Document:

Amendment #2 to Credit Agreement and Security Agreement

 Exhibit 10.1 
  
 AMENDMENT NO. 2 TO CREDIT AGREEMENT 
 AND SECURITY AGREEMENT 
  
 AMENDMENT NO. 2 (this “Amendment”) dated as of December 22, 2005, to the $300,000,000 Amended and Restated Credit Agreement dated as of June 28, 2004 (as heretofore amended, the “Credit
Agreement”) among KINDRED HEALTHCARE, INC. (the “Borrower”), the LENDERS party thereto, and JPMORGAN CHASE BANK, N.A. (formerly known as JPMorgan Chase Bank), as Administrative Agent and Collateral Agent, and AMENDMENT NO.
2 to the Amended and Restated Guarantee and Security Agreement dated as of June 28, 2004 (as heretofore amended, the “Security Agreement”) among the Borrower, the Subsidiary Guarantors party thereto, and JPMORGAN CHASE BANK,
N.A. (formerly known as JPMorgan Chase Bank), as Collateral Agent. 
  
 WITNESSETH: 
  
 WHEREAS, the parties hereto
desire to amend certain provisions of the Credit Agreement and the Security Agreement as provided herein; 
  
 NOW, THEREFORE, the parties hereto agree as follows: 
  
 Section 1. Defined Terms; References. Unless otherwise specifically defined herein, each term used herein which is defined in the Credit
Agreement has the meaning assigned to such term in the Credit Agreement. Each reference to “hereof”, “hereunder”, “herein” and “hereby” and each other similar reference and each reference to “this
Agreement” and each other similar reference contained in the Credit Agreement shall, after the amendments herein become effective, refer to the Credit Agreement as amended hereby. 
  
 Section 2. Defined Terms. (a) The definition of “Consolidated Rental Expense” in
Section 1.01 of the Credit Agreement is amended and restated in its entirety to read as follows: 
  
 ““Consolidated Rental Expense” means, for any period, the total rental expense for operating leases of the Borrower and its
Restricted Subsidiaries (other than any such rental expense that is attributable to the HCPI Properties listed in Part A of Schedule 1.01J), determined on a consolidated basis for such period; provided that Consolidated Rental Expense shall
not be reduced by any rental income.” 
  
 (b) The definition
of “HCPI Transaction” in Section 1.01 of the Credit Agreement is amended and restated in its entirety to read as follows: 
  
 ““HCPI Transaction” means (a) the transaction pursuant to which a Credit Party acquired the HCPI Property referred to as
“MO# 860/861” in Part A of Schedule 1.01J from Health Care Property Investors, Inc. (together with its affiliates, “HCPI”) and, 

 substantially simultaneously therewith and as sole consideration for which acquisition, entered into a
Sale and Leaseback Transaction with respect to the HCPI Property referred to as “TN# 274” in Part A of Schedule 1.01J with HCPI and (b) the proposed transaction pursuant to which a Credit Party acquires the HCPI Properties referred to
in Part B of Schedule 1.01J from HCPI and, substantially simultaneously therewith and as sole consideration for which acquisition, enters into a Sale and Leaseback Transaction with respect to the HCPI Properties referred to in Part C of Schedule
1.01J with HCPI.” 
  
 Section 3. Future Assets To Be
Added To Collateral. Section 5.09(e) of the Credit Agreement is amended and restated in its entirety to read as follows: 
  
 “(e) If any Specified Property referred to in Part B of Schedule 1.01H with a fair market value exceeding $6,000,000 (in the case of a hospital) or
$3,000,000 (in all other cases) has not been sold on or prior to September 30, 2006 (other than to the Borrower or any Subsidiary of the Borrower), the Borrower shall promptly (and in any event by no later than October 30, 2006) cause such
Specified Property to be added to the Collateral by delivering to the Agent a Mortgage with respect thereto. Prior to such time, the Borrower shall ensure that no Lien (other than Permitted Encumbrances) over any such Specified Property is granted
to any Person.” 
  
 Section 4. Consolidations,
Mergers And Asset Sales. Section 7.03(a)(ii)(E) of the Credit Agreement is amended and restated in its entirety to read as follows: 
  
 “(E) such transaction complies with Section 7.03(c)(i) and is solely in respect of any Specified Property;” 
  
 Section 5. Limitations On Acquisitions And Investments.
Section 7.08(b)(ii) of the Credit Agreement is amended by replacing the reference to “$400,000,000” with “$500,000,000”. 
  
 Section 6. Limitation On Sale And Leaseback Transactions. Section 7.11 of the Credit Agreement is amended by adding the phrase
“(other than Sale and Leaseback Transactions with respect to the HCPI Properties)” after the phrase “with respect to any property or asset” therein. 
  
 Section 7. Credit Agreement Schedules. (a) Schedule 1.01H to the Credit Agreement is replaced in its
entirety with Schedule 1.01H attached hereto. 
  
 (b) Schedule
1.01J to the Credit Agreement is replaced in its entirety with Schedule 1.01J attached hereto. 
  

 2 

 Section 8. Increase In Commitments. (a) The second and third sentences of the definition
of “Commitment” in Section 1.01 of the Credit Agreement are amended and restated in their entirety to read as follows: 
  
 “The amount of each Lender’s Commitment as of the Commitment Increase Effective Date is set forth on Schedule 2.01 or, in the case of the
initial Commitment of any Lender that becomes a Lender after the Commitment Increase Effective Date, in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment.” 
  
 (b) The following definition is added to Section 1.01 of the Credit
Agreement in the appropriate alphabetical place: 
  
 ““Commitment Increase Effective Date” means the date on which the conditions specified in Section 11(a) of Amendment No. 2, dated as of December 22, 2005, to this Agreement are satisfied.”

  
 (c) Schedule 2.01 to the Credit Agreement is replaced in its
entirety with Schedule 2.01 attached hereto.1 
  
 (d) The title page of the Credit Agreement, the fourth whereas clause of the Credit Agreement, Section 7.14 of the
Credit Agreement and Section 27 of the Security Agreement are each amended by replacing the reference to “$300,000,000” with the amount set forth as the Total Commitment Amount on Schedule 2.01 attached hereto. 
  
 (e) Section 5.09 of the Credit Agreement is amended by adding the
following subsection (h) at the end of such Section: 
  
 “(h) Within 45 Business Days after the Commitment Increase Effective Date (or such longer period as agreed by the Agent), the Borrower shall deliver or cause to be delivered to the Agent an amendment to each Fee Mortgage and a
modification endorsement to each title insurance policy with respect thereto (or new title policy in states where such endorsements are not available), in each case to confirm that the increased Commitments as in effect after the Commitment Increase
Effective Date are secured by such Fee Mortgage and otherwise in form and substance reasonably satisfactory to the Agent.” 
  
