SC TO-T/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE TO

(Amendment No. 3)

TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1) OF THE

SECURITIES EXCHANGE ACT OF 1934

Emergent Group Inc.

(Name of Subject Company)

Sunrise Merger Sub, Inc.

(Offeror)

a wholly owned subsidiary of

Universal Hospital Services, Inc.

(Parent of Offeror)

COMMON STOCK, $0.04 PAR VALUE PER SHARE

(Title of Class of Securities)

29089V–20–3

(CUSIP Number of Class of Securities)

Rex T. Clevenger

Executive Vice President and Chief Financial Officer

Universal Hospital Services, Inc.

7700 France Avenue South, Suite 275

Edina, Minnesota 55435–5228

(952) 893–3200

(Name, Address and Telephone Number of Person Authorized to Receive Notices and

Communications on Behalf of Filing Persons)

Copy to:

Christopher J. Bellini

Dorsey & Whitney LLP

50 South Sixth Street, Suite 1500

Minneapolis, Minnesota 55402

(612) 340–2600

oCheck the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

xthird–party tender offer subject to Rule 14d–1.

oissuer tender offer subject to Rule 13e–4.

ogoing-private transaction subject to Rule 13e–3.

oamendment to Schedule 13D under Rule 13d–2.

Check the following box if the filing is a final amendment reporting the results of the tender offer. o

This Amendment No. 3 (“Amendment No. 3”) amends and supplements the Tender Offer Statement on Schedule TO originally filed with the Securities and Exchange Commission on March 2, 2011 (as subsequently amended and supplemented, the “Schedule TO”) by (i) Sunrise Merger Sub, Inc., a Nevada corporation (the “Purchaser”), and a wholly owned subsidiary of Universal Hospital Services, Inc., a Delaware corporation (“Parent”), and (ii) Parent. The Schedule TO relates to the offer by the Purchaser to purchase all of the outstanding shares of common stock, par value $0.04 per share (the “Shares”), of Emergent Group Inc., a Nevada corporation (“Emergent Group”), at a purchase price of $8.46 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated March 2, 2011 (which, together with any amendments and supplements thereto, collectively constitute the “Offer to Purchase”), and in the related letter of transmittal (as it may be amended or supplemented, the “Letter of Transmittal” and which, together with the Offer to Purchase, constitute the “Offer”).

All capitalized terms used in this Amendment No. 3 without definition have the meanings ascribed to them in the Schedule TO.

All information in the Schedule TO is incorporated into this Amendment No. 3 by reference, except that such information is hereby amended to the extent specifically provided herein.  This Amendment No. 3 is being filed to reflect certain updates as reflected below.

The items of the Schedule TO set forth below, to the extent such items incorporate by reference the information contained in the Offer to Purchase, are hereby amended and supplemented as described below.  All page references in this Amendment No. 3 refer to the Offer to Purchase.

Item 11. Additional Information

The subsection of Section 16 of the Offer to Purchase entitled “Stockholder Litigation” (which begins on page 48) is hereby revised and restated in its entirety to read as follows:

Stockholder Litigation  Since February 22, 2011, three putative shareholder class action complaints challenging the transactions contemplated by the Merger Agreement were filed on behalf of three separate plaintiffs (collectively, the “Plaintiffs”) in the Superior Court of the State of California in the County of Los Angeles against Emergent Group, Parent, the Purchaser and the individual members of the Emergent Group Board (collectively, the “Defendants”). The complaints allege, among other things, that the members of the Emergent Group Board breached their fiduciary duties owed to the public shareholders of Emergent Group by attempting to sell Emergent Group by means of an unfair process with preclusive deal protection devices at an unfair price of $8.46 in cash per Share and by entering into the Merger Agreement, approving the Offer and the proposed Merger, engaging in self dealing and failing to take steps to maximize the value of Emergent Group to its public shareholders. The complaints further allege that Emergent Group, Parent and the Purchaser aided and abetted such breaches of fiduciary duties. In addition, the complaints allege that certain provisions of the Merger Agreement unduly restrict Emergent Group’s ability to negotiate with rival bidders. The complaints seek, among other things, declaratory and injunctive relief concerning the alleged fiduciary breaches, injunctive relief prohibiting the Defendants from consummating the Merger and other forms of equitable relief.  On March 10, 2011, the Plaintiffs and Defendants (collectively, the “Parties”) executed a stipulation to consolidate the three lawsuits, and on March 22, 2011, the Court ordered the consolidation of the lawsuits for all purposes, including pre-trial proceedings into Lead Case No. BC-455715 and renamed the consolidated lawsuits “In re Emergent Group Inc. Shareholder Litigation”.

