050.7		$	51.6		5.2	%
Cost of services:
	Health Services		$	406.1		$	421.7		$	15.5		3.8	%
	Network Services			138.2			147.3			9.1		6.6
	Care Management Services			267.1			248.3			(18.7	)	(7.0	)
		Total cost of services	$	811.4		$	817.3		$	5.9		0.7	%
Gross profit:
	Health Services		$	65.8		$	89.7		$	23.9		36.4	%
	Network Services			92.1			112.8			20.7		22.5
	Care Management Services			29.7			30.8			1.1		3.7
		Total gross profit	$	187.6		$	233.3		$	45.7		24.4	%
Gross profit margin:
	Health Services			13.9	%		17.5	%				3.6	%
	Network Services			40.0			43.4					3.4
	Care Management Services			10.0			11.0					1.0
		Total gross profit margin		18.8	%		22.2	%				3.4	%

Revenue

        The increase in revenue in 2003 was primarily due to growth in our Health Services and Network Services businesses, partially offset by decreased volumes in our Care Management Services business. Also, the revenue increase in 2003 from 2002 was partially due to a change in accounting estimate for accounts receivable reserves in the first quarter of 2002 whereby we increased contractual allowances and correspondingly reduced revenue by $5.4 million in that quarter. Following an extensive review of our accounts receivable history and collection experience using new data provided by recently implemented information systems, we determined that additional contractual allowances were required as of March 31, 2002. This increase in accounts receivable reserves related primarily to Health Services, which reduced its revenue by $7.9 million, and was partially offset by receivables reserve decreases of $1.3 million in Network Services and $1.2 million in Care Management Services.

        Total contractual allowances offset against revenue during the years ended December 31, 2003 and 2002 were $64.4 million and $53.7 million, respectively. The increase was primarily due to revenue growth in our Health Services and Network Services businesses.

        Health Services.    Health Services' revenue increased $31.5 million or 6.6% in 2003 from 2002 primarily due to growth in average revenue per visit. Increases in ancillary services also contributed significantly to this segment's revenue growth as compared to the prior year. The first quarter 2002 revenue reduction of $7.9 million for the accounts receivable reserve increase also contributed to the

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revenue increase in 2003 from 2002. The number of total patient visits per day to our centers in 2003 increased 1.8% compared to 2002 and increased 0.9% on a same-center basis. Our "same-center" comparisons represent all centers that Health Services has operated for the previous two full years and includes the effects of any centers acquired and subsequently consolidated into existing centers. The increase in same-center visits for 2003 from 2002 relates primarily to increases in non-injury and non-illness related visits, and a slight increase in work-related injuries and illnesses visits. We believe the increase in same-center non-injury and non-illness related visits in 2003 primarily relates to stabilization in the nationwide employment trends during the third and fourth quarters of 2003, partially offsetting decreases in nationwide employment in jobs that are more prone to workplace injuries and illnesses. We have experienced some improvement in these growth trends as compared to the same-center decline of 2.2% we reported for 2002 and anticipate that these rates of growth will generally improve further once job growth rates resume to more traditional levels. For 2003 and 2002, Health Services derived 72.6% and 71.8%, respectively, of its comparable same-center net revenue from the treatment of work-related injuries and illnesses, and 27.4% and 28.2%, respectively, of its net revenue from non-injury and non-illness related medical services. Excluding on-site and ancillary services, injury-related visits constituted 50.1% and 50.5% of same-center visits in 2003 and 2002, respectively. On a same-center basis, average revenue per visit increased 2.5% in 2003 as compared to the prior year, primarily due to increases in the average prices charged for our services. We currently anticipate further price increases in our Health Services segment due to increases in the fee schedules that apply to our services in key states in which we do business. Same-center revenue was $445.1 million and $430.5 million for 2003 and 2002, respectively, while revenue from acquired and developed centers and ancillary services was $66.3 million and $41.5 million for the same respective periods.

        Network Services.    This segment's revenue increased $31.1 million, or 13.6%, for 2003 from 2002 due to growth in billings. The increase for 2003 was partially offset by the $1.3 million revenue increase due to the first quarter of 2002 accounts receivable reserve decrease. Our revenue increased due to growth in services we provide to payors of workers' compensation insurance as well as to payors of group health insurance. Increases in our workers' compensation-based preferred provider organization and provider bill repricing and review services was the primary contributor to growth in this business segment. These increases related primarily to the addition of new customer accounts and business volumes in these lines of business. Additionally, our out-of-network medical providers' bill review services contributed in a significant manner to this segment's increased revenue due to growth in the amount of gross charges reviewed as compared to the prior year and the amount of savings achieved through our review of medical charges. Although we currently believe this segment will provide comparatively higher rates of growth during coming periods than our other two segments, these rates of growth could be decreased depending on our ability to maintain new customer and volume additions at current levels, due to increased price competition, and based on the nature of jurisdictional reimbursement trends for workers' compensation injuries, particularly with respect to recent workers' compensations fee schedule decreases enacted in the State of California.

        Care Management Services.    Revenue for our Care Management Services segment decreased by $16.5 million, or 5.6%, for 2003 from 2002 due to lower billings. The $1.2 million revenue increase in the first quarter of 2002 for the accounts receivable reserve decrease also contributed to the 2003 revenue decline. The billing decrease was due primarily to referral declines in our case management and independent medical exams services.

        Like our other business segments, we provide a majority of our Care Management Services to clients in the workers' compensation market. In a manner similar to our other business segments, we have experienced declines in referral trends, which we believe primarily relate to the overall drop in nationwide employment and related rates of workplace injuries. Generally, Health Services is the first segment to be affected by economic downturns and upturns since it sees patients at the time of initial

59

injury. Network Services is the second segment to be affected because it involves the review of bills generated from injury-related visits. Care Management Services is the final segment to experience the effects of changing injury trends since it generally receives referrals for service a number of months after the initial injury occurs. Accordingly, we believe a primary cause of the decline in revenue experienced in Care Management Services in 2003 is related to the effects of declines in workplace injuries that we experienced in our Health Services business during 2002. As we are currently seeing gradual improvements in the relative visit amounts in our Health Services segment, we anticipate that we could experience a similar future recovery in the rates of referrals in Case Management Services based on the degree to which employment trends stabilize and return to historical rates of growth.

        In addition to the economic effects described above, we have also encountered revenue declines in our independent medical exams and case management services associated with client referral volume decreases due to integration of acquired operations with our own, increased regional competition, and potentially due to a trend by certain insurance company clients to lengthen the amount of time prior to referring cases for case management services and independent medical exams.

Cost of Services

        Total cost of services increased $5.9 million, or 0.7%, in 2003 from the prior year due to increased expenses in Health Services and Network Services, partially offset by decreased costs in Care Management Services. The increases in expenses relate primarily to an increase in the number of visits to our health centers and increased business volumes in our workers' compensation-based preferred provider organization and provider bill repricing and review services. The decrease in expenses in our Care Management Services business segment relates primarily to decreased personnel headcounts from cost reduction initiatives and other factors. Primarily during the fourth quarter of 2002, we undertook several measures to reduce our overall personnel costs and other expenses. These initiatives had a favorable effect on our overall cost structure during 2003 and particularly benefited the Care Management business segment. During the summer of 2002 we had approximately 10,450 employees and, primarily due to our cost reduction initiatives, during the course of 2003 we had approximately 10,000. These reductions were partially responsible for our ability to limit the relative increase in expenses during 2003 as compared to the increase in revenue. While we will continue to seek ways to minimize our costs in future periods, given that we have not recently undertaken cost reduction efforts as significant as those implemented during the later part of 2002, our prospective cost of services will likely grow in a manner more commensurate with our growth in revenue.

Gross Profit

        Due primarily to growth in the higher margin Health Services and Network Services business segments, and the benefits of cost reductions put into place during the later part of 2002, we had a significant increase in gross profit and gross profit margin in 2003 as compared to 2002.

        Health Services.    The primary factor in Health Services' gross profit increase of $23.9 million in 2003 as compared to 2002 was a $14.3 million improvement in revenue, increases in ancillary services and our corresponding utilization of the fixed-cost nature of our existing center facilities. Health Services remaining gross profit increase was a $9.6 million increase in accounts receivable reserves related to the change in accounting estimate in the first quarter of 2002, consisting of a $7.9 million reduction in revenue and a $1.7 million increase in cost of services.

        Network Services.    Network Services' gross profit and gross profit margin increases in 2003 from 2002 were primarily due to revenue growth in 2003 and the relatively fixed nature of this segment's expenses. This segment's gross profit increase for 2003 compared 2002 was partially offset by the $1.3 million accounts receivable adjustment in the first quarter of 2002.

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        Care Management Services.    The slight increases in 2003 gross profit and gross profit margin were due to the $1.2 million accounts receivable reserve adjustment in the first quarter of 2002, partially offset by reductions in costs in excess of the declines in revenue.

General and Administrative Expenses

        General and administrative expenses increased 15.7% in 2003 to $122.9 million from $106.2 million in 2002, or 11.7% and 10.6% as a percentage of revenue for 2003 and 2002, respectively. The increase in general and administrative expenses during 2003 was primarily due to increased compensation and benefits costs, as well as higher costs associated with depreciation and property and casualty insurance. Additionally, the increase for 2003 from 2002 was affected by a $3.9 million reduction in employee benefits in the first quarter of 2002 associated with a reduction in the amount of employee contributions we matched in our defined contribution plan as compared to prior years.

Interest Expense, Net

        Interest expense decreased $7.3 million in 2003 to $56.3 million from $63.6 million in 2002. This decrease was primarily due to the termination of our interest rate collars in August 2003, the redemption of $47.5 million of our 13% senior subordinated notes in July 2002 and the prepayment of $25.0 million of our previous credit facility in November 2002, slightly offset by the additional $180.0 million of 9¹/2% senior subordinated notes issued in the later half of 2003. As of December 31, 2003, approximately 50.6% of our debt contained floating rates. Rising interest rates would negatively impact our results. See "—Liquidity and Capital Resources."

Interest Rate Hedging Arrangements

        In 2003 and 2002, we used interest rate collars to reduce our exposure to variable interest rates and because our previous credit agreement required them. These collars generally provided for certain ceilings and floors on interest payments as the three-month LIBOR rate increased and decreased, respectively. The changes in fair value of this combination of ceilings and floors were recognized each period in earnings. We recorded a gain of $9.9 million in 2003 as compared to a loss of $7.6 million in the prior year. The computation of these gains and losses was based upon the change in the fair value of our interest rate collar agreements. The earnings impact from these gains and losses resulted in non-cash charges or credits and did not impact cash flows from operations or operating income. There had been periods with significant non-cash increases or decreases to our earnings relating to the change in the fair value of the interest rate collars. In August 2003, we completed a series of refinancing transactions, which included terminating our hedging arrangements. The costs related to recognizing changes in their fair value were charged to expense in the third quarter of 2003. For a further discussion of the refinancing transactions, see "—Liquidity and Capital Resources."

Early Retirement of Debt

        In August 2003, we terminated our previous credit facility in connection with the 2003 refinancing transactions. In accordance with SFAS 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections, we included in income from continuing operations $7.8 million of debt extinguishment costs in the third quarter of 2003 for the write-off of related deferred financing fees and other expenses. For a discussion of the 2003 refinancing transactions, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Overview." For a further discussion of our debt, see note 5 in our audited consolidated financial statements included elsewhere in this prospectus.

Provision for Income Taxes

        We recorded tax provisions of $6.2 million and $10.6 million in 2003 and 2002, respectively, which reflected effective tax rates of 12.6% and 1,036.5%, respectively. The effective rate differed from the statutory rate primarily due to the impact of state income taxes and the release of the deferred income tax valuation allowance. Due to our current relationship of taxable income as compared to net income, our effective tax rate can vary significantly from one period to the next depending on relative changes in net income. As such, we currently expect further variation in our effective tax rate in 2004. Due to the 2003 refinancing transactions and other factors, we have determined that the valuation allowance against our deferred income tax assets is no longer required. This determination was made in the fourth quarter of 2003. Accordingly, during the quarter, we recorded a one time benefit of approximately $4.0 million in our income tax provision associated with the reversal of the deferred income tax valuation allowance. For a further discussion of income taxes, see note 7 in our audited consolidated financial statements included elsewhere in this prospectus.

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Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

        The following table provides the results of operations for years ended December 31, 2001 and 2002 ($ in millions):

			Year Ended December 31,						Change
			2001			2002			$			%
Revenue:
	Health Services		$	443.3		$	472.0		$	28.7		6.5	%
	Network Services			185.3			230.3			45.0		24.3
	Care Management Services			228.3			296.8			68.5		30.0
		Total revenue	$	856.9		$	999.1		$	142.2		16.6	%
Cost of services:
	Health Services		$	375.5		$	406.1		$	30.6		8.1	%
	Network Services			110.2			138.2			28.0		25.4
Care Management Services				200.2			267.1			66.9		33.4
		Total cost of services	$	685.9		$	811.4		$	125.5		18.3	%
Gross profit:
	Health Services		$	67.8		$	65.8		$	(2.0	)	(2.9	)%
	Network Services			75.1			92.1			17.0		22.6
	Care Management Services			28.1			29.7			1.6		5.7
		Total gross profit	$	171.0		$	187.6		$	16.6		9.7	%
Gross profit margin:
	Health Services			15.3	%		13.9	%				(1.4	)%
	Network Services			40.5			40.0					(0.5	)
	Care Management Services			12.3			10.0					(2.3	)
		Total gross profit margin		20.0	%		18.8	%				(1.2	)%

Revenue

        The increase in revenue was due to growth in all of our segments. While Network Services and Care Management Services reflected significant growth in their reported revenue during the year, these revenue increases were largely due to our acquisition of NHR and, to a lesser extent, the effects of our acquisition of HNS, both of which occurred in November 2001.

        Due to a change in accounting estimate for accounts receivable reserves, we increased contractual allowances and correspondingly reduced revenue by $5.4 million in the first quarter of 2002. Following an extensive review of our accounts receivable history and collection experience that used new data provided by recently implemented information systems, we determined that additional contractual allowances were required as of March 31, 2002. This increase in accounts receivable reserves related primarily to Health Services, which reduced its revenue by $7.9 million in the first quarter, and was partially offset by receivables reserve adjustments of $1.3 million in Network Services and $1.2 million in Care Management Services.

        Total contractual provisions offset against revenue during the years ended December 31, 2002 and 2001 were $53.7 million and $35.9 million, respectively. The increase was primarily due to the accounts receivable reserve adjustment in 2002 and a full year impact of the NHR acquisition.

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        Health Services.    Health Services' revenue in 2002 increased $36.6 million, or 8.3%, due to the acquisition and development of centers, as well as growth in our on-site and ancillary services. This increase was partially offset by the effect of the $7.9 million accounts receivable reserve adjustment. The full year impact of the 15 centers acquired in 2001 and the 12 centers developed during 2001, as well as the three centers acquired during 2002, contributed to the revenue growth. A number of these centers were subsequently consolidated with other centers we previously owned in the same markets. The number of total patient visits per day to our centers in 2002 increased 3.6% compared with 2001 and decreased 2.2% on a same-center basis. For the years ended December 31, 2002 and 2001, Health Services derived 71.4% and 71.1% of its comparable same-center net revenue from the treatment of work-related injuries and illnesses, respectively, and 28.6% and 28.9% of its net revenue from non-injury and non-illness related medical services, respectively. Excluding on-site and ancillary services, injury-related visits constituted 49.9% of same-center visits in 2002, as compared to 51.4% for 2001. The slight increase in non-injury related visits in 2002 as compared to the prior year was primarily due to an increase in the number of new-hires made by our clients in 2002, mainly in the last half of the year, as compared to 2001, as well as hiring by new customers added during 2002. The new-hires activity affected the number of pre-employment drug screens and physical exams performed. In 2002, we experienced decreases in injury visits as compared to the prior year due primarily to a decline in the number of injuries occurring in our clients' workplaces. On a same-center basis, average revenue per visit increased 1.3% for 2002 as compared to 2001, primarily due to increases in the average prices charged for our services, partially offset by a smaller percentage of our visits being injury visits in 2002. The average fees charged for injury visits are generally higher than those charged for non-injury related visits. Same-center revenue was $396.5 million and $378.0 million for 2002 and 2001 respectively, while revenue from acquired and developed centers and ancillary services was $83.4 million and $65.3 million for the same respective periods.

        Network Services.    The increase in Network Services' revenue was primarily attributable to our acquisitions of NHR and HNS in November 2001. Additionally, we experienced growth in our non-network bill review services. This growth was primarily due to an increase in the amount of gross charges reviewed as compared to the prior year and the amount of savings achieved through our review of medical charges.

        Care Management Services.    Revenue growth for Care Management Services was due primarily to our NHR acquisition in November 2001. Revenue from existing customers experienced a slight decline from the prior year. Like our two other business segments, a majority of our Care Management Services are provided to clients in the workers' compensation market. In a manner similar to our other business segments, we have experienced declines in referral trends, which we believe primarily relate to the overall drop in nationwide employment and related rates of workplace injuries. Generally, Health Services is the first segment to be affected by economic downturns and upturns since it sees patients at the initial time of injury. Network Services is the second segment to be affected since it involves the review of bills generated from injury-related visits. Care Management Services is the final segment to experience the effects of changing injury trends since it generally receives referrals for service a number of months after the initial injury occurs. Accordingly, we believe a primary cause of the decline in revenue experienced in Care Management Services in 2002 was related to the effects of declines in workplace injuries that we first experienced in the Health Services business during 2001.

        In addition to the economic effects described above, we have encountered, to a lesser extent, some revenue declines in our independent medical exams services associated with client referral volume decreases due to the integration of NHR's operations with our own.

Cost of Services

        The increase in total cost of services in 2002 from 2001 was primarily due to the acquisition of NHR and HNS in November 2001. Additionally, adjustments to the accounts receivable reserve in the

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first quarter of 2002 contributed to this increase. As part of the review of our accounts receivable history and collection experience, Health Services recorded an adjustment of $1.7 million in the first quarter of 2002 to increase its bad debt reserves.

Gross Profit

        The increase in the gross profit was primarily due to the acquisitions of NHR and HNS in November 2001. The decrease in the gross profit margin was due primarily to revenue increases in Care Management and Network Services that did not proportionately offset the increases in our cost of services. The decrease in our gross profit percentage was also due to the change in our accounting estimate for accounts receivable reserves in the first quarter of 2002.

        Health Services.    Health Services' gross profit decreased $2.0 million to $65.8 million in 2002 from $67.8 million in 2001, and its gross profit margin decreased by 1.4% to 13.9% from 15.3% for the same periods. The primary factor in this gross profit decrease for 2002 was a $9.6 million increase in accounts receivable reserves related to the change in accounting estimate in the first quarter of 2002, consisting of a $7.9 million reduction in revenue and a $1.7 million increase in cost of services. Health Services' offsetting gross profit increase of $7.6 million was primarily due to improved revenue and the comparative improvement in the year-to-year performance of Em3 and OccMed.

        Network Services.    Network Services' gross profit increase in 2002 from 2001 was primarily related to the acquisition of NHR in 2001. The slight decrease in the gross margin was due to higher proportionate growth in cost of services over the growth in revenue.

        Care Management Services.    Care Management Services' gross profit increase in 2002 from 2001 was primarily due to the 2001 acquisition of NHR. Decreases in our comparative gross margin related primarily to reductions in revenue for which there were not corresponding reductions in costs. Additionally, costs within Care Management Services, and to a lesser extent in Network Services, were also affected during the year due to an increase in the staffing levels and physician costs associated with services provided to our auto insurance clients. These cost increases reflect both the expansion of the business in markets where we are seeking new business as well as increases in service levels to existing customer accounts. During the latter part of the third quarter and throughout the fourth quarter of 2002, we evaluated and implemented various cost reduction initiatives in an effort to lower the cost structure of our case management services and independent medical exams businesses. These initiatives generally seek to lower our staffing to levels more commensurate with current referral volume levels, and they could contribute to improvements in our Care Management Services margins as a whole. However, our margin will be dependent both on our ability to achieve and sustain the planned reductions as well as on the degree to which we achieve stable or growing revenue trends.

General and Administrative Expenses

        General and administrative expenses for 2002 were $106.2 million, or 10.6% of revenue, compared to $81.6 million, or 9.5% of revenue, for 2001. This increase was primarily due to the acquisitions of NHR and HNS in 2001. Partially offsetting this increase was a 2002 decrease in general and administrative expenses related to a $2.4 million reduction in employee benefits associated with a reduction in the amount of employee contributions we matched in our defined contribution plan as compared to prior years. This decrease in expenses was offset by $2.1 million in expenses associated with the separation of our former chief operating officer, certain other officers and division management.

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Amortization of Intangibles

        Amortization of intangibles decreased in 2002 to $3.8 million from $15.7 million in 2001, or 0.4% and 1.8% as a percentage of revenue for 2002 and 2001, respectively. This decrease was primarily the result of the implementation of SFAS 142, Goodwill and Other Intangible Assets on January 1, 2002, which discontinued the amortization of goodwill and intangible assets with an indefinite life, partially offset by the amortization of other intangibles associated with the NHR acquisition in November 2001.

Unusual Charges

        Due to a change in estimates, we reversed $1.7 million in restructuring costs in 2002 related to restructuring reserves from 1998 and 1999. Transaction costs of $0.5 million relating to the Em3 and OccMed acquisitions partially offset these expense reversals. For further discussion of our unusual charges, see "—Unusual Charge Reserves" below and note 4 to our audited consolidated financial statements included elsewhere in this prospectus.

Interest Expense, Net

        Interest expense decreased $2.8 million in 2002 to $63.6 million from $66.4 million in 2001. This decrease was due primarily to lower interest rates in 2002 and the redemption of $47.5 million of our existing 13% senior subordinated notes in July 2002. As of December 31, 2002, approximately 70.2% of our debt bore interest at floating rates.

Interest Rate Hedging Arrangements

        In 2002 and 2001, we used interest rate collars to reduce our exposure to variable interest rates and because our previous credit agreement required them. These collars generally provided for certain ceilings and floors on interest payments as the three-month LIBOR rate increased and decreased, respectively. The changes in fair value of this combination of ceilings and floors were recognized each period in earnings. We recorded a loss of $7.6 million in 2002, as compared to a loss of $13.6 million for 2001. These losses were based upon the change in the fair value of our interest rate collar agreements. This earnings impact and any subsequent changes in our earnings as a result of the changes in the fair values of the interest rate collars were non-cash charges or credits and did not impact cash flows from operations or operating income. In connection with the 2003 refinancing transactions, we terminated these collars.

Early Retirement of Debt

        We redeemed $47.5 million of our existing 13% senior subordinated notes in July 2002 and prepaid $25.0 million of our previous senior term debt in November 2002. In accordance with SFAS 145, we included in income from continuing operations $7.4 million and $0.5 million of debt extinguishment costs in the third and fourth quarters of 2002, respectively. These costs were comprised of $6.2 million premium over the face amount of the redeemed existing 13% senior subordinated notes and $1.7 million of related existing deferred financing fees and other expenses.

Provision for Income Taxes

        We recorded tax provisions of $10.6 million and $3.8 million in 2002 and 2001, which reflected effective tax rates of 1,036.5% and (25.6%), respectively. The effective rate differed from the statutory rate primarily due to the impact of state income taxes and the deferred income tax valuation allowance. For further discussion of our income taxes, see "Critical Accounting Policies—Deferred Income Tax Asset Valuation Allowance" and note 7 in our audited consolidated financial statements included elsewhere in this prospectus.

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Unusual Charge Reserves

        In connection with the NHR acquisition in November 2001, we recorded $6.0 million in asset write-downs and $6.8 million in restructuring costs, which were primarily associated with employee severance and facilities consolidation costs. Of this $12.8 million, $5.5 million was recognized in 2001 as a charge for the acquisition of affiliate and was reflective of WCAS's proportionate ownership percentage in NHR as applied to the total amount of asset write-downs and restructuring liabilities that occurred in connection with the acquisition. Unusual charges of $0.5 million were recorded to reflect employee severance and facility consolidation costs associated with our facilities. The remaining $6.8 million, which was reflective of the remaining proportionate ownership percentage in NHR as applied to the total amount of asset write-downs and restructuring liabilities that occurred in connection with the acquisition, were recorded under the purchase method of accounting. In the last half of 2002, we recorded an additional $0.6 million to the restructuring cost accrual due to a change in estimates. Through December 31, 2003, we used $6.0 million associated with asset write-downs, and we had paid approximately $0.9 million for professional fees and services, including investment banking, legal, accounting and regulatory fees, $3.4 million in facility consolidations, $2.0 million in costs related to personnel reductions and $0.1 million for other unusual costs. At December 31, 2003, approximately $1.0 million of the unusual cost accrual remained for facility obligations with terms expiring through 2006, costs related to personnel reductions and other unusual charges. We anticipate that the majority of the liability will be paid over the next 12 months.

Acquisitions and Divestitures

        Periodically, we evaluate opportunities to acquire or divest of businesses when we believe those actions will enhance our future growth and financial performance. Currently, to the extent we consider acquisitions, they are typically businesses that operate in the same markets or along the same service lines as those in which we currently operate. Our evaluations are subject to our availability of capital, our debt covenant requirements and a number of other financial and operating considerations. The process involved in evaluating, negotiating, gaining required approvals and other necessary activities associated with individual acquisition or divestiture opportunities can be extensive and involve a significant passage of time. It is also not uncommon for discussions to be called off and anticipated acquisitions or divestitures to be terminated shortly in advance of the date upon which they were to have been consummated. As such, we generally endeavor to announce material acquisitions and divestitures based on their relative size and anticipated effect on our company, once we believe they have reached a state in the acquisition or divestiture process where we believe that their consummation is reasonably certain and with consideration of other legal and general business practices.

        During 2003 and 2002, we acquired a total of nine occupational healthcare centers, as well as the 12 centers obtained in the acquisition of substantially all of the assets and liabilities of OccMed. During this time we also acquired Em3. We currently believe we will consummate some acquisitions of centers in small transactions through our Health Services segment during 2004.

Liquidity and Capital Resources

        The $155.0 million aggregate principal amount of the old notes was issued as part of the Transactions. See "Description of the New Notes" for a discussion of the terms of the new notes. Concurrent with the offering of the old notes, we amended our existing credit facility to enable us to incur an additional $70.0 million in term indebtedness. Our amended credit facility consists of a $405.0 million term loan facility and a $100.0 million revolving loan facility. See "Description of Other Indebtedness—Amended Credit Facility" for further description of the terms of the amended credit facility. The net proceeds from the old notes offering, together with borrowings under our amended credit facility and cash on hand, were used, or will be used, to (1) purchase $114.9 million in principal amount of our existing 13% senior subordinated notes that were tendered in the tender offer for these

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notes, pay $4.7 million of accrued and unpaid interest to the purchase date and pay $9.8 million of related tender offer premiums and consent payments, (2) declare a dividend of $97.3 million to our parent, Concentra Inc., approximately $96.0 million of which was paid following the consummation of the Financing Transactions and approximately $1.3 million of which will be paid on a deferred basis to holders of our parent's deferred share units, (3) on or about August 16, 2004, redeem the $27.6 million in principal amount of the 13% senior subordinated notes not tendered in the tender offer, pay approximately $1.8 million of accrued interest thereon and pay approximately $1.8 million in redemption premiums, (4) pay $1.9 million in aggregate cash bonuses to our management, (5) pay $0.6 million to holders of "in-the-money" options to purchase shares of common stock of our parent and (6) pay aggregate fees and expenses of approximately $7.3 million.

        We currently believe that our cash balances, the cash flow generated from operations and our borrowing capacity under our amended credit facility will be sufficient to fund our working capital, occupational healthcare center acquisitions and capital expenditure requirements for the immediately foreseeable future. Our long-term liquidity needs will consist of working capital and capital expenditure requirements, the funding of any future acquisitions, the repayment of borrowings under our amended credit facility and the repayment of outstanding indebtedness, including the notes offered hereby. We intend to fund these long-term liquidity needs from the cash generated from operations, available borrowings under our amended credit facility and, if necessary, future debt or equity financing. However, our ability to generate cash is subject to our performance, general economic conditions, industry trends and other factors. Many of these factors are beyond our control or our ability to currently anticipate. Therefore, it is possible that our business will not generate sufficient cash flow from operations. We regularly evaluate conditions in the credit market for opportunities to raise new capital or to refinance existing debt. We cannot be certain that any future debt or equity financing will be available on terms favorable to us, or that our long-term cash generated from operations will be sufficient to meet our long-term obligations.

        Cash Flows from Operating Activities.    Cash flows from operating activities provided $79.5 million, $56.0 million and $113.6 million for the years ended December 31, 2001, 2002 and 2003, respectively. During 2001, $29.8 million of cash was provided by changes in working capital, primarily related to an increase in accounts payable and accrued expenses of $16.2 million, as well as decreases in prepaid expenses and other assets of $11.8 million and accounts receivable of $1.8 million. Accounts payable and accrued expenses increased and prepaid expenses and other assets decreased primarily due to the timing of certain payments, including the payment of accrued interest on our debt and payroll-related items, while accounts receivable decreased due to improved collections. During 2002, $10.7 million of cash was provided by changes in working capital, primarily related to decreased accounts receivable of $13.1 million and decreased prepaid expenses and other assets of $6.4 million, partially offset by decreased accounts payable and accrued expenses of $8.8 million. The 2002 decrease in net accounts receivable primarily relates to a $7.1 million net adjustment to increase contractual and bad debt allowances in the first quarter of 2002 and other increases to contractual and bad debt allowances. The first quarter 2002 adjustment was a result of the change in accounting estimate for accounts receivable reserves discussed earlier. During 2002, accounts payable and accrued expenses decreased due to the timing of certain payments, including payment of accrued interest on our debt. The increase in cash flows from operating activities in 2003 as compared to 2002 was primarily a result of increased operating income and an increase in accounts payable and accrued liabilities, partially offset by an increase in accounts receivable and prepaid expenses and other assets. During 2003, $21.4 million of cash was provided by changes in working capital, related to increased accounts payable and accrued liabilities of $32.5 million, partially offset by increased accounts receivable of $2.1 million and increased prepaid expenses and other assets of $9.0 million. Prepaid expenses and other assets increased primarily due to the timing of certain payments, and accounts receivable increased primarily due to continued and seasonal revenue growth. Accounts payable and accrued expenses increased due to the timing of certain payments and an increase of $7.1 million in deferred revenue.

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        Cash flows from operating activities used $0.6 million and $1.7 million for the three months ended March 31, 2003 and 2004, respectively. During the first quarter of 2003, $17.3 million of cash was used by changes in working capital, related to increased accounts receivable of $7.0 million, increased prepaid expenses and other assets of $2.7 million and decreased accounts payable and accrued expenses of $7.6 million. The increase in accounts receivable primarily related to increases in revenue in the first quarter of 2003. Accounts payable and accrued expenses decreased due to the timing of certain payments, including payment of accrued interest on our debt. The decrease in cash flows from operating activities in the first quarter of 2004 as compared to the first quarter of 2003 was primarily a result of an increased reduction in accounts payable and accrued liabilities and increased accounts receivable, partially offset by decreased prepaid expenses and other assets and increased operating income. During the first quarter of 2004, $21.1 million of cash was used by changes in working capital, related to decreased accounts payable and accrued liabilities of $18.6 million and increased accounts receivable of $9.7 million, partially offset by decreased prepaid expenses and other assets of $7.2 million. We typically use more cash for accounts receivable in the first quarter due primarily to the seasonality and corresponding revenue increase of our workers' compensation related businesses. Accounts payable and accrued expenses and prepaid expenses and other assets decreased due to the timing of certain payments, including payment of accrued interest on our debt, the payment of annual incentive bonuses, and taxes. One of our financial objectives is to minimize the amount of net working capital necessary for us to operate. We believe that through these efforts, we may be able to generally reduce our overall borrowing requirements. Accordingly, we periodically strive to improve the speed at which we collect our accounts receivable and to maximize the duration of our accounts payable.

        Our DSO on accounts receivable was 73 days at December 31, 2001, as compared to 62 days as of December 31, 2002 and 58 days as of December 31, 2003. At March 31, 2003, our DSO was 62 days compared to 60 days at March 31, 2004. We calculated DSO based on accounts receivable, net of allowances, divided by the average revenue per day for the prior three months. The decrease in the DSO in 2003 from 2002 and 2001, as well as the decrease in the first quarter of 2004 from the prior year's first quarter, was primarily due to our increased focus on collections and increased allowances on accounts receivable.

        In 2003, we paid approximately $1.2 million related to unusual charges that occurred in the fourth quarter of 1998, third quarter of 1999, fourth quarter of 2001, and fourth quarter of 2002. At December 31, 2003, approximately $1.0 million of the accrual for these unusual charges remained for facility lease obligations, personnel reduction costs and other payments. In the first quarter of 2004, we paid approximately $0.1 million related to unusual charges that occurred in the fourth quarter of 1998 and fourth quarter of 2001. At March 31, 2004, approximately $1.0 million of the accrual for these unusual charges remained for facility obligations with terms expiring through 2006, personnel reductions and other unusual charges. We anticipate that the majority of this liability will be paid over the next 12 months.

        Cash Flows from Investing Activities.    In 2001, we used net cash of $107.2 million in connection with acquisitions and $45.8 million of cash to purchase property and equipment, the majority of which was spent on new computer hardware and software technology, and leasehold improvements. Cash flows from investing activities also included $1.1 million of cash received from the sale of internally-developed software. In 2002, we used net cash of $1.7 million in connection with acquisitions and $35.1 million of cash to purchase property, equipment and other assets, the majority of which was spent on new computer hardware and software technology, and leasehold improvements. Cash flows from investing activities also included $0.5 million of cash received from the sale of internally-developed software. As required by relevant accounting literature, the proceeds from this sale were offset against the amount capitalized on the consolidated balance sheet and were not recognized as revenue. In 2003, we used net cash of $6.2 million in connection with acquisitions and $29.6 million to purchase property,

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equipment and other assets, the majority of which was spent on new computer hardware and software technology, including $1.5 million of software acquired under a capital lease.

        In the first quarters of 2003 and 2004, we used net cash of $7.2 million and $5.3 million, respectively, to purchase property, equipment and other assets. The majority of these purchases was for new computer hardware and software technology, including $1.5 million of software acquired under a capital lease in the first quarter of 2003.

        Cash Flows from Financing Activities.    Cash flows provided by financing activities in 2001 of $66.3 million were primarily due to $49.7 million in net proceeds from the issuance of common stock by Concentra Inc. and increased borrowing on our amended credit facility of $6.0 million, $12.9 million of contributions from our primary stockholder, and $5.1 million of contributions from minority interests, reduced by debt repayments of $5.1 million. The proceeds from Concentra Inc.'s additional issuance of equity were used as a part of the financing for our fourth quarter 2001 acquisitions of NHR and HNS. Cash flows used in financing activities in 2002 of $9.6 million were primarily due to $80.6 million in debt repayments, partially offset by $53.0 million of proceeds from the issuance of 54 shares of common stock to Concentra Inc. and $25.4 million in proceeds contributed to us from the issuance of common stock by Concentra Inc. In order to finance the purchase of the 54 shares of our common stock, Concentra Inc. entered into a $55.0 million bridge loan agreement dated June 25, 2002 with affiliates of Salomon Smith Barney, Credit Suisse First Boston LLC and Citicorp North America, Inc. This loan requires no cash interest payments until maturity and is guaranteed by WCAS and WCAS Capital Partners III, L.P. In connection with the November 2003 refinancing transactions, we extended the maturity of this loan from June 24, 2004 to March 31, 2005. The repayment of debt primarily consisted of the third quarter 2002 redemption of $47.5 million of our 13% senior subordinated notes and $28.7 million in principal payments on our senior debt. Of the $28.7 million in principal payments, $25.0 million reflected a fourth quarter prepayment of debt made in connection with our amendment of our senior debt covenants, and the remainder reflected scheduled payments of principal. Additionally, cash flows from financing activities in 2002 reflect the payment of $3.3 million in deferred financing fees to our senior lenders under our amended credit facility in connection with gaining their approval for the redemption discussed above and in establishing revised covenant requirements as described below. Cash flows from financing activities for 2002 also reflected $4.0 million in net proceeds and payments from the issuance and repayment of short-term debt for Em3 and OccMed. Cash flows used in financing activities in 2003 of $54.1 million were primarily due to payments on debt of $340.5 million, transfers of $193.9 million to Concentra Inc., $23.6 million in payments to terminate hedging arrangements and $13.2 million of payments of deferred financing costs, partially offset by $519.2 million in proceeds from the issuance of debt. These activities primarily related to the August 2003 and November 2003 refinancing transactions previously discussed. Included in the $519.2 million in proceeds from the issuance of debt was $1.5 million in proceeds from a five-year capital lease for software that we entered into in February 2003. We paid $1.5 million at the lease execution, with the remaining payment due in one year. Additionally, we paid $2.3 million in distributions to minority interests in 2003.

        Cash flows used in financing activities in the first quarter of 2003 of $1.9 million were primarily due to payments on debt of $2.5 million and distributions to minority interests of $1.1 million, partially offset by $1.5 million in proceeds from a capital lease. Cash flows used in financing activities in the first quarter of 2004 of $2.5 million were primarily due to payments on debt of $2.4 million. In February 2003, we entered into a five-year capital lease for software. We paid $1.5 million at the lease execution, with the remaining $1.5 million paid in the first quarter of 2004. Additionally, we paid $1.0 million and $0.8 million in the first quarters of 2003 and 2004, respectively, on our term loans under our amended credit facility.

        As necessary, we make short-term borrowings under our credit facility and have made short-term borrowings under our previous credit facility for working capital and other purposes. Given the timing

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of our expenditures for payroll, interest payments, acquisitions and other significant outlays, our level of borrowing under our revolving credit facility can vary substantially throughout the course of an operating period. Since January 1, 2002, the level of our borrowings under our revolving credit facilities has varied in the following manner (in thousands):

	Borrowing Level
Quarters Ending
	Minimum		Maximum		Average		Ending
March 31, 2002	$	6,000	$	35,000	$	22,389	$	21,500
June 30, 2002		—		29,000		19,082		—
September 30, 2002		—		28,500		12,821		6,000
December 31, 2002		—		12,500		1,957		—
March 31, 2003		—		9,500		1,961		—
June 30, 2003		—		—		—		—
September 30, 2003		—		—		—		—
December 31, 2003		—		—		—		—
March 31, 2004		—		—		—		—

        Off-Balance Sheet Arrangements.    We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

        Contractual Obligations.    The following table sets forth our schedule of contractual obligations prior to the Transactions at December 31, 2003, including current maturities of our long-term debt, future minimum lease payments due under non-cancelable operating leases, capital lease obligations, and other contractual obligations reflected in long-term liabilities. We did not have any open purchase obligations at December 31, 2003. Amounts in thousands:

	Total		2004		2005-06		2007-08		After 2008
Operating leases	$	165,517	$	40,952	$	55,906	$	31,444	$	37,215
Capital lease obligations		1,516		1,516		—		—		—
Long-term debt		655,825		3,350		6,700		100,500		545,275
Other contractual obligations reflected in long-term liabilities on the consolidated balance sheet		11,408		1,403		174		9,752		79
Total	$	834,266	$	47,221	$	62,780	$	141,696	$	582,569

        The following table sets forth our pro forma schedule of contractual obligations, including current maturities of our long-term debt, future minimum lease payments due under non-cancelable operating leases, capital lease obligations and other contractual obligations as if the Transactions had occurred on January 1, 2004. The pro forma table is based upon available information and certain assumptions we believe are reasonable. The following pro forma table is presented for informational purposes only and does not purport to represent what our contractual obligations actually would have been had the Transactions occurred at that time (dollars in thousands):

	Total		2004		2005-06		2007-08		After 2008
Operating Leases	$	165,517	$	40,952	$	55,906	$	31,444	$	37,215
Capital Lease Obligations		1,516		1,516		—		—		—
Long-term Debt		738,325		4,050		8,100		121,500		604,675
Other Contractual Obligations		12,632		1,403		174		10,976		79
Pro Forma Total	$	917,990	$	47,921	$	64,180	$	163,920	$	641,969

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        Senior Credit Facility.    Our amended credit facility requires us to satisfy certain financial covenant ratio requirements including leverage ratios, interest coverage ratios and fixed charge coverage ratios. Our previous credit facility also contained similar financial covenant ratio requirements. In 2003 and the first quarter of 2004, we were in compliance with our covenants, including our financial covenant ratio tests. The leverage ratio and interest coverage ratio requirements for the quarter ended December 31, 2003, were 5.00 to 1.00 and 2.25 to 1.00, respectively. While less restrictive than the requirements under the previous credit facility, the ratio tests under the amended credit facility become more restrictive in future quarters through the fourth quarter of 2008. Although we currently anticipate achieving these required covenant levels, our ability to be in compliance with these more restrictive ratios will be dependent on our ability to increase cash flows over current levels. For further discussion of our growth strategy, see "Business—Our Business Strategy." At March 31, 2004, we had no borrowings and $18.1 million of letters of credit outstanding under our $100.0 million revolving credit facility and $332.5 million in term loans outstanding under our term loan facility. Our total indebtedness outstanding was $657.0 million at March 31, 2004.

        Our amended credit facility also contains prepayment requirements that occur based on certain net asset sales outside the ordinary course of business by us, from the proceeds of specified debt and equity issuances by us and if we have excess cash flow, as defined in the agreement. Our previous credit facility also contained prepayment requirements that occurred if our financial performance exceeded certain prescribed levels. We were not required to make any prepayments under the respective provisions in 2001, 2002, 2003 or the first quarter of 2004. However, we anticipate that we may meet these requirements in future periods.

Legal Proceedings

        We are party to certain claims and litigation in the ordinary course of business. We are not involved in any legal proceedings that we believe will result, individually or in the aggregate, in a material adverse effect upon our financial condition or results of operations.

Other Considerations

        Goodwill and Other Intangible Assets.    SFAS 142, requires us to perform an annual goodwill impairment test on a reporting unit basis. A reporting unit is the operating segment unless, at businesses one level below that operating segment (the component level), discrete financial information is prepared and regularly reviewed by management, and the businesses are not otherwise aggregated due to having certain common characteristics, in which case such component is the reporting unit. A fair value approach using projected cash flows and comparative market multiples is used to test goodwill for impairment. An impairment charge is recognized for the amount, if any, by which the carrying amount of goodwill exceeds its fair value.

        We completed our 2003 annual impairment test of goodwill and determined that no impairment existed at July 1, 2003. However, the fair value of Care Management Services exceeded its carrying value by approximately 22%, due primarily to this reporting unit's recent performance trends. Although current financial forecasts and operating trends continue to indicate that no impairment is required at March 31, 2004, a non-cash goodwill impairment charge to income may be incurred for this reporting unit in a future period if there is a modest decrease in future earnings.

        Industry Developments.    Recent litigation between healthcare providers and insurers has challenged the insurers' claims adjudication practices and reimbursement decisions. Although we are not a party to any of these lawsuits, nor do they involve any of the services we provide, these types of challenges could affect insurers' use of cost containment services.

        Healthcare providers often designate an independent third party to handle communications with healthcare payors regarding provider contracts, commonly referred to as a "messenger model." Inappropriate uses of the "messenger model" have recently been the subject of increased antitrust enforcement activity by the Federal Trade Commission and the Department of Justice. We are not involved in any enforcement or other actions regarding our use of the messenger model, and we believe that our use of the messenger model complies with applicable law.

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BUSINESS

Overview

        We are a leading provider of workers' compensation and other occupational healthcare services in the United States. We offer our customers a broad range of services designed to improve patient recovery and to reduce the total costs of healthcare. In 2003, we serviced over five million patient visits, reviewed and repriced over $12.0 billion in medical bills and managed or reviewed over 313,000 cases. Our initial treatment of workplace injuries and illnesses accounts for approximately 7% of total reported workplace injuries in the United States. The knowledge we have developed in improving workers' compensation results for our customers has enabled us to expand successfully into other industries, such as group health and auto insurance, where payors of healthcare and insurance benefits are also seeking to reduce costs.

        We believe we are the largest outsource provider of occupational healthcare outcomes improvement and cost containment services in the nation. Through our nationwide network of occupational healthcare centers, we serve employers who have more than 123,200 locations. We also provide services to over 3,500 insurance companies, group health plans, third party administrators and other healthcare payors. These payors and our employer customers provide virtually all of our revenue, with less than 0.1% of our revenue derived from Medicare or Medicaid reimbursement.

        We provide our services through three operating segments: Health Services, Network Services and Care Management Services. Our Health Services segment treats workplace injuries and performs other occupational healthcare services. As of March 31, 2004, we provided these services through our 250 owned and managed centers, located in 81 markets within 34 states. Approximately 570 affiliated primary care physicians, as well as affiliated physical therapists, nurses and other healthcare providers, perform professional services at our centers. Our Network Services segment offers services designed to assist insurance companies and other payors in the review and reduction of the bills they receive from medical providers. During 2003, we estimate that this segment enabled our customers to eliminate an estimated $2.1 billion in excess costs. Our Care Management Services segment offers services designed to monitor cases and facilitate the return to work of injured employees who have been out of work for an extended period of time due primarily to a work-related illness or injury.

        The following chart provides an overview of our services and customer markets:

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Our Competitive Strengths

        We believe that we are distinguished by the following competitive strengths:

        Leadership in Workers' Compensation and Occupational Healthcare.    We believe we are the nation's largest provider specializing in the treatment of workplace injuries and other occupational healthcare needs. In 2003, we serviced over five million patient visits, accounting for approximately 7% of total workplace injuries in the United States, reviewed and repriced over $12.0 billion in medical bills and managed or reviewed over 313,000 cases. Our extensive treatment, bill review and care management experience, as well as our clinicians' principal focus on occupational healthcare, enable us to deliver high-quality results and reduce workers' compensation costs for our customers.

        Demonstrated Superior Clinical Expertise and Outcomes.    We have developed a comprehensive set of clinical protocols for occupational injuries by collecting and analyzing data regarding treatment methodologies and outcomes achieved. By applying these clinical protocols consistently across our organization, we have produced superior patient outcomes and generated significant cost savings for our customers. For example, workplace injury patients we treated in 2001 were able to return to work in an average of 17 days, versus the national average of 23 days, as reported by the National Safety Council in 2001. Our track record of superior clinical outcomes allows us to demonstrate the value of our services to our current and prospective customers.

        National Service Network.    We currently operate 250 dedicated occupational healthcare centers across the United States, which we believe is the broadest national network of centers in the workers' compensation industry. We have operations in 34 states, giving us a regional presence in 81 markets. In addition, to address the needs of large employers whose workforce extends beyond the geographic coverage of our centers, we expand the reach of our service offerings by giving these employers access to an additional network of select occupational healthcare providers. These providers use our proprietary software to benchmark treatment methodologies and outcomes achieved, thereby extending the delivery of consistent, high quality health services to our customers. We believe that our numerous centers and our broad geographic reach provide us with an advantage in serving national customers over single-market or regional service providers.

        Comprehensive Scope of Services.    Our broad service offerings enable us to offer our customers a single source for workers' compensation, group health, and auto injury outcomes improvement and cost containment services. Our product offerings cover the continuum of services required to process a healthcare claim from the initial incident through its final resolution. For example, our Health Services segment provides services at the outset of a claim, including initial treatment and follow-up care. Through our Network Services segment we review healthcare bills to recover excess costs incurred on patient care, including cases in which a patient is treated by a out-of-network provider or a provider with whom the insurance company does not have a negotiated billing rate. Our Care Management Services segment helps our customers minimize the costs associated with workers' compensation cases where workplace injuries or illnesses prevent employees from returning to work for an extended period of time. During 2003, we estimate that we enabled our customers to eliminate more than $2.1 billion in excess costs by using our combined service offerings.

        Effective Use of Technology.    We have developed and maintain sophisticated information systems and an extensive, proprietary database of patient outcomes, disability management information, treatment protocols, and complex regulatory provisions governing the workers' compensation market. These resources currently enable us to generate cost savings for our customers by promptly identifying and addressing care being provided outside of recommended treatment parameters and generally reducing medical and administrative costs. In addition, our information systems enable us to automate certain administrative complexities in the markets we serve and allow our customers to more easily access the range of products and services we offer. These and other uses of technology enable us to

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deliver superior service quality and cost savings to our customers, as well as optimize our own operating efficiencies.

        Established Base of Blue Chip Customers.    Through our nationwide network of centers, we serve employers who have over 123,200 locations. We also provide services to over 3,500 insurance companies, group health plans, third party administrators and other healthcare payors. Nevertheless, no single customer represents more than 5% of our total annual revenue. We believe that we have been able to establish our strong customer base and achieve a solid rate of customer retention due to the significant name recognition that Concentra has achieved in the marketplace and due to our high quality performance.

        Strong Cash Flow Generation.    We believe our strong operating cash flow substantially enhances our competitive position in the markets we serve. During the twelve-month period ended March 31, 2004, we had cash flow from operating activities of $112.6 million. Our margins are primarily a result of our focus on superior clinical care and outcomes, our economies of scale, and our advanced information systems. In addition, we believe our strong operating cash flow strengthens our ability to fund organic and external growth initiatives, which enhances our competitiveness relative to our smaller, regional competitors.

Our Business Strategy

        Our goal is to further establish ourselves as a leading provider of healthcare outcomes improvement and cost containment services. We intend to achieve this goal by pursuing the following strategies:

        Actively Target New Health Services Customers.    We intend to continue to expand our Health Services operations by selling our services to employers and payors and by utilizing advanced database research techniques to identify potential new customers and new locations for our facilities. Qualified customers that could benefit from the services offered by one of our existing facilities are called on by one of our 230-person Health Services sales force. We also have a dedicated business development team that will continue to build and selectively acquire facilities in identified new and existing markets. By giving new customers access to high quality physicians employed by our affiliated physician groups, highly trained personnel and experience-based protocols, we intend to grow our patient visits and enhance our industry-leading position in occupational healthcare services.

        Intensify the Marketing of Our Network Services and Care Management Services.    We believe that multi-state insurance carriers, third party administrators, and self-funded employers will continue to seek innovative ways to address rising healthcare and workers' compensation costs, and will increasingly seek to outsource outcomes improvement and cost containment services to third parties. Across our three business segments, we have built a continuum of services that responds to these outsourcing needs. We intend to build on our reputation as a leading provider of workers' compensation services to expand our Network Services and Care Management Services segments by intensifying our marketing of these services to payors in the group health marketplace. We believe that our size and experience in the workers' compensation industry has allowed us to build awareness and credibility with this customer base. In addition, we believe that our significant visibility among key decision makers within these organizations will enhance our ability to expand the services we provide these current and potential customers through our Network Services and Care Management Services segments. We believe that our growth will be further enhanced as our multi-state customers, in turn, gain market share, due in part to the outcomes and efficiencies they enjoy by using our services.

Continue Investing in Technology to Broaden Our Service Offerings and Increase Profitability. We have used technology effectively to deliver and demonstrate better outcomes at a more efficient cost.

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        We intend to continue to invest in technology to identify and deliver further improvements in the treatment, management and administrative oversight of medical cases, thereby creating additional revenue opportunities for us from this proprietary resource. We also intend to continue building electronic interfaces with payors in an effort to reduce their administrative burdens and reduce our operating expenses. Additionally, we are currently evaluating strategies to provide our customers with fully outsourced document management and mailroom management solutions that would provide a single electronic storage location for all documents related to a claim. Our objective is to reduce our customers' costs related to claim and bill administration by combining this single electronic storage location with a proprietary web-based tool set that would allow easy entry of referrals, queries, and other request for services, as well as access to all documentation including reports, bills, and claims.

        Profitably Expand Our Outsourcing Services into the Group Health Market.    We intend to expand our presence in the group health industry. Historically, our focus in this industry has been in services designed to reduce and limit out-of-network medical costs. We believe that we are the largest outsource provider of these services in the nation today, managing over $5.7 billion annually in medical claim volume. We recently expanded the services we perform for this industry to include network management services, consisting of processes required to maintain numerous preferred provider and other managed care networks. Our services enable payors to outsource components of the network management function, namely contract repricing and provider file management, in order to improve payment accuracy and cycle times, eliminate redundant costs, and improve network management efficiency. We also provide complementary services that reduce the medical and administrative costs associated with network and out-of-network medical care and assist our customers in meeting automatic claim-adjudication objectives. We believe we are uniquely positioned to capture greater market share as demand for such strategic outsourcing services grows.

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Industry Overview

Health Services

        Occupational healthcare consists of two primary components: workers' compensation injury care and non-injury occupational healthcare services.

        Workers' Compensation Injury Care.    Generally, workers' compensation is a state-mandated, comprehensive insurance program for work-related injuries and illnesses. In the United States, each of the 50 states, the District of Columbia and, for federal employees, the federal government, maintains its own individual workers' compensation program. Canada has a federal workers' compensation program and similar workers' insurance programs at the provincial level. Each political jurisdiction is responsible for implementing and regulating its own program. Consequently, workers' compensation benefits and arrangements vary considerably among jurisdictions and are often highly complex.

        Workers' compensation legislation in the United States generally requires employers, either directly or indirectly through the use of insurance, to fund the total costs of an employee's medical treatment and all lost wages, legal fees and other costs associated with a work-related injury or illness. Typically, work-related maladies are broadly defined, and injured or ill employees are entitled to extensive benefits. Employers are required to provide first-dollar coverage with no co-payment or deductible due from the injured or ill employee and, in many states, there is no lifetime limit on expenses any one employee can incur. In exchange for providing this coverage to employees, employers are not liable for benefits in excess of those provided under the relevant state statute. Employers provide this extensive benefits coverage, both for medical costs and lost wages, by purchasing commercial insurance from private insurance companies, participating in state-run insurance funds or self-insuring.

        The amounts and methods of compensation for healthcare providers who perform workers' compensation injury care services differ from state to state. As of March 31, 2004, 40 states had adopted fee schedules under which all healthcare providers are uniformly compensated within a particular state. The fee schedules are set by each state and generally prescribe the maximum amounts that may be paid for a designated procedure. In states without fee schedules, healthcare providers are reimbursed based on usual, customary and reasonable fees charged in the particular state in which the services are provided.

        Limits on an employee's right to select a specific workers' compensation healthcare provider vary among states. According to the Workers' Compensation Research Institute, 37 states currently limit employees' initial choice of provider, and two states prohibited employees from changing providers. Furthermore, 45 states and the District of Columbia placed restrictions on employees' ability to switch providers, including provisions requiring employer approval for any changes. Generally, an employer will also have the ability to direct its employees to particular providers when the employer is self-insured. It has been our experience that our results of operations and business prospects in a particular state do not materially differ as a result of state-to-state differences in the requirements regarding direction of care. We believe that employers greatly influence their employees' choices of physicians even in states that permit employees to select their own providers.

        Many employers have been slow to adopt cost savings techniques to control their workers' compensation expenses until recently, primarily because the total costs involved are relatively small compared to those associated with group health benefits and because state-by-state regulations related to workers' compensation are more complex than those related to group health benefits. However, in recent years, the dollar amount of workers' compensation claims has increased significantly. According to the National Safety Council, total workers' compensation costs to employers in the United States exceeded $146.6 billion in 2003.

        Although total U.S. workers' compensation costs have increased, work-related injury rates have declined recently due to improvements in workplace safety and general shifts in job composition toward

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less physical work activities, as well as outsourcing of certain job functions to foreign countries. Historically, steady increases in the overall workforce have partially offset these declining injury rates. We believe the market for workers' compensation and occupational healthcare will grow in future years primarily due to the following factors:

•

premium increases for workers' compensation insurance;



•

broader definitions of work-related injuries and illnesses covered by workers' compensation laws;



•

the shifting of medical costs from group health plans to the workers' compensation system as the result of an increase in the number of uninsured individuals and the first dollar coverage provided in workers' compensation programs;



•

an aging work force;



•

medical cost inflation;



•

the under-utilization to date of comprehensive cost containment programs in the workers' compensation industry; and



•

the recovery of employment growth rates within the United States.

        Because workers' compensation benefits are mandated by law and subject to extensive regulation, insurers, third party administrators and employers do not have the same flexibility to alter benefits as they have with other health benefit programs. In addition, workers' compensation programs vary among jurisdictions, making it difficult for insurance companies and multi-state employers to adopt uniform policies to administer, manage and control the costs of benefits across states. As a result, managing the cost of workers' compensation requires approaches that are tailored to the specific regulatory environments in which the employer operates.

        Non-Injury Occupational Health Services.    Non-injury occupational health services include occupational physical examinations, drug and alcohol testing, functional capacity testing and other related programs designed to meet specific employer, state or federal requirements. Non-injury occupational healthcare services also include programs to assist employers in complying with an increasing number of federal and state health and safety requirements, including hearing conservation programs, toxic chemical exposure surveillance and monitoring programs and physical examinations mandated by the Department of Transportation and Federal Aviation Administration. Federal laws governing health issues in the workplace, including the Americans with Disabilities Act, have increased employers' demand for healthcare professionals who are experts in the delivery of these services.

Network Services and Care Management Services

        Our network services are designed to assist payors in the review and reduction of medical bills. Our care management services are designed to monitor and facilitate the resolution of cases involving injured employees who have been out of work for an extended period of time due to a work-related illness or injury. We provide our network services and care management services to the following three industries:

        Workers' Compensation Industry.    As workers' compensation costs continue to increase, employers are increasingly seeking assistance from strategic outsourcing providers to help control their costs. A number of states have adopted legislation encouraging the use of workers' compensation managed care organizations in an effort to enable employers to control their workers' compensation costs. State laws regulating managed care organizations generally provide employers with an opportunity to channel injured employees into provider networks.

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        Auto Insurance Industry.    Auto insurance carriers have experienced increased costs associated with the reimbursement of medical expenses, lost wages and other essential services related to personal injury protection coverage. In most states, medical evaluations and peer reviews are the primary mechanisms used to manage care rendered to individuals injured in auto accidents. Provider bill review may also be used to determine the appropriate reimbursement rate for medical services provided to injured parties. A few states have adopted formal medical management regulations that endorse the use of provider networks or formal utilization review programs.

        Group Health Industry.    According to the Centers for Medicare and Medicaid Services, private health insurance expenditures for personal healthcare in the United States were estimated to total over $607.0 billion in 2003. In particular, healthcare payors are exposed to high costs when medical care under a group health plan is delivered on a non-contractual basis, commonly referred to as an out-of-network claim. These claims arise when services are provided outside of either a healthcare payor's geographic coverage area or its network of providers. Out-of-network healthcare claims expose payors to a greater incidence of over-utilization, cost shifting, upcoding and billing errors than contracted or in-network claims do. Out-of-network bill review service providers produce savings for their customers by analyzing and applying cost savings techniques to out-of-network medical claims.

Services and Operations

        We provide our services through three primary operating segments: Health Services, Network Services and Care Management Services. Our service offerings in these segments encompass the performance of necessary services for each stage of a healthcare claim, from the initial incident through its final resolution.

Health Services

        Our health services include injury care services and other occupational healthcare services to assist our customers in maintaining healthy employees and safe workplaces. During 2003, approximately 50.1% of all patient visits to our centers were for the treatment of injuries or illnesses and 49.9% were for non-injury occupational healthcare services.

        Our principal channel for delivering health services is through our 250 owned and managed occupational healthcare centers, located in 81 markets within 34 states. In response to the needs of large employers whose workforces extend beyond the geographic coverage available through our centers, we have expanded our healthcare service offerings to include a network of select occupational healthcare providers. These providers use our proprietary software to benchmark treatment methodologies and outcomes achieved, thereby extending the delivery of consistent, high quality health services to our customers.

        By serving as an entry point for quality medical care in workers' compensation cases, we can promptly identify for employers those cases that have the potential to result in significant recovery time and employer costs. Also, through our ancillary programs, such as physical examinations, Americans with Disabilities Act compliance assistance, substance abuse testing, job-specific return-to-work evaluation and related injury prevention services, we strengthen our relationships with employers and help prevent occurrences of workplace injuries and illnesses.

        We develop clusters of centers in new and existing geographic markets through acquisitions and internal development. In selected markets in which a hospital management company, hospital system or other healthcare provider has a significant presence, we focus our expansion efforts on strategic joint ventures or management agreements. In our joint venture relationships, we typically acquire a majority ownership interest in the venture and agree to manage the venture for a management fee based on its net revenue.

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        Provider Arrangements.    We manage physician-owned entities or groups that employ the physicians, physical therapists and other healthcare providers performing healthcare services at our centers. Our affiliated physician groups are independently organized professional corporations or associations owned by physicians that hire these licensed providers to provide healthcare services to the centers' patients. The physicians employed by our affiliated physician groups do not maintain other practices. Each of the physicians typically enters into a written employment agreement with one of our affiliated physician groups that prohibits the physician from competing with the group within a defined geographic area and from soliciting its employees and clients for a period of time after termination of employment. The enforceability of these restrictive covenants varies from state to state, but the physician groups attempt to structure and enforce all of them in compliance with applicable laws.

        We maintain long-term management agreements with our affiliated physician groups under which we exclusively manage all aspects of the operation other than the provision of medical services. Under each management agreement, we provide a wide array of business services to our affiliated physician groups, such as:

•

non-medical support personnel;



•

practice and facilities management;



•

billing and collection;



•

accounting;



•

tax and financial management;



•

human resources management;



•

risk management;



•

marketing and information-based services, such as process management and outcomes analysis; and



•

assistance in the recruitment of physicians, nurses, physical therapists, and other healthcare providers.

        We receive a management fee based on the services performed at the centers. The management fee is subject to renegotiation and may be adjusted from time to time to reflect industry practice, business conditions and actual expenses for contractual allowances and bad debts. Our affiliated physician groups operate in accordance with annual budgets. We consult with our affiliated physician groups to aid in establishing their budgets. The management agreements with our affiliated physician groups provide that we have no obligation to supply working capital out of our funds for our affiliated physician groups or their operations.

        The physician owners of our affiliated physician groups retain sole responsibility for all medical decisions, as well as for hiring and managing physician employees, developing operating policies and procedures, implementing professional standards and controls and maintaining malpractice insurance. Subject to certain exceptions, each of our affiliated physician groups indemnifies us against any loss or expense arising from acts or omissions of the physician group, including claims for malpractice.

        Information Systems.    We use information systems and technology to enhance our delivery of occupational healthcare services. The backbone of our platform is a wide area network, or WAN, in each market in which we provide health services. All centers in a market use a patient administration system named OccuSource™ that allows each center to access and share a common database for that market. The database contains employer protocols, patient records and other information regarding our operations in the market. We also have created a centralized repository of patient data to be used for clinical outcomes analysis, among other things. We believe that our commitment to continued

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development of our healthcare information system assists us in our delivery of high quality, cost-effective services.

        We recently implemented a new application for our providers using wireless, handheld touchscreen devices in all of our centers. Our providers are now able to create and approve clinical notes in real time, which decreases the time spent on patient processing and invoice development.

        We typically generate revenue from our health services on a fee-for-service basis. Revenue from healthcare services as a percentage of our total revenue was approximately 51.7% in 2001 and 47.2% in 2002 and 48.7% in 2003.

Network Services

        Our network services include:

•

in-network and out-of-network bill review and repricing services;



•

network management;



•

access to preferred provider networks; and



•

first notice of loss or injury services.

        These services are designed to reduce medical and administrative costs by monitoring the timing, appropriateness and pricing of medical care. Our network services customers typically pay us an agreed-upon fee per bill reviewed and repriced or a percentage of their savings generated by the performance of our services, except that our first notice of loss or injury customers reimburse us on a fee-for-service basis.

        Although we perform all of our network services for the workers' compensation and auto insurance markets, these markets predominantly use our provider bill review and repricing services, preferred provider networks and first notice of loss or injury services. Currently, our principal customer base for our out-of-network bill review services is the group health market, but we continue to expand our out-of-network bill review services to the workers' compensation and auto insurance markets.

        We offer our network services both separately and on a bundled basis as a part of or as a full-service cost containment program. Our comprehensive approach to cost containment serves the needs of a broad range of customers, from local to national accounts.

        We believe that the demand for our network services will continue to increase as a result of:

•

greater payor awareness of the availability of these techniques for controlling the costs of medical claims;



•

verifiable savings obtained through application of cost containment techniques;



•

ongoing improvements in savings obtained through cost containment services; and



•

the need for enhanced claims processing efficiencies that will drive administrative savings in each industry that we serve.

        In-Network and Out-of-Network Provider Bill Review and Repricing.    We review and reprice medical bills for workers' compensation and auto insurance claims. Workers' compensation claims are repriced to either the state-mandated fee schedule rates or, for non-fee schedule states, a percentage of the usual, customary and reasonable rates. Additionally, our automated bill review service enables us to identify duplicative billings and provide our customers with access to certain preferred provider pricing schedules, including those of our contracted provider networks, to achieve additional savings below the fee schedules or below the usual, customary and reasonable rates. Our customers compensate us for

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these services by providing us a percentage of the savings we achieve, a flat fee per bill reviewed, or a combination of these two compensation methods.

        Out-of-network claims arise when medical services are provided outside a healthcare payor's geographic coverage area or its contracted network of providers. This type of claim often exposes healthcare payors to very high medical costs. Our services focus on the repricing of out-of-network medical bills and the reduction of administrative expenses associated with reviewing and analyzing medical bills.

        We believe that we are the market leader in the out-of-network bill review business in the group health market and seek to increase further our presence in this market. We hope to continue to expand our services in the workers' compensation and auto insurance markets through performance of out-of-network provider bill repricing and review services.

        Network Management.    We perform network management services that enable our customers to outsource the processes required to maintain and apply the discounts for numerous preferred provider and other managed care networks. By performing these services for our customers, we improve payment accuracy and cycle times and eliminate redundant costs. Our customers reimburse us for these services on a fee-for-service basis according to the types of network management services we perform on their behalf.

        Access to Preferred Provider Networks.    We provide our customers with access to national provider networks. These provider networks offer high quality medical care at pre-negotiated discounts, enabling our customers to refer or, in certain states, to direct, patients to a contracted provider network as a means of managing their healthcare costs. As of March 1, 2004, our national workers' compensation provider network included over 460,000 individual providers and over 4,000 hospitals located in all 50 states and the District of Columbia. Our customers compensate us for access to contracted provider networks by paying us primarily a percentage of their savings.

        First Notice of Loss or Injury Services.    We provide a computerized first notice of loss or injury service using three centralized call centers and a web-based intake platform. We provide our first notice of loss or injury services primarily to workers' compensation carriers for first report of injuries and to the auto industry for first notice of loss reporting. We receive claims from individuals, employers, agents, risk managers and insurance personnel. Upon receipt, we electronically transfer each report of loss or injury to the appropriate state agency, the employer and the employer's insurance company in accordance with applicable state requirements and the unique business rules of each customer.

        Our first notice of loss or injury services assist our customers in the timely preparation and distribution of state-mandated injury reports, serve as an early intervention tool for claim management, and provide us with cross-selling and referral opportunities. By receiving the initial reports of injuries or accidents, we are able to assist our customers in mitigating the costs associated with those events. For the performance of our first notice of loss or injury services, our customers pay us on a fee-per-claim basis.

        Information Systems.    We use a proprietary system to perform our out-of-network bill review services. We receive bills through multiple access points in order to minimize the administrative cost to our customers. Once a bill is entered into our system, we evaluate and analyze the bill, using our extensive database and applying our customers' preferences and requirements to identify the type of claims review service with the greatest expected savings. We are compensated for these services primarily on a percentage-of-savings basis.

        For our first notice of loss or injury service line, we have developed and licensed to third parties a web-based reporting system for all lines of insurance that enables users to report first notices of loss or

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injury and obtain immediate access to customized networks and routing to appropriate and qualified healthcare providers. This application has increased the speed and efficiency of our reporting system.

        Revenue from Network Services as a percentage of our total revenue was approximately 21.6% in 2001, 23.1% in 2002 and 24.7% in 2003.

Care Management Services

        We provide care management services designed to monitor and resolve cases involving injured or ill individuals who have been out of work, receiving healthcare, or both, for an extended period of time due to a work-related or auto incident. Our care management services include:

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field case management;



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telephonic case management;



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independent medical examinations;



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utilization management; and



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peer reviews.

        We are optimistic that we will achieve growth of our care management services due to the increased acceptance of care management techniques to help reduce the total cost of a claim and to facilitate an early return to work. We are able to identify at an early stage those cases for which cost savings may be achieved through the performance of care management services.

        Field Case Management.    We provide field case management services for workers' compensation and auto injury cases through case managers working at the local level on a one-on-one basis with injured employees and their healthcare professionals, employers and insurance company adjusters. Our field case managers are located in 47 states, the District of Columbia and parts of Canada.

        Our field case managers focus on coordinating case activities to enable injured or ill workers to recover and return to work as quickly and safely as possible through medical management and vocational rehabilitation services. The medical management services we offer include reviewing diagnoses, prognoses and treatment plans, coordinating the efforts of healthcare professionals, employers and insurance company adjusters, and encouraging compliance and active participation on the part of the injured or ill worker to increase the effectiveness of the medical care provided. Our vocational rehabilitation services include job analysis, work capacity assessments, labor market assessments, job placement assistance and return-to-work coordination.

        Telephonic Case Management.    Our telephonic case management services consist of telephonic management of workers' compensation and auto injury claims, as well as of short-term disability, long-term disability and employee absences covered under the Family and Medical Leave Act. While similar to field case management in that telephonic case managers coordinate the efforts of individuals involved in a medical claim, telephonic case management is typically performed for claims of shorter duration. Most telephonic case management claims are completed within 30 to 90 days. Telephonic case management is an important component of early intervention that enables us to identify promptly those cases that require field case management or independent medical exams.

        Independent Medical Examinations.    We provide our customers with access to healthcare professionals who perform independent medical examinations to evaluate the medical condition and treatment plan of patients. We perform independent medical examination services primarily for the occupational healthcare, disability and auto industries. Through our extensive network of independent medical professionals, our customers can receive independent medical reviews for injured claimants

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nationwide. Our technology enables customers to make on-line referrals and check on the current status of their cases.

        Utilization Management, Precertification and Concurrent Review.    Customers use our precertification and concurrent review services to ensure that a physician or registered nurse reviews, and precertifies if appropriate, specified medical procedures for medical necessity and appropriateness. Our precertification and concurrent review determinations are only recommendations to the customer, and the customer's claims adjuster makes the actual decision to approve or deny a request for medical services. After we precertify a treatment plan, we follow-up with the claimant to evaluate compliance and, as appropriate, discuss alternative treatment plans if the claimant does not respond to the initial plan.

        Peer Reviews.    Our peer review services consist of the review of medical files by a physician, therapist, chiropractor or other healthcare provider to determine if the care provided by other healthcare professionals appears to be necessary and appropriate.

        Information Systems.    Our information systems enable us to improve our performance of care management services and our communications with our customers. Our proprietary care management information systems allow immediate exchange of information among our case managers. We have recently enhanced our care management information systems to enable our customers to make on-line referrals and check on the current status of their cases.

        We have also recently completed a major technology initiative that we believe will eventually streamline operations and enable business process improvement for our care management operations. This technology is based on a professional services automation product deployed to all of our field case managers. This technology enables us to eliminate numerous redundant, non-value-added activities, automate service delivery expectations for billing to customer contracts, and collect and report on a daily basis management performance information.

        Our customers compensate us for our care management services on a fee-for-service basis. The fees are typically flat fees determined in advance for each type of service we perform. For some of our care management services, including field and telephonic case management, fees are typically based on the number of hours we dedicate to performing services. The fees for our independent medical examination, utilization management and peer review services vary according to the geographic location, specialty and type of medical provider performing the medical examination or review. Revenue from care management services as a percentage of our total revenue was approximately 26.7% in 2001, 29.7% in 2002 and 26.6% in 2003.

Customers

        Through our nationwide network of centers, we serve employers with over 123,200 locations. We also serve more than 3,500 network services and care management customers across the United States and Canada, including major underwriters of workers' compensation, group health, auto and disability insurance, third party administrators, healthcare payors and self-insured employers.

        Although no single customer represented more than 5% of our total revenue in 2003, our two largest customers represented 4.5% and 3.8%, respectively, of our total revenue in 2003. We do not have written agreements with most of our health services customers; however, many of our network services and care management relationships are based on written agreements (most of which are terminable by either party on short notice and without penalty). We typically do not assume risk of loss in connection with the services we provide. We have no capitated arrangements. Less than 0.1% of our revenue is dependent on Medicare or Medicaid reimbursement.

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Sales and Marketing

        We position ourselves as a quality service provider addressing the nation's problem of rising workers' compensation and medical costs. Our vision is to be our customers' most valued partner by providing innovative, knowledge-based medical and cost savings solutions based on our:

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extensive clinical research and consistent performance of evidence-based medicine;



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knowledge and expertise in workers' compensation and medical costs; and



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significant investments in technology to integrate our services and to increase productivity and efficiency in the delivery and management of healthcare services.

        Our sales strategy is focused on selling our services at the national, regional and local levels. Our national sales force focuses on selling our integrated services to large, strategic accounts, including Fortune 1000 companies, third party administrators and insurance carriers and brokers. Our regional sales force focuses on regional customers and supports our national sales force at the regional level. The local sales force is also a key component of our strategy as customer decisions are often made at the local level.

        As part of our marketing and sales strategy, we conduct research on medical outcomes associated with different treatment plans. Some of our research has been published in national medical journals. We also provide our existing and potential customers with reports demonstrating medical outcomes and cost savings achieved by using our services.

Quality Assurance and Corporate Compliance Program

        We routinely use internal reviews to test the quality of our services. We conduct audits of compliance with special instructions by our customers, completion of activities in a timely fashion, quality of reporting, accuracy of billing and professionalism in contacts with healthcare providers. We also conduct audits on a nationwide basis for particular customers or on a local office basis by randomly selecting files for review. We generate detailed reports outlining the audit findings and providing specific recommendations for service delivery improvements. When appropriate, we conduct follow-up audits to ensure that recommendations from the initial audit have been implemented.

        We have a comprehensive, company-wide corporate compliance program. The key components of our compliance program include the following:

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a compliance officer and compliance committee responsible for oversight of our compliance program and reporting to our board of directors and the audit and compliance committee of our board of directors;



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a code of business conduct and ethics, addressing certain legal and ethical obligations of our directors and employees;



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employee education and training requirements;



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an internal system for reporting employees' concerns;



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a hotline staffed by a third party vendor for reporting employees' concerns anonymously;



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an annual compliance survey distributed to certain management employees;



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ongoing auditing and monitoring programs, including periodic risk assessments and reviews;



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enforcement provisions if the compliance program policies are violated; and



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periodic reporting to and oversight by our board of directors and the audit and compliance committee of our board of directors.

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Competition

Health Services

        The market to provide occupational healthcare services is highly fragmented and competitive. Historically, our primary competitors have typically been independent physicians, hospital emergency departments and hospital-owned or hospital-affiliated medical facilities. As managed care techniques continue to gain acceptance in the occupational healthcare marketplace, however, we believe that our competitors will increasingly consist of nationally-focused workers' compensation managed care service companies, specialized provider groups, insurance companies, health management organizations and other significant providers of managed care products. These organizations may be significantly larger and have greater financial and marketing resources than we do. We cannot assure you that we will be able to compete effectively against these organizations in the future.

        Because we believe the barriers to entry in our geographic markets are not substantial and our current customers have the flexibility to move easily to new healthcare service providers, the addition of new competitors may occur relatively quickly. Some of our contracted physicians and other healthcare providers may elect to compete with us by offering their own products and services to our customers. In addition, significant merger and acquisition activity has occurred in our industry as well as in industries that supply products to us, such as the hospital, physician, pharmaceutical, medical device and health information systems industries. If competition within our industry intensifies, our ability to retain customers or physicians, or maintain or increase our revenue growth, pricing flexibility and control over medical cost trends and marketing expenses, may be compromised.

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Network Services and Care Management Services

        The market for our network services and care management services is also fragmented and competitive. Our competitors include national managed care providers, preferred provider networks, smaller independent providers and insurance companies. Companies that offer one or more workers' compensation managed care services on a national basis are our primary competitors. Additionally, we encounter pricing competition from smaller providers of out-of-network services. We also compete with many smaller vendors that generally provide unbundled services on a local level, particularly companies that have an established relationship with a local insurance company adjuster. In addition, several large workers' compensation insurance carriers offer managed care services for their customers, either by performance of the services in-house or by outsourcing to organizations like ours. If these carriers increase their performance of these services in-house, our business could be adversely affected.

Government Regulation

General

        As a provider of health, network and care management services, we are subject to extensive and increasing regulation by a number of governmental entities at the federal, state and local levels. We are also subject to laws and regulations relating to business corporations in general. In recent years, Congress and state legislatures have introduced an increasing number of proposals to make significant changes in the healthcare system. Changes in law and regulatory interpretations could reduce our revenue and profitability.

Workers' Compensation Laws and Regulations

        In performing services for the workers' compensation industry, we must comply with applicable workers' compensation laws. Workers' compensation laws generally require employers to assume financial responsibility for medical costs, lost wages and related legal costs of work-related illnesses and injuries. These laws establish the rights of workers to receive benefits and to appeal benefit denials. Workers' compensation laws generally prohibit charging medical co-payments or deductibles to employees. In addition, certain states restrict employers' rights to select healthcare providers.

        Several states have special requirements for physicians providing non-emergency care for workers' compensation patients. These requirements frequently require registration with the state agency governing workers' compensation, as well as special continuing education and training requirements. In those states, we must establish procedures to confirm that physicians providing services at our centers have completed these requirements.

        At present, our affiliated physicians perform health services in 25 states that have treatment-specific fee schedules with established maximum reimbursement levels. The remaining states in which we manage clinics provide for a "reasonableness" review of medical costs paid or reimbursed by workers' compensation. When not governed by a fee schedule, we adjust our charges to the usual, customary and reasonable levels accepted by the payor.

        Some states limit the ability of the employer to direct an injured employee to a specific provider to receive non-emergency workers' compensation medical care, while other states allow the employer to direct care to a specific provider. In other states, the employee is free to receive treatment from any qualified provider the employee chooses. Even in those states where the employer is permitted to direct an injured employee to a specific provider, the employer's ability to direct care is frequently limited only to a certain timeframe and/or to a limited group of eligible providers. States typically also mandate administrative procedures for employees who desire to change providers. In some states that typically do not permit direction of care, the employer still has the right to direct care if the employer participates in a managed care organization for workers' compensation medical care.

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        Many states permit an employer to post a list of primary care physicians available to provide care to injured employees. Those states frequently place restrictions on the content of those postings, including the number and categories of providers that must be listed.

        Many states have licensing and other regulatory requirements related to workers' compensation that apply to our network services and care management business lines. Twenty-five states have enacted laws that require licensing of businesses that provide workers' compensation medical review services. These laws typically establish minimum standards for qualifications of personnel, confidentiality, internal quality control and dispute resolution procedures. In addition, a number of states have adopted laws regulating the operation of managed care provider networks. These laws apply to managed care provider networks having contracts with us and, in some states, to provider networks that we are affiliated with and may affiliate with in the future. To the extent that we are governed by these regulations, we may be subject to additional licensing requirements, financial oversight and procedural standards for beneficiaries and providers.

Corporate Practice of Medicine and Other Laws

        We are not licensed to practice medicine. Every state in which our Health Services segment operates limits the practice of medicine to licensed individuals or professional organizations comprised of licensed individuals. Corporations generally may not exercise control over the medical decisions of physicians. Many states also limit the scope of business relationships between business entities and medical professionals, particularly with respect to fee splitting. Most state fee-splitting laws only prohibit a physician from sharing medical fees with a referral source, but some states have interpreted certain management agreements between business entities and physicians as unlawful fee-splitting. Statutes and regulations relating to the practice of medicine, fee-splitting and similar issues vary widely from state to state. Because these laws are often vague, their application is frequently dependent on court rulings and attorney general opinions.

        Under the management agreements with our affiliated physician groups, the groups retain sole responsibility for all medical decisions, as well as for hiring and managing physician employees, developing operating policies and procedures, implementing professional standards and controls and maintaining malpractice insurance. We attempt to structure all of our health services operations, including arrangements with our affiliated physician groups, to comply with applicable state statutes regarding corporate practice of medicine, fee-splitting and similar issues. However, there can be no assurance:

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that private parties, or courts or governmental officials with the power to interpret or enforce these laws and regulations, will not assert that we are in violation of such laws and regulations;



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that future interpretations of such laws and regulations will not require us to modify the structure and organization of our business; or



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that any such enforcement action, which could subject us and our affiliated physician groups to penalties or restructuring or reorganization of our business, will not adversely affect our business or results of operations.

Laboratory Regulation

        We own a toxicology laboratory, Advanced Toxicology Network, that tests urine samples to determine drug and alcohol levels. Many of these samples are obtained from our health services operations. Our laboratory is certified by the Substance Abuse and Mental Health Services Administration and maintains licensure where required for toxicology laboratory operations.

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Anti-Kickback, Physician Self-Referral and Other Fraud and Abuse Laws

        A federal law commonly referred to as the "Anti-Kickback Statute" prohibits the offer, payment, solicitation or receipt of any form of remuneration to induce, or in return for, the referral of Medicare or other governmental health program patients or patient care opportunities, or in return for the purchase, lease or order of items or services that are covered by Medicare or other federal governmental health programs. Because the prohibitions contained in the Anti-Kickback Statute apply to the furnishing of items or services for which payment is made in "whole or in part," the Anti-Kickback Statute could be implicated if any portion of an item or service we provide is covered by any of the state or federal health benefit programs described above. Violation of these provisions constitutes a felony criminal offense and applicable sanctions include imprisonment of up to five years, criminal fines of up to $25,000, civil monetary penalties of up to $50,000 per act plus three times the amount claimed or remuneration offered and exclusion from the Medicare and Medicaid programs.

        Section 1877 of the Social Security Act, referred to herein as the "Stark Law," prohibits physicians, subject to certain exceptions described below, from referring Medicare or Medicaid patients to an entity providing "designated health services" in which the physician, or an immediate family member, has an ownership or investment interest or with which the physician, or an immediate family member, has entered into a compensation arrangement. These prohibitions, contained in the Omnibus Budget Reconciliation Act of 1993, commonly known as "Stark II," amended prior federal physician self-referral legislation known as "Stark I" by expanding the list of designated health services to a total of 11 categories of health services. The physician groups with which we are affiliated provide one or more of these designated health services. Persons or entities that violate the Stark Law are subject to denial of payment for services furnished pursuant to an improper referral, civil monetary penalties of up to $15,000 for each improper claim and exclusion from the Medicare and Medicaid programs.

        Final regulations interpreting Stark I, referred to herein as the "Stark I Regulations," were issued on August 14, 1995. On January 4, 2001, the Centers for Medicare and Medicaid Services issued final regulations modifying the Stark I Regulations and interpreting parts of Stark II. The Centers for Medicare and Medicaid Services issued Phase II of these regulations on March 26, 2004 as an interim final rule with comment period. The Centers for Medicare and Medicaid Services may issue further regulations at an unknown future date.

        In addition to the Anti-Kickback Statute and the Stark Law, which generally only apply to certain federal and state healthcare programs, as part of HIPAA, Congress created five new categories of criminal federal offenses that apply to all healthcare benefit programs regardless of whether such programs are funded in whole or in part with federal funds. The five new categories of federal offenses created by HIPAA are: healthcare fraud; theft or embezzlement in connection with healthcare; false statements relating to healthcare matters; obstruction of criminal investigations of healthcare offenses; and money laundering. Violations of these provisions constitute felony criminal offenses and applicable sanctions include imprisonment and/or substantial monetary fines.

        Many states also have enacted laws similar in scope and purpose to the Anti-Kickback Statute and, in more limited instances, the Stark Law, that are not limited to services for which Medicare or Medicaid payment is made. In addition, most states have statutes, regulations or professional codes that restrict a physician from accepting various kinds of remuneration in exchange for making referrals. These laws vary from state to state and have seldom been interpreted by the courts or regulatory agencies. In states that have enacted these statutes, we believe that regulatory authorities and state courts interpreting these statutes may regard federal law under the Anti-Kickback Statute and the Stark Law as persuasive.

        We believe that our operations have been structured in an attempt to comply with the Anti-Kickback Statute, the Stark Law or similar federal or state laws addressing fraud and abuse. These laws are subject to modification and changes in interpretation and have not often been interpreted by

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appropriate authorities in a manner applicable to our business. Moreover, these laws are enforced by authorities vested with broad discretion. We also continually monitor developments in this area. If these laws are interpreted in a manner contrary to our interpretation or are reinterpreted or amended, or if new legislation is enacted with respect to healthcare fraud and abuse, illegal remuneration or similar issues, we may be required to restructure our affected operations to maintain our compliance with applicable law. We cannot assure you that this restructuring will be possible, or, if possible, will not adversely affect our business or results of operations.

HIPAA Administrative Simplification Provisions—Patient Privacy and Security

        HIPAA requires the adoption of standards for the exchange of health information in an effort to encourage overall administrative simplification and to enhance the effectiveness and efficiency of the healthcare industry. Pursuant to HIPAA, the Secretary of the Department of Health and Human Services has issued final rules concerning the privacy and security of health information, the establishment of standard transactions and code sets and adoption of a unique employer identifier and a national provider identifier. Noncompliance with the administrative simplification provisions can result in civil monetary penalties up to $100 per violation as well as criminal penalties that include fines and imprisonment. The Department of Health and Human Services Office of Civil Rights is charged with implementing and enforcing the privacy standards, while the Centers for Medicare and Medicaid Services are responsible for implementing and enforcing the security standards, the transactions and code sets standards and the other HIPAA administrative simplification provisions.

        The HIPAA requirements only apply to covered entities, which include health plans, healthcare clearinghouses and healthcare providers that transmit any health information in electronic form. Our business unit that provides occupational healthcare services is a covered entity under HIPAA. In addition, our business units that provide cost containment services may be subject to HIPAA obligations through business associate agreements with our customers. We are also indirectly regulated by HIPAA as a plan sponsor of a healthcare benefit plan for our own employees.

        Of the HIPAA requirements, the privacy standards and the security standards have the most significant impact on our business operations. Compliance with the privacy standards was required by April 14, 2003. The privacy standards require covered entities to implement certain procedures to govern the use and disclosure of protected health information and to safeguard such information from inappropriate access, use or disclosure. Protected health information includes individually identifiable health information, such as an individual's medical records, transmitted or maintained in any format, including paper and electronic records. The privacy standards establish the different levels of individual permission that are required before a covered entity may use or disclose an individual's protected health information and establish new rights for the individual with respect to his or her protected health information.

        The final security rule was effective on April 21, 2003, and compliance with the security standards is required by April 21, 2005. This rule establishes security standards that apply to covered entities. The security standards are designed to protect health information against reasonably anticipated threats or hazards to the security or integrity of the information and to protect the information against unauthorized use or disclosure. The security standards establish a national standard for protecting the security and integrity of medical records when they are kept in electronic form.

        The administrative simplification provisions of HIPAA require the use of uniform electronic data transmission standards for healthcare claims and payment transactions submitted or received electronically. We believe that we were in substantial compliance with the transaction and code set standards as of the applicable date for our compliance, October 16, 2003. The transaction standards require us to use standard code sets when we transmit health information in connection with certain transactions, including health claims and health payment and remittance advice.

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        Compliance with these standards has required significant commitment and action by us and we expect that it will continue to do so. Because the final regulations for the privacy standards have been effective for less than one year and final regulations for the security standards have only recently been issued, we cannot predict the total financial impact of the regulations on our operations.

Other Privacy and Confidentiality Laws

        In addition to the HIPAA requirements described above, numerous other state and federal laws regulate the privacy of an individual's health information. These laws specify the persons to whom health information can be disclosed and the conditions under which such disclosures may occur. Many states have requirements related to an individual's right to access his own medical records, as well as requirements related to the use and content of consent or authorization forms. Also, because of employers' economic interests in paying medical bills for injured employees and in the timing of the injured employees' return to work, many states have enacted special confidentiality laws related to disclosures of medical information in workers' compensation claims. These laws limit employer access to such information. To the extent state law affords greater protection of an individual's health information than that provided under HIPAA, the state law will control.

        The federal Financial Services Modernization Act, more commonly known as the Gramm-Leach-Bliley Act, sets forth requirements related to the disclosure of non-public personal financial information by financial institutions, including banks, securities firms and insurance companies. Although the statute expressly regulates the disclosure of personal financial information, some of our insurance company customers have required us to participate in their initiatives to comply with this Act.

        In addition, many states have adopted some form of the National Association of Insurance Commissioners Privacy of Consumer Financial and Health Information Model Regulation, which requires that individuals elect to permit the disclosure of his health information. Where adopted, licensees of that state's insurance department must enact procedures to secure compliance with these regulations. In addition, 22 states have adopted new security regulations that impact licensees of the state insurance department and their service providers. Many of our insurance company customers who are subject to these regulations require us to adhere to their compliance programs and procedures to satisfy their obligations under these regulations.

        We anticipate that there will be more regulation in the areas of privacy and confidentiality, particularly with respect to medical information. We currently monitor the privacy and confidentiality requirements that relate to our business, and we anticipate that we may have to modify our operating practices and procedures in order to comply with these requirements.

Cost Containment Services

        Many of our cost containment services, including our case management services, involve prospective or concurrent review of requests for medical care or therapy. Twenty-five states have enacted laws that require licensure, certification or other approval of businesses like ours that provide such types of workers' compensation medical review services. These laws typically establish minimum standards for qualifications of personnel, confidentiality, internal quality control and dispute resolution procedures. Some states waive these registration requirements for entities accredited by specified recognized agencies, such as the Utilization Review Accreditation Commission.

        In addition to these licensure requirements, many states regulate various aspects of utilization review services, such as our cost containment services. Some states mandate utilization review for specified procedures or for claims exceeding stated financial limits, establish time limits for utilization review decisions, establish guidelines for the communication of utilization review decisions and provide for the appeal of utilization review decisions. Some states require case managers to be licensed. These

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regulations may result in increased costs of operation for us, which may have an adverse impact on our ability to compete with other available alternatives for healthcare cost control.

Managed Care

        Many states have passed laws expressly regulating the use of managed care arrangements in workers' compensation. The definition of "managed care" varies from state to state; however, nearly all states provide that managed care involves the delivery and management of healthcare to injured employees. States that have adopted such laws typically require managed care plans to be certified, with the certification renewed every one or two years. States with managed care certification programs regulate both the types of services that must be included in a plan and specific requirements related to those services. Many states require that managed care entities perform the following types of services: reasonable access and availability of various specified types of healthcare providers; case management and utilization review; return to work programs; quality assurance programs; the use of treatment guidelines; and grievance processes.

        These certifications often may be obtained from the regulatory agency with primary oversight over workers' compensation. However, some states grant certification through various other agencies, such as the department of health or department of insurance. States frequently encourage employers and payors to adopt a managed care program by permitting direction of care and case management. Because we serve as a certified managed care organization in some states and implement portions, or all, of our customers' managed care programs on their behalf, we are subject to these certification laws.

Use of Provider Networks

        Our ability to provide comprehensive healthcare management and cost containment services depends in part on our ability to contract with provider networks consisting of healthcare providers who share our objectives and to maintain our existing provider network. For some of our customers, we offer injured workers access to these provider networks. A number of states have adopted laws regulating the operation of managed care provider networks. These laws often apply to our provider network, managed care provider networks having contracts with us and, in some instances, provider networks that we may develop or acquire. To the extent these regulations apply to us, we may be subject to:

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additional licensing requirements;



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mandated provisions in provider contracts;



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financial oversight; and



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procedural standards for beneficiaries and providers.

        In 2002 and 2003, several states implemented legislation requiring the inclusion of certain language in provider contracts for group health plans that related to the timing of payments, the amount to be paid under the contracts and the payment methodology. These requirements currently impact our business for the contracts that we have with providers that relate to the performance of healthcare services that are reimbursable under group health plans. In addition, these contractual requirements may be extended to care reimbursable under workers' compensation and/or auto insurance. We may be required to amend some of our provider contracts as a result of this legislation and future legislative initiatives.

        One of the procedural standards that may apply in some states is the requirement for credentialing of all network providers. For workers' compensation, some states require that workers' compensation providers be on pre-approved lists in order to treat workers' compensation patients. These credentialing and licensing requirements may adversely affect our ability to expand our provider network.

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        In addition, approximately half of the states have some type of "any willing provider" law. These laws require networks to accept as participating providers any qualified professional who is willing to meet the terms and conditions of the network. For example, networks cannot decline a provider admission to the network because the network believes it already has a sufficient number of providers in a given specialty. In all but two instances, these laws are applicable to group health networks only and do not apply to workers' compensation networks. These laws could impact our ability to provide access to provider networks limited to healthcare providers who share our objectives.

        These additional licensing requirements, financial oversight and procedural standards for beneficiaries and providers may adversely affect our ability to maintain or expand our operations to new markets and increase our cost of providing services.

Prompt Pay Laws

        Many states are considering or have enacted legislation governing prompt payment for healthcare services. These laws generally define a process for the payment of claims and set a specific timeframe during which payors must remit payment for services rendered. Although we are not responsible for provider payment, our network and cost containment services customers typically do have that responsibility and may require assistance from us in performing our services within the prescribed time periods under these laws. Approximately half of the states have some form of prompt pay law for workers' compensation, and an even greater number of states have implemented prompt pay laws for the provision of group health medical services.

        In addition to mandating timeframes in which claims must be paid, these laws frequently define what constitutes a "clean claim." A clean claim is a medical claim that contains all of the information deemed to be required under the law for the claim to be processed and paid. Typically, states with these laws require use of standardized forms and specify how various fields on those forms should be completed. These laws also typically detail the types of attachments that should be included with claims. If a claim is a clean claim under these requirements, then the timeframes of the prompt payment laws apply. If the claim is not "clean," many states specify provider and payor responsibilities that must be met for proper handling of that claim. We may be subject to procedural requirements and may be responsible for the education of our customers in connection with prompt pay laws. These additional procedural requirements may increase our cost of services.

ERISA

        The provision of our network services to certain types of employee health benefit plans is subject to the Employee Retirement Income Security Act, or ERISA, which is a complex set of laws and regulations subject to periodic interpretation by the Internal Revenue Service and the Department of Labor. ERISA regulates some aspects of the network services we provide for employers who maintain group health plans subject to ERISA. The Department of Labor is engaged in ongoing ERISA enforcement activities that may result in additional constraints on how ERISA-governed benefit plans conduct their activities. Changes in ERISA and judicial or regulatory interpretations of ERISA could adversely affect our business and profitability.

Environmental

        We are subject to various federal, state and local laws and regulations relating to the protection of human health and the environment, including those governing the management and disposal of infectious medical waste and other waste generated at our occupational healthcare centers and the cleanup of contamination. If an environmental regulatory agency finds any of our facilities to be in violation of environmental laws, penalties and fines may be imposed for each day of violation and the affected facility could be forced to cease operations. We could also incur other significant costs, such as

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cleanup costs or claims by third parties, as a result of violations of or liabilities under environmental laws. Although we believe that our environmental practices, including waste handling and disposal practices, are in material compliance with applicable laws, future claims or violations, or changes in environmental laws, could have an adverse effect on our business.

Seasonality

        Our business is seasonal in nature. Patient visits at our occupational healthcare centers are generally lower in the first and fourth quarters primarily because fewer occupational injuries and illnesses occur during those time periods due to plant closings, vacations, inclement weather and holidays. In addition, since employers generally hire fewer employees in the fourth quarter, the number of pre-placement physical examinations and drug and alcohol tests conducted at the centers during that quarter is further reduced. Additionally, Care Management Services' revenue is usually lower in the fourth quarter compared to the third quarter due to the impact of vacations and holidays. Accordingly, our first and fourth quarters generally reflect lower revenue when compared to our second and third quarters. Additionally, absent the effects of business volume growth, revenue during the second half of the year is generally lower than the first.

Insurance

        For 2004, our affiliated physician groups maintain medical malpractice insurance in the amount of $1.0 million each medical incident and $3.0 million per provider in the aggregate per year, with a shared aggregate of $10.0 million. We also maintain umbrella liability coverage with a liability limit of $20.0 million. We maintain a managed care organization errors and omissions liability insurance policy covering all aspects of our network and care management services. This policy has limits of $10.0 million per claim, with an annual aggregate of $10.0 million. We maintain an excess liability policy that provides an additional $5.0 million over the errors and omissions liability policy primary limit. We also maintain an Internet errors and omissions liability policy with a $10.0 million limit. Our directors and officers liability policy has a liability limit of $20.0 million per occurrence and in the aggregate, with an additional $10.0 million in limits provided through an excess liability policy. In addition, we maintain $1.0 million per occurrence and $3.0 million annual aggregate of commercial general liability insurance. Although we believe that our insurance coverage is adequate for our current operations, we cannot assure you that our coverage will cover all future claims or will be available in adequate amounts or at a reasonable cost.

Employees

        We had approximately 10,100 employees as of March 31, 2004. We have experienced no work stoppages and believe that our employee relations are good. All physicians, physical therapists and other healthcare providers performing professional services in our occupational healthcare centers are either employed by or are under contract with one of our affiliated physician groups.

        Currently, none of our employees is subject to a collective bargaining agreement. However, in August 2000, several physicians employed by one of our affiliated physician groups in New Jersey petitioned the National Labor Relations Board to form a local collective bargaining unit of physicians. Although the New Jersey physicians voted on this issue in September 2000, the National Labor Relations Board has not determined the outcome of that vote. We have appealed a recent decision by the Newark, New Jersey regional National Labor Relations Board office regarding the status of the physicians and the appropriateness of their inclusion in a collective bargaining unit.

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MANAGEMENT

Directors and Executive Officers

        Our directors and executive officers are the same as the persons identified below as directors and executive officers of our parent, Concentra Inc. Since August 17, 1999, they have served in these positions with us during the same periods they served in these positions with our parent, except as otherwise indicated. James T. Kelly served on the board of directors of both companies during 2003 until his resignation as a director in September 2003.

        Our executive officers and those of our parent are elected annually by the applicable board of directors and serve until their successors are duly elected and have qualified. Our directors and those of our parent are elected annually by the applicable stockholders and serve until their successors are duly elected and have qualified. There are no arrangements or understandings between any officer or director and any other person pursuant to which any officer or director was, or is to be, selected as an officer, director or nominee for officer or director. There are no family relationships between any of our executive officers or directors. The names, ages as of March 31, 2004 and positions of our executive officers and directors and those of our parent are listed below along with their business experience.

Name	Age	Position
Daniel J. Thomas	45	Director and Chief Executive Officer
Frederick C. Dunlap	45	President and Chief Operating Officer
Thomas E. Kiraly	44	Executive Vice President, Chief Financial Officer and Treasurer
James M. Greenwood	43	Executive Vice President—Corporate Development
Richard A. Parr II	45	Executive Vice President, General Counsel and Corporate Secretary
Paul B. Queally	40	Chairman of the Board and Director
John K. Carlyle	49	Director
Carlos A. Ferrer	50	Director
David A. George	48	Director
D. Scott Mackesy	35	Director
Steven E. Nelson	49	Director
Richard J. Sabolik	56	Director

Daniel J. Thomas has served as a director of our parent since January 1998 and of us since August 1999. He has served as Chief Executive Officer of our parent since September 1998. He served as President and Chief Executive Officer of our parent from January 1998 until August 2002. He served as President and Chief Operating Officer of our parent from January 1998 until September 1998. He served as Executive Vice President of our parent and President of Concentra Health Services, Inc. from August 1997 until January 1998. He served as a director of OccuSystems, Inc., or OccuSystems, one of our predecessor companies, and as its President and Chief Operating Officer from January 1997 to August 1997. From April 1993 through December 1996, Mr. Thomas served as OccuSystems' Executive Vice President and Chief Operating Officer. Prior to joining OccuSystems in 1993, Mr. Thomas served in various capacities with Medical Care International, Inc., a national outpatient surgery center company, including Senior Vice President and Divisional Director. He is a director of AmComp, a company that specializes in providing workers' compensation protection to businesses and their employees, and serves on that company's audit committee. Mr. Thomas is a certified public accountant.

Frederick C. Dunlap has served as President and Chief Operating Officer of our parent and us since August 2002. Prior to that time, Mr. Dunlap served as Chief Executive Officer of Phycom Corporation, a healthcare service company, from September 2000 until March 2002. He served as

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President and Chief Executive Officer of FDWP Ventures, Inc., a company established to pursue investments in healthcare companies with an emphasis on technology, from March 2000 until its acquisition of Phycom Corporation in September 2000. From October 1996 to February 2000 Mr. Dunlap served as President of UnitedHealthcare of Florida/Puerto Rico, Inc., an affiliate of UnitedHealth Group, Inc. that operated four health benefit plans. He served as Vice President, Specialty Companies for UnitedHealth Group, Inc. from August 1994 to September 1996. Mr. Dunlap served as Senior Vice President of CIGNA Corporation from November 1991 to August 1994, and as Sales Vice President from July 1990 to October 1991. Prior to its acquisition by CIGNA Corporation in July 1990, Mr. Dunlap served in various capacities with Equicor, Inc., an employee benefits company, from 1982 to 1990, including Divisional Marketing Manager.

Thomas E. Kiraly has served as Executive Vice President, Chief Financial Officer and Treasurer of our parent since May 1999 and of us since August 1999. Prior to that time, Mr. Kiraly served as the principal accounting and financial officer of BRC Holdings, Inc. from December 1988 to May 1999. BRC Holdings, Inc. was a diversified provider of specialized information systems and services to healthcare institutions and local governments and was acquired in February 1999 by Affiliated Computer Services, Inc., an information services provider. During his tenure at BRC Holdings, Inc., Mr. Kiraly held the titles of Executive Vice President and Chief Financial Officer from March 1994 through May 1999 and Vice President of Finance from December 1988 through March 1994. Prior to that time, Mr. Kiraly was a Senior Management Consultant with the national accounting firm of Touche Ross & Co., a predecessor to Deloitte & Touche L.L.P., from May 1985 until December 1988.

James M. Greenwood has served as Executive Vice President—Corporate Development of our parent since February 1998 and of us since August 1999 and as Senior Vice President—Corporate Development of our parent from August 1997 to February 1998. He served as OccuSystems' Chief Financial Officer from 1993 until August 1997. Mr. Greenwood also served as a Senior Vice President of OccuSystems from May 1994 to August 1997. From 1988 until he joined OccuSystems in 1993, Mr. Greenwood served in numerous positions with Bank One, Texas, N.A., and its predecessors, including as Senior Vice President and Manager of Mergers and Acquisitions.

Richard A. Parr II has served as Executive Vice President, General Counsel and Corporate Secretary of our parent since August 1997 and of us since August 1999. He served as OccuSystems' Executive Vice President, General Counsel and Secretary from August 1996 to August 1997. Prior to joining OccuSystems, Mr. Parr served as Vice President and Assistant General Counsel of OrNda HealthCorp, a national hospital management company, from April 1993 through August 1996 and as Associate General Counsel of OrNda HealthCorp from September 1991 through March 1993. Mr. Parr serves on the board of directors of the American Society of Corporate Secretaries.

Paul B. Queally has served as a director and the Chairman of the Board of our parent and us since August 1999. He has served as a managing member or general partner of the respective sole general partner of WCAS and other associated investment partnerships since February 1996. Prior to joining WCAS in February 1996, Mr. Queally held various positions, including General Partner at The Sprout Group, a private equity affiliate of Credit Suisse First Boston Corporation, since 1987. He is a director of United Surgical Partners International, Inc., an ambulatory surgery center company, MedCath, Inc., a cardiac care management and cardiac specialty hospital company, LabOne, Inc., a clinical laboratory company, and several other private companies.

John K. Carlyle has served as a director of our parent since August 1997 and of us since August 1999. He served as Chairman of the Board our parent from August 1997 to January 1998 and from September 1998 until August 17, 1999. Mr. Carlyle served as Chief Executive Officer of MAGELLA Healthcare Corporation, a private physician group devoted to the area of neonatology and perinatology, from July 2000 until its sale to Pediatrix Medical Group, Inc., in May 2001, and as President and Chief Executive Officer of MAGELLA from February 1998 through June 2000. Prior to

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joining MAGELLA, Mr. Carlyle served as OccuSystems' Chairman and Chief Executive Officer from January 1997 until August 1997 and as the Chief Executive Officer and a director of OccuSystems from 1991 until August 1997. He joined OccuSystems in 1990 as its President and served in that capacity until December 1996.

Carlos A. Ferrer has served as a director of our parent and us since August 1999. He has served as a member of the general partner of Ferrer Freeman and Company, LLC, a private healthcare equity firm, since 1995. Prior to 1995, he was employed by Credit Suisse First Boston Corporation as a Managing Director. He is a director of AMERIGROUP Corporation, a Medicaid HMO company, and several private companies and is Vice Chairman of the Board of Trustees of the Cancer Research Institute.

David A. George has served as a director of our parent and us since December 2003. He served as President of AdvancePCS from 2000 to 2003 and as Executive Vice President of that company's predecessor, Advance Paradigm, Inc., from 1999 until its acquisition of PCS Health Services and name change to AdvancePCS. He also served on the board of directors of Advance Paradigm from 1998 to 2000 and on the board of AdvancePCS from 2000 to 2003. Prior to his tenure with AdvancePCS, Mr. George was a founding officer and Executive Vice President of MetraHealth from 1994 until MetraHealth's acquisition by United Healthcare in 1995, where he continued to serve as Executive Vice President through 1999. From 1979 to 1994, Mr. George progressed through positions of increasing responsibility at The Prudential, where he ultimately became President of Southern Operations.

D. Scott Mackesy has served as a director of our parent and us since August 1999. Mr. Mackesy joined WCAS in early 1998 and has served as a general partner or managing member of the respective sole general partner of WCAS and other associated investment partnerships since 2001. Mr. Mackesy is a director of LabOne, Inc., a clinical laboratory company, United Surgical Partners International, Inc., an ambulatory surgery center company, and several other private companies.

Steven E. Nelson has served as a director of our parent and us since August 1999. From October 1999 to November 2001, he served as President of HealthNetwork Systems LLC, a private provider of network management services to the payor and PPO industries, until its acquisition in 2001 by Concentra Preferred Systems, Inc., an affiliate of us engaged in bill review services. Mr. Nelson served as President of Concentra Preferred Systems, Inc. from March 1997 to June 2000. From 1990 to March 1997, he served as President and Chief Executive Officer of Preferred Payment Systems, Inc., a provider of bill review services, until its acquisition by Concentra Inc. in 1998.

Richard J. Sabolik has served as a director of our parent and us since June 2003. He is currently serving as Senior Vice President and Chief Financial Officer at Radiologix, Inc., a leading national provider of diagnostic imaging services. He previously served as Chief Executive Officer of ez-GT, Inc., an Internet-based transportation services company that he founded in March 2000. Prior to that time, he was a partner with KPMG LLP from July 1981 to January 2000, where he served large regional and national clients and was responsible for various regional KPMG healthcare practices and national service offerings. He also was a member of KPMG's National Healthcare Practice "Board of Directors" for more than 15 years. He is a member of the board of directors of the North Texas Chapter of the National Association of Corporate Directors and of the Governance Committee of CEO Netweavers, Inc. Mr. Sabolik is a certified public accountant.

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Executive Compensation

        The following table summarizes the compensation paid or earned for the fiscal years 2003, 2002 and 2001 to our parent's and our Chief Executive Officer and the four other most highly compensated executive officers of our parent and us whose individual compensation for services rendered to us or our parent exceeded $100,000 for fiscal year 2003. These executive officers are referred to as the named executive officers.

	Annual Compensation					Long-Term Compensation Awards
Name and Principal Position	Year	Salary($)	Bonus($)(1)	Other Annual Compensation($)		Restricted Stock Awards($)		Securities Underlying Options		All Other Compensation ($)(2)
Daniel J. Thomas Chief Executive Officer, Director	2003 2002 2001	500,000 495,769 399,231	100,000 125,000 20,000	— 17,864 —	(3)	— 1,237,500 —	(4)	— 207,000 174,000	(5)	644 550 3,640
Frederick C. Dunlap President and Chief Operating Officer	2003 2002 2001	500,000 182,692 —	— — —	165,210 — —	(6)	— 825,000 —	(4)	— 625,000 —		180 69 —
James M. Greenwood Executive Vice President—Corporate Development	2003 2002 2001	295,000 294,365 279,616	— 75,000 20,000	— — —		24,240 — —	(7)	— — 20,000	(8)	519 515 3,590
Thomas E. Kiraly Executive Vice President, Chief Financial Officer and Treasurer	2003 2002 2001	320,000 319,154 298,846	85,000 100,000 20,000	— — —		90,910 — —	(7)	— — 75,000	(8)	525 519 3,615
Richard A. Parr II Executive Vice President, General Counsel and Corporate Secretary	2003 2002 2001	278,500 277,823 262,019	85,000 75,000 20,000	— — —		18,180 — —	(7)	— — 15,000	(8)	643 480 3,618

(1)

The bonus amounts paid each year were determined based on our performance, the performance of the individual and related factors for the immediately preceding year.

(2)

Amounts shown represent, to the extent that the named executive officer participated in our parent's 401(k) plan, (a) our parent's matching provision under its 401(k) plan, if any, and (b) premiums paid by our parent for group term life insurance that is taxable compensation to the named executive officers.

(3)

Amount shown was for relocation-related costs and benefits paid to Mr. Thomas totaling $17,864 in 2002 associated with his relocation from temporary to permanent housing in Dallas, Texas.

(4)

Because there is no active trading market for our parent's common stock, we rely on the Compensation Committee to determine in good faith the fair value of securities underlying awards at the time they are granted. Neither our parent nor us has any class of equity securities registered pursuant to Section 12 of the Exchange Act of 1934, or the Exchange Act.

(5)

At Mr. Thomas's request, the options he was granted in 2001 to purchase shares of our parent's common stock at an exercise price of $22.06 per share were cancelled in 2003. Mr. Thomas did not receive deferred restricted shares in exchange for this cancellation.

(6)

Amount shown was for relocation-related costs and benefits paid to Mr. Dunlap totaling $165,210 in 2003 associated with his relocation from Orlando, Florida to Dallas, Texas.