 (f) Section 8.01(b)(ii) of the Credit Agreement is amended and restated in its entirety to read as follows: 
  

	1	This Schedule will be posted as soon as it is finalized. 

  

 3 

 “(ii) Section 5.01(e), Section 5.01(f), Section 5.09(h), Article 6 or Article
7;” 
  
 (g) On the Commitment Increase Effective Date (as
defined below), without further action by any party hereto or to the Credit Agreement, the Issuing Lender shall be deemed to have granted to each Lender, and each Lender shall be deemed to have acquired from the Issuing Lender, a participation in
each Letter of Credit issued and outstanding on the Commitment Increase Effective Date equal to such Lender’s Applicable Percentage (after giving effect to the increase in Commitments pursuant to this Section 8) of (i) the aggregate
amount available to be drawn thereunder and (ii) the aggregate unpaid amount of any outstanding reimbursement obligations in respect thereof. Such participations shall be on all the same terms and conditions as participations granted in Letters
of Credit under Section 2.04(e) of the Credit Agreement. With respect to each such outstanding Letter of Credit, if the Issuing Lender has heretofore sold a participation therein to a Lender, such Lender and the Issuing Lender agree that such
participation shall be automatically canceled on the Commitment Increase Effective Date. Each of the parties hereto hereby agrees that the Administrative Agent may take any and all additional actions as may be reasonably necessary to ensure that,
after giving effect to the increase in the Commitments contemplated hereby, the Credit Exposures are held by the Lenders in accordance with their Applicable Percentages. This may be accomplished at the discretion of the Administrative Agent by
(i) requiring the outstanding Loans to be prepaid with the proceeds of a new Borrowing, (ii) causing each of the Lenders having a Commitment prior to the Commitment Increase Effective Date (each a “Pre-Increase Lender”) to
assign portions of their outstanding Loans to Lenders (including any new Lenders) which have acquired new or additional Commitments on the Commitment Increase Effective Date (each a “Post-Increase Lender”) or (iii) any
combination of the foregoing. Any such prepayment or assignment shall be subject to the provisions of Section 2.14 of the Credit Agreement. 
  
 (h) If requested by the Administrative Agent pursuant to clause (g), on the Commitment Increase Effective Date, each Pre-Increase Lender shall assign to
any Post-Increase Lender, and each such Post-Increase Lender shall purchase from such Pre-Increase Lender, at the principal amount thereof, such interests in the Loans outstanding on the Commitment Increase Effective Date as shall be necessary to
give effect to the provisions of clause (g). Such assignments shall be effected pursuant an assignment agreement in form and substance satisfactory to the Administrative Agent. 
  
 (i) This Section 8 shall supersede any provisions in Sections 2.16(c) or 10.02 of the Credit Agreement to the contrary.

  
 Section 9. Representations Correct; No Default.
The Borrower represents and warrants that (i) the representations and warranties contained in the Financing Documents are true as though made on and as of the date hereof and 
  

 4 

 will be true on and as of the Commitment Increase Effective Date and the Amendment Effective Date (as defined below) as
though made on and as of each such date and (ii) no Default has occurred and is continuing on the date hereof and no Default will occur or be continuing on the Commitment Increase Effective Date or the Amendment Effective Date. 
  
 Section 10. Counterparts. This Amendment may be signed in any
number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 
  
 Section 11. Effectiveness. (a) The amendments contained in Section 8 hereof shall become effective on the date (the
“Commitment Increase Effective Date”) when the Administrative Agent shall have received: 
  
 (i) duly executed counterparts hereof signed by the Borrower, the Subsidiary Guarantors, the Required Lenders, each Lender whose
Commitment is being increased and each new lender that has agreed to become a Lender party to the Credit Agreement (or, in the case of any Lender or new Lender as to which an executed counterpart shall not have been received, the Administrative
Agent shall have received facsimile or other written confirmation from such party of execution of a counterpart hereof by such Lender or new Lender); 
  
 (ii) a certificate, dated the Commitment Increase Effective Date, from an appropriate officer of each of the Credit Parties
(A) attaching copies of the resolutions or consents of the board of directors of such Credit Party or of its applicable partner or member approving or consenting to the increase in Commitments contemplated by Section 8 and
(B) certifying (1) that such resolutions or consents are in full force and effect as of the Commitment Increase Effective Date and have been duly adopted in accordance with the Organizational Documents of such Credit Party and (2) as
to the signatures and incumbency of the Persons executing this Amendment on behalf of such Credit Party; 
  
 (iii) favorable legal opinions consistent with those delivered on the Effective Date pursuant to Section 4.01(g) of the Credit
Agreement. The Borrower requests each counsel delivering such opinions to deliver such opinions; and 
  
 (iv) a certificate, dated the Commitment Increase Effective Date, signed by the President, a Vice President or a Financial Officer of the
Borrower, certifying that, before and after giving effect to such increase in Commitments (A) the representations and warranties of each Credit Party contained in the Financing Documents are true on and as of the Commitment Increase Effective
Date as though made on and as of such date and (B) no Default has occurred and is continuing. 
  

 5 

 (b) This Amendment (other than the amendments contained in Section 8) shall become effective as of
the date hereof on the date (the “Amendment Effective Date”) when the Administrative Agent shall have received duly executed counterparts hereof signed by the Borrower, the Subsidiary Guarantors and the Required Lenders (determined
without regard to the increase in Commitments contemplated by Section 8) (or, in the case of any Lender as to which an executed counterpart shall not have been received, the Administrative Agent shall have received facsimile or other written
confirmation from such party of execution of a counterpart hereof by such Lender). 
  
 (c) No later than the first Business Day after the Fee Determination Date (as defined below), the Borrower shall pay the Administrative Agent, in immediately available funds for the account of each Lender that has
evidenced its agreement hereto as provided in clause (b) by 5:00 P.M. (New York City time) on the later of (i) December 22, 2005 and (ii) the date the Administrative Agent issues a notice to the Lenders saying this Amendment
(other than, unless such amendments have theretofore become effective, the amendments referred to in Section 8) has become effective (such later date, the “Fee Determination Date”), an amendment fee in an amount equal to 0.05%
of such Lender’s Commitment (as in effect on the opening of business on the date of this Amendment (determined without regard to the increase in Commitments contemplated by Section 8)). 
  
 (d) No later than the first Business Day after the Commitment Increase
Effective Date, the Borrower shall pay the Administrative Agent, in immediately available funds for the account of each Lender that has consented to an increase in its Commitment or that has acquired a new Commitment, a commitment increase fee in an
amount equal to a percentage of the increase in such Lender’s Commitment or new Commitment as agreed between the Borrower and the Administrative Agent. 
  
 (e) Except as expressly set forth herein, the amendments contained herein shall not constitute a waiver or amendment of any term or condition of the
Credit Agreement or any other Financing Document, and all such terms and conditions shall remain in full force and effect and are hereby ratified and confirmed in all respects. 
  
 Section 12. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. 
  

 6 

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective
authorized officers as of the date and year first above written. 
  

