Document:

Nobilis Health Corp. : Exhibit 10.8 - Filed by newsfilecorp.com

AGENCY AGREEMENT 

December 16, 2013 

Northstar Healthcare Inc. 
Suite 150 - 4120 Southwest
Freeway 
Houston, Texas, 77027 
U.S.A. 

Attention: Harry Fleming, CFO 

Dear Sir: 

Re: Private Placement of up to 6,250,000 Units of Northstar
Healthcare Inc. 

PI Financial Corp. (the “Agent”), understands that
Northstar Healthcare Inc. (the “Issuer”) proposes to sell up to 6,250,000
units (the “Units”) at $0.80 per Unit (the “Offering Price”), and
that the Issuer wishes to appoint the Agent to distribute the Units to
purchasers (the “Purchasers”) who are qualified to purchase such Units
pursuant to the Exemptions (as defined below). The Agent is willing to accept
such appointment, pursuant to the terms and conditions set forth below. 

1.             DEFINITIONS 

1.1            In this Agreement: 

	 	(a) 	
      “Acts” means the securities legislation of the
      Offering Jurisdictions and the regulations, rules, administrative policy
      statements, instruments, blanket orders, notices, directions and rulings
      issued or adopted by the applicable Commissions, all as amended;

	 	 	 
	 	(b) 	
      “Agent’s Commission” means the commission which is
      set out in this Agreement and which is payable by the Issuer to the Agent
      in consideration for the services performed by the Agent under this
      Agreement;

	 	 	 
	 	(c) 	
      “Agent’s Shares” means the previously unissued
      common shares in the authorized share structure of the Issuer, as
      presently constituted, issuable on exercise of the Agent’s
  Warrants;

	 	 	 
	 	(d) 	
      “Agent’s Warrants” means the transferable warrants
      to acquire Agent’s Shares to be issued to the Agent in further
      consideration of the services performed by the Agent under this Agreement
      and having the terms described in Section 4.3;

	 	 	 
	 	(e) 	
      “Business Day” means any day except Saturday,
      Sunday or a statutory holiday in Vancouver, British
  Columbia;

- 2- 

	 	(f) 	
      “Certificates” means the certificates, if any,
      representing the Shares and the Warrants sold on the Closing in the names
      and denominations reasonably requested by the Agent or the Purchasers, and
      the certificates representing the Agent’s Warrants in the names and
      denominations reasonably requested by the Agent;

	 	 	 
	 	(g) 	
      “Closing” means the closing of the purchase and
      sale of the Units;

	 	 	 
	 	(h) 	
      “Closing Date” means the date on which the Closing
      occurs;

	 	 	 
	 	(i) 	
      “Commissions” means the provincial securities
      commission or other regulatory authority in each of the Offering
      Jurisdictions;

	 	 	 
	 	(j) 	
      “Disclosure Record” means all prospectuses,
      information circulars, annual information forms, financial statements,
      management’s discussion and analysis, press releases, material change
      reports or other documents filed by and in respect of the Issuer with the
      applicable Commissions and available on SEDAR at www.sedar.com;

	 	 	 
	 	(k) 	
      “Exchange” means the Toronto Stock
  Exchange;

	 	 	 
	 	(l) 	
      “Exemptions” means the exemptions from the
      prospectus requirements of the Acts which are outlined in Section 2.3 and
      2.10 of National Instrument 45-106 and BC Instrument 72-503;

	 	 	 
	 	(m) 	
      “Material Change” has the meaning defined in the
      Acts;

	 	 	 
	 	(n) 	
      “Material Fact” has the meaning defined in the
      Acts;

	 	 	 
	 	(o) 	
      “Material Subsidiaries” means Northstar Healthcare
      Acquisitions, LLC, Northstar Healthcare Surgery Center - Houston, LLC,
      Medical Ambulatory Surgical Suites, L.P., Microsurgery Institute, LLC and
      The Palladium for Surgery - Houston, Ltd.;

	 	 	 
	 	(p) 	
      “National Instrument 45-102” means National
      Instrument 45-102 Resale of Securities adopted by the Canadian
      Securities Administrators;

	 	 	 
	 	(q) 	
      “National Instrument 45-106” means National
      Instrument 45-106 Prospectus and Registration Exemptions adopted by
      the Canadian Securities Administrators;

	 	 	 
	 	(r) 	
      “Offering Jurisdictions” means each of the
      provinces of Canada;

	 	 	 
	 	(s) 	
      “Offering Price” means the offering price for the
      Units under the Private Placement being $0.80 per Unit;

	 	 	 
	 	(t) 	
      “Private Placement” means the offering of the
      Units on the terms and conditions of this
Agreement;

- 3- 

	 	(u) 	
      “Proceeds” means the gross proceeds from the sale
      of Units on Closing plus any advance payments for expenses or on account
      of the Agent’s Commission made by the Issuer and held by the Agent at
      Closing, less:

	 	 	 	 
	 		(i) 	
      the Agent’s Commission;

	 	 	 	 
	 		(ii) 	
      the reasonable expenses of the Agent, including the fees
      and disbursements of the Agent’s legal counsel, in connection with the
      Private Placement which have not been paid by the Issuer;

	 	 	 	 
	 		(iii) 	
      any amount which has been attached by garnishing order or
      other form of attachment; and

	 	 	 	 
	 		(iv) 	
      any amount paid directly to the Issuer by Purchasers in
      connection with the Private Placement.

	 	(v) 	
      “Purchasers” means the purchasers of the Units
      pursuant to the Private Placement;

	 	 	 
	 	(w) 	
      “Regulation S” means Regulation S promulgated
      under the U.S. Securities Act;

	 	 	 
	 	(x) 	
      “Regulatory Authorities” means the Commissions and
      the Exchange and the securities regulatory authorities in any other
      applicable international jurisdictions;

	 	 	 
	 	(y) 	
      “Right of First Refusal” has the meaning ascribed
      to that term in Section 17.1;

	 	 	 
	 	(z) 	
      “ROFR Notice” has the meaning ascribed to that
      term in Section 17.1;

	 	 	 
	 	(aa) 	
      “Securities” means the Units, the Shares, the
      Warrants, the Warrant Shares, the Agent’s Warrants and the Agent’s
      Shares;

	 	 	 
	 	(bb) 	
      “Shares” means the previously unissued common
      shares in the authorized share structure of the Issuer, as presently
      constituted, which comprise part of the Units;

	 	 	 
	 	(cc) 	
      “Subscription Agreements” has the meaning ascribed
      to that term in Section 6.1;

	 	 	 
	 	(dd) 	
      “United States” means the United States of
      America, its territories and possessions, any state of the United States
      and the District of Columbia;

	 	 	 
	 	(ee) 	
      “Units” means an aggregate of 6,250,000 units of
      the Issuer being offered for sale under the Private Placement, each
      comprised of one Share and one-half of one Warrant;

	 	 	 
	 	(ff) 	
      “U.S. Person” has the meaning ascribed to that
      term in Regulation S;

	 	 	 
	 	(gg) 	
      “U.S. Securities Act” means the United States
      Securities Act of 1933, as amended;

- 4- 

	 	(hh) 	
      “Warrant Shares” means the previously unissued
      common shares in the authorized share structure of the Issuer, as
      presently constituted, which will be issued upon the exercise of the
      Warrants; and

	 	 	 
	 	(ii) 	
      “Warrants” means the transferable share purchase
      warrants of the Issuer, with one-half of one Warrant comprising part of
      one Unit having the terms described in Sections 3.1 and
  3.2.

2.              APPOINTMENT OF AGENT 

2.1            The Issuer appoints the Agent as its exclusive agent and
the Agent accepts the appointment and agrees to act as the exclusive agent of
the Issuer to use its reasonable commercial efforts to find and introduce to the
Issuer potential purchasers to purchase up to 6,250,000 Units at a price of
$0.80 per Unit by way of private placement under the applicable Exemptions.

3.              WARRANTS 

3.1            Each whole Warrant will entitle the holder, on exercise, to
purchase one Warrant Share at any time from the Closing Date until 5:00 p.m.
(Vancouver time) on the date 24 months following the Closing Date at a price of
$1.10 per Warrant Share. If, commencing on that date that is four months and one
day from the Closing Date, the volume weighted average price of the Shares on
the Exchange is greater than $1.40 for a period of ten (10) consecutive trading
days, then the Issuer may provide written notice to the Warrant holders (the
“Written Notice”) that the Warrants will expire 30 calendar days
following the date of the Written Notice. The Company will also issue a press
release on the date that the notice is provided indicating the expiry date of
the Warrants. The Warrants are transferable but will not be listed on the
Exchange or on any other public market. 

3.2            The terms governing the Warrants will be set out in the
certificates representing the Warrants, the form of which will be subject to the
approval of the Issuer and the Agent, acting reasonably. The certificates
representing the Warrants will include, among other things, provisions for the
appropriate adjustment in the class, number and price of the Warrant Shares
issued upon exercise of the Warrants upon the occurrence of certain events,
including any subdivision, consolidation or reclassification of the Issuer’s
common shares, the payment of stock dividends and the amalgamation of the
Issuer. 

3.3            The issue of the Warrants will not restrict or prevent the
Issuer from obtaining any other financing, or from issuing additional securities
or rights, during the period within which the Warrants may be exercised. 

4.              AGENT’S COMPENSATION 

4.1            In consideration of the services performed by the Agent
under this Agreement, the Issuer will pay to the Agent, the Agent’s Commission
equal to 7% of the gross proceeds received by the Issuer from the sale of the
Units to Purchasers, payable in cash at the Closing or, in whole or in part, in
Units of the Issuer at a deemed price equal to the Offering Price or, if not
permitted by the Exchange, at the lowest price permitted by the Exchange.

- 5- 

4.2            In addition to payment of the Agent’s Commission, the
Issuer will issue to the Agent at Closing that number of Agent’s Warrants equal
to 7% of the aggregate number of Units sold to Purchasers under the Private
Placement. Each Agent’s Warrant will entitle the holder to purchase one Agent’s
Share at a price of $0.95. The Agent’s Warrants are exercisable in whole or in
part at any time from the Closing Date until 5:00 p.m. (Vancouver time) on the
date 24 months following the Closing Date. 

4.3            The terms governing the Agent’s Warrants will be set out in
the certificates representing the Agent’s Warrants, the form of which will be
subject to the approval of the Issuer and the Agent, acting reasonably. The
certificates representing the Agent’s Warrants will include, among other things,
provisions for the appropriate adjustment in the class, number and price of the
Agent’s Shares issued upon exercise of the Agent’s Warrants upon the occurrence
of certain events, including any subdivision, consolidation or reclassification
of the Issuer’s common shares, the payment of stock dividends and the
amalgamation of the Issuer. 

4.4            The Issuer agrees not to place or have placed a U.S.
securities law restrictive legend on the certificates representing the Agent’s
Warrants and the Agent’s Shares. 

4.5            The amounts paid to the Agent under this section are in
addition to and not in substitution for any other commission or remuneration
payable to the Agent by the Issuer under any other agreement or arrangement.

5.              OFFERING RESTRICTIONS 

5.1            The Agent will only sell the Units, on behalf of the
Issuer, to persons resident in the Offering Jurisdictions (or to persons outside
the Offering Jurisdictions in compliance with Section 5.2) who represent
themselves as being persons: 

	 	(a) 	
      purchasing as principal or deemed to be purchasing as
      principal under applicable securities laws or purchasing as authorized
      agent on behalf of a disclosed principal;

	 	 	 
	 	(b) 	
      qualified to purchase the Units under one or more of the
      applicable Exemptions and

	 	 	 
	 	(c) 	
      who are not U.S. Persons or in the United
  States.

5.2            The Agent covenants and agrees that if it offers to sell or
sells any Units in jurisdictions other than the Offering Jurisdictions, such
offers and sales shall be effected in accordance and compliance with the
applicable laws of such jurisdictions and shall be effected in such manner so as
not to: (i) require registration of any of the Securities, or the filing of a
prospectus or other similar document with respect thereto; or (ii) subject the
Issuer to any additional continuous disclosure or similar reporting requirements
under the laws of any jurisdiction outside the Offering Jurisdictions. 

- 6- 

5.3            Notwithstanding Section 5.2, neither the Issuer, the Agent,
nor any of their respective affiliates, nor any person acting on behalf of any
of the foregoing, will offer or sell any of the Securities to U.S. Persons or in
the United States, or undertake any activity for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the market for the
Securities in the United States. The Agent agrees that at the time any buy order
for Units is placed by clients of the Agent, the buyer will be outside the
United States, or the Agent and all persons acting on its behalf will reasonably
believe that the buyer is outside the United States, and neither the Agent nor
any person acting on its behalf will have knowledge that such transaction has
been pre-arranged with a buyer in the United States. 

6.              SUBSCRIPTIONS 

6.1            The Agent will use its best efforts to obtain from each
Purchaser introduced by the Agent, and deliver to the Issuer, as soon as
practicable but in any event before the Closing, duly completed and signed
subscriptions in the form or forms consented to by the Issuer and the Agent (the
“Subscription Agreements”) and executed by the Purchaser, together with
all other documents required under the Exemptions or by the Exchange. 

7.              FILINGS WITH THE REGULATORY AUTHORITIES

7.1            The Issuer will, in a timely manner, file all required
documents, pay all required filing fees and undertake any other actions required
by the rules and policies of the Exchange in order to obtain the acceptance of
the Exchange for the issuance of the Securities. 

7.2            Within 10 days of the Closing, the Issuer will file with
the Commissions any report(s) required to be filed by the Acts, including under
National Instrument 45-106, in connection with the Private Placement in the
required form, and will provide the Agent’s legal counsel with copies of the
report or reports. 

8.              CLOSING 

8.1            The Issuer and the Agent will cause Closing to take place
on a date or dates mutually agreeable to the parties. 

8.2            The Issuer will, on Closing, issue and deliver the
Securities by electronic issuance or by Certificates, as directed by the Agent,
to the Agent or, at the Agent’s request, to the Purchasers, against payment of
the Proceeds. 

8.3            If the Issuer has satisfied all of its material obligations
under this Agreement, the Agent will, on Closing, pay the Proceeds to the Issuer
against delivery of the Certificates. 

8.4            The Issuer will endorse the Certificates, and the
certificates representing any Warrant Shares or Agent’s Shares issued prior to
the expiry of applicable hold periods with any legends which may be required by
any of the Regulatory Authorities.

