S-4/A

As filed with the Securities and Exchange Commission on May 3, 2007.

Registration Statement No. 333-141698

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

AMENDMENT NO. 1

TO

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

HEALTHSOUTH CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	8062	63-0860407
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

One HealthSouth Parkway

Birmingham, Alabama 35243

(205) 967-7116

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

John P. Whittington

Executive Vice President, General Counsel and Corporate Secretary

HealthSouth Corporation

One HealthSouth Parkway

Birmingham, Alabama 35243

(205) 967-7116

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies of all communications to:

Robert B. Pincus, Esq. Skadden, Arps, Slate, Meagher & Flom LLP One Rodney Square, P.O. Box 636 Wilmington, Delaware 19899-0636 (302) 651-3000 Richard B. Aftanas, Esq. Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, New York 10036-6522 (212) 735-3000

Approximate date of commencement of proposed sale to the public:  As soon as practicable after this registration statement becomes effective.

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.  ¨

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

TABLE OF ADDITIONAL REGISTRANTS

Exact Name of Registrant as Specified in its Charter and Address, Including Zip Code, and Telephone Number, Including Area Code of Registrant’s Principal Executive Offices*	State or other Jurisdiction of Incorporation or Organization	Primary Standard Industrial Classification Code Number	I.R.S. Employer Identification Number
Advantage Health, LLC	Delaware	8069	04-2772046
Advantage Health Development Corp.	Massachusetts	8069	63-1105930
Advantage Health Harmarville Rehabilitation Corporation	Pennsylvania	8069	52-1960506
ASC Network Corporation	Delaware	8011	95-438431
Baton Rouge Rehab, Inc.	Delaware	8069	74-2478651
Beaumont Rehab Associates Limited Partnership	Delaware	8069	25-1656648
Chiron, Inc.	Nevada	8011	88-0122716
CMS Development and Management Company, Inc.	Delaware	8069	25-1570583
CMS Jonesboro Rehabilitation, Inc.	Delaware	8069	62-1347455
CMS Topeka Rehabilitation, Inc.	Delaware	8069	74-2498820
Collin County Rehab Associates Limited Partnership	Delaware	8069	25-1661222
Continental Medical of Arizona, Inc.	Delaware	8069	25-1622263
Continental Medical Systems, Inc.	Delaware	8069	72-1051812
Continental Rehabilitation Hospital of Arizona, Inc.	Delaware	8069	25-1622264
Diagnostic Health Corporation	Delaware	8071	63-1059483
HEALTHSOUTH Bakersfield Rehabilitation Hospital Limited Partnership	Alabama	8069	63-1184845
HEALTHSOUTH Diagnostic Center of Colorado Springs Limited Partnership	Alabama	8071	72-1383580
HEALTHSOUTH Diagnostic Centers of Tennessee Limited Partnership	Alabama	8071	63-1184829
HEALTHSOUTH Diagnostic Centers of Texas Limited Partnership	Alabama	8071	63-1184833
HEALTHSOUTH Diagnostic Centers, Inc.	Alaska	8071	63-1184671
HEALTHSOUTH LTAC of Sarasota, Inc.	Delaware	8069	63-1283287
HEALTHSOUTH Medical Center, Inc.	Alabama	8062	63-0872396
HEALTHSOUTH Meridian Point Rehabilitation Hospital Limited Partnership	Alabama	8049	63-1184846
HEALTHSOUTH Northern Kentucky Rehabilitation Hospital Limited Partnership	Alabama	8069	63-1184835
HEALTHSOUTH of Alexandria, Inc.	Delaware	8069	48-1266084
HEALTHSOUTH of Altoona, Inc.	Delaware	8069	63-1105927
HEALTHSOUTH of Austin, Inc.	Delaware	8069	63-1105908
HEALTHSOUTH of Charleston, Inc.	Delaware	8069	63-1106610
HEALTHSOUTH of Dothan, Inc.	Alabama	8069	63-1097851
HEALTHSOUTH of East Tennessee, LLC	Delaware	8069	63-1028003
HEALTHSOUTH of Erie, Inc.	Delaware	8069	63-1105904
HEALTHSOUTH of Fort Smith, Inc.	Delaware	8069	63-1105919
HEALTHSOUTH of Ft. Lauderdale Limited Partnership	Alabama	8069	63-1134714
HEALTHSOUTH of Henderson, Inc.	Delaware	8069	63-1262946
HEALTHSOUTH of Houston, Inc.	Delaware	8069	63-1105909
HEALTHSOUTH of Largo Limited Partnership	Alabama	8069	63-1134645
HEALTHSOUTH of Mechanicsburg, Inc.	Delaware	8069	63-1105923
HEALTHSOUTH of Midland, Inc.	Delaware	8069	63-1105911
HEALTHSOUTH of Montgomery, Inc.	Alabama	8069	63-1106107
HEALTHSOUTH of New Mexico, Inc.	New Mexico	8069	63-0923407
HEALTHSOUTH of Nittany Valley, Inc.	Delaware	8069	63-1105924

Exact Name of Registrant as Specified in its Charter and Address, Including Zip Code, and Telephone Number, Including Area Code of Registrant’s Principal Executive Offices*	State or other Jurisdiction of Incorporation or Organization	Primary Standard Industrial Classification Code Number	I.R.S. Employer Identification Number
HEALTHSOUTH of Pittsburgh, Inc.	Delaware	8069	63-1105926
HEALTHSOUTH of Reading, Inc.	Delaware	8069	72-1397929
HEALTHSOUTH of San Antonio, Inc.	Delaware	8069	63-1105930
HEALTHSOUTH of Sarasota Limited Partnership	Alabama	8069	63-1134650
HEALTHSOUTH of Sewickley, Inc.	Delaware	8069	63-1227357
HEALTHSOUTH of South Carolina, Inc.	Delaware	8069	63-0974715
HEALTHSOUTH of Spring Hill, Inc.	Delaware	8069	63-1244181
HEALTHSOUTH of Tallahassee Limited Partnership	Alabama	8069	63-1134713
HEALTHSOUTH of Texarkana, Inc.	Delaware	8069	63-1105916
HEALTHSOUTH of Texas, Inc.	Texas	8069	63-0923506
HEALTHSOUTH of Toms River, Inc.	Delaware	8069	63-1105897
HEALTHSOUTH of Treasure Coast, Inc.	Delaware	8069	63-1105921
HEALTHSOUTH of Utah, Inc.	Delaware	8069	63-1105917
HEALTHSOUTH of York, Inc.	Delaware	8069	63-1105925
HEALTHSOUTH of Yuma, Inc.	Delaware	8069	95-4895912
HEALTHSOUTH Properties, LLC	Delaware	8011	63-1133453
HEALTHSOUTH Real Property Holding, LLC	Delaware	8011	63-1044004
HEALTHSOUTH Rehabilitation Center of New Hampshire, Ltd.	Alabama	8069	63-1102594
HEALTHSOUTH Rehabilitation Center, Inc.	South Carolina	8069	57-0775688
HEALTHSOUTH Rehabilitation Hospital of Arlington Limited Partnership	Alabama	8069	63-1184844
HEALTHSOUTH Rehabilitation Hospital of Odessa, Inc.	Delaware	8069	33-1039783
HEALTHSOUTH Rehabilitation Institute of Tucson, LLC	Alabama	8069	63-1184847
HEALTHSOUTH S.C. of Portland, Inc.	Delaware	8011	94-3418398
HEALTHSOUTH S.C. of Scottsdale-Bell Road, Inc.	Delaware	8011	63-1190153
HEALTHSOUTH Specialty Hospital, Inc.	Texas	8082	63-1114772
HEALTHSOUTH Sub-Acute Center of Mechanicsburg, Inc.	Delaware	8069	63-1105903
HEALTHSOUTH Surgery Center of Fairfield, Inc.	Delaware	8011	63-1176243
HEALTHSOUTH Surgery Centers-West, Inc.	Delaware	8011	68-0282268
HEALTHSOUTH Surgical Center of Tuscaloosa, Inc.	Alabama	8011	63-1138507
HEALTHSOUTH Valley of the Sun Rehabilitation Hospital Limited Partnership	Alabama	8069	63-1184848
HSC of Beaumont, Inc.	Tennessee	8011	62-150273
HVPG of California, Inc.	California	8011	33-0044383
Lakeland Physicians Medical Building, Inc.	Mississippi	8011	75-2261520
Lakeshore System Services of Florida, Inc.	Florida	8069	63-1119356
Lakeview Rehabilitation Group Partners	Kentucky	8069	25-1573943
Little Rock-SC, Inc.	Arkansas	8011	74-2397267
National Imaging Affiliates, Inc.	Delaware	8071	74-2627497
National Surgery Centers, Inc.	Delaware	8011	36-3549627
Neuro Imaging Institute, Inc.	Florida	8071	59-3387335
New England Rehabilitation Hospital, Inc.	Massachusetts	8069	04-2443258
New England Rehabilitation Management Co., Inc.	New Hampshire	8069	02-0393832
North Louisiana Rehabilitation Center, Inc.	Louisiana	8069	72-1091113
Northeast Surgery Center, Ltd.	Texas	8011	76-0428226
NSC Connecticut, Inc.	Connecticut	8011	06-1492451
NSC Houston, Inc.	Texas	8011	76-0509159

Exact Name of Registrant as Specified in its Charter and Address, Including Zip Code, and Telephone Number, Including Area Code of Registrant’s Principal Executive Offices*	State or other Jurisdiction of Incorporation or Organization	Primary Standard Industrial Classification Code Number	I.R.S. Employer Identification Number
NSC Seattle, Inc.	Washington	8011	91-1553479
Rebound, LLC	Delaware	8069	62-1178229
Rehab Concepts Corp.	Delaware	8049	25-1650793
Rehabilitation Hospital Corporation of America, Inc.	Delaware	8069	23-2655290
Rehabilitation Hospital of Colorado Springs, Inc.	Delaware	8069	25-1612420
Rehabilitation Hospital of Nevada - Las Vegas, Inc.	Delaware	8069	25-1694347
Rehabilitation Hospital of Nevada - Las Vegas, L.P.	Delaware	8069	25-1693810
Rehabilitation Hospital of Plano, Inc.	Texas	8069	25-1612423
Rehabilitation Institute Of Western Massachusetts, Inc.	Massachusetts	8069	04-2987822
Sarasota LTAC Properties, LLC	Florida	8069	20-0978999
SCA - Roseland, Inc.	New Jersey	8011	62-1510206
SCA-Dalton, Inc.	Tennessee	8011	71-0923702
SCA-Shelby Development Corp.	Tennessee	8011	62-1179532
SelectRehab, Inc.	Delaware	8069	25-1649024
Sherwood Rehabilitation Hospital, Inc.	Delaware	8069	25-1604215
Southeast Texas Rehabilitation Hospital, Inc.	Texas	8069	25-1595744
Southern Arizona Regional Rehabilitation Hospital, L.P.	Delaware	8069	25-1654947
Surgery Center Holding Corporation	Delaware	8011	62-1739361
Surgical Care Affiliates, Inc.	Delaware	8011	62-1149229
Surgical Health Corporation	Delaware	8011	58-1941168
Surgicare of Huntsville, Inc.	Alabama	8011	75-2305255
Surgicare of Laguna Hills, Inc.	California	8011	75-2501088
Tarrant County Rehabilitation Hospital, Inc.	Texas	8069	25-1587575
Terre Haute Regional Rehabilitation Hospital, L.P.	Delaware	8069	25-1675783
Terre Haute Rehabilitation Hospital, Inc.	Delaware	8069	25-1672916
Tyler Rehabilitation Hospital, Inc.	Texas	8069	25-1667731
Western Medical Rehab Associates, L.P.	Delaware	8069	33-0695017
Western Neuro Care, Inc.	Delaware	8069	25-1572589

* All Registrants have the following principal executive offices:

c/o HealthSouth Corporation

One HealthSouth Parkway

Birmingham, Alabama 35243

(205) 967-7116

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

SUBJECT TO COMPLETION, DATED MAY 3, 2007

PROSPECTUS

HealthSouth Corporation

OFFER TO EXCHANGE

$375 million aggregate principal amount of Floating Rate Senior Notes due 2014 in exchange for $375 million aggregate principal amount of Floating Rate Senior Notes due 2014, which have been registered under the Securities Act of 1933, as amended

AND

$625 million aggregate principal amount of 10.75% Senior Notes due 2016 in exchange for $625 million aggregate principal amount of 10.75% Senior Notes due 2016, which have been registered under the Securities Act of 1933, as amended

In this prospectus we refer to the Floating Rate Senior Notes due 2014 (the “Floating Rate Notes”) and the 10.75% Senior Notes due 2016 (the “Fixed Rate Notes”) that have been registered under the Securities Act of 1933, as amended (the “Securities Act”) as the “Exchange Notes,” and we refer to the Floating Rate Notes and the Fixed Rate Notes that have not been registered under the Securities Act as the “Restricted Notes”.

The Exchange Offer will expire at 5:00 p.m., New York City time, on June 7, 2007,

unless earlier terminated or extended by us.

Terms of the Exchange Offer:

• We will exchange Exchange Notes for all outstanding Restricted Notes that are validly tendered and not withdrawn prior to the expiration or termination of the Exchange Offer.

• You may withdraw tenders of Restricted Notes at any time prior to the expiration or termination of the Exchange Offer.

• The terms of the Exchange Notes are substantially identical to those of the Restricted Notes, except that the issuance of the Exchange Notes has been registered under the Securities Act and the transfer restrictions, registration rights and additional interest provisions relating to the Restricted Notes do not apply to the Exchange Notes.

• The exchange of Restricted Notes for Exchange Notes will not be a taxable transaction for United States federal income tax purposes, but you should see the discussion under the caption “Certain U.S. Federal Income Tax Considerations” for more information.

• We will not receive any proceeds from the Exchange Offer.

• We issued the Restricted Notes in a transaction not requiring registration under the Securities Act and, as a result, their transfer is restricted. We are conducting the Exchange Offer to satisfy your registration rights, as a holder of the Restricted Notes.

Each broker-dealer that receives Exchange 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 Exchange Notes. 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 Notes received in exchange for Restricted Notes where such Exchange 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 up to 180 days after the closing 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.”

There is no established trading market for the Exchange Notes. We have not applied, and do not currently intend to apply, to list the Exchanged Notes on any securities exchange.

See “ Risk Factors” beginning on page 11 for certain risks incorporated herein by reference and discussed herein that you should consider prior to tendering your Restricted Notes for exchange.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is                      , 2007.

TABLE OF CONTENTS

Summary	1
Risk Factors	11
Ratio of Earnings to Fixed Charges	17
Use of Proceeds	18
Selected Consolidated Financial Data	19
The Exchange Offer	21
Description of the Exchange Notes	30
Certain U.S. Federal Income Tax Considerations	78
Plan of Distribution	79
Legal Matters	80
Experts	80
Incorporation by Reference	80
Where You Can Find More Information	81

ABOUT THIS PROSPECTUS

In this prospectus, unless otherwise stated, “HealthSouth,” “the company,” “we,” “us” and “our” refer to HealthSouth Corporation and its subsidiaries.

This prospectus incorporates by reference important business and financial information about us that is not included in or delivered with this document. Copies of this information are available, without charge to any person to whom this prospectus is delivered, upon written or oral request to:

HealthSouth Corporation

One HealthSouth Parkway

Birmingham, Alabama 35243

Attn: Investor Relations

(205) 967-7116

In order to obtain timely delivery, you must request the information no later than May 31, 2007, which is five business days before the expiration date of the Exchange Offer.

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains historical information, as well as forward-looking statements that involve known and unknown risks and relate to future events, our future financial performance, or our projected business results. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “targets,” “potential,” or “continue” or the negative of these terms or other comparable terminology. Such forward-looking statements are necessarily estimates based upon current information and involve a number of risks and uncertainties. Actual events or results may differ materially from the results anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors that could cause actual results to differ materially from those estimated by us include:

• each of the factors discussed in under the heading Risk Factors, starting on page 11 of this prospectus or incorporated herein by reference, including the risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, as amended by our Form 10-K/A filed with the SEC on March 22, 2007;

• the outcome of our plan to reposition our primary focus on the post-acute care sector, including the results of our attempts to divest our surgery centers, outpatient and diagnostic divisions;

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• changes or delays in or suspension of reimbursement for our services by governmental or private payors;

• changes in the regulations of the health care industry at either or both of the federal and state levels;

• changes in reimbursement for health care services we provide;

• competitive pressures in the health care industry and our response to those pressures;

• our ability to obtain and retain favorable arrangements with third-party payors;

• our ability to attract and retain nurses, therapists, and other health care professionals in a highly competitive environment with often severe staffing shortages; and

• general conditions in the economy and capital markets.

The cautionary statements referred to in this section also should be considered in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf. We undertake no duty to update these forward-looking statements, even though our situation may change in the future. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements.

ii

SUMMARY

The following summary is qualified in its entirety by the more detailed information included elsewhere or incorporated by reference in this prospectus. Because this is a summary, it may not contain all the information that may be important to you. You should read the entire prospectus, as well as the information incorporated by reference, before making an investment decision.

Our Company

HealthSouth is the largest provider of rehabilitative health care and ambulatory surgery services in the United States, with 978 facilities and approximately 33,000 full- and part-time employees as of December 31, 2006. We provide these services through a national network of inpatient and outpatient rehabilitation facilities, diagnostic centers, and other health care facilities. Shares of our common stock began trading on the New York Stock Exchange on October 26, 2006 under the ticker symbol “HLS”.

This prospectus relates to the exchange of Exchange Notes for all outstanding Restricted Notes that are validly tendered and not withdrawn prior to the expiration or termination of the Exchange Offer. The terms of the Exchange Notes are substantially identical to those of the Restricted Notes, except that the issuance of the Exchange Notes has been registered under the Securities Act and the transfer restrictions, registration rights and additional interest provisions relating to the Restricted Notes do not apply to the Exchange Notes. The exchange of Restricted Notes for Exchange Notes will not be a taxable transaction for United States federal income tax purposes, but you should see the discussion under the caption “Certain U.S. Federal Income Tax Considerations” for more information. We will not receive any proceeds from the Exchange Offer.

We issued the Restricted Notes in a transaction not requiring registration under the Securities Act and, as a result, their transfer is restricted. We are making the Exchange Offer to satisfy the registration rights of the holders of the Restricted Notes. Each broker or dealer that receives Exchange Notes for its own account in exchange for Restricted Notes that were acquired by such broker-dealer as a result of market-making or other trading activities must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. See “Plan of Distribution”.

HealthSouth was incorporated under the laws of the State of Delaware. Our principal executive offices are located at One HealthSouth Parkway, Birmingham, Alabama 35243, and our telephone number is (205) 967-7116. Our Internet website address is www.healthsouth.com. Information on our website does not constitute part of this prospectus and should not be relied upon in connection with making any investment decision with respect to the Exchange Notes.

Significant Recent Events

On March 12, 2007, the Company announced it had amended its existing Senior Secured Credit Facilities to lower the applicable interest rates and modify certain other covenants. The amendment and related supplement reduce the interest rate on the Term Loan B to LIBOR plus 2.5%, as well as reduce the applicable participation rate on the Tranche A letter of credit facility to 2.5%. The amendment also gives the Company the appropriate approvals for its divestiture activities.

On March 25, 2007, we entered into a Stock Purchase Agreement with ASC Acquisition LLC (“ASC”), a Delaware limited liability company and newly-formed affiliate of TPG Partners V, L.P. (“TPG”), pursuant to which ASC will acquire our surgery centers division for approximately $945 million. The purchase price consists

of cash consideration of $920 million, subject to certain adjustments, and an equity interest whereby we will have an option to acquire 5% of ASC’s primary shares acquired by TPG at closing at an exercise price that will

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escalate at 15% annually, which option is estimated to be worth between $25 and $30 million assuming a five-year horizon. The closing of the transactions is subject to the satisfaction of closing conditions set forth in the Stock Purchase Agreement, including certain regulatory and other approvals. The closing is anticipated to occur in the third quarter of 2007.

On April 19, 2007, the Company entered into a definitive agreement with The Gores Group (“Gores”), a private equity firm, pursuant to which Gores will acquire the Company’s diagnostic division for approximately $47.5 million. The transaction is expected to be completed by the end of June or early in the third quarter of 2007 and is subject to customary closing conditions, including regulatory approval.

On May 1, 2007, the Company consummated the transactions contemplated by the previously reported Stock Purchase Agreement with Select Medical Corporation (“Select”), a privately owned operator of specialty hospitals and outpatient rehabilitation facilities, pursuant to which Select acquired the Company’s outpatient rehabilitation division.

The Exchange Offer

On June 14, 2006, we issued and sold $375.0 million aggregate principal amount of Floating Rate Senior Notes due 2014 and $625.0 million aggregate principal amount of 10.75% Senior Notes due 2016, which we refer to together as the “Restricted Notes”, in an offering under Rule 144A and Regulation S of the Securities Act of 1933, as amended (the “Securities Act”), that was not registered under the Securities Act. Simultaneously with this transaction, we entered into a registration rights agreement with the initial purchasers of those Restricted Notes (the “Registration Rights Agreement”) in which we agreed, among other things, to deliver this prospectus to you and to commence this Exchange Offer for the Restricted Notes. Below is a summary of the Exchange Offer. You should read the discussion under the headings “The Exchange Offer” and “Description of the Exchange Notes” for further information regarding the notes to be issued in the Exchange Offer.

Restricted Notes $375.0 million principal amount of Floating Rate Senior Notes due 2014 (the “Floating Rate Restricted Notes”) and $625.0 million principal amount of Fixed Rate Senior Notes due 2016 (the “Fixed Rate Restricted Notes” and, together with the Floating Rate Restricted Notes, the “Restricted Notes”), in each case, which have not been registered under the Securities Act.

Exchange Notes Up to $375.0 million principal amount of Floating Rate Senior Notes due 2014 (the “Floating Rate Exchange Notes”) and $625.0 million principal amount of Fixed Rate Senior notes due 2016 (the “Fixed Rate Exchange Notes” and, together with the Floating Rate Exchange Notes, the “Exchange Notes”), in each case, the issuance of which has been registered under the Securities Act. The Floating Rate Exchange Notes and Fixed Rate Exchange Notes will be issued under separate indentures, each dated as of June 14, 2006 (together, the “Indentures”), in each case, among us, the guarantors named therein and The Bank of Nova Scotia Trust Company of New York, as trustee.

The form and terms of the Exchange Notes are substantially identical to those of the applicable series of Restricted Notes, except that issuance of the Exchange Notes has been registered under the Securities Act and the transfer restrictions, registration rights and additional interest provisions relating to the Restricted Notes do not apply to the Exchange Notes.

Exchange Offer We are offering to exchange:

(i) $375.0 million principal amount of Floating Rate Exchange Notes for a like principal amount of the Floating Rate Restricted Notes; and

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(ii) $625.0 million principal amount of Fixed Rate Exchange Notes for a like principal amount of the Fixed Rate Restricted Notes

to satisfy our obligations under the registration rights agreement that we entered into when the Restricted Notes were issued in reliance upon the exemption from registration provided by Rule 144A and Regulation S of the Securities Act. Once the Exchange Offer is complete, you will no longer be entitled to exchange or registration rights with respect to the Restricted Notes.

In order to be exchanged, a Restricted Note must be properly tendered and accepted. All Restricted Notes that are validly tendered and not withdrawn will be exchanged.

Expiration Date; Tenders The Exchange Offer will expire at 5:00 p.m., New York City time, on June 7, 2007, unless earlier terminated or extended by us.

By tendering your Restricted Notes, you represent to us:

• that any Exchange Notes received in exchange for your Restricted Notes in the Exchange Offer are being acquired by you or any other person receiving such Exchange Notes in the ordinary course of your or such other person’s business;

• that at the time of the commencement of the Exchange Offer, you do not, or any other person who will receive Exchange Notes in exchange for your Restricted Notes does not, have any arrangement or understanding with any person to participate in the “distribution” (as defined in the Securities Act) of the Exchange Notes in violation of the Securities Act;

• that you are not holding Restricted Notes that have, or are reasonably likely to have, the status of an unsold allotment;

• that you are not, or such other person receiving Exchange Notes in exchange for your Restricted Notes is not, an “affiliate” (as defined in Rule 405 under the Securities Act) of HealthSouth Corporation,, or if you are, or such other person is, an “affiliate” of HealthSouth Corporation., that you or such other person will comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction;

• if you are not, or such other person receiving Exchange Notes in exchange for your Restricted Notes is not, a broker-dealer, that you are not, or such other person is not, engaged in, and you do not, or such other person does not, intend to engage in, the distribution of the Exchange Notes; and

• if you are a broker-dealer, that you will receive the Exchange Notes for your own account in exchange for Restricted Notes that were acquired by you as a result of your market- making or other trading activities and that you will deliver a prospectus in connection with any resale of the Exchange Notes you receive in the Exchange Offer. For further information regarding resales of the Exchange Notes by participating broker-dealers, see the discussion below under the caption “Plan of Distribution.”

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Withdrawal; Non-Acceptance You may withdraw any Restricted Notes tendered in the Exchange Offer at any time prior to 5:00 p.m., New York City time, on June 7, 2007, unless the Exchange Offer is earlier terminated. If we extend the Exchange Offer, you may withdraw Restricted Notes tendered at any time prior to the expiration date, as extended. If we decide for any reason not to accept any Restricted Notes for exchange, the Restricted Notes will be returned to you at our expense promptly after the expiration or termination of the Exchange Offer. See “The Exchange Offer—Terms of the Exchange Offer.”

Conditions to the Exchange Offer The Exchange Offer is subject to customary conditions, which we may waive. See the discussion below under the caption See “The Exchange Offer—Conditions to the Exchange Offer”.

Resales Based on interpretations by the staff of the SEC, as detailed in a series of no-action letters issued to third parties, we believe that the Exchange Notes you receive in the Exchange Offer may be offered for resale, resold or otherwise transferred by you without compliance with the registration and prospectus delivery requirements of the Securities Act. However, you or any other person receiving Exchange Notes in exchange for your Restricted Notes will not be able to freely transfer the Exchange Notes if:

• you are, or such other person receiving Exchange Notes in exchange for your Restricted Notes is, an “affiliate” (as defined in Rule 405 under the Securities Act) of HealthSouth Corporation;

• you are not, or any other person receiving Exchange Notes in exchange for your Restricted Notes is not, acquiring the Exchange Notes in the Exchange Offer in the ordinary course of your or such other person’s business; or

• you are, or such other person receiving Exchange Notes in exchange for your Restricted Notes is, participating, intends to participate or has an arrangement or understanding with any person to participate, in the distribution of the Exchange Notes you or such other person will receive in the Exchange Offer.

If you fall within one of the exceptions listed above, or if you are a broker-dealer that receives Exchange Notes for your own account in the Exchange Offer in exchange for Restricted Notes that were acquired by you as a result of your market-making or other trading activities, you must comply with the registration and prospectus delivery requirements of the Securities Act or qualify for a registration exemption in connection with any resale transaction involving the Exchange Notes. For further information regarding resales of the Exchange Notes by participating broker-dealers, see the discussion under the caption “Plan of Distribution.”

By executing the letter of transmittal relating to this offer, or by agreeing to the terms of the letter of transmittal, you represent to us that you, or any other person receiving Exchange Notes in exchange for your Restricted Notes, satisfy each of these conditions. If you, or any other person receiving Exchange Notes in exchange for your

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Restricted Notes, does not satisfy any of these conditions and you, or any other person receiving Exchange Notes in exchange for your

Restricted Notes, transfers any exchange note without delivering a proper prospectus or without qualifying for a registration exemption, you or such other person may incur liability under the Securities Act. Moreover, our belief that transfers of Exchange Notes would be permitted without registration or prospectus delivery under the conditions described above is based on SEC interpretations given to other, unrelated issuers in similar exchange offers. We cannot assure you that the SEC would make a similar interpretation with respect to our Exchange Offer. We will not be responsible for or indemnify you against any liability you may incur under the Securities Act.

If you are an affiliate of ours, are engaged in or intend to engage in or have any arrangement or understanding with any person to participate in the distribution of the Exchange Notes:

• you cannot rely on the applicable interpretations of the staff of the SEC;

• you will not be entitled to participate in the Exchange Offer; and

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

See the discussion below under the caption “The Exchange Offer—Consequences of Failure to Exchange Restricted Notes” and “The Exchange Offer—Consequences of Exchanging Restricted Notes” for more information.

Procedures for Tendering the Restricted Notes A tendering holder must, on or prior to the expiration date:

• transmit a properly completed and duly executed letter of transmittal, including all other documents required by the letter of transmittal, to the Exchange Agent at the address listed in this prospectus; or

• if Restricted Notes are tendered in accordance with the book-entry procedures described in this prospectus, the tendering holder must transmit (i) a letter of transmittal (along with all other documents required by the letter of transmittal), or (ii) an agent’s message; in each case, to the Exchange Agent at the address listed in this prospectus.

See “The Exchange Offer—Procedures for Tendering”.

Special Procedures for Beneficial Owners If you are the beneficial owner of Restricted Notes that are registered in the name of your broker, dealer, commercial bank, trust company or other nominee and you wish to tender in the Exchange Offer, you should promptly contact the person in whose name your Restricted Notes are registered and instruct that person to tender on your behalf. If you wish to tender in the Exchange Offer on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your Restricted Notes, either make appropriate

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arrangements to register ownership of the Restricted Notes in your name or obtain a properly completed bond power from the person in whose name the Restricted Notes are registered. See “The Exchange Offer—Procedures for Tendering.”

Use of Proceeds We will not receive any proceeds from the Exchange Offer.

Exchange Agent The Bank of Nova Scotia Trust Company of New York has been appointed Exchange Agent for the Exchange Offer. You can find the address and telephone number of the Exchange Agent below under the caption “The Exchange Offer—Exchange Agent”.

Broker-Dealer Each broker or dealer that receives Exchange Notes for its own account in exchange for Restricted Notes that were acquired by such broker-dealer as a result of market-making or other trading activities must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. See “Plan of Distribution”.

Furthermore, any broker-dealer that acquired any of its Restricted Notes directly from us:

• may not rely on the applicable interpretation of the staff of the SEC’s position contained in Exxon Capital Holdings Corp., SEC no-action letter (April 13, 1988), Morgan, Stanley & Co. Inc., SEC no-action letter (June 5, 1991) and Shearman & Sterling, SEC no-action letter (July 2, 1993); and

• must also be named as a selling noteholder in connection with the registration and prospectus delivery requirements of the Securities Act relating to any resale transaction.

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 Notes received in exchange for Restricted Notes which were received by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that for a period of not more than 180 days after the consummation of the Exchange Offer, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution” for more information.

Accounting Treatment We will not recognize any gain or loss for accounting purposes upon the consummation of the Exchange Offer. We will amortize the expense of the Exchange Offer over the term of the Exchange Notes in accordance with generally accepted accounting principles.

Consequences of Failure to Exchange the Restricted Notes If you do not exchange your Restricted Notes in the Exchange Offer, your Restricted Notes will continue to be subject to the restrictions on transfer currently applicable to the Restricted Notes. In general, you may offer or sell your Restricted Notes only:

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• if they are registered under the Securities Act and applicable state securities laws;

• if they are offered or sold under an exemption from registration under the Securities Act and applicable state securities laws; or

• if they are offered or sold in a transaction not subject to the Securities Act and applicable state securities laws.

We do not currently intend to register the Restricted Notes under the Securities Act. If you do not participate in the Exchange Offer and other holders’ Restricted Notes are accepted for exchange, the trading market, if any, for the Restricted Notes would be adversely affected due to a reduction in market liquidity. After the Exchange Offer is completed, you will not be entitled to any exchange or registration rights with respect to your Restricted Notes, except under limited circumstances. Under certain circumstances, certain holders of Restricted Notes (including certain holders who are not permitted to participate in the Exchange Offer or who do not receive freely tradeable Exchange Notes in the Exchange Offer) may require us to file and cause to become effective a shelf registration statement which would cover resales of Restricted Notes by these holders. See “The Exchange Offer—Consequences of Failure to Exchange Restricted Notes” and “Description of the Exchange Notes—Registration Rights Agreement.”

Registration Rights Agreement When we issued the Restricted Notes in June 2006, we entered into a registration rights agreement with the initial purchasers of the Restricted Notes, under which we have agreed to:

• on or prior to the day that is 30 days after the we are required under the Exchange Act to file our Annual Report on Form 10-K for the fiscal year ended December 31, 2006 (after giving effect to all applicable extensions under the Exchange Act), file a registration statement with the SEC with respect to the Exchange Offer;

• use our reasonable best efforts to cause such registration statement to be declared effective under the Securities Act no later than 180 days after the date of filing thereof;

• as soon as practicable after the effectiveness of such registration statement, offer the Exchange Notes in exchange for the Restricted Notes, and keep such offer open for not less than 30 days after notice thereof to the holders; and

• file a shelf registration statement for the resale of the Notes under certain circumstances.

If we do not comply with these obligations under the registration rights agreement, we will be required to pay additional interest to the holders of the Restricted Notes. See “The Exchange Offer—Additional Interest”.

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Certain U.S. Federal Income Tax Considerations The exchange of Restricted Notes for Exchange Notes generally will not be a taxable event to a holder of Restricted Notes for U.S. federal income tax purposes. See “Certain U.S. Federal Income Tax Considerations”.

Summary Description of the Exchange Notes

The summary below describes the principal terms of the Exchange Notes. Certain of the terms and conditions described below are subject to important limitations and exceptions. The registered Floating Rate Notes and the registered Fixed Rate Notes are referred to herein as the Exchange Notes, and the Exchange Notes together with the Restricted Notes are referred to together as the Notes. The “Description of the Exchange Notes” section of this prospectus contains a more detailed description of the terms and conditions of the Exchange Notes.

Issuer HealthSouth Corporation.

Notes Offered $375,000,000 aggregate principal amount of Floating Rate Notes

$625,000,000 aggregate principal amount of Fixed Rate Notes

Maturity For the Floating Rate Notes: June 15, 2014.

For the Fixed Rate Notes: June 15, 2016.

Interest Interest on the Floating Rate Notes accrues at the rate of LIBOR plus 6.0% per annum, reset semi-annually, from the issue date or from the most recent date to which interest has been paid, and is payable in cash semi-annually in arrears on June 15 and December 15 of each year to the persons who are registered holders of the Floating Rate Notes at the close of business on the preceding June 1 or December 1, as the case may be.

Interest on the Fixed Rate Notes accrues at the rate of 10.75% per annum from the issue date or from the most recent date to which interest has been paid, and is payable in cash semi-annually in arrears on June 15 and December 15 of each year to the persons who are registered holders of the Fixed Rate Notes at the close of business on the preceding June 1 or December 1, as the case may be.

Optional redemption Floating Rate Notes:

We may redeem the Floating Rate Notes, in whole or in part, at any time on or after June 15, 2009, at the redemption prices set forth in this prospectus.

Prior to June 15, 2009, we may redeem up to 35% of the aggregate principal amount of the Floating Rate Notes with the net cash proceeds of certain equity offerings, at a redemption price equal to 100% of their principal amount plus a premium equal to the interest rate per annum on the Floating Rate Notes applicable on the date that notice of redemption is given, plus accrued and unpaid interest thereon, if any, to the redemption date, if at least 65% of the aggregate principal amount of the Floating Rate Notes remains outstanding after giving effect to such redemption.

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In addition, at any time prior to June 15, 2009, we may at our option redeem all, but not less than all, of the Floating Rate Notes, at a redemption price equal to 100% of the principal amount plus a “make-whole” premium, plus accrued and unpaid interest thereon, if any, to the redemption date.

See “Description of the Exchange Notes—Optional Redemption”.

Fixed Rate Notes:

We may redeem the Fixed Rate Notes, in whole or in part, at any time on or after June 15, 2011, at the redemption prices set forth in this prospectus.

Prior to June 15, 2009, we may redeem up to 35% of the aggregate principal amount of the Fixed Rate Notes with the net cash proceeds of certain equity offerings, at a redemption price equal to 110.75% of their principal amount, plus accrued and unpaid interest thereon, if any, to the redemption date, if at least 65% of the aggregate principal amount of the Fixed Rate Notes remains outstanding after giving effect to such redemption.

In addition, at any time prior to June 15, 2011, we may at our option redeem all, but not less than all, of the Fixed Rate Notes, at a redemption price equal to 100% of principal amount plus a “make-whole” premium, plus accrued and unpaid interest thereon, if any, to the redemption date.

See “Description of the Exchange Notes—Optional Redemption”.

Guarantees The Exchange Notes will be jointly and severally guaranteed on a senior unsecured basis by all of our existing and future subsidiaries that guarantee borrowings under our senior secured credit facilities or certain of our other debt. However, certain of our subsidiaries will not guarantee the Exchange Notes. For a discussion of the risks relating to the guarantees, see “Risk Factors—Not all of our subsidiaries will be guarantors. The Exchange Notes will be effectively junior to the indebtedness and other liabilities of our non-guarantor subsidiaries”.

Ranking The Exchange Notes and the guarantees will be senior unsecured obligations of HealthSouth Corporation and our guaranteeing subsidiaries. The Exchange Notes will rank equal in right of payment to our current and future senior debt and will rank senior in right of payment to our current and future subordinated debt. The Exchange Notes will be effectively subordinated to our current and future secured debt, including borrowings under our senior secured credit facilities, to the extent of the value of the assets securing such debt. See “Description of the Exchange Notes—Ranking”. In addition, the Notes and the guarantees will be effectively subordinated to any liabilities, including trade payables, of our non-guarantor subsidiaries.

Mandatory offers to purchase The occurrence of a change of control will be a triggering event requiring us to offer to purchase the Exchange Notes at a price equal to 101% of their principal amount, together with accrued and unpaid

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interest, if any, to the date of purchase. Certain asset dispositions will be triggering events which may require us to use the proceeds from those asset dispositions to make an offer to purchase the Exchange Notes at 100% of their principal amount, together with accrued and unpaid interest, if any, to the date of purchase if such proceeds are not otherwise used within 365 days to repay senior indebtedness, including indebtedness under our amended credit agreement (with a corresponding reduction in commitment), or to invest in capital assets related to our business.

Change of Control Upon the occurrence of a Change of Control (as defined in this prospectus), each holder of the Exchange Notes will have the right to require us to repurchase such holder’s Notes at a purchase price in cash equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase. See “Description of the Exchange Notes—Change of Control.”

Covenants The Indentures governing the Exchange Notes contain covenants that, among other things, limit our ability and the ability of our subsidiaries to:

• incur or guarantee indebtedness;

• pay dividends on, redeem or repurchase our capital stock; or redeem or repurchase our subordinated obligations;

• make investments;

• incur obligations that restrict the ability of our subsidiaries to make dividends or other payments to us;

• sell assets;

• engage in transactions with affiliates;

• create certain liens;

• enter into sale/leaseback transactions; and

• merge, consolidate, or transfer all or substantially all of our assets.

These covenants are subject to important qualifications and exceptions, which are described under the heading “Description of the Exchange Notes” in this prospectus.

Absence of public market The Exchange Notes generally will be freely transferable but will be new securities for which there will not initially be a market. Accordingly, there can be no assurance as to the development or liquidity of any market for the Exchange Notes.

Risk Factors Investing in the Exchange Notes involves risks. See “Risk Factors” beginning on page 11 and the other information in this prospectus incorporated herein by reference for a discussion of factors you should carefully consider before deciding to invest in the Notes.

Ratio of Earnings to Fixed Charges

Our ratio of earnings to fixed charges for the years ended December 31, 2006, 2005, 2004, 2003 and 2002 were 0, 0, 1.15x, 0 and 0, respectively. See “Ratio of Earnings to Fixed Charges.”

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RISK FACTORS

Participating in the Exchange Offer involves a number of risks. You should carefully consider the specific risks described below, the risks described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, as amended by our Form 10-K/A filed with the SEC on March 22, 2007, which are incorporated herein by reference, the risk factors described under the caption “Risk Factors” in any applicable prospectus supplement and any risk factors set forth in our other filings with the SEC, pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act before making an investment decision. See “Where You Can Find More Information.”

Risks Related to the Exchange Notes

Our substantial indebtedness may impair our financial condition and prevent us from fulfilling our obligations under the Indentures governing the Exchange Notes and our other debt instruments.

We are highly leveraged. As of December 31, 2006, we had approximately $3.3 billion of long-term debt outstanding (including that portion of long-term debt classified as current and excluding $149.5 million in capital leases). As discussed in our Annual Report on Form 10-K for the year ended December 31, 2006, as amended by our Form 10-K/A filed with the SEC on March 22, 2007, in Item 1, “Business, Completion of Recapitalization and Other Significant Financial Transactions,” we have prepaid substantially all of our prior indebtedness with proceeds from a series of recapitalization transactions and replaced it with approximately $3 billion of new long-term debt. Although we remain highly leveraged, we believe these recapitalization transactions have eliminated a number of uncertainties regarding our capital structure and have improved our financial condition by reducing our refinancing risk, increasing our liquidity, improving our operational flexibility, improving our credit profile, and reducing our interest rate exposure.

Our substantial indebtedness could have important consequences to you, including:

• preventing us from fulfilling our obligations under the Indentures governing the Exchange Notes and our other debt instruments;

• limiting our ability to borrow additional amounts to fund working capital, capital expenditures, acquisitions, debt service requirements, execution of our business strategy and other general corporate purposes;

• requiring us to dedicate a substantial portion of our cash flow from operations to pay principal and interest on our debt, which would reduce availability of our cash flow to fund working capital, capital expenditures, acquisitions, execution of our business strategy and other general corporate purposes;

• making us more vulnerable to adverse changes in general economic, industry and competitive conditions, in government regulation and in our business by limiting our flexibility in planning for, and making it more difficult for us to react quickly to, changing conditions;

• placing us at a competitive disadvantage compared with our competitors that have less debt; and

• exposing us to risks inherent in interest rate fluctuations because some of our borrowings, including the Floating Rate Notes, will be at variable rates of interest, which could result in higher interest expense in the event of increases in interest rates.

We are required to use a substantial portion of our cash flow to service our debt. A substantial downturn in earnings could jeopardize our ability to make our interest payments and could impair our ability to obtain additional financing, if necessary. Certain trends in our business, including declining revenues resulting from the 75% Rule, acute care volume weakness and pricing pressure have created a challenging operating environment, and future changes could place additional pressure on our revenues and cash flow. In addition, we are subject to numerous contingent liabilities and are subject to prevailing economic conditions and to financial, business, and other factors beyond our control. Although we expect to make scheduled interest payments and principal reductions, we cannot assure you that changes in our business or other factors will not occur that may have the effect of preventing us from satisfying obligations under our debt.

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Despite current indebtedness levels, we may still be able to incur more debt. This could further exacerbate the risks associated with our substantial indebtedness.

Subject to specified limitations, the Indentures governing the Exchange Notes and the credit agreement governing our senior secured credit facilities permit us and our subsidiaries to incur substantial additional debt. If new debt is added to our or any of our subsidiaries’ current debt levels, the risks described in the immediately preceding risk factor could intensify. See “Description of the Exchange Notes—Certain Covenants—Limitation on Indebtedness” for additional information.

The restrictive covenants in our senior secured credit facilities and the Indentures governing the Exchange Notes and our other debt instruments may affect our ability to operate our business successfully.

The Indentures governing the Exchange Notes and our other debt instruments and the terms of our senior secured credit facilities do, and our future debt instruments may, contain various provisions that limit our ability to, among other things:

• incur additional indebtedness;

• make restricted payments;

• create certain liens;

• sell assets;

• enter into sale and leaseback transactions;

• issue or sell certain types of preferred stock;

• in the case of our restricted subsidiaries, restrict them from making dividends or other payments to us;

• in the case of our restricted subsidiaries, incur or guarantee debt;

• engage in transactions with affiliates;

• create unrestricted subsidiaries; and

• consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries (if any) on a consolidated basis.

These covenants could adversely affect our ability to finance our future operations or capital needs and pursue available business opportunities.

In addition, our senior secured credit facilities require us to maintain specified financial ratios and satisfy certain financial condition tests. Events beyond our control, including changes in general economic and business conditions, may affect our ability to meet those financial ratios and financial condition tests. We cannot assure you that we will meet those tests or that the lenders will waive any failure to meet those tests. A breach of any of these covenants or any other restrictive covenants contained in our senior secured credit facilities or the Indentures could (after giving effect to applicable grace periods, if any) result in an event of default. If an event of default under our senior secured credit facilities or the Indentures occurs, the holders of the affected indebtedness could declare all amounts outstanding, together with accrued interest, to be immediately due and payable, which, in turn, could cause the default and acceleration of the maturity of our other indebtedness. If we were unable to pay such amounts, the lenders under our senior secured credit facilities could proceed against the collateral pledged to them. We have pledged substantially all of our assets to the lenders under our senior secured credit facilities. In such an event, we cannot assure you that we would have sufficient assets to pay amounts due on the Exchange Notes. As a result, you may receive less than the full amount you would otherwise be entitled to receive on the Exchange Notes. See Note 9, “Long-term Debt” to our consolidated financial statements and Item 2, “Properties” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, as amended by our Form 10-K/A filed with the SEC on March 22, 2007, and “Description of the Exchange Notes—Certain Covenants” in this prospectus for additional information.

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The Exchange Notes and the guarantees will not be secured by any of our assets. Our senior secured credit facilities are secured and our senior lenders have a prior claim on substantially all of our assets.

The Exchange Notes and the guarantees will not be secured by any of our assets. However, our senior secured credit facilities are secured by substantially all of our assets, including the stock of substantially all of our domestic wholly-owned subsidiaries (including future subsidiaries, if any). If we become insolvent or are liquidated, or if payment under any of the instruments governing our secured debt is accelerated, the lenders under those instruments will be entitled to exercise the remedies available to a secured lender under applicable law and pursuant to the instruments governing such debt. Accordingly, the lenders under our senior secured credit facilities have a prior claim on our assets securing the debt owed to them. In that event, because the Exchange Notes and the guarantees will not be secured by any of our assets, it is possible that our remaining assets might be insufficient to satisfy your claims in full.

As of December 31, 2006, the aggregate amount of our senior secured indebtedness was approximately $2.2 billion, excluding approximately $197.7 million that we had available for additional borrowing under the revolving portion of our senior secured credit facilities. We will be permitted to borrow substantial additional secured indebtedness in the future under the terms of the Indentures. See “Description of the Exchange Notes—Certain Covenants—Limitation on Indebtedness” and “Description of the Exchange Notes—Certain Covenants—Limitation on Liens.”

Not all of our subsidiaries will be guarantors. The Exchange Notes are effectively junior to the indebtedness and other liabilities of our non-guarantor subsidiaries.

Not all of our subsidiaries will guarantee the Exchange Notes. The Exchange Notes will be guaranteed by all of our current and future subsidiaries that guarantee borrowings under our senior secured credit facilities or incur or guarantee any outstanding capital markets debt. Our current subsidiary guarantors are listed on the cover page of this the registration statement of which this prospectus forms a part. Certain of our 100% owned subsidiaries and all of our non-wholly-owned subsidiaries, which are not guarantors of our senior secured credit facilities and through which we conduct a significant portion of our business, will not guarantee the Exchange Notes due to, among other things, restrictions in their constituent documents or other agreements. The Exchange Notes are effectively subordinated to the outstanding indebtedness and other liabilities, including trade payables, of our non-guarantor subsidiaries. In the event of a bankruptcy, liquidation or reorganization of any of our non-guarantor subsidiaries, holders of their indebtedness and their trade creditors will generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are made available for distribution to us.

The lenders under the senior secured credit facilities will have the discretion to release the guarantors under the senior secured credit agreement under certain circumstances, which will cause those guarantors to be released from their guarantees of the Exchange Notes.

While any obligations under the senior secured credit facilities remain outstanding, any guarantee of the Exchange Notes may be released without action by, or consent of, any holder of the Exchange Notes or the trustee under the Indentures governing the Exchange Notes, at the discretion of lenders under the senior secured credit facilities, if the related guarantor is no longer a guarantor of obligations under the senior secured credit facilities and does not have or guarantee any outstanding capital markets indebtedness. See “Description of the Exchange Notes.” The lenders under the senior secured credit facilities will have the discretion to release the guarantees under the senior secured credit facilities under certain circumstances. You will not have a claim as a creditor against any subsidiary that is no longer a guarantor of the Exchange Notes, and the indebtedness and other liabilities, including trade payables, of those subsidiaries will effectively be senior to claims of any holder of the Exchange Notes.

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We will require a significant amount of cash to service all our indebtedness, including the Exchange Notes, and our ability to generate sufficient cash depends upon many factors, some of which are beyond our control.

Our ability to make payments on and refinance our debt and to fund working capital needs and planned capital expenditures depends on our ability to generate cash flow in the future. To some extent, this is subject to general economic, financial, competitive, legislative and regulatory factors and other factors that are beyond our control. We cannot assure you that our business will continue to generate cash flow from operations at levels sufficient to permit us to pay principal, premium, if any, and interest on our indebtedness or that our cash needs will not increase. If we are unable to generate sufficient cash flow from operations in the future to service our debt and meet our other needs, we may have to refinance all or a portion of our debt, obtain additional financing or reduce expenditures or sell assets that we deem necessary to our business. We cannot assure you that any of these measures would be possible or that any additional financing could be obtained. The inability to obtain additional financing could have a material adverse effect on our financial condition and on our ability to meet our obligations to you under the Exchange Notes.

We may not have the funds to purchase the Exchange Notes upon the change of control offer as required by the Indentures governing the Exchange Notes.

Upon a change of control, as defined in the Indentures, subject to certain conditions, we are required to offer to repurchase all outstanding Exchange Notes at 101% of the principal amount thereof, plus accrued and unpaid interest to, but not including, the date of repurchase. The source of funds for that purchase of Exchange Notes will be our available cash, cash generated from our operations or the operations of our subsidiaries or other potential sources, including borrowings, sales of assets or sales of equity. We cannot assure you that sufficient funds from such sources will be available at the time of any change of control to make required repurchases of Exchange Notes tendered. In addition, the terms of our senior secured credit facilities will limit our ability to repurchase your Exchange Notes and will provide that certain change of control events will constitute an event of default thereunder. Our future debt agreements may contain similar restrictions and provisions. If the holders of the Exchange Notes exercise their right to require us to repurchase all the Exchange Notes upon a change of control, the financial effect of this repurchase could cause a default under our other debt, even if the change of control itself would not cause a default. Accordingly, it is possible that we will not have sufficient funds at the time of the change of control to make the required repurchase of the Exchange Notes and our other debt or that restrictions in our senior secured credit facilities and the Indentures will not allow such repurchases. In addition, certain corporate events, such as leveraged recapitalizations that would increase the level of our indebtedness, would not constitute a “change of control” under the Indentures. See “Description of the Exchange Notes—Change of Control” in this prospectus for additional information.

There is no established trading market for the Exchange Notes.

There is no existing trading market for the Notes. We cannot assure you that an active trading market will develop for the Exchange Notes. We do not intend to apply for listing of the Exchange Notes on any securities exchange. Although we are obligated, subject to some exceptions, to seek to exchange the Restricted Notes for Exchange Notes, we may not be able to do so. See the description of the proposed Exchange Offer under “Description of the Exchange Notes—Registered Exchange Offer; Registration Rights.” Whether or not the Restricted Notes are exchanged for Exchange Notes in the Exchange Offer, an active market for the Exchange Notes may not develop. If a market for the Exchange Notes does not develop, you may not be able to resell your Exchange Notes for an extended period of time, if at all. Consequently, your lenders may be reluctant to accept the Exchange Notes as collateral for loans. Moreover, if markets for the Exchange Notes do develop in the future, we cannot assure you that these markets will continue indefinitely or that the Exchange Notes can be sold at a price equal to or greater than their initial offering price. Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the Exchange Notes. The market for the Exchange Notes, if any, may be subject to similar disruptions. Any such disruptions may materially adversely affect you as a holder of the Exchange Notes. In addition, in response to

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prevailing interest rates and market conditions generally, as well as our performance and our ability to effect the Exchange Offer, the Exchange Notes could trade at a price lower than their initial offering price.

Federal and state statutes could allow courts, under specific circumstances, to void the subsidiary guaranties, subordinate claims in respect of the Exchange Notes and require note holders to return payments received from subsidiary guarantors.

Under U.S. bankruptcy law and comparable provisions of state fraudulent transfer laws, a court could void a subsidiary guaranty or claims related to a guarantor or subordinate a subsidiary guaranty to all other debts of a subsidiary guarantor if, among other things, the subsidiary guarantor, at the time it incurred the indebtedness evidenced by its subsidiary guaranty:

• intended to hinder, delay or defraud any present or future creditor or received less than reasonably equivalent value or fair consideration for the incurrence of such indebtedness;

• was insolvent or rendered insolvent by reason of such 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 the subsidiary guarantor’s ability to pay such debts as they mature.

In addition, a court could void any payment by a subsidiary guarantor pursuant to the Exchange Notes or a subsidiary guaranty and require that payment to be returned to such subsidiary guarantor or to a fund for the benefit of the creditors of the subsidiary guarantor. The measures of insolvency for purposes of fraudulent transfer laws will vary depending upon the governing law in any proceeding to determine whether a fraudulent transferred has occurred. Generally, however, a subsidiary guarantor would be considered insolvent if:

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

• the present fair saleable value of its assets was 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.

On the basis of historical financial information, recent operating history and other factors, we believe that we will not be insolvent, will not have insufficient capital for the business in which we are engaged and will not have incurred debts beyond our ability to pay such debts as they mature. There can be no assurance, however, as to what standard a court would apply in making such determinations or that a court would agree with our or any subsidiary guarantor’s conclusions in this regard.

Risks Related to the Exchange Offer

You may have difficulty selling the Restricted Notes which you do not exchange, since Restricted Notes will continue to have restrictions on transfer and cannot be sold without registration under securities laws or exemptions from registration.

If a large number of Restricted Notes are exchanged for Exchange Notes issued in the Exchange Offer, it may be difficult for holders of Restricted Notes that are not exchanged in the Exchange Offer to sell the Restricted Notes, since those Restricted Notes may not be offered or sold unless they are registered or there are exemptions from registration requirements under the Securities Act or state laws that apply to them. In addition, if there are only a small number of Restricted Notes outstanding, there may not be a very liquid market in those Restricted Notes. There may be few investors that will purchase unregistered securities in which there is not a liquid market. See “The Exchange Offer—Consequences of Exchanging Restricted Notes” and “The Exchange Offer—Consequences of Failure to Exchange Restricted Notes”.

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In addition, if you do not tender your Restricted Notes or if we do not accept some Restricted Notes, those notes will continue to be subject to the transfer and exchange provisions of the applicable Indenture and the existing transfer restrictions of the Restricted Notes that are described in the legend on such notes and in the offering memorandum relating to the Restricted Notes.

Late deliveries of Restricted Notes or any other failure to comply with the Exchange Offer procedures could prevent a holder from exchanging its Restricted Notes.

Noteholders are responsible for complying with all Exchange Offer procedures. The issuance of Exchange Notes in exchange for Restricted Notes will only occur upon completion of the procedures described in this prospectus under “The Exchange Offer.” Therefore, holders of Restricted Notes who wish to exchange them for Exchange Notes should allow sufficient time for timely completion of the exchange procedure. Neither we nor the Exchange Agent are obligated to extend the offer or notify you of any failure to follow the proper procedure.

If you do not exchange your Restricted Notes in the Exchange Offer, you will no longer be entitled to an increase in interest payments on Restricted Notes that the Indenture provides for if we fail to complete the Exchange Offer.

Once the Exchange Offer has been completed, holders of outstanding Restricted Notes will not be entitled to any increase in the interest rate on their notes, which the Indenture provides for if we fail to complete the Exchange Offer. Holders of Restricted Notes will not have any further rights to have their Restricted Notes registered, except in limited circumstances, once the Exchange Offer is completed.

If you exchange your Restricted Notes, you may not be able to resell the Exchange Notes you receive in the Exchange Offer without registering them and delivering a prospectus.

If you exchange your Restricted Notes in the Exchange Offer for the purpose of participating in a distribution of the Exchange Notes, you may be deemed to have received restricted securities and, if so, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction.

Based on interpretations by the SEC in no-action letters, we believe, with respect to Exchange Notes issued in the Exchange Offer, that:

• holders who are not “affiliates” of ours within the meaning of Rule 405 of the Securities Act,

• holders who acquire their notes in the ordinary course of business and

• holders who do not engage in, intend to engage in, or have arrangements to participate in a distribution (within the meaning of the Securities Act) of the notes do not have to comply with the registration and prospectus delivery requirements of the Securities Act.

Holders described in the preceding sentence must represent to us that they meet these criteria. Holders that do not meet these criteria can not rely on interpretations of the SEC in no-action letters, and will have to register the Exchange Notes they receive in the Exchange Offer and deliver a prospectus for them. In addition, holders that are broker-dealers may be deemed “underwriters” within the meaning of the Securities Act in connection with any resale of Exchange Notes acquired in the Exchange Offer. Holders that are broker-dealers must acknowledge that they acquired their Restricted Notes in market-making activities or other trading activities and must deliver a prospectus when they resell the Exchange Notes they acquire in the Exchange Offer in order not to be deemed an underwriter. Our obligation to make this prospectus available to broker-dealers is limited. We cannot guarantee that a proper prospectus will be available to broker-dealers wishing to resell their Exchange Notes.

You should review the more detailed discussion in “The Exchange Offer—Procedures for Tendering”, “The Exchange Offer—Consequences of Exchanging Restricted Notes” and “The Exchange Offer—Consequences of Failure to Exchange Restricted Notes”.

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RATIO OF EARNINGS TO FIXED CHARGES

The following table sets forth our ratio of earnings to fixed charges on a historical basis for the periods indicated:

Year ended December 31,
2006	2005	2004	2003	2002
*	*	1.15x	*	*

* For the years ended December 31, 2006, 2005, 2003, and 2002, the Company had an earnings-to-fixed charges coverage deficiency of approximately $472.8 million, $250.1 million, $372.3 million, and $271.8 million, respectively.

In computing the ratio of earnings to fixed charges: (1) earnings have been based on income from continuing operations before income taxes, fixed charges (exclusive of interest capitalized), and distributed income of equity investees and (2) fixed charges consist of interest and amortization of debt discounts and fees expense (including amounts capitalized), the estimated interest portion of rents, and dividends on our convertible perpetual preferred stock.

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USE OF PROCEEDS

The Exchange Offer is intended to satisfy certain obligations under the registration rights agreement we entered into with the initial purchasers of the Restricted Notes. We will not receive any proceeds from the issuance of the Exchange Notes in the Exchange Offer. In consideration for issuing the Exchange Notes in the Exchange Offer, we will receive the Restricted Notes in like principal amount, the form and terms of which are substantially the same as the form and terms of the Exchange Notes (which replace the Restricted Notes and which represent the same indebtedness). The Restricted Notes surrendered in exchange for the Exchange Notes will be retired and canceled and cannot be reissued. Accordingly, the issuance of the Exchange Notes will not result in any increase or decrease in our indebtedness.

The proceeds of the issuance and sale of the Restricted Notes were approximately $969 million, after deducting the discount payable to the initial purchasers of the Restricted Notes and estimated offering expenses payable by us. Such proceeds, together with cash on hand, were used to repay all outstanding borrowings under our Interim Loan Agreement that were incurred as part of our Recapitalization Transactions. See “Business—Completion of Recapitalization and Other Significant Financial Transactions” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, filed with the SEC on March 1, 2007, as amended by our Form 10-K/A filed with the SEC on March 22, 2007.

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SELECTED CONSOLIDATED FINANCIAL DATA

We derived the selected historical consolidated financial data presented below for the years ended December 31, 2006, 2005, and 2004 from our audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the year ended December 31, 2006, as amended by our Form 10-K/A filed with the SEC on March 22, 2007. We derived the selected historical consolidated financial data presented below for the years ended December 31, 2003 and 2002 from our audited consolidated financial statements and related notes included in our comprehensive Form 10-K for the years ended December 31, 2003 and 2002. The selected historical financial data should be read in conjunction with our annual report, as well as other information that has been filed with the SEC. The historical results included below and elsewhere in this document may not be indicative of future performance.

	For the year ended December 31,
	2006			2005			2004			2003			2002
	(In Millions, Except Per Share Data)
Income Statement Data:
Net operating revenues	$	3,000.1		$	3,117.0		$	3,409.7		$	3,544.9		$	3,519.7
Salaries and benefits		1,398.4			1,386.1			1,571.8			1,550.1			1,586.8
Professional and medical director fees		72.0			71.6			72.3			80.5			87.8
Supplies		287.8			294.2			318.2			304.1			300.5
Other operating expenses		457.2			540.4			428.2			539.6			619.2
Provision for doubtful accounts		119.3			94.3			109.6			120.0			112.0
Depreciation and amortization		148.2			162.6			172.2			180.4			205.7
Occupancy costs		141.4			113.1			152.4			180.0			181.4
Recovery of amounts due from Richard M. Scrushy		(47.8	)		—			—			—			—
Recovery of amounts due from Meadowbrook		—			(37.9	)		—			—			—
(Gain) loss on disposal of assets		(4.5	)		16.6			10.2			(13.7	)		82.6
Impairment of goodwill		—			—			—			335.6			—
Impairment of intangible assets		0.2			—			1.0			—			15.3
Impairment of long-lived assets		15.0			43.3			35.5			132.1			47.1
Government, class action, and related settlements expense		38.8			215.0			—			170.9			347.7
Professional fees—accounting, tax, and legal		163.6			169.8			206.2			70.6			—
Loss (gain) on early extinguishment of debt		365.6			—			—			(2.3	)		(9.6	)
Interest expense and amortization of debt discounts and fees		335.1			337.5			301.4			264.2			250.3
Interest income		(15.7	)		(17.1	)		(13.1	)		(7.2	)		(6.6	)
Loss (gain) on sale of investments		1.9			0.1			(4.0	)		15.8			(11.8	)
Loss on interest rate swap		10.5			—			—			—			—
Equity in net income of nonconsolidated affiliates		(21.3	)		(29.4	)		(9.9	)		(15.8	)		(15.3	)
Minority interests in earnings of consolidated affiliates		92.3			97.2			95.0			97.0			90.5
		3,558.0			3,457.4			3,447.0			4,001.9			3,883.6
Loss from continuing operations before income tax expense		(557.9	)		(340.4	)		(37.3	)		(457.0	)		(363.9	)
Provision for income tax expense (benefit)		41.4			38.4			11.9			(28.4	)		20.3
Loss from discontinued operations, net of income tax expense		(26.0	)		(67.2	)		(125.3	)		(3.5	)		(34.4	)
Cumulative effect of accounting change, net of income tax expense		—			—			—			(2.5	)		(48.2	)
Net loss		(625.0	)		(446.0	)		(174.5	)		(434.6	)		(466.8	)
Convertible perpetual preferred dividends		(22.2	)		—			—			—			—
Net loss available to common shareholders	$	(647.2	)	$	(446.0	)	$	(174.5	)	$	(434.6	)	$	(466.8	)

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	For the year ended December 31,
	2006			2005			2004			2003			2002
	(In Millions, Except Per Share Data)
Weighted average common shares outstanding:
Basic		79.5			79.3			79.3			79.2			79.1
Diluted*		90.3			79.6			79.5			81.2			81.7
Basic and diluted loss per common share:
Loss from continuing operations available to common shareholders	$	(7.81	)	$	(4.77	)	$	(0.62	)	$	(5.41	)	$	(4.86	)
Loss from discontinued operations, net of tax		(0.33	)		(0.85	)		(1.58	)		(0.05	)		(0.43	)
Cumulative effect of accounting change, net of tax		—			—			—			(0.03	)		(0.61	)
Net loss per share available to common shareholders	$	(8.14	)	$	(5.62	)	$	(2.20	)	$	(5.49	)	$	(5.90	)

* Per share diluted amounts are treated the same as basic per share amounts because the effect of including potentially dilutive shares is antidilutive.

	As of December 31,
	2006			2005			2004			2003			2002
	(In Millions)
Balance Sheet Data:
Cash and marketable securities	$	40.6		$	198.3		$	450.1		$	462.0		$	85.8
Restricted cash		99.6			237.4			235.4			170.3			24.0
Restricted marketable securities		71.1			—			—			—			—
Working capital (deficit)		(381.3	)		(235.5	)		(3.8	)		167.0			(490.5	)
Total assets		3,359.6			3,592.2			4,083.0			4,209.7			4,536.7
Long-term debt, including current portion		3,402.3			3,401.9			3,493.9			3,499.7			3,480.8
Convertible perpetual preferred stock		387.4			—			—			—			—
Shareholders’ deficit		(2,184.6	)		(1,540.7	)		(1,109.4	)		(963.8	)		(528.8	)

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THE EXCHANGE OFFER

Purpose of the Exchange Offer

On June 14, 2006, we issued an aggregate principal amount of $1,000,000,000 of Restricted Notes in an offering under Rule 144A and Regulation S of the Securities Act that was not registered under the Securities Act. We sold the Restricted Notes to the initial purchasers under a Purchase Agreement, dated June 9, 2006, among us, the guarantors party thereto, and the initial purchasers. When we issued and sold the Restricted Notes to the initial purchasers, we entered into a registration rights agreement with the initial purchasers of those Restricted Notes. Under the registration rights agreement, we agreed to file a registration statement regarding the exchange of the Restricted Notes for Notes which are registered under the Securities Act. We also agreed to use our reasonable best efforts to cause the registration statement to become effective with the SEC and to conduct this Exchange Offer after the registration statement is declared effective. The form and terms of the Exchange Notes are substantially identical to those of the Restricted Notes except that the issuance of the Exchange Notes has been registered under the Securities Act and the transfer restrictions, registration rights and certain additional interest provisions relating to the Restricted Notes do not apply to the Exchange Notes.

Terms of the Exchange Offer

Upon the terms and conditions described in this prospectus and in the accompanying letter of transmittal, which together constitute the Exchange Offer, we will accept for exchange all Restricted Notes that are properly tendered on or before the expiration date and not withdrawn as permitted below. As used in this prospectus, the term “expiration date” means 5:00 p.m., New York City time, on June 7, 2007. However, if we have extended the period of time for which the Exchange Offer is open, the term “expiration date” means the latest time and date to which we extend the Exchange Offer.

As of the date of this prospectus, $375,000,000 aggregate principal amount of the Floating Rate Restricted Notes is outstanding and $625,000,000 aggregate principal amount of the Fixed Rate Restricted Notes is outstanding. This prospectus, together with the letter of transmittal, is first being sent on or about May 8, 2007 to all holders of Restricted Notes known to us. Our obligation to accept Restricted Notes for exchange in the Exchange Offer is subject to the conditions described below under the heading “—Conditions to the Exchange Offer.”

The Exchange Offer will be open for no less than thirty (30) days after the date notice of the Exchange Offer is mailed to holders. We reserve the right, at any time and from time to time, in our sole discretion, to extend the period of time during which the Exchange Offer is open. We would then delay acceptance for exchange of any Restricted Notes by giving oral or written notice of an extension and delay to the holders of Restricted Notes as described below. During any extension period, all Restricted Notes previously tendered will remain subject to the Exchange Offer and may be accepted for exchange by us. Any Restricted Notes not accepted for exchange will be returned to the tendering holder after the expiration or termination of the Exchange Offer. We will notify you of any extension by means of a press release or other public announcement no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date.

We expressly reserve the right to amend or terminate the Exchange Offer, and not to accept for exchange any Restricted Notes not previously accepted for exchange, upon the occurrence of any of the conditions of the Exchange Offer specified below under the heading “—Conditions to the Exchange Offer.” We will give oral or written notice of any extension, amendment, non-acceptance or termination to the holders of the Restricted Notes as promptly as practicable. If we materially change the terms of the Exchange Offer, we will resolicit tenders of the Restricted Notes, file a post-effective amendment to the prospectus and provide notice to the noteholders. If the change is made less than five business days before the expiration of the Exchange Offer, we will extend the offer so that the noteholders have at least five business days to tender or withdraw.

Following completion of the Exchange Offer, we may, in our sole discretion, commence one or more additional Exchange Offers to those holders of Restricted Notes who do not exchange their Restricted Notes for

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Exchange Notes in this Exchange Offer. The terms of these additional Exchange Offers may differ from those applicable to this Exchange Offer. We may use this prospectus, as amended or supplemented from time to time, in connection with any additional Exchange Offers. These additional Exchange Offers may take place from time to time until all outstanding Restricted Notes have been exchanged for Exchange Notes, subject to the terms and conditions contained in the prospectus and the letter of transmittal we will distribute in connection with these additional Exchange Offers.

Procedures for Tendering

Restricted Notes tendered in the Exchange Offer must be in denominations of principal amount of $1,000 and any integral multiple of $1,000.

When the holder of Restricted Notes tenders, and we accept, Restricted Notes for exchange, a binding agreement between us and the tendering holder is created, subject to the terms and conditions set forth in this prospectus and the accompanying letter of transmittal. Except as described below, a tendering holder must, on or prior to the expiration date:

• transmit a properly completed and duly executed letter of transmittal, including all other documents required by the letter of transmittal, to the Exchange Agent at the address listed below under the heading “—Exchange Agent” or

• if Restricted Notes are tendered in accordance with the book-entry procedures listed below, the tendering holder must transmit either (i) a properly completed and duly executed letter of transmittal, with any required signature guarantees and all other documents required by the letter of transmittal, or (ii) an agent’s message (as defined below) to the Exchange Agent at the address listed below under the heading “—Exchange Agent.”

In addition, the Exchange Agent must receive, prior to the expiration date, a timely confirmation of book-entry transfer of the Restricted Notes being tendered into the Exchange Agent’s account at The Depository Trust Company (“DTC”), the book-entry transfer facility, along with the letter of transmittal or an agent’s message; or

The term “agent’s message” means a message, transmitted to DTC and received by the Exchange Agent and forming a part of a book-entry transfer, that states that DTC has received an express acknowledgment that the tendering holder agrees to be bound by the letter of transmittal and that we may enforce the letter of transmittal against this holder.

The method of delivery of Restricted Notes, letters of transmittal and all other required documents is at your election and risk. If the delivery is by mail, we recommend that you use registered mail, properly insured, with return receipt requested. In all cases, you should allow sufficient time to assure timely delivery. You should not send letters of transmittal or agent’s messages directly to us.

If you are a beneficial owner whose Restricted Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, and wish to tender, you should promptly instruct the registered holder to tender on your behalf. Any registered holder that is a participant in DTC’s book-entry transfer facility system may make book-entry delivery of the Restricted Notes by causing DTC to transfer the Restricted Notes into the Exchange Agent’s account.

Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed unless the Restricted Notes surrendered for exchange are tendered:

• by a registered holder of the Restricted Notes who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal; or

• for the account of an “eligible institution.”

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If signatures on a letter of transmittal or a notice of withdrawal are required to be guaranteed, the guarantees must be by an “eligible institution.” An “eligible institution” is a financial institution, including most banks, savings and loan associations and brokerage houses that is a participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or the Stock Exchanges Medallion Program.