			
	 KINDRED HEALTHCARE, INC., as Borrower

		
	 By:
	 	 /s/ Hank Robinson

	 Name:
	 	Hank Robinson
	 Title:
	 	 Senior Vice President, Tax
 and
Treasurer

			
	 ADVANCED INFUSION SYSTEMS, INC.
 CARIBBEAN BEHAVIORAL HEALTH SYSTEMS, INC.
 COURTLAND GARDENS HEALTH CENTER, INC.
 HELIAN ASC OF NORTHRIDGE, INC.
 HELIAN HEALTH GROUP, INC.
 HELIAN RECOVERY CORPORATION
 HILLHAVEN – MSC PARTNERSHIP
 HOMESTEAD HEALTH CENTER, INC.
 J.B. THOMAS HOSPITAL, INC.
 KINDRED ACUTE PULMONARY EAST, INC.
 KINDRED ACUTE PULMONARY WEST, INC.
 KINDRED HEALTHCARE, INC.
 KINDRED HEALTHCARE OPERATING, INC.
 KINDRED HEALTHCARE PHARMACY, LLC
 KINDRED HEALTHCARE SERVICES, INC.
 KINDRED HOLDINGS, L.L.C.
 KINDRED HOME CARE AND HOSPICE INDIANA PARTNERSHIP
 KINDRED HOME CARE SERVICES,
INC.
 KINDRED HOSPICE, INC.
 KINDRED HOSPITAL PHARMACY SERVICES, INC.
 KINDRED HOSPITALS EAST, L.L.C.
 KINDRED HOSPITALS LIMITED PARTNERSHIP
 KINDRED HOSPITALS WEST, L.L.C.
 KINDRED INSTITUTIONAL PHARMACY SERVICES, INC.
 KINDRED INSURANCE HOLDINGS, INC.
 KINDRED NEVADA, L.L.C.
 KINDRED NURSING CENTERS CENTRAL LIMITED PARTNERSHIP
 KINDRED NURSING CENTERS LIMITED
PARTNERSHIP
 KINDRED NURSING CENTERS EAST, L.L.C.
 KINDRED NURSING CENTERS NORTH, L.L.C.
 KINDRED NURSING CENTERS SOUTH, L.L.C.
 KINDRED NURSING CENTERS WEST, L.L.C.
 KINDRED PHARMACY SERVICES, INC.

		
	 By:
	 	 /s/ Hank Robinson

	 Name:
	 	 Hank Robinson

	 Title:
	 	 Senior Vice President, Tax
 and Treasurer

			
	 KINDRED REHAB SERVICES, INC.
 KINDRED SUPPORT SERVICES, LLC
 KINDRED SYSTEMS, INC.
 KPS ORLANDO, INC.
 KPS GREAT FALLS, INC.
 KPS PENNSYLVANIA, INC.
 KPS NASHVILLE, LLC
 KPS CHICAGO, INC.
 KPS-6, INC.
 KPS-7, INC.
 KPS-8, INC.
 KPS-9, INC.
 KPS-10, INC.
 KPS EAST, INC.
 KPS MIDWEST, INC.
 KPS MOUNTAIN, INC.
 KPS SEATTLE, INC.
 KPS WISCONSIN, INC.
 LAFAYETTE HEALTH CENTER, INC.
 MEDEQUITIES, INC.
 PERSONACARE OF BRADENTON, INC.
 PERSONACARE OF CLEARWATER, INC.
 PERSONACARE OF CONNECTICUT, INC.
 PERSONACARE OF GEORGIA, INC.
 PERSONACARE OF HUNTSVILLE, INC.
 PERSONACARE OF OHIO, INC.
 PERSONACARE OF OWENSBORO, INC.
 PERSONACARE OF PENNSYLVANIA, INC.
 PERSONACARE OF POMPANO EAST, INC.
 PERSONACARE OF POMPANO WEST, INC.
 PERSONACARE OF READING, INC.
 PERSONACARE OF SAN ANTONIO, INC.
 PERSONACARE OF SAN PEDRO, INC.
 PERSONACARE OF SHREVEPORT, INC.
 PERSONACARE OF ST. PETERSBURG, INC.
 PERSONACARE OF WARNER ROBINS, INC.
 PERSONACARE OF WISCONSIN, INC.
 PRODATA SYSTEMS, INC.
 RECOVERY INN OF MENLO PARK, L.P.
 RECOVERY INNS OF AMERICA, INC.
 RESPIRATORY CARE SERVICES, INC.

		
	 By:
	 	 /s/ Hank Robinson

	 Name:
	 	 Hank Robinson

	 Title:
	 	 Senior Vice President, Tax
 and Treasurer

			
	 SOUTHERN CALIFORNIA SPECIALTY CARE, INC.
 SPECIALTY HEALTHCARE SERVICES, INC.
 SPECIALTY HOSPITAL OF CLEVELAND, INC.
 SPECIALTY HOSPITAL OF PHILADELPHIA, INC.
 SPECIALTY HOSPITAL OF SOUTH CAROLINA, INC.THC – CHICAGO, INC.
 THC – HOUSTON, INC.
 THC – MINNEAPOLIS, INC.
 THC – NORTH SHORE, INC.
 THC – ORANGE COUNTY, INC.
 THC – SEATTLE, INC.
 TRANSITIONAL HOSPITALS CORPORATION OF INDIANA, INC.
 TRANSITIONAL HOSPITALS
CORPORATION OF LOUISIANA, INC.
 TRANSITIONAL HOSPITALS CORPORATION OF NEVADA, INC.
 TRANSITIONAL HOSPITALS CORPORATION OF NEW MEXICO, INC.
 TRANSITIONAL HOSPITALS CORPORATION OF TAMPA, INC.
 TRANSITIONAL HOSPITALS CORPORATION OF TEXAS, INC.
 TRANSITIONAL HOSPITALS CORPORATION OF WISCONSIN, INC.
 TUCKER NURSING CENTER, INC.
 KPS DENVER, L.L.C.
 KINDRED HOSPITAL-TOLEDO, L.L.C.
 KINDRED DEVELOPMENT 3, L.L.C.
 KINDRED DEVELOPMENT 4, L.L.C.
 KINDRED DEVELOPMENT 5, L.L.C.
 KINDRED DEVELOPMENT 6, L.L.C.
 KINDRED DEVELOPMENT 7, L.L.C.
 KINDRED DEVELOPMENT 8, L.L.C.
 KINDRED DEVELOPMENT 9, L.L.C.
 KINDRED DEVELOPMENT 10, L.L.C.
 KINDRED DEVELOPMENT 11, L.L.C.
 KINDRED DEVELOPMENT 12, L.L.C.
 KINDRED DEVELOPMENT 13, L.L.C.
 KINDRED DEVELOPMENT 14, L.L.C.
 KINDRED DEVELOPMENT 15, L.L.C.

