Document:

General Warranty Deed

 Exhibit 10.6 
  
 GENERAL WARRANTY DEED 
 (Cash)

  

					
	 THE STATE OF TEXAS
	  	§	  	 
	 	  	§	  	KNOW ALL MEN BY THESE PRESENTS:
	 COUNTY OF MONTGOMERY
	  	§	  	 

  
 THAT THE UNDERSIGNED,
Vision Park Joint Venture, hereinafter referred to as “Grantor,” whether one or more, for and in consideration of the sum of TEN DOLLARS ($10.00) cash, and other good and valuable consideration in hand paid by the Grantee, herein
named, the receipt and sufficiency of which is hereby fully acknowledged and confessed, has GRANTED, SOLD and CONVEYED, and by these presents does hereby GRANT, SELL and CONVEY unto Vista Land and Equipment, L.L.C., herein referred to as
“Grantee,” whether one or more, the real property described as follows: 
  
 4.000 acres of land situated in the William McDermott Survey, Abstract Number 389, Montgomery County, Texas, being a portion of Restricted Reserve “A” of Vision Park Three, a subdivision as shown on map or
plat recorded under Cabinet R, Sheets 37 and 38 of the Montgomery County Map Records, said 4.000 acres of land being more particularly described by metes and bounds on Exhibit “A” attached hereto and made a part hereof. 
  
 This conveyance, however, is made and accepted subject to any and all validly
existing encumbrances, shown on the attached Exhibit “B”. 
  
 TO HAVE AND TO HOLD the above described premises, together with all and singular the rights and appurtenances thereto in anywise belonging unto the said Grantee, Grantee’s heirs, executors, administrators, successors and/or assigns
forever; and Grantor does hereby bind Grantor, Grantor’s heirs, executors, administrators, successors and/or assigns to WARRANT AND FOREVER DEFEND all and singular the said premises unto the said Grantee, Grantee’s heirs, executors,
administrators, successors and/or assigns, against every person whomsoever claiming or to claim the same or any part thereof. 
  
 Current ad valorem taxes on said property having been prorated, the payment thereof is assumed by Grantee. 
  
 EXECUTED this 9th day of December, 2002. 
  

									
	 	 	 	 	 VISION PARK JOINT VENTURE
 A Texas joint venture

					
	 	 	 	 	 	 	 By:
	 	 VISION REAL ESTATE & DEVELOPMENT, INC.
 A Texas
Corporation,
 Joint Venturer

	 	 	 	 	 	 	 	 	 
					
	 	 	 	 	 	 	 By:
	 	/s/    Jim Galloway        
	 	 	 	 	 	 	 	 	Jim Galloway, President

  

					
	 Grantee’s Address: 
	 	 	 	 
			
	  	 	 	 	  
			
	  	 	 	 	  
	 	 	 	 	 

  

					
	 THE STATE OF TEXAS
	  	§	  	 
	 	  	§	  	 
	 COUNTY OF HARRIS
	  	§	  	 

  
 The foregoing
instrument was acknowledged before me on the 9th day of December, 2002, by Jim Galloway, President of Vision Real Estate & Development, Inc., Joint Venturer of Vision Park Joint Venture, on behalf of said joint venture.

  

					
			
	  	 	 	 	 /s/    Ann D. Golbraith

 Notary Public, State of Texas
 My
Commission Expires:                 illegible                

  

 -2- 

 GF No.: 02150584 
  
 EXHIBIT “A” 
  
 4.000 acres of land situated in the William McDermott survey, Abstract Number 389, Montgomery County, Texas, being a portion of Restricted Reserve “A” of Vision
Park Three, a subdivision as shown on map or plat recorded under Cabinet R, Sheets 37 and 38 of the Montgomery County Map Records, said 4.000 acres of land being more particularly described by metes and bounds as follows: 
  
 BEGINNING at a 5/8 inch iron rod with cap found in the Southerly right-of-way line of Vision
Park Boulevard (80 foot right-of-way) for the Northwesterly corner of Commercial Reserve “E” of Vision Park One Replat, a subdivision as shown on map or plat recorded under Cabinet Q, Sheets 128 and 129 of the Montgomery County Map Records
and the most Northerly Northeast corner of said Restricted Reserve “A” of Vision Park Three; 
  
 Thence, S 00° 18’ 18” E, along the Westerly line of said Commercial Reserve “E”, a distance of 326.14 feet to a 3/8 inch iron rod found for the Southwesterly corner of said Commercial Reserve
“E”; 
  
 Thence, N 89°34’ 39” E, along the Southerly line
of said Commercial Reserve “E”, a distance of 38.00 feet to a 5/8 inch iron rod with cap set for the Northwesterly corner of that certain called 5.5062 acres of land as described in deed and recorded in the Official Public Records of Real
Property of Montgomery County, Texas, under County Clerk’s File Number 9727855; 
  
 Thence, S 00°46’ 20” E, along the Westerly line of said 5.5062 acres, a distance of 192.41 feet to a 5/8 inch iron rod with cap set for the Southwesterly corner of said 5.5062 acres and the Northwesterly corner of that certain
called 5.9875 acres of land as described in deed and recorded in the Official Public Records of Real Property of Montgomery County, Texas, under County Clerk’s File Number 9333767; 
  
 Thence, S 01°02’ 44” E, along the Westerly line of said 5.9875 acres, a distance of 7.29 feet to a 5/8 inch iron rod with cap
set for corner; 
  
 Thence, S 89°31’ 33” W, a distance of 471.48
feet to a 5/8 inch iron rod with cap set for corner; 
  
 Thence, N 00°44’
49” W, a distance of 202.80 feet to a 5/8 inch iron rod with cap set in the Southeasterly right-of-way line of said Vision Park Boulevard; 
  
 Thence, N 48°46’ 28” E, along the Southeasterly right-of-way line of said Vision Park Boulevard, a distance of 403.31 feet to a 5/8 inch iron rod with cap
found for a point of curvature to the right; 
  
 Thence, in a Northeasterly
direction, continuing along the Southeasterly right-of-way line of said Vision Park Boulevard, with said curve to the right having a central angle of 31°41’ 49”, a radius of 260.00 feet, an arc length of 143.84 feet, a chord bearing of
N 64°37’ 22” E and a chord distance of 142.01 feet to the POINT OF BEGINNING and containing 4.000 acres of land. 
  

