in Re: DeSoto Surgicare Partners, Ltd., Successor-In-Interest to Baylor Surgicare at Duncanville, LLC Texas Health Ventures Group, LLC And United Surgical Partners International, Inc.

ACCEPTED 05-15-00161-CV 05-15-00161-CV FIFTH COURT OF APPEALS DALLAS, TEXAS 2/9/2015 3:21:23 PM NO. LISA MATZ CLERK In the Fifth Court of Appeals FILED IN 5th COURT OF APPEALS Dallas, Texas DALLAS, TEXAS 2/9/2015 3:21:23 PM LISA MATZ In Re DeSoto Surgicare Partners, Ltd., Successor-in-Interest toClerk Baylor Surgicare at Duncanville LLC; Texas Health Ventures Group, LLC; and United Surgical Partners International, Inc.; Relators-Defendants. Original Proceeding From Cause No. DC-13-02334-L In the 193rd Judicial District Court of Dallas County, Texas Honorable Carl Ginsberg, Presiding SWORN RECORD FOR PETITION FOR WRIT OF MANDAMUS Volume 2 (Pages 0235-0493) NORTON ROSE FULBRIGHT US LLP Jeff Cody State Bar No. 04468960 jeff.cody@nortonrosefulbright.com Nathan B. Baum State Bar No. 24082665 nathan.baum@nortonrosefulbright.com 2200 Ross Avenue, Suite 3600 Dallas, Texas 75201 Telephone: (214) 855-8000 Facsimile: (214) 855-8200 Katherine D. Mackillop State Bar No. 10288450 katherine.mackillop@nortonrosefulbright.com 1301 McKinney, Suite 5100 Houston, Texas 77010-3095 Telephone: (713) 651-5151 Facsimile: (713) 651-5246 Counsel for Relators-Defendants ORAL ARGUMENT REQUESTED  TABLE OF CONTENTS Description Page(s) Volume 1 Defendants’ Motion to Strike Pleadings (with Exhibits), filed 0001-0219 December 23, 2014 Plaintiff’s Response to Defendants’ Motion to Strike Pleadings, filed 0220-0234 January 7, 2015 Volume 2 Exhibits to Plaintiff’s Response to Defendants’ Motion to Strike 0235-0493 Pleadings, filed January 7, 2015 Volume 3 Hearing Transcript Vol. 1, on Defendants’ Motion to Strike 0494-0561 Pleadings, held on January 12, 2015 Hearing Transcript Vol. 2 (Plaintiff’s Exhibits), on Defendants’ 0562-0828 Motion to Strike Pleadings, held on January 12, 2015 Volume 4 Hearing Transcript Vol. 3 (Defendants’ Exhibits), on Defendants’ 0829-1123 Motion to Strike Pleadings, held on January 12, 2015 Volume 5 Defendants’ Supplemental Letter Brief, filed January 16, 2015 1124-1131 Plaintiff’s Supplemental Letter Brief (with Exhibits), filed January 1132-1171 16, 2015 Order, signed January 19, 2015 1172 Original Petition, filed February 26, 2013 1173-1177 First Amended Petition, filed March 21, 2013 1178-1180 Original Answer, filed April 6, 2013 1181-1183 Second Amended Petition, filed July 15, 2014 1184-1192 Third Amended Petition, filed August 6, 2014 1193-1202 Original Answer to Third Amended Petition, filed September 2, 2014 1203-1206 1  Description Page(s) Volume 5, cont’d. Affidavit of Nathan B. Baum in Support of the Defendants' Motion to 1207-1209 Strike Pleadings or, in the Alternative, Exclude Evidence, signed January 12, 2015 2  Sworn Record 0235 EXHIBIT A  Sworn Record 0236 Texas Health Ventures Group, LLC To: LaVone.Arthur Jonathan Bond From: Brett Brodnax Carolyn Exley EvieMillet JarodMoss Date: October 19, 2010 Re: Request for Approval- Acquisition of Surgety Center of Duncanville ($1,226,250) The p urp ose of this memo is to reques t approval to inves t a total of $1.2 million to acquire a 50.1% ownership p osition in Sutgcry Center of Duncanville ("SCD'') located at 1018 East Wheatland Road in Duncanville, Texas, as well as acquire the rights to initiate a new management agreement with the surgery center. The purchas e would be conswnmated by Texas Health Ventures G-roup, ILC ("THVG"). , With your approval, we plan to close by this Friday October 22, with an eff ec tive of November 1, 2010. Background SCD commenced op era tions in 198.5 and is afour operating room, one procedure room facility . SCD's AAAHC a ccre dita ion was ren ewed in May 2009 and expires on May 15, 2012. t SCD is owned 41.01% by Symbion, wh o is also the cutte nt management company for the c enter , and 58.99% by physician investors. The facility is located approximately tlu:ee miles from THVG's DeSoto facility, the North Texas Surgery Center. It is anticipated that we will be able to capitalize gi on syner es available between the two centers and eventually merge the Duncanville facility into the ( DeSoto facility within twelve months subsequent to closing se e further iliscussion below). sen o cc upi es 10,000 square feet of leased space in a building owned by art independent landlord . The original tenn of the lease expires in Febtu:u:y 2013 with two five-'year re new al options as cunent ly written. The lease includes a rental rate equal to $33.10 per sq. ft or $27,583 per month and currently includes an annual increase equal to 3%. The lease includes a guaranty from Symbion for the remainder of the term that will be assumed by THVG (with a guaranty fee being charged to the physicians). 'The present value obligation of the guaranty of the lease tlu:ough the remainder of· the term is $713 thousand. Transaction Overview THVG will p urchase a 50.1% interest and enter into a management agreement for cash consideration equal to $1,226,250 in the aggregat e. This is bas ed on an equity valuation equal to $1,250,000 (or $626,250 for 50.1%) and a management fcc valuation equal to $600,000, both as independently verified by Valu e Management Group. D 001730 CONFIDENTIAL  Sworn Record 0237 Page2 Approval Request- Surgery Center of Duncanville, Duncanville, Texas Based on. the proximity of SCD with ou:r DeSoto center, it isbelieved that there a.re opera tional and cost synergies available throu gh a !Ilerger of SCD into our D es oto facility with operations continuing at the DeSoto facility The transactio n documents will include an agreement from the . · Duncanville physicians to a merger with the DeSoto facility so,metime prior to t he first anniversary of the closing of the purchase ttallsaction. However, the m erger will remain subject to a vote o.f the ig DeSoto p ar tnership. Based o n the due dil ence results, certain capital improvements will need to be made to the Dun canville facility if the facility is not closed at the c onclusi o n of the initiallea.se term. 1bis transaction allows us to move in line with Symbion's expectations from a timing perspectiv e while remaining strategic with the transition an d p ot ential merger process. The remaining lease t� on the SCD lease agre eme nt provides time needed to work oil the potential merger in order to maximize operational proce ss es as well as qualitative processes of patient care. Physician PrQfile lnere are currendy 18 physician partner s whose ages .range from 40- 58 wlth an avet:age age of 47 years old. The re are currendy three L1 physicians, one L2 physician and fourteen L3 physicians. 1ne agreement requites that all physician partners must attest annu ally that they meet the Safe Harbor criteria. The ph y sician partners have a very good clinical repu tation in the market and are very interested in further improvement by pattnering \vith a company that has greater operation..'l.l leverage within the metroplex. Pa�or and Sp�cial� Mix Specialty Distribution* #Phys # Panners %Revenue Payor Mix* %Revenue Pain 'Managcmcn t 4 3 59% Mgd Care-In Network 60% General 7 1 9% Medicare/Medicaid 2�/o Podiatry 13 4 8% Worker's Camp 8% Colon & Rectal Suxge.ty/GI 1 1 6% Self-Pay 2% U rolo gy 4 3 6% Mgd Carc-OON 1% Orthopedic 5 2 4% TOTAL 100.0% Radiology 3 1 ·2% *' 'I"I'M Itme 2010 OUGYN 5 1 2% ENT 2 1 2% Plastic 4 1 1% GI 1 0% TOTAL 49 18 100% * Tl'MJunc 2010 Cuttencly, the center is 1% out-of-network. D 001731 CONFIDENTIAL  Sworn Record 0238 Page J Approval Request- Surgery Center of Duncanville, DuncanviJle, Texas Historical Financial Performance TTMDec07 TIMDec08 TTMDec09 TTMAu�10 Cases 3,163 3,408 3,194 2,740 Net Revenue per Case $1,768 $1,465 $1,403 $1,159 EBITDA $276,044 $65,026 $ 1 1 0,140 -$207,021 EBITDA Ma�in 5% 1% 3% -7% The cente r currently has $250 thousand of equipment financing debt with Key Bank, De Lage Land en and Siemens. In conn�ction with the tritnsaction, we will he putting a $450 thousand non­ recourse line of credit in place with Siemens for any potential cash needs during the initial transition months. Therefore, it is anticip ated that, as of the closing of the transaction or shortly thereafter, the ce nter could have up to $700 thousand. of debt outstanding. All of the existing debt will be as signed prior to closing. Valuation VMG conducted an ind ependent valuation of the cen ter and determined the valu e of the cunent equity to be $1,250,000 and the value of the management fee to be $600 th ousand . Our capital contribution will result in the ownerships noted above. As p a r t of this transaction, a 1 0 mile non-comp e te covenant is included for all selling parties for tlrree years following close or two yeats after ceasing to own an interest in the center. The facility will be chatged a 7% management fee with USPI remining 64.3% of the management fee and the remainder being paid to Baylor. The governing board will be made up of eigh t members, fout from THVG and four physician representatives. m Each me ber will vote according to ownership represented. Capital Priorities We .ranked this acquisi ti on as number six on our capital priorities and give it a high strate c, gi high upside and medium risk racing. The center .is strategic to THVG as there is an. opportunity for consolidation within the market. The center has high upside with access to THVG's operational oversight. 'The risk is medium, which taring ta ke s into consideration the minimal investment for the transaction offset by the risks ass o ci ated with the potencial merger into DeSoto. Due Diligenc e • Physician arrangements - The center has an anesthesia contract and a medical director agreement and we will retain the saine anesthesia group/medical director and terms. No other physician arrangements exist. • Clinical- Dr. Zarin and Jeannie Montgomery conducted the clinical due diligence and noted the following issues, all of which we believe can be addressed. The diligence report indicated that anesthesia. often leaves the center prior to the time that the p atient is discharged. We are discussing wjth Dr. Wasserman and will implement pr ocedu,t:cs to ensure that this doc s not carry forward. The center cs sentiilyl does not have a formal quality program in place which will be D 001732 CONFIDENTIAL  Sworn Record 0239 Pagc4 Approval Request- Surgery Center ofDunca.JJville, Duncanville, Texas immediately addressed b y USPrs clinical team. The repor also notes that the equipment t is dated and the facility will require capital improvements if we dq not merge with DeSoto. • Pain Screens - The pain screens have been run with no excep tio ns noted. • Coding/Billing- Gale Gonzalezteviewed the bu siness office functions and while concerns were rais ed in regard to the lack of attention the business office has been receiving, all deficiencies found can be, corrected going forward. We will transition the billing and collections process to the Dallas CSO withih 45 days of close; In addition, we will transition the center' s accounts payab l e processing to the CSO as soon as possible . Staffing changes may also be :Qeeded for the center but this will need to be reviewed further in connection with any tnerger with DeSoto. Carolyn Exley and Gale Gow.alez will evaluate c hanges needed in the business office staff post­ closing in con nection with any po te ntial transition to the DeSoto fa cility. The coding audit score was 81% on CPT co des and an 89% on ICD-9 co des, which alth ough not stellar, is not a cause for major alarm. 1be coding will transfer to the CSO with the oth er business office functions. • Managed Care- Currendy, the center is .almost fully contri"c te d The plan i s for the center to be converted to THVG contracts starting at close and we anticipate that the center will be fully converted by month seven of the fust year . Financial Projection§ We have prepare d two pro forma financial projections. The first s cenario assumes SCD stays as a freestanding center, independent of DeSoto. The second assumes SCD stays freestanding for only one yeat and then merges with DeSoto. Scenario 1 We have projected yeat; 1 EBITDA at $602 th ousand, which in cludes management fe es to 'l'HVG of $307 th ousand . lbis assumes no additional physician recruitment for year 2. Base Year \ I Year 1 I [ Year2 I I Year3 Cases 2,668 2,670 2,750 2,833 Net Rev I Case $1,249 $L,645 $ 1 ,94 1 $1,980 EBJTDA $ (329,453) $ 60 1 , 790 $ 1,279,771 $ 1,340,367 USPl EBITDA Contribution 235,735 415,606 426,254 USPJ Investment $ 698,299 $ 698,299 $ 698,299 USPl EB1TDA Multiple 2.96 1.68 1.64 Multiple w/ Mgt Fee at 100% 2.46 1 .47 1.4 3 Available Cash (b) $ 449 ,094 $ 881,669 $ 796,317 (a) Mgt Fcc at 75"/o margin (b) Nctofc�ital expBH!iturcs of$200K in Yenr I, $50 0K inYear2 tind $200K in Year 3 The cen ter does not consolidate to USPI. 0_001733 CONFIDENTIAL  Sworn Record 0240 PageS Approval Request- Surgery Center of Duncanville, Duncanville, Texas Sc;enario 2 .As men tioned above, th ere are potential operational and cost syner es available gi with a merger of SCD into out c:u.rrcnt s rgety c:enter in u DeS oto. This scenario includes the same year 1 results as Sc: enario 1, but in year 2, the cent er tnetges into DeSoto. The assumption regaxding no additional p hyskian rec:nritment remains in plac:e for year 2. Base Year I I Yearl I I Year2 I I Year3 C a ses 2,668 2,670 6,215 6,339 Net Rev I Case $1,249 $1,645 $2,033 $2,094 EBITDA $ (329,453) $ 601,790 $ 4,067,822 $ 4,471,963 USPI EBlTDA Contribution < >: Facility cases 252,650 2 45,597 2.9% Net revenue/case $ 2,351 $ 2,301 2.2% Net revenue $ 593,910 $ 565,158 5.1% Facility operating income margin<3l 24.9% 24.4% 50 bps Other: Total consolidated facilities 64 65 EBITDA less noncontrolling interests<4l GAAP operating income $ 64,369 $ 63,102 2.0% Depreciation and amortization 6,608 6,683 Net loss (gain) on deconsolidations, disposals and impairments 1,419 (506) EBITDA 72,396 69,279 Net income attributable to noncontrolling interests (18,518) (20,009) EBITDA less noncontrolling interests $ 53,878 $ 49,270 9.4% Nine Months Ended September 30, 2014 2013 %Change EBITDA less noncontrolling interests<4l GAAP operating income $ 183,657 $ 181,939 0.9% Depreciation and amortization 19,616 20,758 Net loss on deconsolidations, disposals and impairments 2,336 4,893 EBITDA 205,609 207,590 Net income attributable to noncontrolling interests (53,951) (55,338) EBITDA less noncontrolling interests $ 151,658 $ 152,252 -·----- ===�= (0.4%) {I) Excludes de novo facilities in their first year of operations. Includes facilities accounted for under the equity method as well as consolidated facilities. <2l Statistics for acquired facilities are included in both periods. <3) Calculated as operating income divided by net revenue. <4l EBITDA and EBITDA Jess noncontrolling interests are not measures defined under generally accepted accounting principles (GAAP). The Company believes EBITDA and EBITDA less noncontrolling interests are important measures for purposes of allocating resources and assessing performance. EBITDA, which is computed by adding operating income, depreciation and amortization, and net Joss (gain) on deconsolidations, disposals and impairments, is commonly used as an analytical indicator within the healthcare industry and also serves as a measure of leverage capacity and debt service ability. EBITDA Jess noncontrolling interests, which is computed by subtracting net income attributable to noncontrolling interests from EBITDA, adjusts both years' EBITDA to reflect that the Company does not own 100% of each facility. EBITDA and EBITDA Jess noncontrolling interests should not be considered as measures of financial performance under GAAP, and the items excluded from EBITDA and EBITDA Jess noncontrolling interests are significant components in understanding and assessing financial performance. Because EBITDA and EBITDA Jess noncontrolling interests are not measurements determined in accordance with GAAP and are thus susceptible to varying calculation methods, EBITDA and EBITDA Jess noncontrolling interests as presented by USPI may not be comparable to similarly titled measures of other companies. -END-  Sworn Record 0248 EXHIBIT C  Sworn Record 0249 Transition Plan Topics- Surgety Center of Duncanville Leadership Team: Sr. Vice or Market President: J ohnny Bond Region:al Vice President: Carolyn Exley Development Team: Jarod Moss, Shannon Kinder, Evie Miller PVP: Rob Stahler Hot Areas- • Focusing on potential transition to DeSoto facility • Successfully hiring and/or replacing key personnel. • Transition of billing and collections to CSO • Transition of accounts payable to CSO • There is some risk that unknown liabilities may arise as a result of vendor payables not being properly recorded. • Maximize new contracts by timely communication with partners about effective dates. On sit e fust week- Carolyn Exley will be the operations lead this week. Business Office- We will transition the billing and collections process to the Dallas CSO within 45 days of dose. Carolyn Exley and Gale Gonzalez will evaluate changes needed in the business office staff post-closing in connection with any potential transition to the DeSoto facility. 'Financial Impact: Dep e ndan t upon whether additional staffi1· needed. Expectations are then will be coJt Javings. Managed ca re - T he center will be comrerted to THVG contracts starting at close and we anticipate being fully converted by month seven of the first year . Information Technology- We will be converting the center to USPI's network and email once connectivity is established. Financial Impact: 1To com�} Accounting/Accounts Payable - Subsequent to closing, the accounts payable function will be transition to the CSO. Based on the staffing at the center, Carolyn Exley will approve all check runs on an interim basis to ensure proper internal controls. Facility accounting will immediately take over the general ledger function. M at erials M anagement -The center is cunently on an HPG contract. Payroll/Benefits- Transition to USPI payroll and benefits is expected on March 1"\ 2010. Our benefits are richer than those offered cun:endy; however, they will be more costly for the employees, so bonuses are being paid. The employer portion of the premiwns will also increase . .I-co Sop! 28 2010.x1s 6/18/2ll1(  Sworn Record 0254 Physician Due Diligence Report Duncanville Surgery Center September 28, 2010 when ZariniRN means items is also reviewed b)'RN Resp • Completed Comments Marl< • EOGETM Reportable Events lnfectlon rate ---- _________ I -- stte surgery Zarln/RN Done for surgery NOT FOR BLOCKS. Have had 2 wrongsites on pain cases 1 How does items being monitored compare to.EDGE items? ZarlniRN Done Participate in ASC OC renorting Wrong · Follow UP Will EDGE reporting require PhysiCian behsvlor modification? zarin!RN Done No For hospitals · evaluate utnlzation review, in particular, medical necessity Za!WRN NA documentation for Observation cases and Inpatient Admissions I Clinical Nurse Manager I Director Hal Mayo is Adiiiili No clinical manager-Cindv Rogers, RN does much of the work Management I LeadershiP AbUiW Need clinical manager-no colhesive quality program, no educationprogram. !Clinical skiDs I tenure Hal ls knowlegeable, althouah he does not see himself here long term II Medical Director Review Contract Dr. Anna Taker-contractiriplace (according to Hal), but not seen Specialty Colon and Rectal Suroetv _ Leadership Ability Reported as very good. She Is available and has the respect of MDs Anesthesia Anesthesia seems to be a slanlflcant problem. Some surgeons are not happywith coverage and want to brlll!l.in own .anesthesia IM.D - IPinnac!e __ "-'---- ! .'o<='--- I · -1 CRNAs :.