- 7- 

	9.              CONDITIONS OF CLOSING
	 
	9.1            The obligations of the Agent on Closing will be
      conditional upon the following:

	 	(a) 	
      the Issuer will be a “reporting issuer” in all provinces
      and territories of Canada, the Issuer’s common shares will be listed and
      posted for trading on the Exchange, and the Issuer will not be in default
      of any of the requirements of the Acts or any of the administrative
      policies or notices of the Exchange;

	 	 	 
	 	(b) 	
      the Issuer will have delivered to the Agent and its legal
      counsel favourable opinions of the Issuer’s legal counsel dated as of the
      date of the Closing, in such form as is acceptable to the Agent and its
      legal counsel as to all legal matters reasonably requested by the Agent
      relating to the business of the Issuer and the creation, issuance and sale
      of the Securities;

	 	 	 
	 	(c) 	
      the Issuer will have delivered to the Agent and its legal
      counsel such other legal opinions as may be reasonably requested by the
      Agent and its legal counsel, including without limitation, a corporate
      opinion relating to the Material Subsidiaries;

	 	 	 
	 	(d) 	
      the Issuer will have delivered to the Agent and its legal
      counsel a certificate of the Issuer, dated as of such date requested by
      the Agent and signed by the chief executive officer and the chief
      financial officer of the Issuer, or by such other officers approved by the
      Agent, certifying certain facts specified by the Agent and relating to the
      Issuer and its affairs;

	 	 	 
	 	(e) 	
      the Agent will have completed its due diligence review of
      the Issuer and the results will have been satisfactory to the Agent, in
      its sole discretion;

	 	 	 
	 	(f) 	
      the Issuer will have delivered to the Agent and its legal
      counsel such other certificates relating to the Private Placement or the
      affairs of the Issuer as the Agent or its legal counsel may reasonably
      request; and

	 	 	 
	 	(g) 	
      each representation and warranty of the Issuer which is
      contained in this Agreement continues to be true, and the Issuer has
      performed or complied with all of its covenants, agreements and
      obligations under this Agreement.

9.2            The Closing and the obligations of the Issuer and the Agent
to complete the issue and sale of the Securities are subject to: 

	 	(a) 	
      receipt of all required regulatory approvals for or
      acceptance of the Exchange for:

	 	 	 	 
	 		(i) 	
      the issuance of the Securities; and

	 	 	 	 
	 		(ii) 	
      the listing on the Exchange of the Shares, the Warrant
      Shares and the Agent’s Shares; and

- 8- 

	 	(b) 	
      the removal or partial revocation of any cease trading
      order or trading suspension made by any competent authority to the extent
      necessary to complete the Private Placement.

10.              MATERIAL CHANGES 

10.1            The Issuer agrees that if between the date of the
engagement letter between the parties dated November 29, 2013 and the Closing, a
Material Change or a change in a Material Fact occurs in respect of the Issuer,
the Issuer will: 

	 	(a) 	
      as soon as practicable notify the Agent in writing,
      setting forth the particulars of such change;

	 	 	 
	 	(b) 	
      as soon as practicable, issue and file with the
      applicable Regulatory Authorities a news release that is authorized by a
      senior officer disclosing the nature and substance of the
change;

	 	 	 
	 	(c) 	
      as soon as practicable, and in any event no later than 10
      days after the date on which the change occurs, file with the Commissions
      any report required by the applicable Acts which discloses the change;
      and

	 	 	 
	 	(d) 	
      provide copies of that news release, when issued, and
      that report, when filed, to the Agent and its
counsel.

	11.              ISSUER OBLIGATIONS
	 
	11.1            The Issuer further agrees to:

	 	(a) 	
      fully comply with the covenants made by the Issuer in the
      Subscription Agreements entered into between the Issuer and each of the
      Purchasers;

	 	 	 
	 	(b) 	
      as soon as reasonably possible, take all such steps as
      may reasonably be necessary to enable the Units to be offered for sale and
      sold on a private placement basis to purchasers in the Offering
      Jurisdictions through the Agent or other investment dealers or brokers
      registered in the applicable Offering Jurisdictions by way of the
      Exemptions;

	 	 	 
	 	(c) 	
      permit the Agent and its legal counsel to participate
      fully in the preparation of any documents regarding the Private Placement
      and allow the Agent and its legal counsel to conduct all due diligence
      which the Agent may, in its sole discretion, require or request;

	 	 	 
	 	(d) 	
      ensure that the distribution of the Units will fully
      comply with the requirements of the Acts and the policies of the Exchange;
      and

	 	 	 
	 	(e) 	
      use the Proceeds for general working
  capital.

- 9- 

11.2            The Issuer will immediately send to the Agent and its
legal counsel copies of all correspondence and filings to and correspondence
from the Regulatory Authorities relating to the Private Placement. 

12.              TERMINATION 

12.1            The Agent may terminate its obligations under this
Agreement by notice in writing to the Issuer at any time before the Closing if:

	 	(a) 	
      an adverse Material Change, or an adverse change in a
      Material Fact relating to any of the Securities occurs or is announced by
      the Issuer;

	 	 	 
	 	(b) 	
      there is an event, accident, law or governmental
      regulation or other occurrence of any nature which, in the opinion of the
      Agent, seriously affects or would be expected to seriously affect the
      financial markets, or the business or operations of the Issuer, or the
      market price or value of the Issuer’s securities or the ability of the
      Agent to perform its obligations under this Agreement, or a Purchaser’s
      decision to purchase the Units, in the Agent’s sole opinion;

	 	 	 
	 	(c) 	
      following a consideration of the history, business,
      products, property or affairs of the Issuer or its principals and
      promoters, or of the state of the financial markets in general, or the
      state of the market for the Issuer’s securities in particular, the Agent
      determines, in its sole discretion, that it is not in the interest of the
      Purchasers to complete the purchase and sale of the Units;

	 	 	 
	 	(d) 	
      an enquiry or investigation (whether formal or informal)
      or other proceeding in relation to the Issuer, or any of the Issuer’s
      directors, officers or promoters, is announced, commenced or threatened by
      any court, any Commission, the Exchange, or any other competent
      authority;

	 	 	 
	 	(e) 	
      any order to cease, halt or suspend trading (including an
      order prohibiting communications with persons in order to obtain
      expressions of interest) in any securities of the Issuer is made, or
      proceedings are announced, commenced or threatened for the making of such
      order by a competent regulatory authority and that order is still in
      effect and has not been rescinded, revoked or withdrawn;

	 	 	 
	 	(f) 	
      the results of the Agent’s due diligence review of the
      Issuer are not satisfactory as determined by the Agent in its sole
      discretion;

	 	 	 
	 	(g) 	
      the Issuer is in breach of a material term of this
      Agreement or any condition in this Agreement remains outstanding and
      completion at the time of Closing;

	 	 	 
	 	(h) 	
      any of the representations or warranties made by the
      Issuer in this Agreement is false or has become false; or

	 	 	 
	 	(i) 	
      the Exchange will not accept for filing documentation
      relating to the Private Placement.

- 10- 

12.2            The Agent’s obligations hereunder will terminate if the
Exchange does not issue its letter of conditional acceptance, subject only to
the usual post-closing filings with the Exchange, of the Private Placement
within 60 days of the reference date of this Agreement, unless otherwise agreed
by the Agent. 

12.3            The rights of the Agent to terminate this Agreement are in
addition to such other remedies as they may have in respect of any default,
misrepresentation, act or failure of the Issuer in respect of any of the matters
contemplated by this Agreement. 

12.4            The Company may terminate this Agreement in the event that
it has not received total gross proceeds from this transaction of $3,000,000 on
or prior to December 31, 2013. 12.5 Notwithstanding any other term hereof, this
Agreement will terminate if the Closing does not occur within 90 days of the
reference date of this Agreement. 

12.6            In the event that this Agency Agreement is terminated by
the Agent, then the obligations of the parties hereunder shall immediately
terminate, save and except for this paragraph 12.6 and the obligations of the
Issuer under Sections 14, 16 and 21, which obligations of the Issuer shall
survive such termination and which the Agent shall be specifically entitled to.
In such case, the Issuer acknowledges and agrees that the Agent and its counsel
and advisors will be free to accept any mandate which may be in conflict with
the Issuer’s interests. 

	13.              WARRANTIES, REPRESENTATIONS AND
    COVENANTS
	 
	13.1            The Issuer warrants and represents to and covenants
      with the Agent that:

	 	(a) 	
      the Issuer and the Material Subsidiaries are valid and
      subsisting corporations duly incorporated and in good standing under the
      laws of the jurisdiction in which they are incorporated, continued or
      amalgamated and have all requisite corporate power and authority to carry
      on their respective businesses, as now conducted and as presently proposed
      to be conducted and to own their respective assets;

	 	 	 	 
	 	(b) 	
      the Issuer and the Material Subsidiaries are duly
      registered and licensed to carry on business in the jurisdictions in which
      they carry on business or own property where so required by the laws of
      that jurisdiction;

	 	 	 	 
	 	(c) 	
      the authorized share structure of the Issuer consists of
      an unlimited number of common shares without par value and, as at December
      16, 2013 an aggregate of 36,867,047 common shares, are issued and
      outstanding as fully paid and non- assessable shares;

	 	 	 	 
	 	(d) 	
      in respect of the Issuer's material
  subsidiaries:

	 	 	 	 
	 		(i) 	
      as at December 16, 2013 the issued and outstanding
      capital of the Northstar Healthcare Acquisitions, LLC (“Northstar
      Acquisitions”) consists of 97,032 Class A Membership Interest Units
      owned by Issuer, 12,734 Common Membership Interest Units owned by
      Northstar Healthcare Holdings, Inc. (“Northstar Holdings”), and
      11,000 Preferred Membership Interest Units owned by Northstar Holdings
  which are free and clear of all liens, encumbrances or claims.

- 11- 

	 	(ii) 	
      the Issuer is the sole shareholder of Northstar Holdings
      and Northstar Holdings holds 100% of the outstanding preferred units and
      common units of Northstar Acquisitions;

	 	 	 
	 	(iii) 	
      Northstar Acquisitions is the sole member of Northstar
      Healthcare Surgery Centre - Houston, LLC as at December 16,
2013;

	 	 	 
	 	(iv) 	
      the issued and outstanding partnership interest of
      Medical Ambulatory Surgical Suites, LP (“MASS”) consists of 99
      non-certificated limited partnership units (“LP Units”) and one
      non-certificated general partnership unit as at December 16, 2013, a total
      of 100 partnership units;

	 	 	 
	 	(v) 	
      the Issuer, through its wholly owned subsidiary,
      Northstar Healthcare Limited Partner, LLC (“Northstar Limited”),
      owns 23.99 LP Units of MASS and, through its wholly owns subsidiary
      Northstar Healthcare General Partner, LLC (“Northstar General”),
      owns 1 General Partnership Interest unit of MASS, representing 24.99% of
      the outstanding Partnership Interest of MASS;

	 	 	 
	 	(vi) 	
      the issued and outstanding equity interest of
      Microsurgery Institute, LLC consists of 100 non-certificated membership
      units as at December 16, 2013;

	 	 	 
	 	(vii) 	
      NHC- ASC Dallas, LLC (“NHC Dallas”) is the sole
      owner of the membership interest in Microsurgery Institute, LLC as at
      December 16, 2013;

	 	 	 
	 	(viii) 	
      the Issuer, through Northstar Acquisitions, owns 35
      membership units of NHC Dallas representing, 35% of the outstanding
      membership units of NHC Dallas;

	 	 	 
	 	(ix) 	
      the Issuer through its wholly owned subsidiary, Northstar
      Limited, owns 89.6 LP Units of The Palladium for Surgery – Houston, Ltd.
      (“Palladium Houston”) and, through its wholly owned subsidiary
      Northstar General, owns 1 General Partnership Interest unit of Palladium
      Houston, representing 90.6% of the outstanding Partnership Interest of
      Palladium Houston;

	 	(e) 	
      upon the issuance thereof, the Shares, the Warrant Shares
      and Agent’s Shares will all be duly and validly issued as fully paid and
      non-assessable;

	 	 	 
	 	(f) 	
      the Warrant Shares shall have the attributes
      corresponding in all material respects to the description thereof set
      forth in this Agreement and the Subscription
Agreements;

- 12- 

	 	(g) 	
      the Subscription Agreements and all other written or oral
      representations made by the Issuer to a Purchaser or potential Purchaser
      in connection with the Private Placement will be accurate in all material
      respects and will omit no fact, the omission of which will make such
      representations misleading or incorrect;

	 	 	 
	 	(h) 	
      the Issuer is a “reporting issuer” in each of the
      Provinces of Canada, the Issuer’s common shares are listed on the
      Exchange, and the Issuer is not in any material respect in default of any
      of the requirements of the Acts or any of the administrative policies or
      notices of the Exchange. The Issuer will use its commercially reasonable
      efforts to maintain its status as a “reporting issuer” in at least one of
      the Provinces of Canada and to maintain the listing of its common shares
      on the Exchange, or such other recognized North American stock exchange or
      quotation system, to the date that is 24 months and one day following the
      Closing Date, so long as the Issuer meets the minimum listing requirements
      of the Exchange or such other exchange or quotation system;

	 	 	 
	 	(i) 	
      no order ceasing or suspending trading in securities of
      the Issuer nor prohibiting the sale of such securities has been issued to
      and is outstanding against the Issuer or any of its directors, officers or
      promoters or against any other companies that have common directors,
      officers or promoters and, to the knowledge of the Issuer, no
      investigations or proceedings for such purposes are pending or
      threatened;

	 	 	 
	 	(j) 	
      the Securities will not be subject to a restricted period
      or statutory hold period under the Acts or to any resale restrictions
      under the policies of the Exchange which extends beyond four months and
      one day after issuance of the Securities;

	 	 	 
	 	(k) 	
      to the Issuer’s knowledge, the Issuer’s auditors are
      independent public accountants as required by the Acts;

	 	 	 
	 	(l) 	
      there has never been any reportable event (within the
      meaning of National Instrument 51-102) with the present or any former
      auditor of the Issuer;

	 	 	 
	 	(m) 	
      the Issuer or the Material Subsidiaries are the
      beneficial owners or lessees or sublessees of the properties, business and
      assets or the interests in the properties, business or assets referred to
      in the Disclosure Record and, except as qualified by the Disclosure
      Record, all agreements by which the Issuer or the Material Subsidiaries
      holds an interest in a property, business or asset are in good standing
      according to their terms and the properties are in good standing under the
      applicable laws of the jurisdictions in which they are situated;

	 	 	 
	 	(n) 	
      the Disclosure Record is in all material respects
      accurate and, at the applicable time of filing thereof, there were no
      misrepresentations in any of the documents that comprise the Disclosure
      Record or other publicly filed documents filed by and relating to the
      Issuer or its properties or assets;

	 	 	 
	 	(o) 	
      the Issuer’s financial statements contained in the
      Disclosure Record (the “Financial Statements”) have all been
      prepared in accordance with International Financial Reporting Standards
      applied on a consistent basis, accurately reflect
the financial position and all material liabilities (accrued,
      absolute, contingent or otherwise) of the Issuer and its subsidiaries on
      consolidated basis as of the date thereof, and no adverse material changes
      in the financial position of the Issuer have taken place since the date of
  the most recent such audited financial statements;