(7)

In 2003, deferred restricted shares were awarded to certain named executive officers in exchange for the cancellation of options granted in 2001 to purchase shares of our parent's common stock at an exercise price of $22.06 per share. Because there is no active trading market for our parent's common stock, we rely on the Compensation Committee to determine in good faith the fair value of securities underlying awards at the time they are granted. Neither our parent nor us has any class of equity securities registered pursuant to Section 12 of the Exchange Act.

(8)

The total number of options granted during 2001 includes the options to purchase shares at $22.06 per share that were cancelled in 2003 in exchange for deferred restricted shares (see footnote 7 above).

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Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-end Option and Restricted Stock Values

        The following table provides summary information about option exercises by the named executive officers during 2003 and the value realized by them. The table also provides information about the number and value of options held by the named executive officers at the close of business on December 31, 2003.

			Number of Securities Underlying Unexercised Options At Fiscal Year End(#)(1)
					Value of Unexercised In-The-Money Options At Fiscal Year End($)(2)
Name	Shares Acquired on Exercise(#)	Value Realized($)
			Exercisable	Unexercisable	Exercisable	Unexercisable
Daniel J. Thomas	—	—	353,723	222,334	—	—
Frederick C. Dunlap	—	—	468,750	156,250	—	—
James M. Greenwood	—	—	86,010	130,334	—	—
Thomas E. Kiraly	—	—	49,916	76,667	—	—
Richard A. Parr II	—	—	23,779	36,034	—	—

(1)

Does not include options to purchase shares of our parent's common stock at $22.06 per share that were cancelled on December 31, 2003.

(2)

Because there is no active trading market for our parent's common stock, we rely on the Compensation Committee to determine in good faith the fair value of securities underlying in-the-money options. Neither our parent nor us has any class of equity securities registered pursuant to Section 12 of the Exchange Act.

Compensation of Directors

        Members of the board of directors who are also our officers or employees do not receive compensation for their services as directors. Each non-employee director receives a $10,000 annual retainer, payable in equal quarterly installments, $3,500 for each regular or special board of directors meeting attended and $1,000 for each regular or special standing board of directors committee meeting not held in conjunction with a board of directors meeting. The chairperson of each standing board of directors committee receives an additional fee of $500 for each regular or special standing board of directors committee meeting attended as chairperson, whether or not such meeting was held in conjunction with a board of directors meeting. In addition, the chairperson of the Audit and Compliance Committee receives a $10,000 annual fee, payable in equal quarterly installments.

        Each new non-employee director receives a grant of nonqualified options to purchase 10,000 shares of common stock under Concentra Inc.'s 1999 Stock Option and Restricted Stock Purchase Plan, as amended (the "1999 Stock Plan"), with such grants to be made on the next business day following their first election to the board of directors. This initial option award is immediately vested and exercisable. Each non-employee director also receives an annual grant of options to purchase 4,000 shares of common stock; such award is made on the next business day following each annual meeting of Concentra Inc.. These awards vest and become exercisable at a rate of 25% each year for four years. Each such non-employee director stock option award has an exercise price no less than 100% of fair market value on the date of award, and will expire on the earlier of 10 years from the date of award or one year after the holder ceases to serve on the board of directors. On June 27, 2003, each non-employee director received 4,000 nonqualified stock options to purchase shares of our common stock at an exercise price of $16.50 per share. On December 16, 2003, the next business day after his election to the board of directors, David A. George received a grant of nonqualified options to purchase 10,000 shares of our common stock at an exercise price of $16.50 per share.

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Other Compensation Arrangements

Employment Agreements

        Each of the named executive officers has entered into an employment agreement with our parent. The employment agreements were entered into in August 1999 for Messrs. Thomas, Kiraly, Greenwood and Parr, and in August 2002 for Mr. Dunlap. The principal terms of these employment agreements are as follows:

•

each agreement has a term of two years, subject to automatic renewal for additional one-year terms, unless terminated in accordance with the agreement's terms;



•

each agreement provides for compensation consisting of base salary amounts, bonuses at the discretion of the board of directors of our parent and participation in any group health plan adopted by us for our employees;



•

each agreement provides for a severance payment in the event of (1) termination by our parent without cause, or (2) resignation by the employee for good reason; consisting of two years' base salary for Mr. Thomas, 18 months base salary for Mr. Dunlap and one year's base salary for Messrs. Greenwood, Kiraly and Parr; and



•

effective January 1, 2004, base salaries under the employment agreements are as follows: $550,000 for Mr. Thomas, $525,000 for Mr. Dunlap, $300,000 for Mr. Greenwood, $340,000 for Mr. Kiraly, and $285,000 for Mr. Parr.

        In addition, upon the consummation of the offering of the old notes, the amendment of our existing credit facility and the tender offer for our 13% senior subordinated notes, we paid $1.9 million in aggregate cash bonuses to certain of our named executive officers.

Compensation Plans

1999 Stock Plan

General

        Our parent's board of directors and stockholders approved the 1999 Stock Plan in August 1999 for the purpose of promoting the interests of our parent and its subsidiaries and the interests of its stockholders. The 1999 Stock Plan provides an opportunity for selected employees and officers of our parent and its subsidiaries and to other persons providing services to our parent and its subsidiaries to purchase our parent common stock. By encouraging such stock ownership, we seek to attract, retain and motivate such employees and other persons and to encourage such employees and other persons to devote their best efforts to our business and financial success. The following summary describes the principal features of the 1999 Stock Plan and is qualified in its entirety by reference to the specific provisions of the 1999 Stock Plan, a copy of which has been filed with the SEC.

        Shares and Options Subject to Plan.    The 1999 Stock Plan provides for the grant of options to purchase or awards to receive an aggregate of up to 5,250,000 shares of common stock, either in the form of incentive stock options intended to meet the requirements of Section 422 of the Internal Revenue Code of 1986 ("IRC" or the "Code"), nonqualified stock options or restricted stock awards. The 1999 Stock Plan includes provisions for adjustment of the number of shares of common stock available for grant or award thereunder and in the number of shares of common stock underlying outstanding options in the event of any stock splits, stock dividends or other relevant changes in the capitalization of our parent.

        Eligibility.    Under the 1999 Stock Plan, employees, including officers, are eligible to receive grants of incentive stock options structured to qualify under Section 422 of the Code, nonqualified stock options or shares of restricted stock; neither of the latter two awards is intended to meet the

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requirements of IRC Section 422. Non-employee directors are eligible to receive only nonqualified stock options and restricted stock awards.

        Administration.    Our Compensation Committee designates the individuals to receive the grants and awards, the nature of the grants and awards, the number of options or shares granted, and the terms and conditions of each grant or award.

        Terms of Options and Awards.    Each option grant or award made under the 1999 Stock Plan is evidenced by a stock option or restricted stock award agreement as applicable.

        The exercise price of non-qualified stock options shall not be less than 85% of the fair market value of the shares of our parent's common stock, as determined by the board of directors or the Compensation Committee, as the case may be, on the date the options are granted; provided, that, in the case of non-qualified stock options intended to qualify as "performance-based compensation" within the meaning of IRC Section 162(m), the exercise price may not be less than 100% of the fair market value at the time of grant. The exercise price of incentive stock options may not be less than 100% of the fair market value of the shares of our parent's common stock on the date that the options are granted. In addition, the aggregate fair market value of the shares of our parent's common stock with respect to which incentive stock options are exercisable for the first time by an optionee during any calendar year may not exceed $100,000. Further, no incentive stock options may be granted to an optionee who owns more than 10% of the total combined voting power of all classes of stock of our parent, unless the exercise price is at least 110% of the fair market value of the shares of our parent's common stock and the exercise period does not exceed five years.

        Restricted stock awards made under the 1999 Stock Plan will be in such amounts and at such times as determined by the Compensation Committee. The vesting, restriction and release provisions of such awards shall also be determined by the Compensation Committee.

        Term of the 1999 Stock Plan.    The 1999 Stock Plan will continue in effect until August 17, 2009 unless terminated prior to such date by the board of directors.

Other Outstanding Options

        In addition to the options and awards granted under the 1999 Stock Plan, as of March 1, 2004, our parent had issued or assumed from its predecessors or acquired companies outstanding options to purchase an aggregate of 419,867 shares of common stock pursuant to separate agreements between our parent and the holders thereof.

        The aggregate 4,144,748 options that were outstanding as of March 1, 2004, under the 1999 Stock Plan and all predecessor plans assumed from acquired companies, had a weighted average exercise price of approximately $16.0886 per share, and remain subject to various vesting provisions.

        Unexercised options and their exercise prices are subject to adjustment if there is a subdivision or consolidation of our parent's common stock, the payment of a stock dividend or other increase or decrease in the number of shares of our parent's common stock outstanding, and our parent does not receive compensation for any such adjustments. In addition, the number and type of securities underlying an option are subject to adjustment if our parent is party to a merger or consolidation.

Certain Federal Income Tax Consequences of the 1999 Stock Plan

        The tax consequences of incentive stock options, nonqualified stock options and restricted stock awards are complex. Therefore, the description of tax consequences set forth below is necessarily general in nature and does not purport to be complete. Moreover, statutory provisions are subject to change, as are their interpretations, and their application may vary in individual circumstances. Finally,

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the tax consequences under applicable state and local income tax laws may not be the same as under the federal income tax laws.

        Incentive stock options granted pursuant to the 1999 Stock Plan are intended to qualify as "incentive stock options" within the meaning of Section 422 of the Code. If an optionee does not dispose of the shares acquired pursuant to exercise of incentive stock options within one year after the transfer of such shares to the optionee and within two years from grant of the options, such optionee will recognize no taxable income as a result of the grant or exercise of such options. However, for alternative minimum tax purposes the optionee will recognize as an item of tax preference the difference between the fair market value of the shares received upon exercise and the exercise price. Any gain or loss that is subsequently recognized upon a sale or exchange of the shares may be treated by the optionee as long-term capital gain or loss, as the case may be. Our parent will not be entitled to a deduction for federal income tax purposes with respect to the issuance of incentive stock options, the transfer of shares upon exercise of the options or the ultimate disposition of such shares provided that the holding period requirements are satisfied.

        If shares received upon exercise of incentive stock options are disposed of prior to satisfaction of the holding period requirements, the optionee generally will recognize taxable ordinary income, in the year in which such disqualifying disposition occurs, in an amount equal to the lesser of (1) the excess of the fair market value of the shares on the date of exercise over the exercise price, and (2) the gain recognized on such disposition. Such amount will ordinarily be deductible by our parent for federal income tax purposes in the same year, provided that our parent satisfies certain federal income tax information reporting requirements. In addition, the excess, if any, of the amount realized by the exercise of the incentive stock options will be treated as capital gain, long-term or short-term, depending on whether, after exercise of the options, the shares were held for more than one year.

        Nonqualified stock options may be granted under the 1999 Stock Plan. An optionee generally will not recognize any taxable income upon grant of nonqualified stock options. The optionee will recognize taxable ordinary income at the time of exercise of such options in an amount equal to the excess of the fair market value of the shares on the date of exercise over the exercise price. Such amount will ordinarily be deductible by our parent in the same year, provided that our parent satisfies certain federal income tax information reporting requirements. Any gain or loss subsequently recognized by the optionee upon a sale or exchange of the shares will be capital gain or loss, long-term or short-term, depending on whether, after the exercise of the options, the shares were held for more than one year prior to such sale or exchange.

        Restricted stock awards may also be granted under the 1999 Stock Plan. A recipient of a restricted stock award generally will not recognize taxable income upon the award of shares of such stock, unless he or she makes a timely election under Section 83(b) of the IRC. Such a recipient, however, would recognize taxable ordinary income and the holding period for such shares would commence at the time that such shares become vested, in an amount equal to the excess of the fair market value of the shares at the time over the purchase price paid for such shares, if any. If, on the other hand, the recipient makes a timely election under Section 83(b), he or she would recognize taxable ordinary income and the holding period for such shares would commence at the time of purchase or grant, in an amount equal to the excess of the fair market value of the shares at that time, determined without regard to any transfer restrictions imposed on the shares, vesting provisions or any restrictions imposed by the securities laws, over the purchase price paid for such shares, if any. In either case, our parent should be entitled to a deduction in an amount equal to the ordinary income recognized by the recipient in the same year that the recipient recognized such income, provided that it satisfies certain federal income tax information reporting requirements. Any gain or loss subsequently recognized by the recipient upon a sale or exchange of the shares will be recorded as capital gain or loss, long-term or short-term, depending on whether the shares were held for more than one year prior to such sale or exchange.

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401(k) Plan

        Our parent has a defined contribution plan that complies with Section 401(k) of the IRC. Substantially all employees of our parent and its subsidiaries, including certain officers and directors of ours, are eligible to participate in the 401(k) plan. Since January 1, 2004, eligible employees, once they have attained age 21, may participate in the plan at the first of the calendar month following 30 days of employment. Generally, employees may contribute amounts up to a maximum of 25% of their pre-tax eligible compensation. Under the 401(k) plan, Our parent has the option of matching a portion of the participants' pretax contributions. For 2003 and 2002 we elected to match 25% of participants' pretax contributions during the plan year, up to a maximum of 4% of each participant's eligible compensation as defined in the 401(k) plan document, subject to maximum eligible compensation of $30,000.

Compensation Committee Interlocks and Insider Participation

        The Compensation Committee of our parent is composed of Messrs. Queally, Carlyle, and Ferrer. Mr. Kelly also served as a member of the Compensation Committee during 2003 until his resignation from the board of directors in September 2003.

        Mr. Carlyle, who served as the non-employee Chairman of our parent until August 1999, has served as a member of the Compensation Committee since December 1998.

        Mr. Queally serves as the non-employee Chairman of our board of directors and that of our parent. Mr. Queally is a managing member and Mr. Mackesy is a principal of the sole general partner of WCAS. Because of these affiliations, Messrs. Queally and Mackesy may be deemed to have a material interest in the matters described under "Certain Relationships and Related Transactions—Equity Investor Agreements."

Indemnification of Directors and Officers

        Our parent has entered into agreements to indemnify its directors and executive officers. Under these agreements, our parent is obligated to indemnify our directors and officers to the fullest extent permitted under the Delaware General Corporate Law for expenses, including attorneys' fees, judgments, fines and settlement amounts, incurred by them in any action or proceeding arising out of their services as a director or officer. We believe that these agreements are helpful in attracting and retaining qualified directors and officers.

Committees of the Board

        The board of directors of our parent has two standing committees, the Audit and Compliance Committee and the Compensation Committee. The members of the Audit and Compliance Committee are Messrs. Sabolik (Chairman), Carlyle, Mackesy and Nelson. The members of the Compensation Committee are Messrs. Kelly (Chairman), Carlyle, Queally and Ferrer.

Compensation and Other Transactions Relating to the Offering of the Old Notes

Management Bonuses

        We used $1.9 million of the proceeds of the Financing Transactions to pay cash bonuses to certain of our executive officers and other senior management.

Equity Instrument Payments and Adjustments

        In connection with the declaration of the dividend to our parent as part of the Transactions, it made certain payments and adjustments in respect of its equity instruments, including those held by certain of our executive officers and directors. The 1999 Stock Plan provides that our parent's board of

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directors has the discretion to reduce the exercise price of its outstanding stock options and to adjust the number of shares subject to its restricted stock grants in the event of an extraordinary cash dividend in order to preserve the intrinsic value of outstanding stock options and restricted stock grants. However, with respect to "in-the-money" stock options, in order to preserve the intrinsic value of such options, in accordance with accounting guidance, our parent lowered the exercise price of these stock options by a portion of the amount of the dividend per share and provided a cash payment for the remainder. Accordingly, in connection with the declaration of the dividend by our parent to its stockholders, $0.6 million in cash was paid to option holders with respect to "in-the-money" outstanding options. The exercise price of the "out-of-the-money" options was adjusted downward, with no cash payment to option holders. Our parent adjusted the number of shares subject to restricted stock grants to maintain the intrinsic value of such grants. The reduction in the exercise price of stock options and adjustment in the number of shares subject to restricted stock grants did not result in compensation expense to us.

        Certain of our executive officers and directors hold warrants to acquire our parent's common stock. Our parent's warrant agreements with its holders provide for a proportionate adjustment in the number of shares subject to the warrants and the exercise price for the warrants upon the payment of a dividend. In connection with the declaration of the dividend to our parent as part of the Transactions, the outstanding number of warrants and shares of restricted stock were increased to maintain the same intrinsic value of these securities. This adjustment did not result in compensation expense to us.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS

        We do not issue any of our equity securities in conjunction with an equity compensation plan. See "Management," for a discussion of our parent's equity compensation plan.

        All of our issued and outstanding capital stock is owned by our parent. As of March 1, 2004, our parent had 35,553,873 shares of common stock outstanding. The table below contains information regarding the beneficial ownership of our parent's common stock as of March 1, 2004, by:

•

each stockholder who owns beneficially 5% or more of our parent's common stock;



•

each director of our parent;



•

each named executive officer; and



•

all directors and executive officers as a group.

        We have determined beneficial ownership according to the rules of the SEC. Unless otherwise noted in the footnotes to this table, each of the stockholders named in this table has sole voting and investment power with respect to our parent's common shares shown as beneficially owned, subject to applicable community property laws. The number of shares beneficially owned by a person includes shares of common stock that are subject to stock options or warrants that are either currently exercisable or exercisable within 60 days after March 1, 2004. These shares are also deemed outstanding for the purpose of computing the percentage of outstanding shares owned by the person. These shares are not deemed outstanding, however, for the purpose of computing the percentage

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ownership of any other person. Unless otherwise indicated, all stockholders set forth below have the same principal business address as us.

Name	Number of Shares	Percent Ownership
Welsh, Carson, Anderson & Stowe VIII, L.P.(1)     320 Park Avenue, Suite 2500     New York, NY 10022	24,608,653	64.90
FFC Partners I, L.P.(2)     c/o Ferrer Freeman and Company, LLC     The Mill     10 Glenville Street     Greenwich, CT 06831	2,283,381	6.02
Paul B. Queally(3)     c/o Welsh, Carson, Anderson & Stowe     320 Park Avenue, Suite 2500     New York, NY 10022	23,837,550	62.86
Carlos A. Ferrer(4)     c/o Ferrer Freeman and Company, LLC     The Mill     10 Glenville Street     Greenwich, CT 06831	2,283,381	6.02
D. Scott Mackesy(5) c/o Welsh, Carson, Anderson & Stowe     320 Park Avenue, Suite 2500     New York, NY 10022	23,823,386	62.83

Name	Number of Shares	Percent Ownership
John K. Carlyle(6)	58,466	*
David A. George(7)	10,000	*
Steven E. Nelson(8)	85,091	*
Richard J. Sabolik(9)	10,000	*
Daniel J. Thomas(10)	330,480	*
Frederick C. Dunlap(11)	156,250	*
Thomas E. Kiraly(12)	108,950	*
James M. Greenwood(13)	192,381	*
Richard A. Parr II(14)	56,516	*
All directors and executive officers as a group (12 individuals)	27,153,862	71.61	%

*

Less than one percent.

(1)

Includes 1,168,307 shares that may be acquired pursuant to warrants that are presently exercisable or exercisable within 60 days and 20,000 shares that may be acquired pursuant to stock options awarded under incentive compensation plans that are presently exercisable or exercisable within 60 days. Certain of the shares reflected as owned by WCAS are owned of record by Welsh, Carson, Anderson & Stowe VI, L.P. (1,792,712), WCAS Healthcare Partners, L.P. (118,410), WCAS Capital Partners III, L.P. (619,356), and WCAS Management Corp. (256). An aggregate of 810,064 shares reflected as owned by WCAS are owned beneficially and of record by certain individuals, including Messrs. Mackesy and Queally, who are members of the limited liability company that serves as its sole general partner, or who are employed by its investment adviser. Except for 38,961

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shares held by Mr. Queally and 24,797 shares held by Mr. Mackesy, such individuals disclaim beneficial ownership of such shares.

(2)

Includes 60,560 shares that may be acquired pursuant to warrants that are presently exercisable or exercisable within 60 days and 10,000 shares that may be acquired pursuant to stock options awarded under incentive compensation plans that are presently exercisable or exercisable within 60 days. Certain of the shares reflected as owned by FFC Partners I, L.P. are owned beneficially and of record by FFC Partners II, L.P. (235,143), FFC Executive Partners I, L.P. (80,836) and FFC Executive Partners II, L.P. (3,386). Carlos A. Ferrer and David A. Freeman are the only members of the limited liability company that serves as the sole general partner of FFC Partners I, L.P., FFC Partners II, L.P., FFC Executive Partners I, L.P. and FFC Executive Partners II, L.P. These individuals may be deemed to share beneficial ownership of the shares owned of record by these entities. Except for 10,000 shares, Mr. Ferrer disclaims beneficial ownership of any such shares.

(3)

Includes 1,143,268 shares that may be acquired pursuant to warrants that are presently exercisable or exercisable within 60 days and 10,000 shares that may be acquired pursuant to stock options awarded under incentive compensation plans that are presently exercisable or exercisable within 60 days. Certain of the shares reflected as owned by Mr. Queally are owned of record by WCAS (21,330,855), Welsh, Carson, Anderson & Stowe VI, L.P. (1,729,712), WCAS Healthcare Partners, L.P. (118,410), WCAS Capital Partners III, L.P. (619,356), and WCAS Management Corp. (256). Except for 38,961 shares, Mr. Queally disclaims beneficial ownership of such shares.

(4)

Includes 60,560 shares that may be acquired pursuant to warrants that are presently exercisable or exercisable within 60 days and 10,000 shares that may be acquired pursuant to stock options awarded under incentive compensation plans that are presently exercisable or exercisable within 60 days. The shares reflected as owned by Mr. Ferrer are owned of record by FFC Partners I, L.P. (1,954,016), FFC Partners II, L.P. (235,143), FFC Executive Partners I, L.P. (80,836) and FFC Executive Partners II, L.P. (3,386). Except for 10,000 shares, Mr. Ferrer disclaims beneficial ownership of such shares.

(5)

Includes 1,142,734 shares that may be acquired pursuant to warrants that are presently exercisable or exercisable within 60 days and 10,000 shares that may be acquired pursuant to stock options awarded under incentive compensation plans that are presently exercisable or exercisable within 60 days. Certain of the shares reflected as owned by Mr. Mackesy are owned of record by WCAS (21,330,855), Welsh, Carson, Anderson & Stowe VI, L.P. (1,729,712), WCAS Healthcare Partners, L.P. (118,410), WCAS Capital Partners III, L.P. (619,356), and WCAS Management Corp. (256). Except for 24,797 shares, Mr. Mackesy disclaims beneficial ownership of such shares.

(6)

Includes 50,000 shares that may be acquired pursuant to stock options awarded under incentive compensation plans that are presently exercisable or exercisable within 60 days.

(7)

Includes 10,000 shares that may be acquired pursuant to stock options awarded under incentive compensation plans that are presently exercisable or exercisable within 60 days.

(8)

Includes 3,082 shares that may be acquired pursuant to warrants that are presently exercisable or exercisable within 60 days and 15,000 shares that may be acquired pursuant to stock options awarded under incentive compensation plans that are presently exercisable or exercisable within 60 days.

(9)

Includes 10,000 shares that may be acquired pursuant to stock options awarded under incentive compensation plans that are presently exercisable or exercisable within 60 days.

(10)

Includes 3,082 shares that may be acquired pursuant to warrants that are presently exercisable or exercisable within 60 days and 309,764 shares that may be acquired pursuant to stock options

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awarded under incentive compensation plans that are presently exercisable or exercisable within 60 days.

(11)

Includes 156,250 shares that may be acquired pursuant to stock options awarded under incentive compensation plans that are presently exercisable or exercisable within 60 days.

(12)

Includes 585 shares that may be acquired pursuant to warrants that are presently exercisable or exercisable within 60 days and 106,644 shares that may be acquired pursuant to stock options awarded under incentive compensation plans that are presently exercisable or exercisable within 60 days. Does not include 9,091 shares that may be acquired upon the exchange of deferred share units for our parent's common stock.

(13)

Includes 181,585 shares that may be acquired pursuant to stock options awarded under incentive compensation plans that are presently exercisable or exercisable within 60 days. Does not include 24,024 shares that may be acquired upon the exchange of deferred share units for our parent's common stock.

(14)

Includes 1,264 shares that may be acquired pursuant to warrants that are presently exercisable or exercisable within 60 days and 50,203 shares that may be acquired pursuant to stock options awarded under incentive compensation plans that are presently exercisable or exercisable within 60 days. Does not include 1,818 shares that may be acquired upon the exchange of deferred share units for our parent's common stock.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Equity Investor Agreements

Stockholders Agreement

        Our parent, WCAS, investors affiliated with WCAS, which we refer to as the "WCAS Investors," certain management investors (including certain executive officers of our parent and us), FFC and certain of its affiliates are parties to a stockholders agreement. The stockholders agreement provides:

•

for limitations on the transfer of shares owned by the investors;



•

for tag-along rights for FFC and its affiliates, the management investors, and the WCAS Investors, other than WCAS, to participate in proposed dispositions of our parent's common stock by WCAS;



•

that in the event that WCAS receives a third-party offer to purchase a significant portion of the outstanding common stock of our parent, WCAS may require FFC, the WCAS Investors and the management investors to accept the offer and sell their shares of our parent to the third party; and



•

for preemptive rights to the investors to participate, on a pro rata basis according to their ownership of our parent capital stock, in equity offerings of our parent with certain customary exceptions.

        The stockholders agreement does not provide for any agreements among the WCAS Investors, the management investors, and the FFC investors with respect to voting of shares or management of our parent.

Registration Rights Agreement

        At the same time they entered into the stockholders agreement, our parent, the WCAS Investors, the management investors, and the FFC investors also entered into a registration rights agreement. The registration rights agreement gives investors certain rights to require our parent to register their shares of our parent capital stock under the Securities Act and, upon request, to include their shares in any other registration of shares by our parent.

Class A Common Stock

        Certain shares of our parent's common stock held by FFC and certain of its affiliates are designated Class A common stock. The Amended and Restated Certificate of Incorporation of our parent provides that the Class A common stock is identical in all respects to the rest of our parent's common stock, except that, so long as any Class A common stock is outstanding, the holders of Class A common stock, voting as a class, have the right to elect one member of our parent's board of directors. These holders have elected Carlos A. Ferrer as a member of our parent's board of directors. All shares of Class A common stock automatically convert into shares of common stock upon the occurrence of certain events, including the completion of a firm commitment underwritten public offering of the common stock of our parent resulting in gross proceeds to our parent of at least $30,000,000.

Concentra Inc. Debt and Equity Instruments

        WCAS Capital Partners III, L.P., a WCAS affiliate, held approximately $73.3 million in accreted value of our parent's 14% senior discount debentures until August 13, 2003. Our parent redeemed $53.9 million in accreted value of these debentures on August 13, 2003 in connection with our issuance of $150.0 million aggregate principal amount of the 9¹/2% senior subordinated notes, and the remaining $19.4 million, plus $0.7 million of additional accrued interest, was redeemed on November 20, 2003 in

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connection with our issuance of an additional $30.0 million aggregate principal amount of the 9¹/2% senior subordinated notes. Messrs. Queally and Mackesy, who are members of WCAS, may be deemed to control WCAS Capital Partners III, L.P.

        WCAS and WCAS Capital Partners III, L.P. currently guarantee obligations of our parent under its bridge loan agreement dated June 25, 2002 up to a maximum aggregate amount of $68,000,000, as amended. Our parent's obligations under this bridge loan agreement are secured by a security interest in the current and future indebtedness owed by our parent to WCAS Capital Partners III, L.P., except indebtedness that is subordinated to the bridge loan on terms acceptable to the bridge loan lenders. See "Description of Other Indebtedness—Concentra Inc.'s Bridge Loan Agreement."

Other Related-Party Transactions

Acquisition of National Healthcare Resources, Inc.

        In November 2001, in a transaction valued at $141.8 million (consisting of $83.0 million in of our parent's common stock, $1.0 million in cash, and assumption of $57.8 million in NHR indebtedness), we acquired NHR, a provider of care management and network services to the workers' compensation and auto insurance industries on a national level. NHR's businesses are complementary in nature to and significantly expand our care management and network services businesses. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Significant Acquisitions." D. Scott Mackesy, a director of our parent and us, and James T. Kelly, a director of our parents and us from December 2001 to September 2003, served on NHR's board of directors.

        Entities and individuals affiliated with WCAS, our parent's primary stockholder, owned approximately 48% of NHR at the time of acquisition. In the NHR transaction, WCAS entities and individuals as a group received 1,740,803 shares of Concentra Inc. common stock, representing 5.5% of our parent's common stock then outstanding.

Acquisition of HealthNetwork Systems LLC/Joint Marketing Agreement

        In November 2001, in a transaction valued at approximately $30.9 million, we acquired HNS, a provider of network services such as provider bill repricing and provider data management for health plans and other payors. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Significant Acquisitions." HNS' services are complementary to our existing services. Steven E. Nelson, a director of our parent and us, was the President and Chief Executive Officer of HNS prior to this acquisition.

        Mr. Nelson, Paul B. Queally and Mr. Mackesy, each of whom is a director of our parent and us, and Daniel J. Thomas, a director and executive officer of our parent and us, owned equity interests in HNS. For each, the percentage of total HNS equity ownership and the amount received in the transaction were as follows: Mr. Nelson, 19.8% and $5.4 million (plus repayment of debt of $0.2 million); Mr. Thomas, 2.0% and $0.6 million; Mr. Queally, 0.6% and $0.2 million; and Mr. Mackesy, 0.5% and $0.2 million.

        Until our acquisition of HNS, we were party to a joint marketing agreement with HNS, pursuant to which HNS performed marketing and sales services for certain of our network services businesses. We paid HNS approximately $0.7 million in 2001, pursuant to the joint marketing agreement.

Acquisition of Em3 Corporation

        In December 2002, in a transaction valued at $30.7 million (consisting of $30.1 million in our parent's common stock and assumption of $0.6 million of indebtedness to WCAS), we acquired Em3, a provider of information technology and a software-based system for the management of work-related injuries. Prior to the acquisition, we provided certain administrative services to Em3, including leasing

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employees to Em3, providing office space, providing access to certain of our software and systems and related administrative services. During the eleven-month period ending November 20, 2002, Em3 paid us $2.8 million for the administrative services and reimbursable expenses we provided. During the twelve-month period ending December 31, 2001, Em3 paid us $7.4 million for the administrative services and reimbursable expenses we provided. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Significant Acquisitions."

        The stockholders of Em3 were primarily the same as our parent's principal stockholders. Paul B. Queally, D. Scott Mackesy, and John K. Carlyle, each of whom is a director of our parent and us, Daniel J. Thomas, a director and executive officer of our parent and us, and James M. Greenwood and Richard A. Parr II, each of whom is an executive officer of our parent and us, owned equity interests in Em3. The percentage of total Em3 share ownership by our parent's principal stockholders and by our directors and executive officers prior to the acquisition was as follows: WCAS-affiliated entities and individuals as a group, 66.24%; FFC entities, 6.65%; Mr. Queally, 0.08%; Mr. Mackesy, 0.04%; Mr. Carlyle, 0.46%; Mr. Thomas, 0.47%; Mr. Greenwood, 0.59%; and Mr. Parr, 0.07%. Carlos A. Ferrer, a director of our parent and us, and Messrs. Greenwood, Carlyle, Queally and Mackesy served on Em3's board of directors.

Acquisition of OccMed Systems, Inc.

        In December 2002, in a transaction valued at $16.6 million (consisting of $12.8 million in our parent's common stock, assumption of $1.0 million in indebtedness to WCAS, and assumption of $2.8 million of other indebtedness), we acquired the assets of OccMed, a company engaged in developing new, free-standing, primary care occupational healthcare centers. Prior to the acquisition, we were party to a management and administrative services agreement with OccMed and performed management services for the development and construction of OccMed's occupational healthcare centers, leased employees to OccMed, recruited, hired and trained employees for its occupational healthcare centers, and provided accounting, billing and collection services for its occupational healthcare centers. During the eleven-month period ending November 20, 2002, OccMed paid us $6.0 million for the administrative services and reimbursable expenses we provided in 2002, net of $3.0 million of OccMed receivables balances collected by us. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Significant Acquisitions."

        The stockholders of OccMed were primarily the same as our parent's principal stockholders and included certain of our directors. The percentage of total OccMed share ownership by our principal stockholders and by our directors prior to the date of acquisition was as follows: WCAS-affiliated entities and individuals as a group, 69.40%; FFC entities, 7.56%; Mr. Queally, 0.09%; and Mr. Mackesy, 0.04%. Messrs. Queally, Mackesy and Ferrer served on OccMed's board of directors.

Other Related Party Transactions

        W. Tom Fogarty, M.D., an executive officer of our parent and us, is the President, a director and a stockholder of Occupational Health Centers of the Southwest, P.A. ("OHCSW"), and a stockholder, officer, and/or director of several other of the physician groups. A subsidiary of ours has entered into a 40-year management agreement with each of the physician groups. OHCSW paid approximately $217.6 million, $178.7 million and $184.2 million in management fees to a subsidiary of us in the years ended December 31, 2003, 2002 and 2001, respectively, under its management agreement with that subsidiary. Dr. Fogarty receives no remuneration from any of the physician groups for serving as an officer or director.

        We derive revenue in the normal course of business from other companies owned or controlled by or affiliated with related parties. Health Services revenue from related parties totaled $0.6 million,

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$0.3 million and $0.2 million during 2003, 2002 and 2001, respectively. Care Management Services revenue from related parties totaled $0.4 million in 2003 and $0.1 million in 2002 and 2001.

        We also purchase services in the normal course of business from other companies owned or controlled by or affiliated with related parties. These services include local phone service in certain geographic regions, information technology consulting, claims editing services, administration of open enrollment for employee benefits and third party laboratory services. We made payments to related parties for these services totaling $0.6 million, $0.7 million and $1.7 million during 2003, 2002 and 2001, respectively.

Taxes

        In the normal course of business, our parent and us engage in certain intercompany transactions to permanently reduce state and local income taxes. Since we are included in the consolidated federal, state and local tax returns of our parent (see note 7 in our audited consolidated financial statements included elsewhere in this prospectus), all intercompany state and local income tax transactions between our parent and us have been eliminated in the consolidated financial statements.

Transactions Relating to the Offering of the Old Notes

Warrant Adjustments

        Certain WCAS affiliates and certain of our executive officers and directors hold warrants to acquire our parent's common stock. Our parent's warrant agreements with its holders provide for a proportionate adjustment in the number of shares subject to the warrants and the exercise price of the warrants upon the payment of a dividend. The outstanding number of warrants and shares of restricted stock was increased in connection with the declaration of the dividend to our parent to maintain the same intrinsic value of these securities. This adjustment did not result in compensation expense to us.

Other Transactions

        For information regarding compensatory transactions relating to this offering, see "Management—Compensation and Other Transactions Relating to the Offering of the Old Notes."

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DESCRIPTION OF OTHER INDEBTEDNESS

Amended Credit Facility

        On August 13, 2003, we entered into a senior credit facility with a syndicate of banks and other financial institutions which was arranged by J.P. Morgan Securities Inc., as Lead Arranger and Sole Book Manager, JPMorgan Chase Bank as the Administrative Agent, Citicorp North America, Inc. and Credit Suisse First Boston as Co-Syndication Agents, and Deutsche Banc Alex Brown as the Documentation Agent. As part of the Transactions, we amended this existing credit facility to enable us to incur an additional $70.0 million in term indebtedness.

        The following sets forth a description of some of the terms of our amended credit facility.

        Loans and Interest Rates.    Our existing credit facility consists of (1) a $100.0 million revolving loan facility, of which $35.0 million is available in the form of letters of credit, and (2) a $405.0 million term loan facility. Borrowings under the revolving loan facility and term loan facility bear interest, at our option, at either (1) the alternate base rate plus a margin initially equal to 2.25% for the loans under the revolving loan facility, 2.75% for $335.0 million of the term loan facility and 1.75% for the additional $70.0 million of the term loan facility or (2) the reserve-adjusted Eurodollar rate plus a margin initially equal to 3.25% for the loans under the revolving loan facility, 3.75% for $335.0 million of the term loan facility and 2.75% for the additional $70.0 million of the term loan facility. The margins for borrowings under the revolving loan facility are subject to reduction based on changes in our leverage ratios and certain other performance criteria. The default rate under our amended credit facility is 2.0% above the otherwise applicable rate.

        Maturity and Amortization.    Loans under the revolving loan facility are available on a revolving basis until August 13, 2008. The term loan facility is payable in nominal quarterly installments of not more than 1% per annum for the first five years of the facility, $57,712,500 for each of the two quarters ending September 30, 2008 and December 31, 2008, and $115,425,000 for the quarter ending March 31, 2009 and $154,425,000 for the quarter ending June 30, 2009, or until all principal is repaid.

        Security.    Our amended credit facility is secured by a first-priority lien on (1) 100% of the issued and outstanding capital stock of our company held by our parent, (2) 100% of the issued and outstanding capital stock of our direct and indirect, wholly-owned domestic subsidiaries, other than certain permitted joint ventures, (3) 65% of the issued and outstanding capital stock of any future foreign subsidiaries and (4) all of our other present and future assets and properties and the present and future assets and properties of our subsidiaries, other than certain permitted joint ventures.

        Guarantors.    Our amended credit facility is guaranteed by our parent and each of our current and future, direct and indirect, wholly-owned domestic subsidiaries.

        Prepayments.    Our amended credit facility provides for mandatory repayments, subject to stated exceptions, of the term loan facility and commitment reductions in the revolving loan facility, based on certain net asset sales outside the ordinary course of business, from the net proceeds of specified debt and equity issuances, and excess cash flow. Outstanding loans under our amended credit facility may be prepaid voluntarily, except that we will bear any Eurodollar rate breakage costs and must pay a prepayment premium of 1% the amount of any term loans prepaid prior to August 13, 2004.

        Conditions.    The obligations of the lenders to make revolving loans under our amended credit facility are subject to the satisfaction of certain conditions customary for financings of this type.

        Affirmative Covenants.    Our amended credit facility contains affirmative covenants customary for financings of this type.

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        Negative Covenants.    Our amended credit facility contains negative covenants that limit our ability and the ability of our subsidiaries to, among other things:

•

incur additional indebtedness or contingent obligations, issue guarantees or enter into operating leases;



•

grant liens or negative pledges;



•

make fundamental changes in our business, corporate structure or capital structure, including, among other things, entering into any merger, consolidation or amalgamation, or liquidating, winding up or dissolving;



•

sell assets;



•

make specified restricted payments;



•

make capital expenditures;



•

make investments, including the advancing of loans or extensions of credit, enter into joint ventures or make acquisitions of assets constituting a business unit or the capital stock of another entity;



•

prepay, redeem or repurchase subordinated indebtedness, including the notes offered hereby, or amend documents relating to other existing indebtedness, including the notes offered hereby, or amend documents relating to other existing indebtedness or other material documents; and



•

enter into transactions with affiliates.

        The negative covenants also include financial covenants that require us to maintain certain financial ratios.

        Events of Default.    Our amended credit facility also contains events of default that are customary for financings of this type, including, without limitation, and subject to certain exceptions, those related to:

•

default in payment of principal and interest;



•

materially incorrect representations or warranties;



•

default in observance or performance of any of the affirmative or negative covenants included in our new credit agreement or related security documents;



•

cross-default in the payment of other indebtedness of more than $10.0 million;



•

specified events of bankruptcy;



•

specified ERISA events;



•

specified judgments or decrees involving more than $5.0 million;



•

failure of the applicable credit facility documents or any material provisions thereof, the guarantees, security documents or any related documents to be enforceable and in full force and effect;



•

certain change of control events;



•

conduct of our parent's business; and



•

failure of the subordination of the notes and the subsidiary guarantees to the right of payment of the lenders under our credit facility to be valid.

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Our 9¹/2% Senior Subordinated Notes due 2010

        In August 2003, we issued $150.0 million in principal amount of 9¹/2% senior subordinated notes due 2010. In November 2003, we issued an additional $30.0 million in principal amount of 9¹/2% senior subordinated notes due 2010. All of these 9¹/2% senior subordinated notes were outstanding as of March 31, 2004. The 9¹/2% senior subordinated notes mature on August 15, 2010, with interest payable semi-annually in arrears on February 15 and August 15 of each year. The 9¹/2% senior subordinated notes are senior or pari passu in right of payment to all of our existing and future subordinated indebtedness and are pari passu in right of payment to the notes offered hereby and to our 13% senior subordinated notes. The 9¹/2% senior subordinated notes are unconditionally guaranteed on a senior subordinated basis by certain of our current and future domestic subsidiaries. The payment of principal of, premium, if any, and interest on, the 9¹/2% senior subordinated notes is subordinated to the prior payment in full of all our senior indebtedness.

        We have the option to redeem the outstanding 9¹/2% senior subordinated notes at any time on or after August 15, 2007 at a redemption price equal to 104.75% of the principal amount of the notes, plus accrued and unpaid interest to the redemption date. This redemption premium will decrease annually to 100% of the principal amount beginning on August 15, 2009. We may redeem the notes before August 15, 2007 at a specified make-whole premium. Before August 15, 2006, we may redeem up to 35% of the notes with the net proceeds from certain equity offerings. Holders of the 9¹/2% senior subordinated notes may require us to redeem all or a part of the notes upon a change of control of us at a price equal to 101% of the principal amount of the 9¹/2% senior subordinated notes repurchased, plus accrued and unpaid interest on these notes. In addition, any asset sales by us or our restricted subsidiaries must meet certain requirements (including, but not limited to, repayment of our or our restricted subsidiaries' senior indebtedness) and, when the aggregate amount of excess proceeds from asset sales exceeds $15.0 million, we must offer to repurchase outstanding 9¹/2% senior subordinated notes and other pari passu indebtedness using our excess proceeds before offering to purchase the new notes. See "Description of the New Notes—Asset Sales."

        The indenture governing the 9¹/2% senior subordinated notes contains covenants that restrict, among other things, our and our restricted subsidiaries' ability to:

•

incur additional indebtedness or issue preferred stock;



•

make restricted payments;



•

create or permit to exist certain liens on assets;



•

create or permit to exist consensual restrictions on our or our restricted subsidiaries' ability to make certain distributions or other payments to us or our restricted subsidiaries;



•

merge, consolidate or sell assets;



•

enter into transactions with our affiliates;



•

incur debt that is senior in right of payment to the 9¹/2% senior subordinated notes and junior in right of payment to any senior debt;



•

enter into sale and leaseback transactions; and



•

issue equity interests in our restricted subsidiaries.

        The indenture provides that, in order to enter into certain types of transactions, including the incurrence of indebtedness, the making of restricted payments and the consummation of mergers and consolidations, our Fixed Charge Coverage Ratio (as defined in the indenture) must be at least 2.50 to 1. In addition, it contains events of default that are customary for this type of security.

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Our 13% Senior Subordinated Notes due 2009

        In August 1999, we issued $190.0 million in principal amount of 13% senior subordinated notes, of which approximately $142.5 million in principal amount was outstanding as of March 31, 2004. In connection with the offering of the old notes, we conducted a tender offer and consent solicitation to purchase any and all of these notes that were tendered and to solicit consents to amend the indenture governing the 13% senior subordinated notes to eliminate substantially all of the restrictive covenants and several events of default contained in that indenture. We purchased $114.9 million in principal amount of our 13% senior subordinated notes in the tender offer. Because holders of a majority in principal amount of such notes have consented to the proposed amendments to the indenture governing these notes, we amended the indenture as described above. The terms described below relate to the indenture so amended. On or about August 16, 2004, we expect to redeem all of our 13% senior subordinated notes that were not tendered in the tender offer.

        The 13% senior subordinated notes mature on August 15, 2009, with interest payable semi-annually in arrears on each February 15 and August 15. The 13% senior subordinated notes are senior or pari passu in right of payment to all of our existing and future subordinated indebtedness and are pari passu in right of payment to the notes offered hereby and to our 9¹/2% senior subordinated notes. The 13% senior subordinated notes are unconditionally guaranteed on a senior subordinated basis by all of our restricted subsidiaries, other than our joint ventures. The payment of principal of, premium, if any, and interest on the 13% senior subordinated notes is subordinated to the prior payment in full of all our senior indebtedness.

        We have the option to redeem the outstanding 13% senior subordinated notes on or after August 15, 2004 at a price equal to 106.5% of the principal amount of the notes, plus accrued and unpaid interest to the redemption date. This redemption premium will decrease annually to 100% of the principal amount beginning on August 15, 2008. We intend to redeem all of the outstanding 13% senior subordinated notes on that day. In addition, it contains events of default that are customary for this type of security.

Concentra Inc.'s Bridge Loan Agreement

        On June 25, 2002, our parent, Concentra Inc., entered into a bridge loan agreement providing for $55.0 million in bridge loans. The bridge loan agreement, as subsequently amended, requires our parent to repay the entire unpaid principal amount of the bridge loans by March 31, 2007.

        The bridge loans bear interest at a rate per annum equal to, at our parent's option, either the defined base rate or the defined Eurodollar rate, in each case plus the following applicable margins:

•

0.50% per annum, in the case of base rate loans; and



•

1.50% per annum, in the case of Eurodollar rate loans.

        Interest under the bridge loan agreement may be deferred until March 31, 2007 or at our parent's election is due and payable (1) on the first day of each fiscal quarter, in the case of base rate loans, or (2) at the end of the applicable interest period and, in the case of any interest period longer than three months, on each successive date three months after the first day of such interest period, in the case of Eurodollar rate loans.

        Our parent is required to prepay the bridge loans with:

•

100% of the net proceeds of any sale or issuance of equity after the closing date of the bridge loan agreement by our parent, us or any of its other subsidiaries, subject to limited exceptions; and

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•

100% of the net proceeds of any incurrence of indebtedness after the closing date of the bridge loan agreement by our parent, us or any of its other subsidiaries, subject to limited exceptions.

        Our parent may, at its option, prepay the bridge loans without premium or penalty, subject to reimbursement of the bridge loan lenders' breakage costs in the case of prepayment of Eurodollar rate loans.

        The repayment of up to $68,000,000 of our parent's obligations under the bridge loan agreement is guaranteed by Welsh, Carson, Anderson & Stowe VIII, L.P. and WCAS Capital Partners III, L.P.

        The bridge loan agreement contains customary restrictions on the activities of our parent and any of its subsidiaries, including restrictions on prepayments of debt under the indentures governing our 13% and 9¹/2% senior subordinated senior subordinated notes, the new notes and the amended credit facility, subject to certain exceptions. Our parent secured a waiver of certain of these restrictions which would otherwise prohibit some of the Transactions, including our parent's obligation to cause us to use 100% of the net proceeds of the offering of the old notes and borrowings under our amended credit facility to repay the bridge loans. The bridge loan agreement also contains customary events of default.

        The outstanding principal amount of the bridge loans as of March 31, 2004 was $57.5 million, and accrued but unpaid interest on the bridge loans was approximately $0.4 million.

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DESCRIPTION OF THE NEW NOTES

        The form and terms of the new notes are the same as the form and terms of the old notes, except that the new notes have been registered under the Securities Act, will not bear legends restricting the transfer thereof, will not be entitled to registration rights under the Registration Rights Agreement, and will not contain provisions relating to additional interest. You can find the definitions of certain terms used in this description under the caption "—Certain Definitions." In this description, the word "Company" refers only to Concentra Operating Corporation, a Nevada corporation, and not to any of its Subsidiaries. As used in this section, the term "notes" refers to both the old notes and the new notes.

        The Company issued the old notes and will issue the new notes under an indenture (the "Indenture") among itself, the Guarantors and The Bank of New York, as trustee (the "Trustee"). The terms of the notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").

        The old notes, the new notes and any additional notes issued from time to time in accordance with the terms of the Indenture will constitute a single class of debt securities under the indenture. If the exchange offer is consummated, holders of old notes who do not exchange new notes for their old notes will vote together with holders of the new notes and, if applicable, any holders of additional notes for all relevant purposes under the indenture. Accordingly, in determining whether the required holders have given any notice, consent or waiver or taken any other action permitted under the indenture, any old notes that remain outstanding after the exchange offer will be aggregated with the new notes and, if applicable, any additional notes, and the holders of the old notes, the new notes and the additional notes will vote together as a single class. All references in this prospectus to specified percentages in aggregate principal amount of the notes that are outstanding means, at any time after the exchange offer is consummated, the percentage in aggregate principal amount of the old notes, the new notes and the additional notes then outstanding.

        The following description is a summary of the material provisions of the Indenture. It does not restate that agreement in its entirety. We urge you to read the Indenture and the Registration Rights Agreement because they, and not this description, define your rights as holders of these notes. Copies of the Indenture and Registration Rights Agreement are available as set forth below under the caption "—Additional Information."

Brief Description of the Notes and the Subsidiary Guarantees

The Notes

        The notes:

•

are general unsecured obligations of the Company;



•

are subordinated in right of payment to all existing and future Senior Indebtedness of the Company;



•

are pari passu in right of payment to the Company's existing 9¹/2% Senior Subordinated Notes and 13% Senior Subordinated Notes;



•

are senior or pari passu in right of payment to all existing and future subordinated Indebtedness of the Company; and



•

are unconditionally guaranteed by the Guarantors.

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The Subsidiary Guarantees

        These notes are jointly and severally guaranteed by each Restricted Subsidiary of the Company, except the Permitted Joint Ventures.

        The Subsidiary Guarantees of these notes:

•

are general unsecured obligations of each Guarantor;



•

are subordinated in right of payment to all existing and future Senior Indebtedness of each Guarantor;



•

are pari passu in right of payment to the Guarantees of the Company's 9¹/2% Senior Subordinated Notes and 13% Senior Subordinated Notes; and



•

are senior or pari passu in right of payment to all existing and future subordinated Indebtedness of each Guarantor.

        As of March 31, 2004, after giving pro forma effect to the offering of the old notes and the application of the net proceeds thereof, the Company and the Guarantors would have had total Senior Indebtedness of approximately $402.5 million. As indicated above and as discussed in detail below under the caption "—Subordination," payments on the notes and under the Subsidiary Guarantees are subordinated to the payment of Senior Indebtedness. The Indenture permits us and the Guarantors to incur additional Senior Indebtedness.

        As of the Issue Date, all of our Subsidiaries were "Restricted Subsidiaries." However, under the circumstances described below under the caption "—Certain Covenants—Designation of Restricted and Unrestricted Subsidiaries," we will be permitted to designate certain of our subsidiaries as "Unrestricted Subsidiaries." Unrestricted Subsidiaries will not be subject to many of the restrictive covenants in the Indenture. Unrestricted Subsidiaries will not guarantee the notes. In addition, Foreign Restricted Subsidiaries, Permitted Joint Ventures and Receivables Entities will not guarantee the notes unless and until they guarantee other Indebtedness of the Company or certain other Subsidiaries. See "—Additional Guarantees."

Principal, Maturity and Interest

        The Company issued the notes initially with a maximum aggregate principal amount of $155.0 million. The notes will mature on June 1, 2012. The Company issues notes in denominations of $1,000 and integral multiples of $1,000. Additional notes ("Additional Notes") may be issued from time to time after the Offering in an unlimited amount, subject to the provisions of the Indenture described below under the caption "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock." The notes and any Additional Notes subsequently issued under the Indenture will be treated as a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. Unless the context otherwise requires, for all purposes of the Indenture and the "Description of the New Notes," references to the notes include any Additional Notes actually issued.

        The notes bear interest at the rate of 9¹/8% per annum and interest will be payable in cash semi-annually in arrears on June 1 and December 1 commencing on December 1, 2004. The Company will make each interest payment to the holders of record on the immediately preceding May 15 and November 15.

        Interest on the notes will accrue from the date of original issuance or, if interest has already been paid, from the date it was most recently paid. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

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Methods of Receiving Payments on the Notes

        If a holder has given wire transfer instructions to the Company, the Company will make all principal, premium and interest payments on the holder's notes in accordance with those instructions. All other payments on the notes will be made at the office or agency of the Paying Agent and Registrar within the City and State of New York unless the Company elects to make interest payments by check mailed to the holders at their address set forth in the register of holders.

Paying Agents and Registrar for the Notes

        The Trustee will initially act as Paying Agent and Registrar. The Company may change the Paying Agent or Registrar without prior notice to the holders of the notes, and the Company or any of its Subsidiaries may act as Paying Agent or Registrar.

Transfer and Exchange

        A holder may transfer or exchange notes in accordance with the Indenture. The Registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a holder to pay any taxes and fees required by law or permitted by the Indenture. The Company is not required to transfer or exchange any note selected for redemption. Also, the Company is not required to transfer or exchange any note for a period of 15 days before a selection of notes to be redeemed.

        The registered holder of a note will be treated as its owner for all purposes.

Subordination

        The payment of principal of, premium, if any, and interest on the notes will be subordinated to the prior payment in full of all Senior Indebtedness of the Company.

        The holders of Senior Indebtedness will be entitled to receive payment in full in cash of all amounts due or to become due in respect of Senior Indebtedness before the holders of notes will be entitled to receive any payment with respect to the notes (except that holders of notes may receive Reorganization Securities and payments made from the trust described under the caption "—Legal Defeasance and Covenant Defeasance") in the event of any distribution to creditors of the Company in any Insolvency or Liquidation Proceeding with respect to the Company. Upon any such Insolvency or Liquidation Proceeding, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities (other than Reorganization Securities), to which the holders of the notes or the Trustee would be entitled will be paid by the Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment or distribution, or by the holders of the notes or by the Trustee if received by them, directly to the holders of Senior Indebtedness (pro rata to such holders on the basis of the amounts of Senior Indebtedness held by such holders) or their Representative or Representatives, as their interests may appear, for application to the payment of the Senior Indebtedness remaining unpaid until all such Senior Indebtedness has been paid in full in cash, after giving effect to any concurrent payment, distribution or provision therefor to or for the holders of Senior Indebtedness.

        The Company also may not make any payment in respect of the notes (except in Reorganization Securities) if:

•

a payment default on Designated Senior Indebtedness occurs and is continuing; or



•

any other default occurs and is continuing on Designated Senior Indebtedness that permits holders of the Designated Senior Indebtedness to accelerate its maturity and the Trustee

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receives a notice of such default (a "Payment Blockage Notice") from the Credit Agent or the holders or the Representative of any Designated Senior Indebtedness.

        Payments on the notes may and shall be resumed:

•

in the case of a payment default, upon the date on which such default is cured or waived; and



•

in case of a nonpayment default, the earlier of



(1)

the date on which such nonpayment default is cured or waived;



(2)

179 days after the date on which the applicable Payment Blockage Notice is received; or



(3)

the date on which the Trustee receives written notice from the Credit Agent or the Representative for such Designated Senior Indebtedness, as the case may be, rescinding the applicable Payment Blockage Notice, unless the maturity of any Designated Senior Indebtedness has been accelerated.

        No new Payment Blockage Notice may be delivered unless and until 181 days have elapsed since the effectiveness of the immediately prior Payment Blockage Notice.

        No event of default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice unless such default shall have been cured or waived for a period of not less than 90 days.

        As a result of the subordination provisions described above, in the event of a bankruptcy, liquidation or reorganization of the Company, holders of the notes may recover less ratably than creditors of the Company who are holders of Senior Indebtedness. See "Risk Factors—Risks Relating to the Exchange Offer and the New Notes—Your right to receive payments on the notes is junior to most of our existing indebtedness and possibly most of our future borrowings. Further, the subsidiary guarantees will be junior to most of the subsidiary guarantors' existing indebtedness and possibly to all of their future borrowings. Additionally, claims of creditors of our non-guarantor subsidiaries will generally have priority with respect to the assets and earnings of those subsidiaries over claims of holders of the notes." The Company and its Restricted Subsidiaries will be subject to certain financial tests limiting the amount of additional Indebtedness, including Senior Indebtedness, that the Company and its Restricted Subsidiaries can incur. See "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock."

Subsidiary Guarantees

        Each of the Company's Domestic Restricted Subsidiaries (other than Permitted Joint Ventures and Receivables Entities) will jointly and severally guarantee, on a senior subordinated basis, the Company's obligations under the notes. Each Subsidiary Guarantee will be subordinated to the prior payment in full of all Senior Indebtedness of that Guarantor. As of the Issue Date, each of our subsidiaries that guarantees our existing 9¹/2% Senior Subordinated Notes and 13% Senior Subordinated Notes will guarantee the notes.

        Each Guarantor that makes a payment under its Guarantee will be entitled upon payment in full of all guaranteed obligations under the Indenture to a contribution from each other Guarantor in an amount equal to such other Guarantor's pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.

        If a Guarantee were rendered voidable, it could be subordinated by a court to all other indebtedness (including, without limitation, guarantees and other contingent liabilities) of a Guarantor, as applicable, and depending on the amount of such indebtedness, a Guarantor's liability on its Guarantee could be reduced to zero. See "Risk Factors—Risks Relating to the Exchange Offer and the

120

New Notes—Federal and state statutes allow courts, under specific circumstances, to void subsidiary guarantees and require holders of the notes to return payments received from subsidiary guarantors."

        A Guarantor may not sell or otherwise dispose of all or substantially all of its assets, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person unless:

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

        (2)   either:

(a)

the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger assumes all the obligations of that Guarantor pursuant to a supplemental indenture satisfactory to the Trustee; or



(b)

the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of the Indenture.

        The Subsidiary Guarantee of a Guarantor will be released:

(1)

in connection with any sale or other disposition of all or substantially all of the assets of that Guarantor (including by way of merger or consolidation) if the Company applies the Net Proceeds of that sale or other disposition in accordance with the applicable provisions of the Indenture; or



(2)

in connection with the sale of all of the Capital Stock of a Guarantor if the Company applies the Net Proceeds of that sale in accordance with the applicable provisions of the Indenture; or



(3)

if the Company designates any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary.

        The Net Proceeds of an Asset Sale may be used by the Company to make an offer to holders for the repurchase of notes. See "—Repurchase at the Option of Holders—Asset Sales."

Optional Redemption

        At any time prior to June 1, 2007, the Company may on one or more occasions redeem up to 35% of the aggregate principal amount of notes (including Additional Notes, if any) originally issued under the Indenture at a redemption price of 109.125% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of one or more Equity Offerings; provided that:

•

at least 65% of the aggregate principal amount of notes (including Additional Notes, if any) remains outstanding immediately after the occurrence of such redemption (excluding notes held by the Company and its Subsidiaries); and



•

each such redemption occurs within 90 days of the date of the closing of the related Equity Offering.

        Prior to June 1, 2008, we may at our option redeem all, but not less than all, of the notes (including Additional Notes, if any) at a redemption price equal to 100% of the principal amount of the notes plus the Applicable Premium as of, and accrued and unpaid interest to, the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date). Notice of such redemption must be mailed by first-class mail to each Holder's registered address, not less than 30 nor more than 60 days prior to the redemption date.

        "Applicable Premium" means with respect to a note at any redemption date, the greater of (i) 1.00% of the principal amount of such note and (ii) the excess of (A) the present value at such

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redemption date of (1) the redemption price of such note on June 1, 2008 (such redemption price being described below exclusive of any accrued interest) plus (2) all required remaining scheduled interest payments due on such note through June 1, 2008 (but excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the Adjusted Treasury Rate, over (B) the principal amount of such note on such redemption date.

        "Adjusted Treasury Rate" means, with respect to any redemption date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities", for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after June 1, 2008, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date, in each case calculated on the third Business Day immediately preceding the redemption date, plus 0.50%.

        "Comparable Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the notes from the redemption date to June 1, 2008, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a maturity most nearly equal to June 1, 2008.

        "Comparable Treasury Price" means, with respect to any redemption date, if clause (ii) of the Adjusted Treasury Rate is applicable, the average of three, or such lesser number as is obtained by the Trustee, Reference Treasury Dealer Quotations for such redemption date.

        "Quotation Agent" means the Reference Treasury Dealer selected by the Trustee after consultation with the Company.

        "Reference Treasury Dealer" means Credit Suisse First Boston LLC and its successors and assigns and two other nationally recognized investment banking firms selected by the Company that are primary U.S. Government securities dealers.

        "Reference Treasury Dealer Quotations" means with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day immediately preceding such redemption date.

        On or after June 1, 2008, the Company may redeem all or a part of the notes (including Additional Notes, if any), upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest

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thereon, to the applicable redemption date, if redeemed during the twelve-month period beginning on June 1 of the years indicated below:

Year	Percentage
2008	104.563	%
2009	102.281	%
2010 and thereafter	100.000	%

Selection and Notice

        If less than all of the notes are to be redeemed at any time, the Trustee will select notes for redemption as follows:

•

if the notes are listed, in compliance with the requirements of the principal national securities exchange on which the notes are listed; or



•

if the notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate.

        No notes of $1,000 or less shall be redeemed in part. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each holder of notes to be redeemed at its registered address. Notices of redemption may not be conditional.

        If any note is to be redeemed in part only, the notice of redemption that relates to that note shall state the portion of the principal amount thereof to be redeemed. A new note in principal amount equal to the unredeemed portion of the original note will be issued in the name of the holder thereof upon cancellation of the original note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on notes or portions of them called for redemption.

Mandatory Redemption

        Except as set forth under the caption "—Repurchase at the Option of Holders," the Company is not required to make mandatory redemption or sinking fund payments with respect to the notes. The Company may at any time and from time to time purchase notes in the open market or otherwise.

Repurchase at the Option of Holders

Change of Control

        If a Change of Control occurs, each holder of the notes will have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of that holder's notes pursuant to the offer described below (the "Change of Control Offer"). In the Change of Control Offer, the Company will offer a Change of Control Payment in cash equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest thereon, if any, to the date of purchase. Within 60 business days following any Change of Control, the Company will mail a notice to each holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase notes on a specified date no later than five Business Days after the termination of the Change of Control Offer (the "Change of Control Payment Date"), pursuant to the procedures required by the Indenture and described in such notice. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control.

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

•

accept for payment all notes or portions thereof properly tendered pursuant to the Change of Control Offer;



•

deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all notes or portions thereof so tendered; and



•

deliver or cause to be delivered to the Trustee the notes so accepted together with an Officers' Certificate stating the aggregate principal amount of notes or portions thereof being purchased by the Company.

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

        Prior to complying with any of the provisions of this "—Repurchase at the Option of Holders—Change of Control" covenant, but in any event within 90 days following a Change of Control, the Company will either repay all outstanding Senior Indebtedness or obtain the requisite consents, if any, under all agreements governing outstanding Senior Indebtedness to permit the repurchase of notes required by this covenant. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

        The provisions described above that require the Company to make a Change of Control Offer following a Change of Control will be applicable regardless of whether or not any other provisions of the Indenture are applicable. Except as described above with respect to a Change of Control, the Indenture does not contain provisions that permit the holders of the notes to require that the Company repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.

        The Company's outstanding Senior Indebtedness currently prohibits the Company from purchasing any notes, and also provides that certain change of control events with respect to Holdings and/or the Company would constitute a default under the agreements governing the Senior Indebtedness. Any future credit agreements or other agreements relating to Senior Indebtedness to which the Company becomes a party may contain similar restrictions and provisions. In the event a Change of Control occurs at a time when the Company is prohibited from purchasing notes, the Company could seek the consent of its senior lenders to the purchase of notes or could attempt to refinance the borrowings that contain such prohibition. If the Company does not obtain such a consent or repay such borrowings, the Company will remain prohibited from purchasing notes. In such case, the Company's failure to purchase tendered notes would constitute an Event of Default under the Indenture which would, in turn, constitute a default under such Senior Indebtedness. In such circumstances, the subordination provisions in the Indenture would likely restrict payments to the holders of notes.

        The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company and purchases all notes validly tendered and not withdrawn under such Change of Control Offer.

        The definition of Change of Control includes a phrase relating to the sale, lease, transfer, conveyance or other disposition of "all or substantially all" of the assets of the Company and its Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of notes to require the Company to repurchase such notes as a

124

result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of the Company and its Subsidiaries taken as a whole to another Person or group may be uncertain.

        The provisions under the Indenture relative to the Company's obligation to make an offer to repurchase the notes as a result of a Change of Control may be waived or modified with the consent of the holders of a majority in principal amount of the notes.

Asset Sales

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

•

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



•

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



•

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



(1)

any liabilities (as shown on the Company's or the Restricted Subsidiary's most recent balance sheet) of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the notes or any Subsidiary Guarantee), that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability;



(2)

any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are within 60 days (subject to ordinary settlement periods) converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents (to the extent of the cash received in that conversion); and



(3)

any Permitted Business Assets (so long as such Permitted Business Assets are acquired for fair market value, as determined in good faith by the Board of Directors of the Company, in connection with the transaction giving rise to such Asset Sale; provided that the Board of Directors' determination must be based on an opinion or appraisal issued by an independent accounting, appraisal or investment banking firm of national standing if such fair market value exceeds $35 million), which Permitted Business Assets shall be deemed to have been acquired pursuant to the second succeeding paragraph in connection with such Asset Sale.

        The 75% limitation referred to above will not apply to any Asset Sale in which the cash or Cash Equivalents portion of the consideration received therefrom, determined in accordance with the preceding sentence, is equal to or greater than what the after-tax proceeds would have been had such Asset Sale complied with the 75% limitation.

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

•

to repay or repurchase Senior Indebtedness of the Company or any Restricted Subsidiary;



•

to acquire all or substantially all the assets of, or a majority of the Voting Stock of, another Permitted Business;

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•

to make a capital expenditure in a Permitted Business;



•

to acquire other assets (other than securities) that are used or useful in a Permitted Business; or



•

to make an Asset Sale Offer, treating the Net Proceeds as Excess Proceeds for all purposes.

        Any Net Proceeds from Asset Sales that are not applied or invested as provided in the preceding paragraph will constitute "Excess Proceeds". When the aggregate amount of Excess Proceeds exceeds $15 million, the Company will be required to make an offer to all holders of notes (an "Asset Sale Offer") and other pari passu Indebtedness of the Company or any Guarantor (other than the 13% Senior Subordinated Notes) to the extent required pursuant to the terms of that pari passu Indebtedness to purchase the maximum principal amount of such notes or other pari passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of the principal amount (or, in the case of such other pari passu Indebtedness that was issued with significant original issue discount, 100% of the accreted value thereof) plus accrued and unpaid interest, if any, to the date of purchase, and will be payable in cash (or in the case of such pari passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such other pari passu Indebtedness). If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use such Excess Proceeds for general corporate purposes. If the aggregate principal amount of notes tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the notes to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

        The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the notes as a result of an Asset Sale Offer.

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Certain Covenants

        The Indenture contains covenants including, among others, the following:

Restricted Payments

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

(1)

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



(2)

purchase, redeem or otherwise acquire or retire for value (including without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company or any direct or indirect parent of the Company or any Restricted Subsidiary of the Company (other than any such Equity Interests owned by the Company or any Restricted Subsidiary of the Company);



(3)

make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of the Company or any Guarantor that is subordinate or junior in right of payment to the notes or any Subsidiary Guarantee, as applicable, except scheduled payments of interest or principal at Stated Maturity thereof; or



(4)

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

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

(1)

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



(2)

(a) the Company would, after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described below under the caption "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock";

(b)    at the time of any such Restricted Payment (other than up to an aggregate of $5.0 million of such Restricted Payments in any calendar year) either (i) the notes have a Qualifying Rating or (ii) the Company's Consolidated Leverage Ratio is no more than 4.0 to 1 (after giving pro forma effect to such Restricted Payment); and

(3)

such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the Issue Date (excluding Restricted Payments permitted by clauses (1) through (6), (9), (10), (12), (13) and (14) of the next succeeding paragraph), is less than the sum, without duplication, of:



(a)

50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the beginning of the first full fiscal quarter commencing after the Issue Date to the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus

127

(b)

100% of the aggregate net proceeds (including the fair-market value of property other than cash, provided, that fair market value of property other than cash shall be determined in good faith by the Board of Directors whose resolution with respect thereto shall be delivered to the Trustee and such determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if such fair market value exceeds $35 million) received by the Company as a contribution to the Company's capital or received by the Company from the issue or sale since the Issue Date of Equity Interests of the Company (other than Disqualified Stock) or of Disqualified Stock or debt securities of the Company that have been converted subsequent to the Issue Date into such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Restricted Subsidiary of the Company and other than Disqualified Stock or convertible debt securities that have been converted into Disqualified Stock); plus



(c)

to the extent that any Restricted Investment in any Person that was made after the Issue Date is sold for cash or otherwise liquidated or repaid for cash, or an Unrestricted Subsidiary is designated a Restricted Subsidiary, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any), or the portion (proportionate to the Company's equity interest in such Subsidiary) of the fair market value of the net assets of such Unrestricted Subsidiary upon becoming a Restricted Subsidiary, as the case may be, and (ii) the initial amount of such Restricted Investment made after the Issue Date in such Person or Unrestricted Subsidiary; plus



(d)

the amount by which Indebtedness of the Company or its Restricted Subsidiaries is reduced on the Company's balance sheet upon the conversion or exchange subsequent to the Issue Date of any Indebtedness of the Company convertible or exchangeable for Equity Interests (other than Disqualified Stock) of the Company (less the amount of any cash, or other property, distributed by the Company or any Restricted Subsidiary upon such conversion or exchange); plus



(e)

if any Unrestricted Subsidiary pays any cash dividends or cash distributions to the Company or any of its Restricted Subsidiaries, 100% of any such cash dividends or cash distributions made after the Issue Date.

        So long as no Default has occurred and is continuing or would be caused thereby, the preceding provisions will not prohibit:

(1)

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



(2)

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



(3)

the defeasance, redemption, repurchase or other acquisition of Indebtedness or Disqualified Stock of the Company or any Guarantor that is subordinate or junior in right of payment to the notes or any Subsidiary Guarantee, as applicable, with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness (assuming for purposes of this clause that Disqualified Stock is Indebtedness);

128

(4)

the payment of any dividend (or in the case of a partnership, limited liability company or other entity, any similar distribution) by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis regardless of whether any Default has occurred or is continuing;



(5)

the redemption, repurchase, acquisition or retirement of Equity Interests in a Permitted Joint Venture of the Company or of any of the Company's Restricted Subsidiaries in accordance with the organizational documents for, and agreements among holders of Equity Interests in, such Permitted Joint Venture or Restricted Subsidiary, provided that as a result of such redemption, repurchase, acquisition or retirement of Equity Interests in any such Permitted Joint Venture, any such Permitted Joint Venture shall become a Wholly Owned Restricted Subsidiary of the Company and a Guarantor under the Indenture;



(6)

the redemption, repurchase, acquisition or retirement of Equity Interests in and Indebtedness of the Development Corporations in accordance with the respective securities purchase agreements entered into and notes issued by such Development Corporations; provided that as a result of such redemption, repurchase, acquisition or retirement, such Development Corporations will become Wholly Owned Restricted Subsidiaries of the Company and Guarantors under the Indenture;



(7)

the purchase, redemption or other acquisition, cancellation or retirement for value of Equity Interests of the Company or any Restricted Subsidiary of the Company or any parent of the Company held by any existing or former director, officer, employee, independent contractor or consultant of the Company or Holdings or any Subsidiary of the Company or their assigns, estates or heirs, in each case in connection with the repurchase provisions under employee stock option or stock purchase agreements or other agreements to compensate directors, officers, employees, independent contractors or consultants; provided that such redemptions or repurchases pursuant to this clause will not exceed $2 million in any calendar year subsequent to the Issue Date with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum of $10 million in any calendar year; provided that the amount of any such payments will be included in calculations of the amount of Restricted Payments subsequent to the Issue Date;



(8)

loans or advances to employees or directors of the Company or Holdings or any Subsidiary of the Company made in the ordinary course of business subsequent to the Issue Date the proceeds of which are used to purchase Capital Stock of the Company or Holdings, in an aggregate amount not to exceed $5 million at any one time outstanding; provided that the amount of any such payments will be included in calculations of the amount of Restricted Payments subsequent to the Issue Date;



(9)

repurchases of Capital Stock, warrants, stock options or other rights to acquire Capital Stock subsequent to the Issue Date deemed to occur upon the exercise of warrants, stock options or other rights to acquire Capital Stock if such Capital Stock, warrants, stock options or rights represent a portion of the exercise price thereof;



(10)

payments to Holdings in an amount equal to the amount of income tax that the Company and the Restricted Subsidiaries would have paid had they filed consolidated tax returns on a separate Company basis in any given year, less the amount of such taxes paid or to be paid directly by the Company and the Restricted Subsidiaries for such years;



(11)

an amount not to exceed $1.0 million in any fiscal year subsequent to the Issue Date to permit Holdings to pay:



(a)

franchise taxes and other fees required to maintain its legal existence; and

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(b)

its corporate overhead expenses incurred in the ordinary course of business, its audit expenses, any filing fees required by the Commission and to pay salaries or other compensation of employees who perform services for both Holdings and the Company;

provided that the amount of any such payments will be included in calculations of the amount of Restricted Payments subsequent to the Issue Date;

(12)

the Closing Date Dividend;



(13)

Permitted Investments; and



(14)

other Restricted Payments subsequent to the Issue Date in an aggregate amount not to exceed $10 million at any one time.

        The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any non-cash Restricted Payment shall be determined in good faith by the Board of Directors whose resolution with respect thereto shall be delivered to the Trustee. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this "—Restricted Payments" covenant were computed, together with a copy of any fairness opinion or appraisal required by the Indenture.

Incurrence of Indebtedness and Issuance of Preferred Stock

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

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

(1)

the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness and letters of credit pursuant to the Senior Credit Facilities; provided that the aggregate amount of all Indebtedness of the Company and the Guarantors outstanding under this clause (1) after giving effect to such incurrence does not exceed an amount equal to $545.0 million at any one time;



(2)

the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness;



(3)

the incurrence by the Company and the Guarantors of Indebtedness represented by the notes and the Subsidiary Guarantees;

130

(4)

the incurrence by the Company or any of its Restricted Subsidiaries of Capital Lease Obligations, mortgage financings, purchase money obligations or similar financing arrangements, in each case incurred for the purpose of financing all or any part of the purchase price or cost of design, construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary (whether through the direct purchase of assets or the Capital Stock of any Person owning such Assets) or Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount or accreted value, as applicable, not to exceed $25 million at any time outstanding;



(5)

the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by the Indenture to be incurred under the first paragraph of this covenant or clauses (2), (3) or (13) of this paragraph;



(6)

the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries (and the issuance of Disqualified Stock or preferred stock of any Restricted Subsidiary to the Company or another Restricted Subsidiary); provided, however, that:



(a)

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



(b)

(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness, Disqualified Stock or preferred stock being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness, Disqualified Stock or preferred stock to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);



(7)

the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding;



(8)

the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this covenant;



(9)

Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;



(10)

Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, asset or Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that (a) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted

131

Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (a)) and (b) the maximum aggregate liability in respect of such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to any such subsequent changes in value) actually received by the Company and/or such Restricted Subsidiary in connection with such disposition;

(11)

obligations in respect of performance, surety and similar bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;



(12)

Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument (except in the case of daylight overdrafts) drawn against insufficient funding in the ordinary course of business, provided, however, that such Indebtedness is extinguished within five business days of incurrence; and



(13)

the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness, in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (13), not to exceed $35 million.

        For purposes of determining compliance with this "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock" covenant, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company will be permitted to classify such item of Indebtedness in any manner that complies with this covenant. In addition, the Company may, at any time, change the classification of an item of Indebtedness (or any portion thereof) to any other clause or to the first paragraph hereof provided that the Company would be permitted to incur such item of Indebtedness (or the portion thereof) pursuant to such other clause or the first paragraph hereof, as the case may be, at such time of reclassification. Accrual of interest, accretion or amortization of original issue discount and the accretion of accreted value will not be deemed to be an incurrence of Indebtedness for purposes of this covenant.

Liens

        The Company will not, and will not permit any of its Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind securing trade payables or Indebtedness that does not constitute Senior Indebtedness (other than Permitted Liens) upon any of their property or assets, now owned or hereafter acquired unless:

•

in the case of Liens securing Indebtedness that is expressly subordinated or junior in right of payment to the notes, the notes are secured on a senior basis to the obligations so secured until such time as such obligations are no longer secured by a Lien; and



•

in all other cases, the notes are secured on an equal and ratable basis with the obligations so secured until such time as such obligations are no longer secured by a Lien.

132

Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

        The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

•

pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries (i) on its Capital Stock or (ii) with respect to any other interest or participation in, or measured by, its profits;



•

pay any Indebtedness owed to the Company or any of the Company's Restricted Subsidiaries;



•

make loans or advances to the Company or any of the Company's Restricted Subsidiaries; or



•

transfer any of its properties or assets to the Company or any of the Company's Restricted Subsidiaries.

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

•

any encumbrance or restriction pursuant to an agreement in effect at or entered into on the Issue Date, including:



(1)

the Senior Credit Facilities as in effect as of the Issue Date, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof, provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are no more restrictive, taken as a whole (as determined in the good faith judgment of the Company's Board of Directors), with respect to such dividend and other payment restrictions than those contained in the Senior Credit Facilities as in effect on the Issue Date; and



(2)

the Indenture and the notes;



•

any applicable law, rule, regulation or order;



•

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



•

customary provisions restricting assignment, subletting or transfer of any property or asset that is subject to a lease, license or contract entered into in the ordinary course of business and consistent with past practices;



•

any Purchase Money Note or other Indebtedness or contractual requirements incurred with respect to a Qualified Receivables Transaction relating exclusively to a Receivables Entity that, in the good faith determination of the Board of Directors of the Company, are necessary to effect such Qualified Receivables Transaction;



•

any encumbrance or restriction under leases and purchase money obligations for property leased or acquired in the ordinary course of business that impose restrictions on the property so acquired of the nature described in the last clause of the preceding paragraph;



•

restrictions with respect solely to a Restricted Subsidiary of the Company imposed pursuant to a binding agreement which has been entered into for the sale or disposition of all or substantially

133

all of the Capital Stock or assets of such Restricted Subsidiary, provided that such restrictions apply solely to the Capital Stock or assets being sold of such Restricted Subsidiary;

•

provisions with respect to the disposition or distribution of assets or property in connection with Permitted Joint Ventures entered into in accordance with past practice made in the ordinary course of business;



•

Permitted Refinancing Indebtedness, provided that the material restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are no more restrictive, in the good faith judgment of the Company's board of directors, taken as a whole, to the holders of notes than those contained in the agreements governing the Indebtedness being refinanced; and



•

restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business.

Merger, Consolidation or Sale of Assets

        The Company may not: (1) consolidate or merge with or into another Person (whether or not the Company is the surviving corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to another Person unless:

(1)

either: (a) the Company is the surviving corporation; or (b) the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia;



(2)

the Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, conveyance or other disposition shall have been made expressly assumes all the obligations of the Company under the notes and the Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee;



(3)

immediately after giving pro forma effect to such transaction no Default or Event of Default exists; and



(4)

the Company or Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, conveyance or other disposition shall have been made:



(a)

will, after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described above under the caption "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock"; or



(b)

would (together with its Restricted Subsidiaries) have a higher Fixed Charge Coverage Ratio immediately after such transaction (after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period) than the Fixed Charge Coverage Ratio of the Company and its Subsidiaries immediately prior to the transaction.

        The preceding clause (4) will not prohibit:

(a)

a merger between the Company and a Wholly Owned Subsidiary; or



(b)

a merger between the Company and an Affiliate incorporated solely for the purpose of reincorporating the Company in another state of the United States; so long as, in each case, the amount of Indebtedness of the Company and its Restricted Subsidiaries is not increased thereby.

        In addition, the Company may not, directly or indirectly, lease all or substantially all of its properties or assets, in one or more related transactions, to any other Person. This "—Merger, Consolidation or Sale of Assets" covenant will not be applicable to a sale, assignment, transfer, conveyance or other disposition of assets between or among the Company and any of its Wholly Owned Restricted Subsidiaries.

134

Transactions with Affiliates

        The Company will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate or any affiliated professional associations or professional corporations which employ physicians and other professionals who provide healthcare services for the Company's occupational and health services centers (each, an "Affiliate Transaction"), unless:

(1)

such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary made on an arm's-length basis with an unrelated Person; and



(2)

the Company delivers to the Trustee:



(a)

with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $10 million, a resolution of the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (1) above and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors; and



(b)

with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $25 million, an opinion as to the fairness to the holders of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

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

(1)

customary directors' fees to Persons who are not otherwise Affiliates of the Company;



(2)

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



(3)

the payment of Affiliate Management Fees in an amount in any calendar year not to exceed the greater of (a) $1 million and (b) 1% of Consolidated EBITDA;



(4)

payments by the Company or any of its Restricted Subsidiaries to Welsh Carson, Ferrer Freeman and their respective Affiliates made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, which payments are approved in good faith by a majority of the Board of Directors of the Company or a committee thereof consisting of disinterested members;



(5)

loans or advances to employees in accordance with past practice made in the ordinary course of business which are approved in good faith by a majority of the Board of Directors of the Company or a committee thereof consisting of disinterested members;



(6)

any agreement as in effect on the Issue Date or any amendment thereto (so long as any such amendment is no less favorable in any material respect to the Company and its Restricted Subsidiaries);



(7)

any payment pursuant to any tax sharing agreement between the Company and Holdings or any other Person with which the Company is required or permitted to file a consolidated tax return or with which the Company is or could be part of a consolidated, combined or unitary group for tax purposes; provided that in no event shall the amount permitted to be paid

135

pursuant to all such agreements exceed the tax liabilities attributable solely to the Company and its Restricted Subsidiaries (whether as a consolidated, combined or unitary group);

(8)

Restricted Payments that are permitted by the provisions of the Indenture described above under the caption "—Certain Covenants—Restricted Payments";



(9)

customary fees and compensation, options and benefits paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Company or any of its Restricted Subsidiaries;



(10)

any transaction involving ordinary course investment banking, merchant banking, commercial banking or related activities;



(11)

any transaction with customers, clients, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of the Indenture, that is fair to the Company or its Restricted Subsidiaries, in the reasonable determination of the senior management and of the Board of Directors of the Company, or is on terms, taken as a whole, at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;



(12)

any purchases by the Company's Affiliates of Indebtedness of the Company or any of its Restricted Subsidiaries offered to persons who are not Affiliates; provided that such purchases must be on the same terms and conditions as offered to Persons who are not Affiliates; and



(13)

issuances or sales by the Company of Equity Interests (other than Disqualified Stock) or any contribution to the capital of the Company or any Restricted Subsidiary.

        Notwithstanding the foregoing, the holders of notes will be entitled to receive payment in full in cash of all amounts due or to become due in respect of the notes before any payment is made with respect to Affiliate Management Fees in the event of any distribution to creditors of the Company in any Insolvency or Liquidation Proceeding with respect to the Company. No payments of Affiliate Management Fees shall be made by the Company or any of its Restricted Subsidiaries if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which Affiliate Management Fees are to be paid is less than 1.75 to 1; provided, however, that such payments due but not paid shall accrue and shall be paid only after such time as the Fixed Charge Coverage Ratio for a four full fiscal quarter period is no longer less than or equal to 1.75 to 1.

        For the avoidance of doubt, in connection with any transaction between Holdings and the Company, a member of the Board of Directors of the Company shall not cease to be a disinterested director solely because such director also serves on the board of directors of Holdings.

Designation of Restricted and Unrestricted Subsidiaries

        The Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, all outstanding Investments owned by the Company and its Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary so designated will be deemed to be Restricted Payments made at the time of such designation (to the extent not designated a Permitted Investment) and will reduce the amount available for Restricted Payments under the first paragraph of the covenant described above under the caption "—Certain Covenants—Restricted Payments." All such outstanding Investments will be valued at their fair market value at the time of such designation, as determined in good faith by the Board of Directors. That designation will only be permitted if such Restricted Payment would be permitted at that time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a Default.

136

Anti-Layering

        The Company will not, and will not permit any Guarantor to, incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is both:

•

subordinate or junior in right of payment to any Senior Indebtedness; and



•

senior in any respect in right of payment to the notes.

        No Guarantor will incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is both:

•

subordinate or junior in right of payment to any Senior Indebtedness of such Guarantor; and



•

senior in any respect in right of payment to the Subsidiary Guarantees.

Limitation on Issuances and Sales of Equity Interests in Restricted Subsidiaries

        The Company will not, and will not permit any of its Restricted Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any Equity Interests in any Restricted Subsidiary or to issue any of its Equity Interests (other than, if necessary, Equity Interests constituting directors' qualifying shares) to any Person except:

(1)

to the Company or a Wholly Owned Subsidiary (other than a Receivables Entity); or



(2)

in compliance with the covenant described above under the caption "—Repurchase at the Option of Holders—Asset Sales" and immediately after giving effect to such issuance or sale, such Restricted Subsidiary either would continue to be a Restricted Subsidiary or if such Restricted Subsidiary would no longer be a Restricted Subsidiary, then the investment of the Company in such Person (after giving effect to such issuance or sale) would have been permitted under the "Restricted Payments" covenant as if made on the date of such issuance or sale.

        Notwithstanding the preceding paragraph, the Company may sell all the Equity Interests of a Restricted Subsidiary as long as the Company complies with the terms of the covenant described under the caption "—Repurchase at the Option of Holders—Asset Sales."

Limitations on Issuances of Guarantees of Indebtedness

        The Company will not permit any Restricted Subsidiary, directly or indirectly, to incur Indebtedness or Guarantee or pledge any assets to secure the payment of any Indebtedness of the Company or any Restricted Subsidiary unless either such Restricted Subsidiary (1) is a Guarantor or (2) simultaneously executes and delivers a supplemental indenture to the Indenture and becomes a Guarantor, which Guarantee shall (a) with respect to any Guarantee of Senior Indebtedness, be subordinated in right of payment on the same terms as the notes are subordinated to such Senior Indebtedness and (b) with respect to any Guarantee of any other Indebtedness, be senior to or pari passu with such Restricted Subsidiary's other Indebtedness or Guarantee of or pledge to secure such other Indebtedness.

        Notwithstanding the preceding paragraph, any Subsidiary Guarantee of the notes shall provide by its terms that it shall be automatically and unconditionally released and discharged under the circumstances described above under the caption "—Subsidiary Guarantees." The form of the Guarantee will be attached as an exhibit to the Indenture.

137

Additional Guarantees

        If (a) the Company shall acquire or create a Domestic Restricted Subsidiary (other than a Permitted Joint Venture or a Receivables Entity) after the Issue Date, or (b) any Subsidiary of the Company becomes (1) a Domestic Restricted Subsidiary (other than a Permitted Joint Venture or a Receivables Entity) or (2) guarantees any Indebtedness of the Company or a Domestic Restricted Subsidiary, then, in each case, such newly acquired or created Restricted Subsidiary or such other Subsidiary, as the case may be, shall become a Guarantor and execute a supplemental indenture and deliver an opinion of counsel, in accordance with the terms of the Indenture.

Business Activities

        The Company will not, and will not permit any Restricted Subsidiary to, engage in any business other than a Permitted Business.

Advances to Subsidiaries

        All advances to Restricted Subsidiaries made by the Company after the Issue Date will be evidenced by intercompany notes in favor of the Company. Each intercompany note will be payable upon demand and will bear interest at the same rate as the notes. A form of intercompany note will be attached as an exhibit to the Indenture.

Payments for Consents

        The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any holder of notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the notes unless such consideration is offered to be paid and is paid to all holders of the notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

Reports

        Whether or not required by the Commission, so long as any notes are outstanding, the Company will furnish or make available to the holders of notes, within the time periods specified in the Commission's rules and regulations:

(1)

all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were required to file such Forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report on the annual financial statements by the Company's independent registered public accounting firm; and



(2)

all current reports that would be required to be filed with the Commission on Form 8-K if the Company were required to file such reports.

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

138

        In addition, whether or not required by the Commission, the Company will file a copy of all the information and reports referred to in clauses (1) and (2) above with the Commission for public availability within the time periods specified in the Commission's rules and regulations (unless the Commission will not accept such a filing) and make such information available to securities analysts and prospective investors upon request. In addition, the Company has agreed that, for so long as any notes remain outstanding, it will furnish to the holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d) (4) under the Securities Act.

Events of Default and Remedies

        Each of the following is an Event of Default:

(1)

default for 30 days in the payment when due of interest on the notes whether or not prohibited by the subordination provisions of the Indenture;



(2)

default in payment when due of the principal of or premium, if any, on the notes, whether or not prohibited by the subordination provisions of the Indenture;



(3)

failure by the Company to comply with the provisions described under the caption "Certain Covenants—Merger, Consolidation or Sale of Assets;"



(4)

failure by the Company for 30 days after notice from the Trustee or holders of at least 25% in principal amount of the notes then outstanding to comply with the provisions described under the captions "—Repurchase at the Option of Holders—Change of Control," "—Repurchase at the Option of Holders—Asset Sales," "—Certain Covenants—Restricted Payments" or "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock;"



(5)

failure by the Company for 60 days after notice from the Trustee or holders of at least 25% in principal amount of the notes then outstanding to comply with any of its other agreements in the Indenture or the notes;



(6)

default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for borrowed money or Guarantee by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, if that default:



(a)

is caused by a failure to pay principal of or premium, if any, on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a "Payment Default"); or



(b)

results in the acceleration of such Indebtedness prior to its express maturity, and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $25 million or more;



(7)

failure by the Company or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $25 million, which judgments are not paid, discharged or stayed for a period of 60 days;



(8)

except as permitted by the Indenture, any Subsidiary Guarantee of a Significant Subsidiary shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor that is a Significant Subsidiary, or any Person acting on behalf of any such Guarantor, shall deny or disaffirm such Guarantor's obligations under the Subsidiary Guarantee of such Guarantor; and

139

(9)

certain events of bankruptcy or insolvency with respect to the Company or any of the Company's Significant Subsidiaries.

        In the event of a declaration of acceleration of the notes because an Event of Default has occurred and is continuing as a result of the acceleration of any Indebtedness described in clause (6) of the preceding paragraph, the declaration of acceleration of the notes shall be automatically annulled if the holders of any Indebtedness described in clause (6) of the preceding paragraph have rescinded the declaration of acceleration in respect of such Indebtedness within 30 days of the date of such declaration and if:

•

the annulment of the acceleration of notes would not conflict with any judgment or decree of a court of competent jurisdiction; and



•

all existing Events of Default, except nonpayment of principal or interest on the notes that became due solely because of the acceleration of the notes, have been cured or waived.

        If any Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the outstanding notes may declare the principal of the notes to be due and payable immediately; provided, that so long as any Indebtedness permitted to be incurred pursuant to the Senior Credit Facilities shall be outstanding, such acceleration shall not be effective until the earlier of:

•

an acceleration of any such Indebtedness under the Senior Credit Facilities; or



•

five business days after receipt by the Company and Credit Agent on the Issue Date (or to such other Credit Agent as the Trustee may hereafter be notified in writing) of written notice of such acceleration (provided that the notification of the replacement Credit Agent and its address should be received by the Trustee prior to the issuance of such notice of acceleration).

        If payment of the notes is accelerated because of an Event of Default, the Company shall promptly notify the holders of the Senior Indebtedness of the acceleration.

        Notwithstanding the preceding paragraph, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to the Company or any of its Subsidiaries, the principal and any accrued but unpaid interest on all outstanding notes shall become due and payable immediately without further action or notice.

        Holders of the notes may not enforce the Indenture or the notes except as provided in the Indenture. Subject to certain limitations, holders of a majority in principal amount of the then outstanding notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from holders of the notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest.

        The holders of a majority in aggregate principal amount of the notes then outstanding by notice to the Trustee may on behalf of the holders of all of the notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest or premium, if any, on, or the principal of, the notes.

        The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture. Upon becoming aware of any Default or Event of Default, the Company is required to deliver to the Trustee a statement specifying such Default or Event of Default.

No Personal Liability of Directors, Officers, Employees and Stockholders

        No director, officer, employee, incorporator or stockholder of the Company, or any Guarantor, as such, shall have any liability for any obligations of the Company or the Guarantors under the notes, the Indenture, the Subsidiary Guarantees or for any claim based on, in respect of, or by reason of, such

140

obligations or their creation. Each holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. The waiver may not be effective to waive liabilities under the federal securities laws.

Legal Defeasance and Covenant Defeasance

        The Company may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding notes and all obligations of the Guarantors discharged with respect to their Subsidiary Guarantees ("Legal Defeasance") except for:

•

the rights of holders of outstanding notes to receive payments in respect of the principal of, premium, if any, and interest on such notes when such payments are due from the trust referred to below;



•

the Company's obligations with respect to the notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and money for security payments held in trust;



•

the rights, powers, trusts, duties and immunities of the Trustee, and the Company's obligations in connection therewith; and



•

the Legal Defeasance provisions of the Indenture.

        In addition, the Company may, at its option and at any time, elect to have the obligations of the Company and the Guarantors released with respect to certain covenants that are described in the Indenture ("Covenant Defeasance") and thereafter any omission to comply with those covenants shall not constitute a Default or Event of Default with respect to the notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under the caption "—Events of Default and Remedies" will no longer constitute an Event of Default with respect to the notes.

        In order to exercise either Legal Defeasance or Covenant Defeasance:

•

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



•

in the case of Legal Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that (a) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the Issue Date, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, subject to customary assumptions and exclusions, the holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;



•

in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an opinion of counsel in the United States reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance

141

and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

•

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



•

such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the Indenture) to which the Company or any of its Restricted Subsidiaries is a party or by which the Company or any of its Restricted Subsidiaries is bound;



•

the Company must deliver to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the holders of notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others;



•

no event which is, or after notice or lapse of time or both would become, an Event of Default with respect to such notes or any other notes shall have occurred and be continuing at the time of such deposit or, with regard to any such event specified in paragraphs (7) and (8) under the above caption "—Events of Default and Remedies", at any time on or prior to the 90th day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such 90th day); and



•

the Company must deliver to the Trustee an Officers' Certificate and an opinion of counsel, which opinion may be subject to customary assumptions and exclusions, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Amendment, Supplement and Waiver

        With the consent of the holders of not less than a majority in principal amount of the notes at the time outstanding (including consents obtained in connection with a purchase of or tender offer or exchange offer for the notes), the Company and Trustee are permitted to amend or supplement the Indenture or any supplemental indenture or modify the rights of the holders and any existing Default or Event of Default or compliance with any provision of the Indenture or the notes may be waived; provided that without the consent of each holder affected, no amendment, supplement, modification or waiver may:

•

reduce the principal amount of notes whose holders must consent to an amendment, supplement or waiver;



•

reduce the principal of or change the fixed maturity of any note or alter the provisions with respect to the redemption of the notes (other than provisions relating to the covenants described above under the caption "—Repurchase at the Option of Holders");



•

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



•

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



•

make any note payable in money other than that stated in the notes;

142

•

make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of holders of notes to receive payments of principal of or premium, if any, or interest on the notes;



•

waive a redemption payment with respect to any note (other than a payment required by one of the covenants described above under the caption "—Repurchase at the Option of Holders");



•

make any change in the preceding amendment and waiver provisions; or



•

release any Guarantor from any of its obligations under its Guarantee of the notes or the Indenture, except in accordance with the terms of the Indenture.

        In addition, any amendment to, or waiver of the provisions of the Indenture relating to subordination that adversely affects the rights of the holders of the notes will require the consent of the holders of at least 75% in aggregate principal amount of the notes then outstanding.

        Notwithstanding the preceding, without the consent of any holder of notes, the Company and the Trustee may amend or supplement the Indenture or the notes:

•

to cure any ambiguity, defect or inconsistency;



•

to provide for uncertificated notes in addition to or in place of certificated notes;



•

to provide for the assumption of the Company's obligations to holders of notes in the case of a merger or consolidation or the sale of all or substantially all of the Company's assets;



•

to make any change that would provide any additional rights or benefits to the holders of notes or that does not adversely affect in any material respect the legal rights under the Indenture of any such holder;



•

to comply with requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act;



•

to provide for the issuance of additional notes in accordance with the limitations set forth in the Indenture; or



•

to allow any Subsidiary to guarantee the notes.

Concerning the Trustee

        If the Trustee becomes a creditor of the Company or any Guarantor, the Indenture limits the Trustee's right to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the Commission for permission to continue or resign.

        The holders of a majority in principal amount of the then outstanding notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default shall occur and be continuing, the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any holder of notes, unless such holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

Additional Information

        Anyone who receives this prospectus may obtain a copy of the Indenture and Registration Rights Agreement without charge by writing to Concentra Operating Corporation, 5080 Spectrum Drive, Suite 400, West Tower, Addison, Texas 75001; Attention: General Counsel.

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Book-Entry

        We will issue the new notes in the form of one or more global notes (the "Global Notes"). The Global Notes will be deposited with, or on behalf of, the Depository Trust Company ("DTC") and initially registered in the name of DTC or its nominee.

        Except as set forth below, the Global Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Notes may not be exchanged for notes in certificated form except in the limited circumstances described below. See "—Exchange of Global Notes for Certificated Notes."

Depository Procedures

        The following description of the operations and procedures of DTC is provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. We take no responsibility for these operations and procedures and urge investors to contact the system or their participants directly to discuss these matters.

        DTC has advised us that DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the "Participants") and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers (including the initial purchasers), banks, trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the "Indirect Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.

        DTC has also advised us that, pursuant to procedures established by it:

(1)

upon deposit of the Global Notes, DTC will credit the accounts of Participants designated by the Initial Purchasers with portions of the principal amount of the Global Notes; and



(2)

ownership of these interests in the Global Notes will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interests in the Global Notes).

        Investors in the Global Notes who are Participants in DTC's system may hold their interests therein directly through DTC. Investors in the Global Notes who are not Participants may hold their interests therein indirectly through organizations which are Participants in such system. All interests in a Global Note may be subject to the procedures and requirements of DTC. The laws of some states require that certain Persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial interests in a Global Note to such Persons will be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants, the ability of a Person having beneficial interests in a Global Note to pledge such interests to Persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected by the lack of a physical certificate evidencing such interests.

Except as described below, owners of an interest in the Global Notes will not have notes registered in their names, will not receive physical delivery of notes in certificated form and will not be considered the registered owners or "Holders" thereof under the Indenture for any purpose.

144

        Payments in respect of the principal of, and interest and premium and additional interest, if any, on a Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered Holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee will treat the Persons in whose names the notes, including the Global Notes, are registered as the owners of the notes for the purpose of receiving payments and for all other purposes. Consequently, neither the Company, the Trustee nor any agent of the Company or the Trustee has or will have any responsibility or liability for:

(1)

any aspect of DTC's records or any Participant's or Indirect Participant's records relating to or payments made on account of beneficial ownership interest in the Global Notes or for maintaining, supervising or reviewing any of DTC's records or any Participant's or Indirect Participant's records relating to the beneficial ownership interests in the Global Notes; or



(2)

any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants.

        DTC has advised us that its current practice, upon receipt of any payment in respect of securities such as the notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe it will not receive payment on such payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the Trustee or the Company. Neither the Company nor the Trustee will be liable for any delay by DTC or any of its Participants in identifying the beneficial owners of the notes, and the Company and the Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.

        Subject to certain restrictions," transfers between Participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds.

        DTC has advised the Company that it will take any action permitted to be taken by a Holder of notes only at the direction of one or more Participants to whose account DTC has credited the interests in the Global Notes and only in respect of such portion of the aggregate principal amount of the notes as to which such Participant or Participants has or have given such direction. However, if there is an Event of Default under the notes, DTC reserves the right to exchange the Global Notes for legended notes in certificated form, and to distribute such notes to its Participants.

        Neither the Company nor the Trustee nor any of their respective agents will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

Exchange of Global Notes for Certificated Notes

A Global Note is exchangeable for Certificated Notes if:

(1)

DTC (a) notifies the Company that it is unwilling or unable to continue as depositary for the Global Notes and DTC fails to appoint a successor depositary or (b) has ceased to be a clearing agency registered under the Exchange Act; or



(2)

the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of the Certificated Notes; or



(3)

there has occurred and is continuing a Default with respect to the notes and DTC notifies the Trustee of its decision to exchange the Global Notes for Certificated Notes.

145

        In addition, beneficial interests in a Global Note may be exchanged for Certificated Notes upon prior written notice given to the Trustee by or on behalf of DTC in accordance with the Indenture. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures).

Same Day Settlement and Payment

        The Company will make payments in respect of the notes represented by the Global Notes (including principal, premium, if any, interest and additional interest, if any) by wire transfer of immediately available funds to the accounts specified by the Global Note Holder. The Company will make all payments of principal, interest and premium and additional interest, if any, with respect to Certificated Notes by wire transfer of immediately available funds to the accounts specified by the Holders of the Certificated Notes or, if no such account is specified, by mailing a check to each such Holder's registered address. The notes represented by the Global Notes are expected to be eligible to trade in the PORTAL market and to trade in DTC's Same-Day Funds Settlement System, and any permitted secondary market trading activity in such notes will, therefore, be required by DTC to be settled in immediately available funds. The Company expects that secondary trading in any Certificated Notes will also be settled in immediately available funds.

Certain Definitions

        Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.

        "9¹/2% Senior Subordinated Notes" means the Company's 9¹/2% Senior Subordinated Notes due 2010.

        "13% Senior Subordinated Notes" means the Company's 13% Series A Senior Subordinated Notes due 2009 and Series B Senior Subordinated Notes due 2009.

        "Acquired Debt" means, with respect to any specified Person:

•

Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person or assumed in connection with the acquisition of assets from such Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary of such specified Person or such acquisition; and



•

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

        "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control," as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the Voting Stock of a Person shall be deemed to be control. For purposes of this definition, the terms "controlling," "controlled by" and "under common control with" shall have correlative meanings; provided that any affiliated professional associations and professional corporations which employ physicians and other professionals who provide health care services for the Company's occupational health services centers shall not be deemed to be an Affiliate of the Company, Holdings or any of their Subsidiaries.

146

        "Affiliate Management Fees" means any management, consulting, monitoring or advisory fees, and related expenses, payable to Welsh Carson, Ferrer Freeman or their respective Affiliates.

        "Asset Sale" means:

(1)

the sale, lease (other than an operating lease entered into in the ordinary course of business), conveyance or other disposition (a "Disposition") of any assets or rights (other than the licensing of its non-exclusive intellectual property rights) (including, without limitation, by way of a sale and leaseback), provided that the Disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole will be governed by the provisions of the Indenture described above under the caption "—Repurchase at the Option of Holders—Change of Control" and/or the provisions described above under the caption "—Certain Covenants—Merger, Consolidation or Sale of Assets" and not by the provisions described above under the caption "—Repurchase at the Option of Holders—Asset Sales"; and



(2)

the issue or sale by the Company or any of its Restricted Subsidiaries of Equity Interests of any of the Company's Restricted Subsidiaries (other than directors' qualifying shares);

        that, in the case of either clause (1) or (2) and whether in a single transaction or a series of related transactions:

(a)

has a fair market value in excess of $5 million; or



(b)

is for net proceeds to the Company and its Restricted Subsidiaries in excess of $5 million.

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

(1)

a transfer of assets among the Company, its Wholly Owned Restricted Subsidiaries and its Permitted Joint Ventures;



(2)

an issuance of Equity Interests by a Wholly Owned Restricted Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary;



(3)

a Restricted Payment that is permitted by the covenant described above under the caption "—Certain Covenants—Restricted Payments" or a Permitted Investment;



(4)

the sale of Cash Equivalents in the ordinary course of business;



(5)

a disposition of inventory in the ordinary course of business;



(6)

sales of accounts receivable and related assets or an interest therein of the type specified in the definition of "Qualified Receivables Transaction" to a Receivables Entity;



(7)

a disposition relating to the foreclosure of a Permitted Lien;



(8)

the sale and leaseback of any assets within 90 days of the acquisition thereof;



(9)

any exchange of property pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended, for use in a Permitted Business;



(10)

any sale, transfer or other disposition of property that is idle, damaged, worn out, obsolete or no longer suitable for use in the ordinary course of business; and



(11)

sales or grants of licenses or sublicenses to use intellectual property of the Company or any of its Restricted Subsidiaries to the extent such sale, license or sublicense does not interfere in any material respect with the business of the Company and its Restricted Subsidiaries.

147

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

        "Capital Stock" means:

•

in the case of a corporation, corporate stock;



•

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



•

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



•

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

        "Cash Equivalents" means:

(1)

Government Securities having maturities of not more than six months from the date of acquisition;



(2)

certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case with any lender party to the Senior Credit Facilities or with any domestic commercial bank having capital and surplus in excess of $500 million and whose long-term debt, or whose parent holding company's long-term debt, is rated "A" (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act);



(3)

repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (1) and (2) above entered into with any financial institution meeting the qualifications specified in clause (2) above;



(4)

commercial paper having the rating of "P-1" (or higher) from Moody's Investors Service, Inc. or "A-1" (or higher) from Standard & Poor's Corporation and in each case maturing within six months after the date of acquisition; and



(5)

money market funds investing substantially in investments which constitute Cash Equivalents of the kinds described in clauses (1) through (4) of this definition.

        "Certificated Notes" means notes in registered certificated form.

        "Change of Control" means the occurrence of any of the following:

(1)

the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of either (x) the Company and its Subsidiaries taken as a whole or (y) Holdings to any "person" (as such term is used in Section 13(d) (3) of the Exchange Act) other than the Principals or a Related Party of any of the Principals;



(2)

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



(3)

the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as defined above), other than the Principals and their Related Parties, becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Voting Stock of the Company (measured by voting power rather than number of shares);

148

(4)

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



(5)

the Company or Holdings consolidates with, or merges with or into, any Person, or any Person consolidates with, or merges with or into, the Company or Holdings, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of the Company or Holdings, as the case may be, is converted into or exchanged for cash, securities or other property, other than any such transaction where the Voting Stock of the Company or Holdings, as the case may be, outstanding immediately prior to such transaction is converted into or exchanged for Voting Stock (other than Disqualified Stock) of the surviving or transferee Person constituting a majority of the outstanding shares of such Voting Stock of such surviving or transferee Person immediately after giving effect to such issuance.

        "Closing Date Dividend" means the $97,255,042 dividend declared and paid by the Company on or about the Issue Date; provided that $1,224,404 of such dividend may be paid when determined by the Company to Holdings subsequent to the Issue Date.

        "Consolidated EBITDA" means, with respect to any Person, for any period, the Consolidated Net Income of such Person for such period adjusted to add thereto (to the extent deducted from net revenues in determining Consolidated Net Income), without duplication, the sum of

•

consolidated income taxes;



•

consolidated depreciation and amortization (including amortization of debt issuance costs in connection with any Indebtedness of such Person and its Restricted Subsidiaries and depreciation and amortization attributable to the Permitted Joint Ventures existing at August 17, 1999 which were not consolidated);



•

Fixed Charges;



•

expenditures paid prior to or contemporaneously with and related to any actual or proposed financing, mergers or dispositions or acquisitions permitted to be incurred by the Indenture (including, without limitation, financing and legal fees and costs incurred with any such mergers, acquisitions or dispositions); and



•

all other non-cash charges (excluding any such non-cash charge to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period);

provided that consolidated income taxes, depreciation and amortization of a Subsidiary of such Person that is not a Wholly Owned Subsidiary shall only be added to the extent of the Equity Interest of such Person in such Subsidiary.

        "Consolidated Interest Expense" means, with respect to any Person for any period, the sum of, without duplication:

•

the interest expense of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP (including, without limitation, amortization of original issue discount, non-cash interest payments, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments, if any, pursuant to Hedging Obligations; provided that in no event shall any amortization of deferred financing costs be included in Consolidated Interest Expense); plus



•

the consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; plus

149

•

the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to such plan or trust; provided, however, that there will be excluded therefrom any such interest expense of any Unrestricted Subsidiary to the extent the related Indebtedness is not Guaranteed or paid by the Company or any Restricted Subsidiary.

        Notwithstanding the preceding, the Consolidated Interest Expense with respect to any Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary shall be included only to the extent (and in the same proportion) that the net income of such Restricted Subsidiary was included in calculating Consolidated Net Income.

        "Consolidated Leverage Ratio" means, as of any date of determination, the ratio of (x) total Indebtedness of the Company and its Restricted Subsidiaries to (y) Consolidated EBITDA of the Company for the period of four consecutive fiscal quarters most recently ended for which internal financial statements are then available prior to the date of determination, with such pro forma adjustments as are appropriate and consistent with the pro forma adjustments set forth in the definition of Fixed Charge Coverage Ratio.

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

(1)

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



(2)

the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders;



(3)

the Net Income of any Person acquired in a transaction accounted for in a manner similar to a pooling of interests (including any common control acquisition) for any period prior to the date of such acquisition shall be excluded; and



(4)

the cumulative effect of a change in accounting principles shall be excluded.

        "Continuing Directors" means, as of any date of determination, any member of the Board of Directors of the Company who:

•

was a member of such Board of Directors on the Issue Date;



•

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



•

was nominated by the Principals.

        "Credit Agent" means JPMorgan Chase Bank, in its capacity as Administrative Agent for the lenders party to the Senior Credit Facilities, or any successor thereto or any person otherwise appointed.

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

150

        "Designated Senior Indebtedness" means (1) any Indebtedness outstanding under the Senior Credit Facilities and (2) any other Senior Indebtedness which, at the date of determination, has an aggregate principal amount outstanding of, or under which, at the date of determination, the holders thereof are committed to lend up to, at least $25 million and is specifically designated in the instrument evidencing or governing such Senior Indebtedness as "Designated Senior Indebtedness" for purposes of the Indenture (provided, however, that no such Senior Indebtedness under clause (2) shall constitute Designated Senior Indebtedness at any time at which any 9¹/2% Senior Subordinated Notes are outstanding and such Senior Indebtedness does not also constitute "Designated Senior Indebtedness" under the indenture governing the 9¹/2% Senior Subordinated Notes).

        "Development Corporation" means any corporation, association, limited liability company or other business (other than a partnership) existing at the Issue Date managed by the Company but owned by a Person (who is not the Company or an Affiliate or a Subsidiary of the Company), engaged in the development of occupational health centers and financed by the issue of Equity Interests and notes under securities purchase agreements to third party investors.

        "Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the notes mature. Notwithstanding the preceding sentence, any Capital Stock that would not constitute Disqualified Stock but for change of control or asset sale provisions shall not constitute Disqualified Stock if the provisions are not more favorable to the holders of such Capital Stock than the provisions described under "—Repurchase at the Option of Holders—Change of Control" and "—Repurchase at the Option of Holders—Asset Sales."

        "Domestic Restricted Subsidiary" means any Restricted Subsidiary other than (a) a Foreign Restricted Subsidiary or (b) a Subsidiary of a Foreign Restricted Subsidiary.

