Document:

EX-10.12

 Exhibit 10.12 
 PROMISSORY NOTE 
  

			
	 $5,100,000.00
	  	July 22, 2013
		  	Oklahoma City, Oklahoma

 FOR VALUE RECEIVED, FOUNDATION HEALTH ENTERPRISES, LLC, a Delaware limited liability company
(“Maker”), having a notice address of 14000 N. Portland Ave., Oklahoma City, Oklahoma 73134, promises to pay to the order of VALLIANCE BANK (“Lender”) at 1601 Northwest Expressway, Oklahoma City, Oklahoma 73118, or such other
place as may be designated in writing by Lender, on or before the Maturity Date (as hereinafter defined), the principal sum of FIVE MILLION ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($5,100,000.00) or so much thereof as may be advanced hereunder,
together with interest at the rates stated herein on such outstanding principal amount, payable as follows: 

Prior to the Maturity Date, the unpaid principal amount from time to time outstanding under this Note shall bear interest
from the date hereof at a fixed rate ten percent (10.00%). Interest shall be computed on the actual number of days elapsed on the basis of a 360 day year. 

Maker shall repay the indebtedness evidenced by this Note in (i) quarterly installments of
interest only on October 15, 2013, and the 15th day
of each January, April, July and October thereafter until the Maturity Date, and (ii) one installment of principal equal to one-seventh (1/7th) of the principal amount advanced under the Term Note, which shall be due on August 15, 2014. 

This Note shall mature on the earlier to occur of July 22, 2015 or acceleration of this Note after default after
applicable notice and cure period, if any, without cure, at which time all outstanding and unpaid principal and all accrued and unpaid interest on this Note shall be due and payable (the “Maturity Date”). 

If a payment under this Note is fifteen (15) days or more late, Lender will be entitled to assess a late payment charge of five
percent (5.00%) of the unpaid portion of the regularly scheduled payment, or Twenty-five Dollars ($25.00), whichever is greater, which late charge shall be due and payable immediately. 

The indebtedness evidenced by this Note is governed by and secured pursuant to a Loan Agreement of even date herewith by and between
Maker and Lender (the “Loan Agreement”) and certain security agreements, pledge agreements, control agreements and other collateral documents executed pursuant to the Loan Agreement (collectively, the “Security Instruments”).
Reference is made to the Loan Agreement and the Security Instruments for a statement of other terms and provisions regarding the indebtedness evidenced by this Note, including without limitation terms governing when mandatory prepayments of
principal shall be made on this Note, when Maker shall be entitled to a partial refund of interest from Lender, what shall constitute an “Event of Default” and the rights of the Lender to accelerate the Maturity Date of this Note and
enforce its rights to collect amounts outstanding under this Note, all of which terms and conditions are incorporated into this Note by reference and shall be controlling over any provision of this Note to the contrary. 

 If any Event of Default occurs and is not cured within the applicable cure period described
in the Loan Agreement, in lieu of the interest rate provided in this Note, all sums owing by Makers to Lender in connection herewith shall bear interest at the rate equal to five percent (5%) per annum in excess of the interest rate set
forth above, accrued from the date after the applicable grace period to cure the Event of Default, to the date on which such Event of Default is cured. 
 Upon an Event of Default which has not been timely cured as provided in the Loan Agreement, at the option of the holder hereof, the entire indebtedness hereby evidenced shall become due, payable and
collectable then or thereafter as the holder may elect, regardless of the date of maturity thereof. Notice of the exercise of such option is hereby expressly waived. 
 The undersigned agree that if, and as often as, this Note is placed in the hands of an attorney for collection or to defend or enforce any of the holder’s rights hereunder, the undersigned will pay
to the holder hereof its reasonable attorney’s fees, together with all court costs and other expenses paid by such holder. 

All payments on this Note shall be made in legal tender of the United States of America or other immediately available funds at
Lender’s or other holder’s address as shown herein or otherwise indicated and any such payment will not be deemed to have been made until it is received by the holder of this Note in collected funds. 

The makers, endorsers, sureties, guarantors and all other persons who may become liable for all or any part of this obligation severally
waive presentment for payment, protest and notice of nonpayment. Said parties consent to any extension of time (whether one or more) of payment hereof, any renewal (whether one or more) hereof, and any release of any such party liable for payment of
this Note without notice to any such party and without discharging the said party’s liability hereunder. 
 The failure of
the holder hereof to exercise any of the remedies or options set forth in this Note or in any instrument securing payment hereof, upon the occurrence of one or more of the Events of Default shall not constitute a waiver of the right to exercise the
same or any other remedy at any subsequent time in respect to the same or any other Event of Default. Acceptance by the holder hereof of any payment which is less than the total of all amounts due and payable at the time of such payment shall not
constitute a waiver of the right to exercise any of the foregoing remedies or options at that time or at any subsequent time, or nullify any prior exercise of any such remedy or option, without the express consent of the holder hereof, except as and
to the extent otherwise provided by law. 
 [signature on attached page] 

  
 2 

 This Note is to be construed according to the laws of the State of Oklahoma. 

IN WITNESS WHEREOF, the undersigned have executed and delivered this instrument effective as of the date first written above. 

 

									
	 “ MAKER”:
	 	 FOUNDATION HEALTH ENTERPRISES, LLC, a
 Delaware limited liability company
  

		 	 By FHE Manager, LLC, a Delaware limited liability
 company, Manager

				
		 		 	 By:
	 	/s/ Robert M. Byers
		 		 		 	Name:	 	Robert M. Byers
		 		 		 	Title:	 	Manager