- 13- 

	 	(p) 	
      other than as disclosed in the Financial Statements,
      there are no off-balance sheet transactions, arrangement, obligations
      (including contingent obligations) or other relationships of the Issuer
      with unconsolidated entities or other persons that may have a material
      current or future effect on the financial condition, changes in financial
      condition, results of operations, earnings, cash flow, liquidity, capital
      expenditures, capital resources, or significant components of revenues or
      expenses of the Issuer or that would reasonably be expected to be material
      in an investor in making a decision to purchase the Units;

	 	 	 
	 	(q) 	
      expect as disclosed in the Financial Statements, the
      Issuer does not have any contingent liabilities in excess of the
      liabilities that are either reflected or reserved against in the Financial
      Statements which would reasonably be expected to be material to the
      Issuer;

	 	 	 
	 	(r) 	
      the Issuer has complied and will comply fully with the
      requirements of all applicable corporate and securities laws and
      administrative policies and directions, including, without limitation, the
      Acts and the Business Corporations Act (British Columbia) in
      relation to the issue and trading of its securities and in all matters
      relating to the Private Placement;

	 	 	 
	 	(s) 	
      there is no Material Change relating to the Issuer or the
      Material Subsidiaries, and no change in any Material Fact relating to any
      of the Units which has not been or will not be fully disclosed in
      accordance with the requirements of the Acts and the policies of the
      Exchange;

	 	 	 
	 	(t) 	
      the issue and sale of the Securities by the Issuer and
      the Agent does not and will not conflict with, or result in a breach of,
      any of the terms of the Issuer’s incorporating documents or any agreement
      or instrument to which the Issuer is a party or by which it is
    bound;

	 	 	 
	 	(u) 	
      other than as disclosed in the Disclosure Record, neither
      the Issuer, the Material Subsidiaries nor any other party, is a party to
      any actions, suits or proceedings of which it has been served that could
      materially affect their business or financial condition, and to the best
      of the Issuer’s knowledge no such actions, suits or proceedings are
      contemplated or have been threatened that have not been disclosed to the
      Agent;

	 	 	 
	 	(v) 	
      neither the Issuer, the Material Subsidiaries nor any
      other party, is in default in the observance or performance of any term or
      obligation to be performed by it under any contract entered into by the
      Issuer which is material to the business or affairs of the Issuer on a
      consolidated basis and no event has occurred which with
  notice or lapse of time or both would directly or indirectly
      constitute such a default, in any such case which default or event would
      have a material adverse effect on the assets or properties, business,
      results of operations or condition (financial or otherwise) of the
  Issuer;

- 14- 

	 	(w) 	
      there are no judgments against the Issuer or any Material
      Subsidiary which are unsatisfied, nor is the Issuer or any Material
      Subsidiary subject to any consent decrees or injunctions;

	 	 	 
	 	(x) 	
      this Agreement has been or will, by the Closing, be duly
      authorized by all necessary corporate action on the part of the Issuer,
      and the Issuer has full corporate power and authority to undertake the
      Private Placement, and this Agreement and the Subscription Agreements have
      been or will by the Closing be duly authorized, executed and delivered by
      the Issuer and are or will be legal, valid and binding obligations of the
      Issuer, enforceable against the Issuer in accordance with their terms
      subject to laws relating to creditors’ rights generally, the availability
      of equitable remedies and except as rights to indemnity and contribution
      may be limited by applicable law;

	 	 	 
	 	(y) 	
      except as disclosed in the Disclosure Record, no person
      has or will, at Closing, have any right, agreement or option, present or
      future, contingent or absolute, or any right capable of becoming such a
      right, agreement or option, for the issue or allotment of any unissued
      shares in the capital of the Issuer or any subsidiary thereof or any other
      security convertible into or exchangeable for any such shares, or to
      require the Issuer or any subsidiary thereof to purchase, redeem or
      otherwise acquire any of the issued and outstanding shares in its
      capital;

	 	 	 
	 	(z) 	
      the Issuer and the Material Subsidiaries have filed all
      federal, provincial, state, local and foreign tax returns which are
      required to be filed, or has requested extensions thereof, and has paid
      all taxes required to be paid by it and any other assessment, fine or
      penalty levied against it, to the extent that any of the foregoing is due
      and payable;

	 	 	 
	 	(aa) 	
      the Issuer and its Material Subsidiaries have not
      violated the Corruption of Foreign Public Officials Act (Canada)
      and all applicable anti-corruption legislation in the jurisdictions in
      which they operate;

	 	 	 
	 	(bb) 	
      the Issuer has established on its respective books and
      records reserves which are adequate for the payment of all taxes not yet
      due and payable and there are no liens for taxes on the assets of the
      Issuer except for taxes not yet due, and there are no audits of any of the
      tax returns of the Issuer which are known by the Issuer’s management to be
      pending, and there are no claims which have been or, to the Issuer’s
      knowledge, may be asserted relating to any such tax returns which, if
      determined adversely, would result in the assertion by any governmental
      agency of any deficiency which would have a material adverse effect on the
      properties, business or assets of the Issuer or the Material
      Subsidiaries;

- 15- 

	 	(cc) 	
      all operations of the Issuer and the Material
      Subsidiaries have been and are being conducted in accordance with good
      industry practices and to the best of the Issuer’s knowledge, in material
      compliance with applicable laws, rules, regulations, orders and directions
      of government and other competent authorities;

	 	 	 
	 	(dd) 	
      to the best of the Issuer’s knowledge, after due inquiry,
      the Issuer and the Material Subsidiaries: (i) are in material compliance
      with any and all applicable foreign, federal, provincial, state and local
      laws and regulations relating to the protection of human health and
      safety, the environment or hazardous or toxic substances or wastes,
      pollutants or contaminants (“Environmental Laws”); (ii) have
      received all material permits, licenses or other approvals required of any
      of them under applicable Environmental Laws to conduct their business as
      presently conducted; and (iii) are in material compliance with all terms
      and conditions of any such permit, license or approval;

	 	 	 
	 	(ee) 	
      the minute books of the Issuer and the Material
      Subsidiaries as provided or made available to the Agent are true and
      correct in all material respects and contain all the resolutions of its
      directors and shareholders;

	 	 	 
	 	(ff) 	
      the Issuer has not withheld, and will not withhold from
      the Agent, any facts relating to the Issuer or to the offering of the
      Units that would reasonably be considered material to a
  Purchaser;

	 	 	 
	 	(gg) 	
      other than the Agent, no person, firm or corporation
      acting or purporting to act at the request of the Issuer is entitled to
      any brokerage, agency or finder’s fee in connection with the transactions
      described herein; and

	 	 	 
	 	(hh) 	
      the warranties and representations in this section are
      true and correct and will remain so as of the
Closing.

13.2 The Agent warrants and represents to and covenants with
the Issuer that: 

	 	(a) 	
      it is a valid and subsisting corporation under the laws
      of the jurisdiction in which it was incorporated and has good and
      sufficient right and authority to enter into this Agreement and complete
      the transactions under this Agreement on the terms and conditions set
      forth herein;

	 	 	 
	 	(b) 	
      it is a broker or dealer properly registered under the
      Acts;

	 	 	 
	 	(c) 	
      it will be acquiring the Agent’s Warrants as principal
      for its own account;

	 	 	 
	 	(d) 	
      it is a member in good standing of the
Exchange;

	 	 	 
	 	(e) 	
      it: (i) is not a U.S. Person, (ii) did not receive the
      offer to purchase the Agent’s Warrants in the United States, (iii) did not
      execute this Agreement in the United States and (iv) is not acquiring the
      Agent’s Warrants for the account or benefit of a U.S. Person, or person in
      the United States; and

- 16- 

	 	(f) 	
      in connection with the Private Placement, it will, on
      behalf of the Issuer, sell the Units to the Purchasers in compliance with
      the Acts and the restrictions set out in Section
5.

13.3            The Agent acknowledges that none of the Agent’s Warrants
or the Agent’s Shares have been or will be registered under the U.S. Securities
Act or the securities laws of any state and that the Agent’s Warrants may not be
exercised in the United States or by or on behalf of a U.S. Person, nor may the
Agent’s Warrants or the Agent’s Shares be offered or sold in the United States
unless an exemption from registration under the U.S. Securities Act and any
applicable state securities law is available. 

14.              EXPENSES OF AGENT 

14.1            The Issuer will pay all of the expenses of the Private
Placement and all the reasonable expenses incurred by the Agent in connection
with the Private Placement including, without limitation, the reasonable fees
and expenses of the legal counsel for the Agent. The Agent acknowledges receipt
of a retainer towards such expenses in the amount of $15,000. 14.2 The Issuer
will pay the expenses referred to in Section 14.1 even if the transactions
contemplated by this Agreement are not completed or this Agreement is
terminated, unless the failure of acceptance or completion or the termination is
the result of a breach of this Agreement by the Agent. 

14.3            The Agent may, from time to time, render accounts for its
reasonable expenses in connection with the Private Placement to the Issuer for
payment on or before the dates set out in the accounts. 

14.4            The Issuer authorizes the Agent to deduct its reasonable
expenses in connection with the Private Placement, including, without
limitation, the fees and expenses of its legal counsel, from the proceeds of the
Private Placement and any advance payments made by the Issuer, including
expenses for which an account has not yet been rendered. 

15.              GARNISHING ORDERS 

15.1            If at any time up to and including the Closing the Agent
receives a garnishing order or other form of attachment purporting to attach or
garnish a part or all of the sale price of any of the Securities, the Agent will
be free to pay the amount purportedly attached or garnished into court. 

15.2            Any payment by the Agent into court pursuant to a
garnishing order will be deemed to have been received by the Issuer as payment
by the Agent against the sale price of the Securities to the extent of the
amount paid, and the Issuer will be bound to issue and deliver the Securities
proportionately to the amount paid by the Agent. 

15.3            The Agent will not be bound to ascertain the validity of
any garnishing order or attachment, or whether in fact it attaches any moneys
held by the Agent, and the Agent will be free to act with impunity in replying
to any garnishing order or attachment. 

- 17- 

15.4            The Issuer will release, indemnify and save harmless the
Agent in respect of all damages, costs, expenses or liabilities arising from any
acts of the Agent under this section. 

16.              INDEMNITY 

16.1            The Issuer and its Material Subsidiaries or affiliated
companies, as the case may be, (collectively, the “Indemnitor”) hereby
agree to indemnify and hold the Agent and its subsidiaries and affiliates, and
their respective directors, officers, employees and agents (each an
“Indemnified Party” and collectively, the “Indemnified Parties”)
harmless from and against any and all expenses, losses (other than loss of
profits), fees, claims, actions (including shareholder actions, derivative
actions or otherwise), damages, obligations, or liabilities, whether joint or
several, and the reasonable fees and expenses of its counsel, that may be
incurred in advising with respect to and/or defending any actual or threatened
claims, actions, suits, investigations or proceedings to which the Indemnified
Parties or any of them may become subject or otherwise involved in any capacity
under any statute or common law, or otherwise insofar as such expenses, losses,
claims, damages, liabilities or actions arise out of or are based, directly or
indirectly, upon the performance of professional services rendered to the
Indemnitor by the Indemnified Parties hereunder (including the aggregate amount
paid in reasonable settlement of any such actions, suits, investigations,
proceedings or claims that may be made against any of the Indemnified Parties,
provided that the Indemnitor has agreed to such settlement), provided, however,
that this indemnity shall not apply to the extent that a court of competent
jurisdiction in a final judgment that has become non-appealable shall determine
that: 

	 	(a) 	
      the Indemnified Parties have been negligent or have
      committed wilful misconduct or any fraudulent act in the course of such
      performance; and

	 	 	 
	 	(b) 	
      the expenses, losses, claims, damages or liabilities, as
      to which indemnification is claimed, were directly caused by the
      negligence, wilful misconduct or fraud referred to in
  (a).

Without limiting the generality of the foregoing, this
indemnity shall apply to all expenses (including legal expenses), losses, claims
and liabilities that the Agent may incur as a result of any action or litigation
that may be threatened or brought against any of the Indemnified Parties insofar
as such expenses, losses, claims, damages, liabilities or actions arise out of
or are based, directly or indirectly, upon the performance of professional
services rendered to the Indemnitor by the Indemnified Parties hereunder. 

16.2            The Issuer will reimburse the Indemnified Parties for any
and all expenses or liabilities which are indemnifiable hereunder as and when
they are incurred by the Indemnified Party. If any action or claim is brought
against an Indemnified Party in respect of which indemnity may be sought from
the Issuer pursuant to this Agreement, the Indemnified Party will promptly
notify the Issuer in writing. 

16.3            If for any reason (other than the occurrence of any of the
events itemized in paragraphs 16.1(a) and 16.1(b) above), the foregoing
indemnification is unavailable to the Agent or any Indemnified Party or is
insufficient to hold the Agent or any Indemnified Party harmless as a result of
such expense, loss, claim, damage or liability, the Indemnitor, the Agent and
such Indemnified Party will contribute to such expense, loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by the Indemnitor on the one hand and the Agent or
any Indemnified Party on the other hand but also the relative fault of the
Indemnitor and the Agent or any Indemnified Party, as well as any relevant
equitable considerations; provided that the Indemnitor shall in any event
contribute to the amount paid or payable by the Agent or any Indemnified Party
as a result of such expense, loss, claim, damage or liability and any excess of
such amount over the amount of the fees received by the Agent hereunder. 

- 18- 

16.4            The Indemnitor agrees that in case any legal proceeding
shall be brought against the Indemnitor, the Agent and/or any of its respective
Indemnified Party by any governmental commission or regulatory authority or any
stock exchange or other entity having regulatory authority, either domestic or
foreign, or any such entity shall investigate the Indemnitor, the Agent and/or
any Indemnified Party shall be required to testify in connection therewith or
shall be required to respond to procedures designed to discover information
regarding, in connection with, or by reason of the performance of professional
services rendered to the Indemnitor, the Indemnitor shall have the right to
retain, at its own expense, counsel reasonably satisfactory to the Agent to
defend the Agent in respect of such proceeding unless the Agent elects to retain
its own counsel. If the Agent elects to retain its own counsel, the fees and
expenses of such counsel will, notwithstanding section 16.1 above, be borne by
the Agent unless, in the opinion of the Agent on the advice of legal counsel,
the representation of both parties by the same legal counsel would be
inappropriate due to the potential differing interests between them, the
Indemnitor has not retained counsel within a reasonable time after being
notified of the proceeding or the Indemnitor otherwise consents to the use of
such independent legal counsel, in which case the Indemnitor shall be liable to
pay the reasonable fees and expenses of counsel for the Agent as well as the
reasonable costs (including an amount to reimburse the Agent for time spent by
its Personnel in connection therewith) and out-of-pocket expenses incurred by
its Indemnified Parties in connection therewith shall be paid by the Indemnitor
as they occur. 