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

        "Equity Offering" means an offering of the Equity Interests (other than Disqualified Stock) of Holdings or the Company; provided that in the event of an offering by Holdings, Holdings contributes to the capital of the Company the portion of the net cash proceeds of such offering necessary to pay the aggregate redemption price (plus accrued interest to the redemption date) of the notes to be redeemed pursuant to the provisions described in the first paragraph under "—Optional Redemption."

        "Existing Indebtedness" means Indebtedness of the Company and its Subsidiaries (other than Indebtedness under the Senior Credit Facilities) in existence on the Issue Date, until such amounts are repaid.

        "Ferrer Freeman" means Ferrer Freeman Thompson & Co. LLC and its Affiliates.

        "Fixed Charge Coverage Ratio" means with respect to any Person as of any date of determination, the ratio of the Consolidated EBITDA of such Person for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination and as to which internal financial statements are available to the Fixed Charges of such Person for such period. In the event that the Company or any of its Restricted Subsidiaries incurs, assumes, Guarantees, repays, repurchases, defeases, redeems or otherwise discharges any Indebtedness (other than revolving credit borrowings) or issues or redeems preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase, defeasance, redemption or discharge of Indebtedness,

151

or such issuance or redemption of preferred stock, as if the same had occurred at the beginning of the applicable four-quarter reference period.

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

(1)

acquisitions or dispositions that have been made by the Company or any of its Restricted Subsidiaries, including through mergers or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be calculated to include the Consolidated EBITDA of the acquired entities on a pro forma basis (to be calculated in accordance with Article 11-02 of Regulation S-X, as in effect from time to time), shall be deemed to have occurred on the first day of the four-quarter reference period and Consolidated EBITDA for such reference period shall be calculated without giving effect to clause (3) of the proviso set forth in the definition of Consolidated Net Income;



(2)

the Consolidated EBITDA attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded if greater than zero; and



(3)

the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date.

        For purposes of this definition, whenever pro forma effect is to be given to an Investment or an acquisition or disposition of assets, the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness incurred in connection therewith, or any other calculation under this definition, the pro forma calculations will be determined in good faith by a responsible financial or accounting officer of the Company (including pro forma expense and cost reductions calculated on a basis consistent with Regulation S-X under the Securities Act). If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness will be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any interest rate agreement applicable to such Indebtedness if such interest rate agreement has a remaining term in excess of 12 months).

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

(1)

the Consolidated Interest Expense of such Person for such period, minus the interest income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; plus



(2)

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



(3)

the product of (a) all dividend payments, whether or not in cash, on any series of preferred stock of such Person or any of its Restricted Subsidiaries, other than dividend payments on Equity Interests payable solely in Equity Interests of the Company, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP.

        "Foreign Restricted Subsidiary" means any Restricted Subsidiary (a) that is not organized under the laws of the United States of America or any State thereof or the District of Columbia and (b) with

152

respect to which more than 80% of any of its sales, earnings or assets (determined on a consolidated basis in accordance with GAAP) are located in, operated from or derived from operations located in territories outside of the United States of America and jurisdictions outside the United States of America.

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

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

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

        "Guarantors" means each Subsidiary of the Company that executes a Subsidiary Guarantee in accordance with the provisions of the Indenture, and their respective successors and assigns.

        "Hedging Obligations" means, with respect to any Person, the obligations of such Person under:

•

interest rate swap agreements, interest rate cap agreements and interest rate collar agreements; and



•

other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency exchange rates.

        "Holdings" means Concentra, Inc.

        "Indebtedness" means, with respect to any specified Person, any indebtedness of such Person, in respect of:

•

borrowed money;



•

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



•

bankers' acceptances;



•

representing Capital Lease Obligations; or



•

the balance deferred and unpaid of the purchase price of any property (which purchase price is due more than 60 days after the date of placing such property in service or taking delivery and title thereto) or representing any Hedging Obligations, except any such balance that constitutes an accrued expense or trade payable, if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term "Indebtedness" includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by such Person of any indebtedness of any other Person.

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

•

the accreted value thereof, in the case of any Indebtedness that does not require current payments of interest; and

153

•

the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.

        "Insolvency or Liquidation Proceedings" means:

•

any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding, relative to the Company or to the creditors of the Company, as such, or to the assets of the Company;



•

any liquidation, dissolution, reorganization or winding up of the Company, whether voluntary or involuntary, and involving insolvency or bankruptcy; or



•

any assignment for the benefit of creditors or any other marshaling of assets and liabilities of the Company.

        "Investments" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), or purchases or other acquisitions of or the transfer of assets for consideration of, Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Restricted Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph of the covenant described above under the caption "—Certain Covenants—Restricted Payments."

        "Issue Date" means the date on which the notes are first issued under the Indenture.

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

        "Moody's" means Moody's Investors Service, Inc. or any successor to the rating agency business thereof.

        "Net Income" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP, excluding, however:

•

any gain (loss), together with any related provision for taxes on such gain (loss), realized in connection with:



(1)

any Asset Sale; or



(2)

the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries; and



•

any extraordinary or nonrecurring gain (loss), together with any related provision for taxes on such extraordinary or nonrecurring gain (loss).

        "Net Proceeds" means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received

154

upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), the amounts required to be applied to the payment of Indebtedness (other than Indebtedness incurred pursuant to the Senior Credit Facilities) secured by a Lien on the asset or assets that were the subject of the Asset Sale, distributions and other payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such Asset Sale and the deduction of appropriate amounts provided by the seller as a reserve, in accordance with GAAP, for adjustments in respect of the sale price of the assets that were the subject of such Asset Sale or as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed in such Asset Sale and retained by the Company or any Restricted Subsidiary after such Asset Sale.

        "Non-Recourse Debt" means Indebtedness:

•

as to which neither the Company nor any of its Restricted Subsidiaries:



(1)

provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness);



(2)

is directly or indirectly liable as a guarantor or otherwise; or



(3)

constitutes the lender;



•

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



•

as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries.

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

        "Permitted Business" means any business in which the Company and its Restricted Subsidiaries are engaged on the Issue Date or any business reasonably related, incidental or ancillary thereto.

        "Permitted Business Assets" means assets used or useful in a Permitted Business.

        "Permitted Investments" means:

(1)

any Investment in the Company or in a Restricted Subsidiary (other than a Permitted Joint Venture);



(2)

any Investment in cash or Cash Equivalents;



(3)

any Investment in receivables owing to the Company or any Restricted Subsidiary created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances;



(4)

any Investment received by the Company or any Restricted Subsidiary as consideration for the settlement of any litigation, arbitration or claim of bankruptcy or in partial or full satisfaction of accounts receivable owed by a financially troubled Person to the extent reasonably

155

necessary in order to prevent or limit any loss by the Company or any of its Restricted Subsidiaries in connection with such accounts receivable;

(5)

Investments in existence on the Issue Date;



(6)

Hedging Obligations entered into in the ordinary course of business which transactions or obligations are incurred in compliance with the covenant described above under the caption "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock";



(7)

Guarantees issued in accordance with the covenant described above under the caption "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock";



(8)

any Investment by the Company or a Restricted Subsidiary in a Receivables Entity or any Investment by a Receivables Entity in any other Person, in each case, in connection with a Qualified Receivables Transaction; provided, however, that any Investment in any such Person is in the form of a Purchase Money Note, or any equity interest or interests in accounts receivable and related assets generated by the Company or a Restricted Subsidiary and transferred to any Person in connection with a Qualified Receivables Transaction or any such Person owning such accounts receivable;



(9)

any Investment by the Company or any Restricted Subsidiary of the Company (other than a Permitted Joint Venture) in a Person, if as a result of such Investment:



(a)

such Person becomes a Restricted Subsidiary (other than a Permitted Joint Venture) of the Company or of a Restricted Subsidiary of the Company (other than a Permitted Joint Venture); or



(b)

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



(10)

any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption "—Repurchase at the Option of Holders—Asset Sales";



(11)

any acquisition of assets solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company;



(12)

any Investment in any Permitted Joint Venture after the Issue Date in an aggregate amount not to exceed $40 million, such aggregate amount to be increased as a result of any management fees, software fees and development fees received from such Permitted Joint Ventures in the ordinary course of business and any payment of any dividend or distribution received on a pro rata basis from any Permitted Joint Ventures as a holder of its Equity Interests; and



(13)

any Investment in any Person after the Issue Date in an aggregate amount, taken together with all other Investments made pursuant to this clause (13) that are at the time outstanding, not to exceed $30 million.

        "Permitted Joint Venture" means, with respect to any Person:

(1)

any corporation, association or other business entity (other than a partnership):



(a)

of which more than 50% (or in the case of any such business entity in which the Company or any Restricted Subsidiary has an Investment before the Issue Date, 50% or more) of the Voting Stock is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the Restricted Subsidiaries of that Person or a combination thereof; and

156

(b)

which is either managed or controlled by such Person or any of its Restricted Subsidiaries; and



(2)

any partnership, joint venture, limited liability company or similar entity:



(a)

of which more than 50% (or in the case of any such entity in which the Company or any Restricted Subsidiary has an Investment before the Issue Date, 50% or more) of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests are owned or controlled, directly or indirectly, by such Person or one or more of the Restricted Subsidiaries of that Person or a combination thereof; and



(b)

which is either managed or controlled by such Person or any of its Restricted Subsidiaries,

        and which in the case of each of clauses (1) and (2),

(A)

is engaged in a Permitted Business;



(B)

only incurs Indebtedness to the Company;



(C)

does not enter into any Guarantee; and



(D)

distributes all cash pro rata in accordance with the Equity Interests therein at least annually (other than cash required to be reserved on its balance sheet in accordance with GAAP consistent with past practice).

        "Permitted Liens" means:

(1)

Liens that secure up to an aggregate principal amount of $545.0 million of Senior Indebtedness and Guarantees incurred pursuant to the Senior Credit Facilities;



(2)

Liens in favor of the Company or any Restricted Subsidiary;



(3)

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



(4)

Liens on property or assets of any Person existing at the time of acquisition of such property or Person owning such property by the Company or any Restricted Subsidiary of the Company, provided such Liens were not incurred in contemplation of such acquisition;



(5)

Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business;



(6)

Liens existing on the Issue Date;



(7)

Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;



(8)

Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of the covenant described above under the caption "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock";



(9)

Liens securing Permitted Refinancing Indebtedness where the Liens securing the Indebtedness being refinanced were permitted under the Indenture;

157

(10)

Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary of the Company with respect to obligations that do not exceed $10 million at any one time outstanding and that: (a) are not incurred in connection with the borrowing of money or the obtaining of advances or credit (other than trade credit in the ordinary course of business) and (b) do not in the aggregate materially detract from the value of the property or materially impair the use thereof in the operation of business by the Company or such Restricted Subsidiary;



(11)

Liens on assets of Unrestricted Subsidiaries that secure Non-Recourse Debt of Unrestricted Subsidiaries;



(12)

easements, rights-of-way, zoning and similar restrictions and other similar encumbrances or title defects incurred or imposed, as applicable, in the ordinary course of business and consistent with industry practices;



(13)

any interest or title of a lessor under any Capital Lease Obligation;



(14)

Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof;



(15)

Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual or warranty requirements of the Company or any of its Restricted Subsidiaries, including rights of offset and set-off;



(16)

Liens securing Hedging Obligations which Hedging Obligations relate to Indebtedness that is otherwise permitted under the Indenture;



(17)

pledges or deposits by such Person, in each case incurred in the ordinary course of business:



(a)

under workmen's compensation laws, unemployment insurance and other types of social security legislation (other than any Lien imposed by the Employer Retirement Income Security Act of 1974, as amended);



(b)

made in good faith in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party;



(c)

to secure public or statutory obligations of such Person or deposits or cash or Cash Equivalents to secure surety or appeal bonds to which such Person is a party; or



(d)

as security for contested taxes or import or customs duties or for the payment of rent;



(18)

Liens imposed by law, including carriers', warehousemen's and mechanics' Liens, in each case for sums not yet delinquent or being contested in good faith by appropriate proceedings if a reserve or other appropriate provisions, if any, as shall be required by GAAP shall have been made in respect thereof;



(19)

judgment Liens not giving rise to an Event of Default so long as such Lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;



(20)

Liens securing Indebtedness of a Restricted Subsidiary owing to the Company or a Wholly Owned Restricted Subsidiary (other than a Receivables Entity);



(21)

Liens securing the notes and Subsidiary Guarantees under the Indenture;



(22)

Liens on assets transferred to a Receivables Entity or on assets of a Receivables Entity, in either case incurred in connection with a Qualified Receivables Transaction;

158

(23)

leases or subleases granted to others that do not materially interfere with the ordinary course of business of the Company and its Restricted Subsidiaries; and



(24)

Liens arising from filing Uniform Commercial Code financing statements regarding leases.

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

(1)

the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus accrued interest on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of reasonable expenses incurred in connection therewith) except, in the case of the Senior Credit Facilities, the principal amount of such Permitted Refinancing Indebtedness does not exceed the greater of:



(a)

the principal amount of Indebtedness permitted (whether or not borrowed) under clause (1) of the second paragraph of the covenant described above under the caption "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock"; and



(b)

the amount actually borrowed or available to be borrowed under the Senior Credit Facilities;

(2)

such Permitted Refinancing Indebtedness has a final maturity date no earlier than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and



(3)

if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the notes on terms at least as favorable to the holders of notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

        "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or agency or political subdivision thereof (including any subdivision or ongoing business of any such entity or substantially all of the assets of any such entity, subdivision or business).

        "Principals" means Welsh Carson, Ferrer Freeman and their respective Affiliates.

        "Purchase Money Note" means a promissory note of a Receivables Entity evidencing a line of credit, which may be irrevocable, from the Company or any Restricted Subsidiary of the Company in connection with a Qualified Receivables Transaction to a Receivables Entity, which note is repayable from cash available to the Receivables Entity, other than amounts required to be established as reserves pursuant to agreements, amounts paid to investors and amounts owing to such investors and amounts paid in connection with the purchase of newly generated accounts receivable.

        "Qualified Receivables Transaction" means any transaction or series of transactions that may be entered into by the Company or any of its Restricted Subsidiaries on an arms' length basis with the Standard Securitization Undertakings pursuant to which the Company or any of its Restricted Subsidiaries may sell, convey or otherwise transfer to

(1)

a Receivables Entity (in the case of a transfer by the Company or any of its Restricted Subsidiaries); or

159

(2)

any other Person (in the case of a transfer by a Receivables Entity)

or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of the Company or any of its Restricted Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, the proceeds of such receivables and other assets which are customarily transferred, or in respect of which security interests are customarily granted in connection with asset securitization involving accounts receivable; provided that the aggregate consideration received in each such sale is at least equal to the aggregate fair market value of the receivables transferred.

        "Qualifying Rating" means a rating of the notes of Ba3 or better by Moody's or BB- or better by Standard & Poor's (or if either such rating agency shall cease to provide a rating of the notes for reasons outside the control of the Company, the equivalent rating from any other "nationally recognized statistical rating organization" within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company as a replacement agency).

        "Receivables Entity" means a Wholly Owned Subsidiary of the Company (or another Person in which the Company or any Restricted Subsidiary of the Company makes an Investment and to which the Company or any Restricted Subsidiary of the Company enters into a Qualified Receivables Transaction) which engages in no activities other than the financing of a Qualified Receivables Transaction and which is designated by the Board of Directors of the Company (as provided below) as a Receivables Entity:

(1)

no portion of Indebtedness or any other obligations (contingent or otherwise) of such Person of which:



(a)

is guaranteed by the Company or any Restricted Subsidiary of the Company (excluding guarantees of Obligations (other than the principal, and interest, on Indebtedness) pursuant to Standard Securitization Undertakings);



(b)

has recourse to or obligates the Company or any Restricted Subsidiary of the Company in any way other than pursuant to Standard Securitization Undertakings; and



(c)

subjects any property or asset of the Company or any Restricted Subsidiary of the Company, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings;



(2)

with which neither the Company nor any Restricted Subsidiary of the Company has any contract, agreement, arrangement or understanding other than



(a)

a Qualified Receivables Transaction in the ordinary course of business; and



(b)

fees payable in the ordinary course of business in connection with servicing accounts receivable both of which shall be on terms no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Company; and



(3)

to which neither the Company nor any Restricted Subsidiary of the Company has any obligation to



(a)

subscribe for additional shares of Capital Stock or other Equity Interests therein or make any additional capital contributions or similar payments or transfer thereto other than in connection with a Qualified Receivables Transaction; or



(b)

maintain or preserve such entity's solvency, any balance sheet term, financial condition, level of income or cause such entity to achieve certain levels of operating results.

160

        Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of the Company giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing conditions.

        "Related Party" with respect to any Principal means:

•

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



•

any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding a 51% or more controlling interest of which consist of such Principal and /or such other Persons referred to in the immediately preceding clause.

        "Reorganization Securities" means securities distributed to holders of the notes in an Insolvency or Liquidation Proceeding pursuant to a plan of reorganization consented to by each class of the Senior Indebtedness, but only if in such plan of reorganization the holders of the notes on the one hand and the holders of the Senior Indebtedness on the other hand are placed in separate and distinct classes from each other and from the classes of other claimants and the class of the holders of the notes is junior to the class of the holders of the Senior Indebtedness and only if all of the terms and conditions of such securities including, without limitation, term, tenor, interest, amortization, subordination, standstills, covenants and defaults are at least as favorable (and provide the same relative benefits) to the holders of Senior Indebtedness and to the holders of any security distributed in such Insolvency or Liquidation Proceeding on account of any such Senior Indebtedness as the terms and conditions of the notes and the Indenture are, and provide, to the holders of Senior Indebtedness.

        "Representative" means the Trustee, agent or representative for any Senior Indebtedness.

        "Restricted Investment" means an Investment other than a Permitted Investment.

        "Restricted Subsidiary" of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

        "Rule 144A" means Rule 144A promulgated under the Securities Act.

        "Senior Credit Facilities" means the Credit Agreement, existing on the Issue Date, among the Company, Holdings, the several lenders from time to time parties thereto and JPMorgan Chase Bank, as Administrative Agent, providing for revolving credit borrowings, term loans and letters of credit, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as amended, modified, renewed, refunded, replaced or refinanced (whether or not with the original administrative agent and lenders or another administrative agent or agents or other lenders) from time to time including increases in principal amount.

        "Senior Indebtedness" means:

(1)

all Indebtedness outstanding under the Senior Credit Facilities, including any Guarantees thereof and all Hedging Obligations with respect thereto;



(2)

any other Indebtedness permitted to be incurred by the Company under the terms of the Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the notes; and



(3)

all Obligations with respect to the preceding clauses (1) and (2).

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

(1)

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



(2)

any Indebtedness of the Company to any of its Subsidiaries or other Affiliates;

161

(3)

any trade payables; or



(4)

any Indebtedness that is incurred in violation of the Indenture.

        "Significant Subsidiary" means any Restricted Subsidiary that would be a "significant subsidiary" of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the Commission.

        "Standard & Poor's" means Standard & Poor's, a division of The McGraw-Hill Companies, Inc., or any successor to the rating agency business thereof.

        "Standard Securitization Undertakings" means the interest rate, representations, warranties, covenants, the events of default and indemnities entered into by the Company or any Restricted Subsidiary of the Company which shall be customary in securitization of accounts receivable transactions and on market terms.

        "Stated Maturity" means, with respect to any security, the date specified in such security as the fixed date on which payment of or principal on such security is due and payable in the original documentation governing such securities, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

        "Subsidiary" means, with respect to any Person:

(1)

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



(2)

any partnership or limited liability company (a) the sole general partner or the managing general partner or managing member of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof); and



(3)

any Permitted Joint Venture of such Person.

        "Subsidiary Guarantee" means a Guarantee provided by a Restricted Subsidiary.

        "Unrestricted Subsidiary" means (a) any Subsidiary that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors and (b) any Subsidiary of an Unrestricted Subsidiary, but, in each case, only to the extent that such Subsidiary:

(1)

has no Indebtedness other than Non-Recourse Debt;



(2)

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



(3)

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



(4)

has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries.

162

        Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors giving effect to such designation and an Officers' Certificate certifying that such designation complied with the preceding conditions and was permitted by the covenant described above under the caption "—Certain Covenants—Restricted Payments." If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock," the Company shall be in default of such covenant. The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall be permitted only if: (1) such Indebtedness is permitted under the covenant described under the caption "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock," and (2) no Default or Event of Default would be in existence following such designation.

        "Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors or similar governing board or group of such Person.

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

(1)

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



(2)

the then outstanding principal amount of such Indebtedness.

        "Welsh Carson" means Welsh, Carson, Anderson & Stowe VIII, L.P. and its Affiliates.

        "Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares) shall at the time be owned by such Person and/or by one or more Wholly Owned Subsidiaries of such Person.

        "Wholly Owned Restricted Subsidiary" of the Company means a Wholly Owned Subsidiary which is a Restricted Subsidiary of the Company.

163

UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

        The following discussion summarizes certain U.S. federal income tax considerations that may be relevant to the exchange of the old notes for the new notes, but does not purport to be a complete analysis of all potential tax effects. This discussion is based upon the provisions of the IRC, applicable Treasury Regulations promulgated thereunder, judicial authority and administrative interpretations, as of the date hereof, all of which are subject to change, possibly with retroactive effect, or are subject to different interpretations. This discussion does not address the tax considerations arising under the laws of any foreign, state, local, or other jurisdiction.

        We believe that the exchange of the old notes for the new notes should not be an exchange or otherwise a taxable event to a holder for the U.S. federal income tax purposes. Accordingly, a holder should have the same adjusted issue price, adjusted basis and holding period in the new notes as it had in the old notes immediately before the exchange.

164

PLAN OF DISTRIBUTION

        Based on interpretations by the staff of the SEC in no action letters issued to third parties, we believe that you may transfer new notes issued under the exchange offer in exchange for the old notes if:

•

you acquire the new notes in the ordinary course of your business; and



•

you are not engaged in, and do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of such new notes.

        You may not participate in the exchange offer if you are:

•

our "affiliate" within the meaning of Rule 405 under the Securities Act of 1933; or



•

a broker-dealer that acquired old notes directly from us.

        Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such new notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for old notes where such old notes were acquired as a result of market-making activities or other trading activities. We have agreed that for a period of 180 days after the expiration date of the exchange offer, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until                  , 2004, all dealers effecting transactions in the new notes may be required to deliver a prospectus.

        If you wish to exchange new notes for your old notes in the exchange offer, you will be required to make representations to us as described in "Exchange Offer—Purpose and Effect of the Exchange Offer" and "—Procedures for Tendering—Your Representations to Us" in this prospectus. As indicated in the letter of transmittal, you will be deemed to have made these representations by tendering your old notes in the exchange offer. In addition, if you are a broker-dealer who receives new notes for your own account in exchange for old notes that were acquired by you as a result of market-making activities or other trading activities, you will be required to acknowledge, in the same manner, that you will deliver a prospectus in connection with any resale by you of such new notes.

        We will not receive any proceeds from any sale of new notes by broker-dealers. New notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the new notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to, or through, brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such new notes. Any broker-dealer that resells new notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of such new notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of new notes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, the broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

        For a period of 180 days after the expiration date of the exchange offer, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holders of the

165

old notes) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the old notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

LEGAL MATTERS

        The validity of the new notes offered in this exchange offer will be passed upon for us by Vinson & Elkins L.L.P., Dallas, Texas.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

        The consolidated financial statements as of December 31, 2003 and 2002 and for each of the three years in the period ended December 31, 2003, included in this prospectus, have been audited by PricewaterhouseCoopers LLP, independent registered public accounting firm, as stated in their report appearing herein.

166

WHERE YOU CAN FIND MORE INFORMATION

        We file annual, quarterly and current reports and other information with the SEC. Our filings with the SEC are also available to the public from the SEC's website at http://www.sec.gov. These reports do not constitute a part of this prospectus, and we are not incorporating by reference any of the reports we file with the SEC. The public may read and copy any reports or other information that we file with the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the public reference room by calling the SEC at 1-800-SEC-0330.

        In addition, pursuant to the indenture governing the notes, we have agreed to the extent permitted by the SEC to file with the SEC and in all events to distribute to the trustee (under the indenture) our annual reports containing audited annual consolidated financial statements and our quarterly reports containing our unaudited consolidated financial statements for each of the three first quarters of each fiscal year. We will do this without regard to whether we are subject to the informational requirements of the Exchange Act.

        We maintain an internet web site at www.concentra.com. The information on this site does not form a part of this prospectus.

        While any notes remain outstanding, we will make available, upon request, to any beneficial owner and any prospective purchaser of notes the information required pursuant to Rule 144A(d)(4) under the Securities Act during any period in which we are not subject to Section 13 or 15(d) of the Exchange Act. Any such request should be directed to Investor Relations, Concentra, at West Tower, Suite 400, 5080 Spectrum Drive, Addison, Texas 75001.

167

CONCENTRA OPERATING CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

	Page
Report of Independent Registered Public Accounting Firm	F-3
Consolidated Balance Sheets at December 31, 2003 and 2002	F-4
Consolidated Statements of Operations for the Years Ended December 31, 2003, 2002 and 2001	F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2003, 2002 and 2001	F-6
Consolidated Statements of Stockholder's Equity for the Years Ended December 31, 2003, 2002 and 2001	F-7
Notes to Consolidated Financial Statements	F-8
Supplemental Schedule: Valuation and Qualifying Accounts	F-50
Condensed Consolidated Balance Sheets at March 31, 2004 (Unaudited) and December 31, 2003	F-52
Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2004 and 2003	F-53
Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2004 and 2003	F-54
Notes to Consolidated Financial Statements (Unaudited)	F-55
Computation of Ratios	F-70

F-1

Concentra Operating Corporation

Consolidated Financial Statements as of
December 31, 2003 and 2002 and for the
Years Ended December 31, 2003, 2002 and 2001

F-2

Report of Independent Registered Public Accounting Firm

To Board of Directors and Stockholder
of Concentra Operating Corporation:

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Concentra Operating Corporation and its subsidiaries at December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedules listed in the accompanying index present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 2(h) to the consolidated financial statements, effective January 1, 2002, the Company adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible Assets and ceased amortization of certain intangible assets.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
Dallas, Texas
February 11, 2004

F-3

CONCENTRA OPERATING CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)

				December 31,
				2003			2002
ASSETS
Current assets:
	Cash and cash equivalents			$	42,621		$	19,002
	Accounts receivable, net				170,444			167,561
	Prepaid expenses and other current assets				25,698			15,806
	Deferred income taxes				14,386			11,964
			Total current assets		253,149			214,333
Property and equipment, net					120,101			134,981
Goodwill and other intangible assets, net					483,773			486,231
Other assets					17,969			15,146
			Total assets	$	874,992		$	850,691
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
	Revolving credit facility			$	—		$	—
	Current portion of long-term debt				4,841			3,825
	Accounts payable				7,355			9,168
	Accrued expenses				69,167			50,504
	Accrued compensation				54,359			48,377
			Total current liabilities		135,722			111,874
Long-term debt, net					654,393			476,001
Deferred income taxes					11,687			30,552
Other liabilities					29,180			28,076
Fair value of hedging arrangements					—			33,472
			Total liabilities		830,982			679,975
Commitments and contingencies (See Note 8)
Stockholder's equity:
	Common stock, par value $.01 per share:
		Authorized shares—10,000 Issued and outstanding shares—1,054			—			—
	Paid-in capital				140,659			311,077
	Retained deficit				(96,649	)		(140,361	)
			Total stockholder's equity		44,010			170,716
			Total liabilities and stockholder's equity	$	874,992		$	850,691

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

F-4

CONCENTRA OPERATING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)

				Years Ended December 31,
				2003			2002			2001
Revenue:
	Health Services			$	511,387		$	471,968		$	443,321
	Network Services				260,159			230,299			185,267
	Care Management Services				279,142			296,783			228,315
		Total revenue			1,050,688			999,050			856,903
Cost of services:
	Health Services				421,663			406,164			375,565
	Network Services				147,350			138,218			110,187
	Care Management Services				248,312			267,054			200,166
		Total cost of services			817,325			811,436			685,918
			Total gross profit		233,363			187,614			170,985
General and administrative expenses					122,949			106,222			81,631
Amortization of intangibles					3,933			3,776			15,746
Unusual charges (gains)					—			(1,200	)		546
Charges for acquisition of affiliate					—			—			5,519
			Operating income		106,481			78,816			67,543
Interest expense, net					56,318			63,582			66,398
(Gain) loss on change in fair value of hedging arrangements					(9,869	)		7,589			13,602
Loss on early retirement of debt					7,837			7,894			—
Loss of acquired affiliate, net of tax					—			—			5,833
Other, net					2,692			(1,275	)		(3,640	)
			Income (loss) before income taxes		49,503			1,026			(14,650	)
Provision for income taxes					6,214			10,634			3,757
			Net income (loss)	$	43,289		$	(9,608	)	$	(18,407	)

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

F-5

CONCENTRA OPERATING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

				Years Ended December 31,
				2003			2002			2001
Operating Activities:
	Net income (loss)			$	43,289		$	(9,608	)	$	(18,407	)
	Adjustments to reconcile net income (loss) to net cash provided by operating activities:
		Depreciation of property and equipment			46,299			42,957			32,517
		Amortization of intangibles			3,933			3,776			15,746
		(Gain) loss on change in fair value of hedging arrangements			(9,869	)		7,589			13,602
		Write-off of deferred financing costs			7,837			1,588			—
		Write-off of fixed assets			662			135			107
		Charges for acquisition of affiliate			—			—			5,519
		Unusual charges (gains)			—			(1,200	)		546
	Changes in assets and liabilities, net of acquired assets and liabilities:
		Accounts receivable, net			(2,083	)		13,118			1,786
		Prepaid expenses and other assets			(9,009	)		6,385			11,809
		Accounts payable and accrued expenses			32,529			(8,774	)		16,226
			Net cash provided by operating activities		113,588			55,966			79,451
Investing Activities:
	Purchases of property, equipment and other assets				(29,648	)		(35,074	)		(45,837	)
	Acquisitions, net of cash acquired				(6,237	)		(1,726	)		(107,174	)
	Proceeds from the licensing of internally-developed software				—			515			1,103
			Net cash used in investing activities		(35,885	)		(36,285	)		(151,908	)
Financing Activities:
	Proceeds from the issuance of debt				519,218			3,960			—
	Proceeds from issuance of common stock to parent				—			52,955			—
	Contribution from issuance of common stock by parent				266			25,370			49,746
	Repayments of debt				(340,485	)		(80,615	)		(5,137	)
	Contributions to parent				(193,912	)		—			—
	Payment to terminate hedging arrangements				(23,603	)		—			—
	Payment of deferred financing costs				(13,152	)		(3,321	)		—
	Borrowings (payments) under revolving credit facilities, net				—			(6,000	)		6,000
	Distributions to minority interests				(2,316	)		(1,935	)		(2,284	)
	Contribution from primary stockholder				—			—			12,865
	Contribution from minority interest				—			—			5,135
	Other				(100	)		(43	)		—
			Net cash provided by (used in) financing activities		(54,084	)		(9,629	)		66,325
Net Increase (Decrease) in Cash and Cash Equivalents					23,619			10,052			(6,132	)
Cash and Cash Equivalents, beginning of year					19,002			8,950			15,082
Cash and Cash Equivalents, end of year				$	42,621		$	19,002		$	8,950
Supplemental Disclosure of Cash Flow Information:
	Interest paid, net			$	49,867		$	62,983		$	61,480
	Income taxes paid (received), net			$	2,785		$	(861	)	$	(1,623	)
	Liabilities and debt assumed in acquisitions			$	1,154		$	258		$	50,275
	Net asset contribution (to) from parent			$	(193,912	)	$	42,964		$	74,564
Non-cash investing and financing activities:
	Capital lease obligations			$	1,351		$	—		$	—

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

F-6

CONCENTRA OPERATING CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
(in thousands, except share amounts)

		$0.01 Par Value Common Stock
		Number of Shares	Value		Paid-in Capital			Retained Deficit			Stockholder's Equity
Balance, December 31, 2000		1,000	$	—	$	46,483		$	(51,812	)	$	(5,329	)
	Amortization of deferred compensation	—		—		—			398			398
	Restricted stock retirement	—		—		(495	)		—			(495	)
	Tax benefits from parent (see Note 7)	—		—		5,515			—			5,515
	Contribution from issuance of common stock by parent	—		—		124,310			—			124,310
	Equity contribution from primary stockholder	—		—		12,865			—			12,865
	Deemed dividend from acquisition of affiliate (see Note 4)	—		—		—			(32,152	)		(32,152	)
	Net loss	—		—		—			(18,407	)		(18,407	)
Balance, December 31, 2001		1,000		—		188,678			(101,973	)		86,705
	Amortization of deferred compensation	—		—		—			69			69
	Tax benefits from parent (see Note 7)	—		—		211			—			211
	Contribution from issuance of common stock by parent	—		—		68,334			—			68,334
	Shares issued to parent	54		—		52,955			—			52,955
	Modification of stock options and other	—		—		899			—			899
	Deemed dividend from acquisition of affiliate (see Note 4)	—		—		—			(28,849	)		(28,849	)
	Net loss	—		—		—			(9,608	)		(9,608	)
Balance, December 31, 2002		1,054		—		311,077			(140,361	)		170,716
	Amortization of deferred compensation	—		—		—			423			423
	Contribution to parent (see Note 5)	—		—		(193,912	)		—			(193,912	)
	Tax benefits from parent (see Note 7)	—		—		22,860			—			22,860
	Contribution from issuance of common stock by parent	—		—		266			—			266
	Modification of stock options and other	—		—		368			—			368
	Net income	—		—		—			43,289			43,289
Balance, December 31, 2003		1,054	$	—	$	140,659		$	(96,649	)	$	44,010

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

F-7

CONCENTRA OPERATING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     Basis of Presentation

        Concentra Operating Corporation (the "Company" or "Concentra Operating") is a leading comprehensive outsource solution for containing healthcare and disability costs. Serving the occupational, auto and group healthcare markets, Concentra Operating provides employers, insurers and payors with a series of integrated services which include employment-related injury and occupational health care, in-network and out-of-network medical claims review and repricing, access to specialized preferred provider organizations, first notice of loss or injury services, case management and other cost containment services. The Company provides these services through its health services ("Health Services"), network services ("Network Services") and care management services ("Care Management Services") segments. (See "Note 11, Segment Information"). Earnings per share has not been reported for the periods presented, as Concentra Operating is a wholly-owned subsidiary of Concentra Inc. ("Concentra Holding") and has no publicly held shares.

        The Company was formed in 1997 by the merger of CRA Managed Care, Inc. and Occusystems, Inc. The name of the Company after the merger was Concentra Managed Care, Inc., which was subsequently changed to Concentra Inc. In 1999, Concentra Holding was recapitalized in a transaction (the "1999 Recapitalization") valued at approximately $1.1 billion and led by Welsh, Carson, Anderson & Stowe ("WCAS"). Immediately following the 1999 Recapitalization, 86% of Concentra Holding's common stock was held by WCAS, 7% of Concentra Holding's common stock was held by funds managed by Ferrer Freeman and Company, LLC ("FFC") and 7% of Concentra Holding's common stock was held by other investors. In order to finance the 1999 Recapitalization and to effect the repurchase of all of Concentra Holding's then outstanding publicly-held shares, WCAS, FFC and other investors contributed approximately $423.7 million in equity financing and raised $110.0 million of 14.0% senior discount debentures, $190.0 million of senior subordinated notes, and $375.0 million of senior term debt.

2.     Summary of Significant Accounting Policies

        (a)   Consolidation

        The consolidated financial statements include the accounts of all subsidiaries and joint ventures in which a controlling interest is held. Investments in certain joint ventures where the Company owns a 50% or less interest are accounted for on an equity basis and, accordingly, consolidated income includes the Company's share of their income. For joint ventures where the Company owns a more than 50% interest, minority interests of $18.6 million and $17.6 million were included in other liabilities at December 31, 2003 and 2002, respectively. All significant intercompany accounts and transactions are eliminated in consolidation.

        Physician and physical therapy services are provided at the Health Services centers under management agreements with affiliated physician groups (the "Physician Groups"), which are independently organized professional corporations that hire licensed physicians and physical therapists to provide medical services to the centers' patients. The management agreements have original terms of 40-years and provide for the wide array of services that Health Services offers to the physician groups, such as: providing nurses and other medical support personnel, practice and facilities management, billing and collection, accounting, tax and financial management, human resource management, risk management, and marketing and information-based services. Health Services has a nominee stockholder relationship with the Physician Groups as defined in Emerging Issues Task Force Issue No. 97-2, Application of FASB Statement No. 94 and APB Opinion No. 16 to Physician Practice

F-8

Management Entities and Certain Other Entities with Contractual Management Arrangements, and as a result, the financial statements of the Physician Groups are consolidated. The Company's management fees from the Physician Groups are calculated as a percentage of collected revenue net of compensation, benefits and other expenses incurred by the Physician Groups.

        (b)   Cash and Cash Equivalents

        The Company considers all highly liquid debt instruments purchased with original maturities of three months or less to be cash equivalents. The carrying amount approximates fair value due to the short maturity of those instruments.

        (c)   Revenue Recognition

        The Company generally recognizes revenue when there is persuasive evidence of an arrangement, the services have been provided to the customer, the sales price is fixed or determinable and collectibility is reasonably assured. The Company reduces revenue for estimated contractual allowances and records any amounts invoiced to the customer in advance of service performance as deferred revenue. The Company recognizes this revenue in the periods services are performed. The amount of deferred revenue, which is included in accrued liabilities, was $7.3 million and $0.2 million as of December 31, 2003 and 2002 respectively. In addition to the aforementioned general policy, the following are the specific revenue recognition policies of each segment of the Company's operations.

        Health Services.    Health Services consists of two primary components: (1) workers' compensation injury care and related services; and (2) non-injury healthcare services related to employer needs or statutory requirements. The Company recognizes revenue for both of these services as the services are performed. The provider reimbursement methods for workers' compensation injury care and related services vary on a state-by-state basis. Currently, 40 states have fee schedules pursuant to which all healthcare providers are uniformly reimbursed. The fee schedules are determined by each state and generally prescribe the maximum amounts that may be reimbursed for a designated procedure. In the states without fee schedules, healthcare providers are reimbursed based on usual, customary and reasonable fees charged in the particular state in which the services are provided. The Company includes billings for services in states with fee schedules in revenue net of allowance for estimated differences between list prices and allowable fee schedule rates. The Company records adjustments to the allowance based on final payment from the states upon settlement. The Company records the net revenue amount as accounts receivable.

        Network Services.    The Company derives a significant portion of its Network Services' revenue from the review and repricing of provider invoices to determine the appropriate amount of reimbursement to be paid by insurers, third-party administrators and other payors of healthcare costs. The Company's fees are normally based on the number of charges reviewed, or a percentage of the discounts from original invoiced amounts that the Company determines. The Company recognizes this portion of its Network Services revenue as the services are performed and records contractual allowances to reduce the revenue recorded for these services based upon an estimate of credits and chargebacks. A smaller portion of Network Services revenue relates to retrospective, or "post-payment," bill review services. The Company recognizes revenue from its post-payment bill review services when cash is collected because that is when the sales price becomes determinable.

        Care Management Services.    The Company recognizes revenue for its case management and independent medical examinations businesses as the services are performed.

        (d)   Cost of Services

        Cost of services consists primarily of the compensation and fringe benefits of physician and therapy providers, licensed technicians, clinic support and other field personnel, medical malpractice insurance, medical and laboratory supplies, facility costs and bad debt expense. Historically, acquisitions and the

F-9

costs associated with these additional personnel and facilities have been the most significant factor driving increases in the Company's cost of services. More recently, the Company has seen increases in its medical malpractice and other insurance costs.

        (e)   Contractual and Bad Debt Allowances

        Management estimates potential contractual and bad debt allowances relative to current period service revenue. Management analyzes historical collection adjustment experience when evaluating the adequacy of the contractual and bad debt allowances. Management must make significant judgments and estimates in determining contractual and bad debt allowances in any accounting period. One significant uncertainty in management's analysis is whether the Company's past experience will be indicative of future periods. Although management considers future projections when estimating contractual and bad debt allowances, ultimately decisions are based on the best information available at that time. The Company's total bad debt provision charged to expense during the years ended December 31, 2003, 2002 and 2001, was $12.2 million, $15.9 million and $12.7 million, respectively. The Company's total contractual provision offset against revenue during the years ended December 31, 2003, 2002 and 2001, was $64.4 million, $53.7 million and $35.9 million, respectively. The increase in the Company's provision for contractual allowances was due to revenue growth and additional reserves related to specific customer contracts. The decrease in the Company's provision for bad debt allowances was due to improved collections resulting from recently implemented information systems.

        Accounts receivable, net of related allowances, was comprised of the following at December 31 (in thousands):

		2003			2002
Accounts receivable		$	216,601		$	209,734
Bad debt allowances			(20,776	)		(13,261	)
Contractual allowances			(25,381	)		(28,912	)
	Total allowances		(46,157	)		(42,173	)
Accounts receivable, net		$	170,444		$	167,561

        (f)    Inventories

        Inventories primarily consist of medical supplies and related products held for resale and are valued at the lower of cost (first-in, first-out method) or market. Inventories are included in prepaid expenses and other current assets on the consolidated balance sheet.

        (g)   Property and Equipment

        Property and equipment are recorded at cost or fair market value at the date of acquisition. Major expenditures for property, plant and equipment and those that substantially increase useful lives are capitalized. Direct internal and external costs of developing software for internal use, including programming and enhancements, are capitalized and amortized over the estimated useful lives once the software is placed in service. Software training costs, maintenance and repairs are expensed as incurred. When assets are sold or otherwise disposed of, costs and related accumulated depreciation are removed

F-10

from the financial statements and any resulting gains or losses are included in operating income. Property and equipment were comprised of the following, as of December 31 (in thousands):

	2003			2002
Land	$	2,462		$	2,612
Buildings and improvements		5,971			6,266
Leasehold improvements		69,055			65,198
Furniture and equipment		67,080			63,434
Computer hardware		84,659			78,372
Computer software		97,754			82,531
		326,981			298,413
Accumulated depreciation and amortization		(206,880	)		(163,432	)
	$	120,101		$	134,981

        The Company provides for depreciation on property and equipment using straight-line and accelerated methods by charges to operations in amounts that allocate the cost of depreciable assets over their estimated lives as follows:

Asset Classification	Estimated Useful Life
Buildings and improvements	30-40 years
Leasehold improvements	The shorter of the life of lease or asset life
Furniture and equipment	7 years
Computer hardware	3-7 years
Computer software	3-5 years

        (h)   Goodwill and Other Intangible Assets

        The Company assesses the impairment of intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Important factors that could trigger an impairment review include:

•

significant underperformance relative to expected historical or projected future operating results;



•

significant changes in the manner of use of the acquired assets or the strategy for the overall business;



•

significant negative industry or economic trends;



•

significant decline in the Company's public bond price for a sustained period; and



•

significant decline in the Company's estimated market capitalization relative to net book value.

        Under generally accepted accounting principles, the Company is required to write down its intangible assets if they are determined to be impaired. Under current accounting standards, an impairment of an intangible asset is considered to have occurred when the estimated undiscounted future cash flows related to the assets are less than the carrying value of the asset. Estimates of future cash flows involve consideration of numerous factors, depending upon the specific asset being assessed. Relevant factors in this assessment include estimates of future market growth rates, service acceptance and lifecycles, selling prices and volumes, responses by competitors, service delivery costs and assumptions as to other operating expenses. When the Company determines that the carrying value of intangible assets may not be recoverable based upon the existence of one or more of the above indicators of impairment, it measures any impairment based on a projected discounted cash flow method using a discount rate determined by its management to be commensurate with the risk inherent

F-11

in the Company's current business model. The value of these projected discounted cash flows could be subject to change based on differences in the assumptions noted above.

        In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. ("SFAS") 141, Business Combinations ("SFAS 141") and SFAS 142, Goodwill and Other Intangible Assets ("SFAS 142"). SFAS 141 addresses the initial recognition and measurement of goodwill and other intangible assets acquired in a business combination. SFAS 142 addresses the initial recognition and measurement of intangible assets acquired outside of a business combination, whether acquired individually or with a group of other assets, and the accounting and reporting for goodwill and other intangibles subsequent to their acquisition. These standards require all business combinations subsequent to June 30, 2001 to be accounted for using the purchase method of accounting. The Company adopted SFAS 141 and SFAS 142 effective January 1, 2002; however, certain provisions of these new standards also apply to any acquisitions concluded subsequent to June 30, 2001. Accordingly, the Company accounted for acquisitions subsequent to that date under provisions of these new standards. Under SFAS 142, goodwill and indefinite life intangible assets, such as the Company's trademarks, are no longer amortized, but are subject to annual impairment tests. Impairment testing may be more frequent if there are interim "triggering" events, such as adverse revenue trends or adverse economic conditions. Other intangible assets with finite lives, such as customer lists and non-compete agreements, will continue to be amortized over their useful lives. In addition, assembled workforce is no longer defined as an acquired intangible asset under SFAS 141. Accordingly, the Company reclassified assembled workforce to goodwill in the first quarter of 2002 and, effective January 1, 2002, ceased amortizing goodwill and assembled workforce.

        Under SFAS 142, the Company is required to test all existing goodwill and indefinite life intangibles for impairment annually, on a reporting unit basis. A reporting unit is the operating segment unless, at businesses one level below that operating segment (the component level), discrete financial information is prepared and regularly reviewed by management, and the businesses are not otherwise aggregated due to having certain common characteristics, in which case such component is the reporting unit. The Company uses a fair value approach to test goodwill and indefinite life intangibles for impairment. The Company recognizes an impairment charge for the amount, if any, by which the carrying amount of goodwill and indefinite life intangibles exceeds its fair value. The Company established fair values using projected cash flows. When available and as appropriate, the Company used comparative market multiples to corroborate projected cash flow results.

        The Company completed the transitional implementation tests on a reporting unit basis under SFAS 142 for intangible assets with indefinite lives and goodwill and determined that no impairment existed at January 1, 2002. The Company completed its 2003 and 2002 annual impairment tests of goodwill and determined that no impairment existed at July 1, 2003 or July 1, 2002, respectively. The Company recorded no goodwill impairment charges during 2003, 2002 or 2001. However, the fair value of Care Management Services exceeded its carrying value by approximately 22% for the third quarter of 2003 impairment test, due primarily due to this reporting unit's recent performance trends. A non-cash goodwill impairment charge to income may be incurred for this reporting unit in a future period if there is a modest decrease in future earnings.

        A reconciliation of the previously reported net income for the year ended December 31, 2001 to the amounts adjusted for the reduction of amortization expense, is as follows (in thousands):

Net loss:
	As reported	$	(18,407	)
	Add: amortization expense adjustment		14,906
	As adjusted	$	(3,501	)

F-12

        The net carrying value of goodwill and other intangible assets is comprised of the following, as of December 31 (in thousands):

		2003			2002
Amortized intangible assets, gross:
	Customer contracts	$	6,190		$	6,190
	Covenants not to compete		4,305			4,305
	Customer lists		3,420			3,420
	Servicing contracts		3,293			3,293
	Licensing and royalty agreements		285			285
			17,493			17,493
Accumulated amortization of amortized intangible assets:
	Customer contracts		(3,342	)		(1,770	)
	Covenants not to compete		(2,628	)		(1,411	)
	Customer lists		(3,141	)		(2,430	)
	Servicing contracts		(713	)		(384	)
	Licensing and royalty agreements		(229	)		(123	)
			(10,053	)		(6,118	)
Amortized intangible assets, net			7,440			11,375
Non-amortized intangible assets:
	Goodwill		476,179			474,702
	Assembled workforce		—			—
	Trademarks		154			154
		$	483,773		$	486,231

        The change in the net carrying amount of amortized intangible assets during the year ended December 31, 2003 is due to amortization. The net increase in goodwill is primarily due to acquisitions.

        The net carrying value of goodwill by operating segment is as follows, as of December 31 (in thousands):

	2003		2002
Health Services	$	245,203	$	243,726
Network Services		184,902		184,902
Care Management Services		46,074		46,074
	$	476,179	$	474,702

        Amortization expense for intangible assets with finite lives was $3.9 million, $3.8 million and $0.8 million, respectively, for the years ended December 31, 2003, 2002 and 2001. Estimated amortization expense on intangible assets with finite lives for the five succeeding fiscal years ending December 31, is as follows (in millions): $3.3, $2.2, $0.5, $0.4, $0.3.

        The value of goodwill and other intangible assets acquired was recorded at fair value. Through December 31, 2001, goodwill for acquisitions concluded through June 30, 2001 was amortized on a straight-line basis in accordance with Accounting Principles Board ("APB") Opinion No. 16, Business Combinations ("APB 16") over a period not to exceed 25 years. In accordance with SFAS 142, goodwill

F-13

was not amortized for acquisitions concluded subsequent to June 30, 2001. Other intangibles were amortized on a straight-line basis over their estimated lives as follows:

Asset Classification	Estimated Useful Life
Customer contracts	2.5-4.0 years
Covenants not to compete	3.0-5.0 years
Servicing contracts	10.0 years
Customer lists	7.0 years
Assembled workforce	5.0 years
Licensing and royalty agreements	2.7 years
Trademarks	Indeterminate life

        (i)    Deferred Finance Costs

        The Company capitalizes deferred finance costs and amortizes them on a straight-line basis over the life of the indebtedness. In conjunction with the issuance of certain 1999 Recapitalization indebtedness, the Company incurred $18.1 million in deferred finance costs, consisting primarily of underwriting fees. As part of the amendment of its credit facility in March 2000, the Company was required to pay a fee of $1.7 million to its lenders. Additionally, the Company paid $0.5 million in November 2001 for revisions of its credit facility covenants due to the acquisition of National Healthcare Resources, Inc. ("NHR"). The Company also paid $1.1 million and $2.2 million in June 2002 and November 2002, respectively, for credit facility amendments. In June 2002, the Company expensed $1.2 million of deferred financing fees, net of accumulated amortization, related to the early redemption of the Company's 13.0% senior subordinated notes. The Company expensed additional deferred financing fees of $0.4 million, net of accumulated amortization, in November 2002 related to prepayments on its credit facility. The Company paid $5.5 million and $1.2 million in August 2003 and November 2003, respectively, related to the issuance of its 9¹/2% senior subordinated notes. (See "Note 5, Revolving Credit Facility and Long-Term Debt"). The Company paid $5.9 million and $0.6 million in August 2003 and November 2003, respectively, related to its new credit facility. In August 2003, the Company expensed $7.8 million of deferred financing costs, net of accumulated amortization, related to the termination of its previous credit facility. Deferred finance costs, net of accumulated amortization, of $15.2 million and $12.7 million were included in other assets at December 31, 2003 and 2002, respectively.

        (j)    Valuation of Hedging Arrangements

        The Company was a party to certain arrangements that hedged a portion of its exposure to variable interest rates under its previous credit facility. When accounting for hedging arrangements, the Company was required by accounting standards to:

•

recognize the fair value of hedging arrangements as assets or liabilities in the financial statements, and



•

recognize changes in the fair value of these derivatives in the statements of operations.

        Third parties, including major banking institutions, provided the Company with estimates of fair values of the Company's hedging arrangements, which reflected several factors, including relevant future market conditions, current bid-offer spreads and other market conditions. Valuations based on other models or different assumptions, including yield curve shifts, could have resulted in significantly different valuation estimates and could have caused significant non-cash charges to earnings relating to the change in the fair value of the interest rate hedges that the Company utilized. The Company terminated its hedging arrangements in August 2003 as part of its refinancing transactions, and the costs related to recognizing changes in their fair market value were charged to expense in the third quarter of 2003. The fair value of these hedges at December 31, 2002 was a liability of $33.5 million.

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        (k)   Valuation of Acquired Assets and Liabilities

        The Company has grown in part through several strategic acquisitions over the last few years. In many cases, the Company prepares its own internal purchase price allocations and determines the lives of the acquired assets. However, the Company may also use independent appraisers to assist in these efforts for larger or more complex acquisitions. The Company uses several valuation techniques in order to estimate fair values, including discounted cash flow analysis, replacement cost analysis and market comparables. These methods require significant assumptions regarding market conditions, operational integration issues, and the utilization of the underlying assets, which could change in the future and result in a significant impact on the Company's earnings. Additionally, the Company is required to make estimates of restructuring liabilities incurred in connection with these assets. These estimates involve assumptions relating to the timing and cost of personnel reductions, facility lease charges and other related exit costs. Because of the inherent nature of these assumptions and techniques, the Company could experience changes in estimated values that could be material to its earnings.

        During 2003 and 2002, the Company acquired a total of nine occupational healthcare centers, as well as the 12 centers obtained in the acquisition of substantially all of the assets and liabilities of OccMed Systems, Inc. ("OccMed"). During this time we also acquired Em3 Corporation ("Em3"), HealthNetwork Systems LLC ("HNS") and NHR. Except as discussed in "Note 4, Recent Acquisitions and Unusual Charges," the individual assets and liabilities of each acquired company were recorded at fair value, reflecting amounts for tangible assets and liabilities and intangible assets.

        (l)    Investments in Joint Ventures

        Effective December 31, 2001, the Company paid $0.5 million to acquire a controlling interest in the two joint ventures that had historically been accounted for under the equity method. Accordingly, beginning January 1, 2002, the results for these joint ventures are consolidated with those of the Company. For the year ended December 31, 2001, revenue for these entities was $7.4 million, gross profit was $1.2 million and net income was $0.2 million.

        (m)  Self-Insurance

        The Company is self-insured for a portion of the current and prior years' losses related to workers' compensation, professional liability, general liability, automobile and certain employee health benefits. The Company's 2003 self-insurance retention liability on a per claim basis ranges from $500 to $500,000. Generally, the Company's self-insurance retention liability is $50,000 for general and umbrella liability, $250,000 for workers' compensation, and $500,000 for professional liability, directors' and officers' liability, and employment practices. Liabilities in excess of these amounts are the responsibility of the insurer. The Company is self-insured for a portion of healthcare claims for eligible participating employees, subject to certain deductibles and limitations. The Company's policy is to accrue reserve amounts for all reported claims and an estimate of reserves for claims incurred but not yet reported.

        (n)   Professional Liability Insurance Claims

        The Company operates, along with virtually all healthcare providers, in an environment with medical malpractice and professional liability risks. The entire primary care segment of the healthcare industry is experiencing a dramatic increase in professional liability costs because of the volume of claims and the large legal settlements based on alleged negligence in providing healthcare. Allowances for professional liability risks were $6.1 million and $5.6 million at December 31, 2003 and 2002, respectively. The Company bases its provisions for losses related to professional liability risks upon actuarially determined estimates. Loss and loss expense allowances represent the present value of the estimated ultimate net cost of all reported and unreported losses incurred. The Company estimates the allowances for unpaid losses and loss expenses using individual case-basis valuations and statistical analyses. Trends in loss severity and frequency affect these estimates. The Company continually reviews

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and records adjustments for these estimates as experience develops or new information becomes known. Current operating results include the changes to the estimated allowances. Due to the considerable variability that is inherent in such estimates, there can be no assurance that the ultimate liability will not exceed the Company's estimates.

        (o)   Foreign Currency Translation

        All assets and liabilities of the Company's Canadian offices are translated at the year-end exchange rate, while revenue and expenses are translated at the average exchange rate in effect at the time of the transaction. Cumulative translation adjustments were immaterial for the years ended December 31, 2003, 2002 and 2001.

        (p)   Income Taxes

        The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred income tax assets are recognized for deductible temporary differences, net operating loss carryforwards and tax credit carryforwards if it is more likely than not that the tax benefits will be realized. Realization of the Company's deferred income assets is dependent on generating sufficient future taxable income prior to the expiration of the loss and tax credit carryforwards. The Company evaluates the recoverability of the deferred income tax assets and associated valuation allowance on a regular basis. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company evaluates a variety of factors on a regular basis to determine the amount of deferred income tax assets to recognize in the financial statements, including its recent earnings history, projected future taxable income, the number of years its net operating loss and tax credits can be carried forward, the existence of taxable temporary differences, and available tax planning strategies.

        (q)   Use of Estimates

        The preparation of financial statements in accordance with accounting principles generally accepted in the United States 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 revenue and expenses during the reporting period. Actual amounts could differ from those estimates. Changes in estimates are recorded during the period of change.

        (r)    Reclassifications

        Certain reclassifications have been made in the 2002 and 2001 financial statements to conform to classifications used in 2003. As a result, the amounts reported in the consolidated financial statements of the Company differ from amounts previously reported in the Company's Forms 10-K for the years ended December 31, 2002 and 2001 and Forms 10-Q for the quarters ended March 31, June 30 and September 30, 2003, 2002 and 2001.

3.     Recent Accounting Pronouncements

        In July 2001, the FASB issued SFAS 143, Accounting for Asset Retirement Obligations ("SFAS 143"). SFAS 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The statement requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred

F-16

and capitalized as part of the carrying amount of the long-lived asset. The Company adopted SFAS 143 on January 1, 2003. The adoption did not have a material impact on the Company's consolidated financial position, results of operations or cash flows.

        In October 2001, the FASB issued SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets, ("SFAS 144") which supersedes SFAS 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of. The statement provides a single accounting model for long-lived assets to be disposed. The Company adopted SFAS 144 on January 1, 2002. The adoption did not have a material impact on the Company's consolidated financial positions, results of operations or cash flows.

        In April 2002, the FASB issued SFAS 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections ("SFAS 145"). SFAS 145 concludes that gains or losses from debt extinguishments used as part of a company's risk management strategy should not be classified as an extraordinary item, effective for fiscal years beginning after May 15, 2002 with early adoption encouraged. SFAS 145 also requires sale-leaseback accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions, effective for transactions occurring after May 15, 2002. This statement also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings or describe their applicability under changed conditions, effective for financial statements issued on or after May 15, 2002. The Company adopted the provisions of this pronouncement for all related transactions in the second quarter of 2002. This adoption did not have a significant impact on the consolidated financial statements. The Company redeemed $47.5 million of its existing 13.0% senior subordinated notes in July 2002 and prepaid $25.0 million of its senior term indebtedness in November 2002. Additionally, the Company terminated its previous credit facility in the third quarter of 2003. In accordance with SFAS 145, the related losses from debt extinguishment were included in income from continuing operations in the respective periods of 2002 and 2003. For a further discussion, see "Note 5. Revolving Credit Facility and Long-Term Debt."

        In June 2002, the FASB issued SFAS 146, Accounting for Costs Associated with Exit or Disposal Activities ("SFAS 146"). SFAS 146 addresses the accounting for costs to terminate a contract that is not a capital lease, costs to consolidate facilities and relocate employees, and involuntary termination benefits under one-time benefit arrangements that are not an ongoing benefit program or an individual deferred compensation contract. A liability for contract termination costs should be recognized and measured at fair value when either the contract is terminated or when the entity ceases to use the right conveyed by the contract. A liability for one-time termination benefits should be recognized and measured at fair value at the communication date if the employee would not be retained beyond a minimum retention period (i.e., either a legal notification period or 60 days, if no legal requirement exists). For employees who will be retained beyond the minimum retention period, a liability should be accrued ratably over the future service period. The Company adopted SFAS 146 on January 1, 2003. The adoption did not have a material impact on the consolidated financial position, results of operations or cash flows.

        In November 2002, the FASB issued Interpretation No. 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others ("FIN 45"). FIN 45 elaborates on the existing disclosure requirements for most guarantees, including residual value guarantees issued in conjunction with operating lease agreements. It also clarifies that at the time a company issues a guarantee, the company must recognize an initial liability for the fair value of the obligation it assumes under that guarantee and must disclose that information in its interim and annual financial statements. The initial recognition and measurement provisions apply on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements are effective for financial statements of interim or annual periods ending after December 15, 2002. The Company's adoption of FIN 45 did not have a material impact on its results of operations and financial position, as

F-17

the Company's previous credit agreement prohibited, and its existing credit agreement prohibits, these types of guarantees.

        In December 2002, the FASB issued SFAS 148, Accounting for Stock-Based Compensation—Transition and Disclosure ("SFAS 148"). SFAS 148 amends SFAS 123, Accounting for Stock-Based Compensation ("SFAS 123") to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require more prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The additional disclosure requirements of SFAS 148 are effective for fiscal years ending after December 15, 2002. The Company has elected to continue to follow the intrinsic value method of accounting as prescribed by APB Opinion No. 25, Accounting for Stock Issued to Employees, to account for employee stock options. For the disclosures required by SFAS 148, see "Note 10, Stock Option Plans."

        In April 2003, the FASB issued SFAS 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities ("SFAS 149"). SFAS 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS 133, Accounting for Derivative Instruments and Hedging Activities. SFAS 149 was generally effective for contracts entered into or modified after June 30, 2003 and did not have an impact on the Company's financial statements.

        In May 2003, the FASB issued SFAS 150, Accounting for Certain Instruments with Characteristics of Both Liability and Equity ("SFAS 150"). SFAS 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS 150 requires that an issuer classify a financial instrument that is within its scope, which may have previously been reported as equity, as a liability. This statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. SFAS 150 did not have any financial impact on the Company's financial statements.

        In December 2003, FASB issued a revised Interpretation No. 46, Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51 ("FIN 46R"), replacing the original interpretation issued in January 2003. FIN 46R requires certain entities to be consolidated by enterprises that lack majority voting interest when equity investors of those entities have insignificant capital at risk or they lack voting rights, the obligation to absorb expected losses, or the right to received expected returns. Entities identified with these characteristics are called variable interest entities and the interests that enterprises have in these entities are called variable interests. These interests can derive from certain guarantees, leases, loans or other arrangements that result in risks and rewards that are disproportionate to the voting interests in the entities. The provisions of FIN 46R must be immediately applied for variable interest entities created after January 31, 2003 and for variable interests in entities commonly referred to as "special purpose entities." For all other variable interest entities, implementation is required by March 31, 2004. The Company does not have any variable interest entities.

4.     Recent Acquisitions and Unusual Charges

        In December 2002, the Company acquired Em3, a privately-held company located in Addison, Texas, in a transaction valued at $30.7 million. Following its inception in 2000, Em3 established a nationwide network of primary care physicians specializing in occupational healthcare, and its proprietary information systems and approach to the integration and management of workers' compensation care attracted several large national employers as its clients. Em3's business is complementary in nature to the Company's businesses. Under the terms of the transaction, Concentra

F-18

Holding issued approximately $30.1 million of its common stock to Em3's equity holders through an exchange of Concentra Holding's common stock for substantially all of the assets and liabilities of Em3. Because there has been no active trading market for Concentra Holding's common stock, the board of directors relied upon independent valuation analyses, internal and other financial analyses and negotiation with the principal stockholders of Em3 to determine the fair value of the common stock and number of shares to issue in the transaction. Concurrently with the closing of the acquisition, Concentra Holding contributed the assets and liabilities of Em3 to the Company, and the Company subsequently repaid $0.6 million of Em3's indebtedness to its largest stockholder, WCAS. The repayment of the indebtedness was financed through the use of cash on hand and by drawing down the Company's existing revolving credit line.

        In December 2002, the Company also acquired OccMed, a privately-held company located in Addison, Texas, in a transaction valued at $16.6 million. OccMed, established in 2001, developed 12 occupational healthcare centers across six geographic markets in the United States. Under the terms of the transaction, Concentra Holding issued approximately $12.8 million of its common stock for OccMed's assets and liabilities. Concurrent with this acquisition, Concentra Holding contributed the OccMed assets and liabilities to the Company, and the Company repaid $1.0 million of OccMed's indebtedness to its largest stockholder, WCAS, and $2.8 million of other indebtedness. Because there has been no active trading market for Concentra Holding's common stock, the board of directors relied upon independent valuation analyses, internal and other financial analyses and negotiation with the principal stockholders of OccMed to determine the fair value of the common stock and number of shares to issue in the transaction. The repayment of the indebtedness was financed through the use of cash on hand and by drawing down the Company's existing revolving credit line.

        Because the Company is controlled by its primary stockholder, WCAS, and because WCAS also owned approximately 66% of Em3 and 69% of OccMed, the acquisition accounting for these transactions was viewed as a reorganization of entities under common control. Accordingly, the historical costs of Em3's and OccMed's assets and liabilities have been utilized as if WCAS contributed their 66% and 69% respective interests in Em3 and OccMed to the Company at their historical cost. The Company accounted for the remaining 34% of Em3 and 31% of OccMed under the purchase method of accounting in accordance with SFAS 141, whereby assets and liabilities are "stepped-up" to fair value; any purchase price in excess of the amounts allocated to identifiable intangible assets acquired was allocated to goodwill. The effective date of these acquisitions was December 1, 2002.

        Pursuant to the acquisition accounting discussed above, portions of the acquired assets were recorded at historical values and the remaining portion was "stepped up" to fair value. To reflect the deemed dividend to WCAS for their receipt of a portion of Em3's and OccMed's acquisition consideration, goodwill and retained earnings were both reduced by $20.0 million and $8.9 million, respectively. No contingent consideration exists related to this transaction.

F-19

        The following table summarizes the recorded values of the Em3 and OccMed assets acquired and liabilities assumed at the date of acquisition, as determined by internal and third-party valuations ($ in thousands):

		Em3			OccMed
		Amortization life (in years)	As of December 1, 2002		Amortization life (in years)	As of December 1, 2002
Current assets			$	261		$	2,532
Property and equipment, net				2,791			5,070
Identifiable intangible assets:
	Customer contracts	5		304			—
	Customer lists			—	3		163
Goodwill				8,924			3,026
Other assets				2,667			28
				14,947			10,819
Current liabilities				940			4,517
Other long-term liabilities				3,400			173
	Total liabilities assumed			4,340			4,690
Net assets acquired			$	10,607		$	6,129

        The goodwill for Em3 and OccMed was assigned to the Health Services segment. The primary items that generated this goodwill are the synergies between the acquired businesses and the Company. None of the goodwill is expected to be deductible for tax purposes. These transactions occurred after June 30, 2001, and therefore, the acquired goodwill is not subject to amortization.

        The following unaudited pro forma summary presents information as if Em3 and OccMed had been acquired as of the beginning of the periods presented. The pro forma amounts include certain adjustments, primarily to reflect the acquisition of the remaining equity interests from the minority stockholders, and do not reflect any benefits from economies that might be achieved from combining operations. The pro forma information does not necessarily reflect the actual results that would have occurred nor is it necessarily indicative of future results of operations of the combined companies. ($ in thousands):

	2002			2001
Pro forma revenue	$	999,050		$	856,903
Pro forma net loss		(12,845	)		(22,789	)

        In connection with the Em3 acquisition, the Company recorded $0.5 million in restructuring costs primarily associated with professional fees, facilities consolidation costs and personnel reductions. Unusual charges of $0.5 million were recorded to reflect transaction costs associated with the Em3 and OccMed acquisitions. Through December 31, 2003, the Company had paid approximately $0.5 million for professional fees and services, including legal and accounting fees and no restructuring accrual remained in connection with this acquisition.

        In November 2001, the Company acquired all of the outstanding shares of capital stock of NHR, a privately-held company located in New York, New York, in a transaction valued at $141.8 million. NHR, founded in 1992, provided care management and network services to the workers' compensation and auto insurance industries nationwide. NHR's businesses were complementary in nature to and significantly expanded the Company's Care Management and Network Services businesses. In connection with this acquisition, Concentra Holding paid $84.0 million to NHR's equity and option holders through cash payments totaling $1.0 million and an exchange of approximately 3.8 million

F-20

shares of its common stock for all of the outstanding shares and share equivalents of NHR. Because there has been no active trading market for Concentra Holding's common stock, the board of directors relied upon independent valuation analyses, internal financial analyses and negotiation with the principal stockholders of NHR to determine the fair value of the common stock and number of shares to issue in the transaction. Concurrently with the closing of the acquisition, Concentra Holding contributed the capital stock and share equivalents of NHR to the Company's capital, and the Company repaid $57.8 million of NHR's indebtedness. Of this $57.8 million, (1) $19.5 million was financed through Concentra Holding's sale of new common stock and warrants, which were subsequently contributed to the Company's capital; and (2) the remainder was financed through the use of cash on hand and by drawing down the Company's then-existing revolving credit line.

        Because the Company's controlling stockholder, WCAS, owned approximately 48% of the common voting equity of NHR, the acquisition was accounted for as a reorganization of entities under common control. Accordingly, the historical costs of NHR's assets and liabilities were utilized to the extent of WCAS' proportionate ownership interest in NHR and the remainder of the acquisition was accounted for under the purchase method of accounting, whereby assets and liabilities are "stepped-up" to fair value with the remainder allocated to goodwill. The Company recognized NHR's historical net income and loss as a non-operating item in proportion to WCAS' investment in NHR utilizing the equity method of accounting from August 17, 1999 through October 31, 2001. Additionally, for financial statement purposes, WCAS' historical equity interest in NHR as of August 17, 1999, was treated as a deemed contribution of equity to the Company, which has reflected the historical value of its presumed equity interest in NHR as a long-term investment in other assets on its consolidated balance sheet through the date of its acquisition of NHR on November 1, 2001. The presumed equity contribution as of August 17, 1999 was predicated on the premise that WCAS could have contributed its interest in NHR to the Company at the time it undertook its recapitalization transaction. NHR's full results of operations were consolidated after November 1, 2001, the effective date of the acquisition.

        Pursuant to the acquisition accounting discussed above, a portion of the acquired assets was recorded at historical values and the remaining portion was "stepped up" to fair value. To reflect the deemed dividend to WCAS for their receipt of a portion of NHR's acquisition consideration, goodwill and retained earnings were both reduced by $32.2 million. No contingent consideration existed related to this transaction.

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        The following table summarizes the recorded values of the assets acquired and liabilities assumed at the date of acquisition, as determined by internal and third-party valuations ($ in thousands).

		Amortization life (in years)	As of November 1, 2001
Current assets			$	32,878
Property and equipment				16,307
Identifiable intangible assets:
	Customer contracts	4		5,611
	Covenants not to compete	3		2,016
	Servicing contracts	10		3,293
	Trademarks and other	Indefinite		153
Goodwill				100,357
				160,615
Current liabilities				31,080
Long-term debt				56,984
Other long-term liabilities				20,202
	Total liabilities assumed			108,266
Net assets acquired			$	52,349

        The weighted average life of the amortizable intangible assets purchased from NHR is 5.5 years. The $100.4 million of goodwill was assigned to the Network Services and Care Management Services segments in the amounts of $53.7 million and $46.7 million, respectively. The primary items that generated this goodwill were the value of the acquired assembled workforce and the synergies between the acquired business and the Company. None of the goodwill is expected to be deductible for tax purposes. The transaction occurred after June 30, 2001, and therefore, the acquired goodwill is not subject to amortization. Liabilities assumed in the acquisition include a long-term liability of $9.4 million, which requires Concentra Holding to deliver a specified number of shares of its common stock to certain individuals who were stock option holders of NHR on the earlier of six months after an initial public offering by Concentra Holding or the passage of seven years. This liability is reflected on the Company's consolidated balance sheet as another long-term liability.

        The following unaudited pro forma summary for the year ended December 31, 2001 presents information as if NHR had been acquired as of January 1, 2002. The pro forma amounts include certain adjustments, primarily to recognize depreciation and amortization based on the allocated purchase price of NHR's assets, and do not reflect any benefits from economies which might be achieved from combining operations. The pro forma information does not necessarily reflect the actual results that would have occurred nor is it necessarily indicative of future results of operations of the combined companies. ($ in thousands):

	2001
Pro forma revenue	$	977,623
Pro forma net loss		(18,471	)

        In connection with the NHR acquisition, the Company recorded $6.0 million in asset write-downs and $6.8 million in restructuring costs primarily associated with employee severance and facilities consolidation costs. Of this $12.8 million, $5.5 million was recognized in 2001 as a charge for the acquisition of an affiliate and reflects WCAS' proportionate ownership percentage in NHR as applied to the total amount of asset write-downs and restructuring liabilities that occurred in connection with the acquisition. The Company recorded unusual charges of $0.5 million to reflect employee severance

F-22

and facility consolidation costs associated with the Company's facilities. The Company recorded the remaining $6.8 million, which was reflective of the remaining non-WCAS proportionate ownership percentage in NHR as applied to the total amount of asset write-downs and restructuring liabilities that occurred in connection with the acquisition, under the purchase method of accounting. Through December 31, 2003, the Company used $6.0 million associated with asset write-downs and paid approximately $0.9 million for professional fees and services, including legal, accounting and regulatory fees, $3.4 million in facility consolidations, $2.0 million in costs related to personnel reductions and $0.1 million for other unusual costs. In the last half of 2002, the Company recorded an additional $0.6 million to the restructuring cost accrual due primarily to increased estimates for personnel and facility termination costs. At December 31, 2003, approximately $1.0 million of the restructuring cost accrual remained for facility obligations with terms expiring through August 2006, costs related to personnel reductions and other unusual charges. The Company anticipates that the majority of the remaining liability will be used over the next 12 months.

        In November 2001, the Company acquired all of the outstanding capital stock of HNS, a privately-held company located in Naperville, Illinois, in a transaction valued at approximately $30.9 million. HNS, founded in 1999, provides network management services such as provider bill repricing and provider data management for health plans and other payors working with multiple preferred provider organization networks. These services are complementary to the Company's existing services. Concentra Holding financed this acquisition primarily through the sale of its equity. Concentra Holding exchanged this cash and other consideration for all of HNS' capital stock. Concurrent with the closing of the acquisition, Concentra Holding contributed the capital stock of HNS and $0.8 million of cash to the Company, and the Company repaid approximately $0.8 million of HNS' indebtedness. Steven E. Nelson, one of the Company's directors, was the President and Chief Executive Officer of HNS at the time of the acquisition. Mr. Nelson and certain other of the Company's directors and management owned approximately 46.1% of the equity in HNS. All of HNS' assets, including its contracts, equipment, intangibles and goodwill, as well as all of its liabilities, were transferred to the Company and were recorded at fair value under the purchase method of accounting. The fair values of the acquired assets and liabilities were determined by internal financial analyses and third-party valuations. The $26.1 million of goodwill was assigned to the Network Services segment and was reduced by $1.5 million in 2002 primarily due to certain purchase adjustments. The primary items that generated this goodwill were the value of the acquired assembled workforce and the synergies between the acquired business and the Company. The goodwill is expected to be deductible for tax purposes. The transaction occurred after June 30, 2001, and therefore, the acquired goodwill is not subject to amortization.

        Health Services acquired six centers in four transactions in 2003 and three centers in two transactions in 2002. The Company paid approximately $6.2 million and $2.8 million, net of cash acquired, and recorded approximately $5.1 million and $3.0 million for goodwill in 2003 and 2002, respectively. No contingent consideration exists related to these transactions. All of the acquisitions have been accounted for using the purchase method of accounting and, accordingly, the purchase price has been allocated to the tangible and intangible assets acquired and liabilities assumed based on the estimated fair values at the dates of acquisition. Some of those estimates are preliminary and subject to further adjustment.

F-23

        The following are rollforwards of the unusual cost reserves related to the acquisitions of NHR in 2001 and Em3 and OccMed in 2002 recorded by the Company (in thousands):

		Beginning Of Year		Accrued		Usage			End of Year
Fourth Quarter 2001 Accrual
	2001	$	—	$	6,723	$	(1,050	)	$	5,673
	2002		5,673		621		(4,300	)		1,994
	2003		1,994		—		(991	)		1,003
Fourth Quarter 2002 Accrual
	2002	$	—	$	454	$	(304	)	$	150
	2003		150		—		(150	)		—
Total
	2001	$	—	$	6,723	$	(1,050	)	$	5,673
	2002		5,673		1,075		(4,604	)		2,144
	2003		2,144		—		(1,141	)		1,003

5.     Revolving Credit Facility and Long-Term Debt

        The Company's long-term debt as of December 31, 2003 and 2002 consisted of the following (in thousands):

		December 31,
		2003			2002
Term loan due 2009		$	333,325		$	—
Tranche B term loan			—			224,626
Tranche C term loan			—			112,314
91/2% senior subordinated notes due 2010, net			181,918			—
13.0% senior subordinated notes due 2009			142,500			142,500
Other			1,491			386
			659,234			479,826
	Less: Current maturities		(4,841	)		(3,825	)
Long-term debt, net		$	654,393		$	476,001

        The Company had no revolving credit borrowings at December 31, 2003 and 2002. As of December 31, 2003 and 2002, accrued interest was $15.6 million and $11.4 million, respectively.

        On August 13, 2003, the Company completed a series of refinancing transactions (the "Refinancing Transactions") that included issuing $150.0 million aggregate principal amount of 9¹/2% senior subordinated notes (the "9¹/2% Subordinated Notes") and entering into a new $435.0 million senior secured term credit facility (the "New Credit Facility"). The New Credit Facility consists of a $335.0 million term loan facility (the "New Term Loan") and a $100.0 million revolving loan facility (the "New Revolving Credit Facility"). The Company used the proceeds from the 9¹/2% Subordinated Notes offering and the New Credit Facility together with cash on hand to: (1) repay the $335.2 million of outstanding indebtedness under the Company's previous credit facility, (2) terminate previously existing interest rate hedging arrangements valued at $23.6 million, (3) transfer $141.2 million of cash proceeds to the Company's parent, Concentra Holding, to enable it to redeem a portion of its 14.0% senior discount debentures, (4) pay $4.6 million of accrued interest on the previous credit facility and hedging arrangements and (5) pay approximately $11.3 million of related fees and expenses. In connection with the termination of the existing credit facility, the Company recorded approximately

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$7.8 million of debt extinguishment costs in the third quarter of 2003 for the write-off of related deferred financing fees and other expenses.

        On November 20, 2003, the Company issued an additional $30.0 million aggregate principal amount of its 9¹/2% Subordinated Notes. These notes were issued at 106.5% of their face value, resulting in the receipt of $2.0 million in additional gross proceeds. The proceeds from the 9¹/2% Subordinated Notes together with cash on hand were used to: (1) transfer $52.8 million of cash proceeds to the Company's parent, Concentra Holding, to enable it to redeem the remainder of its outstanding 14.0% senior discount debentures and (2) pay approximately $1.8 million of related fees and expenses. Additionally, the Company extended the maturity of Concentra Holding's $55.0 million bridge loan agreement from June 24, 2004 to March 31, 2005.

        On August 13, 2003, the Company entered into the New Credit Facility with a consortium of banks. Borrowings under the New Revolving Credit Facility and New Term Loan bear interest, at the Company's option, at either (1) the Alternate Base Rate ("ABR"), as defined, plus a margin initially equal to 2.25% for the loans under the New Revolving Credit Facility and 2.75% for the New Term Loan or (2) the reserve-adjusted Eurodollar rate plus a margin initially equal to 3.25% for the loans under the New Revolving Credit Facility and 3.75% for the New Term Loan. The margins for borrowings under the New Revolving Credit Facility will be subject to reduction based on changes in the Company's leverage ratios and certain other performance criteria. The New Term Loan matures on June 30, 2009, and requires quarterly principal payments of $0.8 million through June 30, 2008, $47.7 million for each of the following two quarters, $95.5 million on March 31, 2009 and any remaining balance due on June 30, 2009. The New Revolving Credit Facility provides for borrowing up to $100.0 million and matures on August 13, 2008. As part of the New Credit Facility, the Company was required to pay fees of $5.2 million to the lenders approving the agreement and $0.7 million of other related expenses. These fees and expenses were capitalized as deferred financing costs and will be amortized over the life of the New Credit Facility. The New Credit Facility contains certain financial compliance ratio tests. A failure to comply with these and other financial compliance ratios could cause an event of default under the New Credit Facility that could result in an acceleration of the related indebtedness before the terms of that indebtedness otherwise require the Company to pay that indebtedness. Such an acceleration would also constitute an event of default under the indentures relating to the Company's 9¹/2% Subordinated Notes and 13.0% senior subordinated notes ("13.0% Subordinated Notes") and could also result in an acceleration of the 9¹/2% Subordinated Notes and the 13.0% Subordinated Notes before the indentures otherwise require the Company to pay the notes. The New Credit Facility contains prepayment requirements that would occur based on certain net asset sales outside the ordinary course of business by the Company, from the proceeds of specified debt and equity issuances by the Company and if the Company has excess cash flow, as defined in the agreement. The Company was not required to make prepayments under these provisions in 2003. However, management anticipates that the Company may meet these requirements in future periods, based upon its financial projections.

        Prior to August 13, 2003, the Company had a credit agreement (the "Previous Credit Facility") with a consortium of banks, providing for term loans and a $100 million revolving credit facility. The term loans were issued in 1999 as a $250 million term loan (the "Tranche B Term Loan") and a $125 million term loan (the "Tranche C Term Loan") bearing interest, at the Company's option, at the ABR, as defined, plus 3.00% and 3.25%, respectively, or the Eurodollar Rate, as defined, plus 4.00% and 4.25%, respectively.

        On June 14, 2002, the Company and its lenders amended the Previous Credit Facility. Under the terms of the amended agreement, the financial compliance ratios were modified to allow for increased leverage coverage through September 2004 and decreased interest coverage through December 2004, as compared to the previously amended agreement. As part of the amendment, the Company was also required to pay a fee of $1.1 million to lenders approving the agreement. The amendment fee was

F-25

capitalized as deferred financing costs and was amortized over the remaining life of the Previous Credit Facility.

        On November 20, 2002, the Company amended the Previous Credit Facility. Under the terms of the amended agreement, the financial compliance ratios were modified to allow for increased leverage coverage through June 2005 and decreased interest coverage through June 2005, as compared to the previously amended agreement. The amendment also included provisions that enabled the Company to proceed with its acquisitions of Em3 and OccMed. As part of the amendment, the Company was also required to pay a fee of $2.2 million to lenders approving the agreement. The amendment fee was capitalized as deferred financing costs and was amortized over the remaining life of the Previous Credit Facility.

        Also on November 20, 2002, in connection with the amendment of Previous Credit Facility, Concentra Holding completed the sale of $25.0 million of its common stock to its primary equity sponsors and contributed the proceeds to Concentra Operating. The Company subsequently prepaid $16.7 million and $8.3 million of its Tranche B Term Loan and Tranche C Term Loan, respectively, on November 25, 2002, and expensed previously capitalized deferred financing fees of $0.4 million, net of accumulated amortization.

        The Tranche B Term Loan would have matured on June 30, 2006, and required quarterly principal payments of $0.6 million through June 30, 2005, and $54.7 million for each of the remaining four quarters or until all principal was repaid. The Tranche C Term Loan would have matured on June 30, 2007, and required quarterly principal payments of $0.3 million through June 30, 2006, and $27.1 million for each of the remaining four quarters or until all principal was repaid. The previous revolving credit facility provided for borrowing up to $100 million and would have matured on August 17, 2005. As part of the Refinancing Transactions, the Company repaid all amounts outstanding under the Previous Credit Facility and expensed the write-off of related $7.8 million of deferred financing fees and expenses.

        The ABR, as defined, and the Eurodollar Rate, as defined, were 4.00% and 1.15%, respectively, at December 31, 2003, and 4.25% and 1.4%, respectively, at December 31, 2002. Commitment fees on the unused New Revolving Credit Facility borrowings are 0.5% per annum, consistent with the previous revolving credit facility. The weighted-average interest rate for borrowings under the New Term Loan was 4.94% at December 31, 2003. The weighted-average interest rates for the borrowings under the Tranche B Term Loan were 5.4% and under the Tranche C Term Loan were 5.7% at December 31, 2002.

        The Previous Credit Facility required the Company to enter into interest rate hedge agreements for the purpose of reducing the effect of variable interest rate fluctuations on a certain portion of the Previous Credit Facility. Accordingly, the Company entered into an interest rate collar agreement on November 17, 1999, which it subsequently amended on May 17, 2000. The interest rate collar agreement converted $200 million of certain variable rate debt to fixed rates. Had it not been cancelled as a part of the Refinancing Transactions, this agreement would have expired by its terms on November 17, 2004. Under the agreement, the Company generally paid and received the three month LIBOR rate (the "Swap Rate") to and from the counterparty on the notional amount subject to the following limitations: the minimum rate the Company paid was 6.3% when the Swap Rate was less than 5.9%; the maximum rate the Company paid was 6.3%, unless the Swap Rate was greater than 7.5% and less than 8.5%; and, if the Swap Rate was greater than 8.5%, the Company paid 8.5% until November 17, 2002. After November 17, 2002 through the maturity of the agreement, there was no maximum rate the Company paid if the Swap Rate exceeded 7.5%.

        The Company entered into an additional interest rate collar agreement on May 17, 2000. This agreement converted $100 million of certain variable rate debt to fixed rates and, had it not been cancelled as a part of the Refinancing Transactions, would have expired by its terms on May 17, 2005.

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Under the terms of this agreement, the Company generally paid and received the Swap Rate to and from the counterparty on the notional amount subject to the following restrictions: the minimum rate the Company paid was 7.05% when the Swap Rate was less than 6.0%; the maximum rate the Company paid was 7.05%, unless the Swap Rate was greater than 8.25%. Through the maturity of the agreement, there was no maximum rate the Company paid if the Swap Rate exceeded 8.25%.

        In connection with the acquisition of NHR in November 2001, the Company assumed an interest rate collar agreement, which converted $23.6 million of certain variable rate debt to fixed rates and expired on May 19, 2003. Under the terms of this agreement, the Company generally paid and received the Swap Rate to and from the counterparty on the notional amount subject to the following restrictions: the minimum rate the Company paid was 6.5% when the Swap Rate was less than that amount; the maximum rate the Company paid was 8.0% when the Swap Rate was greater than that amount; and if the Swap Rate was between 6.5% and 8.0%, the Company paid the Swap Rate. At May 19, 2003, the counterparty elected to exercise its option to fix the interest rate at 7.11% for an additional two years. However, as were the Company's other interest rate hedge agreements, this agreement was cancelled as a part of the Refinancing Transactions.

        Changes in the fair value of the Company's interest rate hedging arrangements, including the Company's interest rate collar agreements, were recognized each period in earnings. All earnings adjustments resulting from changes in the fair values of the interest rate collars were non-cash charges or credits and did not impact cash flows from operations or operating income. There were periods with significant non-cash increases or decreases to the Company's earnings relating to the change in the fair value of the interest rate collars. Further, if the Company held each of these collars to maturity (2004 and 2005), the earnings adjustments would have offset each other on a cumulative basis and would have ultimately equaled zero. These hedging arrangements were eliminated as part of the Refinancing Transactions, and the costs related to recognizing changes in their fair market value were charged to expense in the third quarter of 2003. In 2003 and 2002, the Company increased its interest expense by $10.4 million and $15.5 million through net cash paid to the counterparty under these collars. The New Credit Facility does not require the Company to enter into any hedging arrangements.

        The 9¹/2% Subordinated Notes are general unsecured indebtedness with semi-annual interest payments due on February 15 and August 15, commencing on February 15, 2004. These notes mature on August 15, 2010. As part of the issuance of the 9¹/2% Subordinated Notes, the Company was required to pay $4.5 million in arrangement fees and $1.0 million of other related expenses. These fees and expenses were capitalized as deferred financing costs and will be amortized over the life of the 9¹/2% Subordinated Notes. At any time prior to August 15, 2006, the Company can redeem, with proceeds from new equity, up to 35% of the aggregate principal amount of the 9¹/2% Subordinated Notes at a redemption price of 109.5% of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date. Prior to August 15, 2007, the Company may redeem all, but not less than all, of the 9¹/2% Subordinated Notes at a redemption price of 100.0% of the principal amount of the notes plus the applicable premium, as defined, and accrued and unpaid interest to the redemption date. The Company can also redeem all or part of the 9¹/2% Subordinated Notes on or after August 15, 2007 at 104.8% of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date, with the redemption premium decreasing annually to 100.0% of the principal amount on August 15, 2009. Upon a change of control, as defined, each holder of the 9¹/2% Subordinated Notes may require the Company to repurchase all or a portion of that holder's notes at a purchase price of 101.0% of the aggregate principal amount of notes repurchased, plus accrued and unpaid interest. On October 14, 2003 the Company completed an exchange offer in which it exchanged the 9¹/2% Subordinated Notes for notes that were registered under the Securities Act of 1933.

        The Company issued an additional $30.0 million aggregate principal amount of its 9¹/2% Subordinated Notes on November 20, 2003 at 106.5% of their face value. As part of this issuance, the

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Company was required to pay $1.4 million in arrangement fees and $0.4 million of other related expenses. These fees and expenses were capitalized as deferred financing costs and will be amortized over the life of the 9¹/2% Subordinated Notes.

        The 13.0% Subordinated Notes were issued on August 5, 1999 for $190.0 million and are general unsecured indebtedness with semi-annual interest payments due on February 15 and August 15 commencing on February 15, 2000. On July 24, 2002, as allowed by the indenture to the 13.0% Subordinated Notes and as elected by the Company, the Company redeemed 25% of the original face value of the 13.0% Subordinated Notes through payment of an amount equal to 113.0% of the face value of the notes redeemed. The redemption is described more fully below. The Company can also redeem the remaining $142.5 million principal balance of the 13.0% Subordinated Notes on or after August 15, 2004 at 106.5% of the principal amount with the redemption premium decreasing annually to 100.0% of the principal amount on August 15, 2008.

        On June 25, 2002, Concentra Holding entered into a $55.0 million bridge loan agreement ("Bridge Loan") with affiliates of Salomon Smith Barney and Credit Suisse First Boston. The loans bear interest, at Concentra Holding's option, at the base rate, as defined, plus 0.50%, or the Eurodollar Rate, as defined, plus 1.5%. The Bridge Loan requires no cash interest payments until maturity. The Bridge Loan is guaranteed by WCAS and WCAS Capital Partners III, L.P. As part of the agreement, Concentra Holding was required to pay fees of $1.0 million to the lenders approving the agreement and $1.0 million to the loan guarantors and others. These fees were capitalized by Concentra Holding as deferred financing costs and will be amortized over the life of the Bridge Loan. Pursuant to action by the Company's board of directors, Concentra Operating then issued 54 shares of its common stock to Concentra Holding for $53.3 million of cash. On July 24, 2002, these proceeds were used to redeem 25%, or $47.5 million, of the Company's outstanding 13.0% Subordinated Notes, pursuant to the provisions of the indenture. In connection with the July redemption, the Company paid a $6.2 million premium over the face value of the redeemed bonds and accrued interest of $2.7 million. Concurrently, the Company expensed approximately $1.2 million of related existing deferred financing fees and other expenses associated with this early redemption. In accordance with SFAS 145, these debt extinguishment costs were included in income from continuing operations in the third quarter of 2002. On November 20, 2003, Concentra Holding extended the maturity of its Bridge Loan from June 24, 2004 to March 31, 2005, in conjunction with Concentra Operating's issuance of the additional $30.0 million of its 9¹/2% Subordinated Notes.

        The 9¹/2% Subordinated Notes, as well as the 13.0% Subordinated Notes, the Previous Credit Facility and the New Credit Facility, are guaranteed on a joint and several basis by each and every current wholly-owned subsidiary, the results of which are consolidated in the results of the Company. These guarantees are full and unconditional. The Company has certain subsidiaries that are not wholly-owned and do not guarantee the 13.0% Subordinated Notes or the 9¹/2% Subordinated Notes. For financial information on guarantor and non-guarantor subsidiaries, see "Note 14. Condensed Consolidating Financial Information."

        The New Credit Facility, the 9¹/2% Subordinated Notes and the 13.0% Subordinated Notes contain certain customary covenants, including, without limitation, restrictions on the incurrence of indebtedness, the sale of assets, certain mergers and acquisitions, the payment of dividends on the Company's capital stock, the repurchase or redemption of capital stock, transactions with affiliates, investments, cross default provisions with other indebtedness of Concentra Operating and Concentra Holding, capital expenditures and changes in control of the Company. Under the New Credit Facility, the Company is also required to satisfy certain financial covenant ratio tests including leverage ratios, interest coverage ratios and fixed charge coverage ratios. The Previous Credit Facility contained similar covenants and financial covenant ratio tests. The Company was in compliance with its covenants, including its financial covenant ratio tests, in 2003 and 2002. While less restrictive than the requirements under the Previous Credit Facility, the ratio tests under the New Credit Facility become

F-28

more restrictive for future quarters through the fourth quarter of 2008. The Company's ability to be in compliance with these more restrictive ratios will be dependent on its ability to increase its cash flows over current levels. The Company believes it will be in compliance with its covenants for the next twelve months.

        In the first quarter of 2003, the Company entered into a five-year capital lease for software. The Company paid $1.5 million to the lessor at the lease execution, with the remaining $1.5 million to be paid in the first quarter of 2004. At the end of the five-year term, the Company has the option to extend the term of the agreement. The software will be amortized over the primary term of the lease.

        On February 15, 2002, OccMed entered into a $2.5 million revolving promissory note. OccMed could request advances against the note through January 31, 2003. The note was to mature February 14, 2003 at which time all principal and accrued interest was due. Interest accrued on outstanding note advances at an annual rate of 18%. Subsequent to the OccMed acquisition, the Company repaid the outstanding principal and accrued interest balance of $2.8 million on December 2, 2002.

        On October 1, 2002, Em3 and OccMed entered into revolving promissory notes for $1.0 million and $1.2 million, respectively, with their largest stockholder, WCAS. Em3 and OccMed could request advances against the notes through January 31, 2003. The notes were to mature April 1, 2003 at which time all principal and accrued interest was due. Interest accrued on outstanding note advances at an annual rate of 18%. Subsequent to the Em3 and OccMed acquisitions, the Company repaid on December 2, 2002 the outstanding principal and accrued interest balances for Em3 and OccMed of $0.6 million and $1.0 million, respectively.

6.     Financial Instruments

        The carrying amounts of cash and cash equivalents, accounts receivable, other current assets, and accounts payable, approximate fair value because of the short maturity of those instruments. The fair value of the Company's borrowings under the New Credit Facility was $323.3 million at December 31, 2003 and was $323.5 million under the Previous Credit Facility at December 31, 2002. The fair value of the Company's 9¹/2% Subordinated Notes was $196.5 million at December 31, 2003. The fair value of the Company's 13.0% Subordinated Notes was $158.9 million and $143.2 million at December 31, 2003 and 2002, respectively. As determined by estimating the amount the Company would pay or receive to terminate the interest rate collars agreement, the fair value of these agreements at December 31, 2002 was a $33.5 million liability. The fair values of the financial instruments were determined utilizing available market information. The use of different market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts.

        The financial instrument that potentially subjects the Company to concentrations of credit risk is accounts receivable. Mitigating factors related to the Company's accounts receivable are that they are spread over a large customer base and various product lines that the Company offers. Further, the Company does monitor the financial performance and credit worthiness of its large customers, and regularly reviews outstanding accounts receivable balances.

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7.     Income Taxes

        The provision for income taxes from continuing operations consisted of the following for the years ended December 31 (in thousands):

		2003		2002			2001
Current:
	Federal	$	347	$	211		$	5,515
	State		2,941		3,490			2,506
			3,288		3,701			8,021
Deferred:
	Federal		1,119		6,958			(6,176	)
	State		1,807		(25	)		(867	)
			2,926		6,933			(7,043	)
Total		$	6,214	$	10,634		$	978

        Significant items included in deferred income tax assets and deferred income tax liabilities were as follows at December 31 (in thousands):

			2003		2002
Deferred income tax assets:
	Bad debt allowances		$	7,616	$	14,230
	Net operating loss carryforwards			26,985		7,655
	Fair value of hedging arrangements			—		13,131
	Accrued expenses and reserves			7,149		6,349
	Other			5,486		5,260
				47,236		46,625
	Valuation allowance			—		(27,252	)
		Deferred income tax assets	$	47,236	$	19,373
Deferred income tax liabilities:
	Intangible assets		$	5,340	$	7,019
	Indefinite life intangible assets			25,497		18,588
	Depreciable assets			13,321		11,890
	Other			379		464
		Deferred income tax liabilities	$	44,537	$	37,961
		Net deferred income tax asset (liability)	$	2,699	$	(18,588	)

        The company evaluates a variety of factors on a regular basis to determine the recoverability of its deferred income tax assets and associated valuation allowance. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. This includes the Company's earnings history, projected future taxable income, expiration periods of the Company's net operating loss ("NOL") carryforwards, the existence of taxable temporary differences, and available tax planning strategies.

Based upon the available evidence, the Company determined that no valuation allowance was necessary at December 31, 2003 related to the recovery and realization of its deferred income tax assets. The Company reduced goodwill by $3.1 million during 2003 related to the valuation allowance decrease.

F-30

        The Company's tax provision attributable to continuing operations differs from the federal statutory rate as follows for the years ended December 31 (in thousands):

	2003			%		2002		%	2001			%
Tax provision (benefit) at federal statutory rate	$	17,326		35.0		$	359	35.0	$	(5,128	)	(35.0	)
Non-deductible expenses		400		0.8			439	42.8		2,710		18.5
State taxes (net of federal effect)		2,275		4.6			2,232	217.5		1,032		7.0
Deferred income tax asset valuation allowance		(13,987	)	(28.3	)		7,440	725.1		3,041		20.8
Other items, net		200		0.4			164	16.0		(677	)	(4.6	)
Effective income tax provision and rate prior to tax provision from income of acquired affiliate		6,214		12.6			10,634	1,036.5		978		6.7
Tax provision from income of acquired affiliate		—		—			—	—		2,779		19.0
Total income tax provision and effective rate	$	6,214		12.6		$	10,634	1,036.5	$	3,757		25.7

        These financial statements reflect a tax provision for the Company as if it filed its own tax return. The Company, however, is included in the consolidated federal income tax return of Concentra Holding. The Company's deferred tax assets reflect the tax benefits of the entire federal consolidated group. Concentra Holding contributes its deferred tax assets to the Company. This permanently reduces the Company's income taxes payable.

        The Company has net operating loss carryforwards for federal income tax purposes of $132.8 million that will be available to reduce future taxable income. The utilization of $41.5 million of losses is subject to annual limitations under federal income tax law. The Company believes that it will be able to fully utilize these losses as well as losses that are not limited in use by current federal tax law. The net operating losses have a carryforward period of fifteen to twenty years depending on the year generated. No NOL's expire in 2004 to 2008, $10.1 million expire in 2009 to 2018, and $122.7 million expire in 2019 to 2023.

        The Company and its subsidiaries' income tax returns are periodically examined by various regulatory tax authorities. In connection with such examinations, tax authorities, including the Internal Revenue Service may raise issues and propose tax deficiencies. The Company believes that its tax positions comply with applicable tax law and will defend its positions vigorously. The Company believes it has adequately provided for any reasonably foreseeable outcome related to any examination by taxing authorities. Management believes that the ultimate resolution of these potential tax deficiencies and contingencies will not have a material adverse effect on the Company's financial condition, annual results of operations or cash flows.

8.     Commitments and Contingencies

        The Company leases certain corporate office space, operating and medical facilities, and office and medical equipment under various non-cancelable operating and capital lease agreements. Certain facility leases require the Company to pay operating costs and real estate taxes.

        The following is a schedule of rent expense by major category for the years ended December 31 (in thousands):

	2003		2002		2001
Facilities	$	37,785	$	38,698	$	31,656
Office equipment		4,450		5,071		4,667
Automobiles		1,887		1,924		2,237
Total rent expense	$	44,122	$	45,693	$	38,560

F-31

        The following is a schedule of future minimum lease payments under noncancelable operating leases for the years ending December 31 (in thousands):

2004	$	40,952
2005		32,339
2006		23,567
2007		17,547
2008		13,897
Thereafter		37,215
	$	165,517

        The Company is party to certain claims and litigation initiated in the ordinary course of business. The Company is not involved in any legal proceeding that it believes will result, individually or in the aggregate, in a material adverse effect upon its financial condition or results of operations.

9.     Employee Benefit Plans

        (a)   Concentra 401(k) Plan

        The Company has a defined contribution plan (the "Concentra 401(k) Plan") pursuant to which employees who are at least 21 years of age and who have completed at least six months of service are eligible to participate. Effective January 1, 2001, employees who are 21 years of age and who have completed 1,000 hours of service within a consecutive 12 month period of service are immediately eligible to participate in the Concentra 401(k) Plan. For 2003 and 2002, participants in the Concentra 401(k) Plan may not contribute more than the lesser of a specified statutory amount or 25% of his or her pretax eligible compensation. For 2001, participants in the Concentra 401(k) Plan could not contribute more than the lesser of a specified statutory amount or 15% of his or her pretax eligible compensation.

        Under the Concentra 401(k) Plan, the Company has the option of matching a portion of the participants' pretax contributions. Employees are 100% vested in their own contributions while Company contributions vest 20% per year of service with employees being fully vested after 5 years. For 2003, 2002 and 2001, the Company elected to match 25% of elective deferral contributions up to a maximum, in the case of each eligible employee, of 4% of such employee's eligible compensation, subject to a maximum eligible compensation of $30,000.

        The Company has expensed $0.9 million, $1.0 million and $3.5 million for the years ended December 31, 2003, 2002 and 2001, respectively, for matching contributions to the Concentra 401(k) Plan. In the first quarter of 2002, the Company reversed $2.9 million of the 2001 expense, due to a change in estimate in the matching contribution paid in 2002 from the amount anticipated at the end of 2001.

        (b)   NHR 401(k) Plan

        NHR had a defined contribution plan (the "NHR 401(k) Plan") with terms similar to the Concentra 401(k) Plan. This plan merged into the Concentra 401(k) Plan on July 1, 2002. The Company expensed $0.1 million in 2001 for matching contributions to the NHR 401(k) Plan.

10.   Stock Option Plans

        All information presented below relates to Concentra Holding stock and stock option activity.

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        (a)   Concentra 1997 Long-Term Incentive Plan

        Concentra Holding granted certain awards with respect to shares under Concentra Holding's 1997 Long-Term Incentive Plan (the "1997 Incentive Plan"). The awards granted under the 1997 Incentive Plan included stock options that do not qualify as incentive stock options and restricted stock. Generally each stock option grant vested ratably over a five year period, subject to continued employment, with a ten year term. The 108,000 restricted shares granted under the 1997 Incentive Plan that remained at December 31, 2002 were to vest on August 1, 2003. However, on March 27, 2003, Concentra Holding's board and stockholders deferred the vesting for these shares to the earlier of an initial public offering by Concentra Holding or August 1, 2005. For the year ended December 31, 2001, the Company recorded amortization of $0.4 million in connection with the deferred compensation associated with the restricted stock grants. Simultaneous with the 1999 Recapitalization, no additional awards can be made under the 1997 Incentive Plan. Only that number of shares of Concentra Holding stock issuable upon exercise of awards granted under the 1997 Incentive Plan as of the 1999 Recapitalization were reserved for issuance by Concentra Holding. During 2003, 2002 and 2001, 38,250, 6,375 and 57,250 options were canceled, respectively under the 1997 Incentive Plan. During 2003, 2002 and 2001, 33,000, 40,875 and 15,000 options were exercised, respectively.

        (b)   Concentra 1999 Long-Term Incentive Plan

        Concentra Holding's board and stockholders approved its 1999 Stock Option and Restricted Stock Purchase Plan ("the 1999 Stock Plan") in August 1999. The 1999 Stock Plan originally provided for the grant of options or awards to purchase an aggregate 3,750,000 shares of Concentra Holding common stock, either in the form of incentive stock options qualified as such under the U.S. Federal Income Tax Laws, nonqualified stock options or restricted stock purchase awards. The 1999 Stock Plan includes provisions for adjustment of the number of shares of common stock available for grant of award there under and in the number of shares of common stock underlying outstanding options in the event of any stock splits, stock dividends or other relevant changes in the capitalization of Concentra Holding. Under the 1999 Stock Plan, employees, including officers, are eligible to receive grants of either incentive stock options or nonqualified stock options and restricted stock purchase awards. Non-employee directors are eligible to be granted only nonqualified options and awards.

        During 2002, Concentra Holding granted 125,000 shares of restricted common stock under the 1999 Stock Plan that were valued at $2.1 million based upon the market value of the shares at the time of issuance. The restricted stock grants have an exercisable period of ten years from the date of grant and vest upon the earlier of the achievement of certain share price levels following an initial public offering of Concentra Holding, the occurrence of a change in control, as defined, or five years following the date of the grant. During 2003 and 2002, the Company recorded compensation expense of $0.4 million and $0.1 million, respectively, in connection with the amortization of these restricted stock grants.

        On June 20, 2002, Concentra Holding's board and stockholders approved amendments to (1) increase the maximum total number of shares of Concentra Holding common stock for which awards may be granted there under to 5,250,000, and (2) increase the maximum number of shares of Concentra Holding common stock that may be granted there under to an individual in a calendar year. On September 24, 2002, the Concentra Holding's board and stockholders approved an amendment to the 1999 Stock Plan to provide for the automatic award of the following nonqualified stock options under the 1999 Stock Plan to non-employee members of Concentra Holding's board: (1) an initial option to purchase 10,000 shares of Concentra Holding common stock on the next business day following the date of his or her initial election to the board (or on September 24, 2002, if serving as a director on that date), and (2) an annual option to purchase 4,000 shares of Concentra Holding common stock on the next business day following each annual meeting of stockholders at which such non-employee director is elected as a director. The exercise price of each director option will be 100%

F-33

of the fair market value at the time of grant. Initial options will be immediately exercisable. Annual option awards will become exercisable ratably on each of the four annual anniversary dates following the date of grant. The exercise period will not exceed ten years from the date of grant; provided that, no director option may be exercised more than 1 year after the optionee ceases to serve as a director of the corporation.

        Stock options granted to employees in 2003 vest over a four year period (25% annually). A portion of the stock options granted to employees in 2002 vest over a four year period (25% annually) and a portion vest over a five year period (20% annually), subject to continued employment. Stock options granted to non-employee directors in 2003 and 2002 totaled 10,000 and 60,000, respectively, and vested immediately. Stock options granted in 2001 vest over a five year period (20% annually), subject to continued employment. A portion of the stock options granted prior to 2001 vest over a five year period (20% annually), the remaining portion was to be subject to cliff vesting in seven years with provisions allowing for accelerated vesting based upon specific performance criteria. However, in December 2001 the Company modified the vesting for a portion of the stock options that allowed for accelerated vesting based upon performance criteria to become vested over a three year period (33¹/3% annually) beginning in 2002. In December 2002, the remaining stock options with performance based vesting criteria were modified to become vested over a four year period (25% annually) beginning in 2004. The Company recognized compensation expense related to the accelerated vesting of these options of $0.5 million for the years ended December 31, 2003, 2002 and 2001, respectively. Prior to vesting, all options are subject to forfeiture upon termination of employment. Depending on the reason for termination of employment, vested options may only be exercised within one month to one year of the termination of employment. The exercise period is ten years from the date of grant. The exercise price of incentive and nonqualified stock options granted may not be less than 100% of the fair market value of the shares of common stock, as determined by Concentra Holding's board of directors or the compensation committee, as the case may be, on the date the option is granted. In addition, the aggregate fair market value of the shares of stock with respect to which incentive stock options are exercisable for the first time by an optionee during any calendar year shall not exceed $100,000. In addition, no incentive stock option shall be granted to an optionee who owns more than 10% of the total combined voting power for all classes of stock of Concentra Holding, unless the exercise price is at least 110% of the fair market value of the shares of Concentra Holding's common stock and the exercise period does not exceed five years.

        The Company granted 645,000, 1,175,500 and 1,218,500 options and canceled due to forfeiture 1,017,925, 546,261 and 282,245 options under the 1999 Stock Plan in 2003, 2002 and 2001, respectively. Restricted stock purchase awards granted under the 1999 Stock Plan will continue in effect until August 17, 2009, unless terminated prior to such date by the Board.

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        A summary of the status for all outstanding options at December 31, 2001, 2002 and 2003, and changes during the years then ended is presented in the table below:

		Number of Options		Weighted Average Exercise Price Per Share
Balance, December 31, 2000		3,240,577		$	14.12
	Granted	1,218,500			21.77
	Exercised	(29,448	)		9.39
	Canceled	(339,495	)		7.89
Balance, December 31, 2001		4,090,134			16.95
	Granted	1,175,500			16.70
	Exercised	(43,375	)		8.55
	Canceled	(552,636	)		18.89
Balance, December 31, 2002		4,669,623			16.74
	Granted	645,000			16.50
	Exercised	(33,000	)		8.06
	Canceled	(1,056,837	)		19.25
Balance, December 31, 2003		4,224,786		$	16.14

        Using the Black-Scholes option valuation model, the weighted average fair market value of options granted in 2003, 2002 and 2001 were $3.67, $5.12 and $7.19, respectively. There were 1,762,580, 1,410,714 and 890,453 exercisable options outstanding with a weighted average exercise price of $14.72, $13.55 and $13.07 as of December 31, 2003, 2002 and 2001, respectively. A further breakdown of the outstanding options at December 31, 2003 is as follows:

Range of Exercise Prices	Number of Options	Weighted Average Price		Weighted Average Contractual Life (Years)	Number of Exercisable Options	Weighted Average Price of Exercisable Options
$4.23-$8.06	419,867	$	8.01	4.78	419,867	$	8.01
$16.50-$18.00	3,448,194		16.52	7.44	1,269,124		16.52
$22.06	356,725		22.06	7.98	73,589		22.06
	4,224,786	$	16.14	7.22	1,762,580	$	14.72

        (c)   SFAS 123, Accounting for Stock-Based Compensation, Disclosures

        The Company accounts for these plans under APB Opinion No. 25, Accounting for Stock Issued to Employees, under which no compensation cost has been recognized related to stock option grants when the exercise price is equal to the market price on the date of grant.

        The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.

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        For purposes of disclosures pursuant to SFAS 123, as amended by SFAS 148, the estimated fair value of options is amortized to expense over the options' vesting period. Had compensation cost for these plans been determined consistent with SFAS 123, the Company's net income would have been decreased to the following supplemental pro forma net income (loss) amounts (in thousands):

		2003			2002			2001
Net income (loss)
	As reported	$	43,289		$	(9,608	)	$	(18,407	)
	Deduct: Incremental stock-based employee compensation expense determined under the fair value method for all awards, net of related tax effects		(3,909	)		(3,356	)		(2,431	)
	Supplemental pro forma	$	39,380		$	(12,964	)	$	(20,838	)

        The fair value of each option granted is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions used:

	2003		2002		2001
Risk-free interest rates	2.7	%	3.1	%	4.7	%
Expected volatility	17.3	%	28.8	%	21.9	%
Expected dividend yield	—		—		—
Expected weighted average life of options in years	4.9		4.8		6.0

11.   Segment Information

        Operating segments represent components of the Company's business that are evaluated regularly by key management in assessing performance and resource allocation. The Company's comprehensive services are organized into the following segments: Health Services, Network Services and Care Management Services.