On March 24, 2011, a memorandum of understanding regarding settlement of the consolidated lawsuits (the “MOU”) was agreed to by the Parties. While the Defendants deny the allegations made in the complaints, they have agreed to enter into the MOU to avoid the costs and disruptions of any further litigation and to permit the timely consummation of the Offer and the Merger. The MOU, which is filed as an exhibit to the Schedule 14D-9, describes the terms that the Parties agree to include in the final settlement agreement concerning the action (the “Settlement Agreement”), and describes the actions that the Parties will take or refrain from taking between the date of the MOU and the date that the Settlement Agreement is finally approved.

The MOU, among other things, provides that Emergent Group will amend the Schedule 14D-9 to include certain supplemental disclosures. The MOU also provides that the Settlement Agreement will require the Parties to seek an order enjoining all proceedings in connection with the consolidated lawsuits and any additional actions alleging claims that are released pursuant to the Settlement Agreement. In addition, the MOU provides that the Settlement Agreement will include a release by the Plaintiffs and the settlement class in favor of the Defendants and their related parties from any claims that arose pursuant to or are related to the Offer or the Merger. The Defendants have agreed that Emergent Group or its successor or

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their respective insurers will pay the Plaintiffs’ attorneys’ fees and expenses as are awarded by the court not to exceed $225,000, subject to court approval of the Settlement Agreement and the consummation of the Offer and the Merger.

The Defendants deny all liability with respect to the facts and claims alleged in the consolidated lawsuits, and specifically deny that any further supplemental disclosure was required under any applicable rule, statute, regulation or law. However, the Defendants considered it desirable that the consolidated lawsuits be settled primarily to avoid the substantial burden, expense, inconvenience and distraction of continued litigation and to fully and finally resolve all of the claims that were or could have been brought in the consolidated lawsuits being settled. In addition, Emergent Group desired to provide additional information to its stockholders at a time and in a manner that would not cause any delay of the Offer or the Merger. Certain of the disclosures set forth in this Amendment to Schedule TO are also being provided as a result of the MOU. The summary of the MOU is qualified in its entirety by reference to the MOU, which is filed herewith as Exhibit (a)(5)(K).

Item 12. Exhibits

Item 12 of the Schedule TO is hereby amended and supplemented by adding the following exhibit:

Exhibit

Description

(a)(5)(K)

Memorandum of Understanding, dated March 24, 2011, between Robbins Umeda LLP, as lead counsel for Plaintiffs, and Paul, Hastings, Janofsky & Walker LLP, as counsel for Defendants Emergent Group Inc., and specially appearing Defendants Bruce J. Haber, Mark Waldron, Howard Waltman and K. Deane Read, Jr., and Dorsey & Whitney LLP, as counsel for Defendants Universal Hospital Services, Inc. and Sunrise Merger Sub, Inc.

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SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Sunrise Merger Sub, Inc.
By:	/s/ Gary D. Blackford
	Name: Gary D. Blackford
	Title: Chief Executive Officer
	Dated: March 25, 2011
Universal Hospital Services, Inc.
By:	/s/ Gary D. Blackford
	Name: Gary D. Blackford
	Title: Chairman of the Board and Chief Executive Officer
	Dated: March 25, 2011

