Document:

Employment Agreement with Phil Douglas

 Exhibit 10.14 
  
 AGREEMENT 
  
 AGREEMENT made and entered into in Plano, Texas, by and between LCI Holding Company, Inc. (the “Company”), a Delaware corporation, LifeCare
Holdings, Inc., a Delaware corporation (the “Principal Subsidiary”) with its principal place of business at 5560 Tennyson Parkway, Plano, TX 75024, and Phillip B. Douglas, of Louisville, KY (the “Executive”), effective as of the
30th day of January, 2006 (the “Effective Date”). 
  
 WHEREAS, the operations of the Company and its subsidiaries are a complex
matter requiring direction and leadership in a variety of arenas, including financial, strategic planning, regulatory, community relations and others; 
  
 WHEREAS, the Executive is possessed of certain experience and expertise that qualify him to provide the direction and leadership required by the Company
and its subsidiaries; and 
  
 WHEREAS, subject to the terms and
conditions hereinafter set forth, the Company therefore wishes to employ the Executive as its Executive Vice President and Chief Financial Officer and the Executive wishes to accept such employment; 
  
 NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises, terms, provisions and conditions set forth in this Agreement, the parties hereby agree: 
  
 1. Employment. Subject to the terms and conditions set forth in this Agreement, the Company hereby offers and the Executive hereby accepts
employment. 
  
 2. Term. Subject to earlier termination as
hereafter provided, the Executive’s employment hereunder shall be for a term of eighteen (18) months, commencing on the Effective Date, and shall automatically renew thereafter for successive terms of one year each unless either party
gives notice to the other not less than ninety (90) days prior to the expiration of the initial or any renewal term that this Agreement shall not renew, in which event this Agreement shall expire at the end of the then-current term.
Notwithstanding anything to the contrary contained herein, however, in the event of a Change of Control, as hereafter defined, the then-current term hereof shall be automatically extended as required in order that the remainder of said term shall
not be less than twelve (12) months from the date of the Change of Control. The term of this Agreement, as from time to time extended or renewed, is hereafter referred to as “the term of this Agreement” or “the term hereof.”
Any notice of nonrenewal given pursuant to this Section 2 shall be treated for all purposes hereunder, if given by the Company, as a termination other than for Cause or, if given by the Executive, as a termination for other than Good Reason.

  
 3. Capacity and Performance. 
  
 (a) During the term hereof, the Executive shall serve the
Company as its Executive Vice President and Chief Financial Officer, subject to his appointment by the Board of Directors of the Company (the “Board”) as a condition precedent to the effectiveness of this Agreement, or in such other
executive position as the Board may designate from time to time. In addition, and without further compensation, the Executive shall serve as a director and/or officer of one or more of the Company’s subsidiaries (including the Principal
Subsidiary) if so elected or appointed from time to time. 

 (b) During the term hereof, the Executive shall be employed by the Company on a full-time
basis and shall perform such duties and responsibilities on behalf of the Company and its subsidiaries as may be designated from time to time by the Board or by its designees. During the term hereof and thereafter, the Company will indemnify the
Executive to the maximum extent permitted by the Delaware General Corporation Law in respect of any action, suit, proceeding or claim (other than any such action, suit, proceeding, claim or counterclaim initiated by or on behalf of the Executive) to
which the Executive is or is threatened to be made a party by reason of the fact that the Executive is or was a director or officer of the Company or any of its subsidiaries. 
  
 (c) During the term hereof, the Executive shall devote his full business time and his best efforts, business
judgment, skill and knowledge exclusively to the advancement of the business and interests of the Company and its subsidiaries and to the discharge of his duties and responsibilities hereunder. The Executive shall not engage in any other business
activity or serve in any industry, trade, professional, governmental or academic position during the term of this Agreement, except as may be expressly approved in advance by the Board in writing. 
  
 4. Compensation and Benefits. As compensation for all services
performed by the Executive under and during the term hereof and subject to performance of the Executive’s duties and of the obligations of the Executive to the Company and its subsidiaries, pursuant to this Agreement or otherwise: 

 
 (a) Base Salary. During the term hereof, the
Company shall pay the Executive a base salary at the rate of two hundred seventy five thousand dollars ($275,000.00) per annum, payable in accordance with the payroll practices of the Company for its executives and subject to adjustment from
time to time by the Board, in its sole discretion. Such base salary, as from time to time adjusted, is hereafter referred to as the “Base Salary”. 
  
 (b) Incentive and Bonus Compensation. During each fiscal year completed during the term hereof, the Executive shall be eligible to
earn an annual bonus (the “Annual Bonus”). The amount of any bonus earned hereunder shall be determined by the Board based on the achievement of performance objectives by the Executive and/or the Company for that year, as established by
the Board after consultation with the Executive. The target amount of the Annual Bonus is 60% of Base Salary. Any compensation paid to the Executive as a bonus shall be in addition to the Base Salary, but shall be in lieu of participation in any
other plan or compensation program, whether cash or equity, that is intended to offer the opportunity for any incentive, bonus or commission compensation, but excluding for the avoidance of doubt the Executive’s equity participation in
accordance with Section 4(c) hereof. 
  
 (c)
Equity Awards. Promptly following the execution and delivery of this Agreement, the Company shall grant to the Executive, pursuant to the Company’s equity incentive plan, as from time to time in effect, an option to purchase a total of
80,000 shares of the Company’s common stock (the “Common Stock”) at an exercise price per share equal to the fair market value of the Common Stock on the date of grant, as determined by the Board and otherwise on the terms and subject
to the conditions set forth in such equity incentive plan and as determined by the Board (such option award together with any subsequently granted option 

  

 -2- 

 
awards, the “Option Awards”). Prior to issuing an Option Award or any shares thereunder to the Executive, the Company may require that the
Executive provide such representations regarding the Executive’s sophistication and investment intent and other such matters as the Company shall determine to be legally required or otherwise appropriate. None of the Company’s securities
will be registered under applicable securities laws for the indefinite future and there will be substantial restrictions on resale imposed by the Company’s corporate charter, the stockholders agreement and applicable law. Option Awards and any
shares issued upon exercise of Option Awards shall be subject to the terms of a stockholders agreement, as from time to time in effect (the “Stockholders Agreement”). 
  
 (d) Vacations. During the term hereof, the Executive shall be entitled to four (4) weeks of
vacation per year, to be taken at such times and intervals as shall be determined by the Executive, subject to the reasonable business needs of the Company and such scheduling procedure as the Company may from time to time require. Vacation shall
otherwise be governed by the policies of the Company, as in effect from time to time. 
  
 (e) Employee Benefit Plans. During the term hereof and subject to any contribution therefor generally required of executives of the
Company, the Executive shall be entitled to participate in any and all Employee Benefit Plans from time to time in effect for executives of the Company generally, except to the extent such plans are duplicative of benefits otherwise provided to the
Executive under this Agreement (e.g., severance pay). Such participation shall be subject to the terms of the applicable plan documents and generally applicable Company policies. The Company may alter, modify, add to or delete its Employee
Benefit Plans at any time as it, in its sole judgment, determines to be appropriate, without recourse by the Executive. For purposes of this Agreement, “Employee Benefit Plan” shall have the meaning ascribed to such term in
Section 3(3) of ERISA, as amended from time to time. 
  
 (f) Business Expenses. The Company shall pay or reimburse the Executive for all reasonable, customary and necessary business expenses incurred or paid by the Executive in the performance of his duties and
responsibilities hereunder, subject to any maximum annual limit and other restrictions on such expenses set by the Board and to such reasonable substantiation and documentation as may be specified by the Company from time to time. 
  
 5. Termination of Employment and Severance Benefits. Notwithstanding
the provisions of Section 2 hereof, the Executive’s employment hereunder shall terminate prior to the expiration of the term hereof under the following circumstances: 
  
 (a) Death. In the event of the Executive’s death during the term hereof, the Executive’s
employment hereunder shall immediately and automatically terminate. In such event, the Company shall pay to the beneficiary designated by the Executive in writing or, if no beneficiary has been so designated by the Executive, to his estate,
(i) the Base Salary earned but not paid through the date of termination, (ii) pay for any vacation time earned but not used through the date of termination, (iii) any bonus compensation awarded for the fiscal year preceding that in
which termination occurs, but unpaid on the date of termination and (iv) any business expenses incurred by the Executive but un-reimbursed on the date of termination, provided that such expenses and required substantiation and documentation are
submitted within 

  

 -3- 

 
sixty (60) days of termination and that such expenses are reimbursable under Company policy (all of the foregoing, “Final Compensation”). In
addition, the Company shall pay to the beneficiary designated by the Executive in writing or, if none, his estate, an annual bonus for the fiscal year in which termination occurs, determined by multiplying the target Annual Bonus the Executive would
have been eligible to receive had he continued employment through the last day of the fiscal year by a fraction, the numerator of which is the number of days he was employed during the fiscal year, through the date of termination, and the
denominator of which is 365 (a “Pro-Rated Annual Bonus”). Such Pro-Rated Annual Bonus will be payable at the time annual bonuses are paid to Company executives generally under its executive incentive plan. Further, the Board shall cause
any portion of any Option Awards granted to Executive by the Company in accordance with this Agreement or otherwise that remains unvested on the date of termination hereunder to vest on the date the Executive’s employment terminates (together,
the “Accelerated Awards”). Such Accelerated Awards shall be granted to the beneficiary designated by the Executive in writing or, if none, to his estate. In the event of termination hereunder, payment by the Company of any amounts that may
be due the Executive under this Section 5(a) shall constitute the entire obligation of the Company to the Executive. 
  
 (b) Disability. 
  
 (i) The Company may terminate the Executive’s employment hereunder, upon notice to the Executive, in the event that the Executive
becomes disabled through any illness, injury, accident or condition of either a physical or psychological nature and, as a result, is unable to perform substantially all of his duties and responsibilities hereunder, notwithstanding the provision of
any reasonable accommodation, for ninety (90) days during any period of three hundred and sixty-five (365) consecutive calendar days. In the event of such termination, the Company shall pay the Executive all Final Compensation. In
addition, the Company will pay to the Executive a Pro-Rated Annual Bonus for the fiscal year in which termination occurs, payable at the time annual bonuses are paid to Company executives generally under its executive incentive plan or, if later, on
the tenth (10th) business day following the later of the effective date of the release of claims in the form
attached hereto as Appendix A (the “Employee Release”) or the date it is received by the Chair of the Board. Further, the Board shall cause any portion of any Option Award granted to Executive by the Company in accordance with this
Agreement or otherwise that remains unvested on the date of termination hereunder (the “Accelerated Option”) to vest on the date the Executive’s employment terminates, and the Executive may exercise the Accelerated Option as of the
date immediately following the later of (i) the effective date of the Employee Release or (ii) the date that the Chair of the Board receives the Employee Release, signed by the Executive. Except for the payment of Final Compensation, any
obligation of the Company to the Executive hereunder, however, is conditioned upon the Executive signing a timely and effective Employee Release following termination of the Executive’s employment hereunder. In the event of termination
hereunder, payment by the Company of any amounts that may be due the Executive under this Section 5(b) shall constitute the entire obligation of the Company to the Executive. 
  

 -4- 

 (ii) The Board may designate another employee to act in the Executive’s place during
any period of the Executive’s disability. Notwithstanding any such designation, the Executive shall continue to receive the Base Salary in accordance with Section 4(a) and benefits in accordance with Section 4(e), to the extent
permitted by the then-current terms of the applicable benefit plans, until the Executive becomes eligible for disability income benefits under the Company’s disability income plan or until the termination of his employment, whichever shall
first occur. 
  
 (iii) While receiving disability
income payments under the Company’s disability income plan, the Executive shall not be entitled to receive any Base Salary under Section 4(a) hereof, but shall continue to participate in Company benefit plans in accordance with
Section 4(e) and the terms of such plans, until the termination of his employment. 
  
 (iv) If any question shall arise as to whether during any period the Executive is disabled through any illness, injury, accident or
condition of either a physical or psychological nature so as to be unable to perform substantially all of his duties and responsibilities hereunder, the Executive may, and at the request of the Company shall, submit to a medical examination by a
physician selected by the Company to whom the Executive or his duly appointed guardian, if any, has no reasonable objection to determine whether the Executive is so disabled and such determination shall for the purposes of this Agreement be
conclusive of the issue. If such question shall arise and the Executive shall fail to submit to such medical examination, the Company’s determination of the issue shall be binding on the Executive. 
  
