Document:

Exhibit 4.1

 

 

FOURTH SUPPLEMENTAL INDENTURE

 

between

 

MEDLEY LLC

 

and

 

U.S. BANK NATIONAL ASSOCIATION,

 

as Trustee

 

Dated as of February 22, 2017

 

 

 

FOURTH SUPPLEMENTAL INDENTURE

 

THIS FOURTH SUPPLEMENTAL INDENTURE (this
“Fourth Supplemental Indenture”), dated as of February 22, 2017, is between Medley LLC, a Delaware limited liability
company (the “Company”), and U.S. Bank National Association, as trustee (the “Trustee”). All capitalized
terms used but not otherwise defined herein shall have the meaning set forth in the Base Indenture (as defined below).

 

RECITALS OF THE COMPANY

 

The Company and the Trustee executed and
delivered an Indenture, dated as of August 9, 2016 (the “Base Indenture” and, as amended and supplemented by this Fourth
Supplemental Indenture, the “Indenture”), to provide for the issuance by the Company from time to time of the Company’s
unsecured debentures, notes or other evidences of indebtedness (the “Securities”), to be issued in one or more series
as provided in the Indenture.

 

The Company desires to issue and sell $34,500,000
of the Company’s 7.25% Notes due 2024 (the “Notes”).

 

Sections 901(5) and 901(7) of the Base Indenture
provide that without the consent of Holders of the Securities of any series issued under the Indenture, the Company, when authorized
by or pursuant to a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures
supplemental to the Base Indenture to (i) change or eliminate any of the provisions of the Indenture when there is no Security
Outstanding of any series created prior to the execution of the supplemental indenture that is entitled to the benefit of such
provision and (ii) establish the form or terms of Securities of any series as permitted by Section 201 and Section 301 of the Base
Indenture.

 

The Company desires to establish the form
and terms of the Notes and to modify, alter, supplement and change certain provisions of the Base Indenture for the benefit of
the Holders of the Notes (except as may be provided in a future supplemental indenture to the Indenture applicable to the Notes
(“Future Supplemental Indenture”)).

 

The Company has duly authorized the execution
and delivery of this Fourth Supplemental Indenture to provide for the issuance of the Notes and amendment of certain provisions
of the Base Indenture as herein provided and all acts and things necessary to make this Fourth Supplemental Indenture a valid,
binding, and legal obligation of the Company and to constitute a valid agreement of the Company, in accordance with its terms,
have been done and performed.

 

     

     

    

 

NOW, THEREFORE, for and in consideration
of the premises and the purchase of the Notes by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit
of all Holders of the Notes, as follows:

 

ARTICLE
I

TERMS
OF THE NOTES

 

Section 101
Terms of the Notes. The following terms relating to the Notes are hereby established:

 

(a) The
Notes shall constitute a series of Senior Securities having the title “7.25% Notes due 2024.” The Notes shall bear
a CUSIP number of 58503Y 204 and an ISIN number of US58503Y2046.

 

(b) The
aggregate principal amount of the Notes that may be authenticated and delivered under the Indenture (except for Notes authenticated
and delivered upon registration of, transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 304, 305,
306, 906, 1107 or 1305 of the Base Indenture, and except for any Securities that, pursuant to Section 303 of the Base Indenture,
are deemed never to have been authenticated and delivered under the Indenture) shall be $34,500,000.
Under a Board Resolution, Officers’ Certificate pursuant to Board Resolutions or an indenture supplement, the Company may
from time to time, without the consent of the Holders of Notes, issue additional Notes (in any such case “Additional Notes”)
having the same ranking and the same interest rate, maturity and other terms as the Notes. Any Additional Notes and the existing
Notes will constitute a single series under the Indenture and all references to the relevant Notes herein shall include the Additional
Notes unless the context otherwise requires.

 

(c) The entire outstanding principal of
the Notes shall be payable on January 30, 2024, unless earlier redeemed or repurchased in accordance with the provisions of this
Fourth Supplemental Indenture.

 

(d) The
rate at which the Notes shall bear interest shall be 7.25% per annum (the “Applicable Interest Rate”). The date from
which interest shall accrue on the Notes shall be January 18, 2017, or the most recent Interest Payment Date to which interest
has been paid or provided for; the Interest Payment Dates for the Notes shall be January 30, April 30, July 30 and October 30,
commencing April 30, 2017 (if an Interest Payment Date falls on a day that is not a Business Day, then the applicable interest
payment will be made on the next succeeding Business Day and no additional interest will accrue as a result of such delayed payment);
the initial interest period will be the period from and including January 18, 2017, to, but excluding, the initial Interest Payment
Date, and the subsequent interest periods will be the periods from and including an Interest Payment Date to, but excluding, the
next Interest Payment Date or the Stated Maturity, as the case may be; the interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date, will be paid to the Person in whose name the Note (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such interest, which shall be January 15, April 15, July 15
or October 15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Payment of principal
of (and premium, if any, on) and any such interest on the Notes will be made at the Corporate Trust Office of the Trustee in Boston,
Massachusetts in such coin or currency of the United States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed
to the address of the Person entitled thereto as such address shall appear in the Security Register; provided,
further, however, that so long as the Notes are registered to Cede & Co., such payment
will be made by wire transfer in accordance with the procedures established by The Depository Trust Company and the Trustee. Interest
on the Notes will be computed on the basis of a 360-day year of twelve 30-day months.

 

(e) The Notes shall be initially issuable
in global form (each such Note, a “Global Note”). The Global Notes and the Trustee’s certificate of authentication
thereon shall be substantially in the form of Exhibit A to this Fourth Supplemental Indenture. Each Global Note shall represent
the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate amount of outstanding
Notes from time to time endorsed thereon and that the aggregate amount of outstanding Notes represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges, redemptions and issuances. Any endorsement of a Global Note
to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee
or the Security Registrar, in accordance with Sections 203 and 305 of the Base Indenture.

  

     

     

    

 

(f) The depositary for such Global Notes
(the “Depositary”) shall be The Depository Trust Company, New York, New York. The Security Registrar with respect to
the Global Notes shall be the Trustee.

 

(g) The Notes shall be defeasible pursuant
to Section 1402 or Section 1403 of the Base Indenture. Covenant defeasance contained in Section 1403 of the Base Indenture shall
apply to the covenants contained in Sections 1007, 1008 and 1009 of the Indenture.

 

(h) The Notes shall be redeemable pursuant
to Section 1101 of the Base Indenture and as follows:

 

(i) The Notes will be redeemable
in whole or in part at any time or from time to time, at the option of the Company, on or after January 30, 2020, at a redemption
price equal to 100% of the outstanding principal amount thereof plus accrued and unpaid interest payments otherwise payable for
the then-current quarterly interest period accrued to, but excluding, the date fixed for redemption.

 

(ii) Notice of redemption shall
be given in writing and mailed, first-class postage prepaid or by overnight courier guaranteeing next-day delivery, to each Holder
of the Notes to be redeemed, not less than thirty (30) nor more than sixty (60) days prior to the Redemption Date, at the Holder’s
address appearing in the Security Register. All notices of redemption shall contain the information set forth in Section 1104 of
the Base Indenture.

 

(iii) Any exercise of the Company’s
option to redeem the Notes will be done in compliance with the Indenture to the extent applicable.

 

(iv) If the Company elects to
redeem only a portion of the Notes, the Trustee or the Depositary, as applicable, will determine the method for selecting the particular
Notes to be redeemed, in accordance with Section 1103 of the Base Indenture and the Investment Company Act and the rules of any
national securities exchange or quotation system on which the Notes are listed, in each case to the extent applicable.

 

(v) Unless the Company defaults
in payment of the Redemption Price, on and after the Redemption Date, interest will cease to accrue on the Notes called for redemption
hereunder.

 

(i) The Notes shall not be subject to any
sinking fund pursuant to Section 1201 of the Base Indenture.

 

(j) The Notes shall be issuable in denominations
of $25 and integral multiples of $25 in excess thereof.

 

(k) Holders of the Notes will not have the
option to have the Notes repaid prior to the Stated Maturity.

 

(l) The Notes are hereby designated as “Designated
Senior Securities” under the Indenture.

 

ARTICLE
II

DEFINITIONS
AND OTHER PROVISIONS OF GENERAL APPLICATION

 

Section 201
Except as may be provided in a Future Supplemental Indenture, for the benefit of the
Holders of the Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, Article
I of the Base Indenture shall be amended by adding the following defined terms to Section 101 in appropriate alphabetical sequence,
as follows:

 

“‘Exchange
Act’ means the Securities Exchange Act of 1934, as amended, and any statute successor
thereto.”

 

“‘GAAP’
means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants, the opinions and pronouncements of the Public Company
Accounting Oversight Board and the statements and pronouncements of the Financial Accounting Standards Board or in such other statements
by such other entity as have been approved by a significant segment of the accounting profession in the United States, which are
in effect from time to time.”

 

     

     

    

 

ARTICLE
III

COVENANTS

 

Section 301
Except as may be provided in a Future Supplemental Indenture, for the benefit of the
Holders of the Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, Article
X of the Base Indenture shall be amended by adding the following new Section 1007 thereto, as set forth below:

 

“Section 1007
Commission Reports and Reports to Holders.

