Document:

EX-10.35

 Exhibit 10.35 

DIRECTOR NOMINATING AGREEMENT 

THIS DIRECTOR NOMINATING AGREEMENT (this “Agreement”) is made and entered into as of September     ,
2014, by and among Civitas Solutions, Inc., a Delaware corporation (the “Company”), and NMH Investment, LLC, a Delaware limited liability company (“NMH Investment”). 

WHEREAS, the Company wishes to grant certain director nomination rights with respect to the shares of Common Stock of the Company currently
held by NMH Investment, as provided further herein. 
 NOW, THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the parties hereto, each intending to be legally bound, agree as follows: 
 1. Board Nomination Rights. 

(a) From and after the date of the consummation of the initial public offering of the common stock of the Company (the “Initial Public
Offering”) and until the provisions of this Section 1 cease to be effective and subject to the terms and conditions of this Agreement, the NMH Investment Majority Holders shall have the right to nominate persons for election to
the Board (each a “Nominee”) as follows: 
 (i) eight (8) of nine (9) of the directors shall be nominated by the
NMH Investment Majority Holders so long as NMH Investment, Vestar and Vestar’s Affiliates continue to hold Voting Securities representing at least 40% of the total voting power of all the then outstanding Voting Securities, voting as a single
class; 
 (ii) seven (7) of nine (9) of the directors shall be nominated by the NMH Investment Majority Holders so long as NMH
Investment, Vestar and Vestar’s Affiliates continue to hold Voting Securities representing at least 35% of the total voting power of all the then outstanding Voting Securities, voting as a single class; 

(iii) six (6) of nine (9) of the directors shall be nominated by the NMH Investment Majority Holders so long as NMH Investment,
Vestar and Vestar’s Affiliates continue to hold Voting Securities representing at least 30% of the total voting power of all the then outstanding Voting Securities, voting as a single class; 

(iv) five (5) of nine (9) of the directors shall be nominated by the NMH Investment Majority Holders so long as NMH Investment,
Vestar and Vestar’s Affiliates continue to hold Voting Securities representing at least 25% of the total voting power of all the then outstanding Voting Securities, voting as a single class; 

(v) four (4) of nine (9) of the directors shall be nominated by the NMH Investment Majority Holders so long as NMH Investment,
Vestar and Vestar’s Affiliates continue to hold Voting Securities representing at least 20% of the total voting power of all the then outstanding Voting Securities, voting as a single class; 

 (vi) three (3) of nine (9) of the directors shall be nominated by the NMH Investment
Majority Holders so long as NMH Investment, Vestar and Vestar’s Affiliates continue to hold Voting Securities representing at least 15% of the total voting power of all the then outstanding Voting Securities, voting as a single class; 

(vii) two (2) of nine (9) of the directors shall be nominated by the NMH Investment Majority Holders so long as NMH Investment,
Vestar and Vestar’s Affiliates continue to hold Voting Securities representing at least 10% of the total voting power of all the then outstanding Voting Securities, voting as a single class; and 

(viii) one (1) director shall be nominated by the NMH Investment Majority Holders so long as NMH Investment, Vestar and Vestar’s
Affiliates continue to hold Voting Securities representing at least 5% of the total voting power of all the then outstanding Voting Securities, voting as a single class. 

(b) The authorized number of directors on the Board shall initially be nine (9). For as long as the NMH Investment Majority Holders shall have
any nomination rights under this Section 1, the Company shall not take any action to increase or reduce the size of the Board from nine (9) without the written consent of the NMH Investment Majority Holders. If the size of the Board
is increased or reduced, then the number of directors the NMH Investment Majority Holders have the right to nominate at each level of ownership set forth in Section 1(a) shall increase or decrease ratably, so that it is equal to the
product of (i) a ratio, which is calculated by dividing the number of directors to be nominated by the NMH Investment Majority Holders specified in the applicable sub-paragraph of Section 1(a) by the total number of directors then
serving on the Board, multiplied by (ii) the total number of directors then serving on the Board, rounded up to the next whole number in all cases. 

(c) After the NMH Investment Majority Holders cease to have any nominations rights under this Section 1, the Board shall determine
the size (i.e., number of Board seats) of the Board in accordance with the Company’s organizational documents. 
 (d) The
representatives designated hereunder by the NMH Investment Majority Holders shall be nominated to serve as a Class I, Class II or Class III director (as defined in the Company’s Certificate of Incorporation), as the case may be. The initial
term of each Class I, Class II and Class III director shall expire as set forth in the Company’s Certificate of Incorporation. Any director nominated by the NMH Investment Majority Holders hereunder to fill a vacancy on the Board shall be
designated as the same class of director as the director whose termination of services as a director created such vacancy. 
 (e) The
Company shall pay the reasonable out-of-pocket expenses incurred by each director in connection with attending the meetings of the Board and any committee thereof. 

(f) At every meeting of the Board, or a committee thereof, for which directors are nominated to stand for election by stockholders of the
Company, the NMH Investment Majority Holders will have the right to select those persons to be nominated for election to the Board for each Retiring Director that was a prior Nominee of the NMH Investment Majority Holders in accordance with this
Section 1. 

