Document:

License Agreement with the University of Michigan

 Exhibit 10.8 License agreement with University of Michigan 
  
 LICENSE AGREEMENT 
  
 University of Michigan Files #894d1, 930, 1089, 1089c1, 1167, 1167c1, 1167c2, 1580, 1580d1 
  
 This Agreement is effective as of January 20, 2006 (the “Effective Date”), between Glyconix Incorporated (“LICENSEE”)
having the address in Article 13 below, and the Regents of the University of Michigan, a constitutional corporation of the State of Michigan (“MICHIGAN”), having the address in Article 13 below. LICENSEE and MICHIGAN agree as follows:

  
 ARTICLE 1 – DEFINITIONS 
  
 1.1 “FIELD OF USE” means all fields. 
  
 1.2 “FIRST COMMERCIAL SALE” means the first sale, rental, or lease of any LICENSED
PRODUCT or first commercial use of any LICENSED PROCESS by LICENSEE or a SUBLICENSEE, other than sale of a LICENSED PRODUCT or use of a LICENSED PROCESS for use in trials, such as field trials or clinical trials, being conducted to obtain FDA or
other governmental approvals to market LICENSED PRODUCTS or otherwise commercially use LICENSED PROCESSES. 
  
 1.3 “LICENSED PROCESS(ES)” means any process or method that, but for this Agreement, comprises an infringement (including contributory or inducement) of an issued, unexpired claim or a pending claim
contained in the PATENT RIGHTS or uses a LICENSED PRODUCT. 
  
 1.4 “LICENSED
PRODUCT(S)” means any product that, but for this Agreement: (a) comprises an infringement (including contributory or inducement) of an issued, unexpired claim or a pending claim contained in the PATENT RIGHTS in the country in which any such
product or product part is made, used, imported, offered for sale or sold; or (b) is manufactured by using a LICENSED PROCESS or is employed to practice a LICENSED PROCESS. 
  
 1.5 “NET SALES” means the amount billed or invoiced, and if any amount is not billed or invoiced, the amounts received, on sales,
rental or lease, however characterized, by LICENSEE and/or SUBLICENSEES of LICENSED PRODUCTS and uses or licenses of LICENSED PROCESSES, less the following deductions (but only to the extent such sums are otherwise included in NET SALES and are not
obtained in view of other consideration received by LICENSEE): 
  
 (a) cash discounts actually granted to customers in such invoices for sales or lease of LICENSED PRODUCTS, but only in amounts customary in the trade; 
  

(b) sales, tariff duties and/or use taxes separately stated in such bills or invoices with reference to particular sales and actually paid by LICENSEE
to a governmental unit; 
  
 (c) actual freight expenses between
LICENSEE and customers, to the extent such expenses are not charged to or reimbursed by customers; or 
  
 (d) amounts actually refunded or credited on returns. 
  
 Where LICENSEE receives any consideration other than cash for such transactions, fair market cash value for such consideration, to be agreed upon by the parties hereto,
shall be included in NET SALES. 

 1.6 “PATENT RIGHTS” means MICHIGAN’S legal rights under the patent laws of the United States or relevant
foreign countries for all of the following: 
  
 (a) the following
United States and foreign patent(s) and/or patent application(s), and divisionals, continuations (except continuations-in-part), and foreign counterparts of the same: 
  
 5,453,500 
  
 5,668,168 
  
 5,677,286 
  
 5,693,767 
  
 5,932,709 
  
 6,093,805 
  
 6,103,884 
  
 6,462,182 
  
 6,720,307 
  
 1.7 “ROYALTY PERIOD(S)” means the six-month periods ending on the last days of June and December each year. 
  
 1.8 “SUBLICENSEE(S)” means any person or entity sublicensed, or granted an option for a sublicense, by LICENSEE under this Agreement. 
  
 1.9 “TERRITORY” means all the countries of the world. 
  
 ARTICLE 2 – GRANT OF LICENSE 
  
 2.1 MICHIGAN hereby grants to LICENSEE an exclusive license with the right to grant
sublicenses, both subject to the terms and conditions of this Agreement, in the FIELD OF USE and the TERRITORY to make, have made, import, use, market, offer for sale and sell LICENSED PRODUCTS and to practice LICENSED PROCESSES. 
  
 2.2 MICHIGAN reserves the right to practice the PATENT RIGHTS for research, public service,
internal (including clinical) and/or educational purposes, and the right to grant the same limited rights to other non-profit research institutions. 
  
 2.3 This Agreement shall extend until expiration of the last to expire of the licensed PATENT RIGHTS, unless sooner terminated as provided in another specific article of
this Agreement. 
  
 2.4 LICENSEE agrees that LICENSED PRODUCTS used, leased or
sold in the United States shall be manufactured substantially in the United States. 
  
 2.5 To the extent that the following grant may be required by research funding agreements between MICHIGAN and the United States Government, MICHIGAN reserves the right to grant to the United States Government nonexclusive, nontransferable,
irrevocable, paid-up licenses to practice or have practiced for or on behalf of the United States PATENT RIGHTS throughout the world. 
  
 ARTICLE 3 - CONSIDERATION 
  
 3.1 LICENSEE shall pay royalties to MICHIGAN until the expiration date of the last to expire of PATENT RIGHTS or until this Agreement is terminated. Royalties shall
include: 
  
 (a) Running Royalties equal to two percent (2%) of
NET SALES (“Running Royalties”). 
  
 If LICENSEE makes
any NET SALES to any party affiliated with LICENSEE, or in any way directly or indirectly related to or under the common control with LICENSEE, at a price less than the regular price charged to other parties, the Running Royalties payable to
MICHIGAN shall be computed on the basis of the regular price charged to other parties. 
  

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 (b) Non-Sales Based Sublicense Royalties equal to ten percent (10%) of any revenue not based on NET SALES
that LICENSEE receives from SUBLICENSEES or assignees in consideration for rights under the PATENT RIGHTS (e.g., license issue fees, maintenance fees, milestone payments, other royalties). 
  
 3.2 LICENSEE shall be responsible for the payment of all taxes, duties, levies, and other
charges imposed by any taxing authority with respect to the royalties payable to MICHIGAN under this agreement. Should LICENSEE be required under any law or regulation of any government entity or authority to withhold or deduct any portion of the
payments on royalties due to MICHIGAN, then the sum payable to MICHIGAN shall be increased by the amount necessary to yield to MICHIGAN an amount equal to the sum it would have received had no withholdings or deductions been made. MICHIGAN shall
cooperate reasonably with LICENSEE in the event LICENSEE elects to assert, at its own expense, MICHIGAN’s exemption from any such tax or deduction. 
  
 3.3 LICENSEE is not obligated to pay multiple royalties if any LICENSED PRODUCT or LICENSED PROCESS is covered by more than one claim of PATENT RIGHTS or the same
LICENSED PRODUCT is covered by claims in two or more countries. 
  
 3.4 Royalty
payments shall be paid to the “Regents of the University of Michigan” in United States dollars in Ann Arbor, Michigan, sent as provided in Article 13. In computing royalties, LICENSEE shall convert any revenues it receives in foreign
currency into its equivalent in United States dollars at the most recent exchange rate published in the Wall Street Journal on the last business day of the ROYALTY PERIOD during which such payments are received by LICENSEE, or at such other exchange
rate as the parties may agree to in writing. 
  
 3.5 Royalty payments shall be
made on a semi-annual basis with submission of the reports required by Article 4. All amounts due under this Agreement, including amounts due for the payment of patent expenses, shall, if overdue, be subject to a charge of interest compounded
monthly until payment, at a per annum rate of five percent (5%) above the prime rate in effect at the JP Morgan Chase Bank, N.A. or its successor bank on the due date (or at the highest allowed rate if a lower rate is required by law) or $250,
whichever is greater. The payment of such interest shall not foreclose MICHIGAN from exercising any other rights it may have resulting from any late payment. LICENSEE shall reimburse MICHIGAN for the costs, including reasonable attorney fees, for
expenses paid in order to collect any amounts overdue more than 120 days. 
  
 ARTICLE 4 - REPORTS 
  
 4.1 Until the FIRST
COMMERCIAL SALE, LICENSEE shall provide to MICHIGAN a written annual report on or before July 30 of each year. The annual report shall include: reports of progress on research and development, regulatory approvals, manufacturing, sublicensing,
marketing and sales during the preceding twelve (12) months, and plans for the coming year. LICENSEE also shall report to MICHIGAN the date of first sale or lease of LICENSED PRODUCTS (or results of LICENSED PROCESSES) in each country within thirty
(30) days of occurrence. 
  
 4.2 After the FIRST COMMERCIAL SALE, LICENSEE shall
provide semi-annual reports to MICHIGAN. By each July 30 and January 31 (i.e., within one month after each ROYALTY PERIOD closes, including the close of the ROYALTY PERIOD immediately following any termination of this Agreement), LICENSEE shall
report to MICHIGAN for that ROYALTY PERIOD: 
  
 (a) number of
LICENSED PRODUCTS sold, leased, or distributed, however characterized, by LICENSEE and each SUBLICENSEE. 
  
 (b) NET SALES, excluding the deductions provided therefor, of LICENSED PRODUCTS sold, distributed, used, rented, leased, or licensed, however
characterized, by LICENSEE and all SUBLICENSEES. 
  
 (c)
accounting for all LICENSED PROCESSES used, sold, or licensed, however characterized, by LICENSEE and all SUBLICENSEES included in NET SALES, excluding the deductions therefor. 
  
 (d) deductions applicable as provided in the definition for NET SALES above. 
  
 (e) royalties due on additional payments from SUBLICENSEES under Paragraph
3.1 above, including supporting figures. 
  
 (f) foreign currency
conversion rate and calculations (if applicable) and total royalties due. 
  

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 (g) names, addresses, and U.S.P.T.O. Entity Status (as discussed in Paragraph 4.5) of all SUBLICENSEES
having a sublicense or option therefor any time during the particular ROYALTY PERIOD. 
  
 (h) for each sublicense or amendment thereto completed in the particular ROYALTY PERIOD (including agreements under which LICENSEE will have LICENSED PRODUCTS made by a third party), the date of each agreement and
amendment, the territory of the sublicense, the scope of the sublicense, and the nature, timing and amounts of all fees and royalties to be paid thereunder. 
  
 (i) any milestone (under Article 3 or Article 5) that has been achieved, and any milestone that was due during the ROYALTY PERIOD but not achieved,
specifying each milestone and whether or not it was achieved. 
  
 LICENSEE shall
include the amount of all payments due, and the various calculations used to arrive at those amounts, including the quantity, description (nomenclature and type designation as described in Paragraph 4.3 below), country of manufacture and country of
sale or use of LICENSED PRODUCTS and LICENSED PROCESSES. LICENSEE shall direct its authorized representative to certify that reports required hereunder are correct to the best of LICENSEE’s knowledge and information. Failure to provide reports
as required under this Article 4 shall be a material breach of this Agreement. 
  
 If no payment is due, LICENSEE shall so report to MICHIGAN that no payment is due. 
  
 4.3 LICENSEE shall promptly establish and consistently employ a system of specific nomenclature and type designations for LICENSED PRODUCTS and LICENSED PROCESSES to permit identification and segregation of various
types where necessary. LICENSEE shall consistently employ, and shall require SUBLICENSEES to consistently employ, the system when rendering invoices thereon and shall inform MICHIGAN, or its auditors, when requested, as to the details concerning
such nomenclature system, all additions thereto and changes therein. 
  
 4.4
LICENSEE shall keep, and shall require SUBLICENSEES to keep, true and accurate records containing data reasonably required for the computation and verification of payments due under this Agreement. LICENSEE shall, and it shall require all
SUBLICENSEES and those making LICENSED PRODUCTS, to: (a) open such records for inspection upon reasonable written notice, during business hours, by either MICHIGAN auditor(s) or an independent certified accountant selected by MICHIGAN, for the
purpose of verifying the amount of payments due; and (b) retain such records for six (6) years from date of origination. 
  
 The terms of this Article shall survive any termination of this Agreement. MICHIGAN is responsible for all expenses of such inspection, except that if any inspection
reveals an underpayment greater than ten percent (10%) of royalties due MICHIGAN, then LICENSEE shall pay all expenses of that inspection and the amount of the underpayment and interest to MICHIGAN within twenty-one (21) days of written notice
thereof. LICENSEE shall also reimburse MICHIGAN for reasonable expenses required to collect the amount underpaid. 
  
 4.5 So that MICHIGAN may pay the proper U.S. Patent and Trademark Office fees relating to the PATENT RIGHTS, if LICENSEE, any company related to LICENSEE or SUBLICENSEE
(including optionees) does not qualify as a “Small Entity” under U.S. patent laws, LICENSEE shall notify MICHIGAN immediately. The parties understand that the changes to LICENSEE’s, SUBLICENSEE’s, or optionees’ businesses
that might affect entity status include: acquisitions, mergers, hiring of a total of more than 500 total employees, sublicense agreements, and sublicense options. 
  
 ARTICLE 5 - DILIGENCE 
  
 5.1 LICENSEE shall use best efforts to bring LICENSED PRODUCTS to market or one or more LICENSED PROCESSES to commercial use through a thorough, vigorous and diligent
program for exploiting the PATENT RIGHTS and to continue active, diligent marketing efforts for one or more LICENSED PRODUCTS or LICENSED PROCESSES throughout the life of this Agreement. LICENSEE has the responsibility to do all that is necessary to
obtain and retain any governmental approvals to manufacture and/or sell LICENSED PRODUCTS and/or use LICENSED PROCESSES for all relevant activities of LICENSEE and SUBLICENSEES. 
  
 5.2 As part of the diligence required by Paragraph 5.1, LICENSEE agrees to reach the following commercialization and research and
development milestones for the LICENSED PRODUCTS and LICENSED PROCESSES (together the “MILESTONES”) by the following dates: 
  
 1) Four years from Effective date: file 1st Investigational New Drug Application (IND) to the U.S Food and Drug Administration or a similar application to any foreign regulatory agency to commence clinical trials in their jurisdiction. 
  

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 5.3 LICENSEE must achieve each MILESTONE on or before the deadline dates indicated and MICHIGAN shall have the sole
discretion to determine the validity of a MILESTONE being reached. LICENSEE shall notify MICHIGAN in writing within ten (10) business days after each such deadline as to whether or not such MILESTONE was met. If LICENSEE fails to meet any MILESTONE
under this Article by the date of any MILESTONE deadline, LICENSEE will be deemed to be in material breach of this Agreement, and MICHIGAN may terminate the Agreement effective on thirty (30) days written notice, unless LICENSEE achieves the
MILESTONE within this thirty-day period. Notwithstanding, MICHIGAN may terminate this Agreement immediately if LICENSEE fails to achieve a MILESTONE by the indicated date and does not provide the written notice to MICHIGAN referred to above.

  
 5.4 This Agreement shall terminate immediately if the FIRST COMMERCIAL SALE
does not occur on or before the date eight years after the Effective Date unless LICENSEE agrees in writing to pay an annual fee of $100,000, payable in quarterly monthly installments until the FIRST COMMERCIAL SALE, the first payment being due
March 30, 2014. 
  
 ARTICLE 6 - SUBLICENSING 
  
 6.1 LICENSEE shall notify MICHIGAN in writing of every sublicense agreement and each
amendment thereto within thirty (30) days after their execution, and indicate the name of the SUBLICENSEE and its number of employees, the territory of the sublicense, the scope of the sublicense, and the nature, timing and amounts of all fees and
royalties to be paid thereunder. Upon request, LICENSEE shall provide MICHIGAN with a copy of sublicense agreements. 
  
 6.2 LICENSEE shall not receive from SUBLICENSEES anything of value other than cash payments in consideration for any sublicense under this Agreement, without the express
prior written permission of MICHIGAN. 
  
 6.3 Each sublicense granted by LICENSEE
under this Agreement shall provide for its termination upon termination of this Agreement. Each sublicense shall terminate upon termination of this Agreement unless LICENSEE has previously assigned its rights under the sublicense to MICHIGAN and
MICHIGAN has agreed at its sole discretion in writing to such assignment. 
  
 6.4
LICENSEE shall require that all sublicenses: 
  
 (1) be
consistent with the terms and conditions of this Agreement; 
  
 (2) contain the SUBLICENSEE’S acknowledgment of the disclaimer of warranty and limitation on MICHIGAN’s liability, as provided by Article 9 below; and 
  
 (3) contain provisions under which the SUBLICENSEE accepts duties at least equivalent to those accepted by the LICENSEE in
the following Paragraphs: 4.4 (duty to keep records); 4.5 (duty regarding Patent Office fees); 9.4 (duty to avoid improper representations or responsibilities); 10.1 (duty to defend, hold harmless, and indemnify MICHIGAN); 10.3 (duty to maintain
insurance); 14.5 (duty to properly mark LICENSED PRODUCTS with patent notices); 14.7 (duty to restrict the use of MICHIGAN’s name); 14.8 (duty to control exports). 
  
 ARTICLE 7 - PATENT APPLICATIONS AND MAINTENANCE 
  
 7.1 MICHIGAN has the right to control all aspects of filing, prosecuting, and maintaining all of the patents and patent applications that
form the basis for the PATENT RIGHTS, interferences, and disputes (including litigation) regarding inventorship. LICENSEE shall fully cooperate in such activities. 
  
 7.2 MICHIGAN shall notify LICENSEE of all information received by MICHIGAN relating to the filing, prosecution and maintenance of the
patents and patent applications which form the basis of the PATENT RIGHTS, and shall make reasonable efforts to allow LICENSEE to review, comment, and advise upon such information. LICENSEE agrees to hold such information confidential and to use the
information provided by MICHIGAN only for the purpose of advancing MICHIGAN’s PATENT RIGHTS. 
  

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 7.3 LICENSEE shall reimburse MICHIGAN for all fees and costs relating to the activities described in this Article. Such
reimbursement shall be made within thirty (30) days of receipt of MICHIGAN’s invoice and shall be subject to the interest and other requirements specified in Paragraph 3.5 above. 
  