=..---- �=: Re "!'. ep:oc:: rt•:; ()f CRNA controlliflg schedule and COV<1fBII&-OIO to salistacllon of surgeons. Arrangement Pfeij()rted to be '90% exclusive• with Pinnacle No s ou v or e me s to vlde r�an:: d s: n: v u: a:: � d: ll i:·� s:ha� c= m•e== . . ------ - .. � :: :: :: :: � �� � !� �] � ·�h�� � ��� re �ieW � if�� �� reau i��� ��iE� rn for oro BMI , :::: �= •� : cove ==� � tj� �� ,- : �eo 'with cl� � rra nnpatient ' "� � �i:�����;;:::::::::::::::::::t.��====� ASA none noted rev IW �aneslhesla ===-�� ----"'---·· - �ssues selecllon, steeoapnea I BMT mi.Rnt o P I..,.,inn ant> ,..,_ 1-3, BMl hiiih - ·· · - • J..L. . Credentials Review tor timefiness (selected ffies lssuea noted NonSif on-sneer bvconrract e-usepnmarvsource anaAMADrome irining of re-credentia[ng very_::0121 Sworn Record 0306 C O N F I D ENTIAL 0_000 1 2 2  - CGL000 0 l\>'llN30l-"NO:) Sworn Record 0307 Sworn Record 0308 CONFID ENTIAL 0_000 1 24 Sworn Record 0309 CONFIDENTIAL 0_000 1 25 Sworn Record 0310 CONFI DENTIAL 0_0001 26 Sworn Record 0311 CONFIDENTIAL 0_0001 27 Sworn Record 0312 CONGID€.•\nAL O_QC-QI28 Sworn Record 0313 CONFIOCN IIAI. J_::·:::·012�  . . �-·: Sworn Record 0314 � f­ z w 0 lL z 0 l) Sworn Record 0315 CONFI DENTIAL 0_000 1 3 1 Sworn Record 0316 CONFIDENTIAL 0_000 1 32 Sworn Record 0317 CONFIDENTIAL 0_000133 Sworn Record 0318 CONFI D E NTIAL 0_0001 34 Sworn Record 0319 CONFID ENTIAL 0_000 1 35 Sworn Record 0320 CON F I D E N T IAL 0_000 1 36  Sworn Record 0321 • ! l COI\1'II)�II:TIAi. o_v.:::C\t:\7 Sworn Record 0322 C O N F I DENTIAL 0_000 1 38 Sworn Record 0323 CONFIDENTIAL 0_00 0 1 39  Sworn Record 0324 EXHIBIT G  Sworn Record 0325 Message From: Lance H ughes [ l h ug h es @ h cm a usti n . com] Sent: 10/18/2011 1 1 :37 :06 AM To: Moss, Jarod [J Moss@uspi .com] Subject: Duncanvi l l e Surgery Center letter Attachments: J a rod M oss Chris Barnet 10. 1 8 . 1 l . doc Jarod, please see the attached letter. I never heard back from you regarding the rem oval of the Generator. La nce Lance R . H ughes Hughes Capital M a n agement, Inc. 130 1 Capital of Texa s Hwy. Suite #A-300 Austi n , TX 78746 l h ughes @ h c m a ustin . co m Di rect ( 5 12) 6 1 5-9502 Mobile (5 12) 413-8303 Fax ( 5 12) 328-0149 HUGHES 00051 1  Sworn Record 0326 Via rt Class US Mail October 1 8, 20 1 1 Mr. Jarod Moss Umoss@uspi.com) USPI 1 5305 Dallas Pkwy, # 1 600 Addison, TX 7500 1 Mr. Chris Barnet Case Healthcare 1 4785 Preston Road, #75 0 Dallas, TX 75254 Re: Duncanville Surgery Center, Patricia Hughes Landlord Dear Jarod: Thi s message is in regard to the Lease Agreement between Patricia Hughes, as Landlord, and Surgical Center of Duncanville, L.P., dated Jw1e 1 , 2004, as assigned to Baylor Surgicare at Dtmcanville, LLC on November 1 ,20 1 0 . You are currently in default of the Lease Agreement as a result of the surgery center having been closed and your abandonment of the leased premises. In addition, it has come to our attention that certain fixtures and equipment, including, but not limited to the generator, have been removed from the leased premises. Pursuant to the terms of the Lease Agreement, in the event that the Tenant abandons or vacates the leased premises for a period of seven days or more, whether or not Tenant is in monetary default, an event of default occurs under the terms of the Lease . During an event of default, the Tenant is not authorized to remove any trade fixtures or movable equipment or furniture from the leased premises. In addition, any property affixed to the floor, walls or ceiling, including, but not limited to, the generator, all ceiling and wall mounted surgical lights, medical gas lines and the like, are always to remain on the leased premises and are to be surrendered with the leased premises at the expiration of the lease. The generator, together with all other property removed from the leased premises, must be returned as soon as possible . In addition to the removal of these items resulting in an additional breach of the lease, we believe that the absence of this equipment will impair our ability to attract an appropriate replacement tenant for the leased premises. In addition, at this time you still have all keys to the leased premises which must be returned so that we can make the leased premises available to prospective tenants for inspection. We would appreciate your immediate response to these requests so that we can identify a replacement tenant for the leased premises, which may reduce Baylor Surgicare at Duncanville, LLC ' s obligations under the Lease Agreement. As you are aware, we have already been contacted by a couple of potential tenants regarding the surgery center. It is imperative that both of us cooperate in an effort to find a replacement tenant, which will be in the best interest of all parties. L:Lance!Duncanville!JarodMossChrisBametlO.l 8 . 1 1 HUGHES 0005 1 2  Sworn Record 0327 Mr. Jarod Moss/Chris Barnet October 12, 20 1 1 Page 2 I look forward to hearing from you at your earliest convenience . We are prepared to show the leased premises to potential tenants as soon as all missing fixtures and equipment have been returned to the l eased premises and we have keys to the leased premises. Yours very truly, Lance R. Hughes HUGHES 0005 1 3  Sworn Record 0328 EXHIBIT H  Sworn Record 0329 Kathleen Rennscheidt From: Lance Hughes Sent: Monday, J u ne 10, 2013 11:24 AM To: Kathleen Rennscheidt Subject: FW: contact La nce R . H ughes Hughes Ca pital Management, Inc. 1301 Capital of Tx Hwy Suite A-300 Austin, Texas 78746 l h ughes@hcmaustln.com Di rect line 5 12 .6 15 .9502 fx 512.3 28.0 149 From : Lance H ughes [mailto:lhugbes@hcmaustin.com] Sent: Friday, Aug ust 26, 2011 1 2 : 1 0 PM To: Moss, Jarod Subject: contact The fellow that called me rega rding the lease on the s u rgery center in Duncanville is anxio us to see if we can move forward. H is use is I m aging. Who is my contact at US PI to get a proposal for him approved? I co uld also j ust m a ke him a n offe r that I think i s fair and if he ta kes it try and get US PI to agree. You may prefer a buyout of the remaining term b ut I cannot get you a n u m ber on that until ! know what he will pay. La n ce Lance R. Hughes Hughes Capital Management, Inc. 1301 Capital of Texas Hwy. Suite #A-300 Austin, TX 78746 lhughes@hcmaustin.com Di rect (512) 61S-9S02 Mobile (512) 413-8303 Fax (512) 328-0149 1 H UG H ES 0030 1  Sworn Record 0330 Kathleen Rennscheidt From: Lance H u ghes Sent: Monday, J u ne 10, 2013 1 1:24 AM To: Kathleen Rennscheidt SLibject: FW: Contact lance R. Hughes H ughes Capital Management, Inc. 1301 Capital of Tx Hwy Suite A-300 Austin, Texas 78746 l h ughes@hcmaustin .com Direct Line 512 .615 .9502 fx 512 .328 .0149 From: Lance Hughes [mailto : lhughes@hcmaustio.com] Sent: Thursday, August 25, 20 1 1 3:26 PM To: Moss, Jarod Subject: Contact Nathan, representing P referred Imaging has contacted me rega rding a su b-lease of the b u i ld ing. Can you sent me the contact info for the person who will ha ndle this req u est from USPI. lance lance R. H ughes H ughes Capital Management, I nc. 1301 Capital of Texas Hwy. S u ite #A-300 Austin, TX 78746 lhughes@hcmaustin .com Direct (512) 61 5-9502 Mobile (512) 413-8303 Fax (512) 328-0149 1 HUGHES 00302  Sworn Record 0331 EXHIBIT I  Sworn Record 0332 Re: The Surgery Center 1018 E. Wheatland Duncanville, Tx April 1 8, 2013 Dear Leslle Hill, This Letter of Intent is contingent upon the prospective Buyer's and Seller's willingness to execute a standard Purchase Agreement as well as review and approve of the details of the transaction proposed above by the appropriate principal parties of the Buyer and Seller. IT is understood and agreed that the foregoing con&titutes a Letter ofIntent setting forth the major business points from our discussions. It is further understood that neither party intends to create al).y contractual rights or obligations as a result of entct·ing into this Letter ofIntent. No binding agreement or rights or o bli gation s shall arise as the result of executing this letter or with respect to the proposed transactions unless and until we execute definitive documentation incorporating the provisions and othet· appropriate terms. This letter expresses Purchaser's interest in pur..:hasing the above referenced Property under the fol lowing terms and conditions : Purchaser: Dr. Tien Phan, Dr. Dung Ngoc Huynh and or Assignee which must be approved by Seller Address: 4939 Soaring Eagle Ct. City: Grand Prairie State: Texas Zip: 75052 Phone: 408-835-3726 Email: tdphan2000@yahoo.com Price: $1,100,000 Earnest Money: As consid eration for the purchase of the Property, Buyer shall deposit $50,000 (" Earnest Money") due within seventy-two (72) hours of the execution of the Contract for Sale and Purchase. Earnest Money shall become non-refundable at the expiration of the Inspection Period. The "Effective Date" of this Agreement for the purpose of performance of all obligations is the date the escrow agent receives the Contract afte r all pArties execute the Contract. Insp ection P eriod: Thirty (30) days from Effective Date, which shall meau the date on which the later of the parties executes a Contract for Sale and Purchase. Due Diligence Do cuments (" Docum ents " ) will be forwarded immediately upon Effective Date of the Contract for Sale and Purchase Agreement. Option: Buyer shall have two (2) thirty (30) days extensions after the Inspection period by payment to Seller of $10,0 00 for each of two thirty day periods which Is not refundable as is not applica ble to the purchase pric e. Due Diligence: Seller shall provide buyer with site plans, building plans, environment assessment or report, current tax record, insurance policy or any plans that is related to the property which are in Seller's p ossession. FinanciRl Information: Buyer's agree to provide flnancial information or references thllt verify Buyer has sufficient liquidity and financial strength to complete the proposed purchase. L:Lance/Duncanvllle/PhanLOl Purchaser's I n itials ___ S · No Insurance Coverage Provided Do Not Use for International Mail . -�---- -�-- -·-- -- - - - - - .. Sworn Record 0343  Sworn Record 0344 . UNITED STiiTES Date Produced: 07/01/2013 WALZ CERTIFIED MAIL SOLUTIONS LLC The following is the delivery information for Certified Mail™ item number 7196 9008 9040 1811 9023. Our records indicate that this item was delivered on 06/24/2013 at 11:12 a.m. in DALLAS, TX, 75201. The scanned image of the recipient information is provided below. ·*'"71:.« ....... \\jii.. Signature of Recipient: · . ..... .. ... Address of Recipient: Thank you for selecting the Postal Service for yoUr mailing needs. If you require additional assistance, please contact your local post office or Postal Service representative. Sincerely, United States Postal Service  Sworn Record 0345 EXHIBITL  Sworn Record 0346 *· REPUBLIC TITLE OF TEXAS, INC. DATE: 08/02/2013· GF NO: 13R01962 NDB -'----- SELLER'S STATEMENT FAST GF: 1002-54311 REPUBLIC TITLE® SALE FROM: Patricia � Hughes s t __ ve__ m e__n t_s________________________________ _ SALE TO: � --�G�r-a-p7h�i�t e -o W ��l� r� I_ d -n__ LLC ------ PROPERTY: I ADDRESS: _1Q.f.:!l _,¥,1!f§.�:f!:�.... J�).! ...P�c:anville I :r'E��-. ?�:1:1:_6 _____ ..�---·· . SALES PRICE: REIMBU RSEMENTS/CREDITS $ $ ------ $ ------- ----- $ ------- -----· ------ $ ______ $ TOTAL REIMBURSEMENTS/CREDITS $ 00 •.:...;:... :.._.: SELLER ______ $ 1 1 1001 000. 00 GROSS AMOUNT DUE TO 75.67 75.913 375.00 25.00 61317.00 Release of Lien to : Hunter & Kramer, P.C. 85.00 __ .... 1,7 .:;; 1 76.86 4 609,649.86 2 51 0 OQ_:.QQ_ $ 7311882.37 $ __ 1 1_1-'--- - '-_ 3_6_8- 7. 6 .;. ..: 3'-- Seller understands the Closing or Escrow Agent has assembled this .in.fol'llUlol:i n .representing the transll(tion from the best b1fo:rmation available from other solll'ces and cannot guarantee the ll(!curacy thereof. Any real estate agent or lender :involved may be furnished a copy of this Statement. Seller understands that tax and insurance prorations and reserves were based on figures Cor the preceding year or supplled by others, or es timates for current ' year, and in the eve:p.t of any change for current yoor, all necessary acljustments must be made between Purchaser and Seller direct. The undersigned hereby au thorizes Closing or Escrow Agent to make expenditures md disbursements as shown above and approves same for payment. The undersigned also acknowledges receipt of Loan Fonds, if appll�able, Jn the aotollnt shown &bove and receipt of a copy of this Statement. SEE S�GNATURE ADDENDUM · ---- ATTACHE�- REPUBLIC TITLE OF TEXAS, INC. ------------ c ADDRESS existing JienS is r�g��red to the d ate indicated. If not paid by then, additional :interest will have to be C!ifiected alld ymir statement will be adjusted to have suffil:ient funds t�:� secure release from the lienholder. HUGHES 000479 . . .. . Sworn Record 0347 :95.�·· -'· h:..:?.t.· ··�1 .. ..., ._ � .- ..-··�·'] . ... #.u•.,-...,. ,., ... ' ; ( �.JJn?- r-·,·,: ...$), . !�.,....... ,.:. • . � .� · -i 1 .-. ,;••• -· -- • , \,.-...-. • I , .. ,._ . •. SIGNATURE ADDENDUM TO SELLER'S CLOSING STATEMENT GF NO. 13R01962 NP8 PATRICIA HUGHES -dii2 x£-�- - - HUGHES 000480  Sworn Record 0348 EXHIBITM  Sworn Record 0349 MEDLINK July 26, 2013 iHeart 885 East Collins Blvd. Suite 110 Richardson, Texas 75081 Attention: Mr. George Geczy Q Reference: Proposal for iHeart South Dallas Facility We appreciate the opportunity to submit this proposal for the planning, design, ng and construction for the new iHeart South Dallas Facility. We understand t�e.,proposedJHeart facility will be located at 1018 East Wheatland Road, Duncanville, Texas. This addres� is the current location of the vacated Duncanville Surgery Center. The existing facility will. e ��o..,�'te�� and expanded to incorporate an MRI & CT suite, two Cath labs and one operatin om witb�s6ciated spaces necessary to function as a licensed ambulatory surgery center. \ The project will be delivered utilizing a fast track design- andi.COQStruc lon method to meet the project's accelerated schedule. The iHeart facility will be com pleted i �Y .ur phases, the first phase will include minor renovations and new finishes to the existing' 'ffia >'area. Phase II includes one Cath lab, one operating room, pre & post op areas, and patient wai ng. l'he third phase will include the second Cath lab, exam rooms, doctor offices and staff suppQrt areas. The fourth and final phase includes the MRI and CT imaging suite and new addition to.th� building. Phase I will be completed in 4 weeks from authorization to proceed; phase II completed in·l� weeks from authorization to proceed. All construction phases of the projectw(ll be completed in 24 weeks. We are currently working on the final design of the interior renov t'on 4,f,_ha�,j & II), so a project schedule with a July 1st start date is included for your review. •V Architectur I Inter or Design, Structural and M.E.P. engineering TAS review and inspection • .4p esign rev ew with the Texas Department of Health ., pliysicist report The a.chitectural and engineering documents will consist of the following: Building Code and Zoning Ordinance review. Energy Code Analysis reports. Architectural demolition plan, new floor plan, and reflected ceiling plan. Interior elevations and millwork details. Plan details and section details. Door schedule and details. Room finish schedule and interior finish specifications. 400 East Royal Lane, Bldg 3, Suite 290 Irving, TX 75039 www .medlinkdevelopment.com iHeart 045  MEDLINK Sworn Record 0350 Mechanical, electrical and plumbing plans, schedules and details Structural engineering plans and details. Project Specifications ~ Construction Phase Services: • All general trade work, electrical and mechanical work, and project management needed fortH construction of the Facility. • All required licenses are included. '-.. � A full-time job superintendent. Scheduled construction meetings with the client. '-..V Publish and update a construction schedule. Clean-up and haul away all construction related debris. Dumpsters for disposal of construction debris and materials Final cleaning. General liability insurance. Sales tax is included for commercial remodeling. Building permit fee. Keep a current and up to date copy of the con�tJ:uctio doc�ments on the job site marked with redlines for all changes that occur during work. • All existing conditions shall be field verifieo and re We have identified the scope of constr by CSI division as follows: DIVISION 2: SITE WORK & DEMO Saw cutting and removatofth.;.e·�isting concrete drive as required to facilitate modifications to electrical service. £) '�"-. . Demolition of int<_�o� _. .artti��Of!i s as required. Saw cutting and :r,� l of the existing concrete floor slab for new plumbing installation. DIVISION 3: CONCRETE Po� ing back of ttie site paving and plumbing trenches to match the existing floor slab design. Concrete floor slab for MRl and concrete pads for the equipment chiller as required. DIVISION 4: MASONRY Conc��te and brick masonry units required for the MRI expansion. Repair I replace damaged existing masonry units DIVISION 5: STRUCTURAL STEEL Structural steel columns, beams and roof joists for the MRI expansion. Floor supported structural steel and unistrut support system for both Cath Labs. 400 East Royal Lane, Bldg 3, Suite 290 Irving, TX 75039 www .medlinkdevelopment .com iHeart 046  Sworn Record 0351 IMEDLINK DIVISION 6: WOOD & PLASTIC AWl Custom grade Cabinetry and countertops for Cath lab and MRI millwork Repair I resurface existing millwork currently damaged or delaminated. DIVISION 7: THERMAL & MOISTURE PROTECTION Membrane roofing system on new roof area Roof patching of existing roof as required for new HVAC and plumbing equipment. Clean and paint existing Exterior Insulation Finish System (EFIS). Demo gabled wall and remodel existing Canopy above main entrance. DIVISION 8: DOORS, FRAMES & HARDWARE Doors, frames and hardware for Cath Labs and M Rl Suite. The lead lined doors where required. Clean and repair existing doors to remain. All new walls are to be textured and painted. Replace carpet in the waiting and office areas with}!