  
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 (g) If a vacancy occurs because of the death, disability, disqualification, resignation or
removal of a Nominee, the NMH Investment Majority Holders shall be entitled to nominate such person’s successors in accordance with this Agreement and the Board, subject to a determination of the Board in good faith, after consultation with
outside legal counsel that such action would not constitute a breach of its fiduciary duties or applicable law, shall fill the vacancy with such successor Nominee. 

(h) If a Nominee is not nominated or elected to the Board because of the Nominee’s death, disability, disqualification, withdrawal as a
nominee or for other reason is unavailable or unable to serve on the Board, the NMH Investment Majority Holders shall be entitled to nominate promptly another Nominee and the director position for which such Nominee was nominated shall not be filled
pending such nomination. 
 (i) Notwithstanding anything to the contrary contained herein, at such time as NMH Investment, Vestar and
Vestar’s Affiliates hold Voting Securities representing less than 5% of the total voting power of all the then outstanding Voting Securities, voting as a single class, the rights of NMH Investment under this Section 1 shall
terminate automatically and cease to have any further force and effect. 
 2. Company Obligations. 

(a) The Company agrees to use its commercially reasonable efforts to assure that (i) each Nominee is included in the Board’s slate
of nominees for each election of directors and (ii) each Nominee is included in the proxy statement prepared by management of the Company in connection with soliciting proxies for every meeting of the stockholders of the Company called with
respect to the election of members of the Board, and at every adjournment or postponement thereof, and on every action or approval by written consent of the stockholders of the Company or the Board with respect to the election of members of the
Board. 
 (b) Notwithstanding anything herein to the contrary, the Company shall not be obligated to cause to be nominated for election to
the Board or recommend to the stockholders the election of any Nominee (i) who fails to submit to the Company on a timely basis such questionnaires as the Company may reasonably require of its directors generally and such other information as
the Company may reasonably request in connection with the preparation of its filings under the Securities Laws or (ii) if the Board or the Nominating Committee determines in good faith, after consultation with outside legal counsel, that such
action would constitute a breach of its fiduciary duties, applicable law or the New York Stock Exchange listing requirements or violate the Company’s Certificate of Incorporation; provided, however, that upon the occurrence of
either (i) or (ii) above, the Company shall promptly notify the NMH Investment Majority Holders of the occurrence of such event and permit the NMH Investment Majority Holders to provide an alternate Nominee sufficiently in advance of any
Board action, meeting of the stockholders called or written action of stockholders with respect to such election of Nominees and the Company shall use commercially reasonable efforts to perform its obligations under Section 2(a) with
respect to such alternate Nominee (provided that if the Company provides at least 45 days advance notice of the occurrence of any such event such alternative Nominee must be designated by the NMH Investment Majority Holders not less
than 30 days in advance of any Board action, notice of meeting of the stockholders or written action 

  
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of stockholders with respect to such election of Nominees). The Company shall use commercially reasonable efforts to perform its obligations under Section 2(a) with respect to such
alternate Nominee, provided that in no event shall the Company be obligated to postpone, reschedule or delay any scheduled meeting of the stockholders with respect to such election of Nominees. 

(c) At any time a vacancy occurs because of the death, disability, resignation or removal of a Nominee, then the Board, or any committee
thereof, shall not fill such vacancy until the earliest to occur of (i) the NMH Investment Majority Holders have nominated a successor Nominee and the Board has filled the vacancy and appointed such successor Nominee, (ii) the NMH
Investment Majority Holders fail to nominate a successor Nominee within 60 Business Days after receiving notification of the vacancy from the Company, and (iii) the NMH Investment Majority Holders have specifically waived their rights under
this Section 2(c). 
 3. Definitions. 

“Affiliate” means, with respect to any Person, any other Person which directly or indirectly controls, is controlled by or is
under common control with such Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as applied to any
Person, means the possession, directly or indirectly, of the power to vote a majority of the securities having voting power for the election of directors (or other Persons acting in similar capacities) of such Person or otherwise to direct or cause
the direction of the management and policies of such Person through the ownership of voting securities, by contract or otherwise (other than the Company or any of its subsidiaries). 

“Board” means the board of directors of the Company. 

“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are
authorized or required by law to close. 
 “Certificate of Incorporation” means the Company’s Certificate of
Incorporation as the same may be amended from time to time. 
 “Common Stock” shall mean the common stock, par value $0.01
per share, of the Company. 
 “NMH Investment” has the meaning given such term in the preamble. 

“NMH Investors” means each of NMH Investment, Vestar and any Affiliate of Vestar that acquires Voting Securities after the
date hereof. 
 “NMH Investment Majority Holders” means the NMH Investors holding a majority in voting power of all of the
Voting Securities held by NMH Investors collectively. 
 “Nominating Committee” means the Nominating and Corporate
Governance Committee of the Board. 