We will determine in our sole discretion all questions as to the validity, form and eligibility of Restricted Notes tendered for exchange. This discretion extends to the determination of all questions concerning the timing of receipts and acceptance of tenders. These determinations will be final and binding. We reserve the absolute right to reject any or all Restricted Notes not properly tendered or any which acceptance might, in our judgment or our counsel’s judgment, be unlawful. We also reserve the right to waive any defects or irregularities or conditions of the Exchange Offer as to any or all Restricted Notes either before or after the expiration date, including the right to waive the ineligibility of any tendering holder. Our interpretation of the terms and conditions of the Exchange Offer as to any particular Restricted Note either before or after the expiration date, including the letter of transmittal and the instructions to the letter of transmittal, shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Restricted Notes must be cured within a reasonable period of time, as determined by us. Neither we, the Exchange Agent nor any other person will be under any duty to give notification of any defect or irregularity in any tender of Restricted Notes. Nor will we, the Exchange Agent or any other person incur any liability for failing to give notification of any defect or irregularity.

If the letter of transmittal is signed by a person other than the registered holder of Restricted Notes, the letter of transmittal must be accompanied by a written instrument of transfer or exchange in satisfactory form duly executed by the registered holder with the signature guaranteed by an eligible institution.

If the letter of transmittal or powers of attorney are signed by Exchange Agents, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, these persons should so indicate when signing. Unless waived by us, proper evidence satisfactory to us of their authority to so act must be submitted.

By tendering, each holder will represent to us that, among other things:

• any Exchange Notes received in exchange for your Restricted Notes in the Exchange Offer are being acquired by you or any other person receiving such Exchange Notes in the ordinary course of your or such other person’s business;

• at the time of the commencement of the Exchange Offer, neither you nor any other person who will receive Exchange Notes in exchange for your Restricted Notes has any arrangement or understanding with any person to participate in the “distribution” (as defined in the Securities Act) of the Exchange Notes in violation of the Securities Act;

• you are not holding Restricted Notes that have, or are reasonably likely to have, the status of an unsold allotment;

• neither you nor any other person receiving Exchange Notes in exchange for your Restricted Notes is an “affiliate” (as defined in Rule 405 under the Securities Act) of the Company, or if you or such other person is an affiliate of the Company, you or such other person will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable;

• neither you nor any other person receiving Exchange Notes in exchange for your Restricted Notes is a broker-dealer, and neither you nor such other person is engaged in or intends to engage in a distribution of the Exchange Notes;

• if you are a participating broker-dealer, you will receive the Exchange Notes for your own account in exchange for Restricted Notes that were acquired by you as a result of your market-making or other trading activities and that you will deliver a prospectus in connection with any resale of the Exchange

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Notes you receive in the Exchange Offer. See “Plan of Distribution.” The SEC has taken the position that participating broker-dealers may fulfill their prospectus delivery requirements with respect to resales of the Exchange Notes (other than a resale of an unsold allotment from the original sale of the Restricted Notes) by delivering this prospectus to prospective purchasers; and

• you have full power and authority to transfer all of your right and title in and to your Restricted Notes in exchange for Exchange Notes and the Company will acquire good and unencumbered title thereto, free and clear of any liens, restrictions, charges, or encumbrances and not subject to any adverse claims.

Acceptance of Restricted Notes for Exchange; Delivery of Exchange Notes

Upon satisfaction or waiver of all of the conditions to the Exchange Offer, we will accept, promptly after the expiration date, all Restricted Notes properly tendered. We will issue the Exchange Notes promptly after acceptance of the Restricted Notes. For purposes of the Exchange Offer, we will be deemed to have accepted properly tendered Restricted Notes for exchange when, as and if we have given oral or written notice to the Exchange Agent, with prompt written confirmation of any oral notice to be given promptly thereafter. See “—Conditions to the Exchange Offer” below for a discussion of the conditions that must be satisfied before we accept any Restricted Notes for exchange.

For each Restricted Note accepted for exchange, the holder will receive an Exchange Note having a principal amount equal to that of the surrendered Restricted Note. The Exchange Notes will bear interest from the most recent date to which interest has been paid on the Restricted Notes. Accordingly, registered holders of Exchange Notes on the relevant record date for the first interest payment date following the completion of the Exchange Offer will receive interest accruing from the most recent date to which interest has been paid, or if no interest has been paid on the Restricted Notes, from June 14, 2006. Restricted Notes accepted for exchange will cease to accrue interest from and after the date of completion of the Exchange Offer. Holders of Restricted Notes whose Restricted Notes are accepted for exchange will not receive any payment for accrued interest on the Restricted Notes otherwise payable on any interest payment date the record date for which occurs on or after completion of the Exchange Offer and will be deemed to have waived their rights to receive the accrued interest on the Restricted Notes. Under the registration rights agreement, we may be required to make additional payments in the form of additional interest to the holders of the Restricted Notes under circumstance relating to the timing of the Exchange Offer. The registration rights agreement provides that we will be required to pay additional interest to the holders of the Restricted Notes if:

• the registration statement is not declared effective by the 180^th day after the filing date;

• the Exchange Offer has not been completed by the 40th day after the effective date; or

• after the registration statement is declared effective, it thereafter ceases to be effective or usable (subject to certain exceptions).

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 such rate will increase by an additional 0.25% per annum with respect to each subsequent 90-day period until all registration defaults as described above have been cured, up to a maximum additional interest rate of 1.0% per annum. We will pay such additional interest on regular interest payment dates. Such additional interest will be in addition to any other interest payable from time to time with respect to the applicable series of Restricted Notes and Exchange Notes. All references in each Indenture, in any context, to any interest or other amount payable on or with respect to the Notes issued under that Indenture shall be deemed to include any additional interest pursuant to the Registration Rights Agreement.

In all cases, issuance of Exchange Notes for Restricted Notes will be made only after timely receipt by the Exchange Agent of:

• a timely book-entry confirmation of the Restricted Notes, into the Exchange Agent’s account at the DTC;

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• a properly completed and duly executed letter of transmittal or an agent’s message; and

• all other required documents.

Unaccepted or non-exchanged Restricted Notes will be returned without expense to the tendering holder of the Restricted Notes. The non-exchanged Restricted Notes will be credited to an account maintained with the DTC, as promptly as practicable after the expiration or termination of the Exchange Offer.

Book-Entry Transfers

The Exchange Agent will make a request to establish an account for the Restricted Notes at DTC for purposes of the Exchange Offer within two business days after the date of this prospectus. Any financial institution that is a participant in DTC’s systems must make book-entry delivery of Restricted Notes by causing DTC to transfer those Restricted Notes into the Exchange Agent’s account at the DTC in accordance with the DTC’s procedure for transfer. This participant should transmit its acceptance to the DTC on or prior to the expiration date. DTC will verify this acceptance, execute a book-entry transfer of the tendered Restricted Notes into the Exchange Agent’s account at DTC and then send to the Exchange Agent confirmation of this book-entry transfer. The confirmation of this book-entry transfer will include an agent’s message confirming that DTC has received an express acknowledgment from this participant that this participant has received and agrees to be bound by the letter of transmittal and that we may enforce the letter of transmittal against this participant. Delivery of Exchange Notes issued in the Exchange Offer may be effected through book-entry transfer at DTC. However, the letter of transmittal or facsimile of it or an agent’s message, with any required signature guarantees and any other required documents, must be transmitted to and received by the Exchange Agent at the address listed below under the heading “—Exchange Agent” on or prior to the expiration date.

Withdrawal Rights

Tenders of Restricted Notes may be withdrawn at any time before 5:00 p.m., New York City time, on the expiration date.

For a withdrawal to be effective, the Exchange Agent must receive a written notice of withdrawal at the address or, in the case of eligible institutions, at the facsimile number, indicated below under the heading “—Exchange Agent” before 5:00 p.m., New York City time, on the expiration date. Any notice of withdrawal must:

• specify the name of the person, referred to as the depositor, having tendered the Restricted Notes to be withdrawn;

• identify the Restricted Notes to be withdrawn, including the principal amount of the Restricted Notes;

• contain a statement that the holder is withdrawing his election to have the Restricted Notes exchanged;

• be signed by the holder in the same manner as the original signature on the letter of transmittal by which the Restricted Notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer to have the Exchange Agent with respect to the Restricted Notes register the transfer of the Restricted Notes in the name of the person withdrawing the tender; and

• specify the name in which the Restricted Notes are registered, if different from that of the depositor.

Any notice of withdrawal must specify the name and number of the account at the DTC to be credited with the withdrawn Restricted Notes and otherwise comply with the procedures of such facility. We will determine all questions as to the validity, form and eligibility, including time of receipt, of notices of withdrawal and our determination will be final and binding on all parties. Any Restricted Notes so withdrawn will be deemed not to have been validly tendered for exchange. No Exchange Notes will be issued unless the Restricted Notes so withdrawn are validly re-tendered. Any Restricted Notes that have been tendered for exchange, but which are not exchanged for any reason, will be returned to the tendering holder without cost to the holder. The Restricted

25

Notes will be credited to an account maintained with the DTC for the Restricted Notes. The Restricted Notes will be credited to the DTC account as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Restricted Notes may be re-tendered by following the procedures described above under the heading “—Procedures for Tendering” above at any time on or before 5:00 p.m., New York City time, on the expiration date.

Conditions to the Exchange Offer

Notwithstanding any other provision of the Exchange Offer, we will not be required to accept for exchange, or to issue Exchange Notes in exchange for, any Restricted Notes, and may terminate or amend the Exchange Offer, if at any time before the acceptance of the Restricted Notes for exchange or the exchange of the Exchange Notes for the Restricted Notes, any of the following events occurs:

1) there is threatened, instituted or pending any action or proceeding before, or any injunction, order or decree issued by, any court or governmental agency or other governmental regulatory or administrative agency or commission (a) seeking to restrain or prohibit the making or completion of the Exchange Offer or any other transaction contemplated by the Exchange Offer, or assessing or seeking any damages as a result of this transaction or (b) resulting in a material delay in our ability to accept for exchange or exchange some or all of the Restricted Notes in the Exchange Offer; or

2) any statute, rule, regulation, order or injunction has been sought, proposed, introduced, enacted, promulgated or deemed applicable to the Exchange Offer or any of the transactions contemplated by the Exchange Offer by any governmental authority, domestic or foreign; or

3) any action has been taken, proposed or threatened, by any governmental authority, domestic or foreign, that in our sole judgment might directly or indirectly result in any of the consequences referred to in clauses (1) or (2) above or, in our sole judgment, might result in the holders of Exchange Notes having obligations with respect to resales and transfers of Exchange Notes which are greater than those described in the interpretation of the SEC referred to above, or would otherwise make it inadvisable to proceed with the Exchange Offer; or

4) the following has occurred:

(a) any general suspension of or general limitation on prices for, or trading in, securities on any national securities exchange or in the over-the-counter market; or

(b) any limitation by a governmental authority, which may adversely affect our ability to complete the transactions contemplated by the Exchange Offer; or

(c) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States or any limitation by any governmental agency or authority which adversely affects the extension of credit; or

(d) a commencement of a war, armed hostilities or other similar international calamity directly or indirectly involving the United States, or, in the case of any of the preceding events existing at the time of the commencement of the Exchange Offer, a material acceleration or worsening of these calamities; or

5) any change, or any development involving a prospective change, has occurred or been threatened in our business, financial condition, operations or prospects and those of our subsidiaries taken as a whole that is or may be adverse to us, or we have become aware of facts that have or may have an adverse impact on the value of the Restricted Notes or the Exchange Notes, which in our sole judgment in any case makes it inadvisable to proceed with the Exchange Offer and/or with such acceptance for exchange or with such exchange.

These conditions to the Exchange Offer are for our sole benefit and we may assert them regardless of the circumstances giving rise to any of these conditions, or we may waive them in whole or in part at any time and from time to time in our sole discretion. Our failure at any time to exercise any of the foregoing rights will not be deemed a waiver of any right.

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In addition, we will not accept for exchange any Restricted Notes tendered, and no Exchange Notes will be issued in exchange for any Restricted Notes, if at this time any stop order is threatened or in effect relating to the registration statement of which this prospectus constitutes a part or the qualification of the Indentures under the Trust Indenture Act of 1939.

Exchange Agent

We have appointed The Bank of Nova Scotia Trust Company of New York as the Exchange Agent for the Exchange Offer. You should direct all executed letters of transmittal to the Exchange Agent at the address indicated below. You should direct questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal to the Exchange Agent addressed as follows:

Delivery To: The Bank of Nova Scotia Trust Company of New York, Exchange Agent

By Registered and Certified Mail:	For Information Call: (212) 225-5437
The Bank of Nova Scotia Trust Company of New York
One Liberty Plaza New York, NY 10006 Attn: Pat Keane	By Facsimile Transmission (for Eligible Institutions only): (212) 225-5436
	Confirm by Telephone: (212) 225-5437

If you deliver the letter of transmittal to an address other than any address indicated above or transmit instructions via facsimile other than any facsimile number indicated, then your delivery or transmission will not constitute a valid delivery of the letter of transmittal.

Fees and Expenses

The principal solicitation is being made by mail by the Exchange Agent. Additional solicitation may be made by telephone, facsimile or in person by our officers and regular employees and by persons so engaged by the Exchange Agent.

We will pay the Exchange Agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection therewith and pay other registration expenses, including fees and expenses of the trustee under the Indentures, filing fees, blue sky fees and printing and distribution expenses. We will not make any payment to brokers, dealers or others soliciting acceptances of the Exchange Offer.

Accounting Treatment

We will not recognize any gain or loss for accounting purposes upon the consummation of the Exchange Offer. We will amortize the expense of the Exchange Offer over the term of the Exchange Notes in accordance with generally accepted accounting principles.

Transfer Taxes

Holders who tender their Restricted Notes in exchange for Exchange Notes will not be obligated to pay any transfer taxes in connection with exchange, except that holders who instruct us to register Exchange Notes in the name of, or request that Restricted Notes not tendered or not accepted in the Exchange Offer be returned to, a person other than the registered tendering holder will be responsible for the payment of any applicable transfer taxes. If satisfactory evidence of payment of, or exemption from, such taxes is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed directly to the tendering holder.

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Consequences of Failure to Exchange Restricted Notes

Holders who desire to tender their Restricted Notes in exchange for Exchange Notes should allow sufficient time to ensure timely delivery. Neither the Exchange Agent nor HealthSouth is under any duty to give notification of defects or irregularities with respect to the tenders of Notes for exchange.

Restricted Notes that are not tendered or are tendered but not accepted will, following the consummation of the Exchange Offer, continue to be subject to the provisions in the Indentures regarding the transfer and exchange of the Restricted Notes and the existing restrictions on transfer set forth in the legend on the Restricted Notes and in the prospectus dated June 14, 2006, relating to the Restricted Notes. Except in limited circumstances with respect to specific types of holders of Restricted Notes, we will have no further obligation to provide for the registration under the Securities Act of such Restricted Notes. In general, Restricted Notes, unless registered under the Securities Act, may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. We do not currently anticipate that we will take any action to register the Restricted Notes under the Securities Act or under any state securities laws.

Upon completion of the Exchange Offer, holders of the Restricted Notes will not be entitled to any further registration rights under registration rights agreement, except under limited circumstances.

Holders of the Exchange Notes and any Restricted Notes which remain outstanding after consummation of the Exchange Offer will vote together as a single class for purposes of determining whether holders of the requisite percentage of the class have taken certain actions or exercised certain rights under the Indentures.

Consequences of Exchanging Restricted Notes

Under existing interpretations of the Securities Act by the SEC’s staff contained in several no-action letters to third parties, we believe that the Exchange Notes may be offered for resale, resold or otherwise transferred by holders after the Exchange Offer other than by any holder who is one of our “affiliates” (as defined in Rule 405 under the Securities Act). Such Exchange Notes may be offered for resale, resold or otherwise transferred without compliance with the registration and prospectus delivery provisions of the Securities Act, if:

• such Exchange Notes are acquired in the ordinary course of such holder’s business; and

• such holder, other than broker-dealers, has no arrangement or understanding with any person to participate in the distribution of the Exchange Notes.

However, the SEC has not considered the Exchange Offer in the context of a no-action letter and we cannot guarantee that the staff of the SEC would make a similar determination with respect to the Exchange Offer as in such other circumstances.

Each holder, other than a broker-dealer, must furnish a written representation, at our request, that:

• it is not an affiliate of HealthSouth;

• it is not engaged in, and does not intend to engage in, a distribution of the Exchange Notes and has no arrangement or understanding to participate in a distribution of Exchange Notes; and

• it is acquiring the Exchange Notes in the ordinary course of its business.

Each broker-dealer that receives Exchange Notes for its own account in exchange for Restricted Notes must acknowledge that such Restricted Notes were acquired by such broker-dealer as a result of market-making or other trading activities and that it will deliver a prospectus in connection with any resale of such Exchange Notes. See “Plan of Distribution” for a discussion of the exchange and resale obligations of broker-dealers in connection with the Exchange Offer.

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In addition, to comply with state securities laws of certain jurisdictions, the Exchange Notes may not be offered or sold in any state unless they have been registered or qualified for sale in such state or an exemption from registration or qualification is available and complied with by the holders selling the Exchange Notes. Unless a holder requests, we currently do not intend to register or qualify the sale of the Exchange Notes in any state where an exemption from registration or qualification is required and not available. “Transfer restricted securities” means each note until:

• the date on which such note has been exchanged by a person other than a broker-dealer for a note in the Exchange Offer;

• following the exchange by a broker-dealer in the Exchange Offer of an exchange note, the date on which the 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 this prospectus;

• the date on which such note has been effectively registered under the Securities Act and disposed of in accordance with a shelf registration statement that we file in accordance with the registration rights agreement; or

• the date on which such note is distributed to the public in a transaction under Rule 144 of the Securities Act.

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DESCRIPTION OF THE EXCHANGE NOTES

HealthSouth Corporation issued the restricted Floating Rate Notes (the “Floating Rate Restricted Notes”) and the restricted Fixed Rate Notes (the “Fixed Rate Restricted Notes”) and will issue the exchange Floating Rate Notes (the “Floating Rate Exchange Notes” and together with the Floating Rate Restricted Notes, the “Floating Rate Notes”) and the exchange Fixed Rate Notes (the “Fixed Rate Exchange Notes” and, together with the Floating Rate Restricted Notes, the “Fixed Rate Notes” and, collectively with the Floating Rate Notes, the “Notes”) under separate indentures (each, an “Indenture” and, collectively, the “Indentures”) among itself, the Subsidiary Guarantors listed therein and The Bank of Nova Scotia Trust Company of New York, as trustee. The terms of each series of Restricted Notes and Exchange Notes include those stated in the applicable Indenture and those made part of such Indenture by reference to the Trust Indenture Act.

Certain terms used in this description are defined under the subheading “—Certain Definitions”. In this description, the word “Company” refers only to HealthSouth Corporation and not to any of its subsidiaries.

The following description is only a summary of the material provisions of the Indentures. We urge you to read the Indentures because they, not this description, define your rights as holders of Exchange Notes. You may request copies of these agreements at our address set forth under the heading “Where You Can Find More Information”.

Exchange Notes versus Restricted Notes

The terms of the Exchange Notes are substantially identical to those of the outstanding Restricted Notes, except that the transfer restrictions, registration rights and additional interest provisions relating to the Restricted Notes do not apply to the Exchange Notes.

Brief Description of the Exchange Notes

These Exchange Notes:

• will be unsecured senior obligations of the Company;

• will be senior in right of payment to any existing and future Subordinated Obligations of the Company; and

• will be guaranteed by each Subsidiary Guarantor.

Principal, Maturity and Interest

Floating Rate Exchange Notes

The Company will issue the Floating Rate Exchange Notes in an aggregate principal amount of up to $375 million. The Floating Rate Notes will mature on June 15, 2014. Subject to our compliance with the covenant described under the subheading “—Certain Covenants—Limitation on Indebtedness”, we are permitted to issue more Floating Rate Notes from time to time under the Indenture governing the Floating Rate Notes (the “Additional Floating Rate Notes”). The Floating Rate Notes and the Additional Floating Rate Notes, if any, will be treated as a single class for all purposes of the applicable Indenture, including waivers, amendments, redemptions and offers to purchase. Unless the context otherwise requires, for all purposes of the applicable Indenture and this “Description of the Exchange Notes”, references to the Notes or the Floating Rate Notes include any Additional Floating Rate Notes actually issued.

Interest on the Floating Rate Exchange Notes will accrue at a rate per annum, reset semiannually, equal to LIBOR plus 6.0%, as determined by the calculation agent (the “Calculation Agent”), which shall initially be the Trustee.

Interest on the Floating Rate Exchange Notes will be payable semiannually in arrears on June 15 and December 15 of each year, commencing on December 15, 2006. We will make each interest payment to the

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holders of record of the Floating Rate Exchange Notes on the immediately preceding June 1 and December 1. We will pay interest on overdue principal at 1% per annum in excess of the rate set forth above and will pay interest on overdue installments of interest at such higher rate to the extent lawful. Interest on the Floating Rate Exchange Notes will accrue from the date of original issuance. Additional interest may accrue on the Floating Rate Exchange Notes in certain circumstances pursuant to the Registration Rights Agreement.

Set forth below is a summary of certain of the defined terms used in the Indenture governing the Floating Rate Notes.

“Determination Date”, with respect to an Interest Period, will be the second London Banking Day preceding the first day of such Interest Period.

“Interest Period” means the period commencing on and including an interest payment date and ending on and including the day immediately preceding the next succeeding interest payment date, with the exception that the first Interest Period shall commence on and include the Issue Date and end on and include December 15, 2006.

“LIBOR”, with respect to an Interest Period, will be the rate (expressed as a percentage per annum) for deposits in U.S. dollars for a six-month period beginning on the second London Banking Day after the Determination Date that appears on Telerate Page 3750 as of 11:00 a.m., London time, on the Determination Date. If Telerate Page 3750 does not include such a rate or is unavailable on a Determination Date, the Calculation Agent will request the principal London office of each of four major banks in the London interbank market, as selected by the Calculation Agent, to provide such bank’s offered quotation (expressed as a percentage per annum), as of approximately 11:00 a.m., London time, on such Determination Date, to prime banks in the London interbank market for deposits in a Representative Amount of U.S. dollars for a six-month period beginning on the second London Banking Day after the Determination Date. If at least two such offered quotations are so provided, the rate for the Interest Period will be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, the Calculation Agent will request each of three major banks in New York City, as selected by the Calculation Agent, to provide such bank’s rate (expressed as a percentage per annum), as of approximately 11:00 a.m., New York City time, on such Determination Date, for loans in a Representative Amount of U.S. dollars to leading European banks for a six-month period beginning on the second London Banking Day after the Determination Date. If at least two such rates are so provided, the rate for the Interest Period will be the arithmetic mean of such rates. If fewer than two such rates are so provided, then the rate of the Interest Period will be the rate in effect with respect to the immediately preceding Interest Period.

“London Banking Day” is any day on which dealings in U.S. dollars are transacted or, with respect to any future date, are expected to be transacted in the London interbank market.

“Representative Amount” means a principal amount of not less than $1,000,000 for a single transaction in the relevant market at the relevant time.

“Telerate Page 3750” means the display designated as “Page 3750” on the Moneyline Telerate service (or such other page as may replace Page 3750 on that service).

The amount of interest for each day that the Floating Rate Notes are outstanding (the “Daily Interest Amount”) will be calculated by dividing the interest rate in effect for such day by 360 and multiplying the result by the principal amount of the Floating Rate Notes. The amount of interest to be paid on the Floating Rate Notes for each Interest Period will be calculated by adding the Daily Interest Amounts for each day in the Interest Period.

All percentages resulting from any of the above calculations will be rounded, if necessary, to the nearest one hundred thousandth of a percentage point, with five one-millionths of a percentage point being rounded upwards

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(e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and all dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one-half cent being rounded upwards).

The interest rate on the Floating Rate Notes will in no event be higher than the maximum rate permitted by New York law as the same may be modified by United States law of general application.

The Calculation Agent will, upon the request of the holder of any Floating Rate Note, provide the interest rate then in effect with respect to the Floating Rate Notes. All calculations made by the Calculation Agent in the absence of manifest error will be conclusive for all purposes and binding on the Company, the Subsidiary Guarantors and the holders of the Floating Rate Notes.

The Company will issue the Floating Rate Exchange Notes in denominations of $1,000 and any integral multiple of $1,000.

Fixed Rate Exchange Notes

The Company will issue the Fixed Rate Exchange Notes in an aggregate principal amount of up to $625 million. The Fixed Rate Notes will mature on June 15, 2016. Subject to our compliance with the covenant described under the subheading “—Certain Covenants—Limitation on Indebtedness”, we are permitted to issue more Fixed Rate Notes from time to time under the Indenture governing the Fixed Rate Notes (the “Additional Fixed Rate Notes”). The Fixed Rate Notes and the Additional Fixed Rate Notes, if any, will be treated as a single class for all purposes of the applicable Indenture, including waivers, amendments, redemptions and offers to purchase. Unless the context otherwise requires, for all purposes of the applicable Indenture and this “Description of the Exchange Notes”, references to the Notes or the Fixed Rate Notes include any Additional Fixed Rate Notes actually issued.

Interest on the Fixed Rate Exchange Notes will accrue at the rate of 10.75% per annum.

Interest on the Fixed Rate Exchange Notes will be payable semiannually in arrears on June 15 and December 15 of each year. We will make each interest payment to the holders of record of the Fixed Rate Exchange Notes on the immediately preceding June 1 and December 1. We will pay interest on overdue principal at 1% per annum in excess of the rate set forth above and will pay interest on overdue installments of interest at such higher rate to the extent lawful. Interest on the Fixed Rate Exchange Notes will accrue from the date of original issuance. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. Additional interest may accrue on the Fixed Rate Exchange Notes in certain circumstances pursuant to the Registration Rights Agreement.

The Company will issue the Fixed Rate Exchange Notes in denominations of $1,000 and any integral multiple of $1,000.

Optional Redemption

Floating Rate Notes

On and after June 15, 2009, we will be entitled at our option to redeem all or a portion of the Floating Rate Notes 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 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 15 of the years set forth below:

Period	Redemption Price
2009	103.00	%
2010	102.00	%
2011	101.00	%
2012 and thereafter	100.00	%

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Prior to June 15, 2009, we will be entitled at our option on one or more occasions to redeem Floating Rate Notes (which includes Additional Floating Rate Notes, if any) in an aggregate principal amount not to exceed 35% of the aggregate principal amount of the Floating Rate Notes (which includes Additional Floating Rate Notes, if any) issued at a redemption price (expressed as a percentage of principal amount) of 100%, plus a premium equal to the interest rate per annum on the Floating Rate Notes applicable on the date that notice of redemption is given, 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 Floating Rate Notes (which includes Additional Floating Rate Notes, if any) remains outstanding immediately after the occurrence of each such redemption (other than Floating Rate Notes held, directly or indirectly, by the Company or its Affiliates); and

(2) each such redemption occurs within 90 days after the date of the related Equity Offering.

Fixed Rate Notes

On and after June 15, 2011, we will be entitled at our option to redeem all or a portion of the Fixed Rate Notes 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 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 15 of the years set forth below:

Period	Redemption Price
2011	105.375	%
2012	103.583	%
2013	101.792	%
2014 and thereafter	100.00	%

Prior to June 15, 2009, we will be entitled at our option on one or more occasions to redeem Fixed Rate Notes (which includes Additional Fixed Rate Notes, if any) in an aggregate principal amount not to exceed 35% of the aggregate principal amount of the Fixed Rate Notes (which includes Additional Fixed Rate Notes, if any) issued at a redemption price (expressed as a percentage of principal amount) of 110.75%, 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 Fixed Rate Notes (which includes Additional Fixed Rate Notes, if any) remains outstanding immediately after the occurrence of each such redemption (other than Fixed Rate Notes held, directly or indirectly, by the Company or its Affiliates); and

(2) each such redemption occurs within 90 days after the date of the related Equity Offering.

Floating Rate Notes and Fixed Rate Notes

Prior to June 15, 2009 (in the case of the Floating Rate Notes) and June 15, 2011 (in the case of the Fixed Rate Notes), we will be entitled at our option to redeem all, but not less than all, of the Notes 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 (1) 1.00% of the principal amount of such Note and (2) the excess of (A) the present value at such redemption date of (i) the redemption price of such Note on June 15, 2009 (in the case of the Floating Rate Notes) or June 15, 2011 (in the case of the Fixed Rate Notes) (such redemption prices being described in the tables above in this “—Optional

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Redemption” section, and exclusive of any accrued interest), plus (ii) all required remaining scheduled interest payments due on such Note through June 15, 2009 (in the case of the Floating Rate Notes, assuming that the rate of interest on the Floating Rate Notes for the period from the redemption date through June 15, 2009, will be equal to the rate of interest on the Floating Rate Notes in effect on the date on which the applicable notice of redemption is given) or June 15, 2011 (in the case of the Fixed Rate Notes) (but, in each case, excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the applicable 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, (1) 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 that 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 15, 2009 (in the case of the Floating Rate Notes) or June 15, 2011 (in the case of the Fixed Rate Notes), 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 (2) 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 15, 2009 (in the case of the Floating Rate Notes) or June 15, 2011 (in the case of the Fixed Rate Notes), 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 15, 2009 (in the case of the Floating Rate Notes) or June 15, 2011 (in the case of the Fixed Rate Notes).

“Comparable Treasury Price” means, with respect to any redemption date, if clause (2) 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 each of Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. and their respective successors and assigns.

“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.

Selection and Notice of Redemption

If we are redeeming less than all of a series of Notes at any time, the Trustee will select Notes of such Series on a pro rata basis to the extent practicable.

We will redeem Notes of $1,000 or less in whole and not in part. We will cause notices of redemption to 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.

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If any Note is to be redeemed in part only, the notice of redemption that relates to that Note will state the portion of the principal amount thereof to be redeemed. We will issue a new note in a principal amount equal to the unredeemed portion of the original note in the name of the holder 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; Offers to Purchase; Open Market Purchases

We are not required to make any mandatory redemption or sinking fund payments with respect to the Notes. However, under certain circumstances, we may be required to offer to purchase Notes as described under the captions “—Change of Control” and “—Certain Covenants— Limitation on Sales of Assets and Subsidiary Stock”. We may at any time and from time to time purchase Notes in the open market or otherwise.

Guarantees

The Subsidiary Guarantors will jointly and severally Guarantee, on a senior unsecured basis, our obligations under the Exchange Notes. The obligations of each Subsidiary Guarantor under its Subsidiary Guaranty will be limited as necessary to prevent that Subsidiary Guaranty from constituting a fraudulent conveyance under applicable law. If, however, a Subsidiary Guaranty were rendered voidable, it could be subordinated by a court to all other indebtedness (including guarantees and other contingent liabilities) of the applicable Subsidiary Guarantor, and, depending on the amount of such other indebtedness, a Subsidiary Guarantor’s liability on its Subsidiary Guaranty could be reduced to zero. See “Risk Factors—Federal and state statutes could allow courts, under specific circumstances, to void the subsidiary guaranties, subordinate claims in respect of the Exchange Notes and require note holders to return payments received from subsidiary guarantors”.

The Exchange Notes will be guaranteed by all of our subsidiaries that guarantee borrowings under the Credit Agreement or certain of our debt.

Each Subsidiary Guarantor that makes a payment under its Subsidiary Guaranty will be entitled upon payment in full of all guaranteed obligations under the applicable Indenture to a contribution from each other Subsidiary Guarantor in an amount equal to such other Subsidiary Guarantor’s pro rata portion of such payment based on the respective net assets of all the Subsidiary Guarantors at the time of such payment determined in accordance with GAAP.

Pursuant to the Indentures, (A) a Subsidiary Guarantor may consolidate with, merge with or into, or transfer all or substantially all its assets to any other Person to the extent described below under “—Certain Covenants—Merger and Consolidation” and (B) the Capital Stock of a Subsidiary Guarantor may be sold or otherwise disposed of to another Person to the extent described below under “—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock”; provided, however, that in the case of the consolidation, merger or transfer of all or substantially all the assets of such Subsidiary Guarantor, if such other Person is not the Company, a Subsidiary Guarantor or a Receivables Entity, such Subsidiary Guarantor’s obligations under its Subsidiary Guaranty must be expressly assumed by such other Person, except that such assumption will not be required in the case of:

(1) the sale or other disposition (including by way of consolidation or merger) of a Subsidiary Guarantor, including the sale or disposition of Capital Stock of a Subsidiary Guarantor, following which such Subsidiary Guarantor is no longer a Subsidiary; or

(2) the sale or disposition of all or substantially all the assets of a Subsidiary Guarantor;

in each case other than to the Company or an Affiliate of the Company and as permitted by the applicable Indenture and if in connection therewith the Company provides an Officers’ Certificate to the Trustee to the effect that the Company will comply with its obligations under the covenant described under “—Limitation on Sales of Assets and Subsidiary Stock” in respect of such disposition. Upon any sale or disposition described in

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clause (1) or (2) above, the obligor on the related Subsidiary Guaranty will be released from its obligations thereunder.

The Subsidiary Guaranty of a Subsidiary Guarantor with respect to a series of Notes also will be released:

(1) upon the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary under the applicable Indenture;

(2) at such time as (A) any Guarantee by such Subsidiary Guarantor of the obligations under the Credit Agreement and any other Guarantee that resulted in (or would by itself require) the creation of such Subsidiary Guaranty under the applicable Indenture has been released and discharged, except a discharge or release by or as a result of payment under such Guarantee, and (B) such Subsidiary Guarantor does not have any Indebtedness outstanding that resulted in (or would by itself require) the creation of such Subsidiary Guaranty under the applicable Indenture; or

(3) if we exercise our legal defeasance option or our covenant defeasance option as described under “—Defeasance” or if our obligations under the applicable Indenture are discharged in accordance with the terms of such Indenture.

Ranking

Senior Indebtedness versus Exchange Notes

The indebtedness evidenced by the Exchange Notes and the Subsidiary Guaranties will be unsecured and will rank pari passu in right of payment to the Senior Indebtedness of the Company and the Subsidiary Guarantors, as the case may be. Other than capital leases, substantially all of the Senior Indebtedness of the Subsidiary Guarantors consists of their respective guarantees of Senior Indebtedness of the Company under the Credit Agreement and with respect to the Exchange Notes.

The Exchange Notes will be unsecured obligations of the Company. Secured debt and other secured obligations of the Company and the Subsidiary Guarantors (including obligations with respect to the Credit Agreement) will be effectively senior to the Exchange Notes and the Subsidiary Guaranties to the extent of the value of the assets securing such debt or other obligations.

Liabilities of Subsidiaries versus Exchange Notes

A substantial amount of our operations are conducted through our subsidiaries. Certain of our wholly-owned subsidiaries, and substantially all of our non-wholly-owned subsidiaries, are not guaranteeing the Exchange Notes. In addition, as described above under “—Guarantees”, Subsidiary Guaranties may be released under certain circumstances. Also, our future subsidiaries may not be required to guarantee the Exchange Notes. Claims of creditors of such non-guarantor subsidiaries, including trade creditors and creditors holding indebtedness or guarantees issued by such non-guarantor subsidiaries, and claims of preferred stockholders of such non-guarantor subsidiaries generally will have priority with respect to the assets and earnings of such non-guarantor subsidiaries over the claims of our creditors, including holders of the Exchange Notes. Accordingly, the Exchange Notes will be effectively subordinated to creditors (including trade creditors) and preferred stockholders, if any, of our non-guarantor subsidiaries.

Although the Indentures limit the incurrence of Indebtedness and preferred stock by certain of our subsidiaries, such limitation is subject to a number of significant qualifications. Moreover, the Indentures do not impose any limitation on the incurrence by such subsidiaries of liabilities that are not considered Indebtedness under the Indentures. See “—Certain Covenants—Limitation on Indebtedness”.

Book-Entry, Delivery and Form

Except as set forth below, Exchange Notes will be issued in the form of one or more global securities registered in the name of DTC or its nominee (the “Global Exchange Notes”). Exchange Notes will be issued in minimum denominations of $1,000 and integral multiples of $1,000 in excess of $1,000.

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Except as set forth below, the Global Exchange 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 Exchange Notes may not be exchanged for Notes in certificated form except in the limited circumstances described below. See “—Exchange of Global Exchange Notes for Certificated Notes”. Except in the limited circumstances described below, owners of beneficial interests in the Global Exchange Notes will not be entitled to receive physical delivery of Notes in certificated form.

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 organized under the laws of the State of New York, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was 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 Exchange Notes, DTC will credit the accounts of participants designated by the initial purchasers with portions of the principal amount of the Global Exchange Notes; and

(2) ownership of these interests in the Global Exchange 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 Exchange Notes).

Investors in the Global Exchange Notes who are participants in DTC’s system may hold their interests therein directly through DTC. Investors in the Global Exchange Notes who are not participants may hold their interests therein indirectly through organizations which are participants in such system. All interests in a Global Exchange 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 Exchange 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 Exchange 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.

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Except as described below, owners of an interest in the Global Exchange 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 Indentures for any purpose.

Payments in respect of the principal of, and interest and premium and additional interest, if any, on a Global Exchange Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered Holder under the applicable Indenture. Under the terms of the Indentures, the Company and the Trustee will treat the Persons in whose names the Notes, including the Global Exchange 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 interests in the Global Exchange 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 Exchange 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 the transfer restrictions set forth under “Notice to Investors”, 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 Exchange 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 Exchange Notes for legended Notes in certificated form, and to distribute such Notes to its participants.

Although DTC has agreed to the foregoing procedures in order to facilitate transfers of interests in the Global Exchange Notes among participants, it is under no obligation to perform such procedures, and such procedures may be discontinued or changed at any time. 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 Exchange Notes for Certificated Notes

A Global Exchange 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 Exchange Notes or (B) has ceased to be a clearing agency registered under the Exchange Act and, in each case, a successor depositary is not appointed;

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(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 an Event of Default with respect to the Notes.

In all cases, Certificated Notes delivered in exchange for any Global Exchange Note or beneficial interests in Global Exchange 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) and will bear the applicable restrictive legend referred to in “Notice to Investors”, unless that legend is not required by applicable law.

Exchange of Certificated Notes for Global Exchange Notes

Certificated Notes may not be exchanged for beneficial interests in any Global Exchange Note unless the transferor first delivers to the Trustee a written certificate (in the form provided in the applicable Indenture) to the effect that such transfer will comply with the appropriate transfer restrictions applicable to such Notes. See “Notice to Investors”.

Same Day Settlement and Payment

The Company will make payments in respect of the Notes represented by the Global Exchange Notes (including principal, premium, if any, interest and additional interest, if any) by wire transfer of immediately available funds to the accounts specified by DTC or its successor as depositary. 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 Exchange 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.

Registration Rights Agreement

We have agreed pursuant to the Registration Rights Agreement that we will, subject to certain exceptions,

(1) on or prior to the day (the “Filing Date”) that is 30 days after the Company is required under the Exchange Act to file its Report on Form 10-K with the SEC for the fiscal year ending December 31, 2006 (after giving effect to all applicable extensions under the Exchange Act), file a registration statement with the SEC with respect to a registered offer to exchange each series of Restricted Notes for Exchange Notes of the Company having terms substantially identical in all material respects to such series of Notes (except that the Exchange Notes will not contain transfer restrictions, registration rights or certain additional interest provisions);

(2) use our reasonable best efforts to cause the Registration Statement to be declared effective under the Securities Act no later than 180 days after the Filing Date;

(3) as soon as practicable after the effectiveness of the this Registration Statement (the “Effectiveness Date”), offer the Exchange Notes in exchange for surrender of the applicable Restricted Notes; and

(4) 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 Restricted Notes.

In the event that:

(1) applicable interpretations of the staff of the SEC do not permit us to effect such a Exchange Offer; or

(2) for any other reason we do not consummate the Exchange Offer with respect to a series of Restricted Notes within 220 days of the Filing Date; or

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(3) an initial purchaser of the Restricted Notes shall notify us following consummation of the Exchange Offer that Restricted Notes held by it are not eligible to be exchanged for Exchange 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 Exchange Notes acquired by them in the Exchange Offer to the public without delivering a prospectus (or an effective notice under Rule 173 under the Securities Act),

then, we will, subject to certain exceptions,

(5) promptly file a shelf registration statement (the “Shelf Registration Statement”) with the SEC covering resales of the applicable series of Restricted Notes or the Exchange Notes, as the case may be;

(6)(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 Filing Date and (B) in the case of clause (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

(7) keep the Shelf Registration Statement effective until the earliest of (A) the time when the applicable 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 date on which the Restricted Notes were issued and (C) the date on which all Exchange Notes registered thereunder are disposed of in accordance therewith.

We will, in the event a Shelf Registration Statement is filed, among other things, provide to each holder for whom such Shelf Registration Statement was filed copies of the prospectus which is a part of the Shelf Registration Statement, notify each such holder when the Shelf Registration Statement has become effective and take certain other actions as are required to permit unrestricted resales of the Restricted Notes or the Exchange Notes, as the case may be. A holder selling such Restricted Notes or Exchange 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 (or an effective notice under Rule 173 under the Securities Act) to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreement that are applicable to such 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 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.

If we effect the Exchange Offer with respect to a series of Notes, we will be entitled to close the Exchange Offer 30 days after the commencement thereof provided that we have accepted all Notes of such series theretofore validly tendered in accordance with the terms of the Exchange Offer.

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Change of Control

Upon the occurrence of any of the following events (each a “Change of Control”), each Holder shall have the right to require that the Company repurchase such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date):

(1) the Company becomes aware that any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or has become the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (1) such person shall be deemed to have “beneficial ownership” of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the Company;

(2) at any time during any period of up to 24 consecutive months, commencing on the Issue Date, individuals who at the beginning of such period constituted the Board of Directors (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the directors of the Company then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors then in office;

(3) the Company is liquidated or dissolved or adopts a plan of liquidation or dissolution; or

(4) the merger or consolidation of the Company with or into another Person or the merger of another Person with or into the Company, or the sale of all or substantially all the assets of the Company (determined on a consolidated basis) to another Person, other than a transaction following which (i) in the case of a merger or consolidation transaction, holders of securities that represented 100% of the Voting Stock of the Company immediately prior to such transaction (or other securities into which such securities are converted as part of such merger or consolidation transaction) own directly or indirectly at least a majority of the voting power of the Voting Stock of the surviving Person in such merger or consolidation transaction immediately after such transaction and (ii) in the case of a sale of assets transaction, each transferee becomes an obligor in respect of the Notes and a Subsidiary of the transferor of such assets.

Within 30 days following any Change of Control, we will mail a notice to each Holder with a copy to the Trustee (the “Change of Control Offer”) stating:

(1) that a Change of Control has occurred and that such Holder has the right to require us to purchase such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof on the date of purchase, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date);

(2) the circumstances and relevant facts and financial information regarding such Change of Control;

(3) the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and

(4) the instructions, as determined by us, consistent with the covenant described hereunder, that a Holder must follow in order to have its Notes purchased.

We will not be required to make a Change of Control Offer following 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 applicable Indenture applicable to a Change of Control Offer made by us and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

We will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes as a result of a Change of

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Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the covenant described hereunder, we will comply with the applicable securities laws and regulations and shall not be deemed to have breached our obligations under the covenant described hereunder by virtue of our compliance with such securities laws or regulations.

The Change of Control purchase feature of the Notes may in certain circumstances make more difficult or discourage a sale or takeover of the Company and, thus, the removal of incumbent management. The Change of Control purchase feature is a result of negotiations between the Company and the Initial Purchasers. We have no present intention to engage in a transaction involving a Change of Control, although it is possible that we could decide to do so in the future. Subject to the limitations discussed below, we could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the Indentures, but that could increase the amount of indebtedness outstanding at such time or otherwise affect our capital structure or credit ratings. Restrictions on our ability to Incur additional Indebtedness are contained in the covenants described under “—Certain Covenants—Limitation on Indebtedness”, “—Limitation on Liens” and “—Limitation on Sale/Leaseback Transactions”. Such restrictions can only be waived under each Indenture with the consent of the holders of a majority in principal amount of the Notes of the applicable series then outstanding. Except for the limitations contained in such covenants, however, the Indentures will not contain any covenants or provisions that may afford holders of the Notes protection in the event of a highly leveraged transaction.

Subject to certain exceptions, the Credit Agreement prohibits us from purchasing any Notes pursuant to a Change of Control Offer, and also provides that the occurrence of certain change of control events with respect to the Company would constitute a default thereunder. In the event a Change of Control occurs at a time when we are prohibited from purchasing Notes, we may seek the consent of our lenders to the purchase of Notes or may attempt to refinance the borrowings that contain such prohibition. If we do not obtain such a consent or repay such borrowings, we will remain prohibited from purchasing Notes. In such case, our failure to offer to purchase Notes would constitute a Default under the Indentures, which would, in turn, constitute a default under the Credit Agreement.

Future indebtedness that we may incur may contain prohibitions on the occurrence of certain events that would constitute a Change of Control or require the repurchase of such indebtedness upon a Change of Control. Moreover, the exercise by the holders of their right to require us to repurchase their Notes could cause a default under such indebtedness, even if the Change of Control itself does not, due to the financial effect of such repurchase on us. Finally, our ability to pay cash to the holders of Notes following the occurrence of a Change of Control may be limited by our then existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make any required repurchases.

The definition of “Change of Control” includes a disposition of all or substantially all of the assets of the Company to any Person. 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, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve a disposition of “all or substantially all” of the assets of the Company. As a result, it may be unclear as to whether a Change of Control has occurred and whether a holder of Notes may require the Company to make an offer to repurchase the Notes as described above.

The provisions under each Indenture relative to our obligation to make an offer to repurchase the Notes issued thereunder as a result of a Change of Control may be waived or modified with the written consent of the holders of a majority in principal amount of such Notes.

Certain Covenants

Each Indenture contains covenants including, among others, those summarized below.

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Limitation on Indebtedness

(a) The Company will not, and will not permit any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness; provided, however, that the Company and the Subsidiary Guarantors will be entitled to Incur Indebtedness if, on the date of such Incurrence and after giving effect thereto on a pro forma basis the Consolidated Coverage Ratio exceeds 2.0 to 1.

(b) Notwithstanding the foregoing paragraph (a), the Company and the Restricted Subsidiaries will be entitled to Incur any or all of the following Indebtedness:

(1) Indebtedness Incurred pursuant to the Credit Agreement; provided, however, that, immediately after giving effect to any such Incurrence, the aggregate principal amount of all Indebtedness Incurred under this clause (1) and then outstanding does not exceed $2,550 million less the sum of all principal payments with respect to such Indebtedness made pursuant to paragraph (a)(3)(A) of, and in satisfaction of, the covenant described under “—Limitation on Sales of Assets and Subsidiary Stock”;

(2) Indebtedness owed to and held by the Company or a Restricted Subsidiary; provided, however, that (A) any subsequent issuance or transfer of any Capital Stock that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness (other than to the Company or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the obligor thereon, (B) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, and (C) if a Subsidiary Guarantor is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations of such Subsidiary Guarantor with respect to its Subsidiary Guaranty;

(3) the Notes (excluding any Additional Floating Rate Notes and any Additional Fixed Rate Notes);

(4) Indebtedness outstanding on the Issue Date (other than Indebtedness described in clause (1), (2) or (3) of this covenant);

(5) Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Subsidiary was acquired by the Company (other than Indebtedness Incurred in connection with, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Subsidiary became a Subsidiary or was acquired by the Company); provided, however, that on the date of such acquisition and after giving pro forma effect thereto, the Company would have been entitled to Incur at least $1.00 of additional Indebtedness pursuant to paragraph (a) of this covenant;

(6) Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to paragraph (a) or pursuant to clause (3), (4) or (5) or this clause (6);

(7) Hedging Obligations directly related to Indebtedness permitted to be Incurred by the Company and its Restricted Subsidiaries pursuant to such Indenture or entered into in the ordinary course of business and not for speculative purposes;

(8) obligations in respect of performance, bid and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;

(9) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within three Business Days of its Incurrence;

(10) Indebtedness consisting of the Subsidiary Guaranty of a Subsidiary Guarantor and any Guarantee by the Company or a Subsidiary Guarantor of Indebtedness or other obligations of the Company or any Restricted Subsidiary (other than Indebtedness Incurred pursuant to clause (5) above) so long as the

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Incurrence of such Indebtedness or other obligations by the Company or such Restricted Subsidiary is permitted under the terms of the Indenture;

(11)(A) Purchase Money Indebtedness, (B) Capital Lease Obligations and (C) Attributable Debt, and Refinancing Indebtedness in respect thereof, in an aggregate principal amount on the date of Incurrence that, when added to all other Indebtedness Incurred pursuant to this clause (11) and then outstanding, does not exceed 10% of Consolidated Tangible Assets, as determined based on the consolidated balance sheet of the Company as of the end of the most recent fiscal quarter ending at least 45 days prior thereto;

(12) Attributable Debt, and Refinancing Indebtedness in respect thereof, in respect of Specified Sale/Leaseback Transactions in an aggregate principal amount on the date of Incurrence that, when added to all other Indebtedness Incurred pursuant to this clause (12) and then outstanding, does not exceed 10% of Consolidated Tangible Assets, as determined based on the consolidated balance sheet of the Company as of the end of the most recent fiscal quarter ending at least 45 days prior thereto;

(13) Indebtedness Incurred by a Receivables Entity in a Qualified Receivables Transaction;

(14) Preferred Stock issued by any Restricted Subsidiary formed to operate a single health care facility; provided that the amount of such Preferred Stock, when added to the aggregate amount of all other such Preferred Stock of Restricted Subsidiaries then outstanding, does not exceed 1% of Consolidated Tangible Assets, as determined based on the consolidated balance sheet of the Company as of the end of the most recent fiscal quarter ending at least 45 days prior thereto; and

(15) Indebtedness of the Company or of any of its Restricted Subsidiaries in an aggregate principal amount that, when taken together with all other Indebtedness of the Company and its Restricted Subsidiaries outstanding on the date of such Incurrence (other than Indebtedness permitted by clauses (1) through (14) above or paragraph (a)) does not exceed $125 million.

(c) Notwithstanding the foregoing, neither the Company nor any Subsidiary Guarantor will incur any Indebtedness pursuant to the foregoing paragraph (b) if the proceeds thereof are used, directly or indirectly, to Refinance any Subordinated Obligations of the Company or any Subsidiary Guarantor unless such Indebtedness shall be subordinated to the Notes or the applicable Subsidiary Guaranty to at least the same extent as such Subordinated Obligations.

(d) For purposes of determining compliance with this covenant:

(1) all Indebtedness outstanding under the Credit Agreement on the Issue Date will be treated as Incurred under clause (1) of paragraph (b) above;

(2) in the event that an item of Indebtedness (or any portion thereof) meets the criteria of more than one of the types of Indebtedness described above, the Company, in its sole discretion, will classify such item of Indebtedness (or any portion thereof) at the time of Incurrence and will only be required to include the amount and type of such Indebtedness in one of the above clauses (provided that any Indebtedness originally classified as Incurred pursuant to any of clauses (b)(2) through (b)(15) above may later be reclassified as having been Incurred pursuant to paragraph (a) or any other of clauses (b)(2) through (b)(15) above to the extent that such reclassified Indebtedness could be Incurred pursuant to paragraph (a) or one of clauses (b)(2) through (b)(15) above, as the case may be, if it were Incurred at the time of such reclassification); and

(3) the Company will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described above.

Limitation on Restricted Payments

(a) The Company will not, and will not permit any Restricted Subsidiary, directly or indirectly, to make a Restricted Payment if at the time the Company or such Restricted Subsidiary makes such Restricted Payment:

(1) a Default shall have occurred and be continuing (or would result therefrom);

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(2) the Company is not entitled to Incur an additional $1.00 of Indebtedness pursuant to paragraph (a) of the covenant described under “—Limitation on Indebtedness”; or

(3) the aggregate amount of such Restricted Payment and all other Restricted Payments since the Issue Date would exceed the sum of (without duplication):

(A) 50% of the Consolidated Net Income accrued during the period (treated as one accounting period) from the beginning of the fiscal quarter immediately following the fiscal quarter during which the Issue Date occurs to the end of the most recent fiscal quarter ending at least 45 days prior to the date of such Restricted Payment (or, in case such Consolidated Net Income shall be a deficit, minus 100% of such deficit); plus

(B) 100% of the aggregate Net Cash Proceeds received by the Company from the issuance or sale of its Capital Stock (other than Disqualified Stock) subsequent to the Issue Date (other than an issuance or sale to a Subsidiary of the Company and other than an issuance or sale to an employee stock ownership plan or to a trust established by the Company or any of its Subsidiaries for the benefit of their employees) and 100% of any cash capital contribution received by the Company from its shareholders subsequent to the Issue Date; plus

(C) the amount by which Indebtedness of the Company 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 Capital Stock (other than Disqualified Stock) of the Company (less the amount of any cash, or the fair value of any other property, distributed by the Company upon such conversion or exchange); provided, however, that the foregoing amount shall not exceed the Net Cash Proceeds received by the Company or any Restricted Subsidiary from the sale of such Indebtedness (excluding Net Cash Proceeds from sales to a Subsidiary of the Company or to an employee stock ownership plan or to a trust established by the Company or any of its Subsidiaries for the benefit of their employees); plus

(D) an amount equal to the net reduction in the Investments (other than Permitted Investments) made by the Company or any Restricted Subsidiary in any Person resulting from repurchases, repayments or redemptions of such Investments by such Person, proceeds realized on the sale of such Investment and proceeds representing the return of capital (excluding dividends and distributions), in each case received by the Company or any Restricted Subsidiary; provided, however, that the foregoing sum shall not exceed, in the case of any such Person, the amount of Investments (excluding Permitted Investments) previously made (and treated as a Restricted Payment) by the Company or any Restricted Subsidiary in such Person; plus

(E) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, 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 at the time such Unrestricted Subsidiary is redesignated as a Restricted Subsidiary, except to the extent that the Investment in such Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary pursuant to clause (10) of the next succeeding paragraph or to the extent that such Investment constituted a Permitted Investment; plus

(F) $50 million.

(b) The preceding provisions will not prohibit:

(1) any Restricted Payment made out of the Net Cash Proceeds of the substantially concurrent sale of, or made by exchange for, Capital Stock of the Company (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company or an employee stock ownership plan or to a trust established by the Company or any of its Subsidiaries for the benefit of their employees) or a substantially concurrent cash capital contribution received by the Company from its shareholders; provided, however, that (A) such Restricted Payment shall be excluded in the calculation of the amount of Restricted Payments and (B) the Net Cash Proceeds from such sale or such cash capital contribution (to the extent so

45

used for such Restricted Payment) shall be excluded in the calculation of amounts under clause (3)(B) of paragraph (a) above;

(2) any purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Obligations of the Company or a Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent Incurrence of, Indebtedness of such Person that is permitted to be Incurred pursuant to the covenant described under “—Limitation on Indebtedness”; provided, however, that such purchase, repurchase, redemption, defeasance or other acquisition or retirement for value shall be excluded in the calculation of the amount of Restricted Payments;

(3) dividends paid within 60 days after the date of declaration thereof if at such date of declaration such dividend would have complied with this covenant; provided, however, that such dividend shall be included in the calculation of the amount of Restricted Payments;

(4) so long as no Default has occurred and is continuing, the purchase, redemption or other acquisition of shares of Capital Stock of the Company or any of its Subsidiaries from employees, former employees, directors or former directors of the Company or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of the agreements (including employment agreements) or plans (or amendments thereto) approved or ratified by the Board of Directors under which such individuals purchase or sell, or are granted the option to purchase or sell, shares of such Capital Stock; provided, however, that the aggregate amount of such Restricted Payments (excluding amounts representing cancellation of Indebtedness) shall not exceed $5,000,000 in any calendar year (provided that (A) if the Company and its Restricted Subsidiaries make less than $5,000,000 in the aggregate of such Restricted Payments in any calendar year, the unused amount for such calendar year may be carried over to the next succeeding calendar year (but not any other calendar year thereafter) and (B) the amount payable in any calendar year may be increased by an amount up to the sum of (i) the amount of cash proceeds from the sale of Capital Stock (other than Disqualified Stock) of the Company to employees, former employees, directors or former directors of the Company or any of its Subsidiaries, to the extent that the cash proceeds from the sale of such Capital Stock have not otherwise been applied to the payment of Restricted Payments by virtue of clause (3)(B) of paragraph (a) of this covenant, plus (ii) the cash proceeds of key man life insurance policies received by the Company or its Restricted Subsidiaries after the Issue Date, less (iii) the amount of repurchases and other acquisitions previously made with the cash proceeds described in clauses (i) and (ii) above); provided, further, however, that (x) such repurchases and other acquisitions shall be excluded in the calculation of the amount of Restricted Payments and (y) cash proceeds referred to in clause (B)(i) above used to make Restricted Payments under this clause (4) shall be excluded in the calculation of amounts under clause (3)(B) of paragraph (a) above;

(5)(A) the declaration and payment of dividends on the Convertible Preferred Stock, and other cash payments at any time to reduce any accretion in the liquidation preference resulting from previously unpaid dividends on the Convertible Preferred Stock, in each case in accordance with the terms thereof in effect on the Issue Date and (B) the declaration and payments of dividends on Disqualified Stock issued pursuant to the covenant described under “—Limitation on Indebtedness”; provided, however, in each case, that at the time of payment of such dividend or other cash payment, no Default shall have occurred and be continuing (or result therefrom); provided, further, however, that dividends and cash payments referred to in this clause (5) shall be excluded in the calculation of the amount of Restricted Payments;

(6) repurchases of Capital Stock deemed to occur upon exercise of stock options if such Capital Stock represents a portion of the exercise price of such options; provided, however, that such Restricted Payments shall be excluded in the calculation of the amount of Restricted Payments;

(7) cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of the Company; provided, however, that any such cash payment shall not be for the purpose of evading the limitation of the covenant described under this subheading; provided, further, however, that such payments shall be excluded in the calculation of the amount of Restricted Payments;

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(8) in the event of a Change of Control, and if no Default shall have occurred and be continuing, the payment, purchase, redemption, defeasance or other acquisition or retirement of Subordinated Obligations of the Company or any Subsidiary Guarantor, in each case, at a purchase price not greater than 101% of the principal amount of such Subordinated Obligations, plus any accrued and unpaid interest thereon; provided, however, that prior to such payment, purchase, redemption, defeasance or other acquisition or retirement, the Company (or a third party to the extent permitted by such Indenture) has made a Change of Control Offer with respect to the Notes as a result of such Change of Control and has repurchased all Notes validly tendered and not withdrawn in connection with such Change of Control Offer; provided, further, however, that such payments, purchases, redemptions, defeasances or other acquisitions or retirements shall be excluded in the calculation of the amount of Restricted Payments;

(9) payments of intercompany subordinated Indebtedness, the Incurrence of which was permitted under clause (2) of paragraph (b) of the covenant described under “—Limitation on Indebtedness”; provided, however, that no Default has occurred and is continuing or would otherwise result therefrom; provided, further, however, that such payments shall be excluded in the calculation of the amount of Restricted Payments; or

(10) Restricted Payments in an amount that, when taken together with all Restricted Payments made pursuant to this clause (10), does not exceed $50 million; provided, however, that (A) at the time of each such Restricted Payment, no Default shall have occurred and be continuing (or result therefrom) and (B) such Restricted Payments shall be excluded in the calculation of the amount of Restricted Payments.

The amount of any Restricted Payment that is not made in cash shall be determined in a manner consistent with the determination of the amount of an Investment as set forth in the final sentence of the first paragraph of the definition of “Investment”.

Limitation on Restrictions on Distributions from Restricted Subsidiaries

The Company will not, and will not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to (a) pay dividends or make any other distributions on its Capital Stock to the Company or a Restricted Subsidiary or pay any Indebtedness owed to the Company, (b) make any loans or advances to the Company or (c) transfer any of its property or assets to the Company, except:

(1) with respect to clauses (a), (b) and (c),

(A) any encumbrance or restriction pursuant to applicable law, rule, regulation or order or an agreement in effect at or entered into on the Issue Date;

(B) any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement relating to any Indebtedness Incurred by such Restricted Subsidiary on or prior to the date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness Incurred as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the Company) and outstanding on such date;

(C) any encumbrance or restriction pursuant to any amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing of an agreement referred to in clause (A) or (B) above; provided, however, that such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing is no more restrictive, as reasonably determined by the Company, with respect to such encumbrances and other restrictions taken as a whole than those prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing;

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(D) any encumbrance or restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition;

(E) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

(F) any limitation or prohibition on the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, stock sale agreements and other similar agreements, which limitation or prohibition is applicable only to the assets that are the subject of such agreements;

(G) any encumbrance or restriction existing under or by reason of contractual requirements of a Receivables Entity in connection with a Qualified Receivables Transaction, provided that such restrictions apply only to such Receivables Entity; and

(2) with respect to clause (c) only,

(A) any encumbrance or restriction consisting of customary nonassignment provisions in leases governing leasehold interests to the extent such provisions restrict the transfer of the lease or the property leased thereunder; and

(B) any encumbrance or restriction contained in Capital Lease Obligations, any agreement governing Purchase Money Indebtedness, security agreements or mortgages securing Indebtedness of a Restricted Subsidiary to the extent such encumbrance or restriction restricts the transfer of the property subject to such Capital Lease Obligations, Purchase Money Indebtedness, security agreements or mortgages.

Limitation on Sales of Assets and Subsidiary Stock

(a) The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, consummate any Asset Disposition unless:

(1) the Company or such Restricted Subsidiary receives consideration at the time of such Asset Disposition at least equal to the Fair Market Value (including as to the value of all non-cash consideration) of the shares and assets subject to such Asset Disposition;

(2) at least 75% of the consideration thereof received by the Company or such Restricted Subsidiary is in the form of cash or cash equivalents; provided, however, that this clause (2) shall not apply to the sale or other disposition of the Company’s diagnostic division; and

(3) an amount equal to 100% of the Net Available Cash from such Asset Disposition, other than any Asset Disposition that constitutes (i) a Syndication or a resyndication transaction in the ordinary course of business or (ii) a Specified Sale/Leaseback Transaction, is applied by the Company (or such Restricted Subsidiary, as the case may be)

(A) to the extent the Company elects (or is required by the terms of any Indebtedness), to prepay, repay, redeem or purchase Senior Indebtedness of the Company or a Subsidiary Guarantor or Indebtedness (other than any Disqualified Stock) of a Restricted Subsidiary that is not a Subsidiary Guarantor (in each case other than Indebtedness owed to the Company or an Affiliate of the Company) within one year from the later of the date of such Asset Disposition or the receipt of such Net Available Cash;

(B) to the extent the Company elects (including with respect to the balance of such Net Available Cash after application (if any) in accordance with clause (A)), to acquire Additional Assets within one year from the later of the date of such Asset Disposition or the receipt of such Net Available Cash; and

(C) to the extent of the balance of such Net Available Cash after application (if any) in accordance with clauses (A) and (B), to make an offer to the holders of the Notes (and to holders of other Senior

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Indebtedness of the Company designated by the Company) to purchase Notes (and such other Senior Indebtedness of the Company) pursuant to and subject to the conditions contained in the applicable Indenture;

provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness made to satisfy clause (A) or (C) above, the Company or such Restricted Subsidiary shall permanently retire such Indebtedness and shall cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased.

Notwithstanding the foregoing provisions of this covenant, the Company and the Restricted Subsidiaries will not be required to apply any Net Available Cash in accordance with this covenant except to the extent that the aggregate Net Available Cash from all Asset Dispositions which is not applied in accordance with this covenant exceeds $20 million. Pending application of Net Available Cash pursuant to this covenant, such Net Available Cash shall be invested in Temporary Cash Investments or applied to temporarily reduce revolving credit indebtedness.

For the purposes of this covenant, the following are deemed to be cash or cash equivalents:

(1) the assumption or discharge of any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the footnotes thereto) of the Company or such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are assumed by the transferee of such assets and for which the Company and all of the Restricted Subsidiaries have been released by all creditors in writing;

(2) securities received by the Company or any Restricted Subsidiary from the transferee that are converted by the Company or such Restricted Subsidiary within 180 days into cash, to the extent of cash received in that conversion;

(3) all Temporary Cash Investments; and

(4) any Designated Noncash Consideration having an aggregate Fair Market Value that, when taken together with all other Designated Noncash Consideration previously received and then outstanding, does not exceed at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value) $30 million.

(b) In the event of an Asset Disposition that requires the purchase of Notes (and other Senior Indebtedness of the Company) pursuant to clause (a)(3)(C) above, the Company will purchase Notes tendered pursuant to an offer by the Company for the Notes (and such other Senior Indebtedness) at a purchase price of 100% of their principal amount (or, in the event such other Senior Indebtedness of the Company was issued with significant original issue discount, 100% of the accreted value thereof) without premium, plus accrued but unpaid interest (or, in respect of such other Senior Indebtedness of the Company, such lesser price, if any, as may be provided for by the terms of such Senior Indebtedness) in accordance with the procedures (including prorating in the event of oversubscription) set forth in the applicable Indenture. If the aggregate purchase price of the securities tendered exceeds the Net Available Cash allotted to their purchase, the Company will select the securities to be purchased on a pro rata basis but in round denominations, which in the case of the Notes will be denominations of $1,000 principal amount or multiples thereof. The Company shall not be required to make such an offer to purchase Notes (and other Senior Indebtedness of the Company) pursuant to this covenant if the Net Available Cash available therefor is less than $20 million (which lesser amount shall be carried forward for purposes of determining whether such an offer is required with respect to the Net Available Cash from any subsequent Asset Disposition). Upon completion of such an offer to purchase, Net Available Cash will be deemed to be reduced by the aggregate amount of such offer.

(c) The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to

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this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this covenant by virtue of its compliance with such securities laws or regulations.

Limitation on Affiliate Transactions

(a) The Company will not, and will not permit any Restricted Subsidiary to, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property, employee compensation arrangements or the rendering of any service) with, or for the benefit of, any Affiliate of the Company (an “Affiliate Transaction”) unless:

(1) the terms of the Affiliate Transaction are no less favorable to the Company or such Restricted Subsidiary than those that could be obtained at the time of the Affiliate Transaction in arm’s-length dealings with a Person who is not an Affiliate;

(2) if such Affiliate Transaction involves an amount in excess of $10 million, the terms of the Affiliate Transaction are set forth in writing and a majority of the non-employee directors of the Company disinterested with respect to such Affiliate Transaction have determined in good faith that the criteria set forth in clause (1) are satisfied and have approved the relevant Affiliate Transaction as evidenced by a resolution of the Board of Directors; and

(3) if such Affiliate Transaction involves an amount in excess of $50 million, the Board of Directors shall also have received a written opinion from an Independent Qualified Party to the effect that such Affiliate Transaction is fair, from a financial standpoint, to the Company and its Restricted Subsidiaries or is not less favorable to the Company and its Restricted Subsidiaries than could reasonably be expected to be obtained at the time in an arm’s-length transaction with a Person who was not an Affiliate.

(b) The provisions of the preceding paragraph (a) will not prohibit:

(1) any Investment (other than a Permitted Investment) or other Restricted Payment, in each case permitted to be made pursuant to the covenant described under “—Limitation on Restricted Payments”;

(2) any employment or consulting agreement, employee benefit plan, officer or director indemnification agreement or any similar arrangement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business or approved by the Board of Directors, and payments pursuant thereto;

(3) loans or advances to employees in the ordinary course of business of the Company or its Restricted Subsidiaries, but in any event not to exceed $10 million in the aggregate outstanding at any one time;

(4) the payment of reasonable fees or other reasonable compensation to, or the provision of customary benefits or indemnification arrangements to, directors of the Company and its Restricted Subsidiaries;

(5) any transaction with the Company, a Restricted Subsidiary or any Person that would constitute an Affiliate Transaction solely because the Company or a Restricted Subsidiary owns an equity interest in or otherwise controls such Restricted Subsidiary or Person;

(6) the issuance or sale of any Capital Stock (other than Disqualified Stock) of the Company;

(7) any agreement as in effect on the Issue Date and described in the offering memorandum for the Notes or any renewals or extensions of any such agreement (so long as such renewals or extensions are not less favorable in any material respect to the Company or the Restricted Subsidiaries) and the transactions evidenced thereby;

(8) the provision of services to directors or officers of the Company or any of its Restricted Subsidiaries of the nature provided by the Company or any of its Restricted Subsidiaries to customers in the ordinary course of business; and

(9) transactions effected as a part of a Qualified Receivables Transaction.

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Limitation on Liens

The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, Incur or permit to exist any Lien (the “Initial Lien”) of any nature whatsoever on any of its properties (including Capital Stock of a Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired, securing any Indebtedness, other than Permitted Liens, without effectively providing that the Notes shall be secured equally and ratably with (or prior to) the obligations so secured for so long as such obligations are so secured.

Any Lien created for the benefit of the Holders of the Notes pursuant to the preceding sentence shall provide by its terms that such Lien shall be automatically and unconditionally released and discharged upon the release and discharge of the Initial Lien.

Limitation on Sale/Leaseback Transactions

The Company will not, and will not permit any Restricted Subsidiary to, enter into any Sale/Leaseback Transaction with respect to any property unless:

(1) the Company or such Restricted Subsidiary would be entitled to (A) Incur Indebtedness in an amount equal to the Attributable Debt with respect to such Sale/Leaseback Transaction pursuant to the covenant described under “—Limitation on Indebtedness” and (B) create a Lien on such property securing such Attributable Debt without equally and ratably securing the Notes pursuant to the covenant described under “—Limitation on Liens”;

(2) the gross proceeds received by the Company or any Restricted Subsidiary in connection with such Sale/Leaseback Transaction are at least equal to the Fair Market Value of such property; and

(3) the Company applies the proceeds of such transaction in compliance with the covenant described under “—Limitation on Sale of Assets and Subsidiary Stock”.

Merger and Consolidation

(a) The Company will not consolidate with or merge with or into, or convey, transfer or lease, in one transaction or a series of transactions, directly or indirectly, all or substantially all its assets to, any Person, unless:

(1) the resulting, surviving or transferee Person (the “Successor Company”) shall be a Person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not the Company) shall expressly assume, by an indenture supplemental thereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the Notes and such Indenture;

(2) immediately after giving pro forma effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company or any Subsidiary as a result of such transaction as having been Incurred by such Successor Company or such Subsidiary at the time of such transaction), no Default shall have occurred and be continuing;

(3) immediately after giving pro forma effect to such transaction, (A) the Successor Company would be able to Incur an additional $1.00 of Indebtedness pursuant to paragraph (a) of the covenant described under “—Limitation on Indebtedness” or (B) the Consolidated Coverage Ratio for the Successor Company would be greater than such ratio for the Company and its Restricted Subsidiaries immediately prior to such transaction; and

(4) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with such Indenture,

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provided, however, that clause (3) will not be applicable to (A) a Restricted Subsidiary consolidating with, merging into or transferring all or part of its properties and assets to the Company (so long as no Capital Stock of the Company is distributed to any Person) or (B) the Company merging with an Affiliate of the Company solely for the purpose and with the sole effect of reincorporating the Company in another jurisdiction.

For purposes of this covenant, the sale, lease, conveyance, assignment, transfer or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Company, which properties and assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Company on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

The Successor Company will be the successor to the Company and shall succeed to, and be substituted for, and may exercise every right and power of, the Company under such Indenture, and the predecessor Company, except in the case of a lease, shall be released from the obligation to pay the principal of and interest on the Notes.