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Exhibit Index

Exhibit No.	Description
(a)(1)(A)	Offer to Purchase, dated March 2, 2011*
(a)(1)(B)	Form of Letter of Transmittal (including Guidelines for Certification of Taxpayer Identification Number (TIN) on Substitute Form W—9)*
(a)(1)(C)	Form of Notice of Guaranteed Delivery*
(a)(1)(D)	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees*
(a)(1)(E)	Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees*
(a)(1)(F)	Form of Summary Advertisement as published in The New York Times on March 2, 2011*
(a)(5)(A)	Press Release issued by Universal Hospital Services, Inc., issued February 7, 2011 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8—K filed by Universal Hospital Services, Inc. on February 7, 2011)
(a)(5)(B)	Email to Universal Hospital Services, Inc. employees, dated February 7, 2011 (incorporated by reference to Exhibit 99.2 to the Current Report on Form 8—K filed by Universal Hospital Services, Inc. on February 7, 2011)
(a)(5)(C)	Transcript of Pre—Recorded Message, released on February 7, 2011 (incorporated by reference to Exhibit 99.3 to the Current Report on Form 8—K filed by Universal Hospital Services, Inc. on February 7, 2011)
(a)(5)(D)	Presentation Materials accompanying Pre—Recorded Message, dated February 7, 2011 (incorporated by reference to Exhibit 99.3 to the Current Report on Form 8—K filed by Universal Hospital Services, Inc. on February 7, 2011)
(a)(5)(E)	Talking Points of Rex T. Clevenger used at UBS Healthcare Conference in New York, New York on February 7, 2011 (incorporated by reference to the Schedule TO—C filed by Universal Hospital Services, Inc. on February 7, 2011)
(a)(5)(F)	Transcript of Conference Call held on February 7, 2011 (incorporated by reference to the Schedule TO—C filed by Universal Hospital Services, Inc. on February 7, 2011)
(a)(5)(G)	Transcripts of Conference Calls held on February 8, 2011 (incorporated by reference to the Schedule TO—C filed by Universal Hospital Services, Inc. on February 8, 2011)
(a)(5)(H)	Complaint filed by Brian McManus, individually and on behalf of others similarly situated, on February 22, 2011 in the Superior Court of the State of California, County of Los Angeles*
(a)(5)(I)	Complaint filed by Bryan Lamb, individually and on behalf of others similarly situated, on February 28, 2011 in the Superior Court of the State of California, County of Los Angeles*
(a)(5)(J)	Complaint filed by Leena Dave, individually and on behalf of others similarly situated, on March 2, 2011 in the Superior Court of the State of California, County of Los Angeles*
(a)(5)(K)	Memorandum of Understanding, dated March 24, 2011, between Robbins Umeda LLP, as lead counsel for Plaintiffs, and Paul, Hastings, Janofsky & Walker LLP, as counsel for Defendants Emergent Group Inc., and specially appearing Defendants Bruce J. Haber, Mark Waldron, Howard Waltman and K. Deane Read, Jr., and Dorsey & Whitney LLP, as counsel for Defendants Universal Hospital Services, Inc. and Sunrise Merger Sub, Inc.†
(d)(1)	Agreement and Plan of Merger, dated February 6, 2011, among Universal Hospital Services, Inc., Sunrise Merger Sub, Inc. and Emergent Group Inc. (incorporated by reference to Exhibit 2.1 to Universal Hospital Services, Inc.’s Current Report on Form 8—K filed on February 7, 2011)
(d)(2)	Tender and Voting Agreement, dated as of February 6, 2011, among Universal Hospital Services, Inc., Sunrise Merger Sub, Inc. and Louis Buther (incorporated by reference to Exhibit 2.2 to Universal Hospital Services, Inc.’s Current Report on Form 8—K filed on February 7, 2011)

