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

• Court: Court of Appeals of Texas
• Decided: February 9, 2015
• Docket: 05-15-00161-CV
• Status: Published

Opinion

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.

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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.

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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.

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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

Available Cash (b) $ 449,094 $ 3,768,551 $ 4,216,356 (a) Mgt Peeat75%mnrgin (b) Net of capital eltpendi(ullls of $200K in Yea� 1 3 •

'!he c:enter does not c:onsolidate to USPI.

In order to convey some of the benefits of the op era tional and c:ost synergies associated \vith a merger of the two facilities, set forth below is a table c:omparing the p roj ected results of DeSoto an d Duncanville as stand-'.llone facilities in Ycar 2 with that of the combined entity.

Variance: DeSoto Duncanville Combined Combined vs Stand-Alone Year 2 I I Year2 Year 2 I I Year 2 I Cases 3,464 2,750 6,215 3,464 Net Rev I Case $2, 119 $1 ,941 $2,033 $92 Management .Fee $502,001 $366;817 $864,227 $497,409 EBITDA $ 2,222,343 $ 1,279 ,771 $ 4,067,822 $ 2,788,050 Availablc Cash $ 1,877,392 $ 881,669 $ 3, 7 68,5 51 $ 2,886,882

St£engths

• P hysician partners enjoy a high-quality reputation within the c:omml.Ulity and with our hospital partner. • C ent er is a strategic: transaction fot THVG. • Turnaround transaction requires a relatively small inves tmen t and immediate issues can be addressed with ap romp t transition THVG�s opera tio nal sttuc:ture. • Additional operational and c:ost synergies are available with a p o tential merger into THVG's existing sutgety c:enter in DeSoto.

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Page 6 Approval Reque�t - Surgery Center of D uncanviiie, Duncanville, Texas

• It is anticipated that additional wor king capital will be needed during the initial transition months. We ha v e a proposal from Siemens regarding a working capital line of credit for $450 tho usand with documents to be finalized over the next few weeks. • There is s ome risk that unknown liabilities may arise as a result of vendor payables not being properly recorded. As pa rt of the transaction, Symbion has agre ed to brin g all acc.ounts a

payable curren t to within 60 day s of invoice due date. Additionally, we have performed a search for unrecorded liabilities and believe we have identified all material amounts.

Exhibits

I. Pro F ormas (Scenario 1 and Scenario 2)

APPROVED BY:

Jonathan Bond

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EXHIBIT B Sworn Record 0243

United Surgical Partners I N T E R N A T I O N A L

Contact: Jason B. Cagle Chief Financial Officer (972) 713-3500

UNITED SURGICAL PARTNERS INTERNATIONAL ANNOUNCES THIRD QUARTER 2014 RESULTS

Dallas, Texas (November 5, 2014) United Surgical Partners International, Inc. ("USPI" or the -

"Company") today announced results for the third quarter and nine months ended September 30, 2014.

Third Quarter Financial Results For the quarter ended September 30, 2014, consolidated net revenues increased 5% to $159.2 million compared with $151.0 million in the prior year period. Operating income for the third quarter increased 2% to $64.4 million, as compared with $63.1 million for the prior year period. EBITDA less noncontrolling interests increased 9% to $53.9 million in the third quarter of 2014 compared with $49.3 million for the prior year period.

Cash flows from operating activities for the third quarter of 2014 totaled $53.9 million compared with $50.7 million in the prior year period. During the third quarter of 2014, the Company and its consolidated subsidiaries invested $3.5 million in maintenance capital expenditures and an additional $0.3 million in the infrastructure of existing facilities.

Nine-Month Financial Results For the nine months ended September 30, 2014, consolidated net revenues increased 3% to $466.1 million compared with $451.4 million in the prior year period. Operating income for the first nine months of 2014 was $183.7 million as compared with $181.9 million for the prior year period. EBITDA less noncontrolling interests was $151.7 million in the first nine months of 2014 as compared with $152.3 million for the first nine months of 2013.

Cash flows from operating activities for the nine months ended September 30, 2014, totaled $159.9 million compared with $128.1 million for the prior year period. During the first nine months of 2014, the Company and its consolidated subsidiaries invested $10.6 million in maintenance capital expenditures and an additional $2.2 million in the infrastructure of existing facilities.