(b) The Company will not permit any Subsidiary Guarantor to consolidate with or merge with or into, or convey, transfer or lease, in one transaction or a series of transactions, all or substantially all of its assets to any Person unless:

(1) except in the case of a Subsidiary Guarantor (x) that has been disposed of in its entirety to another Person (other than to the Company or an Affiliate of the Company), whether through a merger, consolidation or sale of Capital Stock or assets or (y) that, as a result of the disposition of all or a portion of its Capital Stock, ceases to be a Subsidiary of the Company, in both cases, if in connection therewith the Company provides an Officers’ Certificate to the Trustee to the effect that the Company will comply with its obligations under the covenant described under “—Limitation on Sales of Assets and Subsidiary Stock” in respect of such disposition, the resulting, surviving or transferee Person (if not such Subsidiary) shall be a Person organized and existing under the laws of the jurisdiction under which such Subsidiary was organized or under the laws of the United States of America, or any State thereof or the District of Columbia, and such Person shall expressly assume, by a Guaranty Agreement, in a form satisfactory to the Trustee, all the obligations of such Subsidiary, if any, under its Subsidiary Guaranty;

(2) immediately after giving effect to such transaction or transactions on a pro forma basis (and treating any Indebtedness which becomes an obligation of the resulting, surviving or transferee Person as a result of such transaction as having been issued by such Person at the time of such transaction), no Default shall have occurred and be continuing; and

(3) the Company delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such Guaranty Agreement, if any, complies with such Indenture.

Future Guarantors

The Company will cause each Restricted Subsidiary that (a) Guarantees any Indebtedness of the Company or any Subsidiary Guarantor (other than Indebtedness permitted to be Incurred pursuant to clause (2), (8) or (9) of paragraph (b) of the covenant described under “—Limitation on Indebtedness”) or (b) Incurs any Indebtedness other than Eligible Indebtedness, to, at the same time, execute and deliver to the Trustee a Guaranty Agreement pursuant to which such Restricted Subsidiary will Guarantee payment of the Notes on the same terms and conditions as those set forth in such Indenture.

SEC Reports

Whether or not the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company will file with the SEC (subject to the next sentence) and provide the Trustee and Noteholders

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with such annual and other reports as are specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation subject to such Sections, such reports to be so filed and provided at the times specified for the filings of such reports under such Sections and containing all the information, audit reports and exhibits required for such reports. If at any time, the Company is not subject to the periodic reporting requirements of the Exchange Act for any reason, the Company will nevertheless continue filing the reports specified in the preceding sentence with the SEC within the time periods required unless the SEC will not accept such a filing. The Company agrees that it will not take any action for the purpose of causing the SEC not to accept any such filings. If, notwithstanding the foregoing, the SEC will not accept such filings for any reason, the Company will post the reports specified in the preceding sentence on its website within the time periods that would apply if the Company were required to file those reports with the SEC. At any time that any of the Company’s Subsidiaries are Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraph will include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, 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, at any time when the Company is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company will furnish to the Holders of the Notes and to prospective investors, upon the requests of such Holders, any information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as the Notes are not freely transferable under the Securities Act.

Defaults

Each of the following is an Event of Default under the Indenture governing the Floating Rate Notes and the Fixed Rate Notes, as the case may be:

(1) a default in the payment of interest on the Notes when due, continued for 30 days;

(2) a default in the payment of principal of any Note when due at its Stated Maturity, upon optional redemption, upon required purchase, upon declaration of acceleration or otherwise;

(3) the failure by the Company to comply with its obligations under “—Certain Covenants—Merger and Consolidation” above;

(4) the failure by the Company or any Subsidiary Guarantor to comply for 60 days after notice with its agreements contained in such Indenture;

(5) Indebtedness of the Company, any Subsidiary Guarantor or any Significant Subsidiary is not paid within any applicable grace period after final maturity or is accelerated by the holders thereof because of a default and the total amount of such Indebtedness unpaid or accelerated exceeds $50 million (the “cross acceleration provision”);

(6) certain events of bankruptcy, insolvency or reorganization of the Company, a Subsidiary Guarantor or any Significant Subsidiary (the “bankruptcy provisions”);

(7) any judgment or decree for the payment of money in excess of $50 million is entered against the Company, a Subsidiary Guarantor or any Significant Subsidiary, remains outstanding for a period of 60 consecutive days following such judgment and is not discharged, waived or effectively stayed (the “judgment default provision”); or

(8) a Subsidiary Guaranty ceases to be in full force and effect (other than in accordance with the terms of such Subsidiary Guaranty) or a Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary Guaranty.

However, a default under clause (4) will not constitute an Event of Default until the Trustee or the holders of 25% in principal amount of the outstanding Notes of such series notify the Company of the default and the Company does not cure such default within the time specified after receipt of such notice.

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If an Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the outstanding Notes of such series may declare the principal of and accrued but unpaid interest on all the Notes of such series to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs and is continuing, the principal of and interest on all the Notes will ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any holders of the Notes. Under certain circumstances, the holders of a majority in principal amount of the outstanding Notes of a series may rescind any such acceleration with respect to the Notes of such series and its consequences.

In the case of any Event of Default occurring by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Notes of a series pursuant to the optional redemption provisions of such Indenture, an equivalent premium will also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Notes of such series.

Subject to the provisions of the Indentures relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the applicable Indenture at the request or direction of any of the holders of the Notes unless such holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder of a Note may pursue any remedy with respect to the applicable Indenture or the Notes unless:

(1) such holder has previously given the Trustee notice that an Event of Default is continuing;

(2) holders of at least 25% in principal amount of the outstanding Notes of such series have requested the Trustee to pursue the remedy;

(3) such holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity; and

(5) holders of a majority in principal amount of the outstanding Notes of such series have not given the Trustee a direction inconsistent with such request within such 60-day period.

Subject to certain restrictions, the holders of a majority in principal amount of the outstanding Notes of a series are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or such Indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder of a Note or that would involve the Trustee in personal liability.

If a Default occurs, is continuing and is known to the Trustee, the Trustee must mail to each holder of the Notes of the applicable series notice of the Default within 90 days after it occurs. Except in the case of a Default in the payment of principal of or interest on any Note, the Trustee may withhold notice if and so long as a committee of its Trust Officers in good faith determines that withholding notice is not opposed to the interest of the holders of the applicable Notes. In addition, we are required to deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. We are required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any event that would constitute certain Defaults, their status and what action we are taking or propose to take in respect thereof.

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Amendments and Waivers

Subject to certain exceptions, each Indenture may be amended with the consent of the holders of a majority in principal amount of the Notes of the applicable series then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange for, the Notes) and any past default or compliance with any provisions may also be waived with the consent of the holders of a majority in principal amount of the Notes of such series then outstanding. However, without the consent of each holder of an outstanding Note affected thereby, an amendment or waiver may not, among other things:

(1) reduce the amount of Notes whose holders must consent to an amendment;

(2) reduce the rate of or extend the time for payment of interest on any Note;

(3) reduce the principal of or change the Stated Maturity of any Note;

(4)(i) reduce the amount payable upon the redemption of any Note or (ii) change the time at which any Note may be redeemed, in each case as described under “—Optional Redemption” above;

(5) make any Note payable in money other than that stated in the Note;

(6) impair the right of any holder of the Notes to receive payment of principal of and interest on such holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holder’s Notes;

(7) make any change in the amendment provisions that require each holder’s consent or in the waiver provisions;

(8) make any change in the ranking or priority of any Note that would adversely affect the Noteholders; or

(9) make any change in, or release other than in accordance with the applicable Indenture, any Subsidiary Guaranty that would adversely affect the Noteholders.

Notwithstanding the preceding, without the consent of any holder of the Notes, the Company, the Subsidiary Guarantors and Trustee may amend the applicable Indenture:

(1) to cure any ambiguity, omission, defect or inconsistency;

(2) to provide for the assumption by a successor corporation of the obligations of the Company or any Subsidiary Guarantor under such Indenture;

(3) to provide for uncertificated Notes in addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code);

(4) to add Guarantees with respect to the Notes, including any Subsidiary Guaranties, or to secure the Notes;

(5) to add to the covenants of the Company or a Subsidiary Guarantor for the benefit of the holders of the Notes or to surrender any right or power conferred upon the Company or a Subsidiary Guarantor;

(6) to make any change that does not adversely affect the rights of any holder of the Notes;

(7) to conform the text of such Indenture or the Notes to any provision of this “Description of the Exchange Notes” to the extent that such provision in this “Description of the Exchange Notes” was intended to be a verbatim recitation of a provision of such Indenture or the Exchange Notes;

(8) to comply with any requirement of the SEC in connection with the qualification of such Indenture under the Trust Indenture Act; or

(9) to make any amendment to the provisions of such Indenture relating to the transfer and legending of Notes; provided, however, that (a) compliance with such Indenture as so amended would not result in Notes

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being transferred in violation of the Securities Act or any other applicable securities law and (b) such amendment does not materially and adversely affect the rights of Holders to transfer Notes.

The consent of the holders of the Notes is not necessary under the Indentures to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.

After an amendment under an Indenture becomes effective, we are required to mail to holders of the Notes of such series a notice briefly describing such amendment. However, the failure to give such notice to all holders of such Notes, or any defect therein, will not impair or affect the validity of the amendment.

Neither the Company nor any Affiliate of the Company may, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of an Indenture or the Notes of a series unless such consideration is offered to all Holders of such Notes and is paid to all Holders of such Notes that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement.

Transfer

The Exchange Notes will be issued in registered form and will be transferable only upon the surrender of the Exchange Notes being transferred for registration of transfer. We may require payment of a sum sufficient to cover any tax, assessment or other governmental charge payable in connection with certain transfers and exchanges.

Satisfaction and Discharge

When we (1) deliver to the Trustee all outstanding Notes of a series for cancellation or (2) all outstanding Notes of a series have become due and payable, whether at maturity or on a redemption date as a result of the mailing of notice of redemption, and, in the case of clause (2), we irrevocably deposit with the Trustee funds sufficient to pay at maturity or upon redemption all outstanding Notes of a series, including interest thereon to maturity or such redemption date, and if in either case we pay all other sums payable under the applicable Indenture by us, then such Indenture shall, subject to certain exceptions, cease to be of further effect.

Defeasance

At any time, we may terminate all our obligations under the Notes of a series and the applicable Indenture (“legal defeasance”), except for certain obligations, including those respecting the defeasance trust and obligations to register the transfer or exchange of the Notes, to replace mutilated, destroyed, lost or stolen Notes and to maintain a registrar and paying agent in respect of the Notes.

In addition, at any time we may terminate our obligations under “—Change of Control” and under the covenants described under “—Certain Covenants” (other than the covenant described under “—Merger and Consolidation”), the operation of the cross acceleration provision, the bankruptcy provisions with respect to Subsidiary Guarantors and Significant Subsidiaries and the judgment default provision described under “—Defaults” above and the limitations contained in clause (3) of the first paragraph under “—Certain Covenants—Merger and Consolidation” above (“covenant defeasance”).

We may exercise our legal defeasance option notwithstanding our prior exercise of our covenant defeasance option. If we exercise our legal defeasance option with respect to a series of Notes, payment of the Notes of such series may not be accelerated because of an Event of Default with respect thereto. If we exercise our covenant defeasance option with respect to a series of Notes, payment of the Notes of such series may not be accelerated because of an Event of Default specified in clause (4), (5), (6) (with respect only to Significant Subsidiaries and

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Subsidiary Guarantors) or (7) under “—Defaults” above or because of the failure of the Company to comply with clause (3) of the first paragraph under “—Certain Covenants—Merger and Consolidation” above. If we exercise our legal defeasance option or our covenant defeasance option with respect to a series of Notes, each Subsidiary Guarantor under the applicable Indenture will be released from all of its obligations with respect to its Subsidiary Guaranty in respect of such Notes.

In order to exercise either of our defeasance options with respect to a series of Notes, we must irrevocably deposit in trust (the “defeasance trust”) with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Notes of such series to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of an Opinion of Counsel to the effect that holders of the Notes of such series will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and defeasance and will be subject to Federal income tax on the same amounts and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such Opinion of Counsel must be based on a ruling of the Internal Revenue Service or other change in applicable Federal income tax law).

Concerning the Trustee

The Bank of Nova Scotia Trust Company of New York is the Trustee under each of the Indentures and has been appointed by the Company as Registrar and Paying Agent with regard to the Notes.

The Indentures contain certain limitations on the rights of the Trustee, should it become a creditor of the Company, 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; provided, however, if it acquires any conflicting interest it must either eliminate such conflict within 90 days, apply to the SEC for permission to continue or resign.

The Holders of a majority in principal amount of the outstanding Notes of a series 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. If an Event of Default occurs (and is not cured), 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 applicable 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 and then only to the extent required by the terms of such Indenture.

No Personal Liability of Directors, Officers, Employees and Stockholders

No director, officer, employee, incorporator or stockholder of the Company or any Subsidiary Guarantor will have any liability for any obligations of the Company or any Subsidiary Guarantor under the Notes, any Subsidiary Guaranty or the Indentures or for any claim based on, in respect of, or by reason of such obligations or their creation. Each Holder of the 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. Such waiver and release may not be effective to waive liabilities under the U.S. Federal securities laws, and it is the view of the SEC that such a waiver is against public policy.

Governing Law

The Indentures and the Notes are governed by, and construed in accordance with, the laws of the State of New York.

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Certain Definitions

“Additional Assets” means:

(1) any property or assets used in a Related Business;

(2) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary; or

(3) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;

provided, however, that any such Restricted Subsidiary described in clause (2) or (3) above is primarily engaged in a Related Business.

“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 the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing. No Person (other than the Company or any Subsidiary of the Company) in whom a Receivables Entity makes an Investment in connection with a Qualified Receivables Transaction will be deemed to be an Affiliate of the Company or any of its Subsidiaries solely by reason of such Investment.

“Asset Disposition” means any sale, lease, transfer or other disposition (or series of related sales, leases, transfers or dispositions) by the Company or any Restricted Subsidiary, including any disposition by means of a merger, consolidation or similar transaction (each referred to for the purposes of this definition as a “disposition”), of:

(1) any shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Company or a Restricted Subsidiary);

(2) all or substantially all the assets of any division or line of business of the Company or any Restricted Subsidiary; or

(3) any other assets of the Company or any Restricted Subsidiary outside of the ordinary course of business of the Company or such Restricted Subsidiary (other than, in the case of clauses (1), (2) and (3) above,

(A) a disposition by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary;

(B) for purposes of the covenant described under “—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock” only, a disposition that constitutes a Restricted Payment (or would constitute a Restricted Payment but for the exclusions from the definition thereof) that is not prohibited by the covenant described under “—Certain Covenants—Limitation on Restricted Payments” or that constitutes a Permitted Investment;

(C) a disposition of all or substantially all the assets of the Company in accordance with the covenant described under “—Certain Covenants—Merger and Consolidation”;

(D) a disposition of assets with a Fair Market Value of less than or equal to $2 million;

(E) sales of damaged, worn-out or obsolete equipment or assets in the ordinary course of business that, in the Company’s reasonable judgment, are no longer either used or useful in the business of the Company or its Subsidiaries;

(F) the sale or discount, in each case without recourse, of accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof;

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(G) sales of accounts receivable and related assets of the type specified in the definition of “Qualified Receivables Transaction” to a Receivables Entity;

(H) transfers of accounts receivable and related assets of the type specified in the definition of “Qualified Receivables Transaction” (or a fractional undivided interest therein) by a Receivables Entity in a Qualified Receivables Transaction;

(I) leases or subleases to third Persons in the ordinary course of business that do not interfere in any material respect with the business of the Company or any of its Restricted Subsidiaries;

(J) a disposition of cash or Temporary Cash Investments; and

(K) the creation of a Lien (but not the sale or other disposition of the property subject to such Lien)).

“Attributable Debt” in respect of a Sale/Leaseback Transaction means, as at the time of determination, the present value (discounted at the interest rate implicit in the lease, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale/ Leaseback Transaction (including any period for which such lease has been extended); provided, however, that if such Sale/Leaseback Transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capital Lease Obligation”.

“Average Life” means, as of the date of determination, with respect to any Indebtedness, the quotient obtained by dividing:

(1) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment of or redemption or similar payment with respect to such Indebtedness multiplied by the amount of such payment by

(2) the sum of all such payments.

“Birmingham Hospital Transaction” means, collectively, the sale of the Downtown Birmingham Medical Center and, to the extent required in connection therewith, the acquisition of, and the buyout of leases with respect to, such property and Sale/Leaseback Transactions with Healthcare Realty Trust Incorporated and DR Acquisition of Alabama, Inc., in each case to the extent consummated on or prior to September 10, 2006.

“Board of Directors” means the Board of Directors of the Company or any committee thereof duly authorized to act on behalf of such Board.

“Business Day” means each day which is not a Legal Holiday.

“Capital Lease Obligation” means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty. For purposes of the covenant described under “—Certain Covenants—Limitation on Liens”, a Capital Lease Obligation will be deemed to be secured by a Lien on the property being leased.

“Capital Stock” of any Person means any and all shares, interests (including partnership interests), rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.

“Captive Insurance Subsidiary” means HCS, Ltd., a Cayman Islands entity, and any successor to it, and any other Subsidiary formed for the purpose of facilitating self-insurance programs of the Company and its Subsidiaries.

“Code” means the Internal Revenue Code of 1986, as amended.

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“Consolidated Amortization Expense” means, for any Person for any period, the amortization expense of such Person and its Restricted Subsidiaries for such period (to the extent included in the computation of Consolidated Net Income of such Person), determined on a consolidated basis in accordance with GAAP, excluding amortization expense attributable to a prepaid item that was paid in cash in a prior period.

“Consolidated Coverage Ratio” as of any date of determination means the ratio of (a) the aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters ending at least 45 days prior to the date of such determination to (b) Consolidated Interest Expense for such four fiscal quarters; provided, however, that:

(1) if the Company or any Restricted Subsidiary has Incurred any Indebtedness since the beginning of such period that remains outstanding or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness (and the application of the proceeds thereof) as if such Indebtedness had been Incurred on the first day of such period;

(2) if the Company or any Restricted Subsidiary has repaid, repurchased, defeased or otherwise discharged any Indebtedness since the beginning of such period or if any Indebtedness is to be repaid, repurchased, defeased or otherwise discharged (in each case other than Indebtedness Incurred under any revolving credit facility unless such Indebtedness has been permanently repaid and has not been replaced) on the date of the transaction giving rise to the need to calculate the Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for such period shall be calculated on a pro forma basis as if such discharge had occurred on the first day of such period and as if the Company or such Restricted Subsidiary had not earned the interest income actually earned during such period in respect of cash or Temporary Cash Investments used to repay, repurchase, defease or otherwise discharge such Indebtedness;

(3) if since the beginning of such period the Company or any Restricted Subsidiary shall have made any Asset Disposition, EBITDA for such period shall be reduced by an amount equal to EBITDA (if positive) directly attributable to the assets which are the subject of such Asset Disposition for such period, or increased by an amount equal to EBITDA (if negative), directly attributable thereto for such period and Consolidated Interest Expense for such period shall be reduced by an amount equal to the Consolidated Interest Expense directly attributable to any Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with respect to the Company and its continuing Restricted Subsidiaries in connection with such Asset Disposition for such period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period directly attributable to the Indebtedness of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale);

(4) if since the beginning of such period the Company or any Restricted Subsidiary (by merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary) or an acquisition of assets, including any acquisition of assets occurring in connection with a transaction requiring a calculation to be made hereunder, that constitutes a hospital or other health care-related business or all or substantially all of an operating unit of a business, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition had occurred on the first day of such period; and

(5) if since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period) shall have made any Asset Disposition, any Investment or acquisition of assets that would have required an adjustment pursuant to clause (3) or (4) above if made by the Company or a Restricted Subsidiary during such period, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such Asset Disposition, Investment or acquisition had occurred on the first day of such period.

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For purposes of this definition, whenever pro forma effect is to be given to an acquisition 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, the pro forma calculations shall be determined in good faith by a responsible financial or accounting Officer of the Company (and shall include any applicable Pro Forma Cost Savings). If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest 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 any Indebtedness is incurred under a revolving credit facility and is being given pro forma effect, the interest on such Indebtedness shall be calculated based on the average daily balance of such Indebtedness for the four fiscal quarters subject to the pro forma calculation to the extent that such Indebtedness was incurred solely for working capital purposes.

“Consolidated Depreciation Expense” means, for any Person for any period, the depreciation expense of such Person and its Restricted Subsidiaries for such period (to the extent included in the computation of Consolidated Net Income of such Person), determined on a consolidated basis in accordance with GAAP.

“Consolidated Income Tax Expense” means, for any Person for any period, the provision for taxes based on income and profits of such Person and its Restricted Subsidiaries to the extent such provision for income taxes was deducted in computing Consolidated Net Income of such Person for such period, determined on a consolidated basis in accordance with GAAP.

“Consolidated Interest Expense” means, for any period, the total interest expense of the Company and its consolidated Restricted Subsidiaries, net of interest income of the Company and its consolidated Restricted Subsidiaries (other than interest income of any Captive Insurance Subsidiary that is a Restricted Subsidiary), plus, to the extent not included in the calculation of total interest expense, and to the extent incurred by the Company or its Restricted Subsidiaries, without duplication:

(1) interest expense attributable to Capital Lease Obligations;

(2) amortization of debt discount;

(3) capitalized interest;

(4) non-cash interest expense;

(5) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing;

(6) net payments made or received pursuant to Hedging Obligations;

(7) dividends accrued in respect of all Disqualified Stock of the Company and all Preferred Stock of any Restricted Subsidiary, in each case held by Persons other than the Company or a Wholly Owned Subsidiary (other than dividends payable solely in Capital Stock (other than Disqualified Stock) of the Company); provided, however, that such dividends will be multiplied by a fraction the numerator of which is one and the denominator of which is one minus the effective combined tax rate of the issuer of such Preferred Stock (expressed as a decimal) for such period (as estimated by the chief financial officer of the Company in good faith);

(8) interest accruing on any Indebtedness of any other Person to the extent such Indebtedness is Guaranteed by (or secured by the assets of) the Company or any Restricted Subsidiary; and

(9) 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 any Person (other than the Company) in connection with Indebtedness Incurred by such plan or trust.

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“Consolidated Net Income” means, for any period, the net income of the Company and its consolidated Subsidiaries; provided, however, that there shall not be included in such Consolidated Net Income:

(1) any net income of any Person (other than the Company) if such Person is not a Restricted Subsidiary, except that:

(A) subject to the exclusion contained in clause (4) below, the Company’s equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to a Restricted Subsidiary, to the limitations contained in clause (3) below); and

(B) the Company’s equity in a net loss of any such Person for such period shall be included in determining such Consolidated Net Income to the extent such loss has been funded with cash from the Company or a Restricted Subsidiary;

(2) any net income (or loss) of any Person acquired by the Company or a Subsidiary in a pooling of interests transaction (or any transaction accounted for in a manner similar to a pooling of interests) for any period prior to the date of such acquisition;

(3) any net income of any Restricted Subsidiary if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Company, except that:

(A) subject to the exclusion contained in clause (4) below, the Company’s equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash that could have been distributed by such Restricted Subsidiary during such period to the Company or another Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution paid to another Restricted Subsidiary, to the limitation contained in this clause); and

(B) the Company’s equity in a net loss of any such Restricted Subsidiary for such period shall be included in determining such Consolidated Net Income;

(4) any gain (or loss) realized upon the sale or other disposition of any assets of the Company, its consolidated Subsidiaries or any other Person (including pursuant to any sale-and-leaseback arrangement) which is not sold or otherwise disposed of in the ordinary course of business and any gain (or loss) realized upon the sale or other disposition of any Capital Stock of any Person;

(5) any net income or net losses from discontinued operations;

(6) extraordinary gains or losses; and

(7) the cumulative effect of a change in accounting principles,

in each case, for such period. Notwithstanding the foregoing, for the purposes of the covenant described under “—Certain Covenants—Limitation on Restricted Payments” only, there shall be excluded from Consolidated Net Income any repurchases, repayments or redemptions of Investments, proceeds realized on the sale of Investments or return of capital to the Company or a Restricted Subsidiary to the extent such repurchases, repayments, redemptions, proceeds or returns increase the amount of Restricted Payments permitted under such covenant pursuant to clause (a)(3)(D) or (a)(3)(E) thereof.

“Consolidated Tangible Assets” as of any date means the total assets of the Company and its Restricted Subsidiaries (excluding any assets that would be classified as “intangible assets” under GAAP) on a consolidated basis at such date, as determined in accordance with GAAP, less (i) all write-ups subsequent to the Issue Date in the book value of any asset owned by the Company or any of its Restricted Subsidiaries and (ii) Investments in and assets of Unrestricted Subsidiaries.

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“Convertible Preferred Stock” means the Company’s Series A Convertible Perpetual Preferred Stock issued and outstanding on the Issue Date.

“Credit Agreement” means the Credit Agreement dated as of March 10, 2006, by and among the Company, as borrower, JPMorgan Chase Bank, N.A., as administrative agent and the other lenders and agents party thereto from time to time, together with the related documents thereto (including the term loans and revolving loans thereunder, any guarantees and security documents), as amended, extended, renewed, restated, supplemented or otherwise modified (in whole or in part, and without limitation as to amount, terms, conditions, covenants and other provisions) from time to time, and any agreement (and related document) governing Indebtedness incurred to Refinance, in whole or in part, the borrowings and commitments then outstanding or permitted to be outstanding under such Credit Agreement or a successor Credit Agreement, whether by the same or any other lender or group of lenders (including by means of sales of debt securities to institutional investors).

“Currency Agreement” means any foreign exchange contract, currency swap agreement or other similar agreement with respect to currency values.

“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“Designated Noncash Consideration” means noncash consideration received by the Company or one of its Restricted Subsidiaries in connection with an Asset Disposition that is designated by the Company as Designated Noncash Consideration, less the amount of cash or cash equivalents received in connection with a subsequent sale of such Designated Noncash Consideration, which cash and cash equivalents shall be considered Net Available Cash received as of such date and shall be applied pursuant to the covenant described under “Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock”.

“Digital Hospital” means the planned 219-bed acute care hospital located on Highway 280 in Birmingham, Alabama as replacement for the HealthSouth Medical Center.

“Digital Hospital Transaction” means any sale or other related disposition of real property (and any improvements thereon) involving the Digital Hospital.

“Disqualified Stock” means, with respect to any Person, 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 at the option of the holder) or upon the happening of any event:

(1) matures or is mandatorily redeemable (other than redeemable only for Capital Stock of such Person which is not itself Disqualified Stock) pursuant to a sinking fund obligation or otherwise;

(2) is convertible or exchangeable at the option of the holder for Indebtedness or Disqualified Stock; or

(3) is mandatorily redeemable or must be purchased upon the occurrence of certain events or otherwise, in whole or in part;

in each case on or prior to the date that is 91 days after the Stated Maturity of the Notes; provided, however, that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to purchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of control” occurring prior to the date that is 91 days after the Stated Maturity of the Notes shall not constitute Disqualified Stock if the “asset sale” or “change of control” provisions applicable to such Capital Stock are not more favorable to the holders of such Capital Stock than the terms applicable to the Notes and described under “—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock” and “—Certain Covenants—Change of Control”.

The amount of any Disqualified Stock that does not have a fixed redemption, repayment or repurchase price will be calculated in accordance with the terms of such Disqualified Stock as if such Disqualified Stock were

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redeemed, repaid or repurchased on any date on which the amount of such Disqualified Stock is to be determined pursuant to such Indenture; provided, however, that if such Disqualified Stock could not be required to be redeemed, repaid or repurchased at the time of such determination, the redemption, repayment or repurchase price will be the book value of such Disqualified Stock as reflected in the most recent financial statements of such Person. The Convertible Preferred Stock, based on the terms thereof in effect on the Issue Date, is not Disqualified Stock.

“EBITDA” of any Person for any period means Consolidated Net Income of such Person for such period plus, without duplication, the sum for such Person of the following to the extent deducted in calculating Consolidated Net Income for such period:

(1) Consolidated Income Tax Expense,

(2) Consolidated Depreciation Expense,

(3) Consolidated Amortization Expense,

(4) Consolidated Interest Expense,

(5) all other non-cash items or non-recurring non-cash items reducing Consolidated Net Income of such Person and its Subsidiaries, determined on a consolidated basis in accordance with GAAP (including non-cash charges incurred as a result of the application of SFAS No. 123(R); provided that cash expenditures made in respect of items to which the charges referred to in this clause (5) relate in an aggregate amount in excess of $10,000,000 for any period of four consecutive fiscal quarters shall be deducted in determining EBITDA for the period during which such expenditures are made,

(6) any restructuring charges in respect of legal fees associated with the government, class-action and shareholder derivative litigation described in the Company’s Report on Form 10-K for the fiscal year ended December 31, 2005,

(7) fees, costs and expenses related to the Recapitalization Transactions,

(8) any losses from discontinued operations and closed locations,

(9) costs and expenses related to the settlement of the Shareholder Litigation, and

(10) charges in respect of professional fees for reconstruction and restatement of financial statements (including matters related to internal controls and documentation) that relate to the fiscal years ended December 31, 2000, 2001, 2002, 2003, 2004 and 2005 and the fiscal quarters occurring during such fiscal years,

in each case determined on a consolidated basis in accordance with GAAP, less all unusual non-cash items or non-recurring non-cash items to the extent increasing Consolidated Net Income of such Person and its Subsidiaries, determined on a consolidated basis in accordance with GAAP, in each case for such period. Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and the depreciation and amortization and non-cash charges of, a Restricted Subsidiary shall be added to Consolidated Net Income to compute EBITDA only to the extent (and in the same proportion, including by reason of minority interests) that the net income or loss of such Restricted Subsidiary was included in calculating Consolidated Net Income and only if a corresponding amount would be permitted at the date of determination to be dividended to the Company by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to such Restricted Subsidiary or its stockholders.

“Eligible Indebtedness” means any Indebtedness other than:

(1) Indebtedness in the form of, or represented by, bonds (other than surety bonds, indemnity bonds, performance bonds or bonds of a similar nature) or other securities or any Guarantee thereof; and

(2) Indebtedness that is, or may be, quoted, listed or purchased and sold on any stock exchange, automated trading system or over-the-counter or other securities market (including, without prejudice to the

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generality of the foregoing, the market for securities eligible for resale pursuant to Rule 144A under the Securities Act).

“Equity Offering” means any public or private sale of Capital Stock (other than Disqualified Stock) of the Company, other than public offerings with respect to the Company’s common stock registered on Form S-8 under the Securities Act and other than issuances to any Subsidiary of the Company.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“Exchange Notes” means the debt securities of the Company issued pursuant to the applicable Indenture in exchange for, and in an aggregate principal amount equal to, the Notes issued thereunder, in compliance with the terms of the Registration Rights Agreement.

“Fair Market Value” means, with respect to any asset or property, the price that could be negotiated in an arm’s-length, free market transaction, for cash, between a willing and able buyer and an unaffiliated willing seller, neither of whom is under undue pressure or compulsion to complete the transaction, as such price is determined in good faith by (1) the Chief Financial Officer, the Treasurer or the Chief Accounting Officer of the Company (unless otherwise provided in the applicable Indenture) for transactions valued at, or below, $10 million, or (2) the Board of Directors of the Company (unless otherwise provided in the applicable Indenture) for transactions valued in excess of $10 million.

“GAAP” means generally accepted accounting principles in the United States of America as in effect as of the Issue Date, including those set forth in:

(1) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants;

(2) statements and pronouncements of the Financial Accounting Standards Board;

(3) such other statements by such other entity as approved by a significant segment of the accounting profession; and

(4) the rules and regulations of the SEC governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC.

“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any Person and any obligation, direct or indirect, contingent or otherwise, of such Person:

(1) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise); or

(2) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);

provided, however, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

“Guaranty Agreement” means a supplemental indenture, in a form satisfactory to the Trustee, pursuant to which a Subsidiary Guarantor guarantees the Company’s obligations with respect to the Notes on the terms provided for in each Indenture.

“Hedging Obligations” of any Person means the obligations of such Person pursuant to any Interest Rate Agreement or Currency Agreement.

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“Holder” or “Noteholder” means the Person in whose name a Note is registered on the Registrar’s books.

“Incur” means issue, assume, Guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Restricted Subsidiary. The term “Incurrence” when used as a noun shall have a correlative meaning. Solely for purposes of determining compliance with “—Certain Covenants—Limitation on Indebtedness”:

(1) amortization of debt discount or the accretion of principal with respect to a non-interest bearing or other discount security;

(2) the payment of regularly scheduled interest in the form of additional Indebtedness of the same instrument or the payment of regularly scheduled dividends on Capital Stock in the form of additional Capital Stock of the same class and with the same terms; and

(3) the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Indebtedness will not be deemed to be the Incurrence of Indebtedness.

“Indebtedness” means, with respect to any Person on any date of determination (without duplication):

(1) the principal in respect of (A) indebtedness of such Person for money borrowed and (B) indebtedness evidenced by Notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable, including, in each case, any premium on such indebtedness to the extent such premium has become due and payable;

(2) all Capital Lease Obligations of such Person and all Attributable Debt in respect of Sale/Leaseback Transactions entered into by such Person;

(3) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding any accounts payable or other liability to trade creditors arising in the ordinary course of business);

(4) all obligations of such Person for the reimbursement of any obligor on any letter of credit, bankers’ acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in clauses (1) through (3) above) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the tenth Business Day following payment on the letter of credit);

(5) the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock of such Person or, with respect to any Preferred Stock of any Subsidiary of such Person, the principal amount of such Preferred Stock to be determined in accordance with the applicable Indenture (but excluding, in each case, any accrued dividends);

(6) all obligations of the type referred to in clauses (1) through (5) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any Guarantee;

(7) all obligations of the type referred to in clauses (1) through (6) of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person), the amount of such obligation being deemed to be the lesser of the Fair Market Value of such property or assets and the amount of the obligation so secured; and

(8) to the extent not otherwise included in this definition, Hedging Obligations of such Person.

Notwithstanding the foregoing, in connection with the purchase by the Company or any Restricted Subsidiary of any business, the term “Indebtedness” will exclude indemnification, purchase price adjustment,

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holdback and contingency payment obligations to which the seller may become entitled to the extent such payment is determined by a final closing balance sheet or such payment depends on the performance of such business after the closing; provided, however, that, at the time of closing, the amount of any such payment is not determinable and, to the extent such payment thereafter becomes fixed and determined, the amount is paid within 60 days thereafter.

The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all obligations as described above; provided, however, that in the case of Indebtedness sold at a discount, the amount of such Indebtedness at any time will be the accreted value thereof at such time.

“Independent Qualified Party” means an investment banking firm, accounting firm or appraisal firm of national standing; provided, however, that such firm is not an Affiliate of the Company.

“Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement or other financial agreement or arrangement with respect to exposure to interest rates.

“Interim Loan Agreement” means the Interim Loan Agreement dated as of March 10, 2006, among the Company, the subsidiary guarantors named therein, the lenders named therein and the administrative agent named therein.

“Investment” in any Person means any direct or indirect advance, loan (other than advances to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of the lender) or other extensions of credit (including by way of Guarantee or similar arrangement) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such Person. If the Company or any Restricted Subsidiary issues, sells or otherwise disposes of any Capital Stock of a Person that is a Restricted Subsidiary such that, after giving effect thereto, such Person is no longer a Restricted Subsidiary, any Investment by the Company or any Restricted Subsidiary in such Person remaining after giving effect thereto will be deemed to be a new Investment at such time. The acquisition by the Company or any Restricted Subsidiary of a Person that holds an Investment in a third Person will be deemed to be an Investment by the Company or such Restricted Subsidiary in such third Person at such time. Except as otherwise provided for herein, the amount of an Investment shall be its Fair Market Value at the time the Investment is made and without giving effect to subsequent changes in value.

For purposes of the definition of “Unrestricted Subsidiary”, the definition of “Restricted Payment” and the covenant described under “—Certain Covenants—Limitation on Restricted Payments”:

(1) “Investment” shall include the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of any Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount (if positive) equal to (A) the Company’s “Investment” in such Subsidiary at the time of such redesignation less (B) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation; and

(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer.

“Issue Date” means June 14, 2006.

“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions are not required to be open in the State of New York.

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“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof).

“Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating agency business.

“Net Available Cash” from an Asset Disposition means cash payments received therefrom (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and proceeds from the sale or other disposition of any securities received as consideration, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to such properties or assets or received in any other non-cash form), in each case net of:

(1) all legal, title and recording tax expenses, commissions and other fees and expenses incurred (including legal, accounting and investment banking fees and commissions), and all Federal, state, provincial, foreign and local taxes required to be accrued as a liability under GAAP, as a consequence of such Asset Disposition;

(2) all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon or other security agreement of any kind with respect to such assets, or which must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law, be repaid out of the proceeds from such Asset Disposition;

(3) all distributions and other payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such Asset Disposition;

(4) the deduction of appropriate amounts provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed in such Asset Disposition and retained by the Company or any Restricted Subsidiary after such Asset Disposition; and

(5) any portion of the purchase price from an Asset Disposition placed in escrow, whether as a reserve for adjustment of the purchase price, for satisfaction of indemnities in respect of such Asset Disposition or otherwise in connection with that Asset Disposition; provided, however, that upon the termination of that escrow, Net Available Cash will be increased by any portion of funds in the escrow that are released to the Company or any Restricted Subsidiary.

“Net Cash Proceeds”, with respect to any issuance or sale of Capital Stock or Indebtedness, means the cash proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof.

“Obligations” means, with respect to any Indebtedness, all obligations for principal, premium, interest, penalties, fees, indemnifications, reimbursements, and other amounts payable pursuant to the documentation governing such Indebtedness.

“Officer” means the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer or the Secretary of the Company.

“Officers’ Certificate” means a certificate signed by two Officers.

“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee.

“Permitted Investment” means an Investment by the Company or any Restricted Subsidiary in:

(1) the Company, a Restricted Subsidiary or a Person that will, upon the making of such Investment, become a Restricted Subsidiary; provided, however, that the primary business of such Restricted Subsidiary is a Related Business;

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(2) another Person if, as a result of such Investment, such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Company or a Restricted Subsidiary; provided, however, that such Person’s primary business is a Related Business;

(3) cash and Temporary Cash Investments;

(4) receivables owing to the Company or any Restricted Subsidiary if 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;

(5) payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;

(6) loans or advances to officers, directors and employees made in the ordinary course of business of the Company or such Restricted Subsidiary;

(7) stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Company or any Restricted Subsidiary or in satisfaction of judgments;

(8) any Person to the extent such Investment represents the non-cash portion of the consideration received for (A) an Asset Disposition as permitted pursuant to the covenant described under “—Certain Covenants—Limitation on Sales of Assets and Subsidiary Stock” or (B) a disposition of assets not constituting an Asset Disposition;

(9) any Person where such Investment was acquired by the Company or any of its Restricted Subsidiaries (A) in exchange for any other Investment or accounts receivable held by the Company or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable or (B) as a result of a foreclosure by the Company or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

(10) any Person to the extent such Investments consist of prepaid expenses, negotiable instruments held for collection and lease, utility and workers’ compensation, performance and other similar deposits made in the ordinary course of business by the Company or any Restricted Subsidiary;

(11) any Person to the extent such Investments consist of Hedging Obligations otherwise permitted under the covenant described under “—Certain Covenants—Limitation on Indebtedness”;

(12) any Person to the extent such Investment exists on the Issue Date, and any extension, modification or renewal of any such Investments existing on the Issue Date, but only to the extent not involving additional advances, contributions or other Investments of cash or other assets or other increases thereof (other than as a result of the accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities, in each case, pursuant to the terms of such Investment as in effect on the Issue Date);

(13) any Person arising from the transfer of assets made pursuant to the Digital Hospital Transaction;

(14) a Receivables Entity, or any Investment by a Receivables Entity in any other Person in connection with a Qualified Receivables Transaction, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Transaction or any related Indebtedness; provided, however, that any Investment in a Receivables Entity is in the form of a purchase money note, contribution of additional receivables or an equity interest; or

(15) Persons to the extent such Investments, when taken together with all other Investments made pursuant to this clause (15) and outstanding on the date such Investment is made, do not exceed 7.5% of Consolidated Tangible Assets, as determined based on the consolidated balance sheet of the Company as of the end of the most recent fiscal quarter ending at least 45 days prior thereto.

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“Permitted Liens” means, with respect to any Person:

(1) pledges or deposits by such Person under worker’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or United States government bonds to secure surety or appeal bonds to which such Person is a party, performance bonds or obligations of a like nature or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;

(2) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review and Liens arising solely by virtue of any statutory or common law provision relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; provided, however, that (A) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Company in excess of those set forth by regulations promulgated by the Federal Reserve Board and (B) such deposit account is not intended by the Company or any Restricted Subsidiary to provide collateral to the depository institution;

(3) Liens for taxes, assessments or other governmental charges or claims, in each case not yet subject to penalties for non-payment or which are being contested in good faith by appropriate proceedings;

(4) Liens in favor of issuers of surety bonds or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business; provided, however, that such letters of credit do not constitute Indebtedness;

(5) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

(6) Liens securing Indebtedness Incurred to finance the construction, purchase or lease of, or repairs, improvements or additions to, property, plant or equipment of such Person; provided, however, that the Lien may not extend to any other property owned by such Person or any of its Restricted Subsidiaries at the time the Lien is Incurred (other than assets and property affixed or appurtenant thereto), and the Indebtedness (other than any interest thereon) secured by the Lien may not be Incurred more than 180 days after the later of the acquisition, completion of construction, repair, improvement, addition or commencement of full operation of the property subject to the Lien;

(7) Liens to secure (i) Indebtedness permitted pursuant to clause (b)(1) under “—Certain Covenants—Limitation on Indebtedness” and (ii) Attributable Debt in respect of Specified Sale/ Leaseback Transactions; provided, however, that the Liens referred to in this clause (ii) may not extend to any assets or property other than the assets and property subject to the Specified Sale/Leaseback Transaction;

(8) Liens existing on the Issue Date (other than Liens referred to in the foregoing clause (7)(i));

(9) Liens on property or shares of Capital Stock of another Person at the time such other Person becomes a Subsidiary of such Person; provided, however, that the Liens may not extend to any other property owned by such Person or any of its Restricted Subsidiaries (other than assets and property affixed or appurtenant thereto);

(10) Liens on property at the time such Person or any of its Subsidiaries acquires the property, including any acquisition by means of a merger or consolidation with or into such Person or a Subsidiary of

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such Person; provided, however, that the Liens may not extend to any other property owned by such Person or any of its Restricted Subsidiaries (other than assets and property affixed or appurtenant thereto);

(11) Liens securing Indebtedness or other obligations of a Subsidiary of such Person owing to such Person or a Wholly Owned Subsidiary of such Person;

(12) Liens securing Hedging Obligations so long as such Hedging Obligations are permitted to be Incurred under such Indenture;

(13) any Lien on accounts receivable and related assets of the types specified in the definition of “Qualified Receivables Transaction” incurred in connection with a Qualified Receivables Transaction;

(14) Liens in favor of the Company or the Subsidiary Guarantors;

(15) leases, subleases, licenses or sublicenses granted to third parties entered into in the ordinary course of business which do not materially interfere with the conduct of the business of the Company and the Restricted Subsidiaries and which do not secure any Indebtedness;

(16) Liens securing judgments, decrees, orders or awards for the payment of money not constituting an Event of Default in respect of which the Company shall in good faith be prosecuting an appeal or proceedings for review, which appeal or proceedings shall not have been finally terminated, or in respect of which the period within which such appeal or proceedings may be initiated shall not have expired;

(17) Liens to secure any Refinancing (or successive Refinancings) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clause (6), (7)(ii), (8), (9) or (10); provided, however, that:

(A) such new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof); and

(B) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (i) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clause (6), (7)(ii), (8), (9) or (10) at the time the original Lien became a Permitted Lien and (ii) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement; and

(18) other Liens securing Indebtedness to the extent such Indebtedness, when taken together with all other Indebtedness secured by Liens Incurred pursuant to this clause (18) and outstanding on the date such other Lien is Incurred, does not exceed 5% of Consolidated Tangible Assets, as determined based on the consolidated balance sheet of the Company as of the end of the most recent fiscal quarter ending at least 45 days prior thereto.

Notwithstanding the foregoing, “Permitted Liens” will not include any Lien described in clause (6), (9) or (10) above to the extent such Lien applies to any Additional Assets acquired directly or indirectly from Net Available Cash pursuant to the covenant described under “—Certain Covenants—Limitation on Sale of Assets and Subsidiary Stock”. For purposes of this definition, the term “Indebtedness” shall be deemed to include interest on such Indebtedness.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

“Preferred Stock”, as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.

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“principal” of a Note means the principal of the Note plus the premium, if any, payable on the Note which is due or overdue or is to become due at the relevant time.

“Pro Forma Cost Savings” means, with respect to any period, the reduction in costs that were

(1) directly attributable to an asset acquisition and calculated on a basis that is consistent with Regulation S-X under the Securities Act in effect and applied as of the Issue Date, or

(2) implemented by the business that was the subject of any such asset acquisition within the six months prior to or following the date of the asset acquisition and that are supportable and quantifiable by the underlying accounting records of such business,

as if, in the case of each of clause (1) and (2), all such reductions in costs had been effected as of the beginning of such period.

“Purchase Money Indebtedness” means Indebtedness (1) consisting of the deferred purchase price of property, conditional sale obligations, obligations under any title retention agreement, other purchase money obligations and obligations in respect of industrial revenue bonds or similar Indebtedness, in each case where the maturity of such Indebtedness does not exceed the anticipated useful life of the asset being financed, and (2) Incurred to finance the acquisition by the Company or a Restricted Subsidiary of such asset, including additions and improvements, in the ordinary course of business, provided, however, that any Lien arising in connection with any such Indebtedness shall be limited to the specific asset being financed or, in the case of real property or fixtures, including additions and improvements, the real property on which such asset is attached; provided, further, however, that such Indebtedness is Incurred within 180 days after such acquisition of such assets.

“Qualified Receivables Transaction” means any transaction or series of transactions that may be entered into by the Company or any of its Restricted Subsidiaries 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 all collateral securing such accounts receivable, all contracts and all Guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable; provided, however, that the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by the chief financial officer of the Company).

The grant of a security interest in any accounts receivable of the Company or any of its Restricted Subsidiaries to secure Indebtedness permitted pursuant to clause (1) of paragraph (b) under “—Certain Covenants—Limitation on Indebtedness” shall not be deemed a Qualified Receivables Transaction.

“Recapitalization Transactions” means the offering of Convertible Preferred Stock completed on or about March 7, 2006, the borrowing of loans under the Interim Loan Agreement and the Credit Agreement on March 10, 2006, and the use of the proceeds thereof to (A) complete the tender offer for the Company’s then-existing senior Notes and senior subordinated Notes and (B) prepay the loans under, and terminate, the Company’s then-existing senior secured credit agreement, senior subordinated credit agreement and term loan agreement.

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“Receivables Entity” means (a) a Wholly Owned Subsidiary of the Company that is designated by the Board of Directors (as provided below) as a Receivables Entity or (b) another Person engaging in a Qualified Receivables Transaction with the Company, which Person engages in the business of the financing of accounts receivable, and in either of clause (a) or (b):

(1) no portion of the Indebtedness or any other obligations (contingent or otherwise) of such entity

(A) is Guaranteed by the Company or any Subsidiary of the Company (excluding Guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings),

(B) is recourse to or obligates the Company or any Subsidiary of the Company in any way (other than pursuant to Standard Securitization Undertakings), or

(C) subjects any property or asset of the Company or any Subsidiary of the Company, directly or indirectly, contingently or otherwise, to the satisfaction thereof (other than pursuant to Standard Securitization Undertakings);

(2) the entity is not an Affiliate of the Company or is an entity with which neither the Company nor any Subsidiary of the Company has any material contract, agreement, arrangement or understanding other than on terms that the Company reasonably believes to be no less favorable to the Company or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Company; and

(3) is an entity to which neither the Company nor any Subsidiary of the Company has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.

Any such designation by the Board of Directors 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 foregoing conditions.

“Refinance” means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay, prepay, purchase, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for, such Indebtedness. “Refinanced” and “Refinancing” shall have correlative meanings.

“Refinancing Indebtedness” means Indebtedness that Refinances any Indebtedness of the Company or any Restricted Subsidiary existing on the Issue Date or Incurred in compliance with such Indenture, including Indebtedness that Refinances Refinancing Indebtedness; provided, however, that:

(1) such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being Refinanced;

(2) such Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness being Refinanced;

(3) such Refinancing Indebtedness has an aggregate principal amount (or if Incurred with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if Incurred with original issue discount, the aggregate accreted value) then outstanding (plus fees and expenses, including any premium and defeasance costs) under the Indebtedness being Refinanced; and

(4) if the Indebtedness being Refinanced is subordinated in right of payment to the Notes, such Refinancing Indebtedness is subordinated in right of payment to the Notes at least to the same extent as the Indebtedness being Refinanced;

provided, further, however, that Refinancing Indebtedness shall not include (A) Indebtedness of a Subsidiary that is not a Subsidiary Guarantor that Refinances Indebtedness of the Company or a Subsidiary Guarantor or (B) Indebtedness of the Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.

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“Registration Rights Agreement” means the Registration Rights Agreement dated June 14, 2006, among the Company and the Initial Purchasers.

“Related Business” means any business in which the Company or any of the Restricted Subsidiaries was engaged on the Issue Date and any business related, ancillary or complementary to such business.

“Restricted Payment” with respect to any Person means:

(1) the declaration or payment of any dividends or any other distributions of any sort in respect of its Capital Stock (including any payment in connection with any merger or consolidation involving such Person) or similar payment to the direct or indirect holders of its Capital Stock (other than

(A) dividends or distributions payable solely in its Capital Stock (other than Disqualified Stock),

(B) dividends or distributions payable solely to the Company or a Restricted Subsidiary and

(C) pro rata dividends or other distributions made by a Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or owners of an equivalent interest in the case of a Subsidiary that is an entity other than a corporation));

(2) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Capital Stock of the Company held by any Person (other than by a Restricted Subsidiary) or of any Capital Stock of a Restricted Subsidiary held by any Affiliate of the Company (other than by a Restricted Subsidiary), including in connection with any merger or consolidation and including the exercise of any option to exchange any Capital Stock (other than into Capital Stock of the Company that is not Disqualified Stock);

(3) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment of any Subordinated Obligations of the Company or any Subsidiary Guarantor (other than (A) from the Company or a Restricted Subsidiary or (B) the purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Obligations purchased in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such purchase, repurchase, redemption, defeasance or other acquisition or retirement); or

(4) the making of any Investment (other than a Permitted Investment) in any Person.

“Restricted Subsidiary” means any Subsidiary of the Company that is not an Unrestricted Subsidiary.

“Sale/Leaseback Transaction” means an arrangement relating to property owned by the Company or a Restricted Subsidiary on the Issue Date or thereafter acquired by the Company or a Restricted Subsidiary whereby the Company or a Restricted Subsidiary transfers such property to a Person and the Company or a Restricted Subsidiary leases it from such Person, other than leases between the Company and a Restricted Subsidiary or between Restricted Subsidiaries.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the U.S. Securities Act of 1933, as amended.

“Senior Indebtedness” means with respect to any Person:

(1) Indebtedness of such Person, whether outstanding on the Issue Date or thereafter Incurred; and

(2) all other Obligations of such Person (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to such Person whether or not post-filing interest is allowed in such proceeding) in respect of Indebtedness described in clause (1) above

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unless, in the case of clauses (1) and (2), in the instrument creating or evidencing the same or pursuant to which the same is outstanding, it is provided that such Indebtedness or other obligations are subordinate in right of payment to the Notes or the Subsidiary Guaranty of such Person, as the case may be; provided, however, that Senior Indebtedness shall not include:

(3) any obligation of such Person to the Company or any Subsidiary;

(4) any liability for Federal, state, local or other taxes owed or owing by such Person;

(5) any accounts payable or other liability to trade creditors arising in the ordinary course of business;

(6) any Indebtedness or other Obligation of such Person which is subordinate or junior in any respect to any other Indebtedness or other Obligation of such Person; or

(7) that portion of any Indebtedness which at the time of Incurrence is Incurred in violation of such Indenture.

“Shareholder Litigation” means the federal securities class actions and the derivative actions brought against the Company and/or certain of its former directors and officers and certain other parties in the United States District Court for the Northern District of Alabama and the Circuit Court in Jefferson County, Alabama relating to financial reporting and related activity that occurred at the Company during periods ended in March 2003.

“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 SEC.

“Specified Property” means the real property and improvements thereon for (a) rehabilitation hospitals in Fredericksburg, Virginia; Sarasota, Florida and Petersburg, Virginia, (b) long-term acute care facilities in Sarasota, Florida; Huntsville, Alabama; Kansas City, Missouri; Tucson, Arizona and Charlottesville, Virginia and (c) surgery centers in Des Moines, Iowa and Joliet, Illinois, in each case under construction or anticipated to be constructed as of the Issue Date.

“Specified Sale/Leaseback Transaction” means (A) a Sale/Leaseback Transaction consisting of a sale or other transfer of (i) a Specified Property or (ii) any other real property and improvements thereon identified after the Issue Date prior to the acquisition or construction thereof by written notice from the Company to the Trustee which notice shall also contain a reasonably detailed summary of the construction and other improvements that the Company intends to make on the applicable real property), in each case to a real estate investment trust or other Person within 180 days after completion of all principal construction and improvements thereon and the simultaneous lease of such property by such real estate investment trust or other Person to the Company or a Restricted Subsidiary and (B) a Sale/Leaseback Transaction that is a Birmingham Hospital Transaction.

“Standard & Poor’s” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and any successor to its rating agency business.

“Standard Securitization Undertakings” means representations, warranties, covenants and indemnities entered into by the Company or any Subsidiary of the Company that, taken as a whole, are customary in an accounts receivable transaction.

“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency unless such contingency has occurred).

“Subordinated Obligation” means, with respect to a Person, any Indebtedness of such Person (whether outstanding on the Issue Date or thereafter Incurred) which is subordinate or junior in right of payment to the Notes or a Subsidiary Guaranty of such Person, as the case may be, pursuant to a written agreement to that effect.

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“Subsidiary” means, with respect to any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Voting Stock is at the time owned or controlled, directly or indirectly, by:

(1) such Person;

(2) such Person and one or more Subsidiaries of such Person; or

(3) one or more Subsidiaries of such Person.

“Subsidiary Guarantor” means each Subsidiary of the Company that executes the Indentures as a guarantor on the Issue Date and each other Subsidiary of the Company that thereafter Guarantees the Notes pursuant to the terms of the Indentures.

“Subsidiary Guaranty” means a Guarantee by a Subsidiary Guarantor of the Company’s obligations with respect to the Notes.

“Syndication” means the sale of partnership or other equity interests in Subsidiaries of the Company or other Persons controlled by the Company that own or operate surgery, diagnostic or other health care facilities to (i) participating physicians, radiologists and other specialists, (ii) professional corporations and other legal entities owned or controlled by such participating physicians, radiologists and other specialists and (iii) participating hospitals and other health care providers. For purposes of this definition, “controlled” shall have the meaning set forth in the definition of “Affiliate”.

“Temporary Cash Investments” means any of the following:

(1) any investment in direct obligations of the United States of America or any agency thereof or obligations guaranteed by the United States of America or any agency thereof;

(2) investments in demand and time deposit accounts, certificates of deposit and money market deposits maturing within 180 days of the date of acquisition thereof issued by a bank or trust company which is organized under the laws of the United States of America, any State thereof or any foreign country recognized by the United States of America, and which bank or trust company has capital, surplus and undivided profits aggregating in excess of $250.0 million (or the foreign currency equivalent thereof) and has outstanding debt which 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) or any money-market fund sponsored by a registered broker dealer or mutual fund distributor;

(3) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (1) above entered into with a bank meeting the qualifications described in clause (2) above;

(4) investments in commercial paper, maturing not more than 270 days after the date of acquisition, issued by a corporation (other than an Affiliate of the Company) organized and in existence under the laws of the United States of America or any foreign country recognized by the United States of America with a rating at the time as of which any investment therein is made of “P-1” (or higher) according to Moody’s or “A-1” (or higher) according to Standard and Poor’s;

(5) investments in securities issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least “A” by Standard & Poor’s or “A2” by Moody’s;

(6) eligible banker’s acceptances, repurchase agreements and tax-exempt municipal bonds having a maturity of less than one year, in each case having a rating of, or evidencing the full recourse obligation of a person whose senior debt is rated, at least “A” by Standard & Poor’s and at least “A2” by Moody’s; and

(7) investments in money market funds that invest substantially all their assets in securities of the types described in clauses (1) through (6) above.

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“Trustee” means The Bank of Nova Scotia Trust Company of New York until a successor replaces it and, thereafter, means the successor.

“Trust Indenture Act” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the Issue Date.

“Trust Officer” means the Chairman of the Board, the President or any other officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters.

“Unrestricted Subsidiary” means:

(1) any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors in the manner provided below; and

(2) any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or holds any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that either (A) the Subsidiary to be so designated has total assets of $1,000 or less or (B) if such Subsidiary has assets greater than $1,000, such designation would be permitted under the covenant described under “—Certain Covenants—Limitation on Restricted Payments”.

The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation (A) the Company could Incur $1.00 of additional Indebtedness under paragraph (a) of the covenant described under “—Certain Covenants—Limitation on Indebtedness” and (B) no Default shall have occurred and be continuing. Any such designation by the Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a 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 foregoing provisions.

“U.S. Government Obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable at the issuer’s option.

“Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.

“Wholly Owned Subsidiary” means a Restricted Subsidiary all the Capital Stock of which (other than directors’ qualifying shares) is owned by the Company or one or more other Wholly Owned Subsidiaries.

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CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of certain U.S. federal income tax consequences to a holder of Restricted Notes relating to the exchange of Restricted Notes for Exchange Notes. This summary is based upon existing U.S. federal income tax law, which is subject to change, possibly with retroactive effect. This summary does not discuss all aspects of U.S. federal income taxation which may be important to particular investors in light of their individual circumstances, such as holders of Restricted Notes subject to special tax rules (e.g., financial institutions, insurance companies, broker-dealers, tax-exempt organizations (including private foundations), and partnerships and their partners), or holders who hold the Restricted Notes as part of a straddle, hedge, conversion, constructive sale, or other integrated security transaction for U.S. federal income tax purposes or that have a functional currency other than the U.S. dollar, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition, this summary does not address any state, local, or non-U.S. tax considerations.

EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT HIS TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE, LOCAL, AND NON-U.S. INCOME AND OTHER TAX CONSIDERATIONS OF THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF THE EXCHANGE NOTES.

Exchange of Restricted Notes for Exchange Notes

An exchange of Restricted Notes for Exchange Notes pursuant to the exchange offer will be ignored for U.S. federal income tax purposes. Consequently, a holder of Restricted Notes will not recognize gain or loss, for U.S. federal income tax purposes, as a result of exchanging Restricted Notes for Exchange Notes pursuant to the exchange offer. The holding period of the Exchange Notes will be the same as the holding period of the Restricted Notes and the tax basis in the Exchange Notes will be the same as the adjusted tax basis in the Restricted Notes as determined immediately before the exchange.

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PLAN OF DISTRIBUTION

Each broker-dealer that receives Exchange 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 Exchange 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 Exchange Notes received in exchange for Restricted Notes where such Restricted Notes were acquired as a result of market-making activities or other trading activities. We and the subsidiary guarantors have agreed that, starting on the expiration date and ending up to 180 days after the expiration date, 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 June 18, 2007, all dealers effecting transactions in the Exchange Notes may be required to deliver a prospectus.

The Company will not receive any proceeds from any sale of Exchange Notes by broker-dealers. Exchange 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 Exchange 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 at 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 Notes. Any broker-dealer that resells Exchange 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 Exchange Notes may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on any such resale of Exchange Notes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. 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 up to 180 days after the expiration date, 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 incidental to the Exchange Offer (including the expenses of counsel for holders of the Exchange Notes) other than commissions or concessions of any brokers or dealers and will indemnify holders of the Exchange Notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities Act.

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LEGAL MATTERS

Certain legal matters with respect to the validity of the Exchange Notes offered hereby will be passed upon for us by Skadden, Arps, Slate, Meagher & Flom LLP.

EXPERTS

The financial statements incorporated in this prospectus by reference to HealthSouth Corporation’s Current Report on Form 8-K dated March 30, 2007 and management’s assessment of the effectiveness of internal control over financial reporting (which is included in Management’s Report on Internal Control over Financial Reporting) incorporated in this prospectus by reference to the Annual Report on Form 10-K of HealthSouth Corporation for the year ended December 31, 2006, have been so incorporated in reliance on the report (which contains an adverse opinion on the effectiveness of internal control over financial reporting) of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

INCORPORATION BY REFERENCE

This prospectus “incorporates by reference” information that we have filed with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which means that we are disclosing important information to you by referring you to those documents. Any statement contained in this prospectus or in any document incorporated or deemed to be incorporated by reference into this prospectus will be deemed modified or superseded for the purposes of this prospectus to the extent that a statement contained in this prospectus or any subsequently filed document which also is, or is deemed to be, incorporated by reference into this prospectus modifies or supersedes that statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus. Accordingly, we incorporate by reference the specific documents listed below and any future filings made with the SEC after the date hereof under Section 13(a), 13(c), 14, or 15(d) of the Exchange Act which will be deemed to be incorporated by reference into this prospectus and to be part of this prospectus from the date we subsequently file such reports and documents until the termination of this offering:

• Our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, filed with the SEC on March 1, 2007, as amended by our Form 10-K/A filed with the SEC on March 22, 2007 (the financial statements included therein have been superceded by the financial statements filed as Exhibit 99.2 to our Current Report on Form 8-K filed with the SEC on March 30, 2007)

• Our Current Report on Form 8-K that was filed with the SEC on January 12, 2007;

• Our Current Report on Form 8-K that was filed with the SEC on January 30, 2007;

• Our Current Report on Form 8-K that was filed with the SEC on February 9, 2007;

• Our Current Report on Form 8-K that was filed with the SEC on February 20, 2007;

• Our Current Report on Form 8-K that was filed with the SEC on March 1, 2007;

• Our Current Report on Form 8-K that was filed with the SEC on March 5, 2007;

• Our Current Report on Form 8-K that was filed with the SEC on March 14, 2007;

• Our Current Report on Form 8-K that was filed with the SEC on March 26, 2007;

• Our Current Reports on Form 8-K that were filed with the SEC on March 30, 2007;

• Our Current Report on Form 8-K that was filed with the SEC on April 19, 2007; and

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• Our Current Report on Form 8-K that was filed with the SEC pursuant to Items 8.01 and 9.01 on May 2, 2007.

We will provide without charge to each person to whom a copy of this prospectus has been delivered a copy of any and all of these filings. You may request a copy of these filings by writing or telephoning us at:

HealthSouth Corporation

One HealthSouth Parkway

Birmingham, Alabama 35243

Attn: General Counsel

(205) 967-7116

WHERE YOU CAN FIND MORE INFORMATION

We are subject to the information reporting requirements of the Exchange Act, and, in accordance with these requirements, we are required to file periodic reports and other information with the SEC. The reports and other information filed by us with the SEC may be inspected and copied at the public reference facilities maintained by the SEC as described below.

We have filed with the SEC a registration statement on Form S-4 pursuant to the Securities Act, and the rules and regulations promulgated thereunder, with respect to the securities offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all the information contained in the registration statement, parts of which are omitted in accordance with the rules and regulations of the SEC. For further information with respect to us and the securities offered hereby, reference is made to the Registration Statement.

You may copy and inspect the Registration Statement, including the exhibits thereto, and the periodic reports and information referred to above at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our public filings are also available to the public from commercial document retrieval services and at the Internet worldwide website maintained by the SEC at “http://www.sec.gov.”

In addition, you may obtain these materials on our website. Our Internet website address is www.healthsouth.com. Information on our website does not constitute part of this prospectus and should not be relied upon in connection with making any investment decision with respect to our common stock.

You may also request a copy of any SEC filings, and any information required by 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, at no cost, by contacting:

HealthSouth Corporation

One HealthSouth Parkway

Birmingham, Alabama 35243

Attention: General Counsel

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HealthSouth Corporation

OFFER TO EXCHANGE

$375 million aggregate principal amount of Floating Rate Senior Notes due 2014 in exchange for $375 million aggregate principal amount of Floating Rate Senior Notes due 2014, which have been registered under the Securities Act of 1933, as amended

AND

$625 million aggregate principal amount of 10.75% Senior Notes due 2016 in exchange for $625 million aggregate principal amount of 10.75% Senior Notes due 2016, which have been

registered under the Securities Act

PROSPECTUS

Until June 18, 2007, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotment or subscriptions.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Directors and Officers.

The following summary is qualified in its entirety by reference to the complete text of any statutes referred to below and the restated certificate of incorporation, as amended and the amended and restated bylaws of HealthSouth Corporation, a Delaware corporation (the “Registrant”). Article VI or the Registrant’s amended and restated bylaws provides that, to the full extent permitted by applicable law, the Registrant will indemnify any person (and the heirs, executors and administrators of such person) who, by reason of the fact that he is or was a director, officer, employee or agent of the Registrant was or is a party or is threatened to be a party to (a) any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any such action, suit or proceeding, or, (b) any threatened, pending or completed action or suit by or in the right of the Registrant to procure a judgment in its favor, against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit. Moreover, any indemnification by the Registrant pursuant thereto will not be deemed exclusive of any other rights to which those seeking indemnification may otherwise be entitled.

Section 145 of the Delaware General Corporation Law (the “DGCL”) provides that a corporation may indemnify any persons, including officers and directors, who are, or are threatened to be made, parties to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person is or was a director, officer, employee or agent of such corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such director, officer, employee or agent acted in good faith and in a manner the person 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 that the person’s conduct was unlawful. A Delaware corporation may indemnify officers and directors in an action by or in the right of the corporation under the same conditions, except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses that such officer or director actually and reasonably incurred.

The indemnification permitted under the DGCL is not exclusive, and pursuant to Section 145 of the DGCL, a corporation is empowered to purchase and maintain insurance against liabilities whether or not indemnification would be permitted by statute. Article VI of the Registrant’s amended and restated bylaws provides that its has the power to purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Registrant, or is or was serving at the request of the Registrant as a Director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Registrant would have the power to indemnify him against such liability under applicable law. The Registrant presently has an insurance policy for its directors and officers in the amount of $200 million, which includes $50 million in coverage for individual directors and officers in circumstances where we are legally or financially unable to indemnify these individuals.

Section 102(b)(7) of the DGCL allows a Delaware corporation to eliminate or limit the personal liability of directors to a corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional

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misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase or redemption in violation of Delaware corporate law or obtained an improper personal benefit.

Pursuant to Section 102(b)(7) of the DGCL, Article NINTH of The Registrant’s restated certificate of incorporation provides that no director shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director except (a) for any breach of the Director’s duty of loyalty to the Corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under Section 174 of the DGCL (providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions), or (d) for any transaction from which the Director derived an improper personal benefit.

Under separate indemnification agreements with HealthSouth Corporation, each director and certain officers of the Registrant are indemnified against all liabilities relating to his or her position as a director or officer of HealthSouth Corporation, to the fullest extent permitted under applicable laws.

Item 21. Exhibits and Financial Statement Schedules.

See the “Exhibit Index” following the signature pages hereto.

Item 22. Undertakings.

The undersigned registrant hereby undertakes:

(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;

(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 in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (§ 230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective 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 of 1933, 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.

(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.

The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the

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registration statement 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.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant 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 registrant 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 Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the 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 registrant hereby undertakes 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 the registration statement when it became effective.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Birmingham, State of Alabama on May 3, 2007.

HEALTHSOUTH CORPORATION
By:	/S/    JOHN P. WHITTINGTON
Name:	John P. Whittington
Title:	Executive Vice President, General   Counsel and Corporate Secretary

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
* Jay Grinney	President, Chief Executive Officer and Director (Principal Executive Officer)	May 3, 2007
* John Workman	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	May 3, 2007
* Jon F. Hanson	Chairman of the Board of Directors	May 3, 2007
* Edward A. Blechschmidt	Director	May 3, 2007
* Donald L. Correll	Director	May 3, 2007
* Yvonne M. Curl	Director	May 3, 2007
* Charles M. Elson	Director	May 3, 2007
* Leo I. Higdon, Jr.	Director	May 3, 2007

II-4

Signature	Title	Date
* John E. Maupin, Jr.	Director	May 3, 2007
* L. Edward Shaw, Jr.	Director	May 3, 2007

*By:	/S/    JOHN P. WHITTINGTON
	John P. Whittington Attorney-in-fact

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrants have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the City of Birmingham, State of Alabama, on May 3, 2007.

Advantage Health Development Corp.

Advantage Health Harmarville Rehabilitation Corporation

ASC Network Corporation

Baton Rouge Rehab, Inc.

Chiron, Inc.

CMS Development and Management Company, Inc.

CMS Jonesboro Rehabilitation, Inc.

CMS Topeka Rehabilitation, Inc.

Continental Medical of Arizona, Inc.

Continental Medical Systems, Inc.

Continental Rehabilitation Hospital of Arizona, Inc.

Diagnostic Health Corporation

HEALTHSOUTH Diagnostic Centers, Inc.

HEALTHSOUTH LTAC of Sarasota, Inc.

HEALTHSOUTH Medical Center, Inc.

HEALTHSOUTH of Alexandria, Inc.

HEALTHSOUTH of Altoona, Inc.

HEALTHSOUTH of Austin, Inc.

HEALTHSOUTH of Charleston, Inc.

HEALTHSOUTH of Dothan, Inc.

HEALTHSOUTH of Erie, Inc.

HEALTHSOUTH of Fort Smith, Inc.

HEALTHSOUTH of Henderson, Inc.

HEALTHSOUTH of Houston, Inc.

HEALTHSOUTH of Mechanicsburg, Inc.

HEALTHSOUTH of Midland, Inc.

HEALTHSOUTH of Montgomery, Inc.

HEALTHSOUTH of New Mexico, Inc.

HEALTHSOUTH of Nittany Valley, Inc.

HEALTHSOUTH of Pittsburgh, Inc.

HEALTHSOUTH of Reading, Inc.

HEALTHSOUTH of San Antonio, Inc.

HEALTHSOUTH of Sewickley, Inc.

HEALTHSOUTH of South Carolina, Inc.

HEALTHSOUTH of Spring Hill, Inc.

HEALTHSOUTH of Texarkana, Inc.

HEALTHSOUTH of Texas, Inc.

HEALTHSOUTH of Toms River, Inc.

HEALTHSOUTH of Treasure Coast, Inc.

HEALTHSOUTH of Utah, Inc.

HEALTHSOUTH of York, Inc.

HEALTHSOUTH of Yuma, Inc.

II-6

HEALTHSOUTH Rehabilitation Center, Inc.

HEALTHSOUTH Rehabilitation Hospital of Odessa, Inc.

HEALTHSOUTH S.C. of Portland, Inc.

HEALTHSOUTH S.C. of Scottsdale-Bell Road, Inc.

HEALTHSOUTH Specialty Hospital, Inc.

HEALTHSOUTH Sub-Acute Center of Mechanicsburg, Inc.

HEALTHSOUTH Surgery Center of Fairfield, Inc.

HEALTHSOUTH Surgery Centers-West, Inc.

HEALTHSOUTH Surgical Center of Tuscaloosa, Inc.

HSC of Beaumont, Inc.

HVPG of California, Inc.

Lakeland Physicians Medical Building, Inc.

Lakeshore System Services of Florida, Inc.