 7.4 In the event LICENSEE, in its sole discretion, determines not to utilize any one or more PATENT RIGHT as listed in Paragraph 1.6 above,
LICENSEE may return such PATENT RIGHT to MICHIGAN provided: (i) LICENSEE provides MICHIGAN ten (10) days written notice of LICENSEE’s intent to transfer such PATENT RIGHT to MICHIGAN; (ii) LICENSEE provides written assurances that such PATENT
RIGHT was not provided to a SUBLICENSEE or assignees (or, if such PATENT RIGHT was provided to a SUBLICENSEE or assignees, such PATENT RIGHT was rescinded); (iii) LICENSEE agrees to satisfy all obligations underlying such PATENT RIGHT pursuant to
the timing and conditions of Article III above; (iv) LICENSEE reimburses all current costs associated with such patent as provided for in paragraph 7.3; and (v) satisfies the conditions of Paragraph 11.4(c), (d), (e) and (f) and 11.6 as it relates
to the such PATENT RIGHT. In the event that such PATENT RIGHT is transferred to MICHIGAN pursuant to the provisions of this paragraph, all LICENSEE’s obligations to MICHIGAN regarding such PATENT RIGHT hereunder are terminated. 
  
 ARTICLE 8 - ENFORCEMENT 
  
 8.1 Each party shall promptly advise the other in writing of any known acts of potential infringement of the PATENT RIGHTS by another party.
LICENSEE has the first option to police the PATENT RIGHTS against infringement by other parties within the TERRITORY and the FIELD OF USE, but LICENSEE shall notify MICHIGAN in writing thirty (30) days before filing any suit. LICENSEE shall not file
any suit without a diligent investigation of the merits of such suit by its counsel, including with respect to PATENT RIGHTS. This right to police includes defending any action for declaratory judgment of noninfringement or invalidity; and
prosecuting, defending or settling all infringement and declaratory judgment actions at its expense and through counsel of its selection, except that LICENSEE shall make any such settlement only with the advice and consent of MICHIGAN. If LICENSEE
has a reasonable basis for policing the patents, MICHIGAN shall provide reasonable assistance to LICENSEE with respect to such actions, but only if LICENSEE reimburses MICHIGAN for out-of-pocket expenses incurred in connection with any such
assistance rendered at LICENSEE’S request or reasonably required by MICHIGAN and if LICENSEE notifies MICHIGAN in writing thirty (30) days before filing any suit. MICHIGAN retains the right to participate, with counsel of its own choosing and
at its own expense, in any action under this Paragraph. LICENSEE shall defend, indemnify and hold harmless MICHIGAN with respect to any counterclaims asserted by an alleged infringer reasonably related to the enforcement of the PATENT RIGHTS under
this Paragraph, including but not limited to antitrust counterclaims and claims for recovery of attorney fees. 
  
 If a declaratory judgment action alleging invalidity or unenforceability of any of the PATENT RIGHTS is brought against LICENSEE or MICHIGAN, then MICHIGAN, at its sole option, has the right to intervene and assume
control over the defense of such action, and LICENSEE shall provide reasonable cooperation in the defense of such action. If a third party files such action as the result of acts of LICENSEE, then LICENSEE shall reimburse the reasonable costs and
fees of MICHIGAN in defending such action. 
  
 8.2 If LICENSEE demonstrates to
MICHIGAN that it has a reasonable basis to believe that a third party infringes the PATENT RIGHTS and undertakes to enforce and/or defend the PATENT RIGHTS by litigation in the United States, LICENSEE may temporarily withhold up to fifty percent
(50%) of the payments otherwise thereafter due during the course of such litigation to MICHIGAN under Article 3 under the following terms. LICENSEE may apply the amounts withheld to pay up to half of LICENSEE’s out-of-pocket litigation
expenses, including reasonable attorneys’ fees, but not including salaries of LICENSEE’s employees. If LICENSEE recovers damages in patent litigation or settlement thereof, the award shall be applied first to satisfy LICENSEE’S
unreimbursed expenses and legal fees for the litigation, next to reimburse MICHIGAN for any payments under Article 3 which are past due or were withheld pursuant to this Article 8, and then to reimburse MICHIGAN for any other reasonable unreimbursed
expenses and legal fees for the litigation. The remaining balance shall be divided equally between LICENSEE and MICHIGAN. This provision shall control the division of revenues where a license is granted as part of a settlement of such litigation.

  
 If LICENSEE undertakes to enforce and/or defend the PATENT RIGHTS by
litigation in a foreign county, and recovers damages in the patent litigation, the award shall be applied first to satisfy LICENSEE’S unreimbursed expenses and legal fees for the litigation, and next to reimburse MICHIGAN for any payments under
Article 3 which are past due, and then to reimburse MICHIGAN for any unreimbursed expenses and legal fees for the litigation. The remaining balance shall be divided equally between LICENSEE and MICHIGAN. 
  
 8.3 If LICENSEE fails to take action to abate any alleged infringement of patents which form
the basis for the PATENT RIGHTS within sixty (60) days of a request by MICHIGAN to do so (or within a shorter period if required to preserve the 
  

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 legal rights of MICHIGAN under any applicable laws) then MICHIGAN has the right to take such action (including
prosecution of a suit) at its expense and LICENSEE shall use reasonable efforts to cooperate in such action, at LICENSEE’s expense. During such action LICENSEE shall not have the right to grant sublicenses without MICHIGAN’s permission,
and MICHIGAN has full authority to settle on such terms as MICHIGAN determines. If MICHIGAN recovers damages in patent litigation or settlement thereof, the award shall be applied first to satisfy MICHIGAN’S unreimbursed expenses and legal fees
for the litigation, next to reimburse MICHIGAN for any payments overdue under this Agreement, and then to reimburse LICENSEE for any reasonable unreimbursed expenses and legal fees for the litigation (such payment not to exceed the recovery or
settlement amounts MICHIGAN actually receives). The remaining balance shall be divided equally between LICENSEE and MICHIGAN. This provision shall control the division of revenues where a license is granted as part of a settlement of such
litigation. 
  
 ARTICLE 9 - NO WARRANTIES; LIMITATION ON
MICHIGAN’S LIABILITY 
  
 9.1 MICHIGAN, including its Regents, fellows,
officers, employees and agents, makes no representations or warranties that PATENT RIGHTS are or will be held valid, or that the manufacture, importation, use, offer for sale, sale or other distribution of any LICENSED PRODUCTS or LICENSED PROCESSES
will not infringe upon any patent or other rights. 
  
 9.2 MICHIGAN,
INCLUDING ITS REGENTS, FELLOWS, OFFICERS, EMPLOYEES AND AGENTS, MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, AND ASSUMES NO RESPONSIBILITIES WHATEVER WITH RESPECT TO DESIGN, DEVELOPMENT, MANUFACTURE, USE, SALE OR OTHER DISPOSITION BY LICENSEE OR SUBLICENSEES OF LICENSED PRODUCTS OR LICENSED PROCESSES.

  
 9.3 LICENSEE AND SUBLICENSEES ASSUME THE ENTIRE RISK AS TO
PERFORMANCE OF LICENSED PRODUCTS AND LICENSED PROCESSES. In no event shall MICHIGAN, including its Regents, fellows, officers, employees and agents, be responsible or liable for any direct, indirect, special, incidental, or
consequential damages or lost profits or other economic loss or damage with respect to LICENSED PRODUCTS or LICENSED PROCESSES, to LICENSEE, SUBLICENSEES or any other individual or entity regardless of legal or equitable theory. The above
limitations on liability apply even though MICHIGAN, its Regents, fellows, officers, employees or agents may have been advised of the possibility of such damage. 
  
 9.4 LICENSEE shall not, and shall require that its SUBLICENSEES do not, make any statements, representations or warranties whatsoever to any
person or entity, or accept any liabilities or responsibilities whatsoever from any person or entity that are inconsistent with any disclaimer or limitation included in this Article 9. 
  
 ARTICLE 10 - INDEMNITY; INSURANCE 
  
 10.1 LICENSEE shall defend, indemnify and hold harmless and shall require SUBLICENSEES to defend, indemnify and hold harmless MICHIGAN,
including its Regents, fellows, officers, employees, students, and agents, for and against any and all claims, demands, damages, losses, and expenses of any nature (including attorneys’ fees and other litigation expenses), resulting from, but
not limited to, death, personal injury, illness, property damage, economic loss or products liability arising from or in connection with, any of the following: (1) Any manufacture, use, sale or other disposition by LICENSEE, SUBLICENSEES or
transferees of LICENSED PRODUCTS or LICENSED PROCESSES; (2) The use by any person of LICENSED PRODUCTS made, used, sold or otherwise distributed by LICENSEE or SUBLICENSEES; and (3) The use or practice by LICENSEE or SUBLICENSEES of any invention or
computer software related to the PATENT RIGHTS. 
  
 10.2 MICHIGAN is entitled to
participate at its option and expense through counsel of its own selection, and may join in any legal actions related to any such claims, demands, damages, losses and expenses under Paragraph 10.1 above. LICENSEE shall not settle any such legal
action with an admission of liability of MICHIGAN without MICHIGAN’s written approval. 
  
 10.3 Prior to any distribution or commercial use of any LICENSED PRODUCT or use of any LICENSED PROCESS by LICENSEE, LICENSEE shall purchase and maintain in effect commercial general liability insurance, including
product liability insurance and errors and omissions insurance which shall protect LICENSEE and MICHIGAN with respect the events covered by Paragraph 10.1. Prior to any distribution or use of any LICENSED PRODUCT or use of any LICENSED PROCESS by a
SUBLICENSEE, LICENSEE shall require that the SUBLICENSEE purchase and maintain in effect commercial general liability insurance, including product liability insurance and errors and omissions insurance which shall protect LICENSEE, SUBLICENSEE, and
MICHIGAN with respect to the events covered by Paragraph 10.1. Each such 
  

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 insurance policy must provide reasonable coverage for all claims with respect to any LICENSED PROCESS used and any
LICENSED PRODUCTS manufactured, used, sold, licensed or otherwise distributed by LICENSEE — or, in the case of a SUBLICENSEE’s policy, by said SUBLICENSEE — and must specify MICHIGAN, including its Regents, fellows, officers and
employees, as an additional insured. LICENSEE shall furnish certificate(s) of such insurance to MICHIGAN, upon request. 
  
 10.4 In no event shall either party hereunder be liable to the other for any special, indirect, or consequential damages of any kind whatsoever resulting from any breach
or default of this Agreement. 
  
 ARTICLE 11 - TERM AND
TERMINATION 
  
 11.1 If LICENSEE ceases to carry on its business, this
Agreement shall terminate upon written notice by MICHIGAN attempted to be delivered to the address for notices provided in Article 13. 
  
 11.2 If LICENSEE fails to make any payment due to MICHIGAN, upon ten (10) business days’ written notice by MICHIGAN, this Agreement shall automatically terminate
unless MICHIGAN specifically extends such date in writing. Such termination shall not foreclose MICHIGAN from collection any amounts remaining unpaid or seeking other legal relief. 
  
 11.3 Upon any material breach or default of this Agreement by LICENSEE (other than as specifically provided herein, the terms of which shall
take precedence over the handling of any other material breach or default under this Paragraph), MICHIGAN has the right to terminate this Agreement effective on thirty (30) days’ written notice to LICENSEE. Such termination shall become
automatically effective upon expiration of the thirty day period unless LICENSEE cures the material breach or default before the period expires. 
  
 11.4 LICENSEE has the right to terminate this Agreement at any time on ninety (90) days’ written notice to MICHIGAN if LICENSEE: 
  
 (a) pays all amounts due MICHIGAN through the effective date of the
termination; 
  
 (b) submits a final report of the type described
in Paragraph 4.2; 
  
 (c) returns any patent documentation
(including that exchanged under Article 7) and any other confidential or trade-secret materials provided to LICENSEE by MICHIGAN in connection with this Agreement, or, with prior approval by MICHIGAN, destroys such materials, and certifies in
writing that such materials have all been returned or destroyed; 
  
 (d) suspends its manufacture, use and sale of the LICENSED PROCESS(ES) AND LICENSED PRODUCT(S); 
  
 (e) provides MICHIGAN with all data and know-how developed by LICENSEE in the course of LICENSEE’s efforts to develop LICENSED PRODUCTS and LICENSED
PROCESSES; MICHIGAN shall have the right to use such data and know-how for any purpose whatsoever, including the right to transfer same to future licensees; and 
  
 (f) provides MICHIGAN access to any regulatory information filed with any U.S. or foreign government agency with respect to
LICENSED PRODUCTS and LICENSED PROCESSES. 
  
 Upon notice of intent to terminate,
MICHIGAN may elect to immediately terminate this Agreement upon written notice. 
  
 11.5 Upon any termination of this Agreement, and except as provided herein to the contrary, all rights and obligations of the parties hereunder shall cease, except any previously accrued rights and obligations and further as follows:

  
 (1) obligations to pay royalties and other sums, or to
transfer equity or other consideration, accruing hereunder up to the day of such termination, whether or not this Agreement provides for a number of days before which actual payment is due and such date is after the day of termination; 

 

 8 

 (2) MICHIGAN’s rights to inspect books and records as described in Article 4, and LICENSEE’s
obligations to keep such records for the required time; 
  
 (3)
any cause of action or claim of LICENSEE or MICHIGAN accrued or to accrue because of any breach or default by the other party hereunder; 
  
 (4) the provisions of Articles 1, 9, 10, and 14; and 
  
 (5) all other terms, provisions, representations, rights and obligations contained in this Agreement that by their sense and context are intended to
survive until performance thereof by either or both parties. 
  
 11.6 After the
license(s) granted herein terminate, if LICENSEE has filed patent applications or obtained patents to any modification or improvement to LICENSED PRODUCTS or LICENSED PROCESSES within the scope of the PATENT RIGHTS, LICENSEE agrees upon request to
enter into good faith negotiations with MICHIGAN or MICHIGAN’s future licensee(s) for the purpose of granting licensing rights to said modifications or improvements in a timely fashion and under commercially reasonable terms. 
  
 ARTICLE 12 - REGISTRATION AND RECORDATION 
  
 12.1 If the terms of this Agreement, or any assignment or license under this Agreement are
or become such as to require that the Agreement or license or any part thereof be registered with or reported to a national or supranational agency, LICENSEE will, at its expense, undertake such registration or report. Prompt notice and appropriate
verification of the act of registration or report or any agency ruling resulting from it will be supplied by LICENSEE to MICHIGAN upon request. 
  
 12.2 LICENSEE shall also carry out, at its expense, any formal recordation of this Agreement or any license herein granted that the law of any country requires as a
prerequisite to enforceability of the Agreement or license in the courts of any such country or for other reasons, and shall promptly furnish to MICHIGAN appropriately verified proof of recordation. 
  
 ARTICLE 13 - NOTICES 
  
 13.1 Any notice, request, report or payment required or permitted to be given or made under
this Agreement by either party is effective when mailed if sent by recognized overnight carrier or certified mail, electronic mail followed by confirmation by regular U.S. mail, or registered mail (return receipt requested) to the address set forth
below or such other address as such party specifies by written notice given in conformity herewith. Any notice, request, report or payment not so given is not effective until actually received by the other party. 
  

			
	To MICHIGAN:	    	To LICENSEE:
		
	The University of Michigan	    	Glyconix Incorporated
	Office of Technology Transfer	    	350 Fifth Avenue, Suite 4811
	Wolverine Tower, Room 2071	    	New York, NY 10118
	3003 S. State Street	    	 
	Ann Arbor, MI 48109-1280	    	 
		
	 Attn: File No. 894d1, 930,1089
	    	Attn: J.R. Leshufy
	                1167, 1580, 1580d1	    	 

  
 ARTICLE 14 -
MISCELLANEOUS PROVISIONS 
  
 14.1 This Agreement shall be construed, governed,
interpreted and applied according to United States and State of Michigan law, except that questions affecting the construction and effect of any patent shall be determined by the law of the country in which the patent was granted. 
  
 14.2 The parties hereby consent to the jurisdiction of the courts in the State of Michigan
over any dispute concerning this Agreement or the relationship between the parties. Should LICENSEE bring any claim, demand or other action against MICHIGAN, its Regents, fellows, officers, employees or agents, arising out of this Agreement or the
relationship between the parties, LICENSEE agrees to bring said action only in the Michigan Court of Claims. 
  

 9 

 14.3 MICHIGAN and LICENSEE agree that this Agreement sets forth their entire understanding concerning the subject matter
of this Agreement. The parties may amend this Agreement from time to time, but no modification will be effective unless both MICHIGAN and LICENSEE agree to it in writing. 
  
 14.4 If a court of competent jurisdiction finds any term of this Agreement invalid, illegal or unenforceable, that term will be curtailed,
limited or deleted, but only to the extent necessary to remove the invalidity, illegality or unenforceability, and without in any way affecting or impairing the remaining terms. 
  
 14.5 LICENSEE agrees to mark the LICENSED PRODUCTS sold in the United States with all applicable United States patent numbers. All LICENSED
PRODUCTS shipped to or sold in other countries shall be marked to comply with the patent laws and practices of the countries of manufacture, use and sale. 
  
 14.6 No waiver by either party of any breach of this Agreement, no matter how long continuing or how often repeated, is a waiver of any subsequent breach thereof, nor is
any delay or omission on the part of either party to exercise or insist on any right, power, or privilege hereunder a waiver of such right, power or privilege. In no event shall any waiver be deemed valid unless it is in writing and signed by an
authorized representative of each party. 
  
 14.7 LICENSEE agrees to refrain from
using and to require SUBLICENSEES to refrain from using the name of MICHIGAN in publicity or advertising without the prior written approval of MICHIGAN. Reports in scientific literature and presentations of joint research and development work are
not publicity. Notwithstanding this provision, without prior written approval of MICHIGAN, LICENSEE and SUBLICENSEES may state publicly that LICENSED PRODUCTS and PROCESSES were developed by LICENSEE based upon an invention(s) developed at the
University of Michigan and/or that the PATENT RIGHTS were licensed from the University of Michigan. 
  
 14.8 LICENSEE agrees to comply with all applicable laws and regulations. In particular, LICENSEE understands and acknowledges that the transfer of certain commodities and technical data is subject to United States
laws and regulations controlling the export of such commodities and technical data, including all Export Administration Regulations of the United States Department of Commerce. These laws and regulations prohibit or require a license for the export
of certain types of technical data to certain specified countries. LICENSEE agrees to comply with all United States laws and regulations controlling the export of commodities and technical data, to be solely responsible for any violation of such
laws and regulations by LICENSEE or its SUBLICENSEES, and to defend, indemnify and hold harmless MICHIGAN and its Regents, fellows, officers, employees and agents if any legal action of any nature results from the violation. 
  