 (c) By the Company for Cause. The Company may
terminate the Executive’s employment hereunder for Cause at any time upon written notice to the Executive setting forth in reasonable detail the nature of such Cause. The following, as determined by the Board in its reasonable judgment, shall
constitute Cause for termination: 
  
 (i) fraud,
embezzlement or other material dishonesty with respect to the Company or any of its Affiliates; 
  
 (ii) the Executive’s breach of Section 3(c), 7, 8, 9, 10 or 12 hereof or of any fiduciary duty of loyalty owed to the Company or
any of its Affiliates; provided, however, that with respect to a breach of Section 3(c) hereof, “Cause” shall not exist until the Company delivers to Executive written notice of such breach, specifying the nature of the breach, and
Executive fails to cure such breach within thirty days of delivery of such written notice; or 
  
 (iii) commission of a felony or other crime involving moral turpitude. 
  
 Upon the giving of notice of termination of the Executive’s employment hereunder for Cause, the Company shall have no
further obligation to the Executive, other than for Final Compensation. 
  

 -5- 

 (d) By the Company Other than for Cause. The Company may terminate the
Executive’s employment hereunder other than for Cause at any time upon notice to the Executive. In the event of such termination, in addition to Final Compensation, then until the conclusion of the period of eighteen (18) months following
the date of termination (the “Severance Pay Period”), the Company shall pay the Executive the Base Salary at the rate in effect on the date of termination and, subject to any employee contribution applicable to the Executive on the date of
termination, shall continue to contribute to the premium cost of the Executive’s participation in the Company’s group medical and dental plans, provided that the Executive is entitled to continue such participation under applicable law and
plan terms. In addition, the Company shall pay the Executive a bonus (the “Termination Bonus”) equal to one and one-half (1.5) times the lesser of (i) 60% of the Executive’s Base Salary in effect on the date of termination,
or (ii) the Annual Bonus paid to the Executive in the immediately preceding fiscal year (or if no such Annual Bonus was paid to the Executive in the preceding fiscal year, $0). The Termination Bonus shall be payable in up to two equal
installments at the time each year during the Severance Pay Period that annual bonuses are paid to Company executives generally under its executive incentive plan, provided, however, that no Termination Bonus payment shall be made until the later of
the effective date of the Employee Release or the date the Employee Release, signed by the Executive, is received by the Chair of the Board. The Base Salary payment to which the Executive is entitled hereunder shall be payable in accordance with the
normal payroll practices of the Company and will begin at the Company’s next regular payroll period which is at least five business days following the later of the effective date of the Employee Release or the date the Employee Release, signed
by the Executive, is received by the Chair of the Board, but shall be retroactive to next business day following the date of termination. In the event of termination hereunder, payment by the Company of any amounts that may be due the Executive
under this Section 5(d) shall constitute the entire obligation of the Company to the Executive and any obligation of the Company to the Executive hereunder is conditioned upon the Executive signing a timely and effective Employee Release
following termination of the Executive’s employment hereunder. 
  
 (e) By the Executive for Good Reason. The Executive may terminate his employment hereunder for Good Reason upon notice to the Company setting forth in reasonable detail the nature of such Good Reason. The
following shall constitute Good Reason for termination by the Executive: 
  
 (i) failure of the Company to continue the Executive in the position of Executive Vice President and Chief Financial Officer or such other executive position to which the Executive may be assigned pursuant to
Section 3(a) hereof; or 
  
 (ii) diminution,
without his consent (not to be unreasonably withheld), in the nature or scope of the Executive’s responsibilities, duties or authority attendant to the Executive’s position, in each case other than as is materially consistent with the
Executive’s assignment to another executive position in accordance with Section 3(a) hereof; provided, however, that the Company’s failure to continue the Executive’s appointment or election as a director or officer of any of its
subsidiaries, a change in reporting relationships resulting from a Change of Control, any diminution of the business of the Company or any of its subsidiaries or any sale or transfer of equity, 

  

 -6- 

 
property or other assets of the Company or any of its subsidiaries shall not constitute “Good Reason”; or 
  
 (iii) failure of the Company to provide the Executive the
Base Salary and benefits in accordance with the terms of Section 4 hereof, excluding an inadvertent failure which is cured within ten business days following notice from the Executive specifying in detail the nature of such failure; or

  
 (iv) Executive is required to relocate his
business office to a place more than 30 miles from both his existing office in Louisville, Kentucky and the Company’s existing office in Plano, Texas. 
  
 In the event of termination in accordance with this Section 5(e), then the Executive will be entitled to the same pay and benefits he would have been
entitled to receive had the Executive been terminated by the Company other than for Cause in accordance with Section 5(d) above; provided that the Executive satisfies all conditions to such entitlement, including without limitation signing and
return of a timely and effective Employee Release. In the event of termination hereunder, payment by the Company of any amounts that may be due the Executive under this Section 5(e) shall constitute the entire obligation of the Company to the
Executive and any obligation of the Company to the Executive hereunder is conditioned upon the Executive signing a timely and effective Employee Release following termination of the Executive’s employment hereunder. 
  
 (f) By the Executive Other than for Good Reason. The
Executive may terminate his employment hereunder at any time upon thirty (30) days’ notice to the Company. In the event of termination of the Executive pursuant to this Section 5(f), the Board may elect to waive the period of notice,
or any portion thereof, and, if the Board so elects, the Company will pay the Executive his Base Salary for the first thirty (30) days of the notice period (or for any remaining portion of that period). The Company shall have no further
obligation to the Executive, other than for any Final Compensation due to him. 
  
 (g) Upon a Change of Control. 
  
 (i) If a Change of Control occurs hereafter and, within twelve months following such Change of Control, the Company terminates the
Executive’s employment other than for Cause or the Executive terminates his employment for Good Reason, then, in lieu of any payments to or on behalf of the Executive under Section 5(d) or Section 5(e) hereof, and provided that the
Executive signs a timely and effective Employee Release following termination of employment, within ten business days following the later of the effective date of the Employee Release or the date the Employee Release signed by the Executive is
received by the Chair of the Board, the Company shall pay (A) all Final Compensation; (B) a lump sum payment to the Executive equal to one and one-half (1.5) times the current annual Base Salary; (C) the full cost of the
Executive’s continued participation in the Company’s group health and dental insurance plans for so long as the Executive remains entitled to continue such participation under applicable law, to a maximum of eighteen (18) months; and
(D) a lump sum amount to the 

  

 -7- 

 
Executive equal to the Termination Bonus. In addition, the Board shall cause the Accelerated Option to vest on the date the Executive’s employment
terminates, and the Executive may exercise the Accelerated Option as of the date immediately following the later of (i) the effective date of the Employee Release or (ii) the date that the Chair of the Board receives the Employee Release,
signed by the Executive. In the event of termination hereunder, payment by the Company of any amounts that may be due the Executive under this Section 5(g) shall constitute the entire obligation of the Company to the Executive and any
obligation of the Company to the Executive hereunder is conditioned upon the Executive signing a timely and effective Employee Release following termination of the Executive’s employment hereunder. 
  
 (ii) “Change of Control” means the occurrence
hereafter of any of the following: 
  

	 	(1)	the sale, lease or transfer (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and
its direct and indirect subsidiaries, taken as a whole, to any Person other than one or more Permitted Holders; 

  

	 	(2)	the Board’s adoption of a plan relating to the liquidation or dissolution of the Company; 

  

	 	(3)	the acquisition by (x) any Person (other than one or more Permitted Holders and other than in connection with the initial public offering of the Company’s Common Stock) or
(y) any Persons (other than one or more Permitted Holders and other than in connection with the initial public offering of the Company’s Common Stock) that together (A) are a group (within the meaning of Section 13(d)(3),
Section 14(d)(2) of the Exchange Act, or any successor provision) or (B) are acting, for purposes of acquiring, holding or disposing of securities, as a group (within the meaning of Rule 13d-5(b)(1) of the Exchange Act, or any successor
provision), in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor
provision) of more than 50% or more of the total voting power of the Common Stock of the Company (or the surviving company of such merger, consolidation or other business combination transaction, as applicable); or 

  

	 	(4)	the first day on which a majority of the members of the Board (or the board of directors of the surviving company in any merger, consolidation or other business combination
transaction) cease to be Continuing Directors. 

  

 -8- 

 (h) Post-Agreement Employment. In the event the Executive remains in the employ of
the Company or any of its subsidiaries following termination of this Agreement, by the expiration of the term hereof or otherwise, then such employment shall be at will. 
  
 6. Effect of Termination. The provisions of this Section 6 shall apply to any termination, whether pursuant to
Section 5 or otherwise. 
  
 (a) Payment by
the Company of any amounts that may be due the Executive in each case under the applicable termination provision of Section 5 shall constitute the entire obligation of the Company to the Executive. The Executive shall promptly give the Company
notice of all facts necessary for the Company to determine the amount and duration of its obligations in connection with any termination pursuant to Section 5(d), 5(e) or 5(g) hereof. 
  
 (b) Except for any right the Executive has to continue
participation in the Company’s medical and dental plans pursuant to COBRA or any successor law, benefits shall terminate pursuant to the terms of the applicable benefit plans based on the date of termination of the Executive’s employment
without regard to any continuation of Base Salary or other payment to the Executive following such date of termination. 
  
 (c) Provisions of this Agreement shall survive any termination if so provided herein or if necessary or desirable to accomplish the
purposes of other surviving provisions, including without limitation the obligations of the Executive under Sections 7, 8 and 9 hereof. The obligation of the Company to make payments to or on behalf of the Executive under Section 5(b), 5(d),
5(e) or 5(g) hereof is expressly conditioned upon the Executive’s continued full performance of obligations under Sections 7, 8 and 9 hereof. The Executive recognizes that, except as expressly provided in Section 5(b), 5(d), 5(e) or 5(g),
no compensation is earned after termination of employment. 
  
 7.
Confidential Information. 
  
 (a) The
Executive acknowledges that the Company and its subsidiaries continually develop Confidential Information and that the Executive may develop Confidential Information for the Company or its subsidiaries. The Company and its subsidiaries promise to
provide the Executive with Confidential Information to enable the Executive to perform his duties and responsibilities hereunder during the course of his employment. The Executive acknowledges that the disclosure of such Confidential Information
would be harmful to the Company and its subsidiaries, including without limitation if such Confidential Information were made known to any Person or entity engaged in business activities that are in competition with the Company and/or its
subsidiaries. The Executive will comply with the policies and procedures of the Company for protecting Confidential Information and shall not disclose to any Person or use, other than as required by applicable law or for the proper performance of
his duties and responsibilities to the Company and its subsidiaries, any Confidential Information obtained by the Executive incident to his employment or other association with the Company or any of its subsidiaries. The Executive understands that
this restriction shall continue to apply after his employment terminates, regardless of the reason for such termination. 
  

 -9- 

 (b) All documents, records, tapes and other media of every kind and description relating
to the business, present or otherwise, of the Company or its subsidiaries and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by the Executive, shall be the sole and exclusive property of the Company and
its subsidiaries. The Executive shall safeguard all Documents and shall surrender to the Company at the time his employment terminates, or at such earlier time or times as the Board or its designee may specify, all Documents then in the
Executive’s possession or control. 
  
 8. Assignment of
Rights to Intellectual Property. The Executive shall promptly and fully disclose all Intellectual Property to the Company. The Executive hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) the
Executive’s full right, title and interest in and to all Intellectual Property. The Executive agrees to execute any and all applications for domestic and foreign patents, copyrights or other proprietary rights and to do such other acts
(including without limitation the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the Intellectual Property to the Company and to permit the Company to enforce any patents, copyrights or
other proprietary rights to the Intellectual Property. The Executive will not charge the Company for time spent in complying with these obligations. All copyrightable works that the Executive creates shall be considered “work made for
hire”. 
  
 9. Restricted Activities. The Executive
acknowledges the highly competitive nature of the industry in which the Company and its subsidiaries are involved, and agrees that during his employment with the Company, he will have access to the Confidential Information of the Company and its
subsidiaries, will benefit from the Company’s goodwill and will obtain a competitive advantage as to the Company, its subsidiaries, customers and prospective customers and employees. The Executive agrees that some restrictions on his activities
during and after his employment therefore are necessary to protect the goodwill, Confidential Information and other legitimate interests of the Company and its subsidiaries. 
  