  
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 “Person” means an individual, corporation, partnership, association, trust,
limited liability company, joint venture, unincorporated organization or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. 

“Retiring Director” means any director whose term expires at the next annual meeting of the stockholders of the Company
pursuant to the terms of the Company’s Certificate of Incorporation. 
 “Vestar” means, collectively, Vestar Capital
Partners V, L.P. and Vestar/NMH Investors, LLC and any investment fund affiliated with Vestar Capital Partners V, L.P. that at any time acquires Common Stock and executes a counterpart of this Agreement or otherwise agrees to be bound by this
Agreement. 
 “Voting Securities” means capital stock of the Company entitled to vote generally in the election of
directors. 
 4. Amendment and Waiver. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver
is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law. 
 5. Assignment. This Agreement is not assignable to
any third party, except that NMH Investment may assign all or any portion of its rights hereunder to one or more Affiliates of NMH Investment and/or Vestar and any such Affiliate will be entitled to the rights granted hereunder, provided that
(i) the Company is given written notice of said transfer or assignment identifying the name of such Affiliate, (ii) such Affiliate assumes in writing the obligations of NMH Investment under this Agreement, and (iii) such Affiliate
holds Voting Securities. 
 6. Benefit of Parties. This Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. The parties hereto expressly agree that Vestar is intended to be a third party beneficiary of Sections 1 and 2. Except as otherwise expressly provided herein, nothing herein contained shall confer
or is intended to confer on any third party or entity that is not a party to this Agreement any rights under this Agreement. 
 7.
Headings. Headings are for ease of reference only and shall not form a part of this Agreement. 
 8. Governing Law. This
Agreement shall be construed in accordance with and governed by the law of the State of Delaware without giving effect to the principles of conflicts of laws thereof. 

  
 5 

 9. Jurisdiction. Any suit, action or proceeding seeking to enforce any provision of, or
based on any matter arising out of or in connection with, this Agreement may be brought against any of the parties in any federal court located in the State of Delaware or any Delaware state court, and each of the parties hereby consents to the
exclusive jurisdiction of such court (and of the appropriate appellate courts) in any such suit, action or proceeding and waives any objection to venue laid therein. Process in any such suit, action or proceeding may be served on any party anywhere
in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, the parties agree that service of process upon such party at the address referred to in Section 16, together with written notice of such
service to such party, shall be deemed effective service of process upon such party. 
 10. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 

11. Entire Agreement. This Agreement and any other writing signed by authorized representatives of each of the parties after the date
hereof that specifically references this Agreement, constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations, both written and oral between the
parties with respect to the subject matter hereof. 
 12. Counterparts; Effectiveness. This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall become effective on the date of the consummation of the Initial Public Offering. An executed copy or counterpart hereof delivered by facsimile shall be deemed an original
instrument. 
 13. Severability. If any provision of this Agreement or the application thereof to any Person or circumstance shall be
invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provisions to other Persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. 

14. Further Assurances. The parties hereto shall execute and deliver such further instruments and do such further acts and things as
may be required to carry out the intent and purpose of this Agreement. 
 15. Specific Performance. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce
specifically the performance of the terms and provisions hereof in any federal or state court located in the State of Delaware, in addition to any other remedy to which they are entitled at law or in equity. 

  
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 16. Notices. All notices, requests and other communications to any party or to the Company
shall be in writing (including telecopy or similar writing) and shall be given, 
 If to the Company: 

Civitas Solutions, Inc. 
 313
Congress Street, 6th Floor 
 Boston, MA 02210 

Attention: Chief Legal Officer 

Facsimile:                      

With a copy to (which shall not constitute notice): 

Kirkland & Ellis LLP 

300 N. LaSalle 
 Chicago, IL 60654

 Attention: Sanford E. Perl, P.C. and Mark A. Fennell, P.C. 

Facsimile: (312) 862-2200 

If to NMH Investment: 
 c/o
Vestar Capital Partners V, L.P. 
 245 Park Avenue 

41st Floor 
 New York, NY 10167

 Attention: Chris A. Durbin, Erin Russell and General Counsel 

Facsimile: (212) 808-4922 

With a copy to (which shall not constitute notice): 

Kirkland & Ellis LLP 

300 N. LaSalle 
 Chicago, IL 60654

 Attention: Sanford E. Perl, P.C. and Mark A. Fennell, P.C. 

Facsimile: (312) 862-2200 
 or to such other
address or telecopier number as such party or the Company may hereafter specify for the purpose by notice to the other parties and the Company. Each such notice, request or other communication shall be effective when delivered at the address
specified in this Section 16 during regular business hours. 
 17. Enforcement. The parties hereto covenant and agree that the
disinterested members of the Board or the disinterested members of any Board committee so designated by the Board have the right to enforce, waive or take any other action with respect to this Agreement on behalf of the Company. 

*            *           
 *            *            * 

  
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 IN WITNESS WHEREOF, the parties hereto have executed this Stockholders Agreement on the day and
year first above-written. 
  