Systemwide Financial Results Due to the Company's partnerships with physicians and prominent healthcare systems, the Company does not consolidate the financial results of the majority of its facilities. While revenues of the Company's unconsolidated facilities are not recorded as revenues by the Company, equity in earnings of unconsolidated affiliates is a significant portion of the Company's overall earnings. To help analyze results of operations, management uses systemwide operating measures such as systemwide revenue growth, which includes revenues of both consolidated and unconsolidated facilities. In addition to overall systemwide revenue growth, the Company calculates growth rates and operating margins for the facilities that were operational in both the current and prior year periods, a group the Company refers to as same­ store or same-facility. This group also consists of both consolidated and unconsolidated facilities. At September 30, 2014, 155 of the 219 facilities the Company operated were not consolidated.

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United Surgical Partners Announces Third Quarter 2014 Results Page 2 November 5, 2014

For the third quarter, the systemwide revenues of the facilities operated by the Company increased 11% on a year-over-year basis. On a same-store basis, systemwide net revenue increased 5% in the third quarter compared with the prior year period. For the first nine months of2014, the systemwide revenues of the facilities operated by the Company increased 5% on a year-over-year basis. On a same-store basis, systemwide net revenue increased 3% for the first nine months of the year.

Development Activity

The Company acquired an interest in three facilities during the third quarter and one additional facility following quarter end. The Company expects to add two to four additional facilities in the remainder of2014.

Conclusion

Commenting on the results, William H. Wilcox,USPI's chief executive officer, said, "The third quarter represented our strongest same-store volume performance since2012, and we are pleased with the sequential improvement in operating and financial performance. We also continue to add new, high quality facilities and health system partners to our portfolio and anticipate an active fourth quarter from a development perspective."

The live broadcast ofUSPI's third quarter conference call will begin at 5:00 p.m. Eastern Time on November 5, 2014. A 30-day online replay will be available approximately an hour following the conclusion of the live broadcast. A link to these events can be found on the Company's website at www.uspi.com. Additional financial information pertaining toUnited Surgical Partners International may be found by visiting the Investor Relations section of the Company's website.

USPI, headquartered in Dallas, Texas, currently has ownership interests in or operates 220 facilities, of which 154 are jointly owned with not-for-profit healthcare systems.

The above includes forward-looking statements based on current management expectations. Numerous factors exist that may cause results to differfrom these expectations. Many of the factors that will determine the Company's future results are beyond the ability of the Company to control or predict. These statements are subject to risks and uncertainties relating to the Company, including without limitation, (i) reduction in reimbursement; (ii) the Company's ability to attract physicians and retain qualified management and personnel; (iii) the Company's significant leverage; (iv) geographic concentrations of certain of the Company's operations; (v) risks associated with the Company's acquisition and development strategies; (vi) the regulated nature of the healthcare industry; (vii) the highly competitive nature of the healthcare business; and (viii) those risks and uncertainties described from time to time in the Company's filings with the Securities and Exchange Commission. Therefore, the Company's actual results may differ materially. The Company undertakes no obligation to update any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

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United Surgical Partners Announces Third Quarter 2014 Results Page 3 November 5, 2014

UNITED SURGICAL PARTNERS INTERNATIONAL, INC. Unaudited Condensed Consolidated Statements of Income (in thousands, except number of facilities) Three Months Ended Nine Months Ended September 30, September 30, 2014 2013 2014 2013 Revenues $ 159,190 $ 151,009 $ 466, I 07 $ 451,352