 

If, at any time, the Company or
Medley Management Inc. are not subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act to file any periodic
reports with the Commission, the Company agrees to furnish to the Holders of Notes and the Trustee for the period of time during
which the Notes are Outstanding: (i) within 90 days after the end of the each fiscal year of the Company, audited annual consolidated
financial statements of the Company and (ii) within 45 days after the end of each fiscal quarter of the Company (other than the
Company’s fourth fiscal quarter), unaudited interim consolidated financial statements of the Company. All such financial
statements shall be prepared, in all material respects, in accordance with GAAP.”

 

ARTICLE
IV

REDEMPTION
OF SECURITIES

 

Section 401
Except as may be provided in a Future Supplemental Indenture, for the benefit of the
Holders of the Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, Section
1103 of the Base Indenture shall be amended by replacing the heading and the first paragraph thereof with the following:

 

“Section
1103. Selection of Securities to Be Redeemed.

 

If less than all the Securities
of any series issued on the same day with the same terms are to be redeemed, the particular Securities to be redeemed shall be
selected not more than 45 days prior to the Redemption Date by the Trustee, or by the Depositary in the case of global Securities,
from the Outstanding Securities of such series issued on such date with the same terms not previously called for redemption, in
compliance with the requirements of DTC and in compliance with the requirements of the principal national securities exchange on
which the Securities are listed (if the Securities are listed on any national securities exchange), or if the Securities are not
held through DTC or listed on any national securities exchange, or DTC prescribed no method of selection, on a pro rata basis,
or by such method as the Trustee shall deem fair and appropriate and subject to and otherwise in accordance with the procedures
of the applicable Depositary; provided that such method may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination for Securities of that series; provided, however,
that no such partial redemption shall reduce the portion of the principal amount of a Security not redeemed to less than the minimum
authorized denomination for Securities of such series.”

 

ARTICLE
V

MEETINGS
OF HOLDERS OF SECURITIES

 

Section 501
Except as may be provided in a Future Supplemental Indenture, for the benefit of the
Holders of the Notes but no other series of Securities under the Indenture, whether now or hereafter issued and Outstanding, Section
1505 of the Base Indenture shall be amended by replacing clause (c) thereof with the following:

 

     

     

    

  

“(c)
At any meeting of Holders, each Holder of a Security of such series or proxy shall be entitled to one vote for each $25.00 principal
amount of the Outstanding Securities of such series held or represented by such Holder; provided,
however, that no vote shall be cast or counted
at any meeting in respect of any Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding.
The chairman of the meeting shall have no right to vote, except as a Holder of a Security of such series or proxy.”

 

ARTICLE
VI

MISCELLANEOUS

 

Section 601
This Fourth Supplemental Indenture and the Notes shall be governed by and construed
in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. This Fourth Supplemental
Indenture is subject to the provisions of the Trust Indenture Act that are required to be part of the Indenture and shall, to the
extent applicable, be governed by such provisions.

 

Section 602
In case any provision in this Fourth Supplemental Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

 

Section 603
This Fourth Supplemental Indenture may be executed in counterparts, each of which will
be an original, but such counterparts will together constitute but one and the same Fourth Supplemental Indenture. The exchange
of copies of this Fourth Supplemental Indenture and of signature pages by facsimile, .pdf transmission, email or other electronic
means shall constitute effective execution and delivery of this Fourth Supplemental Indenture for all purposes. Signatures of the
parties hereto transmitted by facsimile, .pdf transmission, email or other electronic means shall be deemed to be their original
signatures for all purposes.

 

Section 604
The Base Indenture, as supplemented and amended by this Fourth Supplemental Indenture,
is in all respects ratified and confirmed, and the Base Indenture and this Fourth Supplemental Indenture shall be read, taken and
construed as one and the same instrument with respect to the Notes. All provisions included in this Fourth Supplemental Indenture
supersede any conflicting provisions included in the Base Indenture with respect to the Notes, unless not permitted by law. The
Trustee accepts the trusts created by the Base Indenture, as supplemented by this Fourth Supplemental Indenture, and agrees to
perform the same upon the terms and conditions of the Base Indenture, as supplemented by this Fourth Supplemental Indenture.

 

Section 605
The provisions of this Fourth Supplemental Indenture shall become effective as of the
date hereof.

 

Section 606
Notwithstanding anything else to the contrary herein, the terms and provisions of this
Fourth Supplemental Indenture shall apply only to the Notes and shall not apply to any other series of Securities under the Indenture
and this Fourth Supplemental Indenture shall not and does not otherwise affect, modify, alter, supplement or change the terms and
provisions of any other series of Securities under the Indenture, whether now or hereafter issued and Outstanding.

 

Section 607
The recitals contained herein and in the Notes shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Fourth Supplemental Indenture, the Notes or any Additional Notes, except that the Trustee represents that
it is duly authorized to execute and deliver this Fourth Supplemental Indenture, authenticate the Notes and any Additional Notes
and perform its obligations hereunder. The Trustee shall not be accountable for the use or application by the Company of the Notes
or any Additional Notes or the proceeds thereof.

 

     

     

    

 

IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Supplemental Indenture to be duly executed as of the date first above written.

 

	 	MEDLEY LLC
	 	 
	 	By:	 /s/ Richard T. Allorto, Jr.
	 	Name: 	 Richard T. Allorto, Jr.
	 	Title:	 Chief Financial Officer
	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, as Trustee
	 	 
	 	By:	 /s/ Steven J. Gomes
	 	Name:	 Steven J. Gomes
	 	Title:	 Vice President

 

[Signature page to Fourth Supplemental
Indenture]

 

     

     

    

  

Exhibit A – Form of Global Note

 

This Security is a Global Note within the meaning of the
Indenture hereinafter referred to and is registered in the name of The Depository Trust Company or a nominee thereof. This Security
may not be exchanged in whole or in part for a Security registered, and no transfer of this Security in whole or in part may be
registered, in the name of any Person other than The Depository Trust Company or a nominee thereof, except in the limited circumstances
described in the Indenture.

 

Unless this certificate is presented by an authorized representative
of The Depository Trust Company to the issuer or its agent for registration of transfer, exchange or payment and such certificate
issued in exchange for this certificate is registered in the name of Cede & Co., or such other name as requested by an authorized
representative of The Depository Trust Company, any transfer, pledge or other use hereof for value or otherwise by or to any person
is wrongful, as the registered owner hereof, Cede & Co., has an interest herein.

 

Medley LLC

 

	 	 	 
	No. 2	 	$ 
	 	 	CUSIP No. 58503Y 204
	 	 	
        ISIN No. US58503Y2046 

 

7.25% Notes due 2024

 

Medley LLC, a limited liability company
duly organized and existing under the laws of Delaware (herein called the “Company,” which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of U.S. DOLLARS (U.S.$ ) on January 30, 2024, and to pay interest thereon from January 18, 2017, or
from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly on January 30, April
30, July 30 and October 30 in each year, commencing April 30, 2017, at the rate of 7.25% per annum, until the principal hereof
is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person in whose name this Security is registered at the close of business
on the Regular Record Date for such interest, which shall be January 15, April 15, July 15 or October 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture. This Security may be issued as part of a series.

 

Payment
of the principal of (and premium, if any, on) and any such interest on this Security will be made at the Corporate Trust Office
of the Trustee in Boston, Massachusetts in such coin or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided,
however, that at the option of the Company payment
of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security
Register; provided, further, however, that so long
as this Security is registered to Cede & Co., such payment will be made by wire transfer in accordance with the procedures
established by The Depository Trust Company and the Trustee.

 

Reference is hereby made to the further
provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect
as if set forth at this place.

  

 

Unless the certificate of authentication
hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.

 

     

     

    

 

IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed.

 

Dated:

 

	 	MEDLEY LLC
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title: 

 

Attest

 

	By:	 	 
	 	Name:	 
	 	Title:	 

 

 

     

     

    

  

This is one of the Securities of the series
designated therein referred to in the within-mentioned Indenture.

 

Dated:

 

	 	U.S. BANK NATIONAL ASSOCIATION as Trustee
	 	 
	 	By:	 
	 	 	Authorized Signatory

 

     

     

    

 

Medley LLC

7.25% Notes due 2024

 

This Security is one of a duly authorized
issue of Senior Securities of the Company (herein called the “Securities”), issued and to be issued in one or more
series under an Indenture, dated as of August 9, 2016 (herein called the “Base Indenture”, which term shall have the
meaning assigned to it in such instrument), between the Company and U.S. Bank National Association, as Trustee (herein called the
“Trustee”, which term includes any successor trustee under the Base Indenture), and reference is hereby made to the
Base Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee, and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and
delivered, as supplemented by the Fourth Supplemental Indenture relating to the Securities, dated as of February 22, 2017, by and
between the Company and the Trustee (herein called the “Fourth Supplemental Indenture”; the Fourth Supplemental Indenture
and the Base Indenture collectively are herein called the “Indenture”). In the event of any conflict between the Base
Indenture and the Fourth Supplemental Indenture, the Fourth Supplemental Indenture shall govern and control.

 

This Security
is one of the series designated on the face hereof, which series is initially limited in aggregate principal amount to $34,500,000.
Under a Board Resolution, Officers’ Certificate pursuant to Board Resolutions or an indenture supplement, the Company may
from time to time, without the consent of the Holders of Securities, issue additional Securities of this series (in any such case
“Additional Securities”) having the same ranking and the same interest rate, maturity and other terms as the Securities.
Any Additional Securities and the existing Securities will constitute a single series under the Indenture and all references to
the relevant Securities herein shall include the Additional Securities unless the context otherwise requires. The aggregate amount
of outstanding Securities represented hereby may from time to time be reduced or increased, as appropriate, to reflect exchanges,
redemptions and issuances.