  
 3EX-10.13

 Exhibit 10.13 
 CONSENT, RATIFICATION, ACKNOWLEDGEMENT 
 AND AMENDMENT TO LOAN DOCUMENTS
AGREEMENT 
 THIS CONSENT, RATIFICATION, ACKNOWLEDGEMENT, AND AMENDMENT TO LOAN DOCUMENTS AGREEMENT (hereinafter
“Ratification Agreement”) is executed as of the 22nd day of July, 2013, and effective as of the 1st day of July, 2013 (the “Closing Date”), by and between: 
 FOUNDATION HEALTHCARE AFFILIATES, LLC, an Oklahoma limited liability company (“FHA”); 
 FOUNDATION SURGERY AFFILIATES, LLC, a Nevada limited liability company (“FSA”); 
 FOUNDATION SURGICAL HOSPITAL AFFILIATES, LLC, a Nevada limited liability company (“FSHA”); 
 FOUNDATION SURGERY HOLDINGS, LLC, a Delaware limited liability company (“FSH”); 
 FOUNDATION SURGERY MANAGEMENT, LLC, a Delaware limited liability company (“FSM”); 
 FOUNDATION SURGICAL HOSPITAL HOLDINGS, LLC, a Nevada limited liability company (“FSHH”); 
 FOUNDATION SURGICAL HOSPITAL MANAGEMENT, LLC, an Oklahoma limited liability company (“FSHM”); 
 GRAYMARK HEALTHCARE, INC., an Oklahoma corporation (“GRMH”); 

TSH ACQUISITION, LLC, a Delaware limited liability company (“TSH”); 

LEGACY BANK (“Lender”) 
 BACKGROUND 
 A. WHEREAS, Lender is the current owner and holder of
the various Loans identified on Schedule 1 hereto (FHA Group Loans and FHA Group Related Loans). 
 B. WHEREAS, FHA, GRMH and TSH
have entered into that certain Amended and Restated Membership Interest Purchase Agreement dated as of March 29, 2013 (the “ARMPA Agreement”). 
 C. WHEREAS, FHA, FSA, FSHA GRMH, TSH, and Roy T. Oliver (“Oliver”) have entered into that certain Closing Agreement 1 dated May 21, 2013, that certain Closing Agreement 2 dated May 21,
2013, and that certain Closing Agreement 3 dated             (collectively the “Closing Agreements”). 
 D. WHEREAS, The parties hereto (other than Lender) have requested Lender’s consent to the ARMPA Agreement and the Closing Agreements. 

 TERMS 
 NOW, THEREFORE, in consideration of the mutual promises and agreements set forth below, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, the parties hereto agree as follows with respect to provisions which are applicable to it: 
 1.
FHA Ownership: 
 (a) Prior to the effectiveness of the ARMPA Agreement, the FHA ownership structure was
as set forth on Schedule 2 hereto with FHA owning 100% of the membership interests of FSA and FSHA; 
 (b) After
closing the ARMPA Agreement, GRMH shall wholly own TSH, and TSH shall wholly own FSA and FSHA. 
 (c) After
closing the ARMPA Agreement, FHA’s ownership structure shall be as follows: 
  

	 	(i)	FHA shall own 114,500,000 shares of the common stock of GRMH; 

  

	 	(ii)	GRMH shall own 100% of the membership interests of TSH; 

  

	 	(iii)	TSH shall own 100% of the membership interests of FSA and FSHA; 

  

	 	(iv)	FSA shall own 100% of FSH and FSM; 

  

	 	(v)	FSHA shall own 100% of FSHH and FSHM; 

  

	 	(vi)	FSH shall continue to own the respective interests in the ambulatory surgery centers as reflected on Schedule 2; and 

 

	 	(vii)	FSHH shall continue to own the respective interests in the hospitals as reflected on Schedule 2. 

(d) It is anticipated that within a reasonable period of time after closing the ARMPA Agreement, the names of FHA and GRMH
shall be changed. FHA shall not change its name prior to giving Lender notice of said name change. 
 2. Consent by
Lender. Lender hereby consents to the ARMPA Agreement and the Closing Agreements, subject to the terms and conditions contained herein. Should the ARMPA Agreement and the Closing Agreements not become effective within thirty (30) days of
the date hereof, Lender’s consent shall immediately terminate. 

  
 -2-

 3. FHA, FSA, FSHA and their respective wholly owned Subsidiaries (FSH, FSM, FSHH, and
FSHM) (the “FHA Group”) Ratification, Re-affirmation and Acknowledgment of No Release. As a condition to Lender entering into this Ratification Agreement and giving its consent to the ARMPA Agreement and the Closing Agreements, Lender
has required the parties hereto to ratify and re-affirm their respective liabilities and obligations to Lender under the respective Notes, Guaranties, and all other Loan Documents related to said Notes identified on Schedule 1 hereto. 

The FHA Group and each of them, hereby ratify, re-affirm and confirm all of their respective obligations and liabilities under the Notes and Schedule 1
Loan Documents as the same are set forth therein. 
 4. Representations and Warranties of Lender. Lender hereby represents
and warrants to the parties hereto that Lender is the current owner and holder of the Notes and Loan Documents relating thereto for each of the Loans identified on Schedule 1. 
 5. Representations and Warranties of the FHA Group. To induce the Lender to consent to the ARMPA Agreement and the Closing Agreements, and to enter into this Ratification Agreement, the FHA Group
hereby represents and warrants to the Lender that: 
 (a) as of the date of effectiveness of this Ratification
Agreement, each has the full power and authority to enter into this Ratification Agreement, to execute and deliver all documents and instruments required hereunder, and to incur and perform the obligations provided for herein on its part to be
performed, and to perform and carry out the terms of the Notes and Loan Documents on its part to be performed, all of which have been duly authorized by all necessary entity action of the respective party thereto, if any, and no consent or approval
of any third party is required as a condition to the validity or enforceability hereof or thereof; 
 (b) each
party hereto has duly executed and delivered this Ratification Agreement; 
 (c) this Ratification Agreement will
constitute the valid and legally binding obligation of the parties hereto, enforceable against them in accordance with its terms; 
 (d) the execution, delivery and performance of this Ratification Agreement will not violate (i) any provision of law or any order, rule or regulation of any court or governmental authority, or
(ii) any instrument, contract, agreement, indenture, mortgage, deed of trust or other material document or obligation to which any party hereto is a party or by which any of their property is bound; 

(e) there is no action, suit, proceeding or investigation pending or threatened that challenges the validity or
enforceability of this Ratification Agreement, or any action required to be taken pursuant hereto or thereto; 