 14.9 The relationship between the parties is that of independent contractor and contractee.
Neither party is an agent of the other in connection with the exercise of any rights hereunder, and neither has any right or authority to assume or create any obligation or responsibility on behalf of the other. 
  
 14.10 LICENSEE may not assign this Agreement without the prior written consent of MICHIGAN,
which shall not be unreasonably withheld and shall not pledge any of the license rights granted in this Agreement as security for any creditor. Any attempted pledge of any of the rights under this Agreement or assignment of this Agreement without
the prior consent of MICHIGAN will be void from the beginning. No assignment by LICENSEE will be effective until the intended assignee agrees in writing to accept all of the terms and conditions of this Agreement, and such writing is provided to
MICHIGAN. Notwithstanding, LICENSEE may, without MICHIGAN’s consent, assign its rights under this Agreement to a purchaser of all or substantially all of LICENSEE’s business relating to the subject matter of this Agreement, so long as such
assignee provides a statement in writing to MICHIGAN that it agrees to accept all the terms and conditions of this Agreement in the place of LICENSEE. 
  
 14.11 If during the term of this Agreement, LICENSEE makes or attempts to make an assignment for the benefit of creditors, or if proceedings in voluntary or involuntary
bankruptcy or insolvency are instituted on behalf of or against LICENSEE, or if a receiver or trustee is appointed for the property of LICENSEE, this Agreement shall automatically terminate. LICENSEE shall notify MICHIGAN of any such event mentioned
in this Paragraph as soon as reasonably practicable, and in any event within five (5) days after any such event. 
  

 10 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate originals by their duly authorized
officers or representatives. 
  

			
	FOR LICENSEE	  	FOR THE REGENTS OF THE UNIVERSITY OF MICHIGAN
		
	 /s/

	  	 /s/

	    (authorized representative)	  	    Kenneth J. Nisbet
	 	  	    Executive Director, UM Technology Transfer
		
	Date    January 25, 2006	  	Date    January 25, 2006

  

 11 

	6.	FORCE MAJEURE 

  

	6.1.	Studsvik and the Company shall each be relieved of its obligations under this Agreement to the extent that fulfillment of such obligations shall be prevented by strikes, embargoes,
riots, fires, floods, war, hurricanes, windstorms, acts or defaults of common carriers, governmental laws, acts or regulations, shortages of materials or any other occurrence, whether or not similar to the foregoing, beyond the reasonable control of
the party affected thereby. 

  

	6.2.	If either party is prevented from fulfilling its obligations under this Agreement by reason of a circumstance covered by this Article 6, the party unable to fulfill its obligations
shall, upon the occurrence of any such circumstance, promptly notify the other party of such circumstance and of the likely duration thereof, use its reasonable commercial efforts to alleviate such circumstance and promptly continue performance
hereunder upon the cessation of such circumstance. 

  

	6.3.	If the duration of the force majeure continues for twelve (12) months or more, the party whose performance was not prevented by the force majeure shall be
entitled to terminate this Agreement upon forty-five (45) days’ notice to the other party. 

  

	7.	GOVERNING LAW AND JURISDICTION 

  

	7.1.	The interpretation and construction of this Agreement shall be governed by the laws of Sweden, excluding any conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Agreement to the substantive law of another jurisdiction. 

  

	7.2.	The parties hereby irrevocably consent to the exclusive jurisdiction of the Swedish Courts for any action, suit or proceeding arising out of or relating to this Agreement.

  
         IN WITNESS WHEREOF, this Agreement shall be deemed to have been executed as of the date of the last signature below. This agreement has been executed and issued in two identical copies of
which the parties have taken one each. 
  

			
	GLYCONIX CORP.	 	 
		
	 Authorised signature by:
	 	

	 Name: Ivan Kanevski
	 	 
	 Title: President and CSO
	 	 
		
	 STUDSVIK MEDICAL AB
	 	 
		
	 Authorised signature by:
	 	

	 Name: Kurt Skold
	 	 
	 Title: PresidentLimited Partner Interest Purchase Agreement

 Exhibit 10.1 
  
 EXECUTION VERSION 
  
 LIMITED PARTNER INTEREST PURCHASE AGREEMENT 
  
 by and among 
  
 HHC KINGWOOD INVESTMENT, LLC 
  
 as Purchaser, 
  
 SIGNET
HEALTH CORPORATION 
  
 as Seller 
  
 and 
  
 SHC-KPH, LP 
  
  
  
 Dated as of January 17, 2006 

 TABLE OF CONTENTS 
  

					
	 	 	 	  	Page No.

	 ARTICLE 1    DEFINITIONS; SALE AND TRANSFER OF LIMITED PARTNER INTEREST; CONSIDERATION;
                         CLOSING
	  	1
	    1.1	 	Definitions	  	1
	    1.2	 	Agreement to Sell and Purchase	  	3
	    1.3	 	Excluded Assets	  	3
	    1.4	 	Excluded Liabilities	  	3
	    1.5	 	Purchase Price	  	3
	    1.6	 	Closing Date	  	3
	    1.7	 	Items to be Delivered by Seller at Closing	  	4
	    1.8	 	Items to be Delivered by Purchaser at Closing	  	5
		
	ARTICLE 2     REPRESENTATIONS AND WARRANTIES OF SELLER	  	6
	    2.1	 	Authority.	  	6
	    2.2	 	Authorization/Execution	  	6
	    2.3	 	Organization; No Subsidiaries; No Conflicts.	  	6
	    2.4	 	Title to Limited Partner Interest; General Partner.	  	7
	    2.5	 	Financial Statements; Changes.	  	7
	    2.6	 	Tax and Other Returns and Reports	  	8
	    2.7	 	Contracts	  	10
	    2.8	 	Real and Personal Property; Title to Property; Leases.	  	11
	    2.9	 	Assets	  	12
	    2.10	 	Limited Partner Interest	  	13
	    2.11	 	Intangible Property	  	14
	    2.12	 	Legal Proceedings	  	14
	    2.13	 	Accounting Records; Internal Controls.	  	14
	    2.14	 	Insurance	  	14
	    2.15	 	Employees.	  	15
	    2.16	 	Employee Benefits.	  	15
	    2.17	 	Certain Interests	  	16
	    2.18	 	Intercompany Transactions	  	17
	    2.19	 	Inventory	  	17
	    2.20	 	Receivables	  	17
	    2.21	 	Third Party Payors and Suppliers	  	17
	    2.22	 	Environmental Compliance	  	17
	    2.23	 	Powers of Attorney	  	19
	    2.24	 	Medicare and Medicaid; Third-Party Payors; Compliance with Health Care Laws.	  	19
	    2.25	 	Compliance Program	  	21
	    2.26	 	HIPAA	  	21
	    2.27	 	Restricted Grant and Loan Programs	  	21
	    2.28	 	Experimental Procedures	  	22
	    2.29	 	Medical Staff; Physician Relations	  	22
	    2.30	 	No Brokers or Finders	  	22

  

 - i - 

					
	    2.31	 	Improper Payments	  	22
	    2.32	 	No Misrepresentations	  	22
	    2.33	 	Liabilities	  	22
	    2.34	 	Conduct of Business	  	22
	    2.35	 	Negative Assurances	  	23
		
	ARTICLE 3    REPRESENTATIONS AND WARRANTIES OF PURCHASER	  	24
	    3.1	 	Authority	  	24
	    3.2	 	Authorization/Execution	  	24
	    3.3	 	Organization and Good Standing; No Violation.	  	24
	    3.4	 	Brokers and Finders	  	25
		
	ARTICLE 4    CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER	  	25
	    4.1	 	Accuracy of Representations and Warranties and Compliance with Obligations	  	25
	    4.2	 	Signing and Delivery of Instruments	  	25
	    4.3	 	Unfavorable Action or Proceeding	  	25
	    4.4	 	Governmental Authorizations	  	26
		
	ARTICLE 5    CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER	  	26
	    5.1	 	Accuracy of Representations and Warranties and Compliance with Obligations	  	26
	    5.2	 	Governmental Authorizations	  	26
	    5.3	 	Signing and Delivery of Instruments	  	26
	    5.4	 	Unfavorable Action or Proceeding	  	26
	    5.5	 	No Material Adverse Change	  	27
	    5.6	 	Required Consents	  	27
	    5.7	 	Disclosure Schedules	  	27
	    5.8	 	Real Property Title Matters	  	27
	    5.9	 	Lock Boxes	  	27
		
	ARTICLE 6    POST-CLOSING MATTERS	  	27
	    6.1	 	Preservation and Access to Records After the Closing.	  	27
	    6.2	 	Provision of Benefits of Certain Contracts	  	28
	    6.3	 	Misdirected Payments, Etc	  	28
	    6.4	 	Insurance	  	28
	    6.5	 	Processing of Payroll	  	28
		
	ARTICLE 7    SURVIVAL AND INDEMNIFICATION	  	29
	    7.1	 	Survival	  	29
	    7.2	 	Indemnification of Purchaser by Seller.	  	29
	    7.3	 	Indemnification of Seller by Purchaser.	  	30
	    7.4	 	Method of Asserting Claims	  	31
		
	ARTICLE 8    TAX AND COST REPORT MATTERS	  	33
	    8.1	 	Tax Matters.	  	33
		
	ARTICLE 9    MISCELLANEOUS PROVISIONS	  	34
	    9.1	 	Entire Agreement	  	34

  

 - ii - 

					
	    9.2	 	Further Assurances and Cooperation	  	34
	    9.3	 	Successors and Assigns	  	34
	    9.4	 	Governing Law	  	35
	    9.5	 	Amendments	  	35
	    9.6	 	Notices	  	35
	    9.7	 	Headings	  	35
	    9.8	 	Confidentiality and Publicity	  	36
	    9.9	 	Third Party Beneficiary	  	36
	    9.10	 	Expenses and Attorneys’ Fees	  	36
	    9.11	 	No Waiver	  	36
	    9.12	 	Severability	  	37
	    9.13	 	Counterparts	  	37

  

 - iii - 

 LIST OF EXHIBITS 
  

			
	 EXHIBIT

	  	 DESCRIPTION

	A	  	Assignment of Limited Partner Interest
	B	  	Permitted Encumbrances
	C	  	Assignment and Assumption Agreement

  

 - iv - 

 LIST OF SCHEDULES 
  

			
	 SCHEDULE

	  	 DESCRIPTION

	 1.3(a)
	  	 Excluded Contracts

	 1.3(d)
	  	 Excluded Assets

	 2.3(c)
	  	 Consents/Conflicts

	 2.3(d)
	  	 Limited Partnership Agreement

	 2.5
	  	 Financial Statement Matters

	 2.7
	  	 Contracts

	 2.8
	  	 Property/Encumbrances

	 2.9
	  	 State of Assets

	 2.9(a)
	  	 Real Property

	 2.9(b)
	  	 Personal Property

	 2.9(d)
	  	 Leases

	 2.9(o)
	  	 Lock Boxes and Accounts

	 2.11
	  	 Intangible Property

	 2.12
	  	 Litigation

	 2.14
	  	 Insurance/Claims

	 2.15
	  	 Employees

	 2.16
	  	 Employee Benefits

	 2.17
	  	 Certain Interests

	 2.18
	  	 Intercompany Transaction

	 2.21
	  	 Payor Contracts

	 2.24
	  	 Medicare/Medicare Compliance

	 2.29
	  	 Medical Staff/Physician Relations

	 2.34
	  	 Conduct of Business

	 2.35
	  	 Negative Assurances

  

 - v - 

 TABLE OF DEFINED TERMS 
  

			
	 Term

	  	Page

	 Accounts Receivable
	  	13
	 Affiliate
	  	2
	 Agreement
	  	1
	 Assignment and Assumption Agreement
	  	4
	 Balance Sheet Date
	  	7
	 Claim Notice
	  	31
	 Closing
	  	3
	 Closing Date
	  	3
	 Code
	  	9
	 Commonly Controlled Entity
	  	16
	 Contract
	  	10
	 Contract and Lease Consents
	  	4
	 Control
	  	2
	 Damages
	  	29
	 Declaration
	  	12
	 Disclosure Schedules
	  	2
	 Document Retention Period
	  	27
	 Effective Time
	  	3
	 Encumbrances
	  	3
	 Environmental Laws
	  	17
	 ERISA
	  	15
	 Excluded Assets
	  	3
	 Excluded Contracts
	  	3
	 Excluded Liabilities
	  	3
	 GAAP
	  	2
	 General Partner
	  	7
	 Government Programs
	  	20
	 Governmental Approvals
	  	5
	 HIPAA
	  	21
	 Hospital
	  	1
	 Indemnified Party
	  	31
	 Indemnifying Party
	  	31
	 Indemnity Notice
	  	32
	 Intangible Property
	  	14
	 Interest Assignment
	  	4
	 Inventory
	  	13
	 JCAHO
	  	19
	 Knowledge of Purchaser
	  	2
	 Knowledge of Seller
	  	2
	 Leases
	  	12

  

 - vi - 

			
	 Licenses
	  	12
	 Limited Partner Interest
	  	1
	 Limited Partnership Agreement
	  	7
	 Lock Boxes
	  	13
	 Management Agreement
	  	1
	 Material Adverse Change
	  	2
	 Material Adverse Effect
	  	2
	 MCC
	  	1
	 Notice Period
	  	31
	 Option
	  	1
	 Partnership
	  	1
	 Partnership Agreement Amendment
	  	4
	 Party
	  	1
	 Permitted Encumbrances
	  	11
	 Person
	  	2
	 Personal Property
	  	12
	 Plan
	  	15
	 Prepaids
	  	13
	 Purchase Price
	  	3
	 Purchaser
	  	1
	 Real Property
	  	12
	 Real Property Purchase Contract
	  	1
	 Relevant Claim
	  	30
	 Seller
	  	1
	 Superseded Agreements
	  	34
	 Tax
	  	10
	 Texas Agency
	  	19
	 Third Party Claim
	  	31

  

 - vii - 

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT 
  
 This LIMITED PARTNER INTEREST PURCHASE AGREEMENT (this “Agreement”)
is made and entered into as of the 17th day of January, 2006, by and among SIGNET HEALTH CORPORATION, a Texas
corporation (“Seller”), HHC KINGWOOD INVESTMENT, LLC, a Delaware limited liability company (“Purchaser”), and SHC-KPH, LP, a Texas limited partnership (the “Partnership”). Seller, Purchaser and the
Partnership are sometimes collectively referred to herein as the “Parties” and individually referred to herein as a “Party.” 
  
 R E C I T A L S: 
  
 A. The Partnership exclusively operates and manages Kingwood Pines Hospital, a 78-bed private psychiatric hospital located at 2001 Ladbrook, Kingwood,
Texas 77339 (the “Hospital”) under that certain Management Agreement dated January 31, 2005, between Medical Capital Corporation (“MCC”) and the Partnership, as amended by that certain Amendment to Management Agreement dated
June 3, 2005 (as amended, the “Management Agreement”); and 
  
 B. The Partnership has exercised its option contained in the Management Agreement to purchase the real property on which the Hospital is located along with all other assets constituting or relating to the Hospital
from MCC (the “Option”) and is a party to an Improved Property Commercial Contract, dated effective December 22, 2005, with MCC relating to the purchase of the Real Property (the “Real Property Purchase Contract”) and has
concurrently purchased the Real Property and related assets constituting or relating to the Hospital subject to the Option, as described in the Management Agreement (the “Other Assets”); and 
  
 C. Seller owns a 99.9% limited partner interest in the Partnership (the
“Limited Partner Interest”), and the Limited Partner Interest constitutes all the issued and outstanding limited partner interests of the Partnership; and 
  
 D. Purchaser desires to purchase the Limited Partner Interest from Seller, and Seller desires to sell the Limited Partner
Interest to Purchaser for the consideration and upon the terms and conditions contained in this Agreement. 
  
 A G R E E M E N T: 
  
 NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises and covenants contained in this Agreement, the Parties hereto agree as follows: 
  
 ARTICLE 1 
 DEFINITIONS; SALE AND TRANSFER OF LIMITED PARTNER INTEREST; 
 CONSIDERATION;
CLOSING 
  
 1.1 Definitions. For all purposes of this
Agreement, except as otherwise expressly provided or unless the context otherwise requires, 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 1 

 (a) The defined terms used in this Agreement shall include the plural as well as the singular.

  
 (b) All accounting terms not otherwise defined herein have the
meanings determined in accordance with generally accepted accounting principles (“GAAP”). 
  
 (c) All references in this Agreement to designated “Articles,” “Sections” and other subdivisions are to the designated Articles,
Sections and other subdivisions of the body of this Agreement. 
  
 (d) Pronouns of either gender or neuter shall include, as appropriate, the other pronoun forms. 
  
 (e) The words “including” and “include” shall be deemed to mean in each instance “including, without limitation,” except as
stated otherwise herein. 
  
 (f) The words “herein,”
“hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole, including the Exhibits and Schedules attached hereto, and not to any particular Article, Section or other subdivision. 
  
 (g) “Disclosure Schedules” shall mean the schedules attached to and
constituting a part of this Agreement. 
  
 (h) “Knowledge of
Purchaser,” and similar variations thereof, shall mean the actual knowledge, as of the relevant date, of Purchaser after reasonable inquiry of employees or agents of Purchaser that were involved in its due diligence review of the Partnership.

  
 (i) “Knowledge of Seller,” and similar variations
thereof, shall mean the actual knowledge, as of the relevant date, of Seller after reasonable inquiry of all appropriate employees of the Partnership or Seller having primary responsibility for the relevant matters. 
  
 (j) “Material Adverse Change” or “Material Adverse
Effect”, when used with respect to the Partnership or the Hospital, shall mean any material adverse change in or effect on the Partnership taken as a whole or the Hospital, as the context requires, or other than changes or effects that are or
result from occurrences relating to the United States economy generally or the United States health care industry generally. 
  
 (k) Any reference in this Agreement to an “Affiliate” shall mean any Person directly or indirectly controlling, controlled by or under common
control with a second Person. The term “Control” (including the terms “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. A “Person” shall mean any natural person, partnership, corporation, limited liability company, association, trust or other
legal entity. 
  