 (a) While the Executive is employed by the Company and during the eighteen (18) months immediately
following termination thereof (in the aggregate, the “Non-Competition Period”), the Executive shall not, directly or indirectly, whether as owner, partner, investor, consultant, agent, employee, co-venturer or otherwise, engage in any
business that owns or operates, directly or indirectly, any long-term acute care hospital, including without limitation any facility that meets or intends to meet the requirements in 42 C.F.R. §412.23(e) (or any successor law, rule or
regulation relating to long-term acute care hospitals) to qualify as a long-term care hospital, or undertake any planning for any such business. Specifically, but without limiting the foregoing, the Executive agrees not to engage in any manner in
any activity that is directly or indirectly competitive or potentially competitive with the business of the Company or any of its subsidiaries as conducted at any time during the Executive’s employment. Restricted activity includes without
limitation accepting employment or a consulting position with any Person who is, or at any time within twelve (12) months prior to termination of the Executive’s employment has been, an affiliated hospital, a service provider, or a
supplier to the Company or any of its subsidiaries. For the purposes of this Section 9, the business of the Company and its subsidiaries shall include all Services and the Executive’s undertaking shall encompass all items, products and
services that may be used in substitution for Services. 
  

 -10- 

 (b) The Executive agrees that, during his employment with the Company, he will not
undertake any outside activity, whether or not competitive with the business of the Company or its subsidiaries, that could reasonably give rise to a conflict of interest or otherwise interfere with his duties and obligations to the Company or any
of its subsidiaries. 
  
 (c) The Executive
further agrees that during the Non-Competition Period, the Executive will not hire or attempt to hire any employee of the Company or any of its subsidiaries, assist in such hiring by any Person, encourage any such employee to terminate his or her
relationship with the Company or any of its subsidiaries, or solicit or encourage any customer or vendor of the Company or any of its subsidiaries to terminate or diminish its relationship with them, or, in the case of a customer, to conduct with
any Person any business or activity which such customer conducts or could conduct with the Company or any of its subsidiaries. 
  
 10. Notification Requirement. Until ninety (90) days after the conclusion of the Non-Competition Period, the Executive shall give notice to
the Company of each new business activity he plans to undertake, at least thirty (30) days prior to beginning any such activity. Such notice shall state the name and address of the Person for whom such activity is undertaken and the nature of
the Executive’s business relationship(s) and position(s) with such Person. The Executive shall provide the Company with such other pertinent information concerning such business activity as the Company may reasonably request in order to
determine the Executive’s continued compliance with his obligations under Sections 7, 8 and 9 hereof. 
  
 11. Enforcement of Covenants. The Executive acknowledges that he has carefully read and considered all the terms and conditions of this Agreement,
including the restraints imposed upon him pursuant to Sections 7, 8 and 9 hereof. The Executive agrees that said restraints are necessary for the reasonable and proper protection of the Company and its subsidiaries and that each and every one of the
restraints is reasonable in respect to subject matter, length of time and geographic area. The Executive further acknowledges that, were he to breach any of the covenants contained in Section 7, 8 or 9 hereof, the damage to the Company and its
subsidiaries would be irreparable. The Executive therefore agrees that the Company, in addition to any other remedies available to it, shall be entitled to preliminary and permanent injunctive relief against any breach or threatened breach by the
Executive of any of said covenants, without having to post bond. The parties further agree that, in the event that any provision of Section 7, 8 or 9 hereof shall be determined by any court of competent jurisdiction to be unenforceable by
reason of its being extended over too great a time, too large a geographic area or too great a range of activities, such provision shall be deemed to be modified to permit its enforcement to the maximum extent permitted by law. 
  
 12. Conflicting Agreements. The Executive hereby represents and
warrants that the execution of this Agreement and the performance of his obligations hereunder will not breach or be in conflict with any other agreement to which the Executive is a party or is bound and that the Executive is not now subject to any
covenants against competition or similar covenants or any court order or other legal obligation that would affect the performance of his obligations hereunder. The Executive will not disclose to or use on behalf of the Company any proprietary
information of a third party without such party’s consent. 
  

 -11- 

 13. Certain Expenses. In the event that the Executive brings any Claim against the Company in an
action, suit or other proceeding in law or in equity to enforce a right granted to him under this Agreement, and prevails on any such Claim, resulting in the award of judgment in favor of the Executive on the Claim, the Company, upon demand of the
Executive, shall pay all expenses (including reasonable attorneys’ fees) of the Executive in pursuing such Claim. In the event the Executive fails to obtain a judgment in his favor on any Claim, all expenses (including reasonable
attorneys’ fees) of the Executive in pursuing such Claim shall be paid by the Executive. For the purposes of this Section 13, Claim shall refer to any single claim or count in law or in equity. 
  
 14. Definitions. Words or phrases which are initially capitalized or
are within quotation marks shall have the meanings provided in this Section and as provided elsewhere herein. For purposes of this Agreement, the following definitions apply: 
  
 (a) “Affiliates” means all persons and entities directly or indirectly controlling, controlled by
or under common control with the Company, where control may be by either management authority, contract or equity interest. 
  
 (b) “Confidential Information” means any and all information of the Company and its subsidiaries that is not generally known by
others with whom they compete or do business or with whom any of them plans to compete or do business and any and all information, publicly known in whole or in part or not, which, if disclosed by the Company or its subsidiaries would assist in
competition against them. Confidential Information includes without limitation such information relating to (i) the development, research, testing, manufacturing, marketing and financial activities of the Company and its subsidiaries,
(ii) the Services, (iii) the costs, sources of supply, financial performance and strategic plans of the Company and its subsidiaries, (iv) the identity and special needs of the customers of the Company and its subsidiaries and
(v) the people and organizations with whom the Company and its subsidiaries have business relationships and the nature and substance of those relationships. Confidential Information also includes any information that the Company or any of its
subsidiaries have received, or may receive hereafter, belonging to customers or others with any understanding, express or implied, that the information would not be disclosed. 
  
 (c) “Continuing Director” means, as of any date of determination, any member of the Board who
(1) was a member of the Board on the Effective Date; (2) was nominated for election or elected to such Board with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or
election; or (3) was designated or appointed by TC Group, L.L.C. (which operates under the trade name “The Carlyle Group”) or any of its Affiliates. 
  
 (d) “Intellectual Property” means inventions, discoveries, developments, methods, processes,
compositions, works, concepts and ideas (whether or not patentable or copyrightable or constituting trade secrets) conceived, made, created, developed or reduced to practice by the Executive (whether alone or with others, whether or not during
normal business hours or on or off Company premises) during the Executive’s employment and during the period of six (6) months immediately following termination of his employment that relate to either the 

  

 -12- 

 
Services or any prospective activity of the Company or any of its subsidiaries or that make use of Confidential Information or any of the equipment or
facilities of the Company or any of its subsidiaries. 
  
 (e) “Permitted Holders” means, directly or indirectly, (i) TC Group, L.L.C., Carlyle Partners IV, L.P. and CP IV Coinvestment, L.P. and their Affiliates (but excluding any portfolio companies of the foregoing) and
(ii) any members of the management of the Company on the Effective Date and their respective Affiliates. 
  
 (f) “Person” means an individual, a corporation, a limited liability company, an association, a partnership, an estate, a trust
and any other entity or organization, other than the Company or any of its Affiliates. 
  
 (g) “Services” mean all services provided or planned by the Company or any of its subsidiaries during the Executive’s
employment together with any products planned, researched, developed, tested, manufactured, sold, licensed, leased or otherwise distributed or put into use by the Company or any of its subsidiaries during the term of this Agreement. 
  
 15. Withholding. All payments made by the Company under this Agreement
shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law. 
  
 16. Assignment. Neither the Company nor the Executive may make any assignment of this Agreement or any interest herein, by operation of law or
otherwise, without the prior written consent of the other; provided, however, that the Company may assign its rights and obligations under this Agreement without the consent of the Executive in the event that the Executive is transferred to a
position with any of the Company’s subsidiaries or in the event that the Company shall hereafter affect a reorganization, consolidate with, or merge into, any Person or transfer all or substantially all of its properties or assets to any
Person. This Agreement shall inure to the benefit of and be binding upon the Company and the Executive, their respective successors, executors, administrators, heirs and permitted assigns. 
  
 17. Severability. If any portion or provision of this Agreement shall
to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 
  
 18. Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving
party. The failure of either party to require the performance of any term or obligation of this Agreement, or the waiver by either party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be
deemed a waiver of any subsequent breach. 
  
 19. Notices.
Any and all notices, requests, demands and other communications provided for by this Agreement shall be in writing and shall be effective when delivered in 

  

 -13- 

 
person, consigned to a reputable national courier service or deposited in the United States mail, postage prepaid, registered or certified, and addressed to
the Executive at his last known address on the books of the Company or, in the case of the Company, at its principal place of business, attention of the Chairman of the Board, or to such other address as either party may specify by notice to the
other actually received. 
  
 20. Amendment. This Agreement
may be amended or modified only by a written instrument signed by the Executive and by a expressly authorized representative of the Company. 
  
 21. Headings. The headings and captions in this Agreement are for convenience only and in no way define or describe the scope or content of any
provision of this Agreement. 
  
 22. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. 
  
 23. Obligations of the Company and the Principal Subsidiary. Each of the Company and the Principal Subsidiary shall
be jointly and severally liable for any payment obligation of the Company or the Principal Subsidiary pursuant to this Agreement. 
  
 24. Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all prior communications, agreements and
understandings, written or oral, with respect to the terms and conditions of the Executive’s employment. 
  
 25. Governing Law. This is a Texas contract and shall be construed and enforced under and be governed in all respects by the laws of the State of
Texas, without regard to the conflict of laws principles thereof. 
  
 [Remainder of Page Intentionally Left Blank] 
  

 -14- 

 IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by the Company, by its duly
authorized representative, and by the Executive, as of the date first above written. 
  

									
	 THE EXECUTIVE:
	 	 	 	 LCI HOLDING COMPANY, INC.

				
	/s/ Phillip B. Douglas	 	 	 	By:	 	 /s/ W. Earl Reed, III

	 Phillip B. Douglas
	 	 	 	 Name:
	 	 W. Earl Reed, III

	 	 	 	 	 Title:
	 	 President

			
	 	 	 	 	 LIFECARE HOLDINGS, INC.

				
	 	 	 	 	By:	 	 /s/ W. Earl Reed, III

	 	 	 	 	 Name:
	 	 W. Earl Reed, III

	 	 	 	 	 Title:
	 	 President

  

 -15-Purchase Agreement dated as of August 5, 2005

 Exhibit 10.15 
  
 EXECUTION COPY 
  
 Rainier Acquisition Corp. 
  
 $150,000,000 
  
 9 1/4% Senior Subordinated Notes due 2013 

 
 PURCHASE AGREEMENT 
  
 dated August 5, 2005 
  
 Banc of America Securities LLC 
 J.P. Morgan Securities Inc. 
 ING
Financial Markets LLC 

 PURCHASE AGREEMENT 
  
 August 5, 2005 
  
 BANC OF AMERICA SECURITIES LLC 
 J.P. MORGAN SECURITIES INC. 
 ING FINANCIAL MARKETS LLC 
 As Initial Purchasers 
 c/o Banc of America Securities LLC

 9 West 57th Street 
 New York, New York 10019 
  
 Ladies and Gentlemen: 
  
 Introductory. Rainier Acquisition Corp., a Delaware corporation (“Rainier”) and a wholly owned subsidiary
of LCI Holdco, LLC, a Delaware limited liability company (“Holdings”), proposes to issue and sell to Banc of America Securities LLC, J.P. Morgan Securities Inc. and ING Financial Markets LLC (the “Initial Purchasers”), acting
severally and not jointly, the respective amounts set forth in Schedule A attached hereto of $150,000,000 aggregate principal amount of Rainier’s 9 1/4% Senior Subordinated Notes due 2013 (the “Notes”). 
  
 As described in the Offering Memorandum (as defined below), the Notes are being sold as part of the Transactions (as defined in the Offering Memorandum),
which include the acquisition of LifeCare Holdings, Inc., a Delaware corporation (the “Company”). Concurrently with the closing of the offering of the Notes, Rainier will be merged with and into the Company (the “Merger”), and
the Company will continue as the surviving corporation and a subsidiary of Holdings. As a result of the Merger, all of the obligations of Rainier under this Agreement will, by operation of law, become obligations of the Company. 
  
 The Notes will be issued pursuant to an indenture, to be dated as of
August 11, 2005 (the “Indenture”), between Rainier and U.S. Bank National Association, as trustee (the “Trustee”). Notes will be issued only in book-entry form in the name of Cede & Co., as nominee of The Depository
Trust Company (the “Depositary”) pursuant to a letter of representations, to be dated on or before the Closing Date (as defined in Section 2 hereof) (the “DTC Agreement”), between Rainier and the Depositary. 
  
