Exhibit 10.28

[Execution Copy]

MANAGEMENT UNIT SUBSCRIPTION AGREEMENT

(Class B Units)

THIS MANAGEMENT UNIT SUBSCRIPTION AGREEMENT (this “Agreement”) by and between BP
Healthcare Holdings LLC, a Delaware limited liability company (the “Company”),
and Norman C. Payson, M.D. (“Advisor”) is made as of November 29, 2012.

WHEREAS, on the terms and subject to the conditions hereof, Advisor desires to
subscribe for and acquire from the Company, and the Company desires to issue and
provide to Advisor, 3,830,365 of the Company’s Class B Units (the “Units”); and

WHEREAS, this Agreement is one of several agreements being entered into by the
Company or its Affiliates with certain persons who are or will be key employees
or advisors of the Company or one or more Subsidiaries (collectively with
Advisor, the “Management Investors”) as part of a management equity purchase
plan designed to comply with Regulation D or Rule 701, as applicable,
promulgated under the Securities Act (as defined below);

NOW, THEREFORE, in order to implement the foregoing and in consideration of the
mutual representations, warranties, covenants and agreements contained herein,
the parties hereto agree as follows:

 

1. Definitions.

1.1 Advisor. The term “Advisor” shall have the meaning set forth in the preface.

1.2 Advisor’s Group. The term “Advisor’s Group” means any Permitted Transferee
of Advisor that holds Units.

1.3 Affiliate. An “Affiliate” of, or Person “Affiliated” with, a specified
Person shall mean a Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
the Person specified.

1.4 Agreement. The term “Agreement” shall have the meaning set forth in the
preface.

1.5 Blackstone. The term “Blackstone” means Blackstone Capital Partners V L.P.
and its Affiliates.

1.6 Board. The “Board” shall mean the Company’s Board of Directors.

1.7 Cause. The term “Cause” shall mean (A) Advisor’s willful and continued
failure to substantially perform Advisor’s duties to the Company or any of its
Subsidiaries or Affiliates (other than as a result of total or partial
incapacity due to physical or mental illness or as a result of Advisor resigning
as an Advisor to Apria) which failure has continued for a period of at least 20
days following delivery to Advisor of written demand by the Company or any of
its

 

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Subsidiaries or Affiliates specifying the manner in which Advisor has willfully
failed to so perform; (B) Advisor’s engagement in fraud or willful dishonesty
(other than dishonesty that has no material detrimental impact on the reputation
or business of the Company and its Affiliates); (C) any act on the part of
Advisor that constitutes a felony (other than traffic offenses), or its
equivalent under applicable non-U.S. law (provided that if Advisor’s services
employment is terminated for “Cause” as a result of any such act, but is not
convicted in respect of, and does not plead guilty or nolo contendere to, the
applicable conduct before a court of competent jurisdiction, then the Company
shall have the burden of establishing by clear and convincing evidence that such
conduct occurred and could reasonably be expected to have a material detrimental
impact on the reputation or business of the Company and its Affiliates (and the
failure to so satisfy such burden shall result in the termination of Advisor’s
employment being without Cause) or (D) Advisor’s material breach of the
provisions of Appendix A hereto; provided, further, that “Cause” shall cease to
exist for an event on the 90th day following the later of its occurrence or the
knowledge thereof by a majority of the Board, unless the Company or any of its
Subsidiaries or Affiliates has given Advisor written notice thereof prior to
such date. A termination of Advisor shall not be deemed with Cause unless and
until there shall have been delivered to Advisor a copy of a finding duly
approved by a majority of the entire membership of the Board (not including
Advisor), concluding that, in the good faith opinion of such majority, Advisor
has engaged in the conduct described in one or more of the clauses above,
specifying the particulars thereof in reasonable detail and demonstrating that
no cure by Advisor was effected following giving Advisor 20 days to cure the
negative impact of such conduct after written notice by the Company or any of
its Subsidiaries or Affiliates to Advisor of such conduct, or, in the Board’s
good faith reasonable judgment, no cure was possible.

1.8 Change of Control. The term “Change of Control” shall have the meaning set
forth in either the LLC Agreement or the Amended and Restated Limited Liability
Company Agreement of Apria Holdings LLC, as it may be amended or supplemented
thereafter from time to time.