 Capitalized terms used in this Agreement shall
have the definitions assigned to such terms elsewhere in this Agreement. For ease of reference, the section containing the definition of each such capitalized term is set forth in the table of defined terms included elsewhere as a part of this
Agreement. 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 2 

 1.2 Agreement to Sell and Purchase. Subject to the terms and conditions of this Agreement and in
reliance on the representations, warranties and covenants herein set forth, at the Closing Seller shall sell to Purchaser, and Purchaser shall purchase from Seller, the Limited Partner Interest, free and clear of any and all liens, claims, options,
charges, pledges, security interests, voting agreements or trusts, proxies, preemptive rights, rights of first refusal, encumbrances or other restrictions or interests of any kind or nature whatsoever (collectively, “Encumbrances”).

  
 1.3 Excluded Assets. Notwithstanding the fact that the
transactions contemplated by this Agreement are structured as a Limited Partner Interest Purchase, immediately before the Effective Time, the following assets, whether owned directly or indirectly by the Partnership (or any of the Partnership’s
Affiliates) shall be distributed by the Partnership to Seller (collectively, the “Excluded Assets”): 
  
 (a) all contracts, agreements and arrangements of the Partnership not listed in Schedule 2.7, including those contracts listed in Schedule
1.3(a) (the “Excluded Contracts”); 
  
 (b) all
Partnership records relating to the Excluded Assets and Excluded Liabilities to the extent that Purchaser does not need the same in connection with (i) the ongoing activities of the Hospital, (ii) the assets of the Partnership which are
not Excluded Assets, or (iii) the Retained Obligations, as well as all records which by law Seller is required to maintain in its possession; 
  
 (c) any reserves, prepaid expenses, inventory or deposits to the extent related to Excluded Assets and Excluded Liabilities; 
  
 (d) any other assets of the Partnership identified in
Schedule 1.3(d). 
  
 1.4 Excluded Liabilities.
The Partnership shall not retain or remain responsible for any of the obligations of the Partnership to Medical Capital under the Management Agreement (the “Excluded Liabilities”). 
  
 1.5 Purchase Price. Subject to the terms and conditions of this
Agreement, the aggregate purchase price to be paid by Purchaser to Seller for the purchase of the Limited Partner Interest (the “Purchase Price”) shall be Two Hundred Thousand and 00/100 Dollars ($200,000.00) which shall be payable in cash
at the Closing. 
  
 1.6 Closing Date. The consummation of
the transactions contemplated by this Agreement (the “Closing”) shall be deemed to take place at 10:00 a.m. at the offices of Strasburger & Price, L.L.P., 901 Main Street, Suite 4400, Dallas, Texas 75202 on the date hereof
provided that all conditions precedent and other matters required to be completed as of the Closing Date have been or will be completed on such date or such other date, time and place as the Parties shall mutually agree (the “Closing
Date”). The Closing with respect to the transfer of the Limited Partner Interest, shall be deemed to have occurred and to be effective as between the Parties as of 12:01 a.m., Central Standard Time, on January 17, 2006 (the “Effective
Time”). 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 3 

 1.7 Items to be Delivered by Seller at Closing. At or before the Closing, Seller shall deliver to
Purchaser the following, duly executed by Seller (and/or the Partnership) where appropriate and in the form provided for below or otherwise satisfactory to Purchaser: 
  
 (a) an Assignment of Limited Partner Interest in the form of Exhibit A attached hereto (the “Interest
Assignment”); 
  
 (b) an Amendment of the Limited Partnership
Agreement of the Partnership duly executed by all Partners of the Partnership in a form satisfactory to Purchaser in its sole and absolute discretion (the “Partnership Agreement Amendment”); 
  
 (c) original certificates of existence and good standing, or comparable
status, of the Partnership and Seller, issued by the State of Texas, dated no earlier than a date which is fifteen (15) calendar days prior to the Closing Date; 
  
 (d) a certificate of Seller, executed by the President of Seller, certifying to Purchaser (i) that all the
representations and warranties of Seller and the Partnership contained herein are true as of the Closing Date with the same effect as though made at such time, except to the extent such representations and warranties expressly relate to an earlier
date, in which case such representations and warranties are true on and as of such earlier date, (ii) that Seller and the Partnership have in all material respects performed or complied with the covenants and agreements required of Seller and
the Partnership set forth in this Agreement to be satisfied by the Closing Date and (iii) that all of the conditions contained in Article 4 have been satisfied except those, if any, waived in writing by Seller; 
  
 (e) certificates of the corporate Secretary of Seller and the sole member of
the General Partner certifying to Purchaser (i) the incumbency of the officers of Seller and the appropriate officers or members of the General Partner on the Closing Date and bearing the authentic signatures of all such Persons who shall
execute this Agreement and any additional documents contemplated by this Agreement and (ii) the due adoption and text of the resolutions of the directors of Seller and the sole member of the General Partner, authorizing the execution, delivery
and performance of this Agreement and all ancillary documents and instruments by Seller and the Partnership, and that such resolutions have not been amended or rescinded and remain in full force and effect on the Closing Date; 
  
 (f) a complete release of liens and mortgages and UCC termination statements
for any and all liens, mortgages, security interests, restrictions and financing statements with respect to any of the assets of the Partnership; 
  
 (g) an Assignment and Assumption Agreement, in the form of Exhibit C attached hereto (the “Assignment and Assumption Agreement”);

  
 (h) all consents to the transfer of the Contracts and Leases
or the change in control of the Partnership from the third parties listed in Schedule 2.7 and Schedule 2.8 required to transfer the Contracts and Leases to the Partnership or otherwise to approve the change in control of the
Partnership (the “Contract and Lease Consents”); 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 4 

 (i) all governmental approvals and authorizations that are required for the consummation of the
transactions contemplated by this Agreement and the continued operation of the Hospital as currently operated by the Partnership thereafter (the “Governmental Approvals”); 
  
 (j) consent of General Partner to transfer of the Limited Partner Interest to Purchaser and admission of Purchaser as the
sole limited partner of the Partnership; and 
  
 (k) such other
instruments, certificates, consents, affidavits (including a no-change survey affidavit) or other documents which are reasonably necessary to carry out the transactions contemplated by this Agreement and to comply with the terms hereof. 

 
 1.8 Items to be Delivered by Purchaser at Closing. At or before the
Closing, Purchaser shall execute and deliver or cause to be delivered to Seller the following, duly executed by Purchaser where appropriate: 
  
 (a) payment of the Purchase Price on the Closing Date by wire transfer of immediately available funds to Seller to the account specified by Seller, which
account Seller shall specify to Purchaser not less than three (3) business days prior to the Closing Date in writing; 
  
 (b) a certificate of Purchaser, executed by the President or any Vice President of Purchaser, certifying to Seller (i) that all the representations
and warranties of Purchaser contained herein are true as of the Closing Date with the same effect as though made at such time, except to the extent such representations and warranties expressly relate to an earlier date, in which case such
representations and warranties are true on and as of such earlier date, (ii) that Purchaser has in all material respects performed or complied with the covenants and agreements required of Purchaser set forth in this Agreement required to be
satisfied by the Closing Date and (iii) that all of the conditions contained in Article 5 have been satisfied except those, if any, waived in writing by Purchaser; 
  
 (c) a certificate of the Manager of Purchaser certifying to Seller (i) the incumbency of the Manager of Purchaser on
the Closing Date and bearing the authentic signatures of all such officers who shall execute this Agreement and any additional documents contemplated by this Agreement and (ii) the due adoption and text of the resolutions of the Manager of
Purchaser authorizing the execution, delivery and performance of this Agreement and all ancillary documents and instruments by Purchaser, and that such resolutions have not been amended or rescinded and remain in full force and effect on the Closing
Date; 
  
 (d) original certificate of good standing, or comparable
status, of Purchaser, issued by the Delaware Secretary of State dated no earlier than a date which is fifteen (15) calendar days prior to the Closing Date; 
  

(e) the Interest Assignment; 
  
 (f) the Assignment and Assumption Agreement; 
  
 (g) the Partnership Agreement Amendment; and 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 5 

 (h) such other instruments, certificates, consents or other documents which are reasonably necessary to
carry out the transactions contemplated by this Agreement and to comply with the terms hereof. 
  
 ARTICLE 2 
 REPRESENTATIONS AND WARRANTIES OF SELLER 
  
 Except as otherwise indicated on the applicable Disclosure Schedules
expressly related to the particular representation, warranty or covenant stated below in this Article 2, Seller hereby represents, warrants and covenants to Purchaser as to the following matters as of the Closing Date: 
  
 2.1 Authority. 
  
 (a) Seller has full corporate power and authority to enter into this
Agreement and all documents required to be delivered hereunder and full corporate power and authority to carry out and perform the transactions contemplated herein. 
  
 (b) The Partnership has full limited partnership power and authority to enter into this Agreement and all documents required
to be delivered hereunder and full limited partnership power and authority to carry out and perform the transactions contemplated herein. 
  
 2.2 Authorization/Execution. All corporate, limited partnership and other actions required to be taken by Seller and the Partnership to authorize
the execution, delivery and performance of this Agreement, all agreements to be executed and delivered by Seller and/or the Partnership pursuant to this Agreement, all documents executed by Seller and the Partnership which are necessary to give
effect to this Agreement, and all transactions contemplated hereby have been duly and properly taken or obtained by Seller and the Partnership. No other corporate, limited partnership or other action on the part of Seller or the Partnership is
necessary to authorize the execution, delivery and performance of this Agreement, all agreements to be executed and delivered by Seller and/or the Partnership pursuant to this Agreement, all documents necessary to give effect to this Agreement and
all transactions contemplated herein. This Agreement and all documents delivered hereunder have been duly and validly executed and delivered by Seller and the Partnership and, assuming due and valid execution by, and enforceability against,
Purchaser, this Agreement and all documents delivered hereunder constitute valid and binding obligations of Seller and the Partnership, as applicable, enforceable in accordance with their respective terms subject to (a) applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors’ rights generally from time to time in effect and (b) limitations on the enforcement of equitable remedies. 
  
 2.3 Organization; No Subsidiaries; No Conflicts. 
  
 (a) The Partnership is a limited partnership duly organized and validly
existing under the laws of the State of Texas. The Partnership has full power and authority to own, operate and lease its properties and to carry on its business as now conducted. Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas. 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 6 

 (b) The Partnership has no subsidiaries, whether direct or indirect. The Partnership has no equity
interest or investment in, and does not have any other right or obligation to purchase any equity interest or other investment in, and is not a partner of or joint venturer with, any other person or entity. 
  
 (c) Except as provided in Schedule 2.3(c), the execution and
delivery of this Agreement and the performance of the transactions contemplated by this Agreement and all other instruments, agreements, and certificates referenced herein to which Seller and the Partnership are or will be a Party do not
(i) violate any decree or judgment of any court or governmental authority which is applicable to or binding upon Seller or the Partnership; (ii) violate any law, rule or regulation applicable to Seller or the Partnership;
(iii) violate or conflict with, or result in a breach of, or constitute a default (or an event which, with or without notice or lapse of time or both, would constitute a default) under, or permit cancellation of, or result in the creation of
any encumbrance upon any of the assets of the Partnership or the Limited Partner Interest under, any contract, lease, sales order, purchase order, indenture, mortgage, note, bond, instrument, license or other agreement to which the Partnership or
Seller is a Party, or by which the Partnership or Seller is bound; (iv) require the consent of any third party under any Contract or Lease; (v) permit the acceleration of the maturity of any indebtedness of the Partnership or Seller; or
(vi) violate or conflict with any provision of the Certificate of Limited Partnership or Limited Partnership Agreement of the Partnership or the Articles of Incorporation or Bylaws of Seller. 
  
 (d) A true, correct and complete copy of the Partnership’s Limited
Partnership Agreement is attached as Schedule 2.3(d) (the “Limited Partnership Agreement”). 
  
 2.4 Title to Limited Partner Interest; General Partner. 
  

(a) Seller is the unconditional sole legal, beneficial, record and equitable owner of the Limited Partner Interest, free and clear of any and all
Encumbrances. Seller has not granted and is not a party to any agreement granting preemptive rights, rights of first refusal or any similar or comparable rights with respect to the Limited Partner Interest. At the Closing, Seller will convey to
Purchaser good and valid title to the Limited Partner Interest, free and clear of any and all Encumbrances. The Limited Partner Interest is not certificated. 
  
 (b) Kingwood Pines Hospital, LLC, a Texas limited liability company (the “General Partner”), is and has always been the sole general partner of
the Partnership. The General Partner owns a 0.1% general partner interest in the Partnership. Jerry G. Browder is the sole member of the General Partner. The General Partner is a member-managed limited liability company. 
  
 2.5 Financial Statements; Changes. 
  
 (a) Seller has delivered to Purchaser an unaudited balance sheet for the
Partnership at November 30, 2005 (the “Balance Sheet Date”) and the related statement of income for the period from February 8, 2005 to November 30, 2005. Such financial statements have been prepared in conformity with GAAP.
The statement of operations presents fairly in all material respects the results of the operations of the Partnership for the period covered, and the 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 7 

 balance sheet presents fairly in all material respects the financial condition of the Partnership at the Balance Sheet
Date. Such financial statements reflect all adjustments necessary for a fair presentation of the financial information contained therein other than normal year-end adjustments which are not material in amount in the aggregate. At the Balance Sheet
Date, the Partnership had no material liability (actual, contingent or accrued) that, in accordance with GAAP applied on a consistent basis, should have been shown or reflected on the balance sheet but was not. 
  
 (b) Except as set forth in Schedule 2.5, since the Balance Sheet
Date, whether or not in the ordinary course of business, there has not been, occurred or arisen: 
  
 (i) any change in or event affecting the Partnership or Seller, that has had or would reasonably be expected to have a Material Adverse Effect; or

  
 (ii) any strike or other labor dispute; 
  
 (iii) any material change in the Partnership’s working capital; or

  
 (iv) any casualty, loss, damage or destruction (whether or
not covered by insurance) of any property of the Partnership that is material or that has involved or may involve a material loss to the Partnership in excess of applicable insurance coverage. 
  
 (c) Since February 8, 2005, the Partnership has had no business
operations other than acting as the manager of the Hospital pursuant to the Management Agreement. 
  
 2.6 Tax and Other Returns and Reports. Except as set forth in Schedule 2.6: 
  
 (a) For purposes of this Agreement, “Tax” or “Taxes”
shall be defined as set forth below in Section 2.6(c) and shall include (i) any obligations under any agreements or arrangements with any other Person with respect to such amounts and including any liability for Taxes of any predecessor or
previously owned entity and (ii) any liability for any Taxes as a result of being a member of an affiliated, consolidated, combined or unitary group. For purposes of this Section 2.6, with respect to matters pertaining to this
Section 2.6, the term “Partnership” shall include the Partnership and all entities currently or previously owned, directly or indirectly, by the Partnership. 
  
 (b) Tax Returns and Audits. 
  

(i) The Partnership has timely filed (taking into account valid extensions of the time for filing) all Tax returns required to have been filed and all
such Tax returns were true, correct and complete in all material respects. All Taxes owed by the Partnership (whether or not shown on any Tax return) that have become due and payable have been paid. The Partnership is not currently the beneficiary
of any extension of time within which to file any Tax return. No claim has ever been made by an authority in a jurisdiction where the Partnership does not file Tax returns that it is or may be subject to taxation by that jurisdiction. 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 8 

 (ii) The Partnership has withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor, creditor, member, or other third party. 
  
 (iii) The Partnership and Seller have made available to Purchaser (i) correct and complete copies of all Tax returns of the Partnership and
(ii) any examination reports, statements of deficiencies and assessments by any governmental authority against or agreed to by the Partnership since the Partnership’s formation. The Partnership does not expect any authority to assess
additional Taxes for any period for which Tax returns have been filed. There is no dispute or claim concerning any Tax liability of the Partnership claimed, threatened or otherwise raised by any authority. The Partnership has not waived any statute
of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency. 
  
 (iv) All material liabilities of the Partnership for any unpaid Taxes (whether or not shown to be due on any Tax return) have either (A) been
accrued for or reserved on the Partnership financial statements in accordance with GAAP or (B) with respect to material unpaid Taxes that may have accrued since the Balance Sheet Date in connection with the operation of the business of the
Partnership have been recorded on the books of the Partnership in the ordinary course. 
  
 (v) There are no liens or security interests on any of the assets of the Partnership or the Limited Partner Interest that arose in connection with any failure (or alleged failure) to pay any Tax. 
  
 (vi) The Partnership has not filed any consent agreement under
Section 341(f) of the Internal Revenue Code of 1986 (the “Code”) or agreed to have Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as defined in Section 341(f)(2) of the Code) owned by
the Partnership. No property of the Partnership is “tax-exempt use property” within the meaning of Section 168(h) of the Code. The Partnership is not a party to any lease made pursuant to former Section 168(f)(8) of the Internal
Revenue Code of 1954. 
  
 (vii) The Partnership is not under any
obligation to make a payment that will not be deductible because of the application of Sections 280G, 404, 162(m) and/or 4999 of the Code. The Partnership has disclosed on its Tax returns all positions taken therein that could give rise to a
substantial understatement (i) of federal income tax under Code Section 6662 or (ii) of any Tax under a similar provision of state, local or foreign Tax law. The Partnership has not engaged in any transaction which would be treated as
a “reportable transaction” within the meaning of Treasury Regulations Section 1.6011-4 or otherwise been involved in a transaction which would require it to disclose a “reportable transaction.” The Partnership has not been a
member of an affiliated group filing a consolidated federal income Tax return and does not have any liability for the Taxes of any Person (other than the Partnership) under Treasury Regulations Section 1.1502-6, or any similar provision of
state, local or foreign law, as a transferee or successor, by contract, or otherwise. The Partnership has not been a party to any Tax allocation or sharing agreement. The Partnership is not currently and has not been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 9 

 (viii) The Partnership is and has been in full compliance with all terms and conditions of any Tax
exemptions, Tax holidays or other Tax reduction agreements. The consummation of the transactions contemplated herein will not have any material adverse effect on the continued validity and effectiveness of any such Tax exemption, Tax holiday or
other Tax reduction agreement or order. 
  
 (ix) Neither the
Partnership nor any of its Subsidiaries has constituted either a “distribution corporation” or a “controlled corporation” in a distribution of stock qualifying for tax-free treatment under Code Section 355 (a) in the
two year prior to the date of this Agreement or (b) in a distribution which could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Code Section 355(c)). 
  
 (x) The Partnership has not, with respect to any open taxable period,
applied for and been granted permission to adopt a change in its method of accounting requiring adjustments under Section 481 of the Code or comparable state or foreign law. 
  
 (xi) The Partnership is not a partner in any entity classified as a partnership for federal income Tax purposes.