Equity in earnings of unconsolidated affiliates 27,527 20,923 73,599 63,759

Operating expenses: Salaries, benefits and other employee costs 44,383 40,991 129,878 120,425 Medical services and supplies 27,051 24,945 78,248 72,831 Other operating expenses 28,251 24,722 83,487 75,691 General and administrative expenses 11,718 10,396 34,958 30,793 Provision for doubtful accounts 2,918 1,599 7,526 7,781 Net (gain) Joss on deconsolidations, disposals and impairments 1,419 (506) 2,336 4,893 Depreciation and amortization 6,608 6,683 19,616 20,758 Total operating expenses 122,348 108,830 3 56,049 333,172 Operating income 64,369 63,102 183,657 181,939 Interest expense, net (23,697) (23,710) (70,090) (76,226) Loss on early retirement of debt (5,536) Other, net (55) (80) (3) Income from continuing operations before income taxes 40,617 39,393 113,487 100,174 Income tax expense (8,623) (7,462) (21,997) (17,903) Income from continuing operations 31,994 31,931 91,490 82,271 Discontinued operations, net of tax (332) Net income 31,994 31,931 91,158 82,271 Less: Net income attributable to noncontrolling interests (18,518) (20,009) (53,951) (55,338) Net income attributable toUSPI's common stockholder $ 13,476 $ 11,922 $ 37,207 $ 26,933

Supplemental Data: Facilities operated at period end 219 214 219 214

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United Surgical Partners Announces Third Quarter 2014 Results Page 4 November 5, 2014

UNITED SURGICAL PARTNERS INTERNATIONAL, INC. Unaudited Condensed Consolidated Balance Sheets (in thousands) Sept. 30, Dec. 31, 2014 2013

ASSETS

Current assets: Cash and cash equivalents $ 57,259 $ 78,741 Available for sale securities 9,230 10,802 Accounts receivable, net of allowance for doubtful accounts of $10,902 and $10,236, respectively 49,667 51,608 Other receivables 24,146 24,191 Inventories of supplies 8,326 9,049 Deferred tax assets, net 22,382 22,333 Other 16,483 16,076 Total current assets 187,493 212,800

Property and equipment, net 128,496 132,474 Investments in unconsolidated affiliates 609,481 521,833 Goodwill and intangible assets, net 1,599,125 1,585,401 Other 32,459 28,176 Total assets $ 2,557,054 $ 2,480,684

LIABILITIES AND EQUITY

Current liabilities: Accounts payable $ 18,588 $ 17,407 Accrued expenses and other 273,255 278,876 Current portion of long-term debt 18,940 18,916 Total current liabilities 310,783 315,199

Long-term debt 1,481,701 1,454,692 Other liabilities 230,303 217,573 Total liabilities 2,022,787 1,987,464

Noncontrolling interests - redeemable 179,439 166,578

USPI stockholder's equity 306,387 279,622 Noncontrolling interests - nonredeemable 48,441 47,020 Total equity 354,828 326,642 Total liabilities and equity $ 2,557,054 $ 2,480,684

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United Surgical Partners Announces Third Quarter 2014 Results Page 5 November 5, 2014

UNITED SURGICAL PARTNERS INTERNATIONAL, INC. Key Operating Statistics (in thousands, except for number of facilities, cases and percentages) Three Months Ended September 30, 2014 2013 %Change 2 Systemwide same-facility statistics<1> < >: 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.

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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-

Trea sury - We will change the signers on the current account at closing to add USPI representatives to the current bank account. We will be opening a new bank account at Bank of America and adding this center to our cash management system.

Clinical- A formal quality program will need to be put in place. Additional capital improvements will be required if the center is not merged with DeSoto. Financial Imp act: $500K ifthe center is not merged with DeSoto.

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EDGE The EDGE concept will be introduced to the staff and physicians during the initial post� -

close meetings. Training/implementation is scheduled to begin 90 days post close - .

Internal Controls- The goal is to have the center fully compliant with USPI's 12 week checklists within the first six months. We will imple me nt applicable controls under the existing systems at the center to the extent possible, e.g. reviewing payroll reports, background checks and drug screens for new hires, refund policy. As they convert to USPI systems, the checklists will be inte grated as part of the conversions.

Partnership Management Initiative PMI will be introduced to the board, partnership, and PAB -

over the course of the f1rst 60 days. The PAB will focus on 1/3 rule cotnpliance and appropriate burbacks following the first year of operations, as needed.

