Exhibit 10.1
**AMENDED AND RESTATED COST SHARING AGREEMENT**
         THIS AGREEMENT is entered into this 16th day of August, 2002, by and among**SELECT TRANSPORT, INC.**, a Delaware corporation (“ST”), **SELECT MEDICALCORPORATION**, a Delaware corporation (“SMC”), and **SELECT AIR II CORPORATION**, aPennsylvania corporation (“SAII”).
**BACKGROUND**
         A.     SMC leases a Cessna Citation III, Manufacturer’s Serial Number650-0132, Registration Number N49SM (the “Citation III”). The Citation III iskept in a hangar at the Harrisburg International Airport owned by ST (the“Hangar”). SAII owns a jet aircraft (the “Citation II”), which also occupiesspace in the Hangar.
         B.     On December 11, 2000, SMC, SAII and ST, executed and delivered thatcertain Cost Sharing Agreement (the “Prior Agreement”), pursuant to which theparties thereto provided for an equitable sharing of common expenses relativeto the storage, maintenance and operation of their aircraft. The PriorAgreement was amended by that certain First Amendment to Cost Sharing Agreementdated April 1, 2001 and that certain Second Amendment to Cost Sharing Agreementdated February 12, 2002.
         C.     The parties hereto now desire to amend and restate the Prior Agreementas hereinafter provided.
         NOW THEREFORE, intending to be legally bound hereby, the parties covenantand agree as follows:
         1.     Hangar Usage. SMC will pay ST the sum of $3,250 per month (subject toannual adjustments to be mutually agreed upon by SAII and SMC), which isintended to reimburse ST for costs attributable to the physical hangarfacility, such as interest, depreciation, real estate taxes, maintenance,insurance and utilities. Such amount shall be due and payable from SMC to STon the first day of each calendar month.
         2.     Mechanic. A full-time, professional aircraft mechanic is employedthrough SMC to service the Citation II and the Citation III. Effective onFebruary 12, 2002, SMC will no longer charge SAII for use of its mechanic inproviding services with respect to the Citation II.
         3.     Pilots. Two full-time professional pilots are employed by SMC. Thepilots fly both the Citation II and the Citation III. In addition, SMC andSAII from time to time hire contract pilots on a *per diem*basis. SMC and SAIIwill each be solely responsible for retaining and paying such nonemployeecontract pilots to fly their respective aircraft. However, effective onFebruary 12, 2002, SMC will no longer charge SAII for use of its pilots inconnection with Citation II flights taken for personal trips.
 

 

         4.     Use of Citation II. The parties acknowledge that for business reasons,SMC may utilize the Citation II from time to time. SMC agrees to pay SAII$1,500 per flight hour for its use of the Citation II.
         5.     Use of Citation III. Effective on February 12, 2002, the Citation III(and SMC’s pilots) may be used, from time to time, for personal trips taken bySMC’s executive officers (who are, in some cases, accompanied by friends andfamily members), as follows: (a) Rocco A. Ortenzio, SMC’s Executive Chairman,and Robert A. Ortenzio, SMC’s President and Chief Executive Officer, may usethe Citation III for personal trips without limitation, (b) all otherexecutives officers of SMC may use the Citation III only (i) in connection witha personal emergency or bereavement matter, and (ii) with the prior approval ofeither SMC’s Executive Chairman or SMC’s President and Chief Executive Officer.SMC will receive no charge or reimbursement from any executive officer forpersonal use of the Citation III (and SMC’s pilots), or costs incurred by SMCin connection therewith. In connection with each trip taken by an executiveofficer for personal reasons, SMC will calculate the amount of compensationthat must be included in such executive officers W-2 form, as required by IRSrules.
         6.     Term/Termination. This Agreement shall continue until terminated byany party, provided no termination will take effect until thirty (30) daysafter notice of intent to terminate.