(f) that as of the date of this Ratification Agreement no transfers of membership interests of any entity within the FHA
Group are contemplated except as stated herein; and 

  
 -3-

 6. Representations and Warranties of GRMH and TSH. To induce the Lender to enter into
this Ratification Agreement, GRMH and TSH, hereby represent and warrant (each as to itself and to the others, to be read as if each party signed a separate document) to the Lender that: 

(a) GRMH and TSH, as of the effective date of this Ratification Agreement, the ARMPA Agreement and the Closing Agreements,
each are validly existing under the laws of their respective states of organization, and each has full power and authority to enter into this Ratification Agreement, and have been authorized by all necessary entity action of GRMH and TSH, and no
consent or approval of any third party is required as a condition to the validity or enforceability hereof or thereof; 
 (b) this Ratification Agreement has been duly executed and delivered by GRMH and TSH; 
 (c) this Ratification Agreement will constitute the valid and legally binding obligations of GRMH and TSH, enforceable against GRMH and TSH in accordance with its terms; 

(d) the execution, delivery and performance by GRMH and TSH of this Ratification Agreement will not violate (i) any
provision of law or any order, rule or regulation of any court or governmental authority, or (ii) any instrument, contract, agreement, indenture, mortgage, deed of trust, instrument or other material document or obligation to which GRMH and TSH
may be a party or by which any of GRMH and TSH’s property is bound; and 
 (e) as of the Closing Date, there
is no action, suit, proceeding or investigation pending or threatened that challenges the validity or enforceability of this Ratification Agreement, or any action required to be taken pursuant hereto. 

7. Releases and Indemnity. For the period from the inception of the Loans to and including the date of this Ratification Agreement
and in consideration of Lender’s consent given herein, FHA Group, GRMH, and TSH hereby fully and finally acquit, quitclaim, release and discharge Lender and its officers, directors, shareholders, representatives, employees, servicers, agents
and attorneys of and from any and all obligations, claims, liabilities, damages, demands, debts, liens, deficiencies or cause or causes of action (including claims and causes of action for usury), to, of or for the benefit (whether directly or
indirectly) of FHA Group, GRMH, and TSH and/or any or all of them, arising on or before the date hereof, at law or in equity, known or unknown, contingent or otherwise, whether asserted or unasserted, whether now known or hereafter discovered,
whether statutory, in contract or in tort, as well as any other kind or character of action now held, owned or possessed (whether directly or indirectly) by such person or any or all of them on account of, arising out of, related to or concerning,
whether directly or indirectly, proximately or remotely the Notes, the Loan Documents identified on Schedule 1 hereto, this Ratification Agreement, the ARMPA Agreement and the Closing Agreements (collectively, the “Released Claims”).

  
 -4-

 8. Conditions to Closing. This Ratification Agreement shall be effective upon
execution by the parties, provided that FHA pays Lender, on or before the Closing Date, all costs and expenses incurred by Lender in connection with the review and analysis of the transactions which are the subject of the ARMPA Agreement and the
Closing Agreements, and the effect of same in relation to Lender’s Loans to the FHA Group, FHA’s request for Lender’s consent to enter into the ARMPA Agreement and the Closing Agreements, and close the transaction(s) described in said
agreements, the analysis, preparation, negotiation, and execution of this Ratification Agreement and/or any other documents executed pursuant hereto, and any and all amendments, modifications, and supplements hereto or to the Loans, including,
without limitation, the costs and fees of Lender’s legal counsel. Without limiting the foregoing, the FHA Group shall pay to Lender, on or before the date of execution of this Ratification Agreement by Lender, a Transaction Analysis Fee of
$50,000.00 together with all other actual costs or expenses incurred by Lender, including specifically Lender’s attorneys’ fees in the amount of $78,000.00, owed to BLANEY AND TWEEDY, PLLC.

 9. Existing Covenants. Prior to execution of this Ratification Agreement, the Loan Covenants between Lender and the FHA
Group are as set forth on Schedule 3 attached hereto. 
 10. Post Closing Covenants and Amendments to Loan Documents.
Contemporaneously with the execution of this Ratification Agreement and thereafter, the Loan Documents shall be deemed amended to include the Loan Covenants as set forth herein on Schedule 4, attached hereto. Except as specifically modified by this
Ratification Agreement each and every FHA Group Loan Covenant currently in effect shall remain in full force and effect. 
 11.
No Releases of FHA Group. Nothing contained in this Ratification Agreement shall be construed to in any way release any entity within the FHA Group from its existing obligations under their respective Notes, Guaranties, or other Loan
Documents. 
 12. Participants’ Consent. This Ratification Agreement is subject to Lender obtaining the consent of
all participants in the FHA Group Loans. 
 13. Amendment of Lender’s FHA Group Loans. At any time and from time to
time, without notice to TSH, without liability to TSH and without release or impairing any of Lender’s rights hereunder, Lender may, with respect to the FHA Group Loans, take additional or other security therefor; release any person obligated
thereon; modify, amend, renew, restate, redocument, or waive compliance with any of the documents evidencing the same; make any adjustments, indulgence, or forbearance to, or compromise with, any person liable therefor; delay, omit, fail or refuse
to take or prosecute any action for collection thereof, or to foreclose any collateral for, or take or prosecute any action on any agreement securing the FHA Group Loans or any amounts due thereunder or under any of the security agreements or
mortgages securing same. 

  
 -5-

 14. Continuing Nature of Subordination. This Ratification Agreement and all rights
and obligations of any party hereunder, including but not limited to the Schedule 4 Loan Covenants, shall be effective until the FHA Group Loans have been fully paid and satisfied and all obligations under all of the Schedule 1 Loan Documents and
costs of enforcement have been satisfied in full. 
 15. Successors and Assigns. The obligations and liabilities of the
parties hereto under this Ratification Agreement may not be delegated. This Ratification Agreement shall inure to the benefit of and shall be enforceable by Lender and by Lender’s assignees, transferees and successors against all other parties
hereto and their successors and assigns. 
 16. Waivers and Modifications. No waiver by Lender shall be effective unless
it is in writing and signed by an authorized officer of Lender. No such waiver shall operate as a waiver of any other matter or of a similar matter at a future time. This Ratification Agreement may not be changed except by writing executed by the
parties to be charged and an authorized officer of Lender. 
 17. Severability. If any provision of this
Ratification Agreement is held to be invalid or unenforceable under any applicable law, the remaining provisions of this Ratification Agreement shall remain fully valid and enforceable. 