�rpe� tile Replace existing VCT with new VCT tile and rubber base·. ' Cath Labs will have sheet vinyl flooring with welded S'eams, rolled at walls to form 6" base. Replace existing acoustical panel ceiling tile� with new tiles Cath Labs to have painted gypsum- bo,ard ceilings. DIVISION 10: SPECIALTIES Exterior Building s!gn ge- 2 building mounted iHeart Logo signs, 2 monument mounted iHeart signs. DIVISION 1�: EQUIPMENT- NA DIVISION 12: FURNISHINGS $2,009 allowance for window treatments Three lead lined doors (one 4'0"x 7'0" and two 3'0"x 7'0") for each Cath Lab. The doors will have 1/16" lead installed in hollow metal, lead lined frames. Each Cath Lab will have a 6'0"x 4'0" 1/16" lead equivalency, leaded glass in a hollow metal, lead lined frame. Cath Lab walls will be 1/16" lead lined gypsum board to a height of 7'0" AFF. 400 East Royal Lane, Bldg 3, Suite 290 Irving, TX 75039 www .medlinkdevelopment .com iHeart 047  MEDLINK Sworn Record 0352 MRI RF shielding for walls, ceilings, view window and door. 10' x 10'Non ferrous steel reinforced concrete slab for MRI magnet DIVISION 21: FIRE SUPPRESSION Repair and update existing fire protection system to meet current code. DIVISION 22: PLUMBING Repair or update existing fixtures as required to meet current codes. Relocate existing scrub sink to new Cath lab locations. DIVISION 26: ElECTRICAL Site lighting (clean and relamp) $1,000 allowance. 480V Service and Distribution 480V to 208V Transformer Phase I area- Clean and Relamp fixtures Phase II & Ill areas- clean, tork, and IR s Phase II OR and Cath lab electrical DIVISION 28: Modifications to"' ELECfBON C SAF;El'Y AND SECURITY existing building fire alarm system as required by current code. DIVISION 31- EARTH\IVORK Earthwork required to prep site for MRI addition to existing building. D :VISION 32- EXTERIOR IMPROVEMENTS QIVISION 33- UTILITIES- NA EXCLUSIONS: The following are specifically excluded from our Proposal: Builders' All-Risk insurance is to be provided by the Owner. 400 East Royal Lane, Bldg 3, Suite 290 Irving, TX 75039 www .medlinkdevelopment .com iHeart 048  MEDLINK Sworn Record 0353 • No mold or asbestos abatement or removal of any kind. Security system, sound system, and CCTV systems. Major floor preparation (floating). Power utility company charges. ~ Emergency Generator and automatic transfer switch (ATS). (we recommend the owner assign this work to the electrical sub-contractor for continuity and quality control) � Payment and performance bonds. • Overtime labor rates. Furnishing of power conditioning or surge suppression equipment. Television wiring or antenna work. Furnishing or installing of view boxes. Telephone or data cabling, outlet devices or wall plates. Custom made wireways. Auto door openers Surgical lights and booms. :nm S. Kraft, AlA, LEED-A P BD+C tim.kraft@medlinkdevelopment.com Attachments 400 East Royal Lane, Bldg 3, Suite 290 Irving, TX 75039 www .medlinkdevelopment.com iHeart 049  Sworn Record 0354 MEDLINK lESIGN-BUILD CONTRACTOR'S APPLICATION FOR PAYMENT APPLICATION NO: 10 ROJECT: iHeart Center­ iH eart FROM: Medlink PERIOD ENDING: 4/30/2014 South Dallas 855 East Collins Blvd. CONTRACTOR: 400 East Royal Lane CONTRACT DATE: 7/31/2013 10810 E Wheatland Suite 109 Suite 290 PROJECT NO: 13 0103 Duncanville, TX 75116 I rving, TX 75039 ORIGINAL CONTRACT SUM CHANGE ORDER SUMMARY ADDITIONS DEDUCTIONS NET CHANGE BY CHANGE ORDERS Total changes approved in previous months by Owner $155,229.75 $0.00 CONTRACT SUM TO DATE (Line 1 +/- 2) Total approved this month $0.00 $0.00 TOTAL COMPLETED & STORED TO DATE (Column G on SV) TOTALS $155,229.75 $0.00 RETAINAGE: NET CHANGES by Change Order $15S,229.75 a. 10% %of Completed Work (Column D + E on SV) $1,600,551.84 )= _ $_ 16_0.;_,0_ _.;._ 55 .18 _ _ _ b. 0 %of Stored Material (Column F on SV) $0.00 i= ------ otal Retainage (Lines Sa + Sb or Total in Column f of SV) TOTAL EARNED LESS RETAINAGE (Line 4 less Line 5 Total) LESS PREVIOUS APPLICATIONS FOR PAYMENT $1,429,496.90 (Line 6 from prior Application) DATE: '5/t:Jt/t4 CURRENT PAYMENT DUE $10,999.76 Subsccribed and s thn to.b¢ore C\ � BALANCE TO FINISH, INCLUDING RETAfNAGE methis Notary Public: (Line 3 less Line 6) $274,54 4.98 My Commission expires: la \0. \.. _  Sworn Record 0355 MEDLINK APPLICATION NO: APPLICATION DATE: 10 5/9/2014 PERIOD TO: 4/30/2014 SCHEDULE OF VALUES- iHeart Care South Dallas A B . c D E F G H I l WORK COMPLETED MATERIALS TOTAL BALANCE TO RETAINAGE ITEM SCHEDULED FROM PREVIOUS PRESENTLY COMPLETED AND % NO. DESCRIPTION OF WORK � VALUE APPLICATION THIS PERIOD STORED TO DATE STORED TO DATE (G / C) FINISH (IF VARIABLE (C-G) RATE) ( D+ E) ( NOT I N D or E) (D + E +F) 00 A/E SERVICES I I .1 Architectural I Engineering Fees I 70,400.00 70,400.00 70,400.00 100% 0.00 01 I � GENERAL REQUIREMENTS l .1 Project Supervision I Management 87,600.00 85,310.00 730.00 86,040.00 98% 1,560.00 � ··- - -"-= - - � .2 Cleaning 10,800.00 9,720.00 - - 9,720.00 90% 1,080.00 -�-- - 3 Misc. I 4,200.00 3,780.0() 3,780.00 90% 420.00 .4 Physicist TestinQ 3 500.00 2,500.00 2,500.00 71% 1,000.00 02 SELECTIVE DEMOLITION 8,928.00 8,928.001 I 8,928.00 100% 0.00 03 CONCRETE 22,674.00 20,406. 0�' l 20,406.00 90% 2,268.00 04 MASONRY 24,100.00 21,690.goj ;,� 2,410.00 24,100.00 100% L 0.00 05 METALS I 42,696.00 40,576.0 oJ ... 2,120.00 I 42,696.00 100% 0.00 06 MILLWORK i 38,000.00 36,ooo.oot � ! 36,000.00 95% 2,000.00 07 THERMAL & MOSITURE PROTECTION I 32,100.00 25,770.00! 2,800.00 28,570.00 89% 3,530.00 08 OPENINGS J II .1 Doors, frames, hardware I 4,000.00 3,800.00 3,800.00 1 95% 200.00 .2 glass & Glazing 1 1,800.00 1,620.001 . I 1,620.00 90% I 180.00 .3 Leaded Doors ! 33,320.00 33,320.0� 33,320.00 100".4> I 0.00 .4 Leaded Glass 6,000.00 6,000.001 .� - 6,000.00 100% i 0.00 .5 MRI Suite Doors 10,394.00 8,186.oot � 8,186.00 79% I 2,208.00 .6 2 400.00 2,400.00 2 400.00 100% 0.00 Clean and repair existil]9. doors I .= )I 09 FINISHES .1 , Framing, Drywall Ceilings 10,404.58 9,883.00 _,..,. I IJ 9,883.00 95% 521.58 .2 Leaded drywall I 18,531.08 18,531.08 18,531.08 100% � 0.00 .3 Acoustical Ceilings 6,021.12 5,419.00 -� 5,419.00 90% I 602.12 .4 Cath Lab Ceilings 3,827.20 3,827.20. 3,827.20 100% I 0.00 .5 Painting 18,500.00 16,650.0Q 16,650.00 90% 1 850.00 .6 VCT 21,292.16 19,163. 00 19,163.0( 90% 2,129.16 .7 Floor Coverings Replace ceiling tiles 1 J 38,754.59 8,792.00 l 36,979.00 8,792.00 1-- 36,979.0( 8,792.0( 95% 100% ll ' I 1,775.59 0.00 .8 Window Coverings I 2,000.00 2,000.00 2,000.00 100% � 0.00 10 SPECIALTIES- CURTAINS I 44,23Loo I 44,231.00 J 44,231.00 100% 0.00 11 EQUIPMENT I J I I f ' 12 FURNISHINGS l I I l � 13 SPECIAL CONSTRUCTION • RF Shielding l 41,600.00 l 20,800.00j 20,800.001 50% II 20,800.00 21 FIRE SUPRESSION 2o,o4o.oo I 19,076.00 I 19,076.00 95% I 964.00 22 E!j 23 til PLUMBING HVAC 143,ooo.oo l I 139,900.001 I I I 139,900.00 98% ' I 3,100.00 , :l .1 lAir Handlers & Ductwork 153,ooo.oo I 145,350.00 I 145,350.00 95% L 7,650.00 -. --=- .2 Air Balance 6,8oo.oo I 3,400.00 3,400.00 SO% 3,400.00,_ 24tll ELECTRICAL I. I � .1 Electrical 352,841.20 � 317,557.001 317,557.00 90% 35,284.20 ' .2 Fire Alarms 21,500.00 19,350.001 19,350.00 90% 2,150.00  Sworn Record 0356 EXHIBITN  Sworn Record 0357 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 1 1 CAUSE NO. DC-13-02334-L 2 PATRICIA HUGHES, IN THE DISTRICT COURT Plaintiff 3 v. 193RD JUDICIAL DISTRICT 4 DESOTO SURGICARE PARTNERS, 5 LTD. and TEXAS HEALTH VENTURES GROUP, LLC 6 Defendants DALLAS COUNTY, TEXAS 7 8 ********************************************* ORAL DEPOSITION OF 9 FARIS ZUREIKAT 13 MAY 2014 10 VOLUME 1 ********************************************* 11 12 13 ORAL DEPOSITION of FARIS ZUREIKAT, produced as a 14 witness at the instance of the Plaintiff, and duly 15 sworn, was taken in the above-styled and -numbered cause 16 on the 13th day of May 2014, from 10:05 a.m. to 12:19 17 p.m., before TAMMY DICKSON CROSS, a Certified Shorthand 18 Reporter in and for the State of Texas, reported by 19 machine shorthand, at the law offices of Fulbright & 20 Jaworski, LLP, 2200 Ross Avenue, Suite 2800, Dallas, 21 Texas 75201, pursuant to the Texas Rules of Civil 22 Procedure and the provisions stated on the record or 23 attached hereto. 24 25 Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0358 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 2 1 A P P E A R A N C E S 2 3 FOR THE PLAINTIFF: Mr. J. Bruce Scrafford 4 ARMBRUST & BROWN, PLLC 100 Congress Avenue, Suite 1300 5 Austin, Texas 7870 1 Telephone: (512) 435-2300 6 E-mail: bscrafford®abaustin. com 7 FOR THE DEFENDANTS: Mr. Jeff Cody 8 Mr. Nathan B. Baum FULBRIGHT & JAWORSKI, LLP 9 2200 Ross Avenue, Suite 2800 Dallas, Texas 75201 10 Telephone: (214) 855-8000 E-mail: jeff.cody®nortonrosefulbright.com 11 12 13 14 15 16 17 18 19 20 ALSO PRESENT: Ms. Stephanie Massman 21 22 23 24 25 Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0359 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 3 1 I N D E X 2 Appearances 2 3 FARIS ZUREIKAT 4 Examination by Mr. Scrafford 4 5 Changes and Signature 75 Reporter's Certificates 77 6 7 EXHIBITS MARKED 8 NO. DESCRIPTION PAGE 9 Deposition Exhibit Number 1 49 Correspondence, United Surgical Partners 10 International to Texas Department of Health, 6 I 30 I 11 11 Deposition Exhibit Number 2 51 12 Correspondence, United Surgical Partners International to Texas Department of 13 Health, 7/21/11 14 Deposition Exhibit Number 3 64 Correspondence, Brown to Zureikat 15 Deposition Exhibit Number 4 66 16 E-mail, B ates labeled HUGHES 0006 7 17 Deposition Exhibit Number 5 67 Correspondence, Hughes Capital 18 Management/Lance R. Hughes to Jarod Moss/USPI, and Chris Barnet, Case 19 Healthcare, 10/18/11 20 Deposition Exhibit Number 6 69 E-mail, B ates labeled HUGHES 00148 21 through HUGHES 00158 22 23 24 25 Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0360 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zu.reikat on 05/13/2014 Page 43 1 Q - - f rom your c ompany? 2 A Mr . Hughe s , he might have done it whil e I 3 was n ' t t he r e , but I had the keys t o the buil ding . 4 MR . CODY : Hang on a s e c on d . Hugh e s o r 5 Hil l ? 6 MR . SCRAFFORD : Mr . Hil l . 7 MR . CODY: Yeah, yeah . 8 A Ye s . Hil l ? 9 Q Ye s , s ir . 10 A Yes . 11 Q Okay . And was it your unde r s t anding that M r . 12 Hil l wa s b r inging the s e other doc t or group s to l ook a t 13 the buil ding with the ide a o f t ak ing ove r the l ea s e o n 14 t h e buil d ing? 15 A Wit h the ide a o f l ea s ing the buil ding, Slr . 16 Q Ye s , s ir . Okay. 17 A L e a s ing, not t aking ove r . 18 Q Okay . And - - and back in 20 1 1 and 20 1 2, your 19 c ompany wa s s t il l pay - - mak ing l ea s e p aymen t s on the 20 buil ding, c o r re c t ? 21 A Yes, s 1 r . And main t a in e d equipment 22 operat ional . 23 Q But you we ren ' t making any p ro f it s on the 24 b uil ding at that p o in t , we re you? 25 A No, s ir . Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0361 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 44 1 Q We re you int e re s t ed in gett ing another doc tors 2 group in to l ea s e the bui l di ng so that you wou l d not 3 have t o c ont inue mak ing l e a s e payment s on the 4 bu i l di ng ? 5 A S i r, that was - - Le s Hi l l was comi ng ln w i th 6 two group s . Mr . Hughe s, a s f a r as I ' m conc erned, 7 de l ayed , de l ayed, de l ayed . He could have had a contract 8 or two in that per iod o f t ime . 9 Q Right . 10 MR . SCRAFFORD : And I ' l l obj e c t as 11 nonre spons ive . 12 Q And I ' m not - - I ' m not f u s s i ng with you . I 13 j us t want ed t o f ind out not what you think Mr . Hughe s 14 wa s do ing , but what your i n t e re s t was . Wa s - - wa s i t 15 your i nt e re s t and your company ' s intere st help ing t o 16 fac i l i t a t e another doc t ors group coming i n s o that they 17 coul d t ake ove r the l ease and re l i eve you of those 18 A My unde rstanding i s 19 Q expen s e s ? 20 A we ' re go i ng t o me et the ob l i gat i ons of the 21 lease. And w e wi l l meet and w e me t the obl i gat i ons of 22 the l ease . And that wa s a c ont ract that we ful f i l l ed, 23 s1r . 24 Q Okay. And - - and that ' s not my que s t i on t o 25 you e i t he r . Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0362 PATRICIA HUGHES v.DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 45 1 MR . SCRAFFORD: I ' l l obj e c t as 2 nonre spons ive . 3 Q My que s t ion i s , d i d you have an i nt e re s t as a 4 c ompany i n c ooperat i ng w i t h L e s H i l l showing t h i s 5 bu i l ding t o other doct ors group s s o that they could come 6 over and l ea s e the bui ld i ng and re l i eve you o f the 7 remaining t e rm of the l e a s e ? 8 A F i rst o f a l l , I don ' t speak f or the company . 9 Q Okay . 10 A And I met Les Hi l l b ef ore . He ' s a n i c e guy 11 and we j us t want ed to prov i de a s e rvi c e . I f thi s c an be 12 done there, that ' s f ine . There ' s - - nothi ng . I t ' s j us t 13 do i ng s ervi c e to the c ommuni t y . So there i s no 14 bene f i t s . 15 Q Did di d you ever have any communi cat i ons 16 with Mr . H i l l or with Mr . Hughe s about keeping the 17 bu i l d i ng in que s t i on l i c en s e d so that the l i c ens e could 18 be t rans f e rred t o a new do c t ors group ? 19 A The li c ens e ? 20 Q Fa c i l i ty . Ye s , s i r . 21 A The l i c en s e i s f o r the - - the group - - the 22 bu s i ne s s that owns i t . I t ' s not f or the bu i l d ing, s i r . 23 There i s - - there i s a di s t i nc t i on . So the l i cense for 24 the bus ine s s to operate i n the bui l d ing wa s current , 25 appl i c ab l e , and f ol l owed t o the l e t t e r . Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0363 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 46 1 Someone e l se come s into the bu i l di ng, 2 that ' s a new l i c en s e and t hey have t o meet c urrent 3 st andards , not the t i me the bus ine s s wa s l i c en s e d . It ' s 4 t wo d i f f e rent thing s , s i r . 5 Q My - - my que s t i on was , your - - D e Soto 6 Surgi care Partne r s , L im i t ed, came in and purchased 7 Bayl or Surg i c are at Duncanv i l l e, LLC, corre c t ? 8 MR . CODY : Obj e c t i on; form . 9 Q Who - - who wa s i t that purchased Bayl or 10 Surgi care at Dunc anvi l l e, LLC ? 11 A THVG, s i r . 12 Q And when THVG purcha sed Baylor Surg i c are at 13 Duncanvi l l e , LLC, i t a l so purcha s e d the r i ght s to that 14 c ompany ' s l i cense, corre c t ? 15 A I wou l d i mag ine . 16 Q Okay . And i n June of 20 1 1 , Bayl or Surgi care 17 at Dunc anvi l l e , LLC, was only opera t i ng at t he bu i l ding 18 in que s t i on, corre c t ? 19 A Correc t . 20 Q And Baylor Surgi c are at Duncanvi l l e , LLC, 21 s t i l l had an ope rat i ng l i c ense as of June of 20 1 1 , 22 corre c t ? 23 A Ye s , s i r . 24 Q D i d you have any di s c u s s i ons wi th anyone about 25 s e l l i ng Bayl o r Surgi care a t Dunc anvi l le , LLC, to another Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0364 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 47 1 g roup of doc t ors that wan t e d t o ope rate out of the 2 bu i l ding in que s t ion ? 3 A That i s - - no, s i r, that ' s not me . No . 4 Q You - - you never had any d i s cus s ions l ike 5 tha t ? 6 A S i r , I don ' t own i t . We - - I don't have any 7 author ity . That ' s THVG ' s - - 8 Q Okay . And you neve r - - di d you e ve r have any 9 d i s cus s ions with L e s H i l l about any proce s s or 10 proce dures that cou l d t ake p l ace that wou l d enab l e 11 another doc tors group to c ont inue operat ing out of the 12 bu i l ding in que s t ion ? 13 A That wou l d only happen when they lease the 14 f ac i l i ty and they bring it up to the current code and 15 work, that is none of my bus ine s s , no, I don ' t . 16 Q My que s t ion i s , d i d you have any d i s cu s s ions 17 w i th Les H i l l about that subj e c t ? 18 A About bring i ng i n doc t ors and al l t hat ? Would 19 you repeat that because i t ' s . . . 20 Q About f ac i l i t at ing a new group of doc tors 21 be ing ab l e t o op erat e under the ex i s t ing l i c ense . 22 A What do you mean fac i l i tat ing ? 23 Q We l l , for examp l e , s e l l ing Bay l o r Surg i c are at 24 Duncanvi l l e , LLC . 25 A I don ' t have the autho r i ty to do tha t , no, Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0365 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 48 1 s1r . 2 Q Okay . And I 'm not ask i ng i f you had autho r i ty 3 or not . I 'm j us t asking i f you had any commun i c at i ons 4 with Les H i l l about that subj ect mat t e r . 5 A No, s i r . L es Hi l l brought i n p e o pl e . 6 Q Okay . 7 A And he had h i s own - - he had two s e t s of 8 group s that were int erest ed in purchas i ng t o - - and 9 l e as ing the f ac i l i ty . 10 Q Okay . D i d Mr . H i l l eve r t al k t o you about any 11 o f the de t a i l s of t he s e group s purcha s i ng or l ea s i ng the 12 f ac i l ity? 13 A The only thing t hat wa s di scus s ed was the i r 14 sp e c i al ty . 15 Q Okay . 16 A I know orthoped i c s group and a p a i n management 17 group . 18 Q Okay . But he d i dn't have any d i s cu s s i ons with 19 you ab out whethe r this -- thi s group of doc t or s would be 20 i nt erest ed i n a l s o buying B ayl or Surgic are at 21 Duncanvi l l e , LLC ? 22 A No, s i r . 23 Q Okay . 24 A Mr . H i l l knows the - - the bus ine s s and he 25 knows THVG . Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0366 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 49 1 Q Okay . 2 MR . CODY: Ge t t ing c l o s e t o a break? 3 MR . SCRAFFORD : Sure . Sure thing . 4 ( Re c e s s taken f rom 1 1 :1 7 t o 1 1 :3 2 a . m . ) 5 ( Exhib i t No . 1 marked . ) 6 Q ( BY MR . S CRAFFORD ) S ir , l e t me s how you 7 wha t 's b een marked a s Exhib i t No . 1 , a s k you have you 8 s e en that document b e fore ? 9 A I b e l i eve this is the f i rs t t ime I s e e i t . 10 Q Okay . Do you know Al ex Jenk i n s ? 11 A I know o f her . I met he r onc e . 12 Q Okay . Who - - who i s Uni t ed Surg i c a l Partners 13 I n t e rnat i ona l ? 14 A That 's the managing ent i t y o f t h e f a c i l i ty . 15 Q Okay . Do you s e e i n the f i r s t p a ragraph o f 16 t h i s l et t e r , Exh ib it No . 1 , thi s l et t e r w i l l s e rve a s 17 not i c e t h a t S u rge ry Cen t e r o f Dunc anvi l l e owned by 18 S urgi c a re Dunc anvi l l e , LLC , ha s c l o s ed . Enc l os e d p e r 19 your requ e s t , t he f a c i l i ty l i c e ns e . Do you s e e tha t ? 20 A Y e s , s ir . 21 Q And i n who s e name was the f a c i l i ty l i cens e ? 22 A I n who s e name t h e f a c i l i t y l i c e n s e ? 23 Q Ye s , s i r . Wha t - - wha t w a s t h e name o f the 24 ent i ty that he l d t he f ac i l i ty l i ce ns e ? 25 A The l i c e n s e name i s Surg e ry Center o f Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0367 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 50 1 Duncanvi l l e . That 's the name on the l i cen s e . 2 Q And Baylor Surg i c are at Duncanvi l l e, LLC, 3 neve r he l d a f ac i l ity l i c e n s e ; 1s that corre c t ? 4 A Do ing bus ine s s as Surgery Cent e r o f 5 Duncanv i l l e . 6 Q I ' m sor ry? 7 A When THVG bought the fa c i l i ty - - 8 Q Ye s . 9 A - - they they were ope r a t i ng unde r 10 Duncanv i l l e name and i t wa s - - internal ly, i t was c a l l e d 11 Baylor Surg i c are at Duncanvi l l e . 12 Q My que s t i on i s , t he re wa s never a l i cense 13 i s sued by the Texas Department o f He a l th t o Baylor 14 Surg i c are at Dunc anvi l l e , LLC, corre c t ? 15 A I don't know tha t , s i r . The l i c ense wa s 16 l i st i s sued to the owne rs o f Surge ry Cent er of 17 Duncanvi l l e . 18 Q Okay . And you're not aware o f Baylo r 19 Surg i c are at Duncanvi l l e, LLC, ever hol d ing a l i c ense 20 f rom the T e xas Department o f Hea l th in i t s own name, are 21 you ? 