Exhibit 4.7  STOCKHOLDERS AGREEMENT  THIS STOCKHOLDERS AGREEMENT
(this Agreement)
is entered into as of September 21, 2007 among Universal American Financial
Corp., a New York corporation (the Company), and the securityholders listed on
the signature pages hereto (or which become a party to this Agreement after the
date hereof pursuant to the terms hereof) (each, a Stockholder and,
collectively, the Stockholders).  WHEREAS, this is the Stockholders
Agreement referred to in that certain Securities Purchase Agreement, dated as
of May 7, 2007, among the Company and certain of the entities comprising the Investors
relating to an aggregate of 125,000 shares of Preferred Stock of the Company (the
Securities Purchase
Agreement).  NOW, THEREFORE, in consideration
of the covenants and agreements contained herein, the parties hereto, intending
to be legally bound, hereby agree as follows:  ARTICLE 1
DEFINITIONS  SECTION 1.01.Definitions.  (a)The following terms, as used herein, have the
following meanings:  Affiliate means with
respect to any Person, any other Person directly or indirectly controlling,
controlled by or under common control with such first Person. The terms control (including,
with correlative meanings, the terms controlling,
controlled by
and under common
control with) means, with respect to any Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
ownership of voting securities, by contract or otherwise.  Board means the
board of directors of the Company.  Business Day means
any day except a Saturday, Sunday or other day on which commercial banks in New
York City are authorized by law to close.  Capital Z/Union Square
means Capital Z Financial Services Fund II, L.P., Capital Z Financial Services
Private Fund II, L.P. andUnion Square Universal Partners, L.P.collectively, or, any of such limited
partnerships in the event only one such limited partnership remains a
Stockholder.  Common Stock means
the Companys authorized shares of common stock, par value $0.01 per share, and
any stock into which such common stock may hereafter be converted, changed or
reclassified.  Common Stock Equivalents
means, without duplication, any rights, warrants, options, convertible
securities or exchangeable securities (including, in each case, the Preferred
Shares and NVC Shares), in each case, exercisable for or convertible or
exchangeable into, directly or indirectly, Common Stock, whether at the time of
issuance, upon the passage of time, or the occurrence of some future event.


Company Securities
means (i) the Common Stock (or any other capital stock) issued by the Company
and (ii) Common Stock Equivalents issued by the Company.  Conversion Limitation
means the limitations on conversion of Preferred Shares and NVC Shares, as
applicable, set forth in the Certificate of Amendment to the Certificate of
Incorporation of the Company for such shares.  Exchange Act means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.  Exempt Transfer
means:  (a)
any sale by a Stockholder of Company Securities:  (i) in a public offering
pursuant to a registration statement that was filed with the SEC and declared
effective under the Securities Act;  (ii) in a sale to the public
under Rule 144 under the Securities Act;  (iii) in a block sale to a
financial institution in the ordinary course of such financial institutions
securities business, or in a private sale transaction pursuant to an available
exemption from Securities Act registration requirements, in each case, in
circumstances where, to the knowledge (after reasonable inquiry) of the
Stockholder on whose behalf such sale is being made, such sale will not result
in the acquisition by any other Person of beneficial ownership of any such
Company Securities to the extent that, after giving effect to such acquisition,
such acquiring Person (other than any underwriter acting in such capacity in an
underwritten public offering of Company Securities) would beneficially own
Company Securities entitled to in excess of 5% of the total number of votes
that may be cast generally in the election of directors of the Company
(assuming conversion in full of all outstanding Preferred Shares and NVC Shares,
and irrespective of the Conversion Limitation); or  (iv) into a tender or
exchange offer for more than 50% of the outstanding shares of Common Stock, or
pursuant to a merger agreement to which the Company is a party providing for
the conversion of the outstanding shares of Common Stock into other securities,
cash or other property;  (b) a Transfer of Company
Securities to the Company pursuant to any tender offer or exchange offer made
by the Company that is open to substantially all holders of the class of Company
Securities so Transferred;  (c) a Transfer by a
Stockholder, of shares of Common Stock acquired by such Stockholder pursuant to
the MH Merger Agreement, back to the Company if and as required pursuant to the
terms of the MH Merger Agreement;  (d) in the case of an
Investor, a bona fide pro rata
Transfer by such Investor of Company Securities to its direct or indirect
partners, limited partners, members or stockholders; and  2


(e) in the case of a
Stockholder that is an officer of the Company, a sale pursuant to bona fide written Rule 10b5-1 trading plans adopted by
such officer as part of his or her long-term strategy for achieving asset
diversification and liquidity, provided that
such plans shall have been adopted and shall operate in accordance with all
applicable provisions of the Exchange Act and the Companys securities trading
policy for officers, and provided further
that, for purposes of qualifying as an Exempt Transfer under this Agreement, such
plans may not cover, in the aggregate, more than 35% of the Common Stock
beneficially owned by such officer unless the Board provides otherwise.  For
purposes hereof, the terms beneficial ownership
or beneficially own are used within
the meaning of Rules 13d-3 and 13d-5 under the Exchange Act, provided that a Person shall be deemed to beneficially own
any securities that such Person has the right to acquire, whether or not such
right is exercisable immediately.  Investor means each
of Capital Z/Union Square, Lee, Perry and WCAS.  Lee meansLee-Universal
Holdings, LLC.  MH Merger Agreement means that
certain Agreement and Plan of Merger and Reorganization, dated as of May 7,
2007, among the Company, MHRx LLC, MemberHealth, Inc. and the other parties
thereto.  NVC Shares means shares of
non-voting common stock of the Company that are convertible into shares of
Common Stock.  Permitted Transferee
means, (a) with respect to any Stockholder that is an entity, any entity that
is an Affiliate of such Stockholder (and, with respect to any such Stockholder
that is an Investor, (i) without limiting the foregoing, (A) anyfunds
under common management with such Investor and (B)any individual who is a managing member of
the general partner of such Investor as well as any individuals who are
employees of the manager of such Investor and any other related or similar
co-investors of such Investor (and, with respect to any such individual, any
Person of the type referred to in clause (b) of this definition), and (ii) any
Person (Pre-Closing Assignee) to
which such Investor (the Syndicating Investor)
syndicated a portion of its equity commitment under the Securities Purchase
Agreement prior to the closing thereunder and which purchased Preferred Shares
from the Company at the closing thereunder, but such Pre-Closing Assignee shall
constitute a Permitted Transferee of such Syndicating Investor only for so long
as such Syndicating Investor maintains beneficial ownership (within the meaning
of Rules 13d-3 and 13d-5 under the Exchange Act) of all Company Securities directly
or indirectly owned by such Pre-Closing Assignee through such Syndicating
Investor maintaining voting discretion and voting control over such Company
Securities pursuant to a written agreement), and (b) with respect to any
Stockholder that is an individual, any spouse, lineal descendant, sibling,
parent, executor or administrator of such Stockholder, or a trust, the
beneficiaries of which, or a corporation or partnership, the stockholders or
partners of which, include only such Stockholder and any spouse, lineal
descendant, sibling or parent of such Stockholder.  Perry meansPerry
Partners, L.P., Perry Partners International, Inc., Perry Commitment Fund, L.P.,
Perry Commitment Master Fund, L.P., Perry Private Opportunities Fund, L.P. and  3


Perry Private
Opportunities Offshore Fund, L.P.,collectively, or, either of such entities in the event only one of such
entities remains a Stockholder.  Person means an
individual, corporation, limited liability company, partnership, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.  Preferred Shares
means the shares of Series A Preferred Stock and Series B Preferred Stock of
the Company.  Registration Rights Agreement
means the Registration Rights Agreement, dated as of May 7, 2007, with the
Company, as such Registration Rights Agreement may hereafter be amended or
otherwise modified in accordance with its terms.  Securities Act means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.  Subsidiary means,
with respect to any Person, any corporation, limited liability company,
partnership or other entity of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary
voting power (or, in the case of a partnership, more than 50% of the general
partnership interests) are, as of such date, owned by such Person or one or
more Subsidiaries of such Person or by such Person and one or more of its
Subsidiaries.  Transfer means, with respect to any Company
Securities, (i) when used as a verb, to sell, assign, dispose of, exchange,
pledge, encumber, hypothecate or otherwise transfer such Company Securities or
any participation or interest therein, whether directly or indirectly, or
permit, agree or commit to do, any of the foregoing, and (ii) when used as a
noun, a direct or indirect sale, assignment, disposition, exchange, pledge,
encumbrance, hypothecation or other transfer of such Company Securities or any
participation or interest therein, or any agreement or commitment to do any of
the foregoing.  WCAS means Welsh,
Carson, Anderson & Stowe IX, L.P. and Welsh, Carson, Anderson & Stowe
X, L.P. collectively, or, either of such limited partnerships in the event only
one such limited partnership remains a Stockholder.  (b)Other Definitional and Interpretive Matters. Unless otherwise expressly provided, for
purposes of this Agreement the following rules of interpretation shall
apply:  (i) When calculating the period
of time before which, within which or following which any act is to be done or
step taken pursuant to this Agreement, the date that is the reference date in
calculating such period shall be excluded. If the last day of such period is a
non-Business Day, the period in question shall end on the next succeeding
Business Day. (ii) The division of this Agreement into Articles, Sections and
other subdivisions and the insertion of headings are for convenience of
reference only and shall not affect or be utilized in construing or
interpreting this Agreement. (iii) The word including shall be deemed
followed by (but not limited to). (iv) The word it shall include references
to the male and female gender as the context requires.  4