Little Rock-SC, Inc.

National Imaging Affiliates, Inc.

National Surgery Centers, Inc.

Neuro Imaging Institute, Inc.

New England Rehabilitation Hospital, Inc.

New England Rehabilitation Management Co., Inc.

North Louisiana Rehabilitation Center, Inc.

NSC Connecticut, Inc.

NSC Houston, Inc.

NSC Seattle, Inc.

Rehab Concepts Corp.

Rehabilitation Hospital Corporation of America, Inc.

Rehabilitation Hospital of Colorado Springs, Inc.

Rehabilitation Hospital of Nevada—Las Vegas, Inc.

Rehabilitation Hospital of Plano, Inc.

Rehabilitation Institute Of Western Massachusetts, Inc.

SCA—Roseland, Inc.

SCA-Dalton, Inc.

SCA-Shelby Development Corp.

SelectRehab, Inc.

Sherwood Rehabilitation Hospital, Inc.

Southeast Texas Rehabilitation Hospital, Inc.

Surgery Center Holding Corporation

Surgical Care Affiliates, Inc.

Surgical Health Corporation

Surgicare of Huntsville, Inc.

Surgicare of Laguna Hills, Inc.

Tarrant County Rehabilitation Hospital, Inc.

Terre Haute Rehabilitation Hospital, Inc.

II-7

Tyler Rehabilitation Hospital, Inc.

Western Neuro Care, Inc.

By:	/S/    JOHN P. WHITTINGTON
Name:	John P. Whittington
Title:	Authorized Signatory

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
* Jay Grinney	President and Director (Principal Executive Officer)	May 3, 2007
* John Workman	Vice President and Treasurer (Principal Financial and Accounting Officer)	May 3, 2007
/S/    JOHN P. WHITTINGTON         John P. Whittington	Director	May 3, 2007

* By:	/S/    JOHN P. WHITTINGTON
	John P. Whittington Attorney-in-fact

II-8

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrants have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the City of Birmingham, State of Alabama, on May 3, 2007.

Beaumont Rehab Associates Limited Partnership
By:	Continental Medical Systems, Inc. and Southeast Texas Rehabilitation Hospital, Inc.
Its:	General Partner
Collin County Rehab Associates Limited Partnership
By:	Rehabilitation Hospital of Plano, Inc.
Its:	General Partner
HEALTHSOUTH Bakersfield Rehabilitation Hospital Limited Partnership
By:	HealthSouth Properties, LLC
Its:	General Partner
HEALTHSOUTH Diagnostic Center of Colorado Springs Limited Partnership
By:	HealthSouth Properties, LLC
Its:	General Partner
HEALTHSOUTH Diagnostic Centers of Tennessee Limited Partnership
By:	DHC Holding Company, Inc.
Its:	General Partner
HEALTHSOUTH Diagnostic Centers of Texas Limited Partnership
By:	DHC Holding Company, Inc.
Its:	General Partner
HEALTHSOUTH Meridian Point Rehabilitation Hospital Limited Partnership
By:	HealthSouth Properties, LLC
Its:	General Partner
HEALTHSOUTH Northern Kentucky Rehabilitation Hospital Limited Partnership
By:	HealthSouth Properties, LLC
Its:	General Partner
HEALTHSOUTH of Ft. Lauderdale Limited Partnership
By:	HealthSouth Real Property Holding, LLC
Its:	General Partner

HEALTHSOUTH of Largo Limited Partnership
By:	HealthSouth Real Property Holding, LLC
Its:	General Partner

II-9

HEALTHSOUTH of Sarasota Limited Partnership
By:	HealthSouth Real Property Holding, LLC
Its:	General Partner
HEALTHSOUTH of Tallahassee Limited Partnership
By:	HealthSouth Real Property Holding, LLC
Its:	General Partner
HEALTHSOUTH Rehabilitation Center of New Hampshire, Ltd.
By:	HealthSouth Corporation
Its:	General Partner
HEALTHSOUTH Rehabilitation Hospital of Arlington Limited Partnership
By:	HealthSouth Properties, LLC
Its:	General Partner
HEALTHSOUTH Valley of the Sun Rehabilitation Hospital Limited Partnership
By:	HealthSouth Properties, LLC
Its:	General Partner
Lakeview Rehabilitation Group Partners
By:	HealthSouth Properties, LLC
Its:	General Partner
Northeast Surgery Center, Ltd.
By:	NSC Houston, Inc.
Its:	General Partner
Rehabilitation Hospital of Nevada—Las Vegas, L.P.
By:	Rehabilitation Hospital of Nevada—Las Vegas, Inc.
Its:	General Partner
Southern Arizona Regional Rehabilitation Hospital, L.P.
By:	Continental Rehabilitation Hospital of Arizona, Inc.
Its:	General Partner
Terre Haute Regional Rehabilitation Hospital, L.P.
By:	Terre Haute Rehabilitation Hospital, Inc.
Its:	General Partner
Western Medical Rehab Associates, L.P.
By:	CMS Development & Management
Its:	General Partner
By:	/S/    JOHN P. WHITTINGTON
Name:	John P. Whittington
Title:	Authorized Signatory

II-10

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
* Jay Grinney	President (Principal Executive Officer)	May 3, 2007
* John Workman	Vice President and Treasurer (Principal Financial and Accounting Officer)	May 3, 2007

* By:	/S/    JOHN P. WHITTINGTON
	John P. Whittington Attorney-in-fact

II-11

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrants have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the City of Birmingham, State of Alabama, on May 3, 2007.

Advantage Health, LLC HEALTHSOUTH of East Tennessee, LLC
HEALTHSOUTH Properties, LLC HEALTHSOUTH Real Property Holding, LLC
HEALTHSOUTH Rehabilitation Institute of Tucson, LLC
Sarasota LTAC Properties, LLC Rebound, LLC
By:	/S/    JOHN P. WHITTINGTON
Name:	John P. Whittington
Title:	Authorized Signatory

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
* Jay Grinney	President and Manager (Principal Executive Officer)	May 3, 2007
* John Workman	Vice President and Treasurer (Principal Financial and Accounting Officer)	May 3, 2007
/S/    JOHN P. WHITTINGTON         John P. Whittington	Manager	May 3, 2007

* By:	/S/    JOHN P. WHITTINGTON
	John P. Whittington Attorney-in-fact

II-12

EXHIBIT INDEX

Exhibit Numbers	Description
2.1	Stock Purchase Agreement, dated January 27, 2007, by and between HealthSouth Corporation and Select Medical Systems (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed with the SEC on January 30, 2007).
3.1	Restated Certificate of Incorporation of HealthSouth Corporation, as filed in the Office of the Secretary of State of the State of Delaware on May 21, 1998 (incorporated by reference to Exhibit 3.1 to HealthSouth’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
3.2	Certificate of Amendment to the Restated Certificate of Incorporation of HealthSouth Corporation, as filed in the Office of the Secretary of State of the State of Delaware on October 25, 2006 (incorporated by reference to Exhibit 3.1 to HealthSouth’s Current Report on Form 8-K filed with the SEC on October 31, 2006).
3.3	Amended and Restated By-Laws of HealthSouth Corporation, effective as of September 21, 2006 (incorporated by reference to Exhibit 3.1 to HealthSouth’s Current Report on Form 8-K filed with the SEC on September 27, 2006).
3.4	Amendments to Amended and Restated By-Laws of HealthSouth Corporation, effective as of February 28, 2007 (incorporated by reference to Exhibit 3.1 to HealthSouth’s Current Report on Form 8-K filed with the SEC on March 5, 2007).
3.5	Certificate of Formation of Advantage Health, LLC*
3.6	Limited Liability Company Agreement of Advantage Health, LLC*
3.7	Articles of Organization of Advantage Health Development Corp.
3.8	Bylaws of Advantage Health Development Corp.
3.9	Articles of Incorporation of Advantage Health Harmarville Rehabilitation Corporation
3.10	Bylaws of Advantage Health Harmarville Rehabilitation Corporation
3.13	Sixth Restated Certificate of Incorporation of ASC Network Corporation
3.14	Bylaws of ASC Network Corporation
3.15	Certificate of Incorporation of Baton Rouge Rehab, Inc.
3.16	Amended and Restated Bylaws of Baton Rouge Rehab, Inc.
3.17	Certificate of Limited Partnership of Beaumont Rehab Associates Limited Partnership
3.18	First Amended and Restated Agreement of Limited Partnership of Beaumont Rehab Associates Limited Partnership
3.19	Articles of Incorporation of Chiron, Inc.
3.20	Restated Bylaws of Chiron, Inc.
3.21	Certificate of Incorporation of CMS Development and Management Company, Inc.
3.22	Bylaws of CMS Development and Management Company, Inc.
3.23	Certificate of Incorporation of CMS Jonesboro Rehabilitation, Inc.

II-13

Exhibit Numbers	Description
3.24	Bylaws of CMS Jonesboro Rehabilitation, Inc.
3.25	Certificate of Incorporation of CMS Topeka Rehabilitation, Inc.
3.26	Bylaws of CMS Topeka Rehabilitation, Inc.
3.27	Certificate of Limited Partnership of Collin County Rehab Associates Limited Partnership
3.28	First Amended and Restated Agreement of Limited Partnership of Collin County Rehab Associates Limited Partnership
3.29	Certificate of Incorporation of Continental Medical of Arizona, Inc.
3.30	By-laws of Continental Medical of Arizona, Inc.
3.31	Restated Certificate of Incorporation of Continental Medical Systems, Inc.
3.32	Continental Medical Systems, Inc. Bylaws
3.33	Certificate of Incorporation of Continental Rehabilitation Hospital of Arizona, Inc.
3.34	Continental Rehabilitation Hospital of Arizona, Inc. Bylaws
3.35	Certificate of Incorporation of Diagnostic Health Corporation*
3.36	Bylaws of Diagnostic Health Corporation
3.37	Report of a Limited Partnership of HealthSouth Bakersfield Rehabilitation Hospital Limited Partnership
3.38	Agreement and Certificate of Limited Partnership of HealthSouth Bakersfield Rehabilitation Hospital Limited Partnership
3.39	Report of a Limited Partnership of HealthSouth Diagnostic Center of Colorado Springs Limited Partnership
3.40	Certificate and Agreement of Limited Partnership of HealthSouth Diagnostic Center of Colorado Springs Limited Partnership
3.41	Report of a Limited Partnership of HealthSouth Diagnostic Center of Tennessee Limited Partnership
3.42	Agreement and Certificate of Limited Partnership of HealthSouth Diagnostic Center of Tennessee Limited Partnership
3.43	Report of a Limited Partnership of HealthSouth Diagnostic Center of Texas Limited Partnership
3.44	Agreement and Certificate of Limited Partnership of HealthSouth Diagnostic Center of Texas Limited Partnership
3.45	Certificate of Incorporation of HealthSouth Diagnostic Centers, Inc.
3.46	Bylaws of HealthSouth Diagnostic Centers, Inc.
3.49	Certificate of Incorporation of HealthSouth LTAC of Sarasota, Inc.
3.50	Bylaws of HealthSouth LTAC of Sarasota, Inc.
3.51	Articles of Merger of HealthSouth Medical Center, Inc.

II-14

Exhibit Numbers	Description
3.52	Bylaws of HealthSouth Medical Center, Inc.
3.53	Report of a Limited Partnership of HealthSouth Meridian Point Rehabilitation Hospital Limited Partnership
3.54	Agreement and Certificate of Limited Partnership of HealthSouth Meridian Point Rehabilitation Hospital Limited Partnership
3.55	Report of a Limited Partnership of HealthSouth Northern Kentucky Rehabilitation Hospital Limited Partnership
3.56	Agreement and Certificate of Limited Partnership of HealthSouth Northern Kentucky Rehabilitation Hospital Limited Partnership
3.57	Certificate of Incorporation of HealthSouth of Alexandria, Inc.
3.58	Bylaws of HealthSouth of Alexandria, Inc.
3.59	Certificate of Incorporation of HealthSouth of Altoona, Inc.
3.60	Bylaws of HealthSouth of Altoona, Inc.
3.61	Certificate of Incorporation of HealthSouth of Austin, Inc.
3.62	Bylaws of HealthSouth of Austin, Inc.
3.63	Certificate of Incorporation of HealthSouth of Charleston, Inc.
3.64	Bylaws of HealthSouth of Charleston, Inc.
3.65	Articles of Incorporation of HealthSouth of Dothan, Inc.
3.66	Bylaws of HealthSouth of Dothan, Inc.
3.67	Certificate of Formation of HealthSouth of East Tennessee, LLC*
3.68	Limited Liability Company Agreement of HealthSouth of East Tennessee, LLC*
3.69	Certificate of Incorporation of HealthSouth of Erie, Inc.
3.70	Bylaws of HealthSouth of Erie, Inc.
3.71	Certificate of Incorporation of HealthSouth of Fort Smith, Inc.
3.72	Bylaws of HealthSouth of Fort Smith, Inc.
3.73	Report of a Limited Partnership of HealthSouth of Ft. Lauderdale Limited Partnership
3.74	Agreement and Certificate of Limited Partnership of HealthSouth of Ft. Lauderdale Limited Partnership
3.75	Certificate of Incorporation of HealthSouth of Henderson, Inc.
3.76	Bylaws of HealthSouth of Henderson, Inc.
3.77	Certificate of Incorporation of HealthSouth of Houston, Inc.
3.78	Bylaws of HealthSouth of Houston, Inc.
3.79	Report of a Limited Partnership of HealthSouth of Largo Limited Partnership
3.80	Agreement and Certificate of Limited Partnership of HealthSouth of Largo Limited Partnership
3.81	Certificate of Incorporation of HealthSouth of Mechanicsburg, Inc.

II-15

Exhibit Numbers	Description
3.82	Bylaws of HealthSouth of Mechanicsburg, Inc.
3.83	Certificate of Incorporation of HealthSouth of Midland, Inc.
3.84	Bylaws of HealthSouth of Midland, Inc.
3.85	Certificate of Incorporation of HealthSouth of Montgomery, Inc.
3.86	Bylaws of HealthSouth of Montgomery, Inc.
3.87	Bylaws of HealthSouth of New Mexico, Inc.
3.88	Certificate of Incorporation of HealthSouth of New Mexico, Inc.
3.89	Certificate of Incorporation of HealthSouth of Nittany Valley, Inc.
3.90	Bylaws of HealthSouth of Nittany Valley, Inc.
3.93	Certificate of Incorporation of HealthSouth of Pittsburgh, Inc.
3.94	Bylaws of HealthSouth of Pittsburgh, Inc.
3.95	Certificate of Incorporation of HealthSouth of Reading, Inc.
3.96	Bylaws of HealthSouth of Reading, Inc.
3.97	Certificate of Incorporation of HealthSouth of San Antonio, Inc.
3.98	Bylaws of HealthSouth of San Antonio, Inc.
3.99	Report of a Limited Partnership of HealthSouth of Sarasota Limited Partnership
3.100	Agreement and Certificate of Limited Partnership of HealthSouth of Sarasota Limited Partnership
3.101	Certificate of Incorporation of HealthSouth of Sewickley, Inc.
3.102	Bylaws of HealthSouth of Sewickley, Inc.
3.103	Certificate of Incorporation of HealthSouth of South Carolina, Inc.
3.104	Bylaws of HealthSouth of South Carolina, Inc.
3.105	Certificate of Incorporation of HealthSouth of Spring Hill, Inc.
3.106	Bylaws of HealthSouth of Spring Hill, Inc.
3.107	Report of a Limited Partnership of HealthSouth of Tallahassee Limited Partnership
3.108	Agreement and Certificate of Limited Partnership of HealthSouth of Tallahassee Limited Partnership
3.109	Certificate of Incorporation of HealthSouth of Texarkana, Inc.
3.110	Bylaws of HealthSouth of Texarkana, Inc.
3.111	Articles of Incorporation of HealthSouth of Texas, Inc. (f/k/a Specialty Rehabilitation Centers of Texas, Inc.)
3.112	Bylaws of HealthSouth of Texas, Inc.
3.113	Certificate of Incorporation of HealthSouth of Toms River, Inc.

II-16

Exhibit Numbers	Description
3.114	Bylaws of HealthSouth of Toms River, Inc.
3.115	Certificate of Incorporation of HealthSouth of Treasure Coast, Inc.
3.116	Bylaws of HealthSouth of Treasure Coast, Inc.
3.117	Certificate of Incorporation of HealthSouth of Utah, Inc.
3.118	Bylaws of HealthSouth of Utah, Inc.
3.119	Certificate of Incorporation of HealthSouth of York, Inc.
3.120	Bylaws of HealthSouth of York, Inc.
3.121	Certificate of Incorporation of HealthSouth of Yuma, Inc.
3.122	Bylaws of HealthSouth of Yuma, Inc.
3.123	Certificate of Formation of HealthSouth Properties, LLC*
3.124	Limited Liability Company Agreement of HealthSouth Properties, LLC*
3.125	Certificate of Formation of HealthSouth Real Property Holding, LLC*
3.126	Limited Liability Company Agreement of HealthSouth Real Property Holding, LLC*
3.127	Report of a Limited Partnership of HealthSouth Rehabilitation Center of New Hampshire, Ltd
3.128	Agreement and Certificate of Limited Partnership of HealthSouth Rehabilitation Center of New Hampshire, Ltd.
3.129	Articles of Incorporation of HealthSouth Rehabilitation Center, Inc. (f/k/a Pee Dee Regional Health Center, Inc.)
3.130	Bylaws of HealthSouth Rehabilitation Center, Inc.
3.131	Report of a Limited Partnership of HealthSouth Rehabilitation Hospital of Arlington Limited Partnership
3.132	Agreement and Certificate of Limited Partnership of HealthSouth Rehabilitation Hospital of Arlington Limited Partnership
3.133	Certificate of Incorporation of HealthSouth Rehabilitation Hospital of Odessa, Inc.
3.134	Bylaws of HealthSouth of Rehabilitation Hospital of Odessa, Inc.
3.135	Articles of Organization of HealthSouth Rehabilitation Institute of Tucson, LLC
3.136	Amended and Restated Limited Liability Company Agreement of HealthSouth Rehabilitation Institute of Tucson, LLC
3.137	Certificate of Incorporation of HealthSouth S.C. of Portland, Inc.
3.138	Restated Bylaws of HealthSouth S.C. of Portland, Inc.
3.139	Certificate of Incorporation of HealthSouth S.C. of Scottsdale-Bell Road, Inc.
3.140	Bylaws of HealthSouth S.C. of Scottsdale-Bell Road, Inc.
3.141	Articles of Incorporation of HealthSouth Specialty Hospital, Inc.
3.142	Bylaws of HealthSouth Specialty Hospital, Inc.
3.143	Certificate of Incorporation of HealthSouth Sub-Acute Center of Mechanicsburg, Inc.
3.144	Bylaws of HealthSouth Sub-Acute Center of Mechanicsburg, Inc.
3.145	Certificate of Incorporation of HealthSouth Surgery Center of Fairfield, Inc.

II-17

Exhibit Numbers	Description
3.146	Bylaws of HealthSouth Surgery Center of Fairfield, Inc.
3.147	Certificate of Incorporation of HealthSouth Surgery Centers-West, Inc.
3.148	Bylaws of HealthSouth Surgery Centers-West, Inc.
3.149	Certificate of Incorporation of HealthSouth Surgical Center of Tuscaloosa, Inc.
3.150	Bylaws of HealthSouth Surgical Center of Tuscaloosa, Inc.
3.151	Report of a Limited Partnership of HealthSouth Valley of the Sun Rehabilitation Hospital Limited Partnership
3.152	Agreement and Certificate of Limited Partnership of HealthSouth Valley of the Sun Rehabilitation Hospital Limited Partnership
3.153	Charter of HSC of Beaumont, Inc.
3.154	Bylaws of HSC of Beaumont, Inc.
3.155	Articles of Incorporation of HVPG of California, Inc.
3.156	Bylaws of HVPG of California, Inc.
3.157	Articles of Incorporation of Lakeland Physicians Medical Building, Inc.
3.158	Bylaws of Lakeland Physicians Medical Building, Inc.
3.159	Articles of Incorporation of Lakeshore System Services of Florida, Inc.
3.160	Bylaws of Lakeshore System Services of Florida, Inc.
3.161	Certificate of Assumed Name of Lakeview Rehabilitation Group Partners
3.162	Partnership Agreement of Lakeview Rehabilitation Group Partners
3.163	Articles of Incorporation of Little Rock-SC, Inc.
3.164	Bylaws of Little Rock-SC, Inc.
3.165	Restated Certificate of Incorporation of National Imaging Affiliates, Inc.
3.166	Amended and Restated Bylaws of National Imaging Affiliates, Inc.
3.167	Restated Certificate of Incorporation of National Surgery Centers, Inc.
3.168	Bylaws of National Surgery Centers, Inc.
3.169	Articles of Incorporation of Neuro Imaging Institute, Inc. (f/k/a Magnetic Resonance Imaging of Brevard, Inc.).
3.170	Bylaws of Neuro Imaging Institute, Inc. (f/k/a Magnetic Resonance Imaging of Brevard, Inc.).
3.171	Articles of Organization of New England Rehabilitation Hospital, Inc.
3.172	Bylaws of New England Rehabilitation Hospital, Inc.
3.173	Articles of Incorporation of New England Rehabilitation Management Co., Inc.
3.174	Bylaws of New England Rehabilitation Management Co., Inc.
3.175	Articles of Incorporation of North Louisiana Rehabilitation Center, Inc.
3.176	Bylaws of North Louisiana Rehabilitation Center, Inc.
3.177	Certificate of Limited Partnership of Northeast Surgery Center, Ltd.*

II-18

Exhibit Numbers	Description
3.178	Limited Partnership Agreement of Northeast Surgery Center, Ltd.*
3.179	Certificate of Incorporation of NSC Connecticut, Inc.
3.180	Bylaws of NSC Connecticut, Inc.
3.181	Articles of Incorporation of NSC Houston, Inc.
3.182	Bylaws of NSC Houston, Inc.
3.183	Certificate of Incorporation of NSC Seattle, Inc.
3.184	NSC Seattle, Inc. Bylaws
3.187	Certificate of Formation of Rebound, LLC*
3.188	Limited Liability Company Agreement of Rebound, LLC*
3.189	Certificate of Incorporation of Rehab Concepts Corp.*
3.190	Restated Bylaws of Rehab Concepts Corp.
3.191	Restated Certificate of Incorporation of Rehabilitation Hospital Corporation of America, Inc.
3.192	Bylaws of Rehabilitation Hospital Corporation of America, Inc.
3.193	Certificate of Incorporation of The Rehabilitation Hospital of Colorado Springs, Inc.
3.194	Bylaws of The Rehabilitation Hospital of Colorado Springs, Inc.
3.195	Certificate of Incorporation of Rehabilitation Hospital of Nevada – Las Vegas, Inc.*
3.196	Restated Bylaws of Rehabilitation Hospital of Nevada – Las Vegas, Inc.
3.197	Certificate of Limited Partnership of Rehabilitation Hospital of Nevada – Las Vegas, L.P.
3.198	Agreement of Limited Partnership of Rehabilitation Hospital of Nevada – Las Vegas, L.P.
3.199	Articles of Incorporation of Rehabilitation Hospital of Plano, Inc.
3.200	Bylaws of Rehabilitation Hospital of Plano, Inc.
3.201	Articles of Organization of Rehabilitation Institute of Western Massachusetts, Inc.
3.202	Restated Bylaws of Rehabilitation Institute of Western Massachusetts, Inc.
3.203	Articles of Organization of Sarasota LTAC Properties, LLC
3.204	Operating Agreement of Sarasota LTAC Properties, LLC*
3.205	Certificate of Incorporation of SCA – Roseland, Inc.
3.206	Bylaws of SCA – Roseland, Inc.
3.207	Charter of SCA – Dalton, Inc.
3.208	Bylaws of SCA – Dalton, Inc.
3.209	Charter of SCA – Shelby Development Corp.
3.210	Bylaws of SCA – Shelby Development Corp.
3.211	Certificate of Incorporation of SelectRehab, Inc. (f/k/a CMS Unit Management, Inc.)

II-19

Exhibit Numbers	Description
3.212	Amended, Restated Bylaws of SelectRehab, Inc. (f/k/a CMS Unit Management, Inc.)
3.213	Certificate of Incorporation of Sherwood Rehabilitation Hospital, Inc.
3.214	Bylaws of Sherwood Rehabilitation Hospital, Inc.
3.215	Articles of Incorporation of Southeast Texas Rehabilitation Hospital, Inc.
3.216	Bylaws of Southeast Texas Rehabilitation Hospital, Inc.
3.217	Certificate of Limited Partnership of Southern Arizona Regional Rehabilitation Hospital, L.P.
3.218	Agreement of Limited Partnership of Southern Arizona Regional Rehabilitation Hospital, L.P.
3.219	Certificate of Incorporation of Surgery Center Holding Corporation
3.220	Bylaws of Surgery Center Holding Corporation
3.221	Restated Certificate of Incorporation of Surgical Care Affiliates, Inc.
3.222	Bylaws of Surgical Care Affiliates, Inc.
3.223	Restated Certificate of Incorporation of Surgical Health Corporation
3.224	Bylaws of Surgical Health Corporation
3.225	Certificate of Incorporation of Surgicare of Huntsville, Inc.
3.226	Bylaws of Surgicare of Huntsville, Inc.
3.227	Articles of Incorporation of Surgicare of Laguna Hills, Inc.
3.228	Bylaws of Surgicare of Laguna Hills, Inc.
3.229	Articles of Incorporation of Tarrant County Rehabilitation Hospital, Inc.
3.230	Bylaws of Tarrant County Rehabilitation Hospital, Inc.
3.231	Certificate of Limited Partnership of Terre Haute Regional Rehabilitation Hospital, L.P.
3.232	Agreement of Limited Partnership of Terre Haute Regional Rehabilitation Hospital, L.P.
3.233	Certificate of Incorporation of Terre Haute Rehabilitation Hospital, Inc. (f/k/a CMS Work-Able of Fresno, Inc.)
3.234	Bylaws of Terre Haute Rehabilitation Hospital, Inc. (f/k/a CMS Work-Able of Fresno, Inc.)
3.235	Articles of Incorporation of Tyler Rehabilitation Hospital, Inc.
3.236	Bylaws of Tyler Rehabilitation Hospital, Inc.
3.237	Certificate of Limited Partnership of Western Medical Rehab Associates, L.P.
3.238	Limited Partnership Agreement of Western Medical Rehab Associates, L.P.*
3.239	Certificate of Incorporation of Western Neuro Care, Inc.
3.240	Bylaws of Western Neuro Care, Inc.
4.1	Indenture, dated as of June 14, 2006, among HealthSouth Corporation, the Subsidiary Guarantors (as defined therein) and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to $375,000,000 aggregate principal amount of Floating Rate Senior Notes due 2014 (incorporated by reference to Exhibit 4.1 to HealthSouth’s Current Report on Form 8-K, filed with the SEC on June 16, 2006).

II-20

Exhibit Numbers	Description
4.2	Indenture, dated as of June 14, 2006, among HealthSouth Corporation, the Subsidiary Guarantors (as defined therein) and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to $625,000,000 aggregate principal amount of 10.75% Senior Notes due 2016 (incorporated by reference to Exhibit 4.2 to HealthSouth’s Current Report on Form 8-K, filed with the SEC on June 16, 2006).
4.3	Registration Rights Agreement, dated as of June 14, 2006, among HealthSouth Corporation, the Subsidiary Guarantors (as defined therein) and the Initial Purchasers (as defined therein), relating to the $625,000,000 aggregate principal amount of 10.75% Senior Notes due 2016 and the $375,000,000 aggregate principal amount of Floating Rate Senior Notes due 2014 (incorporated by reference to Exhibit 4.3 to HealthSouth’s Current Report on Form 8-K, filed with the SEC on June 16, 2006).
4.4.1	Indenture, dated as of June 22, 1998, between HealthSouth Corporation and PNC Bank, National Association, as trustee, relating to HealthSouth’s 6.875% Senior Notes due 2005 and 7.0% Senior Notes due 2008 (incorporated by reference to Exhibit 4.1.1 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
4.4.2	Officer’s Certificate pursuant to Sections 2.3 and 11.5 of the Indenture, dated as of June 22, 1998, between HealthSouth Corporation and PNC Bank, National Association, as trustee, relating to HealthSouth’s 6.875% Senior Notes due 2005 and 7.0% Senior Notes due 2008 (incorporated by reference to Exhibit 4.1.2 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
4.4.3	Instrument of Resignation, Appointment and Acceptance, dated as of April 9, 2003, among HealthSouth Corporation, J.P. Morgan Trust Company, National Association (successor in interest to PNC Bank, National Association), as resigning trustee, and Wilmington Trust Company, as successor trustee, relating to HealthSouth’s 6.875% Senior Notes due 2005 and 7.0% Senior Notes due 2008 (incorporated by reference to Exhibit 4.1.3 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
4.4.4	First Supplemental Indenture, dated as of June 24, 2004, to the Indenture, dated as of June 22, 1998, between HealthSouth Corporation and Wilmington Trust Company, as successor trustee to J.P. Morgan Trust Company, National Association (successor in interest to PNC Bank, National Association), relating to HealthSouth’s 7.0% Senior Notes due 2008 (incorporated by reference to Exhibit 99.3 to HealthSouth’s Current Report on Form 8-K filed on June 25, 2004).
4.4.5	Second Supplemental Indenture, dated as of February 15, 2006, to the Indenture, dated as of June 22, 1998, between HealthSouth Corporation and Wilmington Trust Company, as successor trustee to J.P. Morgan Trust Company, National Association (successor in interest to PNC Bank, National Association), relating to HealthSouth’s 7.0% Senior Notes due 2008 (incorporated by reference to Exhibit 4.3 to HealthSouth’s Current Report on Form 8-K filed on February 17, 2006).
4.5.1	Indenture, dated as of September 25, 2000, between HealthSouth Corporation and The Bank of New York, as trustee, relating to HealthSouth’s 10.750% Senior Subordinated Notes due 2008 (incorporated by reference to Exhibit 4.2.1 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
4.5.2	Instrument of Resignation, Appointment and Acceptance, dated as of May 8, 2003, among HealthSouth Corporation, The Bank of New York, as resigning trustee, and HSBC Bank USA, as successor trustee, relating to HealthSouth’s 10.750% Senior Subordinated Notes due 2008 (incorporated by reference to Exhibit 4.2.2 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).

II-21

Exhibit Numbers	Description
4.5.3	Amendment to Indenture, dated as of August 27, 2003, to the Indenture dated as of September 25, 2000 between HealthSouth Corporation and HSBC Bank USA, as successor trustee to The Bank of New York, relating to HealthSouth’s 10.750% Senior Subordinated Notes due 2008 (incorporated by reference to Exhibit 4.2.3 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
4.5.4	Second Supplemental Indenture, dated as of May 14, 2004, to the Indenture dated as of September 25, 2000 between HealthSouth Corporation and HSBC Bank USA, as successor trustee to The Bank of New York, relating to HealthSouth’s 10.750% Senior Subordinated Notes due 2008 (incorporated by reference to Exhibit 99.2 to HealthSouth’s Current Report on Form 8-K filed on May 24, 2004).
4.5.5	Third Supplemental Indenture, dated as of February 15, 2006, to the Indenture dated as of September 25, 2000 between HealthSouth Corporation and HSBC Bank USA, as successor trustee to The Bank of New York, relating to HealthSouth’s 10.750% Senior Subordinated Notes due 2008 (incorporated by reference to Exhibit 4.4 to HealthSouth’s Current Report on Form 8-K filed on February 17, 2006).
4.6.1	Indenture, dated as of February 1, 2001, between HealthSouth Corporation and The Bank of New York, as trustee, relating to HealthSouth’s 8.500% Senior Notes due 2008 (incorporated by reference to Exhibit 4.3.1 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
4.6.2	Amendment to Indenture, dated as of August 27, 2003, to the Indenture dated as of February 1, 2001 between HealthSouth Corporation and The Bank of New York, as trustee, relating to HealthSouth’s 8.500% Senior Notes due 2008 (incorporated by reference to Exhibit 4.3.2 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
4.6.3	Second Supplemental Indenture, dated as of May 14, 2004, to the Indenture dated as of February 1, 2001 between HealthSouth Corporation and The Bank of New York, as trustee, relating to HealthSouth’s 8.500% Senior Notes due 2008 (incorporated by reference to Exhibit 99.1 to HealthSouth’s Current Report on Form 8-K filed on May 24, 2004).
4.6.4	Third Supplemental Indenture, dated as of February 15, 2006, to the Indenture dated as of February 1, 2001 between HealthSouth Corporation and The Bank of New York, as trustee, relating to HealthSouth’s 8.500% Senior Notes due 2008 (incorporated by reference to Exhibit 4.1 to HealthSouth’s Current Report on Form 8-K filed on February 17, 2006).
4.7.1	Indenture, dated as of September 28, 2001, between HealthSouth Corporation and National City Bank, as trustee, relating to HealthSouth’s 7.375% Senior Notes due 2006 and 8.375% Senior Notes due 2011 (incorporated by reference to Exhibit 4.4.1 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
4.7.2	Instrument of Resignation, Appointment and Acceptance, dated as of April 9, 2003, among HealthSouth Corporation, National City Bank, as resigning trustee, and Wilmington Trust Company, as successor trustee, relating to HealthSouth’s 7.375% Senior Notes due 2006 and 8.375% Senior Notes due 2011 (incorporated by reference to Exhibit 4.4.2 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
4.7.3	Amendment to Indenture, dated as of August 27, 2003, to the Indenture dated as of September 28, 2001 between HealthSouth Corporation and Wilmington Trust Company, as successor trustee to National City Bank, relating to HealthSouth’s 7.375% Senior Notes due 2006 and 8.375% Senior Notes due 2011 (incorporated by reference to Exhibit 4.4.3 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).

II-22

Exhibit Numbers	Description
4.7.4	Second Supplemental Indenture, dated as of June 24, 2004, to the Indenture, dated as of September 28, 2001, between HealthSouth Corporation and Wilmington Trust Company, as successor trustee to National City Bank, relating to HealthSouth’s 7.375% Senior Notes due 2006 (incorporated by reference to Exhibit 99.2 to HealthSouth’s Current Report on Form 8-K filed on June 25, 2004).
4.7.5	Third Supplemental Indenture, dated as of February 15, 2006, to the Indenture, dated as of September 28, 2001, between HealthSouth Corporation and Wilmington Trust Company, as successor trustee to National City Bank, relating to HealthSouth’s 7.375% Senior Notes due 2006 (incorporated by reference to Exhibit 4.2 to HealthSouth’s Current Report on Form 8-K filed on February 17, 2006).
4.7.6	Second Supplemental Indenture, dated as of June 24, 2004, to the Indenture, dated as of September 28, 2001, between HealthSouth Corporation and Wilmington Trust Company, as successor trustee to National City Bank, relating to HealthSouth’s 8.375% Senior Notes due 2011 (incorporated by reference to Exhibit 99.4 to HealthSouth’s Current Report on Form 8-K filed on June 25, 2004).
4.7.7	Third Supplemental Indenture, dated as of February 15, 2006, to the Indenture, dated as of September 28, 2001, between HealthSouth Corporation and Wilmington Trust Company, as successor trustee to National City Bank, relating to HealthSouth’s 8.375% Senior Notes due 2011 (incorporated by reference to Exhibit 4.6 to HealthSouth’s Current Report on Form 8-K filed on February 17, 2006).
4.8.1	Indenture, dated as of May 22, 2002, between HealthSouth Corporation and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to HealthSouth’s 7.625% Senior Notes due 2012 (incorporated by reference to Exhibit 4.5.1 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
4.8.2	Amendment to Indenture, dated as of August 27, 2003, to the Indenture dated as of May 22, 2002 between HealthSouth Corporation and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to HealthSouth’s 7.625% Senior Notes due 2012 (incorporated by reference to Exhibit 4.5.2 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
4.8.3	First Supplemental Indenture, dated as of June 24, 2004, to the Indenture dated as of May 22, 2002 between HealthSouth Corporation and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to HealthSouth’s 7.625% Senior Notes due 2012 (incorporated by reference to Exhibit 99.5 to HealthSouth’s Current Report on Form 8-K filed on June 25, 2004).
4.8.4	Second Supplemental Indenture, dated as of February 15, 2006, to the Indenture dated as of May 22, 2002 between HealthSouth Corporation and The Bank of Nova Scotia Trust Company of New York, as trustee, relating to HealthSouth’s 7.625% Senior Notes due 2012 (incorporated by reference to Exhibit 4.5 to HealthSouth’s Current Report on Form 8-K filed on February 17, 2006).
4.9	Registration Rights Agreement, dated February 28, 2006, between HealthSouth and the purchasers party to the Securities Purchase Agreement, dated February 28, 2006, re: HealthSouth’s sale of 400,000 shares of 6.50% Series A Convertible Perpetual Preferred Stock (incorporated by reference to Exhibit 4.8 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on March 29, 2006).
5.1	Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding the validity of the securities being registered.*
10.1	Stipulation of Partial Settlement dated as of September 26, 2006, by and among HealthSouth Corporation, the stockholder lead plaintiffs named therein, the bondholder lead plaintiff named therein and the individual settling defendants named therein (incorporated by reference to Exhibit 10.1 to HealthSouth’s Current Report on Form 8-K filed on September 27, 2006).

II-23

Exhibit Numbers	Description
10.2	Settlement Agreement and Policy Release dated as of September 25, 2006, by and among HealthSouth Corporation, the settling individual defendants named therein and the settling carriers named therein (incorporated by reference to Exhibit 10.2 to HealthSouth’s Current Report on Form 8-K filed on September 27, 2006).
10.3	Stipulation of Settlement with Certain Individual Defendants dated as of September 25, 2006, by and among HealthSouth Corporation, plaintiffs named therein and the individual settling defendants named therein (incorporated by reference to Exhibit 10.3 to HealthSouth’s Current Report on Form 8-K filed on September 27, 2006).
10.4	HealthSouth Corporation Transitional Severance Plan – Executive Employees (incorporated by reference to Exhibit 10.1 to HealthSouth’s Current Report on Form 8-K filed on October 24, 2006).
10.5	HealthSouth Corporation Transitional Severance Plan – Corporate Office Employees (incorporated by reference to Exhibit 10.2 to HealthSouth’s Current Report on Form 8-K filed on October 24, 2006).
10.6	Non-Prosecution Agreement, dated May 17, 2006, between HealthSouth and the United States Department of Justice (incorporated by reference to Exhibit 10.2 to HealthSouth’s Quarterly Report on Form 10-Q filed on August 14, 2006).
10.7	Amended Class Action Settlement Agreement, dated March 6, 2006, with representatives of the plaintiff class relating to the action consolidated on July 2, 2003, captioned In Re HealthSouth Corp. ERISA Litigation, No. CV-03-BE-1700 (N.D. Ala.) (incorporated by reference to Exhibit 10.5.1 to HealthSouth’s Quarterly Report on Form 10-Q filed on May 15, 2006).
10.8	First Addendum to the Amended Class Action Settlement Agreement, dated April 11, 2006 (incorporated by reference to Exhibit 10.5.2 to HealthSouth’s Quarterly Report on Form 10-Q filed on May 15, 2006).
10.9	Consent and Waiver No. 1, dated February 15, 2006, to the Senior Subordinated Credit Agreement, dated as of January 16, 2004, among HealthSouth Corporation, the lenders party thereto and Credit Suisse (formerly known as Credit Suisse First Boston), as Administrative Agent and Syndication Agent (incorporated by reference to Exhibit 10.1.4 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on March 29, 2006).
10.10.1	Senior Subordinated Credit Agreement, dated as of January 16, 2004, among HealthSouth Corporation, the lenders party thereto, and Credit Suisse First Boston, as Administrative Agent and Syndication Agent (incorporated by reference to Exhibit 10.1 to HealthSouth’s Current Report on Form 8-K filed on January 20, 2004).
10.10.2	Warrant Agreement, dated as of January 16, 2004, between HealthSouth Corporation and Wells Fargo Bank Northwest, N.A., as Warrant Agent (incorporated by reference to Exhibit 10.2 to HealthSouth’s Current Report on Form 8-K filed on January 20, 2004).
10.10.3	Registration Rights Agreement, dated as of January 16, 2004, among HealthSouth Corporation and the entities listed on the signature pages thereto as Holders of Warrants and Transfer Restricted Securities (incorporated by reference to Exhibit 10.3 to HealthSouth’s Current Report on Form 8-K filed on January 20, 2004).
10.11.1	Amended and Restated Credit Agreement, dated as of March 21, 2005, among HealthSouth Corporation, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent, Wachovia Bank, National Association, as Syndication Agent, and Deutsche Bank Trust Company Americas, as Documentation Agent (incorporated by reference to Exhibit 10.1 to HealthSouth’s Current Report on Form 8-K filed on March 22, 2005).

II-24

Exhibit Numbers	Description
10.11.2	Collateral and Guarantee Agreement dated as of March 21, 2005, between HealthSouth Corporation and JPMorgan Chase Bank, N.A., as Collateral Agent (incorporated by reference to Exhibit 10.2 to HealthSouth’s Current Report on Form 8-K filed on March 22, 2005).
10.11.3	Waiver, dated as of February 16, 2006 and effective as of February 22, 2006, to the Amended and Restated Credit Agreement dated as of March 21, 2005, among HealthSouth Corporation, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent (incorporated by reference to Exhibit 10.2.3 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on March 29, 2006).
10.12.1	Term Loan Agreement, dated as of June 15, 2005, among HealthSouth Corporation, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Citicorp North America, Inc., as Syndication Agent, and J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. as Co-Lead Arrangers and Joint Bookrunners (incorporated by reference to Exhibit 10 to HealthSouth’s Current Report on Form 8-K filed on June 15, 2005).
10.12.2	Amendment and Waiver No. 1, dated February 15, 2006, to the Term Loan Agreement, dated as of June 15, 2005, among HealthSouth Corporation, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Citicorp North America, Inc., as Syndication Agent, and J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. as Co-Lead Arrangers and Joint Bookrunners (incorporated by reference to Exhibit 10.3.2 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on March 29, 2006).
10.13.1	Lease Agreement, dated as of December 27, 2001, between State Street Bank and Trust Company of Connecticut, National Association, as Owner Trustee for Digital Hospital Trust 2001-1, and HealthSouth Medical Center, Inc (incorporated by reference to Exhibit 10.5.1 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.13.2	Participation Agreement, dated as of December 27, 2001, among HealthSouth Medical Center, Inc., HealthSouth Corporation, State Street Bank and Trust Company of Connecticut, National Association, as Owner Trustee for Digital Hospital Trust 2001-1, the various banks and other lending institutions which are parties thereto from time to time as Holders and Lenders, and First Union National Bank (incorporated by reference to Exhibit 10.5.2 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on March 29, 2006).
10.14	Amended Class Action Settlement Agreement, dated July 25, 2005, with representatives of the plaintiff class relating to the action consolidated on July 2, 2003, captioned In Re Healthsouth Corp. ERISA Litigation, No. CV-03-BE-1700 (N.D. Ala.) (incorporated by reference to Exhibit 10.3.4 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.15.1	HealthSouth Corporation 2004 Amended and Restated Director Incentive Plan (incorporated by reference to Exhibit 10.12.1 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on March 29, 2006).
10.15.2	Form of Restricted Stock Unit Agreement (2004 Amended and Restated Director Incentive Plan) (incorporated by reference to Exhibit 10.12.2 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on March 29, 2006).
10.16	HealthSouth Corporation Change in Control Benefits Plan (incorporated by reference to Exhibit 10 to HealthSouth’s Current Report on Form 8-K filed November 14, 2005).
10.17	HealthSouth Corporation Amended and Restated 1993 Consultants Stock Option Plan (incorporated by reference to Exhibit 10.6 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).

II-25

Exhibit Numbers	Description
10.18.1	HealthSouth Corporation 1995 Stock Option Plan, as amended (incorporated by reference to Exhibit 10.7.1 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.18.2	Form of Non-Qualified Stock Option Agreement (1995 Stock Option Plan) (incorporated by reference to Exhibit 10.7.2 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.19.1	HealthSouth Corporation 1997 Stock Option Plan (incorporated by reference to Exhibit 10.8.1 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.19.2	Form of Non-Qualified Stock Option Agreement (1997 Stock Option Plan) (incorporated by reference to Exhibit 10.8.2 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.20.1	HealthSouth Corporation 1998 Restricted Stock Plan (incorporated by reference to Exhibit 10.9.1 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.20.2	Form of Restricted Stock Agreement (1998 Restricted Stock Plan) (incorporated by reference to Exhibit 10.9.2 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.21	HealthSouth Corporation 1999 Executive Equity Loan Plan (incorporated by reference to Exhibit 10.10 to HealthSouth Corporation’s Annual Report on Form 10-K for the year ended December 31, 2004).
10.22	HealthSouth 1999 Exchange Stock Option Plan (incorporated by reference to Exhibit 10.22 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on March 1, 2007).
10.23.1	HealthSouth Corporation 2002 Non-Executive Stock Option Plan (incorporated by reference to Exhibit 10.23.1 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.23.2	Form of Non-Qualified Stock Option Agreement (2002 Non-Executive Stock Option Plan) (incorporated by reference to Exhibit 10.11.2 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.24	HealthSouth Corporation Executive Deferred Compensation Plan (incorporated by reference to Exhibit 10.13 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.25	HealthSouth Corporation Employee Stock Benefit Plan, as amended (incorporated by reference to Exhibit 10.14 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.26	Employment Agreement, dated as of May 3, 2004, between HealthSouth Corporation and Jay F. Grinney (incorporated by reference to Exhibit 10.15 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.27	Employment Agreement, dated as of June 30, 2004, between HealthSouth Corporation and Michael D. Snow (incorporated by reference to Exhibit 10.16 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.28	Employment Agreement, dated as of September 3, 2004, between HealthSouth Corporation and John L. Workman (incorporated by reference to Exhibit 10.1 to HealthSouth’s Current Report on Form 8-K filed on September 10, 2004).

II-26

Exhibit Numbers	Description
10.29.1	Employment Agreement, dated as of February 1, 2004, between HealthSouth Corporation and John Markus (incorporated by reference to Exhibit 10.18.1 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.29.2	Amendment 1, dated as of April 14, 2004, to Employment Agreement, dated as of February 1, 2004, between HealthSouth Corporation and John Markus (incorporated by reference to Exhibit 10.18.2 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.30	Employment Agreement, dated April 19, 2006, between HealthSouth Corporation and Diane L. Munson (incorporated by reference to Exhibit 10.1 to HealthSouth’s Quarterly Report on Form 10-Q filed on August 14, 2006).
10.31	Employment Agreement, dated as of September 27, 2004, between HealthSouth Corporation and Mark J. Tarr (incorporated by reference to Exhibit 10.2 to HealthSouth’s Current Report on Form 8-K filed on October 12, 2004).
10.32	Employment Agreement, dated as of March 1, 2005, between HealthSouth Corporation and Joseph T. Clark (incorporated by reference to Exhibit 10.1 to HealthSouth’s Current Report on Form 8-K filed on February 8, 2005).
10.33	Employment Agreement, dated as of March 1, 2005, between HealthSouth Corporation and James C. Foxworthy (incorporated by reference to Exhibit 10.2 to HealthSouth’s Current Report on Form 8-K filed on February 8, 2005).
10.34	Form of Indemnity Agreement entered into between HealthSouth Corporation and the directors of HealthSouth (incorporated by reference to Exhibit 10.31 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.35	Form of letter agreement with former directors (incorporated by reference to Exhibit 10.32 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on June 27, 2005).
10.36	Written description of Senior Management Bonus Program (incorporated by reference to Item 1.01 to HealthSouth’s Current Report on Form 8-K filed on April 11, 2005).
10.37.1	Written description of HealthSouth Corporation Key Executive Incentive Program (incorporated by reference to Item 1.01 to HealthSouth’s Current Report on Form 8-K filed on November 21, 2005).
10.37.2	Form of Key Executive Incentive Award Agreement (Key Executive Incentive Program) (incorporated by reference to Exhibit 10.35.2 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on March 29, 2006).
10.38	HealthSouth Corporation 2005 Equity Incentive Plan (incorporated by reference to Exhibit 10 to HealthSouth’s Current Report on Form 8-K, filed on November 21, 2005).
10.39	Form of Non-Qualified Stock Option Agreement (2005 Equity Incentive Plan) (incorporated by reference to Exhibit 10.36.2 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on March 29, 2006).
10.40	Written description of amendment to Annual Compensation to non-employee directors of HealthSouth Corporation (incorporated by reference to Item 1.01 to HealthSouth’s Current Report on Form 8-K filed on February 27, 2006).
10.41	Settlement Agreement, dated as of December 30, 2004, by and among HealthSouth Corporation, the United States of America, acting through the entities named therein and certain other parties named therein (incorporated by reference to Exhibit 10.1 to HealthSouth’s Current Report on Form 8-K filed on January 5, 2005).

II-27

Exhibit Numbers	Description
10.42	Administrative Settlement Agreement, dated as of December 30, 2004, by and among the United States Department of Health and Human Services acting through the Centers for Medicare & Medicaid Services and its officers and agents, including, but not limited to, its fiscal intermediaries, and HealthSouth Corporation (incorporated by reference to Exhibit 10.3 to HealthSouth’s Current Report on Form 8-K filed on January 5, 2005).
10.43	Corporate Integrity Agreement, dated as of December 30, 2004, by and among the Office of Inspector General of the Department of Health and Human Services and HealthSouth Corporation (incorporated by reference to Exhibit 10.2 to HealthSouth’s Current Report on Form 8-K filed on January 5, 2005).
10.44.1	Consent of Defendant HealthSouth Corporation, dated June 1, 2005, in the lawsuit captioned Securities and Exchange Commission v. HealthSouth Corporation and Richard M. Scrushy, CV-03-J-0615-S (incorporated by reference to Exhibit 99.2 to HealthSouth’s Current Report on Form 8-K filed on June 8, 2005).
10.44.2	Form of Final Judgment as to Defendant HealthSouth Corporation in the lawsuit captioned Securities and Exchange Commission v. HealthSouth Corporation and Richard M. Scrushy, CV-03-J-0615-S (incorporated by reference to Exhibit 99.3 to HealthSouth’s Current Report on Form 8-K filed on June 8, 2005).
10.45	Securities Purchase Agreement, dated February 28, 2006, between HealthSouth and the purchasers party thereto re: the sale of 400,000 shares of 6.50% Series A Convertible Perpetual Preferred Stock (incorporated by reference to Exhibit 10.41 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on March 29, 2006).
10.46	Commitment Letter, dated February 2, 2006, from JPMorgan Chase Bank, N.A., J.P. Morgan Securities Inc., Citicorp North America, Inc., Citigroup Global Markets Inc., Merrill Lynch Capital Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated (incorporated by reference to Exhibit 10.1 to HealthSouth’s Current Report on Form 8-K filed on February 3, 2006).
10.47	Credit Agreement, dated March 10, 2006, by and among HealthSouth, the lenders party thereto, JPMorgan Chase Bank, N.A., as the administrative agent and the collateral agent, Citicorp North America, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as co-syndication agents; and Deutsche Bank Securities Inc., Goldman Sachs Credit Partners L.P. and Wachovia Bank, National Association, as co-documentation agents (incorporated by reference to Exhibit 10.1 to HealthSouth’s Current Report on Form 8-K filed on March 16, 2006).
10.48	Collateral and Guarantee Agreement, dated as of March 10, 2006, by and among HealthSouth, certain of the Company’s subsidiaries and JPMorgan Chase Bank, N.A., as collateral agent (incorporated by reference to Exhibit 10.2 to HealthSouth’s Current Report on Form 8-K filed on March 16, 2006).
10.49	Interim Loan Agreement, dated March 10, 2006, by and among HealthSouth and certain of the Company’s subsidiaries, the lenders party thereto, Merrill Lynch Capital Corporation, as administrative agent, Citicorp North America, Inc. and JPMorgan Chase Bank, N.A., as co-syndication agents; and Deutsche Bank AG Cayman Islands Branch, Goldman Sachs Credit Partners L.P. and Wachovia Bank, National Association, as co-documentation agents (incorporated by reference to Exhibit 10.3 to HealthSouth’s Current Report on Form 8-K filed on March 16, 2006).
10.50.1	Asset Purchase Agreement, dated as of July 20, 2005, by and among HealthSouth Corporation, HealthSouth Medical Center, Inc., and The Board of Trustees of The University of Alabama (incorporated by reference to Exhibit 10.37.1 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on March 29, 2006).

II-28

Exhibit Numbers	Description
10.50.2	Amended and Restated Asset Purchase Agreement, dated as of December 31, 2005, by and among HealthSouth Corporation, HealthSouth Medical Center, Inc., and The Board of Trustees of The University of Alabama (incorporated by reference to Exhibit 10.37.2 to HealthSouth Corporation’s Annual Report on Form 10-K filed with the SEC on March 29, 2006).
11.1	Statement of PricewaterhouseCoopers LLP regarding Computation of per Share Earnings (incorporated by reference to Exhibit 11.1 to our Annual Report on Form 10-K for the year ended December 31, 2006).
12.1	Computation of Ratios (incorporated by reference to Exhibit 12 to our Form 10-K/A filed with the SEC on March 22, 2007).
21.1	List of Subsidiaries of HealthSouth Corporation (incorporated by reference to Exhibit 21 to HealthSouth’s Annual Report on Form 10-K for the year ended December 31, 2006, filed with the SEC on March 1, 2007).
23.1	Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.*
23.2	Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in the opinion of Skadden, Arps, Slate, Meagher & Flom LLP filed as Exhibit 5.1 hereto).*
24.1	Power of Attorney (previously filed on signature page hereto).
25.1	Form T-1 Statement of Eligibility of The Bank of Nova Scotia Trust Company of New York to act as Trustee under the Indenture.
99.1	Form of Letter of Transmittal.
99.2	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
99.3	Form of Letter to Clients.

* Filed herewith.

II-29

EX-3.5

Exhibit 3.5

CERTIFICATE OF FORMATION

OF

ADVANTAGE HEALTH, LLC

1. The name of the limited liability company is Advantage Health, LLC.

2. The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle. The name of its registered agent at that address is Corporation Service Company.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation of Advantage Health, LLC on this 20^th day of April, 2007.

By:	/s/ Lucy Hicks
Name:	Lucy Hicks
Title:	Authorized Person

1

CERTIFICATE OF AMENDMENT

OF

ADVANTAGE HEALTH, LLC

1. The name of the limited liability company is Advantage Health, LLC.

2. The Certificate of Formation of the limited liability company is hereby amended as follows:

The registered office of the Limited Liability Company in the state of Delaware is hereby changed to Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware, 19801, in the county of New Castle.

The registered agent of the Limited Liability Company is hereby changed to The Corporation Trust Company.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment of Advantage Health, LLC this 30th day of April, 2007.

ADVANTAGE HEALTH, LLC
By:	/s/ Lucy Hicks
	Lucy Hicks
	Authorized Person

EX-3.6

Exhibit 3.6

LIMITED LIABILITY COMPANY AGREEMENT

OF

ADVANTAGE HEALTH, LLC

THIS LIMITED LIABILITY COMPANY AGREEMENT (the “Agreement”) of Advantage Health, LLC (the “Company”) dated as of this 20^th day of April, 2007, by HealthSouth Corporation, as the sole member of the Company (the “Member”).

RECITAL

The Member has formed the Company as a limited liability company under the laws of the State of Delaware and desires to enter into a written agreement, in accordance with the provisions of the Delaware Limited Liability Company Act and any successor statute, as amended from time to time (the “Act”), governing the affairs of the Company and the conduct of its business.

ARTICLE I

THE LIMITED LIABILITY COMPANY

1.1 Formation. The Member has previously formed the Company as a limited liability company pursuant to the provisions of the Act upon the conversion of Advantage Health Corporation, a Delaware corporation, to a Delaware limited liability company pursuant to Section 266 of the General Corporation Law of the State of Delaware and Section 18-214 of the Act. A certificate of formation for the Company as described in Section 18-201 of the Act (the “Certificate of Formation”) has been filed in the Office of the Secretary of State of the State of Delaware in conformity with the Act.

1.2 Name. The name of the Company shall be “Advantage Health, LLC” and its business shall be carried on in such name with such variations and changes as the Board (as hereinafter defined) shall determine or deem necessary to comply with requirements of the jurisdictions in which the Company’s operations are conducted.

1.3 Business Purpose; Powers. The Company is formed for the purpose of engaging in any lawful business, purpose or activity for which limited liability companies may be formed under the Act. The Company shall possess and may exercise all the powers and privileges granted by the Act or by any other law or by this Agreement, together with any powers incidental thereto, so far as such powers and privileges are necessary or convenient to the conduct, promotion or attainment of the business purposes or activities of the Company.

1.4 Registered Office and Agent. The location of the registered office of the Company shall be 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle. The Company’s Registered Agent at such address shall be Corporation Service Company.

1.5 Term. Subject to the provisions of Article 6 below, the Company shall have perpetual existence.

ARTICLE II

THE MEMBER

2.1 The Member. The name and address of the Member is as follows:

Name	Address
HealthSouth Corporation	One HealthSouth Parkway Birmingham, AL 35243

2.2 Actions by the Member; Meetings. The Member may approve a matter or take any action at a meeting or without a meeting by the written consent of the Member. Meetings of the Member may be called at any time by the Member.

2.3 Liability of the Member. All debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member.

2.4 Power to Bind the Company. The Member (acting in its capacity as such) shall have the authority to bind the Company to any third party with respect to any matter.

2.5 Admission of Members. New members shall be admitted only upon the approval of the Member.

ARTICLE III

THE BOARD

3.1 Management By Board of Managers.

(a) Subject to such matters which are expressly reserved hereunder or under the Act to the Member for decision, the business and affairs of the Company shall be managed by a board of managers (the “Board”), which shall be responsible for policy setting, approving the overall direction of the Company and making all decisions affecting the business and affairs of the Company. The Board shall consist of one (1) to fifteen (15) individuals (the “Managers”), the exact number of Managers to be determined from time to time by resolution of the Member. The initial Board shall consist of three (3) members, who shall be Jay Grinney, Michael D. Snow and John P. Whittington.

(b) Each Manager shall be elected by the Member and shall serve until his or her successor has been duly elected and qualified, or until his or her earlier removal, resignation, death or disability. The Member may remove any Manager from the Board or from

any other capacity with the Company at any time, with or without cause. A Manager may resign at any time upon written notice to the Member.

(c) Any vacancy occurring on the Board as a result of the resignation, removal, death or disability of a Manager or an increase in the size of the Board shall be filled by the Member. A Manager chosen to fill a vacancy resulting from the resignation, removal, death or disability of a Manager shall serve the unexpired term of his or her predecessor in office.

3.2 Action By the Board.

(a) Meetings of the Board may be called by any Manager upon two (2) days prior written notice to each Manager. The presence of a majority of the Managers then in office shall constitute a quorum at any meeting of the Board. All actions of the Board shall require the affirmative vote of a majority of the Managers then in office.

(b) Meetings of the Board may be conducted in person or by conference telephone facilities. Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting if such number of Managers sufficient to approve such action pursuant to the terms of this Agreement consent thereto in writing. Notice of any meeting may be waived by any Manager.

3.3 Power to Bind Company. None of the Managers (acting in their capacity as such) shall have authority to bind the Company to any third party with respect to any matter unless the Board shall have approved such matter and authorized such Manager(s) to bind the Company with respect thereto.

3.4 Officers and Related Persons. The Board shall have the authority to appoint and terminate officers of the Company and retain and terminate employees, agents and consultants of the Company and to delegate such duties to any such officers, employees, agents and consultants as the Board deems appropriate, including the power, acting individually or jointly, to represent and bind the Company in all matters, in accordance with the scope of their respective duties.

ARTICLE IV

CAPITAL STRUCTURE AND CONTRIBUTIONS

4.1 Capital Structure. The capital structure of the Company shall consist of one class of common interests (the “Common Interests”). All Common Interests shall be identical with each other in every respect. The Member shall own all of the Common Interests issued and outstanding.

4.2 Capital Contributions. From time to time, the Board may determine that the Company requires capital and may request the Member to make capital contribution(s) in an amount determined by the Board. A capital account shall be maintained for the Member, to which contributions and profits shall be credited and against which distributions and losses shall be charged.

ARTICLE V

PROFITS, LOSSES AND DISTRIBUTIONS

5.1 Profits and Losses. For financial accounting and tax purposes, the Company’s net profits or net losses shall be determined on an annual basis in accordance with the manner determined by the Board. In each year, profits and losses shall be allocated entirely to the Member.

5.2 Distributions. The Board shall determine profits available for distribution and the amount, if any, to be distributed to the Member, and shall authorize and distribute on the Common Interests, the determined amount when, as and if declared by the Board. The distributions of the Company shall be allocated entirely to the Member.

ARTICLE VI

EVENTS OF DISSOLUTIONS

The Company shall be dissolved and its affairs wound up upon the occurrence of any of the following events (each, an “Event of Dissolution”):

(a) The Member votes for dissolution; or

(b) A judicial dissolution of the Company under Section 18-802 of the Act.

ARTICLE VII

TRANSFER OF INTERESTS IN THE COMPANY

The Member may sell, assign, transfer, convey, gift, exchange or otherwise dispose of any or all of its Common Interests and, upon receipt by the Company of a written agreement executed by the person or entity to whom such Common Interests are to be transferred agreeing to be bound by the terms of this Agreement, such person shall be admitted as a member.

ARTICLE VIII

EXCULPATION AND INDEMNIFICATION

8.1 Exculpation. Notwithstanding any other provisions of this Agreement, whether express or implied, or any obligation or duty at law or in equity, none of the Member, Managers, or any officers, directors, stockholders, partners, employees, affiliates, representatives or agents of any of the foregoing, nor any officer of the Company (individually, a “Covered Person” and, collectively, the “Covered Persons”) shall be liable to the Company or any other person for any act or omission (in relation to the Company, its property or the conduct of its business or affairs, this Agreement, any related document or any transaction or investment involving the Company) taken or omitted by a Covered Person in the reasonable belief that such act or omission is in or is not contrary to the best interests of the Company and is within the scope of

authority granted to such Covered Person by the Agreement, provided such act or omission does not constitute fraud, willful misconduct, bad faith, or gross negligence.

8.2 Indemnification. To the fullest extent permitted by law, the Company shall indemnify and hold harmless each Covered Person from and against any and all losses, claims, demands, liabilities, expenses, judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative (“Claims”), in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, by reason of its management of the affairs of the Company or which relates to or arises out of the Company or its property, business or affairs. A Covered Person shall not be entitled to indemnification under this Section 8.2 with respect to (i) any Claim with respect to which such Covered Person has engaged in fraud, willful misconduct, bad faith or gross negligence or (ii) any Claim initiated by such Covered Person unless such Claim (or part thereof) (A) was brought to enforce such Covered Person’s rights to indemnification hereunder or (B) was authorized or consented to by the Board. Expenses incurred by a Covered Person in defending any Claim shall be paid by the Company in advance of the final disposition of such Claim upon receipt by the Company of an undertaking by or on behalf of such Covered Person to repay such amount if it shall be ultimately determined that such Covered Person is not entitled to be indemnified by the Company as authorized by this Section 8.2.

8.3 Amendments. Any repeal or modification of this Article 8 by the Member shall not adversely affect any rights of such Covered Person pursuant to this Article 8, including the right to indemnification and to the advancement of expenses of a Covered Person existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.

ARTICLE IX

MISCELLANEOUS

9.1 Tax Treatment. Unless otherwise determined by the Member, the Company shall be a disregarded entity for U.S. federal income tax purposes (as well as for any analogous state or local tax purposes), and the Member and the Company shall timely make any and all necessary elections and filings for the Company treated as a disregarded entity for U.S. federal income tax purposes (as well as for any analogous state or local tax purposes).

9.2 Amendments. Amendments to this Agreement and to the Certificate of Formation shall be approved in writing by the Member. An amendment shall become effective as of the date specified in the approval of the Member or if none is specified as of the date of such approval or as otherwise provided in the Act.

9.3 Severability. If any provision of this Agreement is held to be invalid or unenforceable for any reason, such provision shall be ineffective to the extent of such invalidity or unenforceability; provided, however, that the remaining provisions will continue in full force without being impaired or invalidated in any way unless such invalid or unenforceable provision or clause shall be so significant as to materially affect the expectations of the Member regarding this Agreement. Otherwise, any invalid or unenforceable provision shall be replaced by the

Member with a valid provision which most closely approximates the intent and economic effect of the invalid or unenforceable provision.

9.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to the principles of conflicts of laws thereof.

9.5 Limited Liability Company. The Member intends to form a limited liability company and does not intend to form a partnership under the laws of the State of Delaware or any other laws.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the day first above written.

HEALTHSOUTH CORPORATION
By:	/s/ John P. Whittington
Name: Title:	John P. Whittington Executive Vice President, General Counsel and Corporate Secretary
ADVANTAGE HEALTH, LLC
By:	/s/ Lucy C. Hicks
Name: Title:	Lucy C. Hicks Vice President and Assistant Secretary

EX-3.35

Exhibit 3.35

RESTATED CERTIFICATE OF INCORPORATION

OF

DIAGNOSTIC HEALTH CORPORATION

Diagnostic Health Corporation, a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:

1. The name of the Corporation is Diagnostic Health Corporation.

The date of filing its original Certificate of Incorporation with the Secretary of State was September 16, 1991, under the name of American Imaging Corporation.

2. This Restated Certificate of Incorporation, duly adopted in accordance with Section 245 of the General Corporation Law of Delaware, amends and restates the Certificate of Incorporation of the Corporation in full as follows:

FIRST: The name of the Corporation is Diagnostic Health Corporation.

SECOND: The Corporation shall have perpetual duration.

THIRD: The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.

FOURTH: The nature of the business or purposes to he conducted or promoted are:

(a) To engage in the business of providing comprehensive clinical healthcare services on an inpatient or outpatient basis or otherwise in clinics and hospitals to the general public through the provision of physician services, diagnostic imaging services, ambulatory surgery services, anesthesiology services and other services and to do any and all things necessary and appropriate to carry out such business effectively, including, without limitation, the owning, leasing, management and operation of medical facilities and other physical properties, either directly or indirectly, or in concert with others.

(b) To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

FIFTH: The total number of shares of stock which the Corporation shall have authority to issue is 1,000 shares, consisting of 1,000 shares of Common Stock, par value $.01 per share.

SIXTH: The Board of Directors shall have the power to make, alter or repeal the Bylaws of the Corporation at any meeting at which a quorum is present by the affirmative vote of a majority of the whole Board of Directors. Election of Directors need not be by written ballot.

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SEVENTH: A Director of the Corporation shall have no personal liability to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director; provided, however, that this Article SEVENTH shall not eliminate or limit the liability of a Director, except to the extent permitted by applicable law, (i) for any breach of the Director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware as the same now exists or may hereafter be amended, or (iv) for any transaction from which the Director derived an improper personal benefit. No amendment to, or repeal of, this Article SEVENTH shall apply to, or have any effect on, the liability or alleged liability of any Director for, or with respect to, any acts or omissions of such director occurring prior to such amendment or repeal.”

IN WITNESS WHEREOF, Diagnostic Health Corporation has caused its corporate seal to be affixed hereto and caused this Restated Certificate of Incorporation to be executed by William W. Horton, its Vice President and attested by C, Drew Demaray, its Assistant Secretary, this 26th day of August, 1996.

DIAGNOSTIC HEALTH CORPORATION
By:	/s/ [name]
William W Horton
Vice President

ATTEST:

/s/ [name]

C. Drew Demaray

Assistant Secretary

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CERTIFICATE OF MERGER

OF

HEALTH IMAGES, INC.

(a Delaware corporation)

INTO

DIAGNOSTIC HEALTH CORPORATION

(a Delaware corporation)

Pursuant to the provisions of Section 252 of the General Corporation Law of the State of Delaware, the undersigned domestic corporations adopt the following Certificate of Merger for the purpose of merging Health Images, Inc. (the “Merged Corporation”) into Diagnostic Health Corporation, Inc.:

FIRST: The name and state of incorporation of each of the constituent corporations of the merger are as follows:

Corporation	State
Health Images. Inc.	Delaware
Diagnostic Health Corporation	Delaware

SECOND: The name of the surviving corporation is Diagnostic Health Corporation (the “Surviving Corporation”), and it is to be governed by the laws of the State of Delaware. The principal office location of the Surviving Corporation is One HEALTHSOUTH Parkway, Birmingham, Alabama 35243.

THIRD: The Plan of Merger, set forth in Exhibit A attached hereto and incorporated herein by reference as of the date hereof, was submitted to and approved by the respective Boards of Directors and Stockholders of the Surviving Corporation and the Merged Corporation, in the manner prescribed by their respective Certificates of Incorporation and the General Corporation Law of the State of Delaware.

FOURTH: The executed Plan of Merger is on file at the principal place of business of the Surviving Corporation, the address of which is One HEALTHSOUTH Parkway, Birmingham, Alabama 35243.

SIXTH: A copy of the Plan of Merger will be furnished by the Surviving Corporation, on request and without cost, to any stockholder of any constituent corporation.

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SEVENTH: The Merged Corporation has a total of 1,000 shares of Common Stock, par value 5.01 per share, authorized, with a total aggregate par value of $10.00. The Surviving Corporation has a total of 1,000 shares of Common Stock, par value of $.01 per share, authorized, with a total aggregate par value of $10.00. No shares of capital stock of the Surviving Corporation are to he issued in connection with the merger.

EIGHTH: The merger of the Merged Corporation into the Surviving Corporation shall become effective at the close of business on the thirty-first day of December, 1997, Eastern Standard Time

IN WITNESS WHEREOF, the undersigned have hereunto caused this Certificate of Merger to be executed by their respective duly authorized corporate officers, as of the 23rd day of December, 1997, heretofore executed under penalty of perjury.

HEALTH IMAGES, INC.
By	/s/ [name]
Beall D. Gary, Jr.
Its Vice President
DIAGNOSTIC HEALTH CORPORATION
By	/s/ [name]
Richard E. Botts
Its Vice President

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EXHIBIT A

PLAN OF MERGER

The terms and conditions of the following Plan of Merger were advised, authorized and approved by the respective Board of Directors and Stockholders of Health Images, Inc. and Diagnostic Health Corporation in the manner prescribed by their respective Certificates of Incorporation and the General Corporation Law of the State of Delaware:

1. Diagnostic Health Corporation, a Delaware corporation (the “Surviving Corporation”), shall merge into itself Health Images, Inc., a Delaware corporation (the “Merged Corporation”), and assume all of said Merged Corporation’s liabilities and obligations, with the Surviving Corporation being the surviving corporation.

2. Upon the effectiveness of such merger, (a) the separate corporate existence of the Merged Corporation shall cease, (b) all outstanding shares of capital stock of the Merged Corporation shall be canceled and no shares of capital stock of the Surviving Corporation shall be issued as a result of the merger, (c) all corporate acts, liabilities and obligations of the Merged Corporation shall become the acts, liabilities and obligations of the Surviving Corporation, and (d) the merger shall have all effects specified in applicable provisions of the General Corporation Law of the State of Delaware.

3. No amendments to the Certificate of Incorporation of the Surviving Corporation shall occur as a result of such merger.