 

The Securities
of this series are subject to redemption in whole or in part at any time or from time to time, at the option of the Company, on
or after January 30, 2020, at a redemption price per security equal to 100% of the outstanding
principal amount thereof plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period
accrued to, but excluding, the date fixed for redemption.

 

Notice of redemption shall be given in writing
and mailed, first-class postage prepaid or by overnight courier guaranteeing next-day delivery, to each Holder of the Securities
to be redeemed, not less than thirty (30) nor more than sixty (60) days prior to the Redemption Date, at the Holder’s address
appearing in the Security Register. All notices of redemption shall contain the information set forth in Section 1104 of the Base
Indenture.

 

Any exercise of the Company’s option
to redeem the Securities will be done in compliance with the Indenture and the Investment Company Act, to the extent applicable.

 

If the Company elects to redeem only a portion
of the Securities, the Trustee or the Depositary, as applicable, will determine the method for selecting the particular Securities
to be redeemed, in accordance with the Indenture to the extent applicable. In the event of redemption of this Security in part
only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name
of the Holder hereof upon the cancellation hereof.

 

Unless the Company defaults in payment of
the Redemption Price, on and after the Redemption Date, interest will cease to accrue on the Securities called for redemption.

 

The Indenture contains provisions for defeasance
at any time of the entire indebtedness of this Security or certain restrictive covenants and Events of Default with respect to
this Security, in each case upon compliance with certain conditions set forth in the Indenture.

 

 

If an Event of Default with respect to Securities
of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in
the manner and with the effect provided in the Indenture.

 

     

     

    

 

The Indenture permits, with certain exceptions
as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of
the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of not less than a majority in principal amount of the Securities at the time Outstanding of each series
to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance
by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any
such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders
of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.

 

As provided in and subject to the provisions
of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture
or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less
than 50% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in compliance with such request, and the Trustee shall not have received from the
Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such
request, and shall have failed to institute any such proceeding, for sixty (60) days after receipt of such notice, request and
offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of
any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

 

No reference herein to the Indenture and
no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional,
to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.

 

As provided in the Indenture and subject
to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender
of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

 

The Securities of this series are issuable
only in registered form without coupons in denominations of $25 and any integral multiples of $25 in excess thereof. As provided
in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder
surrendering the same.

 

No service charge shall be made for any
such registration of transfer or exchange, but the Company or Trustee may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security
for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose
name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

     

     

    

  

All terms used in this Security which are
defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

The Indenture and this Security shall be
governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws.Exhibit

Exhibit 10.15

Stockholders’ Agreement
Relating to
HealthSouth Home Health Holdings, Inc.
by and among
HealthSouth Home Health Holdings, Inc.,
HealthSouth Corporation,
and
the Other Stockholders Named herein 

Dated as of December 31, 2014

TABLE OF CONTENTS 
	
			
	 
	Page

	Article I
	 

	Certain Definitions

	 

	 
	 

	Article II
	 

	Representations and Warranties and Covenants

	 

	 
	 

	Section 2.01  Representations and Warranties of the Company
	7

	Section 2.02  Representations and Warranties of the Stockholders
	8

	Section 2.03  Investment Representations and Warranties
	8

	 
	 

	Article III 

	 

	Restrictions on Transfer
	 

	 
	 

	Section 3.01  General Restrictions
	9
	

	Section 3.02  Compliance with Securities Law
	10
	

	Section 3.03  Transfers Not In Compliance
	10
	

	Section 3.04  Tag-Along Rights
	10
	

	Section 3.05  Drag-Along Rights
	11
	

	Section 3.06  Call Rights
	14
	

	Section 3.07  Management Investors’ Put Right
	15
	

	 
	 

	Article IV 

	 

	Additional Rights

	 

	 
	 

	Section 4.01  Preemptive Rights
	15
	

	Section 4.02  Information Rights
	17
	

	 
	 

	Article V
	 

	Additional Covenants

	 

	 
	 

	Section 5.01  Transactions with Affiliates
	17
	

	Section 5.02  Purchase or Contribution of HealthSouth’s Home Healthcare Business
	17
	

	Section 5.03  Issuance of Restricted Stock
	18
	

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

i

	
			
	Article VI
	 

	Miscellaneous

	 

	 
	 

	Section 6.01  Specific Performance
	18

	Section 6.02  Entire Agreement
	19

	Section 6.03  Further Assurances
	19

	Section 6.04  Notices
	19

	Section 6.05  Applicable Law
	20

	Section 6.06  Severability
	20

	Section 6.07  Successors; Assigns
	20

	Section 6.08  Termination; Amendments
	20

	Section 6.09  Governing Law
	21

	Section 6.10  Waiver
	21

	Section 6.11  Parties in Interest
	21

	Section 6.1  Headings
	21

	Section 6.13  Counterparts
	21

ii

STOCKHOLDERS’ AGREEMENT
This STOCKHOLDERS’ AGREEMENT (this “Agreement”), dated as of December 31, 2014, which may be amended from time to time in accordance with the terms hereof, is made and entered into by and among HealthSouth Home Health Holdings, Inc., a Delaware corporation (the “Company”), HealthSouth Corporation, a Delaware corporation (“HealthSouth”), and the other stockholders of the Company listed as “Management Investors” on Schedule I attached hereto, as the same may be amended from time to time in accordance with the terms hereof (the “Management Investors” and together with HealthSouth, hereinafter the “Stockholders” and each individually, a “Stockholder”).
W I T N E S S E T H:
WHEREAS, as of the date hereof, HealthSouth owns all of the issued and outstanding shares of Common Stock, par value $0.01 per share, of the Company (the “Common Stock”); and
WHEREAS, pursuant to that certain Stock Purchase Agreement (“SPA”) and that certain Rollover Stock Agreement (the “RSA”), each dated as of November 23, 2014, the Management Investors agreed to contribute certain of their shares of Class A Common Stock, par value $0.01 per share, of EHHI Holdings, Inc. a Delaware corporation (“EHHI”), or Class B Common Stock, par value $.01 per share, of EHHI (collectively, the “Contributed Stock”) to the Company in exchange for non-voting shares of Common Stock; 
WHEREAS, since the date of the SPA and RSA, the parties hereto have agreed that, notwithstanding anything to the contrary in the SPA or RSA, the Contributed Stock will be exchanged for shares of Common Stock, rather than for non-voting shares of Common Stock; 
WHEREAS, as of the closing of the acquisition of EHHI by HealthSouth pursuant to the SPA, each Stockholder will own the number of shares of Common Stock set forth opposite such Stockholder’s name on Schedule I hereto; and
WHEREAS, the Company and each Stockholder desires to enter into this Agreement, all in accordance with the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree as follows:

Article I 
 
CERTAIN DEFINITIONS
For purposes of this Agreement, terms defined in the preamble and other Sections of this Agreement shall have the meanings set forth therein, and the following terms shall have the following meanings:
(a)    The term “Action” means any claim, suit, litigation or action brought by or before any Governmental Authority.
(b)    The term “Adjusted EBITDA” with respect to the Company shall be calculated based on the Company’s combined net income for the twelve-month period ending on the last day of the applicable calendar quarter (the “Relevant Period”), plus, without duplication and to the extent reflected as a charge in the statement of such net income for such Relevant Period: (1) state and federal income tax expense for the Relevant Period, plus (2) depreciation and amortization for the Relevant Period, plus (3) accrued interest expense on the HealthSouth Note and interest expense on any other indebtedness of the Company or its Subsidiaries for the Relevant Period, plus (4) accrued incentive equity compensation/SARs/Restricted Stock expenses for the Relevant Period, plus (5) gain/loss on disposal of any assets, plus (6) any severance costs and expenses incurred in connection with, or as a result of, (A) the transactions contemplated by the SPA or (B) the realization of cost synergies, in each case of (A) and (B), pursuant to any severance agreements entered into in connection with any terminations requested by HealthSouth or the transactions contemplated by the SPA, plus (7) any extraordinary charges or losses determined in accordance with GAAP.  Adjusted EBITDA shall be based on results of the Company under GAAP, without allocation of any HealthSouth corporate overhead or charges for corporate services, other than those approved or permitted pursuant to Section 5.01.
(c)    The term “Affiliate” means, with respect to a given Person (in this definition, the “Relevant Person”), any other Person who (a) directly or indirectly, Controls, or is Controlled by, or is under a common Control with, the Relevant Person, (b) from time to time, is managed by (i) the same investment manager as the Relevant Person is managed by, or (ii) an investment manager that is Controlled by the same Person that Controls the Relevant Person or (c) with respect to a natural Person, is a member of the same family; provided that in no event shall a limited partner, solely in its capacity as a limited partner, of any entity be considered an “Affiliate” of such Person.
(d)    The term “Business Day” means any day other than a day on which banks in the State of Delaware are authorized or obligated to be closed.