ARTICLE 2
CORPORATE GOVERNANCE  SECTION 2.01.Composition
of the Board.  (a)Subject to Section 2.01(b), commencing on the
date of this Agreement, the Board shall consist of thirteen directors,
comprised as follows:  (i)two directors designated by Capital Z/Union
Square;  (ii)two directors designated by WCAS;  (iii)one director designated by Lee;  (iv)one director designated by Perry (the directors referenced in
sub-clauses (i), (ii), (iii) and (iv) of this Section 2.01(a) are sometimes
referred to herein each as an Investor Designee);  (v)one director who shall be the then current Chief Executive Officer of
the Company; and  (vi)six additional directors who shall each satisfy the criteria for independent
director under the rules of the principal stock exchange on which the Common
Stock is listed.  (b)Going forward, (i) with respect to any Investor
that is entitled, pursuant to Section 2.01(a), to designate more than one
director, (A) at such time as such Investor, together with its Permitted
Transferees, holds a number of shares of Common Stock that is less than 50% of
the number (the Start
Number) of shares of Common Stock that such Investor holds on
the date of this Agreement, such Investor shall lose the right under this Agreement
to designate one of its Investor Designees, and (B) at such time as such Investor,
together with its Permitted Transferees, holds a number of shares of Common
Stock that is less than 25% of such Investors Start Number, such Investor
shall no longer have a right under this Agreement to designate any Investor Designees,
and (ii) with respect to any Investor that is entitled, pursuant to Section
2.01(a), to designate one director, at such time as such Investor, together
with its Permitted Transferees, holds a number of shares of Common Stock that
is less than 50% of such Investors Start Number, such Investor shall no longer
have a right under this Agreement to designate any Investor Designees. For
purposes of the foregoing sentence, shares of Common Stock held by a Person
shall include shares issuable directly or indirectly through conversion or
exchange of outstanding Preferred Shares and NVC Shares held by such Person,
and irrespective of the Conversion Limitation. The foregoing calculations shall
be appropriately adjusted to take into account any stock reclassification,
recapitalization or split, exchange of shares or similar transaction.  (c)Each Stockholder agrees that, if at any time
it is entitled to vote for the election of directors to the Board, it shall
vote all of its Company Securities that are entitled to vote or execute proxies
or written consents, as the case may be, and take all other necessary action  5


(including
causing the Company to call a special meeting of stockholders) in order to
ensure that the composition of the Board is as set forth in this Section 2.01.  (d)If, as a result of the death, retirement,
resignation or, subject to the other provisions of this Section 2.01, removal,
of an Investor Designee there shall exist or occur any vacancy on the Board,
the Investor entitled to designate such director pursuant to this Section 2.01
shall have the power to designate a person to fill such vacancy, whereupon each
of the Stockholders agrees to take such action as is necessary to promptly
elect such person to fill such vacancy (including, if necessary, causing the
Company to call a special meeting of stockholders (or effecting a written
consent in lieu thereof) and voting all Company Securities that are entitled to
vote or execute proxies or written consents to accomplish such result).  (e)Directors may resign at any time. An Investor
Designee may be removed at any time for any reason or no reason upon the
written direction of the Investor that designated such Investor Designee,
effective upon the delivery of such written direction. If any Investor entitled
to designate any directors request that any of their respective Investor
Designees be removed as a director, each of the Stockholders shall vote all of
its Company Securities that are entitled to vote or execute proxies or written
consents, as the case may be, and take all other necessary action, to remove
such Investor Designee. Each Stockholder agrees that it shall not vote any of
its Company Securities in favor of, or take any other action related to, the
removal of any Investor Designee who shall have been designated for election to
the Board by an Investor pursuant to this Section 2.01 unless the Investor
entitled to designate such director shall have consented to such removal in
writing or unless such Investor shall have lost the right to designate such
director to the Board pursuant to this Section 2.01. If any Investors right to
designate directors shall be reduced by one or more directors, such Investor
shall, if so requested by any member of the Board, promptly cause a number of Investor
Designees designated by such Investor equal to the number by which such right
to designate was reduced to resign from the Board.  (f)If any person serving as the Chief Executive
Officer of the Company (CEO)
shall cease to be the CEO, then, unless otherwise determined by a majority of
the other members of the Board, such former CEO shall cease to be a member of
the Board and the new CEO shall be appointed as a member of the Board in place
of the former CEO.  (g)The Company agrees to cause each individual
designated for director pursuant to this Section 2.01 to be nominated, by all
necessary and appropriate action, to serve as a director on the Board
(including, to the extent required, by the Nominating Committee of the Board
recommending that such designees be included in each slate of director nominees
and by the Board presenting such slate for election to the Board) and to take
all other actions as may be necessary to ensure that the composition of the
Board is as set forth in this Section 2.01.  (h)To the extent permitted by applicable law and
the rules of the principal stock exchange on which the Common Stock is listed,
each Investor with an Investor Designee serving on the Board shall be entitled
to have at least one of its Investor Designees serve on all committees of the
Board.  6


(i)Any
vacancies on the Board not filled pursuant to the forgoing principles shall be
filled by an individual to be nominated by the Nominating Committee of the
Board.  (j)Subject to the provisions of Section 4.01, an
Investor Designee shall be entitled to supply details of any business
transacted at Board meetings, and any other information obtained by him or her
in his or her capacity as a director of the Company, to the Investor that
designated such director to the Board and to that Investors Affiliates and
professional advisers.  (k)The Company shall reimburse all reasonable
out-of-pocket expenses incurred by the members of the Board in connection with
traveling to and from and attending meetings of the Board and while conducting
business at the request of the Company.  (l)The Company shall use its reasonable best
efforts to purchase and maintain, at its expense, insurance, from reputable
carriers and in an amount determined in good faith by the Board to be
appropriate, on behalf of and covering the individuals who at any time on and
after the date of this Agreement are or become directors or officers of the
Company, or serve at the request of the Company as a director, officer,
employee or agent of another company, joint venture, trust or other enterprise,
against any expense, liability or loss asserted against or incurred by such
individual in any such capacity, or arising out of such individuals status as
such, subject to customary exclusions.  (m)The rights granted to a Stockholder hereunder
are in addition to all rights to which such Stockholder is entitled as a
security holder of the Company under the Companys certificate of incorporation
and by-laws, as in effect from time to time, and applicable law.  (n)In addition, subject to the last sentence of
this clause, WCAS shall be entitled to designate one individual as a non-voting
Board observer (Non-Voting Observer). With
the exception of meetings of the Board (or portions thereof) at which an
Investor Designee designated by WCAS pursuant to Section 2.01(a)(ii) is
recused, such Non-Voting Observer shall be allowed to attend and observe
meetings of the Board, provided that
such Non-Voting Observer shall agree with the Company to maintain the
confidentiality, in accordance with Section 4.01, of all non-public information
obtained in connection with being a Non-Voting Observer. For the avoidance of
doubt, the Non-Voting Observer is not a director of the Company and shall have
no right to vote on any matter coming to a vote of the Board. At such time as
WCAS, together with its Permitted Transferees, holds a number of shares of
Common Stock that is less than 25% of WCASs Start Number, WCAS shall no longer
have a right to designate a Non-Voting Observer (for purposes of this sentence,
shares of Common Stock held by a Person shall include shares issuable directly
or indirectly through conversion or exchange of outstanding Preferred Shares and
NVC Shares held by such Person, and irrespective of the Conversion Limitation;
and the foregoing calculation shall be appropriately adjusted to take into
account any stock reclassification, recapitalization or split, exchange of shares
or similar transaction).  (o)To the extent, if any, that any of the
principles of this Article 2 conflict with any applicable law or any rules of
the principal stock exchange on which the Common Stock is at the time listed
and that are applicable to and binding upon the Company, the Company and  7