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(d)(3)	Tender and Voting Agreement, dated as of February 6, 2011, among Universal Hospital Services, Inc., Sunrise Merger Sub, Inc. and Bruce J. Haber (incorporated by reference to Exhibit 2.3 to Universal Hospital Services, Inc.’s Current Report on Form 8—K filed on February 7, 2011)
(d)(4)	Tender and Voting Agreement, dated as of February 6, 2011, among Universal Hospital Services, Inc., Sunrise Merger Sub, Inc. and the Bruce Haber Family Trust under Agreement dated November 16, 2005 (incorporated by reference to Exhibit 2.4 to Universal Hospital Services, Inc.’s Current Report on Form 8—K filed on February 7, 2011)
(d)(5)	Tender and Voting Agreement, dated as of February 6, 2011, among Universal Hospital Services, Inc., Sunrise Merger Sub, Inc. and the Jessica Haber Irrevocable Trust dated August 13, 1999 (incorporated by reference to Exhibit 2.5 to Universal Hospital Services, Inc.’s Current Report on Form 8—K filed on February 7, 2011)
(d)(6)	Tender and Voting Agreement, dated as of February 6, 2011, among Universal Hospital Services, Inc., Sunrise Merger Sub, Inc. and William M. McKay (incorporated by reference to Exhibit 2.6 to Universal Hospital Services, Inc.’s Current Report on Form 8—K filed on February 7, 2011)
(d)(7)	Tender and Voting Agreement, dated as of February 6, 2011, among Universal Hospital Services, Inc., Sunrise Merger Sub, Inc. and K. Dean Reade, Jr. (incorporated by reference to Exhibit 2.7 to Universal Hospital Services, Inc.’s Current Report on Form 8—K filed on February 7, 2011)
(d)(8)	Tender and Voting Agreement, dated as of February 6, 2011, among Universal Hospital Services, Inc., Sunrise Merger Sub, Inc. and Mark Waldron (incorporated by reference to Exhibit 2.8 to Universal Hospital Services, Inc.’s Current Report on Form 8—K filed on February 7, 2011)
(d)(9)	Tender and Voting Agreement, dated as of February 6, 2011, among Universal Hospital Services, Inc., Sunrise Merger Sub, Inc. and Howard Waltman (incorporated by reference to Exhibit 2.9 to Universal Hospital Services, Inc.’s Current Report on Form 8—K filed on February 7, 2011)
(d)(10)	Non—Disclosure Agreement, dated October 26, 2010, between Universal Hospital Services, Inc. and Emergent Group Inc.*
(d)(11)	Exclusivity Agreement, dated December 22, 2010, between Universal Hospital Services, Inc. and Emergent Group Inc.*
(d)(12)	Exclusivity Agreement Extension, dated January 27, 2011, between Universal Hospital Services, Inc. and Emergent Group Inc.*

*  Previously filed with the Schedule TO.

†  Filed herewith.

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EX-99.(A)(5)(K)

Exhibit (a)(5)(K)

MEMORANDUM OF UNDERSTANDING

The named plaintiffs, Bryan Lamb, Brian McManus, and Leena Dave (collectively, “Plaintiffs”) and defendants Emergent Group Inc. (“Emergent” or the “Company”), Bruce J. Haber, Mark Waldron, Howard Waltman, and K. Deane Reade, Jr. (collectively the “Directors”), Universal Hospital Services, Inc. (“UHS”) and Sunrise Merger Sub, Inc. (“Sunrise” and, collectively, with Emergent, the Directors, and UHS, “Defendants”), in the class action lawsuits currently pending in the Superior Court of the State of California, Los Angeles County (the “Court”) — captioned (1) Lamb v. Emergent Group, Inc., Case No. BC-456216, (2) McManus v. Emergent Group, Inc., Case No. BC-455715, and (3) Dave v. Emergent Group, Inc., Case No. BC-456389 (collectively, the “Actions”) — have, by and through their respective undersigned counsel, reached an agreement in principle providing for the settlement of the Actions (the “Settlement”) on the terms and subject to the conditions set forth in this Memorandum of Understanding (this “MOU”).

WHEREAS, on February 7, 2011, UHS announced a tender offer by its wholly owned subsidiary, Sunrise, to purchase all of the outstanding shares of common stock of Emergent for $8.46 per share in cash, pursuant to an agreement providing for the merger of Emergent and such subsidiary, upon the consummation of which Emergent will become a wholly-owned subsidiary of UHS (the “Proposed Transaction”).

WHEREAS, on February 22, 2011, Brian McManus, an Emergent shareholder, filed a putative class action complaint (captioned McManus v. Emergent Group, Inc., Case No. BC-456216 (“McManus”)), on behalf of Emergent shareholders, challenging the Proposed Transaction and naming as defendants the Directors, UHS, Sunrise, and Emergent.  The McManus complaint contends that the Directors breached their fiduciary duties (and that

Emergent and UHS aided and abetted these breaches) by recommending the Proposed Transaction to Emergent shareholders because the deal price is purportedly unfair and sales process was defective.