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(e)    The term “Cause” means, with respect to any Person who is an employee of the Company or any Subsidiary of the Company, (i) if such Person is a party to an employment agreement with the Company or any Subsidiary of the Company that includes a definition of “Cause,” the definition of “Cause” set forth in such agreement; or (ii) if such Person is not a party to any employment agreement with the Company or any Subsidiary of the Company that includes a definition of “Cause,” (1) dishonesty, fraud, or any act involving moral turpitude on such Person’s part in connection with the performance of his or her duties which is materially detrimental to the Company or any of its Affiliates, (2) being charged (by indictment, information or otherwise) with any criminal violation of any law or regulation pertaining to health care and/or pharmaceutical services and products (including, without limitation, laws and regulations pertaining to reimbursement or coverage by the Medicare program, any state Medicaid program or any other governmental health care program or by third-party payors, laws prohibiting kickbacks or false claims, and laws prohibiting fraud or abuse or fraudulent or abusive activities), (3) such Person’s willful and repeated refusal to follow lawful directives of the board of directors (or other governing body) of the Company or the Company’s Subsidiary with which such Person is employed in a manner that is materially detrimental to the Company, (4) such Person’s intentional or gross neglect of the performance of his or her duties as an employee of the Company or any of its Subsidiaries, (5) if such Person is an executive officer of the Company or a Subsidiary of the Company, such Person’s misappropriation of any corporate opportunity, provided such Person’s pursuit or referral of an opportunity shall not be improper or misappropriation if (A) such Person first presents an opportunity to the Company and the Company does not express an interest in pursuing it within thirty (30) days or (B) the Board authorizes such Person to pursue or refer an opportunity to another Person or entity, or (6) such Person’s conviction of a felony.
(f)    The term “Certificate of Incorporation” means the Certificate of Incorporation of the Company, as the same may be amended from time to time.
(g)    The terms “Control,” “Controlling” and “Controlled” mean the possession, direct or indirect, of the power to direct, or cause the direction of, the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 
(h)    The term “Equity Securities” means Common Stock or any other equity securities of the Company, including any class or series of common or preferred stock or any debt security convertible into or exercisable or exchangeable for any class or series of common or preferred stock.
(i)    The term “Exchange Act” means the Securities Exchange Act of 1934, as amended.

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(j)    For purposes of Section 3.06 and Section 3.07, the “Fair Market Value” of the Common Stock per share means, as of a given time, the result of (a)(i) the product of the Adjusted EBITDA of the Company for the twelve-month period ending on the last day of the most recently completed calendar quarter multiplied by the Market Multiple (as defined herein), less (ii) the outstanding balance of the HealthSouth Note as of the last day of such calendar quarter, plus or minus (iii) the amount of net debt of the Company (which shall be calculated as available cash less any indebtedness for borrowed money of the Company other than the HealthSouth Note) as of the last day of such calendar quarter, divided by (b) the total number of shares of Common Stock outstanding as of such time on a fully diluted basis. 
As used herein, “Market Multiple” means the median of the fair value divided by LTM EBITDA multiples (adjusted for acquisitions) of the companies then-included on either the Public Home Health Trading Comparable List or the Home Health Transaction Comparable List, in each case as most recently publicly reported by such company (provided that, for the companies then-included on the Public Home Health Trading Comparable List, the “fair value” shall be determined based on the average daily stock price for the last two (2) weeks of the most recently completed calendar quarter); provided, however, that LTM EBITDA of any such company shall be adjusted to account for any variation from the definition of Adjusted EBITDA, to the extent that the information necessary to make any such adjustment is publicly available.  As used herein, the “Public Home Health Trading Comparable List” includes those companies in the home health business and whose securities are listed for trading on a national securities exchange, including, without limitation,  HealthSouth, Kindred Healthcare, Inc., Amedisys, Inc., LHC Group, Inc. and Almost Family, Inc.; provided that the Public Home Health Trading Comparable List may be revised as reasonably agreed upon by the parties hereto to include additional home health companies that become listed on a national securities exchange or to remove companies that are no longer listed on a national securities exchange.  As used herein, the “Home Health Transaction Comparable List” means, at a given time, those transactions closing in the preceding twelve months (determined on a rolling basis) that meet the following criteria: (x) more than 60% of the target company’s and its subsidiaries’ consolidated revenue is from home health services; (y) the aggregate transaction value equals or exceeds $400 million; and (z) none of HealthSouth or any of its Affiliates is a party to the transaction.  As used herein, “LTM EBITDA” means “EBITDA” (as publicly reported by a given company) over the preceding period of twelve months. 
(k)    The term “GAAP” means United States generally accepted accounting principles, as in effect from time to time, consistently applied.
(l)    The term “Good Reason” means, with respect to any Person who is an employee of the Company or any Subsidiary of the Company, (i) if such Person is a party to an employment agreement with the Company or any Subsidiary of the Company that includes a 

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definition of “Good Reason,” the definition of “Good Reason” set forth in such agreement; or (ii) if such Person is not a party to any employment agreement with the Company or any Subsidiary of the Company that includes a definition of “Good Reason,” (1) any material reduction in such Person’s pay or benefits or failure to provide any compensation or benefit to which such Person is entitled, other than in connection with a Company-wide reduction in pay or benefits, (2) any relocation of such Person’s primary work site by more than twenty (20) miles from both such Person’s prior primary work site and such Person’s primary residence, or (3) a material diminution of such Person’s duties, responsibilities or title; provided, that in the circumstances described in (1), (2) and (3) the Company shall have fifteen (15) days to cure the default after delivery of written notice by such Person, such written notice to state the nature of the issue and subsection of the Good Reason definition that such Person believes to be present.
(m)    The term “Governmental Authority” means any government or governmental or regulatory authority or entity, whether U.S. federal, state, provincial or local or foreign, including any political subdivision thereof, and any department, court, agency or official of any of the foregoing.
(n)    The term “HealthSouth Note means that certain promissory note, dated on or about the date hereof, issued by the Company in favor of HealthSouth, with an initial aggregate principal amount of $385,137,500, pursuant to which the Company will have borrowed from HealthSouth and HealthSouth will have lent to the Company at the closing date of the transactions contemplated by the SPA, and which amount accrues interest at the same per annum interest rate as HealthSouth’s then-existing revolving credit facility and will be repaid from time to time with excess cash of the Company; provided, that if, after the date the HealthSouth Note is issued, HealthSouth provides funds to the Company or its Subsidiaries for acquisitions, capital expenditures or other corporate purposes (including, without limitation, for losses relating to breaches of representations, warranties or covenants in the SPA relating to the acquisition of the Company contemplated thereby that are not covered by indemnification pursuant to the SPA or by insurance), such amounts will be added to the principal amount of the HealthSouth Note, and interest will accrue on such amounts from the date such funds are provided to the Company or its Subsidiaries. 
(o)    The term “Law” means any foreign or U.S. federal, state or local statute, law, ordinance, code, rule, regulation or requirement from a Governmental Authority, including any Governmental Order; provided, that the term “Governmental Order” means any ruling, award, decision, injunction, judgment, order or decree entered, issued or made by any Governmental Authority. 
(p)    The term “Management Note” means a personal promissory note issued by a Management Investor in favor of the Company, with an aggregate principal amount 

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equal to the portion of the purchase price for the Shares being purchased by such Management Investor upon such Management Investor’s exercise of its Preemptive Right pursuant to Section 4.01, and which amount will accrue interest at the same per annum interest rate as HealthSouth’s then-existing revolving credit facility and may be prepaid at any time without any prepayment premium or penalty, which Management Note (i) shall become due and payable (including all accrued interest thereon) (x) in connection with the consummation of a Transfer of the applicable Management Investor’s Shares (other than to a Permitted Transferee), (y) in connection with the consummation of a Transfer following exercise of any put or call option on the applicable Management Investor’s Shares pursuant to Section 3.06 or Section 3.07 or (z) at such time as (1) such Management Investor becomes an executive officer of HealthSouth, or (2) the indebtedness represented by the Management Note would violate the rules and regulations promulgated under the Exchange Act or the Listed Company Manual of the New York Stock Exchange; and (ii) at the election of such Management Investor, may be nonrecourse and secured only by the Shares acquired by such Management Investor in the applicable issuance. 
(q)    The term “Permitted Transferee” means, with respect to each Management Investor bound by the terms of this Agreement, (i)  the Company; (ii) a transferee by testamentary or intestate disposition; (iii) a transferee by inter vivos transfer to the transferring Person’s spouse, children and/or other lineal descendants; (iv) a trust (or limited liability company, partnership or other estate planning vehicle) for the benefit of such Management Investor and/or Members of the Immediate Family of such Management Investor; (v) any other trust (or limited liability company, partnership or other estate planning vehicle) in respect of which such Management Investor serves as trustee (or as managing member, manager, general partner or otherwise, as applicable); and (vi) a Person approved by HealthSouth; provided that, with respect to the trusts described in clauses (iv) and (v), the trust agreement governing such trust (or limited liability company agreement or partnership agreement, as applicable) must provide, for the benefit of the Company, which shall be a third party beneficiary with respect thereto, that such Management Investor, as trustee (or managing member, manager, general partner or otherwise, as applicable), must retain sole and exclusive control over the voting and disposition of such Management Investor’s Shares until the termination of this Agreement.  As used in this definition, “Members of the Immediate Family” means, with respect to any individual, each spouse or child or other descendants of such individual, each trust created solely for the benefit of one or more of the aforementioned Persons and their spouses and each custodian or guardian of any property of one or more of the aforementioned Persons in his or her capacity as such custodian or guardian.
(r)    The term “Person” means any natural person or any corporation, partnership, limited liability company, other legal entity or Governmental Authority.

