Document:

mdsv_ex102.htm

EXHIBIT 10.2

 

Exclusive License Agreement

 

Between

 

Madison Ventures Inc.

 

And

 

Madison-IL Ltd.

 

And

 

Ocure Ltd.

 

Date: August 5, 2015

 

	 
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THIS EXCLUSIVE LICENSE AGREEMENT ("Agreement"), is entered into on August 5, 2015 by Ocure Ltd., an Israeli corporation with a principal address at High-Tech Village, Givat Ram Campus, Hebrew University, P.O. Box 39158, Jerusalem 91391, Israel ("Ocure"), Madison Ventures Inc., a Nevada corporation with its principal address at 1208 Tamarind Road, Dasmarinas Village, Makati City, Metro Manila, Philippines 1222 ("Madison"), and Madison-IL Ltd., an Israeli corporation with Israeli incorporation number 515285633 ("Madison Israeli Subsidiary"). 

 

WHEREAS, Ocure is the owner of certain inventions, know-how and rights pertaining to a semi-occlusive wound dressing for ambulatory treatment of acute and chronic anal fissure, including without limitation all rights pursuant to the patent applications, and issued patents listed in Exhibit A; and, 

 

WHEREAS, Ocure is a limited liability company that had in the past operated in the framework of a technologic incubator venture centre, in accordance with the rules and regulations of the Office of the Chief Scientist of the Israeli Ministry of the Economy (the "OCS") and in accordance with Directive 8.3 of the Director General of the Ministry of the Economy regarding technological incubators; and 

 

WHEREAS, the Madison Israeli Subsidiary will be established for the purpose of holding the exclusive global license rights as provided for herein, and for the purpose of acting as the operating entity for the Overall Enterprise (as defined herein). For clarity of overall organizational structure, Madison will hold 100% of the shares of the Madison Israeli Subsidiary (the wholly owned subsidiary of Madison), which in turn will hold the exclusive global license rights to the Ocure technology as provided for herein; and 

 

WHEREAS, Madison and Madison Israeli Subsidiary desire to secure the exclusive License for Madison Israeli Subsidiary to use, develop, manufacture, market, otherwise commercialize, sublicense and exploit the inventions disclosed and claimed in the patent applications and issued patents in Exhibit A; and, 

 

NOW, THEREFORE, in consideration of the foregoing, the provisions set forth herein and the mutual benefits to be derived herefrom, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Ocure, Madison and Madison Israeli Subsidiary, hereby agree as follows:

 

SECTION 1 DEFINITIONS 

 

	1.1 	"Affiliate" means any entity, which controls, is controlled by, or is under common control with a party by ownership or control of at least fifty percent (50%) of the voting stock or other ownership.
		 
	1.2 	"Closing" shall be the fulfillment by the Parties, or waiver by the relevant Party, to the extent applicable, of the following conditions and the consummation by the Parties of the following transactions: (a) Ocure shall have provided Madison with the materials referenced in Section 3.1 below, (b) the Parties shall have received all corporate and/or third party approvals required for their respective execution and performance of this Agreement and the transactions considered hereby, (c) the satisfaction of the Condition Precedent, and (d) Madison shall have executed the payment with respect to the Initial Round according to Section 3.2(b) below; which shall take place electronically, with documents sent to the Parties' counsel.

  

	 
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	1.3 	"Confidential Information" means: any information in any form or medium, including without limitation written records, documents, computer-readable disks, tapes, printouts, sound recordings, photographs, reproductions, sketches, notes, or copies or excerpts of them, or other documents or materials, that the disclosing party considers confidential, whether or not marked as confidential. Confidential Information includes inventions, software, source code, object code, algorithms, procedures, databases, compilations, technical data, formulas, theories, methods, equipment, samples, designs, data, specifications, drawings, blueprints, prototypes, models, business plans, customer lists, contacts and information, sales and marketing reports, proposals, prices, costs, personnel and payroll records, mailing lists, accounting records, and other trade secrets and information concerning the businesses and other ventures which the disclosing party now operates or may operate in the future.
		 
	1.4 	"Effective Date" means the date of Closing, by which date inter alia the Condition Precedent (as defined below) is satisfied, upon which this Agreement is deemed to take effect and both Parties become subject to the rights and obligations set forth herein.
		 
	1.5 	"Field of Use" means those uses of the Licensed Technology in uses classified as medical devices, or those otherwise approved ultimately as an OTC (over-the-counter) remedy.
		 
	1.6 	"Party" shall mean Ocure or Madison and/or the Madison Israeli Subsidiary, individually, and "Parties" shall mean Ocure, Madison and Madison Israeli Subsidiary collectively.
		 
	1.7 	"Gross Sales" means the actual gross proceeds received by Madison Israeli Subsidiary and/or Madison Israeli Subsidiary's sublicenses from third parties in the manufacturing, distribution, sale, licensing, franchising, commercialization or exploitation of the Licensed Technology and/or New Inventions (as defined in Section 3.3(b)), less shipping, duty customs costs and taxes for such sales.
		 
	1.8 	"Licensed Technology" means Ocure's semi-occlusive wound dressing for ambulatory treatment of acute and chronic anal fissure, pursuant to the Ocure Patents. .
		 
	1.9 	"Ocure Exclusive Licensed Product(s)" means product(s) whose manufacture, use or sale is covered in whole or in part by any claim of the Licensed Technology; product(s) which are made in whole or in part using a process or machine covered in whole or in part by a claim of the Licensed Technology; is otherwise covered by, or falls within the scope of, a claim, in whole or in part, or the sale of which would infringe a claim but for the grant of the License; or product(s) made, at least in part, using Licensed Technology. Ocure Exclusive Licensed Product(s) shall also include any service rendered in whole or in part through the use of a product, process or machine covered in whole or in part by any claim of any of the Licensed Technology or enabled by Licensed Technology.
		 
	1.10 	"Ocure Patent(s)" are those United States patent applications and issued patents listed in Exhibit A hereto and any corresponding foreign patent applications and issued patents, and any divisionals, continuations (excluding continuations-in-part), reissues and reexaminations to the extent that the claims are directed to subject matter within the Field of Use.
		 
	1.11 	"Sale" means any bona fide transaction for which cash or non-cash consideration is received or expected for the sale, use, lease, import, transfer or other disposition of Ocure Exclusive Licensed Product(s).

 

	 
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	1.12 	"Secondary Round" has the meaning set out in Section 3.2.
		 
	1.13 	"Term" means the term of this Agreement which shall commence on the Effective Date and continue, on a country-by-country basis, until the later of: (a) the date of expiration of the last to expire of Ocure's rights in Ocure Patents in such country or such other grant of statutory exclusivity, or (b) the end of a period of fifteen (15) years from the date of making the First Commercial Sale in such country; unless sooner terminated pursuant to the terms of this Agreement. Should a Ocure Patent expire prior to fifteen (15) years from the date of the First Commercial Sale in a particular country or countries, the License in that country or those countries shall be deemed a License to the Know-how and/or any other intellectual property rights which are not patents and are deemed part of the Licensed Technology. Thereafter, the Madison Israeli Subsidiary shall have an irrevocable option to obtain an exclusive license to the Licensed Technology by agreeing to pay Ocure fifty percent (50%) of the consideration set forth in Section 3.3.A "First Commercial Sale" shall mean the first sale of an Ocure Exclusive Licensed Product and receipt of the sale proceeds by the Madison Israeli Subsidiary, an Affiliate or a sublicensee after receipt of all governmental and other regulatory approvals required to market and sell the Ocure Exclusive Licensed Product have been obtained in the country in which such Ocure Exclusive Licensed Product is sold.
		 
	1.14 	"Territory" means "ALL COUNTRIES AND TERRITORIES OF THE WORLD".

 

SECTION 2 EXCLUSIVE LICENSE

 

	2.1 	Grant of Exclusive License. Ocure grants to Madison Israeli Subsidiary, an exclusive, sublicensable, worldwide, license to the Licensed Technology and to its production, use, import, offer for sale, sell, lease, distribute, or otherwise commercialize the Licensed Technology in the Field of Use only in the Territory,allsubject to and in accordance with the terms and conditions of this Agreement (the "License").
		 
	2.2 	This Agreement will survive the bankruptcy or insolvency of Ocure.
		 
	2.3 	Sublicensing. So long as it remains the licensee hereunder, Madison Israeli Subsidiary shall have the right to grant sublicense of the Licensed under Section 2.1 to third parties, subject to the provisions herein.
		 
		The right to sublicense is subject to the following conditions: 

 

		a) 	In each such sublicense, the sublicensee shall be prohibited from granting further sublicenses and shall be subject to terms substantially similar to the terms and conditions of the License granted to Madison Israeli Subsidiary under this Agreement, including the material terms and conditions of this Agreement. Madison Israeli Subsidiary shall include a requirement that the sublicense use commercially reasonable efforts to bring the subject matter of the sublicense into commercial use as quickly as is reasonably practicable. The sublicensee shall be responsible for its sublicense and shall not grant any rights that are inconsistent with the rights granted to, and obligations of, Madison Israeli Subsidiary hereunder. No such sublicense agreement shall contain any provision that would cause it to extend beyond the Term of this Agreement.

 

	 
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		b) 	Madison Israeli Subsidiary shall notify Ocure of each sublicense to be granted hereunder, regarding the identity of the Sublicensee and the material terms and conditions of the Sublicense. Madison Israeli Subsidiary shall furnish to Ocure a copy of each fully-executed sublicense agreement and any amendments thereof within fourteen (14) days of execution. Madison Israeli Subsidiary shall also promptly forward to Ocure a copy of all royalty reports received by Madison Israeli Subsidiary from sublicensee(s).
			 
		c) 	Each such sublicense shall include the following provisions for the benefit of Ocure:

 

			(i) 	Madison Israeli Subsidiary shall ensure that any sublicense shall include material terms that bind the sublicensee to observe the terms of this Agreement, the breach of which terms shall be a material breach resulting in the prompt termination of the sublicense. In such an event, the Madison Israeli Subsidiary undertakes to take all reasonable steps to enforce such terms upon the sublicensee, including the termination of the sublicense. In all cases, the Madison Israeli Subsidiary shall immediately notify Ocure of any breach of the material terms of a sublicense, and shall copy Ocure on all correspondence with regard such breach.
				 
			(ii) 	Confidentiality obligations on sublicensee to maintain the confidentiality of Ocure Confidential Information.
				 
			(ii) 	Obligation of sublicensee to inform Madison Israeli Subsidiary and Ocure of infringement and litigation related to the Licensed Technology.
				 
			(iii) 	Disclaimer of Warranty by Ocure; Limitation of Liability of Ocure; Indemnification by the sublicensee of Ocure.

 

	2.4

	Agreements with Principals of Ocure

 

i) At the Closing, the Parties will agree upon the terms according to which certain Principals of Ocure will, on or before any portion of the Secondary Round is paid, enter into employment, consulting and service agreements, as applicable, with Madison and/or the Madison Israeli Subsidiary, as applicable, defining among other things compensation and commitment provisions as mutually agreeable to the parties (the "Engagement Agreements"). The material terms upon which such Engagement Agreements will be based on the terms attached hereto as Exhibit C; Exhibit C shall also include a list of the Principals of Ocure who shall enter into such consulting and service agreements.  

 

ii) The Engagement Agreements, as referred to in Section 2.4(i) above, will contain escrow released provisions and repurchase rights to govern the common shares issuable to the Principals that require and mandate the continued involvement of the Principals in the future operations of any of Ocure, the Madison Israeli Subsidiary or Madison (together the"Overall Enterprise"),and most particularly during the entirety of the first 3 years of business following the Closing, in order for the Principals to "retain" the entirety of the escrow shares they individually or collectively subscribe for as per Section 3.4(i). The Engagement Agreements will refer to and define among other things their individual shareholdings, compensation and commitment terms as mutually agreeable to the parties. Commencing 30 days from the date of payment of the Secondary Round of the Financing, 10% of each Principals escrow securities, shall be released, with 10% being released every 90 days thereafter over the course of the initial 3 year engagement term, subject to certain acceleration events as shall be provided for in the said Engagement Agreements.  

 

	 
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iii) Upon execution of the Engagement Agreements provided for in Section 2.4(i) above, Madison Israeli Subsidiary and the respective Principals of Ocure shall enter into industry standard non-competition and non-disclosure agreements (the "Non-Disclosure/Non-Competition Agreements"), on terms acceptable to the parties, wherein such parties will agree not to develop directly or indirectly products, services, or a business enterprise which could reasonably be expected to be in any manner competitive to Madison and/or the Madison Israeli Subsidiary. 

 

iv) Ocure and Madison Israeli Subsidiary agree to work together in good faith to develop a future financing strategy that provides adequate and on-going capitalization to Madison in order to fund its future working capital requirements and expansion initiatives. The parties shall negotiate in good faith the timing and pricing of such future additional financings, with a view to minimizing long-term dilution. It is agreed that during the Calendar year 2015, Madison will on a best efforts basis seek an additional financing round consisting of 1,000,000 units at $1.00 per unit, each unit consisting of one common share and one-half of one warrant for gross proceeds of $1,000,000. Full warrants will be exercisable at $2.00 per share for two (2) years. Madison understands that there may be interest from some outside third parties known to the Principals to make investment into Madison, and as such agrees here to allow for this financing to be arranged by the Principals, or as otherwise agreed by the parties as may be necessary. 

 

v) Following the consummation of the payment with respect to the Secondary Round referenced in Section 3.2(c) the parties shall establish a Board of Directors for Madison consisting of five (5) individuals (three representatives on behalf of Ocure, and two representatives on behalf of Madison), such individuals to be mutually agreed by the parties in advance, with a view to ensuring that the composition of the Board includes appropriate industry, finance, accounting and business experience. At such time, Madison shall procure a D&O liability insurance in a per claim amount to be agreed upon between the parties, and the terms of which and the identity of the insurer are reasonably satisfactory to the Board, including the consent of the directors appointed by Ocure.

 

SECTION 3 CASH PAYMENTS, ROYALTIES, STOCK AND OPTIONS

 

	3.1

	Cash Payments. Madison shall provide $250,000 USD to Ocure as payment to procure the License under the terms of this Agreement. These proceeds shall be submitted by Madison to counsel for direct release to Ocure based on timed and scheduled release dates derived from budgets and specific target milestones mutually agreed upon by the parties as a general basis for such release. The funding will be utilized by Ocure as required for the proper day to day management and operation of the business by Ocure and development of the Licensed Technology so that the Madison Israeli Subsidiary may carry out its business plan of marketing Ocure Exclusive Licensed Products. The budgets and milestones to be met by Ocure in obtaining and retaining such funding shall be detailed in the materials provided to Madison as referenced below (where such material has been provided to Madison to its satisfaction prior to the signature of this Agreement), and contained specifically in Exhibit B hereto:

 

		o	A comprehensive 3-year proforma financial projection
			 
		o	Copies of any/all relevant contracts, documentation/ communications with interested parties (JV, Strategic Alliance, investors, etc.) 
			 
		o	A Use of Proceeds for the initial proposed $250,000 USD payment 

 
	

			
		

	 
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		o	A detailed month-to-month Budget for the next 6 months (tied to the Use of Proceeds)
			 
		o	A table of expected milestones and deliverables for the next 6 months
			 
		o	Articles of Association for the Company

 

	
3.2 
	
Schedule of Cash Payments  

  

Initial Round 

 

The initial round of $250,000, as referred to in Section 3.1 above, shall be made available to the Madison Israeli Subsidiary in staged tranches, payable as follows:

 

			a. 	$10,000 (already paid at the signing of the Letter of Intent dated February 27, 2015),
			 	 
			b. 	$90,000 at the later of 11 May 2015 or the Effective Date.
			 	 
			c. 	$150,000 at the later of 5 June 2015 or 18 calendar days after the Effective Date.

  

Secondary Round 

 

The Secondary round of an additional $250,000 shall be made available to the Madison Israeli Subsidiary at the end of the initial six months period from the Effective Date provided that Ocure has delivered on its applicable commitments and milestones as per Exhibit B for such six month period, the License shall and have continued to be held in force, and that at such time and date, ownership and right to any additional assets (not including the Licensed Technology) then existing in Ocure will be fully transferred to the Madison Israeli Subsidiary.  

 

The Secondary Round shall follow the same tranche structure as the initial payment with such amounts and release dates comprised of three (3) tranches, payable as follows:  

 

			a. 	$100,000 at the later of 6 November 2015 or 168 calendar days after the Effective Date,
			 	 
			b. 	$100,000 at the later of 4 December 2015 or 196 calendar days after the Effective Date, and
			 	 
			c. 	$50,000 at the later of 8 January 2016 or 230 calendar days after the Effective Date.