 The holders of the Notes will be entitled to the benefits of a registration
rights agreement, to be dated as of August 11, 2005 (the “Registration Rights Agreement”), between the Company, the Guarantors (as defined below) and the Initial Purchasers, pursuant to which the 

 
Company and the Guarantors will agree to file with the Securities and Exchange Commission (the “Commission”), under the circumstances set forth
therein, (i) a registration statement under the Securities Act of 1933 (as amended, the “Securities Act,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder) relating to another
series of debt securities of the Company with terms substantially identical to the Notes (the “Exchange Notes”) to be offered in exchange for the Notes (the “Exchange Offer”) and (ii) to the extent required by the
Registration Rights Agreement, a shelf registration statement pursuant to Rule 415 of the Securities Act relating to the resale by certain holders of the Notes, and in each case, to use its commercially reasonable efforts to cause such registration
statements to be declared effective. 
  
 The payment of principal
of, premium and Special Interest (as defined in the Indenture), if any, and interest on the Notes and the Exchange Notes will be fully and unconditionally guaranteed on a senior subordinated and unsecured basis, jointly and severally by (i) all
of the direct and indirect subsidiaries of the Company as of the Closing Date that execute the Supplemental Indenture (as defined below), which are listed in Exhibit B attached hereto (collectively, the “Guarantors”) and
(ii) any direct or indirect subsidiary of the Company formed or acquired after the Closing Date that executes an additional guarantee in accordance with the terms of the Indenture, and their respective successors and assigns, pursuant to their
guarantees (the “Guarantees”). The Notes and the Guarantees are herein collectively referred to as the “Securities”; and the Exchange Notes and the Guarantees thereof are herein collectively referred to as the “Exchange
Securities.” 
  
 Rainier understands that the Initial
Purchasers propose to make an offering of the Securities on the terms and in the manner set forth herein and in the Offering Memorandum and agrees that the Initial Purchasers may resell, subject to the conditions set forth herein, all or a portion
of the Securities to purchasers (the “Subsequent Purchasers”) at any time after the date of this Agreement. The Securities are to be offered and sold to or through the Initial Purchasers without being registered with the Commission under
the Securities Act in reliance upon exemptions therefrom. Pursuant to the terms of the Securities and the Indenture, investors who acquire Securities shall be deemed to have agreed that Securities may only be resold or otherwise transferred, after
the date hereof, if such Securities are registered for sale under the Securities Act or if an exemption from the registration requirements of the Securities Act is available (including the exemptions afforded by Rule 144A under the Securities Act
(“Rule 144A”) or Regulation S under the Securities Act (“Regulation S”)). 
  
 Rainier, with the assistance of the Company, has prepared and delivered to each Initial Purchaser copies of a Preliminary Offering Memorandum, dated July 26, 2005 (the “Preliminary Offering
Memorandum”), and has prepared and will deliver to each Initial Purchaser copies of the Offering Memorandum describing the terms of the Securities, each for use by such Initial Purchaser in connection with its solicitation of offers to purchase
the Securities. As used herein, “Offering Memorandum” shall mean, with respect to any date or time referred to in this Agreement, Rainier’s Offering Memorandum, to be dated the date hereof, including amendments or supplements thereto,
in the most recent form that has been prepared and delivered by Rainier to the Initial Purchasers in connection with their solicitation of offers to purchase Securities. Further, any reference to the Preliminary Offering Memorandum or the Offering
Memorandum shall be deemed to refer to and include any Additional Issuer 

  

 2 

 
Information (as defined in Section 3 hereof) furnished by Rainier or the Company prior to the completion of the distribution of the Securities.

  
 Rainier hereby confirms its agreements with the Initial
Purchasers as follows: 
  
 SECTION 1. Representations and
Warranties. 
  
 Rainier hereby represents, warrants and
covenants to each Initial Purchaser as follows: 
  
 (a) No
Registration Required. Subject to compliance by the Initial Purchasers with the representations and warranties set forth in Section 2(e) hereof and with the procedures set forth in Section 7 hereof, it is not necessary in connection
with the offer, sale and delivery of the Securities to the Initial Purchasers and to each Subsequent Purchaser in the manner contemplated by this Agreement and the Offering Memorandum to register the offer or sale of the Securities under the
Securities Act or, until such time as the Exchange Securities are issued pursuant to an effective registration statement, to qualify the Indenture under the Trust Indenture Act of 1939 (the “Trust Indenture Act,” which term, as used
herein, includes the rules and regulations of the Commission promulgated thereunder). 
  
 (b) No Integration of Offerings or General Solicitation. None of Rainier, the Company, the Guarantors or their respective affiliates (as such term is defined in Rule 501(b) under the Securities Act) (each, an
“Affiliate”), or any person acting on its or any of their behalf (other than the Initial Purchasers, as to whom Rainier makes no representation or warranty) has, directly or indirectly, solicited any offer to buy or offered to sell, or
will, directly or indirectly, solicit any offer to buy or offer to sell, in the United States or to any United States citizen or resident, any security which is or would be integrated with the sale of the Securities in a manner that would require
the Securities to be registered under the Securities Act. None of Rainier, the Company, the Guarantors or their respective Affiliates, or any person acting on its or any of their behalf (other than the Initial Purchasers, as to whom Rainier makes no
representation or warranty) has engaged or will engage, in connection with the offering of the Securities, in any form of general solicitation or general advertising within the meaning of Rule 502 under the Securities Act. With respect to those
Securities sold in reliance upon Regulation S, (i) none of Rainier, the Company, the Guarantors or their respective Affiliates or any person acting on its or any of their behalf (other than the Initial Purchasers, as to whom Rainier makes no
representation or warranty) has engaged or will engage in any directed selling efforts within the meaning of Regulation S and (ii) each of Rainier, the Company and the Guarantors or their respective Affiliates and any person acting on its or
any of their behalf (other than the Initial Purchasers, as to whom Rainier makes no representation or warranty) has complied and will comply with the offering restrictions set forth in Regulation S. 
  
 (c) Eligibility for Resale Under Rule 144A. The Securities are
eligible for resale pursuant to Rule 144A and will not be, at the Closing Date, of the same class as securities listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934 (as amended, the
“Exchange Act,” which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder) or quoted in a U.S. automated interdealer quotation system. 
  

 3 

 (d) The Offering Memorandum. The Offering Memorandum does not, and at the Closing Date will not,
include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that this representation,
warranty and agreement shall not apply to statements in or omissions from the Offering Memorandum made in reliance upon and in conformity with information furnished to Rainier in writing by any Initial Purchaser through Banc of America Securities
LLC expressly for use in the Offering Memorandum. Each of the Preliminary Offering Memorandum and the Offering Memorandum, as of its date, contains all the information specified in, and meeting the requirements of, Rule 144A. None of Rainier, the
Company or any Guarantor has distributed and none of them will distribute, prior to the later of the Closing Date and the completion of the Initial Purchasers’ distribution of the Securities, any offering material in connection with the
offering and sale of the Securities other than the Preliminary Offering Memorandum or the Offering Memorandum. 
  
 (e) The Purchase Agreement. This Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, Rainier,
enforceable in accordance with its terms, except as rights to indemnification hereunder may be limited by applicable law and except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general equitable principles. 
  
 (f) The Registration Rights Agreement. At the Closing Date, the Registration Rights Agreement will be duly authorized, executed and delivered by,
and will be a valid and binding agreement of, the Company and the Guarantors, enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general equitable principles and except as rights to indemnification under the Registration Rights Agreement may be limited by applicable law. 
  
 (g) The DTC Agreement. At the Closing Date, the DTC Agreement will be
duly authorized, executed and delivered by Rainier. 
  
 (h)
Authorization of the Securities and the Exchange Securities. The Notes to be purchased by the Initial Purchasers from Rainier are in the form contemplated by the Indenture, have been duly authorized for issuance and sale pursuant to this
Agreement and the Indenture and, at the Closing Date, will have been duly executed by Rainier and, when authenticated in the manner provided for in the Indenture and delivered against payment of the purchase price therefor, will constitute valid and
binding agreements of Rainier, enforceable in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies
of creditors or by general equitable principles and will be entitled to the benefits of the Indenture. On the Closing Date, following consummation of the Merger, the Exchange Notes will have been duly and validly authorized for issuance by the
Company, and, when issued and authenticated in accordance with the terms of the Indenture, the Registration Rights Agreement and the Exchange Offer, will constitute valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws 

  

 4 

 
relating to or affecting enforcement of the rights and remedies of creditors or by general principles of equity and will be entitled to the benefits of the
Indenture. 
  
 (i) Authorization of the Indenture. The
Indenture has been duly authorized by Rainier and, at the Closing Date, will have been duly executed and delivered by Rainier and will constitute a valid and binding agreement of Rainier, enforceable against Rainier in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles. 
  
 (j) Authorization of the Supplemental Indenture. On the Closing Date,
following consummation of the Merger, the supplemental indenture (the “Supplemental Indenture”) to be entered into among the Company, the Guarantors and the Trustee, pursuant to which the Company will expressly assume Rainier’s
obligations under the Indenture and the Notes and the Guarantors will be added as Guarantors under the Indenture, will have been duly authorized by the Company and the Guarantors and, at the Closing Date, following consummation of the Merger, will
have been duly executed and delivered by the Company and the Guarantors and will constitute a valid and binding agreement of the Company and the Guarantors, enforceable against the Company and the Guarantors in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles. 
  
 (k) Authorization of the Joinder Agreement. The joinder agreement,
substantially in the form of Exhibit C annexed hereto, to be entered into by the Company and the Guarantors (the “Joinder Agreement”), will have been, on the Closing Date following consummation of the Merger, duly authorized by each
of the Company and the Guarantors and will have been duly executed and delivered by each of the Company and the Guarantors and will constitute a valid and binding agreement of each of the Company and the Guarantors, enforceable against each of the
Company and the Guarantors in accordance with its terms, except as rights to indemnification thereunder may be limited by applicable law and except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles. 
  
 (l) Description of the Securities, the Indenture and the Supplemental Indenture. The Securities, the Indenture and the Supplemental Indenture will
conform in all material respects to the respective statements relating thereto contained in the Offering Memorandum. 
  
 (m) No Material Adverse Change. Except as otherwise disclosed in the Offering Memorandum, subsequent to the date of the Offering Memorandum:
(i) there has been no material adverse change, or any development that could reasonably be expected to result in a material adverse change, in the financial condition or in the earnings, business or operations, whether or not arising from
transactions in the ordinary course of business, of Rainier, or of the Company and its subsidiaries, considered as one entity; (ii) there has been no development that would reasonably be likely to result in a material delay in the consummation
of the Merger (any such change or development referred to in clauses (i) and (ii) above is called a “Material Adverse 

  

 5 

 
Change”); and (iii) neither Rainier nor the Company and its subsidiaries considered as one entity has incurred any material liability or
obligation, indirect, direct or contingent, not in the ordinary course of business nor entered into any material transaction or agreement not in the ordinary course of business, except in each case in connection with the Transactions. 
  
 (n) Independent Accountants. To the best of Rainier’s knowledge,
KPMG LLP, which expressed its opinion with respect to the financial statements (which term as used in this Agreement includes the related notes thereto) included in the Offering Memorandum are independent public or certified public accountants
within the meaning of Regulation S-X under the Securities Act and the Exchange Act. To the best of Rainier’s knowledge, as of the date hereof and as of the Closing Date, the independence of such accountants has not been impaired, and any
non-audit services provided by such accountants to the Company or any of its subsidiaries have been approved by the Company’s board of directors. 
  
 (o) Preparation of the Financial Statements. The financial statements, together with the related schedules and notes, included in the Offering
Memorandum present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of and at the dates indicated and the results of their operations and cash flows for the periods specified. The financial
statements included in the Offering Memorandum comply as to form, in all material respects, with the applicable requirements of the Securities Act, other than the failure to include in such financial statements earnings per share data and pro-forma
information. Such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved, except as may be expressly stated in the related notes thereto. The
financial data set forth in the Offering Memorandum under the captions “Summary–Summary Consolidated Financial and Other Data” and “Selected Consolidated Financial and Other Data” fairly present, in all material respects,
the information set forth therein on the basis stated therein. 
  
 (p) Incorporation and Good Standing of Rainier, the Company and its Subsidiaries. Each of Rainier, the Company and the Company’s subsidiaries has been duly organized and is validly existing as a corporation, limited partnership
or limited liability company, as the case may be, in good standing under the laws of the jurisdiction of its organization and has the power to own, lease and operate its properties and to conduct its business as described in the Offering Memorandum
and to enter into and perform the obligations under each of this Agreement, the Registration Rights Agreement, the DTC Agreement, the Securities, the Exchange Securities, the Joinder Agreement, the Indenture and the Supplemental Indenture to which
it is a party. Each of Rainier, the Company and each subsidiary is duly qualified as a foreign corporation, limited partnership or limited liability company, as the case may be, to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except for such jurisdictions where the failure to so qualify or to be in good standing would not, individually or in the
aggregate, result in a Material Adverse Change. All of the issued and outstanding capital stock of each of the Company’s subsidiaries has been duly authorized and validly issued, is fully paid and nonassessable and, upon consummation of the
Transactions, will be owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim other than under the Senior Credit Facility (as defined below). The Company does not
own or control, directly or indirectly, 

  

 6 

 
any corporation, association or other entity other than the Guarantors and LifeCare Funding Company, LLC (which will be dissolved on the Closing Date).