        Health Services provides specialized injury and occupational healthcare services to employers through its centers. Health Services delivers primary and rehabilitative care, including the diagnosis, treatment and management of work-related injuries and illnesses. Health Services also provides non-injury, employment-related health services, including physical examinations, pre-placement substance abuse testing, job-specific return to work evaluations and other related programs. To meet the requirements of large employers whose workforce extends beyond the geographic coverage available to the Company's centers, this segment has also developed a network of select occupational healthcare providers that use the Company's proprietary technology to benchmark treatment methodologies and outcomes achieved. Health Services, and the joint ventures Health Services controls, own all the operating assets of the occupational healthcare centers, including leasehold interests and medical equipment.

        The Network Services segment reflects those businesses that involve the review and repricing of provider bills. For these services, the Company is primarily compensated based on the degree to which the Company achieves savings for its clients, as well as on a fee per bill or claims basis. This segment includes the specialized preferred provider organization, provider bill repricing and review, out-of-network bill review and first report of injury services.

        Care Management Services reflects the Company's professional services aimed at curtailing the cost of workers' compensation and auto claims through field case management, telephonic case management, independent medical examinations and utilization management. These services also concentrate on monitoring the timing and appropriateness of medical care.

        Revenue from individual customers, revenue between business segments, and revenue, operating profit and identifiable assets of foreign operations are not significant.

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        The Company's statements of operations on a segment basis were as follows (in thousands):

		2003			2002			2001
Revenue:
	Health Services	$	511,387		$	471,968		$	443,321
	Network Services		260,159			230,299			185,267
	Care Management Services		279,142			296,783			228,315
			1,050,688			999,050			856,903
Gross profit:
	Health Services		89,724			65,804			67,756
	Network Services		112,809			92,081			75,080
	Care Management Services		30,830			29,729			28,149
			233,363			187,614			170,985
Operating income:
	Health Services		60,197			38,154			30,958
	Network Services		71,708			61,169			52,433
	Care Management Services		2,528			4,231			12,326
	Corporate general and administrative expenses		(27,952	)		(25,938	)		(22,109	)
	Unusual charges (gains)		—			1,200			(6,065	)
			106,481			78,816			67,543
Interest expense, net			56,318			63,582			66,398
(Gain) loss on change in fair value of hedging arrangements			(9,869	)		7,589			13,602
Loss on early retirement of debt			7,837			7,894			—
Loss of acquired affiliate, net of tax			—			—			5,833
Other, net			2,692			(1,275	)		(3,640	)
Income (loss) before income taxes			49,503			1,026			(14,650	)
Provision for income taxes			6,214			10,634			3,757
Net income (loss)		$	43,289		$	(9,608	)	$	(18,407	)

F-37

        The Company's segment depreciation and amortization, capital expenditures and identifiable assets were as follows (in thousands):

		2003		2002		2001
Depreciation and amortization:
	Health Services	$	19,052	$	21,482	$	28,670
	Network Services		17,685		14,006		13,607
	Care Management Services		11,392		10,054		5,164
	Corporate		2,103		1,191		822
		$	50,232	$	46,733	$	48,263
Capital expenditures:
	Health Services	$	9,091	$	13,588	$	28,147
	Network Services and Care Management Services(1)		19,455		19,128		14,652
	Corporate		2,453		2,308		2,863
		$	30,999	$	35,024	$	45,662
Identifiable assets:
	Health Services	$	462,009	$	441,722	$	426,474
	Network Services and Care Management Services(1)		370,172		378,413		400,073
	Corporate		42,811		30,556		26,680
		$	874,992	$	850,691	$	853,227

(1)

Capital expenditures and identifiable assets are not separately reported within the Network Services and Care Management Services groups.

        Management utilizes multiple indicators and views to measure segment performance and to allocate resources to the segments. The primary indicators are pretax income along with cash flows and overall economic returns. The Company is managed among multiple product lines within each segment.

12.   Related Party Transactions

        W. Tom Fogarty, M.D., an executive officer of Concentra Holding and Concentra Operating, is the President, a director and a stockholder of Occupational Health Centers of the Southwest, P.A. ("OHCSW"), and a stockholder, officer, and/or director of several other of the physician groups. A subsidiary of the Company has entered into a 40-year management agreement with each of the physician groups. OHCSW paid approximately $217.6 million, $178.7 million and $184.2 million in management fees to a subsidiary of Concentra Operating in the years ended December 31, 2003, 2002 and 2001, respectively, under its management agreement with that subsidiary. Dr. Fogarty receives no remuneration from any of the physician groups for serving as an officer or director.

Acquisition of National Healthcare Resources, Inc.

        In November 2001, in a transaction valued at $141.8 million (consisting of $83.0 million in Concentra Holding common stock, $1.0 million in cash, and assumption of $57.8 million in NHR indebtedness), the Company acquired NHR, a provider of care management and network services to the workers' compensation and auto insurance industries on a national level. NHR's businesses are complementary in nature to and significantly expand the Company's care management and network services businesses. See "Note 4, Recent Acquisitions and Unusual Charges." D. Scott Mackesy, a director of Concentra Holding and Concentra Operating, and James T. Kelly, a director of Concentra Holding and Concentra Operating from December 2001 to September 2003, served on NHR's board of directors.

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        Entities and individuals affiliated with WCAS, the Company's primary stockholder, owned approximately 48% of NHR. In the NHR transaction, WCAS entities and individuals as a group received 1,740,803 shares of Concentra Holding common stock, representing 5.5% of total outstanding Concentra Holding common stock.

Acquisition of HealthNetwork Systems, LLC/Joint Marketing Agreement

        In November 2001, in a transaction valued at approximately $30.9 million, the Company acquired HNS, a provider of network services such as provider bill repricing and provider data management for health plans and other payors. See "Note 4, Recent Acquisitions and Unusual Charges." HNS' services are complementary to the Company's existing services. Steven E. Nelson, a director of Concentra Operating and of Concentra Holding, was the President and Chief Executive Officer of HNS prior to this acquisition by the Company.

        Mr. Nelson, Paul B. Queally and Mr. Mackesy, each of whom is a director of Concentra Holding and Concentra Operating, and Daniel J. Thomas, a director and executive officer of Concentra Holding and Concentra Operating, owned equity interests in HNS. For each, the percentage of total HNS equity ownership and the amount received in the transaction were as follows: Mr. Nelson, 19.8% and $5.4 million (plus repayment of debt of $0.2 million); Mr. Thomas, 2.0% and $0.6 million; Mr. Queally, 0.6% and $0.2 million; and Mr. Mackesy, 0.5% and $0.2 million.

        Until the Company's acquisition of HNS, the Company was party to a Joint Marketing Agreement with HNS, pursuant to which HNS performed marketing and sales services for certain of the Company's network services businesses. The Company paid HNS approximately $0.7 million in 2001, pursuant to the Joint Marketing Agreement.

Acquisition of Em3 Corporation

        In December 2002, in a transaction valued at $30.7 million (consisting of $30.1 million in Concentra Holding common stock and assumption of $0.6 million of indebtedness to WCAS), the Company acquired Em3, a provider of information technology and a software-based system for the management of work-related injuries. Prior to the acquisition, the Company provided certain administrative services to Em3, including leasing employees to Em3, providing office space, providing access to certain of the Company's software and systems and related administrative services. During the eleven-month period ending November 20, 2002, Em3 paid the Company $2.8 million, for the administrative services and reimbursable expenses the Company provided. During the twelve-month period ending December 31, 2001, Em3 paid the Company $7.4 million for the administrative services and reimbursable expenses the Company provided. See "Note 4, Recent Acquisitions and Unusual Charges."

        The stockholders of Em3 were primarily the same as Concentra Holding's principal stockholders. Paul B. Queally, D. Scott Mackesy, and John K. Carlyle, each of whom is a director of Concentra Holding and Concentra Operating, Daniel J. Thomas, a director and executive officer of Concentra Holding and Concentra Operating, and James M. Greenwood and Richard A. Parr II, each of whom is an executive officer of Concentra Holding and Concentra Operating, owned equity interests in Em3. The percentage of total Em3 share ownership by the Company's principal stockholders and by the Company's directors and executive officers prior to the acquisition was as follows: WCAS-affiliated entities and individuals as a group, 66.24%; FFC entities, 6.65%; Mr. Queally, 0.08%; Mr. Mackesy, 0.04%; Mr. Carlyle, 0.46%; Mr. Thomas, 0.47%; Mr. Greenwood, 0.59%; and Mr. Parr, 0.07%. Carlos A. Ferrer, a director of Concentra Holding and Concentra Operating, and Messrs. Greenwood, Carlyle, Queally and Mackesy served on Em3's board of directors.

F-39

Acquisition of OccMed Systems, Inc.

        In December 2002, in a transaction valued at $16.6 million (consisting of $12.8 million in Concentra Holding common stock, assumption of $1.0 million in indebtedness to WCAS, and assumption of $2.8 million of other indebtedness), the Company acquired the assets of OccMed, a company engaged in developing new, free-standing, primary care occupational healthcare centers. Prior to the acquisition, the Company was party to a management and administrative services agreement with OccMed and performed management services for the development and construction of OccMed's occupational healthcare centers, leased employees to OccMed, recruited, hired and trained employees for its occupational healthcare centers, and provided accounting, billing and collection services for its occupational healthcare centers. During the eleven-month period ending November 20, 2002, OccMed paid the Company $6.0 million, for the administrative services and reimbursable expenses the Company provided in 2002, net of $3.0 million of OccMed receivables balances collected by the Company. See "Note 4, Recent Acquisitions and Unusual Charges."

        The stockholders of OccMed were primarily the same as Concentra Holding's principal stockholders and included certain of the Company's directors. The percentage of total OccMed share ownership by the Company's principal stockholders and by the Company's directors prior to the date of acquisition was as follows: WCAS-affiliated entities and individuals as a group, 69.40%; FFC entities, 7.56%; Mr. Queally, 0.09%; and Mr. Mackesy, 0.04%. Messrs. Queally, Mackesy and Ferrer served on OccMed's board of directors.

Other Related Party Transactions

        The Company derives revenue in the normal course of business from other companies owned or controlled by or affiliated with related parties. Health Services revenue from related parties totaled $0.6 million, $0.3 million and $0.2 million during 2003, 2002 and 2001, respectively. Care Management Services revenue from related parties totaled $0.4 million in 2003 and $0.1 million in 2002 and 2001.

        The Company also purchases services in the normal course of business from other companies owned or controlled by or affiliated with related parties. These services include local phone service in certain geographic regions, information technology consulting, claims editing services, administration of open enrollment for employee benefits and third party laboratory services. The Company made payments to related parties for these services totaling $0.6 million, $0.7 million and $1.7 million during 2003, 2002 and 2001, respectively.

        In the normal course of business, the Company and Concentra Holding engage in certain intercompany transactions to permanently reduce state and local income taxes. Since the Company is included in the consolidated federal, state and local tax returns of Concentra Holding (see Note 7, Income Taxes), all intercompany state and local income tax transactions between the Company and Concentra Holding have been eliminated in the consolidated financial statements.

13.   Selected Quarterly Operating Results (Unaudited)

        The following table sets forth certain unaudited quarterly results of operations for the years ended December 31, 2003, and 2002. In management's opinion, this unaudited information has been prepared on the same basis as the annual financial statements and includes all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the information for the quarters presented, when read in conjunction with the financial statements and notes thereto included elsewhere in this document. The operating results for any quarter are not necessarily indicative of results for any subsequent quarter. Certain amounts in the table below have been adjusted to conform to the current

F-40

presentation, which is different than previously reported on Form 10-Q (see "Note 2. Summary of Significant Accounting Policies, (r) Reclassifications.") Amounts are stated in thousands.

		Quarters Ended
		March 31, 2003			June 30, 2003			September 30, 2003		December 31, 2003
Revenue		$	252,151		$	260,277		$	268,853	$	269,407
Cost of services			199,806			200,813			204,874		211,832
	Gross profit		52,345			59,464			63,979		57,575
General and administrative expenses			28,538			29,516			31,883		33,012
Amortization of intangibles			1,035			967			969		962
	Operating income		22,772			28,981			31,127		23,601
Interest expense, net			14,544			14,610			13,790		13,374
Other, net			(1,540	)		(1,490	)		3,185		505
Provision (benefit) for income taxes			2,895			3,464			3,653		(3,798	)
	Net income	$	6,873		$	12,397		$	10,499	$	13,520

		Quarters Ended
		March 31, 2002			June 30, 2002		September 30, 2002			December 31, 2002
Revenue		$	240,001		$	254,159	$	254,798		$	250,092
Cost of services			199,490			201,641		206,296			204,009
	Gross profit		40,511			52,518		48,502			46,083
General and administrative expenses			22,498			27,127		27,880			28,717
Amortization of intangibles			932			931		853			1,060
Unusual gains			—			—		—			(1,200	)
	Operating income		17,081			24,460		19,769			17,506
Interest expense, net			16,434			16,614		15,507			15,027
Other, net			(5,878	)		5,751		14,984			(649	)
Provision (benefit) for income taxes			3,569			1,418		(3,544	)		9,191
	Net income (loss)	$	2,956		$	677	$	(7,178	)	$	(6,063	)

14.   Condensed Consolidating Financial Information

        As discussed in "Note 4, Revolving Credit Facility and Long-Term Debt," the 9¹/2% Subordinated Notes, the 13.0% Subordinated Notes, the New Credit Facility and the Previous Credit Facility are unconditionally guaranteed by each and every current wholly-owned subsidiary. Additionally, the New Credit Facility and the Previous Credit Facility are secured by a pledge of stock and assets of each and every wholly-owned subsidiary. The Company has certain subsidiaries that are not wholly-owned and do not guarantee the 9¹/2% Subordinated Notes, the 13.0% Subordinated Notes, the New Credit Facility or the Previous Credit Facility. Presented below are condensed consolidating balance sheets as of December 31, 2003 and 2002, the condensed consolidating statements of operations for the years ended December 31, 2003, 2002 and 2001, and the condensed consolidating statements of cash flow for the years ended December 31, 2003, 2002 and 2001 of Concentra Operating (Parent and Issuer), guarantor subsidiaries (Guarantor Subsidiaries) and the subsidiaries that are not guarantors (Non-Guarantor Subsidiaries).

        Investments in subsidiaries are accounted for using the equity method of accounting. The financial information for the Guarantor and Non-Guarantor subsidiaries are each presented on a combined basis. The elimination entries primarily eliminate investments in subsidiaries and intercompany balances and transactions. Intercompany management fees of $4.4 million, $4.4 million and $4.3 million are included in general and administrative expenses of the Non-Guarantor Subsidiaries for the years ended December 31, 2003, 2002 and 2001, respectively. These amounts are reflected as a reduction of general and administrative expenses for the Guarantor Subsidiaries. Separate financial statements for the Guarantor and Non-Guarantor Subsidiaries are not presented because management believes such financial statements would not be meaningful to investors. All information in the tables below is presented in thousands.

F-41

Condensed Consolidating Balance Sheets:

			As of December 31, 2003
			Parent		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Current assets:
	Cash and cash equivalents		$	—	$	35,454		$	7,167		$	—		$	42,621
	Accounts receivable, net			—		157,187			13,257			—			170,444
	Prepaid expenses and other current assets			8,759		30,018			1,307			—			40,084
		Total current assets		8,759		222,659			21,731			—			253,149
Investment in subsidiaries				785,089		32,681			—			(817,770	)		—
Property and equipment, net				—		112,880			7,221			—			120,101
Goodwill and other intangible assets, net				—		459,266			24,507			—			483,773
Other assets				42,153		(24,273	)		89			—			17,969
		Total assets	$	836,001	$	803,213		$	53,548		$	(817,770	)	$	874,992
Current liabilities:
	Revolving credit facility		$	—	$	—		$	—		$	—		$	—
	Current portion of long-term debt			3,350		1,491			—			—			4,841
	Accounts payable and accrued expenses			22,280		103,376			5,225			—			130,881
		Total current liabilities		25,630		104,867			5,225			—			135,722
Long-term debt, net				654,393		—			—			—			654,393
Deferred income taxes and other liabilities				—		22,405			—			18,462			40,867
Fair value of hedging arrangements				—		—			—			—			—
Intercompany				111,968		(109,148	)		(2,820	)		—			—
		Total liabilities		791,991		18,124			2,405			18,462			830,982
Stockholder's equity				44,010		785,089			51,143			(836,232	)		44,010
		Total liabilities and stockholder's equity	$	836,001	$	803,213		$	53,548		$	(817,770	)	$	874,992

F-42

			As of December 31, 2003
			Parent		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Current assets:
	Cash and cash equivalents		$	—	$	13,060		$	5,942		$	—		$	19,002
	Accounts receivable, net			—		156,751			10,810			—			167,561
	Prepaid expenses and other current assets			867		25,546			1,357			—			27,770
		Total current assets		867		195,357			18,109			—			214,333
Investment in subsidiaries				709,466		31,713			—			(741,179	)		—
Property and equipment, net				—		126,250			8,731			—			134,981
Goodwill and other intangible assets, net				—		462,240			23,991			—			486,231
Other assets				12,321		2,730			95			—			15,146
		Total assets	$	722,654	$	818,290		$	50,926		$	(741,179	)	$	850,691
Current liabilities:
	Revolving credit facility		$	—	$	—		$	—		$	—		$	—
	Current portion of long-term debt			3,492		333			—			—			3,825
	Accounts payable and accrued expenses			11,694		93,586			2,769			—			108,049
		Total current liabilities		15,186		93,919			2,769			—			111,874
Long-term debt, net				475,948		53			—			—			476,001
Deferred income taxes and other liabilities				—		41,237			—			17,391			58,628
Fair value of hedging arrangements				33,472		—			—			—			33,472
Intercompany				27,332		(26,385	)		(947	)		—			—
		Total liabilities		551,938		108,824			1,822			17,391			679,975
Stockholder's equity				170,716		709,466			49,104			(758,570	)		170,716
		Total liabilities and stockholder's equity	$	722,654	$	818,290		$	50,926		$	(741,179	)	$	850,691

F-43

Condensed Consolidating Statements of Operations:

		Year Ended December 31, 2003
		Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
Total revenue		$	—		$	974,436	$	84,923		$	(8,671	)	$	1,050,688
Total cost of services			—			757,311		68,685			(8,671	)		817,325
	Total gross profit		—			217,125		16,238			—			233,363
General and administrative expenses			430			116,547		5,972			—			122,949
Amortization of intangibles			—			3,927		6			—			3,933
Unusual gains			—			—		—			—			—
	Operating income (loss)		(430	)		96,651		10,260			—			106,481
Interest expense, net			56,149			186		(17	)		—			56,318
(Gain) loss on change in fair value of hedging arrangements			(9,869	)		—		—			—			(9,869	)
Loss on early retirement of debt			7,837			—		—			—			7,837
Other, net			—			2,692		—			—			2,692
	Income (loss) before income taxes		(54,547	)		93,773		10,277			—			49,503
Provision (benefit) for income taxes			(19,091	)		25,305		—			—			6,214
	Income (loss) before equity earnings		(35,456	)		68,468		10,277			—			43,289
Equity earnings in subsidiaries			(78,745	)		—		—			78,745			—
	Net income (loss)	$	43,289		$	68,468	$	10,277		$	(78,745	)	$	43,289

		Year Ended December 31, 2002
		Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Total revenue		$	—		$	933,337		$	74,275		$	(8,562	)	$	999,050
Total cost of services			—			760,658			59,340			(8,562	)		811,436
	Total gross profit		—			172,679			14,935			—			187,614
General and administrative expenses			69			100,234			5,919			—			106,222
Amortization of intangibles			—			3,765			11			—			3,776
Unusual gains			(140	)		(1,060	)		—			—			(1,200	)
	Operating income		71			69,740			9,005			—			78,816
Interest expense, net			63,316			306			(40	)		—			63,582
Loss on change in fair value of hedging arrangements			7,589			—			—			—			7,589
Loss on early retirement of debt			7,894			—			—			—			7,894
Other, net			—			(1,275	)		—			—			(1,275	)
	Income (loss) before income taxes		(78,728	)		70,709			9,045			—			1,026
Provision (benefit) for income taxes			(27,555	)		38,189			—			—			10,634
	Income (loss) before equity earnings		(51,173	)		32,520			9,045			—			(9,608	)
Equity earnings in subsidiaries			(41,565	)		—			—			41,565			—
	Net income (loss)	$	(9,608	)	$	32,520		$	9,045		$	(41,565	)	$	(9,608	)

F-44

		Year Ended December 31, 2001
		Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Total revenue		$	—		$	794,711		$	70,501		$	(8,309	)	$	856,903
Total cost of services			—			637,139			57,088			(8,309	)		685,918
	Total gross profit		—			157,572			13,413			—			170,985
General and administrative expenses			400			75,313			5,918			—			81,631
Amortization of intangibles			—			14,571			1,175			—			15,746
Unusual charges			—			546			—			—			546
Charges for acquisition of affiliate			—			5,519			—			—			5,519
	Operating income (loss)		(400	)		61,623			6,320			—			67,543
Interest expense, net			66,832			(325	)		(109	)		—			66,398
Loss on change in fair value of hedging arrangements			13,602			—			—			—			13,602
Loss of acquired affiliate, net of tax			—			5,833			—			—			5,833
Other, net			—			(3,640	)		—			—			(3,640	)
	Income (loss) before income taxes		(80,834	)		59,755			6,429			—			(14,650	)
Provision (benefit) for income taxes			(28,292	)		32,049			—			—			3,757
	Income (loss) before equity earnings		(52,542	)		27,706			6,429			—			(18,407	)
Equity earnings in subsidiaries			(34,135	)		—			—			34,135			—
	Net income (loss)	$	(18,407	)	$	27,706		$	6,429		$	(34,135	)	$	(18,407	)

F-45

Condensed Consolidating Statements of Cash Flows:

			Year Ended December 31, 2003
			Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Total
Operating Activities:
	Net cash provided by (used in) operating activities		$	(33,206	)	$	134,808		$	11,986		$	—	$	113,588
Investing Activities:
	Purchases of property, equipment and other assets			—			(29,425	)		(223	)		—		(29,648	)
	Acquisitions, net of cash acquired			—			(6,237	)		—			—		(6,237	)
	Proceeds from the licensing of internally-developed software			—			—			—			—		—
		Net cash used in investing activities		—			(35,662	)		(223	)		—		(35,885	)
Financing Activities:
	Proceeds from the issuance of short-term and long-term debt			517,718			1,500			—			—		519,218
	Contribution from issuance of common stock by parent			266			—			—			—		266
	Repayments of short-term and long-term debt			(338,647	)		(1,838	)		—			—		(340,485	)
	Contribution to parent			(193,912	)		—			—			—		(193,912	)
	Payment to terminate hedging arrangements			(23,603	)		—			—			—		(23,603	)
	Payment of deferred financing costs			(13,152	)		—			—			—		(13,152	)
	Borrowings (payments) under the revolving credit facilities, net			—			—			—			—		—
	Distributions to minority interests			—			(2,316	)		—			—		(2,316	)
	Other			(100	)		—			—			—		(100	)
	Intercompany, net			84,636			(82,764	)		(1,872	)		—		—
	Receipt (payment) of equity distributions			—			8,666			(8,666	)		—		—
		Net cash provided by (used in) financing activities		33,206			(76,752	)		(10,538	)		—		(54,084	)
Net Increase in Cash and Cash Equivalents				—			22,394			1,225			—		23,619
Cash and Cash Equivalents, beginning of year				—			13,060			5,942			—		19,002
Cash and Cash Equivalents, end of year			$	—		$	35,454		$	7,167		$	—	$	42,621

F-46

			Year Ended December 31, 2002
			Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Total
Operating Activities:
	Net cash provided by (used in) operating activities		$	(37,905	)	$	83,691		$	10,180		$	—	$	55,966
Investing Activities:
	Purchases of property, equipment and other assets			—			(34,362	)		(712	)		—		(35,074	)
	Acquisitions, net of cash acquired			—			(1,726	)		—			—		(1,726	)
	Proceeds from the licensing of internally- developed software			—			515			—			—		515
		Net cash used in investing activities		—			(35,573	)		(712	)		—		(36,285	)
Financing Activities:
	Proceeds from issuance of common stock to parent			52,955			—			—			—		52,955
	Contribution from issuance of common stock by parent			25,370			—			—			—		25,370
	Proceeds from the issuance of short-term and long-term debt			—			3,960			—			—		3,960
	Payment of deferred financing costs			(3,321	)		—			—			—		(3,321	)
	Distributions to minority interests			—			(1,935	)		—			—		(1,935	)
	Borrowings (payments) under the revolving credit facilities, net			(6,000	)		—			—			—		(6,000	)
	Repayments of short-term and long-term debt			(76,185	)		(4,430	)		—			—		(80,615	)
	Other			(43	)		—			—			—		(43	)
	Intercompany, net			45,129			(45,669	)		540			—		—
	Receipt (payment) of equity distributions			—			7,294			(7,294	)		—		—
		Net cash provided by (used in) financing activities		37,905			(40,780	)		(6,754	)		—		(9,629	)
Net Increase in Cash and Cash Equivalents				—			7,338			2,714			—		10,052
Cash and Cash Equivalents, beginning of year				—			5,722			3,228			—		8,950
Cash and Cash Equivalents, end of year			$	—		$	13,060		$	5,942		$	—	$	19,002

F-47

			Year Ended December 31, 2001
			Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Total
Operating Activities:
	Net cash provided by (used in) operating activities		$	(99,105	)	$	168,245		$	10,311		$	—	$	79,451
Investing Activities:
	Purchases of property, equipment and other assets			—			(44,259	)		(1,578	)		—		(45,837	)
	Acquisitions, net of cash acquired			—			(105,460	)		(1,714	)		—		(107,174	)
	Proceeds from the licensing of internally-developed software			—			1,103			—			—		1,103
		Net cash used in investing activities		—			(148,616	)		(3,292	)		—		(151,908	)
Financing Activities:
	Contribution from issuance of common stock by parent			49,746			—			—			—		49,746
	Borrowings (payments) under revolving credit facilities, net			6,000			—			—			—		6,000
	Repayments of short-term and long-term debt			(4,701	)		(330	)		(106	)		—		(5,137	)
	Distributions to minority interests			—			(2,284	)		—			—		(2,284	)
	Contribution from primary stockholder			12,865			—			—			—		12,865
	Contribution from minority interest			—			5,135			—			—		5,135
	Intercompany, net			35,195			(34,695	)		(500	)		—		—
	Receipt (payment) of equity distributions			—			7,100			(7,100	)		—		—
		Net cash provided by (used in) financing activities		99,105			(25,074	)		(7,706	)		—		66,325
Net Decrease in Cash and Cash Equivalents				—			(5,445	)		(687	)		—		(6,132	)
Cash and Cash Equivalents, beginning of year				—			11,167			3,915			—		15,082
Cash and Cash Equivalents, end of year			$	—		$	5,722		$	3,228		$	—	$	8,950

15.   Subsequent Event (unaudited)

        On May 10, 2004, the Company commenced a cash tender offer and consent solicitation (the "Offer") for any and all of its 13.0% Subordinated Notes. In connection with the Offer, the Company solicited consents to certain proposed amendments to eliminate substantially all of the restrictive covenants in the indenture governing the 13.0% Subordinated Notes and certain events of default. Additionally, Concentra Holding extended the maturity of its $55.0 million bridge loan from March 31, 2005 to March 31, 2007.

        As of May 24, 2004 the Company had received tenders and related consents from holders of approximately 80% of its outstanding 13.0% Subordinated Notes pursuant to the terms of and subject to the conditions set forth in the Offer dated May 10, 2004. The Company received the consents

F-48

necessary to approve the proposed amendments to the indenture governing the 13.0% Subordinated Notes.

        On June 8, 2004, the Company completed a series of transactions that included issuing $155.0 million aggregate principal amount of 9¹/8% Senior Subordinated Notes ("9¹/8% Subordinated Notes") due 2012. The 9¹/8% Subordinated Notes were priced at 98.613% of par to yield 9.375% to maturity. In addition, the Company completed an amendment to the New Credit Facility under which the Company borrowed an additional $70.0 million of term debt. The additional $70.0 million in term loans bears the same covenants and maturity dates as established in the New Credit Facility. The Company used the net proceeds of the debt offering and additional term debt borrowings together with cash on hand to: (1) redeem $114.9 million principal amount of its 13.0% Subordinated Notes tendered in connection with the Offer and pay $4.7 million of related accrued interest and $9.8 million of call premiums and consent payments, (2) declare a dividend of $97.3 million to the Company's parent corporation, Concentra Inc., $96.0 million of which was paid to Concentra Inc.'s stockholders and $1.3 million of which will be paid on a deferred basis to the holder's of Concentra Inc.'s deferred share units, and (3) pay $9.8 million of associated fees, expenses and compensatory costs. In connection with these financing transactions, the Company will record approximately $14.3 million of debt extinguishment costs in the second quarter of 2004 for: (1) the write-off of approximately $2.0 million of existing deferred financing fees on the redeemed 13.0% Subordinated Notes, (2) $9.8 million of call premiums and consent payments on the redeemed 13.0% Subordinated Notes and (3) $2.5 million of compensatory costs.

        In connection with the amendment of the New Credit Facility, the Company has placed $29.4 million into escrow for the purpose of funding the $27.6 principal amount and the $1.8 million call premium payments necessary to redeem the untendered portion of its 13.0% Subordinated Notes in August 2004. In connection with these financing transactions, the Company will record approximately $2.3 million of debt extinguishment costs in the third quarter of 2004 for: (1) the write-off of approximately $0.5 of remaining deferred financing fees on the 13.0% Subordinated Notes and (2) $1.8 million of call premium payments.

F-49

Supplemental Schedule

CONCENTRA OPERATING CORPORATION
Valuation and Qualifying Accounts
For the Years Ended December 31, 2003, 2002 and 2001
(in thousands)

		Beginning Balance		Charged To Income		Acquisitions		Net Deductions From Reserves		Ending Balance
Bad Debt Allowances
	2001	$	7,856	$	12,684	$	2,190	$	13,397	$	9,333
	2002		9,333		15,925		787		12,784		13,261
	2003		13,261		12,203		301		4,989		20,776
Contractual Allowances
	2001	$	17,037	$	35,941	$	3,351	$	35,954	$	20,375
	2002		20,375		53,737		305		45,505		28,912
	2003		28,912		64,408		1,978		69,917		25,381

Unusual charge breakout by major category was as follows:

		Professional Fees			Facility Consolidations			Personnel Related			Other			Total
Balance, December 31, 2000		$	103		$	1,679		$	53		$	1,990		$	3,825
2001 Provision:
	Fourth Quarter 2001 Accrual		716			4,115			1,892			—			6,723
2001 Usage:
	First Quarter 1998 Charge		—			(51	)		—			(70	)		(121	)
	Fourth Quarter 1998 Charge		—			(388	)		—			(567	)		(955	)
	Third Quarter 1999 Charge		(45	)		(375	)		—			(33	)		(453	)
	Fourth Quarter 2001 Accrual		(688	)		(226	)		(136	)		—			(1,050	)
Total 2001 Usage			(733	)		(1,040	)		(136	)		(670	)		(2,579	)
Balance, December 31, 2001			86			4,754			1,809			1,320			7,969
2002 Provision:
	Fourth Quarter 2002 Accrual		304			100			50			—			454
2002 Usage:
	First Quarter 1998 Charge		—			(27	)		—			—			(27	)
	First Quarter 1998 Charge—Change in Estimates		(23	)		(83	)		—			—			(106	)
	Fourth Quarter 1998 Charge		—			(284	)		—			—			(284	)
	Fourth Quarter 1998 Charge—Change in Estimates		—			(221	)		(53	)		(1,226	)		(1,500	)
	Third Quarter 1999 Charge		—			(147	)		—			—			(147	)
	Third Quarter 1999 Charge—Change in Estimates		(5	)		(64	)		—			(71	)		(140	)
	Fourth Quarter 2001 Accrual		(183	)		(2,715	)		(1,402	)		—			(4,300	)
	Fourth Quarter 2001 Accrual—Change in Estimates		155			156			310			—			621
	Fourth Quarter 2002 Accrual		(304	)		—			—			—			(304	)
Total 2002 Usage			(360	)		(3,385	)		(1,145	)		(1,297	)		(6,187	)
Balance, December 31, 2002			30			1,469			714			23			2,236
2003 Usage:
	Fourth Quarter 1998 Charge		—			(25	)		—			—			(25	)
	Third Quarter 1999 Charge		(30	)		—			—			—			(30	)
	Fourth Quarter 2001 Accrual		—			(474	)		(418	)		(99	)		(991	)
	Fourth Quarter 2001 Accrual—Change in Estimates		—			(99	)		—			99			—
	Fourth Quarter 2002 Accrual		—			(13	)		(117	)		(20	)		(150	)
Total 2003 Usage			(30	)		(611	)		(535	)		(20	)		(1,196	)
Balance, December 31, 2003		$	—		$	858		$	179		$	3		$	1,040

F-50

Concentra Operating Corporation

Consolidated Financial Statements as of
March 31, 2004 and December 31, 2003 and for the
Three Months Ended March 31, 2004 and 2003

F-51

CONCENTRA OPERATING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

			March 31, 2004			December 31, 2003
			(Unaudited)
ASSETS
Current assets:
	Cash and cash equivalents		$	33,130		$	42,621
	Accounts receivable, net			180,201			170,444
	Prepaid expenses and other current assets			32,821			40,084
		Total current assets		246,152			253,149
Property and equipment, net				115,165			120,101
Goodwill and other intangible assets, net				483,007			483,773
Other assets				18,089			17,969
		Total assets	$	862,413		$	874,992
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
	Revolving credit facility		$	—		$	—
	Current portion of long-term debt			3,380			4,841
	Accounts payable and accrued expenses			107,232			130,881
		Total current liabilities		110,612			135,722
	Long-term debt, net			653,600			654,393
	Deferred income taxes and other liabilities			45,638			40,867
		Total liabilities		809,850			830,982
Stockholder's equity:
	Common stock			—			—
	Paid-in capital			140,936			140,659
	Retained deficit			(88,373	)		(96,649	)
		Total stockholder's equity		52,563			44,010
		Total liabilities and stockholder's equity	$	862,413		$	874,992

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

F-52

CONCENTRA OPERATING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands)

				Three Months Ended March 31,
				2004		2003
Revenue:
	Health Services			$	134,257	$	118,521
	Network Services				73,013		61,730
	Care Management Services				64,623		71,900
		Total revenue			271,893		252,151
Cost of Services:
	Health Services				111,493		101,373
	Network Services				41,552		34,767
	Care Management Services				57,128		63,666
		Total cost of services			210,173		199,806
			Total gross profit		61,720		52,345
General and administrative expenses					32,038		28,538
Amortization of intangibles					850		1,035
			Operating income		28,832		22,772
Interest expense, net					13,919		14,544
Gain on change in fair value of hedging arrangements					—		(2,187	)
Other, net					821		647
			Income before income taxes		14,092		9,768
Provision for income taxes					5,919		2,895
			Net income	$	8,173	$	6,873

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

F-53

CONCENTRA OPERATING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)

				Three Months Ended March 31,
				2004			2003
Operating Activities:
	Net income			$	8,173		$	6,873
	Adjustments to reconcile net income to net cash used in operating activities:
		Depreciation of property and equipment			10,328			11,194
		Amortization of intangibles			850			1,035
		Gain on change in fair value of hedging arrangements			—			(2,187	)
		Write-off of fixed assets			109			(258	)
	Changes in assets and liabilities, net of acquired assets and liabilities:
		Accounts receivable, net			(9,757	)		(7,012	)
		Prepaid expenses and other assets			7,198			(2,741	)
		Accounts payable and accrued expenses			(18,563	)		(7,552	)
			Net cash used in operating activities		(1,662	)		(648	)
Investing Activities:
	Purchases of property, equipment and other assets				(5,332	)		(7,154	)
			Net cash used in investing activities		(5,332	)		(7,154	)
Financing Activities:
	Borrowings (payments) under revolving credit facilities, net				—			—
	Repayments of debt				(2,360	)		(2,490	)
	Distributions to minority interests				(132	)		(1,114	)
	Payment of deferred financing costs				(55	)		—
	Contribution from issuance of common stock by parent				50			242
	Proceeds from the issuance of debt				—			1,500
			Net cash used in financing activities		(2,497	)		(1,862	)
Net Decrease in Cash and Cash Equivalents					(9,491	)		(9,664	)
Cash and Cash Equivalents, beginning of period					42,621			19,002
Cash and Cash Equivalents, end of period				$	33,130		$	9,338
Supplemental Disclosure of Cash Flow Information:
	Interest paid, net			$	22,198		$	18,240
	Income taxes paid, net			$	639		$	594
Noncash Investing and Financing Activities:
	Capital lease obligations			$	153		$	1,355

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

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CONCENTRA OPERATING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The accompanying unaudited consolidated financial statements have been prepared by Concentra Operating Corporation (the "Company" or "Concentra Operating") pursuant to the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments (all of which are of a normal, recurring nature) which, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented. Results for interim periods should not be considered indicative of results for a full year. These consolidated financial statements do not include all disclosures associated with the annual consolidated financial statements and, accordingly, should be read in conjunction with the attached Management's Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and footnotes for the year ended December 31, 2003, included in the Company's 2003 Form 10-K, where certain terms have been defined. Earnings per share has not been reported for all periods presented, as Concentra Operating is a wholly-owned subsidiary of Concentra Inc. ("Concentra Holding") and has no publicly held shares.

(1)   Stock Based Compensation Plans

        Concentra Holding issues stock options to the Company's employees and outside directors. The Company accounts for these plans under Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25"), under which no compensation cost has been recognized related to stock option grants when the exercise price is equal to the market price on the date of grant.

        The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.

        For purposes of disclosures pursuant to Statement of Financial Accounting Standards No. ("SFAS") 123, Accounting for Stock-Based Compensation ("SFAS 123"), as amended by SFAS 148, Accounting for Stock-Based Compensation—Transition and Disclosure ("SFAS 148"), the estimated fair value of options is amortized to expense over the options' vesting period. Had compensation cost for these plans been determined consistent with SFAS 123, the Company's net income would have been decreased to the following supplemental pro forma net income amounts (in thousands):

		Three Months Ended March 31,
		2004			2003
Net income:
	As reported	$	8,173		$	6,873
	Deduct: Incremental stock-based employee compensation expense determined under the fair value method for all awards, net of related tax effects		(668	)		(1,112	)
	Supplemental pro forma	$	7,505		$	5,761

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        The fair value of each option granted is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions used:

	Three Months Ended March 31,
	2004	2003
Risk-free interest rates	—	2.8	%
Expected volatility	—	19.0	%
Expected dividend yield	—	—
Expected weighted average life of options in years	—	5.0

        No options were granted during the first quarter of 2004. During April 2004, Concentra Holding granted 300,000 shares of restricted common stock under the 1999 Stock Plan that were valued at approximately $4.3 million based upon the market value of the shares at the time of issuance. The restricted stock grants have an exercisable period of ten years from the date of grant and vest upon the earlier of the achievement of certain operating performance levels or seven years following the date of the grant.

(2)   Recent Accounting Pronouncements

        In April 2003, the Financial Accounting Standards Board (the "FASB") issued SFAS 149, Amendment of Statement of 133 on Derivative Instruments and Hedging Activities ("SFAS 149"). SFAS 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS 133, Accounting for Derivative Instruments and Hedging Activities. SFAS 149 is generally effective for contracts entered into or modified after June 30, 2003 and did not have an impact on the Company's financial statements.

        In May 2003, the FASB issued SFAS 150, Accounting for Certain Instruments with Characteristics of Both Liability and Equity ("SFAS 150"). SFAS 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS 150 requires that an issuer classify a financial instrument that is within its scope, which may have previously been reported as equity, as a liability. This statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. SFAS 150 did not have any financial impact on the Company's financial statements.

        In December 2003, FASB issued a revised Interpretation No. 46, Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51 ("FIN 46R"), replacing the original interpretation issued in January 2003. FIN 46R requires certain entities to be consolidated by enterprises that lack majority voting interest when equity investors of those entities have insignificant capital at risk or they lack voting rights, the obligation to absorb expected losses, or the right to received expected returns. Entities identified with these characteristics are called variable interest entities and the interests that enterprises have in these entities are called variable interests. These interests can derive from certain guarantees, leases, loans or other arrangements that result in risks and rewards that are disproportionate to the voting interests in the entities. The provisions of FIN 46R must be immediately applied for variable interest entities created after January 31, 2003 and for variable interests in entities commonly referred to as "special purpose entities." For all other variable interest entities,

F-56

implementation was required by March 31, 2004. The Company does not have any variable interest entities.

(3)   Goodwill and Other Intangible Assets

        The net carrying value of goodwill and other intangible assets is comprised of the following (in thousands):

		March 31, 2004			December 31, 2003
Amortized intangible assets, gross:
	Customer contracts	$	6,190		$	6,190
	Covenants not to compete		4,305			4,305
	Customer lists		3,420			3,420
	Servicing contracts		3,293			3,293
	Licensing and royalty agreements		285			285
			17,493			17,493
Accumulated amortization of amortized intangible assets:
	Customer contracts		(3,737	)		(3,342	)
	Covenants not to compete		(2,930	)		(2,628	)
	Customer lists		(3,186	)		(3,141	)
	Servicing contracts		(796	)		(713	)
	Licensing and royalty agreements		(255	)		(229	)
			(10,904	)		(10,053	)
Amortized intangible assets, net			6,589			7,440
Non-amortized intangible assets:
	Goodwill		476,264			476,179
	Trademarks		154			154
		$	483,007		$	483,773

        The change in the net carrying amount of amortized intangible assets is due to amortization. The net increase in goodwill is primarily related to acquisitions.

        The net carrying value of goodwill by operating segment is as follows (in thousands):

	March 31, 2004		December 31, 2003
Health Services	$	245,288	$	245,203
Network Services		184,902		184,902
Care Management Services		46,074		46,074
	$	476,264	$	476,179

        Amortization expense for intangible assets with finite lives was $0.9 million and $1.0 million for the three months ended March 31, 2004 and 2003, respectively. Estimated amortization expense on

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intangible assets with finite lives for the five succeeding fiscal years ending December 31 is as follows (in thousands):

2004	$	3,269
2005		2,031
2006		483
2007		394
2008		329

        SFAS 142, Goodwill and Other Intangible Assets ("SFAS 142"), requires the Company to test all existing goodwill and indefinite life intangibles for impairment on a reporting unit basis. A reporting unit is the operating segment unless, at businesses one level below that operating segment (the component level), discrete financial information is prepared and regularly reviewed by management, and the businesses are not otherwise aggregated due to having certain common characteristics, in which case such component is the reporting unit. The Company uses a fair value approach to test goodwill and indefinite life intangibles for impairment. The Company recognizes an impairment charge for the amount, if any, by which the carrying amount of goodwill and indefinite life intangibles exceeds its fair value. The Company established fair values using projected cash flows. When available and as appropriate, the Company used comparative market multiples to corroborate projected cash flow results.

        The Company completed its annual impairment test of goodwill in the third quarter of 2003 and did not record an impairment charge upon completion of this review. However, the fair value of Care Management Services exceeded its carrying amount by approximately 22% for this impairment test, due primarily to this reporting unit's recent performance trends. Although current financial forecasts and operating trends indicate that no impairment is required at March 31, 2004, a non-cash goodwill impairment charge to income may be incurred for this reporting unit in a future period if there is a modest decrease in future earnings.

(4)   Revolving Credit Facility and Long-Term Debt

        The Company's long-term debt as of March 31, 2004, and December 31, 2003, consisted of the following (in thousands):

		March 31, 2004			December 31, 2003
Term loan due 2009		$	332,487		$	333,325
91/2% senior subordinated notes due 2010, net			181,846			181,918
13.0% senior subordinated notes due 2009			142,500			142,500
Other			147			1,491
			656,980			659,234
	Less: Current maturities		(3,380	)		(4,841	)
Long-term debt, net		$	653,600		$	654,393

        The Company had no revolving credit borrowings at March 31, 2004 and December 31, 2003, respectively. As of March 31, 2004, and December 31, 2003, accrued interest was $6.7 million and $15.6 million, respectively.

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        The Company has a credit agreement (the "Credit Facility") with a consortium of banks, consisting of a $335.0 million term loan facility (the "Term Loan") and a $100.0 million revolving loan facility (the "Revolving Credit Facility"). Borrowings under the Revolving Credit Facility and Term Loan bear interest, at the Company's option, at either (1) the Alternate Base Rate ("ABR"), as defined, plus a margin initially equal to 2.25% for the loans under the Revolving Credit Facility and 2.75% for the Term Loan or (2) the reserve-adjusted Eurodollar rate plus a margin initially equal to 3.25% for the loans under the Revolving Credit Facility and 3.75% for the Term Loan. The margins for borrowings under the Revolving Credit Facility will be subject to reduction based on changes in the Company's leverage ratios and certain other performance criteria. The Term Loan matures on June 30, 2009, and requires quarterly principal payments of $0.8 million through June 30, 2008, $47.7 million for each of the following two quarters, $95.5 million on March 31, 2009 and any remaining balance due on June 30, 2009. The Revolving Credit Facility provides for borrowing up to $100.0 million and matures on August 13, 2008.

        The Credit Facility contains certain financial compliance ratio tests. A failure to comply with these and other financial compliance ratios could cause an event of default under the Credit Facility that could result in an acceleration of the related indebtedness before the terms of that indebtedness otherwise require the Company to pay that indebtedness. Such an acceleration would also constitute an event of default under the indentures relating to the Company's 9¹/2% senior subordinated notes (the "9¹/2% Subordinated Notes") and 13.0% senior subordinated notes (the "13.0% Subordinated Notes") and could also result in an acceleration of the 9¹/2% Subordinated Notes and the 13.0% Subordinated Notes before the indentures otherwise require the Company to pay the notes. The Credit Facility also contains prepayment requirements that would occur based on certain net asset sales outside the ordinary course of business by the Company, from the proceeds of specified debt and equity issuances by the Company and if the Company has excess cash flow, as defined in the agreement. The Company was not required to make prepayments under these provisions in the first quarter of 2003 or 2004. However, management anticipates that the Company may meet these requirements in future periods, based upon its financial projections.

        The 9¹/2% Subordinated Notes are general unsecured indebtedness with semi-annual interest payments due on February 15 and August 15 commencing on February 15, 2004. These notes mature on August 15, 2010. At any time prior to August 15, 2006, the Company can redeem, with proceeds from new equity, up to 35% of the aggregate principal amount of the 9¹/2% Subordinated Notes at a redemption price of 109.5% of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date. Prior to August 15, 2007, the Company may redeem all, but not less than all, of the 9¹/2% Subordinated Notes at a redemption price of 100.0% of the principal amount of the notes plus the applicable premium, as defined, and accrued and unpaid interest to the redemption date. The Company can also redeem all or part of the 9¹/2% Subordinated Notes on or after August 15, 2007 at 104.8% of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date, with the redemption premium decreasing annually to 100.0% of the principal amount on August 15, 2009. Upon a change of control, as defined, each holder of the 9¹/2% Subordinated Notes may require the Company to repurchase all or a portion of that holder's notes at a purchase price of 101.0% of the aggregate principal amount of notes repurchased, plus accrued and unpaid interest.

        The 13.0% Subordinated Notes are general unsecured indebtedness with semi-annual interest payments due on February 15 and August 15 commencing on February 15, 2000. The Company can redeem the remaining $142.5 million principal balance of the 13.0% Subordinated Notes on or after

F-59

August 15, 2004 at 106.5% of the principal amount with the redemption premium decreasing annually to 100.0% of the principal amount on August 15, 2008.

        The Credit Facility, the 9¹/2% Subordinated Notes and the 13.0% Subordinated Notes are guaranteed on a joint and several basis by each and every current wholly-owned subsidiary, the results of which are consolidated in the results of the Company. These guarantees are full and unconditional. The Company has certain subsidiaries that are not wholly-owned and do not guarantee the 9¹/2% Subordinated Notes or the 13.0% Subordinated Notes. For financial information on guarantor and non-guarantor subsidiaries, see "Note 9. Condensed Consolidating Financial Information."

        The Credit Facility, the 9¹/2% Subordinated Notes and the 13.0% Subordinated Notes contain certain customary covenants, including, without limitation, restrictions on the incurrence of indebtedness, the sale of assets, certain mergers and acquisitions, the payment of dividends on the Company's capital stock, the repurchase or redemption of capital stock, transactions with affiliates, investments, cross default provisions with other indebtedness of Concentra Operating and Concentra Holding, capital expenditures and changes in control of the Company. Under the Credit Facility, the Company is also required to satisfy certain financial covenant ratio tests including leverage ratios, interest coverage ratios and fixed charge coverage ratios. The Company was in compliance with its covenants, including its financial covenant ratio tests, for the first quarter of 2004. These ratio tests become more restrictive for future quarters through the fourth quarter of 2008. The Company's ability to be in compliance with these more restrictive ratios will be dependent on its ability to increase its cash flows over current levels. The Company believes it will be in compliance with the covenants for the next twelve months.

        The fair value of the Company's borrowings under the Credit Facility was $337.5 million and $323.3 million, as of March 31, 2004 and December 31, 2003, respectively. The fair value of the Company's 9¹/2% Subordinated Notes was $201.8 million and $196.5 million at March 31, 2004 and December 31, 2003, respectively. The fair value of the Company's 13.0% Subordinated Notes was $156.8 million and $158.9 million at March 31, 2004 and December 31, 2003, respectively. The fair values of the financial instruments were determined utilizing available market information. The use of different market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts.

(5)   Subsequent Events

        On May 10, 2004, the Company commenced a cash tender offer and consent solicitation (the "Offer") for any and all of its 13.0% Subordinated Notes. In connection with the Offer, the Company solicited consents to certain proposed amendments to eliminate substantially all of the restrictive covenants in the indenture governing the 13.0% Subordinated Notes and certain events of default. Additionally, Concentra Holding extended the maturity of its $55.0 million bridge loan from March 31, 2005 to March 31, 2007.

        As of May 24, 2004 the Company had received tenders and related consents from holders of approximately 80% of its outstanding 13.0% Subordinated Notes pursuant to the terms of and subject to the conditions set forth in the Offer dated May 10, 2004. The Company received the consents necessary to approve the proposed amendments to the indenture governing the 13.0% Subordinated Notes.

F-60

        On June 8, 2004, the Company completed a series of transactions that included issuing $155.0 million aggregate principal amount of 9¹/8% Senior Subordinated Notes ("9¹/8% Subordinated Notes") due 2012. The 9¹/8% Subordinated Notes were priced at 98.613% of par to yield 9.375% to maturity. In addition, the Company completed an amendment to the Credit Facility under which the Company borrowed an additional $70.0 million of term debt. The additional $70.0 million in term loans bears the same covenants and maturity dates as established in the Credit Facility. The Company used the net proceeds of the debt offering and additional term debt borrowings together with cash on hand to: (1) redeem $114.9 million principal amount of its 13.0% Subordinated Notes tendered in connection with the Offer and pay $4.7 million of related accrued interest and $9.8 million of call premiums and consent payments, (2) declare a dividend of $97.3 million to the Company's parent corporation, Concentra Inc., $96.0 million of which was paid to Concentra Inc.'s stockholders and $1.3 million of which will be paid on a deferred basis to the holder's of Concentra Inc.'s deferred share units, and (3) pay $9.8 million of associated fees, expenses and compensatory costs. In connection with these financing transactions, the Company will record approximately $14.3 million of debt extinguishment costs in the second quarter of 2004 for: (1) the write-off of approximately $2.0 million of existing deferred financing fees on the redeemed 13.0% Subordinated Notes, (2) $9.8 million of call premiums and consent payments on the redeemed 13.0% Subordinated Notes and (3) $2.5 million of compensatory costs.

        In connection with the amendment of the Credit Facility, the Company has placed $29.4 million into escrow for the purpose of funding the $27.6 principal amount and the $1.8 million call premium payments necessary to redeem the untendered portion of its 13.0% Subordinated Notes in August 2004. In connection with these financing transactions, the Company will record approximately $2.3 million of debt extinguishment costs in the third quarter of 2004 for: (1) the write-off of approximately $0.5 of remaining deferred financing fees on the 13.0% Subordinated Notes and (2) $1.8 million of call premium payments.

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(6)   Unusual Charge Reserves

        During the three months ended March 31, 2004, the Company paid approximately $0.1 million related to the unusual charges that occurred in the fourth quarter of 1998 and fourth quarter of 2001. At March 31, 2004, approximately $1.0 million of the unusual cost accrual remained for facility obligations with terms expiring through 2006, costs related to personnel reductions and other unusual charges. The Company anticipates that the majority of this liability will be paid over the next 12 months.

(7)   Changes in Stockholder's Equity

        In addition to the effects on Stockholder's Equity from the Company's 2004 results of operations that decreased the retained deficit, the Company's paid-in capital increased in 2003 on a year to date basis primarily due to $0.2 million of tax benefits from Concentra Holding.

(8)   Segment Information

        Operating segments represent components of the Company's business that are evaluated regularly by key management in assessing performance and resource allocation. The Company's comprehensive services are organized into the following segments: Health Services, Network Services and Care Management Services.

        Health Services provides specialized injury and occupational healthcare services to employers through its centers. Health Services delivers primary and rehabilitative care, including the diagnosis, treatment and management of work-related injuries and illnesses. Health Services also provides non-injury, employment-related health services, including physical examinations, pre-placement substance abuse testing, job-specific return to work evaluations and other related programs. To meet the requirements of large employers whose workforce extends beyond the geographic coverage available to the Company's centers, this segment has also developed a network of select occupational healthcare providers that use the Company's proprietary technology to benchmark treatment methodologies and outcomes achieved. Health Services, and the joint ventures Health Services controls, own all the operating assets of the occupational healthcare centers, including leasehold interests and medical equipment.

        The Network Services segment reflects those businesses that involve the review and repricing of provider bills. For these services, the Company is primarily compensated based on the degree to which the Company achieves savings for its clients, as well as on a fee per bill or claims basis. This segment includes our specialized preferred provider organization, provider bill repricing and review, out-of-network bill review and first report of injury services.

        Care Management Services reflects the Company's professional services aimed at curtailing the cost of workers' compensation and auto insurance claims through field case management, telephonic case management, independent medical examinations and utilization management. These services also concentrate on monitoring the timing and appropriateness of medical care.

        Revenue from individual customers, revenue between business segments and revenue, operating profit and identifiable assets of foreign operations are not significant.

F-62

        The Company's unaudited financial data on a segment basis was as follows (in thousands):

		Three Months Ended March 31,
		2004			2003
Revenue:
	Health Services	$	134,257		$	118,521
	Network Services		73,013			61,730
	Care Management Services		64,623			71,900
			271,893			252,151
Gross profit:
	Health Services		22,764			17,148
	Network Services		31,461			26,963
	Care Management Services		7,495			8,234
			61,720			52,345
Operating income (loss):
	Health Services		14,767			10,166
	Network Services		20,848			17,563
	Care Management Services		66			1,827
	Corporate general and administrative expenses		(6,849	)		(6,784	)
			28,832			22,772
Interest expense, net			13,919			14,544
Gain on change in fair value of hedging arrangements			—			(2,187	)
Other, net			821			647
Income before income taxes			14,092			9,768
Provision for income taxes			5,919			2,895
Net income		$	8,173		$	6,873

(9)   Condensed Consolidating Financial Information

        As discussed in "Note 5, Revolving Credit Facility and Long-Term Debt," the 9¹/2% Subordinated Notes, the 13.0% Subordinated Notes and the Credit Facility are unconditionally guaranteed by each and every current wholly-owned subsidiary. Additionally, the Credit Facility is secured by a pledge of stock and assets of each and every wholly-owned subsidiary. The Company has certain subsidiaries that are not wholly-owned and do not guarantee the 9¹/2% Subordinated Notes, the 13.0% Subordinated Notes or the Credit Facility. Presented below are condensed consolidating balance sheets as of December 31, 2003, the condensed consolidating statements of operations for the three months ended March 31, 2004 and 2003, and the condensed consolidating statements of cash flow for the three months ended March 31, 2004 and 2003 of Concentra Operating (Parent and Issuer), guarantor subsidiaries (Guarantor Subsidiaries) and the subsidiaries that are not guarantors (Non-Guarantor Subsidiaries).

        Investments in subsidiaries are accounted for using the equity method of accounting. The financial information for the Guarantor and Non-Guarantor subsidiaries are each presented on a combined

F-63

basis. The elimination entries primarily eliminate investments in subsidiaries and intercompany balances and transactions. Intercompany management fees of $1.2 million and $1.1 million are included in general and administrative expenses of the Non-Guarantor Subsidiaries for the three months ended March 31, 2004 and 2003, respectively. These amounts are reflected as a reduction of general and administrative expenses for the Guarantor Subsidiaries. Separate financial statements for the Guarantor and Non-Guarantor Subsidiaries are not presented because management believes such financial statements would not be meaningful to investors. All information in the tables below is presented in thousands.

F-64

Condensed Consolidating Balance Sheets:

			As of March 31, 2004
			Parent		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Current assets:
	Cash and cash equivalents		$	—	$	23,717		$	9,413		$	—		$	33,130
	Accounts receivable, net			—		166,123			14,078			—			180,201
	Prepaid expenses and other current assets			1,302		30,497			1,022			—			32,821
		Total current assets		1,302		220,337			24,513			—			246,152
Investment in subsidiaries				802,388		33,622			—			(836,010	)		—
Property and equipment, net				—		108,225			6,940			—			115,165
Goodwill and other intangible assets, net				—		458,500			24,507			—			483,007
Other assets				37,469		(19,889	)		509			—			18,089
		Total assets	$	841,159	$	800,795		$	56,469		$	(836,010	)	$	862,413
Current liabilities:
	Revolving credit facility		$	—	$	—		$	—		$	—		$	—
	Current portion of long-term debt			3,350		30			—			—			3,380
	Accounts payable and accrued expenses			7,233		95,427			4,572			—			107,232
		Total current liabilities		10,583		95,457			4,572			—			110,612
Long-term debt, net				653,483		117			—			—			653,600
Deferred income taxes and other liabilities				—		27,183			—			18,455			45,638
Intercompany				124,530		(124,350	)		(180	)		—			—
		Total liabilities		788,596		(1,593	)		4,392			18,455			809,850
Stockholder's equity				52,563		802,388			52,077			(854,465	)		52,563
		Total liabilities and stockholder's equity	$	841,159	$	800,795		$	56,469		$	(836,010	)	$	862,413

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			As of December 31, 2003
			Parent		Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Current assets:
	Cash and cash equivalents		$	—	$	35,454		$	7,167		$	—		$	42,621
	Accounts receivable, net			—		157,187			13,257			—			170,444
	Prepaid expenses and other current assets			8,759		30,018			1,307			—			40,084
		Total current assets		8,759		222,659			21,731			—			253,149
Investment in subsidiaries				785,089		32,681			—			(817,770	)		—
Property and equipment, net				—		112,880			7,221			—			120,101
Goodwill and other intangible assets, net				—		459,266			24,507			—			483,773
Other assets				42,153		(24,273	)		89			—			17,969
		Total assets	$	836,001	$	803,213		$	53,548		$	(817,770	)	$	874,992
Current liabilities:
	Revolving credit facility		$	—	$	—		$	—		$	—		$	—
	Current portion of long-term debt			3,350		1,491			—			—			4,841
	Accounts payable and accrued expenses			22,280		103,376			5,225			—			130,881
		Total current liabilities		25,630		104,867			5,225			—			135,722
Long-term debt, net				654,393		—			—			—			654,393
Deferred income taxes and other liabilities				—		22,405			—			18,462			40,867
Intercompany				111,968		(109,148	)		(2,820	)		—			—
		Total liabilities		791,991		18,124			2,405			18,462			830,982
Stockholder's equity				44,010		785,089			51,143			(836,232	)		44,010
		Total liabilities and stockholder's equity	$	836,001	$	803,213		$	53,548		$	(817,770	)	$	874,992

F-66

Condensed Consolidating Statements of Operations:

		Three Months Ended March 31, 2004
		Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Total revenue		$	—		$	250,289		$	23,988		$	(2,384	)	$	271,893
Total cost of services			—			193,122			19,435			(2,384	)		210,173
	Total gross profit		—			57,167			4,553			—			61,720
General and administrative expenses			103			30,424			1,511			—			32,038
Amortization of intangibles			—			850			—			—			850
	Operating income (loss)		(103	)		25,893			3,042			—			28,832
Interest expense, net			13,937			(8	)		(10	)		—			13,919
Other, net			—			821			—			—			821
	Income (loss) before income taxes		(14,040	)		25,080			3,052			—			14,092
Provision (benefit) for income taxes			(4,914	)		10,833			—			—			5,919
	Income (loss) before equity earnings		(9,126	)		14,247			3,052			—			8,173
Equity earnings in subsidiaries			(17,299	)		—			—			17,299			—
	Net income (loss)	$	8,173		$	14,247		$	3,052		$	(17,299	)	$	8,173

		Three Months Ended March 31, 2003
		Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
Total revenue		$	—		$	235,482	$	18,743		$	(2,074	)	$	252,151
Total cost of services			—			186,785		15,095			(2,074	)		199,806
	Total gross profit		—			48,697		3,648			—			52,345
General and administrative expenses			114			26,980		1,444			—			28,538
Amortization of intangibles			—			1,032		3			—			1,035
	Operating income (loss)		(114	)		20,685		2,201			—			22,772
Interest expense, net			14,455			93		(4	)		—			14,544
Gain on change in fair value of hedging arrangements			(2,187	)		—		—			—			(2,187	)
Other, net			—			647		—			—			647
	Income (loss) before income taxes		(12,382	)		19,945		2,205			—			9,768
Provision (benefit) for income taxes			(4,334	)		7,229		—			—			2,895
	Income (loss) before equity earnings		(8,048	)		12,716		2,205			—			6,873
Equity earnings in subsidiaries			(14,921	)		—		—			14,921			—
	Net income (loss)	$	6,873		$	12,716	$	2,205		$	(14,921	)	$	6,873

F-67

Condensed Consolidating Statement of Cash Flows:

			Three Months Ended March 31, 2004
			Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Total
Operating Activities:
	Net cash provided by (used in) operating activities		$	(11,719	)	$	8,088		$	1,969		$	—	$	(1,662	)
Investing Activities:
	Purchases of property, equipment and other assets			—			(5,219	)		(113	)		—		(5,332	)
		Net cash used in investing activities		—			(5,219	)		(113	)		—		(5,332	)
Financing Activities:
	Repayments of debt			(838	)		(1,522	)		—			—		(2,360	)
	Distributions to minority interests			—			(132	)		—			—		(132	)
	Payment of deferred financing costs			(55	)		—			—			—		(55	)
	Contribution from issuance of common stock by parent			50			—			—			—		50
	Intercompany, net			12,562			(15,158	)		2,596			—		—
	Receipt (payment) of equity distributions			—			2,206			(2,206	)		—		—
		Net cash provided by (used in) financing activities		11,719			(14,606	)		390			—		(2,497	)
Net Increase (Decrease) in Cash and Cash Equivalents				—			(11,737	)		2,246			—		(9,491	)
Cash and Cash Equivalents, beginning of period				—			35,454			7,167			—		42,621
Cash and Cash Equivalents, end of period			$	—		$	23,717		$	9,413		$	—	$	33,130

F-68

			Three Months Ended March 31, 2003
			Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Total
Operating Activities:
	Net cash provided by (used in) operating activities		$	(12,964	)	$	9,893		$	2,423		$	—	$	(648	)
Investing Activities:
	Purchases of property, equipment and other assets			—			(7,112	)		(42	)		—		(7,154	)
		Net cash used in investing activities		—			(7,112	)		(42	)		—		(7,154	)
Financing Activities:
	Repayments of debt			(873	)		(1,617	)		—			—		(2,490	)
	Distributions to minority interests			—			(1,114	)		—			—		(1,114	)
	Contribution from issuance of common stock by parent			242			—			—			—		242
	Proceeds from the issuance of debt			—			1,500			—			—		1,500
	Intercompany, net			13,595			(15,315	)		1,720			—		—
	Receipt (payment) of equity distributions			—			3,192			(3,192	)		—		—
		Net cash provided by (used in) financing activities		12,964			(13,354	)		(1,472	)		—		(1,862	)
Net Increase (Decrease) in Cash and Cash Equivalents				—			(10,573	)		909			—		(9,664	)
Cash and Cash Equivalents, beginning of period				—			13,060			5,942			—		19,002
Cash and Cash Equivalents, end of period			$	—		$	2,487		$	6,851		$	—	$	9,338

F-69

CONCENTRA OPERATING CORPORATION
COMPUTATION OF RATIOS
Ratio of Pro Forma Earnings to Fixed Charges
(Unaudited)

		Year Ended December 31, 2003		Twelve Months Ended March 31, 2004
		(dollars in thousands)
Pro Forma Earnings:
Income (loss) before income taxes		$	51,396	$	55,200
Less: Equity in earnings of unconsolidated subsidiaries net of related distributions			2,805		3,029
Fixed charges			69,504		69,563
	Total pro forma earnings(1)	$	123,705	$	127,792
Pro Forma Fixed Charges:
Interest expense		$	54,739	$	54,709
Interest portion of rent expense			14,765		14,854
	Total fixed charges	$	69,504	$	69,563
Ratio of pro forma earnings to fixed charges			1.8x		1.8x

(1)

For purposes of determining the ratio of earnings to fixed charges, earnings include income from continuing operations before income taxes adjusted for fixed charges and equity in earnings of unconsolidated subsidiaries and related distributions. Fixed charges consist of interest on debt, including amortization of debt issuance costs, and 33% of rent expenses, which we estimate as the interest component of such rentals.

F-70

CONCENTRA OPERATING CORPORATION
COMPUTATION OF RATIOS
Ratio of Earnings to Fixed Charges
(Unaudited)

		Years Ended December 31,														Three Months Ended March 31,
		1999			2000			2001			2002			2003		2003		2004
		(dollars in thousands)
Earnings:
Income (loss) before income taxes		$	(17,512	)	$	(2,360	)	$	(14,650	)	$	1,026		$	49,503	$	9,768	$	14,092
Less: Equity in earnings of unconsolidated subsidiaries net of related distributions			(474	)		(1,210	)		(3,015	)		(850	)		2,805		593		817
Fixed charges			46,796			80,160			80,175			79,266			71,397		18,330		17,868
	Total earnings(1)	$	28,810		$	76,590		$	62,510		$	79,442		$	123,705	$	28,691	$	32,777
Fixed Charges:
Interest expense		$	35,779		$	68,932		$	67,250		$	63,981		$	56,632	$	14,588	$	14,038
Interest portion of rent expense			11,017			11,228			12,925			15,285			14,765		3,742		3,830
	Total fixed charges	$	46,796		$	80,160		$	80,175		$	79,266		$	71,397	$	18,330	$	17,868
Ratio of earnings to fixed charges			0.6x			1.0x			0.8x			1.0x			1.7x		1.6x		1.8x

(1)

For purposes of determining the ratio of earnings to fixed charges, earnings include income from continuing operations before income taxes adjusted for fixed charges and equity in earnings of unconsolidated subsidiaries and related distributions. Fixed charges consist of interest on debt, including amortization of debt issuance costs, and 33% of expenses, which we estimate as the interest component of such rentals.

F-71

ANNEX A

        LETTER OF TRANSMITTAL
TO TENDER
OUTSTANDING 9¹/8% SENIOR SUBORDINATED NOTES DUE 2012
OF
CONCENTRA OPERATING CORPORATION
PURSUANT TO THE EXCHANGE OFFER AND PROSPECTUS DATED                        , 2004

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                  , 2004 (THE "EXPIRATION DATE"), UNLESS THE EXCHANGE OFFER IS EXTENDED BY THE COMPANY.

        The Exchange Agent for the Exchange Offer is:

        The Bank of New York
Corporate Trust Operations Reorganization Unit
101 Barclay Street 7 East
New York, New York 10286
Attention: Corporate Trust Operations Reorganization Unit

IF YOU WISH TO EXCHANGE CURRENTLY OUTSTANDING 9¹/8% SENIOR SUBORDINATED NOTES DUE 2012 (THE "OLD NOTES") FOR AN EQUAL AGGREGATE PRINCIPAL AMOUNT OF NEW 9¹/8% SENIOR SUBORDINATED NOTES DUE 2012 PURSUANT TO THE EXCHANGE OFFER, YOU MUST VALIDLY TENDER (AND NOT WITHDRAW) OLD NOTES TO THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE BY CAUSING AN AGENT'S MESSAGE TO BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO SUCH TIME.

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The undersigned hereby acknowledges receipt and review of the Prospectus, dated            , 2004 (the "Prospectus"), of Concentra Operating Corporation, a Nevada corporation (the "Company"), and this Letter of Transmittal (the "Letter of Transmittal"), which together describe the Company's offer to exchange (the "Exchange Offer") its 9¹/8% Senior Subordinated Notes due 2012 (the "New Notes") that have been registered under the Securities Act of 1933, as amended (the "Securities Act"), for a like principal amount of its issued and outstanding 9¹/8% Senior Subordinated Notes due 2012 (the "Old Notes"). Capitalized terms used but not defined herein have the respective meaning given to them in this Prospectus.

The Company reserves the right, at any time or from time to time, to extend the Exchange Offer at its discretion, in which event the term "Expiration Date" shall mean the latest date to which the Exchange Offer is extended. The Company shall notify the Exchange Agent and each registered holder of the Old Notes of any extension by oral or written notice prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date.

This Letter of Transmittal is to be used by holders of the Old Notes. Tender of Old Notes is to be made according to the Automated Tender Offer Program ("ATOP") of the Depository Trust Company ("DTC") pursuant to the procedures set forth in the prospectus under the caption "The Exchange Offer—Procedures for Tendering." DTC participants that are accepting the Exchange Offer must transmit their acceptance to DTC, which will verify the acceptance and execute a book-entry delivery to the Exchange Agent's DTC account. DTC will then send a computer generated message known as an "agent's message" to the exchange agent for its acceptance. For you to validly tender your Old notes in the Exchange Offer, the Exchange Agent must receive prior to the Expiration Date, an agent's message under the ATOP procedures that confirms that:

-

DTC has received your instructions to tender your Old Notes; and



-

You agree to be bound by the terms of this Letter of Transmittal

BY USING THE ATOP PROCEDURES TO TENDER OLD NOTES, YOU WILL NOT BE REQUIRED TO DELIVER THIS LETTER OF TRANSMITTAL TO THE EXCHANGE AGENT. HOWEVER, YOU WILL BE BOUND BY ITS TERMS, AND YOU WILL BE DEEMED TO HAVE MADE THE ACKNOWLEDGMENTS AND THE REPRESENTATIONS AND WARRANTIES IT CONTAINS, JUST AS IF YOU HAD SIGNED IT.

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PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

Ladies and Gentlemen:

        1.     By tendering Old Notes in the Exchange Offer, you acknowledge receipt of the Prospectus and this Letter of Transmittal.

        2.     By tendering Old Notes in the Exchange Offer, you represent and warrant that you have full authority to tender the Old Notes described above and will, upon request, execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the tender of Old Notes.

        3.     The tender of the Old Notes pursuant to all of the procedures set forth in the Prospectus will constitute an agreement between you and the Company as to the terms and conditions set forth in the Prospectus.

        4.     The Exchange Offer is being made in reliance upon interpretations contained in no-action letters issued to third parties by the staff of the Securities and Exchange Commission (the "SEC"), including Exxon Capital Holdings Corp., SEC No-Action Letter (available April 13, 1989), Morgan Stanley & Co., Inc., SEC No-Action Letter (available June 5, 1991) and Shearman & Sterling, SEC No-Action Letter (available July 2, 1993), that the New Notes issued in exchange for the Old Notes pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by holders thereof (other than a broker-dealer who purchased Old Notes exchanged for such New Notes directly from the Company to resell pursuant to Rule 144A or any other available exemption under the Securities Act of 1933, as amended (the "Securities Act") and any such holder that is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act, provided that such New Notes are acquired in the ordinary course of such holders' business and such holders are not participating in, and have no arrangement with any person to participate in, the distribution of such New Notes.

        5.     By tendering Old Notes in the Exchange Offer, you represent and warrant that:

a.

the New Notes acquired pursuant to the Exchange Offer are being obtained in the ordinary course of your business, whether or not you are the holder;



b.

neither you nor any such other person is engaging in or intends to engage in a distribution of such New Notes;



c.

neither you nor any such other person has an arrangement or understanding with any person to participate in the distribution of such New Notes; and



d.

neither the holder nor any such other person is an "affiliate," as such term is defined under Rule 405 promulgated under the Securities Act, of the Company.

        6.     You may, if you are unable to make all of the representations and warranties contained in Item 5 above and as otherwise permitted in the Registration Rights Agreement (as defined below), elect to have your Old Notes registered in the shelf registration statement described in the Registration Rights Agreement, dated as of May 25, 2004 (the "Registration Rights Agreement"), by and among the Company, the Guarantors (as defined therein) and the Initial Purchasers (as defined therein). Such election may be made only by notifying the Company in writing at 5080 Spectrum Drive, Suite 400 West, Addison, Texas 75001, Attention: General Counsel. By making such election, you agree, as a holder of Old Notes participating in a shelf registration, to indemnify and hold harmless the Company, each of the directors of the Company, each of the officers of the Company who signs such shelf registration statement, each person who controls the Company within the meaning of either the Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and each other holder of Old Notes, from and against any and all losses, claims, damages or liabilities caused by any untrue statement or alleged untrue statement of a material fact contained in any shelf registration statement or prospectus, or in any supplement thereto or amendment thereof, or caused by the

A-3

omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; but only with respect to information relating to the undersigned furnished in writing by or on behalf of the undersigned expressly for use in a shelf registration statement, a prospectus or any amendments or supplements thereto. Any such indemnification shall be governed by the terms and subject to the conditions set forth in the Registration Rights Agreement, including, without limitation, the provisions regarding notice, retention of counsel, contribution and payment of expenses set forth therein. The above summary of the indemnification provision of the Registration Rights Agreement is not intended to be exhaustive and is qualified in its entirety by the Registration Rights Agreement.

        7.     If you are a broker-dealer that will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market-making activities or other trading activities, you acknowledge, by tendering Old Notes in the Exchange Offer, that you will deliver a prospectus in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus, you will not be deemed to admit that you are an "underwriter" within the meaning of the Securities Act. If you are a broker-dealer and Old Notes held for your own account were not acquired as a result of market-making or other trading activities, such Old Notes cannot be exchanged pursuant to the Exchange Offer.

        8.     Any of your obligations hereunder shall be binding upon your successors, assigns, executors, administrators, trustees in bankruptcy and legal and personal representatives of the undersigned.

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        INSTRUCTIONS

        FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

        1.     Book-Entry confirmations.

Any confirmation of a book-entry transfer to the Exchange Agent's account at DTC of Old Notes tendered by book-entry transfer (a "Book-Entry Confirmation"), as well as an agent's message, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth herein prior to 5:00 P.M., New York City time, on the Expiration Date.

        2.     Partial Tenders.

Tenders of Old Notes will be accepted only in integral multiples of $1,000. The entire principal amount of Old Notes delivered to the exchange agent will be deemed to have been tendered unless otherwise communicated to the exchange agent. If the entire principal amount of all Old Notes is not tendered, then Old Notes for the principal amount of Old Notes not tendered and notes issued in exchange for any Old Notes accepted will be delivered to the holder via the facilities of DTC promptly after the Old Notes are accepted for exchange.

        3.     Validity of Tenders.

All questions as to the validity, form, eligibility (including time of receipt), acceptance, and withdrawal of tendered Old Notes will be determined by the Company, in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any or all tenders not in proper form or the acceptance for exchange of which may, in the opinion of counsel for the Company, be unlawful. The Company also reserves the absolute right to waive any of the conditions of the Exchange Offer or any defect or irregularity in the tender of any Old Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions on this Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notes must be cured within such time as the Company shall determine,. Although the Company intends to notify holders of defects or irregularities with respect to tenders of Old Notes, neither the Company, the Exchange Agent, nor any other person shall be under any duty to give such notification of any defects or irregularities in tenders or incur any liability for failure to give such notification. Tenders of Old Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Old Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering holders via the facilities of DTC, as soon as practicable following the Expiration Date.

        4.     Waiver of Conditions.

The Company reserves the absolute right to waive, in whole or part, up to the expiration of the exchange offer any of the conditions of the Exchange Offer set forth in the Prospectus or in this Letter of Transmittal.

        5.     No Conditional Tender.

No alternative, conditional, irregular or contingent tender of Old Notes will be accepted.

        6.     Request for Assistance or Additional Copies.

Requests for assistance or for additional copies of the Prospectus or this Letter of Transmittal may be directed to the Exchange Agent at the address or telephone number set forth on the cover page of this Letter of Transmittal. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer.

        7.     Withdrawal.

A-5

Tenders may be withdrawn only pursuant to the limited withdrawal rights set forth in the Prospectus under the caption "Exchange Offer—Withdrawal of Tenders."

        8.     No Guarantee of Late Delivery.

There is no procedure for guarantee of late delivery in the Exchange Offer.

IMPORTANT: BY USING THE ATOP PROCEDURES TO TENDER OLD NOTES, YOU WILL NOT BE REQUIRED TO DELIVER THIS LETTER OF TRANSMITTAL TO THE EXCHANGE AGENT. HOWEVER, YOU WILL BE BOUND BY ITS TERMS, AND YOU WILL BE DEEMED TO HAVE MADE THE ACKNOWLEDGEMENTS AND THE REPRESENTATIONS AND WARRANTIES IT CONTAINS, JUST AS IF YOU HAD SIGNED IT.

A-6

Concentra Operating
Corporation

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Directors and Officers

        Section 78.7502 (1) of the Nevada Revised Statutes (the "NRS") provides that a corporation may 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, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a 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 in connection with the action, suit or proceeding if he acted in good faith and in a manner he 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 conduct was unlawful.

        Section 78.7502 (2) of the NRS provides that a corporation may similarly indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a 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 amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which the action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

        Section 78.7502(3) of the NRS provides that to the extent a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (1) and (2), or in defense of any claim, issue or matter therein, the corporation shall indemnify such person against expenses, including attorneys' fees, actually and reasonably incurred by him or her in connection with the defense.

        Section 78.751(1) of the NRS provides that any discretionary indemnification under Section 78.7502, unless ordered by a court or advanced pursuant to subsection 2 of Section 78.751, may be made by the corporation only as authorized in the specific case upon determination that indemnification of such director, officer, employee or agent is proper in the circumstances. The determination must be made (a) by the stockholders; (b) by the board of directors by majority vote of quorum consisting of directors who were not parties to the action, suit or proceeding; (c) if a majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding so orders, by independent legal counsel in a written opinion; or (d) if a quorum consisting of directors who were not parties to the action, suit or proceeding cannot be obtained, by independent legal counsel in a written opinion.

        Section 78.751(2) of the NRS provides that the articles of incorporation, bylaws or an agreement made by the corporation may provide that the expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by

II-1

or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the corporation. Such provision does not affect any rights to advancement of expenses to which corporate personnel other than directors or officers may be entitled under any contract or otherwise by law.

        Section 78.751(3) of the NRS provides that the indemnification pursuant to Section 78.7502 of the NRS and advancement of expenses authorized in, or ordered by, a court pursuant to Section 78.751, (a) does not exclude any other rights to which a person seeking indemnification or advancement of expenses may be entitled under the articles of incorporation or any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, for either an action in his official capacity or an action in another capacity while holding his office, except that indemnification, unless ordered by a court pursuant to Section 78.7502 of the NRS or for the advancement of expenses made pursuant to Section 78.751 (2), may not be made to or on behalf of any director or officer if a final adjudication establishes that his acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and was material to the cause of action; and (b) continues for a person who has ceased to be a director, officer, employee or agent and inures to the benefit of the heirs, executors and administrators of such a person.

        Section 78.752 of the NRS provides that a Nevada corporation may purchase and maintain insurance or make other financial arrangements on behalf of any person who acted in any of the capacities set forth above for any liability asserted against such person for any liability asserted against him or her and liability and expenses incurred by him or her in any such capacity or arising out of his or her status as such, whether or not the corporation has the authority to indemnify him or her against such liabilities and expenses.

        The by-laws of Concentra Operating Corporation, a Nevada corporation ("Concentra Operating") provide that every person serving as its director or officer and every such director or officer serving at the request of Concentra Operating as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise shall be indemnified by Concentra Operating in accordance with and to the fullest extent permitted by law for the defense of, in connection with, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.

        Concentra Operating's parent, Concentra Inc., a Delaware corporation ("Concentra Inc."), has entered into indemnity agreements with the directors and officers of Concentra Inc. and its wholly owned, direct and indirect, subsidiaries, including the Registrants. Pursuant to such agreements, Concentra Inc. will, to the extent permitted by applicable law, indemnify such persons against all expenses, judgments, fines and penalties incurred in connection with the defense or settlement of any actions brought against them by reason of the fact that they were directors or officers of such Registrant or assumed certain responsibilities at the direction of such Registrant. In addition, Concentra Inc. has purchased and maintains insurance to protect persons entitled to indemnification pursuant to its by-laws or the applicable law against expenses, judgments, fines and amounts paid in settlement, to the fullest extent permitted by the Delaware General Corporation Law. Such insurance covers the directors and officers of the Registrants.

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Item 21. Exhibits and Financial Statement Schedules

(a) Exhibits

Exhibit Number		Description
1.1*	—	Purchase Agreement, dated May 25, 2004, by and among Concentra Operating, each of the subsidiary guarantors listed on the signature pages thereto, Credit Suisse First Boston LLC and Citigroup Global Markets Inc.
3.1	—	Articles of Incorporation of Concentra Operating (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
3.2	—	Amended and Restated By-Laws of Concentra Operating, as further amended June 20, 2002 (incorporated by reference to Exhibit 3.1 to Concentra Operating's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002).
4.1	—	Indenture dated as of August 17, 1999, by and between Concentra Operating, the Guarantors named therein and United States Trust Company of New York, as Trustee, relating to the 13% Senior Subordinated Notes due 2009 of Concentra Operating (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
4.2	—	Supplemental Indenture dated as of November 5, 2001, among Concentra Operating, HealthNetwork Systems LLC, Medical Network Systems LLC, and The Bank of New York, as Trustee, relating to the 13% Senior Subordinated Notes due 2009 of Concentra Operating (incorporated by reference to Exhibit 4.2 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
4.3	—	Supplemental Indenture dated as of November 20, 2001, among Concentra Operating, National Healthcare Resources, Inc., and The Bank of New York, as Trustee, relating to the 13% Senior Subordinated Notes due 2009 of Concentra Operating (incorporated by reference to Exhibit 4.3 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
4.4*	—	Supplemental Indenture dated as of May 24, 2004, among Concentra Operating and The Bank of New York, as Trustee, relating to the 13% Senior Subordinated Notes due 2009 of Concentra Operating.
4.5	—	Indenture dated as of August 13, 2003, by and among Concentra Operating, The Bank of New York, as Trustee, and the guarantors named therein relating to Concentra Operating's 91/2% Senior Subordinated Notes due 2010 (incorporated by reference to Exhibit 4.7 to Concentra Operating's Registration Statement on Form S-4 filed with the SEC on August 28, 2003).
4.6	—	First Supplemental Indenture dated as of November 20, 2003, between Concentra Operating, and The Bank of New York, as Trustee, relating to the 91/2% Senior Subordinated Notes due 2010 of Concentra Operating (incorporated by reference to Exhibit 4.6 to Concentra Operating's Registration Statement on Form S-4, initially filed on December 8, 2003).
4.7*	—	Indenture dated as of June 8, 2004, by and among Concentra Operating, The Bank of New York as Trustee, and the guarantors named therein relating to Concentra Operating's 91/8% Senior Subordinated Notes due 2012.

II-3

4.8	—	Warrant Agreement dated as of August 17, 1999, by and among Concentra Inc. and the several persons named on Schedule I thereto (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
4.9	—	Amendment No. 1 to Warrant Agreement dated as of November 1, 2001, by and among Concentra Inc. and the several warrant holders that are signatories thereto (incorporated by reference to Exhibit 4.6 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
4.10	—	Form of 13% Senior Subordinated Notes due 2009 of Concentra Operating (included as an exhibit to Exhibit 4.1).
4.11	—	Form of Warrant to acquire Concentra Inc. common stock (included as an exhibit to Exhibit 4.8).
4.12*	—	Registration Rights Agreement dated as of May 25, 2004, by and among Concentra Operating, each of the subsidiary guarantors listed on the signature pages thereto, Credit Suisse First Boston LLC and Citigroup Global Markets Inc.
4.13	—	Warrant Agreement dated as of November 1, 2001, by and among Concentra Inc. and the several persons that are signatories thereto (incorporated by reference to Exhibit 4.11 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
4.14	—	Form of Warrant to acquire Concentra Inc. common stock (included as an exhibit to Exhibit 4.13).
4.15	—	Registration Rights Agreement dated as of November 17, 2003 by and among Concentra Operating, each of the subsidiary guarantors listed on the signature pages thereto, Credit Suisse First Boston LLC and Citigroup Global Markets Inc. (incorporated by reference to Exhibit 4.11 to Concentra Operating's Registration Statement on Form S-4, initially filed on December 8, 2003).
4.16	—	Registration Rights Agreement dated as of August 17, 1999 by and among Concentra Inc. and the persons named in Schedules I and II thereto (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
4.17	—	Amendment No. 1 to Registration Rights Agreement dated as of November 1, 2001, by and among Concentra Inc. and the persons named in Schedules I and II thereto (incorporated by reference to Exhibit 4.14 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
4.18	—	Amendment No. 2 to Registration Rights Agreement dated as of November 5, 2001, by and among Concentra Inc. and the several persons that are signatories thereto (incorporated by reference to Exhibit 4.15 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
4.19	—	Amendment No. 3 to Registration Rights Agreement dated as of November 20, 2002, by and among Concentra Inc. and the several persons that are signatories thereto (incorporated by reference to Exhibit 4.17 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2002).
4.20	—	Amendment No. 4 to Registration Rights Agreement dated as of December 1, 2002, by and among Concentra Inc. and the several persons that are signatories thereto (incorporated by reference to Exhibit 4.18 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2002).

II-4

4.21	—	Bridge Loan Agreement dated as of June 25, 2002 by and among Concentra Inc., the Lenders that are parties thereto, and Citicorp North America, Inc. (incorporated by reference to Exhibit 10.1 to Concentra Operating's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002).
4.22	—	Amendment No. 1 to Bridge Loan Agreement dated as of October 23, 2002, by and among Concentra Inc., the Lenders that are parties thereto, and Citicorp North America, Inc. (incorporated by reference to Exhibit 4.20 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2002).
4.23	—	Amendment No. 2 to Bridge Loan Agreement dated as of November 14, 2002, by and among Concentra Inc., the Lenders that are parties thereto, and Citicorp North America, Inc. (incorporated by reference to Exhibit 4.21 to Concentra Operating's Registration Statement on Form S-4 filed with the SEC on August 28, 2003).
4.24	—	Amendment No. 3 to Bridge Loan Agreement dated as of May 10, 2004, by and among Concentra Inc., the Lenders that are parties thereto, and Citicorp North America, Inc. (incorporated by reference to Exhibit 10.1 to Concentra Operating's Current Report on Form 8-K filed on May 12, 2004).
4.25*	—	Forms of Global Notes for 91/8% Senior Subordinated Notes of Concentra Operating (included as exhibits to Exhibit 4.7 hereto).
4.26	—	Forms of Global Notes for 91/2% Senior Subordinated Notes of Concentra Operating (incorporated by reference to exhibits to Exhibit 4.7 to Concentra Operating's Registration Statement on Form S-4 filed with the SEC on August 28, 2003).
5.1*	—	Opinion of Vinson & Elkins L.L.P.
10.1	—	Securities Purchase Agreement dated November 1, 2001, by and among Concentra Inc. and the several purchasers named on Schedule I thereto, relating to the issuance and sale of 2,266,546 shares of Concentra Inc. common stock and warrants to purchase 771,277 shares of Concentra Inc. common stock (incorporated by reference to Exhibit 10.2 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
10.2	—	Credit Agreement dated as of August 13, 2003, by and among Concentra Inc., Concentra Operating, the several lenders from time to time parties thereto, JPMorgan Chase Bank, as Administrative Agent, Deutsche Banc Alex Brown, as Documentation Agent, and Credit Suisse First Boston and Citicorp North America, Inc., as Co-Syndication Agents (incorporated by reference to Concentra Operating's Registration Statement on Form S-4 filed with the SEC on December 8, 2003).
10.3	—	Amendment to Credit Agreement dated as of November 17, 2003, by and among Concentra Inc., Concentra Operating, the several lenders from time to time parties thereto, JPMorgan Chase Bank, as Administrative Agent, Deutsche Banc Alex Brown, as Documentation Agent, and Credit Suisse First Boston and Citicorp North America, Inc., as Co-Syndication Agents (incorporated by reference to Exhibit 10.3 to Concentra Operating's Registration Statement on Form S-4 filed with the SEC on August 28, 2003).
10.4*	—	Second Amendment to Credit Agreement dated as of June 8, 2004, by and among Concentra Inc., Concentra Operating, the several lenders from time to time parties thereto, JPMorgan Chase Bank, as Administrative Agent, Deutsche Banc Alex Brown, as Documentation Agent, and Credit Suisse First Boston and Citicorp North America, Inc., as Co-Syndication Agents.

II-5

10.5*	—	Escrow Agreement dated as of June 8, 2004 by and between Concentra Operating and JPMorgan Chase Bank.
10.6	—	Concentra Managed Care, Inc. 1999 Stock Option and Restricted Stock Purchase Plan (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
10.7	—	Concentra Managed Care, Inc. 1999 Stock Option and Restricted Stock Purchase Plan, as amended through June 20, 2002 (incorporated by reference to Exhibit 10.3 to Concentra Operating's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002).
10.8	—	Concentra Managed Care, Inc. 1999 Stock Option and Restricted Stock Purchase Plan as Amended Through September 24, 2002 (incorporated by reference to Exhibit 10.1 to Concentra Operating's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002).
10.9	—	Concentra Managed Care, Inc. 1997 Long-Term Incentive Plan (incorporated by reference to Appendix G to the Joint Proxy Statement/Prospectus forming a part of Concentra Inc.'s Registration Statement on Form S-4 filed on July 31, 1997).
10.10	—	Employment Agreement dated as of August 17, 1999, between Concentra Inc. and James M. Greenwood (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
10.11	—	Employment Agreement dated as of August 17, 1999, between Concentra Inc. and Richard A. Parr II (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
10.12	—	Employment Agreement dated as of August 17, 1999, between Concentra Inc. and Daniel J. Thomas (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
10.13	—	Employment Agreement dated as of August 17, 1999, between Concentra Inc. and Thomas E. Kiraly (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
10.14	—	Employment Agreement dated as of August 5, 2002 between Concentra Inc. and Frederick C. Dunlap (incorporated by reference to Exhibit 10.4 to Concentra Operating's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001.)
10.15	—	Indemnification Agreement dated as of September 17, 1997, between Concentra Inc. and Daniel J. Thomas (identical agreements were executed as of September 17, 1997, between Concentra Inc. and each of Richard A. Parr II, James M. Greenwood, W. Tom Fogarty, Kenneth Loffredo, Paul B. Queally and John K. Carlyle) (incorporated by reference to Exhibit 10.17 to Concentra Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997).
10.16	—	Indemnification Agreement dated as of June 26, 2003 between Concentra Inc. and Daniel J. Thomas (identical agreements were executed as of June 26, 2003 between Concentra Inc. and each of the following: John K. Carlyle, Frederick C. Dunlap, Carlos A. Ferrer, James M. Greenwood, Thomas E. Kiraly, D. Scott Mackesy, Steven E. Nelson, Richard A. Parr, Paul B. Queally and Richard J. Sabolik) (incorporated by reference to Exhibit 10.1 to Concentra Operating's Quarterly Report on Form 10-Q for the quarter ended June 30, 2003).

II-6

10.17	—	Indemnification Agreement dated as of December 15, 2003, between Concentra Inc. and David A. George (incorporated by reference to Exhibit 10.15 to the Annual Report on Form 10-K of Concentra Operating for the year ended December 31, 2003).
10.18	—	Occupational Medicine Center Management and Consulting Agreement dated as of December 31, 1993, between Concentra Health Services, Inc. (formerly OccuCenters, Inc.) ("CHS") and Occupational Health Centers of Southwest, P.A., an Arizona professional association (incorporated by reference to Exhibit 10.7 to the Annual Report on Form 10-K of OccuSystems Inc., a Delaware corporation ("OccuSystems"), for the year ended December 31, 1995).
10.19	—	Occupational Medicine Center Management and Consulting Agreement dated as of December 31, 1993, between CHS and Occupational Health Centers of New Jersey, a New Jersey professional association (incorporated by reference to Exhibit 10.8 to OccuSystems' Registration Statement on Form S-1 filed on March 28, 1996).
10.20	—	Amended and Restated Occupational Medicine Center Management and Consulting Agreement dated as of July 30, 2003 between Concentra Health Services, Inc. and Occupational Health Centers of the Southwest, P.A. (incorporation by reference to Exhibit 10.2 to Concentra Operating's Quarterly Report on Form 10-Q for the quarter ended June 30, 2003).
10.21	—	Stockholders Agreement dated as of August 17, 1999, by and among Concentra Inc. and the several persons named in Schedules I and II thereto (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
10.22	—	Amendment No. 1 to Stockholders Agreement dated as of November 1, 2001, by and among Concentra Inc. and the several persons named in Schedules I and II thereto (incorporated by reference to Exhibit 10.26 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
10.23	—	Amendment No. 2 to Stockholders Agreement dated as of November 20, 2002, by and among Concentra Inc. and the several persons named in Schedules I and II thereto (incorporated by reference to Exhibit 10.30 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2002).
10.24	—	Amendment No. 3 to Stockholders Agreement dated as of December 1, 2002, by and among Concentra Inc. and the several persons named in Schedules I and II thereto (incorporated by reference to Exhibit 10.31 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2002).
10.25	—	Stockholders Agreement dated as of November 20, 2001, by and among Concentra Inc., Welsh, Carson, Anderson & Stowe VIII, L.P., certain holders of common stock and warrants to purchase common stock of Concentra Inc., certain stockholders of National Healthcare Resources, Inc., and Ferrer Freeman and Company, LLC, formerly known as Ferrer, Freeman, Thompson & Co., LLC (incorporated by reference to Exhibit 10.27 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).

II-7

10.26	—	Agreement and Plan of Reorganization dated August 29, 1997, by and among CRA Managed Care, Inc., OccuSystems, Inc., and Concentra Inc., formerly known as Concentra Managed Care, Inc. (incorporated by reference to Exhibit 2.1 to Concentra Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997).
10.27	—	Agreement and Plan of Merger dated February 24, 1998, by and among Concentra Inc. and Preferred Payment Systems, Inc. (incorporated by reference to Exhibit 2.2 to Concentra Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997).
10.28	—	Agreement and Plan of Merger dated March 2, 1999, by and between Yankee Acquisition Corp. and Concentra Inc. (incorporated by reference to Exhibit 2.1 to Concentra Inc.'s Current Report on Form 8-K filed on March 3,1999).
10.29	—	Amended and Restated Agreement and Plan of Merger dated March 24, 1999, by and between Yankee Acquisition Corp. and Concentra Inc. (incorporated by reference to Exhibit 2.1 to Concentra Inc.'s Current Report on Form 8-K filed on July 14, 1999).
10.30	—	Agreement and Plan of Merger dated as of November 2, 2001, by and among Concentra Inc., NHR Acquisition Company, Inc., and National Healthcare Resources, Inc. (incorporated by reference to Exhibit 2.5 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
10.31	—	Asset Purchase Agreement among Concentra Inc., Concentra Operating and Em3 Corporation dated as of December 1, 2002 (incorporated by reference to Exhibit 10.1 to Concentra Operating's Current Report on Form 8-K filed on December 13, 2002).
12.1*	—	Computation of Ratio of Earnings to Fixed Charges.
21.1*	—	Subsidiaries of Concentra Operating.
23.l*	—	Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1).
23.2*	—	Consent of Schreck Brignone (included in Annex A to Exhibit 5.1).
23.3*	—	Consent of McDermott, Will & Emery (included in Annex B to Exhibit 5.1).
23.4*	—	Consent of Richard A. Parr II (included in Annex C to Exhibit 5.1).
23.5*	—	Consent of PricewaterhouseCoopers LLP.
24.1*	—	Powers of Attorney (included on the signature pages of this Registration Statement).
25.1*	—	Statement of Eligibility (Form T-1) of The Bank of New York, as trustee.

*

Filed herewith

(b)   Financial Statement Schedules

        All financial statements, financial statement schedules and reports of independent registered public accounting firm are included in the Prospectus.

II-8

Item 22. Undertakings

        The undersigned registrants hereby undertake:

        (1)   To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

        (i)    to include any prospectus required by section 10(a)(3) of the Securities Act of 1933 (the "Securities Act");

        (ii)   To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually, or in the aggregate, represent a fundamental change in the information set forth in the registration statement;

        (iii)  To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

        (2)   That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and

        (3)   To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

        Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

        The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into this prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

        The undersigned registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in this registration statement when it became effective.

II-9

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Addison, State of Texas, on the 28th day of June, 2004.

CONCENTRA OPERATING CORPORATION
By:	/s/  DANIEL J. THOMAS Daniel J. Thomas Chief Executive Officer

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard A. Parr II and Thomas E. Kiraly and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-and post-effective amendments) to this Registration Statement and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/  DANIEL J. THOMAS Daniel J. Thomas	Director and Chief Executive Officer	June 28, 2004
/s/  THOMAS E. KIRALY Thomas E. Kiraly	Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)	June 28, 2004
/s/  PAUL B. QUEALLY	Chairman and Director	June 28, 2004
Paul B. Queally
/s/  JOHN K. CARLYLE John K. Carlyle	Director	June 28, 2004
/s/  CARLOS A. FERRER Carlos A. Ferrer	Director	June 28, 2004
/s/  DAVID A. GEORGE David A. George	Director	June 28, 2004
/s/  D. SCOTT MACKESY D. Scott Mackesy	Director	June 28, 2004
/s/  STEVEN E. NELSON Steven E. Nelson	Director	June 28, 2004
/s/  RICHARD J. SABOLIK Richard J. Sabolik	Director	June 28, 2004

II-10

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, each registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Addison, State of Texas, on the 28th day of June, 2004.

CONCENTRA HEALTH SERVICES, INC.
By:	/s/  RICHARD A. PARR II Name: Richard A. Parr II Title: Executive Vice President, General Counsel and Corporate Secretary

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard A. Parr II and Thomas E. Kiraly and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-and post-effective amendments) to this Registration Statement and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/  DANIEL J. THOMAS Daniel J. Thomas	Chairman of the Board and Director	June 28, 2004
/s/  W. KEITH NEWTON W. Keith Newton	President	June 28, 2004
/s/  THOMAS E. KIRALY Thomas E. Kiraly	Executive Vice President, Chief Financial Officer, Treasurer and Director (Principal Financial Officer and Principal Accounting Officer)	June 28, 2004

II-11

        Pursuant to the requirements of the Securities Act of 1933, each registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Addison, State of Texas, on the 28th day of June, 2004.

CONCENTRA LABORATORY, L.L.C.
By: Concentra Health Services, Inc., its sole member
By:	/s/  RICHARD A. PARR II Name: Richard A. Parr II Title: Executive Vice President, General Counsel and Corporate Secretary

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard A. Parr II and Thomas E. Kiraly and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-and post-effective amendments) to this Registration Statement and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/  W. KEITH NEWTON W. Keith Newton	President	June 28, 2004
/s/  THOMAS E. KIRALY Thomas E. Kiraly	Vice President and Treasurer (Principal Financial Officer and Principal Accounting Officer)	June 28, 2004

(The limited liability company is member-managed, and does not have any directors)

II-12

        Pursuant to the requirements of the Securities Act of 1933, each registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Addison, State of Texas, on the 28th day of June, 2004.

CONCENTRA PREFERRED SYSTEMS, INC.
By:	/s/  RICHARD A. PARR II Name: Richard A. Parr II Title: Executive Vice President, General Counsel and Corporate Secretary

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard A. Parr II and Thomas E. Kiraly and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-and post-effective amendments) to this Registration Statement and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/  DANIEL J. THOMAS Daniel J. Thomas	Chairman of the Board and Director	June 28, 2004
/s/  THOMAS BARTLETT Thomas Bartlett	President	June 28, 2004
/s/  THOMAS E. KIRALY Thomas E. Kiraly	Executive Vice President, Treasurer and Director (Principal Financial Officer and Principal Accounting Officer)	June 28, 2004

II-13

        Pursuant to the requirements of the Securities Act of 1933, each registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Addison, State of Texas, on the 28th day of June, 2004.

MEDICAL NETWORK SYSTEMS LLC
By: Concentra Preferred Systems, Inc., its sole member
By:	/s/  RICHARD A. PARR II Name: Richard A. Parr II Title: Executive Vice President, General Counsel and Corporate Secretary

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard A. Parr II and Thomas E. Kiraly and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-and post-effective amendments) to this Registration Statement and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/  RANA MENDICINO Rana Mendicino	President	June 28, 2004
/s/  THOMAS E. KIRALY Thomas E. Kiraly	Vice President and Treasurer (Principal Financial Officer and Principal Accounting Officer)	June 28, 2004

(The limited liability company is member-managed, and does not have any directors)

II-14

        Pursuant to the requirements of the Securities Act of 1933, each registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Addison, State of Texas, on the 28th day of June, 2004.

CONCENTRA INTEGRATED SERVICES, INC.
By:	/s/  RICHARD A. PARR II Name: Richard A. Parr II Title: Executive Vice President and Clerk

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard A. Parr II and Thomas E. Kiraly and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-and post-effective amendments) to this Registration Statement and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/  DANIEL J. THOMAS Daniel J. Thomas	Chairman of the Board and Director	June 28, 2004
/s/  FREDERICK C. DUNLAP Frederick C. Dunlap	President	June 28, 2004
/s/  THOMAS E. KIRALY Thomas E. Kiraly	Executive Vice President, Treasurer and Director (Principal Financial Officer and Principal Accounting Officer)	June 28, 2004

II-15

        Pursuant to the requirements of the Securities Act of 1933, each registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Addison, State of Texas, on the 28th day of June, 2004.

CISI BUSINESS CORPORATION CPS BUSINESS CORPORATION FHM BUSINESS CORPORATION
By:	/s/  RICHARD A. PARR II Name: Richard A. Parr II Title: Vice President and Corporate Secretary

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard A. Parr II and Thomas E. Kiraly and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-and post-effective amendments) to this Registration Statement and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/  DANIEL J. THOMAS Daniel J. Thomas	President and Director	June 28, 2004
/s/  THOMAS E. KIRALY Thomas E. Kiraly	Vice President, Treasurer and Director (Principal Financial Officer and Principal Accounting Officer)	June 28, 2004

II-16

        Pursuant to the requirements of the Securities Act of 1933, each registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Addison, State of Texas, on the 28th day of June, 2004.

CONCENTRA MANAGEMENT SERVICES, INC.
By:	/s/  RICHARD A. PARR II Name: Richard A. Parr II Title: Vice President and Corporate Secretary

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard A. Parr II and Thomas E. Kiraly and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-and post-effective amendments) to this Registration Statement and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/  DANIEL J. THOMAS Daniel J. Thomas	President and Director	June 28, 2004
/s/  THOMAS E. KIRALY Thomas E. Kiraly	Vice President, Treasurer and Director (Principal Financial Officer and Principal Accounting Officer)	June 28, 2004

II-17

        Pursuant to the requirements of the Securities Act of 1933, each registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Addison, State of Texas, on the 28th day of June, 2004.

FIRST NOTICE SYSTEMS, INC.
By:	/s/  RICHARD A. PARR II Name Richard A. Parr II Title: Vice President and Corporate Secretary

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard A. Parr II and Thomas E. Kiraly and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-and post-effective amendments) to this Registration Statement and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/  DANIEL J. THOMAS Daniel J. Thomas	Chairman of the Board and Director	June 28, 2004
/s/  WILL FULTON Will Fulton	President	June 28, 2004
/s/  THOMAS E. KIRALY Thomas E. Kiraly	Vice President, Treasurer and Director (Principal Financial Officer and Principal Accounting Officer)	June 28, 2004

II-18

        Pursuant to the requirements of the Securities Act of 1933, each registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Addison, State of Texas, on the 28th day of June, 2004.

FOCUS HEALTHCARE MANAGEMENT, INC.
By:	/s/  RICHARD A. PARR II Name: Richard A. Parr II Title: Vice President and Corporate Secretary

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard A. Parr II and Thomas E. Kiraly and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-and post-effective amendments) to this Registration Statement and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/  DANIEL J. THOMAS Daniel J. Thomas	Director	June 28, 2004
/s/  THOMAS COX Thomas Cox	President	June 28, 2004
/s/  THOMAS E. KIRALY Thomas E. Kiraly	Vice President, Treasurer and Director (Principal Financial Officer and Principal Accounting Officer)	June 28, 2004

II-19

        Pursuant to the requirements of the Securities Act of 1933, each registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Addison, State of Texas, on the 28th day of June, 2004.

CRA MANAGED CARE OF WASHINGTON, INC. CRA-MCO, INC.
By:	/s/  RICHARD A. PARR II Name: Richard A. Parr II Title: Executive Vice President and Corporate Secretary

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard A. Parr II and Thomas E. Kiraly and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-and post-effective amendments) to this Registration Statement and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/  DANIEL J. THOMAS Daniel J. Thomas	Chairman of the Board and Director	June 28, 2004
/s/  FREDERICK C. DUNLAP Frederick C. Dunlap	President	June 28, 2004
/s/  THOMAS E. KIRALY Thomas E. Kiraly	Executive Vice President, Treasurer and Director (Principal Financial Officer and Principal Accounting Officer)	June 28, 2004

II-20

        Pursuant to the requirements of the Securities Act of 1933, each registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Addison, State of Texas, on the 28th day of June, 2004.

HEALTHNETWORK SYSTEMS LLC
By:	/s/  RICHARD A. PARR II Name: Richard A. Parr II Title: Vice President, General Counsel and Corporate Secretary

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard A. Parr II and Thomas E. Kiraly and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-and post-effective amendments) to this Registration Statement and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/  DANIEL J. THOMAS Daniel J. Thomas	Chairman of the Board and Manager	June 28, 2004
/s/  THOMAS BARTLETT Thomas Bartlett	President	June 28, 2004
/s/  THOMAS E. KIRALY Thomas E. Kiraly	Vice President and Treasurer; Manager (Principal Financial Officer and Principal Accounting Officer)	June 28, 2004

II-21

        Pursuant to the requirements of the Securities Act of 1933, each registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Addison, State of Texas, on the 28th day of June, 2004.

NATIONAL HEALTHCARE RESOURCES, INC.
By:	/s/  RICHARD A. PARR II Name: Richard A. Parr II Title: Senior Vice President and Corporate Secretary

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard A. Parr II and Thomas E. Kiraly and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-and post-effective amendments) to this Registration Statement and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/  DANIEL J. THOMAS Daniel J. Thomas	Director	June 28, 2004
/s/  THOMAS COX Thomas Cox	President and Director	June 28, 2004
/s/  THOMAS E. KIRALY Thomas E. Kiraly	Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)	June 28, 2004

II-22

        Pursuant to the requirements of the Securities Act of 1933, each registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Addison, State of Texas, on the 28th day of June, 2004.

METRACOMP, INC.
By:	/s/  RICHARD A. PARR II Name: Richard A. Parr II Title: Vice President and Corporate Secretary

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard A. Parr II and Thomas E. Kiraly and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-and post-effective amendments) to this Registration Statement and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/  DANIEL J. THOMAS Daniel J. Thomas	Director	June 28, 2004
/s/  THOMAS COX Thomas Cox	President and Director	June 28, 2004
/s/  THOMAS E. KIRALY Thomas E. Kiraly	Vice President and Treasurer (Principal Financial Officer and Principal Accounting Officer)	June 28, 2004

II-23

        Pursuant to the requirements of the Securities Act of 1933, each registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Addison, State of Texas, on the 28th day of June, 2004.

OCCUCENTERS I, L.P.
By: Concentra Health Services, Inc., its general partner
By:	/s/  RICHARD A. PARR II Name: Richard A. Parr II Title: Executive Vice President, General Counsel and Corporate Secretary

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard A. Parr II and Thomas E. Kiraly and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-and post-effective amendments) to this Registration Statement and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/  DANIEL J. THOMAS Daniel J. Thomas	Chairman of the Board and Director of the General Partner	June 28, 2004
/s/  W. KEITH NEWTON W. Keith Newton	President of the General Partner	June 28, 2004
/s/  THOMAS E. KIRALY Thomas E. Kiraly	Executive Vice President, Chief Financial Officer, Treasurer and Director of the General Partner (Principal Financial Officer and Principal Accounting Officer)	June 28, 2004

II-24

        Pursuant to the requirements of the Securities Act of 1933, each registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Addison, State of Texas, on the 28th day of June, 2004.