 

In the event that Ocure does not deliver on its applicable commitments and milestones as per Exhibit B for Madison to invest the consummate the Secondary Round payment to the Madison Israeli Subsidiary, and Madison elects not to pay the Secondary Round payment, then this Agreement and the License thereunder shall be terminated.  

 

	 
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3.3
	
Royalties  

 

		a. 	Reserved.
			 
		b. 	The parties shall co-operate in the further development of the Licensed Technology and in such regard shall inform each other of all Know-how and any New Inventions (as defined below) developed by the parties; such New Inventions shall be owned by the Madison Israeli Subsidiary. Notwithstanding the aforesaid, the Madison Israeli Subsidiary shall be required to pay Royalties, whether attributable to Madison Israeli Subsidiary and/or to Madison Israeli Subsidiary's sublicenses (as provided for in Section 3.3(c) below) on the Gross Sales relating to the New Inventions.
			 
			For the purpose of this Agreement, "New Inventions" shall mean: any inventions, improvement, development or enhancement based upon, consists of, comprises, contains or incorporates the Licensed Technology invented following the Effective Date by the Madison Israeli Subsidiary, an Affiliate or Sublicensee. 
			 
		c. 	In consideration of the License for the Licensed Technology and with respect to the New Inventions (as as set out in Section 3.3(b) above, Ocure shall receive, and Madison Israeli Subsidiary shall pay to Ocure, the following during the Term:

 
			i)	Royalties ("Royalties") calculated as 5% (five percent) of:

        
				i. 	Gross Sales attributable to Madison Israeli Subsidiary; and
			 		 
				ii. 	Gross Sales attributable to Madison Israeli Subsidiary's sublicenses, provided that Royalties on any Sale of Ocure Exclusive Licensed Product(s) by Madison Israeli Subsidiary to Madison Israeli Subsidiary's sublicenses shall not be due until the resale of such Ocure Exclusive Licensed Product(s) by the sublicense.

 

			(ii) 	Madison Israeli Subsidiary shall promptly pay to Ocure twenty percent (20%) ("Non-Sale Based Sublicense Consideration") of any cash or non-cash consideration received, whether for sublicense initiation fee, annual fee, sublicense milestone payments, or other such non sale based royalty consideration payable by a sublicense as consideration for or under a sublicense. Non Sale Based Sublicense Consideration does not include (i) the Sale-based Royalties set forth in Section 3.3(c)(i)  payable to Ocure by Madison Israeli Subsidiary under this Agreement, or (ii) any equity investments and/or loans made by a sublicense in and to Madison Israeli Subsidiary, provided however that such equity investments and/or loans are not made in consideration for the grant of any sublicense. Any non-cash consideration received by the Madison Israeli Subsidiary from such sublicenses shall be valued at its fair market value as of the date of receipt.

 

		d) 	Royalties and Non-Sale Based Sublicense Consideration payable by Madison Israeli Subsidiary to Ocure under this Section 3.3 shall be accompanied by reports as set forth in Section 3.3 (f, g) below.
		 	 
		e) 	Payments of Royalty and Non-Sale Based Sublicense Consideration: The Royalty and Non-Sale Based Sublicense Consideration payments shall be calculated on a calendar quarter basis and paid, without set-off or counterclaim, for each quarter within 60 days of the end of such quarter. Any amounts not paid within 60 days shall bear interest, calculated from the end of the quarter for which such payment was due,at the prime lending rate charged by HSBC to its most credit worthy customers plus two percent (2%). To the extent that the revenue received by Madison Israeli Subsidiary for the manufacturing, distribution, sale, licensing, franchising or exploitation of the Licensed Technology is in a form other than the lawful currency of the United States, the Royalty shall be paid to Ocure in the lawful currency of the United States based on published foreign exchange rates (as constituted on the last day of the applicable quarter) reasonably designated by Ocure. Madison Israeli Subsidiary shall be responsible for maintaining books and records in accordance with Generally Accepted Accounting Principles as required by international accounting standards which accurately document its revenues and the Royalty. Payment of Value Added Tax - or of any analogous foreign tax, charge or levy (if charged), applicable to the sale of Ocure Exclusive Licensed Products shall be added to each payment in accordance with the statutory rate in force at such time.

 

	 
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		f) 	Report of Sales: Within 60 days following the close of the first calendar quarter in which there are any revenues generated from the Licensed Technology, Madison Israeli Subsidiary shall provide Ocure with a full written report showing the sales in such quarter and the amount of Royalty payable with respect thereto, certified by the accountant for Madison Israeli Subsidiary. Thereafter, within 60 days following the close of each calendar quarter, Madison Israeli Subsidiary shall provide Ocure with a written report showing the amount of sales in such quarter and the amount of Royalty and/or Non-Sale Based Sublicense Consideration payable with respect thereto. Madison Israeli Subsidiary shall require and cause its Affiliates and sublicenses to prepare and provide similar such reports to Ocure.
			  
		g) 	Examination of Books and Records: Upon the written request of Ocure and, except as otherwise provided below, at Ocure' expense, Madison Israeli Subsidiary shall allow and make available on an annual basis its books and records to be examined and audited by a registered auditing firm for the purpose of determining compliance with Royalty and Non-Sale Based Sublicense Consideration payment obligations under this Agreement, where such books shall be managed in accordance with Generally Accepted Accounting Principles as required by international accounting standards. If such audit discloses any discrepancy in the amount of Royalty and/or Non-Sale Based Sublicense Consideration paid, the appropriate adjustment shall be made immediately thereafter. To the extent of an overpayment, the amount due from Ocure shall be deducted from future payments. In the event that any such examination or audit shall determine that the Royalty and/or Non-Sale Based Sublicense Consideration actually paid for any period was less than 95% of the amount properly payable, or was greater than the amount that should have been paid, Madison Israeli Subsidiary shall pay the reasonable expenses actually incurred by Ocure in connection therewith, in addition to all previously unpaid Royalties and Non-Sale Based Sublicense Consideration. Ocure and its representatives shall not use or disclose such books and records, nor any of the specific information contained therein, to any third parties except as reasonably necessary if Madison Israeli Subsidiary is in breach of this Agreement. Madison Israeli Subsidiary shall, and shall require and cause its Affiliates and sublicenses to retain such books of accounts for five (5) years after the end of each calendar year during the period of this Agreement, and, if this Agreement is terminated for any reason whatsoever, for five (5) years after the end of the calendar year in which such termination becomes effective.
			 
		h) 	Should any payment required to be made to Ocure in accordance with the provisions of this Agreement be subject to withholding of any taxes assessable upon Ocure, the Madison Israeli Subsidiary shall inform Ocure of such withholding requirement sufficiently in advance of such withholding to allow Ocure to obtain and provide the Madison Israeli Subsidiary with an appropriate certificate of exemption, if available. No withholding shall be made if an exemption is obtained. All payments made shall be free and clear of any other withholding of any kind.

 

	 
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	3.4 	Payment of Stock/Options: In addition to the above, and as consideration for the grant of the License, Madison will grant the following to Ocure at the Closing:

 

		(i) 	Immediately after the Closing and for a period of one month, the Shareholders of Ocure and certain individuals designated by Ocure, all as set out in Exhibit D hereto (the "Designated Parties"), shall have opportunity to purchase and acquire an equity stake in Madison (trading symbol MAVT: OTCPK) that will equate to a collective ownership stake of up to 1,775,000 shares of common stock in Madison, of 25% of the shares of Madison issued, in addition to the approximately 7.100,000 issued and outstanding Madison shares, or otherwise held for issuance, as at the date the Initial Round of Financing has been paid to Ocure. Each of theDesignated Parties, or any of their respective designees will have the right to acquire such proportion of the said Madison shares as equals his/her proportion of equity shares of Ocure. The shares available for acquisition in Madison by the Designated Parties shall have an associated par value purchase price of $0.001/share and shall be accompanied by an industry standard form share subscription agreement to be completed by each of the Designated Parties, which shall include certain representations and warranties surrounding investor suitability and accreditation (whether accredited or non-accredited), residency declaration, security law required share escrow provisions, amongst other required regulatory disclosure. A certified check, bank draft, or wire transfer, shall accompany each executed subscription agreement.
			 
		(ii) 	In addition to the shares in Section 3.4(i), Madison shall establish an incentive stock option plan reserving up to 20% of the Madison issued share capital, as of the Closing (including in such issued share capital number the shares of Designated Parties as provided for in Section 3.4(i) above) for purchase on exercise of any potential future options. Option allocations for the Principals of Ocure who are to serve as members of management and the Board of Madison shall be negotiated by the parties and granted upon establishment of the option plan and execution of an Engagement Agreement with each such Principal as per Section 2.4(i). The Principals shall be granted options in such number as is determined at the Closing and as set out in Exhibit E hereto, with an expiry date as indicated in such Exhibit E, although each option will expire upon such Principal's Engagement Agreement terminating. Without affecting the foregoing, Madison, the Principals and other parties as may be deemed appropriate may be granted options, such number to be determined on a case-by-case basis, carrying a future expiration date, unless they leave the employ of the organization prior to such time. Each party shall be granted options at a price equal to (i) the investment price associated with the financing underlying the investment payments as per Sections 3.1 and 3.2) or, if lower than such investment price (ii) the closing trading price of Madison's shares on the stock market or quotation system on the day prior to the option grant.

 

	3.5 	Overhead Fee. The Madison Israeli Subsidiary shall pay a monthly overhead fee to Van Leer Technology Ventures Jerusalem Ltd. ("Van Leer"), in the amount of $1,000 per month plus VAT (if and to the extent applicable), for office overhead services provided by Van Leer to Madison Israeli Subsidiary.

  

	 
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	3.6 	Country; Place of Payment; Interest; Foreign Taxes.

  

		a) 	All dollar amounts referred to in this Agreement are expressed in United States dollars and all payments to Ocure shall be made in United States dollars by check payable to "Ocure Ltd." or by electronic wire transfer to Ocure as follows:

   

	
 
	Wire To:	
Ocure Ltd.  

Bank Name: Bank Leumi  

Bank Account No.: 047250082 

Branch No.: 968  

Swift Code: LUMIILITXXX  

IBAN: IL76 0109 6800 0004 7250 082 

 

		b) 	If Madison Israeli Subsidiary receives revenues from Gross Sales or consideration from sublicenses in currency other than United States dollars, revenues shall be converted into United States dollars at the conversion rate for the foreign currency used by Madison Israeli Subsidiary's bank on the day the bank credits such funds to Madison Israeli Subsidiary's account.
			 
		c) 	Madison Israeli Subsidiary shall pay all taxes which may be assessed or levied on, or on account of, the Ocure Exclusive Licensed Product made, used, sold, leased, transferred, or disposed of hereunder and all taxes (other than taxes imposed by the United States of America or the states or jurisdictions within such States) levied on or on account of the amounts (including royalty payments) payable to, or for the account of Madison Israeli Subsidiary under this Agreement. These taxes are not deductible from any payments due Ocure.

 

	3.7 	No Dilution. The Initial Round and the Secondary Round of Financing will be raised at USD$1.00 per share, and Madison will not issue any common shares at a price below $1.00 per share until completion of the Secondary Round without the consent of Ocure.

 

SECTION 4 PATENT AND REIMBURSEMENT 

 

	4.1 	Ocure shall work closely with Madison Israeli Subsidiary to develop a suitable strategy for the prosecution and maintenance of Ocure Patents; provided that Ocure shall maintain final authority in all decisions regarding the prosecution and maintenance of Ocure Patents. Madison Israeli Subsidiary shall promptly reimburse Ocure for all pre-approved future documented attorneys' fees, expenses, official fees and other charges incident to the preparation, prosecution and maintenance of Ocure Patents. Madison Israeli Subsidiary may elect to surrender Ocure Patent rights in any country upon at least sixty (60) days' prior written notice to OcureThereafter, such country shall be deleted from the scope of the License in relation to such patent(s) or application(s) and Ocure shall be free to grant rights in and to such patents or patent applications solely with respect to such country to third parties, without further notice or obligation to the Madison Israeli Subsidiary, and the Madison Israeli Subsidiary shall have no rights whatsoever to exploit such patents or patent applications in such country. Such notice shall not relieve Madison Israeli Subsidiary from responsibility to reimburse Ocure for patent-related expenses incurred prior to the expiration of the sixty (60) day notice period (or such longer period specified in Madison Israeli Subsidiary's notice). Ocure shall provide Madison Israeli Subsidiary with itemized statements reflecting the expenses owed to Ocure for the preparation, prosecution and maintenance of Ocure Patents and Madison Israeli Subsidiary shall reimburse Ocure for such expenses within thirty (30) days after receipt of such statement.

 

	 
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	4.2 	Although the Madison Israeli Subsidiary shall be responsible and maintain final authority in all decisions regarding the selection and management of patent counsel, both Ocure and Madison Israeli Subsidiary will be involved in all phases of patent prosecution: preparation, office action responses, filing strategies for continuation or divisional applications, etc. Madison Israeli Subsidiary will request that copies of all documents prepared by patent counsel be provided to Ocure for review and comment prior to filing to the extent practicable under the circumstances. Each application and every patent registration relating to the Licensed Technology shall be made and registered in the name of Ocure.
		 
	4.3 	Madison Israeli Subsidiary shall confer with Ocure as to the countries in which Madison Israeli Subsidiary shall seek patent protection, but may make the final decision in its discretion.
		 
	4.4 	Madison Israeli Subsidiary and its sublicenses shall comply with all United States and foreign laws with respect to patent and copyright marking of Ocure Exclusive Licensed Product(s).
		 
	4.5 	Madison Israeli Subsidiary shall provide to Ocure prompt notice of all matters that come to Madison Israeli Subsidiary's attention that may affect the preparation, prosecution or maintenance of any Ocure Patents. In particular, Madison Israeli Subsidiary must immediately notify Ocure if Madison Israeli Subsidiary or any Affiliate or sublicense does not qualify as a "small entity" as provided by the United States Patent and Trademark Office.

 

SECTION 5 TERM AND TERMINATION 

 

	5.1 	This Agreement shall terminate at the end of the Term unless sooner terminated as herein provided.
		  
	5.2 	Madison Israeli Subsidiary, at its option, may terminate this Agreement at any time by giving ninety (90) days prior written notice to Ocure of Madison Israeli Subsidiary's intent to terminate.
		 
	5.3 	Ocure, at its option, may terminate this Agreement as follows:

 

		a) 	Upon Madison Israeli Subsidiary's failure to cure a monetary breach of more than $10,000 within ninety (90) days after receiving written notice of such breach from Ocure; or
		 	 
		b) 	Upon Madison Israeli Subsidiary's failure to cure a breach of a material term (other than a monetary breach) within one hundred eighty days (180) days after receiving written notice of such breach from Ocure; or
		 	 
		c) 	An examination by Ocure's accountant pursuant to Section 3.3 f, g shows an underreporting or underpayment by Madison Israeli Subsidiary in excess of twenty (20%) for any twelve (12) month period; or
		 	 
		d) 	Madison Israeli Subsidiary provides any false report, which has not been corrected within sixty (60) days after written notice thereof by Ocure or within sixty (60) days after Madison Israeli Subsidiary becomes aware that false information has been provided, whichever occurs earlier.

 

	 
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	5.4 	If Madison or the Madison Israeli Subsidiary passes a resolution for voluntary winding up or a winding up application is made against it and not set aside within sixty (60) days, or if a receiver or liquidator is appointed and has not been removed within sixty (60) days, or enters into winding up or insolvency or bankruptcy proceedings which have not been set aside within sixty (60) days, all duties of Ocure and all rights (but not duties) of Madison Israeli Subsidiary under this Agreement shall immediately terminate without the necessity of any action being taken by Ocure or by Madison Israeli Subsidiary; and in addition, Ocure, at its option, may terminate this Agreement immediately upon written notice to Madison Israeli Subsidiary. Madison and/or Madison Israeli Subsidiary each undertake to notify Ocure within three (3) days if any of the abovementioned events occur.
		 
	5.5 	Upon termination of this Agreement, except under Section 5.1, Madison Israeli Subsidiary shall have ninety (90) days to complete the manufacture of work in progress and one hundred eighty (180) days to complete the sale of any Ocure Exclusive Licensed Product(s) in stock or in the course of manufacture at the time of termination; provided, however, that all such Sales are subject to the royalty and accounting obligations set forth in this Agreement, even if such royalty obligations arise from transactions subsequent to the effective date of termination.
		 