  
 (q) Capitalization and Other Capital Stock Matters. All
of the outstanding shares of capital stock of Rainier and the Company have been duly authorized and validly issued, are fully paid and nonassessable and have been issued in compliance with federal and state securities laws. None of the outstanding
shares of capital stock of Rainier or the Company were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of Rainier or the Company. Following the consummation of the
Merger, all of the outstanding capital stock of the Company will be owned by Holdings, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim, except pursuant to the Senior Credit Facility, and there will be no
authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of Rainier or the Company or any
of its subsidiaries other than those described in the Offering Memorandum. 
  
 As of the date hereof, all of the issued and outstanding capital stock of Rainier is owned directly by Holdings, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim. 
  
 (r) Non-Contravention of Existing Instruments; No Further Authorizations
or Approvals Required. None of Rainier, the Company nor any of its subsidiaries is in violation of its charter or bylaws, limited partnership agreement or limited liability company agreement, as the case may be, or is in default (or, with the
giving of notice or lapse of time, would be in default) (“Default”) under any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease, license or other instrument to which any such entity is a party or by which it
or any of them may be bound, or to which any of the property or assets of any such entity is subject (each, an “Existing Instrument”), except for such violations or Defaults as are described in the Offering Memorandum or would not,
individually or in the aggregate, be reasonably likely to result in a Material Adverse Change. The execution, delivery and performance by each of Rainier, the Company and the Guarantors of its obligations under this Agreement, the Registration
Rights Agreement, the DTC Agreement, the Joinder Agreement, the Indenture and the Supplemental Indenture, to the extent it is a party thereto, and the issuance and delivery of the Securities or the Exchange Securities, (i) will not result in
any violation of the provisions of the charter or bylaws, limited partnership agreement or limited liability company agreement, as the case may be, of Rainier, the Company or any of the Company’s subsidiaries, (ii) will not conflict with
or constitute a breach of, or Default or a Debt Repayment Triggering Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of Rainier, the Company or any of the
Company’s subsidiaries pursuant to, or require the consent of any other party to, any Existing Instrument, and (iii) will not result in any violation of any law, administrative regulation or administrative or court decree applicable to
Rainier, the Company or any of the Company’s subsidiaries, except, in the case of clauses (ii) and (iii), for such conflicts, breaches, Defaults, liens, charges, encumbrances or violations as are described in the Offering Memorandum or
would not, individually or in the aggregate, be reasonably likely to result in a Material Adverse Change. No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority
or agency, is required for either Rainier’s, the Company’s or any 

  

 7 

 
Guarantors’ execution, delivery and performance of this Agreement, the Registration Rights Agreement, the DTC Agreement, the Joinder Agreement, the
Indenture or the Supplemental Indenture, to the extent it is a party thereto, or the issuance and delivery of the Securities or the Exchange Securities, or consummation of the transactions contemplated hereby and thereby and by the Offering
Memorandum, except such as have been obtained or made by Rainier, the Company and the Guarantors and are in full force and effect under the Securities Act, applicable securities laws of the several states of the United States or provinces of Canada
and except such as may be required by the securities laws of the several states of the United States or provinces of Canada with respect to Rainier’s or the Company’s obligations under the Registration Rights Agreement and except as
described in the Offering Memorandum or as would not be reasonably likely to result in a Material Adverse Change. As used herein, a “Debt Repayment Triggering Event” means any event or condition which gives, or with the giving of notice or
lapse of time would give, the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness
by Rainier, the Company or any of the Company’s subsidiaries. 
  
 (s) No Material Actions or Proceedings. Except as otherwise disclosed in the Offering Memorandum or as would not be reasonably likely to result in a Material Adverse Change, there are no legal or governmental actions, suits or
proceedings pending or, to the best of Rainier’s knowledge, threatened (i) against or affecting Rainier, the Company or any of its subsidiaries or (ii) which has as the subject thereof any property owned or leased by, Rainier, the
Company or any of its subsidiaries. 
  
 (t) Intellectual
Property Rights. The Company and its subsidiaries own or possess sufficient trademarks, trade names, patent rights, copyrights, licenses, approvals, trade secrets and other similar rights (collectively, “Intellectual Property Rights”)
reasonably necessary to conduct their businesses as now conducted; and the expiration or loss of any of such Intellectual Property Rights would not be reasonably likely to result in a Material Adverse Change. To the best of Rainier’s knowledge,
neither the Company nor any of its subsidiaries has received any notice of infringement or conflict with asserted Intellectual Property Rights of others, which infringement or conflict, if the subject of an unfavorable decision, would be reasonably
likely to result in a Material Adverse Change. 
  
 (u) Title to
Properties. Except as otherwise disclosed in the Offering Memorandum, the Company and each of its subsidiaries owns or leases all such properties and assets as are necessary to the operation of their business as currently conducted. 

 
 (v) Tax Law Compliance. The Company and its consolidated
subsidiaries have filed all necessary federal, state and foreign income and franchise tax returns and have paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against
any of them except as described in the Offering Memorandum or as would not be reasonably likely to result in a Material Adverse Change. 
  
 (w) Company Not an “Investment Company”. As of the date hereof, neither Rainier nor the Company is, and upon consummation of the
Transactions, none of Rainier, the Company nor the Guarantors will be, an “investment company” within the meaning of the rules 

  

 8 

 
and requirements under the Investment Company Act of 1940, as amended (the “Investment Company Act,” which term, as used herein, includes the rules
and regulations of the Commission promulgated thereunder). 
  
 (x)
Insurance. Except as described in the Offering Memorandum or as would not be reasonably likely to result in a Material Adverse Change, each of the Company and its subsidiaries are insured by recognized, financially sound institutions with
policies in such amounts and with such deductibles and covering such risks as are generally deemed adequate and customary for their businesses including, without limitation, policies covering real and personal property owned or leased by the Company
and its subsidiaries against theft, damage, destruction, acts of vandalism and earthquakes. The Company has no reason to believe that it or any subsidiary will not be able (i) to renew its existing insurance coverage as and when such policies
expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted (or as conducted upon and after consummation of the Transactions, as the case may be) and at a
cost that would not result in a Material Adverse Change. 
  
 (y)
No Price Stabilization or Manipulation. None of Rainier, the Company, any Guarantor or any of their respective affiliates has taken or will take, directly or indirectly, any action designed to or that might be reasonably expected to cause or
result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities in violation of federal securities laws. 
  
 (z) Solvency. Immediately after giving effect to the Transactions and the application of the proceeds from the sale
of the Notes, the Company and each of the Guarantors will be Solvent. As used herein, the term “Solvent” means, with respect to any person on a particular date, that on such date (i) the fair market value of the assets of such person
is greater than the total amount of liabilities (including contingent liabilities) of such person, (ii) the present fair salable value of the assets of such person is greater than the amount that will be required to pay the probable liabilities
of such person on its debts as they become absolute and matured, (iii) such person is able to realize upon its assets and pay its debts and other liabilities, including contingent obligations, as they mature and (iv) such person does not
have unreasonably small capital. 
  
 (aa) Company’s
Accounting System. The Company and its subsidiaries maintain a system of internal controls over financial reporting and accounting that are sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with
management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. 
  
 (bb) Compliance with Environmental Laws. Except as described in the Offering Memorandum or as would not, individually or in the aggregate, be reasonably likely to result in a Material Adverse Change: (i) neither the Company nor
any of its subsidiaries is in violation of 

  

 9 

 
any federal, state, local or foreign law or regulation relating to pollution or protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum and petroleum products (collectively, “Materials of Environmental Concern”), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern (collectively, “Environmental Laws”), which violation includes, without limitation, noncompliance with any permits or other governmental authorizations required for the operation
of the business of the Company or its subsidiaries under applicable Environmental Laws, or noncompliance with the terms and conditions thereof, nor has the Company or any of its subsidiaries received any written communication, whether from a
governmental authority, citizens group, employee or otherwise, that alleges that the Company or any of its subsidiaries is in violation of any Environmental Law; (ii) there is no claim, action or cause of action filed with a court or
governmental authority, no investigation with respect to which the Company or its subsidiaries have received written notice, and no written notice by any person or entity alleging potential liability for investigatory costs, cleanup costs,
governmental responses costs, natural resources damages, property damages, personal injuries, attorneys’ fees or penalties arising out of, based on or resulting from the presence, or release into the environment, of any Material of
Environmental Concern at any location owned, leased or operated by the Company or any of its subsidiaries, now or in the past (collectively, “Environmental Claims”), pending or, to the best of Rainier’s or the Company’s
knowledge, threatened against the Company or any of its subsidiaries or any person or entity whose liability for any Environmental Claim the Company or any of its subsidiaries has retained or assumed either contractually or by operation of law; and
(iii) to the best of Rainier’s knowledge, there are no past or present actions, activities, circumstances, conditions, events or incidents, including, without limitation, the release, emission, discharge, presence or disposal of any
Material of Environmental Concern, that would result in a violation of any Environmental Law or form the basis of a potential Environmental Claim against the Company or any of its subsidiaries or against any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has retained or assumed either contractually or by operation of law. 
  
 (cc) ERISA Compliance. The Company and its subsidiaries and any “employee benefit plan” (as defined under the Employee Retirement Income
Security Act of 1974 (as amended, “ERISA,” which term, as used herein, includes the regulations and published interpretations thereunder) established or maintained by the Company, its subsidiaries or their “ERISA Affiliates” (as
defined below) are in compliance with ERISA except as described in the Offering Memorandum or as would not be reasonably likely to result in a Material Adverse Change. “ERISA Affiliate” means, with respect to the Company or a subsidiary,
any member of any group of organizations described in Section 414 of the Internal Revenue Code of 1986 (as amended, the “Code,” which term, as used herein, includes the regulations and published interpretations thereunder) of which
the Company or such subsidiary is a member. No “reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates except as described in the Offering Memorandum or as would not be reasonably likely to result in a Material Adverse Change. No “employee benefit plan” established or maintained by the Company,
its subsidiaries or any of their ERISA 

  

 10 

 
Affiliates, if such “employee benefit plan” were terminated, would have any “amount of unfunded benefit liabilities” (as defined under
ERISA). Except as described in the Offering Memorandum or as would not be reasonably likely to result in a Material Adverse Change, neither the Company, its subsidiaries nor any of their ERISA Affiliates has incurred or reasonably expects to incur
any liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Section 412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan” established or
maintained by the Company, its subsidiaries or any of their ERISA Affiliates that is intended to be qualified under Section 401 of the Code is so qualified and nothing has occurred, whether by action or failure to act, which would cause the
loss of such qualification except as described in the Offering Memorandum or as would not be reasonably likely to result in a Material Adverse Change. 
  
 (dd) Compliance with Labor Laws. Except as described in the Offering Memorandum or as would not be reasonably likely to, individually or in the
aggregate, result in a Material Adverse Change, (i) there is (A) no unfair labor practice complaint pending or, to the best of Rainier’s or the Company’s knowledge, threatened against the Company or any of its subsidiaries before
the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under collective bargaining agreements pending, or to the best of Rainier’s or the Company’s knowledge, threatened, against the Company or any
of its subsidiaries, (B) no strike, labor dispute, slowdown or stoppage pending or, to the best of Rainier’s or the Company’s knowledge, threatened against the Company or any of its subsidiaries and (C) to the best of
Rainier’s or the Company’s knowledge, no union organizing activities taking place and (ii) there has been no violation of any federal, state or local law relating to discrimination in hiring, promotion or pay of employees or of any
applicable wage or hour laws. 
  