 Exhibit A, Page 1 

 EXHIBIT “B” 
 Special Exceptions 
  

	1.	A landscape buffer and utility easement 10 feet wide along the northwest portion (front) of subject property, as reflected by the recorded plat. 

  

	2.	A drainage easement 30 feet wide along a portion of the east property line, as reflected by the recorded plat. 

  

	3.	A right-of-way easement being 10 feet in width along the east side property line, granted to Entergy Gulf States, Inc. as described in instrument recorded under Montgomery County
Clerk’s File No. 2002-061409. 

  

	4.	An easement for drainage purposes extending a distance of 15 feet on each side of the center line of all natural water courses, as reflected by the recorded plat.

  

	5.	1⁄2 of all oil, gas, and other minerals, the royalties, bonuses, rentals and all other rights in connection with same are excepted herefrom as set forth in instrument recorded in
Volume 839, Page 882 of the Deed Records of Montgomery County, Texas. Title to said interest not checked subsequent to date of aforesaid instrument. 

  

	6.	Mineral Lease dated January 15, 1990, executed by David H. Johnston and wife, Pauline Johnston, Lessor to El Tres Exploration, Inc., Lessee, recorded under Montgomery County
Clerk’s File No. 9018676. Title to said interest not checked subsequent to date of aforesaid instrument. 

  

	    	Waiver of surface rights contained therein. 

  

	7.	Building set back line of 25 feet along the northwest portion (front) of subject property, as set out on the recorded plat. 

  

	8.	Building set back line of 10 feet along the rear (South) property line and 5 feet in width along both side property lines (east and west), as set out on the dedication of the
recorded plat. 

  

	9.	City of Shenandoah Annexation Ordinance No. 0-01010, as certified and described in instrument recorded under Montgomery County Clerk’s file No. 2001-051351.

  

	10.	Affidavit of no unrecorded leases or rental agreements with rights of tenants in possession, recorded under Montgomery County Clerk’s File No. 2001-031677.

  

	11.	All oil, gas and other minerals, the royalties, bonuses, rentals and all other rights in connection with same are excepted herefrom as set forth in instrument filed for record under
County Clerk’s File No(s) 2001-031665 of the Official Public Records of Real Property of Montgomery County, Texas. Title to said interest no checked subsequent to date of aforesaid instrument. 

  

	    	Waiver of surface rights contained therein. 

  

 Exhibit B, Page 1 

	12.	Road easement 20 feet in width located over and across subject property as shown on map recorded in Cabinet R, Sheets 37 and 38 of the Map Records of Montgomery County, Texas.

  

 Exhibit B, Page 2Hospital Program Management Agreement

 Exhibit 10.7 
  
 HOSPITAL PROGRAM MANAGEMENT AGREEMENT 
  
 This Hospital Program Management Agreement (this “Agreement”) is entered into this 15th day of November, 2002, but effective the 15th day of November, 2002, (the “Effective Date”) by and between Doctor’s Practice Management, Inc., a Texas corporation (hereinafter referred to as the “DPM”), and Vital Weight Control, Inc., a Texas
corporation (hereinafter referred to as “Manager”). 
  
 W I T N E S S E T H 
  
 WHEREAS, DPM desires to
operate a gastroplasty or stomach stapling program involving surgical intervention for morbid obesity through gastric bypass with Roux-en-Y gastroenterostomy, silastic ring gastroplasty, and all related, consequential and incidental surgical
procedures, including gall bladder removal (the “Program” or the “Gastroplasty Program”) using an interdisciplinary approach for the treatment of morbidly obese patients at its facilities known as Vista Community Medical Center,
located in Pasadena, Texas, and Vista Hospital of Baton Rouge, located in Baton Rouge, Louisiana (the “Initial Hospitals”) and at such additional DPM affiliated hospital facilities as shall be subsequently implemented as provided herein (the “Additional Hospitals”) (the Initial Hospitals and the Additional Hospitals shall individually
referred to herein as a “Hospital” and shall collectively be referred to herein as the “Hospitals”); and, 
  
 WHEREAS, Manager is in the business of managing, marketing and clinical coordination of Gastroplasty Programs (other than patient medical care) for the
treatment of morbid obesity through the use of gastroplasty or stomach stapling; and 
  
 WHEREAS, DPM is seeking to contract the services of Manager to manage, market and coordinate this Gastroplasty Program (EXCEPT FOR THE RENDERING OF INPATIENT AND OUTPATIENT HOSPITAL SERVICES DIRECTLY TO THE PATIENT
WHICH SHALL REMAIN THE SOLE RESPONSIBILITY OF THE HOSPITAL AT ALL TIMES) in accordance with the management goals of the Program outlined in Exhibit A hereto (the “Program Goals”); and 
  
 WHEREAS, Manager and Vista Community Medical Center, an affiliate of DPM,
have in effect as of the Effective Date hereof an Agreement, dated May 15, 2001, pursuant to which Manager manages the Program at the DPM hospital in Pasadena, Texas, and it is the intent of the parties hereto that such agreement be terminated as of
the Effective Date hereof and replaced with this Agreement; and 
  
 WHEREAS, the parties to this Agreement desire to enter into this Agreement in order to provide a full statement of their respective responsibilities in connection with the operation of the Program during the term of this Agreement.