4. The Chairman of the Board, President and Chief Executive Officer of the Surviving Corporation, any Executive Vice President, Senior Vice President or Group Vice President of the Surviving Corporation, and the Secretary or any Assistant Secretary of the Surviving Corporation, are hereby authorized and directed to make, execute and acknowledge a Certificate of Merger and to file the same in the office of the Secretary of State of the State of Delaware and such other public offices as may be necessary or advisable to effect such merger.

5. The Surviving Corporation and the Merged Corporation intend for the merger to qualify as a tax-free reorganization under the Internal Revenue Code of 1986, as amended.

IN WITNESS WHEREOF, the undersigned have hereunto caused this Plan of Merger to be executed by their respective duly authorized corporate officers, as of this the 23rd day of December, 1997.

HEALTH IMAGES, INC.
By	/s/ [name]
Beall D. Gary, Jr.
Its Vice President

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DIAGNOSTIC HEALTH CORPORATION:
By	/s/ [name]
Richard E. Botts
Its Vice President

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EX-3.67

Exhibit 3.67

CERTIFICATE OF FORMATION

OF

HEALTHSOUTH OF EAST TENNESSEE, LLC

1. The name of the limited liability company is HealthSouth of East Tennessee, LLC.

2. The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle. The name of its registered agent at that address is Corporation Service Company.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation of HealthSouth of East Tennessee, LLC on this 20^th day of April, 2007.

By:	/s/ Lucy Hicks
Name: Title:	Lucy Hicks Authorized Person

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CERTIFICATE OF AMENDMENT

OF

HEALTHSOUTH OF EAST TENNESSEE, LLC

1. The name of the limited liability company is HealthSouth of East Tennessee, LLC.

2. The Certificate of Formation of the limited liability company is hereby amended as follows:

The registered office of the Limited Liability Company in the state of Delaware is hereby changed to Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware, 19801, in the county of New Castle.

The registered agent of the Limited Liability Company is hereby changed to The Corporation Trust Company.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment of HealthSouth of East Tennessee, LLC this 30^th day of April, 2007.

HealthSouth of East Tennessee, LLC
By:	/s/ Lucy Hicks
	Lucy Hicks
	Authorized Person

EX-3.68

Exhibit 3.68

LIMITED LIABILITY COMPANY AGREEMENT

OF

HEALTHSOUTH OF EAST TENNESSEE, LLC

THIS LIMITED LIABILITY COMPANY AGREEMENT (the “Agreement”) of HealthSouth of East Tennessee, LLC (the “Company”) dated as of this 20^th day of April, 2007, by HealthSouth Corporation, as the sole member of the Company (the “Member”).

RECITAL

The Member has formed the Company as a limited liability company under the laws of the State of Delaware and desires to enter into a written agreement, in accordance with the provisions of the Delaware Limited Liability Company Act and any successor statute, as amended from time to time (the “Act”), governing the affairs of the Company and the conduct of its business.

ARTICLE I

THE LIMITED LIABILITY COMPANY

1.1 Formation. The Member has previously formed the Company as a limited liability company pursuant to the provisions of the Act upon the conversion of HealthSouth of East Tennessee, Inc., a Delaware corporation, to a Delaware limited liability company pursuant to Section 266 of the General Corporation Law of the State of Delaware and Section 18-214 of the Act. A certificate of formation for the Company as described in Section 18-201 of the Act (the “Certificate of Formation”) has been filed in the Office of the Secretary of State of the State of Delaware in conformity with the Act.

1.2 Name. The name of the Company shall be “HealthSouth of East Tennessee, LLC” and its business shall be carried on in such name with such variations and changes as the Board (as hereinafter defined) shall determine or deem necessary to comply with requirements of the jurisdictions in which the Company’s operations are conducted.

1.3 Business Purpose; Powers. The Company is formed for the purpose of engaging in any lawful business, purpose or activity for which limited liability companies may be formed under the Act. The Company shall possess and may exercise all the powers and privileges granted by the Act or by any other law or by this Agreement, together with any powers incidental thereto, so far as such powers and privileges are necessary or convenient to the conduct, promotion or attainment of the business purposes or activities of the Company.

1.4 Registered Office and Agent. The location of the registered office of the Company shall be 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle. The Company’s Registered Agent at such address shall be Corporation Service Company.

1.5 Term. Subject to the provisions of Article 6 below, the Company shall have perpetual existence.

ARTICLE II

THE MEMBER

2.1 The Member. The name and address of the Member is as follows:

Name	Address
HealthSouth Corporation	One HealthSouth Parkway Birmingham, AL 35243

2.2 Actions by the Member; Meetings. The Member may approve a matter or take any action at a meeting or without a meeting by the written consent of the Member. Meetings of the Member may be called at any time by the Member.

2.3 Liability of the Member. All debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member.

2.4 Power to Bind the Company. The Member (acting in its capacity as such) shall have the authority to bind the Company to any third party with respect to any matter.

2.5 Admission of Members. New members shall be admitted only upon the approval of the Member.

ARTICLE III

THE BOARD

3.1 Management By Board of Managers.

(a) Subject to such matters which are expressly reserved hereunder or under the Act to the Member for decision, the business and affairs of the Company shall be managed by a board of managers (the “Board”), which shall be responsible for policy setting, approving the overall direction of the Company and making all decisions affecting the business and affairs of the Company. The Board shall consist of one (1) to fifteen (15) individuals (the “Managers”), the exact number of Managers to be determined from time to time by resolution of the Member. The initial Board shall consist of three (3) members, who shall be Jay Grinney, Michael D. Snow and John P. Whittington.

(b) Each Manager shall be elected by the Member and shall serve until his or her successor has been duly elected and qualified, or until his or her earlier removal, resignation, death or disability. The Member may remove any Manager from the Board or from

any other capacity with the Company at any time, with or without cause. A Manager may resign at any time upon written notice to the Member.

(c) Any vacancy occurring on the Board as a result of the resignation, removal, death or disability of a Manager or an increase in the size of the Board shall be filled by the Member. A Manager chosen to fill a vacancy resulting from the resignation, removal, death or disability of a Manager shall serve the unexpired term of his or her predecessor in office.

3.2 Action By the Board.

(a) Meetings of the Board may be called by any Manager upon two (2) days prior written notice to each Manager. The presence of a majority of the Managers then in office shall constitute a quorum at any meeting of the Board. All actions of the Board shall require the affirmative vote of a majority of the Managers then in office.

(b) Meetings of the Board may be conducted in person or by conference telephone facilities. Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting if such number of Managers sufficient to approve such action pursuant to the terms of this Agreement consent thereto in writing. Notice of any meeting may be waived by any Manager.

3.3 Power to Bind Company. None of the Managers (acting in their capacity as such) shall have authority to bind the Company to any third party with respect to any matter unless the Board shall have approved such matter and authorized such Manager(s) to bind the Company with respect thereto.

3.4 Officers and Related Persons. The Board shall have the authority to appoint and terminate officers of the Company and retain and terminate employees, agents and consultants of the Company and to delegate such duties to any such officers, employees, agents and consultants as the Board deems appropriate, including the power, acting individually or jointly, to represent and bind the Company in all matters, in accordance with the scope of their respective duties.

ARTICLE IV

CAPITAL STRUCTURE AND CONTRIBUTIONS

4.1 Capital Structure. The capital structure of the Company shall consist of one class of common interests (the “Common Interests”). All Common Interests shall be identical with each other in every respect. The Member shall own all of the Common Interests issued and outstanding.

4.2 Capital Contributions. From time to time, the Board may determine that the Company requires capital and may request the Member to make capital contribution(s) in an amount determined by the Board. A capital account shall be maintained for the Member, to which contributions and profits shall be credited and against which distributions and losses shall be charged.

ARTICLE V

PROFITS, LOSSES AND DISTRIBUTIONS

5.1 Profits and Losses. For financial accounting and tax purposes, the Company’s net profits or net losses shall be determined on an annual basis in accordance with the manner determined by the Board. In each year, profits and losses shall be allocated entirely to the Member.

5.2 Distributions. The Board shall determine profits available for distribution and the amount, if any, to be distributed to the Member, and shall authorize and distribute on the Common Interests, the determined amount when, as and if declared by the Board. The distributions of the Company shall be allocated entirely to the Member.

ARTICLE VI

EVENTS OF DISSOLUTIONS

The Company shall be dissolved and its affairs wound up upon the occurrence of any of the following events (each, an “Event of Dissolution”):

(a) The Member votes for dissolution; or

(b) A judicial dissolution of the Company under Section 18-802 of the Act.

ARTICLE VII

TRANSFER OF INTERESTS IN THE COMPANY

The Member may sell, assign, transfer, convey, gift, exchange or otherwise dispose of any or all of its Common Interests and, upon receipt by the Company of a written agreement executed by the person or entity to whom such Common Interests are to be transferred agreeing to be bound by the terms of this Agreement, such person shall be admitted as a member.

ARTICLE VIII

EXCULPATION AND INDEMNIFICATION

8.1 Exculpation. Notwithstanding any other provisions of this Agreement, whether express or implied, or any obligation or duty at law or in equity, none of the Member, Managers, or any officers, directors, stockholders, partners, employees, affiliates, representatives or agents of any of the foregoing, nor any officer of the Company (individually, a “Covered Person” and, collectively, the “Covered Persons”) shall be liable to the Company or any other person for any act or omission (in relation to the Company, its property or the conduct of its business or affairs, this Agreement, any related document or any transaction or investment involving the Company) taken or omitted by a Covered Person in the reasonable belief that such act or omission is in or is not contrary to the best interests of the Company and is within the scope of

authority granted to such Covered Person by the Agreement, provided such act or omission does not constitute fraud, willful misconduct, bad faith, or gross negligence.

8.2 Indemnification. To the fullest extent permitted by law, the Company shall indemnify and hold harmless each Covered Person from and against any and all losses, claims, demands, liabilities, expenses, judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative (’Claims‘), in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, by reason of its management of the affairs of the Company or which relates to or arises out of the Company or its property, business or affairs. A Covered Person shall not be entitled to indemnification under this Section 8.2 with respect to (i) any Claim with respect to which such Covered Person has engaged in fraud, willful misconduct, bad faith or gross negligence or (ii) any Claim initiated by such Covered Person unless such Claim (or part thereof) (A) was brought to enforce such Covered Person’s rights to indemnification hereunder or (B) was authorized or consented to by the Board. Expenses incurred by a Covered Person in defending any Claim shall be paid by the Company in advance of the final disposition of such Claim upon receipt by the Company of an undertaking by or on behalf of such Covered Person to repay such amount if it shall be ultimately determined that such Covered Person is not entitled to be indemnified by the Company as authorized by this Section 8.2.

8.3 Amendments. Any repeal or modification of this Article 8 by the Member shall not adversely affect any rights of such Covered Person pursuant to this Article 8, including the right to indemnification and to the advancement of expenses of a Covered Person existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.

ARTICLE IX

MISCELLANEOUS

9.1 Tax Treatment. Unless otherwise determined by the Member, the Company shall be a disregarded entity for U.S. federal income tax purposes (as well as for any analogous state or local tax purposes), and the Member and the Company shall timely make any and all necessary elections and filings for the Company treated as a disregarded entity for U.S. federal income tax purposes (as well as for any analogous state or local tax purposes).

9.2 Amendments. Amendments to this Agreement and to the Certificate of Formation shall be approved in writing by the Member. An amendment shall become effective as of the date specified in the approval of the Member or if none is specified as of the date of such approval or as otherwise provided in the Act.

9.3 Severability. If any provision of this Agreement is held to be invalid or unenforceable for any reason, such provision shall be ineffective to the extent of such invalidity or unenforceability; provided, however, that the remaining provisions will continue in full force without being impaired or invalidated in any way unless such invalid or unenforceable provision or clause shall be so significant as to materially affect the expectations of the Member regarding this Agreement. Otherwise, any invalid or unenforceable provision shall be replaced by the

Member with a valid provision which most closely approximates the intent and economic effect of the invalid or unenforceable provision.

9.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to the principles of conflicts of laws thereof.

9.5 Limited Liability Company. The Member intends to form a limited liability company and does not intend to form a partnership under the laws of the State of Delaware or any other laws.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the day first above written.

HEALTHSOUTH CORPORATION
By:	/s/ John P. Whittington
Name: Title:	John P. Whittington Executive Vice President, General Counsel and Corporate Secretary
HEALTHSOUTH OF EAST TENNESSEE, LLC
By:	/s/ Lucy C. Hicks
Name: Title:	Lucy C. Hicks Vice President and Assistant Secretary

EX-3.123

Exhibit 3.123

CERTIFICATE OF FORMATION

OF

HEALTHSOUTH PROPERTIES, LLC

1. The name of the limited liability company is HealthSouth Properties, LLC.

2. The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle. The name of its registered agent at that address is Corporation Service Company.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation of HealthSouth Properties, LLC on this 26^th day of April, 2007.

By:	/s/ Lucy Hicks
Name:	Lucy Hicks
Title::	Authorized Person

1

CERTIFICATE OF AMENDMENT

OF

HEALTHSOUTH PROPERTIES, LLC

1. The name of the limited liability company is HealthSouth Properties, LLC.

2. The Certificate of Formation of the limited liability company is hereby amended as follows:

The registered office of the Limited Liability Company in the state of Delaware is hereby changed to Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware, 19801, in the county of New Castle.

The registered agent of the Limited Liability Company is hereby changed to The Corporation Trust Company.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment of HealthSouth Properties, LLC this 30th day of April, 2007.

HealthSouth Properties , LLC
By:	/s/ Lucy Hicks
	Lucy Hicks
	Authorized Person

EX-3.124

Exhibit 3.124

LIMITED LIABILITY COMPANY AGREEMENT

OF

HEALTHSOUTH PROPERTIES, LLC

THIS LIMITED LIABILITY COMPANY AGREEMENT (the “Agreement”) of HealthSouth Properties, LLC (the “Company”) dated as of this 26^th day of April, 2007, by HealthSouth Corporation, as the sole member of the Company (the “Member”).

RECITAL

The Member has formed the Company as a limited liability company under the laws of the State of Delaware and desires to enter into a written agreement, in accordance with the provisions of the Delaware Limited Liability Company Act and any successor statute, as amended from time to time (the “Act”), governing the affairs of the Company and the conduct of its business.

ARTICLE I

THE LIMITED LIABILITY COMPANY

1.1 Formation. The Member has previously formed the Company as a limited liability company pursuant to the provisions of the Act upon the conversion of HealthSouth Properties Corporation, a Delaware corporation, to a Delaware limited liability company pursuant to Section 266 of the General Corporation Law of the State of Delaware and Section 18-214 of the Act. A certificate of formation for the Company as described in Section 18-201 of the Act (the “Certificate of Formation”) has been filed in the Office of the Secretary of State of the State of Delaware in conformity with the Act.

1.2 Name. The name of the Company shall be “HealthSouth Properties, LLC” and its business shall be carried on in such name with such variations and changes as the Board (as hereinafter defined) shall determine or deem necessary to comply with requirements of the jurisdictions in which the Company’s operations are conducted.

1.3 Business Purpose; Powers. The Company is formed for the purpose of engaging in any lawful business, purpose or activity for which limited liability companies may be formed under the Act. The Company shall possess and may exercise all the powers and privileges granted by the Act or by any other law or by this Agreement, together with any powers incidental thereto, so far as such powers and privileges are necessary or convenient to the conduct, promotion or attainment of the business purposes or activities of the Company.

1.4 Registered Office and Agent. The location of the registered office of the Company shall be 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle. The Company’s Registered Agent at such address shall be Corporation Service Company.

1.5 Term. Subject to the provisions of Article 6 below, the Company shall have perpetual existence.

ARTICLE II

THE MEMBER

2.1 The Member. The name and address of the Member is as follows:

Name	Address
HealthSouth Corporation	One HealthSouth Parkway
	Birmingham, AL 35243

2.2 Actions by the Member; Meetings. The Member may approve a matter or take any action at a meeting or without a meeting by the written consent of the Member. Meetings of the Member may be called at any time by the Member.

2.3 Liability of the Member. All debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member.

2.4 Power to Bind the Company. The Member (acting in its capacity as such) shall have the authority to bind the Company to any third party with respect to any matter.

2.5 Admission of Members. New members shall be admitted only upon the approval of the Member.

ARTICLE III

THE BOARD

3.1 Management By Board of Managers.

(a) Subject to such matters which are expressly reserved hereunder or under the Act to the Member for decision, the business and affairs of the Company shall be managed by a board of managers (the “Board”), which shall be responsible for policy setting, approving the overall direction of the Company and making all decisions affecting the business and affairs of the Company. The Board shall consist of one (1) to fifteen (15) individuals (the “Managers”), the exact number of Managers to be determined from time to time by resolution of the Member. The initial Board shall consist of three (3) members, who shall be Jay Grinney, Michael D. Snow and John P. Whittington.

(b) Each Manager shall be elected by the Member and shall serve until his or her successor has been duly elected and qualified, or until his or her earlier removal, resignation, death or disability. The Member may remove any Manager from the Board or from

any other capacity with the Company at any time, with or without cause. A Manager may resign at any time upon written notice to the Member.

(c) Any vacancy occurring on the Board as a result of the resignation, removal, death or disability of a Manager or an increase in the size of the Board shall be filled by the Member. A Manager chosen to fill a vacancy resulting from the resignation, removal, death or disability of a Manager shall serve the unexpired term of his or her predecessor in office.

3.2 Action By the Board.

(a) Meetings of the Board may be called by any Manager upon two (2) days prior written notice to each Manager. The presence of a majority of the Managers then in office shall constitute a quorum at any meeting of the Board. All actions of the Board shall require the affirmative vote of a majority of the Managers then in office.

(b) Meetings of the Board may be conducted in person or by conference telephone facilities. Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting if such number of Managers sufficient to approve such action pursuant to the terms of this Agreement consent thereto in writing. Notice of any meeting may be waived by any Manager.

3.3 Power to Bind Company. None of the Managers (acting in their capacity as such) shall have authority to bind the Company to any third party with respect to any matter unless the Board shall have approved such matter and authorized such Manager(s) to bind the Company with respect thereto.

3.4 Officers and Related Persons. The Board shall have the authority to appoint and terminate officers of the Company and retain and terminate employees, agents and consultants of the Company and to delegate such duties to any such officers, employees, agents and consultants as the Board deems appropriate, including the power, acting individually or jointly, to represent and bind the Company in all matters, in accordance with the scope of their respective duties.

ARTICLE IV

CAPITAL STRUCTURE AND CONTRIBUTIONS

4.1 Capital Structure. The capital structure of the Company shall consist of one class of common interests (the “Common Interests”). All Common Interests shall be identical with each other in every respect. The Member shall own all of the Common Interests issued and outstanding.

4.2 Capital Contributions. From time to time, the Board may determine that the Company requires capital and may request the Member to make capital contribution(s) in an amount determined by the Board. A capital account shall be maintained for the Member, to which contributions and profits shall be credited and against which distributions and losses shall be charged.

ARTICLE V

PROFITS, LOSSES AND DISTRIBUTIONS

5.1 Profits and Losses. For financial accounting and tax purposes, the Company’s net profits or net losses shall be determined on an annual basis in accordance with the manner determined by the Board. In each year, profits and losses shall be allocated entirely to the Member.

5.2 Distributions. The Board shall determine profits available for distribution and the amount, if any, to be distributed to the Member, and shall authorize and distribute on the Common Interests, the determined amount when, as and if declared by the Board. The distributions of the Company shall be allocated entirely to the Member.

ARTICLE VI

EVENTS OF DISSOLUTIONS

The Company shall be dissolved and its affairs wound up upon the occurrence of any of the following events (each, an “Event of Dissolution”):

(a) The Member votes for dissolution; or

(b) A judicial dissolution of the Company under Section 18-802 of the Act.

ARTICLE VII

TRANSFER OF INTERESTS IN THE COMPANY

The Member may sell, assign, transfer, convey, gift, exchange or otherwise dispose of any or all of its Common Interests and, upon receipt by the Company of a written agreement executed by the person or entity to whom such Common Interests are to be transferred agreeing to be bound by the terms of this Agreement, such person shall be admitted as a member.

ARTICLE VIII

EXCULPATION AND INDEMNIFICATION

8.1 Exculpation. Notwithstanding any other provisions of this Agreement, whether express or implied, or any obligation or duty at law or in equity, none of the Member, Managers, or any officers, directors, stockholders, partners, employees, affiliates, representatives or agents of any of the foregoing, nor any officer of the Company (individually, a “Covered Person” and, collectively, the “Covered Persons”) shall be liable to the Company or any other person for any act or omission (in relation to the Company, its property or the conduct of its business or affairs, this Agreement, any related document or any transaction or investment involving the Company) taken or omitted by a Covered Person in the reasonable belief that such act or omission is in or is not contrary to the best interests of the Company and is within the scope of

authority granted to such Covered Person by the Agreement, provided such act or omission does not constitute fraud, willful misconduct, bad faith, or gross negligence.

8.2 Indemnification. To the fullest extent permitted by law, the Company shall indemnify and hold harmless each Covered Person from and against any and all losses, claims, demands, liabilities, expenses, judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative (“Claims”), in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, by reason of its management of the affairs of the Company or which relates to or arises out of the Company or its property, business or affairs. A Covered Person shall not be entitled to indemnification under this Section 8.2 with respect to (i) any Claim with respect to which such Covered Person has engaged in fraud, willful misconduct, bad faith or gross negligence or (ii) any Claim initiated by such Covered Person unless such Claim (or part thereof) (A) was brought to enforce such Covered Person’s rights to indemnification hereunder or (B) was authorized or consented to by the Board. Expenses incurred by a Covered Person in defending any Claim shall be paid by the Company in advance of the final disposition of such Claim upon receipt by the Company of an undertaking by or on behalf of such Covered Person to repay such amount if it shall be ultimately determined that such Covered Person is not entitled to be indemnified by the Company as authorized by this Section 8.2.

8.3 Amendments. Any repeal or modification of this Article 8 by the Member shall not adversely affect any rights of such Covered Person pursuant to this Article 8, including the right to indemnification and to the advancement of expenses of a Covered Person existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.

ARTICLE IX

MISCELLANEOUS

9.1 Tax Treatment. Unless otherwise determined by the Member, the Company shall be a disregarded entity for U.S. federal income tax purposes (as well as for any analogous state or local tax purposes), and the Member and the Company shall timely make any and all necessary elections and filings for the Company treated as a disregarded entity for U.S. federal income tax purposes (as well as for any analogous state or local tax purposes).

9.2 Amendments. Amendments to this Agreement and to the Certificate of Formation shall be approved in writing by the Member. An amendment shall become effective as of the date specified in the approval of the Member or if none is specified as of the date of such approval or as otherwise provided in the Act.

9.3 Severability. If any provision of this Agreement is held to be invalid or unenforceable for any reason, such provision shall be ineffective to the extent of such invalidity or unenforceability; provided, however, that the remaining provisions will continue in full force without being impaired or invalidated in any way unless such invalid or unenforceable provision or clause shall be so significant as to materially affect the expectations of the Member regarding this Agreement. Otherwise, any invalid or unenforceable provision shall be replaced by the

Member with a valid provision which most closely approximates the intent and economic effect of the invalid or unenforceable provision.

9.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to the principles of conflicts of laws thereof.

9.5 Limited Liability Company. The Member intends to form a limited liability company and does not intend to form a partnership under the laws of the State of Delaware or any other laws.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the day first above written.

HEALTHSOUTH CORPORATION
By:	/s/ John P. Whittington
Name: Title:	John P. Whittington Executive Vice President, General Counsel and Corporate Secretary

HEALTHSOUTH PROPERTIES, LLC
By:	/s/ Lucy C. Hicks
Name: Title:	Lucy C. Hicks Vice President and Assistant Secretary

EX-3.125

Exhibit 3.125

CERTIFICATE OF FORMATION

OF

HEALTHSOUTH REAL PROPERTY HOLDING, LLC

1. The name of the limited liability company is HealthSouth Real Property Holding, LLC.

2. The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle. The name of its registered agent at that address is Corporation Service Company.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation of HealthSouth Real Property Holding, LLC on this 20th day of April, 2007.

By:	/s/ Lucy Hicks
Name: Title:	Lucy Hicks Authorized Person

1

CERTIFICATE OF AMENDMENT

OF

HEALTHSOUTH REAL PROPERTY HOLDING, LLC

1. The name of the limited liability company is HealthSouth Real Property Holding, LLC.

2. The Certificate of Formation of the limited liability company is hereby amended as follows:

The registered office of the Limited Liability Company in the state of Delaware is hereby changed to Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware, 19801, in the county of New Castle.

The registered agent of the Limited Liability Company is hereby changed to The Corporation Trust Company.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment of HealthSouth Real Property Holding, LLC this 30^th day of April, 2007.

HealthSouth Real Property Holding, LLC
By:	/s/ Lucy Hicks
	Lucy Hicks Authorized Person

EX-3.126

Exhibit 3.126

LIMITED LIABILITY COMPANY AGREEMENT

OF

HEALTHSOUTH REAL PROPERTY HOLDING, LLC

THIS LIMITED LIABILITY COMPANY AGREEMENT (the “Agreement”) of HealthSouth Real Property Holding, LLC (the “Company”) dated as of this 20th day of April, 2007, by HealthSouth Corporation, as the sole member of the Company (the “Member”).

RECITAL

The Member has formed the Company as a limited liability company under the laws of the State of Delaware and desires to enter into a written agreement, in accordance with the provisions of the Delaware Limited Liability Company Act and any successor statute, as amended from time to time (the “Act”), governing the affairs of the Company and the conduct of its business.

ARTICLE I

THE LIMITED LIABILITY COMPANY

1.1 Formation. The Member has previously formed the Company as a limited liability company pursuant to the provisions of the Act upon the conversion of HealthSouth Real Property Holding Corporation, a Delaware corporation, to a Delaware limited liability company pursuant to Section 266 of the General Corporation Law of the State of Delaware and Section 18-214 of the Act. A certificate of formation for the Company as described in Section 18-201 of the Act (the “Certificate of Formation”) has been filed in the Office of the Secretary of State of the State of Delaware in conformity with the Act.

1.2 Name. The name of the Company shall be “HealthSouth Real Property Holding, LLC” and its business shall be carried on in such name with such variations and changes as the Board (as hereinafter defined) shall determine or deem necessary to comply with requirements of the jurisdictions in which the Company’s operations are conducted.

1.3 Business Purpose; Powers. The Company is formed for the purpose of engaging in any lawful business, purpose or activity for which limited liability companies may be formed under the Act. The Company shall possess and may exercise all the powers and privileges granted by the Act or by any other law or by this Agreement, together with any powers incidental thereto, so far as such powers and privileges are necessary or convenient to the conduct, promotion or attainment of the business purposes or activities of the Company.

1.4 Registered Office and Agent. The location of the registered office of the Company shall be 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle. The Company’s Registered Agent at such address shall be Corporation Service Company.

1.5 Term. Subject to the provisions of Article 6 below, the Company shall have perpetual existence.

ARTICLE II

THE MEMBER

2.1 The Member. The name and address of the Member is as follows:

Name	Address
HealthSouth Corporation	One HealthSouth Parkway Birmingham, AL 35243

2.2 Actions by the Member; Meetings. The Member may approve a matter or take any action at a meeting or without a meeting by the written consent of the Member. Meetings of the Member may be called at any time by the Member.

2.3 Liability of the Member. All debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member.

2.4 Power to Bind the Company. The Member (acting in its capacity as such) shall have the authority to bind the Company to any third party with respect to any matter.

2.5 Admission of Members. New members shall be admitted only upon the approval of the Member.

ARTICLE III

THE BOARD

3.1 Management By Board of Managers.

(a) Subject to such matters which are expressly reserved hereunder or under the Act to the Member for decision, the business and affairs of the Company shall be managed by a board of managers (the “Board”), which shall be responsible for policy setting, approving the overall direction of the Company and making all decisions affecting the business and affairs of the Company. The Board shall consist of one (1) to fifteen (15) individuals (the “Managers”), the exact number of Managers to be determined from time to time by resolution of the Member. The initial Board shall consist of three (3) members, who shall be Jay Grinney, Michael D. Snow and John P. Whittington.

(b) Each Manager shall be elected by the Member and shall serve until his or her successor has been duly elected and qualified, or until his or her earlier removal, resignation, death or disability. The Member may remove any Manager from the Board or from

any other capacity with the Company at any time, with or without cause. A Manager may resign at any time upon written notice to the Member.

(c) Any vacancy occurring on the Board as a result of the resignation, removal, death or disability of a Manager or an increase in the size of the Board shall be filled by the Member. A Manager chosen to fill a vacancy resulting from the resignation, removal, death or disability of a Manager shall serve the unexpired term of his or her predecessor in office.

3.2 Action By the Board.

(a) Meetings of the Board may be called by any Manager upon two (2) days prior written notice to each Manager. The presence of a majority of the Managers then in office shall constitute a quorum at any meeting of the Board. All actions of the Board shall require the affirmative vote of a majority of the Managers then in office.

(b) Meetings of the Board may be conducted in person or by conference telephone facilities. Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting if such number of Managers sufficient to approve such action pursuant to the terms of this Agreement consent thereto in writing. Notice of any meeting may be waived by any Manager.

3.3 Power to Bind Company. None of the Managers (acting in their capacity as such) shall have authority to bind the Company to any third party with respect to any matter unless the Board shall have approved such matter and authorized such Manager(s) to bind the Company with respect thereto.

3.4 Officers and Related Persons. The Board shall have the authority to appoint and terminate officers of the Company and retain and terminate employees, agents and consultants of the Company and to delegate such duties to any such officers, employees, agents and consultants as the Board deems appropriate, including the power, acting individually or jointly, to represent and bind the Company in all matters, in accordance with the scope of their respective duties.

ARTICLE IV

CAPITAL STRUCTURE AND CONTRIBUTIONS

4.1 Capital Structure. The capital structure of the Company shall consist of one class of common interests (the “Common Interests”). All Common Interests shall be identical with each other in every respect. The Member shall own all of the Common Interests issued and outstanding.

4.2 Capital Contributions. From time to time, the Board may determine that the Company requires capital and may request the Member to make capital contribution(s) in an amount determined by the Board. A capital account shall be maintained for the Member, to which contributions and profits shall be credited and against which distributions and losses shall be charged.

ARTICLE V

PROFITS, LOSSES AND DISTRIBUTIONS

5.1 Profits and Losses. For financial accounting and tax purposes, the Company’s net profits or net losses shall be determined on an annual basis in accordance with the manner determined by the Board. In each year, profits and losses shall be allocated entirely to the Member.

5.2 Distributions. The Board shall determine profits available for distribution and the amount, if any, to be distributed to the Member, and shall authorize and distribute on the Common Interests, the determined amount when, as and if declared by the Board. The distributions of the Company shall be allocated entirely to the Member.

ARTICLE VI

EVENTS OF DISSOLUTIONS

The Company shall be dissolved and its affairs wound up upon the occurrence of any of the following events (each, an “Event of Dissolution”):

(a) The Member votes for dissolution; or

(b) A judicial dissolution of the Company under Section 18-802 of the Act.

ARTICLE VII

TRANSFER OF INTERESTS IN THE COMPANY

The Member may sell, assign, transfer, convey, gift, exchange or otherwise dispose of any or all of its Common Interests and, upon receipt by the Company of a written agreement executed by the person or entity to whom such Common Interests are to be transferred agreeing to be bound by the terms of this Agreement, such person shall be admitted as a member.

ARTICLE VIII

EXCULPATION AND INDEMNIFICATION

8.1 Exculpation. Notwithstanding any other provisions of this Agreement, whether express or implied, or any obligation or duty at law or in equity, none of the Member, Managers, or any officers, directors, stockholders, partners, employees, affiliates, representatives or agents of any of the foregoing, nor any officer of the Company (individually, a “Covered Person” and, collectively, the “Covered Persons”) shall be liable to the Company or any other person for any act or omission (in relation to the Company, its property or the conduct of its business or affairs, this Agreement, any related document or any transaction or investment involving the Company) taken or omitted by a Covered Person in the reasonable belief that such act or omission is in or is not contrary to the best interests of the Company and is within the scope of

authority granted to such Covered Person by the Agreement, provided such act or omission does not constitute fraud, willful misconduct, bad faith, or gross negligence.

8.2 Indemnification. To the fullest extent permitted by law, the Company shall indemnify and hold harmless each Covered Person from and against any and all losses, claims, demands, liabilities, expenses, judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative (“Claims”), in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, by reason of its management of the affairs of the Company or which relates to or arises out of the Company or its property, business or affairs. A Covered Person shall not be entitled to indemnification under this Section 8.2 with respect to (i) any Claim with respect to which such Covered Person has engaged in fraud, willful misconduct, bad faith or gross negligence or (ii) any Claim initiated by such Covered Person unless such Claim (or part thereof) (A) was brought to enforce such Covered Person’s rights to indemnification hereunder or (B) was authorized or consented to by the Board. Expenses incurred by a Covered Person in defending any Claim shall be paid by the Company in advance of the final disposition of such Claim upon receipt by the Company of an undertaking by or on behalf of such Covered Person to repay such amount if it shall be ultimately determined that such Covered Person is not entitled to be indemnified by the Company as authorized by this Section 8.2.

8.3 Amendments. Any repeal or modification of this Article 8 by the Member shall not adversely affect any rights of such Covered Person pursuant to this Article 8, including the right to indemnification and to the advancement of expenses of a Covered Person existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.

ARTICLE IX

MISCELLANEOUS

9.1 Tax Treatment. Unless otherwise determined by the Member, the Company shall be a disregarded entity for U.S. federal income tax purposes (as well as for any analogous state or local tax purposes), and the Member and the Company shall timely make any and all necessary elections and filings for the Company treated as a disregarded entity for U.S. federal income tax purposes (as well as for any analogous state or local tax purposes).

9.2 Amendments. Amendments to this Agreement and to the Certificate of Formation shall be approved in writing by the Member. An amendment shall become effective as of the date specified in the approval of the Member or if none is specified as of the date of such approval or as otherwise provided in the Act.

9.3 Severability. If any provision of this Agreement is held to be invalid or unenforceable for any reason, such provision shall be ineffective to the extent of such invalidity or unenforceability; provided, however, that the remaining provisions will continue in full force without being impaired or invalidated in any way unless such invalid or unenforceable provision or clause shall be so significant as to materially affect the expectations of the Member regarding this Agreement. Otherwise, any invalid or unenforceable provision shall be replaced by the

Member with a valid provision which most closely approximates the intent and economic effect of the invalid or unenforceable provision.

9.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to the principles of conflicts of laws thereof.

9.5 Limited Liability Company. The Member intends to form a limited liability company and does not intend to form a partnership under the laws of the State of Delaware or any other laws.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the day first above written.

HEALTHSOUTH CORPORATION
By:	/s/ John P. Whittington
Name: Title:	John P. Whittington Executive Vice President, General Counsel and Corporate Secretary
HEALTHSOUTH REAL PROPERTY HOLDING, LLC
By:	/s/ Lucy Hicks
Name: Title:	Lucy Hicks Vice President and Assistant Secretary

EX-3.177

Exhibit 3.177

CERTIFICATE OF LIMITED PARTNERSHIP

NAME:	NORTHEAST SURGERY CENTER, LTD.
ADDRESS:	16100 Cairnway Suite 205 Houston, Texas 77084
REGISTERED AGENT:	Arthur Minguez
REGISTERED OFFICE & PRINCIPAL OFFICE	16100 Cairnway Suite 205 Houston, TX 77084
GENERAL PARTNER:	HFMH L.C. 16100 Cairnway Suite 205 Houston, TX 77084
General Partner
/s/Arthur Minguez, Jr.
Arthur Minguez, Jr.
Manager
HFMH, L.C.

EX-3.178

Exhibit 3.178

FIRST AMENDMENT TO

AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF

HEALTHSOUTH NORTHEAST SURGERY CENTER, LTD.

This First Amendment to Amended and Restated Limited Partnership Agreement of HEALTHSOUTH Northeast Surgery Center, Ltd., a Texas limited partnership (the “Partnership”) dated as of October 2, 2000 (this “Amendment”), is executed by NSC Houston, Inc., a Delaware corporation and the general partner (the “General Partner”) of the Partnership, and the Interim Limited Partner, as defined in the Amended and Restated Limited Partnership Agreement of the Partnership, dated April 9, 1999 (the “Partnership Agreement”).

WITNESSETH:

WHEREAS, the General Partner desires to decrease its general partner interest and to increase the maximum authorized number of Units of limited partnership interest, extend the term of the Limited Partner non-compete covenant, and provide for the mandatory redemption of Limited Partners’ Units in certain situations;

WHEREAS, the General Partner and the Interim Limited Partner are the sole parties to the Partnership Agreement; and

WHEREAS, pursuant to Section 16.02(b) of the Partnership Agreement, the General Partner and the Interim Limited Partner desire to amend the Partnership Agreement as described herein.

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

1. Amendments to the Partnership Agreement.

(a) The definition of “Maximum Number of Units” in Section 1.01 is hereby amended to read in its entirety as follows:

“Maximum Number of Units means 49 Units.”

(b) The last sentence in the definition of “Units” in Section 1.01 is hereby amended to read in its entirety as follows:

“There shall be a total of 49 Units available for issuance to the Additional Limited Partners.”

(c) The following sentence is hereby added at the end of Section 3.02(a):

“As a result of the First Amendment to this Agreement, the General Partner owns a 51% general partnership interest and 49 Units.”

(d) The following shall be added as the last sentence of Section 11.01:

“In the case of any attempted Transfer of a Unit or of an interest in a Unit by a Limited Partner in violation of this Agreement, such Limited Partner, or person or entity then holding the interest, will be required to offer his interest in the Partnership to the Partnership or the General Partner for $1.00. The Partnership shall have 30 days after the receipt of the offer in which to accept it. In addition, such a Limited Partner shall, upon demand made by the General Partner, pay to the Partnership any distributions he received pursuant to Article V hereof, plus (1) interest at the highest rate allowed by law from the date of such demand until the date of payment and (2) all costs of collection incurred by the General Partner, including, without limitation, attorney’s fees.

(e) Section 11.03 shall be amended by (i) adding the words “Retirement or” in the heading, (ii) adding the words “retirement or” immediately after the words “Upon the” in the first line, (iii) adding the words “retirement or” immediately before the word “death” in the fifth line; and (iv) the third sentence in Section 11.03 is hereby amended to read in its entirety as follows:

“The purchase price per Unit shall be equal to the lesser of the Limited Partner’s initial purchase price of his Unit(s) (the “Initial Purchase Price”) or the distributions of Available Cash per Unit for the twelve-month period preceding the date of the Limited Partner’s retirement or death.”

(f) Section 11.08 is hereby amended to replacing the words “sixty percent (60%)” with the words “fifty-one percent (51%)” in the last line.

(g) The following shall be added as Section 11.09:

“11.09 Relocation of Practice. Upon relocation of a Limited Partner’s practice outside of the Center’s market area, or otherwise upon the General Partner’s good faith determination, taking into account such facts and circumstances as the General Partner shall deem relevant, that the Limited Partner no longer uses the Center as an extension of his or her practice, then (provided such Limited Partner is not in violation of the non-compete provisions in Section 16.01, in which case the provisions of Section 16.01 shall apply), the General Partner may require the Limited Partner to transfer his or its Units(s) to the General Partner or the Partnership for an amount equal to the lesser of (x) distributions of Available Cash per Unit for the twelve-month period preceding the date of the General Partner’s delivery of notice that the Limited Partner has relocated his practice or otherwise no longer uses the Center as an extension of his practice; or (y) the Limited Partner’s Initial Purchase Price. The General Partner shall give the affected Limited Partner notice of any determination pursuant to this Section.

IN WITNESS WHEREOF, the undersigned has caused this Amendment to be executed by an officer thereunto duly authorized as of the day and year first written above.

GENERAL PARTNER
NSC Houston, Inc.
By:	/s/ [illegible signature]
Its:	Vice President
INTERIM LIMITED PARTNER
National Surgery Center, Inc.
By:	/s/ [illegible signature]
Its:	Vice President

LIMITED PARTNERSHIP AGREEMENT

OF

HEALTHSOUTH NORTHEAST SURGERY CENTER, LTD.

DATED AS OF APRIL 9, 1999

CONTENTS

		Page
	ARTICLE I
	DEFINITIONS
1.01	Definitions	1
1.02	Interpretation	4
	ARTICLE II
	FORMATION OF PARTNERSHIP
2.01	Formation	4
2.02	Name	5
2.03	Principal Office	5
2.04	Term	5
2.05	Purposes of the Partnership	5
2.06	Securities Law Legend	5
2.07	Discipline of Partnership Interest	5
	ARTICLE III
	CAPITAL CONTRIBUTIONS
3.01	Admission of Additional Limited Partners	5
3.02	Partnership Interests and Capital Contributions	6
3.03	Additional Capital Contributions	6
3.04	Liability for Negative Capital Accounts	6
3.05	No Interest on Contributions	6
3.06	Loans	7
	ARTICLE IV
	ADJUSTMENT OF CAPITAL ACCOUNTS AND PROFITS AND LOSSES
4.01	Allocations Subsequent to the Admission of Additional Limited Partners	7
4.02	General Partner Allocations	8
4.03	Tax Items	8
4.04	Partial Year Allocations	8
4.05	Allocations and Distributions Upon Dissolution	8
	ARTICLE V
	DISTRIBUTIONS
5.01	General Distribution	9
5.02	Distributions Upon Dissolution	9
5.03	Withholding	9

5.04	Liability of General Partner	9
	ARTICLE VI
	POWERS, DUTIES AND RIGHTS OF GENERAL PARTNER
6.01	Powers of General Partner	9
6.02	Duties of and Decisions by General Partner	11
6.03	Medical Director	11
6.04	Medical Executive Committee	11
6.05	Related Party Transactions	12
6.06	Reliance on Authority of General Partner	12
	ARTICLE VII
	LIMITATION ON LIABILITY AND INDEMNIFICATION OF GENERAL PARTNER
7.01	Limitation of Liability of the General Partner	12
	ARTICLE VIII
	POWERS AND RIGHTS OF LIMITED PARTNERS
8.01	Powers and Rights	13
8.02	Liability	13
	ARTICLE IX
	COMPENSATION AND REIMBURSEMENTS
9.01	Out-of-Pocket Reimbursements	13
9.02	Reimbursement for Organization and Start-up Expenses	13
9.03	Management Agreement	13
9.04	Medical Director	13
	ARTICLE X
	ACCOUNTING, BOOKS AND RECORDS
10.01	Accounting Method	14
10.02	Books and Records	14
10.03	Financial Statements	14
10.04	Tax Returns	14
10.05	Tax Matters Partner	14
	ARTICLE XI
	TRANSFERS, ASSIGNMENTS AND REDEMPTIONS BY PARTNERS
11.01	General Prohibition	14
11.02	Conditions of Transfer	15
11.03	Death of Limited Partner	16
11.04	Fraud and Abuse	16

11.05	ERISA	17
11.06	Transfer of Interest in Limited Partner	17
11.07	Right of First Refusal Granted to General Partner	18
11.08	Redemption of Units from General Partner	18
	ARTICLE XII
	DISQUALIFICATION
12.01	Limited Partners	18
12.02	General Partner	18
12.03	Disqualification	19
	ARTICLE XIII
	DISSOLUTION OF PARTNERSHIP
13.01	Events of Dissolution	19
	ARTICLE XIV
	DISTRIBUTIONS UPON DISSOLUTION
14.01	Liquidation	20
14.02	Distributions in Kind	20
14.03	Action for Dissolution	21
14.04	No Further Claim	21
	ARTICLE XV
	POWER OF ATTORNEY
15.01	Appointment	21
	ARTICLE XVI
	MISCELLANEOUS
16.01	Restrictions on Relationships of Limited Partners with Competitors	21
16.02	Amendments by the General Partner	22
16.03	Additional Documents	22
16.04	Notices	23
16.05	Applicable Law	23
16.06	Entire Agreement	23
16.07	Severability	23
16.08	Successors	23
16.09	Counterparts	23
16.10	Headings	23
16.11	Acceptance of Prior Acts by New Partner	23
16.12	Partnership Property	23
16.13	Meetings	24
16.14	Gender and Number	24

AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT

OF

HEALTHSOUTH NORTHEAST SURGERY CENTER, LTD.

THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT is entered into as of the 9^th day of April 1999 by and between, NSC Houston, Inc., a Texas corporation (hereinafter referred to as the “General Partner”), and National Surgery Center, Inc., a Delaware corporation (hereinafter referred to as the “Interim Limited Partner”).

W I T N E S S E T H:

WHEREAS, the Partnership was formed and governed in accordance with the Limited Partnership Agreement of Northeast Surgery Center, Ltd., dated December 1, 1994, ad amended (the “First Agreement”); and

WHEREAS, the parties desire to amend and restate in full the terms and conditions of the First Agreement.

NOW, THEREFORE, in consideration of the foregoing, of the mutual promises, obligations and agreements set forth herein, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

ARTICLE I

DEFINITIONS

1.01 Definitions. For purposes of this Agreement, the following capitalized terms shall have the following respective meanings.

“Act” means the Texas Revised Limited Partnership Act.

“Additional Limited Partner” means any Person who purchase all or part of a Unit and is admitted to the Partnership pursuant to Sections 3.01 and 3.02 hereof.

“Affiliate” means a Person or Persons directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with the Person(s) in question. The term “control,” as used in the immediately preceding sentence, means, with respect to a Person that is a corporation, the right to the exercise, directly or indirectly, of more than 50% of the voting rights attributable to the shares of such controlled corporation and, with respect to a Person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such controlled Person.

“Available Cash” means, with respect to any point in time, all cash of the Partnership on hand as of such point in time, after the payment of all then due debts and liabilities of the

Partnership and after any prepayments of any debts and liabilities of the Partnership that the General Partner deems appropriate to cause the Partnership to make, less any reserves reasonably deemed necessary by the General Partner, consistent with the provisions of this Agreement, for (a) the repayment of any debts or liabilities of the Partnership, (b) the working capital or other requirements of the Partnership, and (c) any contingent or unforeseen liabilities of the Partnership.

“Business” means the development and operation of the Center.

“Capital Account” of a Partner means a capital account established, maintained, and adjusted in accordance with Treasury Regulations section 1.704-1(b)(2)(iv). Consistent therewith, each Partner’s Capital Account will be adjusted from time to time pursuant to Section 4.01 hereof, the purpose of which is to set forth certain operating rules for the allocation of book items of income, gain, loss and deduction for Capital Account purposes. The provisions of Section 4.01 shall be construed in a manner consistent with Treasury Regulations section 1.704-1(b)(2)(iv). The Capital Accounts shall not be adjusted for items as they are computed and allocated to the Partners solely for federal income tax purposes. Upon the transfer hereunder of all or part of a Partner’s Units, other than a transfer that terminates the Partnership within the meaning of Code Section 708(b)(1)(B) and other than a sale of Limited Partner Units held by the General Partner, the Capital Account of the transferor Partner that is attributable to the transferred Units will carry over to the transferee Partner.

“Capital Ratio” means at any particular time with respect to a Limited Partner, the ratio of such Limited Partner’s Units to the total number of General and Limited Partner Units outstanding or available for issuance to Additional Limited Partners. “Capital Ratio” means, at any particular time with respect to the General Partner, a fraction, the/numerator of which is the total number of General and Limited Partner Units outstanding or available for issuance to Additional Limited Partners less the number of Units held by Limited Partners, and the denominator of which is the total number of General and Limited Partner Units outstanding or available for issuance to Additional Limited Partners.

“Center” means the outpatient surgery center to be operated by the Partnership in Humble, Texas.

“Certificate” means the certificate of limited partnership required to be filed pursuant to the Act.

“Code” means the Internal Revenue Code of 1986, as amended, including effective date and transition rules (whether or not codified), and any successor thereto. Any reference to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of succeeding law.

“Commencement Date” means the date upon which the Partnership began operating the Center.

“Fiscal Year” of the Partnership means the calendar year.

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“General Partner” means NSC Houston, Inc., a Texas corporation, so long as it remains the General Partner, and thereafter shall mean any Person who is admitted to the Partnership as a general partner in accordance with the provisions of Articles XI or XII hereof.

“Initial Closing Date” shall have the meaning ascribed in the Memorandum.

“Limited Partners” means the Interim Limited Partner, the Additional Limited Partners, the General Partner in its capacity as a Limited Partner pursuant to Section 3.01 hereof and following the conversion of its General Partner Unit to Limited Partner Units pursuant to Section 12.02 hereof; and shall also mean each Person to whom all or any portion of the Units of any of such Persons is transferred or assigned and who is admitted to the Partnership as a substituted Limited Partner in accordance with the provisions of Section 11.02 hereof.

“Maximum Number of Units” means 40 Units.

“Medical Director” means an individual appointed from time to time by the General Partner, who will be responsible for medical quality control matters, as more particularly described in Section 6.03 hereof.

“Medical Executive Committee” means a standing committee of the medical staff of the Center consisting of the Medical Director, elected officers of the medical staff and one or more additional members of the medical staff. The Medical Executive Committee shall supervise the medical staff and provide the Partnership and the General Partner with counsel and advice concerning the medical standards and practices of the Center, as more particularly described in Section 6.04 hereof.

“Memorandum” means a Confidential Private Placement Memorandum to be used in the offering of Units in the Partnership.

“Net Profits” and “Net Losses” mean the Partnership’s taxable income or loss determined in accordance with Code Section 703(a) for each of its Fiscal Years (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) will be included in taxable income or loss) with the following adjustments: (i) such Net Profits and Net Losses will be computed as if items of tax-exempt income and nondeductible, noncapital expenditures (under Code Section 705(a)(1)(B) and 705(a)(2)(B)) were included in the computation of taxable income or loss; (ii) that any items specially allocated pursuant to Section 4.01(b) hereof shall not be taken into account in computing Net Profits or Net Losses; (iii) if any Partner contributes property to the Partnership with an initial book value to the Partnership different from its adjusted basis for federal income tax purposes to the Partnership, or if Partnership property is revalued in accordance with Treasury Regulations section 1.704-1(b)(2)(iv)(f) or as otherwise required by the Regulations, Net Profits and Net Losses will be computed as if the initial adjusted basis for federal income tax purposes to the Partnership of such contributed or revalued property equaled its initial book value to the Partnership as of the date of contribution or revaluation; and (iv) credits or debits to Capital Accounts due to a revaluation of Partnership assets in accordance with Treasury Regulations section 1.704-1(b)(2)(iv)(f), or due to a distribution of noncash assets as provided in Section 14.02 hereof, will be taken into account as gain or loss from the disposition of such assets for purposes of computing Net Profits and Net Losses.

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“Net Revenues” means the gross revenues of the Partnership minus contractual adjustments and bad debts.

“Offering” means the offering of Units on the terms set forth in a Memorandum approved by the General Partner for such purpose.

“Partners” means, collectively, the General Partner and Limited Partners; reference to a Partner means any one of the General Partner or Limited Partners.

“Partnership Interest” means with respect to each Partner, the Partner’s entire ownership interest in the Partnership acquired by such Partner pursuant to the terms hereof, including the right of such Partner to any and all benefits to which it may be entitled as provided hereunder or in the Act, together with the obligation of such Partner to comply with all the terms hereof.

“Person” means an individual, partnership, joint venture, association, corporation, trust, limited liability company or any other legal entity.

“Subscription Agreement” shall have the meaning ascribed to it in the Memorandum.

“Tax Decision” shall mean the determination: (a) based on advice of counsel, to amend the provisions of this Agreement to the minimum extent necessary to ensure that the allocations set forth in Article IV hereof for federal income tax and Capital Account purposes are respected by the Internal Revenue Service and otherwise remain in compliance with applicable law; (b) to make any election under the Code including without limitation, an election under Code Section 754; (c) to change the accounting method or Fiscal Year of the Partnership for tax purposes; (d) to cause a revaluation of the Partnership’s assets, consistent with Treasury Regulations section 1.704-1(b)(2)(iv)(f); and (e) of any other matter relating to Partnership tax accounting or other tax issues.

“Unit” means one of the units of investment in the Partnership acquired by a Partner amid includes both General Partner Units and Limited Partner Units. There shall be a total of 40 Units available for issuance to the Additional Limited Partners.

1.02 Interpretation. The terms defined in this Article I shall include the plural as well as the singular. Other capitalized terms used in this Agreement and not defined in this Article I shall have the meanings ascribed to such terms elsewhere in this Agreement. Some lower case terms that appear throughout this Agreement also appear above in this Article I and elsewhere in this Agreement as capitalized terms. Only when such terms appear as capitalized terms shall such terms have the meanings ascribed to such capitalized terms in this Agreement.

ARTICLE II

FORMATION OF PARTNERSHIP

2.01 Formation. The Partnership was formed on December 1, 1994 and hereby continues as a limited partnership pursuant to the Act.

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2.02 Name. The name of the Partnership is, and the Business of the Partnership shall be conducted under, the firm name and style: HEALTHSOUTH Northeast Surgery Center, Ltd.

2.03 Principal Office. The principal office of the Partnership will be located at 18929 Highway 59, Humble, Texas 77338, or at such other place as the General Partner from time to time designates by written notice to the Limited Partners. The Partnership may have additional offices at such other places as the General Partner deem advisable.

2.04 Term. The Partnership will commence on the date when the Certificate has been duly filed pursuant to the Act and will continue until December 1, 2018, unless sooner terminated as hereinafter provided.

2.05 Purposes of the Partnership. The purposes of the Partnership are to engage in the Business and to engage in any and all activities related thereto.

2.06 Securities Law Legend. THE UNITS HAVE BEEN ISSUED OR SOLD IN RELIANCE ON EXEMPTIONS FROM REGISTRATION CONTAINED IN TIDE TEXAS, SECURITIES LAW AND BUSINESS OPPORTUNITY INVESTMENT ACT AND/OR THE RULES AND REGULATIONS PROMULGATED THEREUNDER, AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION UNDER SUCH ACT. In addition, the Units have been issued or sold in reliance on exemptions from registration contained in the Securities Act of 1993, as amended, and/or the rules and regulations promulgated thereunder, as amended (collectively, the “1933 Act”). Accordingly, the Units under the 1933 Act are deemed to be “restricted securities” and may not be sold or transferred except in a transaction which is exempt from the registration requirements of the 1933 Act, or pursuant to an effective registration statement under the 1933 Act or in a transaction which is otherwise in compliance with the 1933 Act. The Partnership will be under no obligation to register any of the Units under any federal or state securities laws, or to take any action necessary in order to establish an exemption from the registration requirements of any such laws.

2.07 Discipline of Partnership Interest. Each Limited Partner shall disclose his participation in the Partnership to any individuals referred to or treated at the Center by such Limited Partner. Such disclosures shall be in a forte which complies with all applicable federal and state laws governing the disclosure of a Limited Partner’s ownership interest in a health care facility.

ARTICLE III

CAPITAL CONTRIBUTIONS

3.01 Admission of Additional Limited Partners. The General Partner will have the right to admit such Persons as Additional Limited Partners as it deems advisable, in its discretion, and in accordance with the terms and conditions set forth in this Agreement. The General Partner or any officer, director or shareholder in the General Partner may acquire Units pursuant to this Section 3.01, and in his or its capacity as such, will have the same rights and be subject to the same obligations as other such Additional Limited Partners; provided, however, that nothing contained in this Section 3.01 shall be deemed to reduce any of the liability of the General Partner as such under this Agreement.

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3.02 Partnership Interests and Capital Contributions. The interests in the Partnership shall be as follows:

(a) The Partnership was capitalized by HFMH, L.C., a Texas limited liability company, (the “Original General Partner”) and certain Limited Partners. Pursuant to the First Amendment of the Limited Partnership Agreement, dated September 1, 1996, the General Partner purchased one-half the partnership interest owned by the Original General Partner. Pursuant to the Second Amendment of the Amended and Restated Limited Partnership Agreement, dated December 1, 1997, the General Partner purchased the remaining partnership of the Original General Partner and one half of the partnership interests owned by the Limited Partners. During March 1999, the General Partner purchased the remaining limited partnership interests owned by the Limited Partners. As a result of these contributions and transactions, the General Partner owns a 60% general partnership interest and 40 Units.

(b) An Interim Limited Partner interest for which the Interim Limited Partner has contributed to capital of the Partnership the sum of $100.00 The Interim Limited Partner’s interest shall be redeemed for $100.00 upon the admission of the first Additional Limited Partner.

(c) Not more than the Maximum Number of Units nor less than one Unit; provided, however, that the number of Units under this Section 3.02(c) shall be equal to the number of Units actually subscribed for and purchased by Additional Limited Partners. Each Additional Limited Partner shall make a capital contribution to the Partnership in cash or other form of consideration acceptable to the General Partner for each Unit subscribed for and purchased by such Additional Limited Partner, in accordance with the terms and conditions of the Memorandum. No more than the Maximum Number of Units shall be sold pursuant to an offering of Units as described in a Memorandum.

3.03 Additional Capital Contributions. No Partner shall be required to make any additional capital contributions to the Partnership.

3.04 Liability for Negative Capital Accounts. Upon dissolution and final liquidation of the Partnership pursuant to Articles XIII and V hereof, the General Partner shall be liable for the payment to the Partnership of any negative balance which may exist in its Capital Account after such Capital Account has been adjusted for all allocations of deductions, losses and distributions as provided herein. To the extent possible such payment shall be made within the time period prescribed by Treasury Regulations section 1.704-1(b)(2)(ii)(b)(3). No Limited Partner shall have any liability for restoration of any negative Capital Account balance.

3.05 No Interest on Contributions. No Partner will be entitled to receive interest on its capital contributions.

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3.06 Loans. In the event the General Partner determines in good faith that funds in excess of those provided to the Partnership pursuant to the preceding Sections of this Article III are necessary for maintaining and protecting the Partnership’s assets or conducting its Business, the Partnership shall be authorized to borrow funds from Partners and their Affiliates, provided that the interest rate and other terms of such loans are no less favorable to the Partnership than the Partnership could have secured from third parties. If any Partner, or Affiliate of a Partner, lends money to the Partnership pursuant to this Section 3.06, such Partner or Affiliate shall be deemed an unrelated creditor with respect to such loan to the extent allowed by law.

ARTICLE IV

ADJUSTMENT OF CAPITAL ACCOUNTS AND

PROFITS AND LOSSES

4.01 Allocations Subsequent to the Admission of Additional Limited Partners.

(a) General Tax Allocations. As of the end of each Fiscal Year, and after giving effect to the special tax allocations set forth in Section 4.01(b), Net Profits and Net Losses shall be allocated among the Partners for federal income tax purposes in accordance with their Capital Ratios.

(b) Special Allocations. At the end of each Fiscal Year of the Partnership and notwithstanding any other provision of this Section 4.01, the following special allocations shall be made for both Capital Account and for federal income tax purposes unless otherwise provided:

(i) In accordance with the ordering rules of Treasury Regulation section 1.704-2(j), items of gross income and realized gain first shall be allocated in an amount and in a manner that complies with the “chargeback” requirement of Treasury Regulation section 1.704-2(i)(4), the “qualified income offset” requirement of Treasury Regulation section 1.704-1(b)(2)(ii)(d), and the “minimum gain chargeback” requirement of Treasury Regulation section 1.704-2(f). Further, any “partner nonrecourse deductions within the meaning of Treasury Regulation section 1.704-2(i)(2) attributable to “partner nonrecourse debt” shall be allocated to the Partner who bears the “economic risk of loss” for such debt in accordance with Treasury Regulation section 1.704-2(i). If a Partner receives an allocation under this paragraph (i), to the extent possible the Partnership shall adjust allocations of other items to the Partners in the current, and to the extent necessary, future accounting periods, so as to place the Partners in as nearly as possible the same position as though these provisions were not a part of this Agreement.

(ii) If a taxing authority ignores the characterization of any amounts paid to a Partner (or an Affiliate thereof) as salaries, management fees, commissions or other compensation for services (“Compensation”), and refuses to treat such payments as either guaranteed payments within the meaning of Code Section 707(c) or payments made to such Partner other than in such Partners capacity as a Partner within the meaning of Code Section 707(a), and such taxing

7

authority ultimately treats such amounts paid to a Partner (or an Affiliate thereof) as a distribution to such Partner for federal income tax purposes which reduces such Partner’s Capital Account, then the Compensation shall be treated as an allocation of an item of income or gain of the Partnership to the recipient Partner so that, consistent with the intent of the Partners, the Compensation shall not be treated as a distribution which reduces the recipient Partner’s Capital Account. Accordingly, such Partner shall be allocated the first available items of Partnership income and gain (including in a succeeding year) in a amount equal to the Compensation.

(iii) If the Partnership owns (a) any property contributed by a Partner that had a fair market value different from its adjusted basis for federal income tax purposes on the date of the contribution or (b) any property that has been revalued pursuant to Treasury Regulation section 1.704-1(b)(2)(iv)(f), then for federal income tax purposes only and not for Capital Account purposes, any income, gain, loss or deduction with respect to such property shall be allocated among the Partners in accordance with Code Section 704(c) and the Treasury Regulations thereunder.

4.02 General Partner Allocations. To the extent the allocations language in this Article IV does not otherwise provide for allocations to General Partner Units, such allocations shall be on a Limited Partner Unit equivalent basis.

4.03 Tax Items. Except as otherwise provided herein, any allocation to a Partner of a portion of the Net Profits or Net Losses for a Fiscal Year (or other relevant period) will be deemed to be an allocation to that Partner of the same proportionate part of each item of income, gain, loss, deduction or credit that is earned, realized or available by or to the Partnership for federal income tax purposes.

4.04 Partial Year Allocations. In the event that a Limited Partner is admitted to the Partnership during the Partnership’s Fiscal Year, or all or a portion of a Limited Partner’s Units are transferred during the Partnership’s Fiscal Year, Net Profits and Net Losses shall be allocated to the admitted or transferee Limited Partner in any manner permitted by Code Section 706 or the Treasury Regulations thereunder, as the General Partner shall determine in its discretion. Allocations made in this Article IV shall be made to each holder of a Unit whether or not the holder is a substituted Limited Partner.

4.05 Allocations and Distributions Upon Dissolution. When the Partnership is dissolved and wound-up pursuant to Article XIV hereof, all items of income, gain, loss and deduction not previously allocated shall be allocated to the Partners pursuant to this Article IV. It is the intent of the parties hereto that after the allocations described in the previous sentence are made and the final cash distribution referred to in Section 14.01(d) is made, that such actions will result in the Capital Account balances of the Partners equaling zero following the dissolution of the Partnership. The allocation and distribution provisions of Articles IV and V hereof, respectively, of this Agreement, as well as the provisions of Article XIV hereof, shall be construed in such a way by the General Partner in order to achieve this result.

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ARTICLE V

DISTRIBUTIONS

5.01 General Distribution. The Partnership may distribute Available Cash in the discretion of the General Partner. The General Partner expects to make such distributions at least quarterly. Such distributions shall be made pro rata along the Partners in accordance with their respective Capital Ratios; provided, however, that the General Partner, in its sole discretion, shall have the right to take into account the length of time a Partner bas held its Units in any period relating to a distribution in determining the proportionate amount of such Partner’s respective distributions.

5.02 Distributions Upon Dissolution. Notwithstanding anything herein to the contrary, upon the occurrence of an event of dissolution as provided in Section 13.01 hereof, cash distributions occurring in connection with such event of dissolution and thereafter shall be made in accordance with Article XIV hereof.

5.03 Withholding. The General Partner shall be authorized to withhold from amounts to be distributed to any Partner hereunder any withholding required by the Code or any provision of any statute or local tax law, and to pay such amounts to the Internal Revenue Service or other appropriate taxing authority. Any such amounts withheld shall be treated as having been distributed to such Partner pursuant to this Article V for all purposes of this Agreement.

5.04 Liability of General Partner. Upon the determination in good faith to pay and distribute cash in the manner herein provided, the General Partner shall incur no liability on account of such distribution, even though such distribution may result in the Partnership retaining insufficient funds for the operation of its Business, which insufficiency results in loss to the Partnership or the borrowing of funds by the Partnership.

ARTICLE VI

POWERS, DUTIES AND RIGHTS OF GENERAL PARTNER

6.01 Powers of General Partner. Except as specifically provided herein, all references to any action to be taken by the Partnership shall mean action taken in the name of the Partnership and on its behalf by the General Partner. Except as specifically provided herein, the General Partner will have the rights, powers and authority of a general partner as set forth in the Act and will have full, exclusive and complete discretion in the management and control of the Partnership and will make all decisions affecting the Partnership’s Business and affairs. By way of illustration and not in limitation of the foregoing, the General Partner has the power and authority, on behalf of the Partnership:

(a) To execute all agreements and other documents necessary to implement the purposes of the Partnership, and to take such actions as may be necessary to consummate the transactions contemplated thereby;

(b) To engage personnel and professional advisers, and do such other acts and incur such other expenses on behalf of the Partnership as may be necessary or advisable in connection with the conduct of its Business and affairs;

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(c) To open, maintain and close accounts, including margin accounts, with brokers and dealers, and to pay the customary fees and charges applicable to transactions in all such accounts;

(d) To open, maintain and close bank accounts and to draw checks and other orders for the payment of money;

(e) To make and execute all contracts, certificates and other legal documents relating to the Partnership’s Business or organization, either personally or through agents selected by the General Partner, whether or not compensated by the Partnership (including management agreements to execute and carry out the powers of the General Partner);

(f) To borrow money and pledge assets of the Partnership to secure borrowings;

(g) To lend money and make investments;

(h) To compromise any claim or liability due to the Partnership;

(i) To execute, acknowledge, verify and file any notifications, applications, statements and other filings that the General Partner considers necessary or desirable to be filed with any state or federal securities administrator or commission;

(j) To make all Tax Decisions;

(k) To satisfy the requirements of the Code: (i) with respect to the Partnership’s allocations, (ii) with respect to the Partnership’s status as a partnership for federal income tax purposes, and (iii) to ensure that the Partnership is not treated as a “publicly traded partnership” described in Code Section 7704;

(l) To take any action described in Section 11.04 hereof in the event of an investigation of the Partnership under any applicable federal fraud and abuse statute, rule, regulation or law by either the Department of Health and Human Services or the United States Attorney;

(m) To acquire real or personal property as may be necessary in connection with the development and operation of the Center;

(n) To take any action described in Section 11.05 hereof in the event that any of the Partnerships assets are deemed to be assets of any ERISA plan which invests in the Partnership;

(o) To admit Additional Limited Partners in accordance with the provisions of this Agreement;

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(p) To conduct additional offerings of Units on behalf of the Partnership as the General Partner deems advisable, the terms and conditions of which shall be decided by the General Partner in its sole discretion;

(q) To admit a Person to the Partnership as a General Partner;

(r) To redeem the Units of any Limited Partner; and

(s) To exercise any and all other powers which may be necessary to implement the foregoing purposes, policies and powers of the Partnership including those granted to limited partnerships under the Act, upon such terms and conditions as the General Partner, in its sole discretion, determines to be necessary, desirable or appropriate.

6.02 Duties of and Decisions by General Partner. The General Partner shall be charged with the full responsibility of managing and promoting the Partnership’s purposes and Business. The General Partner shall cause its officers, directors and employees to devote the amount of their business time to the affairs and Business of the Partnership as in the General Partner’s judgment is reasonably required to perform its duties concerning the Business and affairs of the Partnership, taking into account business time required by other business activities of such Persons. The General Partner may, in its sole discretion, appoint such executive owners as it deems desirable to carry on the Business of the Partnership, and any such executive officer shall have the responsibilities expressly designated to him or her by the General Partner, subject to the restrictions on the General Partner’s authority contained in this Agreement. The General Partner and any Affiliate thereof may engage in or possess an interest in directly or indirectly, any other present or future business ventures or investments of any nature or description for its own account, independently or with others, including, but not limited to, any investment in any aspect of medical care delivery business or any other business engaged in by the Partnership and, inter alia, may become a general partner in other partnerships, and neither the Partnership nor any Partner shall have any rights in or to such investment or independent venture or the income or profits derived therefrom.

6.03 Medical Director. The General Partner shall appoint an individual to serve as the Partnership’s Medical Director from time to time. The Medical Director will be responsible for the Partnership’s medical quality control matters. The Medical Director must be a physician licensed to practice medicine in the state in which the Center is located. The Medical Director will receive a salary from the Partnership, as determined from time to time by the General Partner, in its sole discretion.

6.04 Medical Executive Committee. The Medical Executive Committee shall consist of the Medical Director, elected officers of the medical staff and one or more practitioners who are members of the medical staff. The practitioners on the Medical Executive Committee will be selected by the medical staff. The Medical Executive Committee is responsible for the general supervision of the medical staff. The Medical Executive Committee shall meet at least quarterly per year and provide counsel and advice to the Partnership and the General Partner concerning the medical standards and practices of the Center. ‘The Medical Executive Committee shall have no power to bind the Partnership. Its members shall receive no salary from the Partnership in such capacity.

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6.05 Related Party Transactions. The General Partner may employ and deal with any Partner (including itself} or any Affiliate of any Partner for the performance of other services or the purchase of other goods or property or the leasing of the same, provided that such other services, goods or property are reasonably necessary and customary in the Business of the Partnership and that any such other services, goods or property are obtained on terms no less favorable to the Partnership than those reasonably available from third Persons and provided that the Limited Partners are given notice of the terms of the transaction prior to its consummation. Neither the Partnership nor any Partner shall have any rights in or to any income or profits derived by any Partner or Affiliate from such other ventures or businesses as a result of entering into this Agreement.

6.06 Reliance on Authority of General Partner . No Person dealing with the General Partner will be required to determine the General Partner’s authority to make any undertaking on behalf of the Partnership or to determine any fact or circumstance bearing upon the existence of such authority.

ARTICLE VII

LIMITATION ON LIABILITY AND

INDEMNIFICATION OF GENERAL PARTNER

7.01 Limitation of Liability of the General Partner. The General Partner and its affiliates (as defined below for purposes of this Section 7.01) shall have no liability to the Partnership or to any Limited Partner for any loss suffered by the Partnership which arises out of any action or inaction of the General Partner or its affiliates, if the General Partner or its affiliates, in good faith, determined that such course of conduct was in the best interest of the Partnership and such course of conduct did not (i) constitute gross negligence or intentional misconduct on the part of the General Partner or its affiliates; or (ii) involve a transaction for which the General Partner or its affiliates received an improper personal benefit in violation or breach of any provision of this Agreement. The General Partner and its affiliates shall be indemnified by the Partnership to the extent of the Partnership’s assets against any losses, judgments, liabilities, expenses and amounts paid in settlement of any claims sustained by it in connection with the Partnership, provided that the same were not the result of gross negligence or intentional misconduct on the part of the General Partner or its affiliates, and did not involve a transaction for which the General Partner or its affiliates received an improper personal benefit in violation or breach of any provision of this Agreement. Notwithstanding the above, the General Partner and its affiliates shall not be indemnified for liabilities arising under federal and state securities laws unless (a) there has been a successful adjudication on the merits of each count involving securities laws violations; or (b) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction. The Partnership shall not incur the cost of the portion of any insurance which insures any party against any liability as to which such party is herein prohibited from being indemnified. For purposes of this Section 7.01, “affiliates” means any Person or entity performing services on behalf of the Partnership who: (y) directly or indirectly controls, is controlled by, or is under common control with, the General Partner, or (z) is an officer, director or shareholder of the General Partner.