		
	 By:
	 	 /s/ Hank Robinson

	 Name:
	 	 Hank Robinson

	 Title:
	 	 Senior Vice President, Tax
 and Treasurer

			
	 KINDRED DEVELOPMENT 12, L.L.C.
 KINDRED DEVELOPMENT 16, L.L.C.
 KINDRED DEVELOPMENT 17, L.L.C.
 KPS TENNESSEE, L.L.C.
 REHAB STAFFING LLC
 KINDRED DEVELOPMENT 20, L.L.C.
 KINDRED DEVELOPMENT 21, L.L.C.
 KINDRED DEVELOPMENT 22, L.L.C.
 KINDRED DEVELOPMENT 23, L.L.C.
 KINDRED DEVELOPMENT 24, L.L.C.
 KINDRED DEVELOPMENT 25, L.L.C.
 KINDRED DEVELOPMENT 26, L.L.C.
 KINDRED DEVELOPMENT 27, L.L.C.
 KINDRED DEVELOPMENT 28, L.L.C.
 KINDRED DEVELOPMENT 29, L.L.C.
 KINDRED HOSPITAL-SPRINGFIELD, L.L.C.
 FOOTHILL NURSING COMPANY PARTNERSHIP

		
	 By:
	 	 /s/ Hank Robinson

	 Name:
	 	 Hank Robinson

	 Title:
	 	 Senior Vice President, Tax
 and Treasurer

			
	 AVERY MANOR NURSING, L.L.C.
 BRAINTREE NURSING, L.L.C.
 COUNTRY ESTATES NURSING, L.L.C.
 FORESTVIEW NURSING, L.L.C.
 GODDARD NURSING, L.L.C.
 HARBORLIGHTS NURSING, L.L.C.
 HIGHGATE NURSING, L.L.C.
 HIGHLANDER NURSING, L.L.C.
 KINDRED BRAINTREE HOSPITAL, L.L.C.
 LAUREL LAKE HEALTH AND
     REHABILITATION, L.L.C.
 MAIN ASSISTED LIVING, L.L.C.
 MASSACHUSETTS ASSISTED
     LIVING, L.L.C.
 MEADOWS NURSING, L.L.C.
 SPRINGFIELD PARK VIEW
     HOSPITAL, L.L.C.
 TOWER HILL NURSING,
L.L.C.

		
	 By:
	 	 /s/ Donald Hank Robinson

	 Name:
	 	 
	 Title:
	 	 

 Signature Pages to Effectiveness of Amendment (other than the amendments contained in Section 8)

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

		
	 By:
	 	 /s/ Dawn Lee Lum

	 Name:
	 	Dawn Lee Lum
	 Title:
	 	Vice President

			
	 GENERAL ELECTRIC CAPITAL CORPORATION

		
	 By:
	 	 /s/ Thomas A. Buckelew

	 Name:
	 	Thomas A. Buckelew
	 Title:
	 	Duly Authorized Signatory

			
	 The Foothill Group, Inc.

		
	 By:
	 	 /s/ Michael R. Bohannon

	 Name:
	 	 Michael R. Bohannon

	 Title:
	 	 SVP

			
	 CITICORP USA, INC.

		
	 By:
	 	 /s/ William Washburn

	 Name:
	 	 William Washburn

	 Title:
	 	 Director/VicePresident

			
	 THE CIT GROUP/BUSINESS CREDIT, INC.

		
	 By:
	 	 /s/ John Finore

	 Name:
	 	 John Finore

	 Title:
	 	 Vice President

			
	 UBS AG, STAMFORD BRANCH

		
	 By:
	 	 /s/ Balloz Sikka

	 Name:
	 	 Balloz Sikka

	 Title:
	 	 Associate Director
 Banking Products Services, US

		
	 By:
	 	 /s/ Joselin Fernandez

	 Name:
	 	 Joselin Fernandez

	 Title:
	 	 Associate Director
 Banking Products Services, US

			
	 MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services Inc.

		
	 By:
	 	 /s/ Paula K. Berry

	 Name:
	 	 Paula K. Berry

	 Title:
	 	 Vice President

			
	 ALLIED IRISH BANKS, P.L.C.

		
	 By:
	 	 /s/ Martin Chin

	 Name:
	 	 Martin Chin

	 Title:
	 	 SVP

		
	 By:
	 	 /s/ Derrick Lynch

	 Name:
	 	 Derrick Lynch

	 Title:
	 	 AVP

			
	 U.S. BANK NATIONAL ASSOCIATION

		
	 By:
	 	 /s/ David A. Wombwell

	 Name:
	 	 David A. Wombwell

	 Title:
	 	 Senior Vice President

 Signature Pages to Effectiveness of Amendments contained in Section 8 – Commitment Increase

			
	 Commitment Increase Signature Page
  
 JPMORGAN CHASE BANK, N.A., as
     Administrative Agent, Collateral
     Agent and Lender

		
	 By:
	 	 /s/ Dawn Lee Lum

	 Name:
	 	 Dawn Lee Lum

	 Title:
	 	 Vice President

			
	 Commitment Increase Signature Page
  
 CITICORP USA, INC.

		
	 By:
	 	 /s/ William Washburn

	 Name:
	 	 William Washburn

	 Title:
	 	 Director/VicePresident

			
	 Commitment Increase Signature Page
  
 THE CIT GROUP/BUSINESS CREDIT,
INC.

		
	 By:
	 	 /s/ John Finore

	 Name:
	 	 John Finore

	 Title:
	 	 Vice President

			
	 Commitment Increase Signature Page
  
 UBS AG, STAMFORD BRANCH

		
	 By:
	 	 /s/ Irja R. Otsa

	 Name:
	 	 Irja R. Otsa

	 Title:
	 	 Associate Director
 Banking Products Services, US

		
	 By:
	 	 /s/ Pamela Oh

	 Name:
	 	 Pamela Oh

	 Title:
	 	 Associate Director
 Banking Products Services, US

			
	 Commitment Increase Signature Page
  
 SIEMENS FINANCIAL SERVICES,
INC.

		
	 By:
	 	 /s/ Jim Fuller

	 Name:
	 	 Jim Fuller

	 Title:
	 	 VP General Manager

			
	 Commitment Increase Signature Page
  
 U.S. BANK NATIONAL ASSOCIATION

		
	 By:
	 	 /s/ David A. Wombwell

	 Name:
	 	 David A. Wombwell

	 Title:
	 	 Senior Vice President

			
	 Commitment Increase Signature Page
  
 MERRILL LYNCH CAPITAL, a division
     of Merrill Lynch Business Financial
     Services Inc.

		
	 By:
	 	 /s/ Paula K. Berry

	 Name:
	 	 Paula K. Berry

	 Title:
	 	 Vice President

			
	 Commitment Increase Signature Page
  

Lender: Fifth Third Bank

		
	 By:
	 	 /s/ Richard G. Whipple

	 Name:
	 	Richard G. Whipple
	 Title:
	 	Assistant Vice President

			
	 Commitment Increase Signature Page
  

North Fork Business Capital Corporation

		
	 By:
	 	 /s/ Michael Burns

	 Name:
	 	Michael Burns
	 Title:
	 	Senior Vice President

			
	 Commitment Increase Signature Page
  

Lender: PNC BANK, N.A.

		
	 By:
	 	 /s/ John Thurman

	 Name:
	 	John Thurman
	 Title:
	 	Vice President

 SCHEDULE 1.01H 
  
 SPECIFIED PROPERTIES 
  

Part A 
  
 Capital Stock 
  
 All of the issued and outstanding capital stock of Transitional Hospitals Corporation of Michigan, Inc. 
  