16.5            Promptly after receipt of notice of the commencement of
any legal proceeding against the Agent or any of its Indemnified Parties or
after receipt of notice of the commencement of any investigation, which is
based, directly or indirectly, upon any matter in respect of which
indemnification may be sought from the Indemnitor, the Agent will notify the
Indemnitor in writing of the commencement thereof, and throughout the course
thereof, will provide copies of all relevant documentation to the Indemnitor,
will keep the Indemnitor advised of the progress thereof and will discuss with
the Indemnitor all significant actions proposed. However, the failure by the
Agent to notify the Indemnitor will not relieve the Indemnitor of its
obligations to indemnify the Agent and/or any such Indemnified Party. The
Indemnitor shall on behalf of itself and the Agent, and/or any Indemnified
Party, as applicable, be entitled (but not required) to assume the defence of
any suit brought to enforce such legal proceeding; provided, however, that the
defence shall be conducted through legal counsel acceptable to the Agent and/or
any such Indemnified Party, as applicable, acting reasonably, that no settlement
of any such legal proceeding may be made by the Indemnitor without the prior
written consent of the Agent and/or any such Indemnified Party, as applicable,
and none of the Agent and/or any such Indemnified Party, as applicable, shall be
liable for any settlement of any such legal proceeding unless it has consented
in writing to such settlement, such consent not to be unreasonably withheld. If
the Agent and the Indemnified Parties elect to retain its own counsel, the fees
and expenses of such counsel will, notwithstanding section 16.1
above, be borne by the Agent unless, in the opinion of the Agent on the advice
of legal counsel, the representation of both parties by the same legal counsel
would be inappropriate due to the potential differing interests between them,
the Indemnitor has not retained counsel within a reasonable time after being
notified of the proceeding or the Indemnitor otherwise consents to the use of
such independent legal counsel, in which case the Indemnitor shall be liable to
pay the reasonable fees and expenses of counsel for the Agent as they occur 

- 19- 

 

16.6            The indemnity and contribution obligations of the
Indemnitor shall be in addition to any liability, which the Indemnitor may
otherwise have, shall extend upon the same terms and conditions to the
Indemnified Parties and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Indemnitor, the
Agent, and any of the Indemnified Party. The foregoing provisions shall survive
the completion of professional services rendered under this Agreement. 

17.              RIGHT OF FIRST REFUSAL

17.1            The Issuer will provide the Agent written notice (the
“ROFR Notice”) of the terms of any financing, including, without
limitation, any public offering or private placement of equity or convertible
securities whatsoever (whether or not such financing is undertaken through a
broker, underwriter, agent or otherwise), that it requires or proposes to
undertake at any time during the eighteen months following the Closing Date and
the Agent will have, as its option, the right of first refusal (the “Right of
First Refusal”) to participate as agent in respect of such financing for 25%
of any such financing. 

17.2            The Right of First Refusal must be exercised by the Agent
within 15 days following the receipt of the ROFR Notice by notifying the Issuer
that it will provide such financing or such portion of such financing on the
terms set out in the ROFR Notice. 

17.3            If the Agent fails to give notice within the 15 days
referred to in Section 17.2 that it is exercising the Right of First Refusal
upon the terms set out in the ROFR Notice, the Issuer will then be free to make
other arrangements to obtain financing from another source on the same terms or
on terms no less favourable to the Issuer, subject to obtaining the acceptance
of the Commissions and the Exchange.

17.4            The Right of First Refusal will not terminate if, on
receipt of any ROFR Notice from the Issuer under this section, the Agent fails
to exercise the right. 

18.              ADDITIONAL ISSUANCES

18.1            The Issuer shall not, without the prior written consent of
the Agent (such consent not to be unreasonably withheld or delayed), directly or
indirectly, issue, sell, offer, grant an option or right in respect of, or
otherwise dispose of, or agree to, or announce any intention to issue, sell,
offer, grant an option or right in respect of, otherwise dispose of, any
additional common shares of the Company or any securities exchangeable for, or
convertible into, additional common shares of the Company for a period of two
months after the Closing Date except for the issue of common shares or other
securities of the Issuer in relation to currently outstanding commitments (such
as for purposes of the grant of options or the issuance of any common shares issued pursuant to the Issuer’s stock option plan
or upon exercise of any outstanding stock options or warrants of the Issuer),
during the period beginning on the Closing Date and ending two months days after
the Closing Date. 

- 20- 

19.              ASSIGNMENT AND SELLING GROUP PARTICIPATION

19.1            The Agent will not assign this Agreement or any of its
rights under this Agreement or, with respect to the Securities, enter into any
agreement in the nature of an option or a sub-option unless and until, for each
intended transaction, the Agent has obtained the consent of the Issuer. 

19.2            Notwithstanding anything to the contrary in this
Agreement, the Agent may offer selling group participation in the normal course
of the brokerage business to selling groups of other licensed dealers, brokers
and investment dealers, who may or may not be offered part of the Agent’s
Commission and the Agent’s Warrants. The Agent agrees, however, that the Agent’s
Warrants will not be offered pursuant to this paragraph and such securities will
not be issued by the Issuer except to a person who, to the best of knowledge of
the Agent, complies with the representations and warranties set forth in Section
13.2 of this Agreement. 

20.              CONFIDENTIALITY 

20.1            The Agent will establish reasonable procedures to hold in
confidence all information received by it from the Issuer which has not been
generally disclosed to the public and will not knowingly disclose such
information, except as required in its opinion, acting reasonably, to discharge
its obligations: 

	 	(a) 	
      under this Agreement; and

	 	 	 
	 	(b) 	
      under applicable law or regulatory
  policy.

21.              PUBLIC DISCLOSURE 

21.1            The Issuer agrees that no public announcement or news
release concerning this Agreement or any other instrument related thereto, or
the relationship between the Issuer and the Agent will be made without providing
the public announcement or news release to the Agent in advance. The Company
will use its reasonable best efforts to agree to the form of and content thereof
with the Agent prior to release, such consent not to be unreasonably withheld or
delayed. All press releases regarding the Private Placement will include the
following statements: 

Prominently at the top of each press release relating to the
distribution of the Units: 

“NOT FOR DISTRIBUTION TO U.S. NEWSWIRE
SERVICES OR FOR DISSEMINATION IN THE UNITED STATES” 

- 21- 

Within the body of each press release relating to the
distribution of the Units: 

“This press release does not
constitute an offer to sell or solicitation of an offer to sell any of the
securities in the United States. The securities have not been and will not be
registered under the United States Securities Act of 1933, as amended (the “U.S.
Securities Act”) or any state securities laws and may not be offered or sold
within the United States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption from such
registration is available.” 

22.              SEVERABILITY 

22.1            If any provision of this Agreement is found to be illegal
or unenforceable, it will be considered separate and severable from this
Agreement and the remaining provisions of this Agreement will remain in force
and be binding upon the parties as though the illegal or unenforceable provision
had never been included. 

23.              NOTICE 

23.1            All notices required to be given under this Agreement must
be made in writing and either delivered or sent by facsimile to the party to
whom notice is to be given at the address below or at such other address
designated by that party in writing: 

If to the Issuer: 

	 	Northstare Healthcare Inc. 
	 	Suite 150 - 4120 Southwest Freeway 
	 	Houston, Texas 77027 
	 	U.S.A. 	  
	 	  	  
	 	Attention: 	Corporate Secretary 
	 	Fax: 	713-355-8615 
	 	Email: 	info@northstar-healthcare.com 
	 	  	  
	 	with a copy to the Issuer’s legal counsel: 
	 	  	  
	 	Macdonald Tuskey 
	 	Suite 400, 570 Granvile Street 
	 	Vancouver, B.C. 
	 	V6C 3P1 	  
	 	  	  
	 	Attention: 	William MacDonald 
	 	Email: 	wmacdonald@wlmlaw.ca 

- 22- 

If to the Agent: 

	 	PI Financial Corp. 
	 	Suite 1900 - 666 Burrard Street 
	 	Vancouver, B.C. 
	 	V6C 3N1 	  
	 	  	  
	 	Attention: 	Blake Corbet 
	 	Email: 	bcorbet@pifnancialcorp.com 
	 	  	  
	 	with a copy to the Agent’s legal counsel: 
	 	  	  
	 	McCullough O’Connor Irwin LLP 
	 	Suite 2600 – 1066 West Hastings Street 
	 	Vancouver, B.C. 
	 	V6E 3X1 	  
	 	  	  
	 	Attention: 	Dave Gunasekera 
	 	Fax: 	604-687-7099 
	 	Email: 	dgunasekera@moisolicitors.com

23.2            If notice is sent by facsimile or is delivered, it will be
deemed to have been given at the time of transmission or delivery. 

23.3            If notice is mailed, it will be deemed to have been
received five Business Days following the date of mailing of the notice unless
there is an interruption in normal mail service due to strike, labour unrest or
other cause during such five Business Days, in which case any notice sent by
mail shall be deemed not to have been received until it is actually received.

24.              GENERAL 

24.1            Time is of the essence of this Agreement and will be
calculated in accordance with the provisions of the Interpretation Act
(British Columbia). 

24.2            The representations, warranties, covenants and indemnities
of the Issuer and the Agent contained in this Agreement will survive the Closing
and will continue in full force and effect for the benefit of the parties,
regardless of any due diligence investigation carried out by or on behalf of any
party with respect thereto. 

24.3            This Agreement is to be read with all changes in gender or
number as required by the context. 

24.4            This Agreement enures to the benefit of and is binding on
the parties to this Agreement and their successors and permitted assigns.
Notwithstanding the foregoing, this Agreement may not be assigned by either
party without the prior written consent of the other party. 

- 23- 

24.5            The headings in this Agreement are for convenience of
reference only and do not affect the interpretation of this Agreement. 

24.6            This Agreement is governed by, subject to and interpreted
in accordance with the laws of the Province of British Columbia, and the courts
of the Province of British Columbia will have the exclusive jurisdiction over
any dispute arising in connection with this Agreement. 

24.7            Unless otherwise indicated, all dollar amounts referred to
in this Agreement are in lawful money of Canada. 

24.8            This Agreement (together with the Subscription Agreements
referred to above which are to be used in the Private Placement) constitutes the
entire agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior and contemporaneous agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties, including, without limitation, the engagement letter between the
parties dated November 29, 2013, and, except as incorporated by reference above,
there are no warranties, representations or other agreements between the parties
in connection with the subject matter of this Agreement unless signed by each
party and purporting to be an amendment to this Agreement. 

24.9            This Agreement may be executed in two or more counterparts
and may be delivered by facsimile, each of which will be deemed to be an
original and all of which will constitute one agreement, effective as of the
date first given above. 

[THE REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]

- 24- 

If the terms of this Agreement accurately reflect your
understanding and you agree with them, then please signify your acceptance by
signing each copy or counterpart of this Agreement on behalf of the Issuer where
indicated below. Please return the originally signed copies or counterparts to
us. 

Yours truly, 

PI FINANCIAL CORP. 

Per: 

__________________________
Authorized Signatory 

The foregoing is accepted and agreed to by Northstar Healthcare
Inc. on the ______day of December, 2013, effective as of the date appearing on
the first page of this Agreement. 

NORTHSTAR HEALTHCARE INC. 

Per: 

__________________________
Authorized SignatoryNobilis Health Corp.: Exhibit 10.9 - Filed by newsfilecorp.com

 

 

AGREEMENT 

by and between 

FIRST SURGICAL PARTNERS HOLDINGS, INC. 

and 

NORTHSTAR HEALTHCARE INC. 

As of September 2, 2014 

 

 

 

TABLE OF CONTENTS 

	 	 	 	Page
	
      
	
      
	
      
	
	
      ARTICLE I CONSTRUCTION; DEFINITIONS 
	1 
		
      Section 1.1. 
	
      Definitions 
	1 
		
      Section 1.2. 
	
      Other Definitions 
	4 
		
      Section 1.3. 
	
      Construction 
	4 
		
      Section 1.4. 
	
      Accounting Terms 
	4 
	
       
	
      
	
      
	
	
      ARTICLE II NEWCO 
	4 
		
      Section 2.1. 
	
      Formation of Newco 
	4 
		
      Section 2.2. 
	
      Further Assurances 
	5 
	
       
	
      
	
      
	
	
      ARTICLE III REPRESENTATIONS AND WARRANTIES OF FIRST
      SURGICAL 
	5 
		
      Section 3.1. 
	
      Organization 
	5 
		
      Section 3.2. 
	
      Authorization 
	5 
		
      Section 3.3. 
	
      Absence of Restrictions and Conflicts 
	6 
		
      Section 3.4. 
	
      Title to Assets; Related Matters 
	6 
		
      Section 3.5. 
	
      Accounts Receivable 
	6 
		
      Section 3.6. 
	
      Licenses 
	6 
		
      Section 3.7. 
	
      Legal Proceedings 
	7 
		
      Section 3.8. 
	
      Brokers, Finders and Investment Bankers 
	7 
		
      Section 3.9. 
	
      No Additional Representations or Warranties 
	7 
	
       
	
      
	
      
	
	
      ARTICLE IV REPRESENTATIONS AND WARRANTIES OF NORTHSTAR
      
	8 
		
      Section 4.1. 
	
      Organization 
	8 
		
      Section 4.2. 
	
      Authorization 
	8 
		
      Section 4.3. 
	
      Absence of Restrictions and Conflicts 
	8 
		
      Section 4.4. 
	
      Financial Capability 
	8 
		
      Section 4.5. 
	
      Legal Proceedings 
	9 
		
      Section 4.6. 
	
      No Additional Representations or Warranties 
	9 
		
      Section 4.7. 
	
      Brokers, Finders and Investment Bankers 
	9 
	
       
	
      
	
      
	
	
      ARTICLE V CERTAIN COVENANTS AND AGREEMENTS 
	10

		
      Section 5.1. 
	
      Reasonable Efforts; Further Assurances; Cooperation
      
	10 
		
      Section 5.2. 
	
      Public Announcements 
	11

		
      Section 5.3. 
	
      Financing 
	11 
	
       
	
      
	
      
	
	
      ARTICLE VI CONDITIONS TO CLOSING 
	11 
		
      Section 6.1. 
	
      Conditions to Obligations of Each Party 
	11

		
      Section 6.2. 
	
      Conditions to Obligations of First Surgical 
	13 
		
      Section 6.3. 
	
      Conditions to Obligations of Northstar 
	14

	
       
	
      
	
      
	
	
      ARTICLE VII CLOSING 
	14

		
      Section 7.1. 
	
      Closing 
	14 
		
      Section 7.2. 
	