the
Stockholders shall make such elections under such rules and take any and all
other actions as may be necessary in order to enable the purposes and intents
of this Article 2 to be carried out to the fullest extent in compliance with
such laws and rules.  SECTION 2.02.Corporate Opportunities. Each Investor
Designee (other than any Investor Designee who may also be an officer or
employee of the Company or of any of the Companys Subsidiaries) shall have no duty to present corporate
opportunities to the Company unless such opportunity was expressly offered to
such Investor Designee in writing solely in his or her capacity as a director
of the Company, and any Investor Designee who complies with this provision
shall be deemed to have fully satisfied and fulfilled the fiduciary duty of
such director to the Company and its stockholders with respect to such
opportunity.  SECTION 2.03.Charter
and By-law Provisions. Each
Stockholder agrees to vote all of its Company Securities that are entitled to
vote or execute proxies or written consents, as the case may be, and to take
all other actions necessary, to ensure that the Companys certificate of
incorporation and by-laws (a) facilitate, and do not at any time conflict with,
any provision of this Agreement and (b) permit each Stockholder to receive the
benefits to which each such Stockholder is entitled under this Agreement.  ARTICLE 3
RESTRICTIONS ON TRANSFER  SECTION 3.01.General
Restrictions on Transfer.  (a)Each Stockholder understands and agrees that
the Company Securities held by it on the date hereof may not have been
registered under the Securities Act and may be restricted securities under the
Securities Act. Each Stockholder agrees that it shall not Transfer any Company
Securities (or solicit any offers in respect of any Transfer of any Company
Securities), except in compliance with the Securities Act, any other applicable
securities or blue sky laws, and the restrictions on Transfer contained in
this Agreement.  (b)No Stockholder shall Transfer, other than
pursuant to Section 3.04, any Company Securities acquired by such Stockholder
from the Company pursuant to the MH Merger Agreement, until after 180 days following
the closing date of such acquisition.  (c)No Stockholder shall Transfer, other than
pursuant to Section 3.04, any Preferred Shares acquired by such Stockholder
from the Company pursuant to the Securities Purchase Agreement (or any shares
of Series B Preferred Stock or NVC Shares issued in exchange therefor, or any
shares of Common Stock or NVC Shares issued upon conversion of any thereof)
until after the first anniversary of the closing of the acquisition of such Preferred
Shares pursuant to the Securities Purchase Agreement.  (d)No Stockholder shall Transfer, other than
pursuant to Section 3.04, any Preferred Shares acquired by such Stockholder
from the Company pursuant to the Securities Purchase Agreement dated as of May 7,
2007 among the Company and certain of the entities comprising the Investors relating
to an aggregate of 50,000 Preferred Shares (or any shares of Series B Preferred
Stock or NVC Shares  8


issued
in exchange therefor, or any shares of Common Stock or NVC Shares issued upon
conversion of any thereof) until after the first anniversary of the closing of
the acquisition of such Preferred Shares pursuant to such Purchase Agreement.  (e)No Stockholder shall Transfer, other than
pursuant to Section 3.04, any shares of Common Stock acquired by such
Stockholder from Capital Z pursuant to the Share Purchase Agreement, dated as
of May 7, 2007, among certain of the entities comprising the Investors, until after
the first anniversary of the closing of such acquisition.  (f)The 180-day period referred to in Section
3.01(b), and the respective one-year periods referred to in Sections 3.01(c),
3.01(d) and 3.01(e), respectively, are each herein referred to as the respective
Lock-Up Period with respect to the
respective Company Securities to which such periods relate under such Sections.
After the applicable Lock-Up Period, with respect to the Company Securities
referred to in Sections 3.01(b), 3.01(c), 3.01(d) and 3.01(e), respectively, and
with respect to all other Company Securities owned by a Stockholder, any
proposed Transfer by a Stockholder of such Company Securities (or any shares of
Series B Preferred Stock or NVC Shares issued in exchange therefor, or any
shares of Common Stock or NVC Shares issued upon conversion of any thereof),
other than Transfers pursuant to Section 3.04 or Exempt Transfers, shall be
subject to the rights of first offer and tag-along rights as set forth in
Section 3.02 and Section 3.03, as applicable. Sections 3.01(b)-(f) are not
intended to prohibit exchanges by a Stockholder of shares of Series A Preferred
Stock for shares of Series B Preferred Stock or NVC Shares, or conversions of
Preferred Shares or NVC Shares into Common Stock.  (g)Sections 3.01(b), 3.01(c), 3.01(d) and
3.01(e) are not intended to prohibit Transfers pursuant to a merger agreement
to which the Company is a party providing for the conversion of the outstanding
shares of Common Stock into other securities, cash or other property.  (h)Notwithstanding anything to the contrary in
Section 3.01(b), a Stockholder will not be prohibited under Section
3.01(b) from:  (i)exercising piggy-back
registration rights under, and subject to the provisions of, the Registration
Rights Agreement with respect to the shares referred to in Section 3.01(b) in
any underwritten offering that occurs during the Lock-Up Period referred to in
Section 3.01(b) and that is initiated by the Company or a Company stockholder
exercising demand registration rights with respect to Company Securities; and  (ii)Transferring shares of
Common Stock acquired by such Stockholder pursuant to the MH Merger Agreement
back to the Company if and as required pursuant to the terms of the MH Merger
Agreement.  (i)Any attempt to Transfer any Company
Securities not in compliance with this Agreement shall be null and void, and
the Company shall not, and shall cause any transfer agent retained by it not
to, give any effect in the Companys records to such purported Transfer.  (j)Without limiting the other provisions of this
Agreement, no Stockholder shall make or permit any Transfer of its Company
Securities indirectly through any means that would not be permitted directly,
in order to avoid the provisions of this Agreement.  9


(k)Each certificate for Company Securities
issued to any Stockholder shall bear a legend in substantially the form set
forth below (in addition to any legend that may be required by applicable
securities laws):  THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO TRANSFER RESTRICTIONS PURSUANT TO A STOCKHOLDERS AGREEMENT (A COPY
OF WHICH IS ON FILE WITH THE ISSUER OF THIS CERTIFICATE).  SECTION 3.02.Right
of First Offer.  (a)If any Stockholder or Stockholders acting in concert
(a Transferor)
desire to Transfer (other than pursuant to an Exempt Transfer) Company
Securities that represent, in the aggregate, more than 5% of the then
outstanding shares of Common Stock (assuming conversion in full of all
outstanding Preferred Shares and NVC Shares, and irrespective of the Conversion
Limitation), such Transferor shall give each Stockholder (other than the
Transferor and its Permitted Transferees, as applicable) that, together with
its Permitted Transferees, holds more than 5% of the then outstanding shares of
Common Stock (for this purpose, shares of Common Stock held by a Person shall
include shares issuable upon exercise of Company stock options, or directly or
indirectly through conversion or exchange of outstanding Preferred Shares and
NVC Shares, held by such Person, and irrespective of the Conversion Limitation)
and the Company (collectively, the Option Holders) prior written notice of such
proposed Transfer, which notice shall (i) specify the amount and type of
Company Securities to be Transferred (the Subject Securities), the consideration to be
received therefor, and the other material terms on which the Transferor
proposes to Transfer the Subject Securities and (ii) contain the offer
described below (collectively, the Transferors Notice).
The Transferors Notice shall contain an offer to sell (the Option) the Subject
Securities to the Option Holders in accordance with this Article 3 for the
consideration and on the other terms specified in the Transferors Notice; providedthat to the extent such
consideration shall consist of anything other than cash, each Option Holder
shall be entitled, at its option, to instead pay in cash the value of such
consideration as determined by mutual agreement of all such Option Holders so
electing to pay cash and the Transferor, or if such agreement is not reached
within 5 days of receipt of the Transferors Notice, as determined by an
investment banker or appraiser of national reputation reasonably acceptable to
both the Transferor and such Option Holders (the fees and expenses of which
shall be shared equally by the Transferor, on the one hand, and all such Option
Holders requesting such valuation, on the other hand), in which case the date
of the Transferors Notice shall be deemed the date the cash value of such
consideration is so determined.  (b)The Company, at the election of the Board
(acting by majority vote, excluding, for purposes of this Section (i) if the
Transferor is an Investor (or Permitted Transferee thereof), any Investor
Designee designated to the Board by such Investor pursuant to Article 2 hereof
(and if such Transferor is WCAS (or Permitted Transferee thereof), also
excluding Charles Halberg if he is then an Investor Designee of WCAS), and (ii)
if the Transferor is Richard Barasch or any of his Permitted Transferees or
Affiliates, and Richard Barasch is then a director of the Company, Richard
Barasch), shall have the first right and option, exercisable at any time within
the first 10 days following the date of the Transferors Notice, to exercise
the Option to purchase from the Transferor the Subject Securities pursuant to
the Option. If the Option is not exercised by the Company within the first 10
days after the date of the Transferors Notice, then the other Option  10