OCI HOLDINGS, INC.
By:	/s/  GARY CHEDEKEL Gary Chedekel Corporate Secretary and Treasurer

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Richard A. Parr II and Thomas E. Kiraly and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including pre-and post-effective amendments) to this Registration Statement and any additional registration statement pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
/s/  THOMAS SEXTON Thomas Sexton	President and Director (Principal Financial Officer and Principal Accounting Officer)	June 28, 2004
/s/  GARY CHEDEKEL Gary Chedekel	Corporate Secretary, Treasurer and Director	June 28, 2004

II-25

EXHIBIT INDEX

Exhibit Number		Description
1.1*	—	Purchase Agreement, dated May 25, 2004, by and among Concentra Operating, each of the subsidiary guarantors listed on the signature pages thereto, Credit Suisse First Boston LLC and Citigroup Global Markets Inc.
3.1	—	Articles of Incorporation of Concentra Operating (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
3.2	—	Amended and Restated By-Laws of Concentra Operating, as further amended June 20, 2002 (incorporated by reference to Exhibit 3.1 to Concentra Operating's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002).
4.1	—	Indenture dated as of August 17, 1999, by and between Concentra Operating, the Guarantors named therein and United States Trust Company of New York, as Trustee, relating to the 13% Senior Subordinated Notes due 2009 of Concentra Operating (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
4.2	—	Supplemental Indenture dated as of November 5, 2001, among Concentra Operating, HealthNetwork Systems LLC, Medical Network Systems LLC, and The Bank of New York, as Trustee, relating to the 13% Senior Subordinated Notes due 2009 of Concentra Operating (incorporated by reference to Exhibit 4.2 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
4.3	—	Supplemental Indenture dated as of November 20, 2001, among Concentra Operating, National Healthcare Resources, Inc., and The Bank of New York, as Trustee, relating to the 13% Senior Subordinated Notes due 2009 of Concentra Operating (incorporated by reference to Exhibit 4.3 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
4.4*	—	Supplemental Indenture dated as of May 24, 2004, among Concentra Operating and The Bank of New York, as Trustee, relating to the 13% Senior Subordinated Notes due 2009 of Concentra Operating.
4.5	—	Indenture dated as of August 13, 2003, by and among Concentra Operating, The Bank of New York, as Trustee, and the guarantors named therein relating to Concentra Operating's 91/2% Senior Subordinated Notes due 2010 (incorporated by reference to Exhibit 4.7 to Concentra Operating's Registration Statement on Form S-4 filed with the SEC on August 28, 2003).
4.6	—	First Supplemental Indenture dated as of November 20, 2003, between Concentra Operating, and The Bank of New York, as Trustee, relating to the 91/2% Senior Subordinated Notes due 2010 of Concentra Operating (incorporated by reference to Exhibit 4.6 to Concentra Operating's Registration Statement on Form S-4, initially filed on December 8, 2003).
4.7*	—	Indenture dated as of June 8, 2004, by and among Concentra Operating, The Bank of New York as Trustee, and the guarantors named therein relating to Concentra Operating's 91/8% Senior Subordinated Notes due 2012.

II-26

4.8	—	Warrant Agreement dated as of August 17, 1999, by and among Concentra Inc. and the several persons named on Schedule I thereto (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
4.9	—	Amendment No. 1 to Warrant Agreement dated as of November 1, 2001, by and among Concentra Inc. and the several warrant holders that are signatories thereto (incorporated by reference to Exhibit 4.6 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
4.10	—	Form of 13% Senior Subordinated Notes due 2009 of Concentra Operating (included as an exhibit to Exhibit 4.1).
4.11	—	Form of Warrant to acquire Concentra Inc. common stock (included as an exhibit to Exhibit 4.8).
4.12*	—	Registration Rights Agreement dated as of May 25, 2004, by and among Concentra Operating, each of the subsidiary guarantors listed on the signature pages thereto, Credit Suisse First Boston LLC and Citigroup Global Markets Inc.
4.13	—	Warrant Agreement dated as of November 1, 2001, by and among Concentra Inc. and the several persons that are signatories thereto (incorporated by reference to Exhibit 4.11 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
4.14	—	Form of Warrant to acquire Concentra Inc. common stock (included as an exhibit to Exhibit 4.13).
4.15	—	Registration Rights Agreement dated as of November 17, 2003 by and among Concentra Operating, each of the subsidiary guarantors listed on the signature pages thereto, Credit Suisse First Boston LLC and Citigroup Global Markets Inc. (incorporated by reference to Exhibit 4.11 to Concentra Operating's Registration Statement on Form S-4, initially filed on December 8, 2003).
4.16	—	Registration Rights Agreement dated as of August 17, 1999 by and among Concentra Inc. and the persons named in Schedules I and II thereto (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
4.17	—	Amendment No. 1 to Registration Rights Agreement dated as of November 1, 2001, by and among Concentra Inc. and the persons named in Schedules I and II thereto (incorporated by reference to Exhibit 4.14 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
4.18	—	Amendment No. 2 to Registration Rights Agreement dated as of November 5, 2001, by and among Concentra Inc. and the several persons that are signatories thereto (incorporated by reference to Exhibit 4.15 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
4.19	—	Amendment No. 3 to Registration Rights Agreement dated as of November 20, 2002, by and among Concentra Inc. and the several persons that are signatories thereto (incorporated by reference to Exhibit 4.17 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2002).
4.20	—	Amendment No. 4 to Registration Rights Agreement dated as of December 1, 2002, by and among Concentra Inc. and the several persons that are signatories thereto (incorporated by reference to Exhibit 4.18 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2002).

II-27

4.21	—	Bridge Loan Agreement dated as of June 25, 2002 by and among Concentra Inc., the Lenders that are parties thereto, and Citicorp North America, Inc. (incorporated by reference to Exhibit 10.1 to Concentra Operating's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002).
4.22	—	Amendment No. 1 to Bridge Loan Agreement dated as of October 23, 2002, by and among Concentra Inc., the Lenders that are parties thereto, and Citicorp North America, Inc. (incorporated by reference to Exhibit 4.20 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2002).
4.23	—	Amendment No. 2 to Bridge Loan Agreement dated as of November 14, 2002, by and among Concentra Inc., the Lenders that are parties thereto, and Citicorp North America, Inc. (incorporated by reference to Exhibit 4.21 to Concentra Operating's Registration Statement on Form S-4 filed with the SEC on August 28, 2003).
4.24	—	Amendment No. 3 to Bridge Loan Agreement dated as of May 10, 2004, by and among Concentra Inc., the Lenders that are parties thereto, and Citicorp North America, Inc. (incorporated by reference to Exhibit 10.1 to Concentra Operating's Current Report on Form 8-K filed on May 12, 2004).
4.25*	—	Forms of Global Notes for 91/8% Senior Subordinated Notes of Concentra Operating (included as exhibits to Exhibit 4.7 hereto).
4.26	—	Forms of Global Notes for 91/2% Senior Subordinated Notes of Concentra Operating (incorporated by reference to exhibits to Exhibit 4.7 to Concentra Operating's Registration Statement on Form S-4 filed with the SEC on August 28, 2003).
5.1*	—	Opinion of Vinson & Elkins L.L.P.
10.1	—	Securities Purchase Agreement dated November 1, 2001, by and among Concentra Inc. and the several purchasers named on Schedule I thereto, relating to the issuance and sale of 2,266,546 shares of Concentra Inc. common stock and warrants to purchase 771,277 shares of Concentra Inc. common stock (incorporated by reference to Exhibit 10.2 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
10.2	—	Credit Agreement dated as of August 13, 2003, by and among Concentra Inc., Concentra Operating, the several lenders from time to time parties thereto, JPMorgan Chase Bank, as Administrative Agent, Deutsche Banc Alex Brown, as Documentation Agent, and Credit Suisse First Boston and Citicorp North America, Inc., as Co-Syndication Agents (incorporated by reference to Concentra Operating's Registration Statement on Form S-4 filed with the SEC on December 8, 2003).
10.3	—	Amendment to Credit Agreement dated as of November 17, 2003, by and among Concentra Inc., Concentra Operating, the several lenders from time to time parties thereto, JPMorgan Chase Bank, as Administrative Agent, Deutsche Banc Alex Brown, as Documentation Agent, and Credit Suisse First Boston and Citicorp North America, Inc., as Co-Syndication Agents (incorporated by reference to Exhibit 10.3 to Concentra Operating's Registration Statement on Form S-4 filed with the SEC on August 28, 2003).
10.4*	—	Second Amendment to Credit Agreement dated as of June 8, 2004, by and among Concentra Inc., Concentra Operating, the several lenders from time to time parties thereto, JPMorgan Chase Bank, as Administrative Agent, Deutsche Banc Alex Brown, as Documentation Agent, and Credit Suisse First Boston and Citicorp North America, Inc., as Co-Syndication Agents.

II-28

10.5*	—	Escrow Agreement dated as of June 8, 2004 by and between Concentra Operating and JPMorgan Chase Bank.
10.6	—	Concentra Managed Care, Inc. 1999 Stock Option and Restricted Stock Purchase Plan (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
10.7	—	Concentra Managed Care, Inc. 1999 Stock Option and Restricted Stock Purchase Plan, as amended through June 20, 2002 (incorporated by reference to Exhibit 10.3 to Concentra Operating's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002).
10.8	—	Concentra Managed Care, Inc. 1999 Stock Option and Restricted Stock Purchase Plan as Amended Through September 24, 2002 (incorporated by reference to Exhibit 10.1 to Concentra Operating's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002).
10.9	—	Concentra Managed Care, Inc. 1997 Long-Term Incentive Plan (incorporated by reference to Appendix G to the Joint Proxy Statement/Prospectus forming a part of Concentra Inc.'s Registration Statement on Form S-4 filed on July 31, 1997).
10.10	—	Employment Agreement dated as of August 17, 1999, between Concentra Inc. and James M. Greenwood (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
10.11	—	Employment Agreement dated as of August 17, 1999, between Concentra Inc. and Richard A. Parr II (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
10.12	—	Employment Agreement dated as of August 17, 1999, between Concentra Inc. and Daniel J. Thomas (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
10.13	—	Employment Agreement dated as of August 17, 1999, between Concentra Inc. and Thomas E. Kiraly (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
10.14	—	Employment Agreement dated as of August 5, 2002 between Concentra Inc. and Frederick C. Dunlap (incorporated by reference to Exhibit 10.4 to Concentra Operating's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001.)
10.15	—	Indemnification Agreement dated as of September 17, 1997, between Concentra Inc. and Daniel J. Thomas (identical agreements were executed as of September 17, 1997, between Concentra Inc. and each of Richard A. Parr II, James M. Greenwood, W. Tom Fogarty, Kenneth Loffredo, Paul B. Queally and John K. Carlyle) (incorporated by reference to Exhibit 10.17 to Concentra Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997).
10.16	—	Indemnification Agreement dated as of June 26, 2003 between Concentra Inc. and Daniel J. Thomas (identical agreements were executed as of June 26, 2003 between Concentra Inc. and each of the following: John K. Carlyle, Frederick C. Dunlap, Carlos A. Ferrer, James M. Greenwood, Thomas E. Kiraly, D. Scott Mackesy, Steven E. Nelson, Richard A. Parr, Paul B. Queally and Richard J. Sabolik) (incorporated by reference to Exhibit 10.1 to Concentra Operating's Quarterly Report on Form 10-Q for the quarter ended June 30, 2003).

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10.17	—	Indemnification Agreement dated as of December 15, 2003, between Concentra Inc. and David A. George (incorporated by reference to Exhibit 10.15 to the Annual Report on Form 10-K of Concentra Operating for the year ended December 31, 2003).
10.18	—	Occupational Medicine Center Management and Consulting Agreement dated as of December 31, 1993, between Concentra Health Services, Inc. (formerly OccuCenters, Inc.) ("CHS") and Occupational Health Centers of Southwest, P.A., an Arizona professional association (incorporated by reference to Exhibit 10.7 to the Annual Report on Form 10-K of OccuSystems Inc., a Delaware corporation ("OccuSystems"), for the year ended December 31, 1995).
10.19	—	Occupational Medicine Center Management and Consulting Agreement dated as of December 31, 1993, between CHS and Occupational Health Centers of New Jersey, a New Jersey professional association (incorporated by reference to Exhibit 10.8 to OccuSystems' Registration Statement on Form S-1 filed on March 28, 1996).
10.20	—	Amended and Restated Occupational Medicine Center Management and Consulting Agreement dated as of July 30, 2003 between Concentra Health Services, Inc. and Occupational Health Centers of the Southwest, P.A. (incorporation by reference to Exhibit 10.2 to Concentra Operating's Quarterly Report on Form 10-Q for the quarter ended June 30, 2003).
10.21	—	Stockholders Agreement dated as of August 17, 1999, by and among Concentra Inc. and the several persons named in Schedules I and II thereto (incorporated by reference to Concentra Operating's Registration Statement on Form S-4, initially filed on November 12, 1999).
10.22	—	Amendment No. 1 to Stockholders Agreement dated as of November 1, 2001, by and among Concentra Inc. and the several persons named in Schedules I and II thereto (incorporated by reference to Exhibit 10.26 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
10.23	—	Amendment No. 2 to Stockholders Agreement dated as of November 20, 2002, by and among Concentra Inc. and the several persons named in Schedules I and II thereto (incorporated by reference to Exhibit 10.30 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2002).
10.24	—	Amendment No. 3 to Stockholders Agreement dated as of December 1, 2002, by and among Concentra Inc. and the several persons named in Schedules I and II thereto (incorporated by reference to Exhibit 10.31 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2002).
10.25	—	Stockholders Agreement dated as of November 20, 2001, by and among Concentra Inc., Welsh, Carson, Anderson & Stowe VIII, L.P., certain holders of common stock and warrants to purchase common stock of Concentra Inc., certain stockholders of National Healthcare Resources, Inc., and Ferrer Freeman and Company, LLC, formerly known as Ferrer, Freeman, Thompson & Co., LLC (incorporated by reference to Exhibit 10.27 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).

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10.26	—	Agreement and Plan of Reorganization dated August 29, 1997, by and among CRA Managed Care, Inc., OccuSystems, Inc., and Concentra Inc., formerly known as Concentra Managed Care, Inc. (incorporated by reference to Exhibit 2.1 to Concentra Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997).
10.27	—	Agreement and Plan of Merger dated February 24, 1998, by and among Concentra Inc. and Preferred Payment Systems, Inc. (incorporated by reference to Exhibit 2.2 to Concentra Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997).
10.28	—	Agreement and Plan of Merger dated March 2, 1999, by and between Yankee Acquisition Corp. and Concentra Inc. (incorporated by reference to Exhibit 2.1 to Concentra Inc.'s Current Report on Form 8-K filed on March 3,1999).
10.29	—	Amended and Restated Agreement and Plan of Merger dated March 24, 1999, by and between Yankee Acquisition Corp. and Concentra Inc. (incorporated by reference to Exhibit 2.1 to Concentra Inc.'s Current Report on Form 8-K filed on July 14, 1999).
10.30	—	Agreement and Plan of Merger dated as of November 2, 2001, by and among Concentra Inc., NHR Acquisition Company, Inc., and National Healthcare Resources, Inc. (incorporated by reference to Exhibit 2.5 to Concentra Operating's Annual Report on Form 10-K for the year ended December 31, 2001).
10.31	—	Asset Purchase Agreement among Concentra Inc., Concentra Operating and Em3 Corporation dated as of December 1, 2002 (incorporated by reference to Exhibit 10.1 to Concentra Operating's Current Report on Form 8-K filed on December 13, 2002).
12.1*	—	Computation of Ratio of Earnings to Fixed Charges.
21.1*	—	Subsidiaries of Concentra Operating.
23.l*	—	Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1).
23.2*	—	Consent of Schreck Brignone (included in Annex A to Exhibit 5.1).
23.3*	—	Consent of McDermott, Will & Emery (included in Annex B to Exhibit 5.1).
23.4*	—	Consent of Richard A. Parr II (included in Annex C to Exhibit 5.1).
23.5*	—	Consent of PricewaterhouseCoopers LLP.
24.1*	—	Powers of Attorney (included on the signature pages of this Registration Statement).
25.1*	—	Statement of Eligibility (Form T-1) of The Bank of New York, as trustee.

*

Filed herewith

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QuickLinks

TABLE OF CONTENTS
FORWARD-LOOKING STATEMENTS
INDUSTRY AND MARKET DATA
PROSPECTUS SUMMARY
Our Company
Our Competitive Strengths
Our Business Strategy
The Exchange Offer
Terms of the New Notes
Risk Factors
Corporate Information
Summary Consolidated Financial Data
RISK FACTORS
EXCHANGE OFFER
USE OF PROCEEDS
CAPITALIZATION
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS
MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
DESCRIPTION OF OTHER INDEBTEDNESS
DESCRIPTION OF THE NEW NOTES
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
PLAN OF DISTRIBUTION
LEGAL MATTERS
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
WHERE YOU CAN FIND MORE INFORMATION
CONCENTRA OPERATING CORPORATION INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
Report of Independent Registered Public Accounting Firm
CONCENTRA OPERATING CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts)
CONCENTRA OPERATING CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands)
CONCENTRA OPERATING CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
CONCENTRA OPERATING CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (in thousands, except share amounts)
CONCENTRA OPERATING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental Schedule

CONCENTRA OPERATING CORPORATION Valuation and Qualifying Accounts For the Years Ended December 31, 2003, 2002 and 2001 (in thousands)
CONCENTRA OPERATING CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
CONCENTRA OPERATING CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands)
CONCENTRA OPERATING CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)
CONCENTRA OPERATING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
CONCENTRA OPERATING CORPORATION COMPUTATION OF RATIOS Ratio of Pro Forma Earnings to Fixed Charges (Unaudited)
CONCENTRA OPERATING CORPORATION COMPUTATION OF RATIOS Ratio of Earnings to Fixed Charges (Unaudited)
ANNEX A
Concentra Operating Corporation
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
SIGNATURES
SIGNATURES
EXHIBIT INDEX

EX-1.1

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Exhibit 1.1

EXECUTION COPY

$155,000,000
CONCENTRA OPERATING CORPORATION
9¹/8% Senior Subordinated Notes due 2012

PURCHASE AGREEMENT

        May 25, 2004

CREDIT SUISSE FIRST BOSTON LLC
CITIGROUP GLOBAL MARKETS INC.,
    As Representatives of the Initial Purchasers
    listed on Schedule A hereto,
        c/o Credit Suisse First Boston LLC,
        Eleven Madison Avenue,
        New York, N.Y. 10010-3629

Dear Sirs:

        1.     Introductory. Concentra Operating Corporation, a Nevada corporation (the "Company"), proposes, subject to the terms and conditions stated herein, to issue and sell to the several initial purchasers named in Schedule A hereto (the "Purchasers") $155,000,000 principal amount of its 9¹/8% Senior Subordinated Notes due 2012 ("Offered Securities") to be issued under an indenture to be dated as of June 8, 2004 (the "Indenture"), among the Company, the Guarantors (as defined below) and The Bank of New York, as Trustee, on a private placement basis pursuant to an exemption under Section 4(2) of the United States Securities Act of 1933 (the "Securities Act"), and hereby agrees with the several Purchasers as follows:

        The Company's obligations under the Offered Securities, including the due and punctual payment of interest on the Offered Securities, shall be unconditionally guaranteed (each, a "Guarantee" and, collectively, the "Guarantees") on a senior subordinated basis by each of the Company's domestic subsidiaries listed on Schedule B hereto (together, the "Guarantors").

        The holders of the Offered Securities will be entitled to the benefits of a Registration Rights Agreement dated as of the date hereof among the Company, the Guarantors and the Purchasers (the "Registration Rights Agreement"), in substantially the form of Exhibit A hereto, pursuant to which the Company agrees to file a registration statement with the Securities Exchange Commission (the "Commission") registering the resale of the Offered Securities under the Securities Act.

        Concurrently with the consummation of the issue and sale of the Offered Securities as set forth in this Agreement, the Company will (i) amend its existing senior credit facility to enable it to borrow an additional term loan in an aggregate amount of up to $70.0 million, (ii) purchase for cash all of its 13% Series A and Series B senior subordinated notes due 2009 (the "13% Notes" and, together with the Company's 9¹/2% senior subordinated notes due 2010, the "Existing Notes") that were validly tendered pursuant to the terms of the offer to purchase such notes, provided that the amount so tendered shall not be less than a majority in principal amount of the outstanding 13% Notes, (iii) amend the terms of the indenture governing the 13% Notes pursuant to a supplemental indenture, the form of which is attached to the Offer to Purchase and Consent Solicitation Statement dated as of May 10, 2004 (the "Supplemental Indenture") and (iv) declare and pay a cash dividend in the amount of up to $98.3 million to Concentra, Inc., a Delaware corporation and the Company's parent ("Parent"), approximately $1.2 million of which would be paid on a deferred basis (the transactions described in clauses (i)-(iv) being collectively referred to herein as the "Transactions").

        2.     Representations and Warranties of the Company. The Company represents and warrants to, and agrees with, the several Purchasers that:

        (a)   A preliminary offering circular and an offering circular relating to the Offered Securities has been prepared by the Company. Such preliminary offering circular (the "Preliminary Offering Circular") and offering circular (the "Offering Circular"), as supplemented as of the date of this Agreement, together with any other document approved in writing by the Company for use in connection with the contemplated resale of the Offered Securities, are hereinafter collectively referred to as the "Offering Document". On the date of this Agreement, the Offering Document does not, and on the Closing Date the Offering Document will not, include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Offering Document based upon written information furnished to the Company by any Purchaser through Credit Suisse First Boston LLC ("CSFB") and Citigroup Global Markets Inc. (together with CSFB, the "Representatives") specifically for use therein, it being understood and agreed that the only such information is that described as such in Section 8(b) hereof.

        (b)   The Offered Securities have been duly authorized by the Company and each Guarantor and, when delivered and paid for pursuant to this Agreement and the Indenture, will have been duly executed, authenticated, issued and delivered and (assuming due authentication of the Offered Securities by the Trustee) will constitute valid and legally binding obligations of the Company and each Guarantor, entitled to the benefits provided in the Indenture and enforceable in accordance with their terms.

        (c)   The Company has been duly incorporated and is an existing corporation in good standing under the laws of the State of Nevada, with power and authority (corporate and other) to own its properties and conduct its business as described in the Offering Document; and the Company is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified or in good standing would not individually or in the aggregate have a material adverse effect on the condition (financial or otherwise), business, properties or results of operations of the Company and its subsidiaries taken as a whole ("Material Adverse Effect").

        (d)   Each subsidiary of the Company has been duly incorporated or otherwise organized and is an existing corporation, limited liability company or other entity in good standing under the laws of the jurisdiction of its incorporation or organization, with power and authority (corporate, limited liability company or other, as applicable) to own its properties and conduct its business as described in the Offering Document; and each subsidiary of the Company is duly qualified to do business as a foreign corporation or other business entity in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Material Adverse Effect; all of the issued and outstanding capital stock or other equity interests of each subsidiary of the Company has been duly authorized and validly issued and is fully paid and, in the case of corporate subsidiaries, nonassessable; and, after giving effect to the Transactions (as defined in the Offering Document), the capital stock or other equity interests of each subsidiary owned by the Company, directly or through subsidiaries, is owned free from liens, encumbrances and defects other than as described in the Offering Document. A list of all subsidiaries of the Company, including their respective legal names, jurisdictions of formation or organization, the Company's direct or indirect ownership therein and whether they are Guarantors is attached hereto as Schedule C.

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        (e)   The Indenture has been duly authorized by the Company and each Guarantor; when the Offered Securities are delivered and paid for pursuant to this Agreement on the Closing Date, the Indenture will have been duly executed and delivered, such Offered Securities will have been duly executed, authenticated, issued and delivered (assuming due authorization, execution and delivery of the Indenture by the Trustee and due authentication of the Offered Securities by the Trustee) and the Indenture and such Offered Securities will conform in all material respects to the description thereof contained in the Offering Document, and (assuming due authorization, execution and delivery of the Indenture by the Trustee) the Indenture will constitute valid and legally binding obligations of the Company and each Guarantor, enforceable against each of them in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors' rights generally and to general equity principles.

        (f)    The Guarantee to be endorsed on the Offered Securities by each of the Guarantors has been duly authorized by such Guarantor and, on the Closing Date, will have been duly executed and delivered by each such Guarantor and will conform in all material respects to the description thereof contained in the Offering Document; when the Offered Securities have been issued, executed and authenticated in accordance with the Indenture and delivered to and paid for by the Purchasers in accordance with the terms of this Agreement, the Guarantee of each Guarantor endorsed thereon (assuming due authorization, execution and delivery of the Indenture by the Trustee and due authentication of the Offered Securities by the Trustee) will constitute valid and legally binding obligations of such Guarantor, enforceable against such Guarantor in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors' rights generally and to general equity principles.

        (g)   On the Closing Date, the Indenture will conform in all material respects to the requirements of the Trust Indenture Act of 1939, as amended (the "TIA" or "Trust Indenture Act"), and the rules and regulations of the Securities and Exchange Commission (the "Commission") applicable to an indenture which is qualified thereunder.

        (h)   On the Closing Date, the Exchange Securities and Private Exchange Securities (each as defined in the Registration Rights Agreement) will have been duly authorized by the Company and the Guarantors; and when the Exchange Securities and Private Exchange Securities are issued, executed and authenticated in accordance with the terms of the Exchange Offer (as defined in the Registration Rights Agreement) and the Indenture, the Exchange Securities and Private Exchange Securities will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors' rights generally and to general equity principles.

        (i)    The guarantee to be endorsed on the Exchange Securities and Private Exchange Securities by each Guarantor has been duly authorized by such Guarantor and, when issued, will have been duly executed and delivered by each such Guarantor; and when the Exchange Securities and Private Exchange Securities have been issued, executed and authenticated in accordance with the terms of the Exchange Offer and the Indenture, the guarantee of each Guarantor endorsed thereon will constitute valid and legally binding obligations of such Guarantor, enforceable against such Guarantor in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors' rights generally and to general equity principles.

        (j)    The Registration Rights Agreement has been duly authorized by the Company and each of the Guarantors and, on the Closing Date, will have been duly executed and delivered by the Company and each of the Guarantors. When the Registration Rights Agreement has been duly

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executed and delivered, the Registration Rights Agreement (assuming due authorization, execution and delivery thereof by each other party thereto other than the Company and the Guarantors) will be a valid and binding agreement of the Company and each of the Guarantors, enforceable against the Company and each Guarantor in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors' rights generally and to general equity principles and, as to rights of indemnification or contribution, to principles of public policy or Federal or state securities laws relating thereto. On the Closing Date, the Registration Rights Agreement will conform in all material respects to the description thereof in the Offering Document.

        (k)   Neither the Company nor any of its subsidiaries is (i) in violation of its respective charter or by-laws or (ii) in default in the performance of any obligation, agreement, covenant or condition contained in any indenture, loan agreement, mortgage, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or their respective property is bound, except in each case for such violations or defaults under clause (ii) above that would not, individually or in the aggregate, have a Material Adverse Effect.

        (l)    There are no contracts, agreements or understandings between the Company or any Guarantor and any person granting such person the right to require the Company or such Guarantor to include any securities in any registration statement required to be filed pursuant to the Registration Rights Agreement.

        (m)  Except as disclosed in the Offering Document, there are no contracts, agreements or understandings between the Company or any subsidiary of the Company and any person (other than the Purchasers) that would give rise to a valid claim against the Company, any subsidiary of the Company or any Purchaser for a brokerage commission, finder's fee or other like payment with respect to the Offered Securities or otherwise as a result of the Transactions and the other transactions contemplated by this Agreement.

        (n)   No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required for the consummation of the transactions contemplated by this Agreement and the Registration Rights Agreement in connection with the issuance and sale of the Offered Securities, the Exchange Securities or the Private Exchange Securities by the Company or the issuance of the Guarantees or the guarantees related to the Exchange Securities or Private Exchange Securities by the Guarantors, except (i) for the filing of the Exchange Offer Registration Statement or the Shelf Registration Statement with the Commission and the order of the Commission declaring the Exchange Offer Registration Statement or the Shelf Registration Statement (each as defined in the Registration Rights Agreement) effective, (ii) as may be required by the Trust Indenture Act or (iii) for any consent, approval, authorization, order or filing required pursuant to state "blue sky" laws for foreign securities laws.

        (o)   The execution, delivery and performance of the Indenture, the Guarantees, this Agreement and the Registration Rights Agreement by the Company and the Guarantors, and the performance of the Transactions, and the issuance and sale of the Offered Securities by the Company and the issuance of the Guarantees by the Guarantors, and compliance in each case with the terms and provisions thereof, will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, (i) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company or any subsidiary of the Company or any of their respective properties, (ii) any agreement or instrument to which the Company or any such subsidiary is a party or by which the Company or any such subsidiary is bound or to which any of the properties of the Company or any such subsidiary is subject or (iii) the charter or by-laws of the Company or any such subsidiary, in

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each case as contemplated by this Agreement, except in each case for such breaches, violations or defaults under clause (ii) above that would not, individually or in the aggregate, have a Material Adverse Effect; and the Company has full corporate power and authority to authorize, issue and sell the Offered Securities, the Exchange Securities and the Private Exchange Securities and the Guarantors have the corporate, limited liability company or other power and authority to issue the Guarantees and the guarantees related to the Exchange Securities and the Private Exchange Securities.

        (p)   This Agreement has been duly authorized, executed and delivered by the Company and each of the Guarantors.

        (q)   Except as disclosed in the Offering Document, the Company and its subsidiaries have good and marketable title to all real properties and all other properties and assets owned by them and which are material to the business of the Company and its subsidiaries as currently conducted, in each case free from liens, encumbrances and defects that would materially interfere with their ability to conduct their business as currently conducted or utilize such property or asset for its intended purpose; and, except as disclosed in the Offering Document, the Company and its subsidiaries hold any leased real or personal property under valid and enforceable leases with no exceptions that would materially interfere with their ability to conduct their business as currently conducted or utilize such property for its intended purpose.

        (r)   The Company and its subsidiaries own, possess, or can acquire on reasonable terms adequate trademarks, trade names and other rights to inventions, know-how, patents, copyrights, confidential information and other intellectual property (collectively, "Intellectual Property Rights") necessary to conduct the business now operated by them, or presently employed by them, except for such failures to own or possess or such inability to acquire as would not, individually or in the aggregate, have a Material Adverse Effect, and have not received any notice of infringement of or conflict with asserted rights that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect.

        (s)   Except as disclosed in the Offering Document, neither the Company nor any of its subsidiaries (i) is in violation of any statute, rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, "Environmental Laws"), (ii) owns or operates any real property contaminated with any substance that is subject to any Environmental Laws, (iii) is liable for any off-site disposal or contamination pursuant to any Environmental Laws or (iv) is subject to any claim relating to any Environmental Laws, which violation, contamination, liability or claim would individually or in the aggregate have a Material Adverse Effect; and the Company is not aware of any pending investigation which might lead to such a claim.

        (t)    Except as disclosed in the Offering Document, there are no pending actions, suits or proceedings against or affecting the Company, any of its subsidiaries or any of their respective properties that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect, or would materially and adversely affect the ability of the Company to perform its obligations under the Indenture or this Agreement, or the Registration Rights Agreement, or perform any of the Transactions, or which are otherwise material in the context of the sale of the Offered Securities; and no such actions, suits or proceedings are, to the Company's knowledge, threatened or contemplated.

        (u)   The financial statements included in the Offering Document, taken together with the notes thereto, present fairly the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and

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such financial statements have been prepared in conformity with the generally accepted accounting principles in the United States applied on a consistent basis; and the assumptions used in preparing the pro forma financial data included in the Offering Document provide a reasonable basis for presenting the significant effects directly attributable to the transactions or events described therein, the related pro forma adjustments give appropriate effect in all material respects to those assumptions and the pro forma columns therein reflect the proper application of the adjustments to the corresponding historical financial statement amounts.

        (v)   Except as disclosed in the Offering Document, since the date of the latest audited financial statements included in the Offering Document there has been no material adverse change, nor any development or event that would reasonably be expected to cause a material adverse change, in the condition (financial or otherwise), business, properties or results of operations of the Company and its subsidiaries taken as a whole, and, except as disclosed in or contemplated by the Offering Document, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock.

        (w)  The Company is subject to the reporting requirements of either Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and files reports with the Commission on the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.

        (x)   The Company is not an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the United States Investment Company Act of 1940 (the "Investment Company Act"); and the Company is not and, after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the Offering Document, will not be an "investment company" as defined in the Investment Company Act.

        (y)   The Company and its subsidiaries have such permits, licenses, consents, exemptions, franchises, authorizations and other approvals ("Permits") of, and have made all filings with and notice to, all governmental or regulatory authorities and self-regulatory organizations and all courts and other tribunals, including, without limitation, under any applicable Environmental Laws, laws relating to the provisions of occupational healthcare services, medical review services and the operation of managed care provider networks as are necessary to own, lease, license and operate their properties and to conduct their business, except where the failure to have any such Permit or to make any such filing or notice would not, individually or in the aggregate, have a Material Adverse Effect. Each such Permit is valid and in full force and effect and the Company or such subsidiary, as the case may be, is in compliance with all the terms and conditions of its permits and with the rules and regulations of the authorities and governing bodies having jurisdiction with respect thereto; no event has occurred (including the receipt of any notice from any authority or governing body) which allows or, after notice or elapse of time or both, would allow revocation, suspension or termination of any such Permit, or results or, after notice or lapse of time or both, would result in any other impairment of the rights of the holder of any such Permit; and such Permits contain no restrictions that are unduly burdensome to the Company or any of its subsidiaries, except, in each case, where such failure to be valid and in full force and effect or to be in compliance, the occurrence of any such event or the presence of any such restriction would not, individually or in the aggregate, have a Material Adverse Effect.

        (z)   To the Company's knowledge, neither the Company nor any affiliated entity, including, without limitation, any professional corporation, partnership or association, with which the Company or any affiliated entity contracts and through which services are provided (each a "Group Member" or collectively, the "Group Members") has received any indication or notice, written or oral, from representatives of state workers' compensation bureaus or organizations or

6

the Medicare, Medicaid or CHAMPUS programs (each, a "Program" and, collectively, the "Programs") or any other federal or state agency that any of the Group Members' agreements or arrangements are contrary to any federal or state fraud and abuse laws or regulations or federal or state self-referral laws or regulations.

        (aa) Except as set forth in the Offering Document or except for such violations which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, to the Company's knowledge, neither the Company nor any affiliated professional corporation, partnership or association (including its subsidiaries) has violated any federal, state or local statutes, rules or regulations or permit requirements relating to fraud and abuse, self-referral, fee-splitting, the corporate practice of medicine, the Programs, workers' compensation, automobile insurance and other laws that regulate the ownership or operation of managed care provider networks or the provision of occupational healthcare services, cost containment services or medical review services or healthcare services generally or require licensing, certification or other approval of such services provided (collectively, the "Relevant Healthcare Laws"). Except for such violations which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, to the Company's knowledge, neither the Company, nor any affiliated professional corporation, partnership or association has engaged in a pattern or practice of making payments intended to obtain or induce patient referrals for any of their operations.

        (bb) All Group Members that provide items and services reimbursed by the Programs are eligible to participate in the Programs.

        (cc) The Group Members employ personnel familiar with the various laws and regulations governing workers' compensation and reimbursement under the Programs and conduct periodic audits of the Group Members' billing and collection procedures. To the Company's knowledge, (i) each Group Member is in substantial compliance with those laws and regulations; and (ii) except as otherwise indicated in the Offering Document, no Group Member has received any indication or notice, written or oral, from representatives of the Programs or any other federal or state agency that any of the Group Members' billing procedures will be audited.

        (dd) To the Company's knowledge, the Group Members are in compliance with the laws and regulations pertaining to (i) physician licensure and (ii) physician fee-splitting in all states in which they are organized and otherwise authorized to conduct business, and are not engaged, either directly or indirectly, in either the unauthorized or unlicensed practice of medicine or in prohibited physician fee-splitting arrangements, except where such failure to be in compliance, singly or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

        (ee) To the Company's knowledge, no Group Member, or any individual or business entity with which a Group Member contracts and through which services are provided, has received any indication or notice, written or oral, from representatives of the United States Department of Health and Human Services or any other federal or state agency or accrediting body regarding any matters, including, but not limited to, the revocation, suspension, termination or modification of any applicable licenses, certifications, accreditations or supplier numbers, which has had or could have with the passage of time a Material Adverse Effect.

        (ff)  No securities of the same class (within the meaning of Rule 144A(d)(3) under the Securities Act) as the Offered Securities are listed on any national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system.

        (gg) Subject to the accuracy of the Purchasers' representations and warranties and their compliance with their agreements and the procedures in Section 4 of this Agreement, the offer and sale of the Offered Securities by the Company to the several Purchasers in the manner contemplated by this Agreement will be exempt from the registration requirements of the

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Securities Act by reason of Section 4(2) thereof and Regulation S thereunder and it is not necessary to qualify an indenture in respect of the Offered Securities under the TIA.

        (hh) Neither the Company, nor any of its affiliates (including its subsidiaries), nor any person acting on its or their behalf (other than the Purchasers, as to which the Company and the Guarantors make no representation or warranty) (i) has, within the six-month period prior to the date hereof, offered or sold in the United States or to any U.S. person (as such terms are defined in Regulation S under the Securities Act) the Offered Securities or any security of the same class or series as the Offered Securities or (ii) has offered or will offer or sell the Offered Securities (A) in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or (B) with respect to any securities sold in reliance on Rule 903 of Regulation S, by means of any directed selling efforts within the meaning of Rule 902(c) of Regulation S. The Company has not entered and will not enter into any contractual arrangement with respect to the distribution of the Offered Securities except for this Agreement.

        (ii)   None of the Transactions or any of the transactions contemplated by this Agreement (including, without limitation, the use of the proceeds from the sale of the Offered Securities) will violate Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System.

        (jj)   No "nationally recognized statistical rating organization" as such term is defined for purposes of Rule 436(g)(2) under the Securities Act (i) has imposed (or has informed the Company or any Guarantor that it is considering imposing) any condition (financial or otherwise) on the Company's or any Guarantor's retaining any rating assigned to the Company or any Guarantor, any securities of the Company or any Guarantor or (ii) has indicated to the Company or any Guarantor that it is considering (a) the downgrading, suspension, or withdrawal of, or any review for a possible change that does not indicate the direction of the possible change in, any rating so assigned or (b) any change in the outlook for any rating of the Company, any Guarantor or any securities of the Company or any Guarantor.

        (kk) None of the Company, the Guarantors nor any of their respective affiliates or any person acting on its or their behalf (other than the Purchasers, as to whom the Company and the Guarantors make no representation or warranty) has engaged or will engage in any directed selling efforts within the meaning of Regulation S under the Securities Act ("Regulation S") with respect to the Offered Securities or the Guarantees.

        (ll)   The Offered Securities offered and sold in reliance on Regulation S have been and will be offered and sold only in offshore transactions, assuming the accuracy of the Purchaser's representations set forth in Section 4 hereof.

        (mm) The sale of the Offered Securities pursuant to Regulation S is not part of a plan or scheme by the Company or the Guarantors to evade the registration provisions of the Securities Act.

        (nn) No form of general solicitation or general advertising (as defined in Regulation D under the Securities Act) was used by the Company, the Guarantors or any of their respective representatives (other than the Purchasers, as to whom the Company and the Guarantors make no representation or warranty) in connection with the offer and sale of the Offered Securities contemplated hereby, including, but not limited to, articles, notices or other communications published in any newspaper, magazine, or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. No securities of the same class as the Offered Securities have been issued and sold by the Company within the six-month period immediately prior to the date hereof.

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        (oo) No registration under the Securities Act of the Offered Securities or the Guarantees is required for the sale of the Offered Securities and the Guarantees to the Purchasers as contemplated hereby or for the exempt resales by the Initial Purchasers, assuming the accuracy of the Purchaser's representations set forth in Section 4 hereof.

        3.     Purchase, Sale and Delivery of Offered Securities. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company agrees to sell to the Purchasers, and the Purchasers agree, severally and not jointly, to purchase from the Company, at a purchase price of 95.65461% of the principal amount thereof plus accrued interest from June 8, 2004 to the Closing Date the respective principal amounts of Offered Securities set forth opposite the names of the several Purchasers in Schedule A hereto.

        The Company will deliver against payment of the purchase price the Offered Securities to be offered and sold by the Purchasers in reliance on Regulation S (the "Regulation S Securities") in the form of one or more temporary global Securities in registered form without interest coupons (the "Temporary Regulation S Global Securities") which will be deposited with the Trustee as custodian for The Depository Trust Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC. The Company will deliver against payment of the purchase price the Offered Securities to be purchased by each Purchaser hereunder and to be offered and sold by each Purchaser in reliance on Rule 144A under the Securities Act (the "144A Securities") in the form of one or more permanent global securities in definitive form without interest coupons (the "Restricted Global Securities") deposited with the Trustee as custodian for DTC and registered in the name of Cede & Co., as nominee for DTC. The Temporary Regulation S Global Securities and the Restricted Global Securities shall be assigned separate CUSIP numbers. The Restricted Global Securities shall include the legend regarding restrictions on transfer set forth under "Transfer Restrictions" in the Offering Document. Interests in any permanent global Securities will be held only in book-entry form through DTC, except in the limited circumstances described in the Offering Document.

        Payment for the Temporary Regulation S Securities and the 144A Securities shall be made by the Purchasers in Federal (same day) funds by wire transfer to an account of the Company or an account as the Company may direct at a bank acceptable to the representatives, at the office of Cravath, Swaine & Moore LLP at 9:30 a.m. (New York time) on June 8, 2004, or at such other time not later than seven full business days thereafter as the Representatives and the Company determine, such time being herein referred to as the "Closing Date", against delivery to the Trustee as custodian for DTC of (i) the Temporary Regulation S Global Securities representing all of the Regulation S Securities and (ii) the Restricted Global Securities representing all of the 144A Securities. The Temporary Regulation S Global Securities and the Restricted Global Securities will be made available for checking at the office of Cravath, Swaine & Moore LLP at least 24 hours prior to the Closing Date.

        4.     Representations by Purchasers; Resale by Purchasers.

        (a)   Each Purchaser severally represents and warrants to the Company that it is an "accredited investor" within the meaning of Regulation D under the Securities Act.

        (b)   Each Purchaser severally acknowledges that the Offered Securities have not been registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S or pursuant to an exemption from the registration requirements of the Securities Act. Each Purchaser severally represents and agrees that it has offered and sold the Offered Securities and will offer and sell the Offered Securities (i) as part of their distribution at any time and (ii) otherwise until 40 days after the later of the commencement of the offering and the Closing Date, only in accordance with Rule 144A ("Rule 144A") or Rule 903 under the Securities Act. Accordingly, neither the such Purchaser nor its affiliates, nor any persons acting on its or their behalf, have engaged or will engage in any directed selling efforts with respect to the Offered Securities, and such Purchaser, its affiliates and all persons

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acting on its or their behalf have complied and will comply with the offering restrictions requirement of Regulation S. Each Purchaser severally agrees that, at or prior to confirmation of sale of the Offered Securities, other than a sale pursuant to Rule 144A, such Purchaser will have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases the Offered Securities from it during the restricted period a confirmation or notice to substantially the following effect:

"The Securities covered hereby have not been registered under the U.S. Securities Act of 1933 (the "Securities Act") and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the date of the commencement of the offering and the closing date, except in either case in accordance with Regulation S (or Rule 144A if available) under the Securities Act. Terms used above have the meanings given to them by Regulation S."

Terms used in this subsection (b) have the meanings given to them by Regulation S.

        (c)   Each Purchaser severally agrees that it and each of its affiliates has not entered and will not enter into any contractual arrangement with respect to the distribution of the Offered Securities except for any such arrangements with the other Purchasers or affiliates of the other Purchasers or with the prior written consent of the Company.

        (d)   Each Purchaser severally agrees that it and each of its affiliates will not offer or sell the Offered Securities by means of any form of general solicitation or general advertising, within the meaning of Rule 502(c) under the Securities Act, including, but not limited to (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. Each Purchaser severally agrees, with respect to resales made in reliance on Rule 144A of any of the Offered Securities, to deliver either with the confirmation of such resale or otherwise prior to settlement of such resale a notice to the effect that the resale of such Offered Securities has been made in reliance upon the exemption from the registration requirements of the Securities Act provided by Rule 144A.

        5.     Certain Agreements of the Company. The Company agrees with the several Purchasers that:

        (a)   The Company will advise the Representatives promptly of any proposal to amend or supplement the Offering Document and will not effect such amendment or supplementation without the Representatives' consent, which consent will not be reasonably withheld or delayed. If, at any time prior to the completion of the resale of the Offered Securities by the Purchasers any event occurs as a result of which the Offering Document as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Company promptly will notify the Representatives of such event and promptly will prepare, at its own expense, an amendment or supplement which will correct such statement or omission or effect such compliance. Neither the Representatives' consent to, nor the Purchasers' delivery to offerees or investors of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 6.

        (b)   The Company will furnish to the Representatives copies of the Preliminary Offering Circular, the Offering Document and all amendments and supplements to such documents, in each case as soon as available and in such quantities as the Representatives reasonably request. At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act and any of the Offered Securities remain outstanding, the Company will promptly furnish or cause to be furnished to the Representatives (and, upon request, to each of the other Purchasers) and, upon request of holders and prospective purchasers of the Offered Securities, to such holders and purchasers,

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copies of the information required to be delivered to holders and prospective purchasers of the Offered Securities pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto) in order to permit compliance with Rule 144A in connection with resales by such holders of the Offered Securities. The Company will pay the expenses of printing and distributing to the Purchasers all such documents.

        (c)   The Company will arrange for the qualification of the Offered Securities for sale and the determination of their eligibility for investment under the laws of such states in the United States as the Representatives reasonably designate and will continue such qualifications in effect so long as required for the resale of the Offered Securities by the Purchasers provided that the Company will not be required to qualify as a foreign corporation or to file a general consent to service of process in any such state.

        (e)   During the period of two years after the Closing Date, the Company will, upon request, furnish to the Representatives, each of the other Purchasers and any holder of Offered Securities a copy of the restrictions on transfer applicable to the Offered Securities.

        (f)    During the period of two years after the Closing Date, the Company will not, and will not permit any of its affiliates (as defined in Rule 144 under the Securities Act) to, resell any of the Offered Securities that have been reacquired by any of them.

        (g)   During the period of two years after the Closing Date, the Company will not be or become, an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act.

        (h)   The Company will pay all expenses incidental to the performance of its obligations under this Agreement, the Indenture and the Registration Rights Agreement including (i) the fees and expenses of Trustee and its professional advisers, (ii) all expenses in connection with the execution, issue, authentication, packaging and initial delivery of the Offered Securities and, as applicable, the Exchange Securities (as defined in the Registration Rights Agreement), the preparation and printing of this Agreement, the Registration Rights Agreement, the Offered Securities, the Indenture, the Offering Document and amendments and supplements thereto, and any other document relating to the issuance, offer, sale and delivery of the Offered Securities and as applicable the Exchange Securities, (iii) the cost of qualifying the Offered Securities for trading in The Portal^SM Market ("PORTAL") of The Nasdaq Stock Market, Inc. and any expenses incidental thereto, (iv) the cost of any advertising approved by the Company in connection with the issue of the Offered Securities, (v) for any expenses (including fees and disbursements of counsel) incurred in connection with qualification of the Offered Securities or the Exchange Securities for sale under the laws of such jurisdictions as the Representatives designate and the printing of memoranda relating thereto, (vi) for any fees charged by investment rating agencies for the rating of the Securities or the Exchange Securities, and (vii) for expenses incurred in distributing preliminary offering circulars and the Offering Document (including any amendments and supplements thereto) to the Purchasers. The Company will reimburse the Purchasers for all travel expenses of the Purchasers and the Company's officers and employees and any other expenses of the Purchasers and the Company in connection with attending or hosting meetings with prospective purchasers of the Offered Securities.

        (i)    In connection with the offering, until the Representatives shall have notified the Company and the other Purchasers of the completion of the resale of the Offered Securities, neither the Company nor any of its affiliates has or will, either alone or with one or more other persons, bid for or purchase for any account in which it or any of its affiliates has a beneficial interest any Offered Securities or attempt to induce any person to purchase any Offered Securities; and neither it nor any of its affiliates will make bids or purchases for the purpose of creating actual, or apparent, active trading in, or of raising the price of, the Offered Securities.

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        (j)    For a period of 90 days after the date of the initial offering of the Offered Securities by the Purchasers, the Company will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any United States dollar-denominated debt securities issued or guaranteed by the Company and having a maturity of more than one year from the date of issue without the prior written consent of the Representatives, or publicly disclose the intention to make any such offer, sale, pledge or disposition, without the prior written consent of the Representatives, which consent shall not be unreasonably withheld or delayed; provided that this provision shall not prohibit the filing of any Registration Statement, the issuance of the Exchange Securities, borrowings under the credit facilities existing on the date hereof or secured financings of accounts receivables and inventory. The Company will not at any time offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any securities under circumstances where such offer, sale, pledge, contract or disposition would cause the exemption afforded by Section 4(2) of the Securities Act to cease to be applicable to the offer and sale of the Securities.

        6.     Conditions of the Obligations of the Purchasers. The obligations of the several Purchasers to purchase and pay for the Offered Securities on the Closing Date will be subject to the accuracy of the representations and warranties on the part of the Company herein, as of the date hereof and as of the Closing Date, to the accuracy of the statements of officers of the Company made pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions precedent:

        (a)   The Purchasers shall have received a letter, dated the date of this Agreement, of PricewaterhouseCoopers confirming that they are independent public accountants under Rule 101 of the American Institute of Certified Public Accountants Code of Professional Conduct, and its interpretations and rulings, and to the effect that:

        (i)    In their opinion the consolidated financial statements and financial statement schedules audited by them and included in the Offering Circular comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the applicable rules and regulations thereunder (the "Rules and Regulations");

        (ii)   they have performed the procedures specified by the American Institute of Certified Public Accountants for a review of interim financial information as described in Statement of Auditing Standards No. 100, Interim Financial Information, on the unaudited financial statements included in the Offering Circular;

        (iii)  on the basis of the review referred to in clause (ii) above, a reading of the latest available interim financial statements of the Company, inquiries of officials of the Company who have responsibility for financial and accounting matters and other specified procedures, nothing came to their attention that caused them to believe that:

        (A)  the unaudited financial statements included in the Offering Circular do not comply as to form in all material respects with the applicable accounting requirements of the Exchange Act and the related published Rules and Regulations or any material modifications should be made to such unaudited condensed financial statements for them to be in conformity with generally accepted accounting principles;

        (B)  at the date of the latest available balance sheet read by such accountants, or at a subsequent specified date not more than three business days prior to the date of this Agreement, there was any change in the capital stock or any increase in short-term indebtedness or long-term debt of the Company and its consolidated subsidiaries or, at the date of the latest available balance sheet read by such accountants, there was any decrease in consolidated net current assets (working capital) or net assets, as compared with amounts shown on the latest balance sheet included in the Offering Circular; or

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        (C)  for the period from the closing date of the latest income statement included in the Offering Circular to the closing date of the latest available income statement read by such accountants there were any decreases, as compared with the corresponding period of the previous year in consolidated net sales, net operating income or consolidated net income or total income;

except in all cases set forth in clauses (B) and (C) above for changes, increases or decreases which the Offering Circular disclose have occurred or may occur or which are described in such letter; and

        (iv)  they have compared specified dollar amounts (or percentages derived from such dollar amounts) and other financial information contained in the Offering Circular (in each case to the extent that such dollar amounts, percentages and other financial information are derived from the general accounting records of the Company and its subsidiaries subject to the internal controls of the Company's accounting system or are derived directly from such records by analysis or computation) with the results obtained from inquiries, a reading of such general accounting records and other procedures specified in such letter and have found such dollar amounts, percentages and other financial information to be in agreement with such results, except as otherwise specified in such letter.

        (b)   Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in the condition (financial or otherwise), business, properties or results of operations of the Company and its subsidiaries taken as one enterprise which, in the reasonable judgment of the Representatives is material and adverse and makes it impractical or inadvisable to proceed with completion of the offering or the sale of and payment for the Offered Securities; (ii) any downgrading in the rating of any debt securities of the Company by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Securities Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating) or any announcement that the Company has been placed on negative outlook; (iii) any change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls as would, in the reasonable judgment of the Representatives, be likely to prejudice materially the success of the proposed issue, sale or distribution of the Offered Securities, whether in the primary market or in respect of dealings in the secondary market; (iv) any material suspension or material limitation of trading in securities generally on the New York Stock Exchange or any setting of minimum prices for trading on such exchange; (v) any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (vi) any banking moratorium declared by U.S. Federal, New York authorities; (vii) any major disruption of settlements of securities or clearance services in the United States; or (viii) any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration of war by Congress or any other national or international calamity or emergency if, in the reasonable judgment of the Representatives, the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the offering or sale of and delivery and payment for the Offered Securities.

        (c)   The Purchasers shall have received an opinion, dated as of the Closing Date, of Vinson & Elkins L.L.P., counsel for the Company, that:

        (i)    The Indenture, the Guarantees and the Offered Securities conform in all material respects to the description thereof contained in the Offering Circular; and (assuming due authorization, execution and delivery of the Indenture by the Trustee, due authentication of

13

the Offered Securities by the Trustee and delivery of the Offered Securities against payment therefor in accordance with the Purchase Agreement) the Indenture, the Guarantee and the Offered Securities constitute valid and legally binding obligations of the Company and of the Guarantors enforceable against each of them in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors' rights generally and to general equity principles;

        (ii)   The Company is not and, after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the Offering Circular, will not be an "investment company" as defined in the Investment Company Act;

        (iii)  The Indenture conforms in all material respects to the requirements of the Trust Indenture Act and the rules and regulations of the Commission applicable to an indenture which is qualified thereunder;

        (iv)  No consent, approval, authorization or order of, or filing with, any governmental agency or body or any court is required for the consummation of the Transactions or any of the other transactions contemplated by this Agreement and the Registration Rights Agreement in connection with the issuance or sale of the Offered Securities by the Company or the issuance of the Guarantees or the guarantees related to the Exchange Securities or Private Exchange Securities by the Guarantors, except (i) for the filing of the Exchange Offer Registration Statement or the Shelf Registration Statement with the Commission and the order of the Commission declaring the Exchange Offer Registration Statement or the Shelf Registration Statement effective, (ii) as may be required by the Trust Indenture Act or (iii) for any consent, approval, authorization, order, or filing required pursuant to federal or state securities or "blue sky" laws of foreign securities laws;

        (v)   The execution, delivery and performance of the Indenture, the Guarantees, this Agreement and the Registration Rights Agreement by the Company and the Guarantors, and the issuance and sale of the Offered Securities by the Company and the issuance of the Guarantees by the Guarantors, the application of the net proceeds therefrom and compliance in each case with the terms and provisions thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, the Company's senior credit facility, as amended by the amendment thereto to be entered into on the Closing Date, and each of the indentures governing the Company's Existing Notes (including the Supplemental Indenture to be entered into on the Closing Date), as amended and supplemented;

        (vi)  The Registration Rights Agreement has been duly authorized, executed and delivered by the Company and by each of the Guarantors and (assuming due authorization, execution and delivery by the Purchasers) constitutes a valid and legally binding obligation of the Company and of the Guarantors enforceable against each of them in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors' rights generally and to general equity principles and public policy considerations with respect to any rights of indemnity or contribution;

        (vii) The Exchange Securities and Private Exchange Securities have been duly authorized by the Company and each of the Guarantors; and when the Exchange Securities and Private Exchange Securities are issued, executed and authenticated in accordance with the terms of the Exchange Offer and the Indenture, the Exchange Securities and Private Exchange Securities will constitute valid and legally binding obligations of the Company, enforceable against it in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors' rights generally and to general equity principles;

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        (viii) The Guarantee to be endorsed on the Offered Securities by each Guarantor has been duly authorized by such Guarantor and conforms in all material respects to the description thereof in the Offering Circular; and when the Exchange Securities and Private Exchange Securities have been issued, executed and authenticated in accordance with the terms of the Exchange Offer and the Indenture, the guarantee of each Guarantor endorsed thereon will constitute the valid and legally binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors' rights generally and to general equity principles;

        (ix)  The guarantee to be endorsed on the Exchange Securities and Private Exchange Securities by each Guarantor has been duly authorized by such Guarantor; and when the Exchange Securities and Private Exchange Securities are issued, executed and authenticated in accordance with the terms of the Exchange Offer and the Indenture, the guarantee of each Guarantor endorsed thereon will be duly executed and delivered by each such Guarantor and will constitute the valid and legally binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors' rights generally and to general equity principles; and

        (x)   Assuming the accuracy of the Purchaser's representations and warranties set forth in this Agreement, it is not necessary in connection with (i) the offer, sale and delivery of the Offered Securities by the Company to the several Purchasers pursuant to this Agreement or (ii) the resales of the Offered Securities by the several Purchasers in the manner contemplated hereby to register the Offered Securities under the Securities Act or to qualify an indenture in respect thereof under the TIA.

In addition, such counsel shall state in a letter to the Purchasers that such counsel has no reason to believe that the Offering Circular, or any amendment or supplement thereto, as of the date hereof and as of the Closing Date, contained any untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made, not misleading; it being understood that such counsel need express no opinion as to the financial statements or other financial data contained in the Offering Circular. In rendering its opinion pursuant to this Section, Vinson & Elkins L.L.P. shall be entitled to rely (i) as to matters involving the application of laws of any jurisdiction other than the State of Texas, the State of Delaware, the State of New York or the Federal laws of the United States, to the extent they deem proper and specified in such opinion, upon the opinion of other counsel of good standing whom they believe to be reliable and who are reasonably satisfactory to counsel for the Purchasers; and (ii) as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company and public officials. In addition, in rendering its opinion pursuant to this Section, Vinson & Elkins L.L.P. shall be permitted to assume the due authorization, execution and delivery of the documents and securities referenced in paragraphs (i) through (x) above.

        (d)   The Purchasers shall have received an opinion, dated as of the Closing Date, of Richard A. Parr II, General Counsel to the Company, that:

        (i)    The Indenture has been duly authorized, executed and delivered by the Company and each Guarantor; the Guarantees have been duly authorized, executed and delivered by the applicable Guarantor; the Offered Securities have been duly authorized, executed, issued and delivered by the Company;

        (ii)   This Agreement has been duly authorized, executed and delivered by the Company and by each of the Guarantors;

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        (iii)  The Registration Rights Agreement has been duly authorized, executed and delivered by the Company and by each of the Guarantors;

        (iv)  The Exchange Securities and Private Exchange Securities have been duly authorized by the Company and each of the Guarantors;

        (v)   The Guarantee to be endorsed on the Offered Securities by each Guarantor has been duly authorized by each such Guarantor;

        (vi)  The guarantee to be endorsed on the Exchange Securities and Private Exchange Securities by each Guarantor has been duly authorized by such Guarantor and when the Exchange Securities and Private Exchange Securities are issued, executed and authenticated in accordance with the terms of the Exchange Offer and the Indenture, the guarantee of each Guarantor endorsed thereon will be duly executed and delivered by each such Guarantor;

        (vii) The Company is an existing corporation in good standing under the laws of the State of Nevada, with corporate power and authority to own its properties and conduct its business as described in the Offering Circular; and the Company is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Material Adverse Effect;

        (viii) Each subsidiary of the Company is an existing corporation, limited liability company or other entity in good standing under the laws of the jurisdiction of its incorporation or organization, with power and authority (corporate, limited liability company and other, as applicable) to own its properties and conduct its business as described in the Offering Circular; and each subsidiary of the Company is duly qualified to do business as a foreign corporation or other business entity in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be so qualified or in good standing, individually or in the aggregate, would not have a Material Adverse Effect; all of the issued and outstanding capital stock of each subsidiary of the Company has been duly authorized and validly issued and is fully paid and, in the case of corporate subsidiaries, nonassessable;

        (ix)  To such counsel's knowledge, there are no contracts, agreements or understandings between the Company or any Guarantor and any person granting such person the right to require the Company or such Guarantor to include any securities in any registration statement required to be filed pursuant to the Registration Rights Agreement.

        (x)   To such counsel's knowledge, except as set forth in the Offering Circular, there are no pending actions, suits or proceedings against or affecting the Company, any of its subsidiaries or any of their respective properties that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect, or would materially and adversely affect the ability of the Company to perform its obligations under the Indenture, this Agreement, or the Registration Rights Agreement, or which are otherwise material in the context of the sale of the Offered Securities; and no such actions, suits or proceedings are, to such counsel's knowledge, threatened or contemplated;

        (xi)  The execution, delivery and performance of the Indenture, the Guarantees, this Agreement and the Registration Rights Agreement and the issuance and sale of the Offered Securities, the application of the net proceeds therefrom and compliance with the terms and provisions thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, any statute, rule or regulation or, to such counsel's knowledge, any order of any governmental agency or body or any court having jurisdiction

16

over the Company or any subsidiary of the Company or any of their properties, including, without limitation, any Environmental Law, any Relevant Healthcare Law, any Program or the rules and regulations promulgated thereunder, or any agreement or instrument to which the Company or any such subsidiary is a party or by which the Company or any such subsidiary is bound or to which any of the properties of the Company or any such subsidiary is subject and which has been filed with the Commission in connection with the Company's most recent annual report on Form 10-K, as amended to the date of this agreement, or the charter or by-laws of the Company or any such subsidiary, except that no opinion need be expressed pursuant to this paragraph related to securities or other anti-fraud statutes, rules or regulations; and the Company has full corporate power and authority to authorize, issue and sell the Offered Securities, the Exchange Securities and the Private Exchange Securities, and the Guarantors have the corporate, limited liability company or other power and authority to issue the Guarantees and the guarantees related to the Exchange Securities and the Private Exchange Securities, in each case as contemplated by this Agreement;

        (xii) The statements in the Offering Circular set forth under the headings "Risk Factors—Changes in state laws, rules and regulations, including those governing the corporate practice of medicine, fee splitting, workers' compensation and insurance laws, rules and regulations, may affect our ability to expand all of our operations into other states and, therefore, our profitability," "Risk Factors—New federal and state legislative and regulatory initiatives relating to patient privacy and new federal legislative and regulatory initiatives relating to the use of standard transaction code sets have required us and will continue to require us to expend substantial sums of money on the acquisition and implementation of new information systems, which could negatively impact our profitability," "Risk Factors—Changes in the federal Anti-Kickback Statute and Stark Law and/or similar state laws, rules and regulations could adversely affect our profitability and ability to expand our operations," "Business—Government Regulation," "Certain Relationships and Related Transactions," "Description of Other Indebtedness" and "United States Federal Income Tax Considerations," insofar as such statements purport to constitute a summary of the legal matters referred to therein or the terms of the contracts referred to therein are accurate in all material respects and fairly summarize the matters set forth therein;

        (xiii) To such counsel's knowledge, the Company has such Permits of, and has made all filings with and notice to, all governmental or regulatory authorities and self-regulatory organizations and all courts and other tribunals, including, without limitation, under any applicable Environmental Laws, laws relating to the provisions of occupational healthcare services, medical review services and the operation of managed care provider networks as are necessary to own, lease, license and operate its properties and to conduct its business, except where the failure to have any such Permit or to make any such filing or notice would not, singly or in the aggregate, have a Material Adverse Effect; to such counsel's knowledge, each such Permit is valid and in full force and effect and the Company is in compliance with all the terms and conditions of its permits and with the rules and regulations of the authorities and governing bodies having jurisdiction with respect thereto; to such counsel's knowledge, no event has occurred (including the receipt of any notice from any authority or governing body) which allows or, after notice or elapse of time or both, would allow revocation, suspension or termination of any such Permit, or results or, after notice or lapse of time or both, would result in any other impairment of the rights of the holder of any such permit; and to such counsel's knowledge, such Permits contain no restrictions that are unduly burdensome to the Company, except, in each case, where such failure to be valid and in full force and effect or to be in compliance, the occurrence of any such event or the presence of any such restriction would not, individually or in the aggregate, have a Material Adverse Effect;

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        (xiv) To such counsel's knowledge, neither the Company nor any Group Member has received any indication or notice, written or oral, from representatives of any Program or any other federal or state agency that any of the Group Members' agreements or arrangements are contrary to any federal or state fraud and abuse laws or regulations or federal or state self-referral laws or regulations;

        (xv) Except as set forth in the Offering Circular or except for such violations which, singly or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, to such counsel's knowledge, neither the Company nor any affiliated professional corporation, partnership or association has violated any Relevant Healthcare Law; except for such violations which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, to such counsel's knowledge, neither the Company, nor any affiliated professional corporation, partnership or association has engaged in a pattern or practice of making payments intended to obtain or induce patient referrals for any of their operations;

        (xvi) To such counsel's knowledge, all Group Members that provide items and services reimbursed by the Programs are eligible to participate in the Programs;

        (xvii) To such counsel's knowledge, the Group Members employ personnel familiar with the various laws and regulations governing workers' compensation and reimbursement under the Programs and conduct periodic audits of the Group Members' billing and collection procedures; to such counsel's knowledge, (i) each Group Member is in substantial compliance with those laws and regulations; and (ii) except as otherwise indicated in the Offering Circular, no Group Member has received any indication or notice, written or oral, from representatives of the Programs or any other federal or state agency that any of the Group Members' billing procedures will be audited;

        (xviii) To such counsel's knowledge, the Group Members are in compliance with the laws and regulations pertaining to (i) physician licensure and (ii) physician fee-splitting in all states in which they are organized and otherwise authorized to conduct business, and are not engaged, either directly or indirectly, in either the unauthorized or unlicensed practice of medicine or in prohibited physician fee-splitting arrangements, except where such failure to be in compliance, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect; and

        (xix) To such counsel's knowledge, no Group Member, or any individual or business entity with which a Group Member contracts and through which services are provided, has received any indication or notice, written or oral, from representatives of the United States Department of Health and Human Services or any other federal or state agency or accrediting body regarding any matters, including, but not limited to, the revocation, suspension, termination or modification of any applicable licenses, certifications, accreditations or supplier numbers, which has had or could have with the passage of time a Material Adverse Effect.

In addition, such counsel shall state in a letter to the Purchasers that such counsel has no reason to believe that the Offering Circular, or any amendment or supplement thereto, as of the date hereof and as of the Closing Date, contained any untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made, not misleading; it being understood that such counsel need express no opinion as to the financial statements or other financial data contained in the Offering Circular. In rendering his opinion pursuant to this Section, the Company's General Counsel shall be entitled to rely (i) as to matters involving the application of laws of any jurisdiction other than the State of Texas or the Federal laws of the United States, to the extent he deems proper and specified in such opinion, upon the opinion of other counsel of good standing whom he believes to be reliable

18

and who are reasonably satisfactory to counsel for the Purchasers; and (ii) as to matters of fact, to the extent he deems proper, on certificates of responsible officers of the Company and public officials.

        (e)   The Purchasers shall have received an opinion, dated the Closing Date, from counsel reasonably satisfactory to the Representatives with respect to the incorporation and good standing of the Company, the valid existence and good standing of any subsidiary incorporated or organized under the laws of the State of Nevada, the valid existence and good standing of any subsidiary incorporated or organized under the laws of the State of Massachusetts and the valid existence and good standing of each other subsidiary for which an opinion will be delivered in connection with the consummation of the Transactions.

        (f)    The Purchasers shall have received from Cravath, Swaine & Moore LLP, counsel for the Purchasers, such opinion or opinions, dated the Closing Date, with respect to the validity of the Offered Securities, the Offering Circular, the exemption from registration for the offer and sale of the Offered Securities by the Company to the several Purchasers and the resales by the several Purchasers as contemplated hereby and other related matters as the Representatives may require, and the Company shall have furnished to such counsel such documents as they reasonably request for the purpose of enabling them to pass upon such matters.

        (g)   The Purchasers shall have received a certificate, dated the Closing Date, of the President or any Vice President and a principal financial or accounting officer of the Company in which such officers, to their knowledge after reasonable investigation, shall state that the representations and warranties of the Company in this Agreement are true and correct, that the Company and the Guarantors have complied with all agreements and satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date, and that, subsequent to the dates of the most recent financial statements in the Offering Circular, there has been no material adverse change, nor any development or event that would reasonably be expected to cause a material adverse change, in the condition (financial or otherwise), business, properties or results of operations of the Company and its subsidiaries taken as a whole except as set forth in the Offering Circular (exclusive of any amendment or supplement thereto on or after the date of this Agreement).

        (h)   The Purchasers shall have received a letter, dated the Closing Date, of PricewaterhouseCoopers LLP which meets the requirements of subsection (a) of this Section, except that the specified date referred to in such subsection will be a date not more than three days prior to the Closing Date for the purposes of this subsection.

        (i)    The Company, the Guarantors and the Trustee shall have entered into the Indenture and the Purchasers shall have received counterparts, conformed as executed, thereof.

        (j)    The Company and the Guarantors shall have entered into the Registration Rights Agreement and the Purchasers shall have received counterparts, conformed as executed, thereof.

        (k)   Each of the Transactions, other than the declaration and payment of a cash dividend to Parent, shall have been consummated.

        The Company will furnish the Purchasers with such conformed copies of such opinions, certificates, letters and documents as the Purchasers reasonably request. The Representatives may in their sole discretion waive on behalf of the Purchasers compliance with any conditions to the obligations of the Purchasers hereunder, whether in respect of an Optional Closing Date or otherwise.

        7.     Conditions of the Obligations of the Company and the Guarantors. The obligations of the Company and the Guarantors to issue and sell the Offered Securities on the Closing Date will be

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subject to the condition precedent that each of the Transactions, other than the declaration and payment of a cash dividend to Parent, shall have been consummated.

        8.     Indemnification and Contribution. (a) The Company and the Guarantors will, jointly and severally, indemnify and hold harmless each Purchaser, its partners, directors and officers and each person, if any, who controls such Purchaser within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such Purchaser may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Offering Document, or any amendment or supplement thereto, or any related preliminary offering circular, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, including any losses, claims, damages or liabilities arising out of or based upon the Company's failure to perform its obligations under Section 5(a) of this Agreement, and will reimburse each Purchaser for any out-of-pocket legal or other expenses reasonably incurred by such Purchaser in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Company by any Purchaser through the Representatives specifically for use therein, it being understood and agreed that the only such information consists of the information described as such in subsection (b) below; provided further, however, that the foregoing indemnity agreement with respect to losses, claims, damages or liabilities shall not inure to the benefit of any Purchaser (or any person controlling any Purchaser) with respect to any losses, claims, damages or liabilities arising out of our based upon (x) any untrue statement or alleged untrue statement of any material fact in the Preliminary Offering Circular or (y) the omission or alleged omission to state in the Preliminary Offering Circular a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, if (1) the Company furnished to the Purchasers sufficient copies of the Offering Circular on a timely basis to permit delivery of the written confirmation of the sale of the Offered Securities to such persons; (2) the person asserting such losses, claims, damages or liabilities purchased Offered Securities from such Purchaser in the initial resale by such Purchaser (each person an "Initial Resale Purchaser") and a copy of the Offering Circular was not sent or given by or on behalf of such Purchaser to such Initial Resale Purchaser at or prior to the delivery of the written confirmation of such sale; and (3) the Offering Circular would have cured the defect giving rise to such losses, claims, damages or liabilities.

        (b)   Each Purchaser will severally and not jointly indemnify and hold harmless the Company, its directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities to which the Company may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Offering Document, or any amendment or supplement thereto, or any related preliminary offering circular, or arise out of or are based upon the omission or the alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Purchaser through the Representatives specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, it being understood and agreed that the only such information furnished

20

by any Purchaser consists of the following information in the Offering Document furnished on behalf of each Purchaser: the third, sixth, eleventh and twelfth paragraphs under the caption "Plan of Distribution" and the paragraph on the cover page regarding the delivery of the Offered Securities; provided however, that the Purchasers shall not be liable for any losses, claims, damages or liabilities arising out of or based upon the Company's failure to perform its obligations under Section 5(a) of this Agreement.

        (c)   Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying party of the commencement thereof; but the failure to notify the indemnifying party shall not relieve it from any liability that it may have under subsection (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, such consent not to be unreasonably withheld or delayed be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the contrary; (ii) the indemnifying party has failed within a reasonable time to retain counsel reasonably satisfactory to the indemnified party; (iii) the indemnified party shall have reasonably concluded, based on the advice of legal counsel, that there may be legal defenses available to it that are different from or in addition to those available to the indemnifying party; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the indemnifying party shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all indemnified parties, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm for any Purchaser, its affiliates, directors and officers and any control persons of such Purchaser shall be designated in writing by CSFB and any such separate firm for the Company, their directors and officers and any control persons of the Company shall be designated in writing by the Company. In no event will the indemnifying party be required to pay the fees and expenses of more than one counsel for the indemnified parties in any jurisdiction. No indemnified party shall effect any settlement of any pending or threatened action for which indemnification is provided without the prior written consent of the indemnifying parties, such consent not to be unreasonably withheld or delayed. No indemnifying party shall, without the prior written consent of the indemnified party, such consent not to be unreasonably withheld or delayed, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes (i) an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and (ii) does not include a statement as to or an admission of fault, culpability or failure to act by or on behalf of any indemnified party.

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        (d)   If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, other than unavailability caused by the express provisions of subsections (a), (b) or (c), then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Purchasers on the other from the offering of the Offered Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Purchasers on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Purchasers on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total discounts and commissions received by the Purchasers from the Company under this Agreement. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Purchasers and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Purchaser shall be required to contribute any amount in excess of the amount by which the total discounts, fees and commissions received by such Purchaser exceeds the amount of any damages which such Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The Purchasers' obligations in this subsection (d) to contribute are several in proportion to their respective purchase obligations and not joint.

        (e)   The obligations of the Company under this Section shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Purchaser within the meaning of the Securities Act or the Exchange Act; and the obligations of the Purchasers under this Section shall be in addition to any liability which the respective Purchasers may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act.

        9.     Default of Purchasers. If any Purchaser or Purchasers default in their obligations to purchase Securities hereunder and the aggregate principal amount of the Offered Securities that such defaulting Purchaser or Purchasers agreed but failed to purchase does not exceed 10% of the total principal amount of the Offered Securities, the Representatives may make arrangements satisfactory to the Company for the purchase of such Offered Securities by other persons (provided that such persons shall not cause the offer, sale or issuance of the Offered Securities to require registration under the Securities Act, other than pursuant to the Registration Rights Agreement, or make the exemptions provided by Rule 144A and/or Regulation S unavailable for the offer, sale and issuance of the Offered Securities), including any of the Purchasers, but if no such arrangements are made by the Closing Date, the non-defaulting Purchasers shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Offered Securities that such defaulting Purchasers agreed but failed to purchase. If any Purchaser or Purchasers so default and the aggregate principal amount of the Offered Securities with respect to which such default or defaults occur exceeds 10% of the total principal amount of the Offered Securities and arrangements satisfactory to the Representatives and the Company for the purchase of such Offered Securities by other persons are not made within

22

36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Purchaser or the Company, except as provided in Section 10. As used in this Agreement, the term "Purchaser" includes any person substituted for a Purchaser under this Section. Nothing herein will relieve a defaulting Purchaser from liability for its default.

        10.   Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Company or its officers and of the several Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Purchaser, the Company or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Offered Securities. If this Agreement is terminated pursuant to Section 9 or if for any reason the purchase of the Offered Securities by the Purchasers is not consummated, the Company shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 5 (provided that nothing shall prohibit the Company from seeking damages from any defaulting Purchaser) and the respective obligations of the Company and the Purchasers pursuant to Section 8 shall remain in effect. If the purchase of the Offered Securities by the Purchasers is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 9 or the occurrence of any event specified in clause (iii), (iv), (v), (vi) or (vii) of Section 6(b), the Company will reimburse the Purchasers for all out-of-pocket expenses (including fees and disbursements of counsel) reasonably incurred by them in connection with the offering of the Offered Securities.

        11.   Notices. All communications hereunder will be in writing and, if sent to the Purchasers will be mailed, delivered or telegraphed and confirmed to the Purchasers, c/o Credit Suisse First Boston LLC, Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention: Transactions Advisory Group, and c/o Citigroup Global Markets Inc., 338 Greenwich Street, 32nd Floor, New York, NY 10013, Attention: Legal—Addison Crawford, or, if sent to the Company, will be mailed, delivered or telegraphed and confirmed to it at Concentra Operating Corporation, 5080 Spectrum Drive, Suite 400-West Tower, Addison, TX 75001, Attention: Richard Parr, Esq.; provided, however, that any notice to a Purchaser pursuant to Section 8 will be mailed, delivered or telegraphed and confirmed to such Purchaser.

        12.   Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the controlling persons referred to in Section 8, and no other person will have any right or obligation hereunder, except that holders of Offered Securities shall be entitled to enforce the agreements for their benefit contained in the second and third sentences of Section 5(b) hereof against the Company as if such holders were parties hereto.

        13.   Representation of Purchasers. You will act for the several Purchasers in connection with this purchase, and any action under this Agreement taken by you jointly or by the Representatives will be binding upon all the Purchasers.

        14.   Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.

        15.   Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

        The Company hereby submits to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

        [The remainder of this page is blank.]

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        If the foregoing is in accordance with the Purchasers' understanding of our agreement, kindly sign and return to the Company one of the counterparts hereof, whereupon it will become a binding agreement between the Company and the several Purchasers in accordance with its terms.

Very truly yours,
CONCENTRA OPERATING CORPORATION
By:	/s/  RICHARD A. PARR II Richard A. Parr II Executive Vice President, General Counsel and Corporate Secretary
CONCENTRA HEALTH SERVICES, INC. CONCENTRA PREFERRED SYSTEMS, INC.
By:	/s/  RICHARD A. PARR II Richard A. Parr II Executive Vice President, General Counsel and Corporate Secretary
CONCENTRA INTEGRATED SERVICES, INC.
By:	/s/  RICHARD A. PARR II Richard A. Parr II Executive Vice President and Clerk
CONCENTRA MANAGEMENT SERVICES, INC. FIRST NOTICE SYSTEMS, INC. FOCUS HEALTHCARE MANAGEMENT, INC. METRACOMP, INC. CONCENTRA LABORATORY, L.L.C. CISI BUSINESS CORPORATION CPS BUSINESS CORPORATION FHM BUSINESS CORPORATION
By:	/s/  RICHARD A. PARR II Richard A. Parr II Vice President and Corporate Secretary

CRA MANAGED CARE OF WASHINGTON, INC. CRA-MCO, INC.
By:	/s/  RICHARD A. PARR II Richard A. Parr II Executive Vice President and Corporate Secretary
HEALTHNETWORK SYSTEMS LLC MEDICAL NETWORK SYSTEMS LLC
By:	/s/  RICHARD A. PARR II Richard A. Parr II Vice President, General Counsel and Corporate Secretary
NATIONAL HEALTHCARE RESOURCES, INC.
By:	/s/  RICHARD A. PARR II Richard A. Parr II Senior Vice President and Corporate Secretary
OCCUCENTERS I, L.P.
By:	Its general partner CONCENTRA HEALTH SERVICES, INC.
	By:	/s/  RICHARD A. PARR II Richard A. Parr II Executive Vice President, General Counsel and Corporate Secretary
OCI HOLDINGS, INC.
By:	/s/  GARY CHEDEKEL Gary Chedekel Corporate Secretary and Treasurer

The foregoing Purchase Agreement is hereby confirmed and accepted as of the date first written above.
CREDIT SUISSE FIRST BOSTON LLC
		Acting on behalf of itself and as the Representative of the several Purchasers
CREDIT SUISSE FIRST BOSTON LLC
	by	/s/  HAROLD BOGLE Name: Harold Bogle Title: Managing Director
CITIGROUP GLOBAL MARKETS INC.
		Acting on behalf of itself and as the Representative of the several Purchasers
CITIGROUP GLOBAL MARKETS INC.
	by	/s/  RICHARD LANDGARTEN Name: Richard Landgarten Title: Managing Director

EXHIBIT A

[Form of Registration Rights Agreement]

SCHEDULE A

Purchaser		Principal Amount of Offered Securities
Credit Suisse First Boston LLC		$	55,800,000
Citigroup Global Markets Inc.			55,800,000
J.P. Morgan Securities Inc.			20,150,000
Deutsche Bank Securities Inc.			15,500,000
Jefferies & Company, Inc.			7,750,000
	Total	$	155,000,000

SCHEDULE B

CISI Business Corporation
Concentra Health Services, Inc.
Concentra Integrated Services, Inc.
Concentra Laboratory, L.L.C.
Concentra Management Services, Inc.
Concentra Preferred Systems, Inc.
CPS Business Corporation
CRA Managed Care of Washington, Inc.
CRA-MCO, Inc.
FHM Business Corporation
First Notice Systems, Inc.
Focus Healthcare Management, Inc.
Healthnetwork Systems LLC
Medical Network Systems LLC
Metracomp, Inc.
National Healthcare Resources, Inc.
Occucenters I, L.P.
OCI Holdings, Inc.

SCHEDULE C

NAME OF ENTITY	DOMESTIC STATE	CONCENTRA OWNER	% OWNED		GUARANTOR
CISI BUSINESS CORPORATION	Delaware	CRA Managed Care of Washington, Inc.	100	%	YES
CONCENTRA AKRON, L.L.C.	Delaware	Concentra Health Services, Inc.	51	%	NO
CONCENTRA ARKANSAS, L.L.C.	Delaware	Concentra Health Services, Inc.	51	%	NO
CONCENTRA BIRMINGHAM, L.L.C.	Delaware	Concentra Health Services, Inc.	51	%	NO
CONCENTRA HEALTH SERVICES, INC.	Nevada	Concentra Operating Corporation	100	%	YES
CONCENTRA INTEGRATED SERVICES, INC.	Massachusetts	National Healthcare Resources, Inc.	100	%	YES
CONCENTRA LABORATORY, L.L.C.	Delaware	Concentra Health Services, Inc.	100	%	YES
CONCENTRA MANAGEMENT SERVICES, INC.	Nevada	Concentra Operating Corporation	100	%	YES
CONCENTRA NEW ORLEANS, L.L.C.	Delaware	Concentra Health Services, Inc.	51	%	NO
CONCENTRA OCCUPATIONAL HEALTHCARE HARRISBURG, L.P.	Pennsylvania	Concentra Health Services, Inc.	51	%	NO
CONCENTRA PREFERRED SYSTEMS, INC.	Delaware	Concentra Operating Corporation	100	%	YES
CONCENTRA SOUTH CAROLINA, L.L.C.	Delaware	Concentra Health Services, Inc.	51	%	NO
CONCENTRA ST. LOUIS, L.L.C.	Delaware	Concentra Health Services, Inc.	51	%	NO
CONCENTRA-UPMC, L.L.C.	Delaware	Concentra Health Services, Inc.	51	%	NO
CONCENTRA/VANDERBILT, L.L.C.	Delaware	Concentra Health Services, Inc.	51	%	NO
CONCENTRA WINSTON-SALEM, L.L.C.	Delaware	Concentra Health Services, Inc.	51	%	NO
CPS BUSINESS CORPORATION	Delaware	Concentra Preferred Systems, Inc.	100	%	YES
CRA MANAGED CARE OF WASHINGTON, INC.	Washington	Concentra Integrated Services, Inc.	100	%	YES
CRA-MCO, INC.	Nevada	Concentra Integrated Services, Inc.	100	%	YES
FHM BUSINESS CORPORATION	Delaware	FOCUS Healthcare Management, Inc.	100	%	YES
FIRST NOTICE SYSTEMS, INC.	Delaware	Concentra Integrated Services, Inc.	100	%	YES
FOCUS HEALTHCARE MANAGEMENT, INC.	Tennessee	Concentra Integrated Services, Inc.	100	%	YES
HEALTHNETWORK SYSTEMS LLC	Delaware	Concentra Preferred Systems, Inc.	100	%	YES
MANAGED PRESCRIPTION PROGRAM	Arizona	Concentra Health Services, Inc.	94	%	NO
MEDICAL NETWORK SYSTEMS LLC	Delaware	Concentra Preferred Systems, Inc.	100	%	YES
METRACOMP, INC.	Connecticut	National Healthcare Resources, Inc.	100	%	YES
NATIONAL HEALTHCARE RESOURCES, INC.	Delaware	Concentra Operating Corporation	100	%	YES
OCCUCENTERS I, L.P.	Texas	Concentra Health Services, Inc. (GP) OCI Holdings, Inc. (LP)	1 99	% %	YES
OCCUPATIONAL HEALTH VENTURES, L.L.C.	Pennsylvania	Concentra Health Services, Inc.	51	%	NO
OCI HOLDINGS, INC.	Nevada	Concentra Health Services, Inc.	100	%	YES
OHC OF OKLAHOMA, L.L.C.	Oklahoma	Concentra Health Services, Inc.	51	%	NO
TUCSON OCCUPATIONAL MEDICINE PARTNERSHIP	Arizona	Concentra Health Services, Inc.	95	%	NO

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EXHIBIT A [Form of Registration Rights Agreement]
SCHEDULE A
SCHEDULE B
SCHEDULE C

EX-4.4

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Exhibit 4.4

CONCENTRA OPERATING CORPORATION

        AND

THE BANK OF NEW YORK

        as Trustee

        SUPPLEMENTAL INDENTURE

        Dated as of May 24, 2004

        to

        Indenture

        Dated as of August 17, 1999

        13% Series A Senior Subordinated Notes due 2009

        13% Series B Senior Subordinated Notes due 2009

SUPPLEMENTAL INDENTURE dated as of May 24, 2004, by and among Concentra Operating Corporation, a Nevada corporation (the "Company"), and The Bank of New York, as successor to United States Trust Company of New York, as trustee (the "Trustee").

        WHEREAS, the Trustee, the Company and certain subsidiaries of the Company have heretofore executed and delivered that certain Indenture dated as of August 17, 1999 (as amended, supplemented or otherwise modified from time to time, the "Indenture"), providing for the issuance of 13% Series A Senior Subordinated Notes due 2009 and 13% Series B Senior Subordinated Notes due 2009;

        WHEREAS, on August 17, 1999, the Company issued $190,000,000 aggregate principal amount of its 13% Series A Senior Subordinated Notes due 2009 and subsequently offered to exchange them for an equal aggregate principal amount of its 13% Series B Senior Subordinated Notes due 2009 (collectively, the "Notes");

        WHEREAS, on July 24, 2002, the Company redeemed an aggregate principal amount of $47.5 million of the Notes, such that there are now outstanding under the Indenture $142.5 million aggregate principal amount of the Notes comprised of $1,651,000 aggregate principal amount of 13% Series A Senior Subordinated Notes due 2009 and $140,849,000 aggregate principal amount of 13% Series B Senior Subordinated Notes due 2009;

        WHEREAS, Section 902 of the Indenture provides that, with the consent of Holders representing a majority in aggregate principal amount of the Notes then outstanding, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture supplemental to the Indenture for the purpose of amending or supplementing the Indenture or modifying the rights of the Holders (subject to certain exceptions);

        WHEREAS, the Company desires and has requested the Trustee to join with it in entering into this Supplemental Indenture for the purpose of amending the Indenture in certain respects as permitted by Section 902 of the Indenture;

        WHEREAS, the Company has been soliciting consents to this Supplemental Indenture upon the terms and subject to the conditions set forth in its Offer to Purchase and Consent Solicitation Statement dated May 10, 2004 and the related Consent and Letter of Transmittal (which together, including any amendments, modifications or supplements thereto, constitute the "Tender Offer");

        WHEREAS, the execution and delivery of this Supplemental Indenture has been authorized by resolutions of the Board of Directors of the Company;

        WHEREAS, the Company (1) has received the consent of the Holders of, and will accept for payment under the Tender Offer promptly after the expiration of the Tender Offer, more than a majority in principal amount of the outstanding Notes, all as certified by an Officers' Certificate delivered to the Trustee simultaneously with the execution and delivery of this Supplemental Indenture, (2) has delivered to the Trustee simultaneously with the execution and delivery of this Supplemental Indenture an Opinion of Counsel relating to this Supplemental Indenture as contemplated by Section 903 of the Indenture and (3) has satisfied all other conditions required under Article 9 of the Indenture to enable the Company and the Trustee to enter into this Supplemental Indenture.

        NOW, THEREFORE, in consideration of the above premises, each party hereby agrees, for the benefit of the others and for the equal and ratable benefit of the holders of the Notes, as follows:

ARTICLE I

DEFINITIONS

Section 1.1    Deletion of Definitions and Related References.    Section 101 of Article 1 of the Indenture is hereby amended to delete in their entirety all terms and their respective definitions for

2

which all references are eliminated in the Indenture as a result of the amendments set forth in Article II of this Supplemental Indenture.

ARTICLE II

AMENDMENTS TO INDENTURE

Section 2.1    Amendments to Articles 5, 7, 8 and 10.    The Indenture is hereby amended by deleting the following provisions of the Indenture and all references thereto in their entirety:

Section 501, Clauses (3), (4), (5), (6), (8) and (9) (Events of Default);
Section 502, first two paragraphs (Acceleration of Maturity; Rescission and Annulment);
Section 515 (Waiver of Usury, Stay or Extension Laws);
Section 704 (Reports by the Company);
Article Eight (Consolidation, Merger, Conveyance, Transfer or Lease);
Section 1002 (Maintenance of Office or Agency);
Section 1004 (Existence);
Section 1005 (Maintenance of Properties);
Section 1006 (Payment of Taxes and Other Claims);
Section 1007 (Maintenance of Insurance);
Section 1008. (Limitation on Incurrence of Indebtedness And Issuance of Preferred Stock);
Section 1009 (Limitation on Restricted Payments);
Section 1010 (Limitations on Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries);
Section 1011 (Limitation on Liens Securing Indebtedness);
Section 1012 (Limitation on Transactions With Affiliates);
Section 1013 (Limitation on Issuances and Sales of Equity Interests in Restricted Subsidiaries);
Section 1014 (Repurchase of Notes at the Option of The Holder Upon a Change of Control);
Section 1015 (Repurchase of Notes at The Option of the Holder Upon an Asset Sale);
Section 1016 (Investment Company);
Section 1017, first paragraph (Limitations on Issuances of Guarantees of Indebtedness);
Section 1018 (Additional Guarantees);
Section 1019 (Limitation on Lines of Business);
Section 1020 (Anti-Layering);
Section 1021 (Sale and Leaseback Transactions);
Section 1024 (Advances of Subsidiaries)
Section 1025 (Payments for Consents); and
Section 1026 (Statement by Officers as to Default; Compliance Certificates).

ARTICLE III

MISCELLANEOUS PROVISIONS

Section 3.1    Defined Terms.    For all purposes of this Supplemental Indenture, except as otherwise defined or unless the context otherwise requires, terms used in capitalized form in this Supplemental Indenture and defined in the Indenture have the meanings specified in the Indenture.

Section 3.2    Indenture.    Except as amended hereby, the Indenture and the Notes are in all respects ratified and confirmed and all the terms shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered under the Indenture shall be bound hereby and all terms and conditions of both shall be read together as though they constitute a single instrument, except that in the case of conflict the provisions of this Supplemental Indenture shall control.

3

Section 3.3    Governing Law.    THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

Section 3.4    Successors.    All agreements of the Company in this Supplemental Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Supplemental Indenture shall bind its successors.

Section 3.5    Duplicate Originals.    All parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together shall represent the same agreement. It is the express intent of the parties to be bound by the exchange of signatures on this Supplemental Indenture via telecopy.

Section 3.6    Severability.    In case any one or more of the provisions in this Supplemental Indenture or in the Notes shall be held invalid, illegal or unenforceable, in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions shall not in any way be affected or impaired thereby, it being intended that all of the provisions hereof shall be enforceable to the full extent permitted by law.

Section 3.7    Trustee Disclaimer.    The Trustee accepts the amendment of the Indenture effected by this Supplemental Indenture and agrees to execute the trust created by the Indenture as hereby amended, but on the terms and conditions set forth in the Indenture, including the terms and provisions defining and limiting the liabilities and responsibilities of the Trustee, which terms and provisions shall in like manner define and limit its liabilities and responsibilities in the performance of the trust created by the Indenture as hereby amended, and without limiting the generality of the foregoing, the Trustee shall not be responsible in any manner whatsoever for or with respect to any of the recitals or statements contained herein, all of which recitals or statements are made solely by the Company, and the Trustee makes no representation with respect to any such matters. Additionally, the Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture.

Section 3.8    Effectiveness.    The provisions of this Supplemental Indenture shall be effective only upon execution and delivery of this instrument by the parties hereto. Notwithstanding the foregoing sentence, the provisions of this Supplemental Indenture shall become operative only upon the purchase of more than a majority in principal amount of the outstanding Notes pursuant to the Tender Offer. The Company shall notify the Trustee promptly after the occurrence of such purchase.

Section 3.9    Endorsement and Change of Form of Notes.    Any Notes authenticated and delivered after the close of business on the date that this Supplemental Indenture becomes operative in substitution for Notes then outstanding and all Notes presented or delivered to the Trustee on and after that date for such purpose shall be stamped, imprinted or otherwise legended by the Trustee, with a notation as follows:

"Effective as of            , 2004, certain restrictive covenants of the Company and certain Events of Default have been eliminated or limited, as provided in the Supplemental Indenture, dated as of            , 2004. Reference is hereby made to said Supplemental Indenture, copies of which are on file with the Trustee, for a description of the amendments made therein."

Section 3.10    Effect of Headings.    The Section headings herein are for convenience only and shall not affect the construction thereof.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

4

        IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the day and year written above.

Attest:	CONCENTRA OPERATING CORPORATION, as Obligor
/s/  RICHARD A. PARR II	By:	/s/  DOUGLAS C. RICE
Richard A. Parr II, Secretary	Name:	Douglas C. Rice
	Title:	Senior Vice President & Controller
	THE BANK OF NEW YORK, as Trustee
	By:	/s/  JEREMY FINKELSTEIN
	Name:	Jeremy Finkelstein
	Title:	Assistant Treasurer

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Exhibit 4.4

ARTICLE I DEFINITIONS
ARTICLE II AMENDMENTS TO INDENTURE
ARTICLE III MISCELLANEOUS PROVISIONS

EX-4.7

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Exhibit 4.7

EXECUTION COPY

CONCENTRA OPERATING CORPORATION

and

THE GUARANTORS NAMED HEREIN

TO

THE BANK OF NEW YORK
as Trustee

Indenture

Dated as of June 8, 2004

9¹/8% Senior Subordinated Notes due 2012

Reconciliation and tie between Trust Indenture Act of 1939 and Indenture, dated as of June 8, 2004.¹

Trust Indenture Act Section		Indenture Section
§ 310	(a)(1)	609
	(a)(2)	609
	(a)(3)	Not Applicable
	(a)(4)	Not Applicable
	(b)	608, 610
§ 311	(a)	613
	(b)	613
§ 312	(a)	701, 702(a)
	(b)	702(b)
	(c)	702(c)
§ 313	(a)	703(a)
	(b)	703(a)
	(c)	703(a)
	(d)	703(b)
§ 314	(a)	704
	(b)	Not Applicable
	(c)(1)	102
	(c)(2)	102
	(c)(3)	Not Applicable
	(d)	Not Applicable
	(e)	102
§ 315	(a)	601(a)
	(b)	602, 703(a)
	(c)	601(a)
	(d)	601(c)
	(d)(1)	601(c)(1)
	(d)(2)	601(c)(2)
	(d)(3)	601(c)(3)
	(e)	514
§ 316	(a)(1)(A)	512
	(a)(1)(B)	513
	(a)(2)	Not Applicable
	(b)	508
	(c)	104(e)
§ 317	(a)(1)	503
	(a)(2)	504
	(b)	1003
§ 318	(a)	107

¹ Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.

TABLE OF CONTENTS

	Page
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.	1
SECTION 102. Compliance Certificates and Opinions	23
SECTION 103. Form of Documents Delivered to Trustee	23
SECTION 104. Acts of Holders; Record Date.	24
SECTION 105. Notices, Etc., to Trustee and Company	26
SECTION 106. Notice to Holders; Waiver	26
SECTION 107. Conflict with Trust Indenture Act	26
SECTION 108. Effect of Headings and Table of Contents	26
SECTION 109. Successors and Assigns	26
SECTION 110. Separability Clause	26
SECTION 111. Benefits of Indenture	26
SECTION 112. Governing Law	26
SECTION 113. Legal Holidays	27
SECTION 114. No Personal Liability of Directors, Officers, Employees and Stockholders	27
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally	27
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms	27
SECTION 302. Denominations	28
SECTION 303. Execution, Authentication, Delivery and Dating	28
SECTION 304. Temporary Securities	29
SECTION 305. Register; Transfer and Exchange	29
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities	29
SECTION 307. Payment of Interest; Interest Rights Preserved	30
SECTION 308. Persons Deemed Owners	31
SECTION 309. Cancellation	31
SECTION 310. CUSIP and ISIN Numbers	31
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture	32
SECTION 402. Application of Trust Money	32
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default	33
SECTION 502. Acceleration of Maturity; Rescission and Annulment	34

ii

SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.	35
SECTION 504. Trustee May File Proofs of Claim	36
SECTION 505. Trustee May Enforce Claims Without Possession of Securities	36
SECTION 506. Application of Money Collected	36
SECTION 507. Limitation on Suits	36
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest	37
SECTION 509. Restoration of Rights and Remedies	37
SECTION 510. Rights and Remedies Cumulative	37
SECTION 511. Delay or Omission Not Waiver	37
SECTION 512. Control by Holders	37
SECTION 513. Waiver of Past Defaults	38
SECTION 514. Undertaking for Costs	38
SECTION 515. Waiver of Usury, Stay or Extension Laws	38
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.	38
SECTION 602. Notice of Defaults	39
SECTION 603. Certain Rights of Trustee.	39
SECTION 604. Not Responsible for Recitals or Issuance of Securities	40
SECTION 605. May Hold Securities	40
SECTION 606. Money Held in Trust	40
SECTION 607. Compensation and Reimbursement	41
SECTION 608. Disqualification; Conflicting Interests	41
SECTION 609. Corporate Trustee Required; Eligibility	41
SECTION 610. Resignation and Removal; Appointment of Successor	41
SECTION 611. Acceptance of Appointment by Successor	42
SECTION 612. Merger, Conversion, Consolidation or Succession to Business	43
SECTION 613. Preferential Collection of Claims Against Company	43
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders	43
SECTION 702. Preservation of Information; Communications to Holders.	43
SECTION 703. Reports by Trustee.	44
SECTION 704. Reports by Company	44
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Limitation on Merger, Consolidation or Sale of Assets	44
SECTION 802. Successor Substituted	45
SECTION 803. Transfer of Subsidiary Assets	46
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders	46
SECTION 902. Supplemental Indentures with Consent of Holders	46

iii

SECTION 903. Execution of Supplemental Indentures	47
SECTION 904. Effect of Supplemental Indentures	47
SECTION 905. Conformity With Trust Indenture Act	47
SECTION 906. Reference in Securities to Supplemental Indentures	47
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest	47
SECTION 1002. Maintenance of Office or Agency	47
SECTION 1003. Money for Security Payments to be Held in Trust	48
SECTION 1004. Existence	49
SECTION 1005. Maintenance of Properties	49
SECTION 1006. Payment of Taxes and Other Claims	49
SECTION 1007. Maintenance of Insurance	49
SECTION 1008. Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock	49
SECTION 1009. Limitation on Restricted Payments	52
SECTION 1010. Limitations on Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries	55
SECTION 1011. Limitation on Liens Securing Indebtedness	56
SECTION 1012. Limitation on Transactions With Affiliates	56
SECTION 1013. Limitation on Issuances and Sales of Equity Interests in Restricted Subsidiaries	58
SECTION 1014. Repurchase of Securities at the Option of the Holder Upon a Change of Control.	58
SECTION 1015. Repurchase of Securities at the Option of the Holder Upon an Asset Sale	61
SECTION 1016. Investment Company	62
SECTION 1017. Limitations on Issuances of Guarantees of Indebtedness	62
SECTION 1018. Additional Guarantees	63
SECTION 1019. Limitation on Lines of Business	63
SECTION 1020. Anti-Layering	63
SECTION 1021. [NOT USED]	63
SECTION 1022. [NOT USED]	63
SECTION 1023. Designation of Restricted and Unrestricted Subsidiaries	63
SECTION 1024. Advances to Subsidiaries	64
SECTION 1025. Payments for Consents	64
SECTION 1026. Statement by Officers as to Default; Compliance Certificates	64
SECTION 1027. Waiver of Covenants	64
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. [NOT USED]	64
SECTION 1102. Applicability of Article	64
SECTION 1103. Election to Redeem; Notice to Trustee	65
SECTION 1104. Selection by Trustee of Securities to be Redeemed	65
SECTION 1105. Notice of Redemption	65
SECTION 1106. Deposit of Redemption Price	66
SECTION 1107. Securities Payable on Redemption Date	66
SECTION 1108. Securities Redeemed in Part	66

iv

ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Company's Option to Effect Legal Defeasance or Covenant Defeasance	66
SECTION 1202. Legal Defeasance and Discharge	67
SECTION 1203. Covenant Defeasance	67
SECTION 1204. Conditions to Legal or Covenant Defeasance	67
SECTION 1205. Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions	68
SECTION 1206. Reinstatement	69
ARTICLE THIRTEEN
SUBORDINATION
SECTION 1301. Agreement to Subordinate	69
SECTION 1302. Liquidation; Dissolution; Bankruptcy	69
SECTION 1303. Default on Senior Indebtedness	69
SECTION 1304. Acceleration of Securities	70
SECTION 1305. When Distribution Must be Paid Over	70
SECTION 1306. Notice by Company	71
SECTION 1307. Subrogation	71
SECTION 1308. Relative Rights	71
SECTION 1309. Subordination May Not be Impaired by Company	72
SECTION 1310. Rights of Trustee and Paying Agent	72
SECTION 1311. Authorization to Effect Subordination	72
SECTION 1312. Amendments	73
SECTION 1313. Trustee Not Fiduciary for Holders of Senior Indebtedness	73
ARTICLE FOURTEEN
SUBSIDIARY GUARANTEES
SECTION 1401. Subsidiary Guarantees	73
SECTION 1402. Execution and Delivery of Subsidiary Guarantees	74
SECTION 1403. Guarantors May Consolidate, etc., on Certain Terms.	75
SECTION 1404. Releases Following Sale of Assets	75
SECTION 1405. Limitation of Guarantor's Liability	76
SECTION 1406. Application of Certain Terms and Provisions to the Guarantors	76
SECTION 1407. Release of Subsidiary Guarantees	76
SECTION 1408. Subordination of Subsidiary Guarantees	76
SECTION 1409. Waiver of Subrogation	77
SECTION 1410. Immediate Payment	77
SECTION 1411. No Set-Off	77
SECTION 1412. Obligations Absolute	77
SECTION 1413. Obligations Continuing	77
SECTION 1414. Obligations Not Reduced	78
SECTION 1415. Obligations Reinstated	78
SECTION 1416. Obligations Not Affected	78
SECTION 1417. Dealing With the Company and Others	79
SECTION 1418. Default and Enforcement	79
SECTION 1419. Costs and Expenses	79
SECTION 1420. No Waiver; Cumulative Remedies	79

v

SECTION 1421. Representation and Warranty of Each Guarantor	80
SECTION 1422. Successors and Assigns	80
SECTION 1423. Contribution	80

RULE 144A	REGULATION S/IAI APPENDIX
EXHIBIT 1	FORM OF INITIAL SECURITY
EXHIBIT 2	FORM OF EXCHANGE SECURITY OR PRIVATE EXCHANGE SECURITY
EXHIBIT 3	FORM OF TRANSFEREE LETTER OF REPRESENTATION
EXHIBIT A	FORM OF ENDORSEMENT OF SUBSIDIARY GUARANTORS	A-1
EXHIBIT B	FORM OF INTERCOMPANY NOTE	B-1

vi

        INDENTURE, dated as of June 8, 2004, among CONCENTRA OPERATING CORPORATION, a corporation duly organized and existing under the laws of the State of Nevada (herein called the "Company"), having its principal office at 5080 Spectrum Drive, Suite 400—West Tower, Addison, Texas 75001, the GUARANTORS and THE BANK OF NEW YORK, a New York banking corporation, as Trustee (herein called the "Trustee").

        Each party agrees as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Initial Securities and, if and when issued pursuant to a registered exchange for Initial Securities, the Exchange Securities and, if and when issued pursuant to a private exchange for Initial Securities, the Private Exchange Securities:

ARTICLE ONE

Definitions and Other Provisions
of General Application

        SECTION 101.    Definitions.

        For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

        (1)   the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

        (2)   all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

        (3)   all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;

        (4)   unless otherwise specifically set forth herein, all calculations or determinations of a Person shall be performed or made on a consolidated basis in accordance with GAAP; and

        (5)   the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

        Certain terms, used principally in Article Six, are defined in that Article.

        "9¹/2% Senior Subordinated Notes" means the Company's 9¹/2% Series B Senior Subordinated Notes due 2010.

        "13% Senior Subordinated Notes" means the Company's 13% Series A Senior Subordinated Notes due 2009 and Series B Senior Subordinated Notes due 2009.

        "Acquired Debt" means, with respect to any specified Person:

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

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

        "Act," when used with respect to any Holder, has the meaning specified in Section 104.

        "Additional Interest" has the meaning set forth in the Registration Rights Agreement.

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        "Additional Securities" means Securities issued under this Indenture after the Issue Date and in compliance with Sections 301 and 1008, it being understood that any Securities issued in exchange for or replacement of any Initial Security issued on the Issue Date shall not be an Additional Security, including any such Securities issued pursuant to a Registration Rights Agreement.

        "Adjusted Treasury Rate" means, with respect to any Redemption Date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which established yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities" for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after June 1, 2008, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (ii) is such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date, in each case calculated on the third Business Day immediately preceding the Redemption Date, plus 0.50%.

        "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control," as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the Voting Stock of a Person shall be deemed to be control. For purposes of this definition, the terms "controlling," "controlled by" and "under common control with" shall have correlative meanings; provided that any affiliated professional associations and professional corporations which employ physicians and other professionals who provide health care services for the Company's occupational health services centers shall not be deemed to be an Affiliate of the Company, Holdings or any of their Subsidiaries.

        "Affiliate Management Fees" means any management, consulting, monitoring or advisory fees, and related expenses, payable to Welsh Carson, Ferrer Freeman or their respective Affiliates.

        "Affiliate Transaction" has the meaning set forth in Section 1012.

        "Appendix" has the meaning set forth in Section 201.

        "Applicable Premium" means with respect to a Security at any Redemption Date, the greater of (i) 1.00% of the principal amount of such Security and (ii) the excess of (A) the present value at such redemption date of (1) the redemption price of such Security on June 1, 2008 (such redemption price being described below exclusive of any accrued interest) plus (2) all required remaining scheduled interest payments due on such Security through June 1, 2008 (but excluding accrued and unpaid interest to the Redemption Date), computed using a discount rate equal to the Adjusted Treasury Rate, over (B) the principal amount of such Security on such Redemption Date.

        "Asset Sale" means:

        (1)   the sale, lease (other than an operating lease entered into in the ordinary course of business), conveyance or other disposition (a "Disposition") of any assets or rights (other than the licensing of its non-exclusive intellectual property rights) (including, without limitation, by way of a sale and leaseback); provided that the Disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole shall be governed by Section 1014 and/or by Section 801 and not by Section 1015; and

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        (2)   the issue or sale by the Company or any of its Restricted Subsidiaries of Equity Interests of any of the Company's Restricted Subsidiaries (other than directors' qualifying shares);

that, in the case of either clause (1) or (2) and whether in a single transaction or a series of related transactions:

        (a)   has a fair market value in excess of $5 million; or

        (b)   is for net proceeds to the Company and its Restricted Subsidiaries in excess of $5 million.

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

        (1)   a transfer of assets among the Company, its Wholly Owned Restricted Subsidiaries and its Permitted Joint Ventures;

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

        (3)   a Restricted Payment that is permitted by Section 1009 or a Permitted Investment;

        (4)   the sale of Cash Equivalents in the ordinary course of business;

        (5)   a disposition of inventory in the ordinary course of business;

        (6)   sales of accounts receivable and related assets or an interest therein of the type specified in the definition of "Qualified Receivables Transaction" to a Receivables Entity;

        (7)   a disposition relating to the foreclosure of a Permitted Lien;

        (8)   the sale and leaseback of any assets within 90 days of the acquisition thereof;

        (9)   any exchange of property pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended, for use in a Permitted Business;

        (10) any sale, transfer or other disposition of property that is idle, damaged, worn out, obsolete or no longer suitable for use in the ordinary course of business; and

        (11) sales or grants of licenses or sublicenses to use intellectual property of the Company or any of its Restricted Subsidiaries to the extent such sale, license or sublicense does not interfere in any material respect with the business of the Company and its Restricted Subsidiaries.

        "Asset Sale Offer" has the meaning set forth in Section 1015.

        "Bankruptcy Law" means Title 11, U.S. Code or any Federal or State bankruptcy, insolvency, reorganization or other similar law.

        "Board of Directors" means, with respect to any Person, the board of directors of such Person, or any committee of the Board of Directors of such Person authorized, with respect to any particular matters, to exercise the power of such board of directors of such Person.

        "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors of the Company and to be in full force and effect on the date of such certification, and delivered to the Trustee.

        "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York, New York are authorized or obligated by law or executive order to close.

        "Calculation Date" has the meaning set forth in the definition of "Fixed Charge Coverage Ratio."

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

        "Capital Stock" means:

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

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

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

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

        "Cash Equivalents" means:

        (1)   Government Securities having maturities of not more than six months from the date of acquisition;

        (2)   certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case with any lender party to the Senior Credit Facilities or with any domestic commercial bank having capital and surplus in excess of $500 million and whose long-term debt, or whose parent holding company's long-term debt, is rated "A" (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act);

        (3)   repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (1) and (2) above entered into with any financial institution meeting the qualifications specified in clause (2) above;

        (4)   commercial paper having the rating of "P-1" (or higher) from Moody's Investors Service, Inc. or "A-1" (or higher) from Standard & Poor's Rating Service and in each case maturing within six months after the date of acquisition; and

        (5)   money market funds investing substantially in investments which constitute Cash Equivalents of the kinds described in clauses (1) through (4) of this definition.

        "Certificated Securities" means Securities in registered certificated form.

        "Change of Control" means the occurrence of any of the following:

        (1)   the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of either (x) the Company and its Subsidiaries taken as a whole or (y) Holdings to any "person" (as such term is used in Section 13(d) (3) of the Exchange Act) other than the Principals or a Related Party of any of the Principals;

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

        (3)   the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as defined above), other than the Principals and their Related Parties, becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Voting Stock of the Company (measured by voting power rather than number of shares);

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

        (5)   the Company or Holdings consolidates with, or merges with or into, any Person, or any Person consolidates with, or merges with or into, the Company or Holdings, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of the Company or Holdings, as the case may be, is converted into or exchanged for cash, securities or other property, other than any such transaction where the Voting Stock of the Company or Holdings, as the case may be, outstanding immediately prior to such transaction is converted into or exchanged for Voting Stock (other than Disqualified Stock) of the surviving or transferee Person constituting a majority of the outstanding shares of such Voting Stock of such surviving or transferee Person immediately after giving effect to such issuance.