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(s)    The terms “Securities Act” means the Securities Act of 1933, as amended.
(t)    The term “Share Percentage” means, with respect to any Stockholder as of the date of determination, a percentage equal to the quotient of (i) the total number of Shares held by such Stockholder on a fully-diluted basis, divided by (ii) the aggregate number of Shares outstanding on a fully-diluted basis.
(u)    The term “Shares” means the shares of Common Stock owned by each Stockholder on the date hereof, as set forth opposite each Stockholder’s name on Schedule I attached hereto, and all additional shares of Common Stock acquired by any Stockholder after the date of this Agreement not in contravention of the terms of this Agreement.
(v)    The term “Subsidiary” or “Subsidiaries” of any Person means another Person, of which at least a majority of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions is owned or controlled directly or indirectly by such first Person.
(w)    The term “Transfer” means any voluntary or involuntary sale, assignment, transfer, grant of participation in, pledge or other disposition of any Shares to any other Person, whether directly or indirectly, and “Transferred,” “Transferee” and “Transferring” shall each have a correlative meaning.
ARTICLE II     
 
REPRESENTATIONS AND WARRANTIES AND COVENANTS
Section 2.01    Representations and Warranties of the Company.  The Company represents and warrants to each Stockholder as of the date of this Agreement as follows:
(a)    Corporate Authority.  The Company has full power and authority to execute, deliver and perform this Agreement;
(b)    Due Authorization.  This Agreement has been duly and validly authorized, executed and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that (i) the enforceability hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws now or hereafter in effect affecting creditors’ rights, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to certain equitable defenses and to the discretion of the court before which any proceedings therefor may be brought; and

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(c)    No Conflict.  The execution, delivery and performance of this Agreement by the Company do not violate or conflict with or constitute a default under (i) the Certificate of Incorporation or the by-laws of the Company, (ii) any Law applicable to the Company, or (iii) any material agreement to which the Company is a party or by which it or its property is bound.
Section 2.02    Representations and Warranties of the Stockholders.  Each Stockholder individually represents and warrants to each other Stockholder and the Company as follows as of the date of this Agreement:
(a)    Authority.  In the case of a Stockholder that is not an individual, such Stockholder has full corporate or other power and authority to execute, deliver and perform this Agreement.  In the case of a Stockholder who is a natural person, such Stockholder has full power and authority to execute, deliver and perform this Agreement;
(b)    Due Authorization.  This Agreement has been duly and validly authorized, executed and delivered by such Stockholder and constitutes a valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms, except that (i) the enforceability hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws now or hereafter in effect affecting creditors’ rights, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to certain equitable defenses and to the discretion of the court before which any proceedings therefor may be brought; and
(c)    No Conflict.  The execution, delivery and performance of this Agreement by such Stockholder do not violate or conflict with or constitute a default under (i) in the case of Stockholders that are not individuals, such Stockholder’s organizational documents, (ii) any Law applicable to such Stockholder, or (iii) any material agreement to which such Stockholder is a party or by which it or its property is bound.
Section 2.03    Investment Representations and Warranties.  Each Management Investor individually represents and warrants to each other Stockholder and the Company as follows as of the date of this Agreement:
(a)    Such Management Investor is acquiring the Shares for such Management Investor’s own account, for investment, and not with a view to the distribution thereof, nor with any present intention of distributing the same.
(b)    Such Management Investor understands that the Shares acquired by such Management Investor have not been registered under the Securities Act or the securities laws of any state; and that such Shares are being issued in a transaction exempt from the 

8

registration requirements of the Securities Act and the rules and regulations thereunder; and that such Shares must be held indefinitely unless a subsequent disposition thereof is registered under the Securities Act or is exempt from registration thereunder.  The Shares have not been approved or disapproved by the United States Securities and Exchange Commission, any state securities commission, or any other regulatory authority.
(c)    Such Management Investor has such knowledge and experience in business and financial matters as to enable such Management Investor to understand and evaluate the risks of such investment and form an investment decision with respect thereto.  Such Management Investor has relied only on its own tax advisor and legal counsel, and not on HealthSouth, the Company, or any of their respective advisors, with respect to the federal, state, local, foreign and other tax consequences arising from such Management Investor’s acquisition, ownership, and disposition of Shares.  
(d)    Such Management Investor  (i) has been advised and understands that no public market now exists for Shares and that a public market may never exist for Shares, (ii) has no need for liquidity in its investment in the Company, (iii) is able to bear the economic risk of such investment for an indefinite period and to afford a complete loss thereof, and (iv) understands all of the risks associated with the acquisition of Shares and may sustain a loss of such Management Investor’s entire investment.
(e)    Such Management Investor agrees that the Shares will be subject to the terms and conditions of this Agreement.  The certificate representing the Shares shall bear a restrictive legend.  
ARTICLE III     
 
RESTRICTIONS ON TRANSFER
Section 3.01    General Restrictions.  Except as set forth in this Article III, no Management Investor may Transfer any Shares, without the prior written approval of HealthSouth, in its sole discretion, except for Transfers pursuant to Section 3.04, Section 3.05, Section 3.06, or Section 3.07 or to any of its Permitted Transferees.  Prior to any Transfer of Shares to a Permitted Transferee, the Person to whom such Shares are being Transferred shall, as a condition precedent to such Transfer, agree in writing to take such Shares subject to, and to comply with, all of the provisions of this Agreement, a copy of which agreement shall be filed with the Secretary of the Company and shall include the address of the Person to whom such Shares are being Transferred to which notices hereunder shall be sent.  Each Management Investor agrees that it shall provide the Company with prior written notice of any proposed Transfer of Shares.

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Section 3.02    Compliance with Securities Laws.  Each Stockholder agrees that any Transfer of Shares engaged in by such Stockholder shall be required to comply with all federal, state and local securities Laws applicable to such transaction.  At the request of the Company, the transferring Stockholder shall deliver to the Company an opinion of counsel, which counsel and opinion shall be reasonably satisfactory to the Company, to the effect that the Transfer satisfies this Section 3.02.
Section 3.03    Transfers Not In Compliance.  A purported or attempted Transfer of Shares by a Stockholder that does not comply with the terms of this Agreement shall be void ab initio, and the purported transferee or successor by operation of Law shall not be deemed to be a stockholder of the Company for any purpose and shall not be entitled to any of the rights of a stockholder, including, without limitation, the right to vote the Shares or to receive a certificate for the Common Stock or any dividends or other distribution on or with respect to the Common Stock.
Section 3.04    Tag-Along Rights.
(a)    If, at any time during the term of this Agreement, HealthSouth proposes to Transfer, directly or indirectly, in one transaction or a series of related transactions, more than an aggregate of ten percent (10%) of the number of Shares owned by HealthSouth on the date of the proposed Transfer (or, in the case of a series of related transactions, on the date of the first proposed Transfer) to one or more Persons, other than to Affiliates of HealthSouth, HealthSouth shall provide each other Stockholder (each, a “Notice Recipient”) with not less than twenty (20) Business Days’ prior written notice (the “Sale Notice”) of such proposed Transfer(s), which notice shall include the material terms and conditions of such proposed Transfer(s) and which shall identify such purchaser or purchasers (the “Tag-Along Purchaser(s)”).  Each Notice Recipient shall have the option, exercisable by written notice to HealthSouth within ten (10) Business Days after the receipt of the Sale Notice, to require HealthSouth to arrange for such Tag-Along Purchaser(s) to purchase the same percentage (the “Percentage”) of the Shares then owned by such Notice Recipient as the ratio of (i) the total number of Shares which are to be Transferred by HealthSouth pursuant to the proposed Transfer(s) to (ii) the total number of Shares owned by HealthSouth immediately prior to such Transfer(s), or any lesser amount of Shares as such Notice Recipient shall desire, together with HealthSouth’s Shares at the same time, and upon the same terms and conditions (other than any non-competition, non-solicitation and non-hire covenants), as HealthSouth sells its Shares.  If a Notice Recipient shall so elect, HealthSouth agrees that it shall either (A) arrange for the proposed purchaser or purchasers to purchase all or a portion (as such Notice Recipient shall specify) of the same Percentage of the Shares then owned by such Notice Recipient at the same time, and upon the same terms and conditions (other than any non-competition, non-solicitation and non-hire covenants), as HealthSouth sells its Shares, including any indemnification or holdback; provided that, if such 