Holders
shall have the right and option, exercisable at any time within the first 20
days following the date of the Transferors Notice, to exercise the Option and
purchase from the Transferor the Subject Securities pursuant to the Option, in
which event, such other Option Holders may elect to purchase the Subject
Securities in the proportions upon which they mutually agree or, if they are
unable to agree upon an allocation of such Subject Securities among themselves,
then in the proportion that the number of shares of Common Stock held by each
such Option Holder which desires to participate in the purchase of such Company
Securities pursuant to the Option bears to the aggregate number of shares of
Common Stock held by all such Option Holders that desire to participate in the
purchase of such Company Securities pursuant to the Option. For purposes of the
foregoing sentence, shares of Common Stock held by a Person shall include
shares issuable upon exercise of Company stock options, or directly or
indirectly through conversion or exchange of outstanding Preferred Shares and
NVC Shares, held by such Person, and irrespective of the Conversion Limitation.
Acceptance of the Option by an Option Holder shall be in a writing delivered to
the Transferor and the Company, which shall deliver copies thereof to the other
Option Holders.  (c)If the Option is accepted in a manner such
that all Company Securities covered by the Transferors Notice are to be
purchased by the Option Holders, the Transferor shall, subject to Section 3.03,
Transfer such Company Securities free of all liens and encumbrances (other than
restrictions imposed by this Agreement) to the respective Option Holder
purchasers thereof against delivery by the Option Holder purchaser of the
applicable consideration payable to the Transferor therefor. Unless, through
exercise of the Option, all the Company Securities proposed to be transferred
in the Transferors Notice are to be acquired by one or more Option Holders,
the Transferor may, subject to Section 3.03, either (i) Transfer the
Company Securities subscribed for by the Option Holders at the applicable
purchase price therefor to the Option Holders or (ii) Transfer the Subject
Securities that were subject to the Option to a third party Transferee at the
same purchase price set forth in the Transferors Notice (or at a higher price)
and on terms and conditions no less favorable to the Transferor than the terms
and conditions set forth in the Transferors Notice; provided, however, that such Transfer shall occur no later
than 90 days after the date of the Transferors Notice. If such Transfer does
not occur within such 90 day period, then the Company Securities shall be
re-offered to the Option Holders under this Section 3.02 prior to any
subsequent Transfer otherwise covered by this Section 3.02. The
transactions contemplated by this Section 3.02 shall be consummated in
accordance with Section 3.03.  SECTION 3.03.Tag-Along
Rights.  (a)In connection with each Option pursuant to
Section 3.02, the Stockholders shall have the tag along rights set forth
in this Section 3.03. Upon expiration or waiver of the rights of first offer
under Section 3.02 and at least 20 days prior to any Transfer of any Company
Securities to any proposed third party Transferee (Proposed
Transferee) or Option Holder, as contemplated by Section
3.02(c), the Transferor shall deliver a notice (the Sale Notice) to each
of the Company and the Stockholders stating (i) in reasonable detail the
identity of the prospective transferee(s), the Subject Securities to be
Transferred and the terms and conditions of such Transfer, and
(ii) whether or not Option Holders elected pursuant to Section 3.02
to purchase all of the Subject Securities (the Electing Stockholders). If Electing Stockholders
elect to purchase all of the Subject Securities pursuant to Section 3.02,
the other Stockholders shall have the tag along rights under this
Section 3.03 with respect to the Transfer to Electing Stockholders, and,
if  11


Electing
Stockholders did not so elect to purchase all of the Subject Securities, such
other Stockholders shall also have tag along rights under this
Section 3.03 with respect to the proposed Transfer to the Proposed
Transferee (the Stockholders that are entitled to exercise their tag along
rights hereunder are referred to as the Eligible Stockholders).  (b)Each Eligible Stockholder may elect to
participate in the contemplated Transfer on the same conditions and terms
(including selling the percentage of its Company Securities specified below in
this Section 3.03), and at the same price as the Transferor, by delivering
written notice to the Transferor, with a copy to the other Stockholders, within
10 days after the delivery of the Sale Notice. Each Eligible Stockholder that
elects to participate in such Transfer (a Tag Along Electing Stockholder) shall be
entitled to sell in the contemplated Transfer, on the same conditions, terms
and at the price described above, a portion of its Company Securities equal to
the lesser of 100% of its Company Securities and such number of its Company
Securities that represent the product of (A) the number of shares of
Common Stock represented by the Subject Securities multipliedby (B) a fraction the numerator of which is
the number of shares of Common Stock held by such Tag Along Electing
Stockholder and the denominator of which is the aggregate number of shares of
Common Stock held by all Stockholders electing to participate in the Transfer; provided that in order to be entitled to
exercise its right pursuant to this Section 3.03 to Transfer Company
Securities to the Proposed Transferee or the Electing Stockholders, as the case
may be, a Tag Along Electing Stockholder must agree to make to the Proposed
Transferee or the Electing Stockholders, as the case may be, the same
representations and warranties (to the extent applicable to such Tag Along
Electing Stockholder), and the same covenants, indemnities and agreements, in
each case, as the Transferor agrees to make in connection with the proposed
Transfer of its Subject Securities; provided, however,
that (i) no Tag Along Electing Stockholder shall be required to become subject
thereby to a covenant not to compete or similar restrictive covenant without
such Stockholders consent, (ii) each Tag Along Electing Stockholder shall be
obligated to join, severally but not jointly, on a pro rata basis (based on each such Tag Along Electing Stockholders
share of the aggregate proceeds paid with respect to the Company Securities
included in such Transfer) in any indemnification obligation to the Proposed
Transferee that the Proposed Transferee requires of the Transferor in
connection with the proposed Transfer, other than any such obligations that
relate specifically to a particular Stockholder, such as indemnification with
respect to representations and warranties given by a Stockholder regarding such
Stockholders title to and ownership of Company Securities, and (iii) each Tag
Along Electing Stockholders aggregate liability under such agreements shall be
limited to no more than the aggregate proceeds received by such Tag Along
Electing Stockholder from the acquirer(s) in such Transfer; and provided further, however, that if the
Proposed Transferee refuses to purchase (x) the total amount of Company
Securities offered by the Tag Along Electing Stockholders and (y) the
Subject Securities, the amount of Company Securities to be Transferred by the
Tag Along Electing Stockholders and the Transferor shall be reduced to the
amount of the Subject Securities or (if greater) such amount of the sum of the
Company Securities in clauses (x) and (y) above as the Proposed
Transferee may agree to purchase, which amount of Company Securities shall be
allocated among the Tag Along Electing Stockholders and the Transferor pro rata, in proportion to the relative
amount of Common Stock held by them. For purposes of the preceding sentence,
shares of Common Stock held by a Person shall include shares issuable upon
exercise of Company stock options, or directly or indirectly through conversion
or exchange of outstanding Preferred Shares and NVC Shares, held by such
Person, and irrespective of the Conversion Limitation. If any Tag Along
Electing Stockholder elects to exercise its right to participate in a Transfer  12