22 MR . CODY : Obj e c t i on; f orm . 23 A I s aw the l i cens e . 24 Q Okay . 25 A And i t s ays Surge ry Center of Duncanvi l l e and Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0368 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 51 .----- 1 I s u rrende red the l i c ens e . 2 Q And a s a comp any repre s entat ive , c an you 3 c onf i rm that B ay l o r Surg i c ar e a t Dunc anvi l l e , LLC , had 4 c l o s ed as of June 3 0 th , 2 0 1 1 ? 5 A Yes . 6 Q Okay . 7 (Exhib i t No . 2 marked . ) 8 Q I ' l l s how you wha t ' s been marked a s Exhi b i t 9 No . 2 and a s k have you ever - - take a moment t o review 10 tha t and t e l l me if you ' ve s een that doc ument b e f o r e . 11 A I ' ve never s e en thi s b e f or e . 12 Q Al l r i ght . I ' d l i ke to t ake you s entenc e by 13 s en t e n c e t hrough thi s . 14 A Thi s i s June ' 1 1 . I t ' s not June ' 1 0 . 15 Q R ight . And I ' m go i ng to t ak e you s en t e n c e by 16 s en t e n c e through thi s to d e t ermine what ' s ac curat e l y 17 s t a t e d , t o the b e s t o f your knowl e dg e a s a c ompany 18 r ep r e s en tat ive , i n th i s l e t t er and wha t ' s inac c u ra t e . 19 Okay? 20 A I - - okay . 21 Q F i r s t s entenc e , e f f ec t ive November 1 , 2 0 1 0 , 22 t h e LLC acqu i red the surg e ry c ent e r known a s Surgery 23 Cent e r o f Dunc anvi l l e , L i c en s e 0 0 7 2 4 5 . I s - - i s thi s 24 a c cu r at e ? 25 MR. CODY : As a c ompany rep ? Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0369 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 52 1 MR . SCRAFFORD : Ye s , s i r . 2 MR . CODY : I don ' t know that he ' s 3 de s ignat e d on s ome t hing l ike that . 4 MR . S CRAFFORD : We l l , I think he was 5 de s ignat ed to t a l k about t he ope rat i ons of t he ent i t i e s 6 during that t ime f rame . 7 MR . CODY : Ye ah, but thi s i s - - thi s i s 8 the e f f e c t ive dat e of the acqu i s i t i on and he ' s a l ready 9 s a id he d i dn ' t know about the acqu i s i t i on. I mean , I - - 10 and - - and I ' m not me s s i ng w i t h you . 11 MR . SCRAFFORD : Okay. 12 MR . CODY : He 's he re on ope ra t i onal s tuf f 13 and the c ondi t i on o f t he p rope rty and a l l that , but as 14 we get int o the - - he ' s not here t o t e s t ify about the 15 t rans act i on, t he l i cens i ng , t hat kind of thing . 16 MR . SCRAFFORD : We l l , I - - I think the 17 l i c ens ing wa s part of hi s j ob i n t he admini s t ra t i on and 18 that wou l d be part o f t he ope rat i ons to know whe ther or 19 not i t was l i c ensed in op e rat i ons in that t ime . 20 MR . CODY : He can - - and he c an t e s t i fy 21 about i t t o t o the ext ent there ' s ove r l ap t he re , but 22 in t e rms of the app l i c at i on f ee and the appl i c at i on 23 i t s e l f and s t u f f , t hat - - I don ' t - - I didn ' t read and I 24 don ' t b el i eve that ' s p a rt of the top i c s . 25 MR . S CRAFFORD : That ' s okay . I f he Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0370 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 53 1 does n ' t know s ometh ing, I ' m j us t t rying to get an answer 2 that I can rely on . I f he doe sn ' t know, that ' s f i ne i f 3 I need t o ge t i t f rom somebody e l s e . The s e are j us t 4 kind o f obj e c t ive f a c t s I want t o g e t conf i rme d . 5 MR . CODY : I - - and I ' m with you . I 6 gue s s the on ly t ri c k to tha t , though, i s a s when 7 you - - when you prefaced that que s t i on with as a 8 repre s ent at ive, i t - - i t has a l it t l e more we i ght than 9 it woul d j u s t in h i s individual capa c i t y . 10 MR . S CRAFFORD : Okay . 11 Q Let me ask you t h i s : As a repre s entat ive , did 12 you do any res earch t o be ab l e to t e l l us today whether 13 or not a l i c ense app l i cat i on and fee were submi t t ed to 14 the Texas Department o f He a l t h S e rvi c e s to r e f l ec t a 15 change in ownership o f the the fac i l i ty 1n que s t i on 16 f rom Duncanvi l l e - - excuse me - - f rom Surgery Cent e r of 17 Duncanvi l l e to Baylor Surg i c are at Duncanvi l l e , LLC ? 18 A I did not , no . 19 Q Okay . Who - - who - - who i n your o rgan i z a t i on 20 woul d have submi t t e d the l i cense app l i cat i on and fee for 21 the change in an owne rship ? 22 A The re ' s a who l e department that sp e c i a l i z e s ln 23 that and I don ' t know who woul d b e invo lved there . 24 Q Okay . That - - t hat ' s not something that you 25 p e rs ona l l y handl ed? H useby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0371 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 54 1 A No, s i r . 2 Q Okay . Do you recal l eve r see i ng the l i cense 3 app l i ca t i on and f ee that were subm i t t e d to the Texa s 4 Department of S t a t e He a l th S e rvi c e s with r e sp e c t to the 5 change in ownership of the f a c i l i ty? 6 A No, s i r . 7 Q Okay . And doe s i t appear ln t h i s thi rd 8 sentence that there ' s a typo whe re i t s ays, e f f e c t ive 9 June 20 1 0 , the LLC - - the c l o s ing of the fa c i l i ty 10 e f f e c t ive 20 1 0 , that - - that shou l d be June 20 1 1 , 11 corre c t ? 12 A Ye s , s i r . 13 Q And do you have any knowl e dge whe ther or not 14 the change of owne rship ever re c e ived f i nal app rova l and 15 whe ther a new l i cen se was eve r i s sued t o Baylor 16 Surg i c are at Dun canvi l l e , LLC ? 17 A I ' m not aware of that , s i r . 18 Q Okay . I f you wanted to f ind the answe r to 19 that que s t ion, is there any anybody bes ides Al ex 20 Jenkins that you wou l d cal l to f ind ou t that 21 i n forma t i on ? 22 A No, s i r . I woul d go through the pe rson that 23 wrote thi s . 24 Q Okay . You t o l d me be fore about Mr . Patel 25 be ing - - that ' s the bu i l d i ng engineer b e i ng as s i gned to Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0372 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 55 1 go out to the bui l ding every Saturday - - 2 A Ye s , s 1 r . 3 Q - - to l ook over the syst ems . 4 A Ye s . 5 Q Do you know f or a fact whe the r he went to the 6 bui l ding every s ingl e S aturday f rom June o f 2 0 1 1 up 7 unt i l Feb ruary of 2 0 1 3 ? 8 A I t ru s t the man . I worked w i t h h i m and I 9 t rust him , ye s . And I know he went t o the bui l ding on 10 other t i me s whenever the a l arm went o f f b e c ause he would 11 go in for me and check on things . 12 Q My que s t i on i s , do you know f or a fa ct that he 13 went t o the bu i l ding eve ry Saturday dur i ng that t ime 14 f rame f rom June o f 2 0 1 1 unt i l February o f 2 0 1 3 ? 15 A I f - - I - - I don ' t think anybody c an speak t o 16 that . 17 Q Okay . I n other words , have you gone back t o 18 review hi s t ime records o r h i s b i l l i ng records to 19 de t ermine whe ther h e was there f or that who l e t ime 20 pe r i od or i f he t ook any vaca t i ons dur i ng that t ime 21 p e r i od or i f he might have mi s s e d a S aturday here and 22 there? 23 A I know I have things f o r h im t o do and I 24 as s i gn him l i t t l e things t o do i n the f ac i l i ty and he 25 ma int a ine d that and made sure that everything wa s kosher Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0373 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 56 1 and he arranged for a lot of the rep a i r s 1 n the p l a c e . 2 I can ' t speak whether he was the re a l l the t ime . Al l I 3 c an s ay i s hi s s ervi ce ha s been imp e c cab l e and be cau s e 4 of him, w e a r e enj oying t h e benef i t s of b e i ng i n code i n 5 t h i s o f f i ce current ly they own and then i n that 6 f ac i l i t y . 7 Q Okay . 8 MR . S CRAFFORD : I ' l l ob j e c t as - - as 9 nonrespons ive . 10 Q My que s t i on 1 s , have you gone back t o review 11 hi s t i me rec o rds or any other re cords to det e rmine i f , 12 i n f a c t , h e went out t o the bui l d i ng i n que st i on every 13 s i ngl e Saturday? 14 A Aga i n, I get h i s bi l l eve ry month, I review i t 15 every month, and I approve i t every month . So was he 16 there at S at u rday X? I don ' t know . Was the work done ? 17 I am sure i t ha s be cau s e when he when I was - - had 18 the f ac i l i t y c l o s ed, I made sure that I di d wal k through 19 at l ea s t onc e a week . 20 Q You walked t hrough the bui l d i ng at l east once 21 a week ? 22 A Yes, s i r . I t ' s my r e spons i b i l i ty . I t ake 23 care o f my re spons ib i l ity . 24 Q Okay . And - - and t e l l me, you wa lked through 25 the bu i l d ing onc e a week f rom June o f 20 1 1 through Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0374 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 57 1 February of 20 13 ? 2 A I had peop l e in eve ry day t i l l August - - the 3 end of Augus t / s o I wa l ked through . And the re st of the 4 t i me / ye s . 5 Q You personal ly walked through eve ry s ingl e 6 we ek f rom Augus t o f 20 1 1 unt i l February of 20 1 3 ? 7 A I made i t a point to wa l k through on a regu l ar 8 bas i s . Whether I walked through eve ry s ingl e week or 9 not / I know the p l ace is l ocked / i t ' s s e cured and a l l 10 that / but we had a wa l k- through on a regu l a r ba s i s . I 11 don ' t have a t ime c l ock there to c l ock by . 12 Q Right . D i d you keep any records o f the dat e s 13 that you did a wa l k - through 1n the bui l ding ? 14 A For what purpose / s i r ? 15 Q My - - my que st i on i s j u st / did you keep any 16 re cords ? 17 A Aga in / for what purpo s e ? No . 18 Q D i d you take any vacat i ons or t rips out o f the 19 c ount ry at any t ime between June of 20 11 - - 20 A No 1 s i r . 21 Q and February o f 20 13 22 MR . CODY : L e t him f i ni sh . 23 THE WI TNESS : Thank you . 24 Q for more than a week? 25 A No 1 s i r . Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0375 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 58 1 Q Were you eve r out o f the s t a t e f o r more than a 2 week f rom June o f 20 1 1 t i l l F ebruary of 20 1 3 ? 3 A No, s 1 r . 4 Q Okay . Do you k e ep any kind of t i me records or 5 l ogs or d i a r i e s that s t at e your whe reabout s or the t asks 6 that you p e rf orm on a day - t o - day bas i s ? 7 A No, s i r . 8 Q And do you s t i l l have cop i e s of Mr . Pat e l ' s 9 b i l l i ng r ecords f rom 20 1 1 t o pre s ent ? 10 A For Duncanvi l l e ? 11 Q Ye s , s 1 r . 12 A No, s i r . 13 Q What happened to tho s e rec ords ? 14 A Tho s e record s were s c anned and put into 15 e l e c t roni c archive . 16 Q Al l right . Do you have an e l e c t roni c arch ive 17 of Mr . Pat e l ' s b i l l ing re c o rds f rom 20 1 1 to 20 1 3 ? 18 A Probab l y somewhe re . 19 Q Okay . Who - - who maintains that e l e c t roni c 20 archive? 21 A I think i t ' s on the ha rd dr ive in - - at US P I . 22 Q And i s there a p a rt i cu l a r depa rtment there 23 t hat ma intains tho s e records ? 24 A I t wi l l be account s payab l e . 25 Q Okay . And do you r e c a l l when the generator Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0376 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 59 1 was removed f rom the bu i l d i ng in que s t i on? 2 A I want to s ay probably around Ju l y . I ' m not 3 exac t ly sure when . 4 Q Probab ly around July of ? 5 A Ju ly ' 1 1 , something l i ke t hat . 6 Q 20 1 1 ? 7 A Yes, s 1 r . 8 Q And did you authori z e the generator to be 9 removed f rom the bu i l ding? 10 A Yes, s i r . 11 Q And why wa s the generator remove d f rom the 12 bui l ding back in Ju ly of 20 1 1 ? 13 A B e c au s e I di dn ' t f e e l comfortab l e that i t 14 was i t wa s j u s t o l d . I t l ooked t e rribl e . I cou l dn ' t 15 f e e l comfortab l e , r e l y - - I - - I j u s t didn ' t l i ke - - i t 16 j u s t s e emed l ike i t real ly wa s , you know, j u s t o l d and 17 not in good shape . 18 Q We re you us 1 ng t he gene rat or? 19 A No , s i r . 20 Q And wa s i t - - your - - your op erat i ons of the 21 bu i l ding were f in i shed at that t ime , weren ' t t hey ? 22 A Yes, s i r . 23 Q So why remove the generator ? 24 A I made a m i s t ake . 25 Q And what happ ene d t o t he gene rator? Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0377 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 60 1 A I t ' s s c rapped . 2 Q And where di d i t go ? 3 A I think D ive rs i f i ed Power got - - j u s t s crapped 4 it . 5 Q And what - - what is D ivers i f i e d P owe r ? 6 A I t ' s the peop l e I c a l l ed to ma i n t ain the 7 gene rat o r . 8 Q I s that a - - a c ompany in the D al l as / Fort 9 Wo rth are a ? 10 A Ye s , s 1 r . 11 Q And what ' s the name o f the person that you 12 deal with at D ive rs i f i ed P owe r? 13 A B i l l B e rt rand . 14 Q And d i d D ive r s i f ied Powe r pay anyt hing for the 15 generator ? 16 A No, s i r . 17 Q Okay . I s Mr . B e rt rand a f r i end o f yours ? 18 A He ' s s omeone that I ' ve used i n - - at DeSoto 19 Surg i c are and he ' s one tha t I t rust i n hi s j udgment . He 20 ma i nta ined the f ac i l i t y, t he generator we have there 1 n 21 exc e l l ent condi t i on, and I asked hi m to l ook at the 22 other generat o r . 23 Q Al l r i ght . Why - - why di d you a s k him to l ook 24 at the other gene ra t o r ? 25 A Becau s e I t ru s t e d hi s j udgment . Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0378 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, L TD., ET AL. Faris Zureikat on 05/13/2014 Page 61 1 Q Okay . But why were you conc e rned about the 2 other generat or in Jul y of 20 1 1 ? 3 A I don ' t reca l l why . I t ' s j us t - - I wanted 4 t o - - to look at the - - the place - - I mean , l ook at the 5 generator . That ' s a l l I a sked . 6 Q Al l r i ght . And - - 7 A S a i d wou l d you t ake a l ook at i t next t i me 8 you ' re 1n the area? Okay . 9 Q And what d i d he t e l l you about the 10 generat or ? 11 A I t ' s very o l d, i t ' s rus ty, l o t o f the l ine s 12 are c rack ing, whi ch I saw - - saw that and he s a i d 13 it ' s i t ' s s crap , i t ' s s omething you c an ' t c ount on . 14 Q Okay . D i d he charge you or the company 15 anyth i ng to remove the gene rator? 16 A No , s i r . 17 Q Pr ior to removi ng the gene rat or, d i d - - di d 18 you te l l anybody at the l and on beha l f o f the 19 l andl ord that you were go i ng to remove the gene rator? 20 A I asked Caro lyn Exl ey i f I c an remove i t . 21 It ' s I t o l d her t he c ondi t ion o f i t . She goe s , yeah, 22 okay, get r id of i t . I t was my - - 23 Q Okay . 24 A - - thing . 25 Q But you di dn ' t have any commun i c at i ons with Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0379 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 62 1 the landl ord? 2 A No, no . 3 Q Okay . And di d you eve r i nve s t igate rep l ac ing 4 that gene rator w i th a new generator? 5 A Seve ral t ime s , s i r . 6 Q Al l r i ght . When - - when di d you f i rs t look at 7 g e t t i ng a rep l a c ement gene rator put i n ? 8 A The - - the day t hey took i t b e caus e Les was i n 9 t h e p l ac e , was witne s s t o the ext rac t i on, and sa id, you 10 know, they probab ly need a new one here, could you work 11 up something ? Sure . 12 Q You asked Le s to work some t hing up ? 13 A No . 14 Q He asked you - - 15 A I -- 16 Q - - t o work s ome t hing up ? 17 A I - - I asked Divers i f i ed . I s a i d would you do 18 that and maybe you can t a l k t o him about that . 19 Q So that was Mr . - - 20 A Ber trand . 21 Q B e rt rand? 22 A Yes, sir . 23 Q And d i d Mr . Bert rand eve r get you a pri ce for 24 a rep l ac ement generat o r ? 25 A He got me a quot e on two rep l a c ement s . Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0380 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 63 1 Q And when did he get you the quot e s on the 2 replac ement generat ors ? 3 A I do not rec al l , but I have a - - a record and 4 I think i t ' s - - s omewhere . I want to say i t was 5 S ep t ember . 6 Q Sept ember of 2 0 1 1 ? 7 A 2 011 . 8 Q And why didn ' t you order a rep l a c ement 9 genera t or at that t ime ? 10 A You know, I was t a l k ing t o L e s at the t ime and 11 I sa id, you know, we ' l l - - we ' l l get one, we ' l l rep l a c e 12 it . And h e s a i d, wel l , l et ' s j u s t wa i t and s e e what ' s 13 going t o b e the pul l on the se thi ngs , how many rooms 14 they ' re going to have and what t hey wi l l need . 15 Q And and did t hat c onve r s at i on with L e s 16 o c cur ove r the phone or in person or by e - ma i l ? 17 A I - - I don ' t know . I think at that t i me then, 18 I wa sn ' t aware - - I mean, I j us t - - I I t alked - - L e s 19 wa s t h e r e , he came by, wal ked through, and h e says , you 20 know, I wou l d wa i t on the gene rator, l e t ' s s e e what el s e 21 we ' l l - - we ' l l do there . And h e wa s j us t talking t o 22 hims e l f t h i s , you know, I wou l d want to wai t o n thi s and 23 s e e what happens . 24 Now, I was not aware t hat - - I made the 25 mi s take and l et go of the generat or . I don ' t know when Huseby, Inc. www .huseby .com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0381 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 64 1 they c ame to me and said , hey , you s hou ldn ' t have got t en 2 t hat got t en r i d of that . At that t ime , I sa i d , I ' l l 3 rep l a c e i t . 4 Q And did - - 5 A So I don ' t have t he t ime l i ne for you . 6 Q Okay . 7 ( Exhib i t No . 3 marked . ) 8 Q Let me show you what ' s been marked as 9 Exhib i t 10 A Okay . 11 Q - - 3 and ask - - we l l , I ' l l repre s ent thi s 1 s a 12 document that was produced by your company . 13 A Okay . 14 Q Have you seen t h i s e - mai l before ? I s t h i s an 15 e - ma i l , f i r s t of a l l , Exhib i t 3 ? 16 A I don ' t know i f i t ' s a f ax or an e - ma i l . I 17 c an ' t t e l l you whi ch one i t i s . 18 Q And I didn ' t see a dat e on the document . Do 19 you r e c a l l when you got that document t hat ' s been marked 20 as Exhib i t 3 ? 21 A September . B e c au s e I have i t 1 n PDF format . 22 Sept emb e r 20 1 1 . 23 Q Okay . Okay . Who i s Jarod Mos s ? 24 A He ' s i n US PI . 25 Q You know what h i s po s i t i on i s at US P I ? Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0382 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 65 1 A I - - I - - ri ght now / I don ' t know what i t i s 2 now / but my rec o l l e c t i on i n the pas t / he wa s i n the 3 l e gal dep artment . 4 Q Okay . Be fore I mark the s e 1 I ' m j us t - - I ' m 5 go ing to hand you a s t a ck of photographs that we re 6 produced in d i s covery 7 A Ye s 1 s ir . 8 Q - - that are Bat e s number D 0 0 0 7 5 to D 0 0 0 1 3 9 . 9 Do you know who took the s e photographs or wha t they ' re 10 of ? 11 A I did take some photos the day that we were 12 supposed t o hand ove r the bui l ding that Mr . Hughe s 13 di dn ' t show up 1 but I don ' t rec ogni z e some o f the s e 14 p i c ture s . I t ' s - - I - - the se are - - I mean / i t - - i t 15 c ou l d b e s ome of my photographs / but looking at thi s / i t 16 l ooks l ike s tu f f i s d i rty . I l e f t the p l a c e the 17 p l a c e spo t l e s s . So thi s doe s no t show a spot l e s s c l e an 18 place . The b l ack and whi t e doe s not . So I don ' t know 19 i f the s e are my p i c tures o r not 1 s i r . 