1.9 Closing. The term “Closing” shall have the meaning set forth in Section 2.2.

1.10 Closing Date. The term “Closing Date” shall have the meaning set forth in
Section 2.2.

1.11 Company. The term “Company” shall have the meaning set forth in the
preface.

1.12 Constructive Termination. The term “Constructive Termination” shall be
deemed to have occurred upon (A) the failure of the Company or its Subsidiaries
to pay or cause to be paid Advisor’s fees and reimbursable expenses (in each
case, if any) when due under the Services Agreement; (B) a reduction in such
fees or reimbursable expenses under the Services Agreement or (C) any material
breach by the Company or its Subsidiaries or any material agreement with
Advisor; provided that none of these events shall constitute Constructive
Termination unless the Company fails to cure such event within 30 days after
receipt from Advisor of written notice specifying in reasonable detail the event
which constitutes Constructive Termination; provided, further, that
“Constructive Termination” shall cease to exist for an event on the 90th day
following the later of its occurrence or Advisor’s knowledge thereof, unless
Advisor has given the Company written notice thereof prior to such date.

 

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1.13 Employee and Employment. The term “employee” shall mean, without any
inference as to negate Advisor’s status as a member of the Company for all
purposes hereunder (subject to the terms hereof) and for federal and other tax
purposes, any employee (as defined in accordance with the regulations and
revenue rulings then applicable under Section 3401(c) of the Internal Revenue
Code of 1986, as amended) of the Company or any of its Subsidiaries, and the
term “employment” shall include service as a part- or full-time employee or
advisor or board member to the Company or any of its Subsidiaries.

1.14 LLC Agreement. The term “LLC Agreement” shall have the meaning set forth in
the Securityholders Agreement.

1.15 Management Investors. The term “Management Investors” shall have the
meaning set forth in the preface.

1.16 Permitted Transferee. The term “Permitted Transferee” means any Person to
whom Advisor transfers Units in accordance with the Securityholders Agreement
(other than the Sponsor and the Company and their respective Affiliates and
except for transfers pursuant to a Public Offering).

1.17 Person. The term “Person” shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

1.18 Public Offering. The term “Public Offering” shall have the meaning set
forth in the Securityholders Agreement.

1.19 Securities Act. The term “Securities Act” shall mean the Securities Act of
1933, as amended, and all rules and regulations promulgated thereunder, as the
same may be amended from time to time.

1.20 Securityholders Agreement. The term “Securityholders Agreement” shall mean
the Securityholders Agreement among the Sponsor, one or more Management
Investors and the Company, as it may be amended or supplemented thereafter from
time to time.

1.21 Sponsor. The term “Sponsor” means Blackstone.

1.22 Subsidiary. The term “Subsidiary” means any corporation, limited liability
company, partnership or other entity with respect to which another specified
entity has the power to vote or direct the voting of sufficient securities to
elect directors (or comparable authorized persons of such entity) having a
majority of the voting power of the board of directors (or comparable governing
body) of such entity.

1.23 Termination Date. The term “Termination Date” means the date upon which
Advisor’s employment with the Company and its Subsidiaries is terminated.

1.24 Unvested Units. The term “Unvested Units” means, with respect to Advisor’s
Class B Units granted pursuant to this Agreement, the number of such Units that
are not “Vested Units”.

 

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1.25 Vested Units. The term “Vested Units” shall mean, with respect to an
Advisor’s Class B Units granted pursuant to this Agreement, the number of such
Units that are vested, as determined in accordance with Schedule I attached
hereto. The Board may elect at any time to treat Units as Vested Units by
resolution.

1.26 Vesting Reference Date. The term “Vesting Reference Date” shall mean,
November 29, 2012.

 