pursuant
to this Section 3.03, the Transferor shall use reasonable efforts to
obtain the agreement of the Proposed Transferee to the participation of such
Tag Along Electing Stockholder(s) in the contemplated Transfer. The Transferor
shall not Transfer any of its Company Securities to any prospective
transferee(s) if such prospective transferee(s) decline(s) to allow the participation
of such Tag Along Electing Stockholders in accordance with this
Section 3.03.  (c)The closing of any purchase and sale of
Company Securities pursuant to Section 3.02 and Section 3.03 shall
take place on the first Business Day 20 days after delivery of the Sale Notice;
provided that such period may be
extended for up to an additional 90 days solely to the extent necessary to
obtain any required governmental regulatory approvals. At such closing, the
Proposed Transferee(s) or Electing Stockholders, as the case may be, shall
deliver to the Transferor and, if applicable, each Tag Along Electing
Stockholder a wire transfer or a certified check in the entire amount of the
applicable purchase price against delivery of instrument(s) evidencing the Company
Securities, in each case duly endorsed for Transfer to, such third party
transferee(s) or Electing Stockholders, as the case may be. At or prior to the
closing of any such purchase or sale to any third party transferee, such third
party transferee shall execute and deliver to the Company all agreements and
instruments required by Section 3.05.  SECTION 3.04.Certain
Transfers Excluded. Sections
3.01(b)-(e), 3.02 and 3.03 shall not apply to any Transfer by a Stockholder of
Company Securities to a Permitted Transferee of such Stockholder. Notwithstanding
the foregoing, if, while a Permitted Transferee holds any Company Securities, such
Person would cease to qualify as a Permitted Transferee in relation to the
initial transferring Stockholder from whom or which such Permitted Transferee
or any previous Permitted Transferee of such initial transferring Stockholder
received such securities (an Unwinding Event), then the relevant initial transferor
Stockholder shall forthwith notify the other Stockholders and the Company of
the pending occurrence of such Unwinding Event and, prior to such Unwinding
Event, such initial transferor Stockholder and such transferee shall take all
actions necessary to effect a Transfer of all the Company Securities held by
such transferee either back to such initial Stockholder or to another Person
that qualifies as a Permitted Transferee of such initial Stockholder.  SECTION 3.05.Transferees
Bound. No Stockholder shall
Transfer any Company Securities pursuant to Section 3.04, or to a Proposed
Transferee pursuant to Sections 3.02-3.03, unless (in each case) as a condition
to the effectiveness of such Transfer, the Stockholder shall cause the proposed
transferee to agree, pursuant to a written joinder agreement to this Agreement
(which joinder agreement shall be in form and substance reasonably satisfactory
to the Company), to take and hold such Company Securities subject to the
obligations and restrictions applicable to a Stockholder under this Agreement
and to be bound by the provisions of this Agreement. Any Person that hereafter
becomes a Stockholder shall provide its contact details to the Company, which
shall promptly provide such information to each other Stockholder. This Section
3.05 shall not apply to Exempt Transfers.  ARTICLE 4
CERTAIN OTHER PROVISIONS  SECTION 4.01.Confidentiality. Unless otherwise approved by the Board,
each Stockholder shall maintain the confidentiality of any and all non-public
information  13


furnished by the Company and received by such Stockholder pursuant to
this Agreement, by using the same degree of care, but no less than a reasonable
degree of care, as such Stockholder uses to protect its own confidential
information, except:  (a)to the extent such information shall have
become publicly available otherwise than through a breach of this Agreement by
such Stockholder or any of its Affiliates;  (b)to the extent required (i) to comply with any
subpoena or similar demand to which a Stockholder becomes subject or (ii) by
applicable law or regulation, or stock exchange rule; provided that in each such case such
Stockholder shall give the Company prompt notice of such requirement or demand
(as applicable), to the extent practicable, so that the Company may seek an
appropriate protective order or similar relief (and the Stockholder shall
cooperate reasonably with such efforts by the Company, at the Companys
expense);  (c)in the case of an Investor, to Affiliates of
such Investor and its and their respective directors, officers, employees,
counsel, accountants and other professional advisors with whom such Investor
reasonably determines it is necessary to share such information in connection
with such Investors investment in the Company and that are informed of the
confidential nature of the information and agree to keep it confidential (and
such Investor shall be liable for any disclosure made by such Persons that is
not permitted hereunder), in each case, subject to any limitations under
applicable law; or  (d)in the case of an Investor, to a bona fide prospective purchaser of such Investors
Company Securities if such prospective purchaser shall have first executed and
delivered to the Company a non-disclosure agreement in favor of the Company and
in form and substance reasonably acceptable to the Company.  Nothing in this Section 4.01 or elsewhere in this Agreement is intended
to limit any duties, covenants or other obligations that a Stockholder who is
an officer or employee of the Company or its Subsidiaries may have pursuant to
any agreement with the Company or any of its Subsidiaries or any applicable
law.  SECTION 4.02.Information
Rights; VCOC Rights.  (a)The
Company shall, for so long as an Investor (together with its Permitted
Transferees) shall continue to hold at least 5% of the outstanding shares of
Common Stock, (i) afford such Investor (or Affiliate or Permitted Transferee
thereof), during normal business hours and upon reasonable notice, reasonable
access and consultation rights at all reasonable times to its officers, offices
and books and records, and (ii) afford such Investor (or Affiliate or Permitted
Transferee thereof) the opportunity to discuss the Companys affairs, finances
and accounts with the Companys officers from time to time as such Investor (or
Affiliate or Permitted Transferee thereof) may reasonably request.  (b)Any Investor
(or Affiliate or Permitted Transferee thereof) that is intended to qualify as a
venture capital operating company within the meaning of 29 C.F.R. 2510.3-101(d)
(each such entity, a VCOC
Investor) shall have the right, for so long as such Investor
(together with its Permitted Transferees) holds at least 5% of the outstanding
shares of Common Stock, to receive from the Company any written information or
written materials  14


provided by the Company
to members of the Board; provided
that the VCOC Investor receiving such information shall agree to maintain the confidentiality
of such information in accordance with Section 4.01.  (c)For purposes of this Section, shares of
Common Stock held by a Person shall include shares issuable upon exercise of
Company stock options, or directly or indirectly through conversion or exchange
of outstanding Preferred Shares and NVC Shares, held by such Person, and
irrespective of the Conversion Limitation.  SECTION 4.03.Additional Covenant.  No Investor or Affiliate thereof, nor Richard Barasch or Affiliate of
Richard Barasch, shall acquire beneficial ownership (within the meaning of
Rules 13d-3 and 13d-5(b)(1) under the Exchange Act, without regard to the
60-day limit in Rule 13d-3(d)(1)(i), but in each case excluding any beneficial
ownership solely by reason of the express terms of this Agreement) of any
additional shares of Common Stock except:  (i)if such acquisition is
pursuant to a tender offer or exchange offer for outstanding shares of Common
Stock, or a merger pursuant to a merger agreement with the Company, that in
each case (A) is approved by not less than a majority of the members of the
Board then in office (x) who have not recused themselves from the vote of the
Board in respect of such approval, (y) who satisfy the criteria for independent
director under the rules of the principal stock exchange on which the Common
Stock is listed, and (z) who are not Investor Designees (such tender offer or
exchange offer, an Approved Offer, and such
merger, an Approved Merger), and (B) in
such Approved Offer, not less than a majority of the Subject Shares (as defined
below) are tendered into such Approved Offer and not withdrawn prior to the
final expiration of such Approved Offer, or in such Approved Merger, not less
than a majority of the Subject Shares that are affirmatively voted (in person
or by proxy) on the related merger proposal (and not withdrawn) are voted for
(i.e., in favor) of such proposal. As used in this Section 4.03, Subject Shares means, where such an
offer or acquisition referred to in this clause (i) is made by or on behalf one
or more Investors or Richard Barasch or any of their respective Affiliates or
any combination of the foregoing (each such Person making such offer or
acquisition or on whose behalf such offer or acquisition is made, together with
its Affiliates, a Subject Person), the then
outstanding shares of Common Stock not owned by any such Subject Person or
Affiliate thereof;  (ii)acquisitions of Company
Securities issued or sold to such Investor or its Affiliates pursuant to the
Merger Agreement or any of the Purchase Agreements referred to in Section 3.01
or directly or indirectly through conversion or exchange of Preferred Shares or
NVC Shares issued to such Investor or its Affiliates pursuant to any of such
Purchase Agreements;  (iii)acquisitions of shares
issued (including pursuant to exercise of stock options granted) with the
approval of a majority of the Board or the Compensation Committee of the Board
to any Investor Designee of such Investor in respect of such Investor Designees
service on the Board;  (iv)acquisitions of shares pursuant
to any stock split, stock dividend or the like effected by the Company;  15