 (ee) Compliance with
Healthcare Regulations. Except as described in the Offering Memorandum, each of the Company and its subsidiaries possesses such permits, licenses, provider numbers, certificates, approvals (including, without limitation, certificate of need
approvals), consents, orders, certifications (including, without limitation, certification under the Medicare and Medicaid programs), accreditations (including, without limitation, accreditation by the Joint Commission on the Accreditation of
Healthcare Organizations) and other authorizations (collectively, “Licenses”) issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct
its business as now being conducted and as described in the Offering Memorandum (including, without limitation, Licenses as are required (i) under such federal and state healthcare laws as are applicable to the Company and its subsidiaries and
(ii) with respect to those facilities operated by the Company and its subsidiaries that participate in the Medicare and or Medicaid programs, to receive reimbursement thereunder), except where the failure to possess such Licenses or to make
such declarations and filings would not, individually or in the aggregate, be reasonably likely to result in a Material Adverse Change; except as described in the Offering Memorandum, the Company and its subsidiaries are in compliance with the terms
and conditions of all such Licenses, except where the failure so to comply would not, individually or in the aggregate, be reasonably likely to result in a Material Adverse Change; and except as described in the Offering Memorandum, none of the
Company or its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Licenses which, 

  

 11 

 
singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would be reasonably likely to result in a Material Adverse Change.

  
 (ff) Related Party Transactions. Upon consummation of
the Transactions, no relationship, direct or indirect, will exist between or among any of the Company or any affiliate of the Company, on the one hand, and any director, officer, member, stockholder, customer or supplier of the Company or any
affiliate of the Company, on the other hand, which would be required by the Securities Act to be disclosed in a registration statement on Form S-1 which is not so disclosed in the Offering Memorandum, other than (i) any employment or equity
arrangements between or among the Company or its affiliates, on the one hand, and any director, officer, member or stockholder of the Company or any affiliate of the Company or any investment fund associated with The Carlyle Group, on the other
hand, or (ii) any stockholder or registration rights agreements among the Company or its affiliates, on the one hand, and any director, officer, member or stockholder of the Company or any affiliate of the Company or any investment fund
associated with The Carlyle Group, on the other hand. Upon consummation of the Transactions, there will be no outstanding loans, advances (except advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the
Company or any affiliate of the Company to or for the benefit of any of the officers or directors of the Company or any affiliate of the Company or any of their respective family members. 
  
 (gg) No Unlawful Contributions or Other Payments. Except as described in the Offering Memorandum and as would not
reasonably be likely to have a Material Adverse Change, neither the Company nor any of its subsidiaries nor, to the best of Rainier’s or the Company’s knowledge, any employee or agent of the Company or any subsidiary, has made any
contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law or of the character necessary to be disclosed in the Offering Memorandum in order to make the statements therein not
misleading. 
  
 (hh) Regulation S. Rainier, the Company,
the Guarantors and their respective affiliates and all persons acting on their behalf (other than the Initial Purchasers, as to whom Rainier makes no representation) have complied with and will comply with the offering restrictions requirements of
Regulation S in connection with the offering of the Securities outside the United States and, in connection therewith, the Offering Memorandum will contain the disclosure required by Rule 902. The Securities sold in reliance on Regulation S will be
represented upon issuance by a temporary global security that may not be exchanged for definitive securities until the expiration of the 40-day restricted period referred to in Rule 903 of the Securities Act and only upon certification of beneficial
ownership of such Securities by non-U.S. persons or U.S. persons who purchased such Securities in transactions that were exempt from the registration requirements of the Securities Act. 
  
 (ii) Taxes; Fees. There are no stamp or other issuance or transfer taxes or duties or other similar fees or charges
required to be paid in connection with the execution and delivery of this Agreement or the issuance or sale by Rainier to the Initial Purchasers of the Securities. 
  
 (jj) Senior Credit Facility. Rainier is not aware of any fact that will prevent Rainier, on or prior to the Closing
Date, from borrowing funds under the proposed senior credit facility as described in the Offering Memorandum (the “Senior Credit Facility”), in amounts that 

  

 12 

 
are sufficient, together with the proceeds from the other financings as described in the Offering Memorandum, including the issuance of the Notes, to
consummate the Transactions. 
  
 (kk) Repayment of Existing
Debt. Rainier and the Company are not aware of any fact that will prevent the Company from repaying the existing debt of the Company on the Closing Date, in the manner contemplated in the Offering Memorandum, which manner contemplates not
repaying the Company’s existing capital lease obligations, with proceeds from the issuance and sale of the Securities or from the funding of the Senior Credit Facility. 
  
 (ll) No Operations. Rainier has no subsidiaries and has conducted no business prior to the date hereof other than in
connection with the transactions contemplated by this Agreement and the Offering Memorandum. Rainier, as of the date hereof, owns no property or assets. 
  
 Any certificate signed by an officer of Rainier and delivered to the Initial Purchasers or to counsel for the Initial Purchasers shall be deemed to be a
representation and warranty by Rainier to each Initial Purchaser as to the matters set forth therein. 
  
 SECTION 2. Purchase, Sale and Delivery of the Securities. 
  
 (a) The Securities. Rainier agrees to issue and sell to the Initial Purchasers, severally and not jointly, all of the
Notes, and the Initial Purchasers agree, severally and not jointly, to purchase from Rainier the aggregate principal amount of Notes set forth opposite their names on Schedule A, at a purchase price of 97.50% of the principal amount thereof payable
on the Closing Date, in each case, on the basis of the representations, warranties and agreements herein contained, and upon the terms, subject to the conditions thereto, herein set forth. 
  
 (b) The Closing Date. Delivery of certificates for the Notes in
definitive form to be purchased by the Initial Purchasers and payment therefor shall be made at the offices of Ropes & Gray LLP, 1251 Avenue of the Americas, New York, New York 10111 (or such other place as may be agreed to by Rainier, the
Company and Banc of America Securities LLC) at 10:00 a.m. New York City time, on August 11, 2005 or such other time and date as Banc of America Securities LLC and Rainier may agree (the time and date of such closing are called the “Closing
Date”). 
  
 (c) Delivery of the Securities. Rainier
shall deliver, or cause to be delivered, to Banc of America Securities LLC for the accounts of the several Initial Purchasers certificates for the Notes at the Closing Date against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor. The certificates for the Notes shall be in such denominations and registered in the name of Cede & Co., as nominee of the Depositary, pursuant to the DTC Agreement, and shall be made
available for inspection on the business day preceding the Closing Date at a location in New York City, as Banc of America Securities LLC may designate. Time shall be of the essence, and delivery at the time and place specified in this Agreement is
a further condition to the obligations of the Initial Purchasers. 
  
 (d) Delivery of Offering Memorandum to the Initial Purchasers. Not later than 12:00 p.m., New York City time, on the second business day following the date of this 

  

 13 

 
Agreement, Rainier shall deliver or cause to be delivered copies of the Offering Memorandum in such quantities and at such places as the Initial Purchasers
shall reasonably request. 
  
 (e) Initial Purchasers as
Qualified Institutional Buyers. Each Initial Purchaser severally and not jointly represents and warrants to, and agrees with, Rainier that it is a “qualified institutional buyer” within the meaning of Rule 144A (a “Qualified
Institutional Buyer”). 
  
 SECTION 3. Additional
Covenants. Rainier further covenants and agrees with each Initial Purchaser as follows: 
  
 (a) Initial Purchasers’ Review of Proposed Amendments and Supplements. Prior to amending or supplementing the Offering Memorandum, Rainier or the Company shall furnish to the Initial Purchasers for review
a copy of each such proposed amendment or supplement, and Rainier or the Company shall not use any such proposed amendment or supplement to which the Initial Purchasers reasonably object, such objection not to be unreasonably withheld or delayed.

  
 (b) Amendments and Supplements to the Offering Memorandum
and Other Securities Act Matters. If, prior to the completion of the placement of the Securities by the Initial Purchasers with the Subsequent Purchasers, any event shall occur or condition exist as a result of which it is necessary to amend or
supplement the Offering Memorandum in order to make the statements therein, in the light of the circumstances when the Offering Memorandum is delivered to a Subsequent Purchaser, not misleading, or if in the reasonable judgment of the Initial
Purchasers or counsel for the Initial Purchasers or the Company or its counsel it is otherwise necessary to amend or supplement the Offering Memorandum to comply with law, Rainier agrees to promptly prepare (subject to Section 3 hereof), and
furnish at its own expense to the Initial Purchasers, amendments or supplements to the Offering Memorandum so that the statements in the Offering Memorandum as so amended or supplemented will not, in the light of the circumstances when the Offering
Memorandum is delivered to a Subsequent Purchaser, be misleading or so that the Offering Memorandum, as amended or supplemented, will comply with all applicable law. 
  
 Rainier hereby expressly acknowledges that the indemnification and contribution provisions of Sections 8 and 9 hereof are
specifically applicable and relate to each offering memorandum, registration statement, prospectus, amendment or supplement referred to in this Section 3. 
  

(c) Copies of the Offering Memorandum. Rainier agrees to furnish the Initial Purchasers, without charge, as many copies of the Offering
Memorandum and any amendments and supplements thereto as they shall have reasonably requested. 
  
 (d) Blue Sky Compliance. Rainier shall cooperate with the Initial Purchasers and counsel for the Initial Purchasers to qualify or register (or to obtain exemptions from qualifying or registering) all or any
part of the Securities for offer and sale under the securities laws of the several states of the United States, the provinces of Canada or any other jurisdictions designated by the Initial Purchasers, shall comply with such laws and shall continue
such qualifications, registrations and exemptions in effect so long as required for the distribution of the Securities. 

  

 14 

 
Neither Rainier nor the Company shall be required to qualify as a foreign corporation or to take any action that would subject it to general service of
process in any such jurisdiction where it is not presently qualified or where it would be subject to taxation as a foreign corporation. Rainier will advise the Initial Purchasers promptly of the suspension of the qualification or registration of (or
any such exemption relating to) the Securities for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification,
registration or exemption, each of Rainier and the Company shall use its commercially reasonable efforts to obtain the withdrawal thereof at the earliest possible moment. 
  
 (e) Use of Proceeds. The net proceeds from the sale of the Securities sold by Rainier shall be applied in the manner
described under the caption “Use of Proceeds” in the Offering Memorandum. 
  
 (f) The Depositary. Rainier will cooperate with the Initial Purchasers and use its commercially reasonable efforts to permit the Securities to be eligible for clearance and settlement through the facilities of
the Depositary. 
  
 (g) Additional Issuer Information.
Prior to the completion of the placement of the Securities by the Initial Purchasers with the Subsequent Purchasers, and at any time when the Securities are “restricted securities” within the meaning of Rule 144(a)(3) and the Company is
not subject to Section 13 or 15 of the Exchange Act, for the benefit of holders and beneficial owners from time to time of the Securities, the Company shall furnish, at its expense, upon request, to holders and beneficial owners of Securities
and prospective purchasers of Securities information (“Additional Issuer Information”) satisfying the requirements of Rule 144A(d). 
  
 (h) Agreement Not To Offer or Sell Additional Securities. During the period of 90 days following the date of the Offering Memorandum, neither
Rainier nor the Company will, without the prior written consent of Banc of America Securities LLC (which consent may be withheld at the sole discretion of Banc of America Securities LLC), directly or indirectly, sell, offer, contract or grant any
option to sell, pledge, transfer or establish an open “put equivalent position” within the meaning of Rule 16a-1 under the Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or file any registration statement
under the Securities Act in respect of, any debt securities of Rainier or the Company or securities exchangeable for or convertible into debt securities of Rainier or the Company (other than as contemplated by this Agreement or to register the
Exchange Securities). 
  
 (i) Future Reports to the Initial
Purchasers. For a period of 365 days following the Closing Date, if the Company is not subject to Section 13 or 15 of the Exchange Act and any Securities or Exchange Securities remain outstanding, the Company will furnish to Banc of America
Securities LLC a copy of the information provided by the Company to the Trustee and to Cede & Co., the nominee of DTC and the holder of the Notes, pursuant to the reporting covenant set forth in the Indenture. 
  
 (j) No Integration. Each of Rainier and the Company will not and will
cause its Affiliates not to make any offer or sale of securities of the Company of any class if, as a result of the doctrine of “integration” referred to in Rule 502 under the Securities Act, such offer or sale 

  

 15 

 
would render invalid (for the purpose of (i) the sale of the Securities by Rainier to the Initial Purchasers, (ii) the resale of the Securities by
the Initial Purchasers to Subsequent Purchasers or (iii) the resale of the Securities by such Subsequent Purchasers to others) the exemption from the registration requirements of the Securities Act provided by Section 4(2) thereof or by
Rule 144A or by Regulation S thereunder or otherwise. 
  
 (k)
No Restricted Resales. During the period of two years after the Closing Date, Rainier will not, and will not permit any of its affiliates (as defined in Rule 144 under the Securities Act) to resell any of the Securities which constitute
“restricted securities” under Rule 144 that have been reacquired by any of them, except for securities purchased by Rainier or any of its affiliates and resold in a transaction registered under the Securities Act and as would not otherwise
violate the federal securities laws. 
  