2. Subscription for and Grant of Units; Forfeiture.

2.1 Grant of Units. Pursuant to the terms and subject to the conditions set
forth in this Agreement, Advisor hereby subscribes for and agrees to acquire,
and the Company hereby agrees to issue and award to Advisor on the Closing Date,
3,830,365 Class B Units in exchange for services performed for the Company and
its Subsidiaries by Advisor. Notwithstanding anything to the contrary in the LLC
Agreement, Executive’s initial distributions in respect of each Class B Unit
granted pursuant to this Agreement (whether or not then vested) shall be
foregone and shall instead be distributed in respect of other Units until such
time as the cumulative foregone distributions in respect of each such Class B
Unit equals $0.10 (the “Delayed Amount Per Class B Unit”). Once the Delayed
Amount Per Class B Unit has been foregone, Executive shall then be entitled to
receive 100% of all subsequent distributions to holders of Units until Executive
shall have received distributions in respect of this sentence per Class B Unit
equal to the Delayed Amount Per Class B Unit. Thereafter, Executive shall be
entitled to receive distributions in connection with each Class B Unit
calculated in the same manner as other Class B Units. The intent of the
foregoing exclusion is to ensure that the Class B Units do not participate in a
distribution of any profits or increase in the value of the Company created
prior to the Closing Date, such that the Class B Units qualify as “profits
interests” on the date of the conversion under applicable tax laws.

2.2 The Closing. The closing (the “Closing”) of the grant of Units hereunder
shall take place on November 30, 2012. The date of the Closing shall be the
“Closing Date”.

2.3 Section 83(b) Election. Within 10 days after the Closing, Advisor shall
provide the Company with a copy of a completed election under Section 83(b) of
the Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder in the form of Exhibit A. Advisor shall timely (within 30 days of the
Closing) file (via certified mail, return receipt requested) such election with
the Internal Revenue Service and shall thereafter notify the Company it has made
such timely filing. Advisor should consult his tax advisor regarding the
consequences of a Section 83(b) election, as well as the receipt, vesting,
holding and sale of Units.

2.4 Closing Conditions. Notwithstanding anything in this Agreement to the
contrary, the Company shall be under no obligation to issue or grant to Advisor
any Units unless (i) Advisor is an employee of, or advisor or consultant to, the
Company or one of its Subsidiaries on the Closing Date; (ii) the representations
of Advisor contained in Section 3 hereof are true and correct in all material
respects as of the Closing Date and (iii) Advisor is not in breach of any
agreement, obligation or covenant herein required to be performed or observed by
Advisor on or prior to the Closing Date.

 

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2.5 Termination; Forfeiture of Units. If Advisor’s employment with the Company
and its Subsidiaries is terminated for any reason, all Unvested Units will be
forfeited (whether held by Advisor or Advisor’s Group). In addition, if
Advisor’s employment with the Company and its Subsidiaries is terminated by the
Company or any of its Subsidiaries with Cause (or by Advisor when grounds exist
for a termination by the Company or any of its Subsidiaries with Cause), all
Vested Units also will be forfeited (whether held by Advisor or Advisor’s
Group).

 

3. Investment Representations and Covenants of Advisor and Representations of
the Company.

3.1 Units Unregistered. Advisor acknowledges and represents that Advisor has
been advised by the Company that:

(a) the offer and sale of the Units have not been registered under the
Securities Act;

(b) the Units must be held indefinitely and Advisor must continue to bear the
economic risk of the investment in the Units unless the offer and sale of such
Units are subsequently registered under the Securities Act and all applicable
state securities laws or an exemption from such registration is available (or as
otherwise provided in the Securityholders Agreement);

(c) there is no established market for the Units and it is not anticipated that
there will be any public market for the Units in the foreseeable future;

(d) a restrictive legend in the form set forth below and the legends set forth
in Section 7.3(a) and (b) of the Securityholders Agreement shall be placed on
the certificates, if any, representing the Units:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A MANAGEMENT UNITS
SUBSCRIPTION AGREEMENT WITH THE ISSUER, AS AMENDED AND MODIFIED FROM TIME TO
TIME, A COPY OF WHICH MAY BE OBTAINED BY THE HOLDER HEREOF AT THE ISSUER’S
PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE”; and

(e) a notation shall be made in the appropriate records of the Company
indicating that the Units are subject to restrictions on transfer and, if the
Company should at some time in the future engage the services of a securities
transfer agent, appropriate stop-transfer instructions will be issued to such
transfer agent with respect to the Units.