18. TSH Guaranty and Collateral Pledge. Lender’s consent to the transfer of the FSA and FSHA membership units from FHA to TSH
is further conditioned upon the requirement that TSH shall execute a Collateral Pledge Agreement in the form of Exhibit A hereto, therein pledging all of its right, title, and interest in and to all FSA and FSHA membership interests transferred by
FHA to TSH. Contemporaneously with execution of this Ratification Agreement TSH shall execute the Collateral Pledge Agreement and a Guaranty Agreement, in the form of Exhibit B, attached hereto, therein pledging the FSA and FSHA membership interests
to Lender and guaranteeing the following Loans payable to Lender: 
  

	 	a.	Loan #10666758 

  

	 	b.	Loan #10748453 

  

	 	c.	Loan #10748908 

  

	 	d.	Loan #10749202 

  

	 	e.	Loan #10938126 

  

	 	f.	Loan #11041948 

  

	 	g.	Loan #11119391 

  

	 	h.	Loan #10228482 

  

	 	i.	Loan #10970411 

  
 -6-

 19. Confirmation of Loan Balances. The parties hereby acknowledge and agree that the
principal balance of the FHA Group Loans as of July 18, 2013, are as set forth on Schedule 1 hereto. 
 20.
Counterparts. It is understood and agreed that this Ratification Agreement may be executed in a number of identical counterparts, each of which shall be deemed an original for all purposes. It is understood and agreed that photostatic or
facsimile signatures of the original signatures of this Ratification Agreement, and/or photostatic or facsimile copies of this Ratification Agreement fully executed, shall be deemed an original for all purposes. Any parties submitting a facsimile
signature shall be estopped from denying that an original signature was required, and such parties hereby agree to provide original signatures upon demand by the other parties. The parties hereto waive the “best evidence” rule or any
similar law or rule in any proceeding in which this Ratification Agreement shall be presented as evidence. 
 21. Default.
A default or other breach of this Ratification Agreement by any party hereto shall be an Event of Default under all of the Loan Documents identified on Schedule 1 hereto. 
 22. Capitalized Terms. Capitalized terms not otherwise defined herein shall have the same meanings as is prescribed in the Loan Documents. 

SIGNATURES ON THE FOLLOWING PAGES 

  
 -7-

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

			
	 	 	FOUNDATION HEALTHCARE
AFFILIATES, LLC, an Oklahoma limited
liability company
		
	 By:
	 	/s/ THOMAS MICHAUD
		 	  

		 	Name: Thomas Michaud
		 	Title: CEO
		
		 	FOUNDATION SURGERY AFFILIATES, LLC, a Nevada limited liability company
		
	 By:
	 	/s/ THOMAS MICHAUD
		 	  

		 	Name: Thomas Michaud
		 	Title: Manager
		
		 	FOUNDATION SURGICAL HOSPITAL AFFILIATES, LLC, a Nevada limited liability company
		
	 By:
	 	/s/ THOMAS MICHAUD
		 	  

		 	Name: Thomas Michaud
		 	Title: Manager
		
		 	FOUNDATION SURGERY HOLDINGS, LLC, a Delaware limited liability company
		
	 By:
	 	/s/ THOMAS MICHAUD
		 	  

		 	Name: Thomas Michaud
		 	Title: Manager

  
 -8-

 SIGNATURE PAGE 2 TO RATIFICATION AGREEMENT 

 
  

					
	  	 	  	 	FOUNDATION SURGERY
MANAGEMENT, LLC, a Delaware limited
liability company
			
	 By:
	 		 	 /s/ THOMAS MICHAUD

		 		 	Name: Thomas Michaud
		 		 	Title: Manager
			
		 		 	FOUNDATION SURGICAL HOSPITAL HOLDINGS, LLC, a Nevada limited liability company
			
	 By:
	 		 	/s/ THOMAS MICHAUD
		 		 	  

		 		 	Name: Thomas Michaud
		 		 	Title: Manager
			
		 		 	FOUNDATION SURGICAL HOSPITAL MANAGEMENT, LLC, an Oklahoma limited liability company
			
	 By:
	 		 	/s/ THOMAS MICHAUD
		 		 	Name: Thomas Michaud
		 		 	Title: Manager

  
 -9-

 SIGNATURE PAGE 3 TO RATIFICATION AGREEMENT 

 

			
	 	 	GRAYMARK HEALTHCARE, INC., an
Oklahoma corporation
		
	 By:
	 	/s/ STANTON M. NELSON
		 	  

		 	STANTON M. NELSON, CEO
		
		 	TSH ACQUISTION, LLC a Delaware limited liability company
		
	 By:
	 	/s/ MICHAEL B. HORRELL
		 	  

		 	Name: Michael B. Horrell
		 	Title: Manger
		
		 	LEGACY BANK
		
	 By:
	 	/s/ RUSS NATION
		 	  

		 	Name: Russ Nation
		 	Title: Senior Vice President
		 	

  
 -10-

 Schedule 1 
 All FHA Group Loans and FHA Group Related Loans 
  

	A.	FHA Group Loans: 

  

									
	 Loan # &
 Date
	  	 Borrowers
	  	 Amount
	  	 Maturity
	  	 Guarantors

	 10666758

02/05/2010
	  	 Foundation Surgery Affiliates, LLC
 Foundation Surgery Holdings, LLC
 Foundation Surgery Management, LLC
	  	$3,712,725.42	  	05/20/2013	  	 Tom Michaud
 Bob
Byers

	 10748453

09/07/2010
	  	Foundation Bariatric Hospital of San Antonio, L.L.C. d/b/a Foundation Surgical Hospital of San Antonio, LLC	  	 $1,000,000.00