(v)acquisitions by an
Investor or any of its Affiliates that would not result in such Investor
(together with its Affiliates) owning a percentage of the then outstanding
Common Stock that is greater than such Investors Cap Percentage (as hereafter
defined) (assuming for this purpose conversion in full of all Preferred Shares and
NVC Shares (irrespective of the Conversion Limitation), and it being understood
that no Person shall be in violation of this Section as a result of any
reacquisition by the Company of any Company Securities provided
that such reacquisition shall have been approved by not less than a majority of
the members of the Board then in office who (x) have not recused themselves
from the vote of the Board in respect of such approval, (y) are not Investor
Designees and (z) satisfy the criteria for independent director under the
rules of the principal stock exchange on which the Common Stock is listed
(each, an Approved Reacquisition Transaction));  (vi)in the case of Richard
Barasch, acquisitions of equity based compensation awards, including stock
option grants and restricted stock grants, that have been approved by a
majority of the Board or the Compensation Committee of the Board, and shares
acquired upon exercise of such awards; or  (vii)acquisitions by an
Investor or Affiliates thereof of securities of companies (each, a Portfolio Company) that own shares
of Common Stock, provided that (A) the purpose of
such acquisition by such Investor or its Affiliates was not the acquisition of
beneficial ownership of additional shares of Common Stock and (B) such
Portfolio Company owns no more than 0.5% of the outstanding shares of Common
Stock.  As used in this Section 4.03:  Base Cap Percentage means (1) in
respect of CapitalZ/Union Square 24%, (2) in respect of Lee, 7%, (3) in respect
of Perry, 14%, and (4) in respect of WCAS, 18%.  Cap Percentage means, in respect of
any Investor, a percentage equal to such Investors Base Cap Percentage plus such Investors Intra-Investor Buy Percentage (as
hereafter defined) and lesssuch
Investors Intra-Investor Sale Percentage (as hereafter defined), provided that no Investors Cap Percentage shall exceed 25%
(the Ceiling Percentage), provided further, however, that an Investors Cap
Percentage, and the Ceiling Percentage, shall be equitably increased for (A)
acquisitions permitted under clauses (iii) and (vii) above and (B) Approved
Reacquisition Transactions. Intra-Investor Buy
Percentageof any Investor means the percentage of the
outstanding Common Stock acquired by such Investor (or any Affiliate of such
Investor) in an Intra-Investor Private Transfer (as hereafter defined),
determined as of the time of such acquisition (assuming for this purpose
conversion in full of all Preferred Shares and NVC Shares (irrespective of the
Conversion Limitation)). Intra-Investor Private
Transfer means any sale by an Investor (or Affiliates thereof)
to one or more of the other Investors (or Affiliates of such other Investor) in
a private transaction, including a sale pursuant to the right of first offer or
tag-along rights contemplated by Sections 3.02-3.03. Intra-Investor
Sell Percentageof any Investor means the percentage of the
outstanding Common Stock sold by such Investor (or any Affiliate of such
Investor) in an Intra-Investor Private Transfer, determined as of the time of
such sale (assuming for this purpose conversion in full of all Preferred Shares
and NVC Shares (irrespective of the Conversion Limitation)).  16


For purposes of
this Section 4.03, an Associate (as defined in Rule 12b-2 under the Exchange
Act) of Richard Barasch shall be deemed an Affiliate of Richard Barasch.  The agreements of the several Investors and Richard Barasch hereunder
are several and not joint.  All of the restrictions set forth above in this Section 4.03 shall
terminate upon the earliest to occur of:  (A)June 30, 2010;  (B)the entry by the Company into a definitive
agreement with any Person (other than such an agreement with a Subject Person
made in contravention of this Section 4.03) providing for: (x) a
recapitalization, merger, share exchange, business combination or similar
extraordinary transaction as a result of which the Persons possessing,
immediately prior to the consummation of such transaction, beneficial ownership
of voting securities of the Company entitling them to exercise at 100% of the
voting power of all outstanding securities entitled to vote generally in
elections of directors of the Company, would cease to possess, immediately
after consummation of such transaction, beneficial ownership of voting
securities entitling them to exercise at least 60% of the total voting power of
all outstanding securities entitled to vote generally in elections of directors
of the Company (or, if the Company is not the surviving or resulting entity
from such transaction, in elections of directors (or equivalent governing body)
of such surviving or resulting entity); (y) a sale of all or substantially all
of the assets the Company (determined on a consolidated basis), in one
transaction or series of related transactions; or (z) the acquisition (by purchase,
merger or otherwise) by any such Person (including any syndicate or group
deemed to be a person under Section 13(d)(3) of the Exchange Act) of
beneficial ownership of voting securities of the Company entitling that Person
to exercise 50% or more of the total voting power of all outstanding securities
entitled to vote generally in elections of directors of the Company (for
purposes of this subsection, beneficial ownership shall be determined in
accordance with Rules 13d-3 and 13d-5 under the Exchange Act, provided that a Person shall be deemed to beneficially own
any securities that such Person has the right to acquire, whether or not such
right is exercisable immediately) (the transactions described in clauses (x),
(y) and (z) of this subsection being each hereinafter referred to as a Transaction Agreement);  (C)the commencement
(within the meaning of the Exchange Act) by any Person of a tender offer or
exchange offer for voting securities of the Company entitling the holders
thereof to exercise more than 50% of the total voting power of all outstanding
securities entitled to vote generally in elections of directors of the Company
(other than a tender offer or exchange offer (i) pursuant to a Transaction
Agreement or (ii) made by or on behalf of an Investor (or Affiliate thereof) in
violation of this Section 4.03 or that would be in violation of this Section
4.03 if such tender offer or exchange offer were consummated), which offer is
not withdrawn within 5 days after it is commenced; or  (D)at such time as the
Investors and their respective Affiliates, collectively, own in the aggregate
less than 20% of the then outstanding Common Stock (assuming for this purpose
conversion in full of all Preferred Shares and NVC Shares (irrespective of the
Conversion Limitation)), providedthat
at such time no Investor (or Affiliate thereof) has disclosed in a  17


Schedule 13D filing with
the Securities and Exchange Commission that it or any of its Affiliates has any
specific plan or proposal to acquire additional securities of the Company entitled to vote generally in elections of
directors of the Company that is required to be disclosed under Item 4 of
Schedule 13D.  Notwithstanding
anything to the contrary in Section 5.03, neither the provisions of this
Section 4.03 nor the penultimate sentence of Section 5.04 may be amended unless
such amendment is approved by not less than a majority of the members of the
Board then in office who (x) have not recused themselves from the vote of the
Board in respect of such approval, (y) are not Investor Designees and (z)
satisfy the criteria for independent director under the rules of the
principal stock exchange on which the Common Stock is listed.  ARTICLE 5
MISCELLANEOUS  SECTION 5.01.Binding
Effect; Assignability; Benefit.  (a)This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors, legal
representatives, heirs and permitted assigns; provided
that rights granted to any Stockholder hereunder may only be assigned in
connection with a Transfer of Company Securities in accordance with the terms of
this Agreement, and provided further
that an Investors right to designate Investor Designees (or a Non-Voting
Observer) pursuant to Article 2 hereof are only assignable with the written
consent of the Company in connection with a Transfer of Company Securities by
such Investor to the purported assignee. Any purported assignment not in
accordance with this Agreement shall be null and void. Except as may otherwise
be expressly provided in this Agreement, any Stockholder that ceases to hold any
Company Securities shall cease to be entitled to the benefits of this Agreement.  (b)Nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the parties hereto, and
their respective successors, legal representatives, heirs and permitted
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement.  SECTION 5.02.Notices. All notices, requests and other
communications to any party shall be in writing and shall be delivered in
person, sent by reputable overnight courier service, or sent by facsimile
transmission,  if
to the Company, to Universal American Financial Corp., 6 International Drive,Rye Brook, NY 10573-1068;  Attention:
General Counsel; Facsimile:  (914)
934-0700,  if
to Stockholders, at their respective addresses set forth in Schedule I,  or, in each case, at such
other address or fax number as such party may hereafter specify for the purpose
of notices hereunder by written notice to the other parties hereto. All
notices, requests and other communications shall be deemed received on the date
of receipt by the recipient thereof if received prior to 5:00 p.m. in the place
of receipt and such day is a Business Day in the place of receipt. Otherwise,
any such notice, request or communication shall be deemed not to have been
received until the next succeeding Business Day in the place of receipt. Any
notice, request or  18


