Court Opinion

ID: 4041979
Source: CourtListenerOpinion
Date Created: 2016-09-28 22:58:03.1716+00
Date Added: 2024-06-11T09:36:25.623675
License: Public Domain

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
                                                                                                                                                                                                                                                             __

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 -1 CRNAs                                                                                              :.=..---- �=:
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                                                                                                                          rt•:; ()f CRNA controlliflg schedule and COV<1fBII&-OIO to salistacllon of surgeons.
    Arrangement                                                            Pfeij()rted to be '90% exclusive• with Pinnacle
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     on-sneer bvconrract                                                                                                             e-usepnmarvsource anaAMADrome
     irining of re-credentia[ng                                                                                                very_::0121
Sworn Record 0306

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Sworn Record 0318

                    CONFI D E NTIAL
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Sworn Record 0319

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Sworn Record 0320

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    Sworn Record 0321

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 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
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                                                                                                           Thu 10/21110       Thu 10121110                                                                                   Kinder

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                                                                                                            Fri 101211110       Fri Hl/29110                                                                                 Kinder
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                                                                                                                                                                                                                              Noilml:$

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                                                                                                              Fri 10129110

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                                                                                             Sworn Record 0392

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 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

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                                                                                                                                                                                                                                                                 H U G H ES 004 1 9
                                                          Sworn Record 0457

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                                                                                                  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)
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     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
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                         {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
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                connection with its acquisition of Tenant's interest under the Lease.

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                                                                                            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
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               Duncanville, Texas 75 166, and all references in the Lease to the address of the
               Premises are changed to HHS East Wheatland Road.
                                                                                                                    I
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       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
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�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]

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                                                                                         H U G H ES 00005
                            Sworn Record 0464

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      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��---
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                                                                    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.�
                                          ·
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                                                             ----

                                    T�e:.
                                        ____
                                          __ ______________

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                                                                    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
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                                        �-------
                                        rme:.

                                                                                               .
                                              __________________

                          ASSIGNEE:     BAYLOR SURGICARE AT DUNCANVILLE,
                                        LLC
                                                                                                       II
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                                                                            H U G H ES 00008
                      Sworn Record 0467

                           lOO!JBIT A

               Copy ofLease (including Amendment.)

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                                                     HUG HES 00009
              Sworn Record 0468

              LEASE AGREEMENT

                  BETWEEN

                                                                             l
        PATRICIA HUGHES, AS LANDLORD,

                     AND

SURGERY CENTD. OF DUNCANVILLE, L.P., AS TENANT
                                                                     ' lI
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                 .JUNE 1. 2004
                                                                             !

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                                                 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
                                                                                              .. ...   .

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                                                                                                                                                                                                                                                                                                                              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
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                                                                                                                                !
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
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                                                                                                   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
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                                                                                                                    ·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                    !

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                                                                                                     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
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                                                                                                                                      !'
                                                                                                               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
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                                                                                                                           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