        "Change of Control Offer" has the meaning set forth in Section 1014.

        "Change of Control Payment" has the meaning set forth in Section 1014.

        "Closing Date Dividend" means the dividend in the amount of up to $98.3 million declared and paid by the Company on or about the Issue Date; provided that approximately $1.2 million of such dividend may be paid on a deferred basis when determined by the Company to Holdings subsequent to the Issue Date.

        "Commission" means the Securities and Exchange Commission as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

        "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture and thereafter "Company" shall mean such successor Person.

        "Company Request" or "Company Order" means a written request or order signed in the name of the Company by its Chairman of the Board, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee.

        "Comparable Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Securities from the Redemption Date to June 1, 2008, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a maturity most nearly equal to June 1, 2008.

        "Comparable Treasury Price" means, with respect to any Redemption Date, if clause (ii) of the Adjusted Treasury Rate is applicable, the average of three, or such lesser number as is obtained by the Trustee, Reference Treasury Dealer Quotations for such Redemption Date.

        "consolidated" means, with respect to any Person, the consolidated accounts of such Person and its Subsidiaries with those of such Person, all in accordance with GAAP; provided that "consolidated" shall not include consolidation of the accounts of any Unrestricted Subsidiary with the accounts of the Company.

        "Consolidated EBITDA" means, with respect to any Person, for any period, the Consolidated Net Income of such Person for such period adjusted to add thereto (to the extent deducted from net revenues in determining Consolidated Net Income), without duplication, the sum of

        (1)   consolidated income taxes;

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        (2)   consolidated depreciation and amortization (including amortization of debt issuance costs in connection with any Indebtedness of such Person and its Restricted Subsidiaries and depreciation and amortization attributable to the Permitted Joint Ventures existing at August 17, 1999 which were not consolidated);

        (3)   Fixed Charges;

        (4)   expenditures paid prior to or contemporaneously with and related to any actual or proposed financing, mergers or dispositions or acquisitions permitted to be incurred by this Indenture (including, without limitation, financing and legal fees and costs incurred with any such mergers, acquisitions or dispositions);

        (5)   all other non-cash charges (excluding any such non-cash charge to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period);

provided that consolidated income taxes, depreciation and amortization of a Subsidiary of such Person that is not a Wholly Owned Subsidiary shall only be added to the extent of the Equity Interest of such Person in such Subsidiary.

        "Consolidated Interest Expense" means, with respect to any Person for any period, the sum of, without duplication:

        (1)   the interest expense of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP (including, without limitation, amortization of original issue discount, non-cash interest payments, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments, if any, pursuant to Hedging Obligations; provided that in no event shall any amortization of deferred financing costs be included in Consolidated Interest Expense); plus

        (2)   the consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; plus

        (3)   the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to such plan or trust; provided, however, that there shall be excluded therefrom any such interest expense of any Unrestricted Subsidiary to the extent the related Indebtedness is not Guaranteed or paid by the Company or any Restricted Subsidiary.

        Notwithstanding the preceding, the Consolidated Interest Expense with respect to any Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary shall be included only to the extent (and in the same proportion) that the net income of such Restricted Subsidiary was included in calculating Consolidated Net Income.

        "Consolidated Leverage Ratio" means, as of any date of determination, the ratio of (x) total Indebtedness of the Company and its Restricted Subsidiaries to (y) Consolidated EBITDA of the Company for the period of four consecutive fiscal quarters most recently ended for which internal financial statements are then available prior to the date of determination, with such pro forma adjustments as are appropriate and consistent with the pro forma adjustments set forth in the definition of Fixed Charge Coverage Ratio.

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

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

        (2)   the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders;

        (3)   the Net Income of any Person acquired in a transaction accounted for in a manner similar to a pooling of interests (including any common control acquisition) for any period prior to the date of such acquisition shall be excluded; and

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

        "Continuing Directors" means, as of any date of determination, any member of the Board of Directors of the Company who:

        (1)   was a member of such Board of Directors on the Issue Date;

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

        (3)   was nominated by the Principals.

        "Corporate Trust Office" shall be at the address of the Trustee specified in Section 105 hereof or such other address as to which the Trustee may give notice to the Company.

        "Covenant Defeasance" has the meaning specified in Section 1203.

        "Credit Agent" means JPMorgan Chase Bank, in its capacity as Administrative Agent for the lenders party to the Senior Credit Facilities, or any successor thereto or any person otherwise appointed.

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

        "Defaulted Interest" has the meaning specified in Section 307.

        "Designated Senior Indebtedness" means (1) any Indebtedness outstanding under the Senior Credit Facilities and (2) any other Senior Indebtedness which, at the date of determination, has an aggregate principal amount outstanding of, or under which, at the date of determination, the holders thereof are committed to lend up to, at least $25 million and is specifically designated in the instrument evidencing or governing such Senior Indebtedness as "Designated Senior Indebtedness" for purposes of this Indenture (provided, however, that no such Senior Indebtedness under clause (2) shall constitute Designated Senior Indebtedness at any time at which any 9¹/2% Senior Subordinated Notes are outstanding and such Senior Indebtedness does not also constitute "Designated Senior Indebtedness" under the indenture governing 9¹/2% Senior Subordinated Notes).

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        "Development Corporation" means any corporation, association, limited liability company or other business (other than a partnership) existing at the Issue Date managed by the Company but owned by a Person (who is not the Company or an Affiliate or a Subsidiary of the Company), engaged in the development of occupational health centers and financed by the issue of Equity Interests and notes under securities purchase agreements to third party investors.

        "Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the Securities mature. Notwithstanding the preceding sentence, any Capital Stock that would not constitute Disqualified Stock but for change of control or asset sale provisions shall not constitute Disqualified Stock if the provisions are not more favorable to the holders of such Capital Stock than the provisions under Section 1014 and Section 1015.

        "Domestic Restricted Subsidiary" means any Restricted Subsidiary other than (a) a Foreign Restricted Subsidiary or (b) a Subsidiary of a Foreign Restricted Subsidiary.

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

        "Equity Offering" means an offering of the Equity Interests (other than Disqualified Stock) of Holdings or the Company; provided that in the event of an offering by Holdings, Holdings contributes to the capital of the Company the portion of the net cash proceeds of such offering necessary to pay the aggregate redemption price (plus accrued interest to the redemption date) of the Securities to be redeemed pursuant to the provisions of paragraph 5 of the Securities.

        "Event of Default" has the meaning specified in Section 501.

        "Excess Proceeds" has the meaning set forth in Section 1015.

        "Exchange Act" means the Securities Exchange Act of 1934, as amended.

        "Exchange Securities" has the meaning set forth in the Appendix.

        "Existing Indebtedness" means Indebtedness of the Company and its Subsidiaries (other than Indebtedness under the Senior Credit Facilities) in existence on the Issue Date, until such amounts are repaid.

        "Expiration Date" has the meaning set forth in Section 104.

        "Ferrer Freeman" means Ferrer Freeman Thompson & Co. LLC and its Affiliates.

        "Fixed Charge Coverage Ratio" means with respect to any Person as of any date of determination, the ratio of the Consolidated EBITDA of such Person for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination and as to which internal financial statements are available to the Fixed Charges of such Person for such period. In the event that the Company or any of its Restricted Subsidiaries incurs, assumes, Guarantees, repays, repurchases, defeases, redeems or otherwise discharges any Indebtedness (other than revolving credit borrowings) or issues or redeems preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase, defeasance, redemption or discharge of Indebtedness, or such issuance or redemption of preferred stock, as if the same had occurred at the beginning of the applicable four-quarter reference period.

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

        (1)   acquisitions or dispositions that have been made by the Company or any of its Restricted Subsidiaries, including through mergers or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be calculated to include the Consolidated EBITDA of the acquired entities on a pro forma basis (to be calculated in accordance with Article 11-02 of Regulation S-X, as in effect from time to time), shall be deemed to have occurred on the first day of the four-quarter reference period and Consolidated EBITDA for such reference period shall be calculated without giving effect to clause (3) of the proviso set forth in the definition of Consolidated Net Income;

        (2)   the Consolidated EBITDA attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded if greater than zero; and

        (3)   the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges shall not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date.

        For purposes of this definition, whenever pro forma effect is to be given to an Investment or an acquisition or disposition of assets, the amount of income or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness incurred in connection therewith, or any other calculation under this definition, the pro forma calculations shall be determined in good faith by a responsible financial or accounting officer of the Company (including pro forma expense and cost reductions calculated on a basis consistent with Regulation S-X under the Securities Act). If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any interest rate agreement applicable to such Indebtedness if such interest rate agreement has a remaining term in excess of 12 months).

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

        (1)   the Consolidated Interest Expense of such Person for such period, minus the interest income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; plus

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

        (3)   the product of (a) all dividend payments, whether or not in cash, on any series of preferred stock of such Person or any of its Restricted Subsidiaries, other than dividend payments on Equity Interests payable solely in Equity Interests of the Company, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, on a consolidated basis and in accordance with GAAP.

        "Foreign Restricted Subsidiary" means any Restricted Subsidiary (a) that is not organized under the laws of the United States of America or any State thereof or the District of Columbia and (b) with respect to which more than 80% of any of its sales, earnings or assets (determined on a consolidated basis in accordance with GAAP) are located in, operated from or derived from operations located in

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territories outside of the United States of America and jurisdictions outside the United States of America.

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

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

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

        "Guarantors" means each Subsidiary of the Company that executes a Subsidiary Guarantee in accordance with the provisions of this Indenture, and their respective successors and assigns.

        "Hedging Obligations" means, with respect to any Person, the obligations of such Person under:

        (1)   interest rate swap agreements, interest rate cap agreements and interest rate collar agreements; and

        (2)   other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency exchange rates.

        "Holder" means a Person in whose name a Security is registered in the Note Register.

        "Holdings" means Concentra, Inc.

        "incur" has the meaning set forth in Section 1008.

        "Indebtedness" means, with respect to any specified Person, any indebtedness of such Person, in respect of:

        (1)   borrowed money;

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

        (3)   bankers' acceptances;

        (4)   representing Capital Lease Obligations; or

        (5)   the balance deferred and unpaid of the purchase price of any property (which purchase price is due more than 60 days after the date of placing such property in service or taking delivery and title thereto) or representing any Hedging Obligations, except any such balance that constitutes an accrued expense or trade payable,

if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term "Indebtedness" includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by such Person of any indebtedness of any other Person.

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

        (a)   the accreted value thereof, in the case of any Indebtedness that does not require current payments of interest; and

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

        "Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively.

        "Initial Securities" has the meaning set forth in the Appendix.

        "Insolvency or Liquidation Proceedings" means:

        (1)   any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding, relative to the Company or to the creditors of the Company, as such, or to the assets of the Company;

        (2)   any liquidation, dissolution, reorganization or winding up of the Company, whether voluntary or involuntary, and involving insolvency or bankruptcy; or

        (3)   any assignment for the benefit of creditors or any other marshaling of assets and liabilities of the Company.

        "Interest Payment Date" means each June 1 and December 1, commencing on December 1, 2004.

        "Investments" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), or purchases or other acquisitions of or the transfer of assets for consideration of, Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Restricted Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph of Section 1009.

        "Issue Date" means the date on which the Securities are first issued under this Indenture.

        "Legal Defeasance" has the meaning specified in Section 1202.

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

        "Maturity," when used with respect to any Security, means the date on which the principal of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.

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        "Net Income" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP, excluding, however:

        (1)   any gain (loss), together with any related provision for taxes on such gain (loss), realized in connection with:

        (a)   any Asset Sale; or

        (b)   the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries; and

        (2)   any extraordinary or nonrecurring gain (loss), together with any related provision for taxes on such extraordinary or nonrecurring gain (loss).

        "Net Proceeds" means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), the amounts required to be applied to the payment of Indebtedness (other than Indebtedness incurred pursuant to the Senior Credit Facilities) secured by a Lien on the asset or assets that were the subject of the Asset Sale, distributions and other payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such Asset Sale and the deduction of appropriate amounts provided by the seller as a reserve, in accordance with GAAP, for adjustments in respect of the sale price of the assets that were the subject of such Asset Sale or as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed in such Asset Sale and retained by the Company or any Restricted Subsidiary after such Asset Sale.

        "Non-Recourse Debt" means Indebtedness:

        (1)   as to which neither the Company nor any of its Restricted Subsidiaries:

        (a)   provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness),

        (b)   is directly or indirectly liable as a guarantor or otherwise, or

        (c)   constitutes the lender;

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

        (3)   as to which the lenders have been notified in writing that they shall not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries.

        "Note Register" or "Notes Registrar" have the respective meanings set forth in Section 305.

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

        "Officer" means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any

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Assistant Treasurer, the Controller, the Secretary, any Assistant Secretary or any Vice-President of such Person.

        "Officers' Certificate" means a certificate signed by the Chairman of the Board, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee. One of the officers signing an Officers' Certificate given pursuant to Section 1026 shall be the principal executive, financial or accounting officer of the Company.

        "Opinion of Counsel" means a written opinion of counsel, who may be internal counsel for the Company.

        "Outstanding", when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:

        (1)   Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation;

        (2)   Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and

        (3)   Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;

provided that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

        "pari passu", when used with respect to the ranking of any Indebtedness of any Person in relation to other Indebtedness of such Person, means that each such Indebtedness (a) either (i) is not subordinated in right of payment to any other Indebtedness of such Person or (ii) is subordinate in right of payment to the same Indebtedness of such Person as is the other and is so subordinate to the same extent and (b) is not subordinate in right of payment to the other or to any Indebtedness of such Person as to which the other is not so subordinate.

        "Paying Agent" means any Person authorized by the Company to pay the principal of (and premium, if any) or interest (and Additional Interest, if any) on any Securities on behalf of the Company.

        "Payment Blockage Period" has the meaning set forth in Section 1303.

        "Payment Default" has the meaning set forth in Section 501.

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        "Payment Notice" has the meaning set forth in Section 1303.

        "Permitted Business" means any business in which the Company and its Restricted Subsidiaries are engaged on the Issue Date or any business reasonably related, incidental or ancillary thereto.

        "Permitted Business Assets" means assets used or useful in a Permitted Business.

        "Permitted Debt" has the meaning set forth in Section 1008.

        "Permitted Investments" means:

        (1)   any Investment in the Company or in a Restricted Subsidiary (other than a Permitted Joint Venture);

        (2)   any Investment in cash or Cash Equivalents;

        (3)   any Investment in receivables owing to the Company or any Restricted Subsidiary created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances;

        (4)   any Investment received by the Company or any Restricted Subsidiary as consideration for the settlement of any litigation, arbitration or claim of bankruptcy or in partial or full satisfaction of accounts receivable owed by a financially troubled Person to the extent reasonably necessary in order to prevent or limit any loss by the Company or any of its Restricted Subsidiaries in connection with such accounts receivable;

        (5)   Investments in existence on the Issue Date;

        (6)   Hedging Obligations entered into in the ordinary course of business which transactions or obligations are incurred in compliance with Section 1008;

        (7)   Guarantees issued in accordance with Section 1008;

        (8)   any Investment by the Company or a Restricted Subsidiary in a Receivables Entity or any Investment by a Receivables Entity in any other Person, in each case, in connection with a Qualified Receivables Transaction; provided, however, that any Investment in any such Person is in the form of a Purchase Money Note, or any equity interest or interests in accounts receivable and related assets generated by the Company or a Restricted Subsidiary and transferred to any Person in connection with a Qualified Receivables Transaction or any such Person owning such accounts receivable;

        (9)   any Investment by the Company or any Restricted Subsidiary of the Company (other than a Permitted Joint Venture) in a Person, if as a result of such Investment:

        (a)   such Person becomes a Restricted Subsidiary (other than a Permitted Joint Venture) of the Company or of a Restricted Subsidiary of the Company (other than a Permitted Joint Venture); or

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

        (10) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 1015;

        (11) any acquisition of assets solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company;

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        (12) any Investment in any Permitted Joint Venture after the Issue Date in an aggregate amount not to exceed $40 million, such aggregate amount to be increased as a result of any management fees, software fees and development fees received from such Permitted Joint Ventures in the ordinary course of business and any payment of any dividend or distribution received on a pro rata basis from any Permitted Joint Ventures as a holder of its Equity Interests; and

        (13) any Investment in any Person after the Issue Date in an aggregate amount, taken together with all other Investments made pursuant to this clause (13) that are at the time outstanding, not to exceed $30 million.

        "Permitted Joint Venture" means, with respect to any Person:

        (1)   any corporation, association or other business entity (other than a partnership):

        (a)   of which more than 50% (or in the case of any such business entity in which the Company or any Restricted Subsidiary has an Investment before the Issue Date, 50% or more) of the Voting Stock is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the Restricted Subsidiaries of that Person or a combination thereof; and

        (b)   which is either managed or controlled by such Person or any of its Restricted Subsidiaries; and

        (2)   any partnership, joint venture, limited liability company or similar entity:

        (a)   of which more than 50% (or in the case of any such entity in which the Company or any Restricted Subsidiary has an Investment before the Issue Date, 50% or more) of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests are owned or controlled, directly or indirectly, by such Person or one or more of the Restricted Subsidiaries of that Person or a combination thereof;

        (b)   which is either managed or controlled by such Person or any of its Restricted Subsidiaries,

and which in the case of each of clauses (1) and (2),

        (A)  is engaged in a Permitted Business;

        (B)  only incurs Indebtedness to the Company;

        (C)  does not enter into any Guarantee; and

        (D)  distributes all cash pro rata in accordance with the Equity Interests therein at least annually (other than cash required to be reserved on its balance sheet in accordance with GAAP consistent with past practice).

        "Permitted Liens" means:

        (1)   Liens that secure up to an aggregate principal amount of $545 million of Senior Indebtedness and Guarantees incurred pursuant to the Senior Credit Facilities;

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

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

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        (4)   Liens on property or assets of any Person existing at the time of acquisition of such property or Person owning such property by the Company or any Restricted Subsidiary of the Company, provided such Liens were not incurred in contemplation of such acquisition;

        (5)   Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business;

        (6)   Liens existing on the Issue Date;

        (7)   Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor;

        (8)   Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of Section 1008;

        (9)   Liens securing Permitted Refinancing Indebtedness where the Liens securing the Indebtedness being refinanced were permitted under this Indenture;

        (10) Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary of the Company with respect to obligations that do not exceed $10 million at any one time outstanding and that: (a) are not incurred in connection with the borrowing of money or the obtaining of advances or credit (other than trade credit in the ordinary course of business) and (b) do not in the aggregate materially detract from the value of the property or materially impair the use thereof in the operation of business by the Company or such Restricted Subsidiary;

        (11) Liens on assets of Unrestricted Subsidiaries that secure Non-Recourse Debt of Unrestricted Subsidiaries;

        (12) easements, rights-of-way, zoning and similar restrictions and other similar encumbrances or title defects incurred or imposed, as applicable, in the ordinary course of business and consistent with industry practices;

        (13) any interest or title of a lessor under any Capital Lease Obligation;

        (14) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof;

        (15) Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual or warranty requirements of the Company or any of its Restricted Subsidiaries, including rights of offset and set-off;

        (16) Liens securing Hedging Obligations which Hedging Obligations relate to Indebtedness that is otherwise permitted under this Indenture;

        (17) pledges or deposits by such Person, in each case incurred in the ordinary course of business:

        (a)   under workmen's compensation laws, unemployment insurance and other types of social security legislation (other than any Lien imposed by the Employer Retirement Income Security Act of 1974, as amended);

        (b)   made in good faith in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party;

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        (c)   to secure public or statutory obligations of such Person or deposits or cash or Cash Equivalents to secure surety or appeal bonds to which such Person is a party; or

        (d)   as security for contested taxes or import or customs duties or for the payment of rent;

        (18) Liens imposed by law, including carriers', warehousemens' and mechanics' Liens, in each case for sums not yet delinquent or being contested in good faith by appropriate proceedings if a reserve or other appropriate provisions, if any, as shall be required by GAAP shall have been made in respect thereof;

        (19) judgment Liens not giving rise to an Event of Default so long as such Lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;

        (20) Liens securing Indebtedness of a Restricted Subsidiary owing to the Company or a Wholly Owned Restricted Subsidiary (other than a Receivables Entity);

        (21) Liens securing the Securities and Subsidiary Guarantees under this Indenture;

        (22) Liens on assets transferred to a Receivables Entity or on assets of a Receivables Entity, in either case incurred in connection with a Qualified Receivables Transaction;

        (23) leases or subleases granted to others that do not materially interfere with the ordinary course of business of the Company and its Restricted Subsidiaries; and

        (24) Liens arising from filing Uniform Commercial Code financing statements regarding leases.

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

        (1)   the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus accrued interest on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of reasonable expenses incurred in connection therewith) except, in the case of the Senior Credit Facilities, the principal amount of such Permitted Refinancing Indebtedness does not exceed the greater of:

        (a)   the principal amount of Indebtedness permitted (whether or not borrowed) under clause (1) of the second paragraph of Section 1008; and

        (b)   the amount actually borrowed or available to be borrowed under the Senior Credit Facilities;

        (2)   such Permitted Refinancing Indebtedness has a final maturity date no earlier than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and

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

17

the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded.

        "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or agency or political subdivision thereof (including any subdivision or ongoing business of any such entity or substantially all of the assets of any such entity, subdivision or business).

        "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

        "Principals" means Welsh Carson, Ferrer Freeman and their respective Affiliates.

        "Private Exchange Securities" has the meaning set forth in the Appendix.

        "pro forma" includes, with respect to an acquisition or the incurrence of Indebtedness in connection therewith, all adjustments, permitted or required to be included pursuant to Article 11 of Regulation S-X and subject to agreed-upon procedures to be performed by the Company's independent accountants to determine whether the pro forma calculations are made in accordance with Article 11 of Regulation S-X.

        "Purchase Date" means the settlement date specified by the Company in an Asset Sale Offer or Change of Control Offer, which shall be within five Business Days of the expiration date specified in such offer.

        "Purchase Money Note" means a promissory note of a Receivables Entity evidencing a line of credit, which may be irrevocable, from the Company or any Restricted Subsidiary of the Company in connection with a Qualified Receivables Transaction to a Receivables Entity, which note is repayable from cash available to the Receivables Entity, other than amounts required to be established as reserves pursuant to agreements, amounts paid to investors and amounts owing to such investors and amounts paid in connection with the purchase of newly generated accounts receivable.

        "Qualified Receivables Transaction" means any transaction or series of transactions that may be entered into by the Company or any of its Restricted Subsidiaries on an arms' length basis with the Standard Securitization Undertakings pursuant to which the Company or any of its Restricted Subsidiaries may sell, convey or otherwise transfer to:

        (1)   a Receivables Entity (in the case of a transfer by the Company or any of its Restricted Subsidiaries); or

        (2)   any other Person (in the case of a transfer by a Receivables Entity)

or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of the Company or any of its Restricted Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, the proceeds of such receivables and other assets which are customarily transferred, or in respect of which security interests are customarily granted in connection with asset securitization involving accounts receivable; provided that the aggregate consideration received in each such sale is at least equal to the aggregate fair market value of the receivables transferred.

        "Qualifying Rating" means a rating of the Notes of Ba3 or better by Moody's or BB- or better by Standard & Poor's (or if either such rating agency shall cease to provide a rating of the notes for reasons outside the control of the Company, the equivalent rating from any other "nationally

18

recognized statistical rating organization" within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company as a replacement agency).

        "Quotation Agent" means the Reference Treasury Dealer selected by the Company.

        "Receivables Entity" means a Wholly Owned Subsidiary of the Company (or another Person in which the Company or any Restricted Subsidiary of the Company makes an Investment and to which the Company or any Restricted Subsidiary of the Company enters into a Qualified Receivables Transaction) which engages in no activities other than the financing of a Qualified Receivables Transaction and which is designated by the Board of Directors of the Company (as provided below) as a Receivables Entity:

        (1)   no portion of Indebtedness or any other obligations (contingent or otherwise) of such Person of which:

        (a)   is guaranteed by the Company or any Restricted Subsidiary of the Company (excluding guarantees of Obligations (other than the principal, and interest, on Indebtedness) pursuant to Standard Securitization Undertakings);

        (b)   has recourse to or obligates the Company or any Restricted Subsidiary of the Company in any way other than pursuant to Standard Securitization Undertakings; and

        (c)   subjects any property or asset of the Company or any Restricted Subsidiary of the Company, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings;

        (2)   with which neither the Company nor any Restricted Subsidiary of the Company has any contract, agreement, arrangement or understanding other than

        (a)   a Qualified Receivables Transaction in the ordinary course of business; and

        (b)   fees payable in the ordinary course of business in connection with servicing accounts receivable,

both of which shall be on terms no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Company; and

        (3)   to which neither the Company nor any Restricted Subsidiary of the Company has any obligation to

        (a)   subscribe for additional shares of Capital Stock or other Equity Interests therein or make any additional capital contributions or similar payments or transfers thereto other than in connection with a Qualified Receivables Transaction; or

        (b)   maintain or preserve such entity's solvency, any balance sheet term, financial condition, level of income or cause such entity to achieve certain levels of operating results.

        Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of the Company giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing conditions.

        "Redemption Date," when used with respect to any Security to be redeemed, means the date fixed for such redemption pursuant to this Indenture (including paragraph 5 of the Securities).

        "Redemption Price," when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture (including paragraph 5 of the Securities).

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        "Reference Treasury Dealer" means Credit Suisse First Boston LLC and its successors and assigns and two other nationally recognized investment banking firm selected by the Company that are primary U.S. Government securities dealers.

        "Reference Treasury Dealer Quotations" means with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day immediately preceding such Redemption Date.

        "Registration Rights Agreement" means the Registration Rights Agreement, dated as of August 13, 2003, by and among the Company, the Guarantors, Credit Suisse First Boston LLC, Citigroup Global Markets, Inc. and the other parties named on the signature pages thereof, as such agreement may be amended, modified or supplemented from time to time.

        "Regular Record Date" means each May 15 and November 15.

        "Related Party" with respect to any Principal means:

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

        (2)   any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding a 51% or more controlling interest of which consist of such Principal and/or such other Persons referred to in the immediately preceding clause.

        "Reorganization Securities" means securities distributed to Holders of the Securities in an Insolvency or Liquidation Proceeding pursuant to a plan of reorganization consented to by each class of the Senior Indebtedness, but only if in such plan of reorganization the Holders of the Securities on the one hand and the holders of the Senior Indebtedness on the other hand are placed in separate and distinct classes from each other and from the classes of other claimants and the class of the Holders of the Securities is junior to the class of the holders of the Senior Indebtedness and only if all of the terms and conditions of such securities, including, without limitation, term, tenor, interest, amortization, subordination, standstills, covenants and defaults, are at least as favorable (and provide the same relative benefits) to the holders of Senior Indebtedness and to the holders of any security distributed in such Insolvency or Liquidation Proceeding on account of any such Senior Indebtedness as the terms and conditions of the Securities and this Indenture are, and provide, to the holders of Senior Indebtedness.

        "Representative" means the Trustee, agent or representative for any Senior Indebtedness.

        "Responsible Officer" when used with respect to the Trustee, means any Vice President, the treasurer, any assistant treasurer, any trust officer or assistant trust officer or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

        "Restricted Investment" means an Investment other than a Permitted Investment.

        "Restricted Payment" has the meaning set forth in Section 1009.

        "Restricted Subsidiary" of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

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        "Securities" means the Securities issued under this Indenture, including the Initial Securities, the Exchange Securities, the Private Exchange Securities and any Additional Securities but excluding the Subsidiary Guarantees.

        "Securities Act" means the Securities Act of 1933, as amended.

        "Senior Credit Facilities" means the Credit Agreement, existing on the Issue Date, among the Company, Holdings, the several lenders from time to time parties thereto and JPMorgan Chase Bank, as Administrative Agent, providing for revolving credit borrowings, term loans and letters of credit, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as amended, modified, renewed, refunded, replaced or refinanced (whether or not with the original administrative agent and lenders or another administrative agent or agents or other lenders) from time to time including increases in principal amount.

        "Senior Indebtedness" means:

        (1)   all Indebtedness outstanding under the Senior Credit Facilities, including any Guarantees thereof and all Hedging Obligations with respect thereto;

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

        (3)   all Obligations with respect to the preceding clauses (1) and (2).

        Notwithstanding anything to the contrary in the preceding, Senior Indebtedness shall not include:

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

        (2)   any Indebtedness of the Company to any of its Subsidiaries or other Affiliates;

        (3)   any trade payables; or

        (4)   any Indebtedness that is incurred in violation of this Indenture.

        "Senior Indebtedness" of any Guarantor has a correlative meaning.

        "Significant Subsidiary" means any Restricted Subsidiary that would be a "significant subsidiary" of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the Commission.

        "Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307.

        "Standard Securitization Undertakings" means the interest rate, representations, warranties, covenants, the events of default and indemnities entered into by the Company or any Restricted Subsidiary of the Company which shall be customary in securitization of accounts receivable transactions and on market terms.

        "Stated Maturity" means, with respect to any security, the date specified in such security as the fixed date on which payment of or principal on such security is due and payable in the original documentation governing such securities, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

        "Subsidiary" means, with respect to any Person:

        (1)   any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned

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or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof);

        (2)   any partnership or limited liability company (a) the sole general partner or the managing general partner or managing member of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof); and

        (3)   any Permitted Joint Venture of such Person.

        "Subsidiary Guarantee" means a Guarantee provided by a Restricted Subsidiary.

        "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

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

        "Unrestricted Subsidiary" means (a) any Subsidiary that is designated by the Board of Directors of the Company as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors and (b) any Subsidiary of an Unrestricted Subsidiary, but, in each case, only to the extent that such Subsidiary:

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

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

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

        (4)   has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries.

        Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors giving effect to such designation and an Officers' Certificate certifying that such designation complied with the preceding conditions and was permitted by Section 1009. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 1008, the Company shall be in default of such covenant. The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall be permitted only if: (1) such Indebtedness is permitted under Section 1008 and (2) no Default or Event of Default would be in existence following such designation.

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        "U.S. Government Obligations" means direct non-callable obligations of, or noncallable obligations guaranteed by, the United States of America for the payment of which obligation or guarantee the full faith and credit of the United States of America is pledged.

        "Vice President," when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president."

        "Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors or other similar governing board or group of such Person.

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

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

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

        "Welsh Carson" means Welsh, Carson, Anderson & Stowe VIII, L.P. and its Affiliates.

        "Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares) shall at the time be owned by such Person and/or by one or more Wholly Owned Subsidiaries of such Person.

        "Wholly Owned Restricted Subsidiary" of the Company means a Wholly Owned Subsidiary which is a Restricted Subsidiary of the Company.

        SECTION 102.    Compliance Certificates and Opinions.    Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such certificates and opinions as it may reasonably request or as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers' Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirement set forth in this Indenture.

        Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

        (1)   a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

        (2)   a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

        (3)   a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

        (4)   a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

        SECTION 103.    Form of Documents Delivered to Trustee.    In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all

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such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

        Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

        Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

        SECTION 104.    Acts of Holders; Record Date.

        (a)   Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

        (b)   The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

        (c)   The ownership of Securities shall be proved by the Notes Register.

        (d)   Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.

        (e)   The Company may set any day as a record day for the purpose of determining the Holders of Outstanding Securities entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders; provided that the Company may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in the next paragraph. If any record date is set pursuant to this paragraph, the

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Holders of Outstanding Securities on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities on such record date. Nothing in this paragraph shall be construed to prevent the Company from setting a record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be canceled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder in the manner set forth in Section 106.

        The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities entitled to join in the giving or making of (i) any notice of Default, (ii) any declaration of acceleration referred to in Section 502, (iii) any request to institute proceedings referred to in Section 507(2) or (iv) any direction referred to in Section 512. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities on such record date. Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be canceled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company's expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company in writing and to each Holder in the manner set forth in Section 106.

        With respect to any record date set pursuant to this Section, the party hereto which sets such record dates may designate any day as the "Expiration Date" and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party hereto in writing, and to each Holder in the manner set forth in Section 106, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the party hereto which set such record date shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph.

        (f)    Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount.

        (g)   Notwithstanding any provision herein to the contrary, all Securities issued under this Indenture shall vote and consent together on all matters (as to which the Holders may vote or consent) as one class and no series of Securities will have the right to vote or consent as a separate class on any matter.

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        SECTION 105.    Notices, Etc., to Trustee and Company.    Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

        (1)   the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (which may be via facsimile) to or with the Trustee at its Corporate Trust Office at The Bank of New York, 101 Barclay Street, Fl. 8W, New York, New York 10286, Attention: Corporate Trust Administration, or

        (2)   the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company.

        Notice to the Trustee shall not be effective until it is actually received by a Responsible Officer.

        SECTION 106.    Notice to Holders; Waiver.    Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Note Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

        In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

        SECTION 107.    Conflict with Trust Indenture Act.    If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.

        SECTION 108.    Effect of Headings and Table of Contents.    The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

        SECTION 109.    Successors and Assigns.    All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

        SECTION 110.    Separability Clause.    In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

        SECTION 111.    Benefits of Indenture.    Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.

        SECTION 112.    Governing Law.    This Indenture, the Securities and the Subsidiary Guarantees shall be governed by and construed in accordance with the laws of the State of New York.

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        SECTION 113.    Legal Holidays.    In any case where any Interest Payment Date, Redemption Date, Purchase Date or Stated Maturity of any Security shall not be a Business Day, then (notwithstanding any other provision of this Indenture or of the Securities) payment of interest or principal (and premium, if any) need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date, Redemption Date or Purchase Date, or at the Stated Maturity; provided that to the extent such payment is made on such next succeeding Business Day, no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date, Purchase Date or Stated Maturity, as the case may be.

        SECTION 114.    No Personal Liability of Directors, Officers, Employees and Stockholders.    No director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or the Guarantors under the Securities, the Subsidiary Guarantees, this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities.

ARTICLE TWO

Security Forms

        SECTION 201.    Forms Generally.    Provisions relating to the Initial Securities, the Private Exchange Securities and the Exchange Securities are set forth in the Rule 144A/Regulation S/IAI Appendix attached hereto (the "Appendix") which is hereby incorporated in, and expressly made a part of, this Indenture. The Initial Securities and the Trustee's certificate of authentication shall be substantially in the form of Exhibit 1 to the Appendix which is hereby incorporated in, and expressly made a part of, this Indenture. The Exchange Securities, the Private Exchange Securities and the Trustee's certificate of authentication shall be substantially in the form of Exhibit 2, which is hereby incorporated in and expressly made a part of this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company). Each Security shall be dated the date of its authentication. The terms of the Securities set forth in the Appendix and Exhibit 1 are part of the terms of this Indenture.

        The Subsidiary Guarantees shall be in substantially the form set forth in Exhibit A attached hereto.

ARTICLE THREE

The Securities

        SECTION 301.    Title and Terms.    Except as set forth in the next paragraph, the aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is limited to $155,000,000 million, except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities pursuant to Section 304, 305, 306, 906 or 1108 or in connection with an Asset Sale Offer or Change of Control Offer pursuant to Sections 1015 or 1014, respectively.

        After the Issue Date, the Company shall be entitled, subject to its compliance with Section 1008, to issue Additional Securities under this Indenture, which Securities shall have identical terms as the Initial Securities issued on the Issue Date, other than with respect to the date of issuance and issue price. All the Securities issued under this Indenture shall be treated as a single class for all purposes of this Indenture.

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        With respect to any Additional Securities, the Company shall set forth in a resolution of the Board of Directors, an Officers' Certificate and a supplemental indenture pursuant to Section 901, a copy of each which shall be delivered to the Trustee, the following information:

        (1)   the aggregate principal amount of such Additional Securities to be authenticated and delivered pursuant to this Indenture and the provision of Section 1008 that the Company is relying on to issue such Additional Securities;

        (2)   the issue price, the issue date and the CUSIP number of such Additional Securities; provided, however, that no Additional Securities may be issued at a price that would cause such Additional Securities to have "original issue discount" within the meaning of Section 1273 of the Internal Revenue Code of 1986, as amended; and

        (3)   whether such Additional Securities shall be Initial Securities or shall be issued in the form of Exchange Securities as set forth in Exhibit 2.

        The Securities shall be known and designated as the "9¹/8% Senior Subordinated Notes due 2012" of the Company.

        The Securities are general senior subordinated unsecured obligations of the Company, are subordinated in right of payment to all existing and future Senior Indebtedness of the Company and shall rank senior or pari passu in right of payment to all existing and future subordinated Indebtedness of the Company and are unconditionally guaranteed by the Guarantors.

        Holders shall be entitled to the benefits of the Subsidiary Guarantees. The Subsidiary Guarantees are general unsecured obligations of each Guarantor, are subordinated in right of payment to all existing and future Senior Indebtedness of each Guarantor, are pari passu in right of payment to the Guarantees of the Company's 13% Senior Subordinated Notes and 9¹/2% Senior Subordinated Notes and are senior or pari passu in right of payment to all existing and future subordinated Indebtedness of each Guarantor.

        If a Holder has given wire transfer instructions to the Company, the Company shall make all principal, premium and interest payment on the Holder's Securities in accordance with such instruction. All other payments of the principal of (and premium, if any) and interest (and Additional Interest, if any) on the Securities shall be payable at the office or agency of the Paying Agent and Notes Registrar within the City and State of New York maintained for such purpose and at any other office or agency maintained by the Company for such purpose; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Securities Register.

        The Company initially appoints the Trustee as the Paying Agent and the Notes Registrar. The Company may change the Paying Agent or Notes Registrar without prior notice to the Holders, and the Company or any of its Subsidiaries may act as Paying Agent or Notes Registrar. The Company shall promptly notify the Trustee in writing of the name and address of any Notes Registrar or Paying Agent not a party to this Indenture.

        SECTION 302.    Denominations.    The Securities shall be issuable only in registered form without coupons and only in denominations of $1,000 and any integral multiple thereof.

        SECTION 303.    Execution, Authentication, Delivery and Dating.    The Securities shall be executed on behalf of the Company by its Chairman of the Board, its President, its Chief Executive Officer or one of its Vice Presidents. The signature of any of these officers on the Securities may be manual or facsimile.

        Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any

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of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.

        At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities; and the Trustee in accordance with such Company Order shall authenticate and deliver such Securities as provided in this Indenture and not otherwise.

        No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Each Security shall be dated the date of its authentication.

        SECTION 304.    Temporary Securities.    Pending the preparation of definitive Securities, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.

        If temporary Securities are issued, the Company shall cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at any office or agency of the Company designated pursuant to Section 1002, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of authorized denominations. Until so exchanged the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities.

        SECTION 305.    Register; Transfer and Exchange.    The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency designated pursuant to Section 1002 being herein sometimes collectively referred to as the "Note Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed "Notes Registrar" for the purpose of registering Securities and transfers of Securities as herein provided.

        The Securities shall be issued in registered form and shall be transferable only upon the surrender of a Security for registration of transfer. When a Security is presented to the Notes Registrar with a request to register a transfer, the Notes Registrar shall register the transfer as requested if the requirements of this Indenture and Section 8-401(1) of the Uniform Commercial Code are met. When Securities are presented to the Notes Registrar with a request to exchange them for an equal principal amount of Securities of other denominations, the Notes Registrar shall make the exchange as requested if the same requirements are met. The Securities shall be subject to the transfer and exchange provisions set forth in the Appendix.

        SECTION 306.    Mutilated, Destroyed, Lost and Stolen Securities.    If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding.

        If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them

29

to save each of them and any agent of either of them harmless, then, in the absence of notice to and actual receipt by the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding.

        In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

        Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

        Every new Security issued pursuant to this Section in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the mutilated, destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder.

        The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

        SECTION 307.    Payment of Interest; Interest Rights Preserved.    Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date immediately preceding such Interest Payment Date.

        Any interest on any Security which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (1) or (2) below:

        (1)   The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder at his address as it appears in the Note Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities (or

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their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (2).

        (2)   The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

        Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration or transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

        SECTION 308.    Persons Deemed Owners.    Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 309) interest (and Additional Interest, if any) on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

        SECTION 309.    Cancellation.    The Company at any time may deliver Securities to the Trustee for cancellation. The Notes Registrar and Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and dispose of (subject to the record retention requirements of the Exchange Act) all Securities surrendered for registration of transfer, exchange, payment or cancellation and deliver a certificate of such disposal to the Company upon its request therefor unless the Company directs the Trustee to deliver canceled Securities to the Company. The Company may not issue new Securities to replace Securities it has redeemed, paid or delivered to the Trustee for cancellation.

        SECTION 310.    CUSIP and ISIN Numbers.    The Company in issuing Securities may use "CUSIP" and "ISIN" numbers (if then generally in use) in addition to serial numbers; if so, the Trustee shall use such "CUSIP" and "ISIN" numbers in addition to serial numbers in notices of redemption and repurchase as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such CUSIP and ISIN numbers either as printed on the Securities or as contained in any notice of a redemption or repurchase and that reliance may be placed only on the serial or other identification numbers printed on the Securities, and any such redemption or repurchase shall not be affected by any defect in or omission of such CUSIP and ISIN numbers. The Company shall promptly notify the Trustee of any change in the CUSIP numbers.

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ARTICLE FOUR
Satisfaction and Discharge

        SECTION 401.    Satisfaction and Discharge of Indenture.    This Indenture shall cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when

        (1)   either

        (A)  all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or

        (B)  all such Securities not theretofore delivered to the Trustee for cancellation

        (i)    have become due and payable, or

        (ii)   shall become due and payable at their Stated Maturity within one year, or

        (iii)  are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,

and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest (and Additional Interest, if any) to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be;

        (2)   the Company has paid or caused to be paid all other sums payable hereunder by the Company; and

        (3)   the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 607 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section, the obligations of the Trustee under Section 402, the provisions of Sections 303, 305 and 306 and the last paragraph of Section 1003 shall survive such satisfaction and discharge.

        SECTION 402.    Application of Trust Money.    Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest (and Additional Interest, if any) for whose payment such money has been deposited with the Trustee.

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ARTICLE FIVE
Remedies

        SECTION 501.    Events of Default.    "Event of Default", wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1)

default for 30 days in the payment when due of interest on the Securities whether or not prohibited by Article Thirteen;



(2)

default in payment when due of the principal of or premium, if any, on the Securities, whether or not prohibited by Article Thirteen;



(3)

failure by the Company to comply with Section 801;



(4)

failure by the Company for 30 days after notice by the Trustee or Holders of at least 25% in principal amount of the Securities then outstanding to comply with Section 1008, Section 1009, Section 1014 and Section 1015;



(5)

failure by the Company for 60 days after notice from the Trustee or Holders of at least 25% in principal amount of the Securities then outstanding to comply with any of its other agreements in this Indenture or the terms of the Securities;



(6)

default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for borrowed money or Guarantee by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, if that default:



(a)

is caused by a failure to pay principal of or premium, if any, on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date such default (a "Payment Default"); or



(b)

results in the acceleration of such Indebtedness prior to its express maturity,

and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $25 million or more;

(7)

failure by the Company or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $25 million, which judgments are not paid, discharged or stayed for a period of 60 days;



(8)

except as permitted by this Indenture, any Subsidiary Guarantee of a Significant Subsidiary shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor that is a Significant Subsidiary, or any Person acting on behalf of such Guarantor, shall deny or disaffirm such Guarantor's obligations under the Subsidiary Guarantee of such Guarantor;



(9)

the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company or any of its Restricted Subsidiaries that are Significant Subsidiaries of Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company or any such Significant Subsidiary a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company or any such Significant Subsidiary under any applicable Federal or

33

State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any such Significant Subsidiary or of any substantial part of the property of the Company or any such Significant Subsidiary, or ordering the winding up or liquidation of the affairs of the Company or any such Significant Subsidiary, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; and

(10)

the commencement by the Company or any of its Restricted Subsidiaries that are Significant Subsidiaries of the Company of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by the Company or any such Significant Subsidiary to the entry of a decree or order for relief in respect of the Company or any of its Restricted Subsidiaries that are Significant Subsidiaries of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against the Company or any such Significant Subsidiary of the Company, or the filing by the Company or any such Significant Subsidiary of a petition or answer or consent seeking reorganization or relief under any Federal or State law, or the consent by the Company or any such Significant Subsidiary to the filing of such or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or any of its Restricted Subsidiaries that are Significant Subsidiaries of the Company or of any substantial part of the property of the Company or any of its Restricted Subsidiaries that are Significant Subsidiaries of the Company, or the making by the Company or any of its Restricted Subsidiaries that are Significant Subsidiaries of Company of an assignment for the benefit of creditors, or the admission by the Company or any such Significant Subsidiary in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company or any such Significant Subsidiary in furtherance of any such action.

        In the event of a declaration of acceleration of the Securities because an Event of Default has occurred and is continuing as a result of the acceleration of any Indebtedness described in clause (6) of this Section 501, the declaration of acceleration of the Securities shall be automatically annulled if the holders of any Indebtedness described in clause (6) of this Section 501 have rescinded the declaration of acceleration in respect of such Indebtedness within 30 days of the date of such declaration and if:

        (a)   the annulment of the acceleration of Securities would not conflict with any judgment or decree of a court of competent jurisdiction; and

        (b)   all existing Events of Default, except nonpayment of principal or interest on the Securities that became due solely because of the acceleration of the Securities, have been cured or waived.

        SECTION 502.    Acceleration of Maturity; Rescission and Annulment.    If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Outstanding Securities may declare the principal of the Securities to be due and payable immediately; provided that so long as any Indebtedness permitted to be incurred pursuant to the Senior Credit Facilities shall be outstanding, such acceleration shall not be effective until the earlier of:

(1)

an acceleration of any such Indebtedness under the Senior Credit Facilities, or



(2)

five business days after receipt by the Company and the Credit Agent on the Issue Date (or to such other Credit Agent as the Trustee may hereafter be notified in writing) of written notice of such acceleration (provided that the notification of the replacement Credit Agent and its address shall be received by the Trustee prior to the issuance of such notice of acceleration).

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        Notwithstanding the preceding paragraph, in the case of an Event of Default described in clause (9) or (10) of Section 501, with respect to the Company or any of its Significant Subsidiaries, the principal and unpaid interest on all Outstanding Securities shall become due immediately without further action or notice.

        At any time after such a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in aggregate principal amount of the Outstanding Securities or the holders of a supermajority in aggregate principal amount of the Securities with respect to a default in respect of any provision requiring a supermajority for an amendment to such provision, as the case may be, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if (1) the Company has paid or deposited with the Trustee a sum sufficient to pay (A) all overdue interest on the Securities, (B) the principal of (and premium, if any, on) any Securities which have become due otherwise than by such declaration of acceleration (including any Securities required to have been purchased on the Purchase Date pursuant to an offer to purchase made by the Company) and interest thereon at the rate provided therefor in the Securities, (C) interest upon overdue interest at the rate provided therefor in the Securities and (D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and (2) all existing Events of Default, other than the non-payment of the principal of, premium, if any, and interest (and Additional Interest, if any) on the Securities which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.

        No such rescission shall affect any subsequent Default or impair any right consequent thereon.

        SECTION 503.    Collection of Indebtedness and Suits for Enforcement by Trustee.

        The Company covenants that if

        (1)   Default is made in the payment of any interest (and Additional Interest, if any) on any Security when such interest (and Additional Interest, if any) becomes due and payable and such Default continues for a period of 30 days, or

        (2)   Default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof or, with respect to any Security required to have been purchased pursuant to an Asset Sale Offer or Change of Control Offer made by the Company, at the Purchase Date thereof,

the Company shall, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal (and premium, if any) and interest (and Additional Interest, if any), and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal (and premium, if any) and on any overdue interest and Additional Interest, at the rate provided by the Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

        If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon the Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Securities, wherever situated.

        If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders by such judicial proceedings as the Trustee shall deem appropriate, whether for the specific enforcement of any covenant or agreement in this

35

Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

        SECTION 504.    Trustee May File Proofs of Claim.    In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized and directed by each Holder to make such payments to the Trustee and, in the event that the Trustee requests the making of such payments directly to the Holders, is authorized and directed to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607.

        No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a Trustee in bankruptcy or similar official and be a member of a creditors' or other similar committee.

        SECTION 505.    Trustee May Enforce Claims Without Possession of Securities.    All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.

        SECTION 506.    Application of Money Collected.    Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest (or Additional Interest, if any), upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

        FIRST: To the payment of all amounts due the Trustee under Section 607;

        SECOND: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest (and Additional Interest, if any) on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium, if any) and interest (and Additional Interest, if any), respectively; and

        THIRD: To the Company or to such party as a court of competent jurisdiction may direct.

        SECTION 507.    Limitation on Suits.    No Holder of any Security shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless

        (1)   such Holder has previously given written notice to the Trustee of a continuing Event of Default;

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        (2)   the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

        (3)   such Holder or Holders have offered to the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request;

        (4)   the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

        (5)   no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities;

it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders.

        SECTION 508.    Unconditional Right of Holders to Receive Principal, Premium and Interest.    Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Section 307) interest (and Additional Interest, if any) on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date or in the case of an Asset Sale Offer or Change of Control Offer made by the Company and required to be accepted as to such Security, on the Purchase Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.

        SECTION 509.    Restoration of Rights and Remedies.    If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

        SECTION 510.    Rights and Remedies Cumulative.    Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

        SECTION 511.    Delay or Omission Not Waiver.    No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

        SECTION 512.    Control by Holders.    The Holders of a majority in aggregate principal amount of the Outstanding Securities shall have the right to direct the time, method and place of conducting any

37

proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee; provided that:

        (1)   such direction shall not be in conflict with any rule of law or with this Indenture or involve the Trustee in personal liability, and

        (2)   the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

        SECTION 513.    Waiver of Past Defaults.    The Holders of not less than a majority in aggregate principal amount of the Outstanding Securities may on behalf of the Holders of all the Securities waive any existing Default or Event of Default hereunder and its consequences hereunder, except

        (1)   a Default or Event of Default with respect to any provision requiring a supermajority to amend, which Default or Event of Default may only be waived by such a supermajority,

        (2)   a continuing Default or Event of Default in the payment of the principal of (or premium, if any) or interest (or Additional Interest, if any) on any Security (including any Security which is required to have been purchased pursuant to an Asset Sale Offer or Change of Control Offer which has been made by the Company), or

        (3)   a Default or Event of Default in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security affected.

        Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.

        SECTION 514.    Undertaking for Costs.    In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs, including reasonable attorney's fees and expenses, against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; provided, that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Trustee or the Company.

        SECTION 515.    Waiver of Usury, Stay or Extension Laws.    The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.

ARTICLE SIX
The Trustee

        SECTION 601.    Certain Duties and Responsibilities.

        (a)   The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for

38

believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to provisions of this Section. In case an Event of Default shall occur and be continuing, the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs.

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

        (1)   The Trustee need undertake to perform only those duties as are specifically set forth in this Indenture and no covenants or obligations shall be implied in this Indenture against the Trustee.

        (2)   In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of certificates or opinions specifically required by any provision hereof to be furnished to it, the Trustee shall examine such certificates or opinions to determine whether or not they conform to the requirements of this Indenture.

        (c)   The Trustee shall have no liability except for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

        (1)   This paragraph does not limit the effect of paragraph (b) of this Section 601.

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

        (3)   The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 512.

        SECTION 602.    Notice of Defaults.    If a Default or Event of Default occurs and is continuing and if it is actually known by a Responsible Officer, the Trustee shall mail to Holders a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium, if any, or interest on any Security, the Trustee may withhold the notice if and so long as the board of directors, the executive committee or a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders.

        SECTION 603.    Certain Rights of Trustee.

        Subject to the provisions of Section 601:

        (a)   the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, security, note, other evidence of indebtedness or other paper or document (whether in original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties (but need not confirm or investigate the accuracy of any mathematical calculations or other facts stated therein);

        (b)   any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors of the Company may be sufficiently evidenced by a Board Resolution;

        (c)   whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the

39

Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate;

        (d)   the Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

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

        (f)    the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, Security, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled, upon reasonable prior notice, to examine the books, records and premises of the Company, personally or by agent or attorney, at such reasonable times as reasonably requested at the expense of the Company and shall incur no liability of any kind by reason of such inquiry or investigation;

        (g)   the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care;

        (h)   the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;

        (i)    the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by a Responsible Officer at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture; and

        (j)    the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed by the Trustee to act hereunder.

        SECTION 604.    Not Responsible for Recitals or Issuance of Securities.    The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Company of the Securities or the proceeds thereof.

        SECTION 605.    May Hold Securities.    The Trustee, any Paying Agent, any Notes Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Paying Agent, Notes Registrar or such other agent.

        SECTION 606.    Money Held in Trust.    Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no

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liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company.

        SECTION 607.    Compensation and Reimbursement.    Each of the Company and the Guarantors, jointly and severally agrees

        (1)   to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

        (2)   except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as shall be determined to have been caused by its own negligence or willful misconduct; and

        (3)   to indemnify the Trustee for, and to hold it harmless against, any loss, liability, claim, damage or expense incurred without negligence or willful misconduct on its part, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.

        The Trustee, upon its receipt of written notice thereof, shall notify the Company promptly of any claim for which it may seek indemnity. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.

        To secure the Company's payment obligations in this Section 607, the Trustee shall have a lien prior to the Securities on all assets held or collected by the Trustee, in its capacity as Trustee, except assets held in trust to pay principal of or interest on particular Securities.

        When the Trustee incurs expenses or renders services after an Event of Default specified in Section 501(9) or (10) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. This Section 607 shall survive the satisfaction and discharge of the Indenture and resignation or removal of the Trustee.

        SECTION 608.    Disqualification; Conflicting Interests.    If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall eliminate such conflict within 90 days, apply to the Commission for permission to continue or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.

        SECTION 609.    Corporate Trustee Required; Eligibility.    There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000 and a Corporate Trust Office in the Borough of Manhattan, The City of New York. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

        SECTION 610.    Resignation and Removal; Appointment of Successor.    (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 611.

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        (b)   The Trustee may resign at any time by giving written notice thereof to the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee.

        (c)   The Trustee may be removed at any time by Act of the Holders of a majority in principal amount of the Outstanding Securities, delivered to the Trustee and to the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of removal, the removed Trustee may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee.

        (d)   If at any time:

        (1)   the Trustee shall fail to comply with Section 608 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or

        (2)   the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder, or

        (3)   the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its of property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

then, in any such case, (i) the Company by a Board Resolution may remove the Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

        (e)   If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the successor Trustee appointed by the Company. If no successor Trustee shall have been so appointed by the Company or the Holders and accepted appointment in the manner hereinafter provided, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee.

        (f)    The Company shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to all Holders in the manner provided in Section 106. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office.

        SECTION 611.    Acceptance of Appointment by Successor.    Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, subject to payment of its fees and expenses in Section 607, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any

42

such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts.

        No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.

        SECTION 612.    Merger, Conversion, Consolidation or Succession to Business.    Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided that such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

        SECTION 613.    Preferential Collection of Claims Against Company.    If and when the Trustee shall be or become a creditor of the Company or any Guarantor (or any other obligor under the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).

ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company

        SECTION 701.    Company to Furnish Trustee Names and Addresses of Holders.    The Company shall furnish or cause to be furnished to the Trustee

        (a)   semi-annually, not more than 15 days after each Regular Record Date a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of such Regular Record Date, and

        (b)   at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;

excluding from any such list names and addresses received by the Trustee in its capacity as Notes Registrar.

        SECTION 702.    Preservation of Information; Communications to Holders.

        (a)   The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Notes Registrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished.

        (b)   The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities and the corresponding rights and duties of the Trustee, shall be provided by the Trust Indenture Act.

        (c)   Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to the names and addresses of Holders made pursuant to the Trust Indenture Act.

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        SECTION 703.    Reports by Trustee.

        (a)   The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto.

        (b)   A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which the Securities are listed, with the Commission and with the Company. The Company shall promptly notify the Trustee when the Securities are listed on any stock exchange and any delisting thereof.

        SECTION 704.    Reports by Company.    Whether or not required by the Commission, so long as any Securities are Outstanding, the Company shall furnish or make available to the Holders, within the time periods specified in the Commission's rules and regulations:

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

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

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

        In addition, following the consummation of the Exchange Offer contemplated by the Registration Rights Agreement, whether or not required by the Commission, the Company shall file a copy of all the information and reports referred to in clauses (1) and (2) above with the Commission for public availability within the time periods specified in the Commission's rules and regulations (unless the Commission shall not accept such a filing) and make such information available to securities analysts and prospective investors upon request.

        In addition, the Company shall, for so long as any Securities remain Outstanding, furnish to the Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

        Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to conclusively rely exclusively on Officers' Certificates).

ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease

        SECTION 801.    Limitation on Merger, Consolidation or Sale of Assets.    The Company may not: (1) consolidate or merge with or into another Person (whether or not the Company is the surviving

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corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to another Person unless:

        (1)   either: (a) the Company is the surviving corporation; or (b) the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia;

        (2)   the Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, conveyance or other disposition shall have been made expressly assumes all the obligations of the Company under the Securities and this Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee;

        (3)   immediately after giving pro forma effect to such transaction no Default or Event of Default exists; and

        (4)   the Company or Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, conveyance or other disposition shall have been made,

        (a)   shall, after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 1008; or

        (b)   would (together with its Restricted Subsidiaries) have a higher Fixed Charge Coverage Ratio immediately after such transaction (after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period) than the Fixed Charge Coverage Ratio of the Company and its Subsidiaries immediately prior to the transaction.

The preceding clause (4) shall not prohibit:

        (a)   a merger between the Company and a Wholly Owned Subsidiary; or

        (b)   a merger between the Company and an Affiliate incorporated solely for the purpose of reincorporating the Company in another state of the United States;

so long as, in each case, the amount of Indebtedness of the Company and its Restricted Subsidiaries is not increased thereby.

        In addition, the Company may not, directly or indirectly, lease all or substantially all of its properties or assets, in one or more related transactions, to any other Person. This Section 801 is not applicable to a sale, assignment, transfer, conveyance or other disposition of assets between or among the Company and any of its Wholly Owned Restricted Subsidiaries.

        SECTION 802.    Successor Substituted.    Upon any consolidation of the Company with, or merger of the Company into, any other Person or any transfer, conveyance, sale, lease or other disposition of all or substantially all of the properties and assets of the Company as an entirety in accordance with Section 801, the successor corporation formed by such consolidation or into which the Company is merged or to which such transfer, conveyance, sale, lease or other disposition is made shall succeed to and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor corporation had been named therein as the Company herein, and thereafter (except in the case of a lease), the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

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        SECTION 803.    Transfer of Subsidiary Assets.    For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise) of all or substantially all of the properties and assets of one or more Subsidiaries, the Company's interest in which constitutes all or substantially all of the properties and assets of the Company, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

ARTICLE NINE
Supplemental Indentures

        SECTION 901.    Supplemental Indentures Without Consent of Holders.    Subject to Section 1312, without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

        (1)   to cure any ambiguity, defect or inconsistency;

        (2)   to provide for uncertificated Securities in addition to or in place of certificated Securities;

        (3)   to provide for the assumption of the Company's obligations to Holders in the case of a merger or consolidation or the sale of all or substantially all of the Company's assets;

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

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

        (6)   to provide for the issuance of Additional Securities in accordance with Section 301, Section 1008 and the other limitations set forth in this Indenture; or

        (7)   to allow any Subsidiary to guarantee the Securities.

        SECTION 902.    Supplemental Indentures with Consent of Holders.    Subject to Section 1312, with the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities (including consents obtained in connection with a purchase of or tender offer or exchange offer for the Securities), by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of amending or supplementing this Indenture or any supplemental indenture or the Securities or modifying the rights of the Holders, and any existing Default or Event of Default or compliance with any provision of the Indenture or the Securities may be waived; provided, however, that no such modification or waiver may, without the consent of Holders of at least 75% in aggregate principal amount of the Outstanding Securities, modify or waive the provisions of Article Thirteen in a manner adverse to the Holders; and provided that no such modification or waiver may, without the consent of each Holder thereby:

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

        (2)   reduce the principal of or change the Stated Maturity of any Security or alter the provisions with respect to the redemption of the Securities (other than Sections 1014 or 1015);

        (3)   reduce the rate of or change the time for payment of interest on any Security;

        (4)   waive a Default or Event of Default in the payment principal of or premium, if any, or interest on the Securities (except a rescission of acceleration of the Securities by the Holders of at

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least a majority in aggregate principal amount of the Securities and a waiver of the payment default that resulted from such acceleration);

        (5)   make any Security payable in money other than that stated in the Securities;

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

        (7)   waive a redemption payment with respect to any Security (other than a payment under Sections 1014 or 1015);

        (8)   make any change in the preceding amendment and waiver provisions; or

        (9)   release any Guarantor from any of its obligations under its Guarantee of the Securities or this Indenture, except in accordance with the terms of this Indenture.

        It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

        SECTION 903.    Execution of Supplemental Indentures.    In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be provided with, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise.

        SECTION 904.    Effect of Supplemental Indentures.    Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

        SECTION 905.    Conformity With Trust Indenture Act.    Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act.

        SECTION 906.    Reference in Securities to Supplemental Indentures.    Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities.

ARTICLE TEN
Covenants

        SECTION 1001.    Payment of Principal, Premium and Interest.    The Company shall duly and punctually pay the principal of (and premium, if any) and any interest (and Additional Interest, if any) on the Securities in accordance with the terms of the Securities and this Indenture.

        SECTION 1002.    Maintenance of Office or Agency.    The Company shall maintain in the Borough of Manhattan, The City of New York, an office or agency where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this

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Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

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

        SECTION 1003.    Money for Security Payments to be Held in Trust.    If the Company shall at any time act as its own Paying Agent, it shall, on or before each due date of the principal of (and premium, if any) or interest (and Additional Interest, if any) on any of the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest (and Additional Interest, if any) so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and shall promptly notify the Trustee of its action or failure so to act.

        Whenever the Company shall have one or more Paying Agents, it shall, prior to each due date of the principal of (and premium, if any) or interest (and Additional Interest, if any) on any Securities, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest (and Additional Interest, if any) so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium, interest or Additional Interest, and (unless such Paying Agent is the Trustee) the Company shall promptly notify the Trustee of its action or failure so to act.

        The Company shall cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent shall:

        (1)   hold all sums held by it for the payment of the principal of (and premium, if any) or interest (and Additional Interest, if any) on Securities in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;

        (2)   give the Trustee prompt notice of any Default by the Company (or any other obligor upon the Securities) in the making of any payment of principal (and premium, if any) or interest (and Additional Interest, if any); and

        (3)   at any time during the continuance of any such Default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

        The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

        Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest (and Additional Interest, if any)

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on any Security and remaining unclaimed for two years after such principal (and premium, if any) or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining shall be repaid to the Company.

        SECTION 1004.    Existence.    Subject to Article Eight and Section 1015, the Company and its Restricted Subsidiaries shall do or cause to be done all things necessary to preserve and keep in full force and effect their existence, rights (charter and statutory) and franchises; provided, however, that the Company and its Restricted Subsidiaries shall not be required to preserve any such right or franchise if the Board of Directors of the Company in good faith shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company or its Restricted Subsidiaries and that the loss thereof is not disadvantageous in any material respect to the Holders.

        SECTION 1005.    Maintenance of Properties.    The Company shall cause all properties used or useful in the conduct of its business or the business of any Restricted Subsidiary of the Company to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and shall cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section shall prevent the Company from discontinuing the operation or maintenance of any of such properties if such discontinuance is, as determined by the Board of Directors of the Company in good faith, desirable in the conduct of its business or the business of any Subsidiary and not disadvantageous in any material respect to the Holders.

        SECTION 1006.    Payment of Taxes and Other Claims.    The Company shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (1) all taxes, assessments and governmental charges levied or imposed upon the Company or any of its Restricted Subsidiaries or upon the income, profits or property of the Company or any of its Restricted Subsidiaries, and (2) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the property of the Company or any of its Restricted Subsidiaries; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders.

        SECTION 1007.    Maintenance of Insurance.    The Company shall, and shall cause its Restricted Subsidiaries to, keep at all times all of their properties which are of an insurable nature insured against loss or damage with insurers believed by the Company to be responsible or in the case of insurance coverage, to self insure in each case to the extent, in the judgment of the Company, to do so comports with good business practice.

        SECTION 1008.    Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock.    The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) and the

49

Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Company's Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and issue Disqualified Stock or preferred stock if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.00 to 1; determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or preferred stock, as applicable, had been issued, as the case may be, at the beginning of such four-quarter period.

        The first paragraph of this Section 1008 shall not prohibit the incurrence of any of the following (collectively, "Permitted Debt"):

        (1)   the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness and letters of credit pursuant to the Senior Credit Facilities; provided that the aggregate amount of all Indebtedness of the Company and the Guarantors outstanding under this clause (1) after giving effect to such incurrence does not exceed an amount equal to $545.0 million at any one time;

        (2)   the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness;

        (3)   the incurrence by the Company and the Guarantors of Indebtedness represented by the Securities (other than any Additional Securities) and the Subsidiary Guarantees;

        (4)   the incurrence by the Company or any of its Restricted Subsidiaries of Capital Lease Obligations, mortgage financings, purchase money obligations or similar financing arrangements, in each case incurred for the purpose of financing all or any part of the purchase price or cost of design, construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary (whether through the direct purchase of assets or the Capital Stock of any Person owning such Assets) or Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount or accreted value, as applicable, not to exceed $25 million at any time outstanding;

        (5)   the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this covenant or clauses (2), (3) or (13) of this Section 1008;

        (6)   the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries (and the issue of Disqualified Stock or preferred stock of any Restricted Subsidiary to the Company or another Restricted Subsidiary); provided, however, that:

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

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

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

        (7)   the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding;

        (8)   the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 1008;

        (9)   Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;

        (10) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, asset or Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that (a) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and otherwise reflected on the balance sheet shall not deemed to be reflected on such balance sheet for purposes of this clause (a)) and (b) the maximum aggregate liability in respect of such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time and without giving effect to any such subsequent changes in value) actually received by the Company and/or such Restricted Subsidiary in connection with such disposition;

        (11) obligations in respect of performance, surety and similar bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;

        (12) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument (except in the case of daylight overdrafts) drawn against insufficient funding in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five business days of incurrence; and

        (13) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (13), not to exceed $35 million.

        For purposes of determining compliance with this Section 1008, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company shall be permitted to classify such item of Indebtedness in any manner that complies with this covenant. In addition, the Company may, at any time, change the classification of an item of Indebtedness (or any portion thereof) to any other clause or to the first paragraph hereof, provided that the Company would be permitted to incur such item of Indebtedness (or the portion thereof) pursuant to such other clause or the first paragraph hereof, as the case may be, at

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such time of reclassification. Accrual of interest, accretion or amortization of original issue discount and the accretion of accreted value shall not be deemed to be an incurrence of Indebtedness for purposes of this covenant.

        SECTION 1009.    Limitation on Restricted Payments.    The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:

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

        (2)   purchase, redeem or otherwise acquire or retire for value (including without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company or any direct or indirect parent of the Company or any Restricted Subsidiary of the Company (other than any such Equity Interests owned by the Company or any Restricted Subsidiary of the Company);

        (3)   make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of the Company or any Guarantor that is subordinate or junior in right of payment to the Securities or any Subsidiary Guarantee, as applicable, except scheduled payments of interest or principal at Stated Maturity thereof; or

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

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

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

        (2)   (a) the Company would, after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of Section 1008; and (b) at the time of any such Restricted Payment (other than up to an aggregate of $5 million of such Restricted Payments in any calendar year) either (i) the Notes have a Qualifying Rating or (ii) the Company's Consolidated Leverage Ratio is no more than 4.0 to 1 (after giving pro forma effect to such Restricted Payment); and

        (3)   such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the Issue Date (excluding Restricted Payments permitted by clauses (1) through (6), (9), (10), (12), (13) and (14) of the next succeeding paragraph), is less than the sum, without duplication, of:

        (a)   50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) from the beginning of the first full fiscal quarter commencing after the Issue Date to the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus

        (b)   100% of the aggregate net proceeds (including the fair-market value of property other than cash; provided that fair market value of property other than cash shall be

52

determined in good faith by the Board of Directors whose Board Resolution with respect thereto shall be delivered to the Trustee and such determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if such fair market value exceeds $35 million) received by the Company as a contribution to the Company's capital or received by the Company from the issue or sale since the Issue Date of Equity Interests of the Company (other than Disqualified Stock) or of Disqualified Stock or debt securities of the Company that have been converted subsequent to the Issue Date into such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Restricted Subsidiary of the Company and other than Disqualified Stock or convertible debt securities that have been converted into Disqualified Stock); plus

        (c)   to the extent that any Restricted Investment in any Person that was made after the Issue Date is sold for cash or otherwise liquidated or repaid for cash, or an Unrestricted Subsidiary is designated a Restricted Subsidiary, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any), or the portion (proportionate to the Company's equity interest in such Subsidiary) of the fair market value of the net assets of such Unrestricted Subsidiary upon becoming a Restricted Subsidiary, as the case may be, and (ii) the initial amount of such Restricted Investment made after the Issue Date in such Person or Unrestricted Subsidiary; plus

        (d)   the amount by which Indebtedness of the Company or its Restricted Subsidiaries is reduced on the Company's balance sheet upon the conversion or exchange subsequent to the Issue Date of any Indebtedness of the Company convertible or exchangeable for Equity Interests (other than Disqualified Stock) of the Company (less the amount of any cash, or other property, distributed by the Company or any Restricted Subsidiary upon such conversion or exchange); plus

        (e)   if any Unrestricted Subsidiary pays any cash dividends or cash distributions to the Company or any of its Restricted Subsidiaries, 100% of any such cash dividends or cash distributions made after the Issue Date.

        So long as no Default has occurred and is continuing or would be caused thereby, the preceding provisions shall not prohibit:

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

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

        (3)   the defeasance, redemption, repurchase or other acquisition of Indebtedness or Disqualified Stock of the Company or any Guarantor that is subordinate or junior in right of payment to the Securities or any Subsidiary Guarantee, as applicable, with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness (assuming for the purpose of this clause that Disqualified Stock is Indebtedness);

        (4)   the payment of any dividend (or, in the case of a partnership, limited liability company or other entity, any similar distribution) by a Restricted Subsidiary of the Company to the holders of its Equity Interests on a pro rata basis regardless of whether any Default has occurred or is continuing;

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        (5)   the redemption, repurchase, acquisition or retirement of Equity Interests in a Permitted Joint Venture of the Company or of any of the Company's Restricted Subsidiaries in accordance with the organizational documents for, and agreements among holders of Equity Interests in, such Permitted Joint Venture or Restricted Subsidiary, provided that as a result of such redemption, repurchase, acquisition or retirement of Equity Interests in any such Permitted Joint Venture, any such Permitted Joint Venture shall become a Wholly Owned Restricted Subsidiary of the Company and a Guarantor under this Indenture;

        (6)   the redemption, repurchase, acquisition or retirement of Equity Interests in and Indebtedness of the Development Corporations in accordance with the respective securities purchase agreements entered into and notes issued by such Development Corporations; provided that as a result of such redemption, repurchase, acquisition or retirement, such Development Corporations shall become Wholly Owned Restricted Subsidiaries of the Company and Guarantors under this Indenture;

        (7)   the purchase, redemption or other acquisition, cancellation or retirement for value of Equity Interests of the Company or any Restricted Subsidiary of the Company or any parent of the Company held by any existing or former director, officer employee, independent contractor or consultant of the Company or Holdings or any Subsidiary of the Company or their assigns, estates or heirs, in each case in connection with the repurchase provisions under employee stock option or stock purchase agreements or other agreements to compensate directors, officers, employees, independent contractors or consultants; provided that such redemptions or repurchases pursuant to this clause shall not exceed $2 million in any calendar year subsequent to the Issue Date with unused amounts in any calendar year being carried over to succeeding calendar years subject to a maximum of $10 million in any calendar year; provided that the amount of any such payments will be included in calculations of the amount of Restricted Payments subsequent to the Issue Date;

        (8)   loans or advances to employees or directors of the Company or Holdings or any Subsidiary of the Company made in the ordinary course of business subsequent to the Issue Date the proceeds of which are used to purchase Capital Stock of the Company or Holdings, in an aggregate amount not to exceed $5 million at any one time outstanding; provided that the amount of any such payments will be included in calculations of the amount of Restricted Payments subsequent to the Issue Date;

        (9)   repurchases of Capital Stock warrants, stock options or other rights to acquire Capital Stock subsequent to the Issue Date deemed to occur upon exercise of warrants, stock options or other rights to acquire Capital Stock if such Capital Stock, warrants, stock options or rights represent a portion of the exercise price thereof;

        (10) payments to Holdings in an amount equal to the amount of income tax that the Company and the Restricted Subsidiaries would have paid had they filed consolidated tax returns on a separate Company basis in any given year, less the amount of such taxes paid or to be paid directly by the Company and the Restricted Subsidiaries for such years;

        (11) an amount not to exceed $1.0 million in any fiscal year subsequent to the Issue Date to permit Holdings to pay:

        (i)    franchise taxes and other fees required to maintain its legal existence; and

        (ii)   its corporate overhead expenses incurred in the ordinary course of business, its audit expenses, any filing fees required by the Commission and to pay salaries or other compensation of employees who perform services for both Holdings and the Company;

provided that the amount of any such payments will be included in calculations of the amount of Restricted Payments subsequent to the Issue Date;

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        (12) the Closing Date Dividend;

        (13) Permitted Investments; and

        (14) other Restricted Payments subsequent to the Issue Date in an aggregate amount not to exceed $10 million at any one time.

        The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any non-cash Restricted Payment shall be determined in good faith by the Board of Directors whose resolution with respect thereto shall be delivered to the Trustee. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 1009 were computed, together with a copy of any fairness opinion or appraisal required by this Indenture.

        SECTION 1010.    Limitations on Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries.    The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

        (1)   pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries (i) on its Capital Stock or (ii) with respect to any other interest or participation in, or measured by, its profits;

        (2)   pay any Indebtedness owed to the Company or any of the Company's Restricted Subsidiaries;

        (3)   make loans or advances to the Company or any of the Company's Restricted Subsidiaries; or

        (4)   transfer any of its properties or assets to the Company or any of the Company's Restricted Subsidiaries.

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

        (1)   any encumbrance or restriction pursuant to an agreement in effect at or entered into on the Issue Date, including:

        (a)   the Senior Credit Facilities as in effect as of the Issue Date, and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof, provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are no more restrictive, taken as a whole (as determined in the good faith judgment of the Company's Board of Directors), with respect to such dividend and other payment restrictions than those contained in the Senior Credit Facilities as in effect on the Issue Date; and

        (b)   this Indenture and the Securities;

        (2)   any applicable law, rule, regulation or order;

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

55

in the case of Indebtedness, such Indebtedness was permitted by the terms of this Indenture to be incurred;

        (4)   customary provisions restricting assignment, subletting or transfer of any property or asset that is subject to a lease, license or contract entered into in the ordinary course of business and consistent with past practices;

        (5)   any Purchase Money Note or other Indebtedness or contractual requirements incurred with respect to a Qualified Receivables Transaction relating exclusively to a Receivables Entity that, in the good faith determination of the Board of Directors of the Company, are necessary to effect such Qualified Receivables Transaction;

        (6)   any encumbrance or restriction under leases and purchase money obligations for property leased or acquired in the ordinary course of business that impose restrictions on the property so acquired of the nature described in the last clause of the preceding paragraph;

        (7)   restrictions with respect solely to a Restricted Subsidiary of the Company imposed pursuant to a binding agreement which has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Restricted Subsidiary; provided that such restrictions apply solely to the Capital Stock or assets being sold of such Restricted Subsidiary;

        (8)   provisions with respect to the disposition or distribution of assets or property in connection with Permitted Joint Ventures entered into in accordance with past practice made in the ordinary course of business;

        (9)   Permitted Refinancing Indebtedness, provided that the material restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are no more restrictive, in the good faith judgment of the Company's Board of Directors, taken as a whole, to the Holders than those contained in the agreements governing the Indebtedness being refinanced; and

        (10) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business.

        Notwithstanding the foregoing, neither (a) customary provisions restricting subletting or assignment of any lease entered into in the ordinary course of business, consistent with industry practice, nor (b) Liens permitted under the terms of this Indenture shall in and of themselves be considered a restriction on the ability of the applicable Restricted Subsidiary to transfer such agreement or assets, as the case may be.

        SECTION 1011.    Limitation on Liens Securing Indebtedness.    The Company shall not, and shall not permit any of its Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind securing trade payables or Indebtedness that does not constitute Senior Indebtedness (other than Permitted Liens) upon any of their property or assets, now owned or hereafter acquired unless:

        (1)   in the case of Liens securing Indebtedness that is expressly subordinated or junior in right of payment to the Securities, the Securities are secured on a senior basis to the obligations so secured until such time as such obligations are no longer secured by a Lien; and

        (2)   in all other cases, the Securities are secured on an equal and ratable basis with the obligations so secured until such time as such obligations are no longer secured by a Lien.

        SECTION 1012.    Limitation on Transactions With Affiliates.    The Company shall not, and shall not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate or any affiliated professional associations or professional

56

corporations which employ physicians and other professionals who provide healthcare services for the Company's occupational and health services centers (each, an "Affiliate Transaction"), unless:

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

        (2)   the Company delivers to the Trustee:

        (a)   with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $10 million, a Board Resolution set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with clause (1) above and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors; and

        (b)   with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $25 million, an opinion as to the fairness to the holders of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

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

        (1)   customary directors' fees to Persons who are not otherwise Affiliates of the Company;

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

        (3)   the payment of Affiliate Management Fees in an amount in any calendar year not to exceed the greater of (a) $1 million and (b) 1% of Consolidated EBITDA;

        (4)   payments by the Company or any of its Restricted Subsidiaries to Welsh Carson, Ferrer Freeman and their respective Affiliates made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, which payments are approved in good faith by a majority of the Board of Directors of the Company or a committee thereof consisting of disinterested members;

        (5)   loans or advances to employees in accordance with past practice made in the ordinary course of business which are approved in good faith by a majority of the Board of Directors of the Company or a committee thereof consisting of disinterested members;

        (6)   any agreement as in effect on the Issue Date or any amendment thereto (so long as any such amendment is no less favorable in any material respect to the Company and its Restricted Subsidiaries);

        (7)   any payment pursuant to any tax sharing agreement between the Company and Holdings or any other Person with which the Company is required or permitted to file a consolidated tax return or with which the Company is or could be part of a consolidated, combined or unitary group for tax purposes; provided that in no event shall the amount permitted to be paid pursuant to all such agreements exceed the tax liabilities attributable solely to the Company and its Restricted Subsidiaries (whether as a consolidated, combined or unitary group);

        (8)   Restricted Payments that are permitted by Section 1009;

        (9)   customary fees and compensation, options and benefits paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Company or any of its Restricted Subsidiaries;

57

        (10) any transaction involving ordinary course investment banking, merchant banking, commercial banking or related activities;

        (11) any transaction with customers, clients, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture that is fair to the Company or its Restricted Subsidiaries, in the reasonable determination of the senior management and of the Board of Directors of the Company, or is on terms, taken as a whole, at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

        (12) any purchases by the Company's Affiliates of Indebtedness of the Company or any of its Restricted Subsidiaries offered to Persons who are not Affiliates; provided that such purchases must be on the same terms and conditions as offered to Persons who are not Affiliates; and

        (13) issuances or sales by the Company of Equity Interests (other than Disqualified Stock) or any contribution to the capital of the Company or any Restricted Subsidiary.

        Notwithstanding the foregoing, the Holders will be entitled to receive payment in full in cash of all amounts due or to become due in respect of the Securities before any payment is made with respect to Affiliate Management Fees in the event of any distribution to creditors of the Company in any Insolvency or Liquidation Proceeding with respect to the Company. No payments of Affiliate Management Fees shall be made by the Company or any of its Restricted Subsidiaries if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which Affiliate Management Fees are to be paid is less than 1.75 to 1; provided, however, that such payments due but not paid shall accrue and shall be paid only after such time as the Fixed Charge Coverage Ratio for a four full fiscal quarter period is no longer less than or equal to 1.75 to 1.

        For the avoidance of doubt, in connection with any transaction between Holdings and the Company, a member of the Board of Directors of the Company shall not cease to be a disinterested director solely because such director also serves on the board of directors of Holdings.

        SECTION 1013.    Limitation on Issuances and Sales of Equity Interests in Restricted Subsidiaries.    The Company shall not, and shall not permit any of its Restricted Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any Equity Interests in any Restricted Subsidiary or to issue any of its Equity Interests (other than, if necessary, Equity Interests constituting directors' qualifying shares) to any Person except:

        (1)   to the Company or a Wholly Owned Subsidiary (other than a Receivables Entity); or

        (2)   in compliance with Section 1015 and immediately after giving effect to such issuance or sale, such Restricted Subsidiary either would continue to be a Restricted Subsidiary or if such Restricted Subsidiary would no longer be a Restricted Subsidiary, then the investment of the Company in such Person (after giving effect to such issuance or sale) would have been a Restricted Payment permitted under Section 1009 as if made on the date of such issuance or sale.

        Notwithstanding the preceding paragraph, the Company may sell all the Equity Interests of a Restricted Subsidiary as long as the Company complies with Section 1015.

        SECTION 1014.    Repurchase of Securities at the Option of the Holder Upon a Change of Control.

        (1)   Upon the occurrence of a Change of Control, each Holder shall have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder's Securities pursuant to the offer described below (the "Change of Control Offer") at an offer price in cash equal to 101% of the aggregate principal amount of repurchased Securities plus accrued and unpaid interest and Additional Interest thereon, if any, to the Purchase Date (the

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"Change of Control Payment"). Within 60 Business Days following any Change of Control, the Company shall mail a notice to each Holder stating:

(a)

that the Change of Control Offer is being made pursuant to this Section 1014 and that all Securities tendered shall be accepted for payment;



(b)

that the Change of Control Offer shall remain open for 20 Business Days;



(c)

the Purchase Price and the Purchase Date;



(d)

that any Security not tendered shall continue to accrue interest;



(e)

that, unless the Company defaults in the payment of the Change of Control Payment, all Securities accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Purchase Date;



(f)

that Holders electing to have any Securities purchased pursuant to a Change of Control Offer shall be required to surrender the Securities, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Securities completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Purchase Date;



(g)

that Holders shall be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Purchase Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of Securities delivered for purchase, certificate number, if applicable, and a statement that such Holder is withdrawing his election to have the Securities purchased; and



(h)

that Holders whose Securities are being purchased only in part shall be issued new Securities equal in principal amount to the unpurchased portion of the Securities surrendered, which unpurchased portion must be equal to $1,000 in principal amount or an integral multiple thereof.

        The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Securities as a result of a Change of Control.

        To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture relating to such Change of Control Offer, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

        (2)   By 12:00 p.m. (noon) Eastern Time on the Purchase Date, the Company shall, to the extent lawful:

(a)

accept for payment all Securities or portions thereof properly tendered pursuant to the Change of Control Offer;



(b)

deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Securities or portions thereof so tendered; and



(c)

deliver or cause to be delivered to the Trustee the Securities so accepted together with an Officers' Certificate stating the aggregate principal amount of Securities or portions thereof being purchased by the Company.

        The Paying Agent shall promptly as practible mail to each Holder of Securities so tendered the Change of Control Payment for such Securities, and the Trustee shall promptly as practible authenticate and mail (or cause to be transferred by book entry) to each Holder a new Security equal in principal

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amount to any unpurchased portion of the Securities surrendered, if any; provided that each such new Security shall be in a principal amount of $1,000 or an integral multiple thereof. The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Purchase Date.

        (3)   If the Purchase Date hereunder is on or after an interest payment Regular Record Date and on or before the associated Interest Payment Date, any accrued and unpaid interest (and Additional Interest, if any) due on such Interest Payment Date shall be paid to the Person in whose name a Security is registered at the close of business on such Regular Record Date, and such interest (and Additional Interest, if applicable) shall not be payable to Holders who tender the Securities pursuant to such Change of Control Offer.

        (4)   Prior to making a Change of Control Offer pursuant to paragraph (1), but in any event within 90 days following such Change of Control, the Company shall either (i) obtain any required consents, if any, under all agreements governing outstanding Senior Indebtedness to permit the making of the Change of Control Offer and the purchase of Securities pursuant to this Section 1014, or (ii) repay all or a portion of the outstanding Senior Indebtedness to the extent necessary (including, if necessary, payment in full of such Indebtedness and payment of any prepayment premiums, fees, expenses or penalties) to permit the repurchase of the Securities pursuant to this Section 1015 without such consent.

        (5)   The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

        (6)   The provisions described above that require the Company to make a Change of Control Offer following a Change of Control will be applicable regardless of whether or not any other provisions of the Indenture are applicable. Except as described above with respect to a Change of Control, the Company is not required to make mandatory repurchases or redemptions of the Securities in the event of a takeover, recapitalization or similar transaction.

        (7)   Notwithstanding anything to the contrary in this Section 1014, the Company shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 1014 hereof and all other provisions of this Indenture applicable to a Change of Control Offer made by the Company and purchases all Securities validly tendered and not withdrawn under such Change of Control Offer.

        (8)   The provisions of this Section 1014 relating to the Company's obligation to make a Change of Control Offer may be waived or modified with the consent of the Holders of a majority in principal amount of the Securities.

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        SECTION 1015.    Repurchase of Securities at the Option of the Holder Upon an Asset Sale.    The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

(1)

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



(2)

such fair market value is determined by the Company's Board of Directors and evidenced by a Board Resolution set forth in an Officers' Certificate delivered to the Trustee; and



(3)

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



(a)

any liabilities (as shown on the Company's or the Restricted Subsidiary's most recent balance sheet) of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Securities or any Subsidiary Guarantee), that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability;



(b)

any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are within 60 days (subject to ordinary settlement periods) converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents (to the extent of the cash received in that conversion); and



(c)

any Permitted Business Assets (so long as such Permitted Business Assets are acquired for fair market value, as determined in good faith by the Board of Directors of the Company, in connection with the transaction giving rise to such Asset Sale; provided that the Board of Directors' determination must be based on an opinion or appraisal issued by an independent accounting, appraisal or investment banking firm of national standing if such fair market value exceeds $35 million), which Permitted Business Assets shall be deemed to have been acquired pursuant to the second succeeding paragraph in connection with such Asset Sale.

        The 75% limitation referred to above shall not apply to any Asset Sale in which the cash or Cash Equivalents portion of the consideration received therefrom, determined in accordance with the preceding sentence, is equal to or greater than what the after-tax proceeds would have been had such Asset Sale complied with the 75% limitation.

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

        (1)   to repay or repurchase Senior Indebtedness of the Company or any Restricted Subsidiary;

        (2)   to the extent any proceeds remain after the prepayment of all outstanding Senior Indebtedness, if any, that is prepayable at the option of the Company or such Restricted Subsidiary, to repay or repurchase the Company's 13% Senior Subordinated Notes pursuant to the terms of the "Asset Sales" covenant in the indenture governing the 13% Senior Subordinated Notes;

        (3)   to acquire all or substantially all the assets of, or a majority of the Voting Stock of, another Permitted Business;

        (4)   to make a capital expenditure in a Permitted Business;

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        (5)   to acquire other assets (other than securities) that are used or useful in a Permitted Business; or

        (6)   to make an Asset Sale Offer, treating the Net Proceeds as Excess Proceeds for all purposes.

        Any Net Proceeds from Asset Sales that are not applied or invested as provided in the preceding paragraph shall constitute "Excess Proceeds". When the aggregate amount of Excess Proceeds exceeds $15 million, the Company shall be required to make an offer to all Holders of Securities (an "Asset Sale Offer") and other pari passu Indebtedness of the Company or any Guarantor (other than the 13% Senior Subordinated Notes) to the extent required pursuant to the terms of that pari passu Indebtedness to purchase the maximum principal amount of such Securities or other pari passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer shall be equal to 100% of the principal amount (or, in the case of such other pari passu Indebtedness that issued with significant original issue discount, 100% of the accreted value thereof) plus accrued and unpaid interest, if any, to the Purchase Date, and shall be payable in cash (or in the case of such pari passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such other pari passu Indebtedness). If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use such Excess Proceeds for general corporate purposes. If the aggregate principal amount of Securities tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Securities to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

        The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Securities as a result of an Asset Sale Offer.

        To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture relating to such Asset Sale Offer, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

        SECTION 1016.    Investment Company.    The Company shall not, and shall not permit any of its Subsidiaries to, be required to register as an "Investment Company" (as that term is defined in the Investment Company Act of 1940, as amended), or otherwise become subject to registration under the Investment Company Act.

        SECTION 1017.    Limitations on Issuances of Guarantees of Indebtedness.    The Company shall not permit any Restricted Subsidiary, directly or indirectly, to incur Indebtedness or Guarantee or pledge any assets to secure the payment of any Indebtedness of the Company or any Restricted Subsidiary unless either such Restricted Subsidiary (1) is a Guarantor or (2) simultaneously executes and delivers a supplemental indenture to this Indenture and becomes a Guarantor, which Guarantee shall (a) with respect to any Guarantee of Senior Indebtedness, be subordinated in right of payment on the same terms as the Securities are subordinated to such Senior Indebtedness and (b) with respect to any Guarantee of any other Indebtedness, be senior to or pari passu with such Restricted Subsidiary's other Indebtedness or Guarantee of or pledge to secure such other Indebtedness.

        Notwithstanding the preceding paragraph, any Subsidiary Guarantee of the Securities shall provide by its terms that it shall be automatically and unconditionally released and discharged:

        (1)   in connection with any sale or other disposition of all or substantially all of the assets of that Guarantor (including by way of merger or consolidation) if the Company applies the Net Proceeds of that sale or other disposition in accordance with the applicable provisions of this Indenture; or

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        (2)   in connection with the sale of all of the Capital Stock of a Guarantor if the Company applies the Net Proceeds of that sale in accordance with the applicable provisions of this Indenture; or

        (3)   if the Company designates such Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary.

        SECTION 1018.    Additional Guarantees.    If (a) the Company shall acquire or create a Domestic Restricted Subsidiary (other than a Permitted Joint Venture or a Receivables Entity) after the Issue Date, or (b) any Subsidiary of the Company becomes (1) a Domestic Restricted Subsidiary (other than a Permitted Joint Venture or a Receivables Entity) or (2) guarantees any Indebtedness of the Company or a Domestic Restricted Subsidiary, then, in each case, such newly acquired or created Restricted Subsidiary or such other Subsidiary, as the case may be, shall become a Guarantor and execute a supplemental indenture that subjects such Person to the provisions of this Indenture as a Guarantor and the Company shall deliver an Opinion of Counsel to the Trustee, in accordance with the terms of this Indenture, stating that such supplemental indenture and such Person's obligations under its Subsidiary Guarantee and this Indenture constitute valid, legal, binding and enforceable obligations of such Person (subject to customary exceptions concerning creditors' rights and to equitable principles as may be acceptable to the Trustee).

        SECTION 1019.    Limitation on Lines of Business.    The Company shall not, and shall not permit any Restricted Subsidiary to, engage in any business other than a Permitted Business.

        SECTION 1020.    Anti-Layering.    The Company shall not, and shall not permit any Guarantor to, incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is both:

        (1)   subordinate or junior in right of payment to any Senior Indebtedness; and

        (2)   senior in any respect in right of payment to the Securities.

        No Guarantor shall incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is both:

        (1)   subordinate or junior in right of payment to any Senior Indebtedness of such Guarantor; and

        (2)   senior in any respect in right of payment to the Subsidiary Guarantees.

        SECTION 1021.    [NOT USED]    

        SECTION 1022.    [NOT USED]    

        SECTION 1023.    Designation of Restricted and Unrestricted Subsidiaries.    The Board of Directors of the Company may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, all outstanding Investments owned by the Company and its Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary so designated shall be deemed to be Restricted Payments made at the time of such designation (to the extent not designated a Permitted Investment) and shall reduce the amount available for Restricted Payments under the first paragraph of Section 1009. All such outstanding Investments shall be valued at their fair market value at the time of such designation, as determined in good faith by the Board of Directors. That designation shall only be permitted if such Restricted Payment would be permitted at that time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The Board of Directors of the Company may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a Default.

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        SECTION 1024.    Advances to Subsidiaries.    All advances to Restricted Subsidiaries made by the Company after the Issue Date shall be evidenced by intercompany notes in favor of the Company substantially in the form of Exhibit B. Each intercompany note shall be payable upon demand and shall bear interest at the same rate as the Securities.

        SECTION 1025.    Payments for Consents.    The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Securities unless such consideration is offered to be paid and is paid to all Holders that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

        SECTION 1026.    Statement by Officers as to Default; Compliance Certificates.    (a) The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year an Officers' Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of Section 801 or Sections 1004 to 1025, inclusive, and if the Company shall be in default, specifying all such Defaults and the nature and status thereof of which they may have knowledge.

        (b)   The Company shall deliver to the Trustee, as soon as possible and in any event within 10 days after the Company becomes aware or should reasonably become aware of the occurrence of a Default or an Event of Default, an Officers' Certificate setting forth the details of such Default or Event of Default, and the action which the Company proposes to take with respect thereto.

        (c)   So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the Company shall deliver to the Trustee within 90 days after the end of each fiscal year a written statement by the Company's independent public accountants stating (A) that their audit examination has included a review of the terms of this Indenture and the Securities as they relate to accounting matters, and (B) whether, in connection with their audit examination, any Default has come to their attention and, if such a Default has come to their attention, specifying the nature and period of the existence thereof.

        SECTION 1027.    Waiver of Covenants.    The Company may omit in any particular instance to comply with any covenant or condition set forth in Section 801 and Sections 1004 to 1025, if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such covenant or condition shall remain in full force and effect; provided, however, with respect to any provision requiring a supermajority approval to waive, such provision may only be waived by such a supermajority, and with respect to a covenant or provision which cannot be modified or amended without the consent of the Holder of each Outstanding Security affected, such provision may only be waived by the consent of each and every Holder of Outstanding Security affected.

ARTICLE ELEVEN

Redemption of Securities

        SECTION 1101.    [NOT USED]    

        SECTION 1102.    Applicability of Article.    Redemption of Securities at the election of the Company, as permitted by any provision of this Indenture, shall be made in accordance with such provision, paragraph 5 of the Securities and this Article. Except as set forth in Section 1014 or Section 1015, the Company is not required to make mandatory redemption of sinking fund payments

64

with respect to the Securities. The Company may at any time and from time to time purchase Securities in the open market or otherwise.

        SECTION 1103.    Election to Redeem; Notice to Trustee.    The election of the Company to redeem any Securities pursuant to paragraph 5 of the Securities shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company of less than all the Securities, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction.

        SECTION 1104.    Selection by Trustee of Securities to be Redeemed.    If less than all of the Securities are to be redeemed at any time, the Trustee shall select Securities for redemption, not more than 60 days prior to the Redemption Date, as follows:

        (1)   if the Securities are listed, in compliance with the requirements of the principal national securities exchange on which the Securities are listed; or

        (2)   if the Securities are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate.

        The Trustee shall promptly notify the Company and each Notes Registrar in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.

        Securities and portions of Securities selected shall be in amounts of $1,000 or whole multiples of $1,000; except that if all of the Securities of a Holder are to be redeemed, the entire outstanding amount of Securities held by such Holder, even if not a multiple of $1,000, shall be redeemed.

        For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.

        SECTION 1105.    Notice of Redemption.    Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Note Register.

        All notices of redemption shall state:

        (1)   the Redemption Date;

        (2)   the Redemption Price;

        (3)   if less than all the Outstanding Securities are to be redeemed, the identification (and, in the case of partial redemption, the principal amounts) of the particular Securities to be redeemed, and in the case of partial redemption, a statement to the effect that upon surrender of such Securities, a new Security in a principal amount equal to the unredeemed portion thereof shall be issued upon cancellation of the original Security;

        (4)   that on the Redemption Date the Redemption Price shall become due and payable upon each such Security to be redeemed;

        (5)   the place or places where such Securities are to be surrendered for payment of the Redemption Price; and

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        (6)   the CUSIP number of the Securities to be redeemed.

        Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company if the Company gives notice to the Trustee at least 45 days prior to the Redemption Date (unless shorter notice shall be acceptable to the Trustee).

        Notices of redemption may not be conditional.

        SECTION 1106.    Deposit of Redemption Price.    Prior to 11:00 a.m. Eastern Time on any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) any applicable accrued interest and Additional Interest on, all the Securities which are to be redeemed on that date. The Trustee or the Paying Agent shall no later than 30 days after the expiration of the Redemption Date return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the Redemption Price of, and any applicable accrued interest and Additional Interest on, all Securities to be redeemed.

        SECTION 1107.    Securities Payable on Redemption Date.    Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and any applicable accrued interest) such Securities or portions of them called for redemption shall not bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with any applicable accrued interest and Additional Interest to (but excluding) the Redemption Date; provided, however, that installments of interest whose Interest Payment Date is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307.

        If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate provided by the Security.

        SECTION 1108.    Securities Redeemed in Part.    Any Security which is to be redeemed only in part shall be surrendered at an office or agency of the Company designated for that purpose pursuant to Section 1002 (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.

ARTICLE TWELVE

Defeasance and Covenant Defeasance

        SECTION 1201.    Company's Option to Effect Legal Defeasance or Covenant Defeasance.    The Company may, at its option and at any time, by Board Resolution elect to have either Section 1202 or 1203 hereof be applied with respect to the Outstanding Securities upon compliance with the conditions set forth below in this Article Twelve.

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        SECTION 1202.    Legal Defeasance and Discharge.    Upon the Company's exercise of the option provided in Section 1201 applicable to this Section, the Company shall be deemed to have been discharged from its obligations with respect to the Outstanding Securities and the Guarantors shall be deemed to have been discharged from their obligations under the Subsidiary Guarantees on the date the conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance means that the Company and the Guarantors shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Securities and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except as to (i) rights of Holders to receive payments in respect of the principal of, premium, if any, and interest (and Additional Interest, if any) on such Securities when such payments are due from the trust funds; (ii) the Company's obligations with respect to such Securities concerning Sections 304, 305, 306, 1002 and 1003; (iii) the rights, powers, trust, duties, and immunities of the Trustee, and the Company's obligations in connection therewith; and (iv) the Legal Defeasance provisions of this Article Twelve, all of which shall survive until otherwise terminated or discharged hereunder. Subject to compliance with this Article Twelve, the Company may exercise its option under this Section 1202 notwithstanding the prior exercise of its option under Section 1203.

        SECTION 1203.    Covenant Defeasance.    Upon the Company's exercise of the option provided in Section 1201 applicable to this Section, the Company may, at its option and at any time, elect to have the obligations of the Company and the Guarantors released with respect to its (i) obligations under Sections 1005 through 1025, inclusive, and clause (4) of Section 801 and (ii) the occurrence of an event specified in Sections 501(5), (with respect to any of Sections 1005 through 1025, inclusive), 501(6) and 501(7) shall not be deemed to be a Default or an Event of Default on and after the date the conditions set forth below are satisfied (hereinafter, "Covenant Defeasance"). For this purpose, such Covenant Defeasance means that the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such Section or clause, whether directly or indirectly by reason of any reference elsewhere herein to any such Section or clause or by reason of any reference in any such Section or clause to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby.

        SECTION 1204.    Conditions to Legal or Covenant Defeasance.    The following shall be the conditions to application of either Section 1202 or Section 1203 to the then Outstanding Securities:

        (1)   the Company shall irrevocably have deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities, in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as shall be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest, Additional Interest, if any, on the Outstanding Securities on the Stated Maturity of the Securities or on the applicable Redemption Date, as the case may be, and the Company must specify whether the Securities are being defeased to maturity or to a particular Redemption Date;

        (2)   in the case of an election of Legal Defeasance under Section 1202, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that (a) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the Issue Date, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, subject to customary assumptions and exclusions, the Holders of the Outstanding Securities shall not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and shall be subject to federal income tax on

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the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

        (3)   in the case of an election of Covenant Defeasance under Section 1203, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that, subject to customary assumptions and exclusions, the Holders of the Outstanding Securities shall not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and shall be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

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

        (5)   such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of its Restricted Subsidiaries is a party or by which the Company or any of its Restricted Subsidiaries is bound;

        (6)   the Company must deliver to the Trustee an Officers' Certificate stating that the deposit was not made by the Company or with the intent of preferring the Holders over the other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others;

        (7)   no event which is, or after notice or lapse of time or both would become, an Event of Default with respect to such Securities or any other Securities shall have occurred and be continuing at the time of such deposit or, with regard to any such event specified in paragraphs (7) or (8) of Section 501, at any time on or prior to the 90th day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such 90th day); and

        (8)   the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, which opinion may be subject to customary assumptions and exclusions, each stating that all conditions precedent provided for relating to either the Legal Defeasance under Section 1202 or the Covenant Defeasance under Section 1203 (as the case may be) have been complied with.

        SECTION 1205.    Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions.    Subject to the provisions of the last paragraph of Section 1003, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee pursuant to Section 1204 in respect of the Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal (and premium, if any) and interest (and Additional Interest, if any), but such money need not be segregated from other funds except to the extent required by law.

        The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 1204 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the Outstanding Securities.

        Anything in this Article Twelve to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 1204 which, in the opinion of a nationally recognized firm of

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independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

        SECTION 1206.    Reinstatement.    If the Trustee or the Paying Agent is unable to apply any money in accordance with Section 1202 or 1203 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, or if a Default from a bankruptcy or insolvency event occurs at any time during the period ending on the 91st day after the date of a deposit by the Company hereunder, then the Company's obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to this Article Twelve until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 1202 or 1203; provided, that if the Company makes any payment of principal of (and premium, if any) or interest (and Additional Interest, if any) on any Security following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money held by the Trustee or the Paying Agent.

ARTICLE THIRTEEN

Subordination

        SECTION 1301.    Agreement to Subordinate.    The Company agrees, and each Holder by accepting a Security agrees, that the Indebtedness evidenced by the Securities and all Obligations in respect of the Securities (including but not limited to Additional Interest) are subordinated in right of payment, to the extent and in the manner provided in this Article Thirteen, to the prior payment in full in cash of all Senior Indebtedness (whether outstanding on the date hereof or hereafter created, incurred, assumed or guaranteed), and that the subordination is for the benefit of the holders of Senior Indebtedness.

        SECTION 1302.    Liquidation; Dissolution; Bankruptcy.    Upon any distribution of assets of the Company upon any Insolvency or Liquidation Proceeding:

        (1)   the holders of all Senior Indebtedness of the Company shall be entitled to receive payment in full in cash or Cash Equivalents before the Holders shall be entitled to receive any payment on account of the principal of, premium, if any, and interest on the Securities or any Obligation in respect to the Securities (except that Holders may receive (i) Reorganization Securities and (ii) payments made from any defeasance trust created pursuant to Section 1201 hereof); and

        (2)   any payment or distribution of assets of the Company of any kind or character from any source, whether in cash, property or securities (other than (i) Reorganization Securities and (ii) payments made from any defeasance trust created pursuant to Section 1201 hereof), to which the Holders or the Trustee on behalf of the Holders would be entitled (by set-off or otherwise), except for this Article, shall be paid by the Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment or distribution, or by the Holders or by the Trustee if received by them, directly to the holders of Senior Indebtedness (pro rata to such holders on the basis of the amounts of Senior Indebtedness held by such holders) or their Representative or Representatives, as their interests may appear, for application to the payment of the Senior Indebtedness remaining unpaid until all such Senior Indebtedness has been paid in full in cash, after giving effect to any concurrent payment, distribution or provision therefor to or for the holders of Senior Indebtedness.

        SECTION 1303.    Default on Senior Indebtedness.    (a) In the event of and during the continuation of any default in the payment of principal of, interest or premium, if any, on any Senior

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Indebtedness, or any Obligation owing from time to time under or in respect of Senior Indebtedness, or in the event that any event of default (other than a payment default) with respect to any Senior Indebtedness shall have occurred and be continuing and shall have resulted in such Senior Indebtedness becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, then no payment shall be made by or on behalf of the Company on account of principal of, premium, if any, and interest (and Additional Interest, if any) on the Securities (other than payments in the form of Reorganization Securities), unless and until such default shall have been cured or waived in writing in accordance with the instruments governing such Senior Indebtedness or such acceleration shall have been rescinded or annulled;

        (b)   If any event of default other than as described in clause (a) above with respect to any Designated Senior Indebtedness shall have occurred and be continuing permitting the holders of such Designated Senior Indebtedness (or their Representative or Representatives) to declare such Designated Senior Indebtedness due and payable prior to the date on which it would otherwise have become due and payable, then no payment shall be made by or on behalf of the Company on account of the principal of, premium, if any, and interest (and Additional Interest, if any) on the Securities (other than payments in the form of Reorganization Securities) during the period (a "Payment Blockage Period") commencing on the date the Company or a Responsible Officer receives written notice (a "Payment Notice") of such event of default (which notice shall be binding on the Trustee and the Holders as to the occurrence of such a payment default or nonpayment event of default) from the Credit Agent (or other holders of Designated Senior Indebtedness or their Representative or Representatives) and ending on the earliest of:

        (A)  179 days after such date;

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

        (C)  the date on which the Responsible Officer receives written notice from the Credit Agent (or other holders of Designated Senior Indebtedness or their Representative or Representatives), as the case may be, terminating the Payment Blockage Period, unless the maturity of any Designated Senior Indebtedness has been accelerated.

        (c)   During any consecutive 360-day period, the aggregate of all Payment Blockage Periods shall not exceed 179 days and there shall be a period of at least 181 consecutive days in each consecutive 360-day period when no Payment Blockage Period is in effect. No event of default which existed or was continuing with respect to the Senior Indebtedness for which notice commencing a Payment Blockage Period was given on the date such Payment Blockage Period commenced shall be or be made the basis for the commencement of any subsequent Payment Blockage Period unless such event of default is cured or waived for a period of not less than 90 consecutive days.

        SECTION 1304.    Acceleration of Securities.    If payment of the Securities is accelerated because of an Event of Default, the Company shall promptly notify holders of Senior Indebtedness of the acceleration.

        SECTION 1305.    When Distribution Must be Paid Over.    In the event that, notwithstanding the other provisions of this Article Thirteen, the Trustee receives any payment or distribution in respect of the Securities or of any Obligations with respect to the Securities at a time when the Trustee has received notice in accordance with Section 1310 that such payment or distribution is prohibited by Section 1303 hereof, such payment or distribution shall be held by the Trustee in trust for the benefit of, and shall be paid forthwith over and delivered, upon written request, to, the holders of Senior Indebtedness remaining unpaid or unprovided for or their representative or representatives, or to the

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trustee or trustees under any indenture pursuant to which any instruments representing any of such Senior Indebtedness may have been issued, ratably according to aggregate principal amounts remaining unpaid on account of such Senior Indebtedness held or represented by each, for application to the payment of all obligations with respect to Senior Indebtedness remaining unpaid, to the extent necessary to pay or to provide for the payment of all such obligations in full in cash or Cash Equivalents in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness.

        In the event that, notwithstanding the other provisions of this Article Thirteen, a Holder receives any payment or distribution of any Obligations with respect to the Securities at a time when such payment or distribution is prohibited by Section 1303 hereof, such payment or distribution shall be paid forthwith over and delivered, upon written request, to, the holders of Senior Indebtedness remaining unpaid or unprovided for or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments representing any of such Senior Indebtedness may have been issued, ratably according to aggregate principal amounts remaining unpaid on account of such Senior Indebtedness held or represented by such, for application to the payment of all obligations with respect to Senior Indebtedness remaining unpaid, to the extent necessary to pay or to provide for the payment of all such obligations in full in cash or Cash Equivalents in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness.

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

        SECTION 1306.    Notice by Company.    The Company shall promptly notify the Trustee and the Paying Agent of any facts known to the Company that would cause a payment of any Obligations with respect to the Securities to violate this Article Thirteen, but failure to give such notice shall not affect the subordination of the Securities to the Senior Indebtedness as provided in this Article Thirteen.

        SECTION 1307.    Subrogation.    After all Senior Indebtedness is paid in full in cash or Cash Equivalents and until the Securities are paid in full, Holders shall be subrogated (equally and ratably with all other Indebtedness pari passu with the Securities) to the rights of holders of Senior Indebtedness to receive distributions applicable to Senior Indebtedness to the extent that distributions otherwise payable to the Holders have been applied to the payment of Senior Indebtedness. A distribution made under this Article Thirteen to holders of Senior Indebtedness that otherwise would have been made to Holders is not, as between the Company and Holders, a payment by the Company on the Securities. No holder of Senior Indebtedness shall be obligated to create, warrant, preserve or protect any such subrogation right or shall suffer any loss or diminution of its rights hereunder if for any reason such right of subrogation is not available to any Holder.

        SECTION 1308.    Relative Rights.    This Article defines the relative rights of Holders and holders of Senior Indebtedness. Nothing in this Indenture shall:

        (1)   impair, as between the Company and Holders, the obligation of the Company, which is absolute and unconditional, to pay principal of (and premium, if any) and interest (and Additional Interest, if any) on the Securities in accordance with their terms;

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

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

        If the Company fails because of this Article to pay principal of (or premium, if any) or interest (or Additional Interest, if any) on a Security on the due date, the failure is still a Default or Event of Default.

        SECTION 1309.    Subordination May Not be Impaired by Company.    No right of any holder of Senior Indebtedness to enforce the subordination of the Indebtedness evidenced by the Securities shall be impaired by any act or failure to act by the Company or any Holder or by the failure of the Company or any holder of Senior Indebtedness to comply with this Indenture.