  
 (xii) The Partnership has not made an election under Treasury
Regulations Section 301.7701-3 with respect to any entity. 
  
 (xiii) The Partnership will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending prior to, on, or after the Closing Date as a result of
any deferred intercompany gain or any excess loss account described in Treasury Regulations under Code Section 1502 (or any corresponding or similar provision of federal state, local or foreign income Tax law). 
  
 (c) “Tax” means any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code Section 59A), customs duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated or other tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not. 
  
 2.7 Contracts.
Schedule 2.7 lists each formal and informal contract, agreement or arrangement to which the Partnership is a party or to which any of its properties are subject or by which any thereof is bound and/or which otherwise relate to the
business of the Hospital (each a “Contract“ and collectively, the “Contracts”). Unless otherwise so noted in Schedule 2.7, each such Contract was entered into in the ordinary course of business. True, correct and
complete copies of the Contracts and any other contracts of the Partnership or the Hospital, including all amendments and supplements, have been made available to Purchaser. Each Contract is valid and subsisting; except as set forth in
Schedule 2.7, the Partnership or the Hospital has duly performed in all material respects all its obligations thereunder to the extent that such obligations to perform have accrued; and, except as set forth in Schedule 2.7,
no breach or default, alleged breach or default, or event which would (with the passage of time, notice or both) constitute a 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 10 

 breach or default thereunder by the Partnership or the Hospital (or any other party or obligor with respect thereto), has
occurred or as a result of the execution of this Agreement or its performance will occur. The Partnership has received no notices of termination of any Contract. Neither the Partnership nor Seller has been advised or has Knowledge that any party to
any of the Contracts intends to terminate or amend any Contract at any time in the future. 
  
 2.8 Real and Personal Property; Title to Property; Leases. 
  
 (a) To the Knowledge of Seller, the Partnership has valid title, free of encumbrances in and to the Real Property and Other Property, except for those
exceptions and other matters set forth in Exhibit B. Such exceptions and other matters shall be referred to herein as the “Permitted Encumbrances”. Except as shown in Schedule 2.8, to the Knowledge of Seller, all
material tangible properties of the Partnership are in a good state of maintenance and repair (except for ordinary wear and tear) and in operating condition. 
  
 (b) The Real Property listed in Schedule 2.9(a) consists of all real property owned used in the conduct of the business of the Hospital.

  
 (c) Seller has heretofore made available to Purchaser a true,
correct and complete copy of all of the Leases. Except as shown in Schedule 2.8, no consents are required of third parties to the change of control of the Leases arising from the transactions contemplated hereby. 
  
 (d) To the Knowledge of Seller, the Partnership holds good and indefeasible
title to the Real Property and all its other assets and a valid leasehold interest in all of the Partnership’s leased property, subject to no mortgage, lien, pledge, security interest, conditional sales agreement, right of first refusal, option
or encumbrance, except for Permitted Encumbrances and the rights of any lessor or licensor of leased or licensed Personal Property. 
  
 (e) To the Knowledge of Seller, the Leases constitute all of the agreements to which the Partnership is a Party with respect to the properties which are
demised pursuant thereto and pertain to all real and personal property leased by the Partnership and used in the conduct of the business of the Hospital. 
  
 (f) As of the date hereof, to the Knowledge of Seller all conditions precedent to the enforceability of each Lease have been satisfied and there exists no
breach or default, nor state of facts which, with the passage of time, notice, or both, would result in a breach or default on the part of Seller or, to the knowledge of the Partnership, the other Party thereunder. 
  
 (g) Seller has no Knowledge of, and the Partnership has not received any
written notice of, non-compliance with law, zoning ordinance or other restriction with respect to any Real Property. 
  
 (h) There is no pending or, to the Knowledge of Seller, threatened action that would materially interfere with the ownership, use or quiet enjoyment of
any Real Property by the Partnership. 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 11 

 (i) Seller has no Knowledge of, and the Partnership has not received any notice of, any proposed special
assessments, threatened condemnation or any proposed material changes in property tax or land use laws affecting the Real Property. 
  
 (j) The assets described in Section 2.9 constitute all of the property necessary for the Partnership to operate the Hospital after the Effective Time
in the same manner as the Partnership operates the Hospital as of the date hereof. 
  
 (k) To the Knowledge of Seller, all assessments and dues required under that certain Declaration of Covenants, Conditions and Restrictions affecting the Real Property recorded for record under Harris County
Clerk’s File Number E702128 of the Official Public Records of Harris County, Texas (the “Declaration”) are paid. 
  
 (l) To the Knowledge of Seller, the plans and specifications for the improvements (including curb cuts and driveways) on the Real Property comply with the
Declaration and were approved in writing by the Kingwood Place Community Association, Inc. 
  
 (m) To the Knowledge of Seller, there are no outstanding maintenance deficiencies per Section 10.01 of the Declaration. 
  
 2.9 Assets. On the Closing Date, to the Knowledge of Seller, the Partnership owns the assets listed in this Section 2.9 free and clear of all
liens, such assets constitute all of the assets owned by the Partnership as of the Effective Time, and all of such assets shall remain assets of the Partnership free and clear of all liens after the Effective Time. Except as described in Schedule
2.9, to the Knowledge of Seller, the Hospital and its contents are in operating condition and in a good state of repair. To the Knowledge of Seller, the Partnership’s assets as of the Effective Time include: 
  
 (a) all of the real property owned by the Partnership or otherwise used in
connection with the business of the Hospital, including the real property described in Schedule 2.9(a) (such description to include a legal description and address), together with all buildings, improvements and fixtures located
thereupon and all construction in progress thereon (collectively, the “Real Property”); 
  
 (b) all of the tangible personal property owned by the Partnership or otherwise used in connection with the business of the Hospital, including all
equipment, furniture, fixtures, machinery, vehicles, office furnishings, and leasehold improvements, including the items listed in Schedule 2.9(b) (the “Personal Property”); 
  
 (c) all of the Partnership’s rights, to the extent assignable or
transferable, to all licenses, permits, approvals, certificates of need, certificates of exemption, franchises, accreditations and registrations and other governmental licenses, permits or approvals issued to the Partnership or any other Person with
respect to the operation of the Hospital (the “Licenses”); 
  
 (d) all of the Partnership’s or the Hospital’s interest in and to all real property leases and personal property leases listed in Schedule 2.9(d) (collectively, the “Leases”); 
  
 (e) all cash and cash equivalents of the Partnership and the Hospital;

  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 12 

 (f) all of the Partnership’s interests in the Contracts and all of the interests of each other
Person contracting on behalf of the Hospital in the Contracts; 
  
 (g) all accounts, notes, interest and other receivables of the Partnership or otherwise related to the Hospital, and all claims, rights, interests and proceeds related thereto, including all accounts and other receivables arising from the
rendering of services to patients at the Hospital, billed and unbilled, recorded and unrecorded, for services provided by the Partnership (the “Accounts Receivable”); 
  
 (h) all advance payments, prepayments, prepaid expenses, deposits and the like which exist as of the Closing Date (the
“Prepaids”); 
  
 (i) all inventories of supplies, drugs,
food, janitorial and office supplies and other disposables and consumables located or held for use at the Hospital (the “Inventory”); 
  
 (j) all documents, records, policy and procedure manuals, compliance programs, staff bylaws, operating manuals, files and computer software owned or used
by the Hospital and/or the Partnership, including all patient records, medical records, employee records, financial records, equipment records, construction plans and specifications, and medical and administrative libraries; 
  
 (k) all rights in all warranties of any manufacturer or vendor in connection
with the Personal Property; 
  
 (l) all goodwill and other
intangible assets used or useful in connection with the business of the Hospital; and 
  
 (m) the name, symbols, telephone numbers, facsimile numbers, domain names, trademarks, trade names, service marks and copyrights used with respect to the operation of the Hospital, including the names “Kingwood
Pines Hospital” and all variants thereof and all common law trademark rights associated therewith and “SHC-KPH, LP”; 
  
 (n) all of the Partnership’s rights with respect to its Medicare, Medicaid and other third-party provider numbers and all other Medicare, Medicaid
and other third-party provider numbers used by any Person in connection with the business of the Hospital; and 
  
 (o) the exclusive ownership and control of the bank accounts and lock boxes listed in Schedule 2.9(o) (collectively, the “Lock Boxes”)
and the exclusive ownership and control of all amounts received and deposited into the Lock Boxes after the Effective Time. 
  
 2.10 Limited Partner Interest. The Limited Partner Interest is validly issued and outstanding. The Limited Partner Interest is fully paid and
nonassessable. All of the issued and outstanding limited partner interests of the Partnership are owned of record and beneficially by Seller. The Partnership has provided to Purchaser a correct and complete copy of the ownership and interest records
of the Partnership listing all partners of the Partnership and the outstanding total amount of limited partner interest issued to each general partner and limited partner of the Partnership since its inception. There are no outstanding options,
warrants, convertible instruments, or other rights, agreements, or commitments to issue or acquire any general partner 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 13 

 interest or limited partner interest of the Partnership or any other security constituting, or convertible or
exchangeable into, interests of the Partnership. The Partnership has not granted and is not a party to any agreement granting preemptive rights, rights of first refusal, or registration rights with respect to its outstanding or authorized
partnership interests or any partnership interests of the Partnership to be issued in the future. 
  
 2.11 Intangible Property. Schedule 2.11 lists any and all computer software programs and licenses, all other licenses and sublicenses,
all intellectual property, all marks and other material items of intangible property in which the Partnership or, the Hospital has an interest and the nature of such interest (the “Intangible Property”). Except as shown in
Schedule 2.11, the Partnership owns all right, title and interest in and to, or has valid and enforceable licenses to use, all the Intangible Property owned, used or held by it or the Hospital in connection with the business of the Hospital
as now conducted. The Intangible Property represents all intellectual property rights necessary for the operation of its business as now conducted. Except as disclosed in Schedule 2.11, the Hospital does not use any Intangible Property
by consent of any other person and is not required to and does not make any payments to others with respect thereto. Except as shown in Schedule 2.11, the Intangible Property is fully assignable free and clear of any encumbrances. The
Partnership has in all material respects performed all obligations required to be performed by, and neither the Partnership nor any other Person is in default in any material respect under, any contract relating to any of the foregoing. Neither the
Partnership nor any other Person has received any notice to the effect that such intangible property or any use thereof by the Hospital conflicts with or infringes (or allegedly conflicts with or infringes upon) the rights of any Person. To the
Knowledge of Seller, the Partnership currently holds the proper number and types of valid computer software licenses for each of the Hospital’s users and other locations which are required under the Contracts covering such licenses. 

 
 2.12 Legal Proceedings. Except as set forth in
Schedule 2.12, there is no order or action or claim pending, or, to the Knowledge of Seller, threatened, against or affecting the Partnership or the Hospital, or any of their respective properties or assets. Schedule 2.12
lists each order and each action or claim against, or that enjoins or seeks to enjoin or excludes or seeks to exclude the conduct of any activity by, the Partnership. 
  
 2.13 Accounting Records; Internal Controls. 
  
 (a) Accounting Records. The Partnership has records that accurately and validly reflect its respective transactions,
and accounting controls sufficient to insure that such transactions are (i) executed in accordance with management’s general or specific authorization and (ii) recorded in conformity with GAAP so as to maintain accountability for
assets. 
  
 (b) Data Processing; Access. Such records, to
the extent they contain important information that is not easily and readily available elsewhere, have been duplicated, and such duplicates are stored safely and securely pursuant to procedures and techniques utilized by companies of comparable size
in similar lines of business. 
  
 2.14 Insurance.
Schedule 2.14 lists all insurance policies and bonds that are maintained by the Partnership and indicates the type of insurance, policy number, term, identity of insurer, premiums and coverage amounts for the previous four (4) years
and basic coverages 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 14 

 (including applicable deductibles) for each such insurance policy and bond. The Partnership is not in default under any
insurance policy or bond. The Partnership has timely filed claims with its respective insurers with respect to all matters and occurrences for which it believes it has coverage. Schedule 2.14 lists all claims in excess of $10,000 which
have been made by the Partnership in the last two (2) years under any insurance policy and bond. Except as set forth in Schedule 2.14, all insurance policies and bonds are in full force and effect. Except as shown in
Schedule 2.14, the Partnership has not received notice from any insurer or agent of any intent to cancel or not to renew any of such insurance policies and bonds. There are no outstanding requirements or recommendations by any insurance
company that issued a policy with respect to any of the properties and assets of the Partnership or by any Board of Fire Underwriters or other body exercising similar functions or by any governmental entity requiring or recommending any action which
has not been taken. 
  
 2.15 Employees. 
  
 (a) Schedule 2.15 sets forth a complete list (as of the date set
forth therein) of names, positions and current annual salaries or wage rates, bonus and other compensation and/or benefit arrangements, accrued vacation, accrued paid time off and sick leave, the paid time off pay and period of service credited for
vesting as of the date thereof of all full-time and part-time employees of the Partnership and/or the Hospital and indicating whether such employee is a part-time or full-time employee. Except as shown in Schedule 2.15, there are no
employment agreements or severance agreements with employees of the Partnership or the Hospital. There are no agreements or arrangements with any employee of the Partnership or, the Hospital requiring the payment of a bonus or other compensation as
a result of the consummation of the transaction contemplated by this Agreement. 
  
 (b) There are no labor union or collective bargaining agreements in effect with respect to the employees of the Partnership or, the Hospital. There is no unfair labor practice complaint against the Partnership or the
Hospital pending, or to the Knowledge of Seller threatened, before the National Labor Relations Board. There is no labor strike, arbitration, dispute, slowdown or stoppage, and no union organizing campaign, pending, or to the Knowledge of Seller
threatened by or involving the employees of the Partnership or the Hospital. 
  
 2.16 Employee Benefits. 
  
 (a) Schedule 2.16 contains a list of each pension, retirement, savings, deferred compensation, and profit-sharing plan and each bonus or other incentive plan, severance plan, health, group insurance or other welfare plan, or
other similar plan and any “employee plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), under which any employee, former employee or independent contractor
(or beneficiary of any employee, former employee or independent contractor) of the Partnership or, the Hospital has or may have any current or future right to benefits (the term “plan” shall include any contract, agreement, policy or
understanding, each such plan being hereinafter referred to in this Agreement individually as a “Plan”). Seller and the Partnership have made available to Purchaser true and complete copies of (i) each Plan and (ii) the summary
plan description, if any, for each Plan. To the Knowledge of Seller, each Plan intended to be tax qualified under Sections 401(a) and 501(a) of the Code either has received a favorable determination letter from 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 15 

 the IRS or is a prototype or volume submitter plan as to which the prototype sponsor has received a favorable GUST
opinion or advisory letter as described in IRS Announcement 2001-6 on which the Partnership is entitled to reliance on all qualification issues under IRS Announcement 2001-77, and no amendment to or failure to amend any such Plan and, to
Seller’s or the Partnership’s Knowledge, no other event or circumstance has occurred that would reasonably be expected to materially and adversely affect its tax qualified status. To Seller’s or the Partnership’s Knowledge, there
has been no prohibited transaction within the meaning of Section 4975 of the Code and Section 406 of Title I of ERISA with respect to any Plan as to which there is no statutory or administrative exemption. Each Plan is in full
compliance with all requirements of ERISA and the Code. 
  
 (b) To
the Knowledge of Seller, there are no actions pending, threatened, with respect to any Plan or the assets of any Plan, other than claims for benefits in the ordinary course. Each Plan has been administered in all material respects in accordance with
its terms and with all applicable laws (including ERISA). Neither the Partnership nor any of its employees has committed or participated in any breach of any fiduciary duty under ERISA that could result in material liability to the Partnership.

  
 (c) Neither Seller, the Partnership nor any Commonly
Controlled Entity contributes to or has an obligation to contribute to, nor has Seller, the Partnership or any Commonly Controlled Entity at any time within six (6) years prior to the Closing contributed to or had an obligation to contribute
to, either (i) a multiemployer plan within the meaning of Section 3(37) of ERISA, or (ii) any plan subject to Title IV of ERISA. Seller and the Partnership have performed timely and shall timely perform all obligations of Seller, the
Partnership and each Commonly Controlled Entity, whether arising by operation of law or by contract, required to be performed under Section 4980B of the Code (or similar state law), including, but not limited to, such obligations that may arise
by virtue of the transactions contemplated by this Agreement. For the purposes of this Section 2.13, “Commonly Controlled Entity”) means any corporation, trade, business, or entity under common control with Seller or the Partnership
within the meaning of Section 414(b), (c), (m), or (o) of the Code or Section 4001 of ERISA. 
  
 (d) To the Knowledge of Seller, each employee, former employee and independent contractor of the Partnership has been properly classified as such for all
purposes under the Code and ERISA. All employees that work at the Hospital are employees of the Partnership. 
  
 (e) The Partnership’s ceasing as of the Closing to be a member of a controlled group of corporations and entities with Seller and its Affiliates
under Section 414(b) of the Code shall constitute a “severance from employment” of the employees of the Partnership within the meaning of Section 401(k)(2)(B)(i)(I) of the Code with respect to any Plan that is a 401(k) or
other retirement plan qualified under Section 401(a) of the Code in which the employees of the Partnership participate, and such severance from employment shall under the terms of any such Plan entitle the employees of the Partnership to an
immediate distribution of all of their accounts or other benefits under the Plan. 
  
 2.17 Certain Interests. Except as shown on Schedule 2.17, no Affiliate of the Partnership, nor any officer or director of any thereof, nor any associate of any such individual, 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 16 

 has any material interest in any property used in or pertaining to the business of the Partnership; no such Person is
indebted or otherwise obligated to the Partnership; and the Partnership is not indebted or otherwise obligated to any such Person, except for amounts due under normal arrangements applicable to all employees generally as to salary, or reimbursement
of ordinary business expenses not unusual in amount or significance. The consummation of the transactions contemplated by this Agreement will not (either alone, or upon the occurrence of any act or event, or with the lapse of time, or both) result
in any benefit or payment (severance or other) arising or becoming due from the Partnership or the successor or assign of any thereof to any Person. 
  
 2.18 Intercompany Transactions. Schedule 2.18 contains a complete and accurate listing of all business functions and activities of the
Hospital which are performed, in whole or in part, by any Affiliate of the Partnership. Except as shown in Schedule 2.18, the Partnership has not engaged in any transaction with any Affiliate of the Partnership. Except as shown in
Schedule 2.18, the Partnership has no liabilities or obligations to any Affiliate of the Partnership and no Affiliate of the Partnership has any liabilities or obligations to the Partnership. 
  