10

Tag-Along Purchaser(s) shall elect to purchase only such aggregate number of Shares as originally agreed with HealthSouth, then the number of Shares to be sold by HealthSouth and all Notice Recipients electing to participate in the proposed Transfer shall be reduced pro rata to such aggregate number, or (B) not effect the proposed Transfer to such Tag-Along Purchaser(s).  In the event that a Notice Recipient does not exercise its right to participate in such Transfer or declines to so participate, HealthSouth shall have one hundred eighty (180) days from the date of such Sale Notice to consummate the transaction on the terms set forth therein without being required to provide an additional Sale Notice to the other Stockholders and comply with the terms of this Section 3.04.  
(b)    In furtherance and not in limitation of the foregoing, each Stockholder exercising its right to sell Shares pursuant to Section 3.04(a) hereof (each, a “Tag-Along Stockholder”) shall (i) make the same representations, warranties, covenants, indemnities and agreements as made by HealthSouth in connection with HealthSouth’s Transfer of Shares to the Tag-Along Purchaser(s) (other than any non-competition, non-solicitation and non-hire covenants) and (ii) agree to the same terms and conditions (other than any non-competition, non-solicitation and non-hire covenants) to the Transfer as those to which HealthSouth agrees.  Notwithstanding the foregoing, (x) all such representations, warranties, covenants, indemnities and agreements shall be made by HealthSouth and each Tag-Along Stockholder, severally and not jointly, and any liability for breach of any such representations and warranties related to the Company shall be allocated among HealthSouth and each Tag-Along Stockholder pro rata based on the relative number of Shares Transferred by each of them, and (y) no Management Investor (or any of its Permitted Transferees) will be required to be liable for more than its pro rata share (based on the number of Shares Transferred by such Management Investor relative to the total number of Shares Transferred by all Stockholders) of any indemnification or similar obligations (other than with respect to representations and warranties regarding ownership of its Shares) and, in any event, will not be required to be liable for any amounts in excess of the net proceeds received by such Management Investor in such Transfer(s).
Section 3.05    Drag-Along Rights.
(a)    If, at any time during the term of this Agreement, HealthSouth proposes to Transfer to a Person, other than to an Affiliate of HealthSouth, by means of one transaction or a series of related transactions, including pursuant to a merger or consolidation involving the Company, Shares that constitute more than fifty percent (50%) of the number of Shares owned by HealthSouth on the date of the proposed Transfer (or, in the case of a series of related transactions, on the date of the first proposed Transfer), HealthSouth shall have the right (but not the obligation), upon not less than twenty (20) Business Days’ prior written notice of such proposed sale (the “Purchase Notice”), which notice shall include all of the material terms and conditions of such proposed sale and which shall identify the proposed purchaser(s) of such 

11

Shares (“Drag-Along Purchaser(s)”), to require each other Stockholder to sell to the Drag-Along Purchaser(s) that number of Shares (“Call Shares”) equal to the product, rounded down to the nearest whole number, of (a) a fraction, the numerator of which is the total number of Shares proposed to be sold by HealthSouth and the denominator of which is the total number of Shares owned by HealthSouth on the date of the proposed Transfer (or, in the case of a series of related transactions, on the date of the first proposed Transfer), multiplied by (b) the number of Shares then owned by such Stockholders.  If HealthSouth shall elect to require the Stockholders to sell Shares pursuant to the foregoing in this Section 3.05(a), HealthSouth shall arrange for such Drag-Along Purchaser(s) to purchase the Call Shares at the same time, and upon the same terms and conditions (other than any non-competition, non-solicitation and non-hire covenants), as HealthSouth sells its Shares, including any indemnification or holdback.  Subject to the foregoing, upon receipt of the Purchase Notice, the Stockholders shall cooperate with HealthSouth and otherwise take, or cause to be taken, all actions and do, or cause to be done, all things reasonably necessary or appropriate to enter into, consummate and make effective the sale and purchase of the Call Shares, together with HealthSouth’s Shares being so Transferred.  Notwithstanding any provision hereof to the contrary, from and after the date on which HealthSouth consummates a Transfer subject to this Section 3.05, (i) the Stockholder shall have no rights of a Stockholder with respect to the Call Shares sold and purchased in such transaction and (ii) the Stockholder shall not seek, nor shall the Company have any obligation, to enforce any such right with respect to such Call Shares.  
(b)    In furtherance and not in limitation of the foregoing, each Stockholder required to sell Shares pursuant to Section 3.05(a) hereof (each, a “Drag-Along Stockholder”) shall (i) make the same representations, warranties, covenants, indemnities and agreements as made by HealthSouth in connection with HealthSouth’s Transfer of Shares to the Drag-Along Purchaser(s) (other than any non-competition, non-solicitation and non-hire covenants) and (ii) agree to the same terms and conditions (other than any non-competition, non-solicitation and non-hire covenants) to the Transfer as those to which HealthSouth agrees.  Notwithstanding the foregoing, (x) all such representations, warranties, covenants, indemnities and agreements shall be made by HealthSouth and each Drag-Along Stockholder, severally and not jointly, and any liability for breach of any such representations and warranties related to the Company shall be allocated among HealthSouth and each Drag-Along Stockholder pro rata based on the relative number of Shares Transferred by each of them, and (y) no Management Investor (or any of its Permitted Transferees) will be required to be liable for more than its pro rata share (based on the number of Shares Transferred by such Management Investor relative to the total number of Shares Transferred by all Stockholders) of any indemnification or similar obligations (other than with respect to representations and warranties regarding ownership of its Shares) and, in any event, will not be required to be liable for any amounts in excess of the net proceeds received by such Management Investor in such Transfer(s).

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(c)    In the event that any Transfer pursuant to this Section 3.05 is structured as a merger, consolidation or similar business combination, each Drag-Along Stockholder shall (i) take all actions necessary to waive any appraisal or other similar rights with respect thereto and (ii) subject to the foregoing provisions of this Section 3.05, take such other action as are reasonably required to effect such transaction.
(d)    If any Drag-Along Stockholder fails to Transfer to the purchaser or purchasers the Call Shares to be sold pursuant to this Section 3.05, HealthSouth may, at its option, in addition to all other remedies it may have, deposit the purchase price (including any promissory note or other securities constituting all or any portion thereof) for such Call Shares with any national bank or trust company having combined capital, surplus and undivided profits in excess of $500 million (the “Escrow Agent”), and thereupon, other than the right to receive the purchase price in accordance with the immediately following sentence, all of such Drag-Along Stockholder’s rights in and to such Call Shares shall terminate.  Thereafter, upon delivery to the Company by such Drag-Along Stockholder of appropriate documentation evidencing the Transfer of such Call Shares to the Drag-Along Purchaser(s), HealthSouth shall instruct the Escrow Agent to deliver the purchase price (without any interest from the date of the closing to the date of such delivery, any such interest to accrue to the Company) to such Drag-Along Stockholder.
(e)    All costs and expenses of any transaction pursuant to this Section 3.05 that are incurred by any Drag-Along Stockholder shall be borne by such Drag-Along Stockholder; provided, that the reasonable fees and expenses of a single legal counsel representing any or all of the Management Investors in connection with such transaction shall be paid by the Company.  Notwithstanding the foregoing, the Drag-Along Stockholders shall not be required to bear any costs and expenses of such transaction (including any break-up or termination fee) incurred by the HealthSouth (it being understood that such costs and expenses incurred for the benefit of the Drag-Along Stockholders and HealthSouth may be paid for by the Company or the proposed purchaser).

13

Section 3.06    Call Rights.  
(a)    At any time after December 31, 2019, HealthSouth (or any designee of HealthSouth) shall have the right (but not the obligation), upon not less than twenty (20) Business Days’ prior written notice, to purchase all or any portion of the Shares owned by the Management Investors and their Permitted Transferees (or any of them) for a cash purchase price per share equal to the Fair Market Value of the Common Stock per share as of the last day of the most recent calendar quarter completed prior to the date of such notice. 
(b)    Within one hundred twenty (120) days following the termination of employment with the Company and all of its Subsidiaries of any Management Investor (or, in the case of (i) HCHB Consulting, Inc. (“HCHB”) and AGM Children’s Homecare, Inc. (“AGM”), the termination of employment of April Anthony with the Company and all of its Subsidiaries and (ii) any Permitted Transferee, the termination of the employment with the Company and all of its Subsidiaries of the Management Investor who initially owned the Shares then owned by such Permitted Transferee), in each case other than termination of employment without Cause, for Good Reason, or upon the death or disability of such Management Investor, upon written notice to such Management Investor or his or her Permitted Transferees, HealthSouth (or any designee of HealthSouth) shall have the right (but not the obligation) to purchase all, but not less than all, of the Shares owned by such Management Investor, and his or her Permitted Transferees, for a cash purchase price per share equal to the Fair Market Value of the Common Stock per share as of the last day of the most recent calendar quarter completed prior to the date of such termination of employment.  The right set forth in this Section 3.06(b) will expire and no longer be applicable with respect to the Shares held by (1) any Management Investor (other than HCHB or AGM) who remains an employee of the Company or any Subsidiary of the Company through December 31, 2017, and (2) HCHB or AGM, in the event that April Anthony remains an employee of the Company or any Subsidiary of the Company through December 31, 2017, or (3) any Permitted Transferee, in the event that the Management Investor who initially owned the Shares then owned by such Permitted Transferee remains an employee of the Company or any Subsidiary through December 31, 2017.
(c)    Any transaction pursuant to this Section 3.06 shall be consummated no later than ninety (90) days following delivery of the applicable notice, and, in exchange for the cash purchase price for the Shares sold by a Management Investor (or his or her Permitted Transferee) pursuant to this Section 3.06, such Management Investor (or his or her Permitted Transferee) shall deliver, or cause to be delivered, to the Company the stock certificates representing such Shares, together with duly executed stock powers in proper form for Transfer.