        Without in any way limiting the generality of the foregoing paragraph, the holders of the Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or Holders, without incurring responsibility to the Holders and without impairing or releasing the subordination provided in this Article Thirteen or the obligations hereunder of the Holders to the holders of Senior Indebtedness, do any one or more of the following: (a) change the manner, place or terms of payment or extend the time or payment of, or renew or alter, Senior Indebtedness or any instrument evidencing the same or any agreement under which Senior Indebtedness is outstanding; provided, however, that any such alteration shall not (i) increase the amount of Senior Indebtedness outstanding in a manner prohibited by this Indenture or (ii) otherwise violate Section 1008 hereof; (b) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (c) release any Person in any manner for the collection of Senior Indebtedness; and (d) exercise or refrain from exercising any rights against the Company or any other Person; provided, however, that in no event shall any such actions limit the right of the Holders to take any action to accelerate the maturity of the Securities in accordance with the provisions set forth in Section 502 or to pursue any rights or remedies against the parties to this Indenture under this Indenture or under applicable laws if the taking of such action does not otherwise violate the terms of this Article Thirteen.

        SECTION 1310.    Rights of Trustee and Paying Agent.    Notwithstanding the provisions of this Article Thirteen or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Trustee, and the Trustee and the Paying Agent may continue to make payments on the Securities, unless the Responsible Officer shall have received at its Corporate Trust Office at least five Business Days prior to the date of such payment written notice of facts that would cause the payment of any Obligations with respect to the Securities to violate this Article Thirteen. Only the Company or the Representative may give the notice. Nothing in this Article Thirteen shall impair the claims of, or payments to, the Trustee under or pursuant to Section 607 hereof.

        The Trustee in its individual or any other capacity may hold Senior Indebtedness with the same rights it would have if it were not Trustee.

        SECTION 1311.    Authorization to Effect Subordination.    Each Holder of a Security by the Holder's acceptance thereof authorizes and directs the Trustee on the Holder's behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article Thirteen, and appoints the Trustee to act as the Holder's attorney-in-fact for any and all such purposes. If the Trustee does not file a proper proof of claim or proof of Indebtedness in the form required in any proceeding referred to in Section 504 hereof at least 30 days before the expiration of the time to

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file such claim, the Representative is hereby authorized to file an appropriate claim for and on behalf of the Holders.

        SECTION 1312.    Amendments.    The provisions of this Article Thirteen or any related definitions shall not be amended or modified in a manner adverse to the holders of Senior Indebtedness without the written consent of the holders of all Senior Indebtedness.

        SECTION 1313.    Trustee Not Fiduciary for Holders of Senior Indebtedness.    The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any such holders if the Trustee shall in good faith mistakenly pay over or distribute to Holders of Securities or to the Company or to any other person cash, property or securities to which any holders of Senior Indebtedness shall be entitled by virtue of this Article or otherwise. With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants or obligations as are specifically set forth in this Article and no implied covenants or obligations with respect to holders of Senior Indebtedness shall be read into this Indenture against the Trustee.

ARTICLE FOURTEEN

Subsidiary Guarantees

        SECTION 1401.    Subsidiary Guarantees.    Subject to the provisions of this Article Fourteen, each of the Company's Domestic Restricted Subsidiaries (other than Permitted Joint Ventures and Receivables Entities), jointly and severally, hereby irrevocably and unconditionally fully guarantees to each Holder of a Security authenticated and delivered by the Trustee and to the Trustee and its successors and assigns (the "Subsidiary Guarantee"), that: (a) the principal of, and premium, if any, and interest (and Additional Interest, if any) on the Securities shall be duly and punctually paid in full when due, whether at maturity, by acceleration or otherwise, and interest on overdue principal, and premium, if any, and (to the extent permitted by law) interest on any interest and Additional Interest, if any, on the Securities and all other obligations of the Company to the Holders or the Trustee hereunder or under the Securities (including fees, expenses or other) shall be promptly paid in full or performed, all in accordance with the terms hereof; and (b) in case of any extension of time of payment or renewal of any Securities or any of such other obligations, the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or failing performance of any other obligation of the Company to the Holders, for whatever reason, each Guarantor shall be obligated to pay, or to perform or to cause the performance of, the same immediately. An Event of Default under this Indenture or the Securities shall constitute an event of default under the Subsidiary Guarantees, and shall entitle the Trustee or the Holders to accelerate the obligations of each Guarantor hereunder in the same manner and to the same extent as the obligations of the Company. Each Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Securities or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any thereof, the entry of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives and relinquishes: (a) any right to require the Trustee, the Holders or the Company (each, a "Benefitted Party") to proceed against the Company, the Subsidiaries or any other Person or to proceed against or exhaust any security held by a Benefitted Party at any time or to pursue any other remedy in any secured party's power before proceeding against the Subsidiaries; (b) any defense that may arise by reason of the incapacity, lack of authority, death or disability of any other Person or Persons or the failure of a Benefitted Party to file or enforce a claim against the estate (in administration, bankruptcy or any other proceeding) of any other Person or Persons; (c) demand, protest and notice of any kind (except as expressly required by this Indenture), including but not

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limited to notice of the existence, creation or incurring of any new or additional Indebtedness or obligation or of any action or non-action on the part of the Guarantors, the Company, the Subsidiaries, any Benefitted Party, any creditor of the Guarantors, the Company or the Subsidiaries or on the part of any other Person whomsoever in connection with any obligations the performance of which are hereby guaranteed; (d) any defense based upon an election of remedies by a Benefitted Party, including but not limited to an election to proceed against the Guarantors for reimbursement; (e) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (f) any defense arising because of a Benefitted Party's election, in any proceeding instituted under the Bankruptcy Law, of the application of Section 1111(b)(2) of the Bankruptcy Code; and (g) any defense based on any borrowing or grant of a security interest under Section 364 of the Bankruptcy Code. The Guarantors hereby covenant that the Subsidiary Guarantees shall not be discharged except by payment in full of all principal, premium, if any, and interest on the Securities and all other costs provided for under this Indenture, or except as provided in Sections 1202 and 1404.

        If any Holder or the Trustee is required by any court or otherwise to return to either the Company or the Guarantors, or any trustee or similar official acting in relation to either the Company or the Guarantors, any amount paid by the Company or the Guarantors to the Trustee or such Holder, the Subsidiary Guarantees, to the extent theretofore discharged, shall be reinstated in full force and effect. Each of the Guarantors agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article Five hereof for the purposes hereof, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any acceleration of such obligations as provided in Article Five hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purpose of its Subsidiary Guarantee.

        SECTION 1402.    Execution and Delivery of Subsidiary Guarantees.    To evidence the Subsidiary Guarantees set forth in Section 1401 hereof, each of the Guarantors agrees that a Subsidiary Guarantee substantially in the form of Exhibit A hereto shall be endorsed on each Security authenticated and delivered by the Trustee and that this Indenture shall be executed on behalf of such Guarantor by its Chairman of the Board, its President or one of its Vice Presidents.

        Each of the Guarantors agrees that the Subsidiary Guarantees set forth in this Article Fourteen shall remain in full force and effect and apply to all of the Securities notwithstanding any failure to endorse on each Security a notation of the Subsidiary Guarantees.

        If an individual whose manual or facsimile signature is on a Security shall have ceased to hold such office prior to the authentication and delivery of the Security on which the Subsidiary Guarantees are endorsed, the Subsidiary Guarantees shall be valid nevertheless.

        The delivery of any Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Subsidiary Guarantees endorsed thereon and set forth in this Indenture and shall bind each Guarantor notwithstanding the fact that a Subsidiary Guarantee does not bear the signature of such Guarantor. Each of the Guarantors hereby jointly and severally agrees that its form of Subsidiary Guarantee set forth in Section 1401 and in the form of Subsidiary Guarantee established pursuant to Exhibit A shall remain in full force and effect notwithstanding any failure to endorse a Subsidiary Guarantee on any Security.

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        SECTION 1403.    Guarantors May Consolidate, etc., on Certain Terms.

        (a)   Nothing contained in this Indenture or in the Securities shall prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or shall prevent the transfer of all or substantially all of the assets of a Guarantor to the Company or another Guarantor. Upon any such consolidation, merger, transfer or sale, the Subsidiary Guarantee of such Guarantor shall no longer have any force or effect.

        (a)   Except as provided in Section 1403(a), or a transaction referred to in Section 1404, no Guarantor shall consolidate with or merge with or into (whether or not such Guarantor is the surviving corporation) another Person other than the Company or another Guarantor, whether in a single transaction or a series of related transactions, unless (i) subject to the provisions of Section 1404 hereof, the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) assumes all the obligations of such Guarantor in connection with the Subsidiary Guarantees and this Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee, pursuant to which such Person shall unconditionally guarantee on a senior subordinated basis all of such Guarantor's obligations under such Guarantor's Subsidiary Guarantee and this Indenture on the terms set forth in this Indenture; (ii) immediately before and immediately after giving effect to such transaction on a pro forma basis, no Default or Event of Default shall have occurred and be continuing; and (iii) such Guarantor shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel addressed to the Trustee, each stating that such consolidation or merger and such supplemental indenture, if any, comply with this Indenture and that such supplemental indenture is enforceable. In case of any such consolidation or merger and upon the assumption by the successor corporation, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the Subsidiary Guarantees endorsed upon the Securities and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by such Guarantor, such successor corporation shall succeed to and be substituted for such Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor corporation thereupon may cause to be signed any or all of the Subsidiary Guarantees to be endorsed upon all of the Securities issuable hereunder which theretofore shall have been signed by the Company and delivered to the Trustee. All the Subsidiary Guarantees so issued shall in all respects have the same legal rank and benefit under this Indenture as the Subsidiary Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Subsidiary Guarantees had been issued at the date of the execution hereof.

        (b)   The Trustee, subject to the provisions of Section 1404 hereof, shall be entitled to receive an Officers' Certificate and an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale or conveyance, and any such assumption of obligations, comply with the provisions of this Section 1403.

        SECTION 1404.    Releases Following Sale of Assets.    Upon the sale or disposition (whether by merger, stock purchase, asset sale or otherwise) of a Guarantor (or all or substantially all of the assets of any such Guarantor or 50% or more of the Equity Interests of any such Guarantor) to an entity which is not a Guarantor or the designation of a Subsidiary to become an Unrestricted Subsidiary, which transaction is otherwise in compliance with this Indenture, including without limitation Section 1015 hereof, such Guarantor shall be deemed released from its obligations under its Subsidiary Guarantee. Upon delivery by the Company to the Trustee of an Officers' Certificate and Opinion of Counsel, to the effect that such sale or other disposition was made by the Company in accordance with the provisions of this Indenture, including without limitation Section 1015 hereof, the Trustee shall execute any documents reasonably required in order to evidence the release of any such Guarantor from its obligations under its Subsidiary Guarantee. Any Guarantor not released from its obligations under its Subsidiary Guarantee shall remain liable for the full amount of principal of and interest on

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the Securities and for the other obligations of any Guarantor under this Indenture as provided in this Article Fourteen.

        SECTION 1405.    Limitation of Guarantor's Liability.    Each Guarantor, and by its acceptance hereof each Holder, hereby confirms that it is the intention of all such parties that the guarantee by such Guarantor pursuant to its Subsidiary Guarantee not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law. To effectuate the foregoing intention, the Holders and such Guarantor hereby irrevocably agree that the obligations of such Guarantor under this Article Fourteen shall be limited to the maximum amount as shall, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article Fourteen, result in the obligations of such Guarantor under the Subsidiary Guarantee of such Guarantor not constituting a fraudulent transfer or conveyance.

        SECTION 1406.    Application of Certain Terms and Provisions to the Guarantors.    (a) For purposes of any provision of this Indenture which provides for the delivery by any Guarantor of an Officers' Certificate and/or an Opinion of Counsel, the definitions of such terms in Section 101 shall apply to such Guarantor as if references therein to the Company were references to such Guarantor.

        (b)   Any request, demand, authorization, direction, notice, consent, waiver or other document which by any provision of this Indenture is to be made by any Guarantor, shall be sufficient if evidenced as described in Section 105 as if references therein to the Company were references to such Guarantor.

        (c)   Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by any Holder may be given or served as described in Section 105 as if references therein to the Company were references to such Guarantor.

        (d)   Upon any application or request by any Guarantor to the Trustee to take any action under any provision of this Indenture, such Guarantor shall furnish to the Trustee such certificates and opinions as are required in Section 102 hereof as if all references therein to the Company were references to such Guarantor.

        SECTION 1407.    Release of Subsidiary Guarantees.    Concurrently with the defeasance of the Securities under Section 1202 hereof, the Guarantors shall be released from all of their obligations under the Subsidiary Guarantees and this Article Fourteen.

        SECTION 1408.    Subordination of Subsidiary Guarantees.    The obligations of each Guarantor under its Subsidiary Guarantee pursuant to this Article Fourteen is subordinated in right of payment to the prior payment in full in cash of all Senior Indebtedness of such Guarantor on the same basis as the Securities are subordinated to Senior Indebtedness of the Company. For the purposes of the foregoing sentence, the Trustee and the Holders shall have the right to receive and/or retain payments by any of the Guarantors only at such times as they may receive and/or retain payments in respect of Securities pursuant to this Indenture, including Article Thirteen hereof. In the event that the Trustee receives any Guarantor payment at a time when the Trustee has received notice in accordance with Section 1310, such Guarantor payment shall be held by the Trustee in trust for the benefit of, and shall be paid forthwith over and delivered, upon written request, to, the holders of the Senior Indebtedness of such Guarantor remaining unpaid or unprovided for, for application to the payment of all obligations with respect to Senior Indebtedness of such Guarantor remaining unpaid, to the extent necessary to pay such Senior Indebtedness of such Guarantor in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness. In the event that a Holder receives any Guarantor payment at a time when such payment is prohibited by the second

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preceding sentence, such Guarantor payment shall be forthwith paid over and delivered to the holders of the Senior Indebtedness of such Guarantor remaining unpaid or unprovided for, for application to the payment of all obligations with respect to Senior Indebtedness of such Guarantor remaining unpaid, to the extent necessary to pay such Senior Indebtedness in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness of such Guarantor.

        Each Holder of a Security by its acceptance thereof (a) agrees to and shall be bound by the provisions of this Section 1408, (b) authorizes and directs the Trustee on the Holder's behalf to take such action as may be necessary and appropriate to effectuate the subordination so provided, and (c) appoints the Trustee as the Holder's attorney-in-fact for any and all such purposes.

        SECTION 1409.    Waiver of Subrogation.    Until this Indenture is discharged and all of the Securities are discharged and paid in full, each Guarantor hereby irrevocably waives and agrees not to exercise any claim or other rights which it may now or hereafter acquire against the Company that arise from the existence, payment, performance or enforcement of the Company's obligations under the Securities or this Indenture and each Guarantor's obligations under this Subsidiary Guarantee and this Indenture, in any such instance including, without limitation, any right of subrogation, reimbursement, exoneration, contribution, indemnification, and any right to participate in any claim or remedy of the Holders and the Trustees against the Company, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including, without limitation, the right to take or receive from the Company, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim or other rights. If any amount shall be paid to a Guarantor in violation of the preceding sentence and any amounts owing to the Trustee or the Holders under the Securities, this Indenture, or any other document or instrument delivered under or in connection with such agreements or instruments, shall not have been paid in full, such amount shall have been deemed to have been paid to such Guarantor for the benefit of, and held in trust for the benefit of, the Holders and the Trustee and shall forthwith be paid to the Trustee for the benefit of such Holders to be credited and applied to the obligations in favor of the Holders, whether matured or unmatured, in accordance with the terms of this Indenture. Each Guarantor acknowledges that it has received consideration for providing the Subsidiary Guarantee and that it shall receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the waiver set forth in this Section 1409 is knowingly made in contemplation of such benefits.

        SECTION 1410.    Immediate Payment.    Each Guarantor agrees to make immediate payment to the Trustee on behalf of the Holders of all obligations under the Securities and this Indenture owing or payable to the Holders upon receipt of a demand for payment therefor by the Trustee to such Guarantor in writing.

        SECTION 1411.    No Set-Off.    Each payment to be made by any Guarantor hereunder in respect of the Securities, the Subsidiary Guarantees or this Indenture shall be payable in U.S. Dollars and shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

        SECTION 1412.    Obligations Absolute.    The obligations of each Guarantor hereunder are and shall be absolute and unconditional and any monies or amounts expressed to be owing or payable by a Guarantor hereunder which may not be recoverable from such Guarantor on the basis of a guarantee shall be recoverable from such Guarantor as a primary obligor and principal debtor in respect thereof.

        SECTION 1413.    Obligations Continuing.    Subject to Section 1404, the obligations of each Guarantor hereunder shall be continuing and shall remain in full force and effect until all the obligations of the Company under the Securities and this Indenture shall have been paid and satisfied in full.

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        SECTION 1414.    Obligations Not Reduced.    The obligations of each Guarantor hereunder shall not be satisfied, reduced or discharged by any intermediate payment or satisfaction of the whole or any part of the principal, interest, fees and other monies or amounts which may at any time be or become owing or payable under or by virtue of or otherwise in connection with the Securities or this Indenture.

        SECTION 1415.    Obligations Reinstated.    The obligations of each Guarantor hereunder shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment which would otherwise have reduced the obligations of a Guarantor hereunder (whether such payment shall have been made by or on behalf of the Company or by or on behalf of a Guarantor) is rescinded or reclaimed from the Holders upon the insolvency, bankruptcy, liquidation or reorganization of the Company or any Guarantor or otherwise, all as though such payment had not been made. If demand for, or acceleration of the time for, payment by the Company is stayed upon the insolvency, bankruptcy, liquidation or reorganization of the Company, all such indebtedness otherwise subject to demand for payment or acceleration shall nonetheless be payable by each Guarantor as provided herein.

        SECTION 1416.    Obligations Not Affected.    The obligations of each Guarantor hereunder shall not be affected, impaired or diminished in any way by any act, omission, matter or thing whatsoever, occurring before, upon or after any demand for payment hereunder (and whether or not known or consented to by a Guarantor or the Holders) which, but for this provision, might constitute a whole or partial defense to a claim against a Guarantor hereunder or might operate to release or otherwise exonerate any Guarantor from any of its obligations hereunder or otherwise affect such obligations, whether occasioned by default of any of the Holders or otherwise, including, without limitation:

        (1)   any limitation of status or power, disability, incapacity or other circumstance relating to the Company or any other person, including any insolvency, bankruptcy, liquidation, reorganization, readjustment, composition, dissolution, winding-up or other proceeding involving or affecting the Company or any other person;

        (2)   any irregularity, defect, unenforceability or invalidity in respect of any indebtedness or other obligation of the Company or any other person under this Indenture, the Securities or any other document or instrument;

        (3)   any failure of the Company, whether or not without fault on its part, to perform or comply with any of the provisions of this Indenture or the Securities, or to give notice thereof to a Guarantor;

        (4)   the taking or enforcing or exercising or the refusal or neglect to take or enforce or exercise any right or remedy from or against the Company or any other person or their respective assets or the release or discharge of any such right or remedy;

        (5)   the granting of time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other person;

        (6)   any change in the time, manner or place of payment of, or in any other term of, any of the Securities, or any other amendment, variation, supplement, replacement or waiver of, or any consent to departure from, any of the Securities or this Indenture, including, without limitation, any increase or decrease in the principal amount of or premium, if any, or interest on any of the Securities;

        (7)   subject to Section 1404, any change in the ownership, control, name, objects, businesses, assets, capital structure or constitution of the Company or any Guarantor;

        (8)   subject to Section 1404, any merger or amalgamation of Company or a Guarantor with any person or persons;

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        (9)   the occurrence of any change in the laws, rules, regulations or ordinances of any jurisdiction by any present or future action of any governmental authority or court amending, varying, reducing or otherwise affecting, or purporting to amend, vary, reduce or otherwise affect, the Securities, this Indenture or the obligations of a Guarantor under its Subsidiary Guarantee; and

        (10) any other circumstance (other than by complete, irrevocable payment) that might otherwise constitute a legal or equitable discharge or defense of the Company under this Indenture or the Securities or of a Guarantor in respect of its Subsidiary Guarantee hereunder.

        SECTION 1417.    Dealing With the Company and Others.    The Holders, without releasing, discharging, limiting or otherwise affecting in whole or in part the obligations and liabilities of any Guarantor hereunder and without the consent of or notice to any Guarantor, may

        (1)   grant time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other Person;

        (2)   take or abstain from taking security or collateral from the Company or from perfecting security or collateral of the Company;

        (3)   release, discharge, compromise, realize, enforce or otherwise deal with or do any act or thing in respect of (with or without consideration) any and all collateral, mortgages or other security given by the Company or any third party with respect to the obligations or matters contemplated by this Indenture or the Securities;

        (4)   accept compromises or arrangements from the Company;

        (5)   apply all monies at any time received from the Company or from any security upon such part of the Securities or this Indenture as the Holders may see fit or change any such application in whole or in part from time to time as the Holders may see fit; and

        (6)   otherwise deal with, or waive or modify their right to deal with, the Company and all other Persons and any security as the Holders or the Trustee may see fit.

        SECTION 1418.    Default and Enforcement.    If any Guarantor fails to pay in accordance with Section 1401 or Section 1410 hereof, the Trustee may proceed in its name as trustee hereunder in the enforcement of the Subsidiary Guarantees of such Guarantor and each other Guarantor of the Guarantors' obligations thereunder and hereunder by any remedy provided by law, whether by legal proceedings or otherwise, and to recover from the Guarantors the obligations of the Company under the Securities and this Indenture.

        SECTION 1419.    Costs and Expenses.    Each Guarantor shall pay on demand by the Trustee any and all costs, disbursements, advances and expenses incurred by the Trustee or the Holders (including, without limitation, the reasonable compensation, expenses and disbursements of their respective agents and counsel) in enforcing any of their rights under any Subsidiary Guarantee.

        SECTION 1420.    No Waiver; Cumulative Remedies.    No failure to exercise and no delay in exercising, on the part of the Trustee or the other Holders, any right, remedy, power or privilege hereunder or under this Indenture or the Securities, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under this Indenture or the Securities preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges in the Subsidiary Guarantees and under this Indenture, the Securities and any other document or instrument between the Guarantors and/or the Company and the Trustee are cumulative and not exclusive of any rights, remedies, powers and privilege provided by law.

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        SECTION 1421.    Representation and Warranty of Each Guarantor.    Each Guarantor hereby represents and warrants that all acts, conditions and things required to be done and performed and to have happened precedent to the creation and issuance of its Subsidiary Guarantee, to constitute the same valid, binding and legal obligation of such Guarantor, enforceable against such Guarantor, its successors and assigns in accordance with its terms, have been done and performed and have happened in compliance with all applicable laws and that it has received consideration for providing the Subsidiary Guarantee. The obligation of each Guarantor under its Subsidiary Guarantee shall constitute a direct, general, irrevocable, unconditional and unsecured obligation of such Guarantor, subordinated as provided in Section 1408 of this Indenture, and is the joint and several obligation of each other Guarantor.

        SECTION 1422.    Successors and Assigns.    Each Subsidiary Guarantee shall be binding upon and inure to the benefit of the Guarantors and the Trustee and the Holders and their respective successors and permitted assigns.

        SECTION 1423.    Contribution.    Each Guarantor that makes a payment under its Guarantee shall be entitled upon payment in full of all guaranteed obligations under this Indenture to a contribution from each other Guarantor in an amount equal to such other Guarantor's pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in accordance with GAAP.

(The remainder of this page is blank.)

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        This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

        IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed and as of the day and year first above written.

THE BANK OF NEW YORK
By:	/s/ Jeremy Finkelstein Jeremy Finkelstein Assistant Treasurer
CONCENTRA OPERATING CORPORATION
By:	/s/ Richard A. Parr II Richard A. Parr II Executive Vice President, General Counsel and Corporate Secretary
CONCENTRA HEALTH SERVICES, INC. CONCENTRA PREFERRED SYSTEMS, INC.
By:	/s/ Richard A. Parr II Richard A. Parr II Executive Vice President, General Counsel and Corporate Secretary
CONCENTRA INTEGRATED SERVICES, INC.
By:	/s/ Richard A. Parr II Richard A. Parr II Executive Vice President and Clerk

S-1

CONCENTRA MANAGEMENT SERVICES, INC. FIRST NOTICE SYSTEMS, INC. FOCUS HEALTHCARE MANAGEMENT, INC. METRACOMP, INC. CONCENTRA LABORATORY, L.L.C. CISI BUSINESS CORPORATION CPS BUSINESS CORPORATION FHM BUSINESS CORPORATION
By:	/s/ Richard A. Parr II Richard A. Parr II Vice President and Corporate Secretary
CRA MANAGED CARE OF WASHINGTON, INC. CRA-MCO, INC.
By:	/s/ Richard A. Parr II Richard A. Parr II Executive Vice President and Corporate Secretary
HEALTHNETWORK SYSTEMS LLC MEDICAL NETWORK SYSTEMS LLC
By:	/s/ Richard A. Parr II Richard A. Parr II Vice President, General Counsel and Corporate Secretary
NATIONAL HEALTHCARE RESOURCES, INC.
By:	/s/ Richard A. Parr II Richard A. Parr II Senior Vice President and Corporate Secretary

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OCCUCENTERS I, L.P.
By:	Its general partner CONCENTRA HEALTH SERVICES INC.
	By:	/s/ Richard A. Parr II Richard A. Parr II Executive Vice President, General Counsel and Corporate Secretary
OCI HOLDINGS, INC.
By:	/s/ Gary Chedekel Gary Chedekel Corporate Secretary and Treasurer

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Rule 144A/REGULATION S/IAI APPENDIX

PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES

        1.     Definitions

        1.1   Definitions

        For the purposes of this Appendix the following terms shall have the meanings indicated below:

        "Applicable Procedures" means, with respect to any transfer or transaction involving a Temporary Regulation S Global Security or beneficial interest therein, the rules and procedures of the Depository for such a Temporary Regulation S Global Security, to the extent applicable to such transaction and as in effect from time to time.

        "Definitive Security" means a certificated Initial Security or Exchange Security or Private Exchange Security bearing, if required, the appropriate restricted securities legend set forth in Section 2.3(e).

        "Depository" means The Depository Trust Company, its nominees and their respective successors.

        "Distribution Compliance Period," with respect to any Securities, means the period of 40 consecutive days beginning on and including the later of (i) the day on which such Securities are first offered to Persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S and (ii) the issue date with respect to such Securities.

        "Exchange Securities" means (1) the 9¹/8% Senior Subordinated Notes Due 2012 issued pursuant to the Indenture in connection with a Registered Exchange Offer pursuant to a Registration Rights Agreement and (2) Additional Securities, if any, issued pursuant to a registration statement filed with the Commission under the Securities Act.

        "IAI" means an institutional "accredited investor," as defined in Rule 501(a)(1), (2), (3) and (7) of Regulation D under the Securities Act.

        "Initial Purchasers" means (1) with respect to the Initial Securities issued on the Issue Date, Credit Suisse First Boston LLC, Citigroup Global Markets Inc., J.P. Morgan Securities Inc., Deutsche Bank Securities Inc., and Jefferies & Company, Inc. and (2) with respect to each issuance of Additional Securities, the Persons purchasing such Additional Securities under the related Purchase Agreement.

        "Initial Securities" means (1) $155,000,000 aggregate principal amount of 9¹/8% Senior Subordinated Notes Due 2012 issued on the Issue Date and (2) Additional Securities, if any, issued in a transaction exempt from the registration requirements of the Securities Act.

        "Private Exchange" means the offer by the Company, pursuant to a Registration Rights Agreement, to the Initial Purchasers to issue and deliver to each Initial Purchaser, in exchange for the Initial Securities held by the Initial Purchaser as part of its initial distribution, a like aggregate principal amount of Private Exchange Securities.

        "Private Exchange Securities" means any 9¹/8% Senior Subordinated Notes Due 2012 issued in connection with a Private Exchange.

        "Purchase Agreement" means (1) with respect to the Initial Securities issued on the Issue Date, the Purchase Agreement dated May 25, 2004, among the Company, the Guarantors and the Initial Purchasers, and (2) with respect to each issuance of Additional Securities, the purchase agreement or underwriting agreement among the Company, the Guarantors and the Persons purchasing such Additional Securities.

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

        "Registered Exchange Offer" means the offer by the Company, pursuant to a Registration Rights Agreement, to certain Holders of Initial Securities, to issue and deliver to such Holders, in exchange for the Initial Securities, a like aggregate principal amount of Exchange Securities registered under the Securities Act.

        "Registration Rights Agreement" means (1) with respect to the Initial Securities issued on the Issue Date, the Registration Rights Agreement dated May 25, 2004, among the Company, the Guarantors and the Initial Purchasers, and (2) with respect to each issuance of Additional Securities issued in a transaction exempt from the registration requirements of the Securities Act, the registration rights agreement, if any, among the Company, the Guarantors and the Persons purchasing such Additional Securities under the related Purchase Agreement.

        "Rule 144A Securities" means all Securities offered and sold to QIBs in reliance on Rule 144A.

        "Securities" means the Initial Securities, the Exchange Securities and the Private Exchange Securities, treated as a single class.

        "Securities Act" means the Securities Act of 1933.

        "Securities Custodian" means the custodian with respect to a Global Security (as appointed by the Depository), or any successor Person thereto and shall initially be the Trustee.

        "Shelf Registration Statement" means the registration statement issued by the Company in connection with the offer and sale of Initial Securities or Private Exchange Securities pursuant to a Registration Rights Agreement.

        "Transfer Restricted Securities" means Securities that bear or are required to bear a legend relating to restrictions on transfer relating to the Securities Act set forth in Section 2.3(e).

        1.2   Other Definitions.

Term	Defined in Section:
"Agent Members"	2.1(b)
"Global Security"	2.1(a)
"IAI Global Security"	2.1(a)
"Permanent Regulation S Global Security"	2.1(a)
"Regulation S"	2.1(a)
"Regulation S Global Security"	2.1(a)
"Rule 144A"	2.1(a)
"Rule 144A Global Security"	2.1(a)
"Temporary Regulation S Global Security"	2.1(a)

        2.     The Securities.

        2.1   (a) Form and Dating. The Initial Securities will be offered and sold by the Company pursuant to the Purchase Agreement. The Initial Securities will be resold initially only to (i) QIBs in reliance on Rule 144A under the Securities Act ("Rule 144A") and (ii) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S under the Securities Act ("Regulation S"). Initial Securities may thereafter be transferred to, among others, QIBs, IAIs and purchasers in reliance on Regulation S, subject to the restrictions on transfer set forth herein. Initial Securities initially resold pursuant to Rule 144A shall be issued initially in the form of one or more permanent global Securities in definitive, fully registered form (collectively, the "Rule 144A Global Security"); Initial Securities initially resold to IAIs shall be issued initially in the form of one or more permanent global Securities in definitive, fully registered form (collectively, the "IAI Global Security"); and Initial Securities initially resold pursuant to Regulation S shall be issued initially in the form of one or more temporary

2

global securities in fully registered form (collectively, the "Temporary Regulation S Global Security"), in each case without interest coupons and with the global securities legend and the applicable restricted securities legend set forth in Exhibit 1 hereto, which shall be deposited on behalf of the purchasers of the Initial Securities represented thereby with the Securities Custodian and registered in the name of the Depository or a nominee of the Depository, duly executed by the Company and authenticated by the Trustee as provided in this Indenture. Except as set forth in this Section 2.1(a), beneficial ownership interests in the Temporary Regulation S Global Security will not be exchangeable for interests in the Rule 144A Global Security, the IAI Global Security, a permanent global security (the "Permanent Regulation S Global Security," and together with the Temporary Regulation S Global Security, the "Regulation S Global Security") or any other Security prior to the expiration of the Distribution Compliance Period and then, after the expiration of the Distribution Compliance Period, may be exchanged for interests in a Rule 144A Global Security, an IAI Global Security or the Permanent Regulation S Global Security only upon certification in form reasonably satisfactory to the Trustee that (i) beneficial ownership interests in such Temporary Regulation S Global Security are owned either by non-U.S. persons or U.S. persons who purchased such interests in a transaction that did not require registration under the Securities Act and (ii) in the case of an exchange for an IAI Global Security, certification that the interest in the Temporary Regulation S Global Security is being transferred to an institutional "accredited investor" under the Securities Act that is an institutional accredited investor acquiring the securities for its own account or for the account of an institutional accredited investor.

        Beneficial interests in Temporary Regulation S Global Securities or IAI Global Securities may be exchanged for interests in Rule 144A Global Securities if (1) such exchange occurs in connection with a transfer of Securities in compliance with Rule 144A and (2) the transferor of the beneficial interest in the Temporary Regulation S Global Security or the IAI Global Security, as applicable, first delivers to the Trustee a written certificate (in a form satisfactory to the Trustee) to the effect that the beneficial interest in the Temporary Regulation S Global Security or the IAI Global Security, as applicable, is being transferred to a Person (a) who the transferor reasonably believes to be a QIB, (b) purchasing for its own account or the account of a QIB in a transaction meeting the requirements of Rule 144A, and (c) in accordance with all applicable securities laws of the States of the United States and other jurisdictions.

        Beneficial interests in Temporary Regulation S Global Securities and Rule 144A Global Securities may be exchanged for an interest in IAI Global Securities if (1) such exchange occurs in connection with a transfer of the securities in compliance with an exemption under the Securities Act and (2) the transferor of the Regulation S Global Security or Rule 144A Global Security, as applicable, first delivers to the trustee a written certificate (substantially in the form of Exhibit 3) to the effect that (A) the Regulation S Global Security or Rule 144A Global Security, as applicable, is being transferred (a) to an "accredited investor" within the meaning of 501(a)(1),(2),(3) and (7) under the Securities Act that is an institutional investor acquiring the securities for its own account or for the account of such an institutional accredited investor, in each case in a minimum principal amount of the securities of $250,000, for investment purposes and not with a view to or for offer or sale in connection with any distribution in violation of the Securities Act and (B) in accordance with all applicable securities laws of the States of the United States and other jurisdictions.

        Beneficial interests in a Rule 144A Global Security or an IAI Global Security may be transferred to a Person who takes delivery in the form of an interest in a Regulation S Global Security, whether before or after the expiration of the Distribution Compliance Period, only if the transferor first delivers to the Trustee a written certificate (in the form provided in the Indenture) to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if applicable).

        The Rule 144A Global Security, the IAI Global Security, the Temporary Regulation S Global Security and the Permanent Regulation S Global Security are collectively referred to herein as "Global

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Securities". The aggregate principal amount of the Global Securities may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee as hereinafter provided.

        (b)   Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global Security deposited with or on behalf of the Depository.

        The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b), authenticate and deliver initially one or more Global Securities that (a) shall be registered in the name of the Depository for such Global Security or Global Securities or the nominee of such Depository and (b) shall be delivered by the Trustee to such Depository or pursuant to such Depository's instructions or held by the Trustee as custodian for the Depository.

        Members of, or participants in, the Depository ("Agent Members") shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depository or by the Trustee as the custodian of the Depository or under such Global Security, and the Company, the Trustee and any agent of the Company or the Trustee shall be entitled to treat the Depository as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices of such Depository governing the exercise of the rights of a holder of a beneficial interest in any Global Security.

        (c)   Certificated Securities. Except as provided in this Section 2.1 or Section 2.3 or 2.4, owners of beneficial interests in Global Securities shall not be entitled to receive physical delivery of Definitive Securities.

        2.2   Authentication

        The Trustee shall authenticate and deliver: (1) on the Issue Date, an aggregate principal amount of $155,000,000 9¹/8% Senior Subordinated Notes Due 2012, (2) any Additional Securities for an original issue in an aggregate principal amount specified in a supplemental indenture pursuant to Section 301 and Section 901(6) of the Indenture and (3) Exchange Securities or Private Exchange Securities for issue only in a Registered Exchange Offer or a Private Exchange, respectively, pursuant to a Registration Rights Agreement, for a like principal amount of Initial Securities, in the case of clauses (1) and (3) upon a Company Order. Such Company Order or supplemental indenture, as the case may be, shall specify the amount of the Securities to be authenticated and the date on which the original issue of Securities is to be authenticated and, in the case of any issuance of Additional Securities, shall certify that such issuance is in compliance with Section 1008 of the Indenture.

        2.3   Transfer and Exchange

        (a)   Transfer and Exchange of Definitive Securities. When Definitive Securities are presented to the Notes Registrar with a request:

        (x)   to register the transfer of such Definitive Securities; or

        (y)   to exchange such Definitive Securities for an equal principal amount of Definitive Securities of other authorized denominations,

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the Notes Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the Definitive Securities surrendered for transfer or exchange:

        (i)    shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Notes Registrar, duly executed by the Holder thereof or its attorney duly authorized in writing; and

        (ii)   if such Definitive Securities are required to bear a restricted securities legend, are being transferred or exchanged pursuant to an effective registration statement under the Securities Act, pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C) below, and are accompanied by the following additional information and documents, as applicable:

        (A)  if such Definitive Securities are being delivered to the Notes Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect; or

        (B)  if such Definitive Securities are being transferred to the Company, a certification to that effect; or

        (C)  if such Definitive Securities are being transferred (x) pursuant to an exemption from registration in accordance with Rule 144A, Regulation S or Rule 144 under the Securities Act; or (y) in reliance upon another exemption from the requirements of the Securities Act: (i) a certification to that effect (in the form set forth on the reverse of the Security) and (ii) if the Company so requests, an opinion of counsel or other evidence reasonably satisfactory to it as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i).

        (b)   Restrictions on Transfer of a Definitive Security for a Beneficial Interest in a Global Security. A Definitive Security may not be exchanged for a beneficial interest in a Rule 144A Global Security, an IAI Global Security or a Permanent Regulation S Global Security except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Security, duly endorsed or accompanied by appropriate instruments of transfer, in form satisfactory to the Trustee, together with:

        (i)    certification, in the form set forth on the reverse of the Security, that such Definitive Security is either (A) being transferred to a QIB in accordance with Rule 144A, (B) being transferred to an IAI or (C) being transferred after expiration of the Distribution Compliance Period by a Person who initially purchased such Security in reliance on Regulation S to a purchaser who elects to hold its interest in such Security in the form of a beneficial interest in the Permanent Regulation S Global Security; and

        (ii)   written instructions directing the Trustee to make, or to direct the Securities Custodian to make, an adjustment on its books and records with respect to such Rule 144A Global Security (in the case of a transfer pursuant to clause (b)(i)(A)), IAI Global Security (in the case of a transfer pursuant to clause (b)(1)(B)) or Permanent Regulation S Global Security (in the case of a transfer pursuant to clause (b)(i)(C)) to reflect an increase in the aggregate principal amount of the Securities represented by the Rule 144A Global Security, IAI Global Security or Permanent Regulation S Global Security, as applicable, such instructions to contain information regarding the Depository account to be credited with such increase,

then the Trustee shall cancel such Definitive Security and cause, or direct the Securities Custodian to cause, in accordance with the standing instructions and procedures existing between the Depository and the Securities Custodian, the aggregate principal amount of Securities represented

5

by the Rule 144A Global Security, IAI Global Security or Permanent Regulation S Global Security, as applicable, to be increased by the aggregate principal amount of the Definitive Security to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Rule 144A Global Security, IAI Global Security or Permanent Regulation S Global Security, as applicable, equal to the principal amount of the Definitive Security so canceled. If no Rule 144A Global Securities, IAI Global Securities or Permanent Regulation S Global Securities, as applicable, are then outstanding, the Company shall issue and the Trustee shall authenticate, upon written order of the Company in the form of an Officers' Certificate of the Company, a new Rule 144A Global Security, IAI Global Security or Permanent Regulation S Global Security, as applicable, in the appropriate principal amount.

        (c)   Transfer and Exchange of Global Securities.

        (i)    The transfer and exchange of Global Securities or beneficial interests therein shall be effected through the Depository, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depository therefor. A transferor of a beneficial interest in a Global Security shall deliver to the Notes Registrar a written order given in accordance with the Depository's procedures containing information regarding the participant account of the Depository to be credited with a beneficial interest in the Global Security. The Notes Registrar shall, in accordance with such instructions, instruct the Depository to credit to the account of the Person specified in such instructions a beneficial interest in the Global Security and to debit the account of the Person making the transfer the beneficial interest in the Global Security being transferred.

        (ii)   If the proposed transfer is a transfer of a beneficial interest in one Global Security to a beneficial interest in another Global Security, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Security to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of the Global Security from which such interest is being transferred.

        (iii)  Notwithstanding any other provisions of this Appendix (other than the provisions set forth in Section 2.4), a Global Security may not be transferred as a whole except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository.

        (iv)  In the event that a Global Security is exchanged for Definitive Securities pursuant to Section 2.4 of this Appendix, prior to the consummation of a Registered Exchange Offer or the effectiveness of a Shelf Registration Statement with respect to such Securities, such Securities may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Securities intended to ensure that such transfers comply with Rule 144A, Regulation S or another applicable exemption under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Company.

        (d)   Restrictions on Transfer of Temporary Regulation S Global Securities. During the Distribution Compliance Period, beneficial ownership interests in Temporary Regulation S Global Securities may only be sold, pledged or transferred in accordance with the Applicable Procedures and only (i) to the Company, (ii) in an offshore transaction in accordance with Regulation S (other than a transaction resulting in an exchange for an interest in a Permanent Regulation S Global

6

Security), (iii) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any State of the United States.

        (e)   Legend.

        (i)    Except as permitted by the following paragraphs (ii), (iii) and (iv), each Security certificate evidencing the Global Securities (and all Securities issued in exchange therefor or in substitution thereof), in the case of Securities offered otherwise than in reliance on Regulation S, shall bear a legend in substantially the following form:

THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL INVESTOR ACQUIRING THE SECURITIES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (IV) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (V) PURSUANT TO EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI), IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

        Each certificate evidencing a Security offered in reliance on Regulation S shall, in addition to the foregoing, bear a legend in substantially the following form:

THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF

7

THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.

Each Definitive Security shall also bear the following additional legend:

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

        (ii)   Upon any sale or transfer of a Transfer Restricted Security (including any Transfer Restricted Security represented by a Global Security) pursuant to Rule 144 under the Securities Act, the Notes Registrar shall permit the transferee thereof to exchange such Transfer Restricted Security for a certificated Security that does not bear the legend set forth above and rescind any restriction on the transfer of such Transfer Restricted Security, if the transferor thereof certifies in writing to the Registrar that such sale or transfer was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Security).

        (iii)  After a transfer of any Initial Securities or Private Exchange Securities pursuant to and during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Securities or Private Exchange Securities, as the case may be, all requirements pertaining to legends on such Initial Security or such Private Exchange Security will cease to apply, the requirements requiring any such Initial Security or such Private Exchange Security issued to certain Holders be issued in global form will cease to apply, and a certificated Initial Security or Private Exchange Security or an Initial Security or Private Exchange Security in global form, in each case without restrictive transfer legends, will be available to the transferee of the Holder of such Initial Securities or Private Exchange Securities upon exchange of such transferring Holder's certificated Initial Security or Private Exchange Security or directions to transfer such Holder's interest in the Global Security, as applicable.

        (iv)  Upon the consummation of a Registered Exchange Offer with respect to the Initial Securities, all requirements pertaining to such Initial Securities that Initial Securities issued to certain Holders be issued in global form will still apply with respect to Holders of such Initial Securities that do not exchange their Initial Securities, and Exchange Securities in certificated or global form, in each case without the restricted securities legend set forth in Exhibit 1 hereto will be available to Holders that exchange such Initial Securities in such Registered Exchange Offer.

        (v)   Upon the consummation of a Private Exchange with respect to the Initial Securities, all requirements pertaining to such Initial Securities that Initial Securities issued to certain Holders be issued in global form will still apply with respect to Holders of such Initial Securities that do not exchange their Initial Securities, and Private Exchange Securities in global form with the global securities legend and the applicable restricted securities legend set forth in Exhibit 1 hereto will be available to Holders that exchange such Initial Securities in such Private Exchange.

        (f)    Cancellation or Adjustment of Global Security. At such time as all beneficial interests in a Global Security have either been exchanged for Definitive Securities, redeemed, purchased or canceled, such Global Security shall be retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for certificated Securities, redeemed, purchased or canceled, the principal amount of Securities represented by

8

such Global Security shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Securities Custodian for such Global Security) with respect to such Global Security, by the Trustee or the Securities Custodian, to reflect such reduction.

        (g)   No Obligation of the Trustee.

        (i)    The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Security, a member of, or a participant in the Depository or other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Securities or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Securities. All notices and communications to be given to the Holders and all payments to be made to Holders under the Securities shall be given or made only to or upon the order of the registered Holders (which shall be the Depository or its nominee in the case of a Global Security). The rights of beneficial owners in any Global Security shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners.

        (ii)   The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Depository participants, members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

        2.4   Certificated Securities

        (a)   A Global Security deposited with the Depository or with the Trustee as Securities Custodian for the Depository pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the form of Definitive Securities in an aggregate principal amount equal to the principal amount of such Global Security, in exchange for such Global Security, only if such transfer complies with Section 2.3 hereof and (i) the Depository notifies the Company that it is unwilling or unable to continue as Depository for such Global Security and the Depository fails to appoint a successor depositary or if at any time such Depository ceases to be a "clearing agency" registered under the Exchange Act and, in either case, a successor Depository is not appointed by the Company within 90 days of such notice, or (ii) an Event of Default has occurred and is continuing and the Depository notifies the Trustee of its decision to exchange the Global Notes for Certificated Notes or (iii) the Company, in its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of Definitive Securities under this Indenture.

        (b)   Any Global Security that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depository to the Trustee located at its principal corporate trust office in the Borough of Manhattan, The City of New York, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Security, an equal aggregate principal amount of Definitive Securities of authorized denominations. Any portion of a Global Security transferred pursuant to this Section 2.4 shall be executed, authenticated and delivered only in denominations of $1,000 principal amount and any integral multiple thereof and registered in such names as the Depository shall direct. Any Definitive Security delivered in exchange for an interest in the

9

Transfer Restricted Security shall, except as otherwise provided by Section 2.3(e) hereof, bear the applicable restricted securities legend and definitive note legend set forth in Exhibit 1 hereto.

        (c)   Subject to the provisions of Section 2.4(b) hereof, the registered Holder of a Global Security shall be entitled to grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities.

        (d)   In the event of the occurrence of one of the events specified in Section 2.4(a) hereof, the Company shall promptly make available to the Trustee a reasonable supply of Definitive Securities in definitive, fully registered form without interest coupons.

10

EXHIBIT 1 to Rule 144A/REGULATION S/IAI APPENDIX

[FORM OF FACE OF INITIAL SECURITY]

[Global Securities Legend]

        UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

        TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE, AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

[For Regulation S Global Security only]

        UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES ACT) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.

[Restricted Securities Legend for Securities Offered Otherwise than in Reliance on Regulation S]

        THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

        THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE COMPANY, (II) WITHIN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL INVESTOR ACQUIRING THE SECURITIES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (IV) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (V) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE

144 THEREUNDER (IF AVAILABLE) OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

[Restricted Securities Legend for Securities Offered in Reliance on Regulation S.]

        THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.

[Temporary Regulation S Global Security Legend]

        EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE PERMANENT REGULATION S GLOBAL SECURITY OR ANY OTHER SECURITY REPRESENTING AN INTEREST IN THE SECURITIES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE "40-DAY DISTRIBUTION COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE 903(b)(2) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED (I) TO THE COMPANY, (II) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL NOTIFY ANY PURCHASER OF THIS SECURITY OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN APPLICABLE.

        AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY BE EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL SECURITY ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE WITH RULE 144A AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL SECURITY FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL SECURITY IS BEING TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, (B) TO A PERSON WHO IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, AND (C) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

        AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY BE EXCHANGED FOR INTERESTS IN AN IAI GLOBAL SECURITY ONLY IF (1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE WITH AN EXEMPTION UNDER THE SECURITIES ACT AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL SECURITY FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL SECURITY IS BEING TRANSFERRED (A) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1),(2),(3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL INVESTOR ACQUIRING THE SECURITIES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

        BENEFICIAL INTERESTS IN A RULE 144A GLOBAL SECURITY OR AN IAI GLOBAL SECURITY MAY BE TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE REGULATION S GLOBAL SECURITY, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S OR RULE 144 (IF AVAILABLE).

[Definitive Securities Legend]

        IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

No.                         $                    

9¹/8% Senior Subordinated Notes Due 2012

        Concentra Operating Corporation, a Nevada corporation, promises to pay to Cede & Co., or registered assigns, the principal sum of            Dollars on June 1, 2012.

        Interest Payment Dates: June 1 and December 1.

        Record Dates: May 15 and November 15.

        Additional provisions of this Security are set forth on the other side of this Security.

Dated:

			CONCENTRA OPERATING CORPORATION
				by
				Name:	Richard A. Parr II
				Title:	Executive Vice President, General Counsel and Corporate Secretary
TRUSTEE'S CERTIFICATE OF           AUTHENTICATION
THE BANK OF NEW YORK,    as Trustee, certifies            that this is one of            the Securities referred            to in the Indenture.
	by	Authorized Signatory

[FORM OF REVERSE SIDE OF INITIAL SECURITY]

9¹/8% Senior Subordinated Note Due 2012

1.

Interest

        Concentra Operating Corporation, a Nevada corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the "Company"), promises to pay interest on the principal amount of this Security at the rate per annum shown above; provided, however, that if a Registration Default (as defined in the Registration Rights Agreement) occurs, additional interest will accrue on this Security at a rate of 0.25% per annum for the first 90-day period immediately following the occurrence of a Registration Default (increasing by an additional 0.25% per annum with respect to each subsequent 90-day period up to a maximum additional interest rate of 2.00%) from and including the date on which any such Registration Default shall occur to but excluding the date on which all Registration Defaults have been cured. The Company will pay interest semiannually on June 1 and December 1 of each year, commencing December 1, 2004. Interest on the Securities will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from June 8, 2004. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Company will pay interest on overdue principal at the rate borne by this Security, and it will pay interest on overdue installments of interest at the same rate to the extent lawful.

2.

Method of Payment

        The Company will pay interest on the Securities (except defaulted interest) to the Persons who are registered holders of Securities at the close of business on the May 15 or November 15 next preceding the interest payment date even if Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Securities represented by a Global Security (including principal, premium and interest) will be made by wire transfer of immediately available funds to the accounts specified by the Depository. The Company will make all payments in respect of a certificated Security (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a certificated Security will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

3.

Paying Agent and Notes Registrar

        Initially, The Bank of New York, a New York banking corporation (the "Trustee"), will act as Paying Agent and Notes Registrar. The Company may appoint and change any Paying Agent, Notes Registrar or co-registrar without notice. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Notes Registrar or co-registrar.

4.

Indenture

        The Company issued the Securities under an Indenture dated as of June 8, 2004 (the "Indenture"), among the Company, the Guarantors and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Securities are subject to all such terms, and Holders are referred to the Indenture and the Act for a statement of those terms.

        The Securities are general unsecured obligations of the Company. The Company shall be entitled, subject to its compliance with Section 1008 of the Indenture, to issue Additional Securities pursuant to Section 301 and Section 901(6) of the Indenture. The Initial Securities issued on the Issue Date, any

Additional Securities and all Exchange Securities or Private Exchange Securities issued in exchange therefor will be treated as a single class for all purposes under the Indenture. The Indenture contains covenants that limit the ability of the Company and its subsidiaries to incur or guarantee additional indebtedness and issue certain preferred stock; pay dividends or make distributions to its stockholders; repurchase or redeem capital stock or subordinated indebtedness; make investments; create liens; issue or sell capital stock of subsidiaries; engage in transactions with affiliates; transfer or sell assets; restrict dividends or other payments of subsidiaries; consolidate, merge or transfer all or substantially all of its assets and the assets of its subsidiaries. These covenants are subject to important exceptions and qualifications.

5.

Optional Redemption

        Except as set forth below, the Company shall not be entitled to redeem the Securities.

        On or after June 1, 2008, the Company shall be entitled at its option to redeem all or a portion of the Securities (including Additional Securities, if any) upon not less than 30 nor more than 60 days' notice, at the Redemption Prices (expressed in percentages of principal amount on the Redemption Date) plus accrued and unpaid interest thereon to the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date), if redeemed during the 12-month period commencing on June 1 of the years set forth below:

Period	Redemption Price
2008	104.563	%
2009	102.281	%
2010 and thereafter	100.000	%

        In addition, prior to June 1, 2007 the Company shall be entitled at its option on one or more occasions to redeem Securities (including Additional Securities, if any) in an aggregate principal amount not to exceed 35% of the aggregate principal amount of the Securities (which includes Additional Securities, if any) originally issued under the Indenture at a Redemption Price (expressed as a percentage of principal amount) of 109.125%, plus accrued and unpaid interest to the Redemption Date, with the net cash proceeds from one or more Equity Offerings; provided, however, that (1) at least 65% of such aggregate principal amount of Securities (which includes Additional Securities, if any) remains outstanding immediately after the occurrence of each such redemption (excluding Securities held by the Company or its Subsidiaries); and (2) each such redemption occurs within 90 days of the date of the closing of the related Equity Offering.

        Prior to June 1, 2008 the Company may at its option redeem all, but not less than all, of the Securities (including Additional Securities, if any) at a redemption price equal to 100% of the principal amount of the Securities plus the Applicable Premium as of, and accrued and unpaid interest to, the Redemption Date (subject to the right of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date). Notice of such redemption must be mailed by first-class mail to each Holder's registered address, not less than 30 or more than 60 days prior to the Redemption Date.

6.

Notice of Redemption

        Notice of redemption will be mailed by first-class mail, postage prepaid, at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at his registered address. Securities in denominations larger than $1,000 principal amount may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the Redemption Price of and accrued interest on all Securities (or portions thereof) to be redeemed on the Redemption Date is deposited with the Paying Agent on or before the Redemption Date and certain other conditions are satisfied, on and after such date interest shall cease to accrue on such Securities (or such portions thereof) called for redemption.

7.

Put Provisions

        Upon a Change of Control, any Holder of Securities will have the right to cause the Company to repurchase all or any part of the Securities of such Holder at a repurchase price equal to 101% of the principal amount of the Securities to be repurchased plus accrued interest to the date of repurchase (subject to the right of Holders of record on the relevant record date to receive interest due on the related Interest Payment Date) as provided in, and subject to the terms of, the Indenture.

8.

Guaranty

        The payment by the Company of the principal of, and premium and interest on, the Securities is fully and unconditionally guaranteed on a joint and several senior subordinated basis by each of the Guarantors to the extent set forth in the Indenture.

9.

Subordination

        The Securities are subordinated to Senior Indebtedness of the Company and the Guarantors on the terms and subject to the conditions set forth in the Indenture. To the extent provided in the Indenture, Senior Indebtedness must be paid before the Securities may be paid. Each Holder by accepting a Security agrees to the subordination provisions contained in the Indenture and authorizes the Trustee to give effect to such provisions and appoints the Trustee as attorney-in-fact for such purpose.

10.

Denominations; Transfer; Exchange

        The Securities are in registered form without coupons in denominations of $1,000 principal amount and whole multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Notes Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Notes Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an interest payment date.

11.

Persons Deemed Owners

        The registered Holder of this Security may be treated as the owner of it for all purposes.

12.

Unclaimed Money

        If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.

13.

Discharge and Defeasance

        Subject to certain conditions, the Company at any time shall be entitled to terminate some or all of its obligations under the Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Securities to redemption or maturity, as the case may be.

14.

Amendment, Waiver

        Subject to certain exceptions set forth in the Indenture, (a) the Indenture and the Securities may be amended with the written consent of the Holders of at least a majority in principal amount outstanding of the Securities and (b) any default or noncompliance with any provision may be waived with the written consent of the Holders of a majority in principal amount outstanding of the Securities. Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company, the Guarantors and the Trustee shall be entitled to amend the Indenture or the Securities to cure any ambiguity, defect or inconsistency, to provide for uncertificated Securities in addition to or in place of certificated Securities, to provide for the assumption of the Company's obligations to Holders

in the case of a merger or consolidation or the sale of all or substantially all of the Company's assets, to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect in any material respect the legal rights under the Indenture of any such Holder, to comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Act, to provide for the issuance of Additional Securities in accordance with the limitations set forth in the Indenture or to allow any Subsidiary to guarantee the Securities.

15.

Defaults and Remedies

        Under the Indenture, Events of Default include (a) default for 30 days in payment of interest on the Securities, whether or not prohibited by the subordination provisions of the Indenture; (b) default in payment of principal or premium, if any on the Securities, whether or not prohibited by the subordination provisions of the Indenture; (c) failure by the Company to comply with a covenant providing for certain limitations on mergers, consolidations or sales of assets; (d) failure by the Company, subject to certain notice, to comply with the covenants providing for repurchases at the option of holders upon a Change of Control and upon certain asset sales, limitations on Restricted Payments or limitations on incurrence of certain indebtedness; (e) failure by the Company or any Guarantor to comply with other agreements in the Indenture or the Securities, in certain cases subject to notice and lapse of time; (f) certain accelerations (including failure to pay within any grace period after final maturity) of other Indebtedness of the Company if the amount accelerated (or so unpaid) exceeds $20.0 million; (g) certain events of bankruptcy or insolvency with respect to the Company and the Company's Significant Subsidiaries; (h) certain judgments or decrees for the payment of money in excess of $20.0 million; and (i) certain defaults with respect to Subsidiary Guarantees. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Securities may declare all the Securities to be due and payable immediately. Certain events of bankruptcy or insolvency are Events of Default which will result in the Securities being due and payable immediately upon the occurrence of such Events of Default.

        Holders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives indemnity or security satisfactory to it. Subject to certain limitations, Holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default (except a Default in payment of principal or interest) if it determines that withholding notice is in the interest of the Holders.

16.

Trustee Dealings with the Company

        Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.

17.

No Recourse Against Others

        A director, officer, employee, incorporator or stockholder, as such, of the Company or the Trustee shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.

18.

Authentication

        This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Security.

19.

Abbreviations

        Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of

survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

20.

CUSIP Numbers

        Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

21.

Holders' Compliance with Registration Rights Agreement

        Each Holder of a Security, by acceptance hereof, acknowledges and agrees to the provisions of the Registration Rights Agreement, including the obligations of the Holders with respect to a registration and the indemnification of the Company to the extent provided therein.

22.

Governing Law

THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

        The Company will furnish to any Holder upon written request and without charge to the Security holder a copy of the Indenture which has in it the text of this Security in larger type. Requests may be made to:

Concentra Operating Corporation
5080 Spectrum Drive
Suite 400—West Tower
Addison, TX 75001
Attention: General Counsel

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

        (Print or type assignee's name, address and zip code)

        (Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably appoint                        agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Date:
Your Signature:

Sign exactly as your name appears on the other side of this Security.

In connection with any transfer of any of the Securities evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144(k) under the Securities Act after the later of the date of original issuance of such Securities and the last date, if any, on which such Securities were owned by the Company or any Affiliate of the Company, the undersigned confirms that such Securities are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

1.	o	to the Company; or
2.	o	pursuant to an effective registration statement under the Securities Act of 1933; or
3.	o	inside the United States to a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or
4.	o	outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or
5.	o	pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933; or
6.	o	to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements.

Unless one of the boxes is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any person other than the registered holder thereof; provided, however, that if box (4), (5) or (6) is checked, the Trustee shall be entitled to require, prior to registering any such transfer of the Securities, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an

exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, such as the exemption provided by Rule 144 under such Act.

	Signature
Signature Guarantee:
Signature must be guaranteed	Signature

        Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Notes Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Notes Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.

        The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A.

Dated:
	Notice:	To be executed by an executive officer

[TO BE ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

        The following increases or decreases in this Global Security have been made:

Date of
Exchange
Amount of decrease in
Principal amount of this
Global Security Amount of increase in
Principal amount of this
Global Security Principal amount of this
Global Security following
such decrease or increase) Signature of authorized
officer of Trustee or
Securities Custodian

OPTION OF HOLDER TO ELECT PURCHASE

        If you want to elect to have this Security purchased by the Company pursuant to Section 1014 or 1015 of the Indenture, check the box:

o

        If you want to elect to have only part of this Security purchased by the Company pursuant to Section 1014 or 1015 of the Indenture, state the amount in principal amount: $                                    

Dated: Your Signature:         (Sign exactly as your name appears
        on the other side of this Security.)

Signature Guarantee: (Signature must be guaranteed)

        Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Notes Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Notes Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

EXHIBIT 2

[FORM OF FACE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]*/**/

*/ [If the Security is to be issued in global form add the Global Securities Legend from Exhibit 1 to the Appendix and the attachment from such Exhibit 1 captioned "[TO BE ATTACHED TO GLOBAL SECURITIES]—SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY".]

**/ [If the Security is a Private Exchange Security issued in a Private Exchange to an Initial Purchaser holding an unsold portion of its initial allotment, add the Restricted Securities Legend from Exhibit 1 to the Appendix and replace the Assignment Form included in this Exhibit 2 with the Assignment Form included in such Exhibit 1.]

No.                         $                    

9¹/8% Senior Subordinated Notes Due 2012

        Concentra Operating Corporation, a Nevada corporation, promises to pay to Cede & Co., or registered assigns, the principal sum of                        Dollars on June 1, 2012.

        Interest Payment Dates: June 1 and December 1.

        Record Dates: May 15 and November 15.

        Additional provisions of this Security are set forth on the other side of this Security.

Dated:

			CONCENTRA OPERATING CORPORATION
				By
					Name:	Richard A. Parr II
					Title:	Executive Vice President, General Counsel and Corporate Secretary
TRUSTEE'S CERTIFICATE OF           AUTHENTICATION
THE BANK OF NEW YORK,    as Trustee, certifies            that this is one of            the Securities referred            to in the Indenture.
	By	Authorized Signatory

[FORM OF REVERSE SIDE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]

9¹/8% Senior Subordinated Note Due 2012

1.

Interest

        Concentra Operating Corporation, a Nevada corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the "Company"), promises to pay interest on the principal amount of this Security at the rate per annum shown above; [provided, however, that if a Registration Default (as defined in the Registration Rights Agreement) occurs, additional interest will accrue on this Security at a rate of 0.25% per annum for the first 90-day period immediately following the occurrence of Registration Default (increasing by an additional 0.25% per annum after with respect to each subsequent 90-day period up to a maximum additional interest rate of 2.00%) from and including the date on which any such Registration Default shall occur to but excluding the date on which all Registration Defaults have been cured.]¹ The Company will pay interest semiannually on June 1 and December 1 of each year, commencing December 1, 2004. Interest on the Securities will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from June 8, 2004. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Company will pay interest on overdue principal at the rate borne by this Security, and it will pay interest on overdue installments of interest at the same rate to the extent lawful.

        ¹ Insert if at the date of issuance of the Exchange Security or the Private Exchange Security (as the case may be) any Registration Default has occurred with respect to the related Initial Securities during the interest period in which the date of issuance occurs.

2.

Method of Payment

        The Company will pay interest on the Securities (except defaulted interest) to the Persons who are registered holders of Securities at the close of business on the May 15 or November 15 next preceding the interest payment date even if Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Securities represented by a Global Security (including principal, premium and interest) will be made by wire transfer of immediately available funds to the accounts specified by the Depository. The Company will make all payments in respect of a certificated Security (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a certificated Security will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

3.

Paying Agent and Notes Registrar

        Initially, The Bank of New York, a New York banking corporation (the "Trustee"), will act as Paying Agent and Notes Registrar. The Company may appoint and change any Paying Agent, Notes Registrar or co-registrar without notice. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Notes Registrar or co-registrar.

4.

Indenture

        The Company issued the Securities under an Indenture dated as of June 8, 2004 (the "Indenture"), among the Company, the Guarantors and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in

the Indenture. The Securities are subject to all such terms, and Holders are referred to the Indenture and the Act for a statement of those terms.

        The Securities are general unsecured obligations of the Company. The Company shall be entitled, subject to its compliance with Section 1008 of the Indenture, to issue Additional Securities pursuant to Section 301 and Section 901(6) of the Indenture. The Initial Securities issued on the Issue Date, any Additional Securities and all Exchange Securities or Private Exchange Securities issued in exchange therefor will be treated as a single class for all purposes under the Indenture. The Indenture contains covenants that limit the ability of the Company and its subsidiaries to incur additional indebtedness and issue certain preferred stock; pay dividends or make distributions to its stockholders; repurchase or redeem capital stock or subordinated indebtedness; make investments; create liens; issue or sell capital stock of subsidiaries; engage in transactions with affiliates; transfer or sell assets; restrict dividends or other payments of subsidiaries; consolidate, merge or transfer all or substantially all of its assets and the assets of its subsidiaries. These covenants are subject to important exceptions and qualifications.

5.

Optional Redemption

        Except as set forth below, the Company shall not be entitled to redeem the Securities.

        On or after June 1, 2008, the Company shall be entitled at its option to redeem all or a portion of the Securities (including Additional Securities, if any) upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed in percentages of principal amount on the Redemption Date) plus accrued and unpaid interest to the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date),if redeemed during the 12-month period commencing on June 1 of the years set forth below:

Period	Redemption Price
2008	104.563	%
2009	102.281	%
2010 and thereafter	100.000	%

        In addition, prior to June 1, 2007, the Company shall be entitled at its option on one or more occasions to redeem Securities (which includes Additional Securities, if any) in an aggregate principal amount not to exceed 35% of the aggregate principal amount of the Securities (which includes Additional Securities, if any) originally issued under the Indenture at a Redemption Price (expressed as a percentage of principal amount) of 109.125%, plus accrued and unpaid interest to the Redemption Date, with the net cash proceeds from one or more Equity Offerings; provided, however, that (1) at least 65% of such aggregate principal amount of Securities (which includes Additional Securities, if any) remains outstanding immediately after the occurrence of each such redemption (excluding Securities held by the Company or its Subsidiaries); and (2) each such redemption occurs within 90 days of the date of the closing of the related Equity Offering.

        Prior to June 1, 2008 the Company may at its option redeem all, but not less than all, of the Securities (including Additional Securities, if any) at a redemption price equal to 100% of the principal amount of the Securities plus the Applicable Premium as of, and accrued and unpaid interest to, the Redemption Date (subject to the right of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date). Notice of such redemption must be mailed by first-class mail to each Holder's registered address, not less than 30 or more than 60 days prior to the Redemption Date.

6.

Notice of Redemption

        Notice of redemption will be mailed by first-class mail, postage prepaid, at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at his registered address. Securities in denominations larger than $1,000 principal amount may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the Redemption Price of and accrued interest on all Securities (or portions thereof) to be redeemed on the Redemption Date is deposited with the Paying Agent on or before the Redemption Date and certain other conditions are

satisfied, on and after such date interest shall cease to accrue on such Securities (or such portions thereof) called for redemption.

7.

Put Provisions

        Upon a Change of Control, any Holder of Securities will have the right to cause the Company to repurchase all or any part of the Securities of such Holder at a repurchase price equal to 101% of the principal amount of the Securities to be repurchased plus accrued interest to the date of repurchase (subject to the right of Holders of record on the relevant record date to receive interest due on the related Interest Payment Date) as provided in, and subject to the terms of, the Indenture.

8.

Guaranty

        The payment by the Company of the principal of, and premium and interest on, the Securities is fully and unconditionally guaranteed on a joint and several senior subordinated basis by each of the Guarantors to the extent set forth in the Indenture.

9.

Subordination

        The Securities are subordinated to Senior Indebtedness of the Company and the Guarantors on the terms and subject to the conditions set forth in the Indenture. To the extent provided in the Indenture, Senior Indebtedness must be paid before the Securities may be paid. Each Holder by accepting a Security agrees to the subordination provisions contained in the Indenture and authorizes the Trustee to give effect to such provision and appoints the Trustee as attorney-in-fact for such purpose.

10.

Denominations; Transfer; Exchange

        The Securities are in registered form without coupons in denominations of $1,000 principal amount and whole multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Notes Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Notes Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an interest payment date.

11.

Persons Deemed Owners

        The registered Holder of this Security may be treated as the owner of it for all purposes.

12.

Unclaimed Money

        If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.

13.

Discharge and Defeasance

        Subject to certain conditions, the Company at any time shall be entitled to terminate some or all of its obligations under the Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Securities to redemption or maturity, as the case may be.

14.

Amendment; Waiver

        Subject to certain exceptions set forth in the Indenture, (a) the Indenture and the Securities may be amended with the written consent of the Holders of at least a majority in principal amount outstanding of the Securities and (b) any default or noncompliance with any provision may be waived with the written consent of the Holders of a majority in principal amount outstanding of the Securities. Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the

Company, the Guarantors and the Trustee shall be entitled to amend the Indenture or the Securities to cure any ambiguity, defect or inconsistency, to provide for uncertificated Securities in addition to or in place of certificated Securities, to provide for the assumption of the Company's obligations to Holders in the case of a merger or consolidation or the sale of all or substantially all of the Company's assets, to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect in any material respect the legal rights under the Indenture of any such Holder, to comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Act, to provide for the issuance of Additional Securities in accordance with the limitations set forth in the Indenture or to allow any Subsidiary to guarantee the Securities.

15.

Defaults and Remedies

        Under the Indenture, Events of Default include (a) default for 30 days in payment of interest on the Securities, whether or not prohibited by the subordination provisions of the Indenture; (b) default in payment of principal on the Securities, (c) failure by the Company or any Guarantor to comply with other agreements in the Indenture or the Securities, in certain cases subject to notice and lapse of time; (c) failure by the Company to comply with a covenant providing for certain limitations on mergers, consolidations or sales of assets; (d) failure by the Company, subject to certain notice, to comply with the covenants providing for repurchase at the option of holders upon a Change of Control and upon certain asset sales, limitations on Restricted Payments or limitations on incurrence of certain indebtedness; (e) certain accelerations (including failure to pay within any grace period after final maturity) of other Indebtedness of the Company if the amount accelerated (or so unpaid) exceeds $20.0 million; (f) certain events of bankruptcy or insolvency with respect to the Company and the Company's Significant Subsidiaries; (g) certain judgments or decrees for the payment of money in excess of $20.0 million; and (h) certain defaults with respect to Subsidiary Guarantees. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Securities may declare all the Securities to be due and payable immediately. Certain events of bankruptcy or insolvency are Events of Default which will result in the Securities being due and payable immediately upon the occurrence of such Events of Default.

        Holders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives indemnity or security satisfactory to it. Subject to certain limitations, Holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default (except a Default in payment of principal or interest) if it determines that withholding notice is in the interest of the Holders.

16.

Trustee Dealings with the Company

        Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.

17.

No Recourse Against Others

        A director, officer, employee, incorporator or stockholder, as such, of the Company or the Trustee shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.

18.

Authentication

        This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Security.

19.

Abbreviations

        Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

20.

CUSIP Numbers

        Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

21.

Holders' Compliance with Registration Rights Agreement

        Each Holder of a Security, by acceptance hereof, acknowledges and agrees to the provisions of the Registration Rights Agreement, including the obligations of the Holders with respect to a registration and the indemnification of the Company to the extent provided therein.

22.

Governing Law

THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

        The Company will furnish to any Holder upon written request and without charge to the Security holder a copy of the Indenture which has in it the text of this Security in larger type. Requests may be made to:

Concentra Operating Corporation
5080 Spectrum Drive
Suite 400—West Tower
Addison, TX 75001
Attention: General Counsel

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

        (Print or type assignee's name, address and zip code)

        (Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably appoint                        agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Date:
Your Signature:

Sign exactly as your name appears on the other side of this Security.

OPTION OF HOLDER TO ELECT PURCHASE

        If you want to elect to have this Security purchased by the Company pursuant to Section 1014 or 1015 of the Indenture, check the box:

o

        If you want to elect to have only part of this Security purchased by the Company pursuant to Section 1014 or 1015 of the Indenture, state the amount in principal amount: $                                    

Dated: Your Signature:         (Sign exactly as your name appears
        on the other side of this Security.)

Signature Guarantee: (Signature must be guaranteed)

Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Notes Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Notes Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

EXHIBIT 3 TO RULE 144A/REGULATION S/IAI APPENDIX

Form of Transferee Letter of Representation

Concentra Operating Corporation
5080 Spectrum Drive
Suite 400—West Tower
Addison, Texas 75001

In care of

Ladies and Gentlemen:

        This certificate is delivered to request a transfer of $                  principal amount of the            % Senior Subordinated Notes due 2012 (the "Securities") of Company (the "Company").

        Upon transfer, the Securities would be registered in the name of the new beneficial owner as follows:

        Name: ____________________________________________

        Address: _________________________________________

        Taxpayer ID Numbers: _______________________________

        The undersigned represents and warrants to you that:

        1.     We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the "Securities Act")), purchasing for our own account or for the account of such an institutional "accredited investor" at least $250,000 principal amount of the Securities, and we are acquiring the Securities not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Securities, and we invest in or purchase securities similar to the Securities in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment.

        2.     We understand that the Securities have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Securities to offer, sell or otherwise transfer such Securities prior to the date that is two years after the later of the date of original issue and the last date on which the Company or any affiliate of the Company was the owner of such Securities (or any predecessor thereto) (the "Resale Restriction Termination Date") only (i) to the Company, (ii) in the United States to a person whom the seller reasonably believes is a qualified institutional buyer in a transaction meeting the requirements of Rule 144A, (iii) to an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is an institutional accredited investor purchasing for its own account or for the account of an institutional accredited investor, in each case in a minimum principal amount of the Securities of $250,000, (iv) outside the United States in a transaction complying with the provisions of Rule 904 under the Securities Act, (v) pursuant to an exemption from registration under the Securities Act provided by Rule 144 (if available) or (vi) pursuant to an effective registration statement under the Securities Act, in each of cases (i) through (vi) subject to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Securities is proposed to be made pursuant to clause (iii) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Company and the Trustee, which shall provide, among other things, that the transferee is an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Securities for investment purposes and not for distribution

in violation of the Securities Act. Each purchaser acknowledges that the Company and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Securities pursuant to clause (iii), (iv) or (v) above to require the delivery of an opinion of counsel certifications or other information satisfactory to the Company and the Trustee.

TRANSFEREE:
by
	Name: Title:

[FORM OF ENDORSEMENT OF GUARANTORS
TO 9¹/8% SENIOR SUBORDINATED NOTES DUE 2012]

        For value received, each of the Guarantors listed below (which term includes any successors or assigns under the Indenture, dated as of June 8, 2004 (the "Indenture"), among the Company, the Guarantors listed below and The Bank of New York, as Trustee, and any additional Guarantors that become such following the date hereof), jointly and severally, fully and unconditionally, irrevocably, guarantees, as principal obligor and not only as surety, to the Holder of the Security on which this Subsidiary Guarantee is endorsed, and to the Trustee for itself and on behalf of such Holders, (i) the due and punctual payment of the principal of, premium, if any, and interest (and Additional Interest, if any) on the Securities, whether at Stated Maturity, by acceleration or otherwise, the due and punctual payment of interest on the overdue principal, and premium if any, and (to the extent permitted by law) interest on any interest and Additional Interest, if any, on the Securities, and the due and punctual performance of all other obligations of the Company, all in accordance with the terms set forth in Article Fourteen of the Indenture, (ii) in case of any extension of time of payment or renewal of any Securities or any such other obligations, that the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise, and (iii) the payment of any and all costs and expenses (including reasonable attorneys' fees) incurred by the Trustee or any Holder in enforcing any rights under this Subsidiary Guarantee.

        The obligations of each Guarantor to the Holder and to the Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly set forth in Article Fourteen of the Indenture and reference is hereby made to such Indenture for the precise terms of this Subsidiary Guarantee and other matters in respect of this Subsidiary Guarantee.

        No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest and Additional Interest, if any, on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

        Until the Indenture is discharged and all of the Securities are discharged and paid in full, each Guarantor hereby irrevocably waives and agrees not to exercise any claim or other rights which it may now or hereafter acquire against the Company that arise from the existence, payment, performance or enforcement of the Company's obligations under the Securities or the Indenture and each Guarantor's obligations under this Subsidiary Guarantee and this Indenture, in any such instance including, without limitation, any right of subrogation, reimbursement, exoneration, contribution, indemnification, and any right to participate in any claim or remedy of the Holders and the Trustees against the Company, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including, without limitation, the right to take or receive from the Company, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim or other rights.

        No stockholder, officer, director, employee or incorporator, as such, past, present or future of each Guarantor shall have any liability by reason of his or its status as such stockholder, officer, director, employee or incorporator for any obligations of any Guarantor under the Securities, the Indenture or its Subsidiary Guarantee or for any claim based on, in respect of, or by reason of, such obligations or their creation.

        This is a continuing guarantee and shall remain in full force and effect and shall be binding upon each Guarantor and its successors and assigns until full and final payment of all of the Company's obligations under the Securities and Indenture and shall inure to the benefit of the successors and assigns of the Trustee and the Holders, and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof and the Indenture. This is a guarantee of payment and not of collectibility.

        The obligations of each Guarantor under its Subsidiary Guarantee shall be limited to the extent necessary to insure that it does not constitute a fraudulent transfer or conveyance under applicable law.

        By delivery of a supplemental indenture to the Trustee in accordance with the terms of the Indenture, each Person that becomes a Guarantor after the date of the Indenture will be deemed to have executed and delivered this Subsidiary Guarantee for the benefit of the Holder of the Note upon which this Subsidiary Guarantee is endorsed with the same effect as if such Guarantor was named below and has executed and delivered this Subsidiary Guarantee.

        All terms used in this Subsidiary Guarantee which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

        THIS SUBSIDIARY GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(The remainder of this page is blank)

        IN WITNESS WHEREOF, each of the Guarantors has caused this Subsidiary Guarantee to be duly executed.

CONCENTRA HEALTH SERVICES, INC. CONCENTRA PREFERRED SYSTEMS, INC.
By:	Richard A. Parr II Executive Vice President, General Counsel and Corporate Secretary
CONCENTRA INTEGRATED SERVICES, INC.
By:	Richard A. Parr II Executive Vice President and Clerk
CISI BUSINESS CORPORATION CONCENTRA MANAGEMENT SERVICES, INC. CPS BUSINESS CORPORATION FHM BUSINESS CORPORATION FIRST NOTICE SYSTEMS, INC. FOCUS HEALTHCARE MANAGEMENT, INC. METRACOMP, INC. CONCENTRA LABORATORY, L.L.C.
By:	Richard A. Parr II Vice President and Corporate Secretary

Sig-1

CRA MANAGED CARE OF WASHINGTON, INC. CRA-MCO, INC.
By:	Richard A. Parr II Executive Vice President and Corporate Secretary
HEALTHNETWORK SYSTEMS LLC MEDICAL NETWORK SYSTEMS LLC
By:	Richard A. Parr II Vice President, General Counsel and Corporate Secretary
NATIONAL HEALTHCARE RESOURCES, INC.
By:	Richard A. Parr II Senior Vice President and Corporate Secretary
OCCUCENTERS I, L.P.
By:	Its general partner CONCENTRA HEALTH SERVICES, INC.
	By:	Richard A. Parr II Executive Vice President, General Counsel and Corporate Secretary

Sig-2

OCI HOLDINGS, INC.
By:	Gary Chedekel Corporate Secretary and Treasurer

Sig-3

EXHIBIT B

[FORM OF INTERCOMPANY NOTE]

US$                          (Date)

                            , a corporation duly incorporated and existing under the laws of                      (the "Borrower") and a subsidiary of Concentra Operating Corporation (the "Lender"), for value received, hereby promises to pay to the order of the Lender on demand the principal sum of                      dollars and to pay interest thereon from the date hereof semiannually on                      and                      in each year at        % per annum until the principal hereof is paid or made available for payment.

        This Intercompany Note has been issued in accordance with the Indenture among the Lender, the Guarantors defined therein and The Bank of New York, as Trustee, dated as of June 8, 2004.

        This Intercompany Note shall be governed by and construed in accordance with the laws of the State of New York.

        IN WITNESS WHEREOF, the Borrower has caused this instrument to be executed.

Dated:
	[BORROWER]
		by	Name: Title:
Attest:
Name: Title:

Schedule I

SCHEDULE OF GUARANTORS

        The following schedule lists each Guarantor under the Indenture as of the Issue Date:

CISI Business Corporation
Concentra Health Services, Inc.
Concentra Integrated Services, Inc.
Concentra Laboratory, L.L.C.
Concentra Management Services, Inc.
Concentra Preferred Systems, Inc.
CPS Business Corporation
CRA Managed Care of Washington, Inc.
CRA-MCO, Inc.
FHM Business Corporation
First Notice Systems, Inc.
Focus Healthcare Management, Inc.
Healthnetwork Systems LLC
Medical Network Systems LLC
Metracomp, Inc.
National Healthcare Resources, Inc.
Occucenters I, L.P.
OCI Holdings, Inc.

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Exhibit 4.7

TABLE OF CONTENTS
ARTICLE ONE Definitions and Other Provisions of General Application
ARTICLE TWO Security Forms
ARTICLE THREE The Securities
ARTICLE ELEVEN Redemption of Securities
ARTICLE TWELVE Defeasance and Covenant Defeasance
ARTICLE THIRTEEN Subordination
ARTICLE FOURTEEN Subsidiary Guarantees

Rule 144A/REGULATION S/IAI APPENDIX

PROVISIONS RELATING TO INITIAL SECURITIES, PRIVATE EXCHANGE SECURITIES AND EXCHANGE SECURITIES
EXHIBIT 1 to Rule 144A/REGULATION S/IAI APPENDIX

EX-4.12

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Exhibit 4.12

EXECUTION COPY

$155,000,000
CONCENTRA OPERATING CORPORATION
9¹/8% Senior Subordinated Notes due 2012

REGISTRATION RIGHTS AGREEMENT

        May 25, 2004

CREDIT SUISSE FIRST BOSTON LLC
CITIGROUP GLOBAL MARKETS INC.
J. P. MORGAN SECURITIES INC.
DEUTSCHE BANK SECURITIES INC. JEFFERIES & COMPANY, INC.
c/o Credit Suisse First Boston LLC
        Eleven Madison Avenue
        New York, New York 10010-3629

Dear Sirs:

        Concentra Operating Corporation, a Nevada corporation (the "Issuer"), proposes to issue and sell to Credit Suisse First Boston LLC, Citigroup Global Markets Inc., Deutsche Bank Securities, Inc., Jefferies & Company, Inc. and J. P. Morgan Securities Inc. (collectively, the "Initial Purchasers"), upon the terms set forth in a purchase agreement of even date herewith (the "Purchase Agreement"), $155,000,000 aggregate principal amount of its 9¹/8% Senior Subordinated Notes due 2012 (the "Initial Securities") to be unconditionally guaranteed by each of the Subsidiaries listed on Schedule B to the Purchase Agreement (the "Guarantors and, together with the Issuer, the "Company"). The Initial Securities will be issued pursuant to an Indenture, dated as of June 8, 2004, (the "Indenture") among the Company, the Guarantors and The Bank of New York (the "Trustee"). As an inducement to the Initial Purchasers, the Company agrees with the Initial Purchasers, for the benefit of the holders of the Initial Securities (including, without limitation, the Initial Purchasers), the Exchange Securities (as defined below) and the Private Exchange Securities (as defined below) (collectively the "Holders"), as follows:

        1.     Registered Exchange Offer. The Company shall, at its own cost, prepare and, not later than 90 days after (or if the 90th day is not a business day, the first business day thereafter) the date of original issue of the Initial Securities (the "Issue Date"), file with the Securities and Exchange Commission (the "Commission") a registration statement (the "Exchange Offer Registration Statement") on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), with respect to a proposed offer (the "Registered Exchange Offer") to the Holders of Transfer Restricted Securities (as defined in Section 6 hereof), who are not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer, to issue and deliver to such Holders, in exchange for the Initial Securities, a like aggregate principal amount of debt securities (the "Exchange Securities") of the Company issued under the Indenture and identical in all material respects to the Initial Securities (except for the transfer restrictions relating to the Initial Securities and the provisions relating to the matters described in Section 6 hereof) that would be registered under the Securities Act. The Company shall use its reasonable best efforts to cause such Exchange Offer Registration Statement to become effective under the Securities Act within 180 days (or if the 180th day is not a business day, the first business day thereafter) after the Issue Date of the Initial Securities and shall keep the Exchange Offer Registration Statement effective for not less than 30 days (or longer, if required by applicable law) after the date notice of the Registered Exchange Offer is mailed to the Holders (such period being called the "Exchange Offer Registration Period").

        If the Company effects the Registered Exchange Offer, the Company will be entitled to close the Registered Exchange Offer 40 days after the commencement thereof provided that the Company has accepted all the Initial Securities theretofore validly tendered in accordance with the terms of the Registered Exchange Offer.

        Following the declaration of the effectiveness of the Exchange Offer Registration Statement, the Company shall promptly commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each Holder of Transfer Restricted Securities (as defined in Section 6 hereof) electing to exchange the Initial Securities for Exchange Securities (assuming that such Holder is not an affiliate of the Company within the meaning of the Securities Act, acquires the Exchange Securities in the ordinary course of such Holder's business and has no arrangements with any person to participate in the distribution of the Exchange Securities and is not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer) to trade such Exchange Securities from and after their receipt without any limitations or restrictions under the Securities Act and without material restrictions under the securities laws of the several states of the United States.

        The Company acknowledges that, pursuant to current interpretations by the Commission's staff of Section 5 of the Securities Act, in the absence of an applicable exemption therefrom, (i) each Holder which is a broker-dealer electing to exchange Securities, acquired for its own account as a result of market making activities or other trading activities, for Exchange Securities (an "Exchanging Dealer"), is required to deliver a prospectus containing the information set forth in (a) Annex A hereto on the cover, (b) Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section, and (c) Annex C hereto in the "Plan of Distribution" section of such prospectus in connection with a sale of any such Exchange Securities received by such Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) an Initial Purchaser that elects to sell Exchange Securities acquired in exchange for Initial Securities constituting any portion of an unsold allotment is required to deliver a prospectus containing the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in connection with such sale.

        The Company shall use its reasonable best efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the prospectus contained therein, in order to permit such prospectus to be lawfully delivered by all persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such persons must comply with such requirements in order to resell the Exchange Securities; provided, however, that (i) in the case where such prospectus and any amendment or supplement thereto must be delivered by an Exchanging Dealer or an Initial Purchaser, such period shall be the lesser of 180 days and the date on which all Exchanging Dealers and the Initial Purchasers have sold all Exchange Securities held by them (unless such period is extended pursuant to Section 3(j) below) and (ii) the Company shall make such prospectus and any amendment or supplement thereto, available to any broker-dealer for use in connection with any resale of any Exchange Securities for a period of not less than 90 days after the consummation of the Registered Exchange Offer.

        If, upon consummation of the Registered Exchange Offer, any Initial Purchaser holds Initial Securities acquired by it as part of its initial distribution, the Company, simultaneously with the delivery of the Exchange Securities pursuant to the Registered Exchange Offer, shall issue and deliver to such Initial Purchaser upon the written request of such Initial Purchaser, in exchange (the "Private Exchange") for the Initial Securities held by such Initial Purchaser, a like principal amount of debt securities of the Company issued under the Indenture and identical in all material respects (including the existence of restrictions on transfer under the Securities Act and the securities laws of the several states of the United States, but excluding provisions relating to the matters described in Section 6 hereof) to the Initial Securities (the "Private Exchange Securities"). The Initial Securities, the Exchange Securities and the Private Exchange Securities are herein collectively called the "Securities".

2

        In connection with the Registered Exchange Offer, the Company shall:

        (a)   mail to each Holder a copy of the prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents;

        (b)   keep the Registered Exchange Offer open for not less than 30 days (or longer, if required by applicable law) after the date notice thereof is mailed to the Holders;

        (c)   utilize the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan, The City of New York, which may be the Trustee or an affiliate of the Trustee;

        (d)   permit Holders to withdraw tendered Securities at any time prior to the close of business, New York time, on the last business day on which the Registered Exchange Offer shall remain open; and

        (e)   otherwise comply with all applicable laws.

        As soon as practicable after the close of the Registered Exchange Offer or the Private Exchange, as the case may be, the Company shall:

        (x)   accept for exchange all the Securities validly tendered and not withdrawn pursuant to the Registered Exchange Offer and the Private Exchange;

        (y)   deliver to the Trustee for cancellation all the Initial Securities so accepted for exchange; and

        (z)   cause the Trustee to authenticate and deliver promptly to each Holder of the Initial Securities, Exchange Securities or Private Exchange Securities, as the case may be, equal in principal amount to the Initial Securities of such Holder so accepted for exchange.

        The Indenture will provide that the Exchange Securities will not be subject to the transfer restrictions set forth in the Indenture and that all the Securities will vote and consent together on all matters as one class and that none of the Securities will have the right to vote or consent as a class separate from one another on any matter.

        Interest on each Exchange Security and Private Exchange Security issued pursuant to the Registered Exchange Offer and in the Private Exchange will accrue from the last interest payment date on which interest was paid on the Initial Securities surrendered in exchange therefor or, if no interest has been paid on the Initial Securities, from the date of original issue of the Initial Securities.

        Each Holder participating in the Registered Exchange Offer shall be required to represent to the Company that at the time of the consummation of the Registered Exchange Offer (i) any Exchange Securities received by such Holder will be acquired in the ordinary course of business, (ii) such Holder will have no arrangements or understanding with any person to participate in the distribution of the Securities or the Exchange Securities within the meaning of the Securities Act, (iii) such Holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of the Company or if it is an affiliate, such Holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) if such Holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the Exchange Securities and (v) if such Holder is a broker- dealer, that it will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities and that it will be required to acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities.

        Notwithstanding any other provisions hereof, the Company will ensure that (i) any Exchange Offer Registration Statement and any amendment thereto and any prospectus forming part thereof and any

3

supplement thereto comply in all material respects with the Securities Act and the rules and regulations thereunder, (ii) any Exchange Offer Registration Statement and any amendment thereto do not, when they become effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Exchange Offer Registration Statement, and any supplement to such prospectus, do not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

        2.     Shelf Registration. If, (i) because of any change in law or in applicable interpretations thereof by the staff of the Commission, the Company is not permitted to effect a Registered Exchange Offer, as contemplated by Section 1 hereof, (ii) the Registered Exchange Offer is not consummated within 220 days of the Issue Date, (iii) any Initial Purchaser shall notify the Company following consummation of the Registered Exchange Offer that the Initial Securities (or the Private Exchange Securities) held by it are not eligible to be exchanged for Exchange Securities in the Registered Exchange Offer; or (iv) any Holder (other than an Exchanging Dealer) notifies the Company in writing that it is prohibited by law or SEC policy from participating in the Registered Exchange Offer or may not resell the Exchange Notes acquired by it in the Registered Exchange Offer to the public without delivering a prospectus, and the prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by it, the Company shall take the following actions:

        (a)   The Company shall, at its cost, as promptly as practicable (but in no event more than 60 days after so required or requested pursuant to this Section 2) file with the Commission a registration statement (the "Shelf Registration Statement" and, together with the Exchange Offer Registration Statement, a "Registration Statement") on an appropriate form under the Securities Act relating to the offer and sale of the Transfer Restricted Securities (as defined in Section 6 hereof) by the Holders thereof from time to time in accordance with the methods of distribution set forth in the Shelf Registration Statement and Rule 415 under the Securities Act (hereinafter, the "Shelf Registration"); provided, however, that no Holder (other than an Initial Purchaser) shall be entitled to have the Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all the provisions of this Agreement applicable to such Holder.

        (b)   The Company shall (x) in the case of clause (i) above, use its reasonable best efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act on or prior to the 180th day after the Issue Date and (y) in the case of clause (ii), (iii) or (iv) above, use its reasonable best efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act on or prior to the 60th day after the date on which the Shelf Registration Statement is required to be filed.

        (c)   The Company shall use its reasonable best efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus included therein to be lawfully delivered by the Holders of the relevant Securities, for a period of two years (or for such longer period if extended pursuant to Section 3(j) below) from the Issue Date or such shorter period that will terminate when all the Securities covered by the Shelf Registration Statement (i) have been sold pursuant thereto or (ii) are no longer restricted securities (as defined in Rule 144 under the Securities Act, or any successor rule thereof). The Company shall be deemed not to have used its reasonable best efforts to keep the Shelf Registration Statement effective during the requisite period if it voluntarily takes any action that would result in Holders of Securities covered thereby not being able to offer and sell such Securities during that period, unless such action is required by applicable law.

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        (d)   Notwithstanding any other provisions of this Agreement to the contrary, the Company shall cause the Shelf Registration Statement and the related prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement, amendment or supplement, (i) to comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations thereunder and (ii) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

        3.     Registration Procedures. In connection with any Shelf Registration contemplated by Section 2 hereof and, to the extent applicable, any Registered Exchange Offer contemplated by Section 1 hereof, the following provisions shall apply:

        (a)   The Company shall (i) furnish to each Initial Purchaser, prior to the filing thereof with the Commission, a copy of the Registration Statement and each amendment thereof and each supplement, if any, to the prospectus included therein and, in the event that an Initial Purchaser (with respect to any portion of an unsold allotment from the original offering) is participating in the Registered Exchange Offer or the Shelf Registration Statement, the Company shall use its reasonable best efforts to reflect in each such document, when so filed with the Commission, such comments as such Initial Purchaser reasonably may propose; (ii) include the information set forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of Distribution" section of the prospectus forming a part of the Exchange Offer Registration Statement and include the information set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the Registered Exchange Offer; (iii) if requested by an Initial Purchaser within a reasonable time after receipt of any such document, include the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in the prospectus forming a part of the Exchange Offer Registration Statement; (iv) include within the prospectus contained in the Exchange Offer Registration Statement a section entitled "Plan of Distribution," reasonably acceptable to the Initial Purchasers, which shall contain a summary statement of the positions taken or policies made by the staff of the Commission with respect to the potential "underwriter" status of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of Exchange Securities received by such broker-dealer in the Registered Exchange Offer (a "Participating Broker-Dealer"), whether such positions or policies have been publicly disseminated by the staff of the Commission or such positions or policies, in the reasonable judgment of the Initial Purchasers based upon advice of counsel (which may be in-house counsel), represent the prevailing views of the staff of the Commission; and (v) in the case of a Shelf Registration Statement, include the names of the Holders, who propose to sell Securities pursuant to the Shelf Registration Statement, as selling securityholders; provided, however, that each such Holder shall have furnished to the Company on a timely basis such information regarding the Holder as the Company may require pursuant to Section 3(n) hereof.

        (b)   The Company shall give written notice to the Initial Purchasers, the Holders of the Securities proposed to be sold under the Shelf Registration Statement and any Participating Broker-Dealer from whom the Company has received prior written notice that it will be a Participating Broker-Dealer in the Registered Exchange Offer (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the prospectus until the requisite changes have been made):

        (i)    when the Registration Statement or any amendment thereto has been filed with the Commission and when the Registration Statement or any post-effective amendment thereto has become effective;

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        (ii)   of any request by the Commission for amendments or supplements to the Registration Statement or the prospectus included therein or for additional information;

        (iii)  of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose;

        (iv)  of the receipt by the Company or its legal counsel of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and

        (v)   of the happening of any event that requires the Company to make changes in the Registration Statement or the prospectus in order that the Registration Statement or the prospectus do not contain an untrue statement of a material fact nor omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the prospectus, in light of the circumstances under which they were made) not misleading.

        (c)   The Company shall make every reasonable effort to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of the Registration Statement.

        (d)   The Company shall furnish to each Holder of Securities included within the coverage of the Shelf Registration, without charge, at least one copy of the Shelf Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if the Holder so requests in writing, all exhibits thereto (including those, if any, incorporated by reference).

        (e)   The Company shall deliver to each Exchanging Dealer and each Initial Purchaser, and to any other Holder who so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if any Initial Purchaser or any such Holder requests, all exhibits thereto (including those incorporated by reference).

        (f)    The Company shall, during the Shelf Registration Period, deliver to each Holder of Securities included within the coverage of the Shelf Registration, without charge, as many copies of the prospectus (including each preliminary prospectus) included in the Shelf Registration Statement and any amendment or supplement thereto as such person may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by each of the selling Holders of the Securities in connection with the offering and sale of the Securities covered by the prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement.

        (g)   The Company shall deliver to each Initial Purchaser, any Exchanging Dealer, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer, without charge, as many copies of the final prospectus included in the Exchange Offer Registration Statement and any amendment or supplement thereto as such persons may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by any Initial Purchaser, if necessary, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer in connection with the offering and sale of the Exchange Securities covered by the prospectus, or any amendment or supplement thereto, included in such Exchange Offer Registration Statement.

        (h)   Prior to any public offering of the Securities, pursuant to any Registration Statement, the Company shall register or qualify or cooperate with the Holders of the Securities included therein and their respective counsel in connection with the registration or qualification of the Securities for offer and sale under the securities or "blue sky" laws of such states of the United States as any

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Holder of the Securities reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Securities covered by such Registration Statement; provided, however, that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified or (ii) take any action which would subject it to general service of process or to taxation in any jurisdiction where it is not then so subject.

        (i)    The Company shall cooperate with the Holders of the Securities to facilitate the timely preparation and delivery of certificates representing the Securities to be sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders may request a reasonable period of time prior to sales of the Securities pursuant to such Registration Statement.

        (j)    Upon the occurrence of any event contemplated by paragraphs (ii) through (v) of Section 3(b) above during the period for which the Company is required to maintain an effective Registration Statement, the Company shall promptly prepare and file a post-effective amendment to the Registration Statement or a supplement to the related prospectus and any other required document so that, as thereafter delivered to Holders of the Securities or purchasers of Securities, the prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Initial Purchasers, the Holders of the Securities and any known Participating Broker-Dealer in accordance with paragraphs (ii) through (v) of Section 3(b) above to suspend the use of the prospectus until the requisite changes to the prospectus have been made, then the Initial Purchasers, the Holders of the Securities and any such Participating Broker-Dealers shall suspend use of such prospectus, and the period of effectiveness of the Shelf Registration Statement provided for in Section 2(b) above and the Exchange Offer Registration Statement provided for in Section 1 above shall each be extended by the number of days from and including the date of the giving of such notice to and including the date when the Initial Purchasers, the Holders of the Securities and any known Participating Broker-Dealer shall have received such amended or supplemented prospectus pursuant to this Section 3(j) or the Company shall have notified such Holders that disposition of such Transfer Restricted Securities may resume under the existing prospectus.

        (k)   Not later than the effective date of the applicable Registration Statement, the Company will provide a CUSIP number for the Initial Securities, the Exchange Securities or the Private Exchange Securities, as the case may be, and provide the applicable trustee with certificates for the Initial Securities, the Exchange Securities or the Private Exchange Securities, as the case may be, in a form eligible for deposit with The Depository Trust Company.

        (l)    The Company will comply with all rules and regulations of the Commission to the extent and so long as they are applicable to the Registered Exchange Offer or the Shelf Registration and will make generally available to its security holders (or otherwise provide in accordance with Section 11(a) of the Securities Act) an earnings statement satisfying the provisions of Section 11(a) of the Securities Act, no later than 45 days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning with the first month of the Company's first fiscal quarter commencing after the effective date of the Registration Statement, which statement shall cover such 12-month period.

        (m)  The Company shall cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended, in a timely manner and containing such changes, if any, as shall be necessary for such qualification. In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture.

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        (n)   The Company may require each Holder of Securities to be sold pursuant to the Shelf Registration Statement to furnish to the Company such information regarding the Holder and the distribution of the Securities as the Company may from time to time reasonably require for inclusion in the Shelf Registration Statement, and the Company may exclude from such registration the Securities of any Holder that unreasonably fails to furnish such information within a reasonable time after receiving such request.

        (o)   The Company shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form) and take all such other action, if any, as Holders of not less than a majority of the aggregate principal amount of the Securities to be included in the Registration Statement shall reasonably request in order to facilitate the disposition of the Securities pursuant to any Shelf Registration Statement.

        (p)   In the case of any Shelf Registration, the Company shall (i) make reasonably available for inspection by the Holders of the Securities, any underwriter participating in any disposition pursuant to the Shelf Registration Statement and any attorney, accountant or other agent retained by the Holders of the Securities or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company and (ii) cause the Company's officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by the Holders of the Securities or any such underwriter, attorney, accountant or agent in connection with the Shelf Registration Statement, in each case, as shall be reasonably necessary to enable such persons, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that the foregoing inspection and information gathering shall be coordinated on behalf of the Initial Purchasers by you and on behalf of the other parties, by one counsel designated by and on behalf of such other parties as described in Section 4 hereof and shall be subject to any confidentiality procedures reasonably instituted by the Company and reasonably approved by you.

        (q)   In the case of any Shelf Registration, the Company, if requested by the Holders of at least a majority of the aggregate principal amount of the Securities covered thereby, shall cause (i) its counsel to deliver an opinion and updates thereof relating to the Securities in customary form addressed to such Holders and the managing underwriters, if any, thereof and dated, in the case of the initial opinion, the effective date of such Shelf Registration Statement (it being agreed that the matters to be covered by such opinion shall include, without limitation but subject to customary and reasonable qualifications and exceptions, the due incorporation and good standing of the Company and its subsidiaries; the qualification of the Company and its subsidiaries to transact business as foreign corporations; the due authorization, execution and delivery of the relevant agreement of the type referred to in Section 3(o) hereof; the due authorization, execution, authentication and issuance, and the validity and enforceability, of the applicable Securities; the absence of material legal or governmental proceedings involving the Company and its subsidiaries; the absence of governmental approvals required to be obtained in connection with the Shelf Registration Statement, the offering and sale of the applicable Securities, or any agreement of the type referred to in Section 3(o) hereof; the compliance as to form of such Shelf Registration Statement and any documents incorporated by reference therein and of the Indenture with the requirements of the Securities Act and the Trust Indenture Act, respectively; and, as of the date of the opinion and as of the effective date of the Shelf Registration Statement or most recent post-effective amendment thereto, as the case may be, the absence from such Shelf Registration Statement and the prospectus included therein, as then amended or supplemented, and from any documents incorporated by reference therein of an untrue statement of a material fact or the omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any such documents, in the light of the circumstances existing at the time that such documents were filed with the Commission under the

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Exchange Act); (ii) its officers to execute and deliver all customary documents and certificates and updates thereof requested by any underwriters of the applicable Securities and (iii) its independent public accountants to provide to the selling Holders of the applicable Securities and any underwriter therefor a comfort letter in customary form and covering matters of the type customarily covered in comfort letters in connection with primary underwritten offerings, subject to receipt of appropriate documentation as contemplated, and only if permitted, by Statement of Auditing Standards No. 72.

        (r)   In the case of the Registered Exchange Offer, if requested by any Initial Purchaser or any known Participating Broker-Dealer, the Company shall cause (i) its counsel to deliver to such Initial Purchaser or such Participating Broker-Dealer a signed opinion in the form set forth in Section 6(c) and (d) of the Purchase Agreement with such changes as are customary in connection with the preparation of a Registration Statement and (ii) its independent public accountants to deliver to such Initial Purchaser or such Participating Broker-Dealer a comfort letter, in customary form, meeting the requirements as to the substance thereof as set forth in Section 6(a) of the Purchase Agreement, with appropriate date changes.

        (s)   If a Registered Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Initial Securities by Holders to the Company (or to such other Person as directed by the Company) in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be, the Company shall mark, or cause to be marked, on the Initial Securities so exchanged that such Initial Securities are being canceled in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be; in no event shall the Initial Securities be marked as paid or otherwise satisfied.

        (t)    The Company will use its reasonable best efforts to (a) if the Initial Securities have been rated prior to the initial sale of such Initial Securities, confirm such ratings will apply to the Securities covered by a Registration Statement, or (b) if the Initial Securities were not previously rated, cause the Securities covered by a Registration Statement to be rated with the appropriate rating agencies, if so requested by Holders of a majority in aggregate principal amount of Securities covered by such Registration Statement, or by the managing underwriters, if any.

        (u)   In the event that any broker-dealer registered under the Exchange Act shall underwrite any Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Conduct Rules (the "Rules") of the National Association of Securities Dealers, Inc. ("NASD")) thereof, whether as a Holder of such Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company will assist such broker-dealer in complying with the requirements of such Rules, including, without limitation, by (i) if such Rules, including Rule 2720, shall so require, engaging a "qualified independent underwriter" (as defined in Rule 2720) to participate in the preparation of the Registration Statement relating to such Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Securities, (ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 5 hereof and (iii) providing such information to such broker-dealer as may be required in order for such broker-dealer to comply with the requirements of the Rules.

        (v)   The Company shall use its reasonable best efforts to take all other steps necessary to effect the registration of the Securities covered by a Registration Statement contemplated hereby.

        4.     Registration Expenses. The Company shall bear all fees and expenses incurred in connection with the performance of its obligations under Sections 1 through 3 hereof (including the reasonable fees and expenses, if any, of Cravath, Swaine & Moore LLP, counsel for the Initial Purchasers, incurred

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in connection with the Registered Exchange Offer), whether or not the Exchange Offer Registration Statement or a Shelf Registration Statement is filed or becomes effective, and, in the event of a Shelf Registration, shall bear or reimburse the Holders of the Securities covered thereby for the reasonable fees and disbursements of one firm of counsel designated by the Holders of a majority in principal amount of the Initial Securities covered thereby to act as counsel for the Holders of the Initial Securities in connection therewith.

        5.     Indemnification. (a) The Company agrees to indemnify and hold harmless each Holder of the Securities, any Participating Broker-Dealer and each person, if any, who controls such Holder or such Participating Broker-Dealer within the meaning of the Securities Act or the Exchange Act (each Holder, any Participating Broker-Dealer and such controlling persons are referred to collectively as the "Indemnified Parties") from and against any losses, claims, damages or liabilities, joint or several, or any actions in respect thereof (including, but not limited to, any losses, claims, damages, liabilities or actions relating to purchases and sales of the Securities) to which each Indemnified Party may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus relating to a Shelf Registration, or arise out of, or are based upon, the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse, as incurred, the Indemnified Parties for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action in respect thereof; provided, however, that (i) the Company shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus relating to a Shelf Registration in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Company by or on behalf of such Holder specifically for inclusion therein and (ii) with respect to any untrue statement or omission or alleged untrue statement or omission made in any preliminary prospectus relating to a Shelf Registration Statement, the indemnity agreement contained in this subsection (a) shall not inure to the benefit of any Holder or Participating Broker-Dealer from whom the person asserting any such losses, claims, damages or liabilities purchased the Securities concerned, to the extent that a prospectus relating to such Securities was required to be delivered by such Holder or Participating Broker-Dealer under the Securities Act in connection with such purchase and any such loss, claim, damage or liability of such Holder or Participating Broker-Dealer results from the fact that there was not sent or given to such person, at or prior to the written confirmation of the sale of such Securities to such person, a copy of the final prospectus if the Company had previously furnished copies thereof to such Holder or Participating Broker-Dealer; provided further, however, that this indemnity agreement will be in addition to any liability which the Company may otherwise have to such Indemnified Party. The Company shall also indemnify underwriters, their officers and directors and each person who controls such underwriters within the meaning of the Securities Act or the Exchange Act to the same extent as provided above with respect to the indemnification of the Holders of the Securities if requested by such Holders.

        (b)   Each Holder of the Securities, severally and not jointly, will indemnify and hold harmless the Company, each of its directors and each of its officers and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act from and against any losses, claims, damages or liabilities or any actions in respect thereof, to which the Company or any such controlling person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any

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preliminary prospectus relating to a Shelf Registration Statement, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Company by or on behalf of such Holder specifically for inclusion therein; and, subject to the limitation set forth immediately preceding this clause, shall reimburse, as incurred, the Company for any legal or other expenses reasonably incurred by the Company or any such controlling person in connection with investigating or defending any loss, claim, damage, liability or action in respect thereof. This indemnity agreement will be in addition to any liability which such Holder may otherwise have to the Company or any of its controlling persons.

        (c)   Promptly after receipt by an indemnified party under this Section 5 of notice of the commencement of any action or proceeding (including a governmental investigation), such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 5, notify the indemnifying party of the commencement thereof; but the failure to notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have under subsection (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof the indemnifying party will not be liable to such indemnified party under this Section 5 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the contrary; (ii) the indemnifying party has failed within a reasonable time to retain counsel reasonably satisfactory to the indemnified party; (iii) the indemnified party shall have reasonably concluded, based on the advice of legal counsel, that there may be legal defenses available to it that are different from or in addition to those available to the indemnifying party; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the indemnifying party shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all indemnified parties, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm for any Purchaser, its affiliates, directors and officers and any control persons of such Purchaser shall be designated in writing by CSFB and any such separate firm for the Company, the Guarantors, their directors and officers and any control persons of the Company and the Guarantors shall be designated in writing by the Company. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement (i) includes an unconditional release of such indemnified party from all liability on any

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claims that are the subject matter of such action, and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

        (d)   If the indemnification provided for in this Section 5 is unavailable or insufficient to hold harmless an indemnified party under subsections (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the exchange of the Initial Securities, pursuant to the Registered Exchange Offer, or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as well as any other relevant equitable considerations. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Holder or such other indemnified party, as the case may be, on the other, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding any other provision of this Section 5(d), the Holders of the Securities shall not be required to contribute any amount in excess of the amount by which the net proceeds received by such Holders from the sale of the Securities pursuant to a Registration Statement exceeds the amount of damages which such Holders have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls such indemnified party within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as such indemnified party and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as the Company.

        (e)   The agreements contained in this Section 5 shall survive the sale of the Securities pursuant to a Registration Statement and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party.

        6.     Additional Interest Under Certain Circumstances. (a) Additional interest (the "Additional Interest") with respect to the Initial Securities shall be assessed as follows if any of the following events occur (each such event in clauses (i) through (vi) below a "Registration Default":

        (i)    If the Company fails to file an Exchange Offer Registration Statement with the Commission on or prior to the 90th day after the Issue Date,

        (ii)   If the Exchange Offer Registration Statement is not declared effective by the Commission on or prior to the 180th day after the Issue Date or, if filing a Shelf Registration Statement in the circumstances referenced in clause 2(i) above, a Shelf Registration Statement is not declared effective by the Commission on or prior to the 180th day after the Issue Date,

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        (iii)  if the Exchange Offer is not consummated on or before the 40th day after the Exchange Offer Registration Statement is declared effective,

        (iv)  if filing a Shelf Registration Statement in the circumstances referenced in clause 2(ii), (iii) or (iv) above, the Company fails to file the Shelf Registration Statement with the Commission on or prior to the 60th day (the "Shelf Filing Date") after the date on which the obligation to file a Shelf Registration Statement arises,

        (v)   if filing a Shelf Registration Statement in the circumstances referenced in clause 2(ii), (iii) or (iv) above, the Shelf Registration Statement is not declared effective on or prior to the 60th day after the Shelf Filing Date, or

        (vi)  after the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, is declared effective, (A) such Registration Statement thereafter ceases to be effective; or (B) such Registration Statement or the related prospectus ceases to be usable (except as permitted in paragraph (b)) in connection with resales of Transfer Restricted Securities during the periods specified herein because either (1) any event occurs as a result of which the related prospectus forming part of such Registration Statement would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or (2) it shall be necessary to amend such Registration Statement or supplement the related prospectus, to comply with the Securities Act or the Exchange Act or the respective rules thereunder.