(current balance $896,000.00)
	  	06/07/2014	  	 FSHH*
 FSHA*

FSHM*
 FSA*

FSH*
 FSM*

FHA*
 All Physician Partners limited to 130% of
their pro rata shares

	 10749202

09/07/2010
	  	Foundation Bariatric Hospital of San Antonio, L.L.C. d/b/a Foundation Surgical Hospital of San Antonio, LLC	  	$479,995.94	  	09/07/2015	  	 FSHH*
 FSHA*

FSHM*
 FSA*

FSH*
 FSM*

FHA*
 All Physician Partners limited to
130% of their pro rata shares

	 10748908

09/07/2010
	  	 Foundation Bariatric Hospital of San Antonio, L.L.C. d/b/a Foundation Surgical Hospital of San Antonio, LLC

FSHA*
 FSHH*

FSHM*
	  	$1,925,413.75	  	09/07/2015	  	 FHA*
 All Physician Partners
limited to 130% of their pro rata shares

									
	 Loan # &
 Date
	  	 Borrowers
	  	 Amount
	  	 Maturity
	  	 Guarantors

	 10938126

12/30/2011
	  	 Foundation Surgery Affiliates, LLC
 Foundation Surgery Management, LLC
 Foundation Surgery Holdings, L.L.C.
	  	$734,708.73	  	12/30/2016	  	 FHA*
 FSHA*

FSHH*
 FSHM*

	 10968623

03/21/2012
	  	East El Paso Physician’s Medical Center, LLC	  	$834,272.18	  	03/21/2014	  	 FHA*
 Healthcare
REIT

	 10968635

03/21/2012
	  	East El Paso Physician’s Medical Center, LLC	  	$833,854.20	  	03/21/2014	  	 FHA*
 Healthcare
REIT

	 11041948

08/30/2012
	  	East El Paso Physician’s Medical Center, LLC	  	$804,000.00	  	09/30/2013	  	 FHA*
 FSHA*

FSA*

	 11119391

03/19/2013
	  	 East El Paso Physician’s Medical Center, LLC
 Foundation Surgery Affiliates, LLC
	  	 $2mm RLOC
 (current balance
$2,010,027.00)
	  	03/18/2014	  	 FSM*
 FSH*

FSA*

	 10970411

03/16/2012
	  	Park Ten Surgical Center, LLC	  	 $250,000.00 RLOC

(current balance of $6,875.00)
	  	05/15/2014	  	 FSA*
 FSM*

FSH*
 FHA*

All Physician Partners

	 10228482

09/07/2006
	  	FSHA*	  	$292,912.18	  	02/17/2016	  	FSA*

  

					
		  	ii	  	Schedule 1

	B.	FHA Group Related Loans: 

  

									
	 Loan # &
 Date
	  	 Borrowers
	  	Amount	  	Maturity	  	Guarantors
	 11107480

02/22/2013
	  	West Houston Physician Partners, LLC	  	$2,913,698.40	  	03/15/2023	  	FSA*
 FSM*
 FSH*
 Select
Physician Partners

	 11013734

06/26/2012
	  	Foundation Bariatric Real Estate of San Antonio, LLLP	  	$13,955,707.26	  	06/26/2022	  	Bob Byers
 Randy Soule

Mike Horrell
 FSHA*

FSHH*
 FSHM*

  

	*	FSHH – Foundation Surgical Hospital Holdings, LLC 

 FSHA – Foundation Surgical Hospital Affiliates, LLC 
 FSHM – Foundation Surgical Hospital
Management, LLC 
 FSA – Foundation Surgery Affiliates, LLC 
 FSH – Foundation Surgery Holdings, LLC 
 FSM – Foundation Surgery Management, LLC

 FHA – Foundation Healthcare Affiliates, LLC 
  

	**	FHA Group Related Loans consist of Loans upon which an FHA Group Entity is a Guarantor but no FHA Group Entity holds any ownership interest in the Borrower.

  

					
		  	iii	  	Schedule 1

 Schedule 3 
 FHA Group and each FHA Group Related Existing Loan Covenants – Summary 
 Except
as specifically modified in the Consent, Ratification, Acknowledgment, and Amendment to Loan Documents Agreement, and the schedules attached thereto, each and every FHA Group Loan Covenant shall continue in full force and effect. 

 

							
	  	  	 Loan #
 Borrowers
	  	 Guarantors
	  	 Covenants

	1.	  	10666758	  		  	
		  	 Foundation Surgery Affiliates, LLC
 Foundation Surgery Holdings, LLC
 Foundation Surgery Management, LLC
	  	 Tom Michaud
 Bob
Byers
	  	 Annual Audited Financial Statements consisting of balance sheet, cash flow statement & income statement, within 180 days

Monthly financial statements consisting of a balance sheet and statements of earnings, and changes in stockholders’ equity, and all
accounts
 Quarterly aging A/R and A/P within 30 days
 New Surgery Centers’ quarterly statements consisting of a balance sheet and statements of earnings, and changes in stockholders’ equity within 30 days

Guarantors’ personal financial statements within 30 days
 Guarantors’ tax returns within 60 days of filing
 **Consolidated DSCR of not less than 1.25:1
at the end of each quarter
 **Consolidated Funded Debt to Tangible Net Worth of no more than 2.5:1

**Tangible Net worth of not less than $5,400,000

**Quarterly Compliance Certificate within 15 days as to DSCR and Funded Debt to Tangible Net
Worth

							
	  	  	 Loan #
 Borrowers
	  	 Guarantors
	  	 Covenants

	2.	  	10748453	  		  	
		  	Foundation Bariatric
Hospital of San Antonio, L.L.C. d/b/a Foundation Surgical Hospital of San Antonio, LLC	  	 FSHH*
 FSHA*

FSHM*
 FSA*

FSH*
 FSM*

FHA*
 All Physician Partners limited to
130% of their pro rate shares
	  	 Certified monthly financial statements of Borrower and Guarantors consisting of a balance sheet and statements of earnings, and changes
in stockholders’ equity
 Certified or Audited annual financial statements of Borrower and Guarantors consisting of a balance sheet and
statements of earnings, and changes in stockholders’ equity – if audited financial statements are provided, no tax returns are required