	5.6 	Upon termination of this Agreement, Madison Israeli Subsidiary shall, return to Ocure within thirty (30) days all Confidential Information fixed in any tangible medium of expression and all material relating to the Licensed Technology. Upon termination of this Agreement for any reason other than the expiration of its Term, the License shall terminate, the Licensed Technology and all rights included therein shall revert to Ocure, and Ocure shall be free to enter into agreements with any other third parties for the granting of a license or to deal in any other manner with such right as it shall see fit at its sole discretion.
		 
	 	Without derogating from the above, upon the termination of the Agreement any time for any reason other than the expiration of its term, the Madison Israeli Subsidiary shall transfer and assign to Ocure all of its rights in the New Inventions and any information and documents, in whatever form, relating thereto, including without limitation any data, results, regulatory information (including applications, registrations, licenses, authorizations, approvals and all clinical studies, tests, and manufacturing batch records relating to Ocure Exclusive Licensed Products, and all data contained in any of the foregoing) and files that relate to the Licensed Technology and the Ocure Exclusive Licensed Products.
		 
	5.7 	Madison Israeli Subsidiary's obligation to pay Royalties and/or Non-Sale Based Sublicense Consideration accrued during the Term of this Agreement under Section 3.3 hereof and/or pursuant to Section 5.5 above shall survive termination of this Agreement. For the avoidance of doubt, the parties acknowledge and agree that in no event shall the termination of this Agreement release Madison Israeli Subsidiary, its Affiliates or sublicenses from the obligation to pay any amounts that become due on or before the effective date of termination.
		 
	5.8 	Notwithstanding termination of this Agreement any section of this Agreement which by its nature is intended to survive termination, shall so survive.

 

	 
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SECTION 6 CONFIDENTIALITY 

 

	6.1	Each Party agrees to maintain in confidence and not to disclose to any third party any Confidential Information received from the other Party pursuant to this Agreement, including any Confidential Information disclosed to the other Party prior to the Effective Date; provided however, that Confidential Information may be disclosed to legal counsel or, upon execution of an appropriate confidentiality agreement, to sublicensees or potential sublicensees, corporate partners or potential corporate partners, investment bankers or consultants. Each Party agrees to ensure that its employees have access to Confidential Information only on a need-to-know basis and that they are obligated to abide by the confidentiality obligations hereunder and such party shall be responsible for the compliance of any such persons with the confidentiality provisions and for any harm caused to the other party as a result of such disclosure. The foregoing obligation shall not apply to: 

 
		a) 	Information that is known to the receiving party prior to the time of disclosure, in each case, to the extent evidenced by written records promptly disclosed to the disclosing party upon receipt of the Confidential Information;
			 
		b) 	Information disclosed to the receiving party by a third party that has a right to make such disclosure without any obligation of confidentiality;
			 
		c) 	Information that is independently developed by the receiving party by employees not having access to or knowledge of the disclosing party's Confidential Information, in each case, to the extent evidenced by written records disclosed to the receiving party;
			 
		d) 	Information that becomes patented, published or otherwise part of the public domain as a result of acts by the disclosing party, or a third person obtaining such information as a matter of right without any obligation of confidentiality;
			 
		e) 	Information that is required to be disclosed by order of any governmental authority or a court of competent jurisdiction; provided that the receiving party shall use reasonable efforts to obtain confidential treatment of such information by the authority or court.

 
	6.2	The placement of a copyright notice on any Confidential Information shall not be construed to mean that such information has been published and will not release Madison or Madison Israeli Subsidiary from their obligation of confidentiality hereunder. 

  

SECTION 7 INFRINGEMENT AND LITIGATION 

 

	7.1 	Ocure and Madison Israeli Subsidiary are responsible for notifying each other promptly of any infringement of Ocure Patents or any misappropriation of Ocure Confidential Information that may come to their attention. Ocure and Madison Israeli Subsidiary shall consult one another in a timely manner concerning any appropriate response thereto.
		 
	7.2 	With respect to any Ocure Patents licensed to Madison Israeli Subsidiary pursuant to this Agreement, Madison Israeli Subsidiary shall have the right, but not the obligation to prosecute in its own name such infringement or misappropriation at its own expense, so long as such License is exclusive at the time of the commencement of such action. Before Madison Israeli Subsidiary commences an action with respect to any infringement of such patents, Madison Israeli Subsidiary shall give careful consideration to the views of Ocure in making its decision whether or not to sue. The Madison Israeli Subsidiary shall, or, if relevant, shall make best efforts to ensure that its Affiliate or sublicensee shall, continuously keep Ocure apprised of all developments in the action and shall continuously provide Ocure with full information and copies of all documents relevant to the proceedings, including without limitation, all documents filed with the courts by the parties to the legal action(s) and all correspondence with the other parties to the proceedings, and shall seek Ocure's input on any substantive submissions or positions taken in the litigation regarding the scope, validity or enforceability of the Ocure Patents. Madison Israeli Subsidiary shall not settle or compromise any such suit in a manner that imposes any obligations or restrictions on Ocure or grants any rights to Ocure Patents, without Ocure's advance written consent. Financial recoveries from any such litigation will first be applied to reimburse Madison Israeli Subsidiary for its outside counsel fees and court costs, following which Ocure will be reimbursed for same. After which, any additional recoveries, after the deductions set forth above, will be split 65% to Madison Israeli Subsidiary and 35% to Ocure and the Madison Israeli Subsidiary shall pay Royalties on the portion of the recovery related to sales, or sublicensee consideration payments, on the portion of the recovery not related to sales, with respect thereof, provided however that if the Madison Israeli Subsidiary notified Ocure that it shall not be prosecuting such infringement, and Ocure initiated proceedings on its own costs and expenses - any recovery obtained in such action shall be paid to Ocure (minus costs and expenses, if any, paid by the Madison Israeli Subsidiary).

 

	 
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	7.3 	Madison Israeli Subsidiary's prosecution rights under Section 7.2 shall be subject to the continuing right of Ocure to intervene and join Madison Israeli Subsidiary in any claim or suit for infringement or misappropriation of Ocure Patents. If Ocure elects to join as a party, Ocure shall jointly control the action with Madison Israeli Subsidiary. Ocure shall retain the right to hire its own counsel, the costs of which are reimbursable as set forth in Section 7.2. Any financial recoveries shall be shared equally between Ocure and Madison Israeli Subsidiary.

 

In any claim or suit for infringement of Ocure Patents under Section 7.2, Madison Israeli Subsidiary may request that Ocure join as a party. Madison Israeli Subsidiary shall not join Ocure as a party to any action without Ocure's prior written consent, which shall not be unreasonably withheld, subject to the following conditions: 

 

a) In the event the court or other adjudicating body requires that Ocure be joined as an indispensable party or in some other capacity to establish or maintain standing to an infringement action, Madison Israeli Subsidiary shall immediately notify Ocure of the same and transmit the corresponding court documents to allow for Ocure to respond as it deems appropriate. If the court or other adjudicating body ultimately maintains such requirement, then Ocure shall consent to joinder, and Madison Israeli Subsidiary may join Ocure, as a party in such action.  

 

b) Madison Israeli Subsidiary shall reimburse Ocure for any out-of-pocket costs and expenses Ocure incurs, including reasonable attorneys' fees, as part of an action brought by Madison Israeli Subsidiary in which Madison Israeli Subsidiary has requested Ocure join as a party, irrespective of whether Ocure becomes a co-plaintiff. 

 

	7.4 	If Madison Israeli Subsidiary fails to prosecute such infringement or misappropriation, Ocure shall have the right, but not the obligation, to prosecute such infringement or misappropriation at its own expense. In such event, financial recoveries will be entirely retained by Ocure.
		 
	7.5 	In any action to enforce any of the Ocure Patents, either Party, at the request and expense of the other Party, shall cooperate to the fullest extent reasonably possible. This provision shall not be construed to require either Party to undertake any activities, including legal discovery, at the request of any third party except as may be required by lawful process of a court of competent jurisdiction.
		 
	7.6 	If a declaratory judgment action is brought naming Madison Israeli Subsidiary or Ocure as a defendant and alleging invalidity or unenforceability of any of the Ocure Patents, whether brought as an independently filed declaratory judgment action or as a counterclaim in any infringement-related litigation, Ocure may elect to take over the sole defense of the declaratory judgment action or the declaratory judgment counterclaim portion of the other litigation, at its own expense. Each party shall promptly notify the other party hereto of its receipt of any such allegations. Madison Israeli Subsidiary shall cooperate fully with Ocure in connection with any such defense.

 

	 
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	7.7 	In the event that Madison Israeli Subsidiary does challenge the validity or enforceability of one or more of the Ocure Patents (or any claims therein), Ocure may, at its option, upon written notice to Madison Israeli Subsidiary: (1) terminate this Agreement or (2) require an augmented royalty of up to two (2) times the Royalties payable under Section 3.1 or equal to 8%.Such challenge of validity or enforceability includes, but is not limited to, actions before the United States Patent and Trademark Office, such as through reexamination. Any challenge by Madison Israeli Subsidiary of the Patents shall be brought in the United States District Court in Harris County, Texas, or, when appropriate, the United States Patent and Trademark Office, with at least thirty (30) days written notice to Ocure. Madison Israeli Subsidiary shall pay all of Ocure's reasonable attorneys' fees, costs, and expenses associated with an unsuccessful challenge. A challenge shall be deemed unsuccessful if any claim of a challenged Ocure Patent remains valid and enforceable after the challenge (even when the claim is narrowed in scope). Under no circumstance shall Ocure pay any of Madison Israeli Subsidiary's attorneys' fees, costs, and expenses related to any challenge of one or more of the Ocure Patents.
		 
	7.8 	Non-assert. Madison Israeli Subsidiary and Ocure agree that Madison Israeli Subsidiary shall not assert Ocure Patents infringement claims against not-for-profit research institutions for activities related to research, teaching, education, or academic purposes.

 

SECTION 8 DISCLAIMER OF WARRANTY; LIMITATION OF LIABILITY; INDEMNIFICATION

 

	8.1 	Ocure represents and warrants that Ocure has not received notice of any claim by a third party of an ownership interest in or infringement of third party rights by the Ocure Patents. Except for the foregoing and as set forth in Section 12.2, Ocure makes no representations or warranties of any kind, express or implied, concerning the Ocure Patents, including, but not limited to, representations and warranties as to non-infringement, merchantability and fitness for any particular purpose.
		 
	8.2 	THE OCURE PATENTS AND THE LICENSED TECHNOLOGY, AND ANY OTHER INFORMATION OR TECHNOLOGY PROVIDED BY OCURE AND USED IN THE MANUFACTURE, USE, IMPORT, SALE, OFFER FOR SALE, LEASE, OR OTHER TRANSFER OF OCURE EXCLUSIVE LICENSED PRODUCT(S) ARE PROVIDED ON AN "AS IS" BASIS AND OCURE MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT THERETO. BY WAY OF EXAMPLE BUT NOT OF LIMITATION, OCURE MAKES NO REPRESENTATIONS OR WARRANTIES (I) OF COMMERCIAL UTILITY, OR (II) OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR (III) THAT THE USE OF THE OCURE PATENTS, OR THE LICENSED TECHNOLOGY, OR OCURE EXCLUSIVE LICENSED PRODUCT(S) WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER PROPRIETARY OR PROPERTY RIGHTS OF OTHERS.

 

	 
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8.3  
	
IN NO EVENT SHALL OCURE BE LIABLE TO MADISON OR MADISON ISRAELI SUBSIDIARY OR MADISON ISRAELI SUBSIDIARY'S SUBLICENSES, OR THEIR RESPECTIVE SUCCESSORS OR ASSIGNS OR ANY THIRD PARTY WITH RESPECT TO ANY CLAIM (I) ARISING FROM THE USE OF THE LICENSED TECHNOLOGY, OR (II) ARISING FROM THE MANUFACTURE, USE, IMPORT, OR SALE OR OFFER FOR SALE, LEASE OR OTHER TRANSFER OF OCURE EXCLUSIVE LICENSED PRODUCT(S). IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY (I) FOR LOSS OF PROFITS, LOSS OR INTERRUPTION OF BUSINESS, OR (II) FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES OF ANY KIND, EVEN IF SUCH PARTY IS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 

 

UNDER NO CIRCUMSTANCES THE LIABILITY OF ANY PARTY UNDER OR ARISING OUT OF THIS AGREEMENT, WHETHER FOR BREACH OF CONTRACT, IN TORT (INCLUDING BUT NOT LIMITED TO NEGLIGENCE) OR OTHERWISE SHALL EXCEED IN AGGREGATE AN AMOUNT OF $500,000 (FIVE HUNDRED THOUSAND) USD. 

 

	8.4 	MADISON AND MADISON ISRAELI SUBSIDIARYSHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS OCURE, ITS TRUSTEES, OFFICERS, SHAREHOLDERS, AGENTS, SUBCONTRACTORS, STUDENTS AND EMPLOYEES (INDIVIDUALLY, A "INDEMNIFIED PARTY", AND COLLECTIVELY, THE "INDEMNIFIED PARTIES") FOR, FROM AND AGAINST ANY AND ALL LIABILITY, LOSS, DAMAGE, ACTION, CLAIM OR EXPENSE SUFFERED OR INCURRED BY THE INDEMNIFIED PARTIES (INCLUDING, BUT NOT LIMITED TO,ATTORNEYS' FEES AND OTHER COSTS AND EXPENSES OF LITIGATION) (INDIVIDUALLY, A "LIABILITY", AND COLLECTIVELY, THE "LIABILITIES") BASED UPON, ARISING OUT OF, OR OTHERWISE RELATING TO THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ANY CAUSE OF ACTION RELATING TO PRODUCT LIABILITY, CONCERNING ANY BREACH OF THIS AGREEMENT BY MADISON OR MADISON ISRAELI SUBSIDIARYOR ANY OF ITS SUBLICENSES,USE OF THE OCURE PATENT RIGHTS GRANTED AND/OR LICENSED TECHNOLOGY UNDER THIS AGREEMENT BY MADISON ISRAELI SUBSIDIARY OR ANY OF ITS SUBLICENSES, OR OCURE EXCLUSIVE LICENSED PRODUCT MANUFACTURED, USED, IMPORTED, SOLD OR OFFERED FOR SALE, LEASED, TRANSFERRED OR OTHERWISE DISPOSED OF PURSUANT TO ANY RIGHT OR LICENSE GRANTED UNDER THIS AGREEMENT.
		 
	8.5 	The Indemnified Party shall promptly notify Madison Israeli Subsidiary of any claim or action giving rise to Liabilities. Madison Israeli Subsidiary shall have the right to defend any such claim or action, at its cost and expense with attorneys satisfactory to Ocure. Madison Israeli Subsidiary shall not settle or compromise any such claim or action in a manner that imposes any restrictions or obligations on Ocure or grants any rights to the Ocure Patents or Ocure Exclusive Licensed Product(s) without Ocure's prior written consent. If Madison Israeli Subsidiary fails or declines to assume the defense of any such claim or action within thirty (30) days after notice thereof,or if representation of such Indemnified Party by the counsel retained by Madison Israeli Subsidiary would be inappropriate because of actual or potential differences in the interests of such Indemnified Party or any other party represented by such counsel, Ocure may assume the defense of such claim or action for the account and at the risk of Madison Israeli Subsidiary, and any liabilities related thereto shall be conclusively deemed a liability of Madison Israeli Subsidiary. Madison Israeli Subsidiary shall pay promptly to the Indemnified Party any Liabilities to which the foregoing indemnity relates, as incurred. The indemnification rights of Ocure or any other Indemnified Party contained herein are in addition to all other rights which Ocure or such other Indemnified Party may have at law or in equity or otherwise.

 

	 
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SECTION 9 RESERVED

 

SECTION 10 REPRESENTATIONS AND WARRANTIES

 

Representations and Warranties of Ocure

 

Ocure is the sole owner of the Ocure Patents.

 

Due Establishment. It is an independent legal entity formally established at its place of incorporation, and has obtained all government approvals and registrations necessary for its existence, which approvals and registrations are continuing and effective and it has sufficient authority to conduct its business in accordance with its business license, approval certificate, articles of association or similar corporate documents; 

 

Litigation. There is no lawsuit, arbitration or other legal or government procedure pending or threatened against it which, based on its knowledge, could materially and adversely affect its performance of this Agreement; 

 

Disclosure. It has disclosed to each of the other parties all documents issued by any Government Authority that might have a material adverse effect on the performance of its obligations under this Agreement; 

 

No Dissolution. It is not the subject of any liquidation or dissolution proceedings; and 

 

No Bankruptcy. It has neither been declared bankrupt by a court of competent jurisdiction nor entered into any bankruptcy proceedings.