20 Q Okay . Bu t you t ook some photographs ln ln 21 February of 20 1 3 ? 22 A Ye s 1 s l r . 23 Q D i d you t ake any photographs o f the bu i l ding 24 p r i o r to February of 20 1 3 ? 25 A N0 1 sir . Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687-0424  Sworn Record 0383 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. · Faris Zureikat on 05/13/2014 Pag? 76 1 I I FAI U S ZURJ U KAT I have read the forego ing 2 depo s i t i on / or have had it read to me ; he r e by a f f ix my 3 g i gna ture t ha t s ame is t rue and correc t , excep t a s noted 4 a bove , 5 6 9 J. O THE S TATE OF :\�(A& ii COUNTY OF \)Q.\\(!S ) 12 B e f o r e me , \\t\\che.\<1LcWf\U.(1 1ifA , on thi s day 13 pe r s ona l ly appeared FAR I S ZTJRE I KAT ; krtown to me ( or 14 proved to me i.m.de r oat h o r t hrough U QL.... 15 ( de s c ript i on of i dent i ty card o r other document ) t o be 16 t he person who s e name is subsc ribed t o the f orego ing 17 ins t rument and acknowledged t o me t hat t hey execut ed t he 1B s ame for t he purpo s e s and c on s i dera t i on the r e i n 19 expressed . 20 G iven under my hand and sea l o f o f f i c e thi s 21 day o f June.... .I 2 0 14 • .2 2 23 MICH' ELE lAM AFI"I P.A Ol4ry J:ilubu(,: STA 1'£ Q,� TEXA.s My Comrn. E':.:p. 1 0· l 2· f S 25 Huseby; Inc, . www.huseby.com 1000 North Mupac Ex.pre55Way, 2 nd Fiuor, Austin, TX 7873 1 (5 12) 687-0424 • 6  Sworn Record 0384 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Pag-e 77 1 CAUSE NO . DC- 13 - 0 2 3 3 4 - L 2 PATR I C IA HUGH E S , ) IN THE D I STRI CT COURT P l a i nt i f f ) 3 ) v. ) 1 9 3 RD JUD I C IAL D I STR I CT 4 ) DE SOTO SURG I CARE PARTNERS , ) 5 LTD . and TEXAS HEALTH ) VENTURES GROUP , LLC ) 6 De f endant s ) DALLAS COUNTY I TEXAS 7 RE PORTER ' S CERT I F I CATI ON D E P O S I T I ON OF FARI S ZURE I KAT 8 13 MAY 2 0 1 4 9 I, TAMMY D I CKSON CROS S , Cert i f i ed Short hand 10 Repor t e r in and for the S t at e of Texa s , hereby c e r t i fy 11 to the f ol l ow i ng : 12 That the w i t ne s s , FAR I S ZURE I KAT , was dul y sworn by 13 t he o f f i c e r and t h a t t he t ranscript of the oral 14 depo s i t i on is a t rue r e c o r d o f t h e t e s t imony given by 15 the wi t n e s s ; 16 Tha t the depo s i t i on t rans c r i p t was s ubm i t t ed on 17 f(}o� :23; r20I� t o t h e w i t ne s s or to the a t torney 18 for t he w i t ne s s f o r examinat i on , s igna t ure and r e t urn t o 19 me by �.l.))e /Q J 2od 20 Tha t the amount o f t ime u s e d by e a c h p a rty a t t he 21 depo s i t i on is as f o l l ows : 22 Mr . J. B ru c e S c ra f ford 01 : 59 23 That pursuant to i n f o rma t i on gi ven t o the 24 depo s i t i on o f f i c e r a t t he t ime s a i d t e s t i mony was t aken. , 25 t he f o l l ow i ng i n c ludes coun s e l for al l part i e s of Huseby, Inc. www.husebyicom 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687�)424  Sworn Record 0385 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Page 78 1 re cord : 2 FOR THE P LA I NT I F F : Mr . J. B ru c e S c ra f f o rd 3 ARMBRUST & B ROWN , PLLC 1 0 0 Congre s s Avenue , S u i t e 13 0 0 4 Aus t i n , Texas 78701 Te l ephone : (512 ) 43 5 -23 00 5 E - ma i l : b s c ra f f ord®abaus t in . com 6 FOR THE D E F ENDANT S : Mr . Je f f Cody 7 Mr . Nathan B . Baum FULB R I GH T & JAWORSKI , LLP 8 2200 Ro s s Avenue , Suite 2800 Dal l a s , Texas 75201 9 Te l ephon e : ( 2 14 ) 8 5 5 - 8 0 0 0 E - ma i l : j e f f . c ody®nortonro s e f u l b r i ght . c om 10 11 I further c e r t i fy that I am n e i t h e r coun s e l for , 12 re l a t e d t o , nor emp l oyed by any of t he p ar t i e s or 13 a t t orneys i n t he a c t ion i n whi c h t h i s p ro c e e d ing wa s 14 t aken , and further that I am not f inanc i a l l y or 15 otherw i s e i nt e re s t e d in t he out c ome of thi s a c t i on . 16 Furt her c e rt i f i c a t i on requireme n t s pur s uant t o Rul e 17 203 o f TRCP wi l l be c e rt i f i e d to a f t e r t hey have 18 oc curre d . . tY2.d >"""] 19 Ce rt i f i e d t o by me t h J. s � day o f If 117 t l . �P a .· · · .-. "r;( 20 2 0 14 . 21 � r� . · TAMMY D I CKSON CRO S S , . Texa s CSR # 6 9 �l 5 22 Exp i rat ion D a t e : 12/31/15 F i rm Reg i s t ra t i on No . 6 6 0 23 HUSEBY , INC . 7 0 0 0 Mopa c Expre s s way , 2 nd F l oor 24 Aus t i n , Texas 7 8 72 4 ( 800) 333 -2082 25 Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687:-0424  Sworn Record 0386 PATRICIA HUGHES v. DESOTO SURGICARE PARTNERS, LTD., ET AL. Faris Zureikat on 05/13/2014 Pag� 79 1 FURTHER CERT I F I CAT I ON UNDE R RULE 2 03 TRCP 2 not returned t o 3' t h e depo s i t i on o f f i c er o n _(p�·��-·-·��� ------ ---- 4 If r e t u rned , the a t t ached Change s and S ignature 5 page cont a i n s any change s and t he r e a s ons there f o r ; 6 If r e t u rned , the original depo s i t i on wa s d e l ivered 7 t o Mr . J. B ru c e S c r a f f ord , Cus t od i a l At t o rney ; 8 That $ CoGS?:>� s the depo s i t ion o f f i c e r ' s charge to 9 the P l a i nt i f f f o r p rep ar ing the original depo s i t i on 10 t rans c r i p t and any cop i e s of exhib i t s ; 11 That the depos i t i on was d e l ivered i n ac cordanc e 12 wi th Ru l e 203 . 3 , and that a copy of thi s cert i f i c a t e was 13 s e rv e d o n a l l part i e s shown here in o n and f i l ed w i t h t r�e �· 14 C l e rk . 15 C e r t i f i e d t o by me this C\� day o f • 16 2 0 14 . 17 18 c)::!��fl··- 19 20 TAMMY D I CKSON CROS S , Texa s CSR # 6 9 :� 5 21 Exp i rat ion Da t e : 12/31/15 F i rm Re g i s t ra t ion No . 6 6 0 22 HUSEBY , I NC . 7 0 0 0 Mop ac Exp r e s sway , 2 nd F l oor 23 Au s t i n , Texas 7872 4 (800) 333 -2082 24 25 Huseby, Inc. www.huseby.com 7000 North Mopac Expressway, 2nd Floor, Austin, TX 78731 (512) 687:-0424  Sworn Record 0387 EXHIBITO  Sworn Record 0388 SUn 10110/10 tart Noles Resource Names Negot�'le terms witt! sehor 4:1r..d execu(c tcnn shea't OfYI cpment Activitlu Non A/2110 hu 10121110 Due Oil�nc1 Process Men 612110 K1:1der Men 6/2110 Non81V10 Sen<1 siglod lerm r.heet to legal Wod 101;!0110 Conference CD� -M:h Or. to revt6w project 1.\Qnl!/2/10 Wed 9111\0 8118110 Call sct-.ed/�0 Kinder Mon8J2/10 Fti Bl6/1 0 8117110 NA.•. Kinder Rac:efve dUe crr�genoe clocvments frCITI seller Fri 9110110 ...,sklycalls Thu815!l0 Kinder Sdled.Je interN� DO kicl< offC:�ernalall'f""'n"' to� Us with Seber Fri 911!Y!O 9f1!Y10 Set up bi on Thu<&days... . Kinder Begin olte mils to valid•!� pnxu•... illl d pun:tuue price Wed 10121l110 MOn 812/10 Oistribul.e d.Je difotnce dt.na per disrribVtion c.hecXJ�l Fri 9110110 Fri 9110/10 Knler Sc:hedul� on site v/$ib Mon A/l/ 10 �e moruoly inlefnal DO calls. >ubsoquent lc en s�e -��s Tuu B/3110 Kinder Send Clinicot check list to RVP or tmog:rg Ops Contact Mon a/15110 Wed er.lS/10 Wed 8125110 812211 0 Scheduled a post on she cai for Wodnosd repces fe< uansition p!amlng and Internal Mon81<3110 Tue 9121110 Report en implant chafOes and reimbursemen! Pimper Fri 9124110 Kinder lncludu pain aeteens Wed9122110 Clinical Oper>tlons Send repo� to full ream Analyze and tepor& on historical collections per case Pimper 8127110 Clvis Martin is wollloy wUI be vi$�if'l Tue 9128110 lnw�lig:818 afld vnd�rd:Cand irnptant usage Send ,..port to lull ""'" Wed 912PI10 Wedll/29110 Kinder Document medic.af revteW and transition plan On site visi'I-MeC�eal Tue 8/17/10 Tue 91:28110 9111f10 Dr. Z..rin. Julie Gunden;cn �nd Z..rin Tuc 9/28110 Zarin lilayneedtonofi!ys131e m3.J 10/7110 llf.lOiiO S ent Hoi Mayo an ""'alto coed in Ole !ho physicl:in in!ervi MMB/16110 Pltyslclan Rtlat!ons Thu IQ/14110 For �gOg Center&. revlew TeferTCIIJsources and m�tiog" plan Tuell/17110 On site \li.sii-Phystian retatlons (surgical racitihes) Tue8117110 Ex!oy Mon 6fZ3/tO Exley Kirder Tue 8117110 Identify prelllrr•d PAB members Tue8124110 Mon 8/30110 Suryical facil�tes only Exley Brett Ntolt or 6di to l'l'lee'l entire p3t11"1et"Ship Thu 1!Y1�110 Review DO. trnotn plan. paso thru exp. aca1 tax relurn On stte 63wssion by RVP with all employees Mon S"1l110 W\th Sheily/S'tvlnnon; see power point preRntSiicn Frl101'6ll0 Payroll and EMploy.. B.....,fits Ilion 1113110 Fr/101&'10 MC("' 9113/10 Review M-=1 �mpatt.! ber.elits to de1ermioe CO!f of int�tng employees ll'ltt Thu 10/7110 Hole· In ColoI'V I  Sworn Record 0389 SUTgcry Ce!"der of OJ.n:anvlle Sun 10/10110 otes Resource Names n Srte • tranc:t s Tue 1 11 ue8117110 PfvnrlnglntheC&f>A� Fri 911i'NO H 011 i3 c.ashb.Med, ncl:ify OAl'e"1f prep.srC!!r Kind'et Fti !1117/10 Only If a lLm aro!Jnr.1 centM Hayden Mon911J/10 Klr.dcr Center on 1ul.ure tax returm being e�l bnsed Mon9/13110 so they can &dYise tf,e Kir>der Review I115LI'Cihe:e Policias.. obtain ql.Qv fer noH insur.:mco and eotrtpe�A! tot Mon9113/10 Meec.,g 1o mlliow Financial due dilio]enc:e Wed 912!ll10 Send inst�ance report to full \earn 1009/30/10 Moo 101�/tO 10/4/10 Cosl of ta:lioouronoo is $12,860. �lnder Tue 10/5110 Mon101',1/10 1017/10 Sctoeduled!or 1011:010...• Kinder Fl..d lbsel Revlow Uon S/13110 Tue 10/1!1110 O'o!an 591 oft fn;,m RVP on assets in poor ccnctltion irwesligale Conduot ndopendefll al'l'f'iartnerstop Prclile (SUfllical rwrrties only) Ma-1 9/13/10 �r>d """'"illo Corp Aa:tg. noting wholher US PI ..;1 guarantee facibty � Wed Hl/G/10 1016/10 Senl foJJ Wall:..-.... Kindg lor f�cilily lea>S/13110 WaJ 9/IJIIO Pfunderr Fri B/20/10 Thu 919110 NA... Kind.,- Review deblond capilallooses .nth Legal aro:l Tre<>Suy Deb I Frl81'6110 Fr1 !1124110 Ca!ctJiale IIU'Ir.>nlees ""-deb I balanc! en:/1)' BaylOr Surobreal D11r1 100/10 Since lhe r. Mom anal Hermann, CHW, Legacy Prapare "!>PPiCC!Ioo 10< chango a! ownorsh;p IOilh CON Board Obtlillin FW opinton of �c:haSII!I price Fri 101&'10 nood.partlrularlyifgoing OtMr Proces.ses lll!oo812/10 Mon B/2110 Mon Obla"rt FMV opiniorl of mC.CriCy mtflrvs1 vak.tetion Thu 8112/10 \!Yo!d8118110 Conler�Eviecn fm CON !o IN and ff' Moss Coroty., E>:Jey_ S.okgro""d Che� Monlf2/10 Fn 1018110 Rl!quest rorm be completed end get lh2t11 bac.l< 1.4on81'2/10 Fri 9124110 9/24110 S..n! e.ma� lo Fri 10/8110 RVP will confirm �OK or not .• Stbmil form! 101 process :o be rvn Mon9127/10 Fri I 011110 1on110 Senl Carot,on an e-IT�ail on status of Hat& Cadg:-ound d"\et Recefote forms back and reviGW Men 10/4110 Tqnof11onPI"" Wed 10113110 Tuu Too 1at12/10 Tue10/12/10 l)raft plan from doe dil;genca reports TUIO 10/12110 Tue 10112110 Kinder TIR 10112/10 E•ley R&-�f!Vil!w detailed t.""ansition plan sacHem w/ RVP One week er iiO. pre cloi" Kn1eor Brll\1 .. Oly Run project 10112110 r.. 10112110 Preseflt to Sr. Management Complete�r.�ttsitrJn plan Pres.,. !0 Tue 10112110 Tuo 10112110 Only oooded t is hJghrisk or oompliCi!!ed E>ley Wed 10113110 d'iPgence 3Cfjustme11ts physi.:i;: Wed 1011 J/10 Exley Proforma Frl101111o Fri 101&'10 Prepare lhre8 year proforma Fri 10/6110 FO 1018110 Take-mfc accoc.x1t due a.nd res.ults of tnna1ion 10 l�QOI Tr.uuactfon CfO"Se .nd Funding Thu 9130110 Thu 10121110 1017110 Bo aurelo let them know wo need all of the fin;m� n ThuMOI10 Thu 9130/10 Send to Jim J�Mtie 3 wks b4 close, if possible Kindet Pnopa!e pun:/lale pd 10/li/10 Tho 1017110 K"lllder Fri 1018110 She wil need lo !-slor Fri 10/8110 Kinder Send Be.,.f4s pre•e•nloiO>n kl RVP !or 111 employee meeli"ll Kmer Send 1a Evie 10 review for c...-rency rrrsl Fri 1018110 10/8110 Fti 1018110 Fri 10/8110 Kinder Oefetmilewho will be on�it• s�crt tcrrnr dpa!olo c.harogo led!$ on t.Jcility. � w;ommled Flillllll/10 Fri 1 018/'1 0 Wod 10/20110 Kinder Be �lire to irtfl< Comp """'" Poyro!l sn;tts Exley First meeting of Transition TeBm C9f'Ce1 Eolablbrh weekly confcrer><:e e.nc to trocl: progreu o�r first to days Th\110121110 Thu101W10 e�ail linal eklc:trO"''i: copies of agreem�nt5 Thu 10128/10 Kinder � B�d Fri 1012211 0 Thu 10121110 Mon 1005f1 0 RVP. Aocoun'.ants+aciiry, Corpor..te. Tax Kinder Tue 1 012ti/10 Tue 1012&1 C Kinder Onlyhnlitybeing�..,;,.d remains. rr- sel upe rBWenlity,..., Send copy of 8flY tlrd p«1y vali.Jl!1ions to corporfll)' n place''" emplo)"'e ...,.ing letm. Then. L"ll•l FriiOIUI10 Obtain mnute Dook5 and be sure they are on site ri 10/2ij/10 Thu 111111110 Kinder Thu 111111110 Kinder \Mod tiJVrT� any premus partnerships. if necessary Fri 1012WIO lnformoHon T.ehnolo!IY r;; 1illz1111·o Frifll-4111 0 rder router 2IS1d cirwit Fri 10/2ijl10 Thu 111<1/10 Riffe 1M tali roul\or an<1 awn Riffe Review deleied impiernernation phm Mlh RVP culd Admirli3trator Fri 1 1 15110 Thu 11111110 Cortflllll IZld'erstaodha by center of USPI e-m8il fllt-en1icm policy Fri 11112/10 Thu 12flll10 Riffe CoMe£! to USPI ret.wnr1c Fri 1211.410 Deletes> 180 d8y.s lnbox. 60 dlJYS Oe'e.tod ttems. 90 days Sent II< Kinder Fn Fri 12124110 1 Mon 12121110 Fri1filf1 Riffe Mon 1/11l111 Riffe facoily. Tax t.:>ur P_.. ior <::Ontinuad llc:t:en: at1)' retired patWsnt accou.'ltiOg s�tams 111<1111 Meeiing IO'i!h Aa:ounling lo rev;,.. tem�s or o�reements Accounting a Ccrpc:Jrate level Thu 10/Z1/10 Fri 1115110 Review distributions m•de al clooing. amount i0'1d to .mom made ll!on1111110 Mon 1111110 end CcrPQrsle accoun11ng: ne«< an Kinde< Prepvr• brfget c::a•h •nd woc1ting QPrlel bvo up Thu 10/21110 Thu 10121110 Kinder T"" Re!Lms- determine who will be responsb!e lor short year. proor 10 USPI eftediYe • Man 1111no Fri 1115/10 K(nder Fri 101211110 Fri Hl/29110 Kinder Fri 1/2 1 1 11 Exley Trwooury Fri 10/29110 B-.nk Account Prt 10129!10 frll/21111 Send deP<>srt str;>s for new ban!< accoun11o N r en  Sworn Record 0391 Surge..,- Center or Duncanv1He Sun 10110/10 et up ates esource Noilml:$ Send hi&torical month1y P&L to accounling with monthly cases 0 lor new company T�v 10121110 Thu1 111110 Mart111 Fri 101291tO Fri 10129110 Send lo fa<:ility acx;oum;nt an� lO Matt K�no ill Corp ACC\g Kinder load historical P&l into Oracle Men 11/1/10 Fn t115110 Kline Provide pmforma to accounting for bvdget inpJt Fri 1012SJ10 Facility and c.orporale Se:l'\d hls1oricat balanc::t! sheet to fo.ciW.y .occcx...m,nt Fri 1a/29110 !Gnd Monlf/!!110 Fri 10129110 Estubli>h prolotx>lfor oxpenses refOiod to old onmy ..-.:1 r;! mc�tt;y reporting need$ Kinder Thu 11118/10 RIIP submib; Support Cerd.or tidia con!e�ence col with MminlsU•tor and lead Physi Tl'wJ 1/2011t Fri 11126/lO Fri 11126/10 Thu 12};!3110 Tl'wJ 2/1711t Pfund« R......., inlen:omp•ny biK (mo 3) >i• conference caD with Admini$\llolor omc:f leod Physi Fri 12/24110 Pfund.,. Fri 1 f.21H1 Plunder ' Ofact. Aecounto Poyablo Men 12127110 Fri 11l1111 Sot up Oracle NP Men 12/VIlO Wed 1212\J110 Ploodor Request user ac.cess to Ol'ilde AP and GL Designate indMdual rcspoi\Sible lor atGlln< clod< Fri 10129110 Kinder Fri 10/lS/10 Thu t1/4f10 Thu 11rng r•sl doy on USP payroU Conduot initiolerrc>loyoe boMfil pnosan!B1ioru Thu 1120111 Trail! tis!! on AOP E�l,.pnos Tue 12/14/10 Reinerl Sel up and complete omp\o)'ee bcnefol entormenl Frtt11',;i10 Tue 11<5111 Reinert First doy on USPI psyrci r...., 1/Z5 11 1 Mon11311t1 Reinert Mon 1124111 Mon 112•111 Reinert Refmbunenwnt Thu 11/ll/tO Create or update ma� ca� grids' Fri 1009110 Frl10/29110 Notity of ,....fox 10 and c:l'longe of owne11hlp. � appicablo Fri 10129110 Thv 111251t0 Pimper Fn 10129110 ThtJ 11/25110 Pimper Review free schedu� Yersu� other t;ellta� in the area to de..lCI'Tl'lllle if changes are neEc Thu 1 11251t 0 Pirnper 6I.AIInn110ft'iel' Frt 1115110 Thu 12IJIJ/1 Q Sem e-Oll"' Kinder Train c;er1!or staff on new processes ilnQ roports required to moe! US PI >landard dose r.... t21281JO Thu 12JJ(ll10 Edey Tl'wJ 1212110 Matorl&k !ol0111gement Thu12f.IJ10 Mon 2128/11 Thu 12W,O Wait until new DEA h;u been r�d Eich Eich Send Mlir:B oftenn!na!lon to currenl GPO Perform phy!;al counl of ma dical W)lPly inventory Sero:1 notice to HPG to acid t o USPI CC<1lrad Fri 12/J/10 Frl1213/10 Eich Notify vtrrdors ol c;hange ar owne�lp. n not on GPO pN rm  Sworn Record 0392 Sun 10110/10 Fri 11126110 One montll po>l close. tc bo lead by RVP Notes esource Wed 1/ISI11 cc. Paralegal an llledlcaid. CEA. CUA. JCIMAiiC, Phfln'llk) Names e.vle'W new cpemtin.g agreement w ad'rr.mi:s1r&U>r Fr 11125110 Exley Notify governmtntal agenclu of nftlf legal name and fall10 Thu ID/21/10 State department o1 he>!HfJ Thu10f<1110 Wed 1111(1110 Reed lOCill bus1ness ftcense Thu 10121110 Wed 10127110 �y MedicaJe n.., t0f28/10 Wed 11110110 Reed El<'.ey Wed 1218110 If MO. tnclude Seller POA DEA n.., 11125110 Wed 1211110 Still e OEA or squiviilkfnt 1'1'<.1 1212110 Edoy ThiJ 121!!110 Wed 12122/10 Wed 1112111 AleldJe n Wll! send oul no&oe fo ace1errwmla1icn Conc!Ud ftrot PAll meeting Fri 10129110 Fri 10/Z9110 fri 11/5110 Exley Obtain finnder Pot! Transition Con! Ca!l to Debrief on Process Fri 11/5110 Fri 1115110 Ktnder Mon 111810 Mon 1 !/8110 Alen c� mgt ol on Hne surwy taque!llto bo rec:eivad Kinder No\>ty Of98nizabonol Development to sood SUNoy 1 Nof Or ftN r ....,  Sworn Record 0393 EXHIBIT P  Sworn Record 0394 CAUSE NO. DC-13-02334-L PATRICIA HUGHES, § IN THE DISTRICT COURT Plaintiff § § v. § § RD DESOTO SURGICARE PARTNERS, LTD., § 193 JUDICIAL DISTRICT TEXAS HEALTH VENTURES GROUP, § LLC, UNITED SURGICAL PARTNERS § INTERNATIONAL, INC., § Defendants. § DALLAS COUNTY, TEXAS PLAINTIFF'S SECOND REQUEST FOR PRODUCTION TO DEFENDANTS TO: Defendants DESOTO SURGICARE PARTNERS, LTD., TEXAS HEALTH VENTURES GROUP, LLC, and UNITED SURGICAL PARTNERS INTERNATIONAL, INC. by and through their counsel of record, Nathan B. Baum, Fulbright & Jaworski, L.L.P., 2200 Ross Avenue, Suite 2800, Dallas, Texas 75201. Pursuant to Rule 196 of the Texas Rules of Civil Procedure Plaintiff serves this its Requests for Production of Documents. In response to the Requests for Production, you are requested to produce responsive documents or items to the undersigned counsel of record at the address indicated below within the time period provided by the Texas Rules of Civil Procedure. All of these discovery requests are continuing and require reasonable supplementation. DEFINITIONS I. Documents. The term "Document" is defined to be synonymous in meaning and equal in scope to the usage of this phrase in Texas Rule of Civil Procedure 192.3(b). A draft or a non-identical copy is a separate document within the meaning of this term. The term "Document" also includes electronically or magnetically stored data, which may be produced in any format convenient for Defendant. TEX. R. Crv. P. 196.4. 2. Concerning. The term "Concerning" means relating to, referring to, describing, evidencing or constituting. {W0631142.1}  Sworn Record 0395 3. Defendant or You. The terms "Defendant" or "You" mean and refer to DESOTO SURGICARE PARTNERS, LTD., TEXAS HEALTH VENTURES GROUP, LLC, and UNITED SURGICAL PARTNERS INTERNATIONAL, INC., as well as all other persons acting or purporting to act on their behalf, including any attorney or other representative. 4. Plaintiff The term "Plaintiff' means and refers to PATRICIA HUGHES, as well as all other persons acting or purporting to act on her behalf, including any attorney or other representative, including but not limited to: Lance Hughes, Hughes Capital Management, and its employees or representatives. 5. Premises. The term the "Premises" means and refers to the land, building, and improvements located at 1018 East Wheatland Road, Duncanville, Texas 75116. 