Tax Returns of Borrower and Guarantors within 30 days
 Physician Partners are to provide their personal financial statements within 30 days of Lender’s request
 Monthly Borrowing Base Certificate within 15 days
 Monthly A/R aging report within 30
days
 Maintain accounts with Lender

Debts between Borrowers and/or Guarantors must be subordinated and no payments are to be made on the subordinated debt

				
	3.	  	10748908	  		  	
		  	 Foundation Bariatric
Hospital of San Antonio, L.L.C. d/b/a Foundation Surgical Hospital of San Antonio, LLC

FSHA*
 FSHH*

FSHM*
	  	 FHA*
 All Physician Partners
limited to 130% of their pro rate shares
	  	 Certified monthly financial statements of Borrowers and Guarantors consisting of a balance sheet and statements of earnings, and changes
in stockholders’ equity
 Certified or Audited annual financial statements of Borrowers and Guarantors consisting of a balance sheet and
statements of earnings, and changes in stockholders’ equity – if audited financial statements are provided, no tax returns are required

Tax Returns of Borrowers and Guarantors within 30 days
 Physician Partners are to provide their personal financial statements within 30 days of Lender’s request
 Monthly Borrowing Base Certificate within 15 days
 Monthly A/R aging report within 30
days
 Maintain accounts with Lender

Debts between Borrowers and/or Guarantors must be subordinated and no payments are to be made on the subordinated
debt

  

					
		  	ii	  	Schedule 3

							
	  	  	 Loan #
 Borrowers
	  	 Guarantors
	  	 Covenants

	4.	  	10749202	  		  	
		  	Foundation Bariatric
Hospital of San Antonio, L.L.C. d/b/a Foundation Surgical Hospital of San Antonio, LLC	  	 FSHH*
 FSHA*

FSHM*
 FSA*

FSH*
 FSM*

FHA*
 All Physician Partners limited to 130% of
their pro rate shares
	  	 Certified monthly financial statements of Borrower and Guarantors consisting of a balance sheet and statements of earnings, and changes
in stockholders’ equity
 Certified or Audited annual financial statements of Borrower and Guarantors consisting of a balance sheet and
statements of earnings, and changes in stockholders’ equity – if audited financial statements are provided, no tax returns are required

Tax Returns of Borrower and Guarantors within 30 days
 Physician Partners are to provide their personal financial statements within 30 days of Lender’s request
 Monthly Borrowing Base Certificate within 15 days
 Monthly A/R aging report within 30
days
 Maintain accounts with Lender

Debts between Borrowers and/or Guarantors must be subordinated and no payments are to be made on the subordinated debt

				
	5.	  	10938126	  		  	
		  	 Foundation Surgery Affiliates, LLC
 Foundation Surgery Management, LLC
 Foundation Surgery Holding, L.L.C.
	  	 FHA*
 FSHA*

FSHH*
 FSHM*
	  	 Annual Audited Financial Statements consisting of balance sheet, cash flow statement & income statement, within 180 days

Monthly financial statements consisting of a balance sheet and statements of earnings, and changes in stockholders’ equity, and all
accounts
 Quarterly aging A/R and A/P within 30 days
 New Surgery Centers’ quarterly statements consisting of a balance sheet and statements of earnings, and changes in stockholders’ equity within 30 days

Guarantors’ personal financial statements within 30 days
 Guarantors’ tax returns within 60 days of filing
 **Consolidated DSCR of not less than 1.25:1
at the end of each quarter
 **Consolidated Funded Debt to Tangible Net Worth of no more than 2.5:1

**Tangible Net worth of not less than $5,400,000

**Quarterly Compliance Certificate within 15 days as to DSCR and Funded Debt to Tangible Net
Worth

  

					
		  	iii	  	Schedule 3

							
	  	  	 Loan #
 Borrowers
	  	 Guarantors
	  	 Covenants

	6.	  	10968623	  		  	
		  	East El Paso
Physician’s Medical Center, LLC	  	 FHA*
 Healthcare
REIT
	  	 Quarterly Statements within 45 days compiled by CPA
 Tax Returns within 30 days of filing prepared by CPA
 Annual Guarantor Statements prepared by
Guarantor
 Annual Guarantor Tax Returns prepared by CPA
 Quarterly Aging of A/P and A/R due within 45 days
 Annual 3rd party inspections required on equipment pledged as
collateral
 Hospital is to obtain a lien subordination from Cardinal Health

				
	7.	  	10968635	  		  	
		  	East El Paso
Physician’s Medical Center, LLC	  	 FHA*
 Healthcare
REIT
	  	 Quarterly Statements within 45 days compiled by CPA
 Tax Returns within 30 days of filing prepared by CPA
 Quarterly Aging of A/P and A/R due within 45
days
 Quarterly Statement of actual versus projected income due within 45 days
 Borrower agrees to provide a list of existing equipment and any other assets used as collateral within 45 days of loan closing
 Borrower agrees to provide a list of equipment to be purchased
 Annual 3rd party inspections required on equipment pledged as
collateral
 Borrower is to obtain a lien subordination from Cardinal Health as its lien pertains to Lender’s lien or Lender may activate
the default interest rate of “plus 5%”
 Annual Guarantor Statements prepared by Guarantor

Annual Guarantor Tax Returns prepared by CPA

  

					
		  	iv	  	Schedule 3

							
	  	  	 Loan #
 Borrowers
	  	 Guarantors
	  	 Covenants

	8.	  	11041948	  		  	
		  	East El Paso Physician’s Medical Center, LLC	  	 FHA*
 FSHA*

FSA*
	  	 Monthly, internally prepared financial statements within 30 days
 Tax Returns within 30 days of filing prepared by CPA
 No additional debt without Lender
consent
 Guarantors annual financial statements
 Guarantors tax returns
 If the purchase agreement between Foundation Surgical Hospital Affiliates,
LLC and Healthcare REIT, Inc. is not finalized by December 31, 2012, Foundation Surgical Hospital Holdings, LLC will be required to secure the entire Note with an $800,000 CD held by Legacy or pay off $400k of the note which is not secured by the
existing CD. If the purchase agreement is finalized by 12/31/12, it will need to state in the agreement that the $14MM of debt owed to Healthcare REIT, by EEPPMC will be forgiven in full by the REIT.