      First Surgical Closing Deliveries and Action 
	14

		
      Section 7.3. 
	
      Northstar Closing Deliveries 
	15 

i 

		
      Section 7.4. 
	
      Northstar Capital Contribution 
	15
      
		
      Section 7.5. 
	
      Assignment by FS Surgical and FS Hospital 
	15
      
		
      Section 7.6. 
	
      Newco Payment 
	15
      
		
      Section 7.7. 
	
      Allocation of Receivables 
	15
      
		
      Section 7.8. 
	
      Post-Closing Payment 
	15
      
	
       
	
      
	
      
	
	
      ARTICLE VIII TERMINATION 
	16
      
		
      Section 8.1. 
	
      Termination 
	16
      
		
      Section 8.2. 
	
      Specific Performance and Other Remedies 
	16
      
		
      Section 8.3. 
	
      Effect of Termination 
	16
      
	
       
	
      
	
      
	
	
      ARTICLE IX NORTHSTAR SUBSCRIPTION RIGHT; OPTION
    
	17
      
		
      Section 9.1. 
	
      Northstar Subscription Right: 
	17
      
		
      Section 9.2. 
	
      Option 
	17
      
	
       
	
      
	
      
	
	
      ARTICLE X DISSOLUTION OF RELATIONSHIP 
	18
      
		
      Section 10.1. 
	
      Dissolution of Relationship 
	18
      
	
       
	
      
	
      
	
	
      ARTICLE XI MISCELLANEOUS PROVISIONS 
	19
      
		
      Section 11.1. 
	
      Notices 
	19
      
		
      Section 11.2. 
	
      Schedules and Exhibit 
	20
      
		
      Section 11.3. 
	
      Assignment; Successors in Interest 
	20
      
		
      Section 11.4. 
	
      Captions 
	20
      
		
      Section 11.5. 
	
      Mediation 
	20
      
	
      
	
      Section 11.6. 
	
      Governing Law; Consent to Jurisdiction; WAIVER OF TRIAL
      BY JURY; Etc 
	20
      
		
      Section 11.7. 
	
      Severability 
	21
      
		
      Section 11.8. 
	
      Counterparts 
	22
      
		
      Section 11.9. 
	
      Amendment 
	22
      
		
      Section 11.10. 
	
      Enforcement of Certain Rights 
	22
      
		
      Section 11.11. 
	
      Waiver 
	22
      
		
      Section 11.12. 
	
      Integration 
	22
      
		
      Section 11.13. 
	
      Cooperation Following the Closing 
	22
      
		
      Section 11.14. 
	
      Transaction Costs 
	22
      

ii 

AGREEMENT 

THIS AGREEMENT (this
“Agreement ”), dated as of September [2], 2014, is made and entered into
by and between First Surgical Partners Holdings, Inc., a Delaware corporation
(“First Surgical”), and Northstar Healthcare Inc., a British
Columbia corporation (“Northstar”). First Surgical and Northstar
are sometimes individually referred to herein as a “Party” and
collectively as the “Parties.” 

W I T N E S S E T H: 

WHEREAS, First Surgical is a
parent company of and indirectly owns all of the issued and outstanding equity
of First Street Surgical Center, L.P. (“FS Surgical) and First Street Hospital
L.P. (“FS Hospital”); 

WHEREAS, the Parties desire to enter into this Agreement
  pursuant to which a newly formed Texas limited liability company (“Newco”) shall
  assume the operations of FS Surgical and FS Hospital, on the terms set forth
  herein; 

NOW, THEREFORE, in consideration of the foregoing and the respective
  representations, warranties, covenants, agreements and conditions hereinafter
  set forth, and intending to be legally bound hereby, each Party hereby agrees: 

ARTICLE I 
CONSTRUCTION; DEFINITIONS

Section 1.1. Definitions.
The following terms, as used herein, have the following meanings:

“Affiliate” of any specified Person means any other Person directly or
  indirectly Controlling or Controlled by or under direct or indirect common
  Control with such specified Person. 

“Business Day” means any
day except Saturday, Sunday or any day on which banks are authorized by Law to
be closed in the City of Houston, Texas. 

“Closing Date” means the date on which the Closing
occurs. 

“Exhibit” means any exhibit attached to this Agreement. 

“Financing” means an
anticipated brokered private placement financing by Northstar for gross proceeds
of up to $7,500,000. Completion of the Financing is subject to the approval of
the Toronto Stock Exchange (“TSX”). 

“First Surgical Ancillary
Documents” means any certificate, agreement, document or other instrument,
other than this Agreement, to be executed and delivered by First Surgical or any
Affiliate of First Surgical in connection with the transactions contemplated
hereby. 

“First Street Credit
Agreement” means that certain loan agreement, dated December 20, 2013, by
and among Iberiabank and other lenders and FS Surgical and FS Hospital. 

“GAAP” means generally
accepted accounting principles in the United States of America. 

“Governmental
  Entity” means any federal, state, local or foreign government, any political
  subdivision thereof, or any court, administrative or regulatory agency,
  department, instrumentality, body or commission or other governmental authority
  or agency, or any self-regulating body, including a stock exchange, and any
  related arbitrator.

“Knowledge” means all
facts that are known, after reasonable inquiry, (a) with respect to Northstar,
by Dr. Donald Kramer, Harry Fleming and Doug Samuelson and (b) with respect to
First Surgical, by Dr. Jacob Varon and Jeff Holland. 

“Laws” means all statutes,
rules, codes, regulations, restrictions, ordinances, orders, decrees, approvals,
directives, judgments, injunctions, writs, awards and decrees of, or issued by,
any Governmental Entity. 

“Leased Real Property”
means the parcels of real property on which FS Surgical and FS Hospital are
located, 411 First Street, Bellaire, Texas 77401. 

“Leases” means the
following leases: (i) the lease, dated April1, 2003 between FS Surgical and
First Street Holdings Ltd. (formerly lslington, Ltd.), as amended April 1, 2013
and December 1, 2013; (ii) the lease dated March 1, 2005, between FS Surgical
and Lenox Hill Holdings, Ltd., as amended September 1, 2010, February 1, 2012
and November 19, 2013; (iii) the lease dated November 1, 2006, between FS
Surgical and Ranier Metroplex Partners LP, as amended November 1, 2009; (iv) the
lease dated September 17, 2006, between FS Hospital and First Street Holdings,
Ltd., as amended April 1, 2013 and December 1, 2013.

“Material Adverse Effect”
means any state of facts, change, event, circumstance, effect or occurrence,
individually or in the aggregate with other facts, change, event, effect or
occurrence, that is or would reasonably likely be materially adverse to the,
financial condition, results of operations, properties, assets or liabilities
(including contingent liabilities), or business of the a Party and its
Subsidiaries taken as a whole; provided, that none of the following, and
no changes, effects, events, circumstances, occurrences or states of facts
arising out of or resulting from the following, shall be deemed, either alone or
in combination, to constitute a Material Adverse Effect, or be taken into
account in determining whether there has been a Material Adverse Effect, to the
extent the following do not materially and disproportionately impact applicable
Party and its Subsidiaries, taken as a whole, compared to other companies in the
industry or industries in which the Company and its Subsidiaries operate, in
which case the extent of such material and disproportionate effect may be taken
in to account in determining whether a Material Adverse Effect has occurred: (a)
changes or effects in general economic conditions; (b) changes in Laws or GAAP
(or other analogous accounting standards) or the enforcement thereof; (c)
changes or effects, including legal, tax or regulatory changes, that generally
affect the industry or industry sectors in which the Company and its
Subsidiaries operate; (d) any changes or effects that arise out of or are
attributable to the commencement, occurrence, continuation or intensification of
any war, sabotage, armed hostilities or acts of terrorism; or (e) changes or
effects that arise out of or are attributable to the negotiation, execution, public
announcement, pendency or performance of this Agreement or the compliance with
the provisions thereof. 

2 

“Northstar Ancillary
Documents” means any certificate, agreement, document or other instrument,
other than this Agreement, to be executed and delivered by Northstar or any
Affiliate of Northstar in connection with the transactions contemplated hereby.

“Northstar Capital
Contribution” means the capital contribution in the amount of $7,500,000 to
be made by Northstar into Newco at Closing. 

“Ordinary Course” means
(a) the ordinary course of business of the applicable Party and its Subsidiaries
and consistent with the past practices of the applicable Party and its
Subsidiaries and (b) not required to be authorized by the board of directors or
other governing body or the applicable Party or its Subsidiaries, or by any
Person exercising similar authority; provided, that material violations
of Law or a material violation of the contractual rights of third parties shall
not be Ordinary Course. 

“Payables” means the
payables of FS Surgical and FS Hospital as listed on Schedule 1, or any payable
incurred by FS Surgical and FS Hospital which is incurred in the Ordinary Course
and within one of the categories of payables described in Schedule 1. 

“Permitted Liens” means
(a) Liens for Taxes not yet due and payable, (b) statutory Liens of landlords,
(c) Liens of carriers, warehousemen, mechanics, materialmen and repairmen and
other like Liens incurred in the Ordinary Course and not yet delinquent, and (d)
Real Property, zoning, building, or other restrictions, variances, covenants,
rights of way, easements, mineral leases and reservations, and other minor
irregularities in title, none of which, (i) interfere in any material respect
with the present use of or occupancy of the affected parcel by the applicable
Person, (ii) have more than an immaterial effect on the value thereof or its use
or (iii) impair the ability of such parcel to be sold, leased or subleased for
its present use. For the avoidance of doubt, except for Liens described in
clauses (a) and (b), Liens securing obligations for the payment of
money shall not constitute Permitted Liens hereunder. 

“Person” means any
individual, corporation, partnership, joint venture, limited liability company,
trust, unincorporated organization or Governmental Entity. 

“Receivables” means the
accounts receivable of FS Surgical and FS Hospital as of the Closing Date. 

“Representatives” means,
with respect to a Person, such Person’s respective parents, directors, managers,
officers, employees, attorneys, accountants, representatives, financial
advisors, lenders, consultants, and other agents. 

“Schedule” means any schedule attached to this
Agreement. 

“Subsidiary” or
“Subsidiaries” means any or all Persons of which either Party (or other
specified Person) shall own directly or indirectly through another Person, a
nominee arrangement or otherwise (a) at least a majority of the outstanding
capital stock (or other shares of beneficial interest) entitled to vote
generally or otherwise have the power to elect a majority of the board of directors or similar governing body or the legal power to
direct the business or policies of such Person or (b) a majority of the economic
interests of such Person. 

3 

“Varon Payable” means obligations
of FS Surgical and FS Hospital to Dr. Jacob Varon, in the aggregate amount of
$700,000, with respect to certain advances Dr. Varon previously made to FS
Surgical and FS Hospital. 

Section 1.2. Other
Definitions. Each of the following terms is defined in the Section set forth
opposite such term: T/B/S 

Section 1.3. Construction.
Unless the context of this Agreement clearly requires otherwise, (a) references
to the plural include the singular, and references to the singular include the
plural; (b) references to any gender include the other genders; (c) the words
“include,” “includes” and “including” do not limit the preceding terms or words
and shall be deemed to be followed by the words “without limitation”; (d) the
terms “hereof”, “herein”, “hereunder”, “hereto” and similar terms in this
Agreement refer to this Agreement as a whole and not to any particular provision
of this Agreement; (e) the terms “day” and “days” mean and refer to calendar
day(s); (f) the terms “year” and “years” mean and refer to calendar year(s) and
(g) all references in this Agreement to “dollars” or “$” shall mean United
States Dollars. Unless otherwise set forth herein, references in this Agreement
to (i) any document, instrument or agreement (including this Agreement) (A)
includes and incorporates all exhibits, schedules and other attachments thereto,
(B) includes all documents, instruments or agreements issued or executed in
replacement thereof and (C) means such document, instrument or agreement, or
replacement or predecessor thereto, as amended, modified or supplemented from
time to time in accordance with its terms and in effect at any given time, and
(ii) a particular Law means such Law as amended, modified, supplemented or
succeeded, from time to time and in effect at any given time. All Article,
Section, Exhibit and Schedule references herein are to Articles, Sections,
Exhibits and Schedules of this Agreement, unless otherwise specified. This
Agreement shall not be construed as if prepared by one of the Parties, but
rather according to its fair meaning as a whole, as if both Parties had prepared
it. 

Section 1.4. Accounting
Terms. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP. 

ARTICLE II
NEWCO 

Section 2.1. Formation of
Newco. Upon the Closing, First Surgical (or one or more of its Subsidiaries)
and Northstar (or one or more of its Subsidiaries) shall execute and deliver a
limited liability company agreement for Newco (the “Company Agreement”) in form
to be agreed by the parties. Among other things, the Company Agreement shall
contain the following terms: 

	Board of Managers: 5 member board, initially comprised of two
  Northstar designees, two First Surgical designees and Dr. Jacob Varon. If at
  any time Dr. Varon ceases to serve on the board, the vacancy created shall be
  filled by Northstar.
    

   
  
	Certain Actions: A vote of holders of 80% of the holders of equity
of Newco shall be required to take certain critical actions, including:

4 

	 	1. 	
      Amendments to Company Agreement;

	 	2. 	
      Significant financings;

	 	3. 	
      Major additions or deletions of services;

	 	4. 	
      Major Capital projects;

	 	5. 	
      Acquisitions and dispositions of assets or businesses,
      outside the ordinary course of business;

	 	6. 	
      Entering into a different line of business, and

	 	7. 	
      Hiring and termination of any chief executive officer of
      Newco.

Upon the Closing, First Surgical (and/or one or more of its
Subsidiaries) shall be issued 49% of the outstanding membership interest (the
“Units”) issued by Newco and Northstar (and/or one or more of its Subsidiaries)
shall be issued 51% of the outstanding Units issued Newco. Newco shall have one
class of Units only, with identical economic and non-economic rights and
obligations. 

Section 2.2. Further
Assurances. Each Party shall on the Closing Date and from time to time
thereafter, at the other Party’s reasonable request and without further
consideration, execute and deliver (or cause to be executed and delivered) to
the other Party such instruments of transfer, conveyance and assignment as shall
be reasonably requested by the other Party to effect the transactions
contemplated by this Agreement. 

ARTICLE III 
REPRESENTATIONS AND WARRANTIES OF
FIRST SURGICAL 

First Surgical hereby represents
and warrants to Northstar as follows as of the date hereof and as of the Closing
Date: 

Section 3.1. Organization. Each of First Surgical and each of its
  Subsidiaries is a corporation, limited liability company or other organization
  duly formed, validly existing and in good standing, as applicable, under the
  laws of the jurisdiction of incorporation or organization, as applicable, and
  each has all requisite power and authority to own, lease and operate its
  properties and to carry on its business as now being conducted.