 

Representations and Warranties of Madison and Madison Israeli Subsidiary

 

Due Establishment. It is an independent legal entity formally established at its place of incorporation, and has obtained all government approvals and registrations necessary for its existence, which approvals and registrations are continuing and effective and it has sufficient authority to conduct its business in accordance with its business license, approval certificate, articles of association or similar corporate documents; 

 

Authorization. It is fully authorized to sign this Agreement and to fulfill its obligations hereunder; 

 

No Violation. Its signing of this Agreement and performance of any of its obligations hereunder will not violate its business license, approval certificate, articles of association or similar corporate documents; any applicable Laws, or the conditions attached to any authorization or approval granted by any Government Authority; and any agreement which is binding on the party; 

 

	 
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Litigation. There is no lawsuit, arbitration or other legal or government procedure pending or threatened against it which, based on its knowledge, could materially and adversely affect its performance of this Agreement; 

 

Disclosure. It has disclosed to each of the other parties all documents issued by any Government Authority that might have a material adverse effect on the performance of its obligations under this Agreement; 

 

No Dissolution. It is not the subject of any liquidation or dissolution proceedings; and 

 

No Bankruptcy. It has neither been declared bankrupt by a court of competent jurisdiction nor entered into any bankruptcy proceedings. 

 

SECTION 11 NOTICES

 

	
11.1 
	
Any notice or other communication of the Parties required or permitted to be given or made under this Agreement shall be in writing and be deemed effective upon receipt if delivered personally, by reputable courier, by facsimile with confirmation or electronic transmission with confirmation, or by certified or registered mail, postage prepaid, return receipt requested, addressed to the other Party as follows (or as changed by written notice pursuant to this Section): 

 

If for Ocure:  

Attention: Mr. Amos Bar-Shalev  

Ocure Ltd.  

High-Tech Village, Givat Ram Campus,  

Hebrew University,   

P.O. Box 39158  

Jerusalem 91391 

Israel 

Tel.: ______________Fax.: _____________  

E-mail: amosbarshalev@gmail.com

 

If for Madison:   

Attention: Eugene Gregorio_ 

 Madison Ventures Inc.  

1208 Tamarind Road, Dasmarinas Village,  

Makati City, Metro Manila,  

Philippines 1222 

Tel.: +52 (442) 388-2645  

E-mail: gene.gregorio@gmail.com

 

If for Madison Israeli Subsidiary:   

Attention: Miryam Sani and Vered Caplan  

Madison-ILLtd.  

9 Etzel St. Ramat Gan Israel, 52284 Israel 

Tel.: 011-972523496664  

E-mail: mirisani@013.net and vered.c@orgenesis.com 

 

	 
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SECTION 12 ADDITIONAL PROVISIONS 

 

	12.1 	Legal Compliance. Madison Israeli Subsidiary shall comply with all prevailing laws, rules and regulations pertaining to the development, testing, manufacture, marketing, sale, use, import or export of Ocure Patents and Ocure Exclusive Licensed Product(s). Madison Israeli Subsidiary and its sublicenses shall comply with all United States laws and regulations controlling the export of certain commodities and technical data, including without limitation all Export Administration Regulations under the United States Department of Commerce and International Traffic in Arms Regulations under the Department of State. Among other things, these laws and regulations prohibit or require an Exclusive License for the export of certain types of commodities and technical data to specified countries. Madison Israeli Subsidiary hereby gives written assurance that it will comply with, and will make best commercial efforts to cause its sublicenses to comply with, all United States export control laws and regulations, that Madison Israeli Subsidiary bears sole responsibility for any violation of such laws and regulations by itself or its sublicenses, and that it will indemnify, defend, and hold Ocure harmless (in accordance with Section 8.4) for the consequences of any such violation.
		 
	12.2 	Power and Authority; Due Authorization; No Conflict; Enforceability; Binding Effect. Each Party represents and warrants to the other Party that (i) such Party has the power and authority to execute, deliver and perform its obligations under this Agreement, (ii) the execution, delivery and performance of this Agreement have been duly authorized by such Party and does not and shall not conflict with any agreement or instrument to which it is bound, (iii) this Agreement constitutes the legal, valid and binding obligation of such Party, enforceable against it in accordance with its terms, and (iv) this Agreement, and the interests, rights, duties and obligations hereunder, shall be binding upon, and inure to the benefit of, the Parties and their respective successors and permitted assigns.
		 
	12.3 	Entire Agreement; Further Assurances. This Agreement, including Exhibits A and B attached hereto, constitutes the entire agreement between the Parties, and supersedes any prior or contemporaneous negotiations, understandings and agreements, with respect to the subject matter hereof. Each Party shall execute and deliver such further documents and take such further actions as may be required or reasonably requested by the other Party to effectuate the purposes of this Agreement.
		 
	12.4 	No Assignment; No Amendment; No Waiver. This Agreement may not be assigned or transferred, in whole or in part, by operation of law or otherwise, by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed. This Agreement may not be amended or modified, by course of conduct or otherwise, except in a writing duly executed by each of the Parties. Any waiver of any provision of this Agreement shall be in writing duly executed by the waiving Party. The failure or delay by either Party to seek redress for any breach or default under this Agreement, or to insist upon the strict performance of any provision of this Agreement, shall not constitute a waiver thereof or of any other provision of this Agreement, and such Party shall have all remedies provided herein and at law and in equity with respect to such act and any subsequent act constituting the same.
		 
	12.5 	Reserved.

 

	 
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	12.6 	Resolution of Disputes.

 

a) In the event of any dispute or disagreement between the Parties either in interpreting any provision of this Agreement or about the performance of either Party and upon the written request of either Party, each of the Parties will appoint a designated representative to attempt to resolve such dispute or disagreement. The designated representatives will discuss the problem and negotiate in good faith in an effort to resolve the dispute without any formal proceedings. The specific format of such discussion shall be left to the discretion of the designated representatives. No litigation for the resolution of such dispute may be commenced until the designated representatives have met and either Party has concluded in good faith that amicable resolution through continued negotiation does not appear likely (unless either Party fails or refuses to appoint a designated representative and schedule a meeting of such representatives within thirty (30) days after a request to do so by the other Party). 

 

b) Each party shall continue to perform its undisputed obligations under this Agreement pending final resolution of any dispute arising out of or relating to this Agreement; provided, however, that a party may suspend performance of its undisputed obligations during any period in which the other party fails or refuses to perform its undisputed obligations. Nothing in this Section 12.6(b) is intended to relieve Madison Israeli Subsidiary from its obligation to make undisputed payments pursuant to Sections 3 and 4 of this Agreement. 

 

c) The parties agree that all applicable statutes of limitation and time-based defenses (such as estoppel and laches) shall be tolled while the procedures set forth in Sections 12.6(a) are pending. The parties shall cooperate in taking any actions necessary to achieve this result. 

 

	12.7 	Governing Law; Jurisdiction and Venue; Attorneys' Fees. This Agreement shall be construed in accordance with the laws of the State of Israel and the parties attorn to the exclusive jurisdiction of the competent courts of Tel Aviv, Israel in respect of all disputes arising hereunder. It is agreed that the parties performance of the transactions considered herein shall be subject to the provisions of the Encouragement of Industrial Research and Development Law 1984 of the State of Israel and the applicable directives, rules and regulations of the OCS, to which Ocure is bound. In the event either Party commences any proceeding against the other Party with respect to this Agreement, the prevailing Party (as determined by the authority before whom such proceeding is commenced) shall be entitled to recover reasonable attorneys' fees and costs as may be incurred in connection therewith in addition to any such other relief as may be granted.
		 
	12.8 	Severability. In the event any provision of this Agreement is determined to be invalid or unenforceable, it is the desire and intention of the Parties that such invalidity or unenforceability not invalidate or render unenforceable the remainder of the Agreement and that such provision be reformed and construed in such a manner that it will, to the maximum extent practicable, be deemed valid and enforceable, and the rights and obligations of the Parties shall be construed and enforced accordingly.
		 
	12.9 	Construction of Agreement. The Parties acknowledge and agree that both Parties substantially participated in negotiating the provisions of this Agreement; therefore, both Parties agree that this Agreement shall not be construed more favorably toward one Party than the other Party, regardless of which Party primarily drafted the Agreement. The Section and other headings in this Agreement are for convenience of reference only and shall not affect, expressly or by implication, the meaning or interpretation of any of the provisions hereof.

 

	 
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	12.10 	Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to confer any benefits, rights or remedies on any other person or entity, other than the Parties and their successors and permitted assigns.
		 
	12.11 	Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.
		 
	12.12 	Condition Precedent. The respective obligations of each Party to effect the provisions considered herein are subject to the fulfillment of the following condition precedent, whereby Ocure shall receive the approval of the OCS to Ocure's performance of this Agreement (the "Condition Precedent"). Should the Condition Precedent set forth in this Section 12.12 not be fulfilled within 90 (ninety) days of the date this Agreement is signed, this Agreement will become null and void and cease to have effect without any indemnity being due by each Party.

 

[signature page to follow]

 

	 
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IN WITNESS WHEREOF the Parties, intending to be legally bound, have caused this Agreement to be executed and delivered by their duly authorized representatives and effective as of the Effective Date.

 

	
Ocure Ltd.   
	
 
	
Madison Ventures Inc.
	
 

	 			 		
	Signature:	/s/ Amos Bar Shalev	
 
	
Signature:  
	/s/ Gene Gregorio	
 

		Amos Bar Shalev,	
 
	
 
	Eugenio ("Gene") Gregorio	
 

		
Chief Executive Officer 
	
 
	
 
	
Chief Executive Officer 
	
 

				 		
				 		
				
Madison-IL Ltd.   
	
				 		
				Signature: 	/s/ Miryam Sani	
					Miryam Sani 	
					Director	

 

	 
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EXHIBIT A 

 

OCURE PATENTS 

 

The device and the concept are covered by two broad patents maintained in the US and Europe: 

 

		1. 	Medical Instrument of treating and/or diagnosing of anorectal disorders, and devices and methods of insertion of such: pending in the US, Europe and Israel. TITLE: A DEVICE AND METHOD FOR THE PROLONGED DELIVERY OF AN ACTIVE AGENT TO A BODY CAVITY Applicant: BRAVER David. The European Patent Application No. 07713261.1 was filed: 15 February 2007 and US Patent Appl. No. 12/279,362 was filed: 15-Feb-2007
			 
		2.	MEDICAL INSTRUMENTS OF TREATING AND/OR DIAGNOSING OF ANORECTAL DISORDERS, AND DEVICES AND METHODS... By Ocure Ltd. [BRAVER David et al]

 

	- 	European Patent Application No. 11770171.4 Filed 25-Aug-2011
	- 	USA Patent Application No. 13/818,692 Filed 25-Aug-2011

 

The initial patent describes the entire concept of the use of the device, while the second patent focuses on the unique design developed by Ocure. 

 

On an "as is" basis as of the Effective Date

 

	 
	 

	

	 

 

EXHIBIT B  

 

OCURE CORPORATE MILESTONES 

 

 

	 
	 

	

	 

 

EXHIBIT C 

 

TERMS OF CONSULTING AND SERVICES AGREEMENTS 

 

	
Name of Consultant:  
	
Amos Bar Shalev 

	
Engaging company: 
	
Madison Ventures Inc.  

	
Position:  
	
CEO 

	
Scope of Position: 
	
part-time (20%) 

	
Commencement Date:  
	
Approval of the Israeli Chief Scientist Office to Exclusive License Agreement 

	
Notice Period: 
	
30 days  

	
Consideration:  
	
$1,000/month for the first 6 months; thereafter as shall be agreed upon between the parties.  

	
Options 
	
Following the adoption by the Madison Ventures Inc. ("Madison") of an option plan, and subject to the approval of the Board of Directors of Madison, the consultant shall be granted options to purchase ordinary shares of Madison (the "Options"), all in the terms and conditions stipulated in an option agreement which shall be signed between the Madison and the Consultant.  

 

	
Name of Consultant:  
	
Miryam Sani 

	
Engaging company: 
	
Madison-IL Ltd.

	
Position:  
	
Regulatory Affairs and Clinical Studies 

	
Scope of Position: 
	
full time 

	
Commencement Date:  
	
Approval of the Israeli Chief Scientist Office to Exclusive License Agreement 

	
Notice Period: 
	
30 days  

	
Tern 
	
one year 

	
Consideration:  
	
NIS 12,000 per month, less withholding tax  

 

	 
	 

	

	 

 

	
Name of Consultant:  
	
Zeev Cohen 

	
Engaging company: 
	
Madison-IL Ltd

	
Position:  
	
Engineer 

	
Scope of Position: 
	
full time 

	
Commencement Date:  
	
Approval of the Israeli Chief Scientist Office to Exclusive License Agreement 

	
Term 
	
one year 

	
Notice Period: 
	
in accordance with applicable law 

	
Consideration:  
	
NIS 12,000 per month, less withholding tax 

 

	 
	 

	

	 

 

EXHIBIT D 

 

SHAREHOLDERS OF OCURE AND INDIVIDUALS ENTITLED TO PURCHASE SHARES OF MADISON 

 

	
Name of Shareholder 
	
 
	
 
	
 

	
David Braver 
	
 
	
 
	8.63	%
	
Miryam Sani 
	
 
	
 
	2.16	%
	
Oren Gershtein 
	
 
	
 
	0.26	%
	
Shlomi Schwartzblat 
	
 
	
 
	0.22	%
	
Amir Avraham 
	
 
	
 
	0.10	%
	
Shmuel Ravid 
	
 
	
 
	0.08	%
	
Van Leer Technology Ventures Jerusalem Ltd. 
	
 
	
 
	0.54	%
	
Jerusalem Development Authority 
	
 
	
 
	0.43	%
	
Docor International BV 
	
 
	
 
	1.01	%
	
Van Leer Technology Ventures Jerusalem Ltd. (as a trustee for the state of Israel) 
	
 
	
 
	8.15	%
	
Lundar Industries Inc. 
	
 
	
 
	2.66	%
	
Amos Bar Shalev 
	
 
	
 
	0.75	%
	
 
	
 
	
 
	
 
	
 

	
Total 
	
 
	
 
	25.00	%

 

	 
	 

	

	 

 

EXHIBIT E

 

ALLOCATION OF OPTIONS TO PRINCIPALS AND OTHER THIRD PARTIES

  

Amos Bar Shalev 6%  

Shlomi Schwartzblat 2%  

Miryam Sani 3%  

Iris Shahar 1%  

David Braver 1%2015 Aug Notes Off. Closing Ex 4.4

Exhibit 4.4
SIXTH SUPPLEMENTAL INDENTURE
HEALTHSOUTH CORPORATION
5.75% SENIOR NOTES DUE 2024
WELLS FARGO BANK,
NATIONAL ASSOCIATION,
as Trustee
Dated as of August 7, 2015

TABLE OF CONTENTS
	
					
	 
	 
	 
	Page
	

	ARTICLE I DEFINITIONS; CONFLICTS.................................................................................................
	2
	

	 
	 
	 
	 

	ARTICLE II AMENDMENT OF FOURTH SUPPLEMENTAL INDENTURE........................................
	2
	

	 
	 
	 
	 

	 
	SECTION 2.01.
	Amendment of Preamble of Fourth Supplemental Indenture............................
	2
	

	 
	SECTION 2.02.
	Addition of Exhibits to Fourth Supplemental Indenture...................................
	2
	

	 
	SECTION 2.03.
	Amendment of Section 2.01 of Fourth Supplemental Indenture.......................
	2
	

	 
	SECTION 2.04.
	Amendment of Section 3.01 of Fourth Supplemental Indenture.......................
	3
	

	 
	SECTION 2.05.
	Amendment of Section 4.02 of Fourth Supplemental Indenture.......................
	4
	

	 
	SECTION 2.06.
	Amendment of Section 4.03 of Fourth Supplemental Indenture.......................
	9
	

	 
	 
	 
	 

	ARTICLE III AMENDMENT OF EXISTING INDENTURE....................................................................
	9
	

	 
	 
	 
	 

	 
	SECTION 3.01.
	Amendment of Section 6.06 of Existing Indenture...........................................
	9
	

	 
	SECTION 3.02.
	Amendment of Section 6.08 of Existing Indenture...........................................
	9
	

	 
	SECTION 3.03
	Amendment of Section 12.01 of Existing Indenture.........................................
	9
	

	 
	SECTION 3.04.
	Amendment of Sections 14.01 and 14.02 of Existing Indenture.......................
	9
	

	 
	 
	 
	 

	ARTICLE IV MISCELLANEOUS.............................................................................................................
	10
	

	 
	 
	 
	 

	 
	SECTION 4.01.
	Integral Part.......................................................................................................
	10
	

	 
	SECTION 4.02.
	Adoption, Ratification and Confirmation..........................................................
	10
	

	 
	SECTION 4.03.
	Counterparts......................................................................................................
	10
	