other written communication
sent by facsimile transmission shall be confirmed by personal delivery or by
reputable overnight courier, made within two Business Days after the date of
such facsimile transmissions.  SECTION 5.03.Waiver;
Amendment.  (a)Except as otherwise provided herein, no
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof or the exercise of any other right, power or privilege. No
provision of this Agreement may be waived except by an instrument in writing
executed by the party against whom the waiver is to be effective.  (b)Except as otherwise provided herein, no provision
of this Agreement may be amended or otherwise modified except by an instrument
in writing executed by the Company and Stockholders holding more than 50% of
the Common Stock held by the Stockholders (for this purpose, shares of Common
Stock held by the Stockholders shall include shares issuable upon exercise of
Company stock options, or directly or indirectly through conversion or exchange
of outstanding Preferred Shares and NVC Shares, held by the Stockholders, and
irrespective of the Conversion Limitation); provided,
however, that (i) any amendment or modification of this Agreement
that treats a Stockholder individually in an inconsistent and materially
adverse manner in relation to all other Stockholders shall require the consent
of such Stockholder, (ii) any amendment of (A) Investors rights to designate
Investor Designees (or a Non-Voting Observer) pursuant to Article 2 or (B)
Investors information rights under Section 4.02, shall require the consent of
all affected Investors, and (iii) any amendment of clause (v) or (vi) of
Section 2.01(a) shall require the consent of the Company.  SECTION 5.04.Termination. This Agreement shall terminate upon the
first to occur of any of the following events:  (a)consummation of the acquisition of beneficial
ownership (within the meaning of Rules 13d-3 and 13d-5 under the Exchange
Act), by any Person, of all of the Company Securities subject to this Agreement
without violation of this Agreement (provided that
no Person shall be deemed to beneficially own another Persons Company
Securities for these purposes solely by fact of the existence of the voting and
transfer covenants contained in this Agreement);  (b)if the Company shall admit in writing its
general inability to pay its debts as they become due, shall make a written
assignment for the benefit of creditors, or the appointment of a liquidator,
bankruptcy receiver or similar occurrence under applicable law shall have
occurred with respect to the Company and such proceeding shall not have been
dismissed or stayed within 60 days after the commencement thereof;  (c)duly authorized winding up, liquidation or
dissolution of the Company; or  (d)the written consent to such termination by
Stockholders holding not less than 70% of the Common Stock held by all the
Stockholders (for this purpose, shares of Common Stock held by the Stockholders
shall include shares issuable upon exercise of Company  19


stock
options, or directly or indirectly through conversion or exchange of
outstanding Preferred Shares and NVC Shares, held by the Stockholders, and
irrespective of the Conversion Limitation);  providedthat,
(i) without the consent of the affected Investors, (A) an Investors right to
designate Investor Designees (or a Non-Voting Observer) pursuant to Article 2
and (B) an Investors information rights under Section 4.02, shall survive any
termination under clause (b), (c) or (d) of this Section, and (ii) without the
consent of the Company, the provisions of clauses (v) and (vi) of Section
2.01(a) shall survive any termination under clause (b), (c) or (d) of this
Section.  In addition, Richard Barasch and his Permitted
Transferees shall cease to the bound by, and shall cease to be entitled to
rights and benefits under, this Agreement at such time as Richard Barasch shall
cease to be the Chief Executive Officer of the Company; provided
that, for the avoidance of doubt, even after Richard Barasch ceases to be the
Chief Executive Officer of the Company, if he shall remain a member of the
Board he shall nonetheless not constitute an independent director for
purposes of any of the matters requiring approval of independent directors
under Section 4.03.  Notwithstanding the foregoing, Section 5.05 shall survive any
termination of this Agreement.  SECTION 5.05.Fees
and Expenses. Each party
shall pay its own costs and expenses incurred in connection with the
preparation and execution of this Agreement, or any amendment or waiver hereof,
and (except as otherwise provided herein or separately agreed in writing) the
transactions contemplated hereby and all matters related hereto. In any action
or proceeding brought to enforce any provision of this Agreement, or where any
provision hereof or thereof is validly asserted as a defense, the successful
party shall be entitled to recover reasonable attorneys fees in addition to
any other available remedy.  SECTION 5.06.Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial; Etc. All issues and questions concerning the
construction, validity, interpretation and enforceability of this Agreement
shall be governed by, and construed in accordance with, the laws of the State
of New York, without giving effect to any choice of law or conflict of law
rules or provisions (whether of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than New York. Each
of the parties hereto irrevocably agrees that any legal action or proceeding
that may be based upon, arise out of or relate to this Agreement or the
negotiation, execution or performance hereof, shall be brought and determined
exclusively in any state courts of New York County of the State of New York, or
in the event (but only in the event) that such court does not have subject
matter jurisdiction over such action or proceeding, in any federal District
Court sitting in New York City. Each of the parties hereto hereby irrevocably
submits with regard to any such action or proceeding for itself and in respect
of its property, generally and unconditionally, to the exclusive personal
jurisdiction of the aforesaid courts and agrees that it will not bring any such
action in any court other than the aforesaid courts. Each of the parties hereto
hereby irrevocably waives, and agrees not to assert, by way of motion, as a
defense, counterclaim or otherwise, in any action or proceeding with respect to
this Agreement, (a) any claim that it is not personally subject to the
jurisdiction of the above named courts for any reason other than the failure to
serve in accordance with this Section, (b) any claim that it or its property is
exempt or immune from jurisdiction of any such court or from any legal process  20


commenced in such courts (whether through service of notice, attachment
prior to judgment, attachment in aid of execution of judgment, execution of
judgment or otherwise) and (c) to the fullest extent permitted by the
applicable law, any claim that (i) the suit, action or proceeding in such court
is brought in an inconvenient forum, (ii) the venue of such suit, action or
proceeding is improper or (iii) this Agreement, or the subject mater hereof,
may not be enforced in or by such courts. Each of the parties hereto
irrevocably consents to process being served by any party to this Agreement in
any legal action or proceeding by delivery of a copy thereof in accordance with
the provisions of Section 5.02 without prejudice to the right of any party to
serve process pursuant to applicable laws. The consents to jurisdiction set
forth in this paragraph shall not constitute general consents to service of
process in the State of New York and shall have no effect for any purpose
except as provided in this paragraph and shall not be deemed to confer rights
on any Person other than the parties hereto. Each
of the parties hereto hereby irrevocably waives any and all rights to trial by
jury in any legal proceeding arising out of or related to this Agreement.  SECTION 5.07.Specific
Enforcement; Cumulative Remedies. The parties hereto acknowledge that money damages may not be an
adequate remedy for violations of this Agreement and that any party, in
addition to any other rights and remedies which the parties may have hereunder
or at law or in equity, may, in its sole discretion, apply to a court of
competent jurisdiction for specific performance or injunction (without any
requirement to post a bond or other security) or such other relief as such
court may deem just and proper in order to enforce this Agreement or prevent
any violation hereof and, to the extent permitted by applicable law, each party
waives any objection to the imposition of such relief. All rights, powers and
remedies provided under this Agreement or otherwise available in respect hereof
at law or in equity shall be cumulative and not alternative, and the exercise
or beginning of the exercise of any thereof by any party shall not preclude the
simultaneous or later exercise of any other such rights, powers or remedies by
such party.  SECTION 5.08.Entire
Agreement. This Agreement,
together with the Securities Purchase Agreement and the Registration Rights
Agreement, constitute the entire agreement and understanding among the parties
hereto in respect of the subject matter hereof and thereof and, except as
otherwise expressly agreed in writing, supersede all prior agreements and
understandings (including that certain Shareholders Agreement dated as of July
30, 1999) and contemporaneous agreements and understandings, both oral and
written, among the parties hereto, or between any of them, with respect to the
subject matter hereof and thereof.  SECTION 5.09.Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Upon such a determination, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner so that the transactions contemplated hereby
be consummated as originally contemplated to the fullest extent possible.  SECTION 5.10.Drafting. The parties hereto have participated jointly in the negotiation and
drafting of this Agreement and, in the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as jointly drafted
by the parties hereto and  21


no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provision
of this Agreement.  SECTION 5.11.Counterparts;
Effectiveness. This Agreement
may be executed in any number of counterparts, each of which shall be deemed to
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument.  [SIGNATURE
PAGE FOLLOWS]  22


IN
WITNESS WHEREOF, the parties hereto have caused this Stockholders Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.   UNIVERSAL
  AMERICAN FINANCIAL CORP.By:
  /s/ Robert A. WaegeleinName:Title:STOCKHOLDERS:LEE-UNIVERSAL
  HOLDINGS, LLCBy:
  /s/
  Joseph B. RotbergName:
  Joseph B. RotbergTitle:CFOWELSH,
  CARSON, ANDERSON & STOWE, IX, L.P.,By:
  WCAS IX ASSOCIATES LLC, its General PartnerBy:
  /s/
  Sean M. TraynorName:
  Sean M. TraynorTitle:
  Managing MemberWELSH,
  CARSON, ANDERSON & STOWE, X, L.P.,By:
  WCAS
  X ASSOCIATES LLC, its General PartnerBy:
  /s/
  Sean M. TraynorName:
  Sean M. TraynorTitle:
  Managing MemberCAPITAL
  Z FINANCIAL SERVICES FUND II, L.P.By:
  Capital Z Partners, L.P., its General
  PartnerBy:
  Capital Z Partners, Ltd., its General PartnerBy:
  /s/
  Craig FischerName:
  Craig FisherTitle:
  Authorized SignatoryCAPITAL
  Z FINANCIAL SERVICES PRIVATE FUND II, 
  L.P.By:
   CAPITAL Z PARTNERS, L.P., its General
  PartnerBy:
   CAPITAL Z PARTNERS, LTD., its General
  PartnerBy:
  /s/
  Craig Fischer  Signature Page to
Stockholders Agreement