Section 3.2.
Authorization. Each of First Surgical and, as applicable, each of its
Subsidiaries has all necessary corporate power and authority to execute and
deliver this Agreement and the First Surgical Ancillary Documents, to carry out
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the First Surgical Ancillary Documents by First Surgical and/or its
Subsidiaries, the performance by First Surgical and/or its Subsidiaries of its
obligations hereunder and thereunder, and the consummation of the transactions
provided for herein and therein have been duly and validly authorized by all
necessary corporate action on the part of First Surgical and/or its
Subsidiaries. This Agreement has been and, as of the Closing Date, the First
Surgical Ancillary Documents shall be, duly executed and delivered by First
Surgical and/or its Subsidiaries and do or shall, as the case may be, constitute
the valid and binding agreements of First Surgical and/or its Subsidiaries,
enforceable against such Persons in accordance with their respective terms,
subject to applicable bankruptcy insolvency and other similar Laws affecting the
enforceability of creditors’ rights generally, general equitable principles and
the discretion of courts in granting equitable remedies. 

5 

Section 3.3. Absence of
Restrictions and Conflicts. Except as set forth on Schedule
3.31, the execution, delivery and performance by First Surgical
of this Agreement and the First Surgical Ancillary Documents and the
consummation of the transactions contemplated hereby and thereby: (a) will not
create in any party the right to prevent, enjoin or otherwise delay the
transactions contemplated by this Agreement and (b) do not or will not (as the
case may be) violate or conflict with, constitute a breach of or default under,
result in the loss of any benefit under, permit the acceleration of any
obligation under or create in any party the right to terminate, modify or
cancel, (i) any term or provision of the organizational or constituent documents
of First Surgical or any of its Subsidiaries, (ii) except as indicated on
Schedule 3.3, any other contract, agreement, permit, franchise, license
or other instrument applicable to which First Surgical or any of its
Subsidiaries is a party, (iii) any judgment, decree or order of any court or
Governmental Entity or agency to which First Surgical or any of its Subsidiaries
is a party or by which First Surgical, or any of its Subsidiaries or any of
their respective properties are bound, or (iv) any Law or arbitration award
applicable to First Surgical or any of its Subsidiaries. 

Section 3.4. Title to Assets; Related Matters. 

(a)
Except as set forth on Schedule 3.4,2 FS Hospital and FS
Surgical have good and valid title, a valid leasehold interest in, or a valid
license for, all of the property and assets owned, leased, licensed, operated or
used by them, free and clear of all Liens, except Permitted Liens. 

(b) All
material equipment and other items of tangible personal property and assets
owned, leased, licensed, operated or used by FS Hospital and FS Surgical (i) are
in good operating condition and in a state of good maintenance and repair in
accordance with normal industry practice, ordinary wear and tear excepted, (ii)
were acquired and are usable in the Ordinary Course, (iii) conform to all
applicable Laws applicable thereto. First Surgical has no Knowledge of any
material defect or problem with any of such equipment, tangible personal
property or assets other than ordinary wear and tear. Except as set forth on
Schedule 3.4 and except for leased items that are subject to personal
property leases, no Person other than the Company or its Subsidiaries owns any
equipment or other tangible personal property or assets situated on the premises
of the Company or any Subsidiary. 

(c)
Except as set forth on Schedule 3.4, neither First Surgical nor any of
its Affiliates (other than FS Surgical and FS Hospital) owns or holds any assets
or property (tangible or intangible) that are currently being used in connection
with the business of FS Surgical and FS Hospital. 

Section 3.5. Accounts
Receivable. All Receivables (billed and unbilled) and all Payables of the FS
Surgical and FS Hospital will have arisen from bona fide transactions by
such FS Surgical or FS Hospital, as the case may be, in the Ordinary Course.

Section 3.6. Licenses.
Schedule 3.6 is a correct and complete list of all Licenses held by the
FS Surgical and FS Hospital. FS Surgical and FS Hospital own or possess all
Licenses that are necessary to enable it to carry on its operations as presently
conducted. All such Licenses are valid, binding and in full force and
effect.

____________________

1 Iberia Bank will be listed on Schedule.
  

2 Liens held by Iberia will be listed. 

6 

Section 3.7. Legal Proceedings. 

(a) No
suit, action, claim, arbitration, proceeding or investigation is pending or, to
the Knowledge of First Surgical, threatened against, relating or involving First
Surgical or any of its Subsidiaries that will, either individually or in the
aggregate, impair or delay the ability of the First Surgical to consummate the
transactions contemplated hereby, or by any of the First Surgical Ancillary
Documents. First Surgical is not subject to any judgment, decree, injunction,
rule or order of any court or arbitration panel that will, either individually
or in the aggregate, impair or delay the ability of the First Surgical to
consummate the transactions contemplated hereby, or by the Northstar Ancillary
Documents. 

(b) No
actions, suits, claims, investigations or other legal proceedings are pending
or, to the Knowledge of First Surgical, threatened against or by First Surgical
or any Affiliate of First Surgical that challenge or seek to prevent, enjoin or
otherwise delay the transactions contemplated by this Agreement. 

Section 3.8. Brokers, Finders
and Investment Bankers. Neither First Surgical, any of its Subsidiaries, nor
any officer, member, director or employee of First Surgical or any of its
Subsidiaries nor any Affiliate of First Surgical or any of its Subsidiaries, has
employed any broker, finder or investment banker or incurred any liability for
any investment banking fees, financial advisory fees, brokerage fees or finders’
fees in connection with the transactions contemplated hereby.

Section 3.9. No Additional
Representations or Warranties. Except for the specific representations and
warranties expressly made by First Surgical in Article III, (a) Northstar
acknowledges and agrees that (i) neither First Surgical nor any Subsidiary is
making or has made any representation or warranty, express or implied, at law or
in equity, in respect of First Surgical or its Subsidiaries (including FS
Surgical and FS Hospital), or any of their respective businesses, assets,
liabilities, operations, prospects, or condition (financial or otherwise),
including with respect to merchantability or fitness for any particular purpose
of any assets, the nature or extent of any liabilities, prospects, the
effectiveness or the success of any operations, or the accuracy or completeness
of any confidential information memoranda, documents, projections, material or
other information (financial or otherwise) regarding FS Surgical or FS Hospital
furnished to Northstar or its Representatives or made available to the Northstar
or its Representatives in any “data rooms,” “virtual data rooms,” management
presentations or in any other form in expectation of, or in connection with, the
transactions contemplated by this Agreement, or in respect of any other matter
or thing whatsoever, and (ii) no Representative of First Surgical or any of its
Subsidiaries has any authority, express or implied, to make any statements,
representations, warranties or agreements regarding the transactions
contemplated by and the subject matter of this Agreement not specifically set
forth in this Agreement and subject to the express remedies and limitations
thereon herein provided; (b) Northstar specifically disclaims that it is relying
upon or has relied upon any such other statements, representations or warranties
that were made by any Person, and acknowledges and agrees that First Surgical
has specifically disclaimed and does hereby specifically disclaim any such other representation or
warranty made by any Person; (c) Northstar specifically disclaims any obligation
or duty by First Surgical or its Subsidiaries to make any disclosures of fact
not required to be disclosed pursuant to the specific representations and
warranties set forth in Article III; and (d) Northstar is entering into
the transaction contemplated by this Agreement subject only to the specific
representations and warranties set forth in Article III. 

7 

ARTICLE IV 
REPRESENTATIONS AND WARRANTIES OF
NORTHSTAR 

Northstar hereby represents and
warrants to First Surgical as follows as of the date hereof and as of the
Closing Date: 

Section 4.1. Organization. Northstar is a corporation
duly formed, validly existing and in good standing under the laws of the
Province of British Columbia and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. 

Section 4.2.
Authorization. Northstar has all necessary corporate power and authority
to execute and deliver this Agreement and the Northstar Ancillary Documents, to
carry out its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Northstar Ancillary Documents by Northstar, the performance by
Northstar of its obligations hereunder and thereunder, and the consummation of
the transactions provided for herein and therein have been duly and validly
authorized by all necessary corporate action on the part of Northstar. This
Agreement has been and, as of the Closing Date, the Northstar Ancillary
Documents shall be, duly executed and delivered by Northstar and do or shall, as
the case may be, constitute the valid and binding agreements of Northstar,
enforceable against Northstar in accordance with their respective terms, subject
to applicable bankruptcy insolvency and other similar Laws affecting the
enforceability of creditors’ rights generally, general equitable principles and
the discretion of courts in granting equitable remedies. 

Section 4.3. Absence of
Restrictions and Conflicts. The execution, delivery and performance of this
Agreement and the Northstar Ancillary Documents and the consummation of the
transactions contemplated hereby and thereby do not or will not (as the case may
be), violate or conflict with, constitute a breach of or default under, result
in the loss of any benefit under, permit the acceleration of any obligation
under, or create in any part the right to terminate, modify or cancel (a) any
term or provision of the organizational documents of the Northstar, (b) any
contract to which the Northstar is a party, (c) any judgment, decree or order of
any Governmental Entity to which the Northstar is a party or by which the
Northstar or any of its properties is bound, or (d) any Law or arbitration award
applicable to the Northstar. 

Section 4.4. Financial
Capability. Subject to the completion of the Financing, Northstar has access
to, and, on the Closing Date, will have, sufficient cash to make the Northstar
Capital Contribution on the terms and conditions contemplated by this Agreement
and the fees, expenses and other costs of Northstar incurred in connection with
the transactions contemplated by this Agreement. 

8 

Section 4.5. Legal Proceedings. 

(a) No
suit, action, claim, arbitration, proceeding or investigation is pending or, to
the Knowledge of Northstar, threatened against, relating or involving the
Northstar or any of its Subsidiaries that will, either individually or in the
aggregate, impair or delay the ability of the Northstar to consummate the
transactions contemplated hereby, or by any of the Northstar Ancillary
Documents. Northstar is not subject to any judgment, decree, injunction, rule or
order of any court or arbitration panel that will, either individually or in the
aggregate, impair or delay the ability of the Northstar to consummate the
transactions contemplated hereby, or by Northstar Ancillary Documents.

(b) No
actions, suits, claims, investigations or other legal proceedings are pending
or, to Knowledge of the Northstar, threatened against or by Northstar or any
Affiliate of Northstar that challenge or seek to prevent, enjoin or otherwise
delay the transactions contemplated by this Agreement. 

Section 4.6. No Additional
Representations or Warranties. Except for the specific representations and
warranties expressly made by Northstar in Article IV, (a) First Surgical
acknowledges and agrees that (i) neither Northstar nor any Subsidiary is making
or has made any representation or warranty, express or implied, at law or in
equity, in respect of Northstar or its Subsidiaries, or any of their respective
businesses, assets, liabilities, operations, prospects, or condition (financial
or otherwise), including with respect to merchantability or fitness for any
particular purpose of any assets, the nature or extent of any liabilities,
prospects, the effectiveness or the success of any operations, or the accuracy
or completeness of any confidential information memoranda, documents,
projections, material or other information (financial or otherwise) furnished to
First Surgical or its Representatives or made available to First Surgical or its
Representatives in any “data rooms,” “virtual data rooms,” management
presentations or in any other form in expectation of, or in connection with, the
transactions contemplated by this Agreement, or in respect of any other matter
or thing whatsoever, and (ii) no Representative of Northstar or any of its
Subsidiaries has any authority, express or implied, to make any statements,
representations, warranties or agreements regarding the transactions
contemplated by and the subject matter of this Agreement not specifically set
forth in this Agreement and subject to the express remedies and limitations
thereon herein provided; (b) First Surgical specifically disclaims that it is
relying upon or has relied upon any such other statements, representations or
warranties that were made by any Person, and acknowledges and agrees that
Northstar has specifically disclaimed and does hereby specifically disclaim any
such other representation or warranty made by any Person; (c) First Surgical
specifically disclaims any obligation or duty by Northstar or its Subsidiaries
to make any disclosures of fact not required to be disclosed pursuant to the
specific representations and warranties set forth in Article IV; and (d)
First Surgical is entering into the transaction contemplated by this Agreement
subject only to the specific representations and warranties set forth in
Article IV. 

Section 4.7. Brokers, Finders
and Investment Bankers. Neither Northstar, nor an officer, member, director
or employee of Northstar nor any Affiliate of Northstar, has employed any
broker, finder or investment banker or incurred any liability for any investment
banking fees, financial advisory fees, brokerage fees or finders’ fees in
connection with the transactions contemplated hereby, except that Northstar may
retain an investment banking firm, agent or broker in connection with the Financing. Any financial advisory fees,
brokerage fees or finders’ fees incurred in connection with the Financing shall
be born exclusively by Northstar. 

9 

ARTICLE V 
CERTAIN COVENANTS AND
AGREEMENTS 

Section 5.1. Reasonable
Efforts; Further Assurances; Cooperation. Subject to the other provisions
hereof, each Party shall each use its commercially reasonable, good faith
efforts to perform its obligations hereunder and to take, or cause to be taken,
and do, or cause to be done, all things necessary, proper or advisable under
applicable Law to obtain all required consents, waivers, approvals and
authorizations, including those set forth on Schedule 3.3 and Schedule
3.6, and all regulatory approvals and to satisfy all conditions to its
obligations hereunder and to cause the transactions contemplated herein to be
effected as soon as practicable, but in any event on or before the Expiration
Date, in accordance with the terms hereof (provided, however, that
neither of the Parties nor any of their respective Affiliates shall be required
to pay money to any third party, commence any litigation, grant any
accommodation (financial or otherwise) to any third party, dispose of any assets
or agree to any restriction in connection with such efforts), and shall
cooperate fully with the other Party and its Representatives in connection with
any step required to be taken as a part of its obligations hereunder, including
the following: 

(a) Each Party promptly shall make all
filings and submissions and shall take all other actions necessary, proper or
advisable under applicable Laws to obtain any required approval of any
Governmental Entity with jurisdiction over the transactions contemplated hereby.
Each Party shall furnish all information required for any application or other
filing to be made pursuant to any applicable Law in connection with the
transactions contemplated hereby. Without limiting the foregoing, First Surgical
shall cause FS Surgical and FS Hospital to execute, acknowledge and deliver to
Newco any and all other assignments, consents, approvals, conveyances,
assurances, documents and instruments reasonably requested by Newco and/or the
Texas Department of State Health Services (“DSHS”) at any time and shall take
any and all other actions reasonably requested by Newco and DSHS at any time for
the purpose of more effectively assigning, transferring, granting, conveying and
conferring to Newco, the Hospital and ASC licenses (“DSHS Obligations”). First
Surgical’s DSHS Obligations shall include, but not be limited to, cooperating
with Northstar and Newco to complete the hospital and ambulatory surgery center
change of ownership requirements described in 25 TAC 133 and 25 TAC 135. After
the Closing, 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. 