			
	CIVITAS SOLUTIONS, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	NMH INVESTMENT, LLC
		
	By:	 	  

	Name:	 	
	Title:Northstar Healthcare Inc. - Exhibit 10.1 - Filed by newsfilecorp.com

EMPLOYMENT AGREEMENT 

EMPLOYMENT AGREEMENT (this “Agreement”), dated as
of the 11th Day of December 2013 (the “Effective Date”) by and
among Donald L. Kramer, M.D. (the “Executive”), Northstar Healthcare
Acquisitions, L.L.C., a Delaware limited liability company (the
“Company”), and Northstar Healthcare Inc., a corporation incorporated
under the laws of British Columbia (the “Issuer”). 

            WHEREAS,
the Company wishes to employ the Executive upon the terms and conditions
hereinafter set forth, and the Executive is willing and able to accept such
employment on such terms and conditions. 

            AND
WHEREAS the Company is an indirect subsidiary of the Issuer. 

            AND
WHEREAS, the Issuer wishes for the Executive to serve as the Chief Executive
Officer of the Issuer for no additional compensation upon the terms and
conditions hereinafter set forth, and the Executive is willing and able to serve
in such capacity on such terms and conditions. 

            NOW,
THEREFORE, in consideration of the mutual premises set forth below, the
Company, the Issuer and the Executive agree as follows: 

	1. 	
      Employment Duties. The Company hereby employs the
      Executive, and the Executive accepts employment, as the Company’s Chief
      Executive Officer, subject to the direction and control of the Board of
      Managers of the Company (the “Board”) and the Board of Directors of
      the Issuer (the “Issuer Board”), to whom the Executive shall
      report. In addition, the Issuer hereby employs the Executive, and the
      Executive accepts employment, as the Issuer’s Chief Executive Officer.
      During the employment period, the Executive shall have such duties,
      responsibilities and authority with the Company and its subsidiaries and
      affiliates that are consistent with such position and are assigned by the
      Board, the Issuer Board or the Chief Executive Officer of the Company, as
      applicable. The Executive shall devote one hundred-percent (100%) of his
      business time, energy and experience to the performance of his duties
      hereunder, and is permitted to engage in other business activities, as an
      employee, director, consultant or in any other capacity, whether or not he
      receives any compensation provided that, any of such activities do not
      interfere with the performance of the Executive’s responsibilities
      pursuant to this Agreement. In addition, Executive may (a) manage his own
      passive investments, and (b) serve on civic, charitable or non-profit
      boards or committees, including any board of directors of such
      organization on which the Executive currently serves (a list of which is
      attached hereto as Schedule “A”), so long as any of such activities do not
      interfere with the performance of the Executive’s responsibilities
      pursuant to this Agreement.

	 	 
	2. 	
      Term. The Executive’s employment shall commence on
      the date of this Agreement and, unless earlier terminated as provided
      herein, shall continue until the date that is three (3) years from the
      Effective Date. This Agreement shall automatically renew for additional
      one (1) year terms unless written notice is provided by either the
      Executive or the Company at least 30 days prior to the expiration of any
      term hereunder.

- 2 - 

	3. 	
      Place of Employment.

	 	 	 
		
      The Executive’s place of employment will be the Company’s
      head office located in Houston, Texas.

	 	 	 
	4. 	
      Compensation and Benefits.

	 	 	 
		(a) 	
      Base Salary. The Company will pay the Executive a
      salary of Four Hundred Thousand United States dollars (U.S. $400,000) per
      annum (“Full Base Salary”) payable in accordance with the Company’s
      normal payroll practices. Said Full Base Salary shall increase to Four
      Hundred and Fifty Thousand United States dollars (U.S. $450,000) per annum
      in year two and Five Hundred Thousand United States dollars (U.S.
      $500,000) per annum in year three. The Executive shall receive no
      additional compensation during the Term for serving as the Chief Executive
      Officer of the Issuer.

	 	 	 
		(b) 	
      STIP. The Executive will be eligible to
      participate in the Company’s short-term incentive plan for senior
      management (the “STIP”) and shall be deemed to have commenced his
      employment hereunder on March 1, 2013 solely for purposes of his
      participation in the 2013 STIP. The Executive’s target annual bonus under
      the STIP shall be forty percent (40%) of his Base Salary, as determined by
      the Compensation, Nominating and Corporate Governance Committee of the
      Issuer Board (the “Compensation Committee”) in its sole
      discretion.

	 	 	 
		(c) 	
      Benefits. During the Term, the Executive shall be
      entitled to participate in all benefit plans and programs generally made
      available by the Company to its senior executives. The Executive shall
      also be entitled to all fringe benefits and vacations for which his
      position makes him eligible in accordance with the Company’s usual
      policies and the terms and provisions of such plans, policies or
      arrangements. During the Term, the Company shall pay the Executive’s
      reasonable health insurance premium expenses for any time period during
      which the Executive is not covered by the Company’s benefit plan (e.g.,
      during a “waiting period”), including, without limitation, the Executive’s
      COBRA payments for health insurance continuation.