  

 NOW, THEREFORE, in consideration of the above recitals, the terms and conditions hereinafter set forth,
and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  

	 	1.	DIRECTOR OF PROGRAM 

  
 Manager shall provide a qualified individual to serve as the program director of the Program (the “Director”) and to operate the Program in a
manner consistent with the philosophy of the Administration of the Hospitals (“Administration”); provided, however, that DPM must give prior written approval of the Director that Manager provides unless the Director is Diane Crumley.
Manager employs and will provide the services stated herein through Director who agrees to serve as the Director and who agrees to oversee the provision of services hereunder, including but not limited to the services set forth in Section 2.1
hereof. 
  

	 	2.	MANAGER’S DUTIES AND RESPONSIBILITIES TO HOSPITALS 

  
 2.1. Services 
  
 For the benefit of the Hospitals and the Program, Manager will perform the following specific responsibilities, either directly or through
an affiliate of Manager, subject to the general oversight and direction of each Administration: 
  
 (a) Work with the Administration to manage, design, develop, plan, implement, and evaluate specific Program marketing, services, policies,
and procedures to carry out the Program Goals; 
  
 (b) Work with other Hospital personnel and departments to ensure that Program philosophy is adhered to and non-medical services are provided according to established policies and procedures; 
  
 (c) Establish procedures as part of the Hospitals’
overall patient care evaluation program, to evaluate the consistency and quality of all non-medical services provided in the Program; 
  
 (d) Assist the Administration as reasonably required by the Administration, in the performance of utilization review and cost containment
functions relating to the Program; 
  
 (e)
Prepare and submit to the Administration or to the Hospitals’ Medical Staff all reports of activities of the Program, as such reports may reasonably be requested by the Administration or the Medical Staffs and analyzing and interpreting such
reports as reasonably requested; 
  
 (f) Maintain
continuous liaison with the Administration in regard to patient care, professional conduct, coordination of Hospital personnel and development of clinical or other research projects relating to the Program; 
  
 (g) Provide such technical advice and assistance as may
reasonably be requested by the Administration to facilitate Program implementation and/or expansion; 
  
 (h) Conduct the Program in a cost efficient and effective manner, subject to budgetary systems and constraints established by the
Administration, and otherwise assist the Administration in containing Program costs; 
  

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 (i) Participate, as reasonably requested by the Administration, in the preparation of
operating and capital budgets for the Program (including projections of both revenues and expenditures); 
  
 (j) Use best efforts to elevate the standing of Hospitals and the Medical Staffs with respect to services provided in the Program by
publication of unusual or interesting studies made in the Program; 
  
 (k) Initiate new procedures of demonstrated value, and carry out original studies with respect to services provided in the Program; 
  
 (l) To cooperate in the furtherance of teaching and educational functions of the Hospitals and the Medical
Staff; 
  
 (m) Participate in the development and
presentation of programs related to the marketing of the Program’s services and enhancing the Hospitals’ community relations; 
  
 (n) Assist in the design and development of patient information forms, medical record forms, and consent forms for use in the Program
including allowing the Hospitals the use during the term of this Agreement of Manager’s copyrighted forms; 
  
 (o) Screen patients before Admission to the Program in accordance with the Hospital’s final screening policies and procedures,
including insurance precertification; 
  
 (p)
Undertake activities, as authorized by the Administration, involving professional contracts with physicians, hospitals, public health agencies, nursing associates, and state and local medical societies in order to apprize such individuals and groups
of the nature and availability of the Program and facilities of Hospitals and to facilitate the exchange of information with regard to the Program, patient care, administration, medical policy, and utilization review (it being provided, however,
that Manager shall have no authority to bind Hospitals to any contract nor incur debt on behalf of Hospitals); and 
  
 (q) Assist the Administration in representing the Program before the medical staff, as necessary. 
  
 (r) Assist Hospitals in providing support services to
surgeons providing care to Program patients. 
  
 2.2. Program Advertising and Marketing 
  
 Manager shall be responsible, at its expense, for developing and placing all advertising for the Program with the media. The content of the advertising shall be subject to DPM’s prior review and approval;
provided, however, that if DPM fails to respond to a request for approval of advertising content within ten (10) business days, the approval of DPM shall be deemed to have been given. Manager shall retain ownership and any other rights with respect
to advertising and marketing materials for the Program. 
  

 3 

 2.3. Time and Efforts Requirements 
  
 Manager and its appointed Director shall devote sufficient
time and their best efforts to fulfilling the responsibilities of the Program as set forth in this Agreement such as to permit ample time for the performance of all of the duties normally associated therewith, to meet the needs of the Program and
Hospital, and to perform duties and conduct the Program in accordance with the provisions of Section 2.1. In performing the management duties under this Agreement, Manager shall use its best efforts to perform each of its duties in a competent and
timely fashion. In the event that Manager has engaged third parties to perform one or more services contemplated hereunder under the supervision of Manager, Manager shall use its best efforts to cause such third parties to deliver each service in a
competent and timely fashion. Nothing contained in this Agreement shall be construed to constitute Manager as a guarantor with respect to any obligations of DPM or the Hospitals or with respect to the profitability of the Program or the Hospitals.