 Facilities 
  

									
	 State/Facility #:

	  	 Facility Name:

	  	 County, City, State Location:

	  	 Facility Type:

	  	 Status:

	 CA#4693
	  	Menlo Park Surgical Hospital	  	Menlo Park, CA	  	 Hospital
	  	 Leased

	 CT#565
	  	Hamilton Rehabilitation and Health Care Center	  	New London, Norwich, CT	  	Nursing center	  	 Owned

	 CT#1226
	  	Homestead Health Center	  	Stamford, Stamford, CT	  	Nursing center	  	 Owned

	 IN#4620
	  	LaGrange Community Hospital	  	LaGrange, IN	  	Hospital	  	 Leased

	 KY#699
	  	OK Storage Building	  	Jefferson, Louisville, KY	  	Storage facility	  	 Owned

	 KY#786
	  	Riverfront Terrace Health Care Center	  	McCracken, Paducah, KY	  	Nursing center	  	 Leased

	 MA#523
	  	West Park Alzheimer and Nursing Center	  	Boston, West Roxbury, MA	  	Nursing center	  	 Owned

	 MA#527
	  	Briarwood Healthcare Nursing Center	  	Needham, Needham, MA	  	Nursing center	  	 Owned

	 MA#528
	  	Westridge Healthcare Center	  	Natick, Marlborough, MA	  	Nursing center	  	 Owned

	 MA#540
	  	Brook Farm Rehab and Nursing Center	  	West Roxbury, MA	  	Nursing center	  	 Leased

	 MI#4-677
	  	Kindred Hospital – Metro Detroit	  	Wayne, Detroit, MI	  	Hospital	  	 Owned

	 MN#4-659
	  	Valley Hospital at Hidden Lakes	  	Hennepin, Golden Valley, MN	  	Hospital	  	 Owned

	 MO#860/861
	  	The Greens at Creekside	  	Kansas City, MO	  	Nursing center and ALF	  	 Leased

									
	 State/Facility #:

	  	 Facility Name:

	  	 County, City, State Location:

	  	 Facility Type:

	  	 Status:

	 TN#274
	  	Smith County Health Care Center	  	Smith, Carthage, TN	  	Nursing center	  	 Owned

	 TX#4699
	  	Colony Plaza	  	Missouri City, TX	  	Vacant Land	  	 Owned

	 WI#197
	  	Oshkosh Medical & Rehab Center	  	Oshkosh, WI	  	Nursing center	  	 Leased

	 WI#772
	  	Family Heritage Medical and Rehabilitation Center	  	Wood, Wisconsin Rapids, WI	  	Nursing center	  	 Owned

					
	Part B	  	 	  	 	  	 	  	 
					
	 State/Facility #:

	  	 Facility Name:

	  	 County, City, State Location:

	  	 Facility Type:

	  	 Status:

	 TN#174
	  	Camden Healthcare and Rehabilitation Center	  	 Benton, Camden, TN
	  	Nursing center	  	 Leased

	 TN#175
	  	Jefferson City Health and Rehabilitation Center	  	 Jefferson, Jefferson City, TN
	  	Nursing center	  	 Leased

	 TN#178
	  	Spring Gate Rehabilitation and Healthcare Center	  	 Shelby, Memphis, TN
	  	Nursing center	  	 Leased

	 TN#179
	  	Huntingdon Health & Rehabilitation Center	  	 Carroll, Huntingdon, TN
	  	Nursing center	  	 Leased

	 TN#183
	  	Ripley Healthcare and Rehabilitation Center	  	 Lauderdale, Ripley, TN
	  	Nursing center	  	 Leased

	 TN#184
	  	Greystone Health Care Center	  	 Sullivan, Blountville, TN
	  	Nursing center	  	 Leased

	 IN#287
	  	Crestview	  	 Knox, Vincennes, IN
	  	Nursing center	  	 Leased

	 OH#295
	  	Whitehouse Country Manor	  	 Lucas, Whitehouse, OH
	  	Nursing center	  	 Leased

	 MA#531
	  	Nichols House Nursing Home	  	 Fairhaven, Fairhaven, MA
	  	Nursing center	  	 Leased

	 CO#849
	  	Iliff Care Center	  	 Denver, Denver, CO
	  	Nursing center	  	 Leased

 SCHEDULE 1.01J 
  
 HCPI PROPERTIES 
  

									
	Part A	  	 	  	 	  	 	  	 
					
	 State/Facility #:

	  	 Facility Name:

	  	 County, City, State Location:

	  	 Facility Type:

	  	 Status:

	 MA#540
	  	 Brook Farm Rehab and Nursing Center
	  	 West Roxbury, MA
	  	Nursing center	  	Leased
	 MO#860/861
	  	 The Greens at Creekside
	  	 Kansas City, MO
	  	Nursing center and ALF	  	Leased
	 TN#274
	  	 Smith County Health Care Center
	  	 Smith, Carthage, TN
	  	Nursing center	  	Owned*
	 WI#197
	  	 Oshkosh Medical & Rehab Center
	  	 Oshkosh, WI
	  	Nursing center	  	Leased

	*	This property was the subject of a Sale and Leaseback Transaction with HCPI. 

  

									
	Part B	  	 	  	 	  	 	  	 
					
	 State/Facility #:

	  	 Facility Name:

	  	 County, City, State Location:

	  	 Facility Type:

	  	 Status:

	 TN#174
	  	Camden Healthcare and Rehabilitation Center	  	 Benton, Camden, TN
	  	Nursing center	  	Leased
	 TN#175
	  	Jefferson City Health and Rehabilitation Center	  	 Jefferson, Jefferson City, TN
	  	Nursing center	  	Leased
	 TN#178
	  	Spring Gate Rehabilitation and Healthcare Center	  	 Shelby, Memphis, TN
	  	Nursing center	  	Leased
	 TN#179
	  	Huntingdon Health & Rehabilitation Center	  	 Carroll, Huntingdon, TN
	  	Nursing center	  	Leased
	 TN#183
	  	Ripley Healthcare and Rehabilitation Center	  	 Lauderdale, Ripley, TN
	  	Nursing center	  	Leased
	 TN#184
	  	Greystone Health Care Center	  	 Sullivan, Blountville, TN
	  	Nursing center	  	Leased
	 IN#287
	  	Crestview	  	 Knox, Vincennes, IN
	  	Nursing center	  	Leased
	 OH#295
	  	Whitehouse Country Manor	  	 Lucas, Whitehouse, OH
	  	Nursing center	  	Leased

									
	Part B	  	 	  	 	  	 	  	 
					
	 State/Facility #:

	  	 Facility Name:

	  	 County, City, State Location:

	  	 Facility Type:

	  	 Status:

	 MA#531
	  	Nichols House Nursing Home	  	Fairhaven, Fairhaven, MA	  	Nursing center	  	Leased
	 CO#849
	  	Iliff Care Center	  	Denver, Denver, CO	  	Nursing center	  	Leased
					
	Part C	  	 	  	 	  	 	  	 
					
	 State/Facility #:

	  	 Facility Name:

	  	 County, City, State Location:

	  	 Facility Type:

	  	 Status:

	 TX#4610
	  	 Kindred Hospital – Dallas
	  	 Dallas, Dallas, TX
	  	 Hospital
	  	 Owned

	 GA#4670
	  	 Kindred Hospital – Atlanta
	  	 Fulton, Atlanta, GA
	  	 Hospital
	  	 Owned

 SCHEDULE 2.01 
  
 COMMITMENTS 
  

				
	 Lender:

	  	Commitment:

	 JPMorgan Chase Bank, N.A.
	  	$	53,000,000
	 Citicorp USA, Inc.
	  	$	53,000,000
	 General Electric Capital Corporation
	  	$	53,000,000
	 The CIT Group/Business Credit, Inc.
	  	$	53,000,000
	 Wells Fargo Foothill
	  	$	43,000,000
	 UBS AG, Stamford Branch
	  	$	37,000,000
	 Siemens Financial Services, Inc.
	  	$	25,000,000
	 U.S. Bank National Association
	  	$	20,000,000
	 Merrill Lynch Capital
	  	$	17,000,000
	 Allied Irish Banks, p.l.c.
	  	$	15,000,000
	 Fifth Third Bank
	  	$	13,000,000
	 North Fork Business Capital Corporation
	  	$	10,000,000
	 PNC Bank, N.A.
	  	$	8,000,000
	 TOTAL COMMITMENT AMOUNT
	  	$	400,000,000Medco Health Solutions, Inc. 2006 Executive Severance Plan

 Exhibit 10.1 
  
 MEDCO HEALTH SOLUTIONS, INC. 
  

2006 EXECUTIVE SEVERANCE PLAN 
  
 SECTION 1 
 PURPOSE 
  
 The purpose of the Plan is to alleviate concerns that top-level executives of
the Company may have that their employment may be terminated without Cause so that these executives will be able to focus fully on the success of the business of the Company. 
  
 SECTION 2 
 DEFINITIONS 
  
 For purposes of the Plan, the
following terms shall have the following meanings: 
  
 2.1
“Affiliate” shall mean, with respect to any person or entity, any entity directly or indirectly controlled by, controlling or under common control with such person or entity. 
  
 2.2 “Annual Cash Bonus” shall mean, the annual cash bonus paid or deferred in respect of the Fiscal Year Preceding
Termination, or if bonuses for such fiscal year have not been paid generally to employees as of an Eligible Individual’s Termination Date, Annual Cash Bonus shall mean an amount equal to the Eligible Individual’s Earned But Unpaid Bonus
Amount. 
  
 2.3 “Annual Salary Amount” shall mean an
Eligible Individual’s annual base salary as in effect immediately prior to his or her Termination Date. 
  
 2.4 “Board” shall mean the Board of Directors of Medco Health Solutions, Inc. 
  
 2.5 “Cause” shall mean conduct of an Eligible Individual evidencing any of the following, as determined by the
Plan Administrator: (i) dishonesty related to the Eligible Individual’s employment; (ii) improper disclosure by the Eligible Individual of any information of the Company or any of its Affiliates considered by the Company to be
confidential or in the nature of a trade secret; (iii) any material violation of law by the Eligible Individual related to the Eligible Individual’s employment; (iv) commission of any crime or disorderly persons offense by the
Eligible Individual that materially injures the business or reputation of the Company or any of its Affiliates; (v) gross or willful insubordination by the Eligible Individual; or (vi) dereliction in the performance of the Eligible
Individual’s employment duties that continues after the Eligible Individual has been notified of such dereliction and has been given a reasonable opportunity to correct such dereliction. 
  
 2.6 “Company” shall mean Medco Health Solutions, Inc., a Delaware
corporation, and any successor thereto. 
  
 2.7
“Company’s Bonus Plan” shall mean the Company’s annual cash bonus plan. 

 2.8 “Earned But Unpaid Bonus Amount” shall mean, as to any Eligible Individual whose
Termination Date occurs prior to the date on which annual cash bonuses are paid under the Company’s Bonus Plan in respect of the Fiscal Year Preceding Termination, an amount equal to the bonus awarded to the Eligible Individual under the
Company’s Bonus Plan in respect of the Fiscal Year Preceding Termination (which may be zero); provided, however, if bonuses have not yet been awarded by the Termination Date, the Earned But Unpaid Bonus Amount shall be equal to the annual cash
bonus, if any, paid to or deferred by such Eligible Individual in respect of the fiscal year ended immediately prior to the Fiscal Year Preceding Termination. The Earned But Unpaid Bonus Amount shall not duplicate any bonus paid or deferred in
respect of the Fiscal Year Preceding Termination. By way of example, if an Eligible Individual’s Termination Date is February 1, 2006 (and assuming bonuses have not yet been awarded under the Company’s Bonus Plan in respect of fiscal
year 2005 by such date), the Earned But Unpaid Bonus Amount for such Eligible Individual shall be equal to the Eligible Individual’s annual bonus in respect of 2004, if any. 
  
 2.9 “Effective Date” shall mean February 1, 2006. 
  
 2.10 “Eligible Individual” shall mean Executive Officers and Senior
Officer Participants. For purposes of this Plan, the terms “employ,” “employee” and “employment” shall be construed to refer to the provision of services by the Eligible Individual to the Company, irrespective of
whether the Eligible Individual is classified as an employee of the Company under the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder. 
  
 2.11 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, and the regulations
promulgated thereunder. 
  
 2.12 “Executive Officer”
shall mean as of a particular day, the executive officers of the Company as most recently designated by the Board. The Board may, in its discretion, provide by resolution that an Executive Officer shall not participate in the Plan. 
  
 2.13 “Fiscal Year Preceding Termination” shall mean the most recent
fiscal year of the Company ended prior to an Eligible Individual’s Termination Date. 
  
 2.14 “Plan” shall mean the Medco Health Solutions, Inc. 2006 Executive Severance Plan. 
  
 2.15 “Plan Administrator” shall mean the Chief Executive Officer of the Company or his or her designee. 
  
 2.16 “Plan Year” shall mean the calendar year. 
  
 2.17 “Pro Rata Bonus Amount” shall mean, as to any Eligible
Individual, an amount equal to his or her Annual Cash Bonus multiplied by a fraction, the numerator of which is the number of full calendar months that have elapsed since the end of the Fiscal Year Preceding Termination through the Termination Date
and the denominator of which is 12. The Pro Rata Bonus shall not duplicate any bonus paid or deferred in respect of the fiscal year in which the Termination Date occurs. 
  

 2 

 2.18 “Qualifying Termination” shall mean a termination of employment of an Eligible Individual
that entitles him or her to Severance Benefits, as provided in Section 3.1. 
  
 2.19 “Release of Claims” shall mean the agreement that an Eligible Individual must execute in order to receive Severance Benefits under the Plan, which shall be prepared by the Plan Administrator and shall
contain, among such other terms and conditions determined by the Plan Administrator, a general release of all claims that the Eligible Individual may have against Merck & Co., Inc., the Company and any of their Affiliates relating to the
employment and termination of employment of the Eligible Individual and specifically including any claims for bonus payments pursuant to the Company’s Bonus Plan or otherwise. 
  