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ARTICLE VIII

POWERS AND RIGHTS OF LIMITED PARTNERS

8.01 Powers and Rights. Except as specifically provided herein, the Limited Partners shall not take part in the conduct or control of the Partnership’s Business and affairs, and will have no right or authority to act or sign for or to obligate the Partnership; provided, however, that this Section 8.01 shall in no way limit the powers, duties, rights and obligations of a Limited Partner acting in its capacity as a General Partner. At no time will the Limited Partners be entitled to withdraw all or any part of their contributions to the capital of the Partnership except as provided in Articles V and XIV hereof. The Limited Partners will have no right to demand and receive any property other than cash in return for their contributions and, prior to the dissolution and liquidation of the Partnership pursuant to Articles XIII and XIV hereof, their right to cash shall be limited to the rights set forth in Article V hereof.

8.02 Liability. Except for payment of the subscription price for the Units, the Limited Partners shall not be bound by or personally liable to the Partnership, to the General Partner or to the creditors of the Partnership, for expenses, liabilities or obligations of the Partnership.

ARTICLE IX

COMPENSATION AND REIMBURSEMENTS

9.01 Out-of-Pocket Reimbursements. Direct out-of-pocket costs and expenses incurred by the General Partner or its Affiliates on behalf of the Partnership in conducting the Business will be reimbursed by the Partnership.

9.02 Reimbursement for Organization and Start-up Expenses. The Partnership will pay all costs incurred in the organization and formation of the Partnership, the development of the Center, the offering of Units in the Partnership and the exemption of such offering from registration under the Securities Act of 1933 and the Blue Sky laws of the various states in which such offering may be made, and all costs incurred in the investigation and creation of the Partnership’s trade or business prior to its formation. All of such costs will be reimbursed to the General Partner or its Affiliates to the extent that the General Partner or its Affiliates have already paid such costs.

9.03 Management Agreement. The General Partner is specifically authorized to enter into a management agreement with HEALTHSOUTH Corporation, a Delaware corporation (“HEALTHSOUTH”) under which HEALTHSOUTH will be responsible for assisting the General Partner with the day-to-day management of the Partnership. The Partnership will pay HEALTHSOUTH an annual management fee equal to (5%) of Net Revenues. Such management fee shall be paid monthly based on the Net Revenues of the immediately preceding month.

9.04 Medical Director. The Medical Director will receive the compensation described in Section 6.03 hereof.

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ARTICLE X

ACCOUNTING, BOOKS AND RECORDS

10.01 Accounting Method. The Partnership will maintain its books and records on such basis of accounting as the General Partner shall determine.

10.02 Books and Records. The General Partner shall keep, or cause to be kept, at the Partnership’s expense, full, complete and accurate books of account and other records showing the assets, liabilities, costs, expenditures, receipts and such other matters as are required by Section 14-9-105 of the Act. Such books of account will be the property of the Partnership, will be kept in accordance with sound accounting principles and procedures consistently applied and will be open to the reasonable inspection and examination by the Limited Partners and their duly authorized representatives. Such books of account will be maintained at the principal office of the Partnership, or at such other place as the General Partner determines.

10.03 Financial Statements. Within one hundred twenty (120) days following the end of each Fiscal Year of the Partnership, the General Partner shall cause to be prepared and delivered to each Partner unaudited financial statements of the Partnership for such Fiscal Year.

10.04 Tax Returns. The General Partner shall cause the Partnership’s tax returns and other governmental returns and reports to be prepared and timely filed. The General Partner shall deliver copies of Schedule K-1 of Form 1065 (or a comparable schedule) and other necessary tax information for each Fiscal Year to each Partner no later than ninety (90) days after the end of each Fiscal Year.

10.05 Tax Matters Partner. The General Partner, or such, other Partner as the General Partner, may designate, is hereby designated the Tax Matters Partner of the Partnership, as provided in Treasury Regulations pursuant to Code Section 6231. The Tax Matters Partner shall represent the Partnership (at the expense of the Partnership) in connection with all examinations of the affairs of the Partnership by any federal, state, or local tax authorities, including any resulting administrative and judicial proceedings, and to expend funds of the Partnership for professional services and costs associated therewith. The provisions on limitations of liability of the General Partner and the indemnification set forth in Section 7.01 hereof will be fully applicable to the Tax Matters partner in its capacity as such.

ARTICLE XI

TRANSFERS, ASSIGNMENTS AND REDEMPTIONS BY PARTNERS

11.01 General Prohibition. No Partner may assign, convey, sell, transfer, liquidate, encumber, or in any way alienate (collectively, a “Transfer”), all or any part of his or its Units or, in the event such Partner is a corporation, partnership or any other form of legal entity, such Partner may not Transfer or accept an offer to acquire all of its capital stock, partnership interests or its other form of equity investment interests (a Partner’s Units or a majority of its capital stock, partnership interests or other form of equity investment interests shall be collectively referred to herein as the “Ownership Interest”) unless such Transfer is (i) registered or exempt from registration under all applicable federal and state securities laws, and (ii) authorized by the General Farmer following waiver of its right of fast refusal set forth in Section 11.07 hereof,

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which authorization may be given or withheld by the General Partner in its sole and absolute discretion, regardless of whether it exercises such right of first refusal. If a Limited Partner’s Units are Transferred pursuant to the terms of this Agreement, the transferee shall, upon compliance with the provisions of Section 11.02, succeed to the transferred Units of the transferor Limited Partner and all rights, duties and obligations under this Agreement with respect to such transferred Units. Any attempted Transfer of all or any portion of a Limited Partner’s Units without the necessary consent, or as otherwise permitted hereunder, shall be null and void and shall have no effect whatsoever.

11.02 Conditions of Transfer. No transferee of the Units of a Limited Partner will become a substituted Limited Partner until the following conditions have been satisfied:

(a) the transferor Limited Partner must have executed a written instrument of transfer of such Units in form and substance satisfactory to the General Partner;

(b) the transferee must have executed a written agreement, in form and substance satisfactory to the General Partner, to assume all of the duties and obligations of the transferor Limited Partner under this Agreement and to be bound by and subject to all of the terms and conditions of this Agreement;

(c) the transferor Limited Partner and the transferee must have executed a written agreement, in form and substance satisfactory to the General Partner, to indemnify and hold the Partnership and the General Partner harmless from and against any loss or liability arising out of the transfer,

(d) the transferee must have executed a power of attorney substantially identical to that contained in Article XV hereof, and such other documents and instruments as the General Partner may deem necessary to effect the admission of the transferee as a Limited Partner;

(e) upon request by the General Partner, the transferor must have delivered to the Partnership a written opinion of counsel for the Partnership or of other counsel reasonably satisfactory to the General Partner (which opinion shall be obtained at the expense of the transferor) that such transfer will not result in: (i) a violation of applicable law or this Agreement, (ii) the Partnership being classified as an association taxable as a corporation, or (iii) unless waived by the General Partner, the Partnership being deemed terminated pursuant to Code Section 708 or any comparable future section of the Code; and

(f) unless otherwise waived by the General Partner, the transferee or transferor must have paid the expenses incurred by the Partnership in connection with the admission of the transferee to the Partnership.

A transferee who does not become a substituted Limited Partner will be entitled to receive only that portion of the distributions or allocations to which his transferor would otherwise be entitled, and such transferee will not be entitled to vote on any question regarding the Partnership, and his Units will not be considered to be outstanding for voting purposes but will be treated as outstanding for Article IV purposes.

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11.03 Death of Limited Partner. Upon the death of a Limited Partner, or all of the members or shareholders of a professional association or professional corporation which is a Limited Partner, the General Partner will have an option to purchase the Units of such Limited Partner. Such option will be exercisable, if at all, by the delivery of a written notice by the General Partner to such Limited Partner within the one year period following such death. The purchase price per Unit shall be equal to: (i) four (4) times, (ii) the Partnership’s Net Revenues for the preceding Fiscal Year, reduced by the Partnership’s operating expenses for such preceding Fiscal Year, multiplied by one percent (1%). The purchase price shall be payable twenty percent (20%) in cash at closing, and the balance by the General Partner’s promissory note payable in eight (8) equal quarterly installments of principal, the first of which is due three (3) months after closing. The unpaid balance of such promissory note shall bear interest at the rate announced from time to time as the “prime rate” by NationsBank, N.A., Atlanta, Georgia (or successor thereof). Accrued interest on the entire balance will be payable quarterly with each installment payment of principal.

11.04 Fraud and Abuse. In the event of an investigation of the Partnership or any Partner under any then applicable federal or state fraud and abuse statute, rule, regulation or law by the Department of Health and Human Services, the United States Attorney or any federal or state agency having jurisdiction over the Partnership, the General Partner, in its sole discretion, is authorized to: (i) terminate, liquidate and dissolve the Partnership, (ii) cause the Partnership to redeem all or any portion of the Units of any Limited Partners whose investment in the Partnership is determined by the General Partner to cause a fraud and abuse violation by the Partnership or such Limited Partner, (iii) cause a Limited Partner, in the event such Limited Partner is a corporation, partnership or other form of legal entity, to redeem any stockholder, partner or other investor in such Limited Partner whose investment is determined by the General Partner to cause a fraud and abuse violation by the Partnership or such Limited Partner, or (iv) amend this Limited Partnership Agreement pursuant to Section 16.02(a). In the event the General Partner causes a Limited Partner to redeem any stockholder, partner or other investor therein pursuant to (iii) above, the General Partner shall cause the Partnership to redeem from the Limited Partner that number of Units equal to the product of (A) such redeemed stockholder’s, per’s or other investor’s pro rata share of its equity investment interest in the Limited Partner, times (B) the aggregate number of Units owned by the Limited Partner, rounded to the nearest whole number. The redemption price of the Units payable to any such Limited Partner within three years of the Commencement Date shall be equal to the cash portion of such Limited Partner’s capital contribution, together with simple interest thereon from the date on which the Limited Partner’s subscription was accepted by the Partnership, calculated based on the interest rate payable on the most current one-year U.S. Treasury Bill. The redemption price of the Units payable to any Limited Partner after such three year period shall be equal to the fair market value thereof, as determined by an independent appraisal obtained at Partnership expense. At the option of the General Partner, such redemption price shall be paid in cash at closing or pursuant to the payment terms described in Section 11.03 herein. For federal income tax purposes, all of the Partners expressly intend that the redemption of Units held by Limited Partners by the Partnership shall be treated as a complete liquidation of such Partner’s Partnership Interest pursuant to Section 736 of the Code. The Partners further acknowledge that they have negotiated concerning the treatment of the fair market value of the Units being the redemption price (which may or may not approximate the Capital Account balance attributable to the Units redeemed) and that the redemption price shall be treated as being composed of both so-called “Section 736(a)

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payments” and also so-called “Section 736(b) payments” Having so negotiated, the Partners hereby agree that the fair market value redemption price shall first be treated as a Section 736(b) payment to the extent of the full fair market value of the redeemed Limited Partner’s “interest in partnership property” within the meaning of Code Section 736(b) and the Treasury Regulations thereunder, and the remaining portion of the fair market value redemption price is intended to constitute a Section 707(c) “guaranteed payment” which shall be treated as a Section 736(a) payment. The Partners further expressly agree among themselves that no portion of the redemption price is intended to be treated as a payment for goodwill under Section 736(b) of the Code. Finally, the interest accrued and paid on any unpaid portion of the redemption price shall be treated as a Section 707(c) guaranteed payment.

11.05 ERISA. In the event that any of the Partnership’s assets are deemed to be assets of any ERISA plan (or other plan subject to ERISA’s plan asset rules) which invests in the Partnership, the General Partner, in its sole discretion, is authorized to: (i) cause the Partnership to redeem the Units of any Limited Partner whose investment in the Partnership is determined by the General Partner to cause such Partnership assets to be deemed assets of an ERISA plan (ii) terminate, liquidate and dissolve the Partnership, or (iii) amend this Limited Partnership Agreement pursuant to Section 16.02(a). The redemption price of the Units payable to any such Limited Partner within three years of the Commencement Date shall be equal to the cash portion of such Limited Partner’s capital contribution, together with simple interest thereon from the date on which the Limited Partner’s subscription was accepted by the Partnership, calculated based on the interest rate payable on the most current one-year U.S. Treasury Bill. The redemption price of the Units payable to any Limited Partner after such three year period shall be equal to the fair market value thereof, as determined by an independent appraisal obtained at Partnership expense. At the option of the General Partner, such redemption price shall be paid in cash at closing or pursuant to the payment terms described in Section 11.03 herein. For federal income tax purposes, all of the Partners expressly intend that the redemption of Units held by Limited Partners by the Partnership shall be treated as a complete liquidation of such Partner’s Partnership Interest pursuant to Section 736 of the Code. The Partners further acknowledge that they have negotiated concerning the treatment of the fair market value of the Units being the redemption price (which may or may not approximate the Capital Account balance attributable to the Units redeemed) and that the redemption price shall be treated as being composed of both so-called “Section 736(a) payments” and also so called “Section 736(b) payments.” Having so negotiated, the Partners hereby agree that the fair market value redemption price shall first be treated as a Section 736(b) payment to the extent of the full fair market value of the redeemed Limited Partner’s “interest in partnership property” within the meaning of Code Section 736(b) and the Treasury Regulations thereunder, and the remaining portion of the fair market value redemption price is intended to constitute a Section 707(c) “guaranteed payment” which shall be treated as a Section 736(a) payment. The Partners further expressly agree among themselves that no portion of the redemption price is intended to be treated as a payment for goodwill under Section 736(b) of the Code. Finally, the interest accrued and paid on any unpaid portion of the redemption price shall be treated as a Section 707(c) guaranteed payment.

11.06 Transfer of Interest in Limited Partner. No Limited Partner that is a corporation, partnership or any other form of legal entity may transfer or accept an offer to acquire any of its capital stock, partnership interests or other form of equity investment interests in such Limited Partner without the prior written consent of the General Partner, which consent shall not be

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unreasonably withheld. Notwithstanding the foregoing, any such Limited Partner may, upon providing written notice to the General Partner, effect any such transfer to: (i) a physician, (ii) a professional corporation, partnership or association comprised solely of physicians, or (iii) upon the death of one owning an interest in such Limited Partner.

11.07 Right of First Refusal Granted to General Partner. No Partner may Transfer or accept an offer to acquire its Ownership Interest without first extending the offer to sell such Ownership Interest to the General Partner upon the same terns and at the same purchase price offered to the selling Partner. Such offer to the General Partner shall be in writing, shall include a copy of the offer to purchase received by the Partner or such other applicable terms of Transfer delivered in connection therewith and shall be irrevocable by the selling Partner for a period of thirty (30) days after the receipt thereof by the General Partner. In the event the General Partner rejects the offer or fails to exercise this right of first refusal within such thirty (30) day period, the selling Partner must consummate the sale upon the same terms presented to the General Partner within 180 days of such notice to the General Partner or such Transfer shall again be subject to the restrictions contained in this Section 11.07.

11.08 Redemption of Units from General Partner. The General Partner, in its sole discretion, shall have the authority to cause the Partnership to redeem any portion of its partnership interest in connection with the offering of Additional Limited Partner Units pursuant to Section 3.01; provided, however, that the General Partner does not reduce its interest in the Partnership to less than sixty percent (60%).

ARTICLE XII

DISQUALIFICATION

12.01 Limited Partners. The disqualification (as defined in Section 12.03) of a Limited Partner will not dissolve the Partnership. Upon the disqualification of a Limited Partner, any successor-in-interest of such Limited Partner will become an assignee of such Limited Partner’s Units and will be credited or charged with and/or paid, as the case may be, all future allocations and distributions on account of the Units of such Limited Partner; provided, however, that no such successor-in-interest will become a substituted Limited Partner without first complying with the provisions of Section 11.02 hereof.

12.02 General Partner. The General Partner may not retire or withdraw from the Partnership without the prior written consent of all Partners. If the General Partner retires or withdraws without the prior written consent of all Partners or becomes disqualified (the “Disqualified General Partner’), such Disqualified General Partner’s Units will automatically be converted into Limited Partner Units for all purposes thereafter, and the Partnership shall dissolve and thereafter conduct only activities necessary to wind up its affairs in accordance with the provisions of Article XIV hereof, unless, within ninety (90) days after the retirement, withdrawal or disqualification of the General Partner, the Limited Partners owning a majority of the Units owned by all Limited Partners (including the converted Disqualified General Partner) elect to continue the Partnership pursuant to the terms and provisions of this Agreement. Notwithstanding the preceding sentence, in the event of the conversion of a Disqualified General Partner to a Limited Partner, such conversion shall not relieve the Disqualified General Partner of any liabilities and obligations incurred by the Partnership prior to such conversion or any

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obligation to contribute cash to the capital of the Partnership pursuant to Section 3.04 hereof with respect to liabilities and obligations of the Partnership incurred by the Partnership prior to such conversion. In such event, the provisions of Section 4.01(b)(i) hereof shall continue to apply to such Disqualified General Partner as if such Disqualified General Partner were still a General Partner, to the extent of any negative Capital Account balance it may have as of the date of such conversion or may incur subsequent to such date with respect to liabilities and obligations incurred by the Partnership prior to such conversion. If a decision to continue the Partnership is made, then a new General Partner will be elected by vote of Limited Partners owning a majority of the Units owned by all Limited Partners (including the converted Disqualified General Partner). If the new General Partner was not previously a Limited Partner, it will receive such Partnership Interest as the Limited Partners electing it determine, and this Agreement shall be amended to reflect the Partnership Interest of such new General Partner.

12.03 Disqualification. For purposes of this Agreement, a Partner will be deemed to be “disqualified” upon the occurrence of any of the following events:

(a) If the Partner is a natural person, upon his death, his filing of a voluntary petition in bankruptcy, his adjudication as incompetent, bankrupt or insolvent, or his making an assignment for the benefit of creditors.

(b) If the Partner is not a natural person, upon its voluntary dissolution or liquidation, its filing of a voluntary petition in bankruptcy, its adjudication as bankrupt or insolvent, its making an assignment for the benefit of creditors, or its becoming subject to involuntary reorganization or liquidation proceedings.

(c) In the case of the General Partner, the retirement or withdrawal from the Partnership without the prior written consent of all Partners.

ARTICLE XIII

DISSOLUTION OF PARTNERSHIP

13.01 Events of Dissolution. The Partnership will be dissolved upon the first to occur of the following events:

(a) the expiration of the term of the Partnership set forth in Section 2.04 hereof;

(b) the failure of the Limited Partners to continue the Partnership after the disqualification of the General Partner in accordance with the provisions of Section 12.02 hereof;

(c) the exercise of the General Partner’s power to dissolve the Partnership pursuant to Sections 6.01(1) and 11.04 hereof; or

(d) the election to terminate the Partnership by the General Partner.

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ARTICLE XIV

DISTRIBUTIONS UPON DISSOLUTION

14.01 Liquidation. Upon dissolution of the Partnership for any reason, the Partnership shall promptly commence to wind up its affairs. A reasonable period of time will be allowed for the orderly termination of the Partnership’s Business, the discharge of its liabilities and the distribution or liquidation of its remaining assets so as to enable the Partnership to minimize the normal losses attendant to the liquidation process. A full accounting of the assets and liabilities of the Partnership as of the date of dissolution will be taken and a written statement thereof will be furnished to each Partner within sixty (60) days after such date. Such accounting and statement will be prepared under the direction of the General Partner or, if there is no General Partner, by a liquidating trustee selected by Limited Partners owning a majority of the Units. The Partnership’s property and assets and/or the proceeds from the liquidation thereof will be applied in the following order of priority;

(a) payment of the debts and liabilities of the Partnership, in the order of priority provided by law (excluding any loans by Partners or their Affiliates), and payment of the expenses of liquidation;

(b) payment of any and all loans made by Partners or their Affiliates to the Partnership, plus any accrued but unpaid interest thereon, which amount shall be applied first to interest and then to principal; provided, that in the event the Partnership’s funds are insufficient to satisfy fully all such loans, then all loans made by all Partners or their Affiliates shall be repaid on a pro rata basis;

(c) setting up of such reserves as the General Partner or liquidating trustee deems reasonably necessary for any contingent or unforeseen liabilities or obligations of the Partnership or any obligation, or liability not then due and payable; provided, any balance of such reserve, at the expiration of such period as the General Partner or liquidating trustee shall deem advisable, shall be distributed in the manner herein provided;

(d) distribution to the Partners, on a pro rata basis, of the positive balances of their Capital Accounts, adjusted to the date of distribution until such accounts are zero; and

(e) distribution to the Partners, on a pro rata basis, based upon their Capital Ratio.

14.02 Distributions in Kind. Any noncash asset to be distributed in kind (as a liquidating distribution or otherwise) to one or more Partners will first be valued at its fair market value to determine the gain or loss that would have resulted if such asset were sold for such value, and such gain or loss will then be allocated pursuant to Article IV hereof, and the Partners’ Capital Accounts shall be adjusted to reflect such gain or loss. The amount distributed and charged to the Capital Account of each Partner receiving an interest in such distributed asset shall be the fair market value of such interest (net of any liability secured by such asset that such Partner is considered to assume or take subject to under Code Section 752). The General Partner or liquidating trustee, as the case may be, shall determine the fair market value of such asset.

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14.03 Action for Dissolution. The Partners acknowledge that irreparable damage would be done to the goodwill and reputation of the Partnership if any Partner should bring an action in court to dissolve the Partnership. This Agreement has been drawn carefully to provide fair treatment of all parties and equitable payments in liquidation of the interests of all Partners. Accordingly, each Partner hereby waives and renounces his right to initiate legal action to seek dissolution, or to seek the appointment of a receiver or trustee to liquidate the Partnership.

14.04 No Further Claim. Upon dissolution, each Limited Partner will look solely to the assets of the Partnership for the return of his or its investment, and if the Partnership property remaining after payment or discharge of the debts and liabilities of the Partnership, including debts and liabilities owed to one or more of the Partners, in insufficient to return the aggregate capital contributions of each Limited Partner, such Limited Partners will have no recourse against the General Partner or any other Limited Partner.

ARTICLE XV

POWER OF ATTORNEY

15.01 Appointment. Each Limited Partner hereby irrevocably constitutes and appoints the General Partner as his or its true and lawful agent and attorney-in-fact, with full power of substitution, in his or its name, place and stead, to make, execute and acknowledge, swear to, record, publish and file:

(a) Any instruments with respect to the Partnership that are required to be filed under the laws of any state or of the United States, or which the General Partner deems advisable to file;

(b) Any and all amendments to this Agreement authorized hereunder; and

(c) All documents that are required to effectuate the redemption or transfer of Units or the dissolution and termination of the Partnership.

The foregoing power of attorney is coupled with an interest, is irrevocable and will survive the death, incompetency, dissolution, merger, consolidation, bankruptcy or insolvency of each of the Limited Partners. The Limited Partners shall execute and deliver to the General Partner, within five (5) days after receipt of the General Partner’s written request therefor, such further designations, powers of attorney and other instruments as the General Partner deems necessary to carry out the purposes of this Agreement.

ARTICLE XVI

MISCELLANEOUS

16.01 Restrictions on Relationships of Limited Partners with Competitors. No Limited Partner (or any member, shareholder or partner of a professional association, professional corporation, partnership or other entity which is a Limited Partner) shall have any direct or indirect ownership interest in any business or entity competing with the Partnership in the

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development, management or operation of an outpatient surgical care facility within a ten-mile radius of the Center during the time the Limited Partner is a limited partner of the Partnership and for a period of eighteen (18) months thereafter; provided, however, that no Limited Partner (or any member, shareholder or partner of a professional association, professional corporation, partnership or other entity which is a Limited Partner) shall be prevented from serving as a member of the medical staff, or holding any position on the medical staff, of any hospital. This provision shall not (i) restrict any Person from being able to perform outpatient surgery in his office or in any other location he may desire at any time, (ii) require the referral of patients to the Center, or (iii) apply to any relationship of a Limited Partner which existed as of the date of such Limited Partner’s subscription if reported in writing to the General Partner prior to or upon delivery of the investor’s subscription agreement. Notwithstanding the foregoing, these restrictions shall not apply to the General Partner in its capacity as a Limited Partner.

16.02 Amendments by the General Partner.

(a) Clarifying Amendments. The General Partner may amend this Agreement without the consent of the Limited Partners if such amendment is: (i) for the purpose of clarification and does not materially change the substance hereof and the Partnership has obtained the opinion of its legal counsel to that effect; provided however, that such amendment does not adversely and materially affect the interests of the Limited Partners; (ii) necessary or appropriate pursuant to Section 6.01 hereof, to satisfy the requirements of the Code with respect to the Partnership’s allocations or the Partnership’s status as a partnership, or pursuant to any Tax Decision, or any federal or state securities laws or regulations; (iii) necessary to cause the Partnership to comply with any then applicable fraud and abuse or similar statute, rule, regulation or law pursuant to Section 11.04; or (iv) for the purpose of ensuring that the General Partner will be allocated tax basis associated with Partnership liabilities under Section 752 of the Code and the Treasury Regulations thereunder (the “Section 752 Rules”) when The General Partner, or a “related person” to the General Partner within the meaning of the Section 752 Rules, has the economic risk of loss with respect to such Partnership liabilities.

(b) Substantive Amendments. The General Partner may propose any other amendment or amendments to this Agreement by mailing to the Limited Partners a notice describing the proposed amendment(s), which notice must include the text of the proposed amendment(s). If within thirty (30) days after such notice has been mailed, the General Partner has not received written objections to such amendment(s) from Limited Partners owning, in the aggregate, more than one-third (113) of the Units owned by all of the Limited Partners (exclusive of the Units held by the General Partner), then, subject to the other provisions of this Agreement, the proposed amendment(s) will become effective as of the date specified. The General Partner is expressly authorized to file such amendment(s) to the Partnership’s Certificate as the General Partner deems necessary to implement such amendment(s).

16.03 Additional Documents. At any time and from time to time after the date of this Agreement, upon the request of the General Partner, the Limited Partners shall do and perform, or cause to be done and performed, all such additional acts and deeds, and shall execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, all such additional instruments and documents, as are required to best effectuate the purposes and intent of this Agreement.

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16.04 Notices. Any notices or other communications required or permitted by this Agreement must be in writing and shall be deemed to have been duly given and delivered when delivered in person or when mailed postage prepaid to the recipient Partner(s) at the most recent address of the recipient Partner as shown on the records of the Partnership (or to such other address of which the Partnership subsequently has been notified in writing by such Partner). Any Partner may change his or its address by giving notice to the General Partner.

16.05 Applicable Law. This Agreement is to be governed by, construed under, and enforced and interpreted in accordance with the laws of the State of Texas.

16.06 Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes any prior understanding or agreement among them respecting the subject matter hereof. There are no representations, arrangements, understandings or agreements, oral or written, among the parties hereto relating to the subject matter of this Agreement, except those fully expressed herein. No waiver of any provision hereof will be valid or binding on the parties hereto, unless such waiver is in writing and signed by or on behalf of the parties hereto, and no waiver on one occasion shall be deemed to be a waiver of the same or any other provision hereof in the future.

16.07 Severability. If any term or provision of this Agreement is held illegal, invalid or unenforceable, such illegality, invalidity or unenforceability will not affect the legality, validity or enforceability of the remainder of this Agreement.

16.08 Successors. Subject to the provisions hereof imposing limitations and conditions upon the transfer, sale or other disposition of the Partners’ Units, all the provisions hereof will inure to the benefit of and be binding upon the successors, legal representatives and assigns of the parties hereto.

16.09 Counterparts. This Agreement can be executed in counterparts, each of which shall for all purposes be deemed an original, and all of such counterparts will together constitute one and the same agreement.

16.10 Headings. Section and other headings contained in this Agreement are for reference purposes only and are in no way intended to define, interpret, describe or limit the scope, extent or intent of this Agreement or any provision hereof.

16.11 Acceptance of Prior Acts by New Partner. Each Person who becomes a Partner, by becoming a Partner, ratifies, affirms and confirms, and agrees to be bound by, all actions duly taken by the Partnership, pursuant to the terms of this Agreement, prior to the date such Person becomes a Partner.

16.12 Partnership Property. The title to all real or personal property (or interests therein) now or hereafter acquired by the Partnership will be held by and vested in the Partnership, and not by or in any Partner, individually.

23

16.13 Meetings. The General Partner may call meetings of the Partners from time to time. The General Partner shall provide the Limited Partners with thirty (30) days prior notice of the time and place of any meeting of the Partners. Upon the written request of Limited Partners (other than the General Partner) owning at least twenty-five percent (25%) of the total Units (other than Units held by the General Partner), the General Partner shall call a meeting of the Partners, Partners may vote in person or by proxy at any meeting of the Partners. The provisions of the Texas Business Corporation Code governing the use and validity of corporate proxies shall govern the validity and use of proxies under this Agreement.

16.14 Gender and Number. Where the context requires, the use of a pronoun of one gender is to be deemed to include a pronoun of the appropriate gender or the neuter, and singular words are to be deemed to include the plural and vice versa.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first above written.

GENERAL PARTNER:
NSC HOUSTON, INC.
By:	/s/ [unreadable]
Name:
Title:
INTERIM LIMITED PARTNER:
NATIONAL SURGERY CENTER INC.
By:	/s/ [unreadable]
Name:
Title:

24

SECOND AMENDMENT OF

LIMITED PARTNERSHIP AGREEMENT

NORTHEAST SURGERY CENTER, LTD.

This Second Amendment is entered into as of December 1, 1997 by and among HFMH, L.C., a Texas limited liability company (the “Original General Partner”), NSC Houston, Inc., a Texas corporation (the “New General Partner”), and the Limited Partners of Northeast Surgery Center, Ltd., a Texas limited partnership (the “Partnership”), with reference to the following facts:

RECITALS

A. The Original General Partner, the New General Partner and the Limited Partners of the Partnership are parties to that certain Limited Partnership Agreement dated as of December 1, 1994, as amended by the Amendment dated as of September 1, 1996 (collectively, the “Partnership Agreement”), pursuant to which the Partnership was organized. The capitalized terms used in this Amendment and not otherwise defined herein shall have the meanings ascribed to them in the Partnership Agreement.

B. The New General Partner acquired one-half of the interest of the Original General Partner in the Partnership and was admitted as a General Partner of the Partnership pursuant to the above described Amendment dated as of September 1, 1996.

C. The Original General Partner, the New General Partner and the Limited Partners are parties to that certain Agreement to Purchase Partnership Interests, dated as of November 30, 1997 (the “Purchase Agreement”), pursuant to which the New General Partner has acquired all of the remaining interest of the Original General Partner in the Partnership and a portion of the Partnership interests held by the Limited Partners.

D. It is a condition to the obligations of the parties under the Purchase Agreement that the Partnership Agreement be amended to recognize the withdrawal of the Original General Partner, the acquisition of the Original General Partner’s interest in the Partnership by the New General Partner and to amend the Partnership Agreement in certain other respects as set forth herein.

THEREFORE, in consideration of the mutual covenants set forth herein and in the Purchase Agreement, the parties hereto agree as follows:

AGREEMENT

1. Notwithstanding anything in the Partnership Agreement to the contrary, the Original General Partner is permitted to transfer all of its Partnership Percentage to the New General Partner and to withdraw as a General Partner of the Partnership, all effective as of the date of this Amendment. The parties hereto are authorized and instructed to execute any amendments to the Partnership’s Certificate of Limited Partnership necessary or appropriate to reflect the changes set forth in this Amendment and to file and record such amendments as required under the Act.

2. Section 1.9 of the Partnership Agreement is amended in full to read as follows:

“1.9 ‘Majority Interest’ means Limited Partners (including the General Partner as to any Limited Partnership Units held by the General Partner) who hold a majority of the Limited Partnership Units (as defined in Section 1.21 hereof) then held by Limited Partners.”

3. Section 1.13 of the Partnership Agreement is amended in full to read as follows:

“1.13 ‘Nonaffiliated Majority Interest’ means Nonaffiliated Limited Partners who own a majority of the Limited Partnership Units then held by Nonaffiliated Limited Partners.”

4. Section 1.21 of the Partnership Agreement is amended in full to read as follows:

“1.21 ‘Unit’ means the partnership interests of the General and Limited Partners, which have been divided into 3,000 Units, with each such Unit being referred to herein as a ‘Unit’; 600 of such Units (the ‘General Partners Units’) shall represent the interest of the General Partner in its capacity as such, and 2400 of such Units (the ‘Limited Partnership Units’) shall represent the interests held by the Limited Partners, including any Limited Partnership interest held by the General Partner or its Affiliates. Each of the 24 Units, as such term was defined in the Agreement prior to the adoption of the Second Amendment hereto, has been converted into 100 Limited Partnership Units, and the Partnership Percentage held by the General Partners has been converted into the General Partner Units. The ownership of Units immediately following the effectiveness of the Second Amendment to this Agreement is set forth in the Partner Ownership Schedule attached to said Second Amendment.”

5. The first sentence of Section 2.3 of the Partnership Agreement is amended in full to read as follows:

“The General Partner is NSC Houston, Inc.; the address of the General Partner is at the Premises, 18929 Highway 59, Humble, Texas 77338 or such other address as the General Partner may designate in the future.”

6. The first sentence of Section 4.9 of the Partnership Agreement is amended in full to read as follows:

“The General Partner shall not cause the Partnership to sell all or substantially all of its assets without the approval of Limited Partners who own at least two-thirds of the then outstanding Limited Partnership Units,”

7. Section 4.11(a) of the Partnership Agreement is amended by adding the following sentence at the end thereof:

“In all elections of members of the Medical Advisory Committee, each Nonaffiliated Limited Partner shall be entitled to one vote for each position to be elected, without regard to the number of Limited Partnership Units held by such Nonaffiliated Limited Partner.”

2

8. Section 5.1(e) is amended in full to read as follows:

“(e) ‘Partnership Percentage’ of a Partner shall mean the number of Units held by such Partner divided by the total number of Units that are outstanding at the time in question.”

9. Section 6.4(a) of the Partnership Agreement is amended in full to read as follows:

“(a) The transferee shall be a person approved by the General Partner in its sole and absolute discretion.”

10. Section 7.1 of the Partnership Agreement is amended by deleting subsections (b), (c) and (e).

11. Section 7.2 of the Partnership Agreement is amended by deleting everything after the initial two sentences thereof and replacing such provisions with the following:

“The purchase price for Units acquired by the Partnership or the General Partner pursuant to this Section 7.2 shall be (a) the percentage interest represented by the Units to be purchased multiplied by (b) an amount equal to four times the Partnership’s net income (before taxes) for the most recent four calendar quarters completed prior to the date of purchase, determined in accordance with generally accepted accounting principles consistently applied. Any questions with respect to accounting procedures or valuation not controlled by this Agreement shall be resolved by the independent accountants employed by the General Partner’s parent company, National Surgery Centers, Inc., a Delaware corporation. If an option is exercised pursuant to this Section 7.2, the closing of the purchase of Limited Partnership Units shall be held within 30 days after the date the General Partner delivers notice of such exercise to the affected Limited Partner. The purchase price shall be paid in cash.”

12. Section 7.3(i) of the Partnership Agreement is amended in full to read as follows:

“(i) who is approved by the General Partner in its sole discretion.”

13. Section 7.4 of the Partnership Agreement is amended by deleting the last two sentences thereof and replacing them with the following:

“In the event such Limited Partner does not exercise his or her option to purchase the interest of his or her spouse in the Units, the General Partner shall have the option thereafter to purchase the interest of the spouse in the Units at a purchase price determined in accordance with the formula set forth in Section 7.2 hereof. The purchase price shall be paid by the General Partner in cash.”

14. Section 7.7 of the Partnership Agreement is hereby deleted.

3

15. Section 8.2 of the Partnership is hereby amended by deleting the last sentence thereof and replacing it with the following:

“Thus, the Partners agree that, in addition to all other remedies available to the Partnership, the Limited Partnership Units of a Limited Partner violating Section 8.1 may be purchased by the Partnership for a purchase price equal to the Limited Partner’s net cash investment in such Limited Partnership Units or the Limited Partner’s capital account balance in the Partnership, whichever is greater. Such purchase price shall be paid in cash and the Limited Partner whose Units are being purchased pursuant hereto shall cease to be a Partner upon tender of such cash purchase price to such Limited Partner.”

16. Section 8.3 of the Partnership Agreement is hereby deleted.

17. Section 9.3 of the Partnership Agreement is hereby deleted.

18. The last sentence of Section 12.2 of the Partnership Agreement is amended in full to read as follows:

“The affirmative vote or written consent of the General Partner and a Majority Interest of the Limited Partners shall be required to amend this Agreement.”

19. The last sentence of Section 13.1 of the Partnership Agreement is amended in full to read as follow:

“The Partnership books shall be kept on an accrual basis and in accordance with generally accepted accounting principles.”

20. The parties hereto acknowledge and agree that Section 9.2 of the Partnership Agreement is not applicable to the transfer of the Original General Partner’s interest in the Partnership to the New General Partner and is not otherwise applicable to the transactions described herein or in the Purchase Agreement.

21. The parties acknowledge and agree that the transactions described herein and in the Purchase Agreement shall not result in a dissolution of the Partnership.

22. This Amendment shall be adopted when it has been executed by the Original General Partner and the New General Partner, and consented to (as described below) by Limited Partners who constitute a Nonaffiliated Majority Interest, in accordance with Section 12.2 of the Partnership Agreement, and this Amendment shall thereupon be effective as of the “Effective Date,” as defined in the Purchase Agreement.

23. Except as expressly modified by this -Amendment, the terms and provisions of the Partnership Agreement are ratified and confirmed and shall remain in full force and effect.

24. Separate copies of this Amendment may be signed by the parties hereto, with the same effect as though all parties had signed the same copy of this Amendment. Signatures transmitted by facsimile shall be accepted as original signatures.

4

IN WITNESS WHEREOF, the undersigned have executed this Second Amendment of Limited Partnership Agreement as of the date first above written.

HFMH, L.C.
By:	/s/ Arthur Minquez, Jr.
Name:	Arthur Minquez, Jr.
Title:	Managing Member
NSC HOUSTON, INC.
By:	/s/ Richard D. Pence
Name:	Richard D. Pence
Title:	Vice President
LIMITED PARTNERS: [Signatures of the Limited Partners, and their consent to the foregoing Second Amendment, are set forth in their respective Letter Agreements executed pursuant to the Purchase Agreement]

5

AMENDMENT OF

LIMITED PARTNERSHIP AGREEMENT

NORTHEAST SURGERY CENTER, LTD.

This Amendment is entered into as of September 1, 1996 by and among HFMH, L.C., a Texas limited liability company (the “Original General Partner)”, NSC Houston, Inc., a Texas corporation (the “New General Partner”), and the undersigned Limited Partners of Northeast Surgery Center, Ltd., a Texas limited partnership (the “Partnership”), with reference to the following facts:

RECITALS

A. The Original General Partner and the undersigned Limited Partners of the Partnership are parties to that certain Limited Partnership Agreement dated as of December 1, 1994 (the “Partnership Agreement”), pursuant to which the Partnership was organized. The capitalized terms used in this Amendment and not otherwise defined herein shall have the meanings ascribed to them in the Partnership Agreement.

B. The Original General Partner and the New General Partner are parties to that certain Agreement to Purchase General Partnership Interest, dated as of August     , 1996 (the “Purchase Agreement”), pursuant to which the New General Partner has acquired one-half of the interest of the Original General Partner in the Partnership.

C. It is a condition to the obligations of the parties under the Purchase Agreement that the Partnership Agreement be amended to recognize the addition of the New General Partner as an additional General Partner of the Partnership and to amend the Partnership Agreement in certain other respects as set forth herein.

THEREFORE, in consideration of the mutual covenants set forth herein and in the Purchase Agreement, the parties hereto agree as follows:

AGREEMENT

1. Notwithstanding anything in the Partnership Agreement to the contrary, the Original General Partner is permitted to transfer one-half of its Partnership Percentage to the New General Partner. In addition, the New General Partner is hereby elected as an additional General Partner of the Partnership and shall have one-half the Partnership Percentage previously held by the Original General Partner, all affective as of the date of this Amendment. The parties hereto are authorized and instructed to execute any amendments to the Partnership’s Certificate of Limited Partnership necessary or appropriate to reflect the changes set forth in this Amendment and to file and record such an amendments as required under the Act.

2. All management decisions and actions to be taken by the General Partner pursuant to the Partnership Agreement may be taken by the Original General Partner, acting alone, except that the consent of the New General Partner shall be required with respect to any of the following:

(a) Any matter that, pursuant to the terms of the Partnership Agreement, requires the approval of any of the Limited Partners;

(b) Any of the actions described in Section 4.1(a) (other than loans made to the Partnership by the Original General Partner not exceeding $25,000 in the aggregate) or 4.1(f) (with respect to any transactions or series of related transactions which involve the expenditure of in excess of S25,000);

(c) Any consent to the transfer of an interest in the Partnership by any Limited Partner;

(d) The exercise any right to purchase an interest in the Partnership pursuant to Section 7 of the Partnership Agreement, unless the Original General Partner has offered the New General Partner the opportunity to participate equally in such purchase; or

(e) The sale of any interest in the Partnership by the Original General Partner or the Partnership.

3. The New General Partner hereby accepts the terms and provisions of, and agrees to be bound by, the Partnership Agreement, as modified by this Amendment, and the Management Agreement, dated December 1, 1994, between the Partnership and the Original General Partner.

4. The parties acknowledge and agree that the transactions described herein and in the Purchase Agreement shall not result in a dissolution of the Partnership.

5. Anything in the Partnership Agreement to the contrary notwithstanding, this Amendment shall be effective when it has been executed by the Original General Partner, by the New General Partner and by Limited Partners who constitute a Nonaffiliated Majority Interest, in accordance with Section 12.2 of the Partnership Agreement

6. Except as expressly modified by this Amendment, the terms and provisions of the Partnership Agreement are ratified and confirmed and shall remain in full force and effect.

7. Separate copies of this Amendment may be signed by the parties hereto, with the same effect as though all parties have signed the same copy of this Amendment Signatures transmitted by facsimile shall be accepted as original signatures.

2

IN WITNESS WHEREOF, the undersigned have executed this Amendment of Limited Partnership Agreement as of the date first above written.

	HFMH, L.C.
	By:	/s/ Arthur Minguez, Jr.
	Name:	Arthur Minguez, Jr.
	Title:	Managing Member
	By:	/s/ Harold Taylor
	Name:	Harold Taylor
	Title:	Managing Member
	NSC HOUSTON, INC.
	By:	/s/ Richard D. Pence
	Name:	Richard D. Pence
	Title:	Vice President
	LIMITED PARTNERS
/s/ [unreadable]	/s/ [unreadable]
/s/ [unreadable]	/s/ [unreadable]
/s/ [unreadable]	/s/ [unreadable]
/s/ [unreadable]	/s/ [unreadable]
/s/ [unreadable]	/s/ [unreadable]
/s/ [unreadable]	/s/ [unreadable]
/s/ [unreadable]	/s/ [unreadable]
/s/ [unreadable]	/s/ [unreadable]

3

EX-3.187

Exhibit 3.187

CERTIFICATE OF FORMATION

OF

REBOUND, LLC

1. The name of the limited liability company is Rebound, LLC.

2. The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle. The name of its registered agent at that address is Corporation Service Company.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Formation of Rebound, LLC on this 20th day of April, 2007.

By:	/s/ Lucy Hicks
Name:	Lucy Hicks
Title:	Authorized Person

1

CERTIFICATE OF AMENDMENT

OF

REBOUND, LLC

1. The name of the limited liability company is Rebound, LLC.

2. The Certificate of Formation of the limited liability company is hereby amended as follows:

The registered office of the Limited Liability Company in the state of Delaware is hereby changed to Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware, 19801, in the county of New Castle.

The registered agent of the Limited Liability Company is hereby changed to The Corporation Trust Company.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment of Rebound, LLC this 30th day of April, 2007.

REBOUND, LLC
By:	/s/ Lucy Hicks
	Lucy Hicks
	Authorized Person

EX-3.188

Exhibit 3.188

LIMITED LIABILITY COMPANY AGREEMENT

OF

REBOUND, LLC

THIS LIMITED LIABILITY COMPANY AGREEMENT (the “Agreement”) of Rebound, LLC (the “Company”) dated as of this 20th day of April, 2007, by HealthSouth Corporation, as the sole member of the Company (the “Member”).

RECITAL

The Member has formed the Company as a limited liability company under the laws of the State of Delaware and desires to enter into a written agreement, in accordance with the provisions of the Delaware Limited Liability Company Act and any successor statute, as amended from time to time (the “Act”), governing the affairs of the Company and the conduct of its business.

ARTICLE I

THE LIMITED LIABILITY COMPANY

1.1 Formation. The Member has previously formed the Company as a limited liability company pursuant to the provisions of the Act upon the conversion of Rebound, Inc., a Delaware corporation, to a Delaware limited liability company pursuant to Section 266 of the General Corporation Law of the State of Delaware and Section 18-214 of the Act. A certificate of formation for the Company as described in Section 18-201 of the Act (the “Certificate of Formation”) has been filed in the Office of the Secretary of State of the State of Delaware in conformity with the Act.

1.2 Name. The name of the Company shall be “Rebound, LLC” and its business shall be carried on in such name with such variations and changes as the Board (as hereinafter defined) shall determine or deem necessary to comply with requirements of the jurisdictions in which the Company’s operations are conducted.

1.3 Business Purpose; Powers. The Company is formed for the purpose of engaging in any lawful business, purpose or activity for which limited liability companies may be formed under the Act. The Company shall possess and may exercise all the powers and privileges granted by the Act or by any other law or by this Agreement, together with any powers incidental thereto, so far as such powers and privileges are necessary or convenient to the conduct, promotion or attainment of the business purposes or activities of the Company.

1.4 Registered Office and Agent. The location of the registered office of the Company shall be 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle. The Company’s Registered Agent at such address shall be Corporation Service Company.

1.5 Term. Subject to the provisions of Article 6 below, the Company shall have perpetual existence.

ARTICLE II

THE MEMBER

2.1 The Member. The name and address of the Member is as follows:

Name	Address
HealthSouth Corporation	One HealthSouth Parkway
	Birmingham, AL 35243

2.2 Actions by the Member; Meetings. The Member may approve a matter or take any action at a meeting or without a meeting by the written consent of the Member. Meetings of the Member may be called at any time by the Member.

2.3 Liability of the Member. All debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a member.

2.4 Power to Bind the Company. The Member (acting in its capacity as such) shall have the authority to bind the Company to any third party with respect to any matter.

2.5 Admission of Members. New members shall be admitted only upon the approval of the Member.

ARTICLE III

THE BOARD

3.1 Management By Board of Managers.

(a) Subject to such matters which are expressly reserved hereunder or under the Act to the Member for decision, the business and affairs of the Company shall be managed by a board of managers (the “Board”), which shall be responsible for policy setting, approving the overall direction of the Company and making all decisions affecting the business and affairs of the Company. The Board shall consist of one (1) to fifteen (15) individuals (the “Managers”), the exact number of Managers to be determined from time to time by resolution of the Member. The initial Board shall consist of three (3) members, who shall be Jay Grinney, Michael D. Snow and John P. Whittington.

(b) Each Manager shall be elected by the Member and shall serve until his or her successor has been duly elected and qualified, or until his or her earlier removal, resignation, death or disability. The Member may remove any Manager from the Board or from

any other capacity with the Company at any time, with or without cause. A Manager may resign at any time upon written notice to the Member.

(c) Any vacancy occurring on the Board as a result of the resignation, removal, death or disability of a Manager or an increase in the size of the Board shall be filled by the Member. A Manager chosen to fill a vacancy resulting from the resignation, removal, death or disability of a Manager shall serve the unexpired term of his or her predecessor in office.

3.2 Action By the Board.

(a) Meetings of the Board may be called by any Manager upon two (2) days prior written notice to each Manager. The presence of a majority of the Managers then in office shall constitute a quorum at any meeting of the Board. All actions of the Board shall require the affirmative vote of a majority of the Managers then in office.

(b) Meetings of the Board may be conducted in person or by conference telephone facilities. Any action required or permitted to be taken at any meeting of the Board may be taken without a meeting if such number of Managers sufficient to approve such action pursuant to the terms of this Agreement consent thereto in writing. Notice of any meeting may be waived by any Manager.

3.3 Power to Bind Company. None of the Managers (acting in their capacity as such) shall have authority to bind the Company to any third party with respect to any matter unless the Board shall have approved such matter and authorized such Manager(s) to bind the Company with respect thereto.

3.4 Officers and Related Persons. The Board shall have the authority to appoint and terminate officers of the Company and retain and terminate employees, agents and consultants of the Company and to delegate such duties to any such officers, employees, agents and consultants as the Board deems appropriate, including the power, acting individually or jointly, to represent and bind the Company in all matters, in accordance with the scope of their respective duties.

ARTICLE IV

CAPITAL STRUCTURE AND CONTRIBUTIONS

4.1 Capital Structure. The capital structure of the Company shall consist of one class of common interests (the “Common Interests”). All Common Interests shall be identical with each other in every respect. The Member shall own all of the Common Interests issued and outstanding.

4.2 Capital Contributions. From time to time, the Board may determine that the Company requires capital and may request the Member to make capital contribution(s) in an amount determined by the Board. A capital account shall be maintained for the Member, to which contributions and profits shall be credited and against which distributions and losses shall be charged.

ARTICLE V

PROFITS, LOSSES AND DISTRIBUTIONS

5.1 Profits and Losses. For financial accounting and tax purposes, the Company’s net profits or net losses shall be determined on an annual basis in accordance with the manner determined by the Board. In each year, profits and losses shall be allocated entirely to the Member.

5.2 Distributions. The Board shall determine profits available for distribution and the amount, if any, to be distributed to the Member, and shall authorize and distribute on the Common Interests, the determined amount when, as and if declared by the Board. The distributions of the Company shall be allocated entirely to the Member.

ARTICLE VI

EVENTS OF DISSOLUTIONS

The Company shall be dissolved and its affairs wound up upon the occurrence of any of the following events (each, an “Event of Dissolution”):

(a) The Member votes for dissolution; or

(b) A judicial dissolution of the Company under Section 18-802 of the Act.

ARTICLE VII

TRANSFER OF INTERESTS IN THE COMPANY

The Member may sell, assign, transfer, convey, gift, exchange or otherwise dispose of any or all of its Common Interests and, upon receipt by the Company of a written agreement executed by the person or entity to whom such Common Interests are to be transferred agreeing to be bound by the terms of this Agreement, such person shall be admitted as a member.

ARTICLE VIII

EXCULPATION AND INDEMNIFICATION

8.1 Exculpation. Notwithstanding any other provisions of this Agreement, whether express or implied, or any obligation or duty at law or in equity, none of the Member, Managers, or any officers, directors, stockholders, partners, employees, affiliates, representatives or agents of any of the foregoing, nor any officer of the Company (individually, a “Covered Person” and, collectively, the “Covered Persons”) shall be liable to the Company or any other person for any act or omission (in relation to the Company, its property or the conduct of its business or affairs, this Agreement, any related document or any transaction or investment involving the Company) taken or omitted by a Covered Person in the reasonable belief that such act or omission is in or is not contrary to the best interests of the Company and is within the scope of

authority granted to such Covered Person by the Agreement, provided such act or omission does not constitute fraud, willful misconduct, bad faith, or gross negligence.

8.2 Indemnification. To the fullest extent permitted by law, the Company shall indemnify and hold harmless each Covered Person from and against any and all losses, claims, demands, liabilities, expenses, judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative (“Claims”), in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, by reason of its management of the affairs of the Company or which relates to or arises out of the Company or its property, business or affairs. A Covered Person shall not be entitled to indemnification under this Section 8.2 with respect to (i) any Claim with respect to which such Covered Person has engaged in fraud, willful misconduct, bad faith or gross negligence or (ii) any Claim initiated by such Covered Person unless such Claim (or part thereof) (A) was brought to enforce such Covered Person’s rights to indemnification hereunder or (B) was authorized or consented to by the Board. Expenses incurred by a Covered Person in defending any Claim shall be paid by the Company in advance of the final disposition of such Claim upon receipt by the Company of an undertaking by or on behalf of such Covered Person to repay such amount if it shall be ultimately determined that such Covered Person is not entitled to be indemnified by the Company as authorized by this Section 8.2.

8.3 Amendments. Any repeal or modification of this Article 8 by the Member shall not adversely affect any rights of such Covered Person pursuant to this Article 8, including the right to indemnification and to the advancement of expenses of a Covered Person existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.

ARTICLE IX

MISCELLANEOUS

9.1 Tax Treatment. Unless otherwise determined by the Member, the Company shall be a disregarded entity for U.S. federal income tax purposes (as well as for any analogous state or local tax purposes), and the Member and the Company shall timely make any and all necessary elections and filings for the Company treated as a disregarded entity for U.S. federal income tax purposes (as well as for any analogous state or local tax purposes).

9.2 Amendments. Amendments to this Agreement and to the Certificate of Formation shall be approved in writing by the Member. An amendment shall become effective as of the date specified in the approval of the Member or if none is specified as of the date of such approval or as otherwise provided in the Act.

9.3 Severability. If any provision of this Agreement is held to be invalid or unenforceable for any reason, such provision shall be ineffective to the extent of such invalidity or unenforceability; provided, however, that the remaining provisions will continue in full force without being impaired or invalidated in any way unless such invalid or unenforceable provision or clause shall be so significant as to materially affect the expectations of the Member regarding this Agreement. Otherwise, any invalid or unenforceable provision shall be replaced by the

Member with a valid provision which most closely approximates the intent and economic effect of the invalid or unenforceable provision.

9.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to the principles of conflicts of laws thereof.

9.5 Limited Liability Company. The Member intends to form a limited liability company and does not intend to form a partnership under the laws of the State of Delaware or any other laws.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the day first above written.

HEALTHSOUTH CORPORATION
By:	/s/ John P. Whittington
Name:	John P. Whittington
Title:	Executive Vice President, General Counsel and Corporate Secretary

REBOUND, LLC
By:	/s/ Lucy C. Hicks
Name:	Lucy C. Hicks
Title:	Vice President and Assistant Secretary

EX-3.189

Exhibit 3.189

CERTIFICATE OF MERGER

OF

LAS VEGAS REHABILITATION HOSPITAL, INC.

REHABILITATION HOSPITAL OF TYLER, INC.

RENO REHABILITATION HOSPITAL, INC.

INTO

REHAB CONCEPTS CORP.

* * * * *

The undersigned corporation

DOES HEREBY CERTIFY:

FIRST: That the name and state of incorporation of each of the constituent corporations of the merger is as follows:

NAME	STATE OF INCORPORATION
Las Vegas Rehabilitation Hospital, Inc.	Delaware
Rehabilitation Hospital of Tyler, Inc.	Texas
Reno Rehabilitation Hospital, Inc.	Delaware
Rehab Concepts Corp.	Delaware

SECOND: That an Agreement of Merger between the parties to the merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with the requirements of section 252 of the General Corporation Law of Delaware.

THIRD: That the name of the surviving corporation of the merger is Rehab Concepts Corp., a Delaware corporation.

FOURTH: That the Certificate of Incorporation of Rehab Concepts Corp., a Delaware corporation which is surviving the merger, shall be the Certificate of Incorporation of the surviving corporation.

1

FIFTH: That the executed Agreement of Merger is on file at the principal place of business of the surviving corporation, the address of which is 600 Wilson Lane, Box 715, Mechanicsburg, Pennsylvania 17055.

SIXTH: That a copy of the Agreement of Merger will be furnished on request and without cost, to any stockholder of any constituent corporation.

SEVENTH: The authorized capital stock of each foreign corporation which is a party to the merger is as follows:

CORPORATION	CLASS	NUMBER OF SHARES	PAR VALUE PER SHARE OR STATEMENT THAT SHARES ARE WITHOUT PAR VALUE
Rehabilitation Hospital of Tyler, Inc.	Common	1,000	$	1.00

Dated: March 26, 1993

Rehab Concepts Corp.
By	/s/ David G. Nation
	David G. Nation, Vice President

ATTEST:
By	/s/ David G. Nation
	David G. Nation, Vice President

2

CERTIFICATE OF INCORPORATION

OF

REHAB CONCEPTS CORP.

* * * * *

1. The name of the corporation is

REHAB CONCEPTS CORP.

2. The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.

3. The nature of the business or purposes to be conducted or promoted is:

To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

4. The total number of shares of stock which the corporation shall have authority to issue is One Thousand (1,000) and the par value of each of such shares is One Cent ($0.01) amounting in the aggregate to Ten Dollars ($10.00).

5. The name and mailing address of each incorporator is as follows:

NAME	MAILING ADDRESS
D. A. Hampton	Corporation Trust Center 1209 Orange Street Wilmington, Delaware 19801
M. A. Brzoska	Corporation Trust Center 1209 Orange Street Wilmington, Delaware 19801
L. J. Vitalo	Corporation Trust Center 1209 Orange Street Wilmington, Delaware 19801

3

6. The corporation is to have perpetual existence.

7. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized:

To make, alter or repeal the by-laws of the corporation.

8. Elections of directors need not be by written ballot unless the by-laws of the corporation shall so provide.

Meetings of stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors or in the by-laws of the corporation.

9. The corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

10. A director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit.

WE, THE UNDERSIGNED, being each of the incorporators hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and ertifying that this is our act and deed and the facts herein stated are true, and accordingly have hereunto set our hands this 7th day of February, 1991.

/s/ D. A. Hampton

D. A. Hampton

/s/ M. A. Brzoska

M. A. Brzoska

/s/ L. J. Vitalo

L. J. Vitalo

4

EX-3.195

Exhibit 3.195

CERTIFICATE OF INCORPORATION

OF

SR SUB, INC.

THE UNDERSIGNED, for the purpose of forming a corporation pursuant to the provisions of the General Corporation Law of Delaware, does hereby certify as follows:

FIRST: The name of the Corporation is SR Sub, Inc.

SECOND: The address of the Corporation’s registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of the Corporation’s registered agent at such address is The Corporation Trust Company.

THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

FOURTH: The total number of shares of stock which the Corporation shall have authority to issue is 1,000 shares, par value $.01 per share, all of which are of one class and are designated as Common Stock.

FIFTH: The name and mailing address of the incorporator is as follows:

Name	Mailing Address
John P. Dougherty	1100 PNB Building
	Broad and Chestnut Streets
	Philadelphia, PA 19103

SIXTH: In furtherance and not in limitation of the general powers conferred by the laws of the State of Delaware, the Board of Directors is expressly authorized to make, alter or repeal the Bylaws of the Corporation, except as specifically otherwise provided therein.

SEVENTH: A director of the Corporation shall have no personal liability to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except to the extent that Section 102(b)(7) (or any successor provision) of the Delaware General Corporation Law, as amended from time to time, expressly provides that the liability of a director may not be eliminated or limited.

EIGHTH: Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case nay be, agree to any compromise or arrangement and to any reorganization of this Corporation as consequence of such

compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders of this Corporation, as the case may be, and also on this Corporation.

IN WITNESS WHEREOF, the undersigned, being the incorporator hereinabove named, does hereby execute this Certificate of Incorporation this 31st day of December, 1991.

/s/ John P. Dougherty

John P. Dougherty

CERTIFICATE OF AMENDMENT

OF

CERTIFICATE OF INCORPORATION

* * * * *

SR Sub, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware,

DOES HEREBY CERTIFY:

FIRST: That the Board of Directors of said corporation, by the unanimous written consent of its members, filed with the minutes of the Board, adopted a resolution proposing and declaring advisable the following amendment to the Certificate of Incorporation of said corporation:

RESOLVED, that the Certificate of Incorporation of SR Sub, Inc. be amended by changing the First Article thereof so that, as amended, said Article shall be and read as follows:

“1. The name of the corporation is Rehabilitation Hospital of Las Vegas, Inc.”

SECOND: That in lieu of a meeting and vote of stockholders, the stockholders have given unanimous written consent to said amendment in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware.

THIRD: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Sections 242 and 228 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, said SR Sub, Inc. has caused this certificate to be signed by Deborah Myers Welsh, its Vice President and attested by F. Lisa Murtha, its Assistant Secretary this 23^rd day of October 1992.

SR Sub, Inc.
By:	/s/ Deborah Myers Welsh

ATTEST:
By:	/s/ F. Lisa Murtha

CERTIFICATE OF AMENDMENT

OF

CERTIFICATE OF INCORPORATION

Rehabilitation Hospital of Las Vegas, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware:

DOES HEREBY CERTIFY:

FIRST: That the Board of Directors of said corporation by the unanimous written consent of its members, filed with the minutes of the Board adopted a resolution proposing and declaring advisable the following amendment to the Certificate of Incorporation of said corporation:

RESOLVED, that the Certificate of Incorporation of Rehabilitation Hospital of Las Vegas be amended by changing the First Article thereof so that, as amended, said Article shall be and read as follows:

“1. The name of the corporation is Rehabilitation Hospital of Nevada-Las Vegas, Inc.”

SECOND: That in lieu of a meeting and vote of stockholders, the holder of the majority of the outstanding stock of said corporation has given written consent to said amendment and written notice of the adoption of the amendment has been given as provided in Section 228 of the General Corporation Law of the State of Delaware to every stockholder entitled to such notice.

THIRD: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Section 242 and 228 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, said Rehabilitation Hospital of Las Vegas, Inc. has caused this certificate to be signed by Kenneth T. Barber, its Vice President and attested by Deborah Myers Welsh, its Secretary this 21^st day of December 1992.

Rehabilitation Hospital of Las Vegas, Inc.
By:	/s/ Kenneth T. Barber

ATTEST:
By:	/s/ Deborah Myers Welsh

EX-3.204

Exhibit 3.204

LIMITED LIABILITY COMPANY AGREEMENT OF SARASOTA LTAC

PROPERTIES, LLC

This limited liability company agreement of Sarasota LTAC Properties, LLC, a Florida limited liability company (the “Company”), effective as of the 30th day of March, 2004 (this “Agreement”), is entered into by Healthsouth Corporation, a Delaware corporation, as the sole member (the “Member”).

RECITALS :

WHEREAS, the Company was formed on March 30, 2004 as a limited liability company by the filing of a certificate under and subject to the laws of the State of Florida for the purpose described below; and

WHEREAS, the Member desires to enter into this Agreement to define formally and express the terms of such limited liability company and its rights and obligations with respect thereto.

NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Member hereby adopts this Limited Liability Company Agreement and hereby agrees as follows:

AGREEMENT:

1. Name. The name of the limited liability company is Sarasota LTAC Properties, LLC.

2. Purpose. The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, carrying on any lawful business, purpose or activity for which limited liability companies may be formed under the Florida Statutes, as amended from time to time, and engaging in any and all activities necessary or incidental to the foregoing.

3. Registered Office. The address of the registered office of the Company in the State of Florida is 1200 South Pine Island Road, c/o CT Corporation System, Plantation, Florida 33324.

4. Registered Agent. The name and address of the registered agent of the Company for service of process on the Company in the State of Florida is CT Corporation System, 1200 South Pine Island Road, Plantation, Florida 33324.

5. Authorized Units. The Company shall be authorized to issue up to 100 Units of membership interested in the Company or such greater or lesser number as the Member may determine from time to time. Schedule A sets for the number of Units owned by the Member, which represent 100% of the membership interests in the Company.

6. Member and Capital Contribution. The name and the business address of the Member and the amount of cash or other property contributed or to be contributed by the Member to the capital of the Company is set forth in Schedule A attached hereto and shall be listed on the books and records of the Company. The Member of the Company shall cause the books and records, and the aforementioned Schedule, to be updated from time to time as necessary to accurately reflect the information therein. The Member shall not be required to make any additional contributions of capital to the Company, although the Member may from time to time agree to make additional capital contributions to the Company.

7. Powers. The business and affairs of the Company shall be governed and managed by the Member. The Member shall have the power to do any and all acts necessary or convenient to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise, possessed by members of a limited liability company under the laws of the State of Florida or as otherwise provided herein.

8. Qualification and Election of Officers and Managers. The Member may elect a President, Secretary and any other officer or manager that the Member considers necessary or desirable for the operation and management of the Company to serve at the pleasure of the Member until his or her earlier termination, resignation or death. Managers need not be residents of the State of Florida or a member of the Company. Any such managerial offices may be held by one or more persons, except that the offices of the President and Secretary shall not be held by the same person.

9. Term. The term of the Company shall commence on the date of filing of the Certificate of Formation with the Secretary of State of the State of Florida and shall continue perpetually, unless earlier terminated in accordance with the provisions of this Limited Liability Company Agreement.

10. Dissolution. The Company shall dissolve, and its affairs shall be wound up, upon the first to occur of the following: (a) the written consent of the Member or (b) the entry of a decree of judicial dissolution under Section 608.441 of the Florida Statutes.

11. Allocation of Profits and Losses. The Company’s profits and losses shall be allocated to the Member.

12. Distributions. Distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member.

13. Resignation. The Member shall not resign from the Company (other than pursuant to a transfer of the Member’s entire limited liability company interest in the Company to a single substitute member, including pursuant to a merger agreement that provides for a substitute member pursuant to the terms of this Agreement) prior to the dissolution and winding up of the Company.

14. Assignment and Transfer. The Members may assign or transfer in whole but not in part its Unit(s) of membership interest to a single acquirer upon the unanimous approval of the Member. No person may be admitted as a member of the Company without the prior written consent of the Member.

15. Admission of Substitute Member. A person who acquires the Member’s Unit(s) of membership interest by transfer or assignment shall be admitted to the Company as a member upon the execution of this Agreement or a counterpart of this Agreement and thereupon shall become the “Member” for purposes of this Agreement.

16. Liability of Member and Representatives. The Member shall not be liable for the debts, liabilities, contracts or other obligations of the Company . Except as otherwise provided by applicable state law, the Member shall be liable only to make such Member’s capital contribution and shall not be required to lend any funds to the Company or to make any additional capital contributions to the Company.

17. Indemnification. The Company shall indemnify any individual who is or was a party or is or was threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a manager or officer of the Company against expenses (including reasonable attorneys’ fees and expenses), judgments, fines and amounts paid in settlement actually and reasonably incurred by such individual in connection with such action, suit or proceeding, to the full extent permitted by applicable law. The right to indemnification conferred in this Section 17 includes the right of such individual to be paid by the Company the expenses incurred in defending any such action in advance of its final disposition; provided, however, that the Company will only make such an advancement of expenses upon delivery to the Company of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it is ultimately determined that such indemnitee is not entitled to be indemnified under this Section 17 or otherwise.

18. Amendment. This Limited Liability Company Agreement may be amended from time to time only with the prior written consent of the Member.

19. Governing Law. This Limited Liability Company Agreement shall be governed by, and construed in accordance with, the laws of the State of Florida.

IN WITNESS WHEREOF, the undersigned has executed this Limited Liability Company Agreement as of the 27^th day of March, 2004.

HEALTHSOUTH Corporation
By:	/s/ [Authorized Signatory]
	Name: [Authorized Signatory]
	Title: Senior Vice President

SCHEDULE A

Member and Business Address	Capital Contribution		Units
Healthsouth Corporation One Healthsouth Parkway Birmingham, Alabama 35243	$	10.00	1

EX-3.238

Exhibit 3.238

AGREEMENT OF LIMITED PARTNERSHIP

OF

WESTERN MEDICAL REHAB ASSOCIATES, L.P.

TABLE OF CONTENTS

		Page
	ARTICLE I: FORMATION OF PARTNERSHIP
Section 1.1.	Formation	1
Section 1.2.	Name	1
Section 1.3.	Term	1
Section 1.4.	Business	2
Section 1.5.	Fiscal Year	3
Section 1.6.	Nature of Each Partner's Interest in the Partnership	3
Section 1.7.	Place of Business	3
Section 1.8.	Powers of the Partnership	3
Section 1.9.	Partnership Interests	4
Section 1.10.	Limitation on Liability of Partners	4
Section 1.11.	Conflicts of Interests and Transactions with Affiliates	4
	ARTICLE II: CAPITAL CONTRIBUTIONS OF PARTNERS
Section 2.1.	Initial Capital Contributions	5
Section 2.2.	Additional Capital Contributions and Partner Loans	5
Section 2.3.	Failure of the Managing General Partner to Make Capital or Loan Call	6
Section 2.4.	Default in Making Additional Contributions	6
Section 2.5.	Loans by CMS and WestMed; Third Party Loans	8
Section 2.6.	Partner Loans	9
Section 2.7.	No Third Party Beneficiaries	9
Section 2.8.	Capital Contributions and Loans Generally	10
Section 2.9.	Issuance of Additional Partnership Interests	10
	ARTICLE III: CAPITAL ACCOUNTS
Section 3.1.	Percentage Interests	11
Section 3.2.	Establishment and Maintenance of Capital Accounts	11
Section 3.3.	Distribution Upon Liquidation in Accordance with Capital Accounts	12
Section 3.4.	Restoration of Deficit Capital Account Balances	12
	ARTICLE IV: DISTRIBUTIONS
Section 4.1.	Cash Flow Distributions	13
Section 4.2.	In-Kind Distributions	14

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	ARTICLE V:
	TAX ALLOCATIONS
Section 5.1.	General Rule of Allocation	14
Section 5.2.	Treasury Regulations	14
Section 5.3.	Negative Balances	14
Section 5.4.	Partner Loans	14
Section 5.5.	Chance in Percentage Interests	15
Section 5.6.	Change in Law	15
	ARTICLE VI:
	CONTROL AND MANAGEMENT
Section 6.1.	General	15
Section 6.2.	Authority of Managing General Partner	17
Section 6.3.	Limitations on Managing General Partner's Authority	17
Section 6.4.	Meetings of the Partners	19
Section 6.5.	Governing Board	20
Section 6.6.	Fees and Expenses of the General Partners	20
Section 6.7.	Limitation of Responsibility of General Partners; Indemnification	21
Section 6.8.	No Authority of Limited Partners to Act	22
Section 6.9.	Buy-Sell Mechanism	22
	ARTICLE VII:
	PURCHASE OPTION
Section 7.1.	Grant of Purchase Option	23
Section 7.2.	Term of Purchase Option	24
Section 7.3.	Exercise of Purchase Option	24
Section 7.4.	Purchase Closing	25
Section 7.5.	Operating Performance Guarantee	25
Section 7.6.	Failure to Exercise Purchase Option	25
Section 7.7.	Routine Service Exemption	26
	ARTICLE VIII:
	NON-COMPETITION
Section 8.1.	Non-Competition	26
Section 8.2.	Acquired Entity	27
Section 8.3.	Default	27
	ARTICLE IX:
	BANK ACCOUNTS; BOOKS OF ACCOUNT; REPORTS
Section 9.1.	Bank Accounts	27
Section 9.2.	Books and Records of Account	27
Section 9.3.	Financial Statements and Reports	27
Section 9.4.	Inspections	28

ii

	ARTICLE X:
	TRANSFER OF PARTNERSHIP INTERESTS
Section 10.1.	General Transfer Provisions and Restrictions	28
Section 10.2.	Permitted Transfers; Right of First Refusal	30
Section 10.3.	Waiver of Partition	31
Section 10.4.	Expenses	32
Section 10.5.	Transfers upon Foreclosure of Pledged Interests	32
Section 10.6.	Allocations With Respect to Transferor's Interest	32
Section 10.7.	Section 754 Election	32
	ARTICLE XI:
	ADMISSION OF NEW PARTNERS
Section 11.1.	Procedure	32
Section 11.2.	Amendment	33
	ARTICLE XII:
	DISSOLUTION AND LIQUIDATION OP THE PARTNERSHIP
Section 12.1.	Events of Dissolution	33
Section 12.2.	Continuation of the Business of the Partnership After Certain Events of Dissolution	34
Section 12.3.	Effect of Dissolution	34
Section 12.4.	Sale of Assets by Liquidator	34
Section 12.5.	Liquidation	34
Section 12.6.	Liquidation of Remaining Assets	35
Section 12.7.	Time Limitations on Liquidating Distributions	35
Section 12.8.	Liquidation Following Withdrawal of Certain Patterns	36
	ARTICLE XIII:
	REPRESENTATIONS AND WARRANTIES
Section 13.1.	Representations and Warranties of the Partners	36
	ARTICLE XIV:
	MISCELLANEOUS
Section 14.1.	Counterparts	36
Section 14.2.	Notices	36
Section 14.3.	Amendments	37
Section 14.4.	Severability	37
Section 14.5.	Entire Agreement	37
Section 14.6.	Assignment and Benefit	37
Section 14.7.	Titles and Captions	38
Section 14.8.	Interpretation	38
Section 14.9.	Number of Days	38
Section 14.10.	Patient Choice	38

iii

Section 14.11.	Ancillary Services Agreements	38
Section 14.12.	Managed Care Network	38
Section 14.13.	Nurse Liaison	39
Section 14.14.	Long Term Care Hospital	39
Section 14.15.	Governing Law	39
Section 14.16.	Power of Attorney	39
Section 14.17.	Estoppels	39
Section 14.18.	Reliance on Authority of Person Signing Agreement	39
Section 14.19.	Waiver of Breach	40
Section 14.20.	Further Assurances	40
Section 14.21.	No Third Party Beneficiary	40
Section 14.22.	Schedules	40

iv

AGREEMENT OF LIMITED PARTNERSHIP

OF

WESTERN MEDICAL REHAB ASSOCIATES, L.P.