6. Lease. The term the "Lease" means and refers to the Lease Agreement entered into between Patricia Hughes and Surgery Center of Duncanville, LP on or about June 1, 2004, and any amendments, modifications, assignments, or guaranties thereof, including but not limited to (a) the Assignment and Assumption of Lease and Landlord Consent entered into by and among Patricia Hughes, Surgery Center of Duncanville, LP, and Baylor Surgicare at Duncanville, LLC on or about November 1, 2010; and (b) the Lease Guaranty Agreement entered into by Texas Health Ventures Group, LLC as guarantor for the benefit of Patricia Hughes on or about November 1, 2010. REQUESTS FOR PRODUCTION 16. The "acquisition file" identified by Jarod Moss on Page 32, Line 15 of his deposition testimony. RESPONSE: 17. The "closing binder for [the] acquisition" identified by Jarod Moss on Page 32, Line 18 of his deposition testimony. RESPONSE: {W0631142.1} 2  Sworn Record 0396 18 . The "Duncanville/DeSoto merger file" identified by Jarod Moss on Page 36, Line 5 of his deposition testimony. RESPONSE: 19. The "approval memo" identified by Jarod Moss on Page 37, Line 15 of his deposition testimony. RESPONSE: 20. All emails or other written or electronic communications sent during the calendar year 201 0 between or among Defendants and Symbion, Inc. (including its subsidiaries, employees and agents) concerning the Lease or the Premises. RESPONSE: 21. All emails or other written or electronic communications sent during calendar years 2010, 2011, 2012, or 2013 to or from the individual custodians identified below that (a) contain one or more of the keywords identified below, and (b) concern the Lease, the Premises, or the subject matter of this litigation. Custodians: Jarod Moss; Carolyn Exley; Jonathan ("Johnny") Bond; Brad Brodnax; Faris Zureikat; Shannon Kinder; Niels Vemegaard; Dr. David Zarin Keywords: "Duncanville"; "DeSoto"; "Hughes"; "Baylor Surgicare" RESPONSE: 22. All "maintenance service contracts" entered into by any Defendant (as required by Paragraph 14 of the Lease) concerning the backup electrical generator at the Premises. Respectfully submitted, MARK L. HAWKINS State Bar No. 007908 43 ANDREW F. YORK State Bar No. 24066318 ARMBRUST & BROWN, PLLC 100 Congress Avenue, Suite 1300 Austin, Texas 78 701 ( 512) 435-2300- telephone ( 512) 435-2360- facsimile ATTORNEYS FOR PLAINTIFF {W0631142.1} 3  Sworn Record 0397 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the above and foregoing instrument was delivered via certified mail, return receipt requested on this the � day of August, 2014 to the following attorney of record: Nathan B. Baum Jeff Cody Fulbright & Jaworski, L.L.P. 2200 Ross Avenue, Suite 2800 Dallas, Texas 75201 ANDREW F. YORK MARK L. HAWKINS {W0631142.1} 4  Sworn Record 0398 EXHIBITQ  Sworn Record 0399 CAU S E NO. DC-13-02334-L PATRICIA HUGHES, § IN THE DISTRJCT COURT OF § Plaintiff, § § v. § § DALLAS COUNTY, TEXAS DeSOTO SURGICARE PARTNERS, LTD., § TEXAS HEALTH VENTURES GROUP, § LLC, and UNITED S URGICAL § PARTNERS INTERNATIONAL, INC. § § RD Defendants. § I 93 JUDICIAL DIS TRICT DEFENDANTS' OBJECTIONS AND RESPONSES TO PLAINTIFF'S SECOND REQUEST FOR PRODUCTION TO DEFENDANTS TO: Plaintiff Patricia Hughes, by and through her attorneys of record, Mark L. Hawkins, A ndrew F. York; Armbrust & Brown, PLLC; 1 00 Congress Avenue, Suite 1 300, Austin, Texas 7 8 70 1 ; 512/45-2300; facsimile: 512/435-2360 . Pursuant to the Texas Rules of Civil Procedure, D efendants D e S oto Surgicare Partners, Ltd. , Texas Health Ventures Group, LLC, and United Surgical Partners International, Inc. (collectively, "Defendants") hereby serve their Objections and Responses to Plaintiffs Second Request for Production to Defendants (the "Requests"). WITHHOLDING STATEMENT Pursuant to Rule 1 93 of the Texas Rules of Civil Procedure , Defendants respond that certain documents and information responsive to the Requests are privileged and therefore exempt from di scovery . Defendants will not produce any materials that are protected from discovery b y the attorney-client privilege, work-product doctrine, party communications privilege, witness statement privilege, consulting expert privilege, and/or any other privilege exi sting at law. Defendants reserve the right to assert any such privileges at such time that it DEFENDANTS' OBJECTIONS AND RESPONSES TO PLAINTIFF'S S£COND REQUEST FOR Page 1 58099288.1/11303393 PRODUCTION TO DEFENDANTS  Sworn Record 0400 produces documents. Any disclosure, inadvertent or otherwise, of any information protected by any privilege or protection shall not be deemed a waiver of that privilege or protection with respect to such information or any other information and shall not prejudice Defendants' right to object to any subsequent use of such information. DEFENDANTS' OBJECTIONS AND RESPONSES TO PLAINTIFF'S SECOND REQUEST FOR PRODUCTION TO DEFENDANTS Page 2 58099288.1/11303393  Sworn Record 0401 OBJECTIONS AND RESPONSES TO REQUESTS FOR PRODUCTION 1 6. The "acquisition file" identified by J aro d Moss on Page 32, Line 1 5 of his deposition testimony. RESPONSE: Defendants object to this Request as it cal l s for information that is irrelevant and not reasonably calculated to lead to the discovery of admissible evidence. Subject to and without waiving the foregoing objections, Defendants have produced or wil l produce all non-privileged, responsive documents that could be located following a reasonably diligent search of their documents. 1 7. The "closing binder for [the] acquisition" identified by J ared Moss on Page 32, Line 1 8 of his deposition testimony RESPONSE: Defendants object to this Request as it calls for information that is irrelevant and not reasonably calculated to lead to the discovery of admissible evidence. Subject to and without waiving the foregoing objections, Defendants have produced or will produce all non-privileged, responsive documents that could be located fo llowing a reasonably diligent search of their documents. 1 8. The "Duncanville/D e S oto merger file" identified by Jared Moss on Page 36, Line 5 of his deposition testimony. RESPONSE: S ubject to and without wa1vmg the foregoing objections, Defendants have produced or will produce all non-privileged, responsive documents that could be located foll owing a reasonably diligent search of their documents. 1 9. The "approval memo" identified by J arod Moss on Page 3 7, Line 1 5 of his deposition testimony. RESPONSE : Defendants object to this Request as it calls for information that is irrelevant and not reasonably calculated to lead to the discovery of admissible evidence. Subject to and without waiving the foregoing objections, Defendants have produced or will produce all non-privileged, responsive documents that could be located following a reasonably diligent search of their documents. 20. All emails or other written or electronic communications sent during the calendar year 20 1 0 between or among Defendants and Sym bien, Inc. (including its subsidiaries, employees and agents) concerning the Lease or the Premises. DEFENDANTS' OBJECTIONS AND RESPONSES TO PLAINTIFF'S SECOND REQUEST FOR Page 3 58099288.1/1 1 303393 PRODUCTION TO DEFENDANTS  Sworn Record 0402 RESPONSE: Defendants object to this Request as it is overly broad and unduly burdensome. Subject to and without waiving the foregoing objections, Defendants have produced or will produce all non-privileged, responsive documents that could be located following a reasonably diligent search of their documents. 21. All emails or other written or electronic communications sent during calendar years 20 1 0, 20 1 1 , 20 1 2, or 20 1 3 to or from the individual custodians identified below that (a) contain one or more of the keywords identified below, and (b) concern the Lease, the Premises, or the subject matter of thi s litigation. Custodians: Jarod Moss; Carolyn Exley; Jonathan ("Johnny") Bond; Brad Brodnax; Faris Zureikat; Shannon Kinder; Niels Vernegaard; Dr. D avid Zarin Keywords: "Duncanville"; "DeS oto"; "Hughes"; "Baylor Surgicare" RESPONSE: Defendants object to this Request as it is overly broad and unduly burdensome. Defendants also object to this Request because the phrase "subject matter of thi s litigation" is vague, ambiguous, and confusing. Defendants further object to this Request as it calls for informati on that is irrelevant and not reasonably calculated to lead to the discovery of admissible evidence. Defendants also object to this Request as it is not reasonably limited in time or scope. Defendants further objects to this request as it calls for attorney-client and/or work product privileged information/materials. Subject to and without waiving the foregoing objections, Defendants have produced or will produce all non-privileged, responsive documents that could be located following a reasonably diligent search of their documents. 22. All "maintenance service contracts" entered into by any Defendant (as required by Paragraph 1 4 of the Lease) concerning the backup electrical generator at the Premises. RESPONSE: Defendants object to this Request as it is vague, overly broad, and unduly burdensome. S ubject to and without waiving the foregoing objections, Defendants have produced or will produce all non-privileged, responsive documents that could be located following a reasonably diligent search of their documents. DEFENDANTS' OBJECTIONS AND RESPONSES TO PLAINTIFF 'S SECOND REQUEST FOR PRODUCTION TO DEFENDANTS Page 4 58099288. 1 / 1 1 303393  Sworn Record 0403 Dated : September 29, 20 1 4 FULBRIGHT & JAWORSKI LLP Jeff Cody State Bar No . 04468 960 jcody@fulbright. com N athan B. Baum State Bar No . 24082665 nbaum@fulbright.com 2200 Ross Avenue, S uite 2 800 Dallas, TX 7520 1 -2 7 8 4 Telephone : (2 1 4) 8 5 5 -8000 Facsimile: (2 1 4) 8 5 5 -8200 Attorneys for DeSoto Surgicare Partners, Ltd. and Texas Health Ventures Group, LLC CERTIFICATE OF SERVICE , (" . - The undersigned certifies that on S eptember 29, 20 1 4, a true and correct copy of the foregoing document was served via electronic mail and certified U . S . mail on the following counsel of record: M ark L . H awkins A ndrew Y ork A RM B RUST & B RO W N , PLLC 1 00 C ongress Avenue, S uite 1 3 00 A ustin, TX 7 8 7 0 1 mhawkins@abausti n.com ayork@abaustin. c o m �� Nathan B. Baum DEFENDANTS' OBJECTIONS AND RESPONSES T O PLAINTIFF' S SECOND REQUEST FOR PRODUCTION TO DEFENDANTS Page 5 58099288. 1/1 1 303393  Sworn Record 0404 EXHIBIT R  Sworn Record 0405 .!'1 ··· = • • o Inc. R S�ell'iiiJ'!lg Barnett Little, Architecture I Planning l lnteMor Design I Consulting December 23, 201 1 Lance Hughes 1301 Capital of Texas Highway Ste: A300 Hughes Capital Management Austin, TX 78746 201136.00 Duncanville ASC Code Deficiency Study Re: Duncanville ASC Dear M r. Hughes: Provided in this package is the Sterling Barnett Little, fnc. Code Deficiency Study and supporting narrative and plan documents as requested for the D uncanville ASC located at 1 0 1 8 W. Wheatland Road. The facility is currently not l icensed and has not been operational for the last several months. SBL has been commissioned to investigate the existing facility to identify code deficiencies in order to reopen the facility on which this study is based. The architectural and engineering team consisting of Starting Barnett little, Inc., reviewing architectural portions of the project and Fratto Engineering, conducting reviews of the mechanical, electrical and plumbing systems. The study is based on code deficiencies identified according to Department of State Health Services (TDSHS) ASC Licensing Rules and Texas Department of current State and City model building codes which include, but are not l imited to the Texas License and Regulatio n (TDLR Accessibility) . in order to reopen the facility, the owner will need reviews and approval from these two authorities having jurisdiction in addition to City of Duncanville requirements for Certificate of Occupancy. We appreciate the opportunity to participate in providing the investigation services and study r.anative to assist in identifying deficiencies with the facility. We look forward to the possible next steps in providing design solutions and documents to assist in making the Duncanville ASC operational. Should you have any questions or require additional information. please do not hesitate to call. Sincerely, Sterling Barnett Little, Inc. Michael Barn ett AlA , Principal Attachment(s): Floor Plan Site Plan Sterling Barnett Little, Inc. 1 000 Bal ipar.� Way, Suite 200 Arlington, TX 7601 1 Phone: 81 7.792.2100 Fax: 81 7.46 1 . 1 362 Page 1 of 1 H U G H ES 00088  Sworn Record 0406 ]!! ••• • � IBJ l li\/,i]� • units 2 and 9 are beyond their useful life. • The remaining units appear to have been installed in 1 996. They appear to be in good condition but at 1 5 years old, they are nearing the end of their useful l ife . H U G H ES 0 0 1 02  Sworn Record 0420 - ·- -· --- - - ---- 1 I: . • •I I =i C/J m '1J � J I· ,., '-. - f: . ' ----.,--' . I · I ·:-­ .. - . - ·- · ·'- · - .. ..,.-;.... . . : . �L 0 o' 00 - . . . r ' . •' t • _ . .. ,. .., -'- ' ·'---- "':, ' . . � ·. . .. I ., ..: ' � � . . ·· . � . � , r - . . _. . . - . , ®. . - . ' . r' f.V. i · ;. . - · . .I - . -. � '' . ' • ell· •• •• I ' . ' J - - . TIDD ?; {§ � Dunca::: ASC iSRteEr�l·l�n�B�a�rn�·�t-taD_.L�I-tt�l=•._���- ��·�����-----.�--��-=�.-b.-b-� H UG H ES 0 0 1 03  Sworn Record 0421 . ' c • • . . . . �. . . ,• :� . - . �., - � c.. . ·. . . • ,· · '"' ·· '. , ..,.,..,.. . ,. . - -·� ·, .. �- . r � �-�··, t - ,.. I' · � .� ,.� I .. ., I . . ., .: -· -� -� - '· ;: .; · :..·� . ,··-'"- '·· �: ·--·� '' · �� fp: ;t:.��: - •.' �- . . � .. .tl;:i::;:::;�,. . : ,( .":"'_: j'�..o·. · -·.- I ·-'. := ' . ,. · . . Duncanville ASC _,., ,. H U G H ES 00 1 04  Sworn Record 0422 l() 0 ..-- 0 0 (f) w I (9 :J I ,.• ; I • . ,· ' ": �I ·' ' :-: . . ' ' : 11: I ' ; I �  Sworn Record 0423 r ( ! iI I I I I b. _d __ __ _ ______ H U G H ES 001 06  Sworn Record 0424 -··-· - 'I -·· - · · -=------- --- � - ,. · -- p · -::..:.:� -:.:..:. - � ( I I Il -- . I l I � I: 6._ - - ,..d..___ 1.� II �: H U G H ES 001 07  Sworn Record 0425 ( ( l I b _____ I _rj l�- H U G H ES 0 0 1 08  Sworn Record 0426 ( L. H U G H E S 0 0 1 09  Sworn Record 0427 0 ..­ 0 ..- 0 (f) w I (9 :::J I ANISHES ROOR PlAN 1 G) 1/r......... ---- 1/.U. -- a - - y. . --- �- -- ' __,...._ �= ==- q) -- i! L-�::t.- �.,.a _ _.,_ \ L. ·..._. J  Sworn Record 0428 m r 0 -¢- I s r . I I i I u � ( I � I I <9 <9 0 l' igPI' ; iii I I 'I t. •� p� ai i I H U G H E S 001 1 1  Sworn Record 0429 ( \ Euwer & Associates � ��� ltq) ..,..� H U G H ES 0 0 1 1 2  Sworn Record 0430 .-�... -- � ·-· · -·· ·---- ( l DUNCANV!lli SURGERY CENTER REMODEL uwer 1018 East Wheatland Associates �� H U G H ES 001 1 3  Sworn Record 0431 ( - c;> � L::=:::::;;::====� (._ _ . H U G H E S 001 1 4  Sworn Record 0432 / / � - $l -- · 1j-------·-· i_"' ,- ---f$l�! ../ L.. ---- . :.rr · ----- H----+-�+1 _ _ · -- - 1, I i i i; i I 1! i i il -- � � i i lf · -- ·-- ·-- ·�: i 1 I � -- I ...�· I ( ; ' Ii I I I • . � ; 1 G �J'l�i l] ,. --- - " !1 • � � i.- _ -_- 1 � - ·· DUNCANVILLE SURGERY CENTER REMODEL Duncanville, Texas ______, 1 01 8 Eost Wh eo tl o n d - --- .6 tel �B.!. _ · ·. H U G H ES 00 1 1 5  Sworn Record 0433 ( ,!'-- " ( l_ H U G H ES 0 0 1 1 6  Sworn Record 0434 !i! � · I . .. ll H !s !l� � . • l! ( H U G H ES 001 1 7  Sworn Record 0435 I - -- ----- --- ( l DUNCANV!ill SURGERY CENTER REMODa Euwer 1018 East Wheatland & Associates __ _ Texas .. = -...rua.o. .-r. llo\'l'W"'$1.\ D- 7� (rd2) l-2!rno HUGHES 001 1 8  Sworn Record 0436 (j) 0 ...­ ...- 0 I»A'Il!GS Ntf. (lf....4 ._ '!1C oMO Hit: Jm' fittiCifti "'I *Oilf V.O. NG t\l!ln' nnL OX&llfAtt wnt ona 'IIUDl!l. (j) IIIDD 'IO � � AW> DCr.t!t.$ POA DX't � NMJ .IW��TICIK. w flO'tlt lO tf'ICI'ICI'IDtS II Ftlt Mt"A � Q( � l't£PUU" QMUt1l JO MICHJICf,/riOU111ll!a\IM l51!] 91.0L l3 trl llltAMD"'' INU./Iii..&. WNJ. AS � ItT OVQ. I (9 :J Q} I Q r" � SIJPf'l.Y MA DJC't �Y tt'!U.J.Tm.. ('j � tl' Ol iiM"' 1D K .111131J). Riil.b 'IOin' � COUJIOH. t. "CIIrY � &.QCII'IOI !flni1 11JM;11. {j) MO'\oa: A !fC'" • ::w' lr ... Hl. IXIIJIYIrUrU.. IUU."II:D JI£n.- - un: @ ® ll!!ftMZ tllnHC FI."IDII AT I!OQP' V lNT MTM II!'II M!'lV a i'I..IDS. @ @ MECHANICAL S'ti.IBOl SCHEDULE (D, llliRl&WTAT � CIGWttt %IIHl -o- �tt � -t!L.- � LI!Illlt l.llt ......._ �r wtml»( uu: %31 OllliMCt .....,...,. All· CtiC1' 0 � � - [Qlf ra fft JIIPIYIl. Nii OtiCT t!'l tO IIRII!N IIItt. ·WCT l1i lfLW l!PJ!W o\11! � .... naat � -{;) """"" ..... =+r ���w:=� oo. m wcr ad!:£� wn� f!Dam ....:ltJI :A '(IIJLOJ =;oF AA � F'.&D rwtt � PAroftJI &- OOIOCT TO Q!nVIQ: - DIFFUSER DETAIL .. -. nrZill AR R.:IEII .. � � MJ. � Q�LING I. wrlliOO t:F INSW..I.RlOH R:IR. �RT1Qf(T SQ.. WIL K 1'\'PICN. A:I\" AU. f1.£X � lO M! Ol$ffiiJl11lOM DDCfS. 2.. JIUER. TO ofi!II QEVJC.£ StHl!Uf f'gft COIIJ'W:1' t:llt.M illf'f'IJ5D'\ f!Wit. ---- 2 .. lf}, I ....... ' - -=r. I W'lJ_� I l l I*' .l ....... i - - ...,. " -- ... -· . � �. �..-�. .,.�·�N--· �;�-.�-· --...:. .... ....... ..i =. 'ibli).,_ -.d!h� - ---·- ...�--- - -- - � =::;t  Sworn Record 0455 I f'ieperjjd By i . Approved By � -·- ! !' . ' l '� • t' ' I 5 i 1 I I I � I � I I 7 bfi'ill� I i ;. I i ' ! ! t ' I � 9 1.oill!! [ l l · I j' I 1'· I 9 I t �M� j, l_t; J j' j I 0 1r i 1 '· � r � � 1 � J r _ � I _1 10 1 ll 2 II a j' 4 --- ' 5 16 D.n... . i.-o • ,..-- I .... . .... .,._ I! I 7 1 . � l8 I l ,, i . I 9 20 - 1.... u_ rvi'C:ioo.� .� J . ' i • ' 1 I t'lA� :12 I ' id'GJ� I 23 I ., 4 I 2!o ,uu :vr.,_;,o •. ' I' I- 2tl f.W· � lilht:'v. I �t., I i 7 I : I I, 28 ' I 29 I ' J " ' � I ' ' �;.· ' ··- I-: .. I I:' .,. JJ.d:l.l �-.,.J. I I : ' -I � 1 I i i � I j I Jl 1 r I t ' I H UG H ES 00418  Sworn Record 0456 J�jHal T Dale Prepared By I �fJtt �By ' Cl WILSON JONES 1 2 3 ,, 5 6 ;;;;;;;;: I I ' I! II I .6:o ��� ;..;; - �--� ·- I II I ll II 1 :it ��� I I I ·�lt:;r 4 , �'�If ! �6tW_· l'lr2 �� d#Jb�_L: - � I 2 taJe"t.J , ..��,J1-1 ' - � _l � i [- 1 '· l J i j f" t l • · 3 �JV..t::. ll �� ' I ! �l � u1 I ' J [ 1 I ' , I;' I' j _ __ .1 4 I i 11r 1 ,- I j I I ! 5 I I I �! 11 ! I i 1, I i� ' " I I I �; 1I . ' .I ' a i. f.,., 011:: �t- I ! ' lL I 1-' i ' �-· ! I I �[j J . f��E;I I'! I 7 L�W ' I 't�r · il• ! k '__! I ·� ) . j. . j ! I I !- ' I I ' P,- f 8 .l2'.itR. l . "ill1 4�... . �&l ! "l � 1 ! • I r e I l'..«t 'I l�J.1 ,�.�t.lI ' i j I _M-, i ' I I i 0 I I I I ·I l1 .. , l. I � I I 10 I I I , • . ·II I l I ' I I _l _j J J 1 � . l I ! 'I' i� I I ! I ' I'! 11 2 � J 'j. '- � 1 • JIj -, ·; ; .! · Ll i I l • · I ·. I 12 s � I i+4i : u:..-b i rl, �1'1' '.t.L. looo:· I �. ' j I !S . i �,�,.A i ...,i� I i' I I . I I -� !, B . i ' I '·.: 14 -, _I I I i! � I " ..I ! I � I IS I B I IE:ii�.,.. ' . ! l � . I I ·1 ] I 18 7 of",A...hl- 1 I' , . I I� kii.sPl !"" ' ' " I ' I 'I I 17 8 � ! I! il.�l�it� 't I �l'£- � ���-llo ' t'�i!rtl I M. i&l"' '�r.- �: t:�b�A !/.�il--1dA�"b � j I l ' · 18 - ��It!:-� ' ' tJ� ���� - L . 19 ! 17 . .. ..:. I , . · �· � . b4.1J.i... - .: !. " . II ' � !Jr,, [S,.. . ! l I 20 1 ! ' I· j i " � I I�jt-LI!!I� ' I It!;� ' ! ' 21 � . j I ,• I / I l ; l I � l j I 22 I I f l. I l I 'I ;,...... I ' 23 I -� . ! i 1T ' I ' �Jt;Ao...._,. ;;::, ...... -- ,.J,. J ' . • #' � - JJ I ! 24 2S I I I I I I· . ! I ) J � t I .. , . j I I I • 1 'I I ! 26 . 1 J. ;.n..�.-., I j I l , .I l I 1 !' i , . T '. • 27 I ! 1 . i ' ! 28 r---''--- ! ,, .1 ! 