3.2 Additional Investment Representations. Advisor represents and warrants that:

(a) Advisor’s financial situation is such that Advisor can afford to bear the
economic risk of holding the Units for an indefinite period of time, has
adequate means for providing for Advisor’s current needs and personal
contingencies, and can afford to suffer a complete loss of Advisor’s investment
in the Units;

 

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(b) Advisor’s knowledge and experience in financial and business matters are
such that Advisor is capable of evaluating the merits and risks of the
investment in the Units;

(c) Advisor understands that the Units are a speculative investment which
involves a high degree of risk of loss of Advisor’s investment therein, there
are substantial restrictions on the transferability of the Units and, on the
Closing Date and for an indefinite period following the Closing, there will be
no public market for the Units and, accordingly, it may not be possible for
Advisor to liquidate Advisor’s investment in case of emergency, if at all;

(d) Advisor understands and has taken cognizance of all the risk factors related
to the purchase of the Units and, other than as set forth in this Agreement, no
representations or warranties have been made to Advisor or Advisor’s
representatives concerning the Units or the Company or their prospects or other
matters;

(e) Advisor has been given the opportunity to examine all documents and to ask
questions of, and to receive answers from, the Company and its representatives
concerning the Company and its Subsidiaries, the Securityholders Agreement, the
Company’s organizational documents and the terms and conditions of the purchase
of the Units and to obtain any additional information which Advisor deems
necessary;

(f) all information which Advisor has provided to the Company and the Company’s
representatives concerning Advisor and Advisor’s financial position is complete
and correct in all material respects as of the date of this Agreement; and

(g) Advisor is an “accredited investor” within the meaning of Rule 501(a) under
the Securities Act.

3.3 Other Representations. Advisor acknowledges that Blackstone and its
Affiliates may, from time to time, provide services to the Company and its
Affiliates for which a fee will be paid by the Company or its Affiliates,
including an annual monitoring/advisory fee.

3.4 Representations and Warranties of the Company.

(a) Organization. The Company (i) is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware
and (ii) has the requisite power and authority to own or lease and operate its
assets and carry on its business.

(b) Authorization. The Company (or its applicable Affiliate) has the requisite
power and authority to enter into this Agreement and the Services Agreement
dated as of the date hereof between Advisor, the Company, Holdings and Apria
(the “Services Agreement”) (together with the LLC Agreement and the
Securityholders Agreement, the “Transaction Documents”). The execution, delivery
and performance by the Company of this Agreement and the Services Agreement and
the consummation by the Company of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the part of the
Company.

(c) Due Issuance and Authorization of Units. The Units being issued pursuant to
this Agreement have been duly authorized and upon issuance in accordance with
the terms of this Agreement, will be duly authorized, validly issued, fully paid
and nonassessable (to the extent such concepts are legally applicable to
membership interests in a Delaware limited liability company).

 

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4. Competitive Activity. Advisor acknowledges and recognizes the highly
competitive nature of the businesses of the Company and its Affiliates and
accordingly agrees, in his capacity as an investor and equityholder in the
Company and its Affiliates, to the provisions of Appendix A to this Agreement.

 

5. Miscellaneous.

5.1 Transfers. Prior to the transfer of Units to a Permitted Transferee, Advisor
shall deliver to the Company a written agreement of the proposed transferee (a)
evidencing such Person’s undertaking to be bound by the terms of this Agreement
and (b) acknowledging that the Units transferred to such Person will continue to
be Units for purposes of this Agreement in the hands of such Person. Any
transfer or attempted transfer of Units in violation of any provision of this
Agreement or the Securityholders Agreement shall be void, and the Company shall
not record such transfer on its books or treat any purported transferee of such
Units as the owner of such Units for any purpose.

5.2 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions of this
Agreement shall apply, to the full extent set forth herein with respect to the
Units, to any and all securities of the Company or any successor or assign of
the Company (whether by merger, consolidation, sale of assets or otherwise)
which may be issued in respect of, in exchange for, or in substitution of the
Units, by reason of any dividend payable in Units, issuance of Units,
combination, recapitalization, reclassification, merger, consolidation or
otherwise.

5.3 Advisor’s Engagement by the Company. Nothing contained in this Agreement
shall be deemed to obligate the Company or any Subsidiary of the Company to
engage or retain Advisor in any capacity whatsoever or to prohibit or restrict
the Company (or any such Subsidiary) from terminating the services of Advisor at
any time or for any reason whatsoever, with or without Cause.

5.4 Cooperation. Advisor agrees to cooperate with the Company in taking action
reasonably necessary to consummate the transactions contemplated by this
Agreement.

5.5 Binding Effect. The provisions of this Agreement shall be binding upon and
accrue to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns; provided, however, that no Transferee
shall derive any rights under this Agreement unless and until such Transferee
has executed and delivered to the Company a valid undertaking and becomes bound
by the terms of this Agreement; and provided further that the Sponsor is a third
party beneficiary of this Agreement and shall have the right to enforce the
provisions hereof.