	 	 	 
		(d) 	
      Execution of this Agreement. As consideration for
      executing this Agreement Executive agrees to the following conditions with
      respect to any and all common stock of Issuer that Executive owns or
      controls:

	 	 	 
		(e) 	
      Expenses. The Company shall pay or reimburse the
      Executive for ordinary and necessary business expenses incurred by him in
      the performance of his duties as an employee of the Company in accordance
      with the Company’s usual policies for expenses.

	 	 	 
		(f) 	
      Vacation. The Executive shall be entitled to
      unlimited vacation.

	 	 	 
	5. 	
      Termination of Employment. The Executive’s
      employment may be terminated as follows:

	 	 	 
		(a) 	
      By the Executive Without Good Reason. The
      Executive shall have the right to terminate the Executive’s employment at
      any time during the Term upon Sixty (60) days prior written notice, and upon such termination, the
      Executive shall have the right to receive any earned but unpaid Base
      Salary through the date of termination, accrued but unused vacation
      time and any expenses incurred but unreimbursed at the date of termination
      (the “Termination Benefits”), all of which shall be paid in cash
      either, at the discretion of the Issuer Board, within thirty (30) days
      following such termination date or over the course of the 60-day notice
      period in accordance with the Company’s standard payroll
  practices.

- 3 - 

	 	(b) 	
      By the Executive for Good Reason. The Executive
      may terminate his employment hereunder during the Term for Good Reason by
      providing written notice to the Board and the Issuer Board within thirty
      (30) days following the occurrence of any of the events specified below.
      Such notice shall specify the circumstances relating thereto and, unless
      the Company or the Issuer, as applicable, cures the defect within thirty
      (30) days after receipt of such notice, the Executive’s employment shall
      terminate ten (10) days after such cure period. For purposes of this
      Section 5, “Good Reason” shall mean any of the
  following:

	 	(i) 	
      the Executive’s assignment of title, duties or
      responsibilities that are inconsistent in any material respect with the
      scope of the title, duties or responsibilities as set forth in this
      Agreement;

	 	 	 
	 	(ii) 	
      the Executive’s duties or responsibilities are
      significantly reduced, except with respect to any corporate action
      initiated or recommended by the Executive and approved by the Board and
      the Issuer Board;

	 	 	 
	 	(iii) 	
      the failure of the Company or the Issuer to perform
      substantially any material term or provision of this Agreement required to
      be performed by it;

	 	 	 
	 	(iv) 	
      the Executive’s principal office is relocated more than
      fifty (50) miles from the location at which the Executive was based
      immediately prior to the relocation; or

	 	 	 
	 	(v) 	
      the Executive’s Base Salary is reduced, other than in
      connection with a reduction of compensation for executives in response to
      adverse financial circumstances;

	 	 	 
	 	(vi) 	
      there is a change in control of the
  Company.

	 	(c) 	
      By the Company Without Cause. The Company (subject
      to the prior agreement of the Issuer Board, upon the recommendation of the
      Compensation Committee) shall have the right to terminate the Executive’s
      employment at any time during the Term without Cause (as defined below),
      by providing written notice to the Executive specifying the effective date
      of termination (which may be forthwith).

	 	 	 
	 	(d) 	
      Severance Pay on a Termination Without Cause or for
      Good Reason. Subject to Section 2, if the Company terminates the
      Executive during the Term without Cause or the Executive terminates his
      employment during the Term for Good Reason, the Executive shall be
      entitled to the Termination Benefits and to receive severance pay equal
      to:

- 4 - 

	 	(i) 	
      All Base Salary that would be due for the remaining Term
      of this Agreement. This amount will be paid out either in a lump sum or in
      accordance with the Company’s standard payroll practices over the same
      time period as would have remained on the
agreement.

	 	(e) 	
      For Cause. Either the Issuer or the Company, with
      the prior approval of the Issuer Board upon the recommendation of the
      Compensation, Nominating and Corporate Governance Committee of the Issuer
      Board, may terminate this Agreement during the Term at any time for Cause,
      effective immediately upon written notice to the Executive, in which event
      the Executive shall be entitled to payment of the Termination Benefits and
      neither the Issuer nor the Company shall have any further obligation to
      him. For purposes of this Agreement, “Cause” shall mean any of the
      following:

	 	 	 	 
	 		(i) 	
      the Executive’s continued failure, whether wilful or not,
      to perform substantially all of his duties hereunder (other than as a
      result of being Disabled);

	 	 	 	 
	 		(ii) 	
      the Executive’s dishonesty or gross negligence in the
      discharge of his duties hereunder;

	 	 	 	 
	 		(iii) 	
      the Executive’s conviction of, or entering a plea of nolo
      contendere to, a crime that constitutes a felony under the federal,
      provincial or state laws of Canada or the United States (other than a
      traffic violation);

	 	 	 	 
	 		(iv) 	
      any wilful act or omission on the Executive’s part which
      is materially injurious to the financial condition or business reputation
      of the Company, the Issuer or any of their subsidiaries or
    affiliates;

	 	 	 	 
	 		(v) 	
      the Executive’s failure or refusal to comply with a
      lawful oral or written directive from the Company’s Chief Executive
      Office, the Board or the Issuer Board; or

	 	 	 	 
	 		(vi) 	
      the Executive’s breach of Section 6 or 7 of this
      Agreement.