WHEREAS, on February 28, 2011, Bryan Lamb, another Emergent shareholder, filed a putative class action complaint (captioned Lamb v. Emergent Group, Inc., Case No. BC-455715 (“Lamb”), on behalf of Emergent shareholders, also challenging the Proposed Transaction and naming the same defendants as in McManus.  Like the McManus complaint, the Lamb complaint also contends that the Directors breached their fiduciary duties (and that Emergent and UHS aided and abetted these breaches) by recommending the Proposed Transaction, which allegedly fails to adequately compensate Emergent shareholders and is the product of an unfair sales process.

WHEREAS, on March 2, 2011, Leena Dave, another Emergent shareholder, filed a putative class action complaint (captioned Dave v. Emergent Group, Inc., Case No. BC-456389 (“Dave”)) challenging the Proposed Transaction, alleging breaches of fiduciary duties, and naming the Directors, UHS, and Emergent as defendants.  As in McManus and Lamb, the complaint in Dave contends that the Directors breached their fiduciary duties (and that Emergent and UHS aided and abetted these breaches) by recommending the Proposed Transaction, which allegedly fails to adequately compensate Emergent shareholders and is the product of an unfair sales process.

WHEREAS, on March 2, 2011, the McManus Court stayed all proceedings in that case until the initial status conference.

WHEREAS, on March 2, 2011, the Company filed a Schedule 14D-9 with the Securities and Exchange Commission (the “SEC”), in which it announced that the Board unanimously

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supported the Merger Agreement and Tender Offer and recommended that Emergent shareholders tender their shares in the Tender Offer.

WHEREAS, on March 8, 2011, after reviewing certain public filings, including the March 2, 2011 Scheduled 14D-9, counsel for Plaintiffs served a settlement demand letter on counsel for Emergent and the Directors, proposing certain terms and conditions under which Plaintiffs would consider an offer to settle the Actions.

WHEREAS, on March 10, 2011, the Lamb Court stayed all proceedings in that case until the initial status conference.

WHEREAS, on March 10, 2011, the Dave Court stayed all proceedings in that case until the initial status conference.

WHEREAS, on March 10, 2011, the parties executed a stipulation to consolidate the Actions in the McManus Court.

WHEREAS, on March 11, 2011, Emergent produced to counsel for Plaintiffs a copy of the final presentation from G.C. Anderson Partners LLC (“G.C.A.”), the Company’s financial advisor, to the Emergent board of directors regarding the Proposed Transaction (“Banker’s Book”).

WHEREAS, on March 14, 2011, after reviewing the Banker’s Book, Plaintiffs served a revised settlement demand letter on counsel for Emergent and the Directors, proposing certain additional disclosures.

WHEREAS, on March 22, 2011, the McManus Court ordered the consolidation of the Actions for all purposes, including pre-trial proceedings, into Lead Case No. BC-455715, appointed Lead counsel for Plaintiffs, and renamed the consolidated action In re Emergent Group Inc. Shareholder Litigation.

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WHEREAS, counsel for Plaintiffs and Defendants in the Actions have engaged in negotiations concerning a possible settlement of the Actions, and the parties have reached an agreement in principle to settle the Actions as described herein.

WHEREAS, subject to confirmatory discovery, Plaintiffs and their counsel believe that a settlement of the Actions on the terms reflected in this MOU is fair, reasonable, and adequate as a basis for resolving the Action.

WHEREAS, the Defendants, to avoid the costs, disruption, and distractions of further litigation, and to permit the timely closing of the Proposed Transaction, and without admitting the validity of any allegations made in the Actions or of any of the additional concerns expressed thereto, have concluded that it is desirable that the claims against them be settled on the terms reflected in this MOU.

WHEREAS, the Defendants specifically deny each of the allegations made in the Actions and all other concerns expressed by Plaintiffs with respect to the Proposed Transaction, and Defendants maintain that they have done nothing wrong, have committed no breach of fiduciary duty whatsoever, have not aided or abetted any alleged breach of fiduciary duty, and have committed no disclosure violations or other violations in connection with the Proposed Transaction.

WHEREAS, Plaintiffs’ entry into the MOU is not an admission as to the lack of merit of any of the claims asserted in the Actions.

WHEREAS, the Defendants’ entry into the MOU is not an admission as to the merit of any of the claims asserted in the Actions.