 

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5.6 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

5.7 Governing Law; Jurisdiction. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed therein. Any suit, action or
proceeding with respect to this Agreement, or any judgment entered by any court
in respect of any thereof, shall be brought in any court of competent
jurisdiction in the State of New York or the State of Delaware, and each of the
Company and the members of Advisor’s Group hereby submits to the exclusive
jurisdiction of such courts for the purpose of any such suit, action, proceeding
or judgment. Each of the members of Advisor’s Group and the Company hereby
irrevocably waives (i) any objections which it may now or hereafter have to the
laying of the venue of any suit, action or proceeding arising out of or relating
to this Agreement brought in any court of competent jurisdiction in the State of
Delaware or the State of New York, (ii) any claim that any such suit, action or
proceeding brought in any such court has been brought in any inconvenient forum
and (iii) any right to a jury trial.

5.8 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given when delivered by hand or overnight
courier or three postal delivery days after it has been mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below in this Agreement, or to such other address
as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.

(a) If to the Company:

BP Healthcare Holdings LLC

345 Park Avenue

New York, NY 10154

Attention: Neil P. Simpkins

with a copy (which shall not constitute notice) to:

The Blackstone Group

345 Park Avenue

New York, NY 10154

Attention: Neil P. Simpkins

and

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017-3954

Attention: Gregory T. Grogan

If to Advisor:

Norman C. Payson

NCP, Inc., Suite 3

8 Centre Street

Concord, NH 03301

 

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with a copy to:

Skadden Arps Slate Meagher & Flom LLP

Four Times Square

New York, New York 10036

  Attention: Paul T. Schnell

    Neil P. Stronski

5.9 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth herein and therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter; provided that this Agreement does not modify,
amend or supersede the Management Unit Subscription Agreement by and between the
Company and Advisor, dated November 21, 2008.

5.10 Counterparts. This Agreement may be executed in separate counterparts, and
by different parties on separate counterparts each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.

5.11 Injunctive Relief. The Company, Advisor and Advisor’s Permitted Transferees
each acknowledges and agrees that a violation of any of the terms of this
Agreement will cause the Company, Advisor or Advisor’s Permitted Transferees, as
the case may be, irreparable injury for which adequate remedy at law is not
available. Accordingly, it is agreed that the Company, Advisor or Advisor’s
Permitted Transferees may seek an injunction, restraining order or other
equitable relief to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court of competent
jurisdiction in the United States or any state thereof, in addition to any other
remedy to which it may be entitled at law or equity.

5.12 Rights Cumulative; Waiver. The rights and remedies of Advisor and the
Company under this Agreement shall be cumulative and not exclusive of any rights
or remedies which either would otherwise have hereunder or at law or in equity
or by statute, and no failure or delay by either party in exercising any right
or remedy shall impair any such right or remedy or operate as a waiver of such
right or remedy, nor shall any single or partial exercise of any power or right
preclude such party’s other or further exercise or the exercise of any other
power or right. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any preceding or
succeeding breach and no failure by either party to exercise any right or
privilege hereunder shall be deemed a waiver of such party’s rights or
privileges hereunder or shall be deemed a waiver of such party’s rights to
exercise the same at any subsequent time or times hereunder.

*    *    *    *    *

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.

 

LOGO [g450053ex10_28pg11.jpg]

Norman C. Payson, M.D.

 

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BP HEALTHCARE HOLDINGS LLC By:  

LOGO [g450053ex10_28pg12new.jpg]

  Name:   Neil Simpkins   Title:  

 

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SCHEDULE I

Vesting of Units

Initially, all Units will be Unvested Units. The percentage of the Units that
will be Vested Units in respect of a Termination Date occurring:

 

  •  

prior to 3 months after the Vesting Reference Date, will be 0%

 

  •  

on or after 3 months after the Vesting Reference Date, but prior to 6 months
after the Vesting Reference Date, will be 6.25%

 

  •  

on or after 6 months after the Vesting Reference Date, but prior to 9 months
after the Vesting Reference Date, will be 12.5%

 

  •  

on or after 9 months after the Vesting Reference Date, but prior to 12 months
after the Vesting Reference Date, will be 18.75%

 