         7.     Notices. All notices, requests, demands, waivers, consents and othercommunications hereunder shall be in writing, shall be delivered either inperson, by telegraphic, facsimile or other electronic means, by overnight aircourier or by mail, and shall be deemed to have been duly given and to havebecome effective (a) upon receipt if delivered in person or by telegraphic,facsimile or other electronic means, (b) one business day after having beendelivered to an air courier for overnight delivery, or (c) three business daysafter having been deposited in the mail as certified or registered mail, returnreceipt requested, all fees prepaid, directed to the party or its permittedassignees at the following addresses (or at such other address as shall begiven in writing by either party hereto):     Select Air II Corporation4716 Old Gettysburg RoadP.O. Box 2034Mechanicsburg, PA 17055Attn: Michael Salerno Select Medical Corporation4716 Old Gettysburg RoadP.O. Box 2034Mechanicsburg, PA 17055Attn: Michael E. Tarvin Select Transport, Inc.4716 Old Gettysburg RoadP.O. Box 2034Mechanicsburg, PA 17055Attn: Michael E. Salerno
         8.     Attorneys’ Fees. In any litigation or other proceeding relating tothis Agreement, the prevailing party shall be entitled to recover its costs andreasonable attorneys’ fees.
         9.     Successors and Assigns. This Agreement shall be binding upon, andinure to the benefit of, the parties hereto, and their successors and assigns.
         10.     Counterparts. This Agreement may be executed in one or morecounterparts, each of which shall be deemed an original, and all of whichtogether shall constitute one and the same instrument.
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         11.     Headings. Captions and section headings used herein are forconvenience only and are not a part of this Agreement and shall not be used inconstruing it.
         12.     Entire Agreement. This Agreement (including the exhibits hereto, ifany) and the other documents and instruments specifically provided for hereincontain the entire understanding of the parties hereto concerning the subjectmatter of this Agreement and, except as expressly provided for herein,supersede all prior understandings and agreements, whether oral or written,between them with respect to the subject matter hereof and thereof.
         13.     Amendments. This Agreement may be amended or modified only by aninstrument signed by each of the parties hereto.
         14.     Construction. This Agreement and any documents or instrumentsdelivered pursuant hereto shall be construed without regard to the identity ofthe person who drafted the various provisions of this Agreement. Each andevery provision of this Agreement, and such other documents and instruments,shall be construed as though the parties participated equally in the draftingof this Agreement. Consequently, the parties hereto acknowledge and agree thatany rule of construction that a document is to be construed against thedrafting party shall not be applicable either to this Agreement or to suchother documents and instruments.
         15.     No Waiver. The failure of a party hereto to insist, in any one ormore instances, on performance of any items, covenants and conditions of thisAgreement shall not be construed as a waiver or relinquishment of any rightsgranted hereunder or of the future performance of any such term, covenant orcondition, but the obligations of the parties with respect thereto shallcontinue in full force and effect. No waiver of any provision or condition ofthis Agreement by a party hereto shall be valid unless in writing and signed bysuch party.
         16.     Governing Law. This Agreement shall be governed by all respects,including validity, interpretation and effect, by the laws of the Commonwealthof Pennsylvania, without regard to principles of conflicts of law thereof.
         17.     Severability. Whenever possible, each provision of this Agreementshall be interpreted in such manner as to be valid, binding and enforceableunder applicable law, but if any provision of this agreement is held to beinvalid, void (or voidable) or unenforceable under applicable law, suchprovision shall be ineffective only to the extent held to be invalid, void (orvoidable) or unenforceable, without affecting the remainder of such provisionor the remaining provisions of this Agreement.
         **IN WITNESS WHEREOF**, the parties hereto have duly executed this Agreement,under
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seal, the day and date first above written:       **SELECT TRANSPORT, INC.**, a Delawarecorporation       /s/ Michael E. Salerno  By: Michael E. Salerno,Treasurer       **SELECT MEDICAL CORPORATION**, aDelaware corporation       /s/ Michael E. Tarvin  By: Michael E. Tarvin,Senior Vice President       **SELECT AIR II CORPORATION**, aPennsylvania corporation       /s/ Michael E. Salerno  By: Michael E. Salerno,Vice President
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