THIS AGREEMENT OF LIMITED PARTNERSHIP, (this “Agreement”) of WESTERN MEDICAL REHAB ASSOCIATES, L.P.(the “Partnership”) is made and entered into as of March 13, 1996, by and between WESTERN NEURO CARE, INC., a Delaware corporation (“WNC”), and WESTMED-REHAB, a California corporation (“WestMed Sub”), and is joined into hereinafter by ALPHAMERICA HEALTH SYSTEMS, INC., a California corporation (“AlphAmerica”), the sole shareholder of WestMed Sub, UNITED WESTERN MEDICAL CENTERS, a California non-profit public benefit corporation (“WestMed”) the sole shareholder of AlphAmerica, and CONTINENTAL MEDICAL SYSTEMS, INC., a Delaware corporation (“CMS”), the sole stockholder of WNC. WNC and WestMed Sub are sometimes referred to herein individually as a “Partner” and collectively as the “Partners.” The terms “General Partner“ and “Limited Partner“ are defined in Section 1.9(b).

BACKGROUND

The Partners desire to form a Delaware limited partnership on the terms set forth herein by executing this Agreement and filing a Certificate of Limited Partnership with the Secretary of State of the State of Delaware.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration of the mutual agreements set forth in this Agreement, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I:

FORMATION OF PARTNERSHIP

Section 1.1. Formation. The parties hereby agree to form the Partnership as a limited partnership under the provisions of the Revised Uniform Limited Partnership Act of the State of Delaware (the “Act”) to carry on the business described in Section 1.4 hereof. All rights, duties and obligations of the Partners in respect of one another and other persons and entities who are not parties to this Agreement shall be as provided in the Act and in this Agreement.

Section 1.2. Name. The initial name of the Partnership shall be “Western Medical Rehab Associates, L.P.” All business of the Partnership shall be conducted in such name, in the name of Tustin Rehabilitation Hospital and such other assumed, trade or fictitious names as the General Partners shall determine from time to time.

Section 1.3. Term. The term of the Partnership shall commence on the date a Certificate of Limited Partnership is filed with the Secretary of State of Delaware and shall continue thereafter for a period of twenty-five (25) years, unless sooner dissolved or extended pursuant to law or any provisions hereof. The Managing General Partner (as that term is defined in Section 6.1) shall cause the Certificate of Limited Partnership to be filed promptly after the execution of this Agreement and shall also cause the Partnership to be registered to do business in the State of California (and any other jurisdiction in which such registration may become necessary).

Section 1.4. Business.

(a) The business of the Partnership shall be (i) to acquire from WNC, pursuant to an Asset Purchase Agreement dated of even date herewith (the “Asset Purchase Agreement”), assets comprising a 60-bed comprehensive medical rehabilitation hospital (the “Rehabilitation Hospital”) and a 57-bed skilled nursing care facility (the “SNF”) (the Rehabilitation Hospital and the SNF are sometimes referred to herein collectively as the “Project”), located at 14851 Yorba Street, Tustin, California, (ii) to lease and operate the Project, (iii) to provide medical rehabilitation and related healthcare services in the Tustin, California and surrounding area, and (iv) to do all such other acts and execute all such agreements and instruments as are incidental to the carrying on of the business of the Partnership during the term of this Agreement.

(b) The scope of the Partnership is limited to the foregoing purposes, and shall not apply to any other business activities of the Partners. Nothing in this Agreement shall render the parties partner with, or agents of, each other for any other purpose or activity, and no Partner acting alone shall have any authority to act for, or to undertake or assume any obligation or responsibility on behalf of, any other Partner or the Partnership except as expressly provided in this Agreement.

(c) WestMed Sub is an Affiliate of WestMed. For purposes of this Agreement, the term “Affiliate” shall have the meaning ascribed to such term in Rule 405 under the Securities Act of 1933. WestMed Sub and WestMed do not currently operate a comprehensive medical rehabilitation hospital. Accordingly, the operation of the Project is substantially in furtherance of WestMed Sub’s and WestMed’s purposes and substantially related to the exercise or performance of WestMed Sub’s and WestMed’s functions because the operations of the Project are intended:

(i) For uses which contribute to WestMed Sub’s corporate purposes and to the charitable and corporate purposes of WestMed and which are substantially related to the carrying on of WestMed Sub’s and WestMed’s functions by increasing WestMed Sub’s and WestMed’s efficiency, improving the overall quality of health delivery facilities and patient care in the community by providing a continuum of care for patients in need of a coordinated, interdisciplinary team approach to comprehensive rehabilitation for the restoration of a meaningful life after sustaining injuries or trauma; and

(ii) For uses which improve WestMed Sub’s and WestMed’s ability to deliver a full range of health services to the community in cooperation with the Partnership. Because of the physical proximity of the Project to the Western Medical Center-Santa Ana, the physicians providing services at both facilities will be able to better serve the needs of patients who may require comprehensive medical rehabilitation in a cost-effective and clinically appropriate environment, making more effective use of scarce health manpower and expanding healthcare services to the community.

2

Section 1.5. Fiscal Year. The fiscal year (“Fiscal Year”) of the Partnership shall be the year which commences on June 1 and ends on May 31. As used in this Agreement, a Fiscal Year shall include any partial Fiscal Year at the beginning and end of the Partnership term.

Section 1.6. Nature of Each Partner’s Interest in the Partnership. The interest of each Partner in the Partnership shall be personal property for all purposes. All property owned by the Partnership, whether real or personal, tangible or intangible, shall be beneficially owned by the Partnership as an entity, and no Partner individually shall have any beneficial ownership of such property, or the right to have any such property partitioned.

Section 1.7. Place of Business. The principal offices of the Partnership shall be located at the address of the Project at 14851 Yorba Street, P.O. Box 3848, Tustin, California 92681 or at such other places as shall be designated by the General Partners from time to time. The Partnership may maintain such other or additional offices as the General Partners may from time to time designate.

Section 1.8. Powers of the Partnership.

(a) To carry out the purposes of the Partnership as set forth in Section 1.4. above, the Partnership shall have and exercise all powers now or hereafter permitted by the laws of the State of Delaware to be exercised by limited partnerships formed under the laws of that State, and to do any and all things not prohibited by law in furtherance of the business of the Partnership as fully as natural persons might or could do.

(b) Without limiting the provisions of Section 1.8(a), the powers of the Partnership shall include the power to: sue and be sued in all courts and participate in all proceedings; hold, purchase, receive, lease or otherwise acquire, own, improve, employ, use and deal in and with real or personal property or any interest therein; sell, convey, lease, exchange, transfer or otherwise dispose of or mortgage or pledge all or any of its property and assets, or any interest therein; wind up and dissolve itself as provided in this Agreement; enter into any contract (including any contracts of guarantee and suretyship with respect to the obligations of the Partnership or of third parties), agreement, undertaking, arrangement, or any joint venture, partnership or association of any kind; incur liabilities, borrow or lend money, issue notes, bonds and other obligations and secure any of its obligations by mortgage, pledge or other encumbrance of all or any of its property, franchises and income; issue additional securities of any type, including interests, rights, options, or warrants; lend money, invest and re-invest its funds, and take, hold and deal with real and personal property as security for the payment of funds so loaned or invested; hire any and all persons or entities as employees, agents, independent contractors, consultants, or otherwise; provide insurance for a its benefit on the life of any of its Partners or their partners, officers, directors or employees, guarantee, purchase, take, receive, subscribe for or otherwise acquire, own, hold, use or otherwise employ securities or interests in any general partnership, limited partnership, corporation, joint venture, trust, business trust, limited liability company, cooperative or association; to serve as the licensed operator of the Project and negotiate, execute and perform contracts with third party payors such as insurers, health maintenance organizations, and the Medicare and Medi-Cal programs; and to take or cause to be taken all actions and to perform all functions necessary or appropriate to conduct the business of the Partnership.

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Section 1.9. Partnership Interests.

(a) The Partnership initially shall have two classes of interests: general and limited. The Partnership may designate specifically the existing limited Partnership interests as a separately enumerated class and issue additional classes of interests in the Partnership in accordance with Section 2.9 below.

(b) A person or entity may be a general partner in the Partnership (a “General Partner”) or a limited partner in the Partnership (a “Limited Partner”), or both, according to the terms on which such person or entity is admitted to the Partnership. A person or entity who is both a General Partner and a Limited Partner shall, for the purposes of this Agreement, be separately afforded the rights of a General Partner and a Limited Partner. To the extent that a General Partner contributes to the capital of the Partnership as a Limited Partner or purchases any Limited Partner’s interest, it shall be treated in all respects as a Limited Partner as to such interests.

Section 1.10. Limitation on Liability of Partners. Except as otherwise required under the Act or applicable law and except with respect to any obligations to the Partnership expressly incurred in writing, no director, officer, shareholder, partner, employee or agent of any Partner shall have personal liability for the payment of any sums owing by such Partner to the Partnership or any other Partner under the terms of this Agreement, or for the performance of any other covenant or agreement of such Partner contained herein.

Section 1.11. Conflicts of Interests and Transactions with Affiliates.

(a) Except as set forth in Article VIII below, (i) any Partner, and any Affiliate of any Partner, may conduct any business or activity whatsoever without any accountability to the Partnership or any Partner even if such business or activity competes with the business of the Partnership, and (ii) this Agreement shall not give the Partnership or any Partner any interest in, or right to, any such business or activity or any proceeds, income or profit thereof or therefrom, and no Partner shall be obligated hereunder to offer any business opportunity to the Partnership or any other Partner.

(b) The Partnership may enter into any arrangement, contract, agreement or business venture with any of the Partners or their Affiliates that is permitted under the Act and other applicable law including, without limitation, leases of the Project and related equipment; subleases of a portion of the Project; and development, management, ancillary services, security, mortgage and guarantee agreements; provided, however, that any such contract, agreement or ancillary service arrangement between the Partnership and any Partner or its Affiliate shall be purchased at the lesser of fair market value or fully-loaded Medicare costs and on terms no less favorable than can then be reached with unaffiliated third parties. Each Partner understands and acknowledges that the conduct of the business of the Partnership will involve business dealings with, and borrowings from, such other businesses or undertakings of the Partners and their Affiliates. It is expressly understood and agreed that the Partnership may borrow funds from any Partner or its Affiliates (either through credit facilities maintained by them or directly from them) on such terms as may be provided for or contemplated by such credit facilities or, in the case of direct borrowings from Partners not made from or through a credit facility, terms that are comparable to terms that could be obtained from third parties.

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(c) Without in any way limiting either the foregoing or the discretion and authority of the Managing General Partner to conduct the business of the Partnership, each Partner acknowledges that the Managing General Partner may cause the Partnership to enter into the following arrangements with WNC or its Affiliates: (i) an irrevocable line of credit arrangement with CMS with respect to the CMS Loan (as that term is defined in Section 2.5(a)(i)); and (ii) a contract with Intellex, a company owned by John Ortenzio, pursuant to which Intellex provides maintenance and plant operations services to the Project.

(d) Without in any way limiting either the foregoing or the discretion and authority of the Managing General Partner to conduct the business of the Partnership, each Partner acknowledges that the Managing General Partner may cause the Partnership to enter into the following arrangements with WestMed Sub or its Affiliates: (i) an irrevocable line of credit arrangement with WestMed with respect to the WestMed Loan (as that term is defined in Section 2 .5(a)(ii)), and (ii) agreements to purchase ancillary services from WestMed at the lesser of fair market value or fully-loaded Medicare costs and on terms no less favorable than can then be reached with unaffiliated third parties. Such services may include radiology, laboratory, laundry and dietary services.

ARTICLE II:

CAPITAL CONTRIBUTIONS OF PARTNERS

Section 2.1. Initial Capital Contributions. On or before April 1, 1996, WestMed Sub shall contribute to the capital of the Partnership certain of the assets of its inpatient rehabilitation business located at 1025 South Anaheim Boulevard, Anaheim, California (the “WestMed Business”) in exchange for its General and Limited Partnership interests in the Partnership (as set forth in Section 3.1). WestMed Sub and WNC shall agree to a valuation of the WestMed Business on or before April 1, 1996. On or before April 1, 1996, WNC shall contribute to the capital of the Partnership an amount of cash equal to the agreed-upon valuation of the WestMed Business in exchange for its General and Limited Partnership interests in the Partnership (as set forth in Section 3.1). The initial capital contributions shall be used by the Partnership to fund costs and expenses of the Partnership and working capital requirements of the Project and to further the business of the Partnership.

Section 2.2. Additional Capital Contributions and Partner Loans.

(a) At such time that the CMS Loan and the WestMed Loan have been made and are fully outstanding, the Managing General Partner shall call upon the Partners to make contributions to the Partnership as additional capital or loans in the amount which the Managing General Partner has determined is required for costs, expenses and working capital requirements incurred or arising in the ordinary course of business of the Project, and each Partner shall be obligated to contribute or loan such amount in accordance with this Section 2.2. The Managing General Partner shall call for such contributions or loans unless the Managing General Partner elects to cause the Partnership to borrow additional funds from a third party in accordance with Section 2.5(c). Contributions called by the Managing General Partner pursuant to this Section 2.2

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shall be provided by each Partner on a pro rata basis such that the portion of the additional capital or loan called by the Managing General Partner pursuant to this Section 2.2 which each Partner will be responsible for contributing or lending to the Partnership (the “Additional Contribution”) shall be equal to such Partner’s Percentage Interest (as that term is defined in Section 3.1(a)). The Capital Account (as that term is defined in Section 3.2(a)) of each Partner shall be credited with the amount of any capital contribution made pursuant to this Section 2.2. Each loan made hereunder shall be on the terms set, and shall bear interest at the rate set forth in, and otherwise comply with, Section 2.6(a).

(b) All calls for the contribution of additional capital or for the making of loans to the Partnership (i) shall be in writing, (ii) shall be given to each Partner, (iii) shall state the aggregate amount needed by the Partnership, the amount of each Partner’s Additional Contribution and whether such Additional Contribution is to be made in the form of additional Capital or a loan, and (iv) shall be signed by or on behalf of the Managing General Partner. Each Partner’s Additional Contribution shall be due within fifteen (15) days after the date that notice of the call is given to the Partners.

(c) All capital contributions to the Partnership pursuant to this Section 2.2 shall be made in cash unless the General Partners mutually determine that any such capital contribution may be made in another form (including, in lieu of cash, property, services, notes, other evidences of indebtedness or obligations). Any non-cash contribution to the capital of the Partnership shall be valued at its fair market value. The Partners agree that the valuation given to any non-cash contribution by an independent appraiser or, in the case of services or property, the cost (as invoiced by a third party seller) of such services or property, shall be deemed conclusively to be the fair market value.

Section 2.3. Failure of the Managing General Partner to Make Capital or Loan Call. If the Partnership requires additional working capital to operate the Project in accordance with state and federal law, or to otherwise fulfill its obligations to patients, and the Managing General Partner shall fail to make a capital or loan call in accordance with Section 2.2(a) above, then WNC shall be entitled to an injunction or injunctions to prevent such a breach of this Agreement and to enforce specifically the terms and provisions of Section 2.2(a) in any court. Such remedy shall be cumulative and not exclusive, and shall be in addition to any other rights or remedies to which WNC is entitled at law or in equity. The parties acknowledge that the purpose of this Section 2.3 shall be to ensure that all Partners contribute pro rata at any time while the CMS Loan and the WestMed Loan have been made and are fully outstanding.

Section 2.4. Default in Making Additional Contributions.

(a) If any Partner (the “Defaulting Partner”) shall fail to timely make any Additional Contribution provided for in Section 2.2 in full when due, then the other Partner (the “Non-Defaulting Partner”) may, in its sole discretion, exercise any or all of the following remedies by giving written notice to the Defaulting Partner:

(i) Obtain in any court an injunction or injunctions to enforce specifically the provisions of Section 2.2 to make such an Additional Contribution.

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(ii) Require the Partnership to set off against any distributions to the Defaulting Partner the amount of the Additional Contribution due the Partnership from the Defaulting Partner.

(iii) Borrow, on behalf of the Partnership from a lender other than the Defaulting Partner, the amount of the Additional Contribution due the Partnership by the Defaulting Partner, in which case the Defaulting Partner shall be liable to the Partnership for the amount of such borrowing, plus all expenses incurred by the Partnership in connection with any such borrowing, including interest on the funds borrowed and attorneys’ fees. If the Defaulting Partner shall, within ninety (90) days after receipt by the Partnership of such borrowed amounts, repay such loan and all expenses incurred by the Partnership in connection therewith, the Capital Account of the Defaulting Partner shall be credited with the amount of its Additional Contribution but not with the amount of any such expenses. If such borrowed amounts are not repaid by the Defaulting Partner within ninety (90) days after receipt by the Partnership of such borrowed amount from the third party lender, the Non-Defaulting Partner may, at any time thereafter and in its sole discretion, assume liability for or make payment in full to the lender of such borrowed amounts, whereupon the Capital Account of the Non-Defaulting Partner shall be credited with the borrowed amount.

(iv) Arrange for the Non-Defaulting Partner to lend the Partnership an amount equal to the Defaulting Partner’s Additional Contribution, in which case the Defaulting Partner shall be liable to the Partnership, and the Partnership shall be liable to the Non-Defaulting Partner, for the amount of such borrowing, plus all expenses incurred by the Partnership in connection with any such borrowing, including interest on the funds borrowed and attorneys’ fees. If the amounts loaned by the Non-Defaulting Partner are not paid by the Defaulting Partner within ninety (90) days after receipt of such loaned amounts by the Partnership, the Non-Defaulting Partner may, at any time thereafter and in its sole discretion, convert such loan and expenses to a capital contribution by the Non-Defaulting Partner, whereupon the Defaulting Partner shall have no further obligation to the Partnership or the Non-Defaulting Partner to pay such amounts, and the Capital Account of the Non-Defaulting Partner shill be Credited with such amounts, the Non-Defaulting Partner’s Percentage Interests shall be increased and the Defaulting Partner’s. Percentage Interest shall be decreased in accordance with Section 3.1.

(v) Purchase all the interest of the Defaulting Partner in the Partnership for a purchase price equal to the product of such Defaulting Partner’s Percentage Interest multiplied by the net book value of the Partnership’s net tangible assets (provided, however, in the event of a failure to make an Additional Contribution that is a contribution to capital under Section 2.2, such net book value shall be compiled without regard to any Additional Contribution that is such a contribution to capital by the Non-Defaulting Partner in response to such same capital call), and thereby terminate the Defaulting Partner’s interest in the Partnership while continuing the business of the Partnership. The closing of any purchase hereunder shall occur thirty (30) days after the Non-Defaulting Partner’s notice of election, or at such other time as the Partners may agree.

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(b) Any failure or delay on the part of the Non-Defaulting Partner in exercising any remedy set forth above shall not act as a waiver thereof. The single or partial exercise of any such remedy shall not preclude any other or further exercise thereof or the exercise of any other remedy hereunder.

Section 2.5. Loans by CMS and WestMed; Third Party Loans.

(a) CMS shall make up to $1,000,000 of unsecured loans to the Partnership to provide working capital for the operation of the Project (the “CMS Loan”). After the CMS Loan has been fully advanced, WestMed shall make up to $1,000,000 of unsecured loans to the Partnership to provide sufficient working capital for the Project (the “WestMed Loan”). The CMS Loan and the WestMed Loan (together, the “Working Capital Loans”) shall be documented pursuant to agreements executed and delivered at the Closing under the Asset Purchase Agreement The Working Capital Loans shall be subject to the intercreditor provisions of this Section 2.5.

(b) The Partnership shall pay the current and past-due debt service on the CMS Loan and the WestMed Loan pro rata, paying all past-due interest first pro rata, then all past-due principal pro rata, then all current interest pro rata, and then all current principal pro rata; provided, however, that WestMed shall be subordinated in right of payment to the amount (the “CMS Loan Senior Portion”), if any, by which the outstanding principal balance of the CMS Loan exceeds the outstanding principal balance of the WestMed Loan, as follows: If (1) the Partnership is making a permanent reduction (as opposed to a repayment that can be reborrowed under the terms of the loan documents) before the second anniversary hereof; (2) the Partnership is making a payment on the Working Capital Loans at any time after the second anniversary hereof; or (3) there is an event of liquidation, bankruptcy, or insolvency of the Partnership, then in any such case CMS shall be entitled to receive interest and principal on the CMS Loan Senior Portion before any payment of interest or principal is made on the balance of the working Capital Loans. For example, if after the second anniversary hereof, the outstanding principal balance of the CMS Loan is $1,000,000 and the outstanding principal balance of the WestMed Loan is $500,000, the Partnership shall pay CMS $500,000 plus interest before it begins paying principal and interest on the Working Capital Loans pro rata as provided in the first sentence of this Section 2.5(b): If the Partnership makes any payment to WestMed in violation of this Section 2.5(b), WestMed shall consider such payment held in trust and shall remit it immediately to CMS.

(c) The Partnership shall not grant, and neither CMS nor WestMed shall accept, any collateral security for the Working Capital Loans unless the lien priorities reflect the payment priorities set forth in Section 2.5(b) above. In other words, any liens shall rank pari passu except as to the CMS Loan Senior Portion, which shall be secured by a lien that ranks ahead of the pari passu liens securing the remainder of the Working Capital Loans. Interest and principal on the CMS Loan Senior Portion shall be paid from the proceeds of any collateral before the remainder of the Working Capital Loans are paid from such proceeds.

(d) Provided that the CMS Loan and the WestMed Loan have been made and are fully outstanding, the Managing General Partner may arrange for additional unsecured loans to the Partnership from third parties in order to provide working capital for the Partnership

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whenever the Managing General Partner determines that the Partnership requires additional working capital. Such loans may be provided to the Partnership by lenders directly or indirectly through Affiliates of the General Partners (including CMS and WestMed) through credit facilities or other debt arrangements maintained by them from time to time. Each Partner agrees that such loans may be evidenced by notes or contracts of guaranty and suretyship documenting the Partnership’s repayment obligations. The Partnership may guarantee loans to the Partnership or to Affiliates of the General Partners (with such guarantees limited in amount to the amount of such loans advanced to the Partnership).

(e) The provisions of this Section 2.5 shall survive any dissolution of the Partnership or termination of this Agreement to the extent that any Working Capital Loans remain unpaid.

Section 2.6. Partner Loans.

(a) Except for loans made pursuant to Section 2.5, loans made to the Partnership by the Partners shall be due and payable upon terms mutually agreed upon by the Partners for such loans, with interest equal to the greater of (i) the publicly announced prime interest rate of Citibank, N.A. plus one and one-half (1 ¹/2) percentage points, or (ii) the applicable federal short-term rate as defined in; section 1274(d)(1) of the Internal Revenue Code of 1986, as amended (the “Code”), as each such rate may be adjusted from time to time. Partner loans shall be made on such terms and conditions as are acceptable to and approved by the Partnership’s third party lenders including, without limitation, in the case of loans made through credit facilities maintained by either General Partner or its Affiliates, the providers of such credit facilities. Each Partner agrees, in connection with any loans that it may make to, the Partnership, to subordinate its rights and remedies with respect to such loans to the rights and remedies of the Partnership’s lenders on such terms as may be acceptable to such lenders.

(b) A loan account shall be established and maintained for any Partner making a loan to the Partnership either pursuant to Section 2.2 or this Section 2.6,

(c) Except as provided for in Section 2.7 hereof, after payment of (i) current and past-due debt service on liabilities of the Partnership other than the loans from Partners, (ii) all operating expenses of the Partnership, and (iii) the CMS Loan and the WestMed Loan, the Partnership shall pay the current and past-due debt service on any outstanding Partner loans pursuant to this Section 2.6 (pro rata among such loans, paying all past-due interest first pro rata, then all past-due principal pro rata, then all current interest pro rata, and then all current principal pro rata) before distributing any amount to any Partner by way of capital or profits.

Section 2.7. No Third Party Beneficiaries. The right of the Partnership to require contributions of additional capital or the making of loans to the Partnership under the terms of this Agreement does not confer any rights or benefits to or upon any person or entity who is not a party to this Agreement.

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Section 2.8. Capital Contributions and Loans Generally. Except to the extent otherwise expressly provided in this Agreement or by law:

(a) no Partner may withdraw any part of its capital from the Partnership;

(b) loans by a Partner to the Partnership shall not be considered a contribution of capital (except upon the conversion of loans pursuant to Section 2.4(a)(iv)),shall not increase any Capital Account of the lending Partner, and shall not result in the adjustment of any Partner’s Percentage Interest in the Partnership, and the repayment of such loans by the Partnership shall not decrease any Capital Account of the Partner making the loans;

(c) no interest shall be paid on any initial or additional capital contributed to the Partnership by any Partner; and

(d) under any circumstances requiring a return of all or any portion of a capital contribution, no Partner shall have the right to receive property other than cash.

Section 2.9. Issuance of Additional Partnership Interests.

(a) The General Partners may solicit and accept additional capital contributions from any Partner and/or cause the Partnership to issue additional interests in the Partnership, rights, options, or warrants exercisable for or convertible into interests in the Partnership, or any other “securities” of any type or class whatsoever. Any such interests in the Partnership, rights, options, warrants, or securities may be issued for cash, property, services, or such other type, form, and amount of consideration (including notes, other evidences of indebtedness or obligations of the person or entity acquiring the interest or security, as the case may be) as the General Partners may determine to be appropriate.

(b) The General Partners may cause the Partnership to create and issue such additional classes or other interests in the Partnership with such rights, privileges, and franchises as they determine to be appropriate. Any such issuance may be made by the General Partners, acting without the consent of any other Partner, by setting forth either in an amendment or an addendum to this Agreement, the relative rights, obligations, duties, and preferences of each new class of securities that is created. A copy of this Agreement as so amended, or the addendum as so adopted, as the case may be, shall be provided to each other Partner. All filings necessary to be made under the Act or applicable law in connection with the creation of such interests shall be made by the Managing General Partner on behalf of the Partnership.

(c) By executing this Agreement, each Partner consents and authorizes the Partnership, acting solely through the General Partners, to issue such securities with such terms, rights and preferences, and upon such terms and conditions as the General Partners may from time to time determine to be appropriate.

(d) Upon the admission of any additional Partner to the Partnership, the General Partners shall cause to be properly prepared and executed pursuant to the power of attorney provided for herein, an amendment to this Agreement to reflect such admission which shall be required by the Act.

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ARTICLE III:

CAPITAL ACCOUNTS

Section 3.1. Percentage Interests.

(a) The respective fractional ownership interests (the “Percentage Interests”) of each Partner in the Partnership from time to time shall be the percentage that such Partner’s capital contributions to the Partnership bears to the aggregate capital contributions to the Partnership at the time of determination including, in each case, any additional capital contributions made to the Partnership that are contributions to capital under Section 2.2. Accordingly, upon the making of the initial capital contributions to the Partnership in accordance with Section 2.1, the initial Percentage Interests of the Partners shall be as follows:

Partner	Manner Held	Percentage Interest
WNC	General Partner	1%
WNC	Limited Partner	49%
WestMed Sub	General Partner	1%
WestMed Sub	Limited Partner	49%

(b) Upon admission of any additional Partners to the Partnership, their respective Percentage Interests shall be reflected in an amendment to this Agreement as contemplated in Section 2.9(d) above.

(c) The General Partners may, in their reasonable discretion, deem all capital contributions made in connection with the same event to have been made at the same time solely for purposes of computing Percentage Interests, so as to avoid unintended temporary shifts in Percentage Interests. The provision of this Section 3.1 shall not give any Partner any interest in any amount credited to any Capital Account (as that term is defined in Section 3.2(a)) of any other Partner.

(d) Each Partner’s Percentage Interest shall constitute its interests in Partnership profits for purposes of determining such Partner’s share of nonrecourse liabilities of the Partnership under Treasury Regulation (“Treas. Reg.”) §1.752-3(a) (3)

Section 3.2. Establishment and Maintenance of Capital Accounts.

(a) General Rule. A capital account (a “Capital Account”) shall be established for each Partner in the amount of such Partner’s initial capital contribution. Each Partner’s Capital Account shall be determined and maintained in accordance with the rules of Treas. Reg. §1.704-1(b)(2)(iv). Pursuant to those rules, a Partner’s Capital Account shall be increased by:

(i) the amount of any additional capital contributed by such Partner to the Partnership;

(ii) the fair market value, on the date of contribution, of property (other than money) contributed by such Partner to the Partnership (net of liabilities secured by such contributed property that the Partnership either assumes or to which it takes subject); and

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(iii) allocations to such Partner of Partnership income and gain (or items thereof), including income and gain exempt from tax;

and shall be decreased by:

(iv) the amount of money distributed to such Partner by the Partnership (except as payments of principal and interest on any loans made by such Partner);

(v) the fair market value of property (other than money) distributed to such Partner by the Partnership (net of liabilities secured by such distributed property that the Partner assumes or subject to which it takes the property);

(vi) such Partner’s allocable share of expenditures of the Partnership not deductible in computing its taxable income and not properly capitalized for federal income tax purposes; and

(vii) allocations to such Partner of Partnership loss and deduction (or items thereof), but excluding items described in Section 34(a)(vi) above.

(b) Transferees. Subject to Section 10.6, the Capital Account of any transferee Partner who has acquired the entire interest of a former Partner in the Partnership shall be the same as the Capital Account of the Partner from whom the transferee Partner acquired its interest.

Section 3.3. Distribution Upon Liquidation in Accordance with Capital Accounts. Upon liquidation of the Partnership, liquidating distributions shall in all cases be made in accordance with the positive Capital Account balances of the Partners, as determined after taking into account all Capital Account adjustments for the Partnership taxable year during which such liquidation occurs (other than those made pursuant to this Section 3.3), by the end of such taxable year or, if later, within ninety (90) days after the date of such liquidation, except as permitted by Treas. Reg. §1.704-1(b)-(2)(ii)(b). It is the Partners’ understanding and intent that distributions pursuant to this section 3.3 shall be made in proportion to the Partners’ respective Percentage Interests.

Section 3.4. Restoration of Deficit Capital Account Balances. The Limited Partners shall be required to restore any deficit in their respective Capital Accounts within thirty (30) days after receiving notice thereof from either General Partner. If any Limited Partner (the “Defaulting Partner”) shall fail to restore any deficit in its respective Capital Account within such thirty (30) day period, such failure shall be treated in the same manner as a default in making an Additional contribution and either General Partner may exercise any or all of the remedies provided in Section 2.4 hereof on behalf of the other Partners (the “Non-Defaulting Partners”) by giving written notice to the Defaulting Partner.

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ARTICLE IV:

DISTRIBUTIONS

Section 4.1. Cash Flow Distributions.

(a) Except as provided in Section 12.5, and subject to Section 2.6(c), within one hundred twenty (120) days after the last day of each Fiscal Year of the Partnership (or at such other times as the General Partners shall determine), the Managing General Partner shall distribute the Cash Flow (as that term is defined in Section 4.1(b)), if positive, of the Partnership for the preceding Fiscal Year (or other period determined by the General Partners) to the Partners in accordance: with their respective Percentage Interests in the Partnership.

(b) For purposes of this Agreement, “Cash Flow” for any time period means the amount of all cash receipts of the Partnership derived from all sources (including releases from reserves), other than from (A) capital contributions,(B) Extraordinary Cash Flow (as that term is defined in Section 4.1(c)), and (C) proceeds of a liquidation of Partnership assets under Article XII, less (i) all cash expenditures of the Partnership during such period including, without limitation, expenditures for accounting and legal fees, principal and interest payments due and currently payable in respect of loans made or arranged by the General Partners, including the CMS Loan, the WestMed Loan and Partner loans, any prepayments of any loans to the Partnership, payments to third party payors, payments of any amounts owing to Partners, lease payments, taxes and other assessments, all governmental and quasi-governmental charges payable by the Partnership, and expenses incurred by or on behalf of the Partnership, and (ii) the amount, if any, which the Managing General Partner determines is necessary or appropriate for working capital or other reserves for cash expenses and contingencies.

(c) For purposes of this Agreement, “Extraordinary Cash Flow” shall mean the cash proceeds (including any applicable insurance proceeds in excess of the cost of repair) realized by the Partnership as a result of any Capital Transaction (as that term is defined in Section 4.1(d)) plus any cash interest payments received with respect to such proceeds, decreased by the sum of the following: (A) the amount of such proceeds used, set aside or committed by the Partnership for restoration and repair of the Project or any part thereof or otherwise used to satisfy obligations of the Partnership; (B) a reserve for future expenditures as determined by the General Partners; (C) a reserve or reserves for contingent, unmatured or unforeseen liabilities or obligations of the Partnership as determined by the General Partners, and (D) any expenses, costs or liabilities incurred in connection with such Capital Transactions (including, without limitation, attorneys’ and accountants’ fees, court costs, brokerage fees, commissions, recording fees, transfer taxes and the like)

(d) For purposes of this Agreement, “Capital Transaction” shall mean the sale, exchange, condemnation (or similar eminent domain taking or disposition in lieu thereof), destruction by casualty, financing, refinancing or disposition of the Project or any part thereof.

(e) The Partnership shall have no obligation, except upon liquidation (in which case all distributions will be made as provided in Section 3.3 above and Article XII, below), to distribute Extraordinary Cash Flow. In the event that any Extraordinary Cash Flow is distributed by the Partnership prior to a liquidation, however, it shall be distributed to the Partners prorate in accordance with their respective Percentage Interests in the Partnership as of the date of the applicable Capital Transaction.

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(f) The proceeds of a liquidation of the Partnership shall be distributed as provided in Article XII and Section 3.3 of this Agreement rather than as provided in this Section 4.1.

Section 4.2. In-Kind Distributions. If, in the reasonable discretion of the General Partners, any assets of the Partnership are distributed to the Partners in kind, such assets shall be valued on the basis of the fair market value thereof as determined by the General Partners in their reasonable discretion on the date of distribution. If the fair market value is not readily apparent or is not otherwise agreed upon, the Partners agree that the valuation of any asset by the General Partners on the basis of the determination of its fair market value by an independent appraiser shall be deemed to be a reasonable value for such asset and a reasonable exercise of such discretion.

ARTICLE V:

TAX ALLOCATIONS

Section 5.1. General Rule of Allocation. Except as otherwise provided in this Article V, all income, gain, loss, deduction and credit of the Partnership for each taxable year shall be allocated for federal income tax purposes among the Partners in proportion to their respective Percentage Interests.

Section 5.2. Treasury Regulations. Partnership allocations under this Article V shall comply with applicable provisions of Code sections 704(b) and 704(c) and Treas. Regs. §§1.704-1, -2 and -3 thereunder, including the “qualified income offset” provision of Treas. Reg. §1.704-1(b) (2) (ii) (d) and the “minimum gain chargeback” requirement of Treas. Reg. S1.704-2(f). The Partnership shall use the “remedial allocation method,” as defined in Treas. Reg. §1.704-3(d), with respect to any assets contributed by a Partner to the Partnership.

Section 5.3. Negative Balances. No Partner shall be allocated any item of loss or deduction to the extent such allocation would create or increase a negative balance in any Capital Account of such Partner that exceeds the sum of (i) such Partner’s obligation to restore a deficit balance in such Capital Account, and (ii) such Partner’s share of partnership minimum gain, as defined in Treas. Reg. §1.704-2(g)(1), after taking into account all allocations and distributions for the taxable year and all distributions that, as of the end of the year, are reasonably expected to be made to such Partner in subsequent years and exceed the net amount of income or gain reasonably expected to be allocated to it in those years.

Section 5.4. Partner Loans. If a Partner lends money to the Partnership or guarantees a loan to the Partnership, then except; as provided under Section 2.4(d), the loan shall be treated as nonrecourse to the other Partners and, accordingly, deductions and losses attributable to such loan shall re allocated to such Partner in accordance with Treas. Reg. §1.704-2(i)(1), and any corresponding chargeback of partner nonrecourse debt minimum gain, as defined in Treas. Reg. §1.704-2(i)(4), shall be allocated to such Partner in accordance with such provision.

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Section 5.5. Chance in Percentage Interests. In the event of any change in the Percentage Interests of the Partners, items of income, gain, loss and deduction shall thereafter be allocated specially among the Partners so as to place their Capital Accounts in proportion to their Percentage Interests as quickly as possible, subject to the requirements of Sections 5.2, 5.3 and 5.4.

Section 5.6. Change in Law. In the event of any change in applicable federal income tax law, or interpretations thereof, regarding partnership allocations, the General Partners are hereby authorized to modify the allocation provisions of this Article V in such manner as the General Partners reasonably believe to be necessary to comply with federal income tax law and to preserve the economics of this partnership arrangement.

ARTICLE VI:

CONTROL AND MANAGEMENT

Section 6.1. General. The Partners shall designate a General Partner which shall have responsibility for the day-to-day operations of the Partnership (the “Managing General Partner”). The Partners agree that unless and until replaced by WNC pursuant to Section 7.6 or as otherwise provided in this Agreement, the Managing General Partner shall be WestMed Sub. Subject to the limitations contained in Section 6.3, the Managing General Partner shall implement all Partnership decisions, shall have full, exclusive and complete discretion in the management and control of the business and affairs of the Partnership, and shall carry out such other duties as may from time to time be assigned to it by the General Partners. Without limiting the foregoing, the duties and powers of the Managing General Partner shall be to:

(a) Protect and preserve the Partnership’s title and interest in the assets of the Partnership;

(b) With the proceeds of capital contributions, loans and cash receipts, pay all taxes, assessments, and other impositions applicable to the assets of the Partnership and all debts and other obligations of the Partnership;

(c) Negotiate, sign, administer and perform on behalf of the Partnership contracts, appropriate-Partnership documents and other instruments relating to the business of the Partnership including, without limitation: (i) any documents relating to the CMS Loan; (ii) any documents relating to the WestMed Loan, (iii) agreements to purchase ancillary services from WestMed at the lesser of fair market value or fully-loaded Medicare costs and on terms no less favorable than can be reached with unaffiliated third parties, and (iv) any amendments, renewals, extensions or modifications of any of the foregoing documents;

(d) Open, maintain and administer bank accounts in the banks selected by it, deposit and withdraw funds of the Partnership from such accounts, and sign all checks, drafts or orders for payment of the debts and expenses of the Partnership;

(e) Borrow funds for Partnership purposes in accordance with Article II hereof, make calls under Sections 2.2 and 2.6 hereof, and determine whether additional working capital shall be paid in as (i) Partner loans, (id) additional capital contributions, or (iii) unsecured

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third party loans to the Partnership, and in connection therewith, sign all agreements and instruments evidencing such loans including, without limitation, promissory notes, loan agreements and guaranty and suretyship agreements;

(f) Retain, employ, and coordinate the services of all Partnership employees, accountants, auditors, attorneys, and other consultants or contractors as the Managing General Partner shall determine to be necessary or appropriate for the conduct of the Partnership’s business;

(g) Collect all income due the Partnership;

(h) Purchase or lease all equipment, tools, appliances, materials and supplies necessary for the operation of the Partnership’s business;

(i) Contract for water, gas, electricity, and other services and commodities necessary in the operation and maintenance of the Partnership’s business;

(j) Prepare or cause to be prepared annual operating and capital budgets for the Partnership setting forth the estimated receipts and expenditures of the Partnership for the next Fiscal Year;

(k) Obtain and maintain in the Partnership’s name insurance of such types and in such amounts as it determines is necessary and appropriate reasonably to protect the Partnership;

(l) Act as the tax matters partner for the Partnership for federal income tax purposes, having the power to, make any elections for the Partnership for tax purposes and prepare and timely file or cause to be prepared and timely filed all required Partnership income tax returns, state, federal and, local returns and other documents required under the Federal Insurance Contributions Act and the Federal Unemployment Tax; Act, or any similar federal or state legislation, and all withholding tax returns required for employees of the Partnership, and, notwithstanding any other provision of this Agreement, all of such returns shall be prepared in a manner that, in the Managing General Partner’s reasonable discretion, it believes to be consistent with applicable law;

(m) Settle claims or submit any claim to arbitration or reference, prosecute, defend and settle lawsuits, and handle all matters with governmental agencies;

(n) Issue or cause to be issued securities in the Partnership as provided in Section 2.9 including, without limitation, interests, rights, option, warrants or securities and admit additional or substitute partners;

(o) Amend this Agreement on behalf of the Partnership in accordance with its terms; and

(p) Perform all other normal business functions related to the business and affairs of the Partnership in accordance with this Agreement.

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Section 6.2. Authority of Managing General Partner. Any authorized officer of the Managing General Partner shall have full power and authority to execute all documents and take all other actions as may be taken by the Managing General Partner and thereby bind the Partnership with respect thereto. The duly adopted corporate resolution of the Managing General Partner reciting that it has authority to undertake any action shall be conclusive evidence of the authority of the Managing General Partner or any officer or director of the Managing General Partner and, when delivered to any third party, any such third party shall be entitled to rely upon such resolution or statement and shall not be required to inquire further as to any of the facts contained in such resolution or statement, said facts being deemed to be true insofar as such third party is concerned. After delivering such resolution or statement, the Managing General Partner, by signature of its duly authorized officer, may sign any instrument and bind the Partnership, and the Partnership property just as though all of the Partners had also signed.

Section 6.3. Limitations on Managing General Partner’s Authority. Anything in Sections 6.1 or 6.2 notwithstanding, and in addition to those matters requiring the consent of both General Partners as stated elsewhere in this Agreement, the Managing General Partner shall not be empowered, without the consent of the other General Partner, to do or take any of the following actions:

(a) Except as otherwise provided herein, cause or permit the dissolution, liquidation, termination, consolidation or merger of the Partnership, or otherwise to change or reorganize the Partnership into any other legal form.

(b) Authorize the Partnership to sell, assign, exchange, transfer or otherwise dispose of, in a single transaction or series of related transactions, assets of the Partnership with a fair market value, as determined in the reasonable discretion of the Managing General Partner, in excess of $1,000,000 at the time of sale, assignment, exchange, transfer or disposition, except in connection with a liquidation of the Partnership pursuant to Article XII.

(c) Mortgage, pledge, assign or otherwise encumber or pledge the Partnership’s assets (other than ordinary purchase money security interests covering equipment, furniture and other personal property) to secure loans, or to sign any agreements or instruments in connection therewith including, without limitation, security, mortgage or pledge agreements, unless and until such time as the CMS Loan has been fully satisfied, with no opportunity for reborrowings under the terms thereof, the Existing Letter of credit (as that term is defined in Section 6.9(f)(i)) has been returned to WNC or CMS, and WNC has been reimbursed in the amount of the Security Deposit (as that term is defined in Section 6.9(f)(ii)).

(d) Make, execute or deliver any general assignment for the benefit of creditors, or any bond, confession of judgment, guarantee, indemnity bond or surety bond.

(e) Cause the Partnership, or on behalf of or in the name of the Partnership, to acquire any equity interest in, invest in, guaranty or otherwise become obligated or liable for the obligations of any person or entity (including any Affiliate of the Managing General Partner) other than the Partnership.

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(f) Possess Partnership property, assign any rights in specific Partnership property or employ or permit the employment of the funds or assets of the Partnership in any manner, except for the benefit of the Partnership.

(g) Make, execute or deliver any documents relating to the lease for the Project (the “Property Lease”) including, without limitation, any documents relating to an amendment, renewal, extension or modification thereof, or any sublease of the Project (other than medical treatment room subleases).

(h) Enter into any agreement for the provision of management services with respect to the Project, if (i) such agreement provides for the management of the Rehabilitation Hospital, the SNF or the Project, or (ii) such management services relate to a component of the Rehabilitation Hospital, the SNF or the Project, and the compensation to be paid therefor is in excess of $7,500 in any month, or $90,000 in any year.

(i) Recruit, appoint and/or dismiss the administrator of the Project, unless and until such time as the CMS Loan has been fully satisfied, with no opportunity for reborrowings under the terms thereof, the Existing Letter of Credit has been returned to WNC or CMS, and WNC has been reimbursed in the amount of the Security Deposit; provided, that any action taken by the Managing General Partner without the consent of the other General Partner shall be taken only after the Managing General Partner consults with the other General Partner. Notwithstanding the foregoing, the parties acknowledge that Page Van Hoy shall be acceptable as the administrator of the Project.

(j) Approve annual operating and capital budgets, for the Partnership, or deviations therefrom, unless and until such time as the CMS Loan has been fully satisfied, with no opportunity for reborrowings under the terms thereof, the Existing Letter of Credit has been returned to WNC or CMS, and WNC has been reimbursed in the amount of the Security Deposit; provided, that any action taken by the Managing General Partner without the consent of the other General Partner shall be taken only after the Managing General Partner consults with the other General Partner.

(k) Incur capital expenditures during any fiscal year in excess of $75,000 which are not part of the approved annual operating and capital budgets.

(l) Incur working capital debt under Section 2.5(a) and (c) in excess of $3,000,000 in the aggregate outstanding at any one time.

(m) Purchase or lease any property from, or enter into any transaction, contract or other agreement or arrangement with, any Affiliate of the Managing General Partner requiring payments by the Partnership of greater than $15,000 during any fiscal year, or cause the Partnership to enter into any transaction with an Affiliate of the Managing General Partner on terms that are not commercially reasonable to the Partnership and as good as or better than such terms as could be obtained from an unaffiliated party under the same or similar circumstances; provided, however, that the Partners hereby agree that any loans to the Partnership in accordance with Article II satisfy the requirements of this Section.

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(n) Make any material change-in the mission statement of the Partnership, engage the Partnership in any business venture or change the nature of the Partnership’s business, except as contemplated by this Agreement.

(o) Except as permitted by Article I, admit a person or entity as a Partner, unless and until such time as the CMS Loan has been fully satisfied, with no opportunity for reborrowings under the terms thereof, the Existing Letter of Credit has been returned to WNC or CMS, and WNC has been reimbursed in the amount of the Security Deposit.

(p) Except as provided in Section 7.6, substitute a Managing Partner for WestMed Sub or transfer its interests in the Partnership.

(q) Except as may be required under the Act to effect a transfer of Partnership interests contemplated by Article X or otherwise expressly permitted herein, amend this Agreement.

(r) Acquire, construct or operate on behalf of the Partnership any additional hospital facilities, or increase significantly the size of the Partnership’s hospital facilities.

(s) Convert or reclassify any of the existing license beds of the Project.

(t) Make any loans by the Partnership to a third party, including to Partners or Affiliates of any Partner.

(u) Deal in stocks, bonds, securities or commodities or in the futures market therefor on behalf of the Partnership.

(v) Authorize the hiring of, or otherwise putting on the Partnership’s payroll, any person or entity who has been employed by WestMed or any of its Affiliates at any time during the previous six (6) months, unless the person or entity shall be committed on a full-time basis to the Hospital or the SNF and shall provide services which are legitimate and necessary for the efficient operation thereof.

(w) Determine not to apply for an exemption from the routine service limitation for the SNF with respect to any fiscal year of the Partnership.

(x) Do or cause, permit or suffer to be done any act is violation of this Agreement.

(y) Do any act which would make it impossible to carry on the ordinary business of the Partnership.

Section 6.4. Meetings of the Partners.

(a) Meetings of the Partners may be called by either General Partner. Meetings may be held in person or by telephone conference call. Unless waived by the Partners, at least forty-eight hours prior written notice of the time, date and place of the meeting shall be given to each Partner by the General Partner(s) calling the meeting. Such notice shall specify the business to be conducted at the meeting. Any Partner attending, or participating in, a meeting in person or by proxy shall be deemed to have waived notice thereof.

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(b) Each Partner has the right to vote on each matter submitted to it for its consent or approval. Each Partner shall be entitled to vote its Percentage Interest in the Partnership. Action of the Partners may be taken at a meeting of the Partners or by the written consent of the Partners if a copy of the consent form is furnished to all Partners prior to the taking of such action.

(c) A Partner may authorize another Partner to act for it as its proxy at any meeting of the Partners. Every proxy shall be in writing and filed with the General Partners prior to or at the meeting.

(d) The failure of a Partner to respond, within the response period set forth in the request in question (which response period shall be not less than, two (2) days nor more than thirty (30) days from the date on which the Partner in question is deemed to have received such request sent in accordance with Section 14.2 below), either in the affirmative or the negative to any request it receives from a General Partner relating to a proposed act in respect of which such Partner is entitled to vote pursuant to this Agreement shall be deemed conclusively for all purposes to be a vote by such Partner in favor of the act proposed by one or both of the General Partners.

Section 6.5. Governing Board. The General Partners shall form a governing hoard composed of our (4) members, two (2) of whom shall be appointed by WNC and two (2) of whom shall be appointed by WestMed Sub (the “Governing Board”). The Governing Board shall be responsible for the Project’s medical staff credentialing and all similar type medical issues for which the Joint Commission on Accreditation of Healthcare Organizations requires governing board review and approval.

Section 6.6. Fees and Expenses of the General Partners.

(a) In addition to such distributions as it is entitled to receive in respect of its capital contributions or payments in respect of the loans, if any, which it or its Affiliates may make to the Partnership, each General Partner shall be entitled to current reimbursement for all out-of-pocket costs and expenses to third parties, including Affiliates of such General Partner, that each incurs in its own name, or in the name of or on behalf of the Partnership, in carrying out the business and affairs of the Partnership.

(b) In addition to payment for services provided for in any agreement to purchase ancillary services as described in Section 1.11(d), the Managing General Partner or its Affiliates shall be entitled to payments for services, such as the conduct of a tax audit, litigation, the liquidation of the Partnership or any Partner’s interest therein, and other accounting or legal services rendered to the Partnership by third parties other than routine services performed in the ordinary course of business.

(c) A Partner, or its Affiliate, shall be entitled to pass through as expenses to the Partnership, or otherwise charge the Partnership for, only a “Medicare Percentage” of such

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overhead or home office, costs (including, without limitation, salaries and other expenses of persons or entities who are not on the Partnership’s payroll but who nevertheless provide management or oversight services relating to the Project) which the Partnership has reasonably determined to be reimbursable costs under the Medicare program as allowable overhead or home office expenses relating to the Project. For purposes of this section 6.6(c), the term “Medicare Percentage” shall mean the percentage obtained by dividing the average daily Medicare census for the Project, or applicable portion thereof, by the total average daily census for the Project, or applicable portion thereof, for the calendar month immediately preceding the date on which the expense is incurred. If at any time the Partnership determines, or receives notice under the Medicare program, that a cost for which payment to a, Partner or its Affiliate has previously been made is not an allowable overhead or home office expense, then the Partner, or its Affiliate, which received such payment shall promptly reimburse the Partnership for the amount thereof. Except as provided above, no other overhead or home office costs of any Partner, or its Affiliate, may be charged or passed through to the Partnership. Nothing contained herein shall prevent the Partnership from contracting with, and making payments to, Affiliates of any Partner in accordance with the terms of Section 1.11 or the terms of that certain Asset Purchase Agreement between WNC and the Partnership, dated the date hereof.

Section 6.7. Limitation of Responsibility of General Partners; Indemnification.

(a) No General Partner shall be liable to the Partnership or to any other Partner for any loss arising out of or in connection with the management of the business and affairs of the Partnership, or for any mistake of judgment, or for any action taken or omitted to be taken by it, except by reason of its failure to exercise the care that a reasonably prudent business person in a like position would exercise under similar circumstances, or its gross negligence, willful misconduct or fraud, or by reason of its acting outside of its authority granted herein.

(b) The Partnership shall indemnify each General Partner (and each Affiliate and shareholder, officer, director, employee and agent of each General Partner and its Affiliates) from and hold it harmless from and against any claim, loss, liability, damage or expense, including reasonable attorneys’ fees, arising out of any act by each General Partner (or by any Affiliate or any shareholder, officer, director, employee, agent of each General Partner or an Affiliate), as long as such at or failure to act was not caused by the indemnified party’s breach of the standard of care set forth in Section 6.7(a).

(c) The Partnership shall be permitted to advance funds to any person or entity who may be indemnified by it for legal expenses and other costs incurred as a result of a legal action if the legal action relates to the performance of duties or services by the indemnified party on behalf of the Partnership, and the indemnified party undertakes to repay the advanced funds to the Partnership in cases in which it would not be entitled to indemnification under this Section 6.7.

(d) If a General Partner shall be made, or is threatened to be made, a party to any claim, action or proceeding arising out of its conduct as a General Partner, such General Partner shall give the other Partners written notice of such claim, action or proceeding within two (2) days of obtaining knowledge thereof, and such Partners shall have the right to join in resisting and defending the claim, action or proceeding. Nothing herein shall limit the right of the tax matters partner appointed under Section 6.1(1) to act for the Partnership on federal income tax matters.

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Section 6.8. No Authority of Limited Partners to Act. No Limited Partner, in its capacity as such, shall (i) have the power to sign for or bind the Partnership in any manner; (ii), participate in the management or control of the business of the Partnership; or (iii) except as required by the Act or expressly provided in this Agreement, have any right to vote on or consent to any matter.

Section 6.9. Buy-Sell Mechanism.

(a) In the event that the Managing General Partner is unable, after good faith discussions, to obtain consent for any of the actions set forth in Section 6.3, either General Partner may give the other General Partner written notice of the: dispute not resolved in the normal course of business. The Chief Executive Officer of both CMS and WestMed shall meet at a mutually acceptable time and place within thirty (30) days after delivery of such notice, and thereafter as often as they reasonably deem necessary, and shall attempt to resolve the dispute.

(b) If the matter has not been resolved within thirty (30) days following a meeting of such Chief Executive Officers, either General Partner (the “Offeror Partner”) shall have the right, exercisable by written notice (the “Offer”) delivered to the other General Partner (the “Offeree Partner”), to offer to buy all, but not less than all, of the Offeree Partner’s interest in the Partnership at a purchase price and upon the other terms specified in the Offer.

(c) The Offeree Partner must elect by written notice (the “Notice of Election”) delivered to the Offeror Partner within sixty (60) days after receipt of the Offer, either:

(i) to sell the Offeree Partner’s entire interest in the Partnership to the Offeror Partner at the purchase price and on the other terms specified in the Offer; or

(ii) to offer to purchase the Offeror Partner’s entire interest in the Partnership at the purchase price and on the terms specified in the Offer.

(d) If the Offeree Partner elects clause (i) of Section 6.9(c), the General Partners shall, within thirty (30) days after receipt of the Notice of Election, execute such document and instruments reasonably required by the Offeror Partner to sell and transfer the Offeree Partner’s interest in the Partnership to the Offeror Partner at the purchase price and on the other terms specified in the Offer, and the closing of such sale shall take place as soon as practicable but in any event within thirty (30) days thereafter. At such closing, the Offeree Partner shall sell and transfer its interest in the Partnership to the Offeror Partner free and clear of encumbrances other than encumbrances arising out of the Partnership’s financing, if any, and the Offeror Partner shall repay the principal of and interest on the loans of the Offeree Partner or the parent or affiliate of the Offeree Partner (including, but not limited to, the CMS Loan, the WestMed Loan or Partner loans, as applicable) outstanding on the date of such closing, regardless of whether the terms of the Offer contemplate repayment of such loans.

(e) If the Offeree Partner elects clause (ii) of Section 6.9(c), the General Partners shall, within thirty (30) days after receipt of the Notice of Election, execute such

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documents and instruments reasonably required by the Offeree Partner to purchase the Offeror Partner’s interest in the Partnership at the purchase price and on the other terms specified in the Offer, and the closing of such purchase shall take place as soon as practicable but in any event within thirty (30) days thereafter. At such closing, the Offeree Partner shall purchase the Offeror Partner’s interest and the Offeror shall sell and transfer its interest in the Partnership to the Offeree free and clear of encumbrances other than encumbrances arising out of the Partnership’s financing, if any, and the Offeree Partner shall repay the principal of and interest on the loans of the Offeror Partner or the parent or affiliate of the Offeror Partner (including, but not limited to, the CMS Loan, the WestMed Loan or Partner loans, as applicable) outstanding on the date of such closing, regardless of whether the terms of the Offer contemplate repayment of such loan.

(f) In the event that WestMed Sub purchases WNC’s interest in the Partnership pursuant to this Article VI, WestMed Sub shall, at or prior to the closing of such purchase:

(i) deliver (or cause to be delivered) to Meditrust Mortgage Investments, Inc., a Delaware corporation (“Lender”) a new letter of credit (the “Replacement Letter of Credit”) in substitution for WNC’s Irrevocable Transferable Letter of Credit issued for the benefit of Lender by NationsBank of Texas, N.A. on July 10, 1995 in the amount of $4,052,846 and/or any other then outstanding letter of credit of WNC or CMS required under or pursuant to the Property Lease (the “Existing Letter of Credit”), and shall have caused the Existing Letter of Credit to be returned to WNC or CMS as applicable; and

(ii) reimburse WNC in the amount of $375,000, or such other amount as shall then be deposited by WNC and/or CMS with Tustin Rehab Hospital, Ltd., an Alabama limited partnership (“Landlord”) as a security deposit under the Property Lease (the “Security Deposit”), whereupon WNC and/or CMS, as applicable, shall assign the Security Deposit then deposited with Landlord to WestMed Sub.

(g) Neither General Partner shall be entitled to make an offer under Section 6.9(a) during the pendency of a Bona Fide Offer under Section 10.2 herein (relating to the right of first refusal) or after the occurrence of an Event of Dissolution under Article XII.

(h) In the event of a sale of a Partner’s interest under this Section 6.9, the noncompete provisions contained in Section 8.1 hereof shall continue to apply to the General Partner who sells its interest in the Partnership for three (3) years after it ceases to be a Partner and such General Partner shall not solicit, employ or enter into any contractual arrangement, with any employee of the Partnership during such three (3) year period.

ARTICLE VII:

PURCHASE OPTION

Section 7.1. Grant of Purchase Option. WNC hereby grants to WestMed Sub the right and option, subject to the terms and conditions contained herein, to purchase all, but not less than all, of WNC’s entire interest in the Partnership, as both a General Partner and a Limited Partner (the “Option”). The purchase price for WestMed Sub’s exercise of the Option shall be an amount

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equal to the principal of and interest on the CMS Loan, and any loan made by WNC to the Partnership in accordance with Section 2.2, outstanding on the date of the Purchase Closing (as that term is defined in Section 7.3), and shall be paid in cash at the Purchase Closing.

Section 7.2. Term of Purchase Option. The Purchase Option may be exercised at any time after the first annual anniversary of the Closing under the Asset Purchase Agreement, and shall expire, if not previously exercised, at 11:59 p.m., Eastern time, on the second annual anniversary of the Closing under the Asset Purchase Agreement.

Section 7.3. Exercise of Purchase Option. WestMed Sub shall have the right, but not the obligation, to exercise the Purchase Option at any time during the one-year period provided in Section 7.2, WestMed Sub shall exercise the Purchase Option by giving WNC written notice of such exercise of the Option, whereupon WNC and WestMed Sub shall, as promptly as practicable, consummate WestMed Sub’s purchase of WNC’s entire Partnership interest pursuant to this Article VIII, (the “Purchase Closing”); provided, however, that all of the following conditions precedent to WNC’s obligation to sell its interest in the Partnership shall have been met:

(a) WestMed Sub shall have received prior to the Purchase Closing the written consents of each of Landlord and Lender to WestMed Sub’s purchase of WNC’s entire Partnership interest (the “Additional Interest”). If WestMed Sub exercises the Option, CMS shall use its best efforts to obtain such consents; provided, however, that this Section 7.3(a) shall not rewire CMS or WNC to pay money to any person or entity or agree to any additional terms or conditions in exchange for such consents;

(b) WestMed shall have delivered (or shall have caused to be delivered) to Lender at or prior to the Purchase Closing the Replacement Letter of Credit in substitution for the Existing Letter of Credit, and shall have caused the Existing Letter of Credit to be returned to WNC or CMS, as applicable;

(c) WestMed shall have reimbursed WNC at or prior to the Purchase Closing in the amount of the Security Deposit, whereupon WNC and/or CMS, as applicable, shall assign the Security Deposit then deposited with Landlord to WestMed Sub;

(d) WestMed and WestMed Sub shall assume all obligations relating to the Project at and after the date of the Purchase Closing (the “Assumed Liabilities”) and shall indemnify and hold WNC and CMS harmless from and against all liabilities resulting from any Assumed Liability;

(e) WNC shall have delivered to WestMed Sub a closing certificate, signed by an officer of WNC and dated the Closing Date, to the effect that: (i) WNC is a corporation validly existing and in good standing under the laws of the State of its incorporation; and (ii) WNC has the right; authority, power and capacity to sell the Additional Interest to WestMed Sub, free and clear of any restriction, charge, claim or encumbrance; and

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(f) The Partnership shall have distributed to WNC the Cash Flow of the Partnership, in accordance with WNC’s Percentage Interest in the Partnership, for all periods through the date of the Purchase Closing.

Section 7.4. Purchase Closing. The Purchase Closing shall take place within thirty (30) days after the consents of Landlord and Lender set forth in Section 7.3(a), have been obtained.

Section 7.5. Operating Performance Guarantee.

(a) At the Purchase Closing (if any), CMS shall enter into an operating performance guarantee agreement with WestMed (the “Guarantee”). Under the Guarantee, CMS shall make monthly payments to WestMed in the amount of $62,500 on the first day of each month beginning on the first full month following the data of the Purchase Closing and ending on June 1, 2005. Notwithstanding the foregoing, the amount of each such monthly payment to WestMed shall be reduced (i) dollar for dollar (but in no event by more than $20,833.33 per month) to the extent that WestMed or any of its Affiliates receives Medicare or Medicaid reimbursements in excess of the routine service limitation in effect on December 31, 1995 for the SNF (without taking into account any adjustment to the limit which may thereafter occur), and (ii) by fifty percent (50%) of the Project’s pre-tax income in excess of $162,500 per fiscal quarter (the “Income Target”). The Income Target shall be increased by five percent (5%) on each annual anniversary of the Purchase Closing. The Guarantee shall permit CMS access, during the term thereof, to all financial statements, records and cost reports of the Project for the purpose of verifying the operating results of the Project.

(b) With respect to reductions to the Guarantee pursuant to Section 7.5(a)(i), all such Medicare or Medicaid reimbursements received by WestMed or any of its Affiliates relating to the SNF shall be applied to reduce CMS’ monthly payments for the period to which such reimbursements relate, rather than to the period in which such reimbursements are received. Upon receipt, by WestMed or any of its Affiliates of any such reimbursements, WestMed shall promptly notify CMS, and shall, within 10 days of receipt of such reimbursements, remit to CMS all or such portion of such reimbursement as was overpaid by CMS pursuant to Section 7.5(a)(i) for the period to which such reimbursement pertains.

(c) Within 30 days after the end of each fiscal quarter, WestMed shall notify CMS of the Project’s pre-tax income for such fiscal quarter by delivery of income statements for the Project prepared in accordance with generally accepted accounting principles consistently applied. To the extent that the Project’s pre-tax income for such fiscal quarter exceeded $162,500, CMS shall be entitled to reduce the Guarantee pursuant to Section 7.5(a)(ii) by a credit against the monthly payment or payments described in Section 7.5(a) next becoming due.

Section 7.6. Failure to Exercise Purchase Option. If the Purchase Closing does not occur, for any reason, on or before 11:59 p.m., Eastern time, on June 30, 1998, WNC may require WestMed to deliver the Replacement Letter of Credit to Lender, to return the Existing Letter of Credit to CMS, and to reimburse WNC in the amount of the Security Deposit (whereupon WNC and/or CMS, as applicable, shall assign the Security Deposit then deposited with Landlord to WestMed Sub), within thirty (30) days of WNC’s demand therefor. If WestMed shall fail to do any or all of the foregoing upon WNC’s demand therefor, WNC shall have the

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right and option, exercisable at any time thereafter upon written notice to WestMed Sub, to become the sole Managing General Partner of the Partnership, with the same power and authority as WestMed Sub shall have as of the date hereof pursuant to Section and elsewhere herein.

Section 7.7. Routine Service Exemption. As of the date hereof, the Medicare fiscal intermediary (the “Intermediary”) for the Project has recommended the approval of a routine service exemption relating to the SNF for the Project’s 1994 fiscal year, based on the high acuity of the SNF’s patients. In light of this recommendation, and the belief that the high acuity of the SNF’s patients will continue in the future, the Managing General Partner shall continue to apply for exemptions from the routine service limitation for the SNF with respect to each fiscal year of the Partnership, provided that reasonable grounds for an exemption continue to exist. In the event that the Managing General Partner determines that reasonable grounds cease to exist for an exemption from the SNF’s routine service limitation in any fiscal year, the Managing General Partner shall give, prompt written notice: of such determination to the other General Partner, and shall provide such other General Partner an opportunity to object to such determination.

ARTICLE VIII:

NON-COMPETITION

Section 8.1. Non-Competition. No Partner shall, either directly or indirectly through any of its respective Affiliates, own any interest in, manage or be affiliated in any way, with any inpatient or outpatient facility, unit or beds or other facility used for providing acute or sub-acute rehabilitation services located or to be located within a twenty-five (25) mile radius of the Project (other than the Project) (a “Competing Project”) without the prior written consent of each other Partner provided, however, that nothing contained in this Section 8.1 shall be construed as prohibiting or restricting the following:

(a) WestMed’s continued operation of a 15-bed transitional care unit in the Western Medical Center-Santa Ana, 1001 N. Tustin Avenue, Santa Ana, California (the “TCU”) and a 202-bed skilled nursing care facility located at 600 East Washington, Santa Ana, California (“Bartlett”), insofar as either the TCU or Bartlett provides sub-acute rehabilitation services to patients who (i) are not (a) diagnosed with any of the ten (10) rehabilitation diagnoses recognized by HCFA and described in Schedule 8.1 attached hereto, or (b) diagnosed with, or do not require, any of the procedures described in the International Classification of Diseases, Ninth Revision, Clinical Modification, Fifth Edition, issued by the U.S. Department of Health and Human Services listed on Schedule 8.1 attached hereto; and (ii) do not have a medical diagnosis which requires more than 1 ¹/2 hours of physical therapy, occupational therapy and/or speech therapy three (3) days a week. By way of illustration, and not of limitation, any pulmonary patients requiring more than 1 ¹/2 hours of therapy more than three (3) days a week may not be treated at the TCU or Bartlett, notwithstanding that pulmonary diagnosis is not included on Schedule 8.1.

(b) The continued operation by Western Neurologic Residential Centers, a wholly-owned subsidiary of WNC, of rehabilitation center and residency programs for comatose or brain-injured patients.

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Section 8.2. Acquired Entity. In the event WNC, or any of its Affiliates, acquires another entity (the “Acquired Entity”) (whether by asset or stock purchase, merger or consolidation), the restriction contained in Section 8.1 shall not apply to any Competing Project with respect to which WNC, or any of its Affiliates, would own, operate, manage or be affiliated in any way as a result of such acquisition; provided, that the Competing Project represents less than fifteen percent (15%) of the Acquired Entity’s assets, sales or net income; and provided further, that any free-standing acute rehabilitation hospital acquired as part of such acquisition and located within 25 miles of the Project will be sold by WNC or its Affiliate within six (6) months after such acquisition.

Section 8.3. Default. If a Partner is in default under this Agreement pursuant to Sections 2.4, 10.1 or otherwise, and as a result of such default ceases to be a Partner herein, then (i) the provisions contained in Section 8.1 shall continue to apply to such Partner for two (2) years after it ceases to be a Partner herein, and (ii) such Partner shall not solicit, employ or enter into any contractual arrangement with any employee of the Partnership during such two (2) year period (other than any employee of the Partnership who had been employed by such Partner prior to any such default). This Section 8.3 shall survive any dissolution of the Partnership or termination of this Agreement.

ARTICLE IX:

BANK ACCOUNTS; BOOKS OF ACCOUNT; REPORTS

Section 9.1. Bank Accounts. All funds of the Partnership shall be deposited in accounts at banks selected by the Managing General Partner. Withdrawals from any such bank account or accounts shall be made in the Partnership’s name upon the signature of the Managing General Partner. Funds in any such account shall not be commingled with the funds of any Partner. The Managing General Partner shall send to any Partner which so requests a copy of the Partnership’s most current bank statement promptly after its receipt by the Partnership.

Section 9.2. Books and Records of Account. All books and records of account for the Partnership, which shall reflect a full and accurate record of each transaction of the Partnership, shall be kept at the principal offices of the Partnership.

Section 9.3. Financial Statements and Reports.

(a) The Managing General Partner shall cause to be prepared, at the Partnership’s expense, all financial and other reports required under applicable laws and shall cause copies of all such reports to be furnished to each Partner.

(b) The Managing General Partner shall furnish to each Partner, at the Partnership’s expense, monthly interim financial statements of the Partnership, to be furnished within fifteen (15) days after the end of each month, consisting of an unaudited balance sheet and income statement, and the following annual statements to be furnished within one hundred twenty (120) days after the close of each fiscal year: (i) a cash flow statement for such period showing in reasonable detail the computation of Cash Flow for such period and its distribution, (ii) a balance sheet of the Partnership as of the close of such period, (iii) a statement of income and expenses of the Partnership for such period, and (iv) such information from the Partnership’s

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annual information return as is necessary for the Partners to prepare their federal, state and local income tax returns. The Managing General Partner shall prepare the annual financial statements of the Partnership in accordance with generally accepted accounting principles. At the close of any Fiscal Year, either General Partner shall have the right to request in writing that a formal audit be made of the Partnership’s financial statements and reports, such audit to be conducted by independent certified public accountants, jointly approved by both General Partners, at the expense of the Partnership.

Section 9.4. Inspections.

(a) The books and records of the Partnership and all other Partnership documents (including an executed counterpart of this Agreement and all amendments and supplements hereto) shall at all times be kept at the principal offices of the Partnership, and may be inspected and photocopied upon reasonable notice during normal business hours by any Partner at such Partner’s sole expense.

(b) Each Partner shall have the right and privilege at any time, at its own cost and expense, to inspect any properties or assets of the Partnership.