	6. 	
      Protection of Confidential Information;
      Non-Competition.

	 	 	 
		(a) 	
      Acknowledgment. The Executive agrees and
      acknowledges that, in the course of rendering services to the Company and
      its clients and customers, he has acquired and will acquire access to and
      become acquainted with confidential information about the professional,
      business and financial affairs of the Company, its subsidiaries and
      affiliates (including the Issuer) that is non-public, confidential or
      proprietary in nature. The Executive acknowledges that the Company is
      engaged in a highly competitive business and that the success of the
      Company and the Issuer in the marketplace depends upon their good will and
      reputation for quality and dependability. The Executive agrees and
      acknowledges that reasonable limits on his ability to engage in activities
      competitive with the Company are warranted to protect their substantial
      investment in developing and maintaining its status in the marketplace,
      reputation and good will. The Executive recognizes that in order
  to guard the legitimate interests of the Company and the
      Issuer, it is necessary for them to protect all confidential information.
      The Executive further agrees that his obligations under Sections 6(b) and
  6(c) shall be absolute and unconditional.

- 5 - 

	 	(b) 	
      Confidential Information. During the Term and at
      all times following the Executive’s termination of employment, the
      Executive shall keep secret all non-public information, matters and
      materials of the Company (including subsidiaries or affiliates (including
      the Issuer)), including, without limitation, know-how, trade secrets,
      customer lists, pricing policies, operational methods, any information
      relating to the Company’s (including any subsidiaries or affiliates
      (including the Issuer)) products, processes, customers and services and
      other business and financial affairs of the Company and the Issuer
      (collectively, the “Confidential Information”), to which the
      Executive has had or may have access and shall not use or disclose such
      Confidential Information to any person other than: (i) the Company, its
      authorized employees and such other persons to whom the Executive has been
      instructed to make disclosure by the Issuer Board, in each case only to
      the extent required in the course of the Executive’s employment with the
      Company or as otherwise expressly required in connection with court
      process; (ii) as may be required by law (in which case the Executive will
      provide the Company with prompt notice so that it may seek a protective
      order or other appropriate remedy); or (iii) to the Executive’s personal
      advisers for purposes of enforcing or interpreting this Agreement, or to a
      court for the purpose of enforcing or interpreting this Agreement, and who
      in each case have been informed as to the confidential nature of such
      Information and, as to advisers, their obligation to keep such Information
      confidential. “Confidential Information” shall not include any information
      which is in the public domain during the Executive’s employment, provided
      such information is not in the public domain as a consequence of his
      disclosure in violation of this Agreement. Upon termination of the
      Executive’s employment for any reason, he shall deliver to the Company all
      documents, papers and records (including, but not limited to, electronic
      media) in his possession or subject to his control that (x) belong to the
      Issuer or the Company or (y) contain or reflect any information concerning
      the Company, its subsidiaries or affiliates (including the
  Issuer).

	 	 	 
	 	(c) 	
      Non-Competition and Non-Solicitation. In
      consideration of the obligations of the Company and the Issuer hereunder,
      the Executive shall not, in any capacity, whether for his own account or
      for any other person or organization, directly or indirectly, with or
      without compensation:

	 	(i) 	
      during the Term and for a period following his
      termination of employment corresponding with the amount of severance
      payable under this Agreement (and not, for clarity, the time period over
      which such severance is paid) (A) own, operate, manage, or control, (B)
      serve as an officer, director, partner, employee, agent, consultant,
      advisor or developer or in any similar capacity to (C) have any financial
      interest in, or aid or assist anyone else in the conduct of an enterprise
      of, or (D) engage in any undertaking, provide services to, lend money or
      guarantee the obligations of, any person who carries on business that
      competes in any material respect with the business or any material part
      thereof, of the identification, development, acquisition, ownership,
      operation or management of ambulatory surgery centres
  carried on by the Company or any of its subsidiaries or
      affiliates (including the Issuer) on the date of termination or
      non-renewal or within the preceding six months of the applicable date in
      the United States or any other territory in which such business is carried
      on at such time, or call upon, solicit, divert, take away or attempt to
      solicit any of the customers or suppliers or any other business contacts
  of the Company any of its subsidiaries or affiliates;

- 6 - 

	 	(ii) 	
      during the Term and for a period ending twelve (12)
      months following his termination of employment, solicit, retain, hire,
      offer to hire, entice away or in any manner persuade or attempt to
      persuade any officer, employee or agent of the Company, the Issuer
      (including any subsidiaries or affiliates thereof, including, without
      limitation, any physician limited partner or contract physician employed
      by or working at any of the ambulatory surgery centres owned (directly or
      indirectly) or managed by the Company) to discontinue his or her
      relationship with the Company, the Issuer or such subsidiaries or
      affiliates; or

	 	 	 
	 	(iii) 	
      during the Term and for a period ending twelve (12)
      months following his termination of employment, solicit, divert or
      appropriate any customers, clients, vendors or distributors of the Company
      (including any subsidiaries or affiliates
thereof).