NOW THEREFORE, on March 24, 2011, the parties to the Actions on behalf of whom this MOU has been executed below reached the following agreement in principle which, when

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reduced to a settlement agreement following negotiations by the parties in good faith, is intended to be a full and final resolution of the Actions.

1.Additional Disclosures.  As a result of the prosecution of the Actions and negotiations with counsel for Plaintiffs in the Actions, Emergent shall cause to be filed, substantially in the form attached hereto as Exhibit A, an amendment to its Schedule 14D-9 (the “Supplemental Disclosures”).  The Company shall file the Supplemental Disclosures on Schedule 14D-9/A with the SEC promptly after execution of the MOU.

2.Settlement Agreement.  Subject to the completion of agreed-upon confirmatory discovery described in Paragraph 3, the parties shall negotiate in good faith and execute an appropriate Settlement Agreement (the “Settlement Agreement”).  The parties will present the Settlement Agreement, and such other documentation as may be required to obtain Court approval of the Settlement, to the Court as soon as practicable following execution of the Settlement Agreement.  The parties also will use their best efforts to obtain Final Court Approval of the Settlement and dismissal of the Actions with prejudice as to all claims asserted or which could have been asserted in the Actions and without costs to any party (other than as expressly provided herein).  As used herein, “Final Court Approval” of the Settlement means that the Court has entered an order and final judgment approving the Settlement and that such order and judgment is finally affirmed on appeal or is no longer subject to appeal, or any other form of judicial review.

3.Confirmatory Discovery.  The Settlement shall be conditioned on Plaintiffs’ counsel conducting such reasonable discovery of Emergent and GCA as agreed by Defendants and as is appropriate and necessary to confirm the fairness and reasonableness of the terms of the Settlement.  The parties in good faith shall attempt to resolve the proper scope of such

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confirmatory discovery.  If Plaintiffs’ counsel determines, following completion of such confirmatory discovery, that the Settlement is not fair and reasonable, then this MOU shall be null and void and of no force and effect.

4.Certification of Class.  The Settlement Agreement shall provide for the conditional certification of a non-opt-out settlement class (i.e., mandatory class) consisting of all holders of common stock of Emergent only for the purpose of a settlement providing for the relief set forth herein (excluding Defendants in the Actions, their immediate families and their affiliates), from February 7, 2011 through and including the date the Proposed Transaction is consummated, together with their predecessors and successors and assigns.  If the Settlement does not become final for any reason, no class shall be certified, Defendants shall retain all rights to contest class certification, and Plaintiffs shall retain all rights to seek class certification.

5.Governing Law.  This MOU and the Settlement contemplated by it shall be governed by and construed in accordance with the laws of the State of California.

6.Stay Pending Court Approval.  Pending negotiation, execution, and Court approval of the Settlement Agreement and the Settlement, Plaintiffs agree to stay the proceedings in the Actions and to stay and not to initiate any and all other proceedings (including discovery) other than those incident to implementation of the Settlement itself.  The parties also agree to use their best efforts to prevent, stay or seek dismissal of any claim by, or oppose entry of any interim or final relief in favor of, any class members or any other Releasing Party (as defined in paragraph 8) in any other litigation against any of the parties to this MOU or any other Released Party (as defined in paragraph 8) which challenges the Settlement, the transactions contemplated by the Merger Agreement, or otherwise involves a settled claim.

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7.Injunction Against Further Proceedings.  The Settlement Agreement shall provide for an injunction against any further proceedings in the Actions other than proceedings to implement the Settlement.  The Settlement Agreement shall provide for an injunction against class members bringing any claims covered by the Settlement in any other action, suit, or proceeding.  Prior to Final Court Approval of the proposed Settlement, the parties shall cooperate in obtaining the dismissal or withdrawal of any other action filed in any court and asserting claims that are related to the subject matter of the Actions, including where appropriate joining in any motion to dismiss or demurrer to such litigation.