 2.19 Inventory. All Inventory of the Hospital is exclusively owned by
the Partnership. The Inventory is being transferred “as is” without any warranty of fitness for intended purpose, merchantability or other warranty whatsoever. 
  
 2.20 Receivables. The Accounts Receivable arose from bona fide commercial transactions, and, to the Knowledge of
Seller, the financial statements referred to in Section 2.5 include all material refunds, discounts or setoffs payable or assessable with respect to such Accounts Receivable, taken as a whole. To the Knowledge of Seller, the Partnership
adequately records on its financial statements in accordance with GAAP all estimates for future Cost Report settlements for all years open to settlement. The Partnership records Government Program recoupments on its financial statements as they
occur in accordance with GAAP. 
  
 2.21 Third Party Payors and
Suppliers. Schedule 2.21 lists the names of and describes all Contracts with and the respective percentage of the revenues of the business of the Hospital for the year ended December 31, 2005, attributable to the ten largest
third party payors and any sole-source suppliers of significant goods or services (other than electricity, gas, telephone or water) to the business of the Hospital with respect to which alternative sources of supply are not readily available on
comparable terms and conditions. 
  
 2.22 Environmental
Compliance. Except as disclosed in that certain Environmental Site Assessment dated August 7, 2002, on the Real Property prepared by Comprehensive Building Analysis, Inc. which was provided to Purchaser and to the Knowledge of Seller:

  
 (a) The Partnership and the Hospital are each in full
compliance with all applicable Environmental Laws. As used herein, “Environmental Laws” shall mean all applicable federal, state or local laws relating to pollution or protection of the environment (including, without limitation, ambient
air, surface water, ground water, land or surface or subsurface strata), including all federal, state or local laws relating to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes into the environment and all federal, state or local laws relating 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 17 

 to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of any of the
foregoing, including the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et. seq., and the rules and regulations promulgated
thereunder. 
  
 (b) The Partnership has obtained all permits
required under applicable Environmental Laws for the use, operation or ownership of the Real Property and business of the Hospital and the Partnership. The Partnership is in full compliance with each such applicable permit. No federal, state or
local governmental entity has notified the Partnership that any such permits may or will be suspended, cancelled, revoked or materially modified, or cannot be renewed in the ordinary course of business. 
  
 (c) Neither the Partnership nor the Hospital has received from any federal,
state or local governmental entity or other Person any order, directive, information request, notice of violation, notice of alleged violation, notice of noncompliance, notice of liability or potential liability, regarding compliance with, or
liability or potential liability under, applicable Environmental Laws concerning any of the Real Property or the business of the Partnership or the Hospital or any off-site disposal of a hazardous substance (including any letter or request for
information under Section 104 of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any comparable state law). 
  
 (d) No judicial proceeding, action, claim, suit, or governmental or administrative action is pending or, to the Knowledge of
Seller, threatened, under any applicable Environmental Law pursuant to which the Partnership or the Hospital is or to the Knowledge of Seller could be reasonably expected to be named as a party with respect to the Real Property or the business
operations of the Partnership or the Hospital. 
  
 (e) The
Partnership has not entered into any agreement with any federal, state or local governmental entity or any other Person pursuant to which the Partnership assumed responsibility for the investigation or remediation of any condition resulting from the
release, treatment, storage or disposal of hazardous substances. 
  
 (f) Seller has disclosed and made available to Purchaser all relevant information, including all studies, site assessments, compliance audits and similar environmental reports, analyses, and test results that are in the Partnership’s
possession, custody or control, relating to any past and present (i) environmental conditions concerning the business of the Hospital or on, under or about the Real Property, (ii) use or operation of the Real Property used in or held for
use in connection with the business of the Hospital, and (iii) activities relating to hazardous substances on, or any off-site disposal of a hazardous substance from, the Real Property or used in connection with the business of the Hospital.
Seller has disclosed and made available to Purchaser any and all documents that are in the Partnership’s possession, custody or control relating to projected environmental expenditures for the business of the Hospital and the Real Property,
including capital and operating budgets and reports prepared by independent auditors or accountants and prepared by personnel, and including reports, studies or documents relating to the costs (including, anticipated capital costs and annual
expenses) of compliance with Environmental Laws. 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 18 

 (g) There is no soil or groundwater contamination on, under, or about any Real Property. 
  
 (h) The Partnership does not hold and is not required to hold a permit for
the generation, treatment, storage, or disposal of hazardous waste in accordance with the Resource Conservation and Recovery Act (42 U.S.C. § 6901, et seq.). 
  
 2.23 Powers of Attorney. The Partnership has not given any power of attorney (irrevocable or otherwise) to any Person
for any purpose, other than powers of attorney given to regulatory authorities in connection with routine qualifications to do business. 
  
 2.24 Medicare and Medicaid; Third-Party Payors; Compliance with Health Care Laws. 
  
 (a) The Hospital is duly accredited by the Joint Commission on Accreditation of Healthcare Organizations (“JCAHO”)
as evidenced by the Hospital’s most recent JCAHO accreditation survey reports and is duly and unconditionally licensed by the State of Texas Department of State Health Services (“Texas Agency”) as a Private Mental Hospital and a
Private Psychiatric Hospital. To the Knowledge of Seller, except as described in Schedule 2.24, the Partnership has the lawful authority and all federal, state or local governmental authorizations, certificates of authority, certificates of
need, licenses or permits necessary for or required to conduct the Hospital’s business as such are being conducted. In order to conduct its and the Hospital’s business operations as presently conducted, the Partnership is not required to
hold any licenses, permits and other governmental approvals or authorizations except for the licenses currently held by the Partnership as set forth in Schedule 2.24. The Licenses listed in Schedule 2.24 are in full force and
effect, and the Partnership and the Hospital are in full compliance in all material respects with all requirements of each license. The Partnership has made all material filings with governmental agencies required for the conduct of its business
operations. There are no judgments, consent decrees or injunctions of any court or any governmental department, commission, agency or instrumentality by which the Partnership is bound or to which the Partnership is subject. The Partnership has not
received nor, to the Knowledge of Seller, is the Partnership subject to any notice, subpoena, demand letter, administrative inquiry or formal or informal complaint or claim from any governmental department, commission, agency or instrumentality.

  
 (b) Without limiting the generality of the foregoing, to the
Knowledge of Seller, the applicable facilities, equipment, staffing and operations of the business of the Hospital satisfy in all material respects the accreditation standards of JCAHO, and Seller has previously delivered to Purchaser true, correct
and complete copies of (i) the Hospital’s most recent JCAHO accreditation survey report, a list of deficiencies, if any, and, if applicable, a plan of correction; (ii) the Hospital’s most recent Texas Agency surveys, lists of
deficiencies, if any, and, if applicable, plans of correction; (iii) the Hospital’s fire marshal’s surveys for the past two (2) years and lists of deficiencies, if any; and (iv) the Hospital’s boiler inspection reports
for the past two (2) years and lists of deficiencies, if any. The Partnership has taken all reasonable steps to correct all such deficiencies and a description of any uncorrected deficiency is set forth in Schedule 2.24. 

 

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 19 

 (c) The Partnership receives payment without restriction under Medicare and Medicaid and has a valid and
current provider agreement and one or more properly issued provider numbers with each service relating to any Federal Health Care Program as such term is defined in 42 U.S.C. § 1320a-7b(f) (the “Government Programs”). All such
provider numbers of the Partnership and the Hospital are listed in Schedule 2.24. Except as set forth in Schedule 2.24, the Partnership and the Hospital are each in compliance in all material respects with the conditions of
participation for the Government Programs. 
  
 (d) The Partnership
has timely filed in accordance with instructions from the Centers for Medicare & Medicaid Services or the applicable payor or shall cause to be timely filed in accordance with instructions from the Centers for Medicare & Medicaid
Services or the applicable payor all cost reports and other reports that are required by third-party payors to have been filed or made on or before the Closing Date, including Government Programs and other insurance carriers, and, except as
disclosed in Schedule 2.24, all such reports are or when filed shall be complete and accurate in all material respects. Except as disclosed in Schedule 2.24, the Partnership is and has been in material compliance with filing
requirements with respect to cost reports of the Partnership, and such reports do not claim, and the Partnership has not received, payment or reimbursement in excess of the amount provided or allowed by applicable law or any applicable agreement,
except where excess reimbursement was noted on the cost report. True and correct copies in electronic format of all such reports for the three (3) most recent fiscal years for which cost reports have been filed by the Partnership, and any other
cost report for which a final settlement has not been issued, have been made available to Purchaser. Except as disclosed in Schedule 2.24 and except for claims, actions and appeals in the ordinary course of business, the Partnership has
neither initiated nor received written notice of any material claims, actions or appeals pending before any commission, board or agency, including any fiscal intermediary or carrier, governmental entity, or the Administrator of the Center for
Medicare & Medicaid Services, with respect to any Government Program cost reports or claims filed with any Government Program on behalf of the Partnership, on or before the date of this Agreement. Schedule 2.24 indicates which
of such cost reports have been audited by the fiscal intermediary and finally settled. 
  
 (e) To the Knowledge of Seller, no validation review or program integrity review related to the Partnership, or the consummation of the transactions contemplated by this Agreement, has been conducted by any
commission, board, agency or government entity in connection with the Government Programs, and to the best Knowledge of Seller, no such reviews are scheduled, pending or threatened against or affecting the Partnership or the consummation of the
transactions contemplated by this Agreement. 
  
 (f) To the
Knowledge of Seller, all billing practices of the Partnership and the Hospital to all third-party payors, including the Government Programs and private insurance companies, are and have been in compliance with all applicable laws and policies of
such third-party payors and Government Programs in all material respects, and neither the Partnership nor the Hospital has billed or received any payment or reimbursement in excess of amounts allowed by law. 
  
 (g) The Partnership has performed through third party contractors a review of
the website of the Office of Inspector General of the United States Department of Health and 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 20 

 Human Services and based upon such review and except as listed in Schedule 2.24, to the Knowledge of Seller,
(i) no employee or independent contractor of the Partnership or any physician currently on the medical staff at the Hospital is listed as having been, and to the Knowledge of the Partnership is not, excluded from participating in Medicare or
any other federal health care program (as that term is defined in 42 U.S.C. § 1320a-7b(f)), and (ii) none of the business of the Hospital, or the Partnership or the Partnership’s officers, directors, agents or management
employees (as that term is defined in 42 U.S.C. § 1320a-5(b)), has been excluded from participating in Medicare or any other federal health care program (as that term is defined in 42 U.S.C. § 1320a-7b(f) or has been
subject to sanction pursuant to 42 U.S.C. § 1320a-7a or 1320a-8 or has been convicted of a criminal offense under the Anti-Kickback Laws. 
  
 (h) Since February 8, 2005, none of Seller, the Partnership, or to the Knowledge of Seller, any of their respective employees have committed a
violation of federal or state laws regulating health care fraud, including the Anti-Kickback Laws, the Stark Laws and the False Claims Act which violation relates in any respect. 
  
 2.25 Compliance Program. Seller has made available to Purchaser (i) a copy of the Hospital’s current
compliance program materials, including all program descriptions, compliance officer and committee descriptions, ethics and risk area policy materials, training and education materials, auditing and monitoring - protocols, reporting mechanisms, and
disciplinary policies and (ii) copies of any written complaints received in the previous five (5) years from the date hereof from employees, independent contractors, vendors, physicians or any other Person asserting that the Hospital or
the Partnership have violated any health care fraud law or regulation, including the Anti-Kickback Laws and the Stark Laws. The Partnership (a) is not a party to a Corporate Integrity Agreement with the Office of Inspector General of the United
States Department of Health and Human Services, (b) has no reporting obligations pursuant to any settlement agreement entered into with any Governmental Program, (c) to the Knowledge of Seller, has not been the subject of any Government
Program investigation conducted by any federal or state enforcement agency during the past five (5) years, (d) has not been a defendant in any qui tam/False Claims Act litigation during the past five (5) years, or (e) has
not been served with or received any written search warrant, subpoena, civil investigative demand or contact letter from any federal or state enforcement agency (except in connection with medical services provided to, or medical supplies purchased
from, third parties who may be defendants or the subject of investigation into conduct unrelated to the operation of the health care businesses conducted by the Partnership). 
  
 2.26 HIPAA. To the Knowledge of Seller, the Partnership and the Hospital are each in compliance in all material
respects with the administrative simplification provisions of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), and the rules and regulations promulgated thereunder as of the applicable effective dates for such
requirements. 
  
 2.27 Restricted Grant and Loan Programs.
The transactions contemplated by this Agreement will not result in any obligation on the Partnership or, to the Knowledge of Seller, the Hospital to repay any loans, grants or loan guarantees or provide uncompensated care in consideration thereof
pursuant to the Hill Burton Program or any similar statute or program with respect to the ownership or operation of the business of the Partnership or the Hospital. 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 21 

 2.28 Experimental Procedures. Neither the Partnership nor, to the Knowledge of Seller, the
Hospital has performed or authorized the performance of any experimental or research procedures or studies involving patients of the Hospital that require the prior approval of any governmental entity that has not been obtained. 
  
 2.29 Medical Staff; Physician Relations. The Partnership has delivered
to Purchaser complete and genuine copies of the bylaws and rules and regulations of the medical staff and medical executive committees of the Hospital. Schedule 2.29 sets forth (a) the name, age and status on the medical staff of
each member of the medical staff of the Hospital and (b) the degree (e.g., M.D., D.O.), title specialty and board certification, if any, of each such medical staff member. Except as set forth in Schedule 2.29, there are no pending
or, to Seller’s Knowledge, threatened disputes with the Hospital medical staff members or applicants or allied health professionals, and all appeal periods in respect of any medical staff member or applicant against whom an adverse action has
been taken have expired. 
  
 2.30 No Brokers or Finders.
Except for Marilyn Cochran’s fees under the Real Property Purchase Contract, no agent, broker, finder, or investment or commercial banker, or other Person or firm engaged by or acting on behalf of Seller or the Partnership, or any of their
respective Affiliates in connection with the negotiation, execution or performance of this Agreement or the transactions contemplated by this Agreement, is or will be entitled to any brokerage or finder’s or similar fee or other commission as a
result of this Agreement or such transactions; except for such fees or other commissions as to which Seller shall have full responsibility and, with respect to such fees or commissions, Purchaser shall not have any liability. 
  
 2.31 Improper Payments. None of the Partnership or Seller or, to the
Knowledge of Seller, any of their respective directors, officers, employees, agents or partners have made any bribes, kickbacks or other illegal payments to, or received any such illegal payments from, customers, vendors, suppliers or other persons
contracting with the Partnership or the Hospital and has not proposed or offered to make or receive any such illegal payments. 
  
 2.32 No Misrepresentations. The representations, warranties and statements made by the Partnership and Seller in this Agreement (including any
Schedule, Exhibit or certificate furnished by Seller or the Partnership in accordance with the terms of this Agreement) are true, complete and correct in all material respects and do not contain any untrue statement of a material fact or omit to
state any material fact necessary to make any such representation, warranty or statement, under the circumstances in which it is made, not misleading. 
  
 2.33 Liabilities. True and correct copies of all notes, agreements or other documents evidencing outstanding liabilities of the Partnership have
been delivered or made available to Purchaser by the Partnership. 
  
 2.34 Conduct of Business. Except as stated in Schedule 2.34, Seller represents and warrants that since November 30, 2005, the Partnership has: 
  
 (a) carried on the Partnership’s businesses in substantially the same manner as conducted before such date and has not
made any material change in personnel, operations, finance, accounting policies, Tax elections or Tax returns or Real Property or Personal Property; 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 22 

 (b) maintained the assets of the Partnership in operating condition in a manner consistent with past
practices, ordinary wear and tear excepted; 
  
 (c) performed all
of its material obligations under the Contracts, Leases and all other agreements; 
  
 (d) kept in full force and effect all of its insurance policies or other comparable self-insurance; and 
  
 (e) used commercially reasonable efforts to maintain and preserve both the Partnership’s and the Hospital’s business organizations intact,
retained all of the Partnership’s and the Hospital’s employees and maintained their respective relationships with physicians, suppliers, customers and others having business relationships with the Partnership or the Hospital. 

 
 2.35 Negative Assurances. Except as stated in Schedule 2.35,
Seller represents and warrants that since November 30, 2005, the Partnership has not: 
  
 (a) amended or terminated any of the Contracts or Leases, entered into any new contract or commitment, or incurred or agreed to incur any liability (other than the Promissory Note and Deed of Trust entered into by the
Partnership with Purchaser in order to enable the Partnership to acquire the Real Property and Other Assets); 
  
 (b) increased compensation payable or to become payable or made any bonus payment to or otherwise entered into one or more bonus agreements with any
employee of the Partnership or the Hospital; 
  
 (c) created,
assumed or permitted to exist any new debt, mortgage, deed of trust, pledge or other lien or encumbrance upon any of the assets of the Partnership or the Hospital (other than the Promissory Note and Deed of Trust entered into by the Partnership with
Purchaser in order to enable the Partnership to acquire the Real Property and Other Assets); 
  
 (d) except for the Partnership’s acquisition of the Real Property and other related assets on the date hereof under the Real Property Purchase Contract, acquired (whether by purchase or lease) or sold, assigned,
leased, or otherwise transferred or disposed of any property, plant or equipment, except in the ordinary course of business with comparable replacement thereof; 
  

(e) purchased capital assets or incurred costs in respect of construction in progress; 
  
 (f) taken any action outside the ordinary course of business; 
  
 (g) reduced Inventory except in the ordinary course of business; 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 23 

 (h) made any distribution of any Partnership assets to any partner or any of their respective Affiliates;

  
 (i) except for the Partnership Agreement Amendment, amended
the Limited Partnership Agreement in any manner; or 
  
 (j) had
any material change in the working capital of the Partnership. 
  
 ARTICLE 3 
 REPRESENTATIONS AND WARRANTIES OF PURCHASER 
  
 As an inducement to Seller to enter into this Agreement and to consummate the transactions contemplated by this Agreement,
Purchaser hereby represents, warrants and covenants to Seller as to the following matters as of the Closing Date: 
  
 3.1 Authority. Purchaser has full limited liability company power and authority to enter into this Agreement and to carry out the transactions
contemplated hereby. 
  