	 		
      Notwithstanding anything to the contrary contained
      herein, nothing in this Section 6(c) shall prohibit the Executive from
      acquiring or holding not more than five percent (5%) of any class of
      publicly traded securities or, following his termination of employment,
      serving as an officer, director, partner, employee, agent, consultant or
      advisor of a hospital that derives no more than 5% of its revenues from
      the operation and/or management of an ambulatory surgery centre or
      outpatient clinic; provided that the Executive shall not serve in any such
      capacity if such service relates in any material respect to the
      identification, development, acquisition, ownership, operation or
      management of ambulatory surgery centres by such hospital.

	 	 	 
	 		
      For clarity and by way of example, if the Executive is
      entitled to a severance payment equal to sixty (60) days’ Base Salary, the
      Executive’s obligations not to compete pursuant to Section 6(c)(i) above
      shall extend for sixty (60) days following the date of
  termination.

	 	 	 
	 	(d) 	
      Modification. The parties agree and acknowledge
      that the duration, scope and geographic area of the covenants described in
      this Section 6 are fair, reasonable and necessary in order to protect the
      good will and other legitimate interests of the Company, that adequate
      consideration has been received by the Executive for such obligations, and
      that these obligations do not prevent the Executive from earning a
      livelihood. If, however, for any reason any court of competent
      jurisdiction determines that the restrictions in this Section 6 are not
      reasonable, that consideration is inadequate or that the Executive has
      been prevented unlawfully from earning a livelihood, such restrictions
      shall be interpreted, modified or rewritten to include as much of the
      duration, scope and geographic area identified in this Section 6 as will
      render such restrictions valid and
enforceable.

- 7 - 

	 	(e) 	
      Remedies for Breach. The Company, the Issuer, and
      the Executive agree that the restrictive covenants contained in this
      Agreement are severable and separate, and the unenforceability of any
      specific covenant herein shall not affect the validity of any other
      covenant set forth herein. The Executive acknowledges that the Company and
      the Issuer will suffer irreparable harm as a result of a breach of such
      restrictive covenants by the Executive for which an adequate monetary
      remedy does not exist and a remedy at law may prove to be inadequate.
      Accordingly, in the event of any actual or threatened breach by the
      Executive of any provision of this Agreement, the Company and the Issuer
      shall, in addition to any other remedies permitted by law, be entitled to
      obtain remedies in equity, including, without limitation, specific
      performance, injunctive relief, a temporary restraining order, and/or a
      permanent injunction in any court of competent jurisdiction, to prevent or
      otherwise restrain a breach of Sections 6(b) and 6(c), without the
      necessity of proving damages, posting a bond or other security, and to
      recover any and all costs and expenses, including reasonable counsel fees,
      incurred in enforcing this Agreement against the Executive, and the
      Executive hereby consents to the entry of such relief against him and
      agrees not to contest such entry. Such relief shall be in addition to and
      not in substitution of any other remedies available to the Company. The
      existence of any claim or cause of action of the Executive against the
      Company or the Issuer, whether predicated on this Agreement or otherwise,
      shall not constitute a defense to the enforcement by the Company or the
      Issuer of said covenants. The Executive shall not defend on the basis that
      there is an adequate remedy at law.

	7. 	
      Intellectual Property. All copyrights, trademarks,
      trade names, servicemarks, and other intangible or intellectual property
      rights that may be invented, conceived, developed or enhanced by the
      Executive during the Term that relate to the business or operations of the
      Company or any subsidiary or affiliate thereof (including the Issuer) or
      that result from any work performed by the Executive for the Company or
      any such subsidiary or affiliate shall be the sole property of the Company
      or such subsidiary or affiliate, as the case may be, and the Executive
      hereby waives any right or interest that he may otherwise have in respect
      thereof. Upon the reasonable request of the Company or the Issuer, the
      Executive shall execute, acknowledge and deliver any instrument or
      document reasonably necessary or appropriate to give effect to this
      Section 7 and, at the Company’s cost, do all other acts and things
      reasonably necessary to enable the Company or such subsidiary or
      affiliate, as the case may be, to exploit the same or to obtain patents or
      similar protection with respect thereto.