	 
	SECTION 4.04.
	Severability........................................................................................................
	10
	

	 
	SECTION 4.05.
	Governing Law..................................................................................................
	10
	

	 
	SECTION 4.06.
	Trustee Makes No Representation.....................................................................
	10
	

	 
	SECTION 4.07.
	Damages Limitation..........................................................................................
	10
	

	 
	SECTION 4.08.
	U.S.A. PATRIOT Act.........................................................................................
	10
	

i
        

SIXTH SUPPLEMENTAL INDENTURE, dated as of August 7, 2015 (this “Sixth Supplemental Indenture”), among HEALTHSOUTH CORPORATION, a Delaware corporation (the “Company”), the SUBSIDIARY GUARANTORS party hereto and WELLS FARGO BANK, NATIONAL ASSOCIATION (as successor to The Bank of Nova Scotia Trust Company of New York), as trustee (the “Trustee”).
W I T N E S S E T H:
WHEREAS the Company has heretofore entered into a senior indenture, dated as of December 1, 2009 (the “Base Indenture”), with the Trustee;
WHEREAS, pursuant to the Base Indenture, as supplemented by a Fourth Supplemental Indenture, dated as of September 11, 2012 (the “Fourth Supplemental Indenture,” and together with the Base Indenture, the “Existing Indenture”), between the Company, the Subsidiary Guarantors, and the Trustee, the Company previously has issued $850,000,000 in aggregate principal of 5.75% Senior Notes due 2024 (the “Initial Securities”) in registered public offerings;
WHEREAS, the Company may, from time to time on or after the date hereof, desire to issue Additional Securities under the Existing Indenture (the “Securities”) in transactions that are exempt from the registration requirements of the Securities Act, which Securities may be resold in the United States to Qualified Institutional Buyers (as defined herein) pursuant to Rule 144A under the Securities Act (“Rule 144A”) and in transactions outside the United States pursuant to Regulation S under the Securities Act (“Regulation S,” and such issuance and resale under Rule 144A and Regulation S, a “Private Placement”);
WHEREAS, in connection with a Private Placement, the Company and the Subsidiary Guarantors may enter into a registration rights agreement with the initial purchasers of the Securities pursuant to which the Company and the Subsidiary Guarantors agree to exchange Securities bearing the Private Placement Legend (as defined herein) for Exchange Securities (as defined herein, and such offer, an “Exchange Offer”) and to conduct a Private Exchange (as defined herein);
WHEREAS, the Existing Indenture does not contemplate the transfer of beneficial interests in, and the legending of, the Securities with respect to a Private Placement or the exchange of the Securities for Exchange Securities or Private Exchange Securities (as defined herein);
WHEREAS, the Company and the Subsidiary Guarantors further desire to amend certain provisions of the Existing Indenture to, among other things, permit electronic delivery of certain notices with respect to the Initial Securities and any Additional Securities issued on or after the date hereof  in accordance with the Depositary’s procedures;
WHEREAS, the Existing Indenture, as supplemented and amended by this Sixth Supplemental Indenture, is herein called the “Indenture”;
WHEREAS, pursuant to Section 14.01(6) and (9) of the Indenture, the Company, the Subsidiary Guarantors and the Trustee may amend the Indenture without notice to or consent of any Holder to (1) make any change that does not adversely affect the rights of any Holder, and (2) make any amendment to the provisions of the Indenture relating to the transfer and legending of Securities, provided, however, that (a) compliance with the Indenture would not result in Securities being transferred in violation of the Securities Act or any other applicable securities law and (b) such amendment does not materially and adversely affect the rights of Holders to transfer Securities;
WHEREAS, this Sixth Supplemental Indenture will not make any change that adversely affects the rights of any Holder; 
WHEREAS, this Sixth Supplemental Indenture will supplement and amend the provisions of the Indenture relating to the transfer, exchange and legending of the Securities but (1) compliance with the Indenture will not 

        

result in Securities being transferred in violation of the Securities Act or any other applicable securities law and (2) the rights of Holders to transfer Securities will not be materially and adversely affected thereby; and
WHEREAS all conditions necessary to authorize the execution and delivery of this Sixth Supplemental Indenture and to make it a valid and binding obligation of the Company and the Subsidiary Guarantors have been done or performed.
NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1 
DEFINITIONS; CONFLICTS
All capitalized terms used herein and not otherwise defined in this Sixth Supplemental Indenture shall have the meanings ascribed thereto in the Existing Indenture.  If and to the extent that the provisions of the Existing Indenture are duplicative of, or in contradiction with, the provisions of this Sixth Supplemental Indenture, the provisions of this Sixth Supplemental Indenture shall govern, but solely with respect to the Securities. 
       ARTICLE II     
 
AMENDMENT OF FOURTH SUPPLEMENTAL INDENTURE
SECTION 2.01.    Amendment of Preamble of Fourth Supplemental Indenture. The term “Supplemental Indenture” in the Fourth Supplemental Indenture is hereby amended to mean the Fourth Supplemental Indenture, as amended by this Sixth Supplemental Indenture.
SECTION 2.02.    Addition of Exhibits to Fourth Supplemental Indenture.  Exhibits A through F to this Sixth Supplemental Indenture are hereby appended to and made part of the Fourth Supplemental Indenture as Exhibits C through H, respectively. 
SECTION 2.03.    Amendment of Section 2.01 of Fourth Supplemental Indenture    .  Section 2.01 of the Fourth Supplemental Indenture is hereby amended by inserting the following terms in alphabetical order where they appear in such Section:
“Exchange Offer” means an offer by the Company and the Subsidiary Guarantors to exchange Securities bearing the Private Placement Legend for Exchange Securities.
“Exchange Securities” means securities offered pursuant to the terms of an Exchange Offer and identical in all material respects to the Securities, except such securities would not be subject to restrictions on transfer or to the payment of additional cash interest on the Securities in certain circumstances.  For the avoidance of doubt, the term “Securities” herein shall include Exchange Securities.
“Individual Securities” means Securities issued in definitive form in substantially the form set forth in Exhibit C and bearing the applicable legends, if any.
“Initial Purchaser” means any initial purchaser from the Company of Restricted Securities issued by the Company in an offering that is exempt from the registration requirements of the Securities Act. 
“Institutional Accredited Investor” or “IAI” means an “accredited investor” within the meaning of Rule  501(a)(1), (2), (3) or (7) under the Securities Act.
“Non-U.S. Person” has the meaning assigned to such term in Regulation S.

2
        

“Permanent Regulation S Global Security” has the meaning given to such term in Section 3.01.
“Private Exchange” means an exchange pursuant to which a purchaser of Securities that holds such Securities acquired by it and having the status of an unsold allotment would have the right to receive a like principal amount of securities that are identical to the Exchange Securities in all material respects, except for the existence of restrictions on transfer thereof under the Securities Act and applicable blue sky securities laws of the United States of America.  
“Private Exchange Securities” means Securities issued in a Private Exchange.  For the avoidance of doubt, the term “Securities” herein shall include Private Exchange Securities.
“Private Placement Legend” means the relevant legends initially set forth on the Securities in the form set forth in Exhibit D.
“Qualified Institutional Buyer” or “QIB” has the meaning specified in Rule 144A.
“Regulation S” means Regulation S under the Securities Act.
“Restricted Security” means a Security that constitutes a “Restricted Security” within the meaning of Rule 144(a)(3) under the Securities Act; provided, however, that the Registrar shall be entitled to request and conclusively rely on a legal opinion reasonably satisfactory to the Company and the Registrar with respect to whether any Security constitutes a Restricted Security.
“Rule 144A” means Rule 144A promulgated by the SEC under the Securities Act.
“Special Interest” means any additional cash interest on the Securities assessed under the circumstances, and to the extent, set forth in a registration rights agreement among the Company, the subsidiary guarantors party thereto and the initial purchasers of the Securities. 
“Temporary Regulation S Global Security” has the meaning given to such term in Section 3.01.
SECTION 2.04.    Amendment of Section 3.01 of Fourth Supplemental Indenture    .  Section 3.01 of the Fourth Supplemental Indenture is hereby amended and restated to read in its entirety as follows with respect to the Securities:  
“SECTION 3.01.  Form.  Provisions relating to the Securities are set forth in Exhibit A and Exhibit C hereto, which are hereby incorporated in and expressly made a part of this Supplemental Indenture.  The Securities and the Trustee’s certificate of authentication thereto shall be substantially in the form of Exhibit A, which is hereby incorporated in and expressly made a part of this Supplemental Indenture.  The Securities may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company).  Each Security shall be dated the date of its authentication.  The Securities shall be issuable only in denominations of $2,000 and integral multiples of $1,000 in excess thereof.  The terms of the Securities set forth in Exhibit A are part of the terms of this Supplemental Indenture.  

Securities may be issued from time to time in transactions exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof and/or Regulation D promulgated thereunder.  Any Securities so issued shall be Restricted Securities and shall be issued bearing the Private Placement Legend.  Restricted Securities to be resold in reliance on Rule 144A shall be issued initially in the form of one or more permanent global securities in registered form, substantially in the form of Exhibit C (each a “144A Global Security”), deposited with the Trustee, as custodian for the Depositary, duly executed by the Company and authenticated by the Trustee in accordance with the terms of the Indenture and shall bear the Private Placement Legend. Restricted Securities offered and sold or to be resold in offshore transactions in reliance on Regulation S shall be issued initially in the form of a single temporary global security in registered form, substantially in the form of Exhibit C (the “Temporary Regulation S Global Security”), deposited with the Trustee, as custodian for the Depositary, duly executed by the 

3
        

Company and authenticated by the Trustee in accordance with the terms of the Indenture and shall bear the Private Placement Legend. If required, reasonably promptly following the date that is 40 days after the later of the commencement of the offering of the Securities in reliance on Regulation S and the issue date of the Securities, upon receipt by the Trustee and the Company of a duly executed certificate certifying that the Holder of the beneficial interest in the Temporary Regulation S Global Security is a Non-U.S. Person, substantially in the form of Exhibit G from the Depositary, a single permanent global security in registered form substantially in the form of Exhibit C (the “Permanent Regulation S Global Security,” and together with the Temporary Regulation S Global Security, the “Regulation S Global Security”) duly executed by the Company and authenticated by the Trustee in accordance with terms of the Indenture shall be deposited with the Trustee, as custodian for the Depositary, and, in such case, the Registrar shall reflect on its books and records the cancellation of the Temporary Regulation S Global Security and the issuance of the Permanent Regulation S Global Security.

Neither the initial offer and sale nor the initial resale of the Securities shall be made to an Institutional Accredited Investor. The Securities resold to Institutional Accredited Investors in connection with the first transfer made pursuant to Section 3.15 of the Base Indenture shall be issued initially with a zero balance and in the form of a single permanent global security in registered form, substantially in the form of Exhibit C (the “IAI Global Security,” and, together with the 144A Global Security and the Regulation S Global Security, the “Global Securities”), deposited with the Trustee, as custodian for the Depositary, duly executed by the Company and authenticated by the Trustee in accordance with the terms of the Indenture and shall bear the Private Placement Legend.”
SECTION 2.05.    Amendment of Section 4.02 of Fourth Supplemental Indenture    .  Section 4.02 of the Fourth Supplemental Indenture is hereby amended by designating the current provisions of such Section as subsection (a) and adding the following new subsections thereafter:
(b)    Amendment of Section 3.03 of the Base Indenture.  Section 3.03(g)(iv) of the Base Indenture is hereby amended, but only with respect to the Securities, to add the words “the Private Placement Legend, if applicable, and” after “shall bear” and before “a legend substantially to the following effect.”
(c)    Amendment of Section 3.06 of Base Indenture. Section 3.06 of the Base Indenture is hereby amended, but only with respect to the Securities, as follows:
(i) Section 3.06(a) of the Base Indenture is hereby amended by adding the following subsection (iii) to the end of such section:
“(iii) Interests of beneficial owners in the Securities may be transferred or exchanged in accordance with this Section 3.06 and Section 3.15.”

(ii) Section 3.06(c) of the Base Indenture is hereby amended by adding the words “or in accordance with Section 3.15” in the first sentence of such section after “Except as otherwise provided below” and before “, owners of beneficial interests.”

(iii) Section 3.06 of the Base Indenture is hereby amended by the adding the following subsection (m) to the end of the Section:

“All Securities issued upon any registration of transfer or exchange of Securities that are Restricted Securities shall, except as otherwise provided by Section 3.15, bear the Private Placement Legend.”

(d)    Addition of Section 3.15 to Base Indenture.  Article III of the Base Indenture is hereby amended by adding the following new Section 3.15 at the end thereof:
“SECTION 3.15.    Special Transfer and Exchange Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors.  The following provisions shall apply with respect to the registration of any proposed transfer of an interest in a Restricted Security to any Institutional Accredited Investor which is not a QIB:

4
        

(i) the Registrar shall register the transfer of any Restricted Security, whether or not such Security bears the Private Placement Legend, if (x) the requested transfer is after the expiration of the applicable holding period with respect thereto set forth in Rule 144(d) of the Securities Act; provided, however, that neither the Company nor any Affiliate of the Company has held any beneficial interest in such Security, or portion thereof, at any time on or prior to the expiration of the applicable holding period with respect thereto set forth in Rule 144(d) of the Securities Act or (y) the proposed transferee has delivered to the Registrar a certificate substantially in the form of Exhibit E hereto and any legal opinions, certifications and other information as may be reasonably requested by the Registrar and the Company;

(ii) if the proposed transferee is a Member and the Securities to be transferred consist of Individual Securities which after transfer are to be evidenced by an interest in the IAI Global Security, upon receipt by the Registrar of the Individual Security duly endorsed or accompanied by a written instruction of transfer in a form satisfactory to the Company, the Trustee and the Registrar, duly executed by the Holder thereof or by his, her or its attorney duly authorized in writing, and (x) written instructions given in accordance with the Depositary’s and the Registrar’s procedures and (y) the certificate, if required, referred to in clause (i)(y) of this subsection (a) and any legal opinion, certifications and other information as the Registrar or the Company may reasonably request, the Registrar shall register the transfer and reflect on its books and records the date of such transfer, and the Security Custodian and the Registrar shall increase the aggregate principal amount of the IAI Global Security in an amount equal to the aggregate principal amount of Individual Securities to be transferred, and the Registrar shall cancel the Individual Securities so transferred; 
(iii) if the proposed transferor is a Member seeking to transfer an interest in a Rule 144A Global Security or a Regulation S Global Security, upon receipt by the Security Custodian and the Registrar of (x) written instructions given in accordance with the Depositary’s and the Registrar’s procedures and (y) the certificate, if required, referred to in clause (i)(y) of this subsection (a) and any legal opinion, certifications and other information as the Registrar or the Company may reasonably request, the Registrar shall register the transfer and reflect on its books and records the date of such transfer, and the Security Custodian and the Registrar shall (A) decrease the aggregate principal amount of the 144A Global Security or the Regulation S Global Security, as the case may be, from which such interests are to be transferred in an amount equal to the aggregate principal amount of the Securities to be transferred and (B) an increase in the aggregate principal amount of the IAI Global Security in an amount equal to the aggregate principal amount of the Securities to be transferred; 

(iv) if the Securities to be transferred consist of Individual Securities which after transfer are to be evidenced by Individual Securities, upon receipt by the Registrar of the Individual Security duly endorsed or accompanied by a written instruction of transfer in a form satisfactory to the Company, the Trustee and the Registrar, duly executed by the Holder thereof or by his, her or its attorney duly authorized in writing, and (x) written instructions given in accordance with the Registrar’s procedures and (y) the certificate, if required, referred to in clause (i)(y) of this subsection (a) and any legal opinion, certifications and other information as the Registrar or the Company may reasonably request, the Registrar shall register the transfer of Individual Securities; and

(v) if the proposed transferor  is a Member and the Securities to be transferred will thereafter be evidenced by Individual Securities, upon receipt by the Registrar of (x) written instructions given in accordance with the Depositary’s and the Registrar’s procedures and (y) the certificate, if required, referred to in clause (i)(y) of this subsection (a) and any legal opinion, certifications and other information as the Registrar or the Company may reasonably request, the Registrar shall register the transfer and reflect on its books and records the date of such transfer, and the Security Custodian and the Registrar shall decrease the aggregate principal amount of the relevant Global Security by the aggregate principal amount of the Securities to be transferred.  Thereafter, the Company shall execute, and the Trustee shall authenticate and deliver, Individual Securities to the transferee in accordance with the terms of the Indenture.