				
	9.	  	11119391	  		  	
		  	 East El Paso Physician’s Medical Center, LLC
 Foundation Surgery Affiliates, LLC
	  	 FSHM*
 FSHH*

FSHA*
	  	 Monthly Financial Statements within 30 days prepared by Borrower
 Tax Returns within 30 days of filing
 Borrower shall incur no additional debt without the consent
Lender
 FSA – no new debt in excess of $50,000
 **FSA – maintain DSCR of 1.35:1, tested quarterly
 FSA, FSHH, Borrower, and FBH of SA maintain
a combined DSCR of 1.10:1, tested quarterly
 Borrower – monthly Aging
A/R

  

					
		  	v	  	Schedule 3

							
	  	  	 Loan #
 Borrowers
	  	 Guarantors
	  	 Covenants

	10.	  	10228482	  		  	
		  	FSHA*	  	FSA*	  	 Annual personal financial statements within 30 days
 Tax Returns within 30 days of filing

				
	11.	  	10970411	  		  	
		  	Park Ten Surgical Center, LLC	  	 FSA*
 FSM*

FSH*
 FHA*

All Physician Partners
	  	 Quarterly statements prepared by borrower
 Annual Tax Returns prepared by CPA
 A/R aging due quarterly

no new debt in excess of $50,000
 Individual
Guarantors are to provide current personal financial statements and/or Tax Returns within 45 days of closing or the default rate of 5% above the effective rate will activate and remain active until all information is received by
Lender.

  

	*	FSHH – Foundation Surgical Hospital Holdings, LLC 

 FSHA – Foundation Surgical Hospital Affiliates, LLC 
 FSHM – Foundation Surgical Hospital
Management, LLC 
 FSA – Foundation Surgery Affiliates, LLC 
 FSH – Foundation Surgery Holdings, LLC 
 FSM – Foundation Surgery Management, LLC

 FHA – Foundation Healthcare Affiliates, LLC 
  

	**	Covenant modified as per Schedule 4. 

  

					
		  	vi	  	Schedule 3

 Schedule 4 
 Additional Loan Covenants 
  

	1.	Distributions – FSA and FSHA. Except for Distributions solely between FSA and FSHA, which are expressly permitted, neither FSA or FSHA shall pay or permit
to be paid any dividend, make any distribution of any assets, or make any advances or loans to members, owners, stockholders, officers, employees, or affiliates (“Distributions”) without the prior written consent of Lender, EXCEPT as
follows: (i) FSA and FSHA may make combined monthly Distributions of the lesser of eighty percent (80%) of GRMH’s Regular Monthly Overhead or $100,000.00, and (ii) FSA and FSHA may make quarterly distributions to TSH in the
amount of TSH’s quarterly interest payment due on its preferred debt, and (iii) FSA and FSHA may make combined monthly distributions to TSH to pay FHA other debt assumed by TSH consisting of the Loans or other obligations identified on
Exhibit A to this Schedule 4, not to exceed $70,000.00 per month. Such Distributions may be made so long as immediately following a Distribution the following conditions shall all exist: (a) FSA and FSHA, on a combined basis, shall maintain the
following global Debt Service Coverage Ratio by the dates set forth as follows: 

  

	 	i.	1.0:1 by June 30, 2013 

  

	 	ii.	1.05:1 by September 30, 2013 

  

	 	iii.	1.1:1 by December 31, 2013, 

  

	 	iv.	1.15 by March 31, 2014, and 

  

	 	v.	1.2:1 by June 30, 2014, and thereafter; and 

 (b) the Distribution shall not exceed FSA’s and FSHA’s combined income for the previous month, and (c) there shall exist no default under this Ratification Agreement or any of the Loan
Documents, and (d) all Distributions shall be included as post-net income on all quarterly financial statements. However, until such time as Loan #9952640 (Loan #9952640 is an existing loan having Foundation Healthcare Affiliates, LLC, as a
Co-Borrower, and Legacy Bank as Lender) has been paid in full, FSA and FSHA may make combined monthly Distributions of the lesser of eighty percent (80%) of GRMH’s Regular Monthly Overhead or $115,000.00, so long as immediately following a
Distribution, all of the above conditions exist. GRMH’s Regular Monthly Overhead includes the funds needed to make the payments due under Loan #9952640. 
  

	2.	Debt Service Coverage Ratio – FSA and FSHA. FSA and FSHA shall maintain the following global Debt Service Coverage Ratios including immediately following a
Distribution, by the dates set forth as follows: 

  

	 	i.	1.0:1 by June 30, 2013 

  

	 	ii.	1.05:1 by September 30, 2013 

  

	 	iii.	1.1:1 by December 31, 2013 

  

	 	iv.	1.15:1 by March 31, 2014, and 

  

	 	v.	1.2:1 by June 30, 2014. 

 DSCR is calculated on the combined net income of FSA and FSHA, plus interest expenses, plus
depreciation expenses, plus amortization expenses of FSA and FSHA combined (EBIDA), less profit distributions from FBH SA and EEPPMC for the twelve (12) month period immediately preceding a determination date divided by cumulative Debt Service
(excluding all debt service applicable to FBH SA and EEPPMC) on the subject indebtedness of FSA and FSHA combined for same twelve (12) month period, and all as determined in accordance with GAAP. 

FBH SA is Foundation Bariatric Hospital of San Antonio, L.L.C., d/b/a Foundation Surgical Hospital of San Antonio, LLC. 

EEPPMC is East El Paso Physician’s Medical Center, LLC. 