Name:
  Craig FisherTitle:
  Authorized SignatoryUNION
  SQUARE UNIVERSAL PARTNERS, L.P.By:
   UNION SQUARE UNIVERSAL GP, LLC, its
  General 
  PartnerBy:
  /s/
  Craig FischerName:
  Craig FisherTitle:
  Authorized SignatoryPERRY
  PARTNERS, L.P.,By:
  PERRY CORP., its General PartnerBy:
  /s/
  Michael C. NeusName:
  Michael C. NeusTitle:
  General CounselPERRY
  PARTNERS INTERNATIONAL, INC.By:
  PERRY CORP., its Investment ManagerBy:
  /s/
  Michael C. NeusName:
  Michael C. NeusTitle:
  General Counsel/s/
  Richard BaraschRichard
  Barasch  Signature Page to
Stockholders Agreement


PERRY
  PRIVATE OPPORTUNITIES OFFSHORE FUND, 
  L.P.By:
  PERRY PRIVATE OPPORTUNITIES OFFSHORE 
  FUND (CAYMAN) GP, L.L.C., its General Partner,By:
  PERRY CORP., its Managing MemberBy:
  /s/
  Michael C. NeusName:
  Michael C. NeusTitle:
  General CounselPERRY
  PRIVATE OPPORTUNITIES FUND, L.P.By:
  PERRY PRIVATE OPPORTUNITIES FUND GP, 
  L.L.C., its General Partner,By:
  PERRY CORP., its Managing MemberBy:
  /s/ Michael C. NeusName:
  Michael C. NeusTitle:
  General Counsel  Signature Page to Stockholders
Agreement


Russell L. CarsonThomas E. McInerneyRobert A. MinicucciAnthony J. de NicolaPaul B. QueallySanjay SwaniD. Scott MackesyJohn D. ClarkJames R. MatthewsJohn Almedia, Jr.Sean M. TraynorThomas ScullyMichael E. DonovanEric J. LeeBrian T. ReganLucas GarmanDavid MintzBy:
  /s/ Jonathan M. RatherName: Jonathan M.
  RatherTitle: Attorney-in-FactWCAS MANAGEMENT
  CORPORATIONBy:
  /s/
  Jonathan M. RatherName: Jonathan
  M. RatherTitle:
  Treasurer  Signature Page to
Stockholders Agreement


THE BRUCE K.
  ANDERSON2004 IRREVOCABLE TRUSTBy:
  /s/
  Mary AndersonName:Title:  Signature Page to
Stockholders Agreement


THE PATRICK WELSH2004 IRREVOCABLE TRUSTBy:
  /s/
  Carol WelshName: Carol
  WelshTitle:
  Trustee  Signature Page to
Stockholders Agreement


DE NICOLA HOLDINGS L.P.By:
  Anthony
  J. de NicolaName: Anthony J. de
  NicolaTitle: Authorized
  Signatory  Signature Page to
Stockholders Agreement


SELECT GLOBAL INVESTORS, L.P.By:
  /s/       Rocco
  A. OrtenzioName: Rocco
  A. OrtenzioTitle:
  General Partner  Signature Page to
Stockholders Agreement


JONATHAN M. RATHER  IRA CHARLES 
  SCHWAB & CO., INC. CUSTODIANBy:
  Jonathan
  M. RatherJonathan M.
  Rather  Signature Page to
Stockholders Agreement


/s/    Norman
  BrownsteinNorman Brownstein  Signature Page to
Stockholders Agreement


/s/          Charles
  E. HallbergCharles E. Hallberg  Signature Page to
Stockholders Agreement


SCHEDULE I  STOCKHOLDER NAME
  
  CONTACT
  DETAILSLEE-UNIVERSAL
  HOLDINGS, LLC
  
  767
  Fifth Avenue 
  6th Floor New York, New York 10153 
  Phone: (212) 888-1500 
  Fax: (212) 702-3787 
  Attention: Mark Gormley/ Benjamin HochbergWELSH,
  CARSON, ANDERSON & STOWE, IX, L.P.
  
  320
  Park Avenue 
  Suite 2500 
  New York, New York 10022-6815 
  Phone: (212) 893-9500 
  Fax: (212) 893-9575 
  Attention: Sean M. TraynorWELSH,
  CARSON, ANDERSON & STOWE, X, L.P.
  
  SAME
  AS IMMEDIATELY ABOVE.CAPITAL
  Z FINANCIAL SERVICES FUND II, L.P.
  
  230
  Park Avenue South 
  11th Floor 
  New York, New York 10003 
  Phone: (212) 965-2400 
  Fax: (212) 965-2301 
  Attention: Robert Spass/ Eric LeathersCAPITAL
  Z FINANCIAL SERVICES PRIVATE FUND II, L.P.
  
  230
  Park Avenue South 
  11th Floor 
  New York, New York 10003 
  Phone: (212) 965-2400 
  Fax: (212) 965-2301 
  Attention: Robert Spass/ Eric LeathersUNION
  SQUARE UNIVERSAL PARTNERS, L.P.
  
  230
  Park Avenue South 
  11th Floor 
  New York, New York 10003 
  Phone: (212) 965-2400 
  Fax: (212) 965-2301 
  Attention: Robert Spass/ Eric LeathersPERRY
  PARTNERS, L.P.
  
  767
  Fifth Avenue 
  19th Floor 
  New York, New York 10153 
  Phone: (212) 583-4000 
  Fax: (212) 583-4144 
  Attention: Michael C. NeusPERRY
  PARTNERS INTERNATIONAL, INC.
  
  SAME
  AS IMMEDIATELY ABOVE.PERRY
  PRIVATE OPPORTUNITIES FUND, L.P.
  
  SAME
  AS IMMEDIATELY ABOVE.


PERRY
  PRIVATE OPPORTUNITIES OFFSHORE FUND, L.P.
  
  SAME
  AS IMMEDIATELY ABOVE.RICHARD
  BARASCH
  
  c/o
  Universal American Financial Corp. 
  6 International Drive 
  Rye Brook, NY 10573-1068 
  Phone: (914) 934-5200 
  Fax: (914) 934-0700Russell
  L. Carson 
  Thomas E. McInerney 
  Robert A. Minicucci 
  Anthony J. de Nicola 
  Paul B. Queally 
  Sanjay Swani 
  D. Scott Mackesy 
  John D. Clark 
  James R. Matthews 
  John Almedia, Jr. 
  Sean M. Traynor 
  Thomas Scully 
  Michael E. Donovan 
  Eric J. Lee 
  Brian T. Regan 
  Lucas Garman 
  David Mintz
  
  c/o
  Welsh, Carson, Anderson & Stowe 
  320 Park Avenue 
  Suite 2500 
  New York, New York 10022-6815 
  Phone: (212) 893-9500 
  Fax: (212) 893-9575 
  Attention: Sean M. TraynorWCAS
  MANAGEMENT CORPORATION
  
  SAME
  AS IMMEDIATELY ABOVE.THE
  BRUCE K. ANDERSON 2004 IRREVOCABLE TRUST
  
  SAME
  AS IMMEDIATELY ABOVE.THE
  PATRICK WELSH 2004 IRREVOCABLE TRUST
  
  SAME
  AS IMMEDIATELY ABOVE.DE
  NICOLA HOLDINGS L.P.
  
  SAME
  AS IMMEDIATELY ABOVE.JONATHAN
  M. RATHER  IRA CHARLES SCHWAB & CO., INC. CUSTODIAN
  
  SAME
  AS IMMEDIATELY ABOVE.SELECT
  GLOBAL INVESTORS, L.P.
  
  c/o
  Select Medical Corporation 
  4718 Old Gettysburg Road 
  Suite 405 
  Mechanicsburg, Pennsylvania 17055 
  Attention: Rocco Ortenzio 
  Facsimile: (717) 972-1050Norman
  Brownstein
  
  66
  Sedgwick Place 
  Englewood, Colorado 80113 
  Facsimile: (303) 223-0336Charles
  E. Hallberg
  
  c/o
  MemberHealth, LLC 
  29100 Aurora Road 
  Suite 301 
  Solon, Ohio 44139 
  Facsimile: (440) 248-9644