8.General Release.  The Settlement Agreement shall provide for a general release by class members on behalf of themselves and any of their heirs, executors, administrators, beneficiaries, predecessors, successors, assigns, and any of their former and present employees, directors, officers, accountants, agents, attorneys, representatives, affiliates, and subsidiaries (collectively, the “Releasing Parties”) in favor of the Defendants in the Actions and any defendant’s former and present parents, subsidiaries, affiliates and shareholders, and their respective directors, officers, employees, agents, representatives, accountants, attorneys,  investment bankers, advisors, heirs, executors, administrators, beneficiaries, predecessors, successors, and assigns (collectively, the “Released Parties”) of any and all claims, including known and unknown claims, that were or could have been raised in the Actions or that, directly or indirectly, arise in any way out of or relate in any way to the Proposed Transaction, including, without limitation, any and all claims that could have been asserted under any state and/or federal law, except claims to enforce the Settlement (the “Release”).  The Release shall, among other things, cover any and all claims under federal or state securities laws relating to the Proposed Transaction (including, without limitation, and for the avoidance of doubt, with respect

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to any 10b5-1 trading plan), including claims related to the Schedule 14D-9 and Schedule TO, and any amendments thereto, and any and all other periodic reports filed with the SEC during the period from February 7, 2011 to the consummation of the Proposed Transaction.  The Release does not include claims against Emergent under the federal securities laws for claims unrelated to the Proposed Transaction. The Settlement Agreement shall provide for a waiver of any statutory provision or common law doctrine that limits the scope of a general release, including, but not limited to, a waiver of any rights or benefits under Section 1542 of the California Civil Code.(1)

The Settlement Agreement also shall provide for a largely similar release for Plaintiffs, members of the Class and their counsel from all claims arising out of the institution, prosecution, settlement, or resolution of the Actions; provided, however, that (1) the Directors shall not release counsel for the Plaintiffs / Class, and (2) Defendants shall retain the right to enforce in the Court the terms of the Settlement Agreement or this MOU.

The Settlement Agreement shall also set forth that the Defendants have denied, and continue to deny, that they have committed or aided and abetted in the commission of any breach of fiduciary duty or violation of law or engaged in any of the wrongful acts alleged by Plaintiffs.  Furthermore, the Settlement Agreement shall set forth that Defendants are entering the Stipulation solely because the proposed settlement would eliminate the burden and expense of further litigation and disruption resulting to the Defendants from further litigation.

(1) Cal. Civ. Code § 1542 provides as follows:  “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”

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Plaintiffs and their counsel represent that none of Plaintiffs’ claims or causes of action referred to in this MOU, or that could have been alleged in the Actions, have been assigned, encumbered, or in any manner transferred in whole or in part.

9.Dismissal with Prejudice.  The Settlement Agreement shall provide that upon approval of the Settlement, the Actions shall be dismissed with prejudice and without costs to any party, except as expressly provided herein.

10.Denial of Liability.  The Settlement Agreement shall provide that the Defendants have denied and continue to deny any wrongdoing whatsoever and have denied and continue to deny that they have committed, or have threatened or attempted to commit, any breach of fiduciary duty (or aided and abetted any breach of fiduciary duty), any disclosure or other violation, or any of the other wrongful acts or violations of law or duty that are alleged in the Actions, and contend that they have acted properly.

11.Notice.  Emergent (or any successor-in-interest) shall be responsible for providing notice of the Settlement to class members.  Emergent (or any successor-in-interest) shall pay, on behalf of and for the benefit of the Defendants in the Action, all reasonable costs and expenses incurred in providing notice of the Settlement to class members and shall cooperate with Plaintiffs’ counsel in providing such information as is reasonably available to it.

12.Fees and Expenses.  Following the negotiation of all other material terms of the Settlement set forth herein, the parties began arms-length negotiations concerning the amount of the attorneys’ fees and expenses to be paid Plaintiffs’ counsel, subject to approval by the Court.  Subject to the terms and conditions of this MOU, the terms and conditions of the Settlement Agreement contemplated herein, final approval of the Settlement by the Court and final approval of such fees as reasonable by the Court, Emergent (or any successor-in-interest), or its or their