1! I -- ' ,d I r. 2t Ir -1 � .......UI� ·�� l l 1 I l ' I. ' I l i I ' I . . I lld I !0 · · - 'i • . fl�l. ��- ; I . __ ' ". �"'-�.. I JI i 1 I • I I ' 31 " ' L I I I l, l I � � ': . I I r I " j 33 I 'i J � ! l..l , � I ·1 'l 34 I I I 35 1 Jl li f l! 'I II I i I ' I 35 IMSD� � J! l ,I I I .I ! i I l l i j lJ 1- . i i f, .. . SIJ �'"i�'l IW... l: IJ r :� u I j, I 1 I i: b)JIJ w.Ln- I ' I • I .' l l 8 I : i' l J !. ' . I I l . I I ! i i 'I I � ! I � ' ,I ! t � I . '. . :.. .:J L: ! ; L.J .! r� t r I i I ! 1 l.l ! II . ' I . I i I ;l I I I I I •I 1---. -r u '! J j l H 1 1 i� � : 1 '! l J l �. j i ; H U G H ES 004 1 9  Sworn Record 0457 -- - �-�----------------- � � P�d - �� � hl � C� __ C WILSCN JONES ,r.,.: ,.,_-"� __,b " =--"--'- ---�-------------- .u.=""'·-... J'.pproledfly 1� 0121)!! GREEN �II 6 6 - 7 a a 2n • 2I 22 23 4 � 26 P7 26 29 " I 32 ss S4 as -.._se 37 S8 ::'l ' 40 ; r: � \I •1 ·:I I Il!I I�� \l :I ! j ll 1 ,! l ' ' ' \ Ii I i!I ! HUG HES 00420  Sworn Record 0458 EXHIBITT  Sworn Record 0459 .. ASSIGNMENTAND ASSUMPTION OF LEASE AND LANDLORD CONSENT This ASSIGNMENT AND ASSUMPTION OF LEASE AND LANDLORD CONSENT C'Assigrunent and Consent'j is entered into effective as of November l, 2010 (''Effective Date"), by and among PATRICIA HUGHES (''Landlord''), SURGERY CENTER OF DUNCANVILLE, L.P., a Texas limited partnership, flkla Duncanville Surgery Center, L.P. ("Assignor''), and BAYLOR SURGICARE AT DUNCANVILLE, LLC, a Texas limited liability company ("Assigneej. RECITALS: A. Landlord, as landlord, and Assignor, as tenant, are parties to that certain Lease Agreement h dated June 1, 2004 ("Lease"). Pursuant to the Lease, Landlord has leased to Assignor space currently containing approximately 1 0,000 rentable square feet (''Premises) located at I 018 I I East Wheatland Road, Duncanville, Texas 75116. Capitalized terms not defined herein shall have the meanings assigned to them in the Lease. B. On June 1, 2004, Symbion, Inc. executed a Lease Guaranty Agreement whereby Symbion, Inc. guaranteed the obligations ofAssignor under the Lease. l C. Assignor desires to assign, and Assignee desires to assume, all of Assignor's right. title and I interest in and to the Lease, and Assignor and Assignee have requested Landlord's consent l to such assignment and assumption. I � D. Landlord has agreed to give such consent upon the terms and conditions contained in this Assign.iJlent and Consent. E. Concurrently with the execution of this Assignment and Consent, Texas Health Ventures Group L.L.C., a Texas limited liability company that is an indirect member of Assignee ("TING"), is assuming the pet'$0nal guariinty obligations of Symbion, Inc. under the Lease. I NOW l.11J.<.REFORE, in consideration of the foregoing recitals which by this reference are I incorporated herein and other good and valuable consideration, the receipt and sufficiency ofwhich are hereby acknowledged, Landlord, Assignor and Assignee agree and represent as follows: l I 1. Assignment. Assignor hereby assigns to Assignee all of Assignor's right, title, and interest under the Leaseand in and to the Premises as therein defined for and during the remainder of the Tenn of the Lease. 2. Represeptati�. Assignee hereby represents and warrants to Landlord as follows: (a) .· l ,, _ 398296_l.DOC H U G H ES 00001  Sworn Record 0460 (i) Assignee bas full power ru;1d authority to enter into this Assignment and Consent and to perform its obligations under this Assignment and Consent and the Lease; (u) Assigned is a limited liability company duly organized, validly existing and in good standing under the laws of the State ofTcocas; (iii) The execution ofthis Assignment and Consent bas been approved by all necessary action of the Assignee, and upon execution of this Assignment and Consent, it will be valid, binding and enforceable against the Assignee; (Iv) The person signing this Assi:gnment and Consent has the authority to execute this Assignment and Consent on beha1f of Assignee; and (v) The execution of this Assignment and Consent does not violate any agreement to which Assignee is a party, any law, rule or regu]ation of any governmental authority, or its certificate of fonna!ion or company agreement (b) Assignor and Landlord each represent, warrant and acknowledge to Assignee as follows: (l) Each bas full power and authority to enter into this Assignment and Consent; (u) Each bas not trlm.Sferred or conveyed its interest in the Lease to any person or entity, collaterally or otherwise; (iii) Attached hereto as Exhibit A is a complete and· f!(;Curate copy of the Lease (including all amendments thereto), and except as set forth on Exhibit A. there are no written or oral amendments, modifications. side letters, agreements, or other understandings with regard thereto; (iv) The Lease is in full force and effect and Assignor and Landlord are not in default under the Lease. Assignor and Landlord have not received notice that they are in default under the Lease.. Assignor and Landlord have no current knowledge of any facts which would give rise to a or Assignor under the Lease; breach or default by Landlord I lI {v) Rent under the Lease has been paid through October 31, 201 0; and I 1 (vi) Assignor and Landlord acknowledge that this Assignment and Consent will be relied upon by Assignee and its successors and assigns in i i connection with its acquisition of Tenant's interest under the Lease. l I 398.296_1.DOC 2 I ' j .. l ... I I H U G H E S 00002  Sworn Record 0461 3. Assumption. Assignee, for itself and its successors and assigns, hereby assumes and agrees to perform and be bound by all of 1he covenants, agreements, provisions, conditions and obligations of the tenant under the Lease, as and to the extent any such covenant, agreement, provision, condition and obligation arises on or after the Effective Date; f provided. however, that Landlord and Assignor hereby expressly covenant and agree that I neither Assignee nor any of Assignee's related parties d'Jl!.ll under any circUlllStances or at I any time be liable, responsible or obligated for any of Assignor's or any of Assignor's I related parties' obligations, covenants, indemnities, claims, liabilities, duties, or agreements in, under, to, or in connection with the Lease that arise, accrue or are incurred prior to the Effective Date regardless of when they may be asserted, alleged, claimed, �- ' brought, or discovered, including, without limitation, reconciliations or undercharges of Additional Rent, or any similar charge or expense for any periods prior to the Effective Date, even if they are not ascertainable or calculated tmtil after the Effective Date (collectively, the "Prior Claims"), but Assignor shall remain solely liable and obligated for all Prior Claims, and Assignor hereby expressly agrees to INDEMNIFY, DEFEND, and HOLD Assignee and Assignee's related parties HARMLESS from and against any and all Prior Claims. 4. Financial Statements. Within ninety (90) days from the end of each calendar year during the Lease Term. Assignee agrees to provide Landlord with a.nnual unaudited financial statements certified by an officer or manager ofAssignee. 5. Acceptance of Premises; Landlord's Diselaimer. ASSIGNEE ACKNOWLEOOES AND AGREES THAT IT HAS CONDUC'IED ITS OWN INDEPENDENT INVESTIGATION AND INSPECTION OF AIL ASPECI'S OF 1HE PREMISES AND THAT IT IS RELYING ON SUCH INDEPENDENT INVESTIGATION AND INSPECTION IN EXECUTING THIS ASSIGNMENT AND CONSENT AND ASSUMING TilE OBLIGATIONS OF THE TENANT UNDER THE LEASE PURSUANT TO SECTION 3, AND, EXCEPT AS EXPRESSLY PROVIDED HEREIN, IS NOT RELYlNG ON ANY INFORMATION PROVIDED BY LANDLORD IN DETE.RMIN1NG WHETilER. TO ASSUME TilE OBLIGATIONS OF 1ENANT UNDER THE LEASE PURSUANT TO SECTION 3. .1\SSIGNEE FURTHER ACKNOWl-EDGES THAT IT IS Fl.ULY AND COMPLETELY SATISFIED TIIAT THE PREMISES ARE SATISFACTORY IN AIL RESPECTS FOR ASSIGNEE' S INTENDED USE. ASSIGNEE FURl'HER ACKNOWLEDGES AND AGREES 1HAT EXCEPT AS EXPRESSLY PROVIDED HEREIN, LANDLORD HAS NOT MADE. DOES NOT MAKE AND SPECJFICAI.LY DISCLAIMS ANY AND AIL REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACIER WHATSOEVER. WHE1HER. EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, lI I PRESENT OR FUTIJRE, OF, AS TO. CONCERNING OR WITH RESPEcr TO THE PREMISES, AND ASSIGNEE HEREBY WAIVES ANY SUCH REPRESENTATION, WARRANTY, PROMISE, COVENANT, AGREEMENT OR GUARANTY EXCEPT THOSE EXPRESSLY PROVIDED HEREIN. NO'IWITifSTANDING ANYTIIING HEREIN TO THE CONTRARY, ASSIGNEE IS EXECUTING THIS ASSIGNMENT AND CONSENT, ASSUMING 1BE OBUGATIONS OF 11IE TENANT UNDER TilE � 398296_l.DOC H U G H ES 00003  Sworn Record 0462 lEASE PURSUANT TO SEL'TION 3 AND ACCEPTING THE PREMISES "AS IS", "WHERE IS", AND Wl'IH AU. FAULTS AND SPECIFICALLY AND EXPRESSLY WITIIOUT ANY WARRANTIES, REPRESENTATIONS OR GUARANTEES, EITHER EXPRESS OR IMPLIED, OF ANY KIND, NATURE, OR TYPE WHATSOEVER FROM OR ON BEHAlF OF THE LANDLORD, EXCEP1 THOSE EXPRESSLY PROVIDED HERElN. 6. Amendments to Lease. Landlord and Assignee hereby agree m amend the Lease as follows: a. Address of Premises. Notwithstanding anything contained in the Lease to 1he contrary, Landlord and Assignee acknowledge and agree that the correct address of the Premises is 1018 Bast Wheatland Road {not 1017 East Wheatland Road), I l Duncanville, Texas 75 166, and all references in the Lease to the address of the Premises are changed to HHS East Wheatland Road. I r b. Section 36 - Renewal Option. The seoond sentence of Section 36 is hereby amended to read as follows: "In older- to exercise each Renewal Option, Tenant must give Landlord written notice of the exercise of the Renewal Option at least twelve (12) months prior to the expiration ofthe initial Term or the first Renewal Term, as applicable." 7. Conditional Release ofAssignor. Upon the execution of this Assignment and Consent by all parties hereto. Assignor shall be relieved and released flbtn its obligations under the Lease- arising after the Effective Date; provided. however, Assignor specifically acknowledges and agrees that it remains responsible to Landlord for the discharge and penoritiance of any and all duties and obligations to be performed and/or discharged by the tenant under the Lease prior to the Effective Date,. including, but not limited to, the Prior Claims. 8. Release of Landlord. As part of tlte consideration fer Landlord consenting to this Assignment and Consent, Assignor, on behalf of itself and its successors and assigns. IWeby releases Landlord and her heirs, succesrs so and assigns of and from any and all claims, liabilities, obligations, demands, damages. actions and causes of action of any and every nature whatsoever relating to the Lease or the Premises. and -waives and releases any claim which Assignor now has or may have against Landlord arising out ofor relating to the Lease or the Premises, or any and all acts, omissions or events relating thereto occurring prior to the execution ofthis Assignment and Consent. l . I 9. Landlord's Coosent . In reliance upon the agreements and representations contained in this Assignment and Consent, .Landlord hereby consents tn the assignment and assumption 1 contained herein. This Assignment and Consent shall not constitute a waiver of the I obligation of the tenant under the U1lse to obtain the Landlord's consent to any subsequent i assignment, sublease or other transfer under the Lease. L l l 4 �98296_l.DOC H U G H ES 00004  Sworn Record 0463 10. Notice Address. Any notices to Assignee shall be effective when served to Assignee at the Premises in accordance with the tenns of the Lease. From and after the Effective Date, Landlord may continue to send notices to Assignor at the address(es) provided in. and in a.ccordan.ce with the terms of, the Lease. 11. No Effecton Lease. Except as expressly set forth herein, all of the tenns, conditions and obligations contained in the Lease shall remain in full force and effect without modification from and after the Effective Date. 12. Authority. Each signat.ocy of this Assignment and Consent represents hereby that he or she hasthe authority to execute and deliver the same on behalf of the party hereto for which such signatocy is acting. I I 13. Counterparts; Signature. This Assignment and Consent may be executed in counterparts and shall constitute an agreement binding on all parties notwithstanding that all parties are not signatories to the ori� or the same counterpart provided that all parties are furnished a copy or copies thereof reflecting the signature of all parties. Signatures received by :fucsimile or via other electronic transmission system shall be accepred as original .f I signatures. [Signatures on following page] [ I l l r I l i I r· 5 I .J 398296_1.DOC 1 H U G H ES 00005  Sworn Record 0464 I ll I I I IN WITNESS WHEREOF, Landlord, Assignor and Assignee have executed this Assignment and Consent on the day and year first above written. IANDWRi>,-;diiZ � I I Patricia Hughes Il ASSIGNOR: SURGERY CENTER OF DUNCANVD.LE. L.P., FIK/A DUNCANVU,LE SURGERY CENTER, L.P. �=· ------- Nmne:. __________________ Tffie:.___________________ ASSIGNEE: BAYLOR SURGICARE AT DUNCANVILLE, LLC Ii By.:____________________ I Name.: Tirl��--- _-------­ -I .. I t I I I l - I � 398296_1.DOC .6 I HUG H ES 00006 I  Sworn Record 0465 IN WITNESS WHEREOF, Landlord, Assignor and Assignee have exeotted this Assignment and Consent on the day and year first above written. LANDWRD: Patricia Hughes ASSIGNOR: SURGERY CENTER OF DUNCANVILLE, L.P., F/KIA DUNCANVILLE SURGERY CENTER. L.P. ' -- ASSlGNEE: BAYLOR SURGICARE AT DUNCANVn..LE. LLC By:.___________________ Noooo.� · -------- ------ - ---- T�e:. ____ __ ______________ I ! l I I HUG H E S 00007  Sworn Record 0466 IN WITNESS WHEREOF. J...andlo.o:l Assignor and Assignee have executed this Assignment and Consent on the day and year first above written. LANDLORD: Patricia Hughes ASSIGNOR: SURGERY CENI'ER OF DUNCANVILLE. L.P., F/I{/A DUNC.ANVILLE SURGERY CENTER., L.P. �------­ f ll �------- rme:. . __________________ ASSIGNEE: BAYLOR SURGICARE AT DUNCANVILLE, LLC II I l I' l ! I l I i I I 39(ii92_1 .00C I H U G H ES 00008  Sworn Record 0467 lOO!JBIT A Copy ofLease (including Amendment.) .· I L I I ! I ' I ! I I .I .I I ! ! ; I I � I Il. l 398296_l.DOC j t _ ., ) I �� HUG HES 00009  Sworn Record 0468 LEASE AGREEMENT BETWEEN l PATRICIA HUGHES, AS LANDLORD, AND SURGERY CENTD. OF DUNCANVILLE, L.P., AS TENANT ' lI l .JUNE 1. 2004 ! I, 1- -· ' I I I i I I �- 1 . :- l -� j I H U G HES 00010  Sworn Record 0469 r TABLE OF COJ\'TENTS 1. Granting Clause... . .-................-.....-................................................................-.... 2 ..... . .. 2. Acceptance ofPremiscs . .. . ... . ... .. _,..... . . . . .. ... ..._.. . . -. ...... .2 .. ... . ._ ....... . . ..... .. .. ... . . ..... . ...... ..... . 3. Use . . .. ..__.... . ... ..._..,.. ,. , .. .. . ,. , , , ............. _ .... .. . -...._... , ,.... . J... 3 ... -...................._... ......... ....... ... ___ ,,.,_....,....� ••• 4. ...... . .. Base Rent ...... . . .. . . - .... .......-... ........_, _____, ...... . . . ... ............. ......... .. . . ......... .... . .......... 3 5. .... . . Ute �- . .. .. . . ..,,.� ......-..... .. ___ __.,.. ___ _.. ,._.. .. -....-. ... -.......... ................,., .................... ............4 6. CPI .Atljusbnmt . .. .. . .. . ... .. . ... .. . ... . ....... . ._ .. . ... . . . .. . . .. . .- .. . .. .. . 5 . . .. .. - .. ... ... ..... . -. . . ._.. ... . .. . . .. . . . . .. . 7. Additional Rent . . . . .. . . ....... . . .. . .... . .... .... ._. . ... . . . . ..,_. .. .. . 6 .. _.,__,.,......_ . , . .. ..- · · · .. . .. ... .. . ... .. . . ........... .. .. .... . . .. . 6 . . . . 8. Utili1ies._.�............. .... .... .. .. . -... . . .. . .. .-. . .. . . . .- .. ... . .... . .. . . _ ,, . .... . .. . _. .. .. . .. . . . 9. T� ···----····---··--············-- ·····-···-·.... ..... . ..... ... ..... . .. -.......-........-........;....-.......... . ..... ......... .. 6 10. Insuraru:e .. .. .. ...._.____ ,.. .... .. . . ..: . . . ... . . . . . .. . .... . .. ..-. ... -. . ...... . 7 .... . .. .... . ... .. ..... . . .. .. .. . ....... ._____ 11. Waiver of Subrogation .... . . ... . . . . -. .. . ..... . .. . .. . . . .. . . .. . ...... ... . 7 . . . ... . ........ -... .... . . -.... ... .. .. .. . .. ,.,,__ 12. Irtdernnifica.tiOil - . . .... .._.,.. ... . -.. .,. ___ ......... --8 . - •--..• ••.o-·•-.. ...... -• .. . ... .�� .-u••••••t••••"•••••-••••••-•• •._- .... l Landlord R.epaits . . . .. ... . . . . . .-..........-...............................................9 . ! 13. . .. ... ... .. .. ..... .... . .. . . .. ... . ..... .. 14. Te:IISilt's Repairs., ......... ............ .... . .. .. ... - .. . ...-.•. ,"-··· ..···· -........ -..... ............................ 9 •...... . ... . .-..... 4.. Tenant--Made Altenrtions and Tnde Fixtnres .. . . . . . .... . . . . .. -..........-...........9 . I 15. ... . ... . ... . .. . .. .. ... . 16. 17. Condemnation .. ; . ... . ... . . ... . ... . .... . ... . ... . .. ... . ... .. .. ...... .. m .... .... .. ..... ....... . .. . . ,, .... , .. lO .... . . .. . ..... .. . R.cstonrtion , ... 18. .._............................................. . . . . ....................................... .. .� .. . .. 1 1 .. . . ..... . . . 19. Assignment and Subletting . ... .. . ......-............................... .._. . .. . ...-.................. 1 1 .. . .. ... .. ... 20. Inspection and .Acctss . . .. .- . ... .. -12 .. ..... .. ..... . . . .. � . .. . ..... . .. .. . .. ... .. . . .... .. .... . . ...... ..... ...... .... . . ....... .-. .. 21. Quiet Enjoyment ... ... . ... .... ��·····........ .. . ... ..... . ... .. . -.......... . 12 ..._. .. . ...... . . -............_ . . . .. .. . . ... .. ... .. 12 I 22. Sun-e:ndcr .. .. .... . . ....... .. .. .. . . ... .. . .... ..__,. . .. .. . . . . .... . .. . ._ , ____.._,., . . .... .. . . .. ._ .. ..... . ._ .. . 23. Bolding Ovl::r .. .... . . .-............ ______,. . . . .. . . . . . ..- . . .. . . . ..........._ .. . . .. . .. .. . _ ... . 13 .. ......... ....... . ... Events of Default . . 24. . ._ . ... . . ..... . . ... .. .... . ...... . .... . . .. . -............... 13 . .. .. . ..... .. ..... ! · --· ------ . .... ... . .. . 25. latldlord's Remedies . .. ... ...... . ..... . ... . . . .. .. . .. ... -.....-................................. ........................... 1 4 2�. Ttmant's,�es!LiJnitation ofLiability ......... . .. . . ... .-................ 15 -. . . ...... . . .... . ...,_. ...... 27. . . . &Ibordination. .. .. . .. . . . .. . 16 f ....... . .. .....-�-·4··-····-···-···..- - ,... ... . ... ...... ..... ... . .._ . ....... ..... . l--· .... ··-,... .. .. . . ..._... . . ...... 28. Mechanic's Lic:ns ............................................................ ................ . . . .1 6 -- .. . .. ... . .._ , __ ._ . . .. 29. Esmppel Certificates . ... . . .. ... . . .... .. . .. ..-.................... . ...... ..... .. . ....... . - . . ......... .... . . ....... .... . . 1 7 30. Environmental Rc:quirernents. . . .. .. ... . .. . . .. ... .,............................ 17 .... . .. . ... .. ...-.................. . _ . 31. lndependent Covenants . .. . .... . ... . . . . -................................ 18 ·- ··-- --·· -.... .. ... . .. .. . ... . . . . . .. .. .. .... . .. .. .. ..... . . .. 