(b) Transfers to QIBs. The following provisions shall apply with respect to the registration of any proposed transfer of an interest in a Restricted Security to a QIB:

(i) the Registrar shall register the transfer of any Restricted Security, whether or not such Security bears the Private Placement Legend, if (x) the requested transfer is after the expiration of the applicable holding              

5
        

period with respect thereto set forth in Rule 144(d) of the Securities Act; provided, however, that neither the Company nor any Affiliate of the Company has held any beneficial interest in such Security, or portion thereof, at any time on or prior to the expiration of the applicable holding period with respect thereto set forth in Rule 144(d) of the Securities Act or (y) such transfer is being made by a proposed transferor who has checked the box provided for on the Security stating, or has otherwise advised the Company and the Registrar in writing, that (A) the sale has been made in compliance with the provisions of Rule 144A to a transferee that is purchasing the Security for its own account or an account with respect to which it exercises sole investment discretion and that the transferor reasonably believes that the transferee and any such account is a QIB, (B) the sale has been made in compliance with any applicable blue sky securities laws of the United States of America and (C) the transferor has advised the transferee that the sale to it is being made in reliance on Rule 144A and has received a written acknowledgment from the transferee (a copy of which shall be provided to the Registrar and the Company upon request) that it has received such information regarding the Company as it has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A;

(ii) if the proposed transferee is a Member and the Securities to be transferred consist of Individual Securities which after transfer are to be evidenced by an interest in the 144A Global Security, upon receipt by the Registrar of the Individual Security duly endorsed or accompanied by a written instruction of transfer in a form satisfactory to the Company, the Trustee and the Registrar, duly executed by the Holder thereof or by his, her or its attorney duly authorized in writing and written instructions given in accordance with the Depositary’s and the Registrar’s procedures, the Registrar shall register the transfer and reflect on its books and records the date of such transfer, and the Security Custodian and the Registrar shall increase the aggregate principal amount of the 144A Global Security in an amount equal to the aggregate principal amount of Individual Securities to be transferred, and the Registrar shall cancel the Individual Securities so transferred; 

(iii) if the proposed transferor is a Member seeking to transfer an interest in the IAI Global Security or the Regulation S Global Security which after transfer are to be evidenced by an interest in the 144A Global Security, upon receipt by the Security Custodian and the Registrar of written instructions given in accordance with the Depositary’s and the Registrar’s procedures, the Registrar shall register the transfer and reflect on its books and records the date of such transfer, and the Security Custodian and the Registrar shall (A) decrease the aggregate principal amount of the IAI Global Security or the Regulation S Global Security, as the case may be, in an amount equal to the aggregate principal amount of the beneficial interest in the IAI Global Security or the Regulation S Global Security, as the case may be, to be transferred and (B) increase the aggregate principal amount of the 144A Global Security in an amount equal to the aggregate principal amount of the Global Securities to be transferred; 

(iv) if the Securities to be transferred consist of Individual Securities which after transfer are to be evidenced by Individual Securities, upon receipt by the Registrar of the Individual Security duly endorsed or accompanied by a written instruction of transfer in a form satisfactory to the Company, the Trustee and the Registrar, duly executed by the Holder thereof or by his, her or its attorney duly authorized in writing, and written instructions given in accordance with the Registrar’s procedures, the Registrar shall register the transfer of Individual Securities; and

(v) if the proposed transferor is a Member seeking to transfer an interest in the IAI Global Security, the Regulation S Global Security or the 144A Global Security which after transfer are to be evidenced by Individual Securities, upon receipt by the Security Custodian and the Registrar of written instructions given in accordance with the Depositary’s and the Registrar’s procedures, the Registrar shall register the transfer and reflect on its books and records the date of such transfer, and the Security Custodian and the Registrar shall decrease the aggregate principal amount of the relevant Global Security by the aggregate principal amount of the Securities to be transferred.  Thereafter, the Company shall execute, and the Trustee shall authenticate and deliver, Individual Securities to the transferee in accordance with the terms of the Indenture.

(c) Transfers of Interests in the Temporary Regulation S Global Note. The following provisions shall apply with respect to the registration of any proposed transfer of interests in the Temporary Regulation S Global Security:

(i) the Registrar shall register the transfer of an interest in the Temporary Regulation S Global Security, whether or not such Global Security bears the Private Placement Legend, if the proposed transferor has          

6
        

delivered to the Registrar a certificate substantially in the form of Exhibit G stating, among other things, that the proposed transferee is a Non-U.S. Person; and

(ii) if the proposed transferee is a Member, upon receipt by the Registrar of the documents referred to in clause (i) of this subsection (c), if required, and instructions given in accordance with the Depositary’s and the Registrar’s procedures, the Security Custodian and the Registrar shall reflect on its books and records the date and amount of such transfer of an interest in the Temporary Regulation S Global Security.

(d) Transfers to Non-U.S. Persons. The following provisions shall apply with respect to any transfer of an interest in a Restricted Security to a Non-U.S. Person under Regulation S:

(i) the Registrar shall register any proposed transfer of a Restricted Security to a Non-U.S. Person upon receipt of a certificate substantially in the form of Exhibit F from the proposed transferor and such legal opinion, certifications and other information as the Registrar or the Company may reasonably request; 

(ii) if the proposed transferee is a Member and the Securities to be transferred consist of Individual Securities which after transfer are to be evidenced by an interest in the Permanent Regulation S Global Security, upon receipt by the Registrar of (x) the documents required by clause (i) of this subsection (d) and (y) written instructions given in accordance with the Depositary’s and the Registrar’s procedures, the Registrar shall register the transfer and reflect on its books and records the date of such transfer, and the Security Custodian and the Registrar shall increase the aggregate principal amount of the Permanent Regulation S Global Security in an amount equal to the aggregate principal amount of the Individual Securities to be transferred, and the Registrar shall cancel the Individual Securities so transferred;

(iii) if the proposed transferor is a Member seeking to transfer an interest in the 144A Global Security or the IAI Global Security, upon receipt by the Security Custodian and the Registrar of (x) the documents required by clause (i) of this subsection (d) and (y) written instructions given in accordance with the Depositary’s and the Registrar’s procedures, the Registrar shall register the transfer and reflect on its books and records the date of such transfer, and the Security Custodian and the Registrar shall (A) decrease the aggregate principal amount of the 144A Global Security or the IAI Global Security, as the case may be, in an amount equal to the aggregate principal amount of the beneficial interest in the 144A Global Security or the IAI Global Security, as the case may be, to be transferred and (B) increase the aggregate principal amount of the Permanent Regulation S Global Security in an amount equal to the aggregate principal amount of the Global Securities to be transferred; 

(iv) if the Securities to be transferred consist of Individual Securities which after transfer are to be evidenced by Individual Securities, upon receipt by the Registrar of the Individual Security duly endorsed or accompanied by a written instruction of transfer in a form satisfactory to the Company, the Trustee and the Registrar, duly executed by the Holder thereof or by his, her or its attorney duly authorized in writing, and (x) the documents required by clause (i) of this subsection (d) and (y) written instructions given in accordance with the Registrar’s procedures, the Registrar shall register the transfer of such Individual Securities; and

(v) if the proposed transferor  is a Member and the Securities seeking to transfer an interest in the Permanent Regulation S Global Security which after transfer are to be evidenced by Individual Securities, upon receipt by the Security Custodian and the Registrar of the (x) the documents required by clause (i) of this subsection (d) and (y) written instructions given in accordance with the Registrar’s procedures, the Registrar shall register the transfer and reflect on its books and records the date of such transfer, and the Security Custodian and the Registrar shall decrease the aggregate principal amount of the relevant Global Security by the aggregate principal amount of the Securities to be transferred.  Thereafter, the Company shall execute, and the Trustee shall authenticate and deliver, Individual Securities to the transferee in accordance with the terms of the Indenture.

(e) Exchange Offer; Private Exchange. 

(i) Upon the occurrence of an Exchange Offer in accordance with the terms of a registration rights agreement, the Company will issue and, upon receipt of an authentication order in accordance with Section 3.03, the Trustee shall authenticate one or more Global Securities and/or Individual Securities not bearing the Private Placement Legend in an aggregate principal amount equal to the principal amount of the beneficial interests in the 

7
        

Global Securities or Individual Securities, as the case may be, tendered for acceptance in accordance with the Exchange Offer and accepted for exchange in the Exchange Offer.

(ii) Upon the occurrence of a Private Exchange in accordance with the terms of a of a registration rights agreement, the Company will issue, if necessary, and, upon receipt of an authentication order in accordance with Section 3.03, the Trustee shall authenticate one or more Global Securities and/or Individual Securities in an aggregate principal amount equal to the principal amount of the beneficial interests in the Global Securities or Individual Securities, as the case may be, being exchanged and having the status of an unsold allotment in the initial distribution of the Securities, which, in each case, shall bear such legends and/or notations as the Company and the Trustee reasonably deem appropriate.

(iii) Concurrently with the issuance of such Exchange Securities and/or Private Exchange Securities, the Security Custodian and the Registrar shall cause the aggregate principal amount of the applicable Global Securities bearing the Private Placement Legend to be reduced accordingly, and the Company will execute and the Trustee will authenticate and deliver to the Persons designated by the Holders of Individual Securities so accepted Individual Securities in the appropriate principal amount.  Individual Securities exchanged for Exchange Securities and/or Private Exchange Securities will be canceled by the Trustee in accordance with Section 3.09. 

(f) Other Transfers.  The following provisions shall apply with respect to any transfer of an interest in a Restricted Security other than those set forth in subsections (b), (c), (d) and (e) above: 

            (i) the Registrar shall register the transfer of any Restricted Security, whether or not such Security bears the Private Placement Legend,  if (x) the requested transfer is after the expiration of the applicable holding period with respect thereto set forth in Rule 144(d) of the Securities Act; provided, however, that neither the Company nor any Affiliate of the Company has held any beneficial interest in such Security, or portion thereof, at any time on or prior to the expiration of the applicable holding period with respect thereto set forth in Rule 144(d) of the Securities Act or (y) the proposed transferor has delivered to the Registrar a certificate substantially in the form of Exhibit H hereto and any legal opinions, certifications and other information as may be reasonably requested by the Trustee and the Company; 

(ii) if the proposed transferee is a Member and the Securities to be transferred consist of Individual Securities which after transfer are to be evidenced by an interest in a Global Security, upon receipt by the Registrar of the Individual Security duly endorsed or accompanied by a written instruction of transfer in a form satisfactory to the Company, the Trustee and the Registrar, duly executed by the Holder thereof or by his, her or its attorney duly authorized in writing, and (x) written instructions given in accordance with the Depositary’s and the Registrar’s procedures and (y) the certificate referred to in clause (i)(y) of this subsection (f) and any legal opinion, certifications and other information as the Registrar or the Company may reasonably request, the Registrar shall register the transfer and reflect on its books and records the date of such transfer, and the Security Custodian and the Registrar shall increase the aggregate principal amount of the relevant Global Security in an amount equal to the aggregate principal amount of Individual Securities to be transferred, and the Registrar shall cancel the Individual Securities so transferred; 
(iii) if the proposed transferor is a Member seeking to transfer an interest in a Global Security and the Securities to be transferred will thereafter be evidenced by an interest in a Global Security, upon receipt by the Security Custodian and the Registrar of (x) written instructions given in accordance with the Depositary’s and the Registrar’s procedures and (y) the certificate referred to in clause (i)(y) of this subsection (f) and any legal opinion, certifications and other information as the Registrar or the Company may reasonably request, the Registrar shall register the transfer and reflect on its books and records the date and aggregate principal amount of the Securities to be transferred; 

(iv) if the Securities to be transferred consist of Individual Securities which after transfer are to be evidenced by Individual Securities, upon receipt by the Registrar of the Individual Security duly endorsed or accompanied by a written instruction of transfer in a form satisfactory to the Company, the Trustee and the Registrar, duly executed by the Holder thereof or by his, her or its attorney duly authorized in writing, and (x) written instructions given in accordance with the Registrar’s procedures and (y) the certificate referred to in clause             

8
        

(i)(y) of this subsection (f) and any legal opinion, certifications and other information as the Registrar or the Company may reasonably request, the Registrar shall register the transfer of Individual Securities; and

(v) if the proposed transferor  is a Member seeking to transfer an interest in a Global Security and the Securities to be transferred will thereafter be evidenced by Individual Securities, upon receipt by the Security Custodian and the Registrar of (x) written instructions given in accordance with the Depositary’s and the Registrar’s procedures and (y) the certificate referred to in clause (i)(y) of this subsection (f) and any legal opinion, certifications and other information as the Registrar or the Company may reasonably request, the Registrar shall register the transfer and reflect on its books and records the date of such transfer, and the Security Custodian and the Registrar shall decrease the aggregate principal amount of the relevant Global Security by the aggregate principal amount of the Securities to be transferred.  Thereafter, the Company shall execute, and the Trustee shall authenticate and deliver, Individual Securities to the transferee in accordance with the terms of the Indenture.

(g) Private Placement Legend.  Upon the transfer, exchange or replacement of Securities not bearing the Private Placement Legend unless otherwise required by applicable law, the Registrar shall deliver Securities that do not bear the Private Placement Legend. Upon the transfer, exchange or replacement of Securities bearing the Private Placement Legend, the Registrar shall deliver only Securities that bear the Private Placement Legend unless (i) there is delivered to the Trustee a legal opinion reasonably satisfactory to the Company and the Registrar to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act or (ii) such Security has been offered and sold (including pursuant to the Exchange Offer) pursuant to an effective registration statement under the Securities Act.

(h) By its acceptance of any Security bearing the Private Placement Legend, each Holder of such a Security acknowledges the restrictions on transfer of such Security set forth in this Indenture and in the Private Placement Legend and agrees that it will transfer such Security only as provided in this Indenture.

The Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 3.15. All legal opinions, certifications and other information submitted to the Trustee or Registrar pursuant to this Section 3.15 to effect a registration of transfer or exchange may be submitted by facsimile. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar. 

Neither the Trustee nor the Registrar shall have any duty to monitor the Company’s compliance with, or have any responsibility with respect to, the Company’s compliance with any federal or state securities laws in connection with registrations of transfers and exchanges of the Securities.

(i) Special Interest.  If Special Interest becomes payable pursuant to the terms of a registration rights agreement among the Company, the subsidiary guarantors party thereto and the initial purchasers of any Restricted Securities, Special Interest will be payable in arrears on each Interest Payment Date following accrual in the same manner as regular interest on such Restricted Securities. If Special Interest becomes payable on such Restricted Securities, the Company shall provide an Officer’s Certificate to the Trustee on or before the record date for each Interest Payment Date such Special Interest is payable setting forth the accrual period and the amount of such Special Interest in reasonable detail. The Trustee may provide a copy of such Officer’s Certificate or other notice received from the Company relating to Special Interest to any Holder upon request. Unless and until the Trustee receives such a certificate, the Trustee may assume without inquiry that no such Special Interest is payable. The Trustee shall not at any time be under any duty or responsibility to any Holder to determine whether any Special Interest is payable, or with respect to the nature, extent, or calculation of the amount of any Special Interest owed, or with respect to the method employed in such calculation of any Special Interest.”