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insurers will pay to Plaintiffs’ counsel $225,000 for their fees and expenses.  Counsel for Plaintiffs agree not to seek Court approval for an award of fees and expenses that exceeds $225,000. Defendants have agreed that, subject to Court approval and consummation of the Tender Offer, Emergent (or any successor-in-interest) or its or their insurers will pay to Plaintiffs’ counsel such attorneys’ fees and reimbursement of expenses as are awarded by the Court.  Such fees and expenses (the “Fees and Expenses”) shall be paid by Emergent (or any successor-in-interest) or its or their insurers within ten (10) business days of the later of the entry of an order by the Court finally approving the Settlement on the terms contained in the final Settlement Agreement, even though such order may be subject to appeal.  In the event that the Court’s order is reversed or modified on appeal, Plaintiffs’ counsel shall refund to Emergent (or any successor-in-interest) or its or their insurers the Fees and Expenses consistent with such reversal or modification.  Neither Emergent nor any of the Defendants shall have any obligation to pay any of the Fees and Expenses unless the proposed transaction shall have been consummated.

13.Approval.  The Settlement Agreement is subject to Court approval, including the Fees and Expenses referred to in paragraph 12; provided, however, that the Court’s approval of the Settlement is not contingent on its approval of the Fees and Expenses.  The Settlement shall be valid and final even if the Court reduces or alters the amount of fees or expenses requested.

14.Binding Effect.  This MOU is subject to the negotiation of a definitive Settlement Agreement.  This MOU shall be rendered null and void and of no force and effect in the event that:  (a) the Court fails to enter an order finally approving the Settlement; (b) the Merger Agreement is terminated or the Proposed Transaction is not consummated for any reason; or (c) a settlement class as described above is not certified.  In such an event, the parties shall be

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deemed to be in the position they were in prior to the execution of this MOU and the statements made herein shall not be deemed to prejudice in any way the positions of the parties with respect to the Actions, or to constitute an admission of fact or wrongdoing by any party, and shall not entitle any party to recover any costs or expenses incurred in connection with the implementation of this MOU.  Without limiting the foregoing, if the Settlement does not become final for any reason, Defendants reserve the right to oppose certification of any class in any future proceedings, and nothing herein shall prejudice Plaintiffs’ right to introduce the MOU into evidence for purposes of an application for an award of attorneys’ fees and expenses, which right Plaintiffs expressly reserve.

15.No Admission of Liability.  The provisions contained in this MOU shall not be deemed a presumption, concession, or admission by any Defendant of any fault, liability, or wrongdoing as to any facts or claims that have been or might be alleged or asserted in the Actions, or any other action or proceeding that has been, will be, or could be brought, and shall not be interpreted, construed, deemed, invoked, offered, or received in evidence, or otherwise used by any person in the Actions or in any other action or proceeding (whether civil, criminal, or administrative), for any purpose other than as provided for expressly herein.

16.Binding Impact on the Parties.  This MOU shall be binding upon and inure to the benefit of the parties and their respective agents, executors, heirs, successors, and assigns.

17.Execution by Counterparts.  This MOU may be executed in any number of actual, telecopied, or electronically distributed counterparts, and by each of the different parties on several counterparts, each of which when so executed and delivered will be an original.  The executed signature page(s) from each actual, telecopied, or electronically distributed counterpart may be joined together and attached and will constitute one and the same instrument.

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18.Modification.  This MOU may be modified or amended only by a writing signed by the signatories hereto.

ROBBINS UMEDA LLP	PAUL, HASTINGS, JANOFSKY &
	WALKER LLP
/s/ Stephen J. Oddo	/s/ William F. Sullivan
Stephen J. Oddo (174828)	William F. Sullivan
600 B Street, Suite 1900	515 South Flower Street
San Diego, California 92101	Twenty-Fifth Floor
(619) 525-3990	Los Angeles, CA 90071
	(213) 683-6000
Lead Counsel for Plaintiffs
	Counsel for Defendants Emergent Group Inc., and Specially Appearing Defendants Bruce J. Haber, Mark Waldron, Howard Waltman, and K. Deane Reade, Jr.
	DATED: March 24, 2011
	DORSEY & WHITNEY LLP
	/s/ Peter W. Carter
	Peter W. Carter
	Suite 1500, 50 South Sixth Street
	Minneapolis, MN 55402-1498
	(612) 340-2600
	Counsel for Defendants Universal Hospital Services, Inc. and Sunrise Merger Sub, Inc.
	DATED: March 24, 2011

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