 (l) Legended
Securities. Each certificate for a Note will bear the legend contained in “Notice to Investors” in the Offering Memorandum for the time period and upon the other terms stated in the Offering Memorandum. 
  
 (m) PORTAL. Rainier will use its commercially reasonable efforts to
cause the Securities when issued to be eligible for the PORTAL Market. 
  
 (n) Delivery of Agreements. Concurrently with the closing of the Merger, Rainier shall deliver, or cause to be delivered, to the Initial Purchasers the executed copies of each of (i) the Officers’ Certificate referred to
herein under Section 5(e), (ii) the Registration Rights Agreement, (iii) the Supplemental Indenture and (iv) the Joinder Agreement. 
  
 Banc of America Securities LLC, on behalf of the several Initial Purchasers, may, in its sole discretion, waive in writing the performance by Rainier, the
Company or any of the Guarantors of any one or more of the foregoing covenants or extend the time for their performance. 
  
 SECTION 4. Payment of Expenses. Rainier agrees to pay all costs, fees and expenses incurred in connection with the performance of
Rainier’s and the Company’s obligations hereunder, including, without limitation, (i) all expenses incident to the issuance and delivery of the Securities (including all printing and engraving costs), (ii) all necessary issue,
transfer and other stamp taxes in connection with the issuance and sale of the Securities to the Initial Purchasers, (iii) all fees and expenses of Rainier’s, the Company’s and the Guarantors’ counsel, independent public or
certified public accountants and other advisors, (iv) all costs and expenses incurred by Rainier and the Company in connection with the preparation, printing, filing, shipping and distribution of each Preliminary Offering Memorandum and the
Offering Memorandum (including financial statements and exhibits), and all amendments and supplements thereto, this Agreement, the Registration Rights Agreement, the Indenture, the Supplemental Indenture, the DTC Agreement and the Notes and the
Guarantees, (v) all filing fees, attorneys’ fees and expenses incurred by Rainier, the Company, the Guarantors or the Initial Purchasers in connection with qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Securities for offer and sale under the securities laws of the several states of the United States, the provinces of Canada or other jurisdictions designated by the Initial Purchasers (including, without
limitation, the cost of 

  

 16 

 
preparing, printing and mailing preliminary and final blue sky or legal investment memoranda and any related supplements to the Preliminary Offering
Memorandum or Offering Memorandum, (vi) the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee in connection with the Indenture, the Supplemental Indenture and the Securities, (vii) any fees
payable in connection with the rating of the Securities with the ratings agencies and the listing of the Securities with the PORTAL Market, (viii) any filing fees incident to, and any reasonable fees and disbursements of counsel to the Initial
Purchasers in connection with the review by the NASD, if any, of the terms of the sale of the Securities or the Exchange Securities, which the parties acknowledge that there will be none, (ix) all fees and expenses (including reasonable fees
and expenses of counsel) of Rainier in connection with approval of the Securities by the Depositary for “book-entry” transfer, and the performance by Rainier, the Company and the Guarantors of their respective other obligations under this
Agreement and (x) half of all expenses incident to any “road show” for the offering of the Securities, including the cost of any chartered airplane or other transportation. Except as provided in this Section 4 and Sections 6, 8
and 9 hereof, the Initial Purchasers shall pay their own expenses, including the fees and disbursements of their counsel. 
  
 SECTION 5. Conditions of the Obligations of the Initial Purchasers. The obligations of the several Initial Purchasers to purchase and pay for
the Securities as provided herein on the Closing Date shall be subject to the accuracy of the representations and warranties set forth in Section 1 hereof as of the date hereof and as of the Closing Date as though then made and to the timely
performance by Rainier of its covenants and other obligations hereunder, and to each of the following additional conditions: 
  
 (a) Accountants’ Comfort Letter. On the date hereof, the Initial Purchasers shall have received from KPMG LLP, independent public or certified
public accountants for the Company, a letter dated the date hereof addressed to the Initial Purchasers, in form and substance satisfactory to the Initial Purchasers, containing statements and information of the type ordinarily included in
accountants’ “comfort letters” to Initial Purchasers, delivered according to Statement of Auditing Standards Nos. 72, 76 and 100 (or any successor bulletins), with respect to the audited and unaudited financial statements and certain
financial information contained in the Offering Memorandum. 
  
 (b) No Material Adverse Change or Ratings Agency Change. For the period from and after the date of this Agreement and prior to the Closing Date: 
  
 (i) there shall not have occurred any Material Adverse Change; and 
  
 (ii) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any securities or indebtedness of the Company or any
of its subsidiaries by any “nationally recognized statistical rating organization” as such term is defined for purposes of Rule 436 under the Securities Act. 
  
 (c) Opinion of Counsel for the Company and the Guarantors. On the Closing Date the Initial Purchasers shall have received
the favorable opinion of (i) Ropes & Gray LLP, 

  

 17 

 
counsel for Rainier and the Company, dated as of such Closing Date, the form of which is attached as Exhibit A-1 and (ii) counsel for each
Guarantor listed on Exhibit B, dated as of such Closing Date, the form of which is attached as Exhibit A-2. 
  
 (d) Opinion of Counsel for the Initial Purchasers. On the Closing Date the Initial Purchasers shall have received the favorable opinion of
Shearman & Sterling LLP, counsel for the Initial Purchasers, dated as of such Closing Date, with respect to such matters as may be reasonably requested by the Initial Purchasers. 
  
 (e) Officers’ Certificate. On the Closing Date a written certificate shall have been executed by the Chairman of
the Board, Chief Executive Officer or President of the Company and the Chief Financial Officer or Chief Accounting Officer of the Company, dated as of the Closing Date, to the effect set forth in Section 5(b)(ii) hereof, and further to the
effect that: 
  
 (i) for the period from and
after the date of this Agreement and prior to the Closing Date there has not occurred any Material Adverse Change; 
  
 (ii) the representations, warranties and covenants set forth in Section 1 hereof are true and correct in all material respects
(except with respect to representations and warranties that are qualified as to materiality or Material Adverse Change, which are true and correct in all respects) with the same force and effect as though expressly made on and as of the Closing
Date; and 
  
 (iii) Rainier has complied with all
the agreements in all material respects and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date. 
  
 (f) Bring-down Comfort Letter. On the Closing Date the Initial Purchasers shall have received from KPMG LLP, independent public or certified public
accountants for the Company, a letter dated such date, in form and substance satisfactory to the Initial Purchasers, to the effect that they reaffirm the statements made in the letter furnished by them pursuant to Section 5(a) hereof, except
that the specified date referred to therein for the carrying out of procedures shall be no more than three business days prior to the Closing Date. 
  
 (g) PORTAL Listing. At the Closing Date the Notes shall have been designated for trading on the PORTAL Market. 
  
 (h) Registration Rights Agreement. The Company and each of the
Guarantors shall have executed the Registration Rights Agreement. 
  
 (i) Supplemental Indenture. The Company and each of the Guarantors shall have executed the Supplemental Indenture. 
  
 (j) Joinder Agreement. The Company and each of the Guarantors shall have executed the Joinder Agreement pursuant to which the Company and each of
the Guarantors will expressly assume Rainier’s obligations under this Agreement. 
  

 18 

 (k) The Depositary. At the Closing Date, the Notes will be eligible for clearance and settlement
through the facilities of the Depositary. 
  
 (l) Consummation
of Merger. Immediately prior to the funding of the purchase price for the Securities to be paid by the Initial Purchasers pursuant to Section 2, all conditions precedent to the consummation of the Merger contemplated by the Merger Agreement
shall have been, or shall concurrently with such funding be, satisfied or waived in a manner not material and adverse with respect to holders of the Notes, and the parties to the Merger Agreement shall be prepared to consummate the Merger
immediately after the receipt by Rainier of the purchase price for the Securities and the funding of the Senior Credit Facility. 
  
 (m) Funding of Senior Credit Facility. Immediately prior to the funding of the purchase price for the Securities to be paid by the Initial
Purchasers pursuant to Section 2, all conditions precedent to the funding of the Senior Credit Facility shall have been, or shall concurrently with such funding be, satisfied or waived in a manner not material and adverse with respect to
holders of the Notes, and the parties to the Senior Credit Facility shall be prepared to consummate the funding of the Senior Credit Facility immediately after the receipt by Rainier of the purchase price for the Securities. 
  
 (n) Additional Documents. On or before the Closing Date, the Initial
Purchasers and counsel for the Initial Purchasers shall have received such information, documents and opinions as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the Securities as contemplated
herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained. 
  
 If any condition specified in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may
be terminated by the Initial Purchasers by notice to Rainier at any time on or prior to the Closing Date, which termination shall be without liability on the part of any party to any other party, except that Sections 4, 6, 8 and 9 hereof shall at
all times be effective and shall survive such termination. 
  
 SECTION 6. Reimbursement of Initial Purchasers’ Expenses. If this Agreement is terminated by the Initial Purchasers pursuant to Section 5 or 10 hereof, including if the sale to the Initial Purchasers of the Securities
on the Closing Date is not consummated because of any refusal, inability or failure on the part of Rainier to perform any agreement herein or to comply with any provision hereof, Rainier agrees to reimburse the Initial Purchasers (or such Initial
Purchasers as have terminated this Agreement with respect to themselves), severally, upon demand for all out-of-pocket expenses that shall have been reasonably incurred by the Initial Purchasers in connection with the proposed purchase and the
offering and sale of the Securities, including, without limitation, reasonable fees and disbursements of counsel, printing expenses, travel expenses, postage, facsimile and telephone charges. 
  

 19 

 SECTION 7. Offer, Sale and Resale Procedures. Each of the Initial Purchasers, on the one
hand, and Rainier, on the other hand, hereby agree to observe the following procedures in connection with the offer and sale of the Securities: 
  
 (A) Offers and sales of the Securities will be made only by the Initial Purchasers or Affiliates thereof qualified to do so in the jurisdictions in which
such offers or sales are made. Each such offer or sale shall only be made to persons whom the offeror or seller reasonably believes to be Qualified Institutional Buyers or non-U.S. persons outside the United States to whom the offeror or seller
reasonably believes offers and sales of the Securities may be made in reliance upon Regulation S upon the terms and conditions set forth in Annex I hereto, which Annex I is hereby expressly made a part hereof. 
  
 (B) The Securities will be offered by approaching prospective Subsequent
Purchasers on an individual basis. No general solicitation or general advertising (within the meaning of Rule 502 under the Securities Act) will be used in the United States in connection with the offering of the Securities. 
  
 (C) Upon original issuance by Rainier, and until such time as the same is no
longer required under the applicable requirements of the Securities Act, the Notes (and all securities issued in exchange therefor or in substitution thereof, other than the Exchange Securities) shall bear a legend substantially in the form shown in
the Offering Memorandum under the caption “Notice to Investors.” 
  
 In relation to each Member State of the European Economic Area that has implemented the Prospectus Directive (each, a “Relevant Member State”), each Initial Purchaser represents and agrees that from and
including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of the Notes to the public in that Relevant Member State
prior to the publication of a prospectus in relation to the Notes that has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent
authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of notes to the public in that Relevant Member State at any
time (i) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; (ii) to any legal entity which has two or
more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than EUR 43.0 million and (3) an annual net turnover of more than EUR 50.0 million, as shown in its last
annual or consolidated accounts; or (iii) in any other circumstances which do not require the publication by Rainier of a prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes of this provision, the expression an
“offer of notes to the public” in relation to any notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the notes to be offered so as to enable an
investor to decide to purchase or subscribe for the notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive
2003/71/EC and includes any relevant implementing measure in each Relevant Member State. 
  

 20 

 Each Initial Purchaser represents and agrees that (i) it has only communicated or caused to be
communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the “FSMA”)) received by
it in connection with the issue or sale of the Notes in circumstances in which Section 21(1) of the FSMA does not apply to Rainier; and (ii) it has complied and will comply with all applicable provisions of the FSMA with respect to
anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom. 
  
 Following the sale of the Securities by the Initial Purchasers to Subsequent Purchasers pursuant to the terms hereof, the Initial Purchasers shall not be
liable or responsible to Rainier for any losses, damages or liabilities suffered or incurred by Rainier, including any losses, damages or liabilities under the Securities Act, arising from or relating to any resale or transfer of any Security
(except to the extent arising out of a breach of this Agreement by the Initial Purchasers). 
  
 SECTION 8. Indemnification. 
  