(b) All
analyses, appearances, meetings, discussions, presentations, memoranda, briefs,
filings, arguments, and proposals made by or on behalf of either Party before
any Governmental Entity or the staff or regulators of any Governmental Entity,
in connection with the transactions contemplated hereunder shall be disclosed to
the other Party hereunder in advance of any filing, submission or attendance, it
being the intent that the Parties will consult and cooperate with one another,
and consider in good faith the views of one another, in connection with any such
analyses, appearances, meetings, discussions, presentations, memoranda,
briefs, filings, arguments, and proposals. Each Party shall give notice to the
other Party with respect to any meeting, discussion, appearance or contact with
any Governmental Entity or the staff or regulators of any Governmental Entity,
with such notice being sufficient to provide the other Party with the
opportunity to attend and participate in such meeting, discussion, appearance or
contact. 

10 

Section 5.2. Public Announcements. Notwithstanding
anything herein to the contrary, each Party hereby agrees that, except as may be
required to comply with the requirements of any applicable Laws, the rules and
regulations of each stock exchange upon which the securities of such Party are
listed, if any (in which case the Party proposing to issue such press release or
make such public announcement shall consult in good faith with the other Party
before issuing any such press release or making any such public announcement and
shall allow the other Party reasonable time to comment on such release or
announcement in advance of such issuance), no filing, press release or similar
public announcement or communication shall be made by it or caused to be made by
it concerning the execution or performance of this Agreement unless it shall
have consulted the other Party in advance with respect thereto and such other
Party consents in writing (which consent shall not be unreasonably withheld,
conditioned or delayed) to such filing, release, announcement or communication;
provided, however, each Party and its Affiliates may make internal
announcements regarding this Agreement to its directors, officers and employees
without the consent of the other Party. If either Party determines that any of
this Agreement, the Northstar Ancillary Agreements or the First Surgical
Ancillary Agreements must be filed with any Governmental Authority pursuant to
applicable Law, then before making such filing, such Party shall provide the
other Party with a version of any document it intends to file with any necessary
redactions, and shall give due consideration to the other Party’s comments
regarding the redacted version and use commercially reasonable efforts to ensure
confidential treatment by the applicable authority of any sections specified by
such Party. 

Section 5.3. Financing.
First Surgical agrees to provide such assistance with the Financing as is
reasonably requested by Northstar.

ARTICLE VI
CONDITIONS TO CLOSING 

Section 6.1. Conditions to
Obligations of Each Party. The respective obligations of each Party to
effect the transactions contemplated hereby are subject to the following
conditions: 

(a) Injunction. No effective
injunction, writ or preliminary restraining order or any order of any nature is
issued and outstanding by a Governmental Entity of competent jurisdiction to the
effect that the Transaction may not be consummated as provided herein, no
proceeding or lawsuit is commenced and ongoing by any Governmental Entity or
third party for the purpose of obtaining any such injunction, writ or
preliminary restraining order and no written notice is received and outstanding
from any Governmental Entity indicating an intent to restrain, prevent,
materially delay or restructure the transactions contemplated hereby. 

(b)
Governmental Consents. All consents, approvals, orders or authorizations
of, or registrations, declarations or filings with, all Governmental Entities
required in connection with the execution, delivery or performance hereof
are obtained or made, including the items listed on Schedule 3.6. 

11 

(c)
Personal Property Lease. On or before the Closing, FS Surgical and FS
Hospital and Newco shall have entered into a personal property lease (the
“Personal Property Lease”) on terms and conditions mutually
satisfactory to First Surgical and Northstar. Among other things, the Personal
Property Lease shall contain the following terms: 

(i) Term: 5 years (the “Initial
Term”); provided however, the term may be extended for up to an additional three
(3) years if Newco has not made distribution payments to First Surgical of at
least $18,000,000 during the Initial Term. If the distribution payments made by
Newco to First Surgical during the Initial Term are less than $18,000,000, the
Personal Property Lease payments will continue for that period of time (the
“Extended Term”) until the sum of the Personal Property Lease payments made by
Newco and one half of the distribution payments received by First Surgical equal
the difference between $18,000,000 and the distribution payments made to First
Surgical during the Initial Term; 

(ii) First Surgical agrees to pay at least
  twenty-five percent (25%) of any distribution payment received during the
  Initial Term to principal debt reduction of the loans under the First Street
  Credit Agreement. Additionally, in any month in which First Surgical receives a
  distribution payment from Newco of at least $100,000, First Surgical agrees to
  pay at least $50,000 toward principal debt reduction of such loans; 

(iii)
  Monthly payment: $189,445 per month; subject to adjustment based on changes to
  the monthly debt service due under the First Street Credit Agreement as a result
  of the interest rate charged by Iberia Bank; however, the monthly payments shall
  not be less than $150,000 and not be more than $190,000; 

(iv) Property to be
  leased: All furniture, fixtures, equipment, tenant improvements and other
  personal property owned by FS Hospital and FS Surgery as of the Closing Date;
  and 

(v) Property to be subleased: To the extent not assumed by Newco under
  Section 6.1 (d), all furniture, fixtures, equipment, tenant improvements and
  other person property leased from third parties by FS Hospital and FS Surgery as
of the Closing Date. 

(vi)
  Varon Payable: First Surgical shall cause $19,445 of the Monthly payment of the
  personal property lease shall be applied and paid to satisfy the Varon
  Receivable. After thirty-six (36) months, the monthly payment during the
  Extended Term, if any, of the Personal Property Lease shall be reduced by
  $19,445. 

(d) Lease Agreements. On or
before the Closing either Newco shall have assumed the obligations of FS
Surgical and FS Hospital from and after the Closing under the Leases. Except for
the Newco Payment described in Section 7.6, Newco shall have no obligation to pay rent owed by either
FS Surgical or FS Hospital pursuant to the Leases prior to Closing. 

12 

(e)
Management Services Agreement. Northstar and Newco shall enter into a
Management Services Agreement, on terms satisfactory to Northstar and First
Surgical, (the “Management Services Agreement”). Pursuant to the Management
Services Agreement, Newco shall pay to Northstar a management fee of three
percent (3%) of collections for corporate overhead, including the following
services: (i) recruiting, hiring and employment of all staff; (ii) accounting
and in-house legal services; and (iii) marketing. In addition, under the
Management Services Agreement, Newco shall pay Northstar third-party charges
actually incurred on behalf of or allocable to Newco. 

(f)
Transition Services Agreement. FS Surgical and/or FS Hospital shall enter
into a Transition Services Agreement with Newco, on terms satisfactory to
Northstar and First Surgical, pursuant to which FS Surgical and FS Hospital
shall, for a period of time as may be necessary (not to exceed six months), to
provide for Newco certain services which Newco may be unable to provide
immediately upon Closing (including, without limitation, operating under
existing licenses). Newco will pay FS Surgical and FS Hospital a fee under such
Transition Services Agreement equal to the cost for FS Surgical and FS Hospital
to provide such services. 

(g)
Equipment Leases. FS Surgical and FS Hospital shall either (i) assign the
Equipment Leases listed on Schedule 6.1(g) (the “Equipment Leases”) to Newco,
and Newco shall assume all of FS Surgical’s and/or FS Hospital’s liabilities and
obligations thereunder or (ii) Newco shall enter into new equipment leases in
respect of the equipment leased under the Equipment Leases. 

(h) Upon
Closing, Northstar will cause Newco to arrange to hire employees for Newco,
either directly or indirectly through ADP or other third party. Immediately upon
Closing, persons currently employed at FS Surgical and FS Hospital will continue
their employment through Newco. 

(i)
Assignment and Assumption Agreement. Upon Closing, FS Surgical, FS
Hospital and Newco shall enter into an Assignment and Assumption Agreement, on
customary terms, pursuant to which FS Surgical shall assign all of its
Receivables and Payables to Newco, and Newco shall accept title to the
Receivables and assume the obligations and liabilities for, and agree to pay and
discharge, the Payables. 

Section 6.2. Conditions to
Obligations of First Surgical. The obligations of First Surgical to
consummate the transactions contemplated hereby are subject to the fulfillment
at or before the Closing of each of the following additional conditions: 

(a) Representations and
Warranties. The representations and warranties of Northstar contained in
Article IV are true and correct in all respects (disregarding any
Material Adverse Effect or materiality qualifications set forth therein) as of
the Closing Date with the same effect as though made at and as of such date
(except those representations and warranties that address matters only as of a
specified date, which are true and correct in all respects as of
that specified date), except where failure of such representations and
warranties to be true and correct has no Material Adverse Effect.

13 

(b)
Performance of Obligations of Northstar. Northstar has performed in all
material respects all covenants and agreements required to be performed by it
hereunder at or before the Closing. 

(c)
Ancillary Documents. Northstar has delivered, or caused to be delivered,
to the Northstar Ancillary Documents. 

(d)
Required Consent. First Surgical shall have received the consents set
forth on Schedule 6.2(d).

Section 6.3. Conditions to
Obligations of Northstar. The obligations of the Northstar to consummate the
transactions contemplated hereby are subject to the fulfillment at or before the
Closing of each of the following additional conditions: 

(a) Representations and
Warranties. The representations and warranties of First Surgical contained
in Article III are true and correct in all respects (disregarding any
Material Adverse Effect or materiality qualifications set forth therein) as of
the Closing Date with the same effect as though made at and as of such date
(except those representations and warranties that address matters only as of a
specified date, which are true and correct in all respects of that specified
date), except where the failure of such representations and warranties to be
true and correct has no Material Adverse Effect. 

(b)
Performance of Obligations by First Surgical. First Surgical has
performed in all material respects all covenants and agreements required to be
performed by it hereunder on or before the Closing Date. 

(c)
Ancillary Documents. First Surgical has delivered, or caused to be
delivered, to Northstar the First Surgical Ancillary Documents. 

(d)
Financing. Northstar shall have completed the Financing and shall have
received the proceeds of the Financing. 

ARTICLE VII
CLOSING 

Section 7.1. Closing. The
Closing shall occur at 9:00 a.m., Houston, Texas time, on the third (3rd)
Business Day following the satisfaction or waiver of the conditions set forth in
Article VI that are contemplated to be satisfied before the
Closing, or on such other date as the Parties may agree. The Closing shall take
place at the offices of Strasburger & Price, LLP at 909 Fannin Street, Suite
2300, Houston, Texas 77010, or at such other place as the Parties may agree.

Section 7.2. First Surgical
Closing Deliveries and Action. At the Closing, First Surgical shall deliver,
or cause to be delivered, to Northstar the following: 

14 

(a) a
certificate of an authorized officer of First Surgical as to compliance with the
conditions set forth in Section 6.3(a), Section 6.3(b),Section 6.3(c)
and Section 6.3(d); 

(b) all other documents required to be
entered into by First Surgical, any Subsidiary pursuant hereto or reasonably
requested by Northstar to consummate the transactions contemplated hereby; and

Section 7.3. Northstar Closing Deliveries. At the
Closing, Northstar shall deliver, or cause to be delivered, to the Shareholder
the following documents. 

(a) a
certificate of an authorized officer of the Northstar as to compliance with the
conditions set forth in Section 6.2(a), Section 6.2(b) and Section
6.2(c); and 

(b) all other documents required to be
entered into by Northstar pursuant hereto or reasonably requested by the First
Surgical to otherwise consummate the transactions contemplated hereby. 

Section 7.4. Northstar Capital
Contribution. Simultaneous with the Closing, Northstar shall make the
Northstar Capital Contribution. 

Section 7.5. Assignment by FS
Surgical and FS Hospital. Simultaneous with the Closing, First Surgical
shall cause FS Surgical and FS Hospital to transfer and assign any and all of
the medical supplies owned by them to Newco, pursuant to a Bill of Sale in
customary form. 

Section 7.6. Newco
Payment. Immediately upon receiving the Northstar Capital Contribution,
Northstar shall cause Newco to pay the lessors under the leases the sum of $1
million in the aggregate (allocated as specified by such lessors) in respect of
prior obligations of FS Hospital and FS Surgical under the leases. 

Section 7.7. Allocation of
Receivables. Following the Closing, Newco shall pay to FS Surgical or FS
Hospital (as directed by First Surgical) an amount equal to 50% of the
Receivables as they are collected, up to $300,000. Such amount shall only be
paid out of collected Receivables and shall be paid weekly. 

Section 7.8. Post-Closing
Payment. No later than ten (10) days following the Closing, Newco shall
inform the parties of (i) the amount of Receivables delivered to Newco at
Closing and (ii) the amount of Payables assumed by Newco at Closing. If the
amount of such Receivables collected within 365 days following Closing exceeds
the amount of such Payables paid within 365 days following Closing, Newco shall
promptly pay First Surgical an amount equal to such difference. If the amount of
such Payables paid within 365 days following Closing exceeds the amount of such
Receivables collected within 365 days following Closing, Newco shall promptly
pay Northstar the amount of the difference. All amounts paid by Newco to FS
Surgical or FS Hospital pursuant to Section 7.7 shall be excluded from
Receivables collected in any calculation under this Section. 

15 

ARTICLE VIII
TERMINATION 

Section 8.1. Termination.
This Agreement may be terminated at any time before the Closing: 

(a) by mutual written consent of the
Parties; 

(b) by written notice from the First
Surgical to Northstar, if Northstar (i) fails to perform in any respect any of
its agreements contained herein required to be performed by it at or before the
Closing or (ii) breaches any of its representations and warranties contained
herein, which failure or breach is not cured within twenty (20) days following
First Surgical having notified the Northstar of its intent to terminate this
Agreement pursuant to this Section 8.1(b), except where such failure or
breach would not materially impair or delay the ability of the Northstar to
consummate the transactions contemplated hereby; provided,
however, that, notwithstanding the foregoing, First Surgical shall be
able to terminate this Agreement pursuant to this Section 8.1(b) in the
event that the Northstar fails to consummate the transactions required to be
performed by it on the Closing Date as set forth in Section 8.1; 

(c) by written notice from Northstar to
First Surgical, if First Surgical (i) fails to perform in any respect any of
their agreements contained herein required to be performed by it at or before
the Closing, or (ii) breaches any of its representations and warranties
contained herein, which failure or breach is not cured within twenty (20) days
following Northstar having notified First Surgical of its intent to terminate
this Agreement pursuant to this Section 8.1(c), except where such failure
or breach has no Material Adverse Effect; provided, however, that,
notwithstanding the foregoing, Northstar shall be able to terminate this
Agreement pursuant to this Section 8.1(b) in the event that First
Surgical fails to consummate the transactions required to be performed by it on
the Closing Date as set forth in Section 8.1; or 

(d) by written notice by either party
to the other Party, as the case may be, in the event the Closing has not
occurred on or before November 2, 2014 (the “Expiration Date”) for any
reason other than delay or nonperformance of the Party seeking such termination.