  
 2.4. Standards of Practice and
Compliance with Laws 
  
 Manager and its
appointed Director as well as all of its other employees and subcontractors shall perform their duties under this Agreement and conduct the Program in accordance with (i) applicable federal and state statutes and regulations, (ii) standards and
recommendations of the Joint Commission on Accreditation of Healthcare Organizations, (iii) Medical Staff Bylaws, (iv) Rules and Regulations of the Hospital and the Medical Staff, and (v) the policies of Hospital, the Medical Staff, and the Program
as may be in effect from time to time. It is specifically agreed and understood any remuneration of Manager’s employees or subcontractors based directly or indirectly on the volume or value of the business generated for a Hospital is strictly
prohibited. 
  
 2.5. License to Use
Name 
  
 During the term of this
Agreement, Manager shall provide to DPM a limited license for the use of the name “NeWeigh” as may be necessary for each Hospital’s operation of the Program. Such use shall at all times be subject to the prior written approval of Manager. Upon the expiration or termination of this Agreement for any reason, such license shall
immediately cease, and DPM shall have no further rights to use the NeWeigh name or any NeWeigh materials. 
  

	 	3.	INDEPENDENT CONTRACTOR 

  
 In the performance of this Agreement, it is mutually understood and agreed that Manager and its employees, including its appointed
Director, are at all times acting and performing as an independent contractor and not as an employee, joint venturer, agent, partner or lessee of DPM or Hospitals. Neither DPM nor Hospitals shall exercise any control or direction over the specific
methods by which Manager and Director perform their services hereunder; the sole interest and responsibility of DPM and Hospitals shall be to ensure that the services covered by this Agreement are rendered in accordance with the terms and conditions
hereof. Manager and its personnel shall not have any claim under this Agreement or otherwise against DPM or Hospitals for Worker’s Compensation, unemployment compensation, vacation pay, sick leave, 

  

 4 

 
retirement benefits, social security benefits, disability insurance benefits, unemployment insurance benefits, or other employee benefits, all of which shall
be the sole responsibility of Manager. DPM shall not withhold on behalf of Manager or any of its personnel any sums for income tax, unemployment insurance, Social Security, or otherwise pursuant to any law or requirement of any government agency,
and all such withholding, if any is required, shall be the sole responsibility of Manager. Manager shall indemnify and hold harmless DPM and each of the Hospitals from any and all loss or liability, if any, arising with respect to any of the
foregoing benefits or withholding requirements. 
  

	 	4.	DPM’S DUTIES AND RESPONSIBILITIES TO MANAGER 

  
 4.1. Services and Facilities 
  
 (a) At all times during the term of this Agreement, DPM shall either furnish, at its expense, or reimburse Manager amounts it expends for
the performance of Manager’s responsibilities hereunder, such as fully built out office space, facilities, equipment, utilities, furniture, fixtures, office supplies, and other services as may be reasonably required to operate the Program at
each Hospital. To the extent possible, Manager shall make all purchases through DPM or its affiliates. Any purchases of any nature made by Manager not utilizing DPM’s or its affiliates’ purchasing departments shall require the prior
written approval of DPM if the purchase exceeds $2,500. If written approval or disapproval is not received within ten (10) business days of Manager’s written request, then, in such event, DPM’ s approval shall be deemed given. 

 
 (b) Manager will be responsible for providing, at its
expense, the computer software to be used by the Program. Notwithstanding the foregoing, Manager may agree to allow DPM to utilize certain items of equipment, furniture, and computers for the benefit of the Programs, as set forth on Exhibit B
hereto. In the event that Exhibit B is not attached hereto at the time of execution of this Agreement, DPM and Manager agree to complete and sign Exhibit B within 30 days of the execution of this Agreement. Exhibit B may be
modified from time to time by mutual agreement of the parties. Manager shall provide such items at its expense, provided that DPM shall be responsible for any required maintenance and repair. Upon the termination of the Program at any location or
the expiration or termination of this Agreement for any reason, DPM shall incur the cost to return Manager’s property to a location to be identified by Manager in Houston, Texas. 
  
 (c) In the event that Manager and DPM agree to offer the Program at Additional Hospitals, Manager will
assist DPM in developing, budgets and related financial information concerning the operation of such Programs. 
  
 4.2. Exclusivity 
  
 (a) DPM represents and agrees that during the term of this Agreement Manager shall have the exclusive right to provide Program services
for DPM, its affiliates, and subsidiaries. 
  
 (b) Manager represents and agrees that, during the term of this Agreement, it will not provide Program services for gastroplasty patients for any hospital located within 

  

 5 

 
(i) Harris, Ft. Bend, Montgomery, and Brazoria Counties, Texas, as long as the Pasadena Hospital Program is in effect, or (ii) the Louisiana state parishes
listed on Exhibit C hereto as long as the Baton Rouge Hospital Program is in effect. In addition, Manager agrees that, during the term of this Agreement, if an Additional Hospital Program is implemented under this Agreement, Manager will not
provide Program services for gastroplasty patients for any hospital located within twenty-five (25) miles of such Additional Hospital; provided, however, that such restriction shall not be applicable if Manager has a program in place in that
geographic area prior to the addition of the new Program hereunder. Provided further, that the restrictions contained in this subparagraph shall not be applicable when (a) a Hospital does not belong to a patient’s plan and the patient either
does not have out of network benefits or is unwilling to use out of network benefits, or (b) for any other reason, a Hospital is unable to accommodate a particular patient shall be excluded from the terms of this provision. 
  