 3.2 Authorization/Execution. All
limited liability company and other actions required to be taken by Purchaser to authorize the execution, delivery and performance of this Agreement, all documents executed by Purchaser which are necessary to give effect to this Agreement, and all
transactions contemplated hereby, have been duly and properly taken or obtained by Purchaser. No other limited liability company or other action on the part of Purchaser is necessary to authorize the execution, delivery and performance of this
Agreement, all documents necessary to give effect to this Agreement and all transactions contemplated hereby. This Agreement and all documents delivered hereunder have been duly and validly executed and delivered by Purchaser and, assuming due and
valid execution by, and enforceability against, the Partnership and Seller, this Agreement and all documents delivered hereunder constitute the valid and binding obligations of Purchaser enforceable in accordance with their respective terms subject
to (a) applicable bankruptcy, reorganization, insolvency, moratorium and other laws affecting creditors’ rights generally from time to time in effect and (b) limitations on the enforcement of equitable remedies. 
  
 3.3 Organization and Good Standing; No Violation. 
  
 (a) Purchaser is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has full power and authority to own, operate and lease its properties and to carry on its business as now conducted. 
  
 (b) The execution and delivery of this Agreement and the performance of the transactions contemplated by this Agreement and
all other instruments, agreements, certificates and documents contemplated hereby to which Purchaser is or will be a party do not (i) violate any decree or judgment of any court or governmental authority which may be applicable to or bind
Purchaser; (ii) violate any law, rule or regulation applicable to Purchaser which would have a material adverse effect on Purchaser; (iii) violate or conflict with, or result in a breach of, or constitute a default (or an event which, with
or without notice or lapse of time or both, would constitute a default) under, or permit cancellation of, any material contract, lease, sales order, purchase order, indenture, mortgage, note, bond, instrument, license or other agreement to which

  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 24 

 Purchaser is a party, or by which Purchaser is bound; (iv) permit the acceleration of the maturity of any
indebtedness of Purchaser; or (v) violate or conflict with any provision of the Certificate of Formation or Operating Agreement of Purchaser. 
  
 (c) Purchaser and its Affiliates (a) are not a party to a Corporate Integrity Agreement with the Office of Inspector General of the United States
Department of Health and Human Services, (b) have no reporting obligations pursuant to any settlement agreement entered into with any Governmental Program, (c) to the Knowledge of Purchaser are not the subject of any Government Program
investigation presently being conducted by any federal or state enforcement agency, or (d) have not been a defendant in any qui tam/False Claims Act litigation during the past five (5) years except as disclosed in Horizon Health
Corporation’s Annual Report on Form 10-K filed with the SEC for the year ended August 31, 2005. 
  
 3.4 Brokers and Finders. No agent, broker, finder, or investment or commercial banker, or other Person or firm engaged by or acting on behalf of
Purchaser, or any of their respective Affiliates in connection with the negotiation, execution or performance of this Agreement or the transactions contemplated by this Agreement, is or will be entitled to any brokerage or finder’s or similar
fee or other commission as a result of this Agreement or such transactions; except for such fees and other commissions as to which Purchaser shall have full responsibility and, with respect to such fees or commissions, Seller shall not have any
liability. 
  
 ARTICLE 4 
 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER 
  
 Seller’s obligations to sell the Limited Partner Interest and to close the transactions as contemplated by this Agreement shall be subject to the
satisfaction of each of the following conditions on or prior to the Closing Date unless specifically waived in writing by Seller in whole or in part at or prior to the Closing: 
  
 4.1 Accuracy of Representations and Warranties and Compliance with Obligations. The representations and warranties of
Purchaser contained in this Agreement shall have been true and correct at the date of this Agreement, and they shall be true and correct in all respects as of the Closing with the same force and effect as though made at and as of the Closing.
Purchaser shall have performed and complied with all of its obligations required by this Agreement to be performed or complied with at or prior to the Closing. 
  

4.2 Signing and Delivery of Instruments. Purchaser shall have executed and delivered all documents, instruments and certificates required to be
executed and delivered by it pursuant to the provisions of this Agreement. 
  
 4.3 Unfavorable Action or Proceeding. On the Closing Date, no orders, decrees, judgments or injunctions of any court or governmental body shall be in effect, and no claims, actions, suits, proceedings,
arbitrations or investigations shall be pending or threatened, which challenge or seek to challenge, or which could reasonably be expected to prevent or cause the rescission of, the consummation of the transactions contemplated in this Agreement.

  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 25 

 4.4 Governmental Authorizations. Seller, the Partnership and Purchaser shall have obtained all
material licenses, permits, approvals, certificates of need and authorizations from governmental agencies or governmental bodies that are necessary or required for the completion of the transactions contemplated by this Agreement. Seller, the
Partnership and Purchaser shall have obtained all Governmental Approvals. All consents, waivers, and estoppels of third parties which are reasonably necessary, in the opinion of Seller, to complete effectively the transactions herein contemplated
shall have been obtained in form and substance reasonably satisfactory to Seller. 
  
 ARTICLE 5 
 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER 
  
 Purchaser’s obligation to purchase the Limited Partner Interest and to
close the transactions contemplated by this Agreement shall be subject to the satisfaction of each of the following conditions on or prior to the Closing Date unless specifically waived in writing by Purchaser in whole or in part at or prior to the
Closing. 
  
 5.1 Accuracy of Representations and Warranties and
Compliance with Obligations. The representations and warranties of Seller and the Partnership in this Agreement shall have been true and correct on the date of this Agreement, and they shall be true and correct in all respects as of the Closing
with the same force and effect as though made at and as of the Closing. Seller and the Partnership shall have performed and complied with all of their respective obligations required by this Agreement to be performed or complied with at or prior to
the Closing. 
  
 5.2 Governmental Authorizations.
Purchaser, Seller and the Partnership shall have obtained all material licenses, permits, approvals, certificates of need and authorizations from governmental agencies or governmental bodies that are necessary or required for Purchaser to complete
the transactions contemplated by this Agreement and the operation of the Hospital by Purchaser after the Closing. Purchaser, Seller and the Partnership shall have obtained all material licenses, permits, approvals and authorizations from
governmental agencies or governmental bodies that are necessary or required for completion of the transactions contemplated by this Agreement. All consents, waivers and estoppels of third parties which are reasonably necessary, in the opinion of
Purchaser, to complete effectively the transactions herein contemplated shall have been obtained in form and substance reasonably satisfactory to Purchaser. 
  
 5.3 Signing and Delivery of Instruments. Seller and the Partnership shall have executed and delivered all documents, instruments and certificates
required to be executed and delivered pursuant to all of the provisions of this Agreement. 
  
 5.4 Unfavorable Action or Proceeding. On the Closing Date, no orders, decrees, judgments or injunctions of any court or governmental body shall be in effect, and no claims, actions, suits, proceedings,
arbitrations or investigations shall be pending or threatened, which challenge or seek to challenge, or which could reasonably be expected to prevent or cause the rescission of the consummation of the transactions contemplated in this Agreement.

  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 26 

 5.5 No Material Adverse Change. There shall not have been any Material Adverse Change in or
affecting the Limited Partner Interest or the business of the Partnership since October 31, 2005. 
  
 5.6 Required Consents. The Contract and Lease Consents shall have been received or obtained on or prior to the Closing Date without the imposition
of any burdens or conditions materially adverse to the Party or Parties entitled to the benefit thereof. 
  
 5.7 Disclosure Schedules. Seller and the Partnership shall have promptly and fully completed the Disclosure Schedules hereto. 
  
 5.8 Real Property Title Matters. The Partnership shall have received
an Owner’s Title Policy with respect to each parcel of the Real Property issued to the Partnership covering the Real Property in the amount of the full insurable value of such parcel of the Real Property, and which contains such endorsements as
are customary in the counties where such parcel of the Real Property is located and no exceptions other than the Permitted Encumbrances, and which is reasonably satisfactory to Purchaser in all respects. 
  
 5.9 Lock Boxes. Seller has taken all actions necessary for Purchaser
and the Partnership to obtain full and exclusive access and ownership to all funds relating to and the Lock Boxes used in the business of the Hospital, and Seller shall deliver to Purchaser all necessary executed documents and consents to accomplish
and evidence such exclusive ownership and access. 
  
 ARTICLE 6

 POST-CLOSING MATTERS 
  
 6.1 Preservation and Access to Records After the Closing. 
  

(a) From the Closing Date until seven (7) years after the Closing Date or such longer period as required by law (the “Document Retention
Period”), Purchaser shall cause the Partnership to keep and preserve all medical records, patient records, medical staff records and other required books and records which are among the assets of the Partnership as of the Effective Time. The
Partnership will afford to the representatives of Seller, including their counsel and accountants, full and complete access to, and copies (including, without limitation, color laser copies) of, such records with respect to time periods prior to the
Effective Time during normal business hours after the Effective Time, to the extent reasonably needed by Seller for business purposes. Purchaser acknowledges that, as a result of entering into this Agreement and owning the Limited Partner Interest
of the Partnership, it will gain access to patient records and other information which are subject to rules and regulations concerning confidentiality. Purchaser shall abide by any such rules and regulations relating to the confidential information
it acquires. After the expiration of the Document Retention Period, if the Partnership intends to destroy or otherwise dispose of any of the documents described in this Section 6.1(a), the Partnership shall provide written notice to Seller of
the Partnership’s intention no later than forty-five (45) calendar days prior to the date of such intended destruction or disposal. Seller shall have the right, at their sole cost, to take possession of such documents during such
forty-five (45) calendar day period. If Seller does not take possession of such documents during such forty-five (45) calendar day period, the Partnership shall be free to destroy or otherwise dispose of such documentation upon the
expiration of such forty-five (45) calendar day period. 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 27 

 (b) Purchaser, the Partnership and their respective representatives shall be given access by Seller
during normal business hours to the extent reasonably needed by Purchaser or the Partnership for business purposes to all documents, records, correspondence, work papers and other documents retained by Seller pertaining to any of the Limited Partner
Interest or with respect to the operation of the Partnership prior to the Effective Time. 
  
 6.2 Provision of Benefits of Certain Contracts. If, as of the Effective Time, Seller has not obtained a required consent to the change of control and transfer of a Contract or Lease, or the Partnership is
unable to enter into a new third party contract with respect to such Contract or Lease, until such consent is obtained or a new third party contract is obtained, Seller shall provide the Partnership the benefits of such Contract or Lease and
cooperate in any reasonable and lawful arrangement designed to provide such benefits to the Partnership and shall indemnify and hold harmless Purchaser and its Affiliates for and against any and all damages as a result, directly or indirectly, of
the failure to obtain any such approval or consent if any such Contract or Lease states that it is not transferable without such Party’s consent. Purchaser agrees to cause the Partnership to use reasonable commercial efforts to perform, on
behalf of Seller, the obligations of the Partnership under such Contract or Lease or in connection therewith, but only to the extent that such action would not result in a material default under the applicable Contract or Lease and such obligation
would have been an obligation of the Partnership had it received consent to the transfer of such Contract or Lease or had entered into a new third party contract on substantially similar terms as the applicable Contract or Lease. 
  
 6.3 Misdirected Payments, Etc. Seller covenants and agrees to remit,
with reasonable promptness, to the Partnership any payments received, which payments are on or in respect of accounts or notes receivable owned by (or are otherwise payable to) the Partnership or the Hospital. In the event of a determination by any
governmental or third-party payor that payments to Seller, the Hospital or the Partnership resulted in an overpayment or other determination that funds previously paid by any program or plan to Seller, the Hospital or the Partnership must be repaid,
Seller shall not be responsible for repayment of said monies (or defense of such actions) even if such overpayment or other repayment determination was for services rendered prior to the Effective Time and the Partnership shall be responsible for
repayment of said monies (or defense of such actions) if such overpayment or other repayment determination was for services rendered after the Effective Time. 
  

6.4 Insurance. Purchaser shall, for a period of two (2) years after the Effective Time, maintain insurance coverage with Purchaser’s
current insurers or a financially sound and reputable insurance company selected by Purchaser naming Seller and Jerry G. Browder as additional insureds and covering the health care services general and professional liability risks arising out of the
Partnership’s operation of the Hospital from February 8, 2005 until the Effective Time. This insurance coverage shall cover the General Partner in its capacity as general partner of the Partnership as an insured. 
  
 6.5 Processing of Payroll. From the Effective Time until
February 28, 2006, or such earlier date as the Parties mutually may agree, Seller agrees that it will continue to process the payroll for the Partnership’s employees in the same manner and on the same schedule such payroll was processed
before the Effective Time. 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 28 

 ARTICLE 7 
 SURVIVAL AND INDEMNIFICATION 
  
 7.1 Survival. Except as expressly set forth in this Agreement to the contrary, all representations, warranties, covenants, agreements and indemnifications of Purchaser, Seller and the Partnership, respectively, contained in this
Agreement or in any document delivered pursuant hereto shall be deemed to be material and to have been relied upon by Purchaser and Seller, respectively. All representations and warranties of Purchaser, Seller and the Partnership shall continue to
be fully effective and enforceable following the Effective Time for two (2) years and shall thereafter be of no further force and effect; provided, however, that, if there is at the end of such two (2) year period an outstanding
notice of a claim made in compliance with the terms of Section 7.4, such applicable period shall not end in respect of such claim until such claim is resolved. Notwithstanding the above, the representations and warranties contained in Sections
2.1, 2.2, 2.3, and 2.4, and the rights to indemnity set forth in Section 7.2 hereof with respect to such representations and warranties shall continue to be fully effective and enforceable indefinitely. 
  
 7.2 Indemnification of Purchaser by Seller. 
  
 (a) Indemnification. Seller shall keep and save Purchaser and
Purchaser’s members, managers, officers, directors, employees, agents and other representatives and the Partnership and the Partnership’s partners (other than the General Partner before the closing of the General Partner Purchase
Agreement), officers, directors, employees, agents and other representatives forever harmless from and shall indemnify and defend Purchaser and the Partnership against any and all obligations, judgments, liabilities, penalties, violations, fees,
fines, claims, losses, costs, demands, damages, liens, encumbrances and expenses including reasonable attorneys’ fees (collectively, “Damages”), to the extent arising or resulting from (i) any breach of any representation or
warranty of Seller or the Partnership under this Agreement or any documents delivered pursuant hereto, and (ii) any breach or default by Seller or the Partnership of any covenant or agreement of Seller or the Partnership under this Agreement or
any documents delivered pursuant hereto. No provision in this Agreement shall prevent Seller from pursuing any of its legal rights or remedies that may be granted to Seller by law against any Person other than Purchaser. 
  
 (b) Indemnification Limitations. Notwithstanding any provision to the
contrary contained in this Agreement, Seller shall be under no liability to indemnify Purchaser or the Partnership under Sections 7.2(a)(i) and 7.2(a)(ii) and no claim under Sections 7.2(a)(i) and 7.2(a)(ii) shall be made: 
  
 (i) unless notice thereof shall have been given by or on behalf of
Purchaser to Seller in the manner provided in Section 7.4, unless failure to provide such notice in a timely manner does not materially impair Seller’s ability to defend their respective rights, mitigate damages, seek indemnification from
a third party or otherwise protect its interests; 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 29 

 (ii) to the extent that any loss may be recovered under a policy of insurance in force on the date of
loss; provided, however, that this Section 7.2(b)(ii) shall not apply to the extent that coverage under the applicable policy of insurance is denied by the applicable insurance carrier; 
  
 (iii) to the extent such claim relates to an obligation or liability for
which Purchaser has agreed to indemnify Seller pursuant to Section 7.3; or 
  
 (iv) to the extent related to a claim under Section 7.2(a)(i) or a claim under Section 7.2(a)(ii) for Seller’s or the Partnership’s breach of any covenant required to be performed or satisfied at
or prior to Closing, or accrue to Purchaser unless the liability of Seller or the Partnership in respect of any single claim or multiple claims in the aggregate exceeds Ten Thousand Dollars ($10,000) (a “Relevant Claim”) in which event
Purchaser shall be entitled to seek indemnification for the total amount of the Relevant Claim(s). 
  
 (c) Damages Cap. The maximum aggregate liability of Seller to Purchaser under Section 7.2(a)(i) of this Agreement shall not exceed the
Purchase Price. 
  
 7.3 Indemnification of Seller by
Purchaser. 
  
 (a) Indemnification. Purchaser shall
keep and save Seller forever harmless from and shall indemnify and defend Seller against any and all Damages, to the extent arising or resulting from (i) any breach of any representation or warranty of Purchaser under this Agreement,
(ii) any breach or default by Purchaser under any covenant or agreement of Purchaser under this Agreement, (iii) any liability of the Partnership or the Hospital accruing after the Effective Time except for liabilities for which Purchaser
and/or the Partnership are indemnified under this Agreement, and (iv) any liability claims arising out of acts or omissions of the Partnership from and after February 8, 2005, except for liabilities for which Purchaser and/or the
Partnership are idemnified under this Agreement. No provision in this Agreement shall prevent Purchaser from pursuing any of its legal rights or remedies that may be granted to Purchaser by law against any person or legal entity other than Seller.

  
 (b) Indemnification Limitations. Notwithstanding any
provision to the contrary contained in this Agreement, Purchaser shall be under no liability to indemnify Seller under Section 7.3(a)(i) or Section 7.3(a)(ii) and no claim under Section 7.3(a)(i) or Section 7.3(a)(ii) shall be
made: 
  
 (i) unless notice thereof shall have been given by or
on behalf of Seller to Purchaser in the manner provided in Section 7.4, unless failure to provide such notice in a timely manner does not materially impair Purchaser’s ability to defend its rights, mitigate damages, seek indemnification
from a third party or otherwise protect its interests; 
  
 (ii)
to the extent that any Damages may be recovered under a policy of insurance in force on the date of loss; provided, however, that this Section 7.3(b)(ii) shall not apply to the extent that coverage under the applicable policy of
insurance is denied by the applicable insurance carrier; or 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 30 

 (iii) to the extent related to a claim under Section 7.3(a)(i) or a claim under
Section 7.3(a)(ii) for Purchaser’s breach of any covenant required to be performed or satisfied at or prior to Closing, or accrue to Seller unless and only to the extent that the actual liability of Purchaser in respect of any single claim
or multiple claims in the aggregate exceeds the Relevant Claim amount in which event Seller shall be entitled to seek indemnification for the total amount of the Relevant Claim(s). 
  