(c) The Managing General Partner shall (and, if the Managing General Partner carries out any of its duties under this Agreement through a subcontract with a related organization and such subcontract has a value or cost of $10,000 or more during any 12-month period, such subcontract shall contain a clause to the effect that the subcontractor shall) until the expiration of our (4) years after the furnishing of services pursuant to this Agreement, make available, upon written request by the Secretary of Health and Human Services (“HHS”) or upon request by the U.S. Comptroller General, or any duly authorized representative of either of them, this Agreement, the books, documents, and records of the Partnership (or such subcontractor) that are necessary to verify the nature and extent of the costs incurred by the Project in purchasing services hereunder.

ARTICLE X:

TRANSFER OF PARTNERSHIP INTERESTS

Section 10.1. General Transfer Provisions and Restrictions.

(a) Except as set forth in Section 10.1(f) below, and subject to the right of first refusal set forth in Section 10.2, no Partner may sell, convey, assign, transfer, pledge, hypothecate or otherwise encumber or dispose of or take any action prohibited by Section 10.1(b) below (any such event, a “Transfer,” and the taking of any such action, to “Transfer”) all or any portion of, or right in or to, its interest in the Partnership, without the consent of the General Partners.

(b) Any issuance, sale, disposition, pledge, hypothecation, or other encumbrance of capital stock, partnership interests, options, warrants, rights or other equity securities or rights to obtain such securities by any Partner that is a corporation, partnership, association or other entity or by any shareholder or other owner of any Partner shall constitute a Transfer under this Article X and may not be made without the consent of the General Partners. Each Partner shall, and shall cause each owner of any interest in such Partner to, execute such agreements as may be required to effectuate this restriction on Transfers.

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(c) All Transfers shall be by instrument in form and substance satisfactory to the General Partners. Any Transfer in violation of this Agreement shall be null and void and shall not operate to vest any rights in any transferee. Every transferee of any interest in the Partnership who wishes to participate in the partnership as a Partner shall execute a counterpart of this Agreement accepting and adopting all of the terms and provisions of this Agreement (including, without limitation, the provisions of Article VII and Section 10.2) as the same may have been amended from time to time, The transferor shall execute and acknowledge all such instruments, in form and substance satisfactory to the General Partners as may be necessary or desirable to effectuate such Transfer or purchase, including the furnishing of such information about the proposed transferee as any General Partner shall reasonably request.

(d) Except for Transfers pursuant to Section 10.1(f), either General Partner may require, as a condition to any Transfer, that the transferee deliver to the General Partners an opinion of counsel that the Transfer (a) will not cause the Partnership to be classified for federal income tax purposes as an association taxable as a corporation (provided, however, that no opinion of counsel shall be required on such issue if (i) Treasury regulations have been promulgated, and are in effect, that implement the “check-the-box” approach to partnership classification as contemplated in Internal Revenue Service Notice 95-14, and (ii) the Partnership’s classification as a partnership for federal income tax purposes under such “check-the-box” approach will not be adversely affected by such Transfer), and (b) will not cause a termination of the Partnership under section 708 of the Code.

(e) In no event shall the Partnership dissolve or terminate upon the admission of any Partner to the Partnership or upon any permitted Transfer of a Partnership interest by any Partner. Each Partner hereby waives its right to dissolve, liquidate or terminate the partnership in such event.

(f) Notwithstanding the foregoing Sections 10.1(a), (b) and (d), no consent shall be required for any of the following Transfers; provided, however, that in the case of a Transfer described in clauses (ii) or (iii) below, the transferee delivers to the General Partners an instrument wherein the transferee agrees to be bound by all the terms and conditions of this Agreement:

(i) in order to secure borrowings by any General Partner or its Affiliates, the pledge, assignment or other grant of a security interest by (1) such General Partner of its Partnership interest, or (2) the owner of the stock of such General Partner of its stock in such General Partner, which pledge, assignment or other grant of a security interest shall be subject to the terms and conditions of such borrowings;

(ii) the transfer or assignment by WNC or WestMed Sub of all or any portion of its respective Partnership interest to an Affiliate of each such entity; or

(iii) the transfer of the stock of WNC or WestMed Sub by its respective parent to an Affiliate thereof.

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Section 10.2. Permitted Transfers; Right of First Refusal. (a) With respect to Transfers not permitted by Section 10.1, instead of consenting or refusing to consent to a Transfer of a Partner’s interest, any Partner whose consent is required may elect to exercise a right of first refusal with respect thereto as hereinafter provided. In the event that a Partner desires to sell its interest in the Partnership to and shall have received a bona fide offer to purchase its interest in the Partnership from a third party, such Partner (hereinafter, the “Selling Partner”) shall first offer to sell its interest in the Partnership to the other Partner (hereinafter, the “Remaining Partner”) upon the same terms and conditions as contained in such third party offer (a “Bona Fide Offer”) by giving written notice thereof (the “Notice of Sale”) to the Remaining Partner. The Remaining Partner, upon such notification, shall, within ninety (90) days of receipt of such Notice of Sale, either (i) notify the Selling Partner of its election to purchase, on the same terms and conditions as those contained in the Notice of Sale, the Selling Partner’s Partnership interest, at a purchase price equal to the product of (A) the purchase price named in the Bona Fide Offer and (B) the percentage of the Selling Partner’s interest in the Partnership that such Remaining Partner desires to purchase, or (ii) grant its approval to such proposed assignment or transfer, or (iii) withhold its approval to such proposed assignment or Transfer, which right shall be in its sole discretion. If the offered Partnership Interest is not so sold with the ninety (90) day period, it may not thereafter be sold without again providing the Remaining Partner with the same rights of first refusal as are contained in this Section 10.2(a). The right of first refusal contained in this Section 10.2(a) shall also apply in the event of a transfer pursuant to a foreclosure by, or assignment for the benefit of a creditor in connection with a pledge, assignment, or other security interest as contemplated by Section 10.7. Any approval of an assignment or transfer pursuant to this Section 10.2(a) shall not extinguish any future rights under this Section 10.2(a) or Article VII, and the provisions of this Section 10.2(a) and Article VII shall be binding upon any transferee of any interest in the Partnership.

(b) Upon the bankruptcy of any Partner, the Partnership or, at its sole election, the other General Partner, shall have the option upon the giving of written notice to the representative of the bankrupt Partner to purchase the entire Partnership interest of such bankrupt Partner. Within ninety (90) days from the date of such notice the Partner shall sell to the Partnership or the General Partner, as the case may be, and the Partnership or the General Partner shall purchase all of the Partnership interest owned by such Partner.

(c) If the General Partners determine that any existing or proposed federal or state law, regulation, rule or court or administrative decision, applicable or potentially applicable to the Partnership or its business or to any Partner (the “Legal Provisions”) could reasonably be interpreted to render it illegal for a Partner to refer patients to the Project or any other facility operated by the Partnership or to Provide services or recommend that any person obtain services from or at the Project or such other facility or otherwise through the Partnership, the General Partners shall (i) modify and amend the terms of this Agreement as it deems necessary or appropriate to make such terms consistent with any such Legal Provisions with any other requirements of law, or (ii) if it is not reasonably practicable to amend this Agreement without materially and adversely altering the rights of the Partners, notify the Partners, and within sixty (60) days of such notice, the Partnership shall purchase, and each other Partner shall sell, its Partnership interest for the purchase price set forth in Section 10.2(d) below.

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(d)(i) The purchase or sale price of any Partnership interest under Section 10.2(a) shall be an amount equal to the amount specified in the Bona Fide Offer. The purchase or sale price of any Partnership interest purchased pursuant to Section 10.2(b) above shall be an amount equal to the fair market value of the Partnership interest being purchased as determined by an independent appraiser appointed by the Managing General Partner, which appraiser shall have experience in valuing interests similar to the Partnership interests being purchased. The purchase or sale price of any Partnership interest sold or otherwise transferred pursuant to Section 10.2(c) shall be equal to the lesser of the Selling Partner’s (i) Capital Account balance, or (ii) aggregate capital contributions on the date of the notice described in Section 10.2(c).

(ii) Payment for any Partnership interest purchased pursuant to Section 10.2(a) above shall be made on the same terms as contained in the Bona Fide Offer and for any purchase under Section 10.2(b), above in cash at the closing for such purchase.

(e) Closing for the purchase of any Partnership interest purchased under this Section 10.2 shall occur at a time and place reasonably acceptable to both the seller and the purchaser of such Partnership Interest. If no time and place are agreed upon, the closing shall be held at the Partnership’s principal office at 10:00 a.m. on the thirtieth (30th) day after the expiration of the applicable notice period provided for in Sections 10.2(a), (b) or (c) hereof, as applicable.

(f) At the closing for the purchase of any Partnership interest under this Section 10.2, the seller of such Partnership interest shall represent and warrant to the purchaser that such Partnership interest is held by the seller free and clear of any lien, pledge, security interest or other encumbrance whatsoever (except for encumbrances under, this Agreement or in respect of Partnership borrowings or borrowings contemplated by Section 10.1(f)(i)) and that the purchaser of such Partnership interest is acquiring good title to the Partnership interest, free and clear of all such liens, encumbrances and other objections or exceptions.

(g) The seller of any Partnership interest under this Section 10.2 shall also take, or cause to be taken, all such actions and shall execute and deliver, or cause to be executed and delivered, all such documents, writings, certificates, filings and other materials as treasonably may be necessary to transfer such Partnership interest in accordance with all applicable federal and state laws including, without limitation, federal securities and tax laws.

(h) With respect to any Partnership interest purchased under this Section 10.2, the payment of the purchase price shall be deemed conclusively to be in complete liquidation and satisfaction of all the rights and interest of such Partner, or such Partner’s representative, as the case may be, and all persons or entities claiming by, through, or under such Partner or such Partner’s representative in and in respect of the Partnership including, without limitation, any Partnership interest, and rights in specific Partnership property, and any rights against the Partnership and (insofar as the affairs of the Partnership are concerned) against the Partners.

Section 10.3. Waiver of Partition. No Partner shall, either directly or indirectly, take any action to require partition or appraisement of the Partnership or of any of its assets or properties or cause the sale of any Partnership property, and notwithstanding any provisions of applicable law to the contrary, each Partner (and its legal representatives, successors or assigns) hereby

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irrevocably waives any and all right to maintain any action for partition or to compel any sale with respect to its Partnership interest, or with respect to any assets or properties of the Partnership, except as expressly provided in this Agreement.

Section 10.4. Expenses. All expenses of the Partnership and of the General Partners occasioned by a Transfer of a Partner’s interest permitted under Section 10.1 shall be borne by the Partner effecting such Transfer. Each Partner shall bear its own expenses with respect to a Transfer of a Partner’s interest permitted under Section 10.2 and the expenses of the Partnership occasioned by such Transfer shall be borne by the Partner effecting the Transfer.

Section 10.5. Transfers upon Foreclosure of Pledged Interests. Notwithstanding the provisions contained in Section 10.1, any Partnership interest in the Partnership may be Transferred, subject to the right of first refusal contained in Section 10.2, pursuant to a foreclosure by or assignment for the benefit of a creditor of a Partner or Affiliate of a Partner to whom such Partner or Affiliate has pledged its Partnership Interest in accordance with Sections 2.5 or 10.1. Any such Transfer to a creditor transferee shall not cause the Partnership to be dissolved, and each Partner hereby grants to any creditor transferee a proxy to vote to reconstitute the Partnership and continue its business in the event that any such Transfer would otherwise result in a termination or dissolution of the Partnership.

Section 10.6. Allocations With Respect to Transferor’s Interest. Upon the permitted assignment by a Partner of all or any part of its Partnership interest, each item of Partnership income (or loss) and deduction allocable to the interest shall be pro rated (as to the transferred interest) between transferor and transferee on the basis of the number of days in the taxable year of the Partnership preceding (and including) and succeeding the data as of which the assignment is executed. Gain or loss from the sale or other taxable disposition of a Partnership capital asset shall be allocated to the parties which Were Partners at the time such gain or loss was recognized by the Partnership.

Section 10.7. Section 754 Election. The General Partners may cause the Partnership to elect, pursuant to section 754 of the Code, to adjust the basis of Partnership property as provided in section 734(b) and 743(b) of the Code. The Managing General Partner shall be responsible for determining the adjustments required or permitted by such sections of the Code; provided, however, that, in the case of any adjustment required or permitted under section 743(b) of the Code, the transferee Partner or Partners shall be solely responsible for determining the adjustments required thereunder unless such Partner or Partners provide the Managing General Partner with all the information necessary for the Managing General Partner to determine the adjustments. If any adjustments to the basis of Partnership property are made pursuant to sections 732(d), 734(b) or 743(b) of the Code, the Capital Accounts of the Partners shall be adjusted as specified in Treas. Reg. §1.704-1(b)(2)(iv)(m).

ARTICLE XI: ADMISSION OF NEW PARTNERS

Section 11.1. Procedure. New Partners may be admitted to the partnership only as a result of a Transfer of a Partner’s interest pursuant to Article X or the issuance of additional Partnership interests pursuant to Article II. The Percentage Interest of any such new Partner shall

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be as fixed in accordance with Section 3.1(b) above. Each new Partner shall sign a supplement to this Agreement at the time such new Partner is admitted confirming the admission of the new Partner as a Partner hereunder.

Section 11.2. Amendment. In connection with the admission of any new Partner to the Partnership, the General Partners shall have the power, right, and authority (subject to the limitations on this power as set forth in Section 14.3 below) to amend this Agreement to reflect the rights and obligations of such new Partner including, without limitation, such new Partner’s obligations to contribute to the capital of the Partnership, rights to distributions, or rights to approve or consent to Partnership actions.

ARTICLE XII:

DISSOLUTION AND LIQUIDATION OP THE PARTNERSHIP

Section 12.1. Events of Dissolution. (a) The occurrence of any of the following events shall constitute an event of dissolution of the Partnership (such event, an “Event of Dissolution”):

(i) the failure of WNC and the Partnership to close for any reason whatsoever, prior to May 31, 1996, under that certain Asset Purchase Agreement by and between WNC and the Partnership, dated March 13, 1996 (unless the date of Closing under the Asset Purchase Agreement has been extended by mutual agreement of WNC and the Partnership in accordance with the terms thereof); or

(ii) The vote of all of the General Partners to dissolve, liquidate and wind up the affairs of the Partnership; or

(iii) The expiration of the term provided in Article I hereof, unless extended by all of the Partners; or

(iv) The dissolution or bankruptcy of a General Partner or any parent company thereof, or the making of any assignment for the benefit of creditors or the appointment of a trustee or receiver for the property of a General Partner or any parent company thereof, or the seizure of a General Partner’s partnership interest by a creditor, or a General Partner’s being responsible for any act which would justify a decree of dissolution of the Partnership under the laws of the State of Delaware; or

(v) The breach by a Partner of any of its obligations contained in Section 2.2. or Section 10.1 and failure to remedy such breach within twenty (20) days after written notice by the non-breaching General Partner of its intent to cause the dissolution and liquidation of the Partnership because of such continuing failure; or

(vi) The acquisition by a single entity of all of the Partnership interests;

(vii) The sale or other disposition of all or substantially all of the assets of the Partnership unless such sale or other disposition involves any deferred payment of the consideration for such sale or disposition, in which case the Partnership shall not dissolve until the last day of the calendar year during which the Partnership shall receive the balance of such deferred payment; or

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(viii) The issuance of a final, unappealable order of any governmental authority or regulatory body having such authority and jurisdiction requiring termination of the Partnership.

Section 12.2. Continuation of the Business of the Partnership After Certain Events of Dissolution. Subsequent to any Event of Dissolution, the business of the Partnership may be continued only if all Partners agree in writing to reconstitute the Partnership and continue its business.

Section 12.3. Effect of Dissolution. Upon the occurrence of an Event of Dissolution, the Partnership shall not terminate but shall, unless its business is continued pursuant to Section 12.2 above, continue solely for the purposes of winding up its business and liquidating in accordance with this Article XII all of the assets owned by the Partnership (until all such assets have been sold or liquidated) and collecting the proceeds from such sales and all receivables of the Partnership until the same have been written off as uncollectible, at which time the Partnership shall be wound up. Unless the business of the Partnership is continued as provided in Section 12 above, after the occurrence of an Event of Dissolution the Partnership shall engage in no further business other than that necessary for the Partnership to operate on an interim basis and for the Partnership to collect its receivables, liquidate its assets and pay or discharge its liabilities in accordance with this Article.

Section 12.4. Sale of Assets by Liquidator. Unless the business of the Partnership is continued as provided in Section 22.2, upon dissolution of the Partnership, the Managing General Partner shall, as “Liquidator,” proceed to wind up the affairs of the Partnership and distribute its assets in accordance with the remaining Sections of this Article XII, unless the Managing General Partner is unable or unwilling to serve as Liquidator, in which case a substitute Liquidator shall be appointed by the vote of a majority in interest of the Partners.

Section 12.5. Liquidation.

(a) After liquidation of the Partnership, the assets of the Partnership shall be distributed or applied in the following order of priority (using cash or cash equivalents first):

(i) to pay all creditors of the Partnership who are not Partners (including, without limitation, CMS and WestMed) and to pay all the expenses of liquidation;

(ii) to the creation of any reserves which the liquidator deems reasonably necessary to meet any contingent or unforeseen liabilities or obligations of the Partnership arising out of or in connection with the Partnership;

(iii) to repay any Partner’s loans pro rata among such loans, paying all past-due interest first pro rata, then all current interest pro rata, and then all remaining outstanding principal pro rata; and

(iv) to the Partners in accordance with Section 3.3.

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(b) The assets of the Partnership shall be liquidated as promptly as possible so as to permit distributions in cash. Such liquidation shall be made in an orderly manner so as to avoid undue losses attendant upon liquidation. In the event that in the liquidator’s opinion complete liquidation of the assets of the Partnership within a reasonable period of time proves impractical, assets of the Partnership other than cash may be distributed to the Partners in kind but, without limitation, only after all cash and cash-equivalents received by the Partnership in a liquidating sale pursuant to this Section 12.6 have first been distributed. Any asset distributed in kind pursuant to this Section 12.6, shall be distributed to the Partners in accordance with their then positive Capital Accounts as determined after (A) reduction for distributions of cash and cash-equivalents made pursuant to this Section 12.6, and (B) adjustment to reflect the manner in which the unrealized income, gain, loss and deduction inherent in such property would be allocated among the Partners (pursuant to Article V) if there were a taxable disposition of such property for its fair market value on the date of distribution.

(c) Each Partner shall be furnished with a statement prepared by the Partnership’s accountants, which shall set forth the assets and liabilities of the Partnership as of the date of complete liquidation, and the Capital Account of each Partner prior to any distribution in liquidation.

(d) Dissolution shall be effective on the date of the event giving rise to the dissolution, but the Partnership shall not terminate until the assets thereof have been distributed in accordance with the provisions of this Article XII.

Section 12.6. Liquidation of Remaining Assets. The liquidator shall proceed with the liquidation of the Partnership in the manner provided for in Section 12.2 and shall promptly obtain an appraisal of the assets and interests of the Partnership by an independent appraiser unless a prior appraisal of such assets or interests has already been obtained. All of the assets and interests of the Partnership, other than cash and other than the properties to be acquired by each Partner under Section 12.2(c), shall be offered (either as an entirety or on an asset-by-asset basis) promptly for sale, upon such terms as the liquidator shall determine using the above appraisal(s) as a guide. The Partners, including the General Partners, and their Affiliates shall have the right to negotiate or bid on an arm’s length basis for any or all of the assets and-leasehold interests being offered for sale from and after such date as is ninety (90) days after the Partnership terminates, but not before such date. The decision to accept or reject, an offer to acquire assets or leasehold interests of the Partnership shall be made solely by the liquidator in its reasonable judgment.

Section 12.7. Time Limitations on Liquidating Distributions. Nothing in this Article XII shall be construed to extend the time period prescribed under Treas. Reg. §1.704-1(b)(2)(ii)(b) for making liquidating distributions of the Partnership’s assets. In the event the liquidator deems it impractical to make distributions of the liquidating proceeds to the Partners within such time period, the liquidator may make any arrangement that is considered for federal income tax purposes to effectuate liquidating distributions of all of the Partnership’s assets to the Partners within the time period prescribed in such regulation and that will permit the sale of the non-cash assets considered so distributed in a manner that gives effect, to the extent possible, to the intent of the preceding provisions of this Article XII.

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Section 12.8. Liquidation Following Withdrawal of Certain Patterns. If the liquidation of the Partnership is occasioned by its dissolution as a result of the withdrawal of all Partners other than the General Partners, all assets of the Partnership shall be distributed to the General Partners, and the only amounts to which any withdrawing Partner shall be entitled shall be the amount of accrued and unpaid distributions payable to it pursuant to Article IV through the date of withdrawal.

ARTICLE XIII:

REPRESENTATIONS AND WARRANTIES

Section 13.1. Representations and Warranties of the Partners. Each Partner represents and warrants to the other Partner that:

(a) It is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation.

(b) It has the corporate power and authority to execute and deliver this Agreement and to carry out the transactions contemplated hereby.

(c) The execution, delivery and performance by such Partner of this Agreement has been duly authorized by all necessary corporate action and does not contravene (i) any law applicable to the Partner or any rule, judgment, order, writ, injunction or decree of any court applicable to such Partner, (ii) any rule or regulation of any administrative agency or other governmental authority applicable to such Partner, (iii) the Certificate of Incorporation or by-laws of such Partner, or (iv) any material agreement, indenture, instrument, contract or other agreement by which such Partner is bound.

(d) This Agreement, when executed and delivered by such Partner, will be the legal, valid and binding obligation of such Partner, enforceable against it in accordance with its terms.

ARTICLE XIV:

MISCELLANEOUS

Section 14.1. Counterparts. Each Partner and any new or substitute Partner shall become a signatory hereof by signing such number of counterparts of this Agreement and such other instrument or instruments, and in such manner, as the General Partners shall determine.

Section 14.2. Notices, Any notice or document required or permitted to be given hereunder shall be in writing and shall be deemed to be given on the date (a) deposited in the United States mail, postage prepaid, registered or certified mail, return receipt requested, postage prepaid, (b) delivered to an internationally recognized overnight courier service, service charges prepaid, (c) delivered personally, or (d) delivered via facsimile transmission during normal business hours, confirmation received, in any such case, addressed to the parties hereto at the respective addresses set forth below, or at such other addresses as they have theretofore specified by written notice delivered in accordance herewith, or if to the Partnership, 14851 Yorba Street, P.O. Box 3848, Tustin, California 92681, Attn: Chief Executive Officer.

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If to:	Western Neuro Care, Inc. c/o Continental Medical Systems, Inc. 600 Wilson Lane P.O. Box 715 Mechanicsburg, PA 17055 Attn: President Facsimile: (717) 766-8277
With a copy to:	Continental Medical Systems, Inc. 600 Wilson Lane P.O. Box 715 Mechanicsburg, PA 17055 Attn: Michael E. Tarvin, Vice President Facsimile: (717) 766-1194
If to:	WestMed-Rehab c/o United Western Medical Center 1301 North Tustin Avenue Santa Ana, CA 92705 Attn: Chief Executive Officer Facsimile: (714) 953-4599
With a copy to:	John P. Krave, Esq. Epstein, Becker & Green 1875 Century Park East, Suite 500 Los Angeles, CA 90067-2501 Facsimile: (310) 553-2165

Section 14.3. Amendments. No amendment of this Agreement shall be binding unless such amendment is in writing and signed by both General Partners.

Section 14.4. Severability. If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provision to other persons or entities or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

Section 14.5. Entire Agreement. Except as otherwise provided in the other agreements between the parties and their Affiliates described or referenced herein, this Agreement represents the entire understanding and agreement of the parties with respect to the Partnership and the business of the Partnership, and supersedes any and all prior agreements and understandings or representations, whether oral or written, by or among the parties with respect thereto.

Section 14.6. Assignment and Benefit. Except as expressly provided otherwise herein, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned or delegated by any Partner without the prior written consent of the General Partners. Subject to the foregoing, this Agreement shall inure to the benefit of, and be binding upon, the respective legal representatives, successors and permitted assigns of each Partner.

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Section 14.7. Titles and Captions. All article, section and paragraph titles and captions contained in this Agreement are for convenience only and are not deemed a part of the context hereof.

Section 14.8. Interpretation. All pronouns and any variations thereof are deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the person or persons may require. Except as otherwise indicated, all agreements defined herein refer to the same as from time to time amended or supplemented or the terms thereof waived or modified in accordance herewith and therewith.

Section 14.9. Number of Days. Except as otherwise provided herein, in computing the number of days for purposes of this Agreement, all days shall be counted, including Saturday, Sundays and holidays; provided, however, that if the final day of any time period falls on a Saturday, Sunday or holiday, then the final day shall be deemed to be the next day which is not a Saturday, Sunday or holiday.

Section 14.10. Patient Choice. Nothing in this Agreement is intended or shall be construed to require any Partner or any Affiliate or related person or entity of a Partner to make referrals of patients to the Partnership or to any other provider of health services. The Partners acknowledge that the decision as to where a patient is treated is one to be made and which is made between the patient and his or her healthcare professional on the basis of professional medical judgment and patient preference.

Section 14.11. Ancillary Services Agreements. To the extent permitted by the California Department of Health, Licensure Division, the Partnership may enter into ancillary agreements for the provisions of dietary, housekeeping, security, maintenance, radiology, laboratory and other mutually agreed upon services to the Project. Any ancillary agreements entered into between the Partnership and a Partner or its Affiliate shall be at the lesser of fair market value or fully-loaded Medicare costs and on terms no less favorable than can be reached with unaffiliated third parties.

Section 14.12. Managed Care Network.

(a) The parties agree that in the event WestMed or its Affiliates develops a managed care network, the Partnership shall have a right to be a provider in such network on the same pro rata basis as other providers in the network if WestMed or its Affiliates have sole control over such decision, provided, that if WestMed or its Affiliates do not have sole control over such decision, WestMed and its Affiliates shall use best efforts to grant or cause such right to be granted to the Partnership.

(b) WestMed and CMS shall work together to negotiate acceptable contracts with insurance companies and other managed care payors and shall cooperate with each other in connection with the development of an integrated healthcare delivery system which promotes the interests of both General Partners and the Partnership. WestMed and CMS shall also work together to develop new program services for the Project.

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Section 14.13. Nurse Liaison. WestMed agrees to allow nurse liaisons employed by the Partnership access to its medical facilities for the purpose of consultation concerning (a) types of patients which benefit from medical rehabilitation, and (b) discharge planning.

Section 14.14. Long Term Care Hospital. The parties shall cooperate to analyze the feasibility of converting the Project’s Medicare certification to a long term care hospital designation.

Section 14.15. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware.

Section 14.16. Power of Attorney. Each Limited Partner that is not also a General Partner, including any additional or substituted Limited Partner, by the execution of this Agreement or any counterpart thereof, or by joining in agreement with respect thereto, does hereby irrevocably constitute and appoint the General Partners, each director and officer thereof, and any person or entity which duly becomes a substitute General Partner of the Partnership in accordance with this Agreement, and each of them acting singly, in each case with full power of substitution, its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead, to make, execute, acknowledge, swear to, deliver, file and record (subject, in the case of any amendment hereto, to the limitations of Section 14.3 above) (a) such amendments to this Agreement and the Partnership’s Certificate of Limited Partnership as are necessary to admit new or substituted Partners to the Partnership in accordance with the terms of this Agreement; (b) such documents and instruments as are necessary to cancel the Partnership’s Certificate of Limited Partnership; (c) the Certificate of Limited Partnership of the Partnership and all amendments thereto required by law or permitted by the provisions of this Agreement; (d) all certificates and other instruments deemed advisable by the General Partners to permit the Partnership to become or to continue as a limited partnership or partnership wherein the Limited Partners have limited liability in the jurisdictions where the Partnership may be doing business; (e) all fictitious or assumed name certificates required or permitted to be filed on behalf of the Partnership; (f) all other instruments which may be required or permitted by law to be filed on behalf of the Partnership; and (g) any other amendment to this Agreement that is permitted hereunder. The foregoing power of attorney, being coupled with an interest, is hereby declared to be irrevocable, and shall survive the death, dissolution or incapacity of any Limited Partner.

Section 14.17. Estoppels. Each Partner shall, upon not less than fifteen (15) days written notice from any Partner, execute and deliver to such other Partner a statement certifying that this Agreement is unmodified and in full force and effect (or, if modified, the nature of the modification) and whether or not there are, to such Partner’s knowledge, any uncured defaults on the part of the other Partner, specifying such defaults if any are claimed. Any such statement may be relied upon by third parties.

Section 14.18. Reliance on Authority of Person Signing Agreement. If a Partner is a trust (with or without disclosed beneficiaries), general partnership, limited partnership, joint venture, corporation, or any entity other than a natural person, the Partnership and the Partners shall:

(a) not be required to determine the authority of the person signing this Agreement to make any commitment or undertaking on behalf of such entity or to determine any fact or circumstance bearing upon the existence of the authority of such entity or to determine any fact or circumstance bearing upon the existence of the authority of such person;

39

(b) not be required to see to the application or distribution of proceeds paid or credited to persons signing this Agreement on behalf of such entity;

(c) be entitled to rely on the authority of the person signing this Agreement with respect to the voting of the Partnership’s interest of such entity and with respect to the giving of consent on behalf of such entity in connection with any matter for which consent is permitted or required under this Agreement; and

(d) be entitled to rely upon the authority of any general partner, joint venturer, trustee, or president or vice president, as the case may be, of any such entity the same as if such person were the person originally signing this Agreement on behalf of such entity.

Section 14.19. Waiver of Breach. The waiver by any Partner of breach or violation of any provision of this Agreement shall not operate as, or be construed to be, a waiver of any subsequent breach of the same or other provision hereof.

Section 14.20. Further Assurances. Each Partner agrees that it shall execute and deliver, or cause to be delivered, all such instruments, and shall take all such other actions, as may be reasonably required from time to time in order to effectuate the provisions and purposes hereof.

Section 14.21. No Third Party Beneficiary. Any agreement to pay any amount and any assumption of liability herein contained, express or implied, shall be, only for the benefit of the Partners and their respective successors and permitted assigns, and such agreements and assumption shall not inure to the benefit of the obligees of any indebtedness or any other party, it being the intention of the Partners that no one shall be deemed to be a third party beneficiary of this Agreement.

Section 14.22. Schedules. Any Schedules attached hereto and referenced to herein are hereby incorporated herein and made a part hereof for all purposes as if fully set forth herein.

40

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

WNC:
WESTERN NEGRO CARE, INC.,
a Delaware corporation
By:	/s/ Michael E. Tarvin
	Michael E. Tarvin,
	Vice President
WESTMED SUB:
WESTMED-REHAB,
a California corporation
By:	/s/ Douglas L. Drumwright,
	Douglas L. Drumwright
	President

41

JOINDER

Each of ALPHAMERICA HEALTH SYSTEMS, INC., a California corporation (“AlphAmerica”)and UNITED WESTERN MEDICAL CENTERS, a California non-profit public benefit corporation (“WestMed”), as a material inducement to Western Neuro Care, Inc., a Delaware corporation, to enter into the Agreement of Limited Partnership of Western Medical Rehab Associates, L.P., dated March 13, 1996 (the “Agreement”), hereby unconditionally, irrevocably, and jointly and severally, guarantees the full and timely performance by WestMed-Rehab (“WestMed Sub”) of all of WestMed Sub’s obligations and responsibilities under the Agreement. In furtherance thereof, each of AlphAmerica and WestMed waives all notices, protests, demands and presentments as well as any legal defenses available to a surety or guarantor. Each of AlphAmerica and WestMed warrants that should WestMed Sub default in performance of any of its obligations under the Agreement, each of AlphAmerica and WestMed shall, upon and subject to the terms and conditions of the Agreement, promptly assume responsibility for performance of such obligations. These guarantees shall bind the respective successors and permitted assigns of each of AlphAmerica and WestMed. These guarantees shall terminate, upon termination or expiration of the Agreement, except for any obligations to third parties which have arisen or which may arise in the future under any leases or other contracts or agreements which are in effect upon the date of such termination or expiration, and except to the extent that any of WestMed Sub’s obligations shall otherwise survive termination or expiration of the Agreement by the express terms thereof.

42

WestMed hereby agrees that the Working Capital Loans (as that term is defined in the Agreement) shall be made in accordance with, and governed by, the provisions of Section. 2.5 of the Agreement.

ALPHAMERICA HEALTH SYSTEMS, INC. a California corporation
By:	/s/ Douglas L. Drumwright
	Douglas L Drumwright,
	President
UNITED WESTERN MEDICAL CENTERS, a California non-profit public benefit corporation
By:	/s/ Douglas L. Drumwright
	Douglas L. Drumwright,
	President

43

JOINDER

CONTINENTAL MEDICAL SYSTEMS, INC., a Delaware corporation (“CMS”) as a material inducement to WestMed-Rehab, a California corporation, to enter into the Agreement of Limited Partnership of Western Medical Rehab Associates, L.P.; dated March 13, 1996 (the “Agreement”), hereby unconditionally and irrevocably guarantees the full and timely performance by Western Neuro Care, Inc., a Delaware corporation (“WNC”) of all of WNC’s obligations and responsibilities under the Agreement. In furtherance thereof, CMS waives all notices, protests, demands and presentments as well as any legal defenses available to a surety or guarantor CMS warrants that should WNC default under the Agreement, CMS shall, upon and subject to the terms of the Agreement, promptly assume responsibility for performance of such obligations. This guarantee shall bind the successors and permitted assigns of CMS. This guarantee shall terminate upon termination or expiration of the Agreement, except for any obligations to third parties which have arisen or which may arise in the future under any leases or other contracts or agreements which are in effect upon the date of such termination or expiration, and except to the extent that any of WNC’s obligations shall otherwise survive termination or expiration of the Agreement by the express terms thereof.

CMS hereby agrees that the Working Capital Loans (as that term is defined in the Agreement) shall be made in accordance with, and governed by, the provisions of Section 2.5 of the Agreement.

CONTINENTAL MEDICAL SYSTEMS, INC., a Delaware corporation
By:	/s/ Michael E. Tarvin
	Michael E. Tarvin,
	Vice President

44

LIST OF DEFINED TERMS

Acquired Entity	27
Act	1
Additional Contribution	6
Additional Interest	24
Affiliate	2
Agreement	1
AlphAmerica	1
Asset Purchase Agreement	2
Assumed Liabilities	24
Bartlett	26
Bona Fide Offer	30
Capital Account	11
Capital Transaction	13
Cash Flow	13
CMS Loan	8
CMS Loan Senior Portion	8
Code	9
Competing Project	26
Defaulting Partner	6, 12
Event of Dissolution	33
Existing Letter of Credit	23
Extraordinary Cash Flow	13
Fiscal Year	3
General Partner	1, 4
Governing Board	20
Guarantee	25
HHS	28
Intermediary	26
Landlord	23
Legal Provisions	31
Lender	23
Limited Partner	1, 4
Liquidator	34
Managing General Partner	15
Medicare Percentage	21
Non-Defaulting Partner	7
Non-Defaulting Partners	13
Notice of Election	22
Notice of Sale	30
Offer	22
Offeree Partner	22
Offeror Partner	22
Option	24
Partner	1

45

Partners	1
Partnership	1
Percentage Interests	11
Project	2
Property Lease	18
Purchase Closing	24
Rehabilitation Hospital	2
Remaining Partner	30
Replacement Letter of Credit	23
Security Deposit	23
Selling Partner	30
SNF	2
TCU	26
Transfer	29
Treas. Reg.	11
WestMed	1
WestMed Loan	8
WNC	1
Working Capital Loans	8

46

SCHEDULE 8.1

Rehabilitation Specific Diagnosis

Rehabilitation Diagnosis as recognized by HCFA:

1.	Stroke
2.	Spinal Cord Injury
3.	Congenital Deformity
4.	Amputation
5.	Major Multiple Trauma
6.	Fractures of the Femur (hip fracture)
7.	Brain Injury
8.	Polyarthritis, Rheumatoid Arthritis
9.	Neurological Disorders; Including Multiple Sclerosis, Motor Neuron Disease, Polyneuropathy, Muscular Dystrophy, Parkinson’s Disease, Guillian-Barre Disease
10.	Burns

ICD-9-CM

81.41.	Total knee replacement
81.51	Total hip replacement
84.06	Disarticulation of elbow
84.07	Amputation through humerus
84.08	Disarticulation of shoulder
84.09	Interthoracoscapular amputation
84.10	Lower limb amputation
84.15	Other amputation below knee
84.16	Disarticulation of knee
84.17	Amputation above knee
84.18	Disarticulation of hip
84.19	Abdominopelvic amputation
84.24	Upper arm reattachment
84.27	Lower leg or ankle reattachment
84.28	Thigh reattachment
84.29	Other reattachment of extremity
84.44	Implantation of prosthetic device of arm
84.45	Fitting of prosthesis above knee
84.46	Fitting of prosthesis below knee
013.4	Tuberculoma of spinal cord
013.5	Tuberculous abscess of spinal cord
137.1	Late effects of central nervous system tuberculosis
138	Late effects of acute poliomyelitis
170.2	Malignant neoplasm of vertebral column

47

170.7	Malignant neoplasm of long bones of lower limb
191	Malignant neoplasm of brain
192.1	Malignant neoplasm of cerebral meninges
192.3	Malignant neoplasm of spinal meninges
198.3	Secondary malignant neoplasm of brain and spinal cord
198.4	Secondary malignant neoplasm of other parts of nervous system
225.0	Benign neoplasm of brain
225.1	Benign neoplasm of cranial nerves
225.2	Benign neoplasm of cerebral meninges
225.3	Benign neoplasm of spinal cord
225.4	Benign neoplasm of spinal meninges
237.5	Neoplasm of uncertain behavior of brain and spinal cord
237.7	Neurofibromatosis
239.6	Neoplasms of unspecified nature of brain
239.7	Neoplasms of unspecified nature of endocrine glands and other parts of nervous system
310.0	Postconcussion syndrome
320	Bacterial meningitis
321	Meningitis due to other organisms
322	Meningitis of unspecified cause
323.0	Encephalitis in viral diseases classified elsewhere
323.1	Encephalitis in rickettsial diseases classified elsewhere
323.2	Encephalitis in protozoal diseases classified elsewhere
323.4	Other encephalitis due to infection classified elsewhere
323.5	Encephalitis following immunization procedures
323.6	Post infectious encephalitis
323.7	Toxic encephalitis
323 8	Other causes of encephalitis
323.9	Unspecified cause of encephalitis
324	Intracranial and intraspinal abscess
325	Phlebitis and thrombophlebitis of intracranial venous sinuses
326	Late effects of intracranial abscess or pyogenics infection
330	Cerebral degenerations usually manifest in childhood
331.3	Community hydrocephalus
331.4	Obstructive hydrocephalus
331.7	Cerebral degeneration in diseases classified elsewhere
331.8	Other cerebral degeneration
331.9	Cerebral degeneration, unspecified
332	Parkinson’s disease
333	Other extrapyramidal disease and abnormal movement disorders
335.0	Werdnig-Hoffman disease
335.1	Spinal muscular atrophy
335.2	Motor neuron disease
335.8	Other anterior horn cell disease
336.0	Other diseases of spinal cord
336.2	Subacute combined degeneration of spinal cord in diseases classified elsewhere

48

336.3	Myelopathy in other diseases classified elsewhere
337	Disorders of the autonomic nervous system
340	Multiple sclerosis
341.1	Schilder’s disease
341.8	Other demyelinating disease of central nervous system
341.9	Demyelinating disease of central nervous system, unspecified
342	Hemiplegia
343	Infantile cerebral palsy
344.0	Quadriplegia
344.1	Paraplegia
344.2	Diplegia of upper limbs
344.3	Monoplegia of lower limb
344.4	Monoplegia of upper limb
344.6	Cauda equina syndrome
344.8	Other specified paralytic syndromes
348	Other conditions of brain (exc. 348.2, 348.8 & 348.9)
349.1	Nervous system complications from surgically implanted device
349.82	Toxic encephalopathy
353	Nerve root and plexus disorders (exc. 353.0)
354	Mononeuritis of upper limb and mononeuritis multiplex
355	Mononeuritis of lower limb
356	Hereditary and idiopathic peripheral neuropathy
357	Inflammatory and toxic neuropathy
358	Myoneural disorders
359	Muscular dystrophies and other myopathies
430	Subarachnoid hemorrhage
431	Intracerebral hemorrhage
432	Other and unspecified intracranial hemorrhage
433	Occlusion and stenosis of precerebral arteries
434	Occlusion of cerebral arteries
436	Acute, but ill-defined, cerebrovascular disease
437	Other and ill-defined, cerebrovascular disease
438	Late effects of cerebrovascular disease
441.1	Aortic aneurysm - Thoracic aneurysm, ruptured
441.3	Aortic aneurysm - Abdominal aneurysm, ruptured
441.5	Aortic aneurysm of unspecified site, ruptured
444	Arterial embolism and thrombosis
446.0	Polyarteritis nodosa
446.4	Wegner’s granulomatosis
446.5	Giant cell arteritis
446.7	Takayasu’s disease
447.6	Arteritis, unspecified
496	Chronic airway obstruction, not elsewhere classified
500	Coal workers’ pneumoconiosis
501	Asbestosis
502	Pneumoconiosis due to other silica or silicates

49

503	Pneumoconiosis due to other inorganic dust
504	Pneumoconiosis due to inhalation of other dust
505	Pneumoconiosis, unspecified
506.4	Chronic respiratory conditions manifestations due to fumes and vapors
508.1	Chronic respiratory conditions manifestations due to radiation
518	Other diseases of lung (exc. 518.4)
696.0	Psoriatic arthropathy
710	Diffuse diseases of connective tissue
714	Rheumatoid arthritis and other inflammatory polyarthropathies
715	Osteoarthrosis and allied disorders
716.5	Unspecified polyarthropathy or polyarthritis
720	Ankylosing spondylitis and other inflammatory spondylapathies (exc. 720.81)
721.1	Cervical spondylosis with myelopathy
721.4	Thoracic or lumbar spondylosis with myelopathy
721.91	Spondylosis of unspecified site, with myelopathy
722.7	Intervertebral disc disorder with myelopathy
722.8	Post laminectomy syndrome
724	Other and unspecified disorders of back
725	Polymyalgia rheumatica
728.1	Muscular calcification and ossification
728.2.	Muscular wasting and disuse atrophy, not elsewhere classified
730.1	Chronic osteomyelitis
733	Other disorders of bone and cartilage
741	Spina bifida
742.0	Encephalocele
742.1	Microcephalus
742.2	Reduction deformities of brain
742.3	Congenital hydrocephalus
742.4	Other specified anomalies of brain
742.5	Other specified anomalies of spinal cord
742.8	Other specified anomalies of nervous system
742.9	Unspecified anomaly of brain, spinal cord, and nervous system
754	Certain congenital musculoskeletal deformities
756	Other congenital musculoskeletal anomalies
759	Other and unspecified congenital anomalies
767.0	Birth trauma - subdural and cerebral hemorrhage
767.4	Birth trauma - injury to spine and spinal cord
781.0	Abnormal involuntary movements
781.2	Abnormality of gait
781.3	Lack of coordination
800	Fracture of vault of skull
801	Fracture of base of skull
803	Other and unqualified skull fractures
804	Multiple fractures involving skull or face with other bones
806	Fracture of vertebral column with spinal cord injury
808	Fracture of pelvis

50

820	Fracture of neck and femur
821	Fracture of other and unspecified parts of femur
827	Other, multiple, and ill-defined fractures of lower limb
828	Multiple fractures involving both lower limbs, lower with upper limb, and lower limb(s) with rib(s) and sternum
850.3	Concussion with prolonged loss of consciousness and return to pre-existing conscious level
850.4	Concussion with prolonged loss of consciousness, without return to pre-existing conscious level
851	Cerebral laceration and contusion
852	Subarachnoid, subdural, and extradural hemorrhage, following injury
853	Other and unspecified intracranial hemorrhage following injury
854	Intracranial injury of other and unspecified nature
887.6	Traumatic amputation of arm and hand, bilateral, without mention of complication
887.7	Traumatic amputation of arm and hand, bilateral, complicated
896.2	Traumatic amputation of foot, bilateral, without mention of complication
896.3	Traumatic amputation of foot, bilateral, complicated
897.1	Traumatic amputation of leg, unilateral, below knee, complicated
897.2	Traumatic amputation of leg, unilateral, at or above knee, without mention of complication
897.3	Traumatic amputation of leg(s), unilateral, at or above knee, complicated
897.6	Traumatic amputation of leg(s), bilateral, without mention of complication
897.7	Traumatic amputation of leg(s), bilateral, complicated
905	Late effects of musculoskeletal and connective tissue injuries
907	Late effects of injuries to the nervous system
941.3	Burn of face, head, and neck, full-thickness skin loss
941.4	Burn of face, head, and neck, deep necrosis of underlying tissues without mention of loss of a body part
941.5	Burn of face, head, and neck, deep necrosis of underlying tissues with loss of body part
942.3	Burn of trunk, full-thickness skin loss
942.4	Burn of trunk, deep necrosis of underlying tissues without mention of loss of a body part
943.3	Burn of upper limb, except wrist and hand, full-thickness skin loss
943.4	Burn of upper limb, except wrist and hand, deep necrosis without mention of loss of a body part
943.5	Burn of upper limb, except wrist and hand, deep necrosis with a loss of a body part
944.5	Burn of wrist(s) and hand(s), deep necrosis of underlying tissues with loss of a body part
945.3	Burn of lower limb(s), full-thickness skin loss
945.4	Burn of lower limb(s), deep necrosis of underlying tissues without mention of loss of a body part
945.5	Burn of lower limb(s), deep necrosis of underlying tissues with loss of a body part
946.3	Burn of multiple specified sites, full-thickness skin loss
946.4.	Burn of multiple specified sites, deep necrosis of underlying tissues without mention of loss of a body part

51

946.5	Burn of multiple specified sites, deep necrosis of underlying tissues with a loss of a body part
948.1	Burns, 10-19 percent of body surface
948 2	Burns, 20-29 percent of body surface
948.3	Burns, 30-39 percent of body surface
948.4	Burns, 40-49 percent of body surface
948.5	Burns, 50-59 percent of body surface
948.6	Burns, 60-69 percent of body surface
948.7	Burns, 70-79 percent of body surface
948.8	Burns, 80-89 percent of body surface
948.9	Burns, 90 percent or more of body surface
952	Spinal cord injury without evidence of spinal bone injury
953	Injury to nerve roots and spinal plexus
958	Certain early complications of trauma (exc., 958.6)
996.4	Mechanical complication of internal orthopedic device, implant, and graft
996.6	Infection and inflammatory reaction due to internal prosthetic device, implant and graft
997.0	Central nervous system complications

52

FIRST AMENDMENT TO

AGREEMENT OF LIMITED PARTNERSHIP OF

WESTERN MEDICAL REHAB ASSOCIATES, L.P.

THIS FIRST AMENDMENT (the “Amendment”) is made as of the First day of September, 1996, by and between WESTERN NEURO CARE. INC. a Delaware corporation (“WNC”), and WESTMED-REHAB, a California corporation (“WestMed Sub”), and is joined into hereinafter by ALPHAMERICA HEALTH SYSTEMS, INC. a California corporation (“AlphAmerica”). the sole shareholder of WestMed Sub, UNITED WESTERN MEDICAL CENTERS, a California non-profit public benefit corporation (“WestMed”), the sole shareholder of AlphAmerica, and CONTINENTAL MEDICAL SYSTEMS, INC., a Delaware corporation (“CMS”), the sole stockholder of WNC.

BACKGROUND:

A. WNC and WestMed Sub entered into that certain Agreement of Limited Partnership the “Partnership Agreement”) of Western Medical Rehab Associates, L.P. (the “Partnership”) dated March 13, 1996, with the joinder of AlphAmerica, WestMed and CMS. All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Partnership Agreement.

B. WNC and WestMed Sub, with the joinder of AlphAmerica, WestMed and CMS, now desire to amend the Partnership Agreement as hereinafter set forth.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

1. Section 2.5(a) of the Partnership Agreement is hereby amended and restated in its entirety as follows: “CMS shall make up to $1,350,000 of unsecured loans to the Partnership to provide working capital for the operation of the Project (the “CMS Loan”). WestMed shall make up to $1,350.000 of unsecured loans to the Partnership to provide sufficient working capital for the Project (the “WestMed Loan”). The CMS Loan and the WestMed Loan (together, the “Working Capital Loans”) shall be documented pursuant to agreements executed and delivered by the parties thereto in such form as the parties shall agree. The Working Capital Loans shall be subject to the intercreditor provisions of this Section 2.5.

2. All other terms and conditions contained in the Partnership Agreement and not amended hereby remain in full force and affect.

THE REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK

53

JOINDER

Each of ALPHAMERICA HEALTH SYSTEMS, INC., a California corporation (“AlphAmerica”), and UNITED WESTERN MEDICAL CENTERS, a California non-profit public benefit corporation (“WestMed”), join in this First Amendment to Agreement of Limited Partnership of Western Medical Rehab Associates, L.P. (the “Partnership”) to acknowledge that the Joinder executed by AlphAmerica and WestMed and attached to that certain Agreement of Limited Partnership of the Partnership (the “Agreement”) remains in full force and effect. WestMed hereby agrees that the Working Capital Loans (as that term is defined in the Agreement) shall be made in accordance with, and governed by, the provisions of Section 2.5 of the Agreement. as amended by this First Amendment.

ALPHAMERICA HEALTH SYSTEMS, INC. a California corporation
By:	/s/ Douglas L. Drumwright
	Douglas L Drumwright,
	President
UNITED WESTERN MEDICAL CENTERS, a California non-profit public benefit corporation
By:	/s/ Douglas L. Drumwright
	Douglas L. Drumwright,
	President

54

AMENDMENT NO. 2 TO

AGREEMENT OF LIMITED PARTNERSHIP

OF

WESTERN MEDICAL REHAB ASSOCIATES, L.P.

(a Delaware Limited Partnership)

May 31, 2000

55

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are forever acknowledged and confessed, the parties hereto agree as follows:

1. DEFINED TERMS. Except to the extent it is specifically indicated to the contrary in this Second Amendment, defined terms used in this Second Amendment shall have the same meanings as in the Partnership Agreement.

2. EFFECTIVE TIME. This Second Amendment shall become effective as of 12:01 a.m. on the next day after the date hereof (the “Effective Time”). As soon as practicable after the Effective Time, WNC and CMS shall file, or shall cause to be filed, (a) a Certificate of Amendment to the Partnership’s Certificate of Limited Partnership with the Delaware Secretary of State in the form attached hereto as Exhibit 2-a and (b) a Foreign Limited Partnership Amendment to Application for Registration with the California Secretary of State with respect to the Partnership in the form attached hereto as Exhibit 2-b.

3. WITHDRAWAL OF UWMC. As of the Effective Time, WNC (a) shall be the sole General Partner of the Partnership, (b) shall be the sole Managing General Partner of the Partnership, (c) shall hold a 2% general partnership interest in the Partnership and (d) shall hold a 49% limited partnership interest in the Partnership. As of the Effective Time, CMS shall hold a 49% limited partnership interest in the Partnership. As of the Effective Time, UWMC withdraws from the Partnership with no claim or right to any interest in the Partnership, whether as a General Partner or as a Limited Partner; provided, however, no provision of this Second Amendment shall affect the respective rights and obligations of UWMC, WNC and CMS contained in the Sale Agreement and the documents entered into in connection with the closing of the transaction contemplated by the Sale Agreement, including, without limitation, the Release Agreement (as such term is defined in the Sale Agreement). WNC and CMS do hereby consent to UWMC’s withdrawal from the Partnership. All conditions precedent required to be completed under the Partnership Agreement in connection with UWMC’s withdrawal from the Partnership have been completed as of the Effective Time.

4. GENERAL PROVISIONS. This Second Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Captions and paragraph headings are used herein for convenience only, are not a part of this Second Amendment or the Partnership Agreement as amended by this Second Amendment and shall not be used in construing either document.

56

IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be executed in multiple originals by their authorized officers, all as of the day and year first above written.

UWMC HOSPITAL CORPORATION, a California corporation	WESTERN NEURO CARE, INC., a Delaware corporation
By:	By:	/s/ William W. Horton
Name:	Name:	WILLIAM W. HORTON
Its:	Its:	VICE PRESIDENT
	CMS DEVELOPMENT AND MANAGEMENT COMPANY, INC., a Delaware corporation
	By:	/s/ William W. Horton
	Name:	WILLIAM W. HORTON
	Its:	VICE PRESIDENT

57

IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be executed in multiple originals by their authorized officers, all as of the day and year first above written.

UWMC HOSPITAL CORPORATION, a California corporation		WESTERN NEURO CARE, INC., a Delaware corporation
By:	/s/ Kenneth K. Westbrook	By:
Name:	KENNETH K. WESTBROOK	Name:
Its:	SR VP, OPERATIONS	Its:
		CMS DEVELOPMENT AND MANAGEMENT COMPANY, INC., a Delaware corporation
		By:
		Name:
		Its:

58

EX-5.1

Exhibit 5.1

[SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP LETTERHEAD]

May 3, 2007

HealthSouth Corporation

One HealthSouth Parkway

Birmingham, Alabama 35243

RE: HealthSouth Corporation;
Registration Statement on Form S-4

Ladies and Gentlemen:

We have acted as special counsel to HealthSouth Corporation, a Delaware corporation (the "Company"), and each of the Opinion Guarantors (as defined herein), in connection with the preparation of a registration statement on Form S-4 (Registration Statement No. 333-141698), filed by the Company and the Guarantors referred to below with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), on March 30, 2007, as amended by Amendment No. 1 thereto as filed with the Commission on May 3, 2007 (as so amended, the “Registration Statement”), to register the issuance by the Company of up to $375,000,000 aggregate principal amount of Floating Rate Senior Notes of the Company due 2014 and $625,000,000 aggregate principal amount of 10.75% Senior Notes of the Company due 2016 (together, the "Exchange Notes"). The Exchange Notes will be governed by two separate Indentures, each dated as of June 14, 2006 (together, the "Indentures"), in each case, among the Company, the Guarantors named therein (the "Guarantors") and The Bank of Nova Scotia Trust Company of New York, as trustee (the "Trustee"), which provide for the guarantee, to the extent set forth in the respective Indentures (collectively, the "Guarantees"), of the Exchange Notes by each of the Guarantors. The Exchange Notes are to be issued pursuant to an exchange offer (the

HealthSouth Corporation

May 3, 2007

Page 2

"Exchange Offer") in exchange for like principal amounts of the issued and outstanding Floating Rate Senior Notes due 2014 of the Company and 10.75% Senior Notes due 2016 of the Company (together, the "Original Notes") under the Indentures, as contemplated by the Registration Rights Agreement, dated as of June 14, 2006 (the "Registration Rights Agreement"), by and among the Company, the Guarantors and the Initial Purchasers named therein.

This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.

In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of:

(i) the Registration Statement;

(ii) an executed copy of the Registration Rights Agreement;

(iii) an executed copy of each of the Indentures, which include therein the Guarantees to be issued in respect of the Exchange Notes;

(iv) the forms of the Exchange Notes;

(v) the Amended and Restated Certificate of Incorporation of the Company, as amended to the date hereof and currently in effect, certified by the Secretary of State of the State of Delaware;

(vi) the Amended and Restated Bylaws of the Company, as amended to the date hereof and currently in effect;

(vii) the certificate of incorporation or certificate of formation (or other constituent documents, as applicable) and by-laws or operating agreements (or certificates of limited partnership and the limited partnership agreements or similar documents) of each of the Guarantors that is a corporation, limited liability company or limited partnership incorporated or formed under the laws of the State of Delaware and identified as such on Schedule I hereto (the "Delaware Guarantors") and each of the Guarantors that is a corporation or limited partnership incorporated or formed under the laws of the State of Texas and identified as such on Schedule I hereto (the "Texas

HealthSouth Corporation

May 3, 2007

Page 3

Guarantors", and together with the Delaware Guarantors, the "Opinion Guarantors");

(viii) certain resolutions adopted by the Board of Directors of the Company, or a committee thereof, relating to the Exchange Offer, the issuance of the Original Notes and the Exchange Notes, the Indenture and certain related matters;

(ix) certain resolutions adopted by the governing bodies or entities (as applicable) of the Opinion Guarantors relating to the Exchange Offer, the issuance of the guarantees of the Original Notes and the issuance of the Guarantees, the Indentures and related matters;

(x) a certificate, dated as of May 2, 2007, and a facsimile telegram bringdown of such certificate, dated as of May 3, 2007 from the Secretary of State of the State of Delaware, as to the existence and good standing in the State of Delaware of the Company;

(xi) certificates, dated as of May 2, 2007, and a facsimile telegram bringdown of each such certificate, dated as of May 3, 2007 from the Secretary of State of the State of Delaware as to each of the Delaware Guarantors’ existence and good standing in the State of Delaware;

(xii) certificates, dated as of May 2, 2007, and a facsimile telegram bringdown of each such certificate, dated as of May 3, 2007 from the Secretary of State of the State of Texas as to each of the Texas Guarantors’ existence in the State of Texas; and

(xiii) for each of the Texas Guarantors that is a corporation, certificates, dated as of May 2, 2007, and a facsimile telegram bringdown of each such certificate, dated as of May 3, 2007 from the Texas Comptroller of Public Accounts as to each such Texas Guarantors’ good standing in the State of Texas.

We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and the Opinion Guarantors and such agreements, certificates and receipts of public officials, certificates of officers or other representatives of the Company and the Opinion Guarantors and others, and such other documents as we have deemed necessary or appropriate as a basis for the opinions set forth herein.

HealthSouth Corporation

May 3, 2007

Page 4

In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of such copies. In making our examination of executed documents, we have assumed that the parties thereto, other than the Company and the Opinion Guarantors, had or will have the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and the execution and delivery by such parties of such documents and the validity and binding effect thereof on such parties. As to any facts material to the opinions expressed herein that we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives of the Company, the Opinion Guarantors and others.

Our opinion set forth herein is limited to the General Corporation Law of the State of Delaware, the Delaware Limited Liability Company Act, the Delaware Revised Uniform Limited Partnership Act, the Texas Business Corporation Act and the Texas Revised Limited Partnership Act, and those laws, rules and regulations of the State of New York that, in our experience, are normally applicable to transactions of the type contemplated by the Exchange Offer, but without our having made any special investigation as to the applicability of any specific law, rule or regulation (all of the foregoing being referred to as "Opined on Law"). We do not express any opinion with respect to the law of any jurisdiction other than Opined on Law or as to the effect of any such non-opined on law on the opinion herein stated.

Based upon and subject to the foregoing and the limitations, qualifications, exceptions and assumptions set forth herein, we are of the opinion that, when the Registration Statement becomes effective and the Exchange Notes (in the form examined by us) have been duly executed and authenticated in accordance with the terms of the applicable Indenture and have been delivered upon consummation of the Exchange Offer against receipt of Original Notes surrendered in exchange therefor in accordance with the terms of the Exchange Offer, the Exchange Notes and the Guarantees will constitute valid and binding obligations of the Company and each of the Guarantors, respectively, enforceable against the Company and each of the Guarantors, respectively, in accordance with their terms, except to the extent that enforcement thereof may be limited by (1) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws now or hereafter in effect relating to creditors’ rights generally and (2) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity).

HealthSouth Corporation

May 3, 2007

Page 5

In rendering the opinion set forth above, we have assumed that the execution and delivery by the Company of each of the Indentures and the Exchange Notes, the execution and delivery by each of the Guarantors of each of the Indentures and the performance by each of the Company and the Guarantors of its respective obligations thereunder do not and will not violate, conflict with or constitute a default under any agreement or instrument to which the Company or the Guarantors or their properties are subject, except that we do not make this assumption for those agreements and instruments which have been identified to us by the Company and the Guarantors as being material to them and which are listed as exhibits in Part II of the Registration Statement (the "Listed Agreements and Instruments"). We note that certain of the Listed Agreements and Instruments may be governed by laws other than Opined on Law. Our opinion expressed herein is based solely upon our understanding of the plain language of such agreements or instruments and we do not express any opinion with respect to the validity, binding nature or enforceability of any such agreement or instrument, and we do not assume any responsibility with respect to the effect on the opinions or statements set forth herein of any interpretation thereof inconsistent with such understanding.

We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement. We also consent to the reference to our firm under the caption "Legal Matters" in the prospectus included in the Registration Statement. In giving this consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission.

Very truly yours,

/s/ Skadden, Arps, Slate,

Meagher & Flom LLP

SCHEDULE I

Opinion Guarantors

Delaware Guarantors	Jurisdiction of Organization
Advantage Health, LLC	Delaware
ASC Network Corporation	Delaware
Baton Rouge Rehab, Inc.	Delaware
Beaumont Rehab Associates Limited Partnership	Delaware
CMS Development and Management Company, Inc.	Delaware
CMS Jonesboro Rehabilitation, Inc.	Delaware
CMS Topeka Rehabilitation, Inc.	Delaware
Collin County Rehab Associates Limited Partnership	Delaware
Continental Medical of Arizona, Inc.	Delaware
Continental Medical Systems, Inc.	Delaware
Continental Rehabilitation Hospital of Arizona, Inc.	Delaware
Diagnostic Health Corporation	Delaware
HEALTHSOUTH LTAC of Sarasota, Inc.	Delaware
HEALTHSOUTH of Alexandria, Inc.	Delaware
HEALTHSOUTH of Altoona, Inc.	Delaware
HEALTHSOUTH of Austin, Inc.	Delaware
HEALTHSOUTH of Charleston, Inc.	Delaware
HEALTHSOUTH of East Tennessee, LLC.	Delaware
HEALTHSOUTH of Erie, Inc.	Delaware
HEALTHSOUTH of Fort Smith, Inc.	Delaware
HEALTHSOUTH of Henderson, Inc.	Delaware
HEALTHSOUTH of Houston, Inc.	Delaware
HEALTHSOUTH of Mechanicsburg, Inc.	Delaware
HEALTHSOUTH of Midland, Inc.	Delaware
HEALTHSOUTH of Nittany Valley, Inc.	Delaware
HEALTHSOUTH of Pittsburgh, Inc.	Delaware
HEALTHSOUTH of Reading, Inc.	Delaware
HEALTHSOUTH of San Antonio, Inc.	Delaware
HEALTHSOUTH of Sewickley, Inc.	Delaware
HEALTHSOUTH of South Carolina, Inc.	Delaware
HEALTHSOUTH of Spring Hill, Inc.	Delaware
HEALTHSOUTH of Texarkana, Inc.	Delaware
HEALTHSOUTH of Toms River, Inc.	Delaware
HEALTHSOUTH of Treasure Coast, Inc.	Delaware
HEALTHSOUTH of Utah, Inc.	Delaware
HEALTHSOUTH of York, Inc.	Delaware
HEALTHSOUTH of Yuma, Inc.	Delaware
HEALTHSOUTH Properties, LLC	Delaware
HEALTHSOUTH Real Property Holding, LLC	Delaware
HEALTHSOUTH Rehabilitation Hospital of Odessa, Inc.	Delaware
HEALTHSOUTH S.C. of Portland, Inc.	Delaware

Delaware Guarantors	Jurisdiction of Organization
HEALTHSOUTH S.C. of Scottsdale-Bell Road, Inc.	Delaware
HEALTHSOUTH Sub-Acute Center of Mechanicsburg, Inc.	Delaware
HEALTHSOUTH Surgery Center of Fairfield, Inc.	Delaware
HEALTHSOUTH Surgery Centers-West, Inc.	Delaware
National Imaging Affiliates, Inc.	Delaware
National Surgery Centers, Inc.	Delaware
Rebound, LLC	Delaware
Rehab Concepts Corp.	Delaware
Rehabilitation Hospital Corporation of America, Inc.	Delaware
Rehabilitation Hospital of Colorado Springs, Inc.	Delaware
Rehabilitation Hospital of Nevada - Las Vegas, Inc.	Delaware
Rehabilitation Hospital of Nevada - Las Vegas, L.P.	Delaware
SelectRehab, Inc.	Delaware
Sherwood Rehabilitation Hospital, Inc.	Delaware
Southern Arizona Regional Rehabilitation Hospital, L.P.	Delaware
Surgery Center Holding Corporation	Delaware
Surgical Care Affiliates, Inc.	Delaware
Surgical Health Corporation	Delaware
Terre Haute Regional Rehabilitation Hospital, L.P.	Delaware
Terre Haute Rehabilitation Hospital, Inc.	Delaware
Western Medical Rehab Associates, L.P.	Delaware
Western Neuro Care, Inc.	Delaware
Texas Guarantors	Jurisdiction of Organization
HEALTHSOUTH of Texas, Inc.	Texas
HEALTHSOUTH Specialty Hospital, Inc.	Texas
Northeast Surgery Center, Ltd.	Texas
NSC Houston, Inc.	Texas
Rehabilitation Hospital of Plano, Inc.	Texas
Southeast Texas Rehabilitation Hospital, Inc.	Texas
Tarrant County Rehabilitation Hospital, Inc.	Texas
Tyler Rehabilitation Hospital, Inc.	Texas

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in this Registration Statement on Form S-4/A of our report dated February 28, 2007, except with respect to our opinion on the consolidated financial statements insofar as it relates to the condensed consolidating financial information as discussed in Note 28, as to which the date is March 29, 2007, relating to the financial statements, management’s assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, which appears in the Current Report on Form 8-K dated March 30, 2007. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

Birmingham, Alabama

May 3, 2007

COVER

May 3, 2007

VIA ELECTRONIC TRANSMISSION

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

Re: Amendment No. 1 to Registration Statement

on Form S-4 of HealthSouth Corporation

SEC File No. 333-141698, filed on 3/30/07

Ladies and Gentlemen:

On behalf of HealthSouth Corporation, a Delaware corporation (the "Company"), we hereby electronically transmit, pursuant to Regulation S-T promulgated by the Securities and Exchange Commission, Amendment No. 1 to the Registration Statement of the Company on Form S-4 for filing under the Securities Act of 1933, as amended (the "Securities Act"), in connection with the Company’s offer to exchange an aggregate principal amount of up to $375,000,000 of Floating Rate Senior Notes due 2014 and $625,000,000 of 10.75% Senior Notes due 2016, in each case, which have been registered under the Securities Act, for like principal amounts of the Company’s issued and outstanding Floating Rate Senior Notes due 2014 and 10.75% Senior Notes due 2016, as applicable.

Please contact the undersigned at (212) 735-4112 should you require further information or have any questions.

Very truly yours,

/s/ Richard B. Aftanas

Richard B. Aftanas, Esq.

CORRESP

[HEALTHSOUTH LETTERHEAD]

VIA EDGAR

May 3, 2007

Mary K. Fraser, Esq.

Division of Corporation Finance

United States Securities and Exchange Commission

100 F Street N.E., Mail Stop 7010

Washington, DC 20549

Re: HealthSouth Corporation

Registration Statement on Form S-4

SEC File No. 333-141698

Dear Ms. Fraser:

The undersigned hereby requests, pursuant to Rule 461(a) promulgated under the Securities Act of 1933, as amended, that the above-referenced Registration Statement on Form S-4, as amended (File No. 333-141698), of HealthSouth Corporation (the "Company") be declared effective at 12:00 p.m., May 8, 2007, or as promptly as practicable thereafter. We respectfully request that we be notified of such effectiveness by a telephone call to Robert B. Pincus of Skadden, Arps, Slate, Meagher & Flom LLP at (302) 651-3090 and that such effectiveness also be confirmed in writing.

The Company hereby acknowledges that:

• should the United States Securities and Exchange Commission (the “Commission”) or the staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing;

• the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and

• the Company may not assert the declaration of effectiveness as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Very truly yours,
HEALTHSOUTH CORPORATION
By:	/s/ John P. Whittington
	Name: John P. Whittington
	Title: Executive Vice President, General Counsel and Corporate Secretary

cc: Robert B. Pincus, Esq.

Richard B. Aftanas, Esq.

[HEALTHSOUTH LETTERHEAD]

May 3, 2007

VIA EDGAR

Mary K. Fraser, Esq.

Division of Corporation Finance

United States Securities and Exchange Commission

100 F Street, N.E., Mail Stop 7010

Washington, DC 20549

Re: HealthSouth Corporation

Registration Statement on Form S-4,

SEC File No. 333-141698

Dear Ms. Fraser:

HealthSouth Corporation (the "Company") and each of the guarantor subsidiaries (the "Guarantors" and, together with the Company, the "Registrants") set forth on the signature pages to the Registration Statement on Form S-4 (File No. 333-141698) of the Registrants (as amended, the "Registration Statement"), are registering an exchange offer (the "Exchange Offer") pursuant to the Registration Statement in reliance on the position of the Staff of the Securities and Exchange Commission enunciated in Exxon Capital Holdings Corporation (available April 13, 1989), Morgan Stanley & Co. Incorporated (available June 5, 1991) and Shearman & Sterling (available July 2, 1993). The Registrants represent as follows:

1. The Registrants have not entered into any arrangement or understanding with any person to distribute the notes to be received in the Exchange Offer (the "New Notes") and, to the best of the Registrants’ information and belief, each person participating in the Exchange Offer is acquiring the New Notes in its ordinary course of business and has no arrangement or understanding with any person to participate in the distribution of the New Notes to be received in the Exchange Offer.

2. In this regard, the Registrants will make each person participating in the Exchange Offer aware (through the Exchange Offer prospectus or otherwise) that if such person is participating in the Exchange Offer for the purpose of distributing the New Notes to be acquired in the Exchange Offer, such person (i) cannot rely on the Staff position enunciated in Exxon Capital Holdings Corporation (available April 13, 1989) or interpretive letters to similar effect and (ii) must comply with registration and prospectus delivery requirements of the Securities Act of 1933, as amended (the "Securities Act"), in connection with a secondary resale transaction.

3. The Registrants acknowledge that such a secondary resale transaction by such person participating in the Exchange Offer for the purpose of distributing the New Notes to be acquired in the Exchange Offer should be covered by an effective registration statement containing the selling securityholder information required by Item 507 of Regulation S-K under the Securities Act.

4. The Registrants will make each person participating in the Exchange Offer aware (through the Exchange Offer prospectus) that any broker-dealer who holds Old Notes

Ms. Mary K. Fraser, Esq.

May 3, 2007

Page 2

(as described in the Exchange Offer prospectus) acquired for its own account as a result of market-making activities or other trading activities, and who receives New Notes in exchange for such Old Notes pursuant to the Exchange Offer, may be a statutory underwriter and must deliver a prospectus meeting the requirements of the Securities Act (as described in Shearman & Sterling (available July 2, 1993)) in connection with any resale of such New Notes.

5. The Registrants will include in the transmittal letter or similar documentation to be executed by an exchange offeree in order to participate in the Exchange Offer the following additional provisions:

(a) If the exchange offeree is not a broker-dealer, an acknowledgment that it is not engaged in, and does not intend to engage in, a distribution of the New Notes; and

(b) If the exchange offeree is a broker-dealer holding Old Notes acquired for its own account as a result of market-making activities or other trading activities, an acknowledgment that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of New Notes received in respect of such Old Notes pursuant to the Exchange Offer; and a statement to the effect that by so acknowledging and by delivering a prospectus, such broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

Very truly yours,
HealthSouth Corporation, On behalf of itself and the Guarantors set forth in the Registration Statement
By:	/s/ John P. Whittington
	Name: John P. Whittington
	Title: Executive Vice President, General Counsel and Corporate Secretary