32. No Security Services . . .... ... . .. . . .... .. . . . ... ....... � . 18 . ... . . . ... . . .... .. .. .. ... . .. _ .. . ... .... . ... . .. . . .. . 33. Fon;c Majeure .. . . . . . .. . . . .�.. . . . ..... . .. ........ .. . -. .. . .. . 18 . .�. .. . . . ... .. ... . . . -. . . .- . ....., . . . _.� . .. ... ....... . . � 34. Brolrers .. . . ... ... ... . . . . � .. .. _. .. . -......-........................ ...-. . . ....... . . . . . . . .-......... .... .... ............... 1 8 35. l..andlord"s Lien/Security Interest . . . .. . . . .. .. . . ... .. . 19 ..... . -..-·. . . ..... .._ .•,_,,, .... .. .... . . _ . ...... ... .. .. . . .. .. .. .. . . . . . .. 19 .. .... 36. Renewal Optian. . . . ... . . .. ... .. . .. _ . .... . .. . ..... . . .. ... . ... _.............- . . .. . . . ._,,,.... 20 . . .. .. 37. OrgmiDtion and Power . .. . ... . . -...... .... . . ............................... -....-. . . . ._....... .. . . .. . . ._, ___,. 38. Miscelbmeous............ . . ... , ..._. ..... ..... -...--.•-................................ .- ................. . ....... 20 I .. ... . I l I L I J I HUG H ES 00011  Sworn Record 0470 I II Lease Agreement I TillS LEASE AGREEMENI' is to be effective as ofJtme 1, 2004, between the Landlord and the I I Tenant named below and is as follCJWS: LaBdlord: Patricia Hughes c/o Hughes Capital Management. Inc. I Landlord's representative, address and phone no: Attention! Lance R Hughes !301 Capital of Texas Highway, Suite A-306 Austin, Texas 78746 r Phone; (5 12} 328-821 1 I Fax: (512) 328-0149 I E-Mail: 1hughes4@aol.com I Tenant: Surgery Center ofDuncanvilie, L.P , a Texas limited partnership j• Tenant•s representative, Attention: David Gross 1017 East Wheatland Road ! address, and phone no.: Dunc:anvllle, Texas 751 16 t Phone: (972) 296-6912 . I Fax: {972) 296-1387 E-Maik DGross(@,Symbion.toru I Premises: Land. builiiing and improvementS located at 1017 East Wheatland Road. Duncanville, Dallas County, Texas, as mare particularly described on Exhibit "A" attached hereto and made a part hereof for all purpoies. Landlord and Tenant agree that the improvemoo.ts contain approximately 10.000 �� fe\!t. I· I Lease Term: Approximately 103 montbs, beginning on the Commetl<:ei!lent I Date and tem.tinating on the Expiration Date I Commenl:ement Date: June 1 , 2004 . ! I I Februm:y 28, 2013 I ! ! Bale .Rent: Coil'lDlencement Date through February 28, 2005 $24,331 .69 - !I per month (S29.20 per square foot per year}. Notwithstanding the foregoing. beginning on September 1, 2004, md continuing I ! for fonr (4) months through December, 2004, the monthly Base l Rent shail be reduced by $12.:500.00 per tnneh averdue amount, nor prevent Landlord from exercising any of the other rights and remedies granted by this Lease. fn addition to the late �ha:rge provided above, if any S1IDl of money due Landlord under tbis Lease is not paid on its due date, it sbaU bear interest from its due date at the rate of eighteen percent (18.0"Al) per annum until paid ("Default Interest"). Without limiting the generaliiy oftbe foregoing. in order fur Tenant or any lcndet ofTenant to cure any mcmetmy aemnlt hereunder, the payment of accrued Default In.1emit VI-ill be required w cure such default .. I ' ! In event shall the no aggregate of the interest to be paid by Tenant, plus any other amounts paid in connection with the tra:o.saction evi&nced hereby which would under tppli<:able law be deemed "interest", ever exceed the maximum amount of interest which. under applicable law, could be lawfully charged 1n Tenant hereunder. Landlord and Tenant specifically intend and agree to limit contractually tbe interest payable beretmdcr to not :more than the amount determined at the maxitnum lawful nonllSI.Irious I ! rate of. interest ("u any) which under applicable law is permitted to be charged from time to time ('IDe l "Maximum Ratej. !'hcrefore. none ofthe tmns of this Lease shall ever be oonstrued to create a contract r· w pay interest at a rate in excess of the MaxiilUlll'1 Rate. and Tenant shall not be liable for intcm:st in excess of that determined at the Maxinn.nn Rare., and the provisions of this Section shall control all other t 4 , . ' ' ' H U G H ES 000 1 5  Sworn Record 0474 provisions of this Lease. Ifany amount of interest takM or received by Landlord shall be in excess Gfthe maximum amount of inrerest which. under applicable law, coufd lawfully have. been coUected under this Lease, then the excess shall be deemed to have been the result of a mathema1ica1 error by Landlord and Tenant and &hall be refunded promptly to Tenant. If Tenant fails in two (2) consecutive :months to make rental pa:ymcnts ten (10) days after due, Landlord in order to reduce its administrative costs, may require, by giving notice to Tenant (and in addition to any late charges accruiDg P\l]'Suant to this Section, as well as any other rights and remedies accruing under this Lease or aVIU1able to Landlord m law or equity), that Base Rent be payable quarterly in � instead af monthly. 6. CPI Adinstmeg,t. On March I, 2008, the A4justed Base Rate shall be i.�ed by the increasein the CPJ index (as described below) ftom Febnutry, 2003 to Februaty, 2008. H Tenant exercises the Rc:iewal Option. then on March 1, 2013, the Base Rent shall be increased by the increase in the CPI index from January, 2008 to January. 2013, and on Mamh 1, 2018, the Base Rent shall be increased by the incxnse in the CPI :index from January, 2013 to January, 20 18. 6.1 CPIDefinition. The CPI referred to above is the "Consumer Price Index fur All Urban Consumers, South Region, Population Size Class A. Commodity and Servfue Group, All Items Index - 1982-84 = 100", as published by the U.S. Department of Labor, Bureau of Statistics. Such iitdc:x can nonnally be obtained from any public Iibt'a!y or from the Bureau of Business Resem:ch at the University of Texas at Austin. If no index. is issued covering the dates in question, then the index published immediately prior to such dates shall be used for purposes of calculation until Clll1'e!lt index is available. 6.2 CPIBaseyear Chanw;. If the base year Qf the above CPI changes, the formula descnDed above shall be adjusted to canfunn to the new base so that the calculations shall have the same results as ifmade on the CPI descnbed above. l . 6.3 CP1 Cessation. If the publication of tbc above CPI ceases, Landlord and Tenant shall agree to a substitute index and formula wbieh will produce as close as possible tlu: f!2JI\e results as I the application of the CPL If landlOrd and Tenant fail to so agree. a &Ubstitute index or formula shall be detenoined by binding arbitration. In such event, Landlord and Tenant shall each appoint an arbitrator, I· and the two appointed arbitrators shall elect a third. or if they cannot agree upon a third arbitrator, either party may petition a court of oo� jurisdiction for the appointment ofa third arbitrator. Cost of the I I above arbitration shall be borne eqmilly by Landlord and Tmant 6.4 �1 . · 1m I tation.. At Landlord's option, any caiculation or adjustment of Base Rent may be delayed. Landlord's delay in implenmnting such increases shall not waive Landlord's right thm:m, and the most recent monthly rent figure shall continue to be paid during such I I I delay. If Landlord delays in timely caleulating such adjustment, the Base Rent increases shall become ! due seven {7) days after written notice to Tenant 6.5 Calculationofiru:tt;ase. The CPI Adjustment will be calcW.ated as follows: I I In March, 2008: I CPI forJanuary.2008 Base Rent $24,931.69Jmonth x CPI for January, 2003 I In Man:h, 2013 (for purposes of dctexmi.ning Base Rent for the first Renewal Term): 5 . I ·J. H U G H ES 000 16  Sworn Record 0475 Base Rent ($24,93 1.69) plus CPIforlanu.a[y.2ill3 the March, 2008 CPI Adjustment X CP! far January, 2008 In March, 2018 (for purposes ofdetennining Base Rent for the second Renewal Tenn): Base Rent for epiforJgmmry. 2018 Fm Renewal Term CPl for Jmmary, 2<>13 7. AdditionalRent This U4se is a "Triple Net " Lease. which means that Tenant shall be obligated to pay for all real estate taxes and other impositions (as described in Paragraph 9), all insurance premiums. (as described in Paragraph 10). all repairs, maintenance and replacements to the Premises (as descn"bed in Paragraph 14). all utilities to the Premises {as described in Paragraph 8). 8lld all other cosrs and expenses relatef any Taxes or liens thereof: If Tenant desires to contest au;y assessment of any Taxes which Tenant is required to pay hereunder and gives Landlord written notice of this intention. then Tenant may contest the assessment by appropriate proceedings diligently conducted in good faith without being in default hereunder; provided. however, if Tenant does not, as a part ofsuch contest, pay such Taxes under protest. Tenant shall pay the amount of contested Taxes and the penalty and interest expected to accrue thereon into an interest bearing escrow IICCOUIIt under the control of Landlord, which Landlord shall utilize to pay all Taxes and other sums fmaliy determined to be due. Tenant shall immediately indemnify and hold Landlord harmless :from all expenses and damages (including attorneys' fees and costs and court com) :resulting from 5DCh contest At no cost to Landlord, La.ndlonLs.hall coopmte with Tenant in their efforts to contest any a.ssessment of Tax. Ir Whichever party receives any Tax bill attributable to the Premises aniJ./or any notice of inm:ase of assessment of the Premises � forwani a copy of said Tax bill to the other party witlrin fifu:en {15) days of such party's receipt of same. 10. Insurance. 10.1 Required Policies. Teillltll will, at its sole expense, procure and maintain the insurance coverages set forth in Exhibit "B" attached bereto and made a part hereof fur all purposes. lI I Tenant will, at its sole cost and expense, comply with such requirements during the tenn ofthe Lease. I I 10.2 Minimum Requirements. The covmages set forth in Exhibit :'B" are the minimum requirements and not a determination as to all of the coverages and maximum limits Terumt should carry. Th.e failure of Landlord to demand full compliance by Tenant with respect to the minimum co� outlined in Exhibit "B" will not constitute a waivt:r by Landlord with respect to Tenant's obligation to maintain stroh co�w--s. Landkml will purchase such other insurance poliuiea !!!!dlor endorsements or increase the policy limits of any policy set forth on Exhibit "B". if required by any l mortgagee. l 10.3 Special Remedy. Tenant's failure to obtain and maintaiD. the required insumnce , I will oonstitute a breach of. and de:fuult under, this I..case. If Tenant fails to :remedy such breach within I five (5) days after notice from Landlord. Landlord may, in addition to any ather remedy available to l I.- Landlord, at Landlord's option, purchase such inSlll'lUlCe, at Tenant's expense, and Tenant will promp6y remit to Landlord the cost of such insumnce as Additional Rent Tenant will indemnifY the Landlord Parties (as bt:reinaftcr defmed) against any claims arising from Tenant's failure to purchase and/or maintain the insurance coverages required by this Leue. 11. Waiver of Subrogation. Neither Landlord nor Tenant shall be liable (by way of subrogation or otherwise) to the other party (or to any insu:rance company insuring the other party for any loss oc damage to any of the property of Landlord or Te&llil'lt, B! the case maybe, to the extent and only to I loL lJ the e.xli:.n1 actually covered by insurance even though such loss or damage might have been caused by the negligence of the Landlord or Tenant or their respective employees. agents, servants or invitees. This ! 7 j I .· H U G H ES 0 00 1 8  Sworn Record 0477 .. provision shall be i n effect only so long as the applicable insurance policies contain a clause or endorsement to the effect !hat the aforementioned wai� shall not affect the right of the insured to n:ccwer under such policies; and each party shall use its best efforts (including payment of an additional pnmium) to have its insurance policies contain a waiver of subroga1ion clause. Landlord and Tenant covenant and agree to obtain a waiver of 8Ubrogation frotn its �ve insurance cmicrs and have such waiver contained in all policies of i:nsur2nce reqnired to be obfained under this Lease. In the claim any nature of lien l (prejudgim:nt or otherwise} against any rent or other SUJnS payable by Tenant under this Lease. I 32. NoSecuritySeryice. Tenant acknowledges and agrees that Landlord is not providing any security services with respect to the Premises and tllat Landlord shall not be liable to Trmant for, and Tenant waives any claim against Landlord with respect to, any loss by theft cr any other damage suffered i ,I or incuned by Tenant in connection with any unauthorized entry into the Prc:mises or any otber breach of · security with respect tc tbe Premises. 33. ForceMiieure· Neither Landlord nor Tenant shall be held responsible for delays in the 1 performance of their respective obligations hereunder (other than the payment of Rent) when ca.used by strikes. lockouts, labor �. acts of God. inability to obtain labor or materials or reasonable I 18 - l. j I !' H U G H ES 00029  Sworn Record 0488 .. substitutes. governmental n'l'Strictions. governmental regulations, governmentd controls, delay in issuance ofpermits, enemy or hostile goverm:nental action, civil commotion, fire or other casualty, and other causes beyond the reasonable control of Landlord ("Force Majeure"). 34. llm,km.. Tenant represents end Wl!Il'Bllts that it has dealt with no broker, agent or other person in connection with this tnmsaction, and that no broker. agent or other person brought about this transaction, ifany, and Tenant agn::es to indemnify, defend and hold Landlord hamlless from and against any claims by any other broker, agent or other person claiming commission of other fonn of oompensation by virtue ofhavjng dealt with regard to this leasing trans.e.ction. 35. Land1om's Lien/Security Itlterest: Subordination: Tenant Financing. To secure the payment of all Rent due and to become due hereunder and the faithful performance of all the other covenants ofthis Lease required by Tenant to be petfor:med, Tenant hereby gives to Landlord an express contract lien on and security intl!rest in aU property, chatlcls. trade and other fixtures, equiprrumt, inventory. contract rights, accounts receivable or merchandise which may be placed in the Premises and I also upon all proceeds thereof, and the proceeds of any insurance whichmay accrue to Tenant by reason of damage to or destruction ofany such. property, as security fur all of Tenant'i obligations hereunder, including. without limitation. the obligation to pay Rc:nt. AU exemption laws are hereby waived by r Tenant. This lien and security interest are giw:n in addition to any Laudlord's statutory lien(s) and shall be cumulative thereto. Tenant authorizes Landlord to execute and file Unifunn Commercial Code ! i financing statements relating to the aforesaid security interest If an Event of Default occurs, then Landlord will be entitleil to exercise any or all rights and remedies under the Uniform Commeroial Code, this Lease or by law and may sell any of the property described above at a public or private sale upon 10 days notice to Tenant, which notice Tenant stipulates is. adequate and reasonable. Notwithstanding the foregoing. Landlord subordinates the forgoing contract lien. security interest and statutmy Landlord's lien to the liens and security interests granted by Tenant in favor of Bank of America, ARC Financial Services Cotpcxation or Tenant's other third party lenders. Tenant shall have the right during the Term !I) subject Tenant•s leasehold interest in the Premises and its interest in any improvements made at Tenant's � (except tn the e'lctent. such improve:menu become the property of Landlord under the terms of this Lease) to one or more mortgages, deeds oftrust, assignments of least; security agreement or other methods of financing or refinancing (a "Tenant Mortgage," any bolder of whicl1 is referted to as a "'Tenant Mortgagee"}, or to any one or more e.Uensions, modifioetions or renewals or replacements of a Tenant Mortgage. Tenant shall. immediately notifY Landlord in writing of the name mld address of any Tenant Mortgagee. In connection with such financing or refinancing by Tenant. Landlord agrees to execute and deliver to Tenant Mortgagee a II II L1mdlord's Lien Waiver. Estoppel and Agreement .subsnmtially in the fonn attached hereto as Exhibit .:f:, All such Tenant financing shall be subordinate to this Lease and any financing placed on the Premises by Landlord as contemplated by Section 27 of this Lease. 36. Renewal Ootion. Provided that w Event of Defimlt then exists and no condition exists which with the passage of time or tho giving of notice or both would constitute an Event of Default pursua:nt to fuis Lease, and subject to Tenant being in full compliance with the terms of this Lease, Tenant .shall 'have the right and option (the '1tenewaJ Option) to renew and extend this Lease - with I I respect to all ofthe Premises for two (2) renewal terms of five (5) years each. fn order to exercise each Renewal Option, Tenant must give I...andlord written notice of the exercise of tbe Renewal Option no earlier than twelve (12) months, and no latl!r than nine (9) months prior to the expiration of the initial I Tenn m- the first Renewal Term, as applicable. Failure by Temmt to notifY Landlord in writing of Tenant's election to exerciSe a Renewal Option herein granted within the time limits set forth for such r I i 19 I J • l l I H U G H E S 00030  Sworn Record 0489 exercise sha11 constitute a waiver of sw:h Renewal Option. Each Renewal Term shall be u:pon the same provisions as for the initial Tenn except as follows: (a) During the fm;t Renewal Tenn, the .Base Rate shall be u follows: (i) the Base Rate {$24,.331.69 per month). plus (ii) the CPI Adjustment on the Base Ram dmnnined oo. March 1, 2008, plus (iii) the CPI Adjustment on the Base Rate (as previsiously adjusted) determined on March 1. 2013. (b) During the second Renewal Term, the Base Rate shall be as follows: (l) the Base Rate during 1he first Renewal Term (as determined in (a) above), plus (ii) the CPI Adjustment on the Base Rate determined on March 1 , 2018. ! I ! II (c) During eacll Renewal Tam, Tenant shall pay a11 Base Rent, a11 .AMitional Rent, and all other amounts due under this Lease. (d) Tenant shall have no further right to renew this Lease. (e) Upon exercise of each Renewal Option by Tenant and subject to the conditions set forth herein. the Lease shall be extended for the period of each such Renew'8.l Term without the necessity of the execution of any furtheJ: instrument or docUillent, although if requested by either party. Landlord and Tenant shall enter into a written agreement modifying and supplementing the � I Lease in accordance with the provisions hereof. Any tcmrina:tion of the Lease during tbe initial Tetm or I the firSt Renewal Term shall tenninatc all subsequent reoewal rights hereunder. The rent!Wl1l rights of Tenant hereunder shall not be severable from the Lease, nor may sucb rights be aBISigned or otherwise conveyed in C