14

Section 3.07    Management Investors’ Put Right.  
(a)    At any time after December 31, 2017, each Management Investor and his or her Permitted Transferees shall have the right (but not the obligation), upon not less than twenty (20) Business Days’ prior written notice, to require HealthSouth (or any designee of HealthSouth) to purchase such Management Investor’s (or his or her Permitted Transferees’) Shares for a cash purchase price per share equal to the Fair Market Value of the Common Stock per share as of the last day of the most recent calendar quarter completed prior to the date of such notice; provided that, prior to January 1, 2019, no Management Investor (together with his or her Permitted Transferees) may require HealthSouth (or its designee) to purchase pursuant to this Section 3.07 more than one third of the Shares owned by such Management Investor (and his or her Permitted Transferees); provided, further, that, prior to January 1, 2020, no Management Investor (together with his or her Permitted Transferees) may require HealthSouth (or its designee) to purchase pursuant to this Section 3.07 more than two thirds of the Shares owned by such Management Investor (and its Permitted Transferees); and provided, further, that, from and after January 1, 2020, each Management Investor (together with his or her Permitted Transferees) may require HealthSouth (or its designee) to purchase any and all of such Management Investor’s (and his or her Permitted Transferees’) Shares pursuant to this Section 3.07. 
(b)    Any transaction pursuant to this Section 3.07 shall be consummated no later than ninety (90) days following delivery of the applicable notice, and, in exchange for the cash purchase price of the Shares sold by a Management Investor pursuant to this Section 3.07, such Management Investor shall deliver, or cause to be delivered, to the Company the stock certificates representing such Shares, together with duly executed stock powers in proper form for Transfer.
ARTICLE IV     
 
ADDITIONAL RIGHTS
Section 4.01    Preemptive Rights.
(a)    Each Stockholder shall have the right to purchase (the “Preemptive Right”), with respect to any issuance by the Company of Shares, other Equity Securities or securities convertible into or exercisable for Equity Securities, a number of such additional Shares, other Equity Securities or securities convertible into or exercisable for Equity Securities as are necessary in order for such Stockholder (together with his or her Permitted Transferees) to maintain its then current Share Percentage as of immediately prior to such issuance on a fully diluted basis; provided, however, that no Stockholder shall have a Preemptive Right with respect to the issuance by the Company of any Shares, other Equity Securities or securities convertible 

15

into or exercisable for Equity Securities (i) to officers, employees, or consultants of the Company or any Company Subsidiary in respect of services rendered to the Company or any Company Subsidiary, (ii) pursuant to any equity incentive plan, (iii) as consideration in any merger or consolidation involving the Company or any Subsidiary of the Company or as consideration for the acquisition by the Company or any Subsidiary of the Company of the assets or capital stock of any Person that is not Affiliated with the Company, or (iv) in connection with any Share split or split of other Equity Securities, recapitalization (other than third-party sponsored recapitalizations) or other subdivision or combination of securities.  Such Preemptive Right will be offered to each Stockholder (such offer, the “Preemptive Rights Offer”) pursuant to a written notice from the Company offering such Stockholder the Shares, other Equity Securities or securities convertible into or exercisable for Equity Securities on the same terms and conditions as offered to the proposed purchaser(s) (such written notice, the “Preemptive Rights Notice”).  The Preemptive Rights Notice will specify the material terms and conditions of the offering, including (A) the aggregate offering amount and offering price per Share, other Equity Security or security convertible into or exercisable for Equity Securities, (B) the identity of each proposed purchaser in the offering, and (C) the number of Shares, other Equity Securities or securities convertible into or exercisable for Equity Securities proposed to be acquired by each proposed purchaser.  Each Stockholder will have twenty (20) Business Days from the date of delivery of the Preemptive Rights Notice to notify the Company in writing of its binding acceptance of such Preemptive Rights Offer with respect to all or any portion of the Shares, other Equity Securities or securities convertible into or exercisable for Equity Securities that are offered to such Stockholder pursuant to the Preemptive Rights Offer.
(b)    In the event that any Stockholder elects to purchase Shares, other Equity Securities or securities convertible into or exercisable for Equity Securities pursuant to a Preemptive Rights Offer, the closing of the issuance(s) related to such Preemptive Rights Offer shall be consummated concurrently with the issuance of the Shares, other Equity Securities or securities convertible into or exercisable for Equity Securities to the proposed purchaser(s) in such offering.  After consulting with the Chief Executive Officer of EHHI, each Management Investor that is not then an executive officer of HealthSouth may, unless otherwise prohibited by the rules and regulations promulgated under the Exchange Act or the Listed Company Manual of the New York Stock Exchange, exercise all or any portion of its Preemptive Right by issuing a Management Note.
(c)    In the event that any Stockholder does not accept a Preemptive Rights Offer within the applicable period of twenty (20) Business Days, the Company shall have the right to issue the Shares, other Equity Securities or securities convertible into or exercisable for Equity Securities on terms and conditions (including, without limitation, price) no less favorable to the Company than those set forth in the Preemptive Rights Notice, pursuant to a definitive agreement to be entered into no later than sixty (60) days after such date.  Nothing 

16

contained herein shall preclude the Company from permitting any of the Stockholders to purchase all or a portion of the additional Shares, other Equity Securities or securities convertible into or exercisable for Equity Securities prior to the closing referred to above, subject to the rights of the other Stockholders with respect to such additional Shares, other Equity Securities or securities convertible into or exercisable for Equity Securities set forth in this Section 4.01; provided that such Stockholder(s) agree in writing to take such additional Shares, other Equity Securities or securities convertible into or exercisable for Equity Securities subject to the provisions of this Section 4.01.
Section 4.02    Information Rights.  During the term of this Agreement, for so long as a Management Investor holds Shares, the Company will provide such Management Investor with annual financial statements for each year during the term of this Agreement and quarterly financial information for each quarter during the term of this Agreement, in each case with respect to the Company and its Subsidiaries and in each case promptly following their availability following such year or quarter, as applicable.
ARTICLE V     
 
ADDITIONAL COVENANTS
Section 5.01    Transactions with Affiliates.  Except for Transfers pursuant to Section 3.04, Section 3.05, Section 3.06, Section 3.07, Section 4.01 or Section 5.02, the Company will not enter into any transaction with any Affiliate unless such transaction is on arm’s length terms that are no less favorable to the Company than would otherwise be available from an unaffiliated third party, as determined in good faith by the Chief Executive Officer of EHHI; provided, however, that such restriction shall not preclude HealthSouth from providing any service reasonably necessary to resolve any regulatory or compliance issue.  For the avoidance of doubt, the restrictions in this Section 5.01 shall not apply to the cash management policies and practices of the Company and HealthSouth, to any tax-sharing agreement or other shared services agreement between the Company and HealthSouth, to HealthSouth’s provision of funds to the Company or its Subsidiaries for acquisitions, capital expenditures or other corporate purposes pursuant to the terms of the HealthSouth Note, or to the repayment of the HealthSouth Note.
Section 5.02    Purchase or Contribution of HealthSouth’s Home Healthcare Business.  On or prior to June 30, 2015, HealthSouth may sell or contribute its existing home healthcare business to the Company in exchange for an increase in the HealthSouth Note in an amount equal to (a) such business’s 2014 EBITDA (determined on a basis consistent with the calculation of “Adjusted EBITDA” of the Company for such period), without giving effect to any HealthSouth corporate overhead charges, multiplied by (b) a multiple to be agreed upon by 

17

HealthSouth and the Management Investors that takes into consideration comparable acquisitions made by Wildcat during 2014 and the first six months of 2015 (and no additional consideration). 
Section 5.03    Issuance of Restricted Stock.  On or prior to March 31st of each of 2015, 2016, 2017, 2018 and 2019 (each, a “RS Year”), unless otherwise recommended by the Chief Executive Officer of EHHI and approved by the Compensation Committee of the Board of Directors of HealthSouth, HealthSouth shall issue to members of the EHHI management team (which may include one or more Management Investors)  recommended by the Chief Executive Officer of EHHI and approved by the Compensation Committee of the Board of Directors of HealthSouth, aggregate annual grants of not less than $2,500,000 of restricted stock of HealthSouth (the “Minimum Annual RS Amount”), issued pursuant to HealthSouth’s Amended and Restated 2008 Equity Incentive Plan or such other plan approved by HealthSouth’s stockholders or other cash settled award of similar value, valued as of the date of grant, and on the other terms set forth in Annex B to the RSA and the revised vesting schedule set forth in Schedule II attached hereto (which shall replace the section “Performance Objectives; Continued Employment” in Annex B to the RSA in its entirety).  If, in any RS Year, upon the recommendation of the Chief Executive Officer of EHHI and with the approval of the Compensation Committee of the Board of Directors of HealthSouth, any portion of the Minimum Annual RS Amount for such RS Year is waived, such waived portion of the Minimum Annual RS Amount shall be allocated to, and shall increase the Minimum Annual RS Amount for, a subsequent RS Year.  For the avoidance of doubt, the parties hereto hereby agree and acknowledge that the Management Investors may enforce this Section 5.03.
ARTICLE VI     
 
MISCELLANEOUS
Section 6.01    Specific Performance.  Each of the parties hereto acknowledges and agrees that the other parties would be damaged immediately, extensively, and irreparably and no adequate remedy at law would exist in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached or violated.  Accordingly, in addition to, and not in limitation of, any other remedy available to any party, the parties agree that, without posting bond or similar undertaking, each of the other parties shall be entitled to an injunction or injunctions to prevent breaches or violations of the provisions of this Agreement and to the remedy of specific performance of this Agreement and the terms and provisions hereof.  Subject to Section 6.09, such remedies, and any and all other remedies provided for in this Agreement, will, however, be cumulative in nature and not exclusive and will be in addition to any other remedies to which such party may be entitled.  Each party further agrees that, in the event of any action for injunctive relief or for specific performance in respect of any breach or violation, or threatened breach or violation, of this 