Section 8.2. Specific
Performance and Other Remedies. Each Party hereby acknowledges that the
rights of each Party to consummate the transactions contemplated hereby are
special, unique and of extraordinary character and that, if either Party
violates or fails or refuses to perform any covenant or agreement made by it
herein, the other Party may be without an adequate remedy at law. If either
Party violates or fails or refuses to perform any covenant or agreement made by
it herein, the other Party may, subject to the terms hereof and in addition to
any remedy at law for damages or other relief, institute and prosecute an action
in any court of competent jurisdiction to enforce specific performance of such
covenant or agreement or seek any other equitable relief. 

Section 8.3. Effect of
Termination. In the event of termination of this Agreement pursuant to this
Article VIII, this Agreement shall forthwith become void and there shall
be no liability on the part of either Party or its partners,
officers, directors or stockholders, except for obligations under Section
6.4 (Public Announcements), Section 11.1 (Notices), Section
11.6 (Controlling Law), Section 11.5 (Mediation), Section 11.6 (Consent to Jurisdiction, Etc.), Section 11.9 (Amendment)
and Section 11.14 (Transaction Costs) and this Section 8.3, all of
which shall survive the Termination Date. Notwithstanding the foregoing, nothing
contained herein shall relieve either Party from liability for any then-existing
breach hereof. 

16 

ARTICLE IX 
NORTHSTAR SUBSCRIPTION RIGHT; OPTION

Section 9.1. Northstar Subscription Right:

(a) For
purposes of this Section 9.1, capitalized terms not otherwise defined herein
shall have the meaning specified for such terms in the First Surgical
Stockholders Agreement. 

(b) In
the even any Stockholder delivers a Notice Offer to the Company, the Company
shall notify Northstar of the receipt thereof within five business days of such
receipt. Within fifteen (15) days of receiving such notice, Northstar may (but
shall not be required to) notify the Company that it elects to subscribe for a
number of Shares equal to all of the Shares referred to in the Notice Offer, at
the price specified in the Notice Offer. If Northstar makes such election, the
Company shall exercise its right under Section 4B of the Stockholders Agreement
to purchase all of the Shares specified in the Notice Offer. 

(c) The
consummation of the purchase of Shares by Northstar pursuant to the exercise of
its election set forth in the preceding paragraph shall occur at a date, time
and place designated by the Company, immediately prior to the consummation of
the Company’s repurchase of the Selling Stockholder’s Shares contemplated by
Section 9.1(b). The purchase price shall be paid by Northstar by wire transfer
to an account designated to it by the Company. 

Section 9.2. Option. 

(a)
Commencing on the fourth (4th) anniversary of the Closing and ending
on the tenth (10th) anniversary of the Closing, Northstar shall have
the right to purchase all of the equity in Newco then owned by First Surgical
(the “Option”). Northstar shall notify First Surgical of its exercise of
such right. The exercise of the Option shall be irrevocable. The consummation of
the sale of First Surgical equity shall occur five (5) Business Days after the
exercise of the Option at a place and time in Houston, Texas designated by
Northstar in its notice of exercise of the Option (the “Option Closing”).

(b) The
purchase price for units of Newco purchased pursuant to the Option shall be as
follows: An amount equal to five (5) multiplied by the last twelve months
EBITDA (based on the most recent regularly prepared quarterly financial
statements of Newco; provided that such financial statements are no more than
one month older than 30 days prior to the Option Closing) multiplied by a
fraction, the numerator of which is the First Surgical units in Newco to be
purchased pursuant to the exercise of the Option and the denomination which is
all the outstanding units of Newco. 

17 

(c) If
Northstar exercises its option to purchase all of the equity owned by First
Surgical in Newco, the minimum purchase price shall be $10 million,
notwithstanding the provisions of Section 9.2(b). 

ARTICLE X
DISSOLUTION OF RELATIONSHIP

Section 10.1. Dissolution of Relationship. 

(a) The Parties may at any time
mutually agree to terminate their relationship, terminate this Agreement and
dissolve Newco. 

(b) First
Surgical may elect, in its sole and absolute discretion, any time within 180
days following the second (2nd) anniversary Closing, to terminate the
relationship between itself and Northstar (subject to subsection 10.1(g) below),
terminate this Agreement and dissolve Newco, by giving notice thereof to
Northstar unless Newco achieves during the first two (2) years following
the Closing revenue (based on the regularly prepared monthly financial
information of Newco) for any consecutive twelve months during such two (2) year
period ending on the second anniversary of the Closing equal to or greater than
$40 million. 

(c) In
the event that Newco defaults in a payment obligation under the Personal
Property Lease or a lease payment under any of the Leases, First Surgical may at
any time, in its sole and absolute discretion, terminate its relationship with
Newco terminate this Agreement and dissolve Newco. 

(d) In
the eve
nt that the right to terminate Newco pursuant to Section 10.1(a), 10.1(b)
or 10.1(c) is exercised, then 

(i) the Personal Property Lease shall
be cancelled effective as of the Dissolution Date, and all furniture, fixtures
and equipment leased to Newco thereunder (or subsequently purchased or leased by
Newco) shall be returned to First Surgical or its designee, at the expense of
First Surgical, and Newco shall have no further obligations under the Personal
Property Lease; 

(ii) Newco shall assign its rights and
  obligations under the Real Property Lease from and after the Dissolution Date to
First Surgical or its designee; 

(iii) First Surgical’s equity in Newco
  shall be cancelled; 

(iv) First Surgical shall cause any
  person it has designated for appointment to the Board of Managers of Newco to
  resign as of the Dissolution Date. 

(e) Newco
shall continue to be liable for (i) any obligations and liabilities it incurred
prior to the Dissolution Date including but not limited to obligations under the
Personal Property Lease and the Real Property Lease and (ii) any obligations and
liabilities incurred by Newco following the Dissolution Date. 

18 

(f) The
Parties agree to take any and all action, and to execute and delivery any
necessary agreements and instruments to give effect to the provisions of this
Section 10.1, including with respect to the transfer of any and all licenses.

(g) Upon
and as a condition to the consummation of the termination of Newco pursuant to
Section 10.1(b), First Surgical shall pay Northstar the sum of $7.5 million.

ARTICLE XI
MISCELLANEOUS PROVISIONS 

Section 11.1. Notices. All
notices, communications and deliveries required or made hereunder must be made
in writing signed by or on behalf of the Party making the same and shall be
delivered personally or by a national overnight courier service, by registered
or certified mail (return receipt requested) (with postage and other fees
prepaid), or by electronic mail as follows: 

	 	To the Northstar: 	Northstar Healthcare Inc. 
	 	  	4120 Southwest Freeway, Suite 150 
	 	  	Houston, Texas 77027 
	 	  	Attn: Harry Fleming, President 
	 	  	E-mail: hfleming@northstar-healthcare.com

	 	  	  
	 	with a copy to: 	Northstar Healthcare Inc. 
	 	  	4120 Southwest Freeway, Suite 150 
	 	  	Houston, Texas 77027 
	 	  	Attn: General Counsel 
	 	  	Fax: 713-355-8615 
	 	  	  
	 	To the First Surgical: 	First Surgical Partners Holdings, Inc. 
	 	  	411 First Street 
	 	  	Bellaire, TX 77401 
	 	  	Attn: Dr. Jacob Varon and 
	 	  	Chief Executive Officer 
	 	  	Email: drvaron@varonmd.com 
	 	  	jholland@firstsurgical.com
  
	 	  	  
	 	with a copy to: 	Strasburger & Price, LLP 
	 	  	2 Houston Center 
	 	  	909 Fannin Street, Suite 2300 
	 	  	Houston, Texas 77010-1036 
	 	  	Attn: Steven D. Rubin 
	 	  	Email: steve.rubin@Strasburger.com
  

or to such other representative or at such other address of
either Party as such Party may furnish to the other Party in writing. Any such
notice, communication or delivery shall be deemed given or made (a) on the date
of delivery, if delivered in person, or (b) on the first Business Day following
timely delivery to a national overnight courier service, (c) on the fifth
Business Day following it being mailed by registered or certified mail, or (d) when
actually received, if transmitted by electronic mail. 

19 

Section 11.2. Schedules and
Exhibit. The Schedules and Exhibits are hereby incorporated into this
Agreement and are hereby made a part hereof as if set out in full herein. 

Section 11.3. Assignment;
Successors in Interest. No assignment or transfer by either Party of such
Party’s rights and obligations hereunder shall be made except with the prior
written consent of the other Party. 

Section 11.4. Captions.
The titles, captions and table of contents contained herein are inserted herein
only as a matter of convenience and for reference and in no way define, limit,
extend or describe the scope of this Agreement or the intent of any provision
hereof. 

Section 11.5. Mediation. 

(a)

Except with respect for equitable relief (including interim relief), any Legal
Dispute shall be resolved in accordance with the procedures set forth in this
Section 11.5 and Section 11.6. Until completion of such
procedures, no Party may take any action to force a resolution of a Legal
Dispute by any judicial or similar process, except to the extent necessary to
avoid expiration of a claim that is permitted by this Agreement. 

(b) Any
party seeking resolution of a Legal Dispute shall first submit the Legal Dispute
for resolution by mediation pursuant to the American Arbitration Association
Procedure for Mediation of Commercial Disputes as then in effect. Mediation will
take place in Houston, Texas and will continue for at least sixty (60) days
unless the mediator chooses to withdraw sooner. 

(c) All
offers of compromise or settlement among the Parties or their Representatives in
connection with the attempted resolution of any Legal Dispute shall be deemed to
have been delivered in furtherance of a Legal Dispute settlement and shall be
exempt from discovery and production and shall not be admissible in evidence
(whether as an admission or otherwise) in any proceeding for the resolution of
the Legal Dispute. 

Section 11.6. Governing Law; Consent to Jurisdiction; WAIVER
OF TRIAL BY JURY; Etc. 

(a) This
Agreement shall be governed by and construed and enforced in accordance with the
internal Laws of the State of Texas without reference to its choice of law
rules. 

(b) Each
Party hereby irrevocably consents and agrees that, if any Legal Dispute is not
resolved by mediation undertaken pursuant to Section 11.5, such Legal
Dispute shall be brought only to the exclusive jurisdiction of the courts of the
State of Texas or the federal courts located in the State of Texas. In that
context, and without limiting the generality of the foregoing, each Party hereby
irrevocably and unconditionally (i) consents to the jurisdiction of such courts
(and of the appropriate appellate courts therefrom) in any such suit, action or
proceeding; (ii) waives, to the fullest extent permitted by Law, any objection that it may now
or hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding that is
brought in any such court has been brought in an inconvenient forum; and (iii)
waives any objection to service of process effected in accordance with
Section 11.1 or any means allowable under Texas law or procedure. During
the period a Legal Dispute is pending before a court, all actions, suits or
proceedings with respect to such Legal Dispute or any other Legal Dispute,
including any counterclaim, cross-claim or interpleader, shall be subject to the
exclusive jurisdiction of such court. In the event a Legal Dispute is brought
pursuant to this Section 11.6(b), each Party hereby waives, and shall not
assert as a defense in any Legal Dispute, that (a) such Party is not subject
thereto, (b) such action, suit or proceeding may not be brought or is not
maintainable in such court, (c) such Party’s property is exempt or immune from
execution, (d) such action, suit or proceeding is brought in an inconvenient
forum or (e) the venue of such action, suit or proceeding is improper. A final
judgment in any action, suit or proceeding described in this Section
11.6(b) following the expiration of any period permitted for appeal and
subject to any stay during appeal shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
applicable Laws. 

20 

(c) EACH
PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE FIRST SURGICAL ANCILLARY
AGREEMENTS OR NORTHSTAR ANCILLARY AGREEMENTS OR ANY OTHER TRANSACTION AGREEMENTS
OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY. EACH PARTY ACKNOWLEDGES AND
AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY AND
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
EACH PARTY (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II)
ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO
THIS AGREEMENT, THE FIRST SURGICAL ANCILLARY AGREEMENTS AND NORTHSTAR ANCILLARY
AGREEMENTS AND ANY OTHER TRANSACTION AGREEMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.6(C). 

Section 11.7.
Severability. Any provision hereof that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by Law, each
Party hereby waives any provision of Law that renders any such provision
prohibited or unenforceable in any respect.

21 

Section 11.8.
Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, and it shall not be necessary in
making proof of this Agreement or the terms hereof to produce or account for
more than one of such counterparts. 

Section 11.9. Amendment.
This Agreement may not be amended, modified or supplemented, except by written
agreement of the Parties. 

Section 11.10. Enforcement of
Certain Rights. Except as provided in Section6.1(j), nothing
expressed or implied herein is intended, or shall be construed, to confer upon
or give any Person other than the Parties, and their successors or permitted
assigns, any right, remedy, obligation or liability under or by reason of this
Agreement, or result in such Person being deemed a third-party beneficiary
hereof. 

Section 11.11. Waiver. Any
agreement on the part of either Party to any extension or waiver of any
provision hereof shall be valid only if set forth in an instrument in writing
signed on behalf of such Party. A waiver by either Party of the performance of
any covenant, agreement, obligation, condition, representation or warranty shall
not be construed as a waiver of any other covenant, agreement, obligation,
condition, representation or warranty. A waiver by either Party of the
performance of any act shall not constitute a waiver of the performance of any
other act or an identical act required to be performed at a later time. 

Section 11.12.
Integration. THIS AGREEMENT AND THE DOCUMENTS EXECUTED PURSUANT HERETO,
INCLUDING THE EXHIBITS AND SCHEDULES HERETO, SUPERSEDE ALL NEGOTIATIONS,
AGREEMENTS AND UNDERSTANDINGS BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND CONSTITUTE THE ENTIRE AGREEMENT BETWEEN THE PARTIES
WITH RESPECT THERETO. 

Section 11.13. Cooperation
Following the Closing. Following the Closing, each Party shall deliver to
the other Party such further information and documents and shall execute and
deliver to the other Party such further instruments and agreements as the other
Party shall reasonably request to consummate or confirm the transactions
provided for herein, to accomplish the purpose hereof or to assure to the other
Party the benefits hereof. 

Section 11.14. Transaction
Costs. Except as otherwise expressly provided herein, all costs and
expenses, including, without limitation, fees and disbursements of counsel,
financial advisors and accountants, incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the Party incurring
such costs and expenses, whether or not the Closing shall have occurred. 

(signature page follows) 

22 

IN WITNESS WHEREOF, the
Parties have caused this Agreement to be duly executed, as of the date first
above written. 

	 	NORTHSTAR HEALTHCARE INC. 
	 	 	  
	 	 	  
	 	By: 	
	 	Name: 	
	 	Title: 	
	 	 	  
	 	 	  
	 	 	  
	 	 	  
	 	FIRST SURGICAL PARTNERS HOLDINGS,
      INC. 
	 	 	  
	 	 	  
	 	By: 	
	 	Name: 	
	 	Title:

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