 7.4 Method of Asserting Claims. All claims for indemnification under this Article 7 by any Person entitled to
indemnification (an “Indemnified Party”) under this Article 7 will be asserted and resolved as follows: 
  
 (a) In the event any claim or demand, for which a Party hereto (an “Indemnifying Party”) would be liable for the Damages to an Indemnified
Party, is asserted against or sought to be collected from an Indemnified Party by a Person other than Seller, Purchaser or their Affiliates (a “Third Party Claim”), the Indemnified Party shall give a notice of its claim (a “Claim
Notice”) to the Indemnifying Party within thirty (30) calendar days after the Indemnified Party receives written notice of such Third Party Claim; provided, however, that notice shall be given by the Indemnified Party to the
Indemnifying Party within fifteen (15) calendar days after receipt of a complaint, petition or institution of other formal legal action against the Indemnified Party. If the Indemnified Party fails to provide the Claim Notice within such
applicable time period after the Indemnified Party receives written notice of such Third Party Claim and thereby materially impairs the Indemnifying Party’s ability to protect its interests, the Indemnifying Party will not be obligated to
indemnify the Indemnified Party with respect to such Third Party Claim. The Indemnifying Party will notify the Indemnified Party within thirty (30) calendar days after receipt of the Claim Notice (the “Notice Period”) whether the
Indemnifying Party desires, at the sole cost and expense of the Indemnifying Party, to defend the Indemnified Party against such Third Party Claim. 
  
 (i) If the Indemnifying Party notifies the Indemnified Party within the Notice Period that the Indemnifying Party desires to defend the Indemnified Party
with respect to the Third Party Claim pursuant to this Section 7.4(a), then the Indemnifying Party will have the right to defend, at its sole cost and expense, such Third Party Claim by all appropriate proceedings, which proceedings will be
prosecuted by the Indemnifying Party to a final conclusion or will be settled at the discretion of the Indemnifying Party. The Indemnifying Party will have full control of such defense and proceedings, including any compromise or settlement thereof.
Notwithstanding the foregoing, the Indemnified Party may, at its sole cost and expense, file during the Notice Period any motion, answer or other pleadings that the Indemnified Party may deem necessary or appropriate to protect its interests or
those of the Indemnifying Party and which is not prejudicial, in the reasonable judgment of the Indemnifying Party, to the Indemnifying Party. Except as provided in Section 7.4(a)(ii) hereof, if an Indemnified Party takes any such action that
is prejudicial and causes a final adjudication that is adverse to the Indemnifying Party, the Indemnifying Party will be relieved of its obligations hereunder with respect to the portion of such Third Party Claim prejudiced by the Indemnified
Party’s action. If requested by the Indemnifying Party, the Indemnified Party agrees, at the sole cost and expense of the Indemnifying Party, to cooperate with the Indemnifying Party and its counsel in contesting any Third Party Claim that the
Indemnifying Party elects to contest, or, if appropriate and related to the Third Party Claim in question, in making any counterclaim against the Person asserting the 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 31 

 Third Party Claim, or any cross-complaint against any Person (other than the Indemnified Party or any of its Affiliates).
The Indemnified Party may participate in, but not control, any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this Section 7.4(a)(i), and except as specifically provided in this
Section 7.4(a)(i), the Indemnified Party will bear its own costs and expenses with respect to such participation. 
  
 (ii) If the Indemnifying Party fails to notify the Indemnified Party within the Notice Period that the Indemnifying Party desires to defend the
Indemnified Party pursuant to this Section 7.4(a), or if the Indemnifying Party gives such notice but fails to prosecute diligently or settle the Third Party Claim, or if the Indemnifying Party fails to give any notice whatsoever within the
Notice Period, then the Indemnified Party will have the right to defend, at the sole cost and expense of the Indemnifying Party, the Third Party Claim by all appropriate proceedings, which proceedings will be promptly and reasonably prosecuted by
the Indemnified Party to a final conclusion or will be settled at the discretion of the Indemnified Party. The Indemnified Party will have full control of such defense and proceedings, including any compromise or settlement thereof; provided,
however, that if requested by the Indemnified Party, the Indemnifying Party agrees, at the sole cost and expense of the Indemnifying Party, to cooperate with the Indemnified Party and its counsel in contesting any Third Party Claim which the
Indemnified Party is contesting, or, if appropriate and related to the Third Party Claim in question, in making any counterclaim against the Person asserting the Third Party Claim, or any cross-complaint against any Person (other than the
Indemnifying Party or any of its Affiliates). Notwithstanding the foregoing provisions of this Section 7.4(a)(ii), if the Indemnifying Party has notified the Indemnified Party with reasonable promptness that the Indemnifying Party disputes its
liability to the Indemnified Party with respect to such Third Party Claim and if such dispute is resolved in favor of the Indemnifying Party, the Indemnifying Party will not be required to bear the costs and expenses of the Indemnified Party’s
defense pursuant to this Section 7.4(a)(ii). Subject to the above terms of this Section 7.4(a)(ii), the Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified Party pursuant to this
Section 7.4(a)(ii), and the Indemnifying Party will bear its own costs and expenses with respect to such participation. The Indemnified Party shall give sufficient prior notice to the Indemnifying Party of the initiation of any discussions
relating to the settlement of a Third Party Claim to allow the Indemnifying Party to participate therein. 
  
 (b) In the event any Indemnified Party should have a claim against any Indemnifying Party hereunder that does not involve a Third Party Claim being
asserted against or sought to be collected from the Indemnified Party, the Indemnified Party shall deliver an Indemnity Notice to the Indemnifying Party. (The term “Indemnity Notice” shall mean written notification of a claim for indemnity
under Article 7 hereof (which claim does not involve a Third Party Claim or Tax Claim) by an Indemnified Party to an Indemnifying Party pursuant to this Section 7.4, specifying the nature of and specific basis for such claim and the amount or
the estimated amount of such claim.) The failure by any Indemnified Party to give the Indemnity Notice shall not impair such Party’s rights hereunder except to the extent that an Indemnifying Party demonstrates that it has been prejudiced
thereby. 
  
 (c) If the Indemnifying Party does not notify the
Indemnified Party within thirty (30) calendar days following its receipt of a Claim Notice or an Indemnity Notice that the Indemnifying Party disputes its liability to the Indemnified Party hereunder, such claim specified 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 32 

 by the Indemnified Party will be conclusively deemed a liability of the Indemnifying Party hereunder and the Indemnifying
Party shall pay the amount of such liability to the Indemnified Party on demand, or on such later date (i) in the case of a Third Party Claim, as the Indemnified Party suffers the Damages in respect of such Third Party Claim, or (ii) in
the case of an Indemnity Notice in which the amount of the claim is estimated, when the amount of such claim becomes finally determined. If the Indemnifying Party has timely disputed its liability with respect to such claim, as provided above, the
Indemnifying Party and the Indemnified Party agree to proceed in good faith to negotiate a resolution of such dispute, and if not resolved through negotiations, such dispute will be resolved by adjudication by a court or similar tribunal.

  
 (d) The Indemnified Party agrees to give the Indemnifying
Party reasonable access to the books and records and employees of the Indemnified Party in connection with the matters for which indemnification is sought hereunder, to the extent the Indemnifying Party reasonably deems necessary in connection with
its rights and obligations hereunder. 
  
 (e) The Indemnified
Party shall assist and cooperate with the Indemnifying Party in the conduct of litigation, the making of settlements and the enforcement of any right of contribution to which the Indemnified Party may be entitled from any Person in connection with
the subject matter of any litigation subject to indemnification hereunder. In addition, the Indemnified Party shall, upon request by the Indemnifying Party or counsel selected by the Indemnifying Party (without payment of any fees or expenses to the
Indemnified Party or an employee thereof), attend hearings and trials, assist in the securing and giving of evidence, assist in obtaining the presence or cooperation of witnesses, and make available its own personnel; and shall do whatever else is
necessary and appropriate in connection with such litigation. The Indemnified Party shall not make any demand upon the Indemnifying Party or counsel for the Indemnifying Party in connection with any litigation subject to indemnification hereunder,
except a general demand for indemnification as provided hereunder. If the Indemnified Party shall fail to perform such obligations as Indemnified Party hereunder or to cooperate fully with the Indemnifying Party in Indemnifying Party’s defense
of any suit or proceeding, such cooperation to include, without limitation, attendance at all depositions and the provision of all documents relevant to the defense of any claim, then, except where such failure does not have an adverse effect on the
Indemnifying Party’s defense of such claims, the Indemnifying Party shall be released from all of its obligations under this Agreement with respect to that suit or proceeding and any other claims which had been raised in such suit or
proceeding. 
  
 (f) Following indemnification as provided for
hereunder, the Indemnifying Party shall be subrogated to all rights of the Indemnified Party with respect to all persons or entities relating to the matter for which indemnification has been made. 
  
 ARTICLE 8 
 TAX AND COST REPORT MATTERS 
  
 8.1 Tax Matters. 
  
 (a)
After the Closing Date, the Parties shall cooperate fully with each other and shall make available to each other, as reasonably requested, all information, records or documents relating to Tax liabilities or potential Tax liabilities attributable to
the Partnership for 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 33 

 all periods prior to the Effective Time and shall preserve all such information, records and documents at least until the
expiration of any applicable statute of limitations (including extensions thereof). The Parties shall also make available to each other as reasonably required, and at the reasonable cost of the requesting Party (for out-of-pocket costs and expenses
only), personnel responsible for preparing or maintaining information, records and documents in connection with Tax matters. 
  
 (b) Seller shall prepare or cause to be prepared and file or cause to be filed all Tax returns for the Partnership for all periods ending on or prior to
the Closing Date that are filed after the Closing Date. Seller shall permit Purchaser to review and comment on each such Tax return described in the preceding sentence prior to filing. To the extent permitted by applicable law, Seller shall include
any income, gain, loss, deduction or other tax items for such periods on their Tax returns in a manner consistent with the tax information furnished by the Partnership to Seller for such periods. 
  
 (c) The Parties agree that (A) all Federal and State income and
franchise Taxes attributable to any Tax period (or portion thereof) ending on or prior to the Effective Time and any Federal and State Income and Franchise Taxes attributable to the sale of the Limited Partner Interest pursuant to this Agreement
shall be borne by, shall be the responsibility of and shall be paid by Seller and (B) all other Taxes with respect to the Partnership shall be borne by, shall be the responsibility of and shall be paid by the Partnership as required by
applicable law. 
  
 ARTICLE 9 
 MISCELLANEOUS PROVISIONS 
  
 9.1 Entire Agreement. This Agreement, the Disclosure Schedules, the Exhibits and the documents referred to in this Agreement contain the entire
understanding between the Parties with respect to the transactions contemplated hereby and supersede all prior or contemporaneous agreements, understandings, representations and statements, oral or written, between the Parties on the subject matter
hereof (the “Superseded Agreements”), which Superseded Agreements shall be of no further force or effect. 
  
 9.2 Further Assurances and Cooperation. Seller shall execute, acknowledge and deliver to Purchaser any and all other assignments, consents,
approvals, conveyances, assurances, documents and instruments reasonably requested by Purchaser at any time and shall take any and all other actions reasonably requested by Purchaser at any time for the purpose of more effectively assigning,
transferring, granting, conveying and confirming to Purchaser, the assets of the Partnership. After consummation of the transactions contemplated in this Agreement, the Parties agree to cooperate with each other and take such further actions as may
be necessary or appropriate to effectuate, carry out and comply with all of the terms of this Agreement, the documents referred to in this Agreement and the transactions contemplated hereby. 
  
 9.3 Successors and Assigns. All of the terms and provisions of this
Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the respective successors and assigns of the Parties hereto; provided, however, that no Party hereto may assign any of its rights or delegate any of its
duties under this Agreement without the prior written consent of the other Parties, except that Purchaser may assign any of its rights or delegate any of its duties under this Agreement to any Affiliate. 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 34 

 9.4 Governing Law. This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Texas as applied to contracts made and to be performed entirely within the State of Texas. The Parties hereby waive their right to assert in any proceeding involving this Agreement that the law of any other jurisdiction
shall apply to such dispute; and the Parties hereby covenant that they shall assert no such claim in any dispute arising under this Agreement. 
  
 9.5 Amendments. This Agreement may not be amended other than by a written instrument signed by the Parties hereto. 
  
 9.6 Notices. Any notice, demand or communication required, permitted,
or desired to be given hereunder shall be deemed effectively given when personally delivered, when received by facsimile or overnight courier, or five (5) calendar days after being deposited in the United States mail, with postage prepaid
thereon, certified or registered mail, return receipt requested, addressed as follows: 
  

			
	If to Seller:	  	    Signet Health Corporation
	 	  	    504 Seville Road, Suite 201
	 	  	    Denton, Texas 76205
	 	  	    Attention: Jerry G. Browder, President
	 	  	    Facsimile No.: (940) 380-0697
		
	If to Purchaser	  	    HHC Kingwood Investment, LLC
	or the Partnership:	  	    103 Foulk Road, Suite 202
	 	  	    Wilmington, Delaware 19803
	 	  	    Attention: Harold F. Kalbach, Jr., Manager
	 	  	    Facsimile No.: (302) 652-8667
		
	With copies to:	  	    Horizon Health Corporation
	 	  	    1500 Waters Ridge Drive
	 	  	    Lewisville, Texas 75057
	 	  	    Attention: General Counsel
	 	  	    Facsimile No.: (972) 219-1710
		
	 	  	    Strasburger & Price, L.L.P.
	 	  	    901 Main Street, Suite 4300
	 	  	    Dallas, Texas 75202
	 	  	    Attention: Thomas W. Burton, Esq.
	 	  	    Facsimile No.: (214) 651-4330

  
 or at such other address for a Party
as such Party may designate by notice hereunder to the other Parties. 
  
 9.7 Headings. The section and other headings contained in this Agreement, the Disclosure Schedules, and the Exhibits to this Agreement are included for the purpose of convenient reference only and shall not restrict, amplify, modify
or otherwise affect in any way the meaning or interpretation of this Agreement, the Disclosure Schedules and Exhibits hereto. 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 35 

 9.8 Confidentiality and Publicity. The Parties hereto shall hold in confidence the information
contained in this Agreement, and all information related to this Agreement, which is not otherwise known to the public, shall be held by each Party hereto as confidential and proprietary information and shall not be disclosed without the prior
written consent of the other Parties; provided, however, each Party shall be permitted to provide a copy of this Agreement to any applicable governmental or administrative authorities as reasonably required or necessary. Accordingly,
Purchaser and Seller shall not discuss with, or provide nonpublic information to, any third party (except for such party’s attorneys, accountants, directors, officers and employees, the directors, officers and employees of any Affiliate of any
Party hereto will agree to be bound by the confidentiality provisions of this Agreement, and other consultants and professional advisors) concerning this transaction prior to the Effective Time, except: (a) as required in governmental filings
or judicial, administrative or arbitration proceedings; (b) pursuant to public announcements made with the prior written approval of Seller and Purchaser; or (c) as otherwise required by applicable law. 
  
 9.9 Third Party Beneficiary. None of the provisions contained in this
Agreement are intended by the Parties, nor shall they be deemed, to confer any benefit on any person not a Party to this Agreement. 
  
 9.10 Expenses and Attorneys’ Fees. Upon the occurrence of the Closing Purchaser (i) shall bear all reasonable fees and expenses of the
Seller up to a cumulative maximum of $45,000 relating to the preparation of this Agreement, the Membership Interest Purchase Agreement and the Real Property Purchase Contract and to the transactions contemplated thereby, and the performance of or
compliance with any condition or covenant set forth in this Agreement, the Membership Interest Purchase Agreement and/or the Real Property Purchase Contract; and (ii) pay or cause the Partnership to pay all fees and expenses of MCC required to
be paid or borne by the Partnership pursuant to the Option and the Real Property Purchase Contract. In the event the Closing does not occur, each Party shall bear and pay its own costs and expenses. Seller shall bear and indemnify Purchaser
against and hold Purchaser harmless from all sales or transfer Taxes and recording charges in connection with the conveyance of the Limited Partner Interest to Purchaser. If any action is brought by any Party to enforce any provision of this
Agreement, the prevailing Party shall be entitled to recover its court costs and reasonable attorneys’ fees. 
  
 9.11 No Waiver. Any term, covenant or condition of this Agreement may be waived at any time by the Party which is entitled to the benefit thereof
but only by a written notice signed by the Party expressly waiving such term, covenant or condition. The subsequent acceptance of performance hereunder by a Party shall not be deemed to be a waiver of any preceding breach by any other Party of any
term, covenant or condition of this Agreement, other than the failure of such other Party to perform the particular duties so accepted, regardless of the accepting Party’s knowledge of such preceding breach at the time of acceptance of such
performance. The waiver of any term, covenant or condition shall not be construed as a waiver of any other term, covenant or condition of this Agreement. 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 36 

 9.12 Severability. If any term, provision, condition or covenant of this Agreement or the
application thereof to any Party or circumstance shall be held to be invalid or unenforceable to any extent in any jurisdiction, then the remainder of this Agreement and the application of such term, provision, condition or covenant in any other
jurisdiction or to persons or circumstances other than those as to whom or which it is held to be invalid or unenforceable, shall not be affected thereby, and each term, provision, condition and covenant of this Agreement shall be valid and
enforceable to the fullest extent permitted by law. 
  
 9.13
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement, binding on all of the Parties hereto. 
  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 37 

 IN WITNESS WHEREOF, this Limited Partner Interest Purchase Agreement has been executed and delivered as
of the day and year first above written. 
  

					
	PURCHASER:
	
	 HHC KINGWOOD INVESTMENT, LLC,
 a
Delaware limited liability company

		
	By:	 	 /s/ Harold F. Kalbach, Jr.

	 	 	Harold F. Kalbach, Jr., Manager
	
	SELLER:
	
	 SIGNET HEALTH CORPORATION,
 a Texas
corporation

		
	By:	 	 /s/ Jerry G. Browder

	 	 	Jerry G. Browder, President
	
	THE PARTNERSHIP:
	
	 SHC-KPH, LP,
 a Texas limited
partnership

		
	By:	 	KINGWOOD PINES HOSPITAL, LLC,
	 	 	its sole general partner
			
	 	 	By:	 	 /s/ Jerry G. Browder

	 	 	 	 	Jerry G. Browder, Sole Member

  

 LIMITED PARTNER INTEREST PURCHASE AGREEMENT – Page 38

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