Additional Interest shall accrue on the Initial Securities over and above the interest set forth in the title of the Securities from and including the date on which any such Registration Default shall occur to but excluding the date on which all such Registration Defaults have been cured, at a rate of 0.25% per annum for the first 90-day period immediately following the occurrence of a Registration Default, and such rate will increase by an additional 0.25% per annum with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum additional interest rate of 2.0% per annum. Such Additional Interest will be in addition to any other interest payable from time to time with respect to the Initial Securities and the Exchange Notes.

        (b)   A Registration Default referred to in Section 6(a)(vi)(B) hereof shall be deemed not to have occurred and be continuing in relation to a Shelf Registration Statement or the related prospectus if (i) such Registration Default has occurred solely as a result of (x) the filing of a post-effective amendment to such Shelf Registration Statement to incorporate annual audited financial information with respect to the Company where such post-effective amendment is not yet effective and needs to be declared effective to permit Holders to use the related prospectus or (y) other material events, with respect to the Company that would need to be described in such Shelf Registration Statement or the related prospectus and (ii) in the case of clause (y), the Company is proceeding promptly and in good faith to amend or supplement such Shelf Registration Statement and related prospectus to describe such events; provided, however, that in any case if such Registration Default occurs for a continuous period in excess of 30 days, Additional Interest shall be payable in accordance with the above paragraph from the day such Registration Default occurs until such Registration Default is cured.

        (c)   Any amounts of Additional Interest due pursuant to Section 6(a) above will be payable in cash on the regular interest payment dates with respect to the Initial Securities. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest rate by the principal amount of the Initial Securities, multiplied by a fraction, the numerator of which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months), and the denominator of which is 360.

13

        (d)   "Transfer Restricted Securities" means each Security until (i) the date on which such Transfer Restricted Security has been exchanged by a person other than a broker-dealer for a freely transferable Exchange Security in the Registered Exchange Offer, (ii) following the exchange by a broker-dealer in the Registered Exchange Offer of an Initial Security for an Exchange Note, the date on which such Exchange Note is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement, (iii) the date on which such Initial Security has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement or (iv) the date on which such Initial Securities is distributed to the public pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act.

        7.     Rules 144 and 144A. The Company shall use its reasonable best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the request of any Holder of Initial Securities, make publicly available other information so long as necessary to permit sales of their securities pursuant to Rules 144 and 144A. The Company covenants that it will take such further action as any Holder of Initial Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Initial Securities without registration under the Securities Act within the limitation of the exemptions provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4)). The Company will provide a copy of this Agreement to prospective purchasers of Initial Securities identified to the Company by the Initial Purchasers upon request. Upon the request of any Holder of Initial Securities, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act.

        8.     Underwritten Registrations. If any of the Transfer Restricted Securities covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering ("Managing Underwriters") will be selected by the Holders of a majority in aggregate principal amount of such Transfer Restricted Securities to be included in such offering.

        No person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such person's Transfer Restricted Securities on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. Except as provided in Section 4, the Holders participating in any underwritten offering shall be responsible for any expenses customarily borne by selling securityholders, including underwriting discounts and commissions and fees and expenses of counsel to selling securityholders.

        9.     Miscellaneous.

        (a)   Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, except by the Company and the written consent of the Holders of a majority in principal amount of the Securities affected by such amendment, modification, supplement, waiver or consents.

14

        (b)   Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, first-class mail, facsimile transmission, or air courier which guarantees overnight delivery:

        (i)    if to a Holder of the Securities, at the most current address given by such Holder to the Company.

        (ii)   if to the Initial Purchasers;

Credit Suisse First Boston LLC
Eleven Madison Avenue
New York, NY 10010-3629
Fax No.: (212) 325-8278
Attention: Transactions Advisory Group

Citigroup Global Markets Inc.
338 Greenwich Street
32nd Floor
New York, NY 10013
Attention: Legal—Addison Crawford

with a copy to:

Cravath, Swaine & Moore LLP
825 Eighth Avenue
New York, NY 10019
Attention: Stephen L. Burns, Esq.

        (iii)  if to the Company, at its address as follows:

Concentra Operating Corporation
5080 Spectrum Drive
Suite 400-West Tower
Addison, TX 75001
Attention: Richard Parr, Esq.

with a copy to:

Vinson & Elkins L.L.P.
2001 Ross Avenue
3700 Transmell Crow Center
Dallas, TX 75201-2975
Attention: Jeffrey A. Chapman, Esq.

        All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three business days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged by recipient's facsimile machine operator, if sent by facsimile transmission; and on the day delivered, if sent by overnight air courier guaranteeing next day delivery.

        (c)   No Inconsistent Agreements. The Company has not, as of the date hereof, entered into, nor shall it, on or after the date hereof, enter into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders herein or otherwise conflicts with the provisions hereof.

        (d)   Successors and Assigns. This Agreement shall be binding upon the Company and its successors and assigns.

15

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

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

        (g)   Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

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

        (i)    Securities Held by the Company. Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities is required hereunder, Securities held by the Company or its affiliates (other than subsequent Holders of Securities if such subsequent Holders are deemed to be affiliates solely by reason of their holdings of such Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

        If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Issuer a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the several Initial Purchasers and the Company in accordance with its terms.

Very truly yours,
CONCENTRA OPERATING CORPORATION
By:	/s/  RICHARD A. PARR II Richard A. Parr II Executive Vice President, General Counsel and Corporate Secretary
CONCENTRA HEALTH SERVICES, INC. CONCENTRA PREFERRED SYSTEMS, INC.
By:	/s/  RICHARD A. PARR II Richard A. Parr II Executive Vice President, General Counsel and Corporate Secretary
CONCENTRA INTEGRATED SERVICES, INC.
By:	/s/  RICHARD A. PARR II Richard A. Parr II Executive Vice President and Clerk
CONCENTRA MANAGEMENT SERVICES, INC. FIRST NOTICE SYSTEMS, INC. FOCUS HEALTHCARE MANAGEMENT, INC. METRACOMP, INC. CONCENTRA LABORATORY, L.L.C. CISI BUSINESS CORPORATION CPS BUSINESS CORPORATION FHM BUSINESS CORPORATION
By:	/s/  RICHARD A. PARR II Richard A. Parr II Vice President and Corporate Secretary

CRA MANAGED CARE OF WASHINGTON, INC. CRA-MCO, INC.
By:	/s/  RICHARD A. PARR II Richard A. Parr II Executive Vice President and Corporate Secretary
HEALTHNETWORK SYSTEMS LLC MEDICAL NETWORK SYSTEMS LLC
By:	/s/  RICHARD A. PARR II Richard A. Parr II Vice President, General Counsel and Corporate Secretary
NATIONAL HEALTHCARE RESOURCES, INC.
By:	/s/  RICHARD A. PARR II Richard A. Parr II Senior Vice President and Corporate Secretary
OCCUCENTERS I, L.P.
By:	Its general partner CONCENTRA HEALTH SERVICES, INC.
	By:	/s/  RICHARD A. PARR II Richard A. Parr II Executive Vice President, General Counsel and Corporate Secretary
OCI HOLDINGS, INC.
By:	/s/  GARY CHEDEKEL Gary Chedekel Corporate Secretary and Treasurer

The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written.
CREDIT SUISSE FIRST BOSTON LLC
		Acting on behalf of itself and as the Representative of the Initial Purchasers
CREDIT SUISSE FIRST BOSTON LLC
	by	/s/  HAROLD BOGLE Name: Harold Bogle Title: Managing Director
CITIGROUP GLOBAL MARKETS INC.
		Acting on behalf of itself and as the Representative of the Initial Purchasers
CITIGROUP GLOBAL MARKETS INC.
	by	/s/  RICHARD LANDGARTEN Name: Richard Landgarten Title: Managing Director

ANNEX A

        Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date (as defined herein), it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution."

ANNEX B

        Each broker-dealer that receives Exchange Securities for its own account in exchange for Securities, where such Initial Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. See "Plan of Distribution."

ANNEX C

        PLAN OF DISTRIBUTION

        Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until                         , 200  , all dealers effecting transactions in the Exchange Securities may be required to deliver a prospectus.⁽¹⁾

⁽¹⁾

In addition, the legend required by Item 502(e) of Regulation S-K will appear on the back cover page of the Exchange Offer prospectus.

        The Company will not receive any proceeds from any sale of Exchange Securities by broker-dealers. Exchange Securities received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such Exchange Securities. Any broker-dealer that resells Exchange Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Securities may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of Exchange Securities and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

        For a period of 180 days after the Expiration Date the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the Holders of the Securities) other than commissions or concessions of any brokers or dealers and will indemnify the Holders of the Securities (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

ANNEX D

        CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

Name:

Address:

If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Securities. If the undersigned is a broker-dealer that will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

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ANNEX A
ANNEX B
ANNEX C
ANNEX D

EX-5.1

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Exhibit 5.1

[LETTERHEAD OF VINSON & ELKINS L.L.P.]

        June 28, 2004

Concentra Operating Corporation
5080 Spectrum Drive
Suite 400, West Tower
Addison, Texas 75001

RE:

Registration Statement on Form S-4

Ladies and Gentlemen:

        We have acted as counsel to Concentra Operating Corporation, a Nevada corporation (the "Company"), with respect to certain legal matters in connection with the filing of a Registration Statement on Form S-4 (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") pursuant to which the Company and the Subsidiary Guarantors (as defined below) are registering under the Securities Act of 1933 (the "Securities Act") (i) $155,000,000 in aggregate principal amount of the Company's 9¹/8% Senior Subordinated Notes due 2012 (the "New Notes") to be exchanged for the Company's outstanding notes bearing substantially identical terms and in like principal amount (the "Old Notes") in a registered exchange offer (the "Exchange Offer") and (ii) the guarantees (the "Guarantees") of certain subsidiaries of the Company listed in the Registration Statement as guarantors (the "Subsidiary Guarantors") of the New Notes. The Old Notes were issued, and the New Notes will be issued, under an Indenture dated as of June 8, 2004, among the Company, the Subsidiary Guarantors and The Bank of New York, as Trustee (the "Indenture"). The Exchange Offer will be conducted on such terms and conditions as are set forth in the prospectus contained in the Registration Statement.

        We have examined originals or copies, certified or otherwise identified to our satisfaction, of (i) the Registration Statement, (ii) the Indenture, (iii) the Guarantees and (iv) such other corporate records, certificates, statutes and other instruments and documents as we have considered necessary or appropriate for purposes of the opinions hereafter expressed.

        In connection with this opinion, we have assumed that (i) all information contained in all documents reviewed by us is true and correct, (ii) all signatures on all documents reviewed by us are genuine, (iii) all documents submitted to us as originals are true and complete, (iv) all documents submitted to us as copies are true and complete copies of the originals thereof, (v) each natural person signing any document reviewed by us had the legal capacity to do so, (vi) each person signing in a representative capacity any document reviewed by us had authority to sign in such capacity and (vii) the Indenture is a binding agreement of the Trustee. We have further assumed that the Registration Statement, and any amendments thereto (including post-effective amendments), will have become effective and the New Notes and the Guarantees will be issued and sold in compliance with applicable federal and state securities laws and in the manner described in the Registration Statement.

        Based on the foregoing and subject to the assumptions, qualifications, limitations and exceptions set forth herein, we are of the opinion that when the New Notes and the Guarantees have been duly executed, authenticated, issued and delivered in accordance with the provisions of the Exchange Offer and the Indenture, (i) the New Notes will constitute legal, valid and binding obligations of the Company enforceable against the Company in accordance with their terms, and (ii) the Guarantees will constitute legal, valid and binding obligations of the Subsidiary Guarantors, enforceable against each Subsidiary Guarantor in accordance with their terms.

        The foregoing opinions are subject in each case to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and to general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law). We express no opinion concerning the validity or enforceability of any provisions contained in the Indenture, the New Notes or the Guarantees that purport to waive or not give effect to rights to notices, defenses, subrogation or other rights or benefits that cannot be effectively waived or rendered ineffective under applicable law.

        We are members of the bars of the State of Texas and the State of New York. The opinions set forth above are limited in all respects to matters of the laws of the State of Texas, the General Corporation Law and the Limited Liability Act of the State of Delaware, the contract law of the State of New York and the federal laws of the United States of America to the extent specifically referred to herein. You should be aware that we are not admitted to the practice of law in the State of Delaware, which is the state of incorporation or formation of some of the Subsidiary Guarantors. We do not express any opinions as to the laws of any other jurisdiction.

        In rendering the foregoing opinions and with your permission we have relied, without independent investigation, upon (1) the opinion of Schreck Brignone attached as Annex A hereto, (2) the opinion of McDermott, Will & Emery attached as Annex B hereto, and (3) the opinion of Richard A. Parr II, General Counsel of the Company, attached as Annex C hereto, and our foregoing opinions are subject to the same qualifications and exceptions stated in such opinions.

        We express no opinion as to any matter other than as expressly set forth above, and no opinion is to or may be inferred or implied herefrom. This opinion is given as of the date hereof, and we undertake no, and hereby disclaim any, obligation to advise you regarding any changes subsequent to the date hereof in, or to otherwise communicate with you with respect to, the matters addressed herein. The opinion expressed herein is for the sole use and benefit of, and may only be relied upon by, the Company and is not to be used, circulated, quoted or otherwise referred to in connection with any transaction other than the Exchange Offer or by or to any other person without our prior written consent.

        We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our firm name in the prospectus forming a part of the Registration Statement under the caption "Legal Matters." By giving such consent, we do not admit that we are within the category of person whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission issued thereunder.

Very truly yours,

/s/ Vinson & Elkins L.L.P.

2

ANNEX A

[LETTERHEAD OF SCHRECK BRIGNONE]

        June 28, 2004

Concentra Operating Corporation
5080 Spectrum Drive
Suite 400 West
Addison, Texas 75001

Ladies and Gentlemen:

        We have acted as special Nevada counsel to Concentra Operating Corporation, a Nevada corporation (the "Company"), and to each of the Nevada subsidiaries of the Company listed on Schedule 1 hereto (the "Nevada Subsidiary Guarantors" and, together with the Company, the "Nevada Entities"), in connection with the filing by the Company of a Registration Statement on Form S-4 (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to which the Company and the Subsidiary Guarantors (as defined below) are registering (i) $155,000,000 in aggregate principal amount of the Company's 9¹/8% Senior Subordinated Notes due 2012 (the "New Notes") to be exchanged for Company's outstanding notes bearing substantially identical terms and in like principal amount (the "Old Notes") and (ii) the guarantees (the "Guarantees") of the New Notes by certain subsidiaries of the Company listed in the Registration Statement as guarantors (the "Subsidiary Guarantors"). The New Notes and the Guarantees will be issued pursuant to an Indenture, dated as of June 8, 2004 (the "Indenture"), by and among the Company, the Subsidiary Guarantors and The Bank of New York, as Trustee. Capitalized terms used herein without definition shall have the meanings assigned to such terms in the Indenture, a copy of which will be filed as an exhibit to the Registration Statement.

        In rendering the opinions hereinafter expressed, we have examined and relied on originals or copies, certified or otherwise identified to our satisfaction, of (i) the Registration Statement; (ii) the Indenture; (iii) the form of the New Notes; (iv) the Registration Rights Agreement; (v) the Articles of Incorporation and Bylaws, each as amended to date, of the Nevada Entities; and (vi) such other documents, corporate records, certificates and instruments as we have deemed necessary as a basis for our opinions hereafter set forth. We have been furnished with, and with your consent have relied upon, certificates of officers of the Nevada Entities with respect to certain factual matters. In addition, we have obtained and relied upon such certificates and assurances from public officials as we have deemed necessary or appropriate for purposes of this opinion.

        Without limiting the generality of the foregoing, we have examined such matters of fact and questions of law as we have considered appropriate for purposes of rendering the opinions expressed herein. In our examination, we have assumed: (i) that all information contained in all documents we have reviewed is true and correct; (ii) the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to authentic original documents of all documents submitted to us as certified, conformed, photostatic, facsimile or electronic copies; (iii) that each natural person executing any document has sufficient legal capacity to do so; (iv) that there are no oral or written modifications of or amendments to the documents we have examined, and there has been no waiver of any of the provisions thereof, by actions or conduct of the parties or otherwise; and (v) that all corporate records made available to us by the Nevada Entities and all public records we have reviewed are accurate and complete.

        We are qualified to practice law in the State of Nevada. The opinions set forth herein are expressly limited to the internal laws of the State of Nevada and we do not purport to be experts on, or to

express any opinion herein concerning, or to assume any responsibility as to the applicability to or the effect on any of the matters covered herein of, the laws of any other jurisdiction. We express no opinion concerning, and we assume no responsibility as to laws or judicial decisions related to, or any orders, consents or other authorizations or approvals as may be required by, any federal law, including any federal securities law, or any state securities or "Blue Sky" laws.

        Based on the foregoing, and in reliance thereon, and having regard to legal considerations and other information that we deem relevant, and subject to all assumptions, qualifications, limitations and exceptions set forth herein, we are of the opinion that:

        1.     Each of the Nevada Entities has been duly incorporated and is validly existing as a corporation in good standing under the laws of Nevada.

        2.     Each of the Nevada Entities had the corporate power and authority to enter into the Indenture when it was executed by such Nevada Entity, and has the corporate power and authority to perform its obligations thereunder, including, without limitation, the guarantee of the New Notes by the Nevada Subsidiary Guarantors.

        3.     The execution and delivery of the Indenture by each of the Nevada Entities have been duly authorized by such Nevada Entity.

        4.     The New Notes have been duly authorized by the Company.

        The opinions expressed herein are based upon the applicable Nevada law in effect and the facts in existence as of the date of this letter. In delivering this letter to you, we assume no obligation, and we advise you that we shall make no effort, to update the opinions set forth herein, to conduct any inquiry into the continued accuracy of such opinions, or to apprise the Company or its counsel of any facts, matters, transactions, events or occurrences taking place, and of which we may acquire knowledge, after the date of this letter, or of any change in any applicable law or facts occurring after the date of this letter, which may affect the opinions set forth herein. No opinions are offered or implied as to any matter, and no inference may be drawn, beyond the strict scope of the specific issues expressly addressed by the opinions herein.

        We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our firm name, if desired, in the prospectus forming part of the Registration Statement under the caption "Legal Matters". By giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder. This opinion may not be relied upon or used by you for any other purpose, or otherwise circulated or furnished to, quoted to, or relied upon by any other person, firm or entity for any purpose, without our prior written consent in each instance, except that, subject to all qualifications, assumptions, exceptions and limitations set forth herein, each of Vinson & Elkins L.L.P. and Richard A. Parr II, Executive Vice President, General Counsel and Corporate Secretary of the Company, may rely on this opinion for the sole purpose of issuing its or his respective opinion, of even date herewith, to the Company, as required under the Indenture, which opinions will also be filed as exhibits to the Registration Statement.

Very truly yours,

/s/ SCHRECK BRIGNONE

SCHEDULE 1

NEVADA SUBSIDIARY GUARANTORS

Concentra Health Services, Inc.
Concentra Management Services, Inc.
CRA-MCO, Inc.
OCI Holdings, Inc.

ANNEX B

[LETTERHEAD OF MCDERMOTT, WILL & EMERY]

        June 28, 2004

Concentra Operating Corporation
5080 Spectrum Drive
Suite 400 West
Addison, Texas 75001

Re:

Concentra Integrated Services, Inc.

Ladies and Gentlemen:

        We have acted as special Massachusetts counsel to Concentra Integrated Services, Inc., a Massachusetts corporation (the "Guarantor") in connection with certain legal matters in connection with the Registration Statement on Form S-4 (the "Registration Statement") filed with the Securities and Exchange Commission (the "Commission") in connection with the registration by Concentra Operating Corporation, a Nevada corporation ("Concentra") under the Securities Act of 1933, as amended (the "Securities Act") of (i) the offer and exchange by Concentra (the "Exchange Offer") of $155,000,000 in aggregate principal amount of Concentra's 9¹/8% Senior Subordinated Notes due 2012 (the "Old Notes"), for a new series of notes bearing substantially identical terms and in like principal amount (the "New Notes") and (ii) the Endorsement of Guarantors (the "Guaranty") of the Guarantor of the New Notes. The Old Notes and the New Notes are collectively referred to herein as the "Notes." The Old Notes were issued, and the New Notes will be issued, under an Indenture dated as of June 8, 2004 among Concentra, the Guarantor, the other subsidiaries of Concentra named therein and The Bank of New York, as Trustee (the "Indenture"). The Exchange Offer will be conducted on such terms and conditions as are set forth in the prospectus contained in the Registration Statement to which this opinion is filed as an exhibit.

        In our examination of the documents referred to below, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies, and the authenticity of the originals of such copies. As to any facts material to this opinion which we did not independently verify, we have, without independent investigation, relied upon certificates, statements and representations of the Guarantor and its officers and other representatives, and of public officials.

        I. SCOPE OF REVIEW

        In rendering the opinions set forth herein, we have examined and relied on originals or copies of the following:

        (a)   the Purchase Agreement dated June 8, 2004 (the "Purchase Agreement") among Concentra, Credit Suisse First Boston LLC and Citigroup Global Markets Inc., as Representatives of the Initial Purchasers listed in Schedule A thereto (the "Representatives"), the Guarantor and certain other subsidiaries of Concentra;

        (b)   the Indenture (the "Indenture") dated June 8, 2004 executed by Concentra, the Guarantor and the other subsidiaries of Concentra named therein in favor of the Bank of New York as Trustee;

        (c)   the Registration Rights Agreement (the "Registration Rights Agreement") dated June 8, 2004 among Concentra, the Guarantor, certain other subsidiaries of Concentra and the Representatives;

        (d)   the Guaranty executed by the Guarantor and the other subsidiaries of Concentra named therein in favor of the Bank of New York as Trustee;

        (e)   the form of Old Notes and New Notes each attached as exhibits to the Indenture;

        (f)    the Registration Statement;

        (g)   a certificate of the Clerk of the Guarantor dated June 8, 2004 certifying as to (A) the articles of incorporation and by-laws of Guarantor (the "Organizational Documents"), and (B) resolutions adopted on May 25, 2004, by the Board of Directors of the Guarantor;

        (h)   a certificate of the Secretary of State of the Commonwealth of Massachusetts, dated May 26, 2004 attesting to the continued legal existence and good standing of Guarantor; and

        (i)    such other documents and records, and other certificates, opinions and instruments and have conducted such investigation as we have deemed necessary as a basis for the opinions expressed below.

The documents referred to in clauses (a) through (d) above are herein collectively called the "Subject Documents."

        For purposes hereof, "Applicable Laws" means those laws, rules and regulations of the Commonwealth of Massachusetts which, in our experience, are normally applicable to transactions of the type contemplated by the Subject Documents (but specifically excluding any securities, health-care or anti-fraud statute, rule or regulation).

        Terms not otherwise defined herein are used herein as defined in the Purchase Agreement.

        We are admitted to the Bar in the Commonwealth of Massachusetts. We express no opinion as to the laws of any jurisdiction other than the laws of the Commonwealth of Massachusetts. In this respect we call to your attention that Subject Documents are governed by the laws of the State of New York and we express no opinion as to the effect of any such other laws on the opinions expressed herein.

        Our opinions are also subject to the following assumptions and qualifications:

        II. ASSUMPTIONS

        A.    We have assumed, with your permission, that:

        (1)   Each of the Subject Documents have been duly authorized, executed and delivered by the parties thereto (other than the Guarantor); and

        (2)   Each of the Subject Documents constitutes the legal, valid and binding obligation of each party thereto (including the Guarantor), enforceable against such parties (including the Guarantor) in accordance with its terms.

We understand that you are separately receiving opinions, subject to certain assumptions and limitations, with respect to the foregoing from Vinson & Elkins, L.L.P. and Richard A. Parr II, General Counsel, Executive Vice President and Corporate Secretary of Concentra.

        B.    We have further assumed that the Registration Statement, and any amendments thereto (including post-effective amendments), will have become effective and the New Notes will be issued and sold in compliance with applicable federal and state securities laws and in the manner described in the Registration Statement.

2

        III. QUALIFICATIONS

        A.    We express no opinion as to the effect on the opinions herein stated of (i) the compliance or non-compliance of any party to the Subject Documents with any federal, state, or other laws or regulations applicable to it or (ii) the legal or regulatory status or the nature of the business of such other parties;

        B.    We express no opinion as to the applicability or effect of Sections 364, 547, 548 or 552 of the United States Bankruptcy Code (the "Bankruptcy Code") or any comparable provision of state law on the Subject Documents or any transaction contemplated thereby.

        IV. OPINIONS

        Based upon the foregoing and subject to the assumptions, limitations, qualifications, exceptions and other limitations set forth herein, we are of the opinion that:

        1.     The Guarantor is validly existing and in good standing under the laws of the Commonwealth of Massachusetts.

        2.     The Guarantor has the corporate power to execute, deliver and perform all of its obligations under the Indenture and the Guaranty to which it is a party. The execution and delivery of the Indenture and the Guaranty to which it is a party and the consummation by the Guarantor of the transactions contemplated thereby have been duly authorized by requisite corporate action on the part of the Guarantor.

        * * *

        This opinion is limited to the matters expressly set forth herein and no opinion is implied or may be inferred beyond the matters expressly so stated. This opinion is given as of the date hereof and we do not undertake any liability or responsibility to inform you of any change in circumstances occurring, or additional information becoming available to us, after the date hereof which might alter the opinions contained herein.

        This opinion is, furnished to you solely for your benefit in connection with the transactions described above and is not to be used, circulated, quoted, relied upon or otherwise referred to for any other purpose without our prior written consent, and this opinion may not be relied upon by you for any other purpose or by any other person in any manner or for any purpose, other than by Richard A. Parr II, General Counsel, Executive Vice President and Corporate Secretary of Concentra, Vinson & Elkins, L.L.P. and Bank of New York as Trustee.

        We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our firm name in the prospectus forming a part of the Registration Statement under the caption "Legal Matters." By giving such consent, we do not admit that we are within the category of person whose consent is required under Section 7 of the Securities Act or the rules and regulation of the Commission issued thereunder.

Very truly yours,

/s/ McDermott, Will & Emery

3

ANNEX C

[LETTERHEAD OF CONCENTRA OPERATING CORPORATION]

        June 28, 2004

Concentra Operating Corporation
5080 Spectrum Drive
Suite 400, West Tower
Addison, Texas 75001

Ladies and Gentlemen:

        I am the Executive Vice President, Corporate Secretary and General Counsel of Concentra Operating Corporation, a Nevada corporation (the "Company"). The Company is the direct or indirect parent of each of the Guarantors (as defined below). This opinion is being delivered in connection with the filing of a Registration Statement on Form S-4 (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") pursuant to which the Company and the Guarantors are registering under the Securities Act of 1933, as amended (the "Securities Act"), (i) $155,000,000 in aggregate principal amount of the Company's 9¹/8% Senior Subordinated Notes due 2012 (the "New Notes") to be exchanged for the Company's outstanding notes bearing substantially identical terms and in like principal amount (the "Old Notes") in a registered exchange offer (the "Exchange Offer") and (ii) the guarantees (the "Guarantees") of certain subsidiaries of the Company listed in the Registration Statement as guarantors (the "Guarantors") of the New Notes. The Old Notes were issued, and the New Notes will be issued, under an Indenture dated as of June 8, 2004, among the Company, the Guarantors and The Bank of New York, as Trustee (the "Indenture"). The Exchange Offer will be conducted on such terms and conditions as are set forth in the prospectus contained in the Registration Statement.

        In reaching the opinions set forth herein, I have examined the Indenture, the Guarantees, Registration Statement and such other corporate records, certificates, statutes and other instruments and documents as I have considered necessary or appropriate for purposes of the opinions hereafter expressed.

        In rendering such opinions, I have assumed, in each case without independent verification, that (i) each document has been duly executed and delivered by all parties to such document (other than by the Company and Guarantors) and that each such document is valid, binding and enforceable against the parties thereto other than the Company or any of the Guarantors, (ii) all information contained in all documents I reviewed is true and correct, (iii) all signatures (other than signatures of representatives of the Company or the Guarantors) on all documents I reviewed are genuine, (iv) all documents submitted to me as originals are true and complete, (v) all documents submitted to me as copies are true and complete copies of the originals thereof and (vi) each natural person signing any document I reviewed (other than representatives of the Company or any of the Guarantors) had the legal capacity to do so.

        I have assumed the due and valid authorization, execution and delivery of the Indenture by the Trustee and that the Indenture constitutes a valid and binding agreement of the Trustee, enforceable against the Trustee in accordance with its terms. As to questions of fact material to this opinion not independently established by me, I have relied, to the extent I have deemed reasonably appropriate, upon certificates of public officials.

        Based upon the foregoing, and subject to the limitations, qualifications, exceptions and assumptions contained herein, I express the following opinions:

        1.     The Indenture has been duly authorized, executed and delivered by the Company and each Guarantor.

        2.     The New Notes have been duly authorized by the Company and each of the Guarantors.

        3.     The Guarantee to be endorsed on the New Notes by each Guarantor has been duly authorized by the Company and each such Guarantor.

        4.     The Company is an existing corporation in good standing under the laws of the State of Nevada, with corporate power and authority to execute, deliver and perform its obligations under the Indenture and the New Notes.

        5.     Each subsidiary of the Company is an existing corporation, limited liability company or other entity in good standing under the laws of the jurisdiction of its incorporation or organization, with power and authority (corporate, limited liability company and other, as applicable) to execute, deliver and perform its obligations under the Indenture and the Guarantees.

        The opinions set forth above are limited in all respects to matters of the laws of the State of Texas, the Delaware General Corporation Law, the Delaware Limited Liability Company Act, the Tennessee Business Corporation Act and the federal laws of the United States of America. You should be aware that I am admitted to the practice of law only in the states of Texas, Oklahoma and Tennessee.

        With your permission and without independent investigation, in expressing the foregoing opinions, I have relied (1) with respect to the Company, Concentra Management Services, Inc., a Nevada corporation, Concentra Health Services, Inc., a Nevada corporation, OCI Holdings, Inc., a Nevada corporation, and CRA-MCO, Inc., a Nevada corporation, upon the opinion of even date herewith of Schreck Brignone, and (2) with respect to Concentra Integrated Services, Inc., a Massachusetts corporation, on the opinion of even date herewith of McDermott, Will & Emery.

        In expressing the foregoing opinions relating to the subsidiaries of the Company that are organized under the laws of a state other than the States of Nevada, Delaware, Massachusetts, Tennessee or Texas, I have assumed that the relevant provisions of the business corporation laws of the states of incorporation or organization of each of such subsidiaries are identical in all respects to the Business Corporation Act of the State of Texas, in each case, without having made any independent investigation of such provisions.

        I express no opinion as to any matter other than as expressly set forth above, and no such other opinion is to or may be inferred or implied herefrom. This opinion is given as of the date hereof, and I undertake no, and hereby disclaim any, obligation to advise you of any change in any matter set forth herein.

        Vinson & Elkins L.L.P. is authorized to rely upon this opinion. Except as stated in the previous sentence, this opinion may not be relied upon by you for any other purpose and may not be used or relied upon for any purpose by any other person without my prior written consent. Except for the use permitted herein, this opinion is not to be quoted or reproduced in whole or in part or otherwise referred to in any manner nor is it to be filed with any governmental agency or delivered to any other person without my prior written consent.

        I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and, if desired, to the use of my name in the prospectus forming part of the Registration Statement under the caption "Legal Matters." By giving such consent, I do not admit that I am within the category of person whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission issued thereunder.

Very truly yours,

/s/ Richard A. Parr II

2

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Exhibit 5.1

[LETTERHEAD OF VINSON & ELKINS L.L.P.]

ANNEX A

[LETTERHEAD OF SCHRECK BRIGNONE]
SCHEDULE 1 NEVADA SUBSIDIARY GUARANTORS

ANNEX B

[LETTERHEAD OF MCDERMOTT, WILL & EMERY]

ANNEX C

[LETTERHEAD OF CONCENTRA OPERATING CORPORATION]

EX-10.4

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Exhibit 10.4
EXECUTION COPY

CONCENTRA INC.,
As Holdings,




CONCENTRA OPERATING CORPORATION,
As Borrower,




The Several Lenders from Time to Time Parties Hereto,




JPMORGAN CHASE BANK,
As Administrative Agent

SECOND AMENDMENT TO THE CREDIT AGREEMENT


$70,000,000 INCREMENTAL TERM LOAN FACILITY

June 8, 2004

        SECOND AMENDMENT, dated as of June 8, 2004 and effective as of June 8, 2004 (this "Second Amendment"), to the Credit Agreement, dated as of August 13, 2003, as amended by the First Amendment thereto, dated as of November 17, 2003 (the "Credit Agreement"), among CONCENTRA INC., a Delaware corporation ("Holdings"), CONCENTRA OPERATING CORPORATION, a Nevada corporation (the "Borrower"), the several banks and other financial institutions parties thereto (the "Existing Lenders" and, together with the Incremental Term Lenders (as defined below), the "Lenders") and JPMORGAN CHASE BANK, a New York banking corporation, as administrative agent for the Lenders thereunder (in such capacity, the "Administrative Agent"), is entered into by and among Holdings, the Borrower, the Lenders and the Administrative Agent.

W I T N E S S E T H:

        WHEREAS, Holdings, the Borrower, the Existing Lenders and the Administrative Agent are parties to the Credit Agreement;

        WHEREAS, Holdings and the Borrower have requested that the Administrative Agent and the Lenders agree to amend the Credit Agreement (i) in order to add thereto an additional $70,000,000 term loan facility (the "Incremental Term Loan Facility") as set forth herein and (ii) as otherwise more fully described herein; and

        WHEREAS, the Incremental Term Lenders are severally willing to provide the Incremental Term Loan Facility on, and subject to, the terms and conditions set forth herein and the Lenders are willing to agree to such amendment, but only upon the terms and subject to the conditions set forth herein;

        NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows:

        1.    Defined Terms.    Unless otherwise defined herein, capitalized terms that are defined in the Credit Agreement are used herein as therein defined.

        2.    Amendments to Section 1.1.

        (a)   Section 1.1 of the Credit Agreement is hereby amended by inserting, in proper alphabetical order, the following defined terms and related definitions:

"2004 Senior Subordinated Note Indenture": the indenture entered into by the Borrower, the Subsidiary Guarantors and The Bank of New York, as trustee thereunder, in connection with the issuance of the 2004 Senior Subordinated Notes, together with all instruments and other agreements entered into by the Borrower and the Subsidiary Guarantors in connection therewith, as the same may be amended, supplemented or otherwise modified from time to time in accordance with Section 7.9."

"2004 Senior Subordinated Notes": the $155,000,000 9¹/8% Senior Subordinated Notes due 2012 issued by the Borrower pursuant to the 2004 Senior Subordinated Note Indenture."

"Escrow Account": an interest bearing escrow account governed by the Escrow Agreement with the Administrative Agent funded by the Borrower at the Second Amendment Effective Date in an amount sufficient to purchase or redeem any remaining 1999 Senior Subordinated Notes outstanding after the Second Amendment Effective Date. The Escrow Account shall remain in place from the Second Amendment Effective Date through the purchase or redemption in full of all outstanding 1999 Senior Subordinated Notes. All interest accruing on any funds held in the Escrow Account shall be held for the benefit of the Borrower, and all such funds and accrued interest not previously disbursed to the Borrower shall be promptly disbursed to the Borrower upon completion of the purchase or redemption of all 1999 Senior Subordinated Notes. Prior to and including September 15, 2004, the Borrower shall have immediate access to the funds in the Escrow Account to the extent such funds are used (a) to purchase or redeem the 1999 Senior Subordinated Notes, (b) to pay principal, interest or premiums with respect thereto or (c) for any purpose related to the purchase or redemption of the 1999 Senior

Subordinated Notes, including the reimbursement of the Borrower for any funds expended in accordance with the foregoing.

"Escrow Agreement": an escrow agreement dated the Second Amendment Effective Date, between the Borrower and the Administrative Agent, in form and substance reasonably acceptable to the Administrative Agent and the Borrower.

"Incremental Term Commitment": as to any Incremental Term Lender, its obligation to make an Incremental Term Loan to the Borrower in the amount set forth opposite such Incremental Term Lender's name on Schedule 1.1A (attached to the Second Amendment, dated as of June 8, 2004, to this Agreement) under the heading "Incremental Term Commitment" or, in the case of any Lender that is an Assignee, the amount of the assigning Lender's Incremental Term Commitment assigned to such Assignee pursuant to subsection 10.6(b) (in each case as such amount may be adjusted from time to time as provided herein); collectively, as to all the Incremental Term Lenders, the "Incremental Term Commitments". The original aggregate amount of Incremental Term Commitments is $70,000,000.

"Incremental Term Lender": each Lender that has an Incremental Term Commitment or that holds an Incremental Term Loan.

"Incremental Term Loan": as defined in Section 2.1(b).

"Incremental Term Percentage": as to any Incremental Term Lender at any time, the percentage which such Lender's Incremental Term Commitment then constitutes of the aggregate Incremental Term Commitments (or, at any time after the Second Amendment Effective Date, the percentage which the aggregate principal amount of such Lender's Incremental Term Loans then outstanding constitutes of the aggregate principal amount of the Incremental Term Loans then outstanding).

"Second Amendment Effective Date": the date on which the conditions precedent set forth in Section 19 of the Second Amendment, dated as of June 8, 2004 to this Agreement shall have been satisfied or waived, which date is June 8, 2004.

        (b)   The definition of "Aggregate Exposure" contained in Section 1.1 of the Credit Agreement is hereby amended replacing the "and" at the end of clause (b)(i) with a ",", renumbering clause "(ii)" to clause "(iii)" and by inserting a new clause (ii) as follows:

"(ii) the aggregate then unpaid principal amount of such Lender's Incremental Term Loans and"

        (c)   The definition of "Applicable Margin" contained in Section 1.1 of the Credit Agreement is hereby amended in its entirety to read as follows:

""Applicable Margin": (a) for each Revolving Loan, the rate per annum determined pursuant to the Pricing Grid and (b) for each Term Loan and Incremental Term Loan, the rate per annum set forth under the relevant column heading below:

	ABR Loans	Eurodollar Loans
Term Loans	2.75%	3.75%
Incremental Term
Loans	1.75%	2.75%

        (d)   The definition of "Commitment" contained in Section 1.1 of the Credit Agreement is hereby amended by adding ", the Incremental Term Loan Commitment" after "Term Commitment" therein.

        (e)   The definition of "Consolidated EBITDA" contained in Section 1.1 of the Credit Agreement is hereby amended by adding, immediately before the "," at the end of clause (i) thereof, the following:

"(including (i) bonuses to the management team and (ii) costs associated with the dividend payment to Holdings and from Holdings to its existing stockholders pursuant to Section 7.6(g), in an aggregate amount up to $3,000,000, in each case to be paid within 30 days of the Second Amendment Effective Date and funded with monies previously allocated to fees, expenses and bonuses pursuant to the Second Amendment to this Agreement)"

        (f)    The definition of "Consolidated Fixed Charges" contained in Section 1.1 of the Credit Agreement is hereby amended by adding ", the Incremental Term Loans" after "Term Loans" in clause (c) therein.

        (g)   The definition of "Consolidated Total Debt" contained in Section 1.1 of the Credit Agreement is hereby amended by adding, immediately before the "." at the end thereof, the following:

"minus, until September 15, 2004, the aggregate amount of any cash held in the Escrow Account at such date."

        (h)   The definition of "Excess Cash Flow" contained in Section 1.1 of the Credit Agreement is hereby amended by adding "and the Incremental Term Loans" after "Term Loans" in clauses (iii) and (iv) therein.

        (i)    The definition of "Facility" contained in subsection 1.1 of the Credit Agreement is hereby amended in its entirety to read as follows:

        "Facility": each of (a) the Term Commitments and the Term Loans made thereunder (the "Term Facility"), (b) the Incremental Term Loan Commitments and the Incremental Term Loans made thereunder (the "Incremental Term Loan Facility") and (c) the Revolving Commitments and the extensions of credit made thereunder (the "Revolving Facility")."

        (j)    The definition of "Interest Period" contained in Section 1.1 of the Credit Agreement is hereby amended by adding "or the Incremental Term Loans" after "Term Loans" in clause (ii) therein.

        (k)   The definition of "Majority Facility Lenders" contained in Section 1.1 of the Credit Agreement is hereby amended by adding ", the Incremental Term Loans" after "Term Loans" therein.

        (l)    The definition of "Reinvestment Deferred Amount" contained in Section 1.1 of the Credit Agreement is hereby amended by adding ", the Incremental Term Loans" after "Term Loans" therein.

        (m)  Clause (b) of the definition of "Required Lenders" contained in Section 1.1 of the Credit Agreement is hereby amended by replacing the "and" at the end of clause (i) thereof with a ",", renumbering clause "(ii)" to clause "(iii)" and inserting a new clause (ii) as follows:

"(ii) the aggregate unpaid principal amount of the Incremental Term Loans then outstanding and"

        (n)   The definition of "Senior Subordinated Note Indentures" contained in subsection 1.1 of the Credit Agreement is hereby amended in its entirety to read as follows:

""Senior Subordinated Note Indentures": the collective reference to the 1999 Senior Subordinated Note Indenture, the 2003 Senior Subordinated Note Indenture and the 2004 Senior Subordinated Note Indenture."

        (o)   The definition of "Senior Subordinated Notes" contained in subsection 1.1 of the Credit Agreement is hereby amended in its entirety to read as follows:

""Senior Subordinated Notes": the collective reference to the 1999 Senior Subordinated Notes, the 2003 Senior Subordinated Notes and the 2004 Senior Subordinated Notes."

        (p)   The definition of "Term Loan" contained in Section 1.1 of the Credit Agreement is hereby amended by adding "(a)" after "Section 2.1" therein.

        3.    Amendment to Section 2.1.    Section 2.1 of the Credit Agreement is hereby amended in its entirety as follows:

        "2.1 Term Commitments. Subject to the terms and conditions hereof, (a) each Term Lender severally agrees to make a term loan (a "Term Loan") to the Borrower on the Closing Date in a single draw in the amount of the Term Commitment of such Lender and (b) each Incremental Term Lender severally agrees to make an incremental term loan (an "Incremental Term Loan") to the Borrower on the Second Amendment Effective Date in a single draw in the amount of the Incremental Term Commitment of such Lender. The Term Loans and the Incremental Term Loans may from time to time be Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 2.2 and 2.10."

        4.    Amendment to Section 2.2.    Section 2.2 of the Credit Agreement is hereby amended in its entirety as follows:

        "2.2 Procedure for Term Loan and Incremental Term Loan Borrowing. The Borrower shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to 12:00 Noon, New York City time, three Business Days prior to each of the Closing Date and the Second Amendment Effective Date (as applicable), in the case of Eurodollar Loans, or prior to 10:00 A.M., New York City time, on each of the Closing Date and the Second Amendment Effective Date (as applicable), in the case of ABR Loans) specifying (i) the amount and Type of Term Loans or Incremental Term Loans to be borrowed and (ii) in the case of Eurodollar Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Period therefor. Upon receipt of such notice the Administrative Agent shall promptly notify each Term Lender or Incremental Term Lender, as applicable thereof. Not later than 12:00 Noon, New York City time, on each of the Closing Date and the Second Amendment Effective Date, each Term Lender and Incremental Term Lender, respectively, shall make available to the Administrative Agent at the Funding Office an amount in immediately available funds equal to the Term Loans and Incremental Term Loans, respectively, to be made by such Lender. The Administrative Agent shall credit the account of the Borrower on the books of such office of the Administrative Agent with the aggregate of the amounts made available to the Administrative Agent by the Term Lenders or the Incremental Term Lenders in immediately available funds."

        5.    Amendment to Section 2.3.    Section 2.3 of the Credit Agreement is hereby amended (i) by adding "and Incremental Term Loans" at the end of the heading of such Section, (ii) by inserting an "(a)" at the beginning of the first paragraph therein; (iii) by adding "or" after "all amounts outstanding in respect of the Term Loans" at the end of the table therein and (iv) by inserting at the end of the table therein, the following:

"(b) The Incremental Term Loan of each Incremental Term Lender shall mature in twenty-one (21) consecutive quarterly installments, commencing on June 30, 2004, each of

which shall be in an amount equal to such Incremental Term Lender's Incremental Term Percentage multiplied by the amount set forth below opposite such installment:

Installment	Principal Amount
June 30, 2004	$175,000
September 30, 2004	175,000
December 31, 2004	175,000
March 31, 2005	175,000
June 30, 2005	175,000
September 30, 2005	175,000
December 31, 2005	175,000
March 31, 2006	175,000
June 30, 2006	175,000
September 30, 2006	175,000
December 31, 2006	175,000
March 31, 2007	175,000
June 30, 2007	175,000
September 30, 2007	175,000
December 31, 2007	175,000
March 31, 2008	175,000
June 30, 2008	175,000
September 30, 2008	9,975,000
December 31, 2008	9,975,000
March 31, 2009	19,950,000
June 30, 2009	all amounts outstanding in respect of the Incremental Term Loans

        6.    Amendment to Section 2.8.    (a) Section 2.8(a) of the Credit Agreement is hereby amended (i) by adding "and Incremental Term Loans" after "Term Loans" in the first parenthetical therein, (ii) by adding ", Incremental Term Loans" after "Term Loans" in the last sentence thereof and (iii) by adding "and Section 2.15A(b)" at the end of the last sentence therein.

        (b)   Section 2.8(b) of the Credit Agreement is hereby amended in its entirety as follows:

        "(b) Each optional prepayment of (i) the Term Loans of any Term Lender or (ii) the Incremental Term Loans of any Incremental Term Loan Lender, in each case during the period from the Closing Date to but excluding the first anniversary of the Closing Date shall be accompanied by payment of a 1% prepayment premium on the principal amount of such Lender's Term Loan or Incremental Term Loan prepaid (unless such prepayment premium is waived by such Lender)."

        7.    Amendment to Section 2.9.    (a) Section 2.9(a) of the Credit Agreement is hereby amended as follows:

        (i)    by adding ", the Incremental Term Loans" after "Term Loans" at the end of each of the first and second sentences thereof; and

        (ii)   by adding ", the 2004 Senior Subordinated Notes" after "Holdings Refinancing Indebtedness" in the second sentence thereof.

        (b)   Section 2.9(b) of the Credit Agreement is hereby amended by adding ", the Incremental Term Loans" after "Term Loans" at the end of the first clause thereof and at the end of the proviso thereto.

        (c)   Section 2.9(c) of the Credit Agreement is hereby amended by adding ", the Incremental Term Loans" after "Term Loans" in the first sentence thereof.

        (d)   Section 2.9(d) of the Credit Agreement is hereby amended by adding "and the Incremental Term Loans pro rata" after "Term Loans" in the first sentence thereof.

        (e)   the last paragraph of Section 2.9 is hereby amended by adding "and Section 2.15A(b)" at the end of the first sentence therein.

        8.    New Section 2.15A.    The following new Section 2.15A shall be inserted immediately after Section 2.15 of the Credit Agreement as follows:

"2.15(A) Pro Rata Treatment of the Incremental Term Loans. (a) Each borrowing by the Borrower from the Incremental Term Lenders hereunder shall be made pro rata according to the Incremental Term Percentages of the Incremental Term Lenders.

        (b)   Each payment (including each prepayment) by the Borrower on account of principal of and interest on the Incremental Term Loans shall be made pro rata according to the respective outstanding principal amounts of the Incremental Term Loans then held by the Incremental Term Lenders. Prepayments of the Incremental Term Loans shall be applied pro rata to the installments thereof according to the respective outstanding principal amounts thereof, except that optional prepayments shall be applied in the direct order of maturity thereof. Amounts repaid or prepaid on account of the Incremental Term Loans may not be reborrowed."

        9.    Amendment to Section 4.16.    Section 4.16 of the Credit Agreement is hereby amended by replacing the first sentence therein with the following:

"The proceeds of the Term Loans shall be used to finance a portion of the Transactions and to pay related fees and expenses. The proceeds of the Incremental Term Loans shall be used to refinance in part the 1999 Subordinated Notes, to pay a portion of the dividend to Holdings and from Holdings to its existing stockholders (including the Sponsor) pursuant to Section 7.6(g) and to pay related fees and expenses."

        10.    Amendment to Section 7.1.    Section 7.1(a) of the Credit Agreement is hereby amended by deleting the table appearing at the end of subsection 7.1(a) of the Credit Agreement and substituting in lieu thereof the following:

Fiscal Quarter	Consolidated Leverage Ratio
June 30, 2004	5.25 to 1.00
September 30, 2004	5.25 to 1.00
December 31, 2004	5.25 to 1.00
March 31, 2005	5.25 to 1.00
June 30, 2005	5.25 to 1.00
September 30, 2005	5.00 to 1.00
December 31, 2005	4.75 to 1.00
March 31, 2006	4.75 to 1.00
June 30, 2006	4.75 to 1.00
September 30, 2006	4.50 to 1.00
December 31, 2006	4.25 to 1.00
March 31, 2007	4.25 to 1.00
June 30, 2007	4.25 to 1.00
September 30, 2007	4.00 to 1.00
December 31, 2007	4.00 to 1.00
March 31, 2008	3.75 to 1.00
June 30, 2008	3.75 to 1.00
September 30, 2008	3.75 to 1.00
December 31, 2008	3.50 to 1.00
March 31, 2009 and thereafter	3.25 to 1.00

        11.    Amendment to Section 7.2.    Section 7.2 of the Credit Agreement is hereby amended by (i) deleting the word "and" at the end of clause (j) thereof, (ii) replacing the "." at the end of clause (k) with "; and" and (iii) adding the following:

        "(l)(i) indebtedness of the Borrower in respect of the 2004 Senior Subordinated Notes in an aggregate principal amount not to exceed $155,000,000; provided that Net Cash Proceeds from the issuance of the 2004 Senior Subordinated Notes are used, in part, as contemplated in the parenthetical clause in Section 7.9(a) and (ii) Guarantee Obligations of any Subsidiary Guarantor in respect of such Indebtedness, provided that such Guarantee Obligations are subordinated to the same extent as the obligations of the Borrower in respect of the 2004 Senior Subordinated Notes."

        12.    Amendment to Section 7.3.    Section 7.3 of the Credit Agreement is hereby amended by (i) deleting the word "and" at the end of clause (i) thereof, (ii) replacing the "." at the end of clause (j) with "; and" and (iii) adding the following:

"(k) Liens in connection with the Escrow Account."

        13.    Amendment to Section 7.6.    Section 7.6 of the Credit Agreement is hereby amended by (i) deleting the word "and" at the end of clause (e) thereof, (ii) replacing the "." at the end of clause (f) with "; and" and (iii) adding the following:

"(g) the Borrower may pay a dividend to Holdings on the Second Amendment Effective Date in an amount not to exceed $98,250,000 (up to $2,000,000 of which may be deferred and distributed at a later date) and Holdings may pay a similar dividend to the existing shareholders (including the Sponsor)."

        14.    Amendments to Section 7.9.

        (a)   Section 7.9(a) of the Credit Agreement is hereby amended by replacing the parenthetical therein with the following:

"(other than (i) the Redemption, (ii) such a payment, prepayment, repurchase or redemption of the Senior Discount Debentures (A) upon the issuance of the 2003 Supplemental Notes or (B) with the proceeds of any Senior Discount Debenture Refinancing and (iii) such a payment, prepayment, repurchase or redemption of the 1999 Senior Subordinated Notes upon the issuance and with all or a portion of the Net Cash Proceeds of the 2004 Senior Subordinated Notes (together with available cash, including pursuant to borrowings of Incremental Term Loans hereunder) on either (A) the Second Amendment Effective Date or (B) at any time after the Second Amendment Effective Date and on or prior to September 15, 2004; provided that the purchase or redemption described in this clause (iii)(B) is made with the funds placed in the Escrow Account by the Borrower on the Second Amendment Effective Date (unless less than $15,000,000 of 1999 Senior Subordinated Notes remain outstanding after the Second Amendment Closing Date, in which case the Borrower need not place such funds in the Escrow Account), and with available cash)".

        (b)   Section 7.9(b) of the Credit Agreement is hereby amended by replacing the parenthetical therein with the following:

"(other than the Supplemental Indenture to the 1999 Senior Subordinated Note Indenture, dated June 8, 2004, and any such amendment, modification, waiver or other change that (i) would extend the maturity or reduce the amount of any payment of principal thereof or reduce the rate or extend any date for payment of interest thereon and (ii) does not involve the payment of a material consent fee)".

        15.    Amendment to Section 8.    Section 8 of the Credit Agreement is hereby amended (i) by replacing "either the 1999 Senior Subordinated Notes or the 2003 Senior Subordinated Notes" with "the 1999 Senior Subordinated Notes, the 2003 Senior Subordinated Notes or the 2004 Senior

Subordinated Notes" in Section 8(m), (ii) by adding "; or" at the end of Section 8(m) and (iii) by adding new paragraph (n) at the end thereof as follows:

"(n) the Borrower shall fail to purchase or redeem all outstanding 1999 Senior Subordinated Notes on or prior to September 15, 2004."

        16.    Amendment to Section 10.1.    Section 10.1 is hereby amended (i) by adding "or Incremental Term Loan" immediately after "Term Loan" in clause (i) of the proviso thereto and (ii) by adding "or Section 2.15(A)" immediately after "Section 2.15" in clause (iv) of the proviso thereto.

        17.    Amendment to Section 10.6.    (a) Section 10.6(b)(i)(B) is hereby amended (i) by deleting clause (x) through and including the "(y)" at the end thereof, (ii) by adding "or an Incremental Term Loan" immediately after "Term Loan" therein and (iii) by adding new clause (C) at the end thereof as follows:

"(C) the Issuing Lender, provided that no consent of the Issuing Lender shall be required for an assignment of all or any portion of a Term Loan or Incremental Term Loan."

        (b)   Section 10.6(b)(ii)(A) is hereby amended by adding "or the Incremental Term Loan Facility" immediately after "Term Facility" therein.

        18.    Amendment Fee.    In consideration of the agreement of the Required Lenders to the amendments contained herein, Holdings and the Borrower agree to pay to each Existing Lender (hereinafter, an "Executing Lender") that executes and delivers this Second Amendment to the Administrative Agent or its counsel by 12:00 noon, New York City time, on June 3, 2004, an amendment fee in an amount equal to 0.10% of the aggregate amount of such Executing Lender's Term Loans, Revolving Extensions of Credit and Available Revolving Commitments outstanding on the Second Amendment Effective Date. The amendment fee shall be payable by the Borrower on the Second Amendment Effective Date in immediately available funds to the Administrative Agent on behalf of the applicable Executing Lender.

        19.    Conditions to Effectiveness of this Second Amendment.    This Second Amendment shall become effective upon the date (the "Second Amendment Effective Date") when the following conditions are satisfied:

        (a)   Second Amendment to Credit Agreement. The Administrative Agent shall have received counterparts of this Second Amendment, duly executed and delivered by Holdings, the Borrower, the Administrative Agent, each Lender with an Incremental Term Loan Commitment and Existing Lenders constituting the "Required Lenders" thereunder.

        (b)   Fees. The Administrative Agent shall have received all fees required to be paid on or before the Second Amendment Effective Date, and all expenses required to be paid on or before the Second Amendment Effective Date for which invoices have been timely presented. The reasonable fees and expenses of legal counsel shall be paid promptly upon receipt of an invoice from such counsel, whether before or after the Second Amendment Effective Date.

        (c)   Security Documents. The Administrative Agent shall have received (i) the Acknowledgment and Confirmation, substantially in the form of Exhibit A hereto, executed and delivered by an authorized officer of Holdings, the Borrower and each other Loan Party and, as applicable, (ii) the Escrow Agreement, executed and delivered by the Borrower.

        (d)   2004 Senior Subordinated Notes. The Borrower shall have received at least $152,850,150 in gross cash proceeds from the issuance of the 2004 Senior Subordinated Notes and shall have used all or a portion of such proceeds to consummate all or a portion of the refinancing of the 1999 Senior Subordinated Notes.

        (e)   1999 Senior Subordinated Notes Refinancing. Arrangements satisfactory to the Administrative Agent shall have been made for either (i) the purchase in full of the 1999 Senior Subordinated Notes on the Second Amendment Effective Date or (ii) the partial purchase of the 1999 Senior Subordinated Notes on the Second Amendment Effective Date and the placement in

the Escrow Account of an amount sufficient to finance the purchase or redemption of the remaining 1999 Senior Subordinated Notes. If less than $15,000,000 of the 1999 Senior Subordinated Notes remain outstanding on the Second Amendment Effective Date, the Borrower shall not be required to open such Escrow Account.

        (f)    Pro Forma Balance Sheet. The Lenders shall have received a satisfactory pro forma consolidated balance sheet of each of Holdings and the Borrower as at the Second Amendment Effective Date, adjusted to give effect to (i) the refinancing of the 1999 Senior Subordinated Notes to occur on such date, (ii) the issuance of the 2004 Senior Subordinated Notes and the use of proceeds thereof, (iii) the $98,250,000 dividend payment and (iv) the distribution of bonuses and incurrence of costs related to, or otherwise described in this Second Amendment.

        (g)   Sources and Uses. The sources and uses of funding in connection with this Second Amendment and the other transactions contemplated hereby shall be materially consistent with the Sources and Uses Table attached hereto as Schedule I.

        (h)   Closing Certificate. The Administrative Agent shall have received a certificate of each Loan Party, dated the Second Amendment Effective Date, substantially in the form of Exhibit C to the Credit Agreement, with appropriate insertions and attachments.

        (i)    Legal Opinions. The Administrative Agent shall have received the following executed legal opinions:

        (i)    the legal opinion of Vinson & Elkins L.L.P., counsel to Holdings, the Borrower and its Subsidiaries, substantially in the form of Exhibit E-1 to the Credit Agreement; and

        (ii)   the legal opinion of Richard A. Parr, general counsel to Holdings, the Borrower and its Subsidiaries, substantially in the form of Exhibit E-2 to the Credit Agreement.

        20.    Representations and Warranties

        (a)    No Default.    No Default or Event of Default shall have occurred and be continuing on the Second Amendment Effective Date or after giving effect to the transactions contemplated herein.

        (b)    Representations and Warranties.    Each of the representations and warranties made by the Loan Parties in or pursuant to the Loan Documents shall be true and correct on and as of the date hereof, before and after giving effect to the effectiveness of this Second Amendment, as if made on and as of the date hereof, except to the extent such representations and warranties expressly relate to a specific earlier date, in which case such representations and warranties were true and correct as of such earlier date.

        (c)    Financial Condition.    (i) Holdings hereby represents and warrants that the unaudited consolidated balance sheet of Holdings as at March 31, 2004, and the related unaudited consolidated statements of income and cash flows for the three-month period ended on such date, present fairly the consolidated financial position of Holdings as at such date, and the consolidated results of its operations and its consolidated cash flows for the three-month period then ended (subject to normal year-end audit adjustments). All such financial statements, including the related schedules and any notes thereto (except as contemplated by GAAP or in the case of any notes to the financial statements dated as of March 31, 2004), have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by the aforementioned firm of accountants and disclosed therein).

        (ii)   Since December 31, 2003 there has been no development or event that has had or is reasonably expected to have a Material Adverse Effect.

        21.    Continuing Effect of the Credit Agreement.    This Second Amendment shall not constitute an amendment or waiver of any provision of the Credit Agreement not expressly referred to herein and shall not be construed as an amendment, waiver or consent to any further or future action on the part of the Loan Parties that would require an amendment, waiver or consent of the Lenders or

Administrative Agent. Except as expressly amended hereby, the provisions of the Credit Agreement are and shall remain in full force and effect.

        22.    Counterparts.    This Second Amendment may be executed by one or more of the parties hereto on any number of separate counterparts (including by facsimile), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

        23.    Severability.    Any provision of this Second Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

        24.    Integration.    This Second Amendment and the other Loan Documents represent the agreement of the Loan Parties, the Administrative Agent and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.

        25.    GOVERNING LAW.    THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

        IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

CONCENTRA INC.
By:	/s/  RICHARD A. PARR II Name: Richard A. Parr II Title: Executive Vice President
CONCENTRA OPERATING CORPORATION
By:	/s/  RICHARD A. PARR II Name: Richard A. Parr II Title: Executive Vice President
JPMORGAN CHASE BANK, as Administrative Agent and a Lender
By:	/s/  GARY L. SPEVACK Name: Gary L. Spevack Title: Vice President
JPMorgan Chase Bank, as an Incretmental (name of institution)                   Term Lender
By:	/s/  GARY L. SPEVACK Name: Gary L. Spevack Title: Vice President
Calyon New York Branch, as an Incremental (name of institution)                   Term Lender
By:	/s/  CHARLES HEIDSIECK Name: Charles Heidsieck Title: Managing Director
By:	/s/  THOMAS RANDOLPH Name: Thomas Randolph Title: Director

BANK ONE N.A., as a Lender
By:	/s/  SHARON ELLIS Name: Sharon Ellis Title: Vice President
LOAN FUNDING VI LLC By: Blackstone Debt Advisors L.P. As Collateral Manager, as a Lender
By:	/s/  DEAN CRIARES Name: Dean Criares Title: Managing Director
CITICORP NORTH AMERICA, INC., as a Lender
By:	/s/  ALLEN FISHER Name: Allen Fisher Title: Vice President
CALYON NEW YORK BRANCH, as a Lender
By:	/s/  CHARLES HEIDSIECK Name: Charles Heidsieck Title: Managing Director
By:	/s/  THOMAS RANDOLPH Name: Thomas Randolph Title: Director

CREDIT SUISSE FIRST BOSTON, Acting Through its Cayman Islands Branch, as a Lender
By:	/s/  PAUL COLON Name: Paul Colon Title: Director
By:	/s/  VANESSA GOMEZ Name: Vanessa Gomez Title: Associate
DEUTSCHE BANK TRUST COMPANY AMERICAS, as a Lender
By:	/s/  KAREN M. KEEGAN Name: Karen M. Keegan Title: Vice President
ING SENIOR INCOME FUND By: Aeltus Investment Management, Inc.         as its investment manager, as a Lender
By:	/s/  JEFF BAKALAR Name: Jeff Bakalar Title: Senior Vice President
PACIFICA CDO II, as a Lender By: Alcentra Inc. as its Investment Manager
By:	/s/  DEAN KAWAI Name: Dean Kawai Title: Senior Vice President

R2 TOP HAT, LTD., as a Lender By: Amalgamated Gadget, L.P., its Investment Manager By: Scepter Holdings, Inc., its General Partner
By:	/s/  ROBERT MCCORMICK Name: Robert McCormick Title: Vice President
SANKATY ADVISORS, LLC as Collateral Manager for AVERY POINT CLO, LTD., as Term Lender
By:	/s/  DIANE J. EXTER Name: Diane J. Exter Title: Managing Director, Portfolio Manager
SANKATY ADVISORS, INC. as Collateral Manager for BRANT POINT CBO 1999-1 LTD., as Term Lender
By:	/s/  DIANE J. EXTER Name: Diane J. Exter Title: Managing Director, Portfolio Manager
SANKATY ADVISORS, LLC as Collateral Manager for BRANT POINT II CBO 2000-1 LTD., as Term Lender
By:	/s/  DIANE J. EXTER Name: Diane J. Exter Title: Managing Director, Portfolio Manager

SANKATY ADVISORS, LLC as Collateral Manager for CASTLE HILL I- INGOTS, LTD., as Term Lender
By:	/s/  DIANE J. EXTER Name: Diane J. Exter Title: Managing Director, Portfolio Manager
SANKATY ADVISORS, LLC as Collateral Manager for CASTLE HILL II- INGOTS LTD., as Term Lender
By:	/s/  DIANE J. EXTER Name: Diane J. Exter Title: Managing Director, Portfolio Manager
SANKATY ADVISORS, LLC as Collateral Manager for CASTLE HILL III CLO, LIMITED as Term Lender
By:	/s/  DIANE J. EXTER Name: Diane J. Exter Title: Managing Director, Portfolio Manager
SANKATY ADVISORS, LLC as Collateral Manager for GREAT POINT CLO 1999-1 LTD., as Term Lender
By:	/s/  DIANE J. EXTER Name: Diane J. Exter Title: Managing Director, Portfolio Manager

HARBOUR TOWN FUNDING LLC, as a Lender
By:	/s/  DIANA M. HIMES Name: Diana M. Himes Title: Assistant Vice President
SANKATY ADVISORS, LLC as Collateral Manager for RACE POINT CLO, LIMITED, as Term Lender
By:	/s/  DIANE J. EXTER Name: Diane J. Exter Title: Managing Director, Portfolio Manager
SANKATY ADVISORS, LLC as Collateral Manager for RACE POINT II CLO, LIMITED, as Term Lender
By:	/s/  DIANE J. EXTER Name: Diane J. Exter Title: Managing Director, Portfolio Manager
BLACKROCK LIMITED DURATION INCOME TRUST, as a Lender
By:	/s/  TOM COLWELL Name: Tom Colwell Title: Authorized Signatory

MAGNETITE ASSET INVESTORS LLC, as a Lender
By:	/s/  TOM COLWELL Name: Tom Colwell Title: Authorized Signatory
MAGNETITE ASSET INVESTORS III LLC, as a Lender
By:	/s/  TOM COLWELL Name: Tom Colwell Title: Authorized Signatory
MAGNETITE IV CLO LIMITED, as a Lender
By:	/s/  TOM COLWELL Name: Tom Colwell Title: Authorized Signatory
MAGNETITE V CLO LIMITED, as a Lender
By:	/s/  TOM COLWELL Name: Tom Colwell Title: Authorized Signatory
HANOVER SQUARE CLO LTD. By: Blackstone Debt Advisors L.P. As Collateral Manager, as a Term Lender
By:	/s/  DEAN CRIARES Name: Dean Criares Title: Managing Director

MONUMENT PARK CDO LTD. By: Blackstone Debt Advisors L.P. As Collateral Manager, as a Term Lender
By:	/s/  DEAN CRIARES Name: Dean Criares Title: Managing Director
UNION SQUARE CDO LTD. By: Blackstone Debt Advisors L.P. As Collateral Manager, as a Term Lender
By:	/s/  DEAN CRIARES Name: Dean Criares Title: Managing Director
CALLIDUS DEBT PARTNERS CLO FUND II, LTD. By: Its Collateral Manager, Callidus Capital Management, LLC, as a Lender
By:	/s/  WAYNE KUELLER Name: Wayne Kueller Title: Managing Director
LCM II LIMITED PARTNERSHIP, as a Lender By: Lyon Capital Management LLC         As Attorney in Fact
By:	/s/  FARBOUD TAVANGAR Name: Farboud Tavangar Title: Senior Portfolio Manager

CANYON CAPITAL CDO 2001-1 LTD. By: Canyon Capital Advisors LLC, a Delaware limited liability company, its Collateral Manager
By:	/s/  R. CHRISTIAN B. EVENSEN Name: R. Christian B. Evensen Title: Managing Director
CANYON CAPITAL CDO 2002-1 LTD. By: Canyon Capital Advisors LLC, a Delaware limited liability company, its Collateral Manager
By:	/s/  R. CHRISTIAN B. EVENSEN Name: R. Christian B. Evensen Title: Authorized Signatory
CARLYLE HIGH YIELD PARTNERS II, LTD., as a Lender
By:	/s/  LINDA PACE Name: Linda Pace Title: Managing Director
CARLYLE HIGH YIELD PARTNERS III, LTD., as a Lender
By:	/s/  LINDA PACE Name: Linda Pace Title: Managing Director

CARLYLE HIGH YIELD PARTNERS IV, LTD., as a Lender
By:	/s/  LINDA PACE Name: Linda Pace Title: Managing Director
CARLYLE HIGH YIELD PARTNERS, L.P., as a Lender
By:	/s/  LINDA PACE Name: Linda Pace Title: Managing Director
CARLYLE LOAN OPPORTUNITY FUND, as a Lender
By:	/s/  LINDA PACE Name: Linda Pace Title: Managing Director
TRUMBULL THC, LTD., as a Lender
By:	/s/  THERESA LYNCH Name: Theresa Lynch Title: Assistant Vice President
ATRIUM CDO, as a Lender
By:	/s/  ANDREW H. MARSHAK Name: Andrew H. Marshak Title: Authorized Signatory

CSAM FUNDING II, as a Lender
By:	/s/  ANDREW H. MARSHAK Name: Andrew H. Marshak Title: Authorized Signatory
CSAM FUNDING III, as a Lender
By:	/s/  ANDREW H. MARSHAK Name: Andrew H. Marshak Title: Authorized Signatory
FIRST DOMINION FUNDING III, as a Lender
By:	/s/  ANDREW H. MARSHAK Name: Andrew H. Marshak Title: Authorized Signatory
ELC (CAYMAN) LTD. 1999-II By: David L. Babson & Company Inc. as Collateral Manager, as a Lender
By:	/s/  DAVID P. WELLS Name: David P. Wells, CFA Title: Managing Director
ELC (CAYMAN) LTD. CDO SERIES 1999-I By: David L. Babson & Company Inc. as Collateral Manager, as a Lender
By:	/s/  DAVID P. WELLS Name: David P. Wells, CFA Title: Managing Director

SIMSBURY CLO, LIMITED By: David L. Babson & Company Inc. under delegated authority from Massachusetts Mutual Life Insurance Company as Collateral Manager, as a Lender
By:	/s/  DAVID P. WELLS Name: David P. Wells, CFA Title: Managing Director
TRS CALLISTO LLC, as a Lender
By:	/s/  DEBORAH O'KEEFFE Name: Deborah O'Keeffe Title: Vice President
TRS LEDA LLC, as a Lender
By:	/s/  DEBORAH O'KEEFFE Name: Deborah O'Keeffe Title: Vice President
BIG SKY SENIOR LOAN FUND, LTD, as a Lender By: Eaton Vance Management as Investment Advisor
By:	/s/  SCOTT H. PAGE Name: Scott H. Page Title: Vice President

CONSTANTINUS EATON VANCE CDO V, LTD., as a Lender By: Eaton Vance Management as Investment Advisor
By:	/s/  SCOTT H. PAGE Name: Scott H. Page Title: Vice President
EATON VANCE CDO III, LTD., as a Lender By: Eaton Vance Management as Investment Advisor
By:	/s/  SCOTT H. PAGE Name: Scott H. Page Title: Vice President
EATON VANCE CDO VI, LTD., as a Lender By: Eaton Vance Management as Investment Advisor
By:	/s/  SCOTT H. PAGE Name: Scott H. Page Title: Vice President
EATON VANCE INSTITUTIONAL SENIOR LOAN FUND, as a Lender By: Eaton Vance Management as Investment Advisor
By:	/s/  SCOTT H. PAGE Name: Scott H. Page Title: Vice President

EATON VANCE LIMITED INCOME FUND, as a Lender By: Eaton Vance Management as Investment Advisor
By:	/s/  SCOTT H. PAGE Name: Scott H. Page Title: Vice President
EATON VANCE SENIOR FLOATING-RATE TRUST, as a Lender By: Eaton Vance Management as Investment Advisor
By:	/s/  SCOTT H. PAGE Name: Scott H. Page Title: Vice President
EATON VANCE SENIOR INCOME TRUST, as a Lender By: Eaton Vance Management as Investment Advisor
By:	/s/  SCOTT H. PAGE Name: Scott H. Page Title: Vice President
GRAYSON & CO., as a Lender By: Boston Management and Research as Investment Advisor
By:	/s/  SCOTT H. PAGE Name: Scott H. Page Title: Vice President

OXFORD STRATEGIC INCOME FUND, as a Lender By: Eaton Vance Management as Investment Advisor
By:	/s/  SCOTT H. PAGE Name: Scott H. Page Title: Vice President
SENIOR DEBT PORTFOLIO, as a Lender By: Boston Management and Research as Investment Advisor
By:	/s/  SCOTT H. PAGE Name: Scott H. Page Title: Vice President
TOLLI & CO., as a Lender By: Eaton Vance Management as Investment Advisor
By:	/s/  SCOTT H. PAGE Name: Scott H. Page Title: Vice President
BALLYROCK CDO I LIMITED, as a Lender By: Ballyrock Investment Advisors LLC, as Collateral Manager
By:	/s/  LISA RYMUT Name: Lisa Rymut Title: Assistant Treasurer

BALLYROCK CLO II LIMITED, as a Lender By: Ballyrock Investment Advisors LLC, as Collateral Manager
By:	/s/  LISA RYMUT Name: Lisa Rymut Title: Assistant Treasurer
FIDELITY ADVISOR SERIES II: FIDELITY ADVISOR FLOATING RATE HIGH INCOME FUND, as a Lender
By:	/s/  JOHN H. COSTELLO Name: John H. Costello Title: Assistant Treasurer
GOLDENTREE LOAN OPPORTUNITIES I, LIMITED By: GoldenTree Asset Management, LP, as a Lender
By:	/s/  FREDERICK S. HADDAD Name: Frederick S. Haddad Title: Portfolio Manager
GOLDENTREE LOAN OPPORTUNITIES II, LIMITED By: GoldenTree Asset Management, LP, as a Lender
By:	/s/  FREDERICK S. HADDAD Name: Frederick S. Haddad Title: Portfolio Manager

GULF STREAM-COMPASS CLO 2003-1 LTD. By: Gulf Stream Asset Management LLC as Collateral Manager, as a Lender
By:	/s/  MARK D. ABRAHM Name: Mark D. Abrahm Title: Trader
ARCHIMEDES FUNDING III, LTD. By: ING Capital Advisors, LLC as Collateral Manager, as a Lender
By:	/s/  HELEN Y. RHEE Name: Helen Y. Rhee Title: Senior Vice President
ML CLO XV PILGRIM AMERICA (CAYMAN) LTD. By: ING Investments, LLC as its Investment Manager, as a Lender
By:	/s/  JEFF BAKALAR Name: Jeff Bakalar Title: Senior Vice President
SEQUILS- PILGRIM I, LTD. By: ING Investments, LLC as its Investment Manager, as a Lender
By:	/s/  JEFF BAKALAR Name: Jeff Bakalar Title: Senior Vice President

WHITNEY PRIVATE DEBT FUND, L.P., as a Lender
By:	/s/  KEVIN J. CURLEY Name: Kevin J. Curley Title: Authorized Signatory
LCM I LIMITED PARTNERSHIP By: Lyon Capital Management LLC as Collateral Manager, as a Lender
By:	/s/  FARBOUD TAVANGAR Name: Farboud Tavangar Title: Senior Portfolio Manager
MORGAN STANLEY PRIME INCOME TRUST, as a Lender
By:	/s/  KEVIN EGAN Name: Kevin Egan Title: Vice President
MOUNTAIN CAPITAL CLO I, LTD., as a Lender
By:	/s/  REGINA FORMAN Name: Regina Forman Title: Director

MOUNTAIN CAPITAL CLO II, LTD., as a Lender
By:	/s/  REGINA FORMAN Name: Regina Forman Title: Director
ELF FUNDING TRUST III, as a Lender By: New York Life Investment Management LLC, As Attorney-in-Fact
By:	/s/  ROBERT H. DIAL Name: Robert H. Dial Title: Director
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION, as a Lender By: New York Life Investment Management LLC, as its Investment Manager
By:	/s/  ROBERT H. DIAL Name: Robert H. Dial Title: Director
NYLIM FLATIRON CLO 2003-1 LTD., as a Lender By: New York Life Investment Management LLC, as Collateral Manager and Attorney-in-Fact
By:	/s/  ROBERT H. DIAL Name: Robert H. Dial Title: Director

OCTAGON INVESTMENT PARTNERS III LTD., as a Lender By: Octagon Credit Investors, LLC as Portfolio Manager
By:	/s/  ANDREW D. GORDON Name: Andrew D. Gordon Title: Portfolio Manager
OCTAGON INVESTMENT PARTNERS IV LTD., as a Lender By: Octagon Credit Investors, LLC as Collateral Manager
By:	/s/  ANDREW D. GORDON Name: Andrew D. Gordon Title: Portfolio Manager
OCTAGON INVESTMENT PARTNERS V LTD., as a Lender By: Octagon Credit Investors, LLC as Portfolio Manager
By:	/s/  ANDREW D. GORDON Name: Andrew D. Gordon Title: Portfolio Manager
OCTAGON INVESTMENT PARTNERS VI LTD., as a Lender By: Octagon Credit Investors, LLC as Collateral Manager
By:	/s/  ANDREW D. GORDON Name: Andrew D. Gordon Title: Portfolio Manager

HARBOURVIEW CLO V, LTD., as a Lender
By:	/s/  DAVID FOXHOVEN Name: David Foxhoven Title: Assistant Vice President
HARBOURVIEW CLO IV, LTD., as a Lender
By:	/s/  DAVID FOXHOVEN Name: David Foxhoven Title: Assistant Vice President
OPPENHEIMER SENIOR FLOATING RATE FUND, as a Lender
By:	/s/  DAVID FOXHOVEN Name: David Foxhoven Title: Assistant Vice President
PPM SHADOW CREEK FUNDING LLC, as a Lender
By:	/s/  DIANA M. HIMES Name: Diana M. Himes Title: Assistant Vice President
PPM SPYGLASS FUNDING TRUST, as a Lender
By:	/s/  DIANA M. HIMES Name: Diana M. Himes Title: Authorized Agent

TUSCANY CDO, LIMITED, as a Lender By: PPM America, Inc., as Collateral Manager
By:	/s/  DAVID C. WAGNER Name: David C. Wagner Title: Managing Director
DRYDEN III LEVERAGED LOAN CDO 2002, as a Lender By: Prudential Investment Management Inc., as Collateral Manager
By:	/s/  GEORGE W. EDWARDS Name: George W. Edwards Title: Principal
DRYDEN IV LEVERAGED LOAN CDO 2003, as a Lender By: Prudential Investment Management Inc., as Collateral Manager
By:	/s/  GEORGE W. EDWARDS Name: George W. Edwards Title: Principal
DRYDEN LEVERAGED LOAN CDO 2002-II, as a Lender By: Prudential Investment Management Inc., as Collateral Manager
By:	/s/  GEORGE W. EDWARDS Name: George W. Edwards Title: Principal

DRYDEN V LEVERAGED LOAN CDO 2003, as a Lender By: Prudential Investment Management Inc., as Collateral Manager
By:	/s/  GEORGE W. EDWARDS Name: George W. Edwards Title: Principal
PUTNAM DIVERSIFIED INCOME TRUST, as a Lender
By:	/s/  BETH MAZOR Name: Beth Mazor Title: Vice President
PUTNAM HIGH YIELD ADVANTAGE FUND, as a Lender
By:	/s/  BETH MAZOR Name: Beth Mazor Title: Vice President
PUTNAM MASTER INCOME TRUST, as a Lender
By:	/s/  BETH MAZOR Name: Beth Mazor Title: Vice President

PUTNAM MASTER INTERMEDIATE INCOME TRUST, as a Lender
By:	/s/  BETH MAZOR Name: Beth Mazor Title: Vice President
PUTNAM PREMIER INCOME TRUST, as a Lender
By:	/s/  BETH MAZOR Name: Beth Mazor Title: Vice President
PUTNAM VARIABLE TRUST-PVT DIVERSIFIED INCOME FUND, as a Lender
By:	/s/  BETH MAZOR Name: Beth Mazor Title: Vice President
PUTNAM VARIABLE TRUST- PVT HIGH YIELD FUND, as a Lender
By:	/s/  BETH MAZOR Name: Beth Mazor Title: Vice President

STANFIELD ARBITRAGE CDO, LTD., as a Lender By: Stanfield Capital Partners LLC as its Collateral Manager
By:	/s/  CHRISTOPHER E. JANSEN Name: Christopher E. Jansen Title: Managing Partner
STANFIELD QUATTRO CLO, LTD., as a Lender By: Stanfield Capital Partners LLC as its Collateral Manager
By:	/s/  CHRISTOPHER E. JANSEN Name: Christopher E. Jansen Title: Managing Partner
WINDSOR LOAN FUNDING, LIMITED, as a Lender By: Stanfield Capital Partners LLC as its Investment Manager
By:	/s/  CHRISTOPHER E. JANSEN Name: Christopher E. Jansen Title: Managing Partner
AURUM CLO 2002-1 LTD., as a Lender By: Columbia Management Advisors, Inc. (f/k/a Stein Roe & Farnham Incorporated), as its Investment Manager
By:	/s/  THOMAS R. BOUCHARD Name: Thomas R. Bouchard Title: Vice President

SRF 2000, INC., as a Lender
By:	/s/  DIANA M. HIMES Name: Diana M. Himes Title: Assistant Vice President
SRF TRADING, INC., as a Lender
By:	/s/  DIANA M. HIMES Name: Diana M. Himes Title: Assistant Vice President
GALAXY CLO 1999-1, LTD., as a Lender By: AIG Global Investment Corp. as Collateral Manager
By:	/s/  W. JEFFREY BAXTER Name: W. Jeffrey Baxter Title: Vice President
KZH SOLIEL-2 LLC, as a Lender
By:	/s/  DORIAN HERRERA Name: Dorian Herrera Title: Authorized Agent

STANWICH LOAN FUNDING LLC, as a Lender
By:	/s/  DIANA M. HIMES Name: Diana M. Himes Title: Assistant Vice President
APEX (Trimaran) CDO I, LTD., as a Lender By: Trimaran Advisors, L.L.C.
By:	/s/  DAVID M. MILLISON Name: David M. Millison Title: Managing Director
VAN KAMPEN SENIOR INCOME TRUST, as a Lender By: Van Kampen Investment Advisory Corp.
By:	/s/  BRAD LANGS Name: Brad Langs Title: Executive Director
VAN KAMPEN SENIOR LOAN FUND, as a Lender By: Van Kampen Investment Advisory Corp.
By:	/s/  BRAD LANGS Name: Brad Langs Title: Executive Director

Schedule I

SOURCES AND USES TABLE

Sources:				(in millions	)
	Incremental Term Loans		$	70.0
	Cash			41.7
	New Senior Subordinated Notes due 2012			152.9
		Total Sources	$	264.6
Uses:
	Dividend to Equity Holders		$	96.0
	Redeem tendered 1999 Senior Subordinated Notes			114.9
	Tender Premium on 1999 Senior Subordinated Notes plus accrued interest			14.5
	Escrow 1999 Senior Subordinated Notes not tendered			27.6
	Redemption Premium on 1999 Senior Subordinated Notes not tendered			1.8
	Fees, Expenses and Bonuses			9.8
		Total Uses	$	264.6

Notes:

•

Does not include the $1.2 million accrued dividend



•

Does not include accrued interest on the non-tendered $27.6 million 13% notes (accrued interest was approximately $1.1 million as of closing on June 8, 2004; anticipated accrued interest is estimated to be $1.8 million as of August 15, 2004)

ACKNOWLEDGMENT AND CONFIRMATION

        1.     Reference is made to Second Amendment, dated as of June 8, 2004 and effective as of June 8, 2004 (the "Second Amendment"), to the Credit Agreement, dated as of August 13, 2003, as amended by the First Amendment thereto, dated as of November 17, 2003 (the "Credit Agreement"), among CONCENTRA INC., a Delaware corporation ("Holdings"), CONCENTRA OPERATING CORPORATION, a Nevada corporation (the "Borrower"), the several banks and other financial institutions from time to time parties thereto (the "Lenders") and JPMORGAN CHASE BANK, a New York banking corporation, as administrative agent for the Lenders thereunder (in such capacity, the "Administrative Agent"). Unless otherwise defined herein, capitalized terms that are defined in the Credit Agreement are used herein as therein defined. This Acknowledgement and Confirmation shall be deemed a Security Document, as defined in the Credit Agreement.

        2.     Each of the parties hereto hereby agrees, with respect to each Security Document to which it is a party:

        (a)   all of its obligations, liabilities and indebtedness under such Security Document shall remain in full force and effect on a continuous basis after giving effect to the Second Amendment and its guarantee of the obligations, liabilities and indebtedness of the other Loan Parties under the Credit Agreement shall extend to and cover the Incremental Term Loans made under the Credit Agreement pursuant to the Second Amendment and interest thereon and fees and expenses and other obligations in respect thereof and in respect of commitments related thereto; and

        (b)   all of the Liens and security interests created and arising under such Security Document remain in full force and effect on a continuous basis, and the perfected status and priority of each such Lien and security interest continues in full force and effect on a continuous basis, unimpaired, uninterrupted and undischarged, after giving effect to the Second Amendment, as collateral security for its obligations, liabilities and indebtedness under the Credit Agreement and under its guarantees in the Security Documents.

3.     THIS ACKNOWLEDGMENT AND CONFIRMATION SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

        4.     This Acknowledgment and Confirmation may be executed by one or more of the parties hereto on any number of separate counterparts (including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

[rest of page intentionally left blank]

        IN WITNESS WHEREOF, the parties hereto have caused this Acknowledgement and Confirmation to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

CONCENTRA OPERATING CORPORATION CONCENTRA INC. CONCENTRA HEALTH SERVICES, INC. CONCENTRA PREFERRED SYSTEMS, INC.
By:	/s/  RICHARD A. PARR II Richard A. Parr II Executive Vice President, General Counsel and Corporate Secretary
CONCENTRA INTEGRATED SERVICES, INC.
By:	/s/  RICHARD A. PARR II Richard A. Parr II Executive Vice President and Clerk
CISI BUSINESS CORPORATION CONCENTRA MANAGEMENT SERVICES, INC. CPS BUSINESS CORPORATION FHM BUSINESS CORPORATION FIRST NOTICE SYSTEMS, INC. FOCUS HEALTHCARE MANAGEMENT, INC. METRACOMP, INC. CONCENTRA LABORATORY, L.L.C.
By:	/s/  RICHARD A. PARR II Richard A. Parr II Vice President and Corporate Secretary

CRA MANAGED CARE OF WASHINGTON, INC. CRA-MCO, INC.
By:	/s/  RICHARD A. PARR II Richard A. Parr II Executive Vice President and Corporate Secretary
HEALTHNETWORK SYSTEMS LLC MEDICAL NETWORK SYSTEMS LLC
By:	/s/  RICHARD A. PARR II Richard A. Parr II Vice President, General Counsel and Corporate Secretary
NATIONAL HEALTHCARE RESOURCES, INC.
By:	/s/  RICHARD A. PARR II Richard A. Parr II Senior Vice President and Corporate Secretary
OCCUCENTERS I, L.P.
By:	Its general partner CONCENTRA HEALTH SERVICES, INC.
By:	/s/  RICHARD A. PARR II Richard A. Parr II Executive Vice President, General Counsel and Corporate Secretary
OCI HOLDINGS, INC.
By:	/s/  GARY CHEDEKEL Gary Chedekel Corporate Secretary and Treasurer

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Exhibit 10.4 EXECUTION COPY

CONCENTRA INC., As Holdings, CONCENTRA OPERATING CORPORATION, As Borrower, The Several Lenders from Time to Time Parties Hereto, JPMORGAN CHASE BANK, As Administrative Agent
SECOND AMENDMENT TO THE CREDIT AGREEMENT $70,000,000 INCREMENTAL TERM LOAN FACILITY
W I T N E S S E T H

Schedule I

SOURCES AND USES TABLE
ACKNOWLEDGMENT AND CONFIRMATION

EX-10.5

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Exhibit 10.5

ESCROW AGREEMENT

        This Escrow Agreement (this "Agreement") is made this 8^th day of June, 2004, by and between CONCENTRA OPERATING CORPORATION, a Nevada corporation (the "Borrower"), and JPMORGAN CHASE BANK (the "Escrow Agent").

        SECTION 1. Deposit. Pursuant to the terms of the Second Amendment, dated as of June 8, 2004 (the "Second Amendment") to the Credit Agreement, dated as of August 13, 2003, as amended, modified or supplemented from time to time (the "Credit Agreement"), among Concentra Inc., the Borrower, the Lenders parties thereto, and JPMorgan Chase Bank, as Administrative Agent thereunder, the Borrower has delivered $29,371,635.00 (the "Escrow Funds") to the Escrow Agent required to be deposited with the Escrow Agent pursuant to the terms of the Second Amendment, for deposit in designated account # 304-255122 at JPMorgan Chase Bank (the "Escrow Account"). The Escrow Agent hereby agrees that the Escrow Funds shall be released from escrow only in conformity with, and upon the terms and conditions set forth in, this Agreement, and the Escrow Agent agrees to hold the Escrow Funds until such release. Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Second Amendment and in the Credit Agreement.

        SECTION 2. Release from Escrow. (a) The Escrow Funds will only be released from escrow pursuant to the Escrow Agent's receipt of a written request from the Borrower certifying that such Escrow Funds will be used (i) to purchase or redeem all or any portion of the outstanding 1999 Senior Subordinated Notes, (ii) to pay principal, interest or premiums with respect thereto or (iii) for any purpose related to the purchase or redemption of all or any portion of the outstanding 1999 Senior Subordinated Notes, including the reimbursement of the Borrower for any funds expended in accordance with the foregoing.

        (b)   The Escrow Account shall remain in place until the purchase or redemption in full of all outstanding 1999 Senior Subordinated Notes.

        SECTION 3. Interest. All interest accruing on any funds (including, without limitation, the Escrow Funds) held in the Escrow Account shall be held by the Escrow Agent for the benefit of the Borrower.

        SECTION 4. Reimbursement of Escrow Agent. The Company shall reimburse the Escrow Agent for all reasonable expenses incurred by the Escrow Agent in connection with the establishment and maintenance of the Escrow Account.

        SECTION 5. Responsibilities of the Escrow Agent. (a) The Escrow Agent shall be obligated to perform only such duties as are expressly set forth in this Agreement. No implied covenants or obligations shall be inferred from this Agreement against the Escrow Agent, nor shall the Escrow Agent be bound by the provisions of any agreement of the Borrower beyond the specific terms hereof.

        (b)   The Escrow Agent shall not be liable hereunder except for its own gross negligence, bad faith or willful misconduct and the Borrower agrees to indemnify the Escrow Agent for and hold it harmless as to any loss, liability or expenses, including reasonable attorney fees, incurred without gross negligence, bad faith or willful misconduct on the part of the Escrow Agent and arising out of or in connection with the Escrow Agent's duties under this Agreement. In no event shall the Escrow Agent be liable (i) for acting in good faith in accordance with instructions from the Borrower or any of its agents, (ii) for special or consequential damages, (iii) for the acts or omissions of its nominees, correspondents, designees, sub-agents or sub-custodians or (iv) for any amount in excess of the value of the Escrow Funds deposited in the Escrow Account (plus interest thereon as provided in Section 3 hereof).

        (c)   The Escrow Agent shall (in the absence of gross negligence, willful misconduct or bad faith) be entitled to rely upon any order, judgment, certification, instruction, notice, opinion or other writing delivered to it in compliance with the provisions of this Agreement without being required to

determine the authenticity or the correctness of any fact stated therein or the propriety or validity of service thereof. The Escrow Agent may (in the absence of gross negligence, willful misconduct or bad faith) act in reliance upon any instrument comporting with the provisions of this Agreement or signature believed by it to be genuine and assume that any person purporting to give notice or receipt or advice or make any statement or execute any document in connection with the provisions hereof has been duly authorized to do so.

        (d)   The Escrow Agent may act in accordance with advice of counsel chosen by it with respect to any matter relating to this Agreement and shall not be liable for any action taken or omitted to be taken in good faith in accordance with such advice.

        (e)   In the event of any ambiguity in the provisions of this Agreement or any dispute between or conflicting claims by or between the undersigned or any other person or entity with respect to any property deposited hereunder, the Escrow Agent shall be entitled, at its sole option, to refuse to comply with any and all claims, demands or instructions with respect to such property so long as such dispute or conflict shall continue, and the Escrow Agent shall not be or become liable in any way to the undersigned for its failure or refusal to comply with such conflicting claims, demands or instructions. The Escrow Agent shall be entitled to refuse to act until, at its sole option, either such conflicting or adverse claims or demands shall have been finally determined by a court of competent jurisdiction or settled by agreement between the conflicting parties as evidenced in writing, satisfactory to the Escrow Agent or the Escrow Agent shall have received security or an indemnity satisfactory to the Escrow Agent sufficient to save the Escrow Agent harmless from and against any and all reasonable loss, liability or expense which the Escrow Agent may incur by reason of its acting.

        (f)    No provision of this Agreement shall require the Escrow Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder.

        SECTION 6. Resignation or Removal of Escrow Agent. (a) The Escrow Agent may resign at any time by giving at least 30 days' written notice to the Borrower and the Administrative Agent. During such 30 days, the Borrower shall appoint a successor Escrow Agent at which time the Escrow Agent, subject to the reasonable approval of the Administrative Agent, shall hold the Escrow Funds, pending distribution, until all fees, costs and expenses or other obligations owed to the Escrow Agent are paid. If a successor Escrow Agent has not been appointed or has not accepted such appointment by the end of the 30-day period, the Escrow Agent may apply to a court of competent jurisdiction for the appointment of a successor Escrow Agent, or for other appropriate relief and the costs, expenses and reasonable attorney's fees and expenses which the Escrow Agent incurs in connection with such a proceeding shall be paid by the Borrower.

        (b)   The Borrower may remove the Escrow Agent upon 30 days written notice to the Escrow Agent. Such removal shall take effect upon delivery of the Escrow Funds in the Escrow Account to a successor Escrow Agent designated in writing by the Borrower, and the Escrow Agent shall thereupon be discharged from all obligations under this Agreement and shall have no further duties or responsibilities in connection herewith. The Escrow Agent shall deliver the Escrow Funds in the Escrow Account without unreasonable delay after receiving notice from the Borrower of its designation of a successor Escrow Agent and upon receipt of all fees and reimbursement for all costs and other expenses or other obligations owed to the Escrow Agent.

        (c)   If after 45 days from the date of delivery of its written notice of intent to resign or of the Borrower's notice of removal the Escrow Agent has not received written designation of a successor Escrow Agent, the Escrow Agent's sole responsibility shall be in its sole discretion either to retain custody of the Escrow Funds in the Escrow Account until it receives such designation, or to apply to a court of competent jurisdiction for appointment of a successor Escrow Agent and after such appointment to have no further duties or responsibilities in connection herewith.

2

        (d)   The provisions of Sections 2, 3, 4 and 6 shall survive termination of this Agreement and/or the resignation or removal of the Escrow Agent.

        SECTION 7. Choice of Law and Jurisdiction. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

        (b)   The parties to this Agreement hereby agree that jurisdiction over such parties and over the subject matter of any action or proceeding arising under this Agreement may be exercised by a competent court of the State of New York or by a United States Federal Court, in either case located in The Borough of Manhattan, The City of New York. Each of the parties hereto hereby submits to the personal jurisdiction of such courts, hereby waives personal service of process upon it and consents that any such service of process may be made by certified or registered mail, return receipt requested, directed to it at its address last specified for notices hereunder, and service so made shall be deemed completed five (5) days after the same shall have been so mailed, and hereby waives the right to a trial by jury in any action or proceedings relating to or arising from, directly or indirectly, this Agreement.

        SECTION 8. Benefits and Assignment. Nothing in this Agreement, expressed or implied, shall give or be construed to give any person, firm or corporation, other than the Administrative Agent and the parties hereto and their successors and assigns, any legal claim under any covenant, condition or provision hereof, all the covenants, conditions and provisions contained in this Agreement being for the sole benefit of the Administrative Agent and the parties hereto and their successors and assigns. No party may assign any of its rights or obligations under this Agreement without the written consent of all the other parties, which consent may be withheld in the sole discretion of the party whose consent is sought.

        SECTION 9. Amendment and Waiver. This Agreement may be modified only by written amendment signed by each of the parties hereto, and no waiver of any provision hereof shall be effective unless expressed in a writing signed by the party to be charged.

        SECTION 10. Headings. The headings contained in this Agreement are for convenience of reference only and shall have no effect on the interpretation or operation thereof.

        SECTION 11. Notices. All notices, instructions, reports and other written communications to be given or made under this Agreement shall be sufficiently given or made if, unless otherwise indicated, delivered personally, by facsimile (receipt confirmed by telephone) or sent by first class mail, postage prepaid:

(a)

To the Escrow Agent at:

JPMorgan Chase Bank
270 Park Avenue, 15th Floor
New York, New York 10017
Attention: Lyette Proctor
Telecopy: 212-270-5135
Telephone: 212-270-1479
E-Mail Address: Lyette.proctor@jpmorgan.com

(b)

To the Borrower at:

Concentra Inc.
5080 Spectrum Drive
Suite 400, West Tower
Addison, Texas 75001
Attention: Chief Financial Officer
Telecopy: 972-387-8092
Telephone: 972-364-8217
E-Mail Address: Tom.Kiraly@Concentra.com

3

        With a copy to:

Concentra Inc.
5080 Spectrum Drive
Suite 400, West Tower
Addison, Texas 75001
Attention: General Counsel
Telecopy: 972-387-1938
Telephone: 972-364-8043
E-Mail Address: Richard.Parr@Concentra.com

(c)

To the Administrative Agent at:

JPMorgan Chase Bank
1111 Fannin, 10th Floor
Houston, TX 77002
Attention: Jennifer Anyigbo
Telecopy: 713-750-2782
Telephone: 713-750-2110
E-Mail Address: jennifer.anyigbo@jpmorgan.com

        SECTION 12. Severability. The invalidity, illegality or unenforceability of any provision of this Agreement shall in no way affect the validity, legality or enforceability of any other provision; and if any provision is held to be unenforceable as a matter of law, the other provisions shall not be affected thereby and shall remain in full force and effect.

        SECTION 13. Entire Agreement. This Agreement shall constitute the entire agreement of the parties with respect to the subject matter and supersedes all prior oral or written agreements in regard thereto.

        SECTION 14. Rights and Remedies. The rights and remedies conferred upon the parties hereto shall be cumulative, and the exercise or waiver of any such right or remedy shall not preclude or inhibit the exercise of any additional rights or remedies. The waiver of any right or remedy shall not preclude or inhibit the subsequent exercise of such right or remedy.

        SECTION 15. Representations and Warranties. (a) The Borrower hereby represents and warrants that this Agreement has been duly authorized, executed and delivered on its behalf and constitutes the legal, valid and binding obligation of the Borrower. The execution, delivery and performance of this Agreement by the Borrower does not violate any applicable law or regulation to which the Borrower is subject and does not require the consent of any governmental or other regulatory body to which it is subject, except for such consents and approvals as have been obtained and are in full force and effect.

        (b)   The Escrow Agent hereby represents and warrants that this Agreement has been duly authorized, executed and delivered on its behalf and constitutes the legal, valid and binding obligation of the Escrow Agent. The execution, delivery and performance of this Agreement by the Escrow Agent does not violate any applicable law or regulation to which it is subject and does not require the consent of any governmental or other regulatory body to which it is subject, except for such consents and approvals as have been obtained and are in full force and effect.

        SECTION 16. Counterparts. This Agreement may be executed by each of the parties hereto in any number of counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all such counterparts shall together constitute one and the same agreement.

4

        IN WITNESS WHEREOF, the parties have caused this Escrow Agreement to be executed by duly authorized representatives as of the day and year first written above.

CONCENTRA OPERATING CORPORATION
by	/s/  RICHARD A. PARR II Name: Richard A. Parr II Title: Executive Vice President
JPMORGAN CHASE BANK, as Escrow Agent
by	/s/  GARY L. SPEVACK Name: Gary L. Spevack Title: Vice President

5

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Exhibit 10.5

ESCROW AGREEMENT

EX-12.1

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Exhibit 12.1

CONCENTRA OPERATING CORPORATION
Computation of Ratio of Earnings to Fixed Charges

(Unaudited)

		Years Ended December 31,														Three Months Ended March 31,
		1999			2000			2001			2002			2003		2003		2004
		(dollars in thousands)
Earnings:
Income (loss) before income taxes		$	(17,512	)	$	(2,360	)	$	(14,650	)	$	1,026		$	49,503	$	9,768	$	14,092
Less: Equity in earnings of unconsolidated subsidiaries net of related distributions			(474	)		(1,210	)		(3,015	)		(850	)		2,805		593		817
Fixed charges			46,796			80,160			80,175			79,266			71,397		18,330		17,868
	Total earnings(1)	$	28,810		$	76,590		$	62,510		$	79,442		$	123,705	$	28,691	$	32,777
Fixed Charges:
Interest expense		$	35,779		$	68,932		$	67,250		$	63,981		$	56,632	$	14,588	$	14,038
Interest portion of rent expense			11,017			11,228			12,925			15,285			14,765		3,742		3,830
	Total fixed charges	$	46,796		$	80,160		$	80,175		$	79,266		$	71,397	$	18,330	$	17,868
Ratio of earnings to fixed charges			N/A			N/A			N/A			1.0x			1.7x		1.6x		1.8x

(1)

For purposes of determining the ratio of earnings to fixed charges, earnings include income from continuing operations before income taxes adjusted for fixed charges and equity in earnings of unconsolidated subsidiaries and related distributions. Fixed charges consist of interest on debt, including amortization of debt issuance costs, and 33% of expenses, which we estimate as the interest component of such rentals.

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Exhibit 12.1

CONCENTRA OPERATING CORPORATION Computation of Ratio of Earnings to Fixed Charges (Unaudited)

EX-21.1

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Exhibit 21.1

SUBSIDIARIES

NAME	STATE OF INCORPORATION
CISI Business Corporation	Delaware
Concentra Akron, L.L.C.	Delaware
Concentra Arkansas, L.L.C. (doing business as Concentra Medical Centers)	Delaware
Concentra Birmingham, L.L.C. (doing business as Concentra Medical Centers)	Delaware
Concentra Health Services, Inc. (doing business as Concentra Medical Centers)	Nevada
Concentra Integrated Services, Inc.	Massachusetts
Concentra Laboratory, L.L.C. (doing business as Advanced Toxicology Network)	Delaware
Concentra Management Services, Inc.	Nevada
Concentra New Orleans, L.L.C. (doing business as Concentra Medical Centers)	Delaware
Concentra Occupational Healthcare Harrisburg, L.P. (doing business as Concentra Medical Centers)	Pennsylvania
Concentra Preferred Systems, Inc.	Delaware
Concentra St. Louis, L.L.C. (doing business as Concentra Medical Centers)	Delaware
Concentra South Carolina, L.L.C. (doing business as Concentra Medical Centers)	Delaware
Concentra-UPMC, L.L.C (doing business as Concentra Medical Centers)	Delaware
Concentra Vanderbilt, L.L.C. (doing business as Concentra Medical Centers)	Delaware
Concentra Winston-Salem, L.L.C. (doing business as Concentra Medical Centers)	Delaware
CPS Business Corporation	Delaware
CRA Managed Care of Washington, Inc.	Washington
CRA-MCO, Inc.	Nevada
FHM Business Corporation	Delaware
First Notice Systems, Inc.	Delaware
FOCUS Healthcare Management, Inc.	Tennessee
HealthNetwork Systems LLC	Delaware
Managed Prescription Program Joint Venture	Arizona
Medical Network Systems LLC	Delaware
MetraComp, Inc	Connecticut
National Healthcare Resources, Inc.	Delaware
OccuCenters I, L.P. (doing business as Concentra Medical Centers; Concentra)	Texas
Occupational Health Ventures, L.L.C (doing business as Concentra Medical Centers)	Pennsylvania
OCI Holdings, Inc.	Nevada
OHC of Oklahoma, L.L.C. (doing business as Concentra Medical Centers)	Oklahoma
Tucson Occupational Medicine Partnership (doing business as Concentra Medical Centers)	Arizona

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Exhibit 21.1

SUBSIDIARIES

EX-23.5

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Exhibit 23.5

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

        We hereby consent to the use in this Registration Statement on Form S-4 of Concentra Operating Corporation of our report dated February 11, 2004, relating to the financial statements and financial statement schedules of Concentra Operating Corporation, which appears in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
Dallas, TX
June 28, 2004

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Exhibit 23.5

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

EX-25.1

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Exhibit 25.1

FORM T-1

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)            o

THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)

New York (State of incorporation if not a U.S. national bank)	13-5160382 (I.R.S. employer identification no.)
One Wall Street, New York, N.Y. (Address of principal executive offices)	10286 (Zip code)

CONCENTRA OPERATING CORPORATION
(Exact name of obligor as specified in its charter)

Nevada (State or other jurisdiction of incorporation or organization)	75-2822620 (I.R.S. employer identification no.)
Concentra Preferred Systems, Inc. (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	36-3715258 (I.R.S. employer identification no.)
National Healthcare Resources, Inc. (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	11-3273542 (I.R.S. employer identification no.)
MetraComp, Inc. (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	06-1095987 (I.R.S. employer identification no.)
Concentra Integrated Services Inc. (Exact name of obligor as specified in its charter)
Massachusetts (State or other jurisdiction of incorporation or organization)	04-2658593 (I.R.S. employer identification no.)
First Notice Systems, Inc. (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	04-3373927 (I.R.S. employer identification no.)

Focus Healthcare Management, Inc. (Exact name of obligor as specified in its charter)
Tennessee (State or other jurisdiction of incorporation or organization)	62-1266888 (I.R.S. employer identification no.)
CRA-MCO, Inc. (Exact name of obligor as specified in its charter)
Nevada (State or other jurisdiction of incorporation or organization)	36-4266562 (I.R.S. employer identification no.)
CRA Managed Care of Washington, Inc. (Exact name of obligor as specified in its charter)
Washington (State or other jurisdiction of incorporation or organization)	91-1374650 (I.R.S. employer identification no.)
Concentra Health Services, Inc. (Exact name of obligor as specified in its charter)
Nevada (State or other jurisdiction of incorporation or organization)	75-2510547 (I.R.S. employer identification no.)
OCI Holdings, Inc. (Exact name of obligor as specified in its charter)
Nevada (State or other jurisdiction of incorporation or organization)	75-2679204 (I.R.S. employer identification no.)
Concentra Management Services, Inc. (Exact name of obligor as specified in its charter)
Nevada (State or other jurisdiction of incorporation or organization)	93-1187448 (I.R.S. employer identification no.)
Concentra Laboratory, LLC (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	76-0546504 (I.R.S. employer identification no.)
HealthNetwork Systems LLC (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	36-4285919 (I.R.S. employer identification no.)
Medical Network Systems LLC (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification no.)
OccuCenters I, L.P. (Exact name of obligor as specified in its charter)
Texas (State or other jurisdiction of incorporation or organization)	75-2678146 (I.R.S. employer identification no.)

2

CPS Business Corporation (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	74-3024282 (I.R.S. employer identification no.)
CISI Business Corporation (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	04-3449352 (I.R.S. employer identification no.)
FHM Business Corporation (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	74-3024280 (I.R.S. employer identification no.)
5080 Spectrum Drive Suite 400 West Addison, Texas (Address of principal executive offices)	75001 (Zip code)

9¹/8% Senior Subordinated Notes due 2012
(Title of the indenture securities)

3

1.

General information. Furnish the following information as to the Trustee:

(a)

Name and address of each examining or supervising authority to which it is subject.

Name	Address
Superintendent of Banks of the State of New York	2 Rector Street, New York, N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York	33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation	Washington, D.C. 20429
New York Clearing House Association	New York, New York 10005

(b)

Whether it is authorized to exercise corporate trust powers.

Yes.

2.

Affiliations with Obligor.

If the obligor is an affiliate of the trustee, describe each such affiliation.

None.

16.

List of Exhibits.

Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).

1.

A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.)



4.

A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.)



6.

The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)



7.

A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.

4

SIGNATURE

        Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 21st day of June, 2004.

THE BANK OF NEW YORK
By:	/s/  VAN K. BROWN Name: VAN K. BROWN Title: VICE PRESIDENT

5

Exhibit 7

Consolidated Report of Condition of

THE BANK OF NEW YORK

of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,

a member of the Federal Reserve System, at the close of business March 31, 2004, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.

		Dollar Amounts In Thousands
ASSETS
Cash and balances due from depository institutions:
	Noninterest-bearing balances and currency and coin	$	2,589,012
	Interest-bearing balances		8,872,373
Securities:
	Held-to-maturity securities		1,382,393
	Available-for-sale securities		21,582,893
Federal funds sold and securities purchased under agreements to resell
	Federal funds sold in domestic offices		792,900
	Securities purchased under agreements to resell		932,155
Loans and lease financing receivables:
	Loans and leases held for sale		555,415
	Loans and leases, net of unearned income		36,884,850
	LESS: Allowance for loan and lease losses		628,457
	Loans and leases, net of unearned income and allowance		36,256,393
Trading Assets			3,654,160
Premises and fixed assets (including capitalized leases)			929,969
Other real estate owned			319
Investments in unconsolidated subsidiaries and associated companies			247,156
Customers' liability to this bank on acceptances outstanding			215,581
Intangible assets
	Goodwill		2,687,623
	Other intangible assets		752,283
Other assets			7,905,137
Total assets		$	89,355,762
LIABILITIES
Deposits:
	In domestic offices	$	33,940,195
	Noninterest-bearing		13,973,047
	Interest-bearing		19,967,148
	In foreign offices, Edge and Agreement subsidiaries, and IBFs		22,717,175
	Noninterest-bearing		447,242
	Interest-bearing		22,269,933
Federal funds purchased and securities sold under agreements to repurchase
	Federal funds purchased in domestic offices		442,904
	Securities sold under agreements to repurchase		671,802

6

Trading liabilities		2,452,604
Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)		10,779,148
Bank's liability on acceptances executed and outstanding		217,705
Subordinated notes and debentures		2,390,000
Other liabilities		7,230,967
Total liabilities	$	80,842,500
Minority interest in consolidated subsidiaries		141,523
EQUITY CAPITAL
Perpetual preferred stock and related surplus		0
Common stock		1,135,284
Surplus		2,080,657
Retained earnings		5,021,014
Accumulated other comprehensive income		134,784
Other equity capital components		0
Total equity capital		8,371,739
Total liabilities minority interest and equity capital	$	89,355,762

7

        I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.

Thomas J. Mastro,
Senior Vice President and Comptroller

        We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct.

Thomas A. Renyi
Gerald L. Hassell	Directors
Alan R. Griffith

8

QuickLinks

Exhibit 25.1

SIGNATURE