 4.3. Compensation 
  
 (a) As compensation for the services rendered by Manager
pursuant to this Agreement for the Initial Hospitals, DPM shall pay as a Program management fee the following monthly amounts, due and payable, in advance, on the 15th day of each and every month: 
  

				
	 Month One
	  	$	322,500.00
	 Month Two
	  	$	337,500.00
	 Month Three
	  	$	352,500.00
	 Month Four and Remainder of Term
	  	$	375,000.00

  
 The payment for Month One shall be due
upon the execution of this Agreement. In the event that the effective date hereof is other than the 15th of the
month, the compensation for such period preceding the 15th of the month shall be prorated, based on the Month One
amount, for the days between the effective date hereof and the next following 15th of the month, and shall be
payable together with the Month One compensation at the time of execution of this Agreement. 
  
 The parties hereby stipulate that the Program management fees represent fair consideration for the services provided by Manager with respect to the Program. Time is of the essence for the terms of this Section 4.3.

  
 (b) Notwithstanding the provisions of
paragraph (a) above, in the event the term of this Agreement is extended pursuant to Section 5.2 hereof, the parties will use their best efforts to mutually agree with respect to the monthly fee to be paid pursuant to paragraph (a) above for any
months extending beyond the Initial Term (as defined below). 
  
 (c) During the Initial Term hereof, DPM shall have the option to expand the Program to up to three (3) Additional Hospitals subject to the same terms and conditions set forth herein with respect to the Initial
Hospitals In the event that DPM desires to so expand, the monthly management fee shall increase by $187,500.00 for each Additional Hospital, payable as set forth above; provided, that if any such Additional Hospital is located outside
a radius of 500 miles from Houston, Texas, then the parties will mutually agree upon an additional reasonable 

  

 6 

 
travel allowance to be paid to Manager. Any such agreement with respect to Additional Hospitals shall be made in writing, executed by both parties, and
constitute an addendum to this Agreement. 
  
 4.4. Books and Records 
  
 (a) Manager recognizes that the Centers for Medicare & Medicaid Services (CMS) require that persons and entities that provide services to the health care providers maintain records reflecting the costs associated with such services.
Therefore, Manager agrees to allow the Comptroller General of the United States, the Department of Health and Human Services, and their duly authorized representatives access to books, documents and records until the expiration of four (4) years
after the services are furnished under this Contract. The types of records covered by this clause, the persons entitled to access, and the manner of which the records may be requested and reproduced shall be governed by 42 C.F.R. 420.300-420.304, as
amended from time to time (the “Regulations”). The sole purpose of this Section 4.4 is to comply with the Regulations. This Section 4.4 shall not be interpreted to require Manager to provide access to its records or to any persons or
entities, other than those set forth in the Regulations. Subsequent amendments to or repeal of the Regulations shall be deemed to govern the obligations created in this paragraph as of the effective date of amendment or repeal. Upon written request
of the Secretary of Health and Human Services or the Controller General or any of their duly authorized representatives, Manager shall make available to the Secretary those contracts, books, documents and records necessary to verify the nature and
extent of the cost of providing his or her services. If Manager carries out any of the duties of this Agreement through a subcontract with a value of Ten Thousand ($10,000.00) Dollars or more over a twelve (12) month period with a related individual
or organizations, Manager agrees to include this requirement in any such subcontract. This section is included pursuant to and is governed by the requirements of Section 1861(v)(1) of the Social Security Act and regulations promulgated thereunder.
The parties agree that any attorney-client, accountant-client or other legal privileges shall not be deemed waived by virtue of this Agreement. 
  
 (b) Upon reasonable notice to DPM, Manager shall be entitled to examine the books and records of each Hospital as they relate to charges
and revenues received attributable to the efforts of Manager and the Program. 
  
 (c) The parties acknowledge that the compliance date for the Privacy Regulations issued pursuant to the federal Health Insurance Portability and Accountability Act is April 14, 2003. The parties agree to follow any
procedures and enter into any agreements required by the Privacy Regulations. 
  
 4.5. Covenants of DPM 
  
 DPM covenants and agrees as follows: 
  
 (a) Hospitals shall secure one or more board eligible or certified surgeons to perform all surgical procedures associated with the Gastroplasty Program, which surgeon(s) has been qualified and accepted by the
appropriate Hospital’s Medical Staff Credentialing Committee. 
  

 7 

 (b) Hospitals shall promptly advise Manager of any material changes in their screening
and financial policies and procedures. 
  
 (c) In
the event that any one or more of the surgeons associated with the Gastroplasty Program have any financial relationship with DPM, an affiliate of DPM, or a Hospital, whether through ownership or compensation, DPM represents that it will not make any
distributions or pay any compensation to any such surgeon based upon the volume or value of the surgeon’s referrals or admission of patients, including Gastroplasty Program patients, to any Hospital. 
  

	 	5.	TERM AND TERMINATION 

  
 5.1. Term 
  
 The term of this Agreement shall commence upon the Effective Date and shall continue in effect for a period of thirty-six (36) months
thereafter (“Initial Term”), unless terminated sooner or extended pursuant to the terms of this Agreement. At any time during the ninety (90) day period preceding the expiration of this Agreement, this Agreement may be renewed, upon the
mutual written agreement of DPM and Manager, for an additional thirty-six (36) month period, unless terminated sooner pursuant to the terms of this Agreement. 
  

5.2. Extended Term 
  
 In the event that one or more Programs are implemented at Additional Hospitals within the first eighteen (18) months of the Agreement,
pursuant to Section 4.3(c), then the term of this Agreement shall continue in effect for a period of thirty-six (36) months from the date that the latest of any such additional Programs are commenced (the “Extended Term”); provided,
however, that this Agreement shall automatically terminate at the end of the Initial Term if the parties are unable to mutually agree to the compensation to be paid Manager for the Extended Term pursuant to Section 4.3(b) hereof. 
  