	 	 
	8. 	
      Notices. All notices or other communications
      hereunder shall be in writing and shall be deemed to have been duly given
      (a) when delivered personally, (b) upon confirmation of receipt when such
      notice or other communication is sent by facsimile, (c) one day after
      delivery to an overnight delivery courier, or (d) on the fifth day
      following the date of deposit in the United States mail if sent first
      class, postage prepaid, by registered or certified mail. The addresses for
      such notices shall be as follows:

- 8 - 

	 	(a) 	
      For notices and communications to the Company and the
      Issuer:

	 	 	 
	 		
      Northstar Healthcare Acquisitions, L.L.C. 
4120
      Southwest Freeway, Suite 150 
Houston, Texas 77027

	 		
      Attn: Donald L. Kramer, M.D., Chief Executive Officer
      
Fax: 713-355-8615 
E-mail: dkramer@northstar-healthcare.com

	 	 	 
	 	(b) 	
      For notices and communications to the Executive, to the
      address or facsimile set forth below his signature hereto. Any party
      hereto may, by notice to the other, change its address for receipt of
      notices hereunder.

	9. 	
      General

	 	 	 
		(a) 	
      Governing Law. This Agreement shall be governed by
      the laws of the State of Texas, without regard to any conflicts of laws
      principles thereof that would call for the application of the laws of any
      other jurisdiction. Any action or proceeding seeking to enforce any
      provision of, or based on any right arising out of, this Agreement may be
      brought against either of the parties in the courts of the State of Texas,
      or if it has or can acquire jurisdiction, in the United States District
      Court for the Southern District of Texas and each of the parties hereby
      consents to the jurisdiction of such courts (and of the appropriate
      appellate courts) in any such action or proceeding and waives any
      objection to venue laid therein. Process in any action or proceeding
      referred to in the preceding sentence may be served on any party anywhere
      in the world, whether within or without the State of Texas.

	 	 	 
		(b) 	
      Amendment: Waiver. This Agreement may be amended,
      modified, superseded, cancelled, renewed or extended, and the terms hereof
      may be waived, only by a written instrument executed by both of the
      parties hereto or, in the case of a waiver, by the party waiving
      compliance. The failure of either party at any time or times to require
      performance of any provision hereof shall in no manner affect the right at
      a later time to enforce the same. No waiver by either party of the breach
      of any term or covenant contained in this Agreement, whether by conduct or
      otherwise, in any one or more instances, shall be deemed to be, or
      construed as, a further or continuing waiver of any such breach, or a
      waiver of the breach of any other term or covenant contained in this
      Agreement.

	 	 	 
		(c) 	
      Successors and Assigns. This Agreement shall be
      binding upon the Executive, without regard to the duration of his
      employment by the Company and the Issuer or reasons for the cessation of
      such employment, and inure to the benefit of his administrators,
      executors, heirs and assigns, although the obligations of the Executive
      are personal and may be performed only by him. This Agreement shall also
      be binding upon and inure to the benefit of the Company, the Issuer and
      their respective subsidiaries, successors and assigns, including any
      corporation with which or into which the Company or its successors may be
      merged or which may succeed to its assets or
business.

- 9 - 

	 	(d) 	
      Counterparts. This Agreement may be executed in
      multiple counterparts, each of which shall be considered to have the force
      and effect of an original.

	 	 	 
	 	(e) 	
      Entire Agreement. This Agreement supersedes all
      prior agreements between the parties with respect to its subject matter
      and is intended (with the documents referred to herein) as a complete and
      exclusive statement of the terms of the agreement between the parties with
      respect thereto.

	 	 	 
	 	(f) 	
      Deductions and Withholding. The Executive
      acknowledges and agrees that the Company shall be entitled to withhold
      from the compensation payable hereunder, including the Base Salary and any
      bonus, all federal, state, local or other taxes which the Company
      determines are required to be withheld on amounts payable to the Executive
      pursuant to this Agreement or otherwise.

	 	 	 
	 	(g) 	
      Representation. The Executive hereby acknowledges
      that he has been represented by an attorney of his choice in negotiating
      this Agreement (or has chosen not to be so represented) and that counsel
      for the Company and the Issuer has not advised or represented him in any
      way in this matter.

	 	 	 
	 	(h) 	
      Severability. The invalidity of one or more of the
      words, phrases, sentences, clauses or sections contained herein shall not
      affect the enforceability of the remaining portions of this Agreement, or
      any part thereof, all of which are inserted conditionally on their being
      valid in law, and, in the event any one of the words, phrases, sentences,
      clauses or sections in this Agreement shall be declared invalid, this
      Agreement shall be construed as if such invalid word(s), phrase(s),
      sentence(s), clause(s) or section(s) had not been inserted.

	 	 	 
	 	(i) 	
      Section Headings. The section headings in this
      Agreement are for reference purposes only and shall not affect in any way
      the meaning or interpretation of this
Agreement.

- 10 - 

[Intentionally Blank] 

      
     IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written. 

 

NORTHSTAR HEALTHCARE ACQUISITIONS,
L.L.C. 

 

	 	By: 	     
	 	 	Name: 
	 	 	Title: 

 

NORTHSTAR HEALTHCARE INC. 

 

	 	By: 	  
	 	 	Name: 
	 	 	Title: 

 

EXECUTIVE 

 

	 	 
	 	Name: Donald Kramer 
	 	Address: 3330 Chevy Chase, Houston TX 
	 	77019 

SCHEDULE “A” 

Existing Board/Committee Commitments 

None.

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