  •  

on or after 12 months after the Vesting Reference Date, but prior to 15 months
after the Vesting Reference Date, will be 25%

 

  •  

on or after 15 months after the Vesting Reference Date, but prior to 18 months
after the Vesting Reference Date, will be 31.25%

 

  •  

on or after 18 months after the Vesting Reference Date, but prior to 21 months
after the Vesting Reference Date, will be 37.5%

 

  •  

on or after 21 months after the Vesting Reference Date, but prior to 24 months
after the Vesting Reference Date, will be 43.75%

 

  •  

on or after 24 months after the Vesting Reference Date, but prior to 27 months
after the Vesting Reference Date, will be 50%

 

  •  

on or after 27 months after the Vesting Reference Date, but prior to 30 months
after the Vesting Reference Date, will be 56.25%

 

  •  

on or after 30 months after the Vesting Reference Date, but prior to 33 months
after the Vesting Reference Date, will be 62.50%

 

  •  

on or after 33 months after the Vesting Reference Date, but prior to 36 months
after the Vesting Reference Date, will be 68.75%

 

  •  

on or after 36 months after the Vesting Reference Date, but prior to 39 months
after the Vesting Reference Date, will be 75%

 

  •  

on or after 39 months after the Vesting Reference Date, but prior to 42 months
after the Vesting Reference Date, will be 81.25%

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  •  

on or after 42 months after the Vesting Reference Date, but prior to 45 months
after the Vesting Reference Date, will be 87.5%

 

  •  

on or after 45 months after the Vesting Reference Date, but prior to 48 months
after the Vesting Reference Date, will be 93.75%

 

  •  

on or after 48 months after the Vesting Reference Date, will be 100%;

Notwithstanding the foregoing, immediately prior to, and following, the
occurrence of a Change of Control that occurs prior to the Termination Date,
100% of the Time-Vesting Units that are Unvested Units shall become Vested
Units;

Except as provided in the immediately preceding sentence, any Units that are
Unvested Units on a Termination Date shall be immediately forfeited by Advisor.

 

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Appendix A

Restrictive Covenants

 

  1. Confidentiality; Non-Compete; Non-Solicit.

(a) For the purposes of this Appendix A, any reference to the “Company” shall
mean the Company and its Subsidiaries, collectively. In view of the fact that
Advisor’s work for the Company brings Advisor into close contact with many
confidential affairs of the Company not readily available to the public, and
plans for further developments, Advisor agrees:

(i) to keep and retain in the strictest confidence all confidential matters of
the Company, including, without limitation, “know how,” trade secrets, customer
lists, pricing policies, operational methods, technical processes, formulae,
inventions and research projects, and other business affairs of the Company,
learned by Advisor heretofore or hereafter, and not to disclose them to anyone
outside of the Company or its representatives, agents or advisors, either during
or after Advisor’s services with the Company, except as required by applicable
law , in the course of performing Advisor’s duties hereunder or with the
Company’s express consent; and

(ii) to deliver promptly to the Company on termination of Advisor’s services by
the Company, or at any time the Company may so request, all memoranda, notes,
records, reports, manuals, drawings, blueprints and other documents (and all
copies thereof) relating to the Company’s business and all property associated
therewith, which Advisor may then possess or have under Advisor’s control;

provided that the foregoing shall not apply to information that was or becomes
generally available to the public prior to, and other than as a result of,
disclosure by Advisor.

(b) During the period of Advisor’s services and, following termination of such
services for any reason, for 12 months following the date of such termination,
(i) Advisor shall not, directly or indirectly, enter the employ of, or render
any services to, any person, firm or corporation engaged in any business that
competes with a material line of business of Holdings or its Subsidiaries
(subject to the following proviso, the “Business”) at any time; provided that
for periods after the Termination Date, “material line of business” will be
determined as of the Termination Date; (ii) Advisor shall not engage in the
Business on Advisor’s own account; (iii) Advisor shall not invest in any such
Business, directly or indirectly, as an individual, partner, shareholder,
principal, member, trustee or similar capacity and (iv) Advisor shall not
solicit or assist in soliciting in competition with Company in the Business, the
business of any then current or prospective client or former customer with whom
Advisor (or his direct reports) had personal contact or dealings on behalf of
the Company; provided, however, that nothing contained in this Section 1(b)
shall be deemed to prohibit (i) Advisor’s involvement in any capacity in any
health plan, health insurance business or health care financing business,
(ii) Advisor from acquiring, solely as an investment, up to five percent (5%) of
the outstanding shares of capital stock of any public corporation or
(iii) Advisor’s passive investments in existence as of the date hereof.