 5.3. Grounds for Termination 
  
 (a) In the event of a material breach of this Agreement by
either party, the other party shall have the right to terminate this Agreement by service of written notice upon the defaulting party (the “Default Notice”). In the event such breach is not cured within thirty (30) days after service of
the Default Notice, this Agreement shall automatically terminate at the election of the non-defaulting party upon the giving of a written notice of termination to the breaching party not later than thirty (30) days after the service of the Default
Notice. 
  
 (b) In the event of the nonpayment by
DPM of any amounts due hereunder on the due date thereof, Manager shall have the right to terminate this Agreement by service of written notice upon DPM. In the event such breach is not cured within ten (10) days after service of such notice, this
Agreement may be immediately terminated by Manager. 
  
 (c) The termination of this Agreement or the decision to terminate a Program at a particular Hospital may be made at any time by mutual consent embodied in a written agreement signed by an authorized representative of each of the parties
hereto. 
  

 8 

 (d) In addition, either party may terminate this Agreement immediately at any time upon
the happening of any of the following occurrences or acts: 
  
 (i) Either party ceases to function as a going concern or conduct its operations in the normal course of business; 
  
 (ii) The (a) suspension, liquidation or dissolution, or notice thereof, of substantially all of a party’s usual business without the
prior written consent of the other party hereto, (b) an assignment by a party for the benefit of its creditors, or (c) in the event of the filing of a voluntary or involuntary petition under the provisions of the U.S. Federal Bankruptcy Act or
amendments thereto, or any application for or appointment of a receiver for the property of a party, the filing of which remains unsatisfied and discharged at the end of sixty (60) days after the occurrence of such event; 
  
 (iii) Either party, without the other party’s prior
written consent, attempts to partially or wholly assign its rights or delegate its duties under this Agreement; 
  
 (iv) Either party is convicted of any illegal activity which could, in the reasonable opinion of the other party, jeopardize or adversely
affect the business reputation of the other party; or 
  
 (v) Either party is prevented from substantially performing its obligations under this Agreement by any applicable law enacted or by any applicable order, rule, regulation, decree or ordinance promulgated by any appropriate governmental
authority. 
  
 (e) In the event any of the
following occur with respect to a particular Hospital, either party may terminate this Agreement immediately with respect to the provision of the Program at such Hospital: 
  
 (i) In the event of a Hospital’s failure to maintain professional liability insurance coverage on its
own operations, as required pursuant to Section 6.1 hereof, and Hospital fails to cure such failure within ten (10) days of Hospital losing its insurance coverage; or 
  
 (ii) If any of the Hospital’s applicable licenses, permits, or certifications from any person, entity,
or agency, including, but not limited to, any state agency, federal agency, or any other agreement, which is essential for the operation of the Hospital, is at any time suspended, terminated, or revoked and is not fully reinstated within ninety (90)
days. 
  
 (f) DPM shall have the unilateral right
to terminate a Program at any Hospital at any time by giving Manager written notice of such termination, which notice shall state the date of termination. Notice of termination shall not be effective until payment to Manager in the amount of
$1,125,000.00 for each Program location that DPM wishes to terminate. 
  

 9 

 (g) In the event that certain Guaranty agreement, effective concurrent with the effective
date hereof, pursuant to which Dynacq International, Inc. guarantees the obligations of DPM hereunder, is not properly executed and delivered to Manager within seven (7) days of the effective date hereof, Manager may immediately terminate this
Agreement with written notice to DPM. 
  
 5.4.
Effects of Termination 
  
 The
expiration or earlier termination of this Agreement shall not release or discharge either party from any obligation, debt or liability which shall have previously accrued and remain to be performed upon the date of such expiration or termination.
Upon expiration or termination of this Agreement or a Hospital Program, Manager shall retain the right to any telephone or facsimile numbers used by the Program. In addition, Manager shall have the right to assume the lease for any office space in
which the Program has operated that is not in a building owned or operated exclusively by DPM or an affiliate. 
  

	 	6.	INSURANCE AND INDEMNIFICATION 

  
 6.1. Insurance. 
  
 At all times during the term of this Agreement and for a period of three (3) years following the termination or expiration of this
Agreement for any reason, DPM shall maintain or cause to be maintained, at its expense, professional liability coverage for Manager and its affiliates, for services furnished during the term of this Agreement, in such amounts and under such terms of
coverage as DPM shall provide for Hospitals’ operations and activities. NeWeigh will furnish DPM information necessary for DPM to obtain insurance for NeWeigh. During the term of this Agreement, DPM shall also maintain or caused to be
maintained professional liability coverage, including through a self-insurance plan, on the Hospitals’ and their personnel and operations. In the event that any of the Hospitals should receive notice of the impending termination of its
professional liability coverage, DPM shall immediately provide notice thereof to NeWeigh. 
  
 6.2. Indemnification 
  
 DPM hereby agrees to indemnify, defend, and hold Manager, its shareholders, directors, officers, employees, and affiliates (the
“Indemnified Parties”) free and harmless from and against any and all liability, loss, damage, claim, or cause of action (whether or not well-founded) (collectively, “Claims”), including reasonable attorney’s fees and costs,
which may result from (i) any act or omission of DPM, Hospitals, their employees, contractors, or agents arising or otherwise related to this Agreement, and (ii) any other Claim against the Indemnified Parties that arises as a result of
Manager’s operation of the Programs on behalf of Hospitals, including but not limited to, claims arising under the Texas Deceptive Trade Practices Act. To be entitled to such indemnification, the Indemnified Party shall give DPM prompt written
notice of any assertion by a third party of any claim with respect to which the Indemnified Party might bring a claim for indemnification hereunder, and, in all events, must supply such written notice to DPM within the applicable period for defense
of such claim. The Indemnified Party may elect to retain and direct the actions of legal counsel of its own choosing, the expense of which shall 

  

 10 

 
be borne by DPM, provided that the hourly rate for such counsel shall not exceed $300.00 per hour. The right to indemnification conferred herein shall
include the right to be paid or reimbursed by DPM the reasonable expenses incurred by the Indemnified Party if it is or is threatened to be made a named defendant or respondent in any proceeding in advance of the final disposition of the proceeding
and without any determination as to the Indemnified Party’s ultimate entitlement to indemnification. 
  