 (a) Indemnification of the Initial Purchasers. Rainier agrees to indemnify and hold harmless each Initial Purchaser, its Affiliates, directors, officers and employees, and each person, if any, who controls any Initial Purchaser
within the meaning of the Securities Act and the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which such Initial Purchaser, Affiliate, director, officer, employee or controlling person may become subject, under
the Securities Act, the Exchange Act or other federal or state statutory law or regulation, or at common law or otherwise, insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of
or is based upon any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Offering Memorandum or the Offering Memorandum (or any amendment or supplement thereto), or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the foregoing indemnity agreement shall not apply to any loss, claim,
damage, liability or expense to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information
furnished to Rainier by an Initial Purchaser through Banc of America Securities LLC expressly for use in any Preliminary Offering Memorandum or the Offering Memorandum (or any amendment or supplement thereto). The indemnity agreement set forth in
this Section 8(a) shall be in addition to any liabilities that Rainier, the Company or the Guarantors may otherwise have. 
  
 (b) Indemnification of Rainier. Each Initial Purchaser agrees, severally and not jointly, to indemnify and hold harmless Rainier, each of its
directors and each person, if any, who controls Rainier within the meaning of the Securities Act or the Exchange Act, against any loss, claim, damage, liability or expense, as incurred, to which Rainier or any such director or controlling person may
become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of
such Initial Purchaser), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof 

  

 21 

 
as contemplated below) arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in any Preliminary
Offering Memorandum or the Offering Memorandum (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Offering Memorandum or the Offering
Memorandum (or any amendment or supplement thereto), in reliance upon and in conformity with written information furnished to Rainier by such Initial Purchaser through Banc of America Securities LLC expressly for use therein; and to reimburse
Rainier and each such director or controlling person for any and all expenses (including the fees and disbursements of counsel) as such expenses are reasonably incurred by Rainier or such director or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. Rainier hereby acknowledges that the only information that the Initial Purchasers have furnished to Rainier expressly for use in
any Preliminary Offering Memorandum or the Offering Memorandum (or any amendment or supplement thereto) are the statements set forth in (1) the fifth paragraph on the introductory page (ii) of the Offering Memorandum, (2) the third
sentence of the seventh paragraph in the section “Plan of Distribution” in the Offering Memorandum concerning the intention to make a market in the Notes and (3) the thirteenth paragraph in the section “Plan of Distribution”
in the Offering Memorandum concerning stabilization transactions. The indemnity agreement set forth in this Section 8(b) shall be in addition to any liabilities that each Initial Purchaser may otherwise have. 
  
 (c) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 8, notify the
indemnifying party in writing of the commencement thereof, but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party for contribution or otherwise than under the indemnity
agreement contained in this Section 8 or to the extent it is not materially prejudiced as a proximate result of such failure. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek
indemnity from an indemnifying party, the indemnifying party will be entitled to participate in and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such
action, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying party’s election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the

  

 22 

 
proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with local counsel), approved by the indemnifying party (Banc of America Securities LLC in the case of Sections 8(b) and 9 hereof), representing the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action, in each of which cases the reasonable fees and expenses
of counsel shall be at the expense of the indemnifying party. 
  
 (d) Settlements. The indemnifying party under this Section 8 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was or could have
been sought hereunder by such indemnified party, unless such settlement, compromise or consent includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding
and does not include any statements as to or any findings of fault, culpability or failure to act by or on behalf of any indemnified party. 
  
 SECTION 9. Contribution. If the indemnification provided for in Section 8 hereof is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified
party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to therein (i) in such proportion as is appropriate to reflect the relative benefits received by Rainier, on the one hand, and the Initial
Purchasers, on the other hand, from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative fault of Rainier, on the one hand, and the Initial Purchasers, on the other hand, in connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by Rainier, on the one hand, and the Initial Purchasers, on the other hand, in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by Rainier, and the total
discount received by the Initial Purchasers bear to the aggregate initial offering price of the Securities. The relative fault of Rainier, on the one hand, and the Initial Purchasers, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by Rainier, on the one hand, or the Initial Purchasers, on the other hand,
and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission or inaccuracy. 
  

 23 

 The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 8 hereof, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or
claim. The provisions set forth in Section 8 hereof with respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this Section 9; provided, however, that no additional notice shall
be required with respect to any action for which notice has been given under Section 8 hereof for purposes of indemnification. 
  
 Rainier and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 9. 
  
 Notwithstanding the provisions of this Section 9, no Initial Purchaser
shall be required to contribute any amount in excess of the discount received by such Initial Purchaser in connection with the Securities distributed by it. No person guilty of fraudulent misrepresentation (within the meaning of Section 11 of
the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers’ obligations to contribute pursuant to this Section 9 are several, and not joint, in
proportion to their respective commitments as set forth opposite their names in Schedule A. For purposes of this Section 9, each Affiliate, director, officer and employee of an Initial Purchaser and each person, if any, who controls an Initial
Purchaser within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as such Initial Purchaser, and each director of Rainier, and each person, if any, who controls Rainier within the meaning of the
Securities Act and the Exchange Act shall have the same rights to contribution as Rainier. 
  
 SECTION 10. Termination of this Agreement. Prior to the Closing Date, this Agreement may be terminated by the Initial Purchasers by notice given to Rainier if at any time: (i) trading in securities
generally on either the Nasdaq Stock Market or the New York Stock Exchange shall have been suspended or limited, or minimum or maximum prices shall have been generally established on any of such quotation system or stock exchange by the Commission
or the NASD; (ii) a general banking moratorium shall have been declared by any of federal, New York or Delaware authorities; (iii) there shall have occurred any outbreak or escalation of national or international hostilities or any crisis
or calamity, or any change in the United States or international financial markets, or any substantial change or development involving a prospective substantial change in United States’ or international political, financial or economic
conditions, as in the judgment of the Initial Purchasers is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities in the manner and on the terms described in the Offering
Memorandum or to enforce contracts for the sale of securities; (iv) in the judgment of the Initial Purchasers there shall have occurred any Material Adverse Change; or (v) the Company shall have sustained a loss by strike, fire, flood,
earthquake, accident or other calamity of such character as in the judgment of the Initial Purchasers may interfere materially with the conduct of the business and operations of the Company regardless of whether or not such loss shall have been
insured. Any termination pursuant to this Section 10 shall be without liability on the part of (i) Rainier to any Initial Purchaser, except that Rainier shall be obligated to reimburse the expenses of the Initial 

  

 24 

 
Purchasers pursuant to Sections 4 and 6 hereof, (ii) any Initial Purchaser to Rainier, or (iii) any party hereto to any other party except that the
provisions of Sections 8 and 9 hereof shall at all times be effective and shall survive such termination. 
  
 SECTION 11. Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other
statements of Rainier and its officers and of the several Initial Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Initial Purchaser,
Rainier, the Company or any of their partners, officers or directors or any controlling person, as the case may be, and will survive delivery of and payment for the Securities sold hereunder and any termination of this Agreement. 
  
 SECTION 12. Notices. All communications hereunder shall be in
writing and shall be mailed, hand delivered, couriered or facsimiled and confirmed to the parties hereto as follows: 
  
 If to the Initial Purchasers: 
  
 Banc of America Securities LLC 
 9 West
57th Street 
 New York, New York 10019 
 Facsimile: (212) 901-7897 
 Attention: High Yield Capital Markets 
  
 with a copy to: 
  
 Shearman & Sterling LLP 
 599
Lexington Avenue 
 New York, New York 10022 
 Facsimile: (212) 848-7179 
 Attention: Marwan Elaraby 
  
 If to Rainier: 
  
 Rainier Acquisition Corp. 
 c/o The Carlyle Group 
 520 Madison Avenue,
42nd Floor 
 New York, New York 10022 
 Facsimile: (212) 381-4990 
 Attention: W. Robert Dahl, Walter S. Jin, Eric Edell 
  
 With a copy to: 
  
 Ropes & Gray LLP 
 One International
Place 
 Boston, MA 92110 
 Facsimile: 617-951-7050 
 Attention: Joel F. Freedman 
  

 25 

 If to the Company: 
  
 LifeCare Holdings, Inc. 
 c/o LifeCare Management Services LLC 
 5560 Tennyson Parkway 
 Plano, TX 75024 
 Facsimile:
(469) 241-2199 
 Attention: Legal Department/General Counsel 
  
 With a copy to: 
  
 Ropes & Gray LLP 
 One International
Place 
 Boston, MA 92110 
 Facsimile: 617-951-7050 
 Attention: Joel F. Freedman 
  
 Any party hereto may change the address or facsimile number for receipt of communications by giving written notice to the
others. 
  
 SECTION 13. Successors. This Agreement
will inure to the benefit of and be binding upon the parties hereto, including any substitute Initial Purchasers pursuant to Section 16 hereof, and to the benefit of the indemnified parties referred to in Sections 8 and 9 hereof, and in each
case their respective successors, and no other person will have any right or obligation hereunder. The term “successors” shall not include any Subsequent Purchaser or other purchaser of the Securities as such from any of the Initial
Purchasers merely by reason of such purchase. 
  
 SECTION 14.
Partial Unenforceability. The invalidity or unenforceability of any section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other section, paragraph or provision hereof. If any section,
paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable. 
  
 SECTION 15. Governing Law Provisions. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF. 
  
 (a) Consent to Jurisdiction. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of the United States of America located in the City and County of New York or the courts of
the State of New York in each case located in the City and County of New York (collectively, the “Specified Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for suits, actions, or proceedings instituted in
regard to the enforcement of a judgment of any Specified Court in a Related Proceeding, as to which such jurisdiction is non-exclusive) of the Specified Courts in any Related Proceeding. Service of any 

  

 26 

 
process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any Related Proceeding
brought in any Specified Court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any Related Proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any
Specified Court that any Related Proceeding brought in any Specified Court has been brought in an inconvenient forum. 
  
 SECTION 16. Default of One or More of the Several Initial Purchasers. If any one or more of the several Initial Purchasers shall fail or
refuse to purchase Securities that it or they have agreed to purchase hereunder on the Closing Date, and the aggregate number of Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase does
not exceed 10% of the aggregate number of the Securities to be purchased on such date, the other Initial Purchasers shall be obligated, severally, in the proportions that the number of Securities set forth opposite their respective names on Schedule
A bears to the aggregate number of Securities set forth opposite the names of all such non-defaulting Initial Purchasers, or in such other proportions as may be specified by the Initial Purchasers with the consent of the non-defaulting Initial
Purchasers, to purchase the Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase on the Closing Date. If any one or more of the Initial Purchasers shall fail or refuse to purchase
Securities and the aggregate number of Securities with respect to which such default occurs exceeds 10% of the aggregate number of Securities to be purchased on the Closing Date, and arrangements satisfactory to the Initial Purchasers, Rainier and
the Company for the purchase of such Securities are not made within 48 hours after such default, this Agreement shall terminate without liability of any party to any other party except that the provisions of Sections 4, 6, 8 and 9 hereof shall at
all times be effective and shall survive such termination. In any such case, upon prompt written notice to the Initial Purchasers or Rainier, as applicable, either the Initial Purchasers, on the one hand, or Rainier, on the other hand, shall have
the right to postpone the Closing Date, as the case may be, but in no event for longer than seven days in order that the required changes, if any, to the Offering Memorandum or any other documents or arrangements may be effected. 
  
 As used in this Agreement, the term “Initial Purchaser” shall be
deemed to include any person substituted for a defaulting Initial Purchaser under this Section 16. Any action taken under this Section 16 shall not relieve any defaulting Initial Purchaser from liability in respect of any default of such
Initial Purchaser under this Agreement. 
  

 27 

 SECTION 17. General Provisions. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement may be executed in two or more counterparts, each
one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Rainier acknowledges and agrees that in connection with all aspects of each transaction contemplated by this Agreement,
Rainier and each Initial Purchaser have an arms length business relationship that creates no fiduciary duty on the part of each Initial Purchaser and each expressly disclaims any fiduciary relationship. 
  
 Except as otherwise provided herein, this Agreement may not be amended or
modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. The section headings herein are for the convenience of
the parties only and shall not affect the construction or interpretation of this Agreement. 
  

 28 

 If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to
Rainier the enclosed copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms. 
  

			
	Very truly yours,
	
	RAINIER ACQUISITION CORP.
		
	By:	 	/s/ W. Robert Dahl
	 	 	Name: W. Robert Dahl
	 	 	Title: President

 The foregoing Purchase Agreement is hereby confirmed and accepted by the Initial Purchasers as of the
date first above written. 
  

			
	 BANC OF AMERICA SECURITIES LLC
 J.P. MORGAN
SECURITIES INC.
 ING FINANCIAL MARKETS LLC

		
	By:	 	Banc of America Securities LLC
		
	By:	 	/s/ R. Sean Snipes
	 	 	Name: R. Sean Snipes
	 	 	Title: Managing Director

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}]]