18

Agreement, it shall not assert the defense that a remedy at law would be adequate or that specific performance or injunctive relief in respect of such breach or violation should not be available on any other grounds.
Section 6.02    Entire Agreement.  This Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein, and there are no restrictions, promises, representations, warranties, covenants, conditions or undertakings with respect to the subject matter hereof, other than those expressly set forth or referred to herein.  This Agreement supersedes all prior agreements and understandings between the parties hereto with respect to the subject matter hereof.
Section 6.03    Further Assurances.  The Company and each of the Stockholders agree that, upon the request of any of the others from time to time after the date of this Agreement, and at the expense of the requesting party but without further consideration, such party shall sign such documents and take such actions as may be necessary or otherwise reasonably requested to effect, or make more fully effective, the terms and provisions of this Agreement.
Section 6.04    Notices.  All notices, requests, demands, claims and other communications required or permitted hereunder will be in writing and will be sent by personal delivery, nationally recognized overnight courier or facsimile or, provided that one of the foregoing methods of delivery is also used, by e-mail (as a PDF). Any notice, request, demand, claim, or other communication required or permitted hereunder will be deemed duly given, as applicable, (a) upon personal delivery, (b) one (1) Business Day following the date sent when sent by courier delivery or (c) upon confirmation of receipt when sent by facsimile or e-mail (as a PDF), addressed as follows:
	
		
	If to the Company or HealthSouth Corporation, to:

HealthSouth Home Health Corporation
c/o:  HealthSouth Corporation
3660 Grandview Parkway, Suite 200
Birmingham, Alabama 35243 
Telephone number:  (205) 967-7116
Facsimile number:  (205) 262-3948 
Attention:  Douglas E. Coltharp
                John P. Whittington
	with a copy (which will not constitute notice) to: 

Skadden, Arps, Slate, Meagher & Flom LLP
920 North King Street
Wilmington, Delaware  19801
Telephone number:  (302) 651-3000
Facsimile number:  (302) 434-3090
Attention:   Robert B. Pincus 

19

If to a Holder, at the address set forth under such Holder’s name on Schedule I or to such other address as the party to whom notice is to be given may have furnished to the other parties in writing in accordance herewith.
Any party may change the address to which notices, requests, demands, claims, and other communications required or permitted hereunder are to be delivered by providing to the other parties notice in the manner herein set forth.
Section 6.05    Applicable Law.  This Agreement, and all claims arising in whole or in part out of, related to, based upon, or in connection herewith or the subject matter hereof or the transactions contemplated hereby will be governed by, construed and enforced in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.
Section 6.06    Severability.  The invalidity, illegality or unenforceability of one or more of the provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of this Agreement, including any such provision, in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by Law.
Section 6.07    Successors; Assigns.  The provisions of this Agreement shall be binding upon the parties hereto and their respective heirs, successors and permitted assigns.  Neither this Agreement nor the rights or obligations of any Stockholder hereunder may be assigned, except in connection with the Transfer by a Stockholder of shares of Common Stock to a Permitted Transferee.  Any such attempted assignment in contravention of this Agreement shall be void and of no effect.
Section 6.08    Termination; Amendments.  This Agreement shall remain in full force and effect until the sooner of (a) termination of this Agreement pursuant to the mutual written agreement of each of the parties hereto; (b) with respect to any Stockholder Transferring all or part of its Shares in accordance with the terms of this Agreement, the date upon which such Stockholder ceases to own any Common Stock in the Company, or (c) the dissolution of the Company as approved by the Stockholders or otherwise in accordance with the terms of this Agreement. Except as otherwise provided for, this Agreement may be amended, and the observance of any term of this Agreement may be waived, with (and only with) the written consent of the holders of (i) a majority of the outstanding Common Stock held by all Stockholders and (ii) a majority of the outstanding Shares held by the Management Investors (and their Permitted Transferees, other than those Permitted Transferees who fall within clause (vi) of the definition thereof); provided that any such change shall become effective only when 

20

reduced to writing and signed by such holders of Common Stock and such Management Investors (or their Permitted Transferees). 
Section 6.09    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the choice of law or conflicts of law provisions thereof.  The parties hereto agree that any action, suit, or proceeding at law, in equity or otherwise which in any way arises out of or relates to this Agreement or the transactions contemplated hereby shall be brought solely in the Delaware Court of Chancery, unless the Delaware Court of Chancery lacks jurisdiction, in which case any such claim shall be brought in such state or federal court of competent jurisdiction located in New Castle County, Delaware, and all objections to personal jurisdiction and venue in any action, suit or proceeding so commenced are hereby expressly waived by all parties hereto.  The parties waive personal service of any and all process on each of them and consent that all such service of process shall be made in the manner, to the party and at the address set forth in Schedule I of this Agreement, and service so made shall be complete as stated in such section.
Section 6.10    Waiver.  Any waiver (express or implied) of any default or breach of this Agreement shall not constitute a waiver of any other or subsequent default or breach.
Section 6.11    Parties in Interest.  This Agreement shall be binding upon and inure solely to the benefit of each party hereto and its respective successors and permitted assigns, and no provision of this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
Section 6.12    Headings.  The headings in this Agreement are for convenience of reference only and shall not control or affect the meaning or construction of any provisions hereof.
Section 6.13    Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same Agreement.

[SIGNATURE PAGES FOLLOW]

21

IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the terms and provisions of this Stockholders’ Agreement as of the date first above written.
HEALTHSOUTH HOME HEALTH HOLDINGS, INC.
By:  John P. Whittington 
Name:    John P. Whittington 
Title:    Vice President and Secretary
HEALTHSOUTH CORPORATION
By: Douglas E. Coltharp 
Name:    Douglas E. Coltharp 
Title:    Executive Vice President 
            and Chief Financial Officer

IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the terms and provisions of this Stockholders’ Agreement as of the date first above written.

MANAGEMENT INVESTOR:
By: Judee Barrett 
       Judee Barrett

IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the terms and provisions of this Stockholders’ Agreement as of the date first above written.
MANAGEMENT INVESTOR:
AGM CHILDREN’S HOMECARE, INC.
By: April Anthony 
Name:  April Anthony
Title:    President

IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the terms and provisions of this Stockholders’ Agreement as of the date first above written.
MANAGEMENT INVESTOR:
HCHB CONSULTING, INC.
By: April Anthony 
Name:  April Anthony
Title:    President

IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the terms and provisions of this Stockholders’ Agreement as of the date first above written.

MANAGEMENT INVESTOR:
By: Andrew Ingram 
       Andrew Ingram

IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the terms and provisions of this Stockholders’ Agreement as of the date first above written.

MANAGEMENT INVESTOR:
By: Jesse Luke James 
       Jesse Luke James

IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the terms and provisions of this Stockholders’ Agreement as of the date first above written.

MANAGEMENT INVESTOR:
By: Tracey Kruse 
       Tracey Kruse

IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the terms and provisions of this Stockholders’ Agreement as of the date first above written.

MANAGEMENT INVESTOR:
By: Robert D. Peoples 
       Robert D. Peoples

IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the terms and provisions of this Stockholders’ Agreement as of the date first above written.

MANAGEMENT INVESTOR:
By: Jennifer L. Polak 
       Jennifer L. Polak

IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the terms and provisions of this Stockholders’ Agreement as of the date first above written.

MANAGEMENT INVESTOR:
By: G. Robert Thompson 
       G. Robert Thompson

SCHEDULE I
STOCKHOLDERS 
	
		
	Name, Address, Fax No. and Email
	Number of Shares

	 
	 

	HealthSouth Corporation

	 

	HealthSouth Corporation
3660 Grandview Parkway, Suite 200
Birmingham, Alabama 35243
Facsimile: (205) 262-3948
Attn: Douglas E. Coltharp
         John P. Whittington

	3,208,684

	Management Investors:

	 

	HCHB Consulting, Inc.
3606 Princeton Ave.
Dallas, Texas 75205

	495,979

	AGM Children’s Homecare, Inc.
3606 Princeton Ave.
Dallas, Texas 75205

	31,362

	G. Robert Thompson
5737 Meadowhaven Dr.
Plano, Texas 75093

	23,054

	Tracey Kruse
9633 Fieldcrest
Dallas, Texas 75238

	30,863

	Jennifer L. Polak
6655 Lakewood Blvd.
Dallas, Texas 75214

	5,952

	Robert D. Peoples
1517 Cottonwood Valley Circle South
Irving, Texas 75038

	20,289

	Jesse Luke James
3405 Centenary Ave.
Dallas, Texas 75225

	18,246

	Andrew Ingram
1127 Longford Circle
Southlake, Texas 76092

	12,118

	Judee Barrett
3825 Colgate
Dallas, Texas 75225

	6,701

	 
	 

	TOTAL
	3,853,248

S-I

SCHEDULE II
Restricted Stock: Vesting Schedule 

	
		
	Performance Objectives; Continued Employment:
	The shares of Restricted Stock will be subject to achievement of the target EBITDA for the year of grant, in each case as such target EBITDA is determined by the Compensation Committee of HealthSouth's Board of Directors after consultation with the Chief Executive Officer of EHHI, as set forth below:
Fifty (50%) percent of the Restricted Stock that meet the performance achievement will vest at the end of the second year following grant or, if earlier, upon the consummation of a Change of Control, and the balance of such Restricted Stock that meet the performance achievement will vest at the end of the third year following grant or, if earlier, upon the consummation of a Change of Control.  Vested shares of HealthSouth common stock will be freely transferable by the recipients.

S-II

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