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(c) During the period of Advisor’s services and, following termination of such
services for any reason, for 24 months following the date of such termination,
Advisor shall not, directly or indirectly:

(i) solicit or encourage any manager or executive of the Company to leave the
employment or engagement of the Company; or

(ii) hire any manager or executive of the Company who was employed by the
Company as of the date of Advisor’s termination of services with the Company or
who left the services of the Company coincident with, or within one year prior
to, the termination of Advisor’s services with the Company.

provided, however, that (x) the foregoing clause 1(c)(i) shall not preclude
Advisor from (A) making good faith generalized solicitations for employees
through advertisements or search firms and hiring any persons through such
solicitations if Advisor was not aware of such person’s prior employment with
the Company; provided, that Advisor does not encourage or advise such firm to
approach any such employee and such searches are not targeted or focused on the
Company’s employees, or (B) responding to or hiring any employee of the Company
who contacts Advisor at his or her own initiative without any prior direct or
indirect encouragement or solicitation from Advisor if Advisor was not aware of
such person’s prior employment with the Company and (y) the foregoing paragraph
1(c) shall not apply with respect to the solicitation or hiring on or after
January 1, 2014 of any Person who is a resident of New Hampshire (provided that
conduct that would otherwise be prohibited by paragraph 1(c) did not occur prior
to such date).

(d) If Advisor commits a breach, or threatens to commit a breach, of any of the
provisions of Section 1 hereof, the Company shall have the following rights and
remedies:

(i) the right and remedy to have the provisions of this Appendix specifically
enforced by any court having equity jurisdiction, it being acknowledged and
agreed that any such breach or threatened breach will cause irreparable injury
to the Company and that money damages will not provide an adequate remedy to the
Company; and

(ii) the right and remedy to require Advisor to account for and pay over to the
Company all compensation, profits, monies, accruals, increments or other
benefits (collectively, “Benefits”) derived or received by Advisor as the result
of any transactions constituting a breach of any of the provisions of this
Section 1, and Advisor hereby agrees to account for and pay over such Benefits
to the Company.

Each of the rights and remedies enumerated above shall be independent of the
other, and shall be severally enforceable, and all of such rights and remedies
shall be in addition to, and not in lieu of, any other rights and remedies
available to the Company under law or in equity.

(e) If any of the covenants contained in Section 1 or any part thereof,
hereafter are construed to be invalid or unenforceable, the same shall not
affect the remainder of the covenant or covenants, which shall be given full
effect, without regard to the invalid portions.

 

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(f) If any of the covenants contained in Section 1, or any part thereof, are
held to be unenforceable because of the duration of such provision or the area
covered thereby, the parties agree that the court making such determination
shall have the power to reduce the duration and/or area of such provision and,
in its reduced form, said provision shall then be enforceable.

(g) The parties hereto intend to and hereby confer jurisdiction to enforce the
covenants contained in Section 1 upon the courts of any state within the
geographical scope of such covenants. In the event that the courts of any one or
more of such states shall hold such covenants wholly unenforceable by reason of
the breadth of such covenants or otherwise, it is the intention of the parties
hereto that such determination not bar or in any way affect the Company’s right
to the relief provided above in the courts of any other states within the
geographical scope of such covenants as to breaches of such covenants in such
other respective jurisdictions, the above covenants as they relate to each state
being for this purpose severable into diverse and independent covenants.

(h) It is expressly understood and agreed that although Advisor and the Company
consider the restrictions contained in this Section 1 to be reasonable, if a
final judicial determination is made by a court of competent jurisdiction that
the time or territory or any other restriction contained in this Appendix A is
an unenforceable restriction against Advisor, the provisions of this Appendix A
shall not be rendered void but shall be deemed amended to apply as to such
maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if any court
of competent jurisdiction finds that any restriction contained in this Appendix
A is unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.

(i) The period of time during which the provisions of this Appendix shall be in
effect shall be extended by the length of time during which Advisor is in breach
of the terms hereof as determined by any court of competent jurisdiction on the
Company’s application for injunctive relief.

 

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