SECTION 2.06.    Amendment of Section 4.03 of Fourth Supplemental Indenture    .  Section 4.03 of the Fourth Supplemental Indenture is hereby amended and restated to read in its entirety as follows: 
“SECTION 4.03.  Amendment of Article IV of Base Indenture.  Section 4.02(a) of the Base Indenture is hereby amended, but only with respect to the Securities, by deleting the words “the Trustee shall select, by lot or in such other manner as the Trustee shall deem appropriate”, and replacing such deleted words with “if the Securities are Global Securities, the Securities to be redeemed will be selected by the Depositary in accordance with 

9
        

applicable Depositary procedures, and if the Securities to be redeemed are not Global Securities, the Trustee shall select, on a pro rata basis to the extent practicable”.”
ARTICLE III 
AMENDMENT OF EXISTING INDENTURE
SECTION 3.01.    Amendment of Section 6.06 of Existing Indenture.  Section 6.06(c) of the Existing Indenture is hereby amended, but only with respect to the Initial Securities and any Additional Securities issued on or after the date hereof, to add the following parenthetical after “by first-class mail” and before “to each Holder”:  “(or with respect to Global Securities, to the extent permitted or required by applicable Depositary procedures or regulations, send electronically).”
SECTION 3.02.    Amendment of Section 6.08 of Existing Indenture.  Section 6.08(b) of the Existing Indenture is hereby amended, but only with respect to the Initial Securities and any Additional Securities issued on or after the date hereof, (i) to add the following parenthetical after “the Company shall mail” and before “a notice”:  “(or with respect to Global Securities, to the extent permitted or required by applicable Depositary procedures or regulations, send electronically),” and (ii) to delete the word “mailed” in subsection (iii) and add the word “sent” in                                                                    its place.
SECTION 3.03.    Amendment of Section 12.01 of Existing Indenture.  Section 12.01(a) of the Existing Indenture is hereby amended, but only with respect to the Initial Securities and any Additional Securities issued on or after the date hereof, to delete the word “mailing” after “as a result of the” and before “of a notice” and to add the word “sending” in its place.
SECTION 3.04.    Amendment of Sections 14.01 and 14.02 of Existing Indenture    .  Sections 14.01 and 14.02 of the Existing Indenture are hereby amended, but only with respect to the Initial Securities and any Additional Securities issued on or after the date hereof, to add the following parenthetical after “the Company shall mail” and before “to Holders a notice” in each such Section:  “(or with respect to Global Securities, to the extent permitted or required by applicable Depositary procedures or regulations, send electronically).”
ARTICLE IV
MISCELLANEOUS
SECTION 4.01.    Integral Part.  This Sixth Supplemental Indenture constitutes an integral part of the Indenture.
SECTION 4.02.    Adoption, Ratification and Confirmation.  The Existing Indenture, as supplemented and amended by this Sixth Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed.
SECTION 4.03.    Counterparts.  This Sixth Supplemental Indenture may be executed in any number of counterparts, each of which when so executed shall be deemed an original; and all such counterparts shall together constitute but one and the same instrument. Signatures of the parties hereto transmitted by facsimile or PDF may be used in lieu of the originals and shall be deemed to be their original signatures for all purposes.
SECTION 4.04.    Severability.  Should any provision of this Sixth Supplemental Indenture for any reason be declared invalid or unenforceable, such decision shall not affect the validity or enforceability of any of the other provisions of this Sixth Supplemental Indenture, which other provisions shall remain in full force and effect and the application of such invalid or unenforceable provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall be valid and be enforced to the fullest extent permitted by law.
SECTION 4.05.    Governing Law.     THIS SIXTH SUPPLEMENTAL INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS 

10
        

OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 4.06.    Trustee Makes No Representation.  The Trustee makes no representation and shall not be responsible or accountable as to the validity, execution by the other parties hereto or thereto or sufficiency of this Sixth Supplemental Indenture or of the Securities or Subsidiary Guarantees.  The recitals and statements herein are deemed to be those of the Company  and Subsidiary Guarantors and not of the Trustee and the Trustee shall not be held responsible in any manner whatsoever for their correctness.  The Trustee shall not be accountable for the use or application by the Company of the Securities or the proceeds thereof.
SECTION 4.07.    Damages Limitation.  In no event shall the Trustee be responsible or liable for any special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit), irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action. The Company hereby confirms to the Trustee that this Sixth Supplemental Indenture has not resulted in a material modification of the Initial Securities for Foreign Accounting Tax Compliance Act purposes.
SECTION 4.08.    U.S.A. PATRIOT Act.   The Company and the Subsidiary Guarantors acknowledge that in accordance with Section 326 of the U.S.A. PATRIOT Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Sixth Supplemental Indenture agree that they shall provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. PATRIOT Act.

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IN WITNESS WHEREOF, the parties hereto have executed this Sixth Supplemental Indenture on the date first set forth above.
HEALTHSOUTH CORPORATION, as Issuer

By:          /s/ Douglas E. Coltharp
Name:   Douglas E. Coltharp
Title:     Executive Vice President and Chief Financial Officer

[Signatures Continued on Next Page]

[Signature Page to Sixth Supplemental Indenture]

     GUARANTORS
CMS Jonesboro Rehabilitation, Inc.
Continental Medical of Arizona, Inc.
Continental Medical Systems, Inc.
Continental Rehabilitation Hospital of Arizona, Inc.
HEALTHSOUTH LTAC of Sarasota, Inc.
HEALTHSOUTH of Dothan, Inc.
HEALTHSOUTH of Nittany Valley, Inc.
HEALTHSOUTH of South Carolina, Inc.
HEALTHSOUTH of Spring Hill, Inc.
HEALTHSOUTH of Treasure Coast, Inc.
HEALTHSOUTH of Yuma, Inc.
HEALTHSOUTH Rehabilitation Center, Inc.
HEALTHSOUTH Rehabilitation Center of New Hampshire, Inc.
HealthSouth Rehabilitation Hospital of Austin, Inc.
HEALTHSOUTH Rehabilitation Hospital of Manati, Inc.
HealthSouth Rehabilitation Hospital of Montgomery, Inc.
HealthSouth Rehabilitation Hospital of San Juan, Inc.
HealthSouth Rehabilitation Hospital of Texarkana, Inc.
HealthSouth Rehabilitation Hospital The Woodlands, Inc.
HealthSouth Rehabilitation Institute of San Antonio, (RIOSA), Inc.
Lakeshore System Services of Florida, Inc.
Rehab Concepts Corp.
Rehabilitation Hospital of Colorado Springs, Inc.
Rehabilitation Hospital of Nevada-Las Vegas, Inc.
Sherwood Rehabilitation Hospital, Inc.
Tarrant County Rehabilitation Hospital, Inc.
Tyler Rehabilitation Hospital, Inc.
Western Neuro Care, Inc.

     By:  /s/ Edmund M. Fay    
Name:  Edmund M. Fay 
Title:   Authorized Signatory

[Signatures Continued on Next Page]

[Signature Page to Sixth Supplemental Indenture]

Lakeview Rehabilitation Group Partners
By:  Continental Medical of Kentucky, Inc.
Its:  General Partner
 
Southern Arizona Regional Rehabilitation Hospital, L.P.
By:  Continental Rehabilitation Hospital of Arizona, Inc.
Its:  General Partner
 
Western Medical Rehab Associates, L.P.
By:  Western Neuro Care, Inc.
Its:  General Partner

By:  /s/ Edmund M .Fay          
Name:  Edmund M. Fay 
Title:  Authorized Signatory 

[Signature Page to Sixth Supplemental Indenture]

Advantage Health, LLC
HealthSouth Arizona Real Estate, LLC
HEALTHSOUTH Aviation, LLC
HealthSouth Bakersfield Rehabilitation Hospital, LLC
HealthSouth California Real Estate, LLC
HealthSouth Cardinal Hill Rehabilitation Hospital, LLC
HealthSouth Colorado Real Estate, LLC
HealthSouth Deaconess Holdings, LLC
HealthSouth East Valley Rehabilitation Hospital, LLC
HealthSouth Harmarville Rehabilitation Hospital, LLC
HealthSouth Johnson City Holdings, LLC
HealthSouth Joint Ventures Holdings, LLC
HealthSouth Kansas Real Estate, LLC
HealthSouth Kentucky Real Estate, LLC
HealthSouth Littleton Rehabilitation, LLC
HealthSouth Martin County Holdings, LLC
HealthSouth Middletown Rehabilitation Hospital, LLC
HealthSouth Nevada Real Estate, LLC
HealthSouth New Mexico Real Estate, LLC
HealthSouth Northern Kentucky Rehabilitation Hospital, LLC
HealthSouth Ohio Real Estate, LLC
HealthSouth Owned Hospitals Holdings, LLC
HealthSouth Pennsylvania Real Estate, LLC
HealthSouth Plano Rehabilitation Hospital, LLC
HealthSouth Properties, LLC
HealthSouth Reading Rehabilitation Hospital, LLC
HealthSouth Real Estate, LLC
HealthSouth Real Property Holding, LLC
HealthSouth Rehabilitation Hospital at Drake, LLC
HealthSouth Rehabilitation Hospital of Arlington, LLC
HealthSouth Rehabilitation Hospital of Beaumont, LLC
HealthSouth Rehabilitation Hospital of Charleston, LLC
HealthSouth Rehabilitation Hospital of Cypress, LLC
HealthSouth Rehabilitation Hospital of Desert Canyon, LLC
HealthSouth Rehabilitation Hospital of Fort Worth, LLC
HealthSouth Rehabilitation Hospital of Fredericksburg, LLC
HealthSouth Rehabilitation Hospital of Gadsden, LLC
HealthSouth Rehabilitation Hospital of Henderson, LLC
HealthSouth Rehabilitation Hospital of Humble, LLC
HealthSouth Rehabilitation Hospital of Largo, LLC
HealthSouth Rehabilitation Hospital of Las Vegas, LLC
HealthSouth Rehabilitation Hospital of Marion County, LLC
HealthSouth Rehabilitation Hospital of Mechanicsburg, LLC
HealthSouth Rehabilitation Hospital of Miami, LLC 
HealthSouth Rehabilitation Hospital of Midland/Odessa, LLC 
HealthSouth Rehabilitation Hospital of Modesto, LLC 
HealthSouth Rehabilitation Hospital of New Mexico, LLC
HealthSouth Rehabilitation Hospital of Newnan, LLC
HealthSouth Rehabilitation Hospital of Northern Virginia, LLC
HealthSouth Rehabilitation Hospital of Petersburg, LLC
HealthSouth Rehabilitation Hospital of Sarasota, LLC
HealthSouth Rehabilitation Hospital of Seminole County, LLC
HealthSouth Rehabilitation Hospital of Sewickley, LLC
HealthSouth Rehabilitation Hospital of South Jersey, LLC
HealthSouth Rehabilitation Hospital of Sugar Land, LLC
HealthSouth Rehabilitation Hospital of Tallahassee, LLC

[Signature Page to Sixth Supplemental Indenture]

HealthSouth Rehabilitation Hospital of Utah, LLC
HealthSouth Rehabilitation Institute of Tucson, LLC
HealthSouth Savannah Holdings, LLC
HealthSouth Scottsdale Rehabilitation Hospital, LLC
HealthSouth Sea Pines Holdings, LLC
HealthSouth South Carolina Real Estate, LLC
HealthSouth Specialty Hospital of North Louisiana, LLC
HealthSouth Sub-Acute Center of Mechanicsburg, LLC
HealthSouth Sunrise Rehabilitation Hospital, LLC
HealthSouth Support Companies, LLC
HealthSouth Texas Real Estate, LLC
HealthSouth Tucson Holdings, LLC
HealthSouth Utah Real Estate, LLC
HealthSouth Valley of the Sun Rehabilitation Hospital, LLC
HealthSouth Virginia Real Estate, LLC
HealthSouth Walton Rehabilitation Hospital, LLC
HealthSouth West Virginia Real Estate, LLC
HealthSouth Westerville Holdings, LLC
HealthSouth of East Tennessee, LLC
HealthSouth of Erie, LLC
HealthSouth of Fort Smith, LLC
HealthSouth of Pittsburgh, LLC
HealthSouth of Toms River, LLC
HealthSouth of York, LLC
New England Rehabilitation Management Co., LLC
Print Promotions Group, LLC
Rebound, LLC
Rehabilitation Hospital Corporation of America, LLC
Rehabilitation Hospital of Plano, LLC
Rehabilitation Institute of Western Massachusetts, LLC

By:  /s/ Edmund M. Fay         
Name:  Edmund M. Fay 
Title:  Authorized Signatory 

[Signatures Continued on Next Page]

[Signature Page to Sixth Supplemental Indenture]

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee

By:          /s/ Stefan Victory
Name:   Stefan Victory 
Title:     Vice President
 

[Signature Page to Sixth Supplemental Indenture]

EXHIBIT C
FORM OF FACE OF SECURITY
[Insert the applicable legends from Exhibit D]

5.75% Senior Notes Due 2024

NO.    CUSIP No. [            ]
ISIN No. [             ]
HEALTHSOUTH CORPORATION, a Delaware corporation, promises to pay to Cede & Co., or registered assigns, the principal sum of $                            Dollars on November 1, 2024.
Interest Payment Dates: May 1 and November 1.
Record Dates: April 15 and October 15.
Additional provisions of this Security are set forth on the other side of this Security.

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Dated: 
                    
HEALTHSOUTH CORPORATION
By       
Name:   
Title:  
                         By      ___________________________________ 
Name:  
Title:    
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
Date of authentication: 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee
By __________________________
     Authorized Signatory

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[FORM OF REVERSE SIDE OF SECURITY]  
5.75% Senior Note Due 2024
1.Interest
HealthSouth Corporation, a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises to pay interest on the principal amount of this Security at the rate per annum shown above. The Company will pay interest semiannually on May 1 and November 1 of each year, commencing                        . Interest on the Securities will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from                     . Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Company will pay interest on overdue principal at the rate borne by this Security plus 1.0% per annum, and it will pay interest on overdue installments of interest at the same rate to the extent lawful.
2.Method of Payment
The Company will pay interest on the Securities (except defaulted interest) to the Persons who are registered holders of Securities at the close of business on the April 15 or October 15 next preceding the interest payment date even if Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Securities represented by a Global Security (including principal, premium and interest) will be made by wire transfer of immediately available funds to the accounts specified by the Depositary. The Company will make all payments in respect of a certificated Security (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a certificated Security will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).
3.Paying Agent and Registrar
Initially, Wells Fargo Bank, National Association, a national banking association (the “Trustee”), will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4.Indenture
The Company issued the Securities under the fourth supplemental indenture, dated September 11, 2012, as supplemented by the sixth supplemental indenture, dated August 7, 2015, to the indenture dated as of December 1, 2009 (together with the supplemental indentures, the “Indenture”), among the Company, the Subsidiary Guarantors and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) (the “Act”). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and the Act for a statement of those terms.
The Securities are general unsecured obligations of the Company. The Company shall be entitled, subject to its compliance with Section 6.03 of the Indenture, to issue Additional Securities pursuant to Section 3.14 of the Indenture. The Securities issued on August 7, 2015, and any Additional Securities, will be treated as a single class for all purposes under the Indenture. The Indenture contains covenants that limit the ability of the Company and its subsidiaries to incur additional indebtedness; pay dividends or distributions on, or redeem or repurchase capital stock; make investments; issue or sell capital stock of subsidiaries; engage in transactions with affiliates; create liens on assets; transfer or sell assets; guarantee indebtedness; restrict dividends or other payments of subsidiaries;

C-2

consolidate, merge or transfer all or substantially all of its assets; and engage in sale/leaseback transactions. These covenants are subject to important exceptions and qualifications.
5.Optional Redemption
Except as set forth below, the Company shall not be entitled to redeem the Securities.
On and after November 1, 2017, the Company shall be entitled at its option to redeem all or a portion of the Securities upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed in percentages of principal amount on the redemption date), plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on November 1 of the years set forth below:
	
		
	Period
	Redemption Price

	2017
	102.875%

	2018
	101.917%

	2019
	100.958%

	2020 and thereafter
	100.000%

In addition, prior to November 1, 2015, the Company shall be entitled at its option on one or more occasions to redeem Securities (which includes Additional Securities, if any) in an aggregate principal amount not to exceed 35% of the aggregate principal amount of the Securities (which includes Additional Securities, if any) originally issued at a redemption price (expressed as a percentage of principal amount) of 105.75%, plus accrued and unpaid interest to the redemption date, with the net cash proceeds from one or more Equity Offerings; provided, however, that (1) at least 65% of such aggregate principal amount of Securities (which includes Additional Securities, if any) remains outstanding immediately after the occurrence of each such redemption (other than Securities held, directly or indirectly, by the Company or its Affiliates); and (2) each such redemption occurs within 90 days after the date of the related Equity Offering.
Prior to November 1, 2017, the Company shall be entitled at its option to redeem all, but not less than all, of the Securities at a redemption price equal to 100% of the principal amount of the Securities plus the Applicable Premium as of, and accrued and unpaid interest to, the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).
6.Notice of Redemption
Notice of redemption will be mailed (or with respect to Global Securities, to the extent permitted or required by applicable DTC procedures or regulations, send electronically) at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at his registered address. Securities in denominations larger than $2,000 principal amount may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued interest on all Securities (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Securities (or such portions thereof) called for redemption.
7.Put Provisions
Upon a Change of Control, any Holder of Securities will have the right to cause the Company to repurchase all or any part of the Securities of such Holder at a repurchase price equal to 101% of the principal amount of the Securities to be repurchased plus accrued interest to the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on the related interest payment date) as provided in, and subject to the terms of, the Indenture.