 2.20 “Senior Officer Participants” shall mean non-executive officers selected for participation after the
Effective Date. The Plan Administrator, in his or her discretion, may add or remove Senior Officer Participants from the Plan from time to time. 
  
 2.21 “Severance Benefits” shall mean the Severance Pay and the benefits provided pursuant to Section 4.3. 
  
 2.22 “Severance Pay” shall mean the cash benefit payable under the
Plan pursuant to Section 4.1. 
  
 2.23 “Termination
Date” shall mean the date designated by the Company as an Eligible Individual’s date of termination of employment. 
  
 SECTION 3 
 ELIGIBILITY FOR SEVERANCE
BENEFITS 
  
 3.1 Eligibility for Severance
Benefits 
  
 (a) Except as provided in Sections 3.1(b) and
3.4, an Eligible Individual will become entitled to Severance Benefits under the Plan if his or her employment is involuntarily terminated by the Company other than for Cause prior to the Expiration Date (any such termination of employment is herein
referred to as a “Qualifying Termination”). 
  
 (b) An
Eligible Individual shall not be entitled to Severance Benefits if his or her employment is terminated by the Company in connection with a sale, divestiture or other disposition of the stock or assets of the Company or any of its Affiliates (a
“Transaction”) if (i) the Eligible Individual is offered a position with the counterparty to the Transaction (or an Affiliate of such counterparty) (such counterparty or Affiliate, the “Post-Transaction Employer”),
(ii) the Plan Administrator determines that the cash compensation to be provided to the Eligible Individual in such position is comparable to the Eligible Individual’s then-current cash compensation and (iii) the Company obtains an
agreement from the Post-Transaction Employer such that the Post-Transaction Employer will provide severance pay and benefits, if the Eligible Individual accepts the offered employment and continues in employment with the Post-Transaction Employer
following the Transaction, (A) substantially equal to the Severance Benefits and (B) to be provided upon a termination of the Eligible Individual’s employment with the Post-Transaction Employer by the Post-Transaction Employer without
Cause prior to the Expiration Date. For purposes of this Section 3.1(b), the term Cause shall have the meaning ascribed to it in Section 2.3, but the term Employer as it is used in Section 2.3 shall be deemed to 

  

 3 

 
refer to the Post-Transaction Employer, and the term Plan Administrator as it is used in Section 2.3 shall be deemed to refer to the Chief Executive
Officer of the Post-Transaction Employer or, if applicable, of the ultimate parent corporation of the Post-Transaction Employer. 
  
 (c) An Eligible Individual shall not be entitled to Severance Benefits if his or her employment is transferred by the Company to an Affiliate or by an
Affiliate to the Company. 
  
 3.2 Death of an Eligible
Individual 
  
 If an Eligible Individual whose employment
terminates in a Qualifying Termination dies after his or her Termination Date but before the Eligible Individual receives the Severance Pay to which he or she is entitled, the payment will be made to the Eligible Individual’s surviving spouse
or, if the Eligible Individual does not have a surviving spouse, to the Eligible Individual’s estate; provided, however, that, if permitted by the Plan Administrator, such payment will be made to a beneficiary designated by the Eligible
Individual; provided, further however, that no Severance Pay will be paid pursuant to this Section 3.2 unless the surviving spouse or such beneficiary, or the executor of the Eligible Individual’s estate, or any or all of the
foregoing, upon the request of the Plan Administrator, properly execute and deliver to the Company a Release of Claims that has become irrevocable as provided therein. 
  
 3.3 Requirement for Release of Claims 
  
 No Severance Benefits will be provided to an Eligible Individual unless the Eligible Individual has properly executed and
delivered to the Company a Release of Claims and that Release of Claims has become irrevocable as provided therein. Such Release of Claims shall not be accepted by the Company unless it is executed on or after the Eligible Individual’s
Termination Date. 
  
 3.4 Duration of Participation

  
 An Eligible Individual shall cease to be an Eligible
Individual if his or her employment is terminated under circumstances under which he or she is not entitled to Severance Benefits under the Plan. An Eligible Individual who is a Senior Officer Participant shall cease to be an Eligible Individual on
the date the Plan Administrator terminates such Eligible Individual’s participation in the Plan and an Eligible Individual who is an Executive Officer shall cease to be an Eligible Individual on the date the Board terminates such Eligible
Individual’s participation in the Plan. To avoid any doubt, the Plan Administrator has full discretion to add Senior Officer Participants to, or remove Senior Officer Participants from, the Plan at any time, and the Board shall have full
discretion to remove Executive Officers. Notwithstanding the foregoing, an Eligible Individual who has become entitled to receive Severance Benefits under the Plan shall remain an Eligible Individual until he or she has received the full amount of
the Severance Benefits; provided, such Eligible Individual shall remain subject to the Restrictions as provided in Section 4.4. 
  

 4 

 SECTION 4 
 SEVERANCE PAY AND BENEFITS 
  
 4.1 Amount of Severance Pay 
  
 (a) In the event
of a Qualifying Termination, the amount of Severance Pay that shall be payable to an Eligible Individual who the Plan Administrator determines is entitled to Severance Pay shall be an amount of cash equal to the sum of (1) the Annual Salary
Amount, plus (2) the Pro Rata Bonus Amount, plus (3) the Earned But Unpaid Bonus Amount. 
  
 4.2 Form and Time of Payment 
  
 Severance Pay shall be paid in accordance with the employees normal payroll cycle, less any applicable state and federal taxes required to be withheld.
Severance Pay shall be paid as soon as practicable after the expiration of any period during which the Eligible Individual may revoke the Release of Claims pursuant to the terms of the Release of Claims. Notwithstanding the forgoing, severance pay
shall be delayed for six months to the extent the Plan Administrator in his or her discretion deems necessary to comply with section 409A of the Internal Revenue code of 1986, as amended. 
  
 4.3 Other Benefits 
  
 Upon the Qualifying Termination of an Eligible Individual, the Company shall make available for up to twelve months following his or her Termination Date
active health and welfare benefits coverage for him or her and his or her spouse and dependents who are eligible and were covered dependents on the date of termination of employment. COBRA continuation coverage shall be applicable to the period
following the continuation of active coverage. Such active coverage shall terminate to the same extent COBRA continuation coverage would terminate. In addition, such coverage shall terminate upon the Eligible Individual’s eligibility for
coverage by a subsequent employer, even if that coverage is declined. If an Eligible Individual whose employment terminates in a Qualifying Termination dies after his or her Termination Date but before he or she receives the full amount of the
benefits set forth in this Section 4.3, such benefits shall, if they are then being provided to the spouse and dependents of the Eligible Individual, continue to be provided to his or her spouse and dependents for the period set forth herein.
Notwithstanding the forgoing, if the provision of continued active coverage could result in the taxation of benefits under the Company’s self-insured health plan, the Company shall be relieved of its obligation to provide active coverage under
this Section 4.3. 
  