 Notwithstanding the foregoing, Manager or any Indemnified Party shall not be entitled to any indemnification under this section for Claims
arising out of Manager’s or any Indemnified Party’s negligence, willful misconduct, or criminal acts (collectively, “Manager Acts”) in their provision of services or products under this Agreement. Provided, however, that DPM
shall defend Manager or an Indemnified Party with respect to any Claim, including potential Manager Acts, and, if a court determines that Manager or an Indemnified Party has committed a Manager Act, then Manager will reimburse DPM for all costs it
has incurred to defend Manager or an Indemnified Party. Provided, further, that DPM shall not be required to indemnify or defend Manager or an Indemnified Party. if the Claim is brought only against Manager or an Indemnified Party, and not against
DPM, its affiliates, a Hospital, or a physician practicing at a Hospital, and the Claim does not relate in any manner to a situation in which medical malpractice may be an issue. 
  

	 	7.	NON-SOLICITATION 

  
 7.1. By Manager. 
  
 During the term of this Agreement, or the term of this Agreement as extended, and for a twelve (12) month period commencing on the date of
the expiration or earlier termination of this Agreement, Manager shall not, without the prior written consent of DPM, employ or contract with, or solicit for employment or contract, any employee or independent contractor of DPM or any affiliate
(other than persons who were employees of or had a contract with Manager immediately prior to their employment by or contract with DPM or an affiliate and other than persons recruited by Manager and placed in the employment of DPM or an affiliate by
Manager) to provide services similar to those provided in this Agreement. Manager acknowledges that a breach of this Section 7.1 by Manager will result in irreparable injury to DPM, the precise amount of which is not readily ascertainable in
monetary damages, and that DPM, in addition to any other remedies, shall be entitled to injunctive relief. 
  
 7.2. By DPM 
  
 During the term of this Agreement, or the term of this Agreement as extended, and for a twelve (12) month period commencing on the date of
the expiration or earlier termination of this Agreement, neither DPM, Hospitals, nor any affiliate (the “Non-Soliciting Parties”) thereof shall, without the prior written consent of Manager employ or contract with, or solicit for
employment or contract, any employee or independent contractor of Manager to provide services similar to those provided in this Agreement (other than persons who were employees of, or had a contract with the Non-Soliciting Parties), immediately
prior to their employment by or those who had a contract with Manager and other than persons recruited by the Non-Soliciting Parties. The Non-Soliciting Parties acknowledge that a breach of this 

  

 11 

 
Section 7.2 by the Non-Soliciting Parties will result in irreparable injury to Manager, the precise amount of which is not readily ascertainable in monetary
damages, and that Manager, in addition to any other remedies, shall be entitled to injunctive relief. 
  

	 	8.	CONFIDENTIAL INFORMATION 

  
 Manager and DPM recognize and understand that, during the term of this Agreement, or the term of this Agreement as extended, each shall receive, have
access to, and otherwise become acquainted with various trade secrets, materials, patient information, and other proprietary information relating to DPM and Manager which is of a secret or confidential nature (“Confidential Information”).
During and after the term of this Agreement, DPM, Hospitals, and Manager shall not use Confidential Information for any purposes other than the performance of this Agreement, and shall not disclose such Confidential Information received by DPM,
Hospitals, and Manager to any third party, without the prior written consent of DPM or Manager, as the case may be. Provided, however, that either party may divulge Confidential Information to the minimum extent necessary to comply with any
applicable statute, governmental rule or regulation or valid Court order. Confidential Information does not include, however, information which (a) is or becomes generally available to the public other than as a result of a disclosure by either
party or its Representatives (as defined below), (b) was available to the non-disclosing party on a nonconfidential basis prior to its disclosure to such party by the disclosing party or its Representative, or (c) becomes available to the
non-disclosing party on a nonconfidential basis from a person, other than the disclosing party or its Representative, who is not known by the non-disclosing party to be bound by a confidentiality agreement with such disclosing party or otherwise
prohibited from transmitting the information to the non-disclosing party. As used in this Agreement, the term “Representative” means, as to any party, such party’s affiliates and its directors, officers, employees, agents, advisors (including, without limitation, financial advisors, counsel and accountants), and controlling persons.

  
 DPM and Manager each acknowledge that a breach of this Section
8 by either party will result in irreparable injury to the other party, the precise amount of which is not readily ascertainable in monetary damages, and that the parties hereto, in addition to any other remedies, shall be entitled to injunctive
relief. 
  

	 	9.	NOTICES 

  
 All notices which either party is required or may desire to give to the other party under or in conjunction with this Agreement shall be in writing, and
shall be deemed to have been duly given on the date of delivery if delivered in person to the party named below, or as of the date indicated on a return receipt if by certified or registered mail, postage prepaid, return receipt requested, addressed
as follows: 
  

			
	If to DPM:	  	 Doctor’s Practice Management, Inc.
 4301 Vista Road
 Pasadena, Texas 77504
 Attention: President

  

 12 

			
	If to Manager:	  	 NeWeigh
 10738 Braes forest
 Houston, Texas 77071
 Attention: Diane Crumley

  
 or to such other addresses or persons
as may be designated by DPM or Manager from time to time in accordance with the provisions of this Section 9. 
  