C-3

8.Guarantee
The payment by the Company of the principal of, and premium and interest on, the Securities is fully and unconditionally guaranteed on a joint and several senior basis by each of the Subsidiary Guarantors to the extent set forth in the Indenture.
9.Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations of $2,000 principal amount and any greater integral multiple of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an interest payment date.
10.Persons Deemed Owners
Except as provided in paragraph 2 hereof, the registered Holder of this Security may be treated as the owner of it for all purposes.
11.Unclaimed Money
If money for the payment of principal or interest on any Securities remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request at the end of the two years after such principal or interest has become due or payable, unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company as general creditors and not to the Trustee for payment.
12.Discharge and Defeasance
Subject to certain conditions, the Company at any time shall be entitled to terminate some or all of its obligations under the Securities and the Indenture if the Company irrevocably deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Securities to redemption or maturity, as the case may be.
13.Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (a) the Indenture and the Securities may be amended with the written consent of the Holders of at least a majority in principal amount outstanding of the Securities and (b) any default or noncompliance with any provision may be waived with the written consent of the Holders of a majority in principal amount outstanding of the Securities. Subject to certain exceptions set forth in the Indenture, without the consent of any Securityholder, the Company, the Subsidiary Guarantors and the Trustee shall be entitled to amend the Indenture or the Securities to cure any ambiguity, omission, defect or inconsistency, or to comply with Article V of the Indenture, or to provide for uncertificated Securities in addition to or in place of certificated Securities, or to add guarantees with respect to the Securities, including Subsidiary Guarantees, or to secure the Securities, or to add additional covenants or surrender rights and powers conferred on the Company or the Subsidiary Guarantors, or to conform the text of the Indenture or the Securities to any provision of the “Description of Notes” section of the Prospectus Supplement under certain circumstances, or to comply with any requirement of the SEC in connection with qualifying the Indenture under the Act, or to make any change that does not adversely affect the rights of any Securityholder, or to make amendments to provisions of the Indenture relating to the form, authentication, transfer and legending of the Securities. 

14.Defaults and Remedies
Under the Indenture, Events  of Default include (a) default for 30 days in payment of interest on the Securities; (b) default in payment of principal on the Securities at maturity, upon redemption pursuant to paragraph 5 of the Securities, upon acceleration or otherwise, or failure by the Company to redeem or purchase 

C-5

Securities when required; (c) failure by the Company or any Subsidiary Guarantor to comply with other agreements in the Indenture or the Securities, in certain cases subject to notice and lapse of time; (d) certain accelerations (including failure to pay within any grace period after final maturity) of other Indebtedness of the Company if the amount accelerated (or so unpaid) exceeds $50 million; (e) certain events of bankruptcy or insolvency with respect to the Company and the Significant Subsidiaries; (f) certain judgments or decrees for the payment of money in excess of $50 million; and (g) certain defaults with respect to Subsidiary Guarantees. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Securities may declare all the Securities to be due and payable immediately. Certain events of bankruptcy or insolvency are Events of Default which will result in the Securities being due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives indemnity or security satisfactory to it. Subject to certain limitations, Holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing Default (except a Default in payment of principal or interest) if it determines that withholding notice is in the interest of the Holders.
15.Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, Co-Registrar or Co-Paying Agent may do the same with like rights.
16.No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company or the Trustee shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.
17.Authentication
This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Security.
18.Abbreviations
Customary abbreviations may be used in the name of a Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
19.CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders. No representation is made as to

C-6

the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
20.    Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Securityholder upon written request and without charge to the Security holder a copy of the Indenture, which has in it the text of this Security in larger type[, and the Registration Rights Agreement (as defined herein)]. Requests may be made to:

3660 Grandview Parkway, Suite 200
             Birmingham, Alabama 35243
                            Attention:  General Counsel

[21.     Registration Rights Agreement

The Holder of this Security is entitled to the benefits of the registration rights agreement (the “Registration Rights Agreement”) between the Company, the Subsidiary Guarantors and the initial purchasers named therein, dated         [                        ].  In certain circumstances, the Company may be obligated to pay liquidated damages in the form of special interest.]1 

1This Section not to appear on Exchange Securities, Private Exchange Securities or Additional Securities unless required by the terms of such Additional Securities.

C-7

ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to

(Print or type assignee’s name, address and zip code)

(Insert assignee’s soc. sec. or tax I.D. No.)    

and irrevocably appoint ____________________ agent to transfer this Security on the books of the Company.  The agent may substitute another to act for him.
        
DATE:     YOUR SIGNATURE:
        
Sign exactly as your name appears on the other side of this Security. 

In connection with any transfer of this Security occurring prior to the date which is the day following the expiration of the applicable holding period set forth in Rule 144(d) of the Securities Act, the undersigned confirms that it has not utilized any general solicitation or general advertising in connection with the transfer and is making the transfer pursuant to one of the following: 
[Check One]

(1)  ̈to Company or a subsidiary thereof; or

(2)  ̈ to a person who the transferor reasonably believes is a “qualified institutional buyer” pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”); or

(3)  ̈; to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that has furnished to the Trustee a signed letter containing certain representations and agreements (the form of which letter can be obtained from the Trustee); or

(4)  ̈; outside the United States to a non-“U.S. person” as defined in Rule 902 of Regulation S under the Securities Act in compliance with Rule 904 of Regulation S under the Securities Act and, if the transfer is being made prior to the expiration of the 40-day distribution compliance period as defined in Regulation S, the Securities shall be held immediately thereafter through the Euroclear System or Clearstream Banking, S.A.; or

(5)  ̈; pursuant to the exemption from registration provided by Rule 144 under the Securities Act or pursuant to another exemption available under the Securities Act; or

(6)  ̈; pursuant to an effective registration statement under the Securities Act.

C-8

and unless the box below is checked, the undersigned confirms that such Security is not being transferred to an “affiliate” of the Company as defined in Rule 144 under the Securities Act (an “Affiliate”):

 ̈; The transferee is an Affiliate of the Company.

Unless one of the foregoing items (1) through (6) is checked, the Registrar will refuse to register any of the Securities evidenced by this certificate in the name of any person other than the registered Holder thereof; provided, however, that if item (3), (4) or (5) is checked, the Company or the Registrar may require, prior to registering any such transfer of the Securities, in their sole discretion, such legal opinions, certifications (including an investment letter in the case of box (3) or (4)) and other information as the Registrar or the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

If none of the foregoing items (1) through (6) are checked, the Registrar shall not be obligated to register this Security in the name of any person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 3.15 of the Indenture shall have been satisfied.

BOX TO BE CHECKED IF TRANSFEROR CHECKED BOX 2 ABOVE

 ̈;    The undersigned represents and warrants that, that the transfer will be made (A) in compliance with the provisions of Rule 144A to a transferee that is purchasing the Security for its own account or an account with respect to which it exercises sole investment discretion and that the transferor reasonably believes that the transferee and any such account is a QIB, and (B) the sale has been made in compliance with any applicable blue sky securities laws of the United States of America.

Dated: _________________________        Signed:_________________________________________
(Sign exactly as name appears on the other side of                             this Security)

Signature Guarantee:_________________________________________________________________________
      

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Act.

C-9

[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been made:
	
					
	Date of Exchange
	Amount of decrease
	Amount of increase
	Principal amount of
	Signature of

	 
	in Principal amount
	in Principal amount
	this Global Security
	authorized signatory of Trustee or

	 
	of this Global
	of this Global
	following such
	Securities

	 
	Security
	Security
	decrease or increase
	Custodian

C-10

OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company pursuant to Section 6.06 or 6.08 of the Indenture, check the box:   ̈
If you want to elect to have only part of this Security purchased by the Company pursuant to Section 6.06 or 6.08 of the Indenture, state the amount in principal amount:  $
	
			
	Dated:
_____________________________________________
	Your  
Signature:_____________________________________

	 
	(Sign exactly as your name appears on the other side of this Security.)

	Signature Guarantee:
	____________________________________________________________________
                                             (Signature must be guaranteed)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

C-11

EXHIBIT D
FORM OF LEGENDS

Each Global Security and Individual Security that constitutes a Restricted Security shall bear the following legend (the “Private Placement Legend”) on the face thereof until the expiration of the applicable holding period with respect thereto set forth in Rule 144(d) of the Securities Act, unless otherwise agreed by the Company and the Holder thereof or if such legend is no longer required by Section 3.15(g) of the Indenture:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY STATE SECURITIES LAWS OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.

THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES FOR THE BENEFIT OF THE COMPANY TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS IN OFFSHORE TRANSACTIONS AND IN ACCORDANCE WITH THE LAWS APPLICABLE TO IT IN THE JURISDICTION IN WHICH SUCH PURCHASE IS MADE, (D) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF AVAILABLE), (E) PURSUANT TO OFFERS AND SALES TO “ACCREDITED INVESTORS” WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR 7 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITIES FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY “DISTRIBUTION” AS DEFINED IN AND IN VIOLATION OF THE SECURITIES ACT, (F) PURSUANT TO ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (G) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S, OR REGISTRAR’S, AS APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE OR REGISTRAR. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE EXPIRATION OF THE APPLICABLE HOLDING PERIOD WITH RESPECT TO RESTRICTED SECURITIES SET FORTH IN RULE 144 UNDER THE SECURITIES ACT.

Each Temporary Regulation S Global Security shall also bear the following legend:

THIS SECURITY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED 

D-1

ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT. 

Each Global Security authenticated and delivered hereunder shall also bear the following legend:

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK OR A NOMINEE OF DTC, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL PURPOSES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
Each Individual Security authenticated and delivered hereunder shall also bear the following legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

D-2

EXHIBIT E
FORM OF CERTIFICATE TO BE
DELIVERED IN CONNECTION WITH
TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS

Date:

Wells Fargo Bank – DAPS Reorg.
MAC N9303-121
608 2nd Avenue South
Minneapolis, MN 55479
Telephone No.: (877) 872-4605
Fax No.: (866) 969-1290
Email: DAPSReorg@wellsfargo.com

Re: Transfer of 5.75% Senior Notes due 2024 of HealthSouth Corporation (the “Company”)

Ladies and Gentlemen:

In connection with our proposed purchase of the Company’s 5.75% Senior Notes due 2024 (the “Securities”), we confirm that:

		
	1.
	We understand that any subsequent transfer of the Securities is subject to certain restrictions and conditions set forth in the Indenture relating to the Securities, and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Securities except in compliance with, such restrictions and conditions and the Securities Act, and all applicable state securities laws.

		
	2.
	We understand that the offer and sale of the Securities have not been registered under the Securities Act, and that the Securities may not be offered, sold, pledged or otherwise transferred except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell, offer, pledge or otherwise transfer any Securities, we will do so only (i) to the Company or any of its subsidiaries, (ii) inside the United States in a transaction meeting the requirements of Rule 144A under the Securities Act to a person whom we reasonably believe to be a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act), (iii) inside the United States to an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to the Registrar a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Securities (the form of which letter can be obtained from the Registrar), 

(iv) outside the United States to a person that is not a U.S. person (as defined in Rule 902 of Regulation S, (v) pursuant to the exemption from registration provided by Rule 144 under the Securities Act (if available) or another available exemption under the Securities Act or (vi) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing any of the Securities from us a notice advising such purchaser that resales of the Securities are restricted as stated herein.

		
	3.
	We are not acquiring the Securities for or on behalf of, and will not transfer the Securities to, any pension or welfare plan (as defined in Section 3 of the Employee Retirement Income Security Act of 1974, as amended) or plan (as defined in Section 4975 of the Internal Revenue Code of 1986, as amended), except as permitted in the section entitled “Transfer Restrictions” of the offering circular pursuant to which the Securities were sold.

		
	4.
	We understand that, on any proposed resale of any Securities, we will be required to furnish to the Registrar, the Security Custodian and the Company such legal opinions, certifications and other information as the Registrar, the Security Custodian and the Company may reasonably request to confirm 

E-1

that the proposed sale complies with the foregoing restrictions. We further understand that the Securities purchased by us will bear a legend to the foregoing effect.

		
	5.
	We are an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) of the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Securities, and we and any accounts for which we are acting are each able to bear the economic risk of our or their investment, as the case may be.

		
	6.
	We are acquiring the Securities purchased by us for our account or for one or more accounts (each of which is an institutional “accredited investor”) as to each of which we exercise sole investment discretion.

		
	7.
	Capitalized terms used herein and not otherwise defined below shall have the meanings ascribed thereto in the Indenture.

You, as Registrar, the Security Custodian, the Company, counsel for the Company and others are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

Very truly yours,
[Name of Transferee]

By:____________________
Name:
Title:

E-2

EXHIBIT F
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS OF PURSUANT TO REGULATION S 

Wells Fargo Bank – DAPS Reorg.
MAC N9303-121
608 2nd Avenue South
Minneapolis, MN 55479
Telephone No.: (877) 872-4605
Fax No.: (866) 969-1290
Email: DAPSReorg@wellsfargo.com

Re: Transfer of 5.75% Senior Notes due 2024 (the “Securities”) of HealthSouth Corporation (the             “Company”)

Ladies and Gentlemen:
In connection with our proposed sale of $[          ] aggregate principal amount of the Securities, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we represent as follows (check one of the boxes in the first or second paragraphs):
(1) Transfer Pursuant to Regulation S.         ̈;
(a) the offer of the Securities was not made to a person in the United States; 
(b) either (i) at the time the buy offer was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States, or (ii) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither we nor any person acting on our behalf knows that the transaction has been prearranged with a buyer in the United States;
(c) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903 (b) or Rule 904(b) of Regulation S under the Securities Act, as applicable; and
(d) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act.
(2) Transfer Pursuant to Rule 144 of the Securities Act.     ̈;
(a) such transfer has been made in accordance with Rule 144 of the Securities Act.
(3) Other Representations.  We represent that we have advised the transferee of the transfer restrictions applicable to the Securities.

F-1

You, as Registrar, the Security Custodian, the Company, counsel for the Company and others are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S under the Securities Act.

Very truly yours,
[Name of Transferor]
By:______________________
    Authorized Signatory

F-2

EXHIBIT G

FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS OF TEMPORARY REGULATION S GLOBAL NOTE

Date:

Wells Fargo Bank – DAPS Reorg.
MAC N9303-121
608 2nd Avenue South
Minneapolis, MN 55479
Telephone No.: (877) 872-4605
Fax No.: (866) 969-1290
Email: DAPSReorg@wellsfargo.com

Re: Transfer of 5.75% Senior Notes due 2024 (the “Securities”) of HealthSouth Corporation (the                 “Company”)
Dear Sirs:
This letter relates to U.S. $[           ] principal amount of Securities represented by a certificate (the “Legended Certificate”) which bears a legend outlining restrictions upon transfer of such Legended Certificate. Pursuant to Section 3.15(c) of the indenture, dated as of December 1, 2009 (the “Base Indenture”), as supplemented by the fourth supplemental indenture (the “Fourth Supplemental Indenture”), dated as of September 11, 2012 and as further supplemented by the sixth supplemental indenture, dated as of August 7, 2015 (together with the Base Indenture and the Fourth Supplemental Indenture, the “Indenture”), by and among the Company, the guarantors named therein and Wells Fargo Bank, National Association (as successor in interest to The Bank of Nova Scotia Trust Company of New York), as trustee, relating to the Securities, we hereby certify that we are (or we will hold such securities on behalf of) a person outside the United States to whom the Securities could be transferred in accordance with Rule 904 of Regulation S promulgated under the Securities Act of 1933, as amended (the “Securities Act”).
You, as Registrar, the Security Custodian, the Company, counsel for the Company and others are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this letter have the meanings set forth in Regulation S under the Securities Act.

Very truly yours,
[Name of Holder]
By:______________________
    Authorized Signatory

G-1

EXHIBIT H
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH OTHER TRANSFERS OF SECURITIES

Date:

Wells Fargo Bank – DAPS Reorg.
MAC N9303-121
608 2nd Avenue South
Minneapolis, MN 55479
Telephone No.: (877) 872-4605
Fax No.: (866) 969-1290
Email: DAPSReorg@wellsfargo.com

Re: Transfer of 5.75% Senior Notes due 2024 (the “Securities”) of HealthSouth Corporation (the                 “Company”)

Ladies and Gentlemen:

In connection with our proposed purchase of the Securities, we confirm that (check the appropriate box):

		
	1.
	The transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Securities and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States of America, and

 ̈;  such transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;
or
 ̈;  such transfer is being effected to the Company or a subsidiary thereof;
or
 ̈; such transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act;
		
	2.
	 ̈;  (i) The transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the indenture, dated as of December 1, 2009 (the “Base Indenture”), as supplemented by the fourth supplemental indenture (the “Fourth Supplemental Indenture”), dated as of September 11, 2012 and as further supplemented by the sixth supplemental indenture, dated as of August     7, 2015 (together with the Base Indenture and the Fourth Supplemental Indenture, the “Indenture”), by and among the Company, the guarantors named therein and Wells Fargo Bank, National Association (as successor in interest to The Bank of Nova Scotia Trust Company of New York), as trustee, and any applicable blue sky securities laws of any state of the United States of America and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act.  Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Securities and in the Indenture.   

		
	3.
	Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Indenture.

H-1

You, as Registrar, the Security Custodian, the Company, counsel for the Company and others are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

Very truly yours,
[Name of Transferee]

By:____________________
Name:
Title:

H-2

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