 

	3.	Minimum Tangible Net Worth – FSA and FSHA. For the quarter ending June 30, 2013, FSA and FSHA reflected a combined Minimum Tangible Net Worth
(“MTNW”) of $11,127,023.00. Beginning with the calendar quarter ending on September 30, 2013, and at the end of each calendar-quarter thereafter during the life of the Loan, FSA’s and FSHA’s required combined MTNW shall be
adjusted by fifty percent (50%) of immediately preceding calendar quarter’s combined net income gain; however, in no event shall FSA’s and FSHA’s required combined Minimum Tangible Net Worth be adjusted by the immediately
preceding calendar-quarter’s combined net income loss, if any. For clarity, the combined MTNW required for the calendar quarter ending September 30, 2013, shall be equal to the 2013 second quarter combined MTNW (e.g., $11,127,023.00) plus
fifty percent (50%) of FSA’s and FSHA’s 2013 combined third quarter net income gain. 

 For purposes
of this Ratification Agreement, MTNW shall be defined as the combined equity of FSA and FSHA less equity investment eliminations of FBH SA and EEPPMC plus preferred membership payable plus preferred membership interest payable as of measurement
date. 
  

	4.	Limitation of Indebtedness – FSA and FSHA. Without Lender’s prior written consent, neither FSA or FSHA or their respective subsidiaries, shall incur,
create, contract, waive, assume, have outstanding, guarantee or otherwise be or become directly or indirectly liable with respect to any indebtedness, except (i) renewals or increases of existing Loans with Lender, (ii) current liabilities
for taxes and assessments incurred in the ordinary course of business, (iii) indebtedness with respect to current accounts payable or accrued (other than for borrowed funds or purchase money obligations) and incurred in the ordinary course of
business, provided that all such liabilities, accounts and claims shall be promptly paid and discharged when due or in conformity with customary trade terms, and (iv) existing indebtedness of FSA and FSHA and their subsidiaries as reflected in their
respective financial statements as of May 31, 2013. 

  

					
		  	ii	  	Schedule 4

	5.	Limitation of Indebtedness, Encumbrances, and/or Purchases and Payments. Except for the preferred debt incurred by TSHA and disclosed to Lender prior to
execution of this Agreement, TSH shall not become directly or indirectly liable for any debts of its subsidiaries including specifically SDC Holdings, LLC, an Oklahoma limited liability company. TSH shall not sell, assign, transfer, pledge, or
encumber its assets or the assets of any of its subsidiaries, including specifically FSA and FSHA, without Lender’s prior written consent. TSH’s purchase and/or payments, if any, pursuant to Section 2.3 of Closing Agreement 1 are
specifically made subject to the terms and conditions of this Covenant. 

  

	6.	Subordination of Distributions by TSH. TSH stipulates, acknowledges, and agrees that TSH’s right to receive Distributions from FSA and FSHA shall at all
times be subordinated to FSA’s and FSHA’s covenants with Lender as set forth herein and as set forth in the Schedule 1 Loan Documents and the Lender’s right to require TSH and the TSH Subsidiaries (FSH and FSHA) full, complete, and
punctual performance of their respective agreements with Lender. In the absence of an Event of Default, as that term is defined in the Loan Documents, including this Agreement, and so long as no Event of Default shall be created or exist by reason
of TSH’s performance under the Closing Agreements, TSH may perform the terms and conditions of the Closing Agreements. Upon the occurrence of an Event of Default of any of the FHA Group Loans upon which FSA and FSHA are obligated to Lender
(“Event of Default”), FSA and FSHA are prohibited from paying or distributing funds to TSH, and TSH is prohibited from paying or distributing funds to GRMH and/or SDC. In addition, GRMH and SDC are prohibited from receiving any payments of
any nature whatsoever from TSH until the default has been cured as required by the terms of the Loan Documents with Lender. TSH, GRMH and Oliver agree that any payments received by TSH from FSH or FSHA or by GRMH or SDC from TSH subsequent to an
Event of Default shall be received in trust for payment to Lender pursuant to this Agreement. To the extent, if any, TSH’s performance of the terms and conditions of the Closing Agreements would breach or cause a breach of TSH’s,
FSA’s, or FSHA’s covenants with Lender as set forth herein and as set forth on the Loan Documents, then TSH shall be excused from performance under the Closing Agreements. 

 

	7.	Affiliates. As used hererin “Affiliates” means any Person directly or indirectly controlling, controlled by, or under common control with, such Person.
For the purposes of this definition “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of Voting Shares or by contract or otherwise. For purposes of this definition “Person” shall include natural
persons, corporations, associations, limited liability companies, partnerships, joint ventures, trusts, governments and agencies and departments thereof and every other entity of every kind. 

  

					
		  	iii	  	Schedule 4

	8.	As used herein “GRMH’s Regular Monthly Overhead” means any expense related to the following: (a) GRMH employee salaries (specifically, CEO, CFO,
CAO, and assistant); (b) Securities and Exchange Commission reporting related expenses; (c) Insurance, specifically but not limited to Directors and Officers Liability and health insurance for employees; (d) Consultants related to
accounting, legal, compliance with the Sarbanes-Oxley Act of 2002, and investor relations; (e) lease payments; and (f) regular payments due under Loan #9952640 (described above). 

 

	9.	 Monthly Compliance Certificate. By on or before the twentieth (20th) day of each month FSA, FSHA and, to the extent applicable, TSH, shall complete, execute and deliver to Lender
the Compliance Certificate in the form of Schedule 5 attached hereto. 

  

					
		  	iv	  	Schedule 4

 EXHIBIT A TO SCHEDULE 4 

Other Obligations 
  

									
	 Lender
	  	Balance	 	  	Monthly
Payment	 
	 1. Don Emilian Settlement
	  	$	615,941.00	  	  	$	20,000.00	  
	 2. Dell Equipment Lease
	  	$	45,024.00	  	  	$	7,551.00	  
	 3. TBF Judgment
	  	$	50,000.00	  	  			
	 4. Medistar Settlement
	  	$	525,000.00	  	  			
	 5. Huffman Settlement
	  	$	214,756.00	  	  	$	12,500.00	  
	 6. Whitney Bank Forbearance
	  	$	20,522.00	  	  	$	3,420.00	  
	 7. R M Byers Note
	  	$	351,581.00	  	  	$	10,946.00	  
	 8. Legacy Loan #10963595
	  	$	220,311.00	  	  	$	11,628.00

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