 4.4 Payments, Benefits Conditional

  
 (a) Anything in this Plan to the contrary
notwithstanding, all payments and benefits for each Eligible Individual are conditional upon such Eligible Individual’s compliance with the Restrictions on Competitive Employment and Restrictions Against Solicitation and Inducement described
below (collectively the “Restrictions”). Until such Restrictions are completely satisfied, the Eligible Individual shall be a constructive trustee of such payments and benefits and shall return them to the Company promptly if he/she
violates any aspect of such Restrictions. 
  
 (b) During
employment, and for a period 12 months following the Qualifying Termination, the Eligible Individual will not (as an individual, principal, agent, employee, consultant, or otherwise), directly or indirectly in any territory in which the Company
and/or any of its Affiliates does business and/or markets its products and services, engage in activities 

  

 5 

 
competitive with, nor render services to any firm or business engaged or about to become engaged in the Business of the Company (collectively,
“Restrictions on Competitive Employment”). The Business of the Company includes, but is not limited to, the following businesses: (i) the third party prescription drug claims processing business; (ii) the design, development or
marketing of or consulting as to, prescription drug benefit plans; (iii) the provision of mail service pharmacy (including all those products and services that are presently or hereafter marketed by the Company, or that are in the development
stage at the time of the Qualifying Termination and are actually marketed by the Company and/or its Affiliates thereafter; (iv) the collection, analysis and/or sale of data relating to prescription drug utilization; (v) the pharmacy
benefit management and disease management business whether such business is conducted through mail service, retail pharmacy networks or other means, including but not limited to, the internet or other types of electronic transmission; (vi) the
organization and administration of retail pharmacy networks; and (vii) any other business in which the Company and/or any of its Affiliates is then engaged as to which the Eligible Individual has involvement in the course of his or her
employment hereunder and/or acquired or received Confidential Information, (hereinafter collectively, the “Business of the Company”). In addition, the Eligible Individual will not have an equity interest in any such firm or business other
than as a 1% or less shareholder of a public corporation. 
  
 (c)
During employment and for a period of 12 months following a Qualifying Termination, the Eligible Individual will not, directly or indirectly do any of the following (collectively, “Restrictions Against Solicitation and Inducement”):
(i) solicit or contact any customer or targeted potential customer of the Company and/or its Affiliates upon whom he/she called or solicited or with whom he/she became acquainted after commencement of employment; (ii) induce or attempt to
induce, any employees, agents or consultants of the Company and/or its Affiliates to do anything from which he or she is restricted by reason of this Plan or any agreement between the Eligible Individual and the Company that restricts the Eligible
Individual against solicitation or inducement; (iii) offer or aid others to offer employment to any employees, agents, or consultants of the Company and/or its Affiliates; or (iv) provide services to any customer or otherwise interfere
with or disrupt any contractual or potential contractual relationship between any customer and the Company and/or its Affiliates. 
  
 (d) The Restrictions on Competitive Employment and the Restrictions Against Solicitation applicable to Eligible Individuals are effective for the time
stated in this Plan and do not affect and are not affected by any other similar restrictions that may apply or may in the future apply to such Eligible Individual pursuant to any other plan, agreement or other arrangement. 
  
 SECTION 5 
 ADMINISTRATION, AMENDMENT AND TERMINATION 
  
 5.1 Administration 
  
 (a) The Plan will be interpreted by the Plan Administrator in accordance with the terms of the Plan and their intended meanings. The Plan Administrator
shall be the “Named Fiduciary” (within the meaning of Section 402(a) of ERISA) of the Plan and will have the discretion, in his or her sole judgment, to (i) make any findings of fact needed in the administration of the Plan,
(ii) interpret or construe ambiguous, unclear or implied (but omitted) terms, (iii) establish rules and regulations for administering the Plan and (iv) take such other 

  

 6 

 
action as he or she deems necessary or appropriate. The validity of any such action or determination by the Plan Administrator will not be given de
novo review if challenged in court, by arbitration or any other forum and will be upheld unless clearly arbitrary or capricious. All actions and all determinations made in good faith by the Plan Administrator shall be final, binding and
conclusive upon all persons claiming any interest in or under the Plan. Benefits under the Plan will be paid only if the Plan Administrator decides in his or her discretion that a claimant is entitled to them. 
  
 (b) The Plan Administrator shall establish a claims procedure in accordance
with ERISA and shall set forth such claims procedure in the summary plan description of the Plan. 
  
 (c) The Plan Administrator may in its sole and absolute discretion, upon prior written notice to the Compensation Committee, grant additional severance
pay to an Eligible Individual; provided, however, total severance pay to such Eligible Individual shall not exceed two times such Eligible Individual’s base salary. 
  
 5.2 Amendment and Termination 
  
 The Company reserves the right to amend, terminate or otherwise modify all or any part of the Plan at any time, and from
time to time, without the consent of or notice to any person; provided, however, that no such action of the Company may adversely affect the rights of any person who incurred a Qualifying Termination prior to such action. 
  
 SECTION 6 
 GENERAL PROVISIONS 
  
 6.1 Unfunded Obligation 
  
 The Severance Benefits to be provided to an Eligible Individual under the Plan shall be an unfunded obligation of the Company and shall be provided only from the Company’s general assets. 
  
 6.2 Applicable Law 
  
 It is intended that the Plan shall constitute an “employee welfare
benefit plan” within the meaning of Section 3(1) of ERISA, and the Plan shall be administered in a manner consistent with such intent. The Plan and all rights thereunder shall be governed and construed in accordance with ERISA and, to the
extent not preempted by federal law, with the laws of the State of New Jersey, wherein venue shall lie for any dispute arising hereunder. 
  
 6.3 Severability 
  
 If a court of competent jurisdiction holds any provision of the Plan invalid or unenforceable, the Plan shall be construed and enforced as if such
provision had not been included herein, and the remaining provisions of the Plan shall continue to be fully effective. 
  

 7 

 6.4 Employment at Will 
  
 No provision of the Plan shall be construed to constitute a contract of employment or impose upon the Company any obligation
to (a) retain the employment of any Eligible Individual, (b) make any payments or provide any benefits upon termination of employment to the Eligible Individual (except as otherwise provided herein), (c) change the status of any
Eligible Individual’s employment, (d) change any employment policies of the Company or (e) restrict the scope of services to be provided to the Company by any Eligible Individual. 
  
 6.5 Limitation on Benefits 
  
 Severance Benefits under this Plan are not intended to duplicate benefits
such as (i) workers’ compensation wage replacement benefits, disability benefits, and pay-in-lieu-of-notice, (ii) severance pay, or similar benefits under other benefit plans, severance programs or agreements, or employment contracts,
or (iii) applicable laws, such as the WARN Act; provided, however, clause (ii) shall not apply to any contract in existence on August 19, 2003 with an Initial Participant in the 2002 Executive Severance Plan. Should such other
benefits be payable, an Eligible Individual’s benefits under this Plan will be reduced accordingly or, alternatively, benefits previously paid under this Plan will be treated as having been paid to satisfy such other benefit obligations. In
either case, the Plan Administrator, in his or her sole discretion, will determine how to apply this provision and may override other provisions in this Plan in doing so. 
  

 8

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