	 	10.	ENTIRE AGREEMENT; AMENDMENTS 

  
 This Agreement supersedes any and all other agreements, whether oral or written, between the parties with respect to the subject matter hereof and there
are no representations, covenants or undertakings other than those expressly set forth in this Agreement. This Agreement may not be modified or amended except by a written document executed by both parties to this Agreement, and such written
modification(s) shall be attached hereto. 
  

	 	11.	STATE LAW: SEVERABILITY 

  
 This Agreement shall be construed and governed by the laws of the State of Texas. In the event any provision of this Agreement is rendered invalid or
unenforceable by the enactment of any applicable statute or ordinance or by any regulation duly promulgated or is made or declared unenforceable by any court of competent jurisdiction, the remainder of this Agreement shall, subject to the following,
remain in full force and effect. The parties agree that venue for any proceeding arising hereunder shall lie exclusively in Harris County, Texas, and venue for any litigation arising for enforcement of this Agreement shall lie exclusively in the
state district courts of Harris County, Texas. 
  

	 	12.	CATASTROPHE 

  
 In the event that any Hospital facilities are partially damaged or destroyed by fire, earthquake or other catastrophe, and such damage is sufficient to
render the facilities unusable for Program purposes but not entirely or substantially destroyed, this Agreement shall be suspended until such time as DPM determines that the premises or the facilities shall again be usable. In the event that DPM
determines that the affected Hospital facilities have been entirely or substantially destroyed by fire, earthquake, or other catastrophe, this Agreement may be terminated by either party upon at least ten (10) days’ prior written notice to the
other; or, in the alternative, this Agreement shall be suspended until such time as DPM shall erect or otherwise acquire new facilities with accommodations substantially similar to those provided herein for the use of Manager, provided that DPM
gives written notice to Manager that it shall erect or otherwise acquire such facilities. Nothing in this Agreement shall obligate DPM to erect or otherwise acquire such facilities. 
  

	 	13.	NON-WAIVER 

  
 The waiver by either party of any breach of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach
of the same or any other term, covenant or condition contained herein. The subsequent acceptance of performance 

  

 13 

 
hereunder by a party shall not be deemed to be a waiver of any preceding breach by the other party of any term, covenant or condition of this Agreement,
other than the failure of such party to perform the particular duties so accepted, regardless of such party’s knowledge of such preceding breach at the time of acceptance of such performance. 
  

	 	14.	CAPTIONS 

  
 Any captions to or hearing of the articles, sections, subsections, paragraphs, or subparagraphs of this Agreement are solely for the convenience of the
parties, are not a part of this Agreement, and shall not be used for the interpretation or determination of validity of this Agreement or any provision hereof. 
  

	 	15.	ASSIGNMENT 

  
 Neither party shall assign any rights or delegate any duties under this Agreement without the prior written consent of the other party, except that either
party may assign its rights and delegate its duties under this Agreement in the event of any transfer of all or substantially all of its stock or assets without the prior written consent of the other party. Any unauthorized attempted assignment by
either party shall be void and of no force and effect and shall constitute a material breach of this Agreement. All covenants, conditions and provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and
their respective heirs, personal representatives, successors and assigns. 
  

	 	16.	COUNTERPARTS 

  
 This Agreement may be executed in counterparts, each of which shall be deemed to be an original, and all of such counterparts shall together constitute
one and the same Agreement. 
  

	 	17.	THIRD PARTY BENEFICIARIES 

  
 This Agreement is solely for the benefit of the parties and their officers, directors and employees to the extent named herein. No other third party is
granted or shall have any rights by virtue of this Agreement. 
  

	 	18.	AFFILIATE 

  
 For purposes of this Agreement, the term “affiliate” shall mean any wholly-owned subsidiary of an entity or any entity with common ownership or
common control. 
  

	 	19.	ALTERNATIVE DISPUTE RESOLUTION 

  
 The parties agree to submit any dispute arising under this Agreement to voluntary mediation before a mediator to be mutually acceptable to both parties.
The parties shall share equally in the cost of the mediator, and each party shall incur the cost of its own legal representation. In the event the dispute is not resolved through mediation, the parties agree to submit the dispute to binding
arbitration before a mutually acceptable arbitrator in accordance with the rules of the American Arbitration Association. Unless otherwise ordered by the arbitrator, the parties shall share equally in the cost of the arbitration and each party shall
incur 

  

 14 

 
the cost of its own legal representation. Judgment upon any award rendered by an arbitrator may be entered in any court having jurisdiction. Notwithstanding
anything to the contrary herein, this provision shall not be applicable to the rights of any party to seek an equitable remedy to enforce the terms of this Agreement, including but not limited to Section 8 of this Agreement. 
  

	 	20.	CONFIDENTIALITY OF THIS AGREEMENT 

  
 It is the express intent of the parties that the terms and conditions of this Agreement shall not be disclosed except in response to a request from a
valid subpoena, a request from a government agency, by mutual written consent of both parties, or as otherwise specifically provided herein. The parties also agree that the parties may disclose the terms of this Agreement to its officers,
affiliates, directors, attorneys and to those employees who are necessary to carry out the terms of the Agreement. 
  
 IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the 15th day of November, 2002. 
  

			
	MANAGER:
	
	VITAL WEIGHT CONTROL, INC.
a Texas Corporation
		
	By:	 	/s/    Diane Crumley        
	 Name:
	 	Diane Crumley
	 Title:
	 	President
	
	DPM:
	
	 DOCTOR’S PRACTICE MANAGEMENT, INC.

		
	By:	 	/s/    Philip S. Chan
	 Name:
	 	Philip S. Chan
	 Title:
	 	Chief Financial Officer

  

 15

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