D 001729 COOFlOCtfl'lAL Sworn Record 0251

EXHIBITD Sworn Record 0252

From: Zarin, Dr. David Sent: Tuesday, October OS, 2010 12:08 PM To: Kinder, Shannon C<:: Miller, Evelyn; Exley, Carolyn; Montgomery, Jeannie; Moss, Jarod; Bond, Jonathan Subject: Duncanville Attachments: Duncanville ASC Physidan Due Diligence Sept28 2010.xls

Attached Is my report for the Duncanville ASC DO visit. As you will see, I have noted several issues from a clinical perspective. I have discussed th!s with Johnny Bond.

Please let me know If you have any questions.

DZ

David Zarin, M.D. FACS

SVP Medical Affairs-Medical Director 972-713·3501 (Dallas Office) 281-788-4100 (Houston Cell) dzarin@uspi.com

CO:."mDENllAL 1 DJl00639 Sworn Record 0253

Physician Due Diligence Report

Duncanville Surgery Center September 28, 2010 I I Pn...oue Dlliaence "Zarln/RN means ti ems is also re viewed by RN R esp• Markwhen j: o mpleted I I Comments I om ee ca e t tre or n Done r. er 0

Administration ar Review Gov. Bo d stn.tcture Done i5MD members-Taker. Mason, Koonsman, Aronowitz Wasserman !No issues l Review Gov. Bo ard Bylaws flags from RN review Done Review Gov Board minute s flags from RN review Done t.ln i utes are In order and well done Review Med Staff Byla ws flags from RN review zeri n Done tlo lssue s Review Med Exec minutes Zarin Done �lnutes are In order and well done Review 01 Program zen n Done �rted as inactive-started In 08, but not active since July 09. No cllnic131 manager to champion Document communication between 01, Med Exec & Gov Board zat1n/RN Done IReoorted in minutes occurance reoorts, etc)

I I Pre-Op J4baVS Phone call for H & P zetin!RN Done IRNcalls aliDatients-triggers to anesthesia Pre-admll visit for Dalient zerB!IRN D one IAvaiable-I!J)Jlrox 1/2 do on site visR topre.admnlt H&Ponchart ZltrM{N Done IRoutlne EKG protocols zerin Done I oer anesthesia Pre-Op tab WOik perfonned zerin D one lv er anesthesia zem TAf ilreoobiiYS fAilllts called -message left Ifno answer. Use pt satisfaction surv�_ Monit ors Done Post opphone calls zer1n Done

I I 1 4 OR and 1 Procedure room OR's are smanbv-IOdavstandards, Table s are old. Have Steri s 1 svstern. P entax Gl scopes OR General cleanliness and order Zarin!RN MD do not flke jSpeciai!YequipmentpUrchased (e.g. lnstatrak) Done Zarin!RN Done JNeed uneteroscooe. l'hev share lntrumeots wUh nearby centers. Major Is sue with aiutoclave _I Emergency Equipment l zeriniRN Don e !,Center has 2 MH kils. butliiilvkeeos 1/2 or Dantrolene on site shares with nearby center if nee fAvalable Maflgnant hvDerthennia Difficult ln!Ubations zartn/RN Done Pedlallics zeriniRN Done IAvalable Crash cart Zarin!RN Done LAvalable-mock codes done I PACU �6 Bavs PattenVStaff rallo zerin Done !Varies bV-case load Pedia!JiCS zerin/RN Done I 1:01

Discharge by�hysidan zerin Done Wrders wriUen-bY-MD bul notfitlielV Narcotic controls Zarin/RN Done THad diversion issue 1 !lear aao-orocedUJes amend ed to prevent furtherproblems Phvstclan present Ull patients gone Zarl n Done . MAJOR CONCERN-raDroted that 90% of tl me anesthesa i leaves before_pt Is discharged

l I Staff I Overview ofskills, capabilities and !enure zennJRN Done IS Clinical FTE -1- Pmpool, Thev do use aaencv nurse sometimes Background checks on RN's? Zarin/RN Done IR outin e irlduding drug screens ACLS requirement' zetin!RN Dona jAll RN in PACU PALS raqurement zariniRN -IRN fn PACU Cit pedi cases on schedule I I Accreditation - Joint Commission or AAAHC zerin!RN Done lSurveved inti.iiiY2009 �?�.- -· . - zerin/RN Done 2012 Review last survey zerin!RN Done Issues with credential ina and PI DI'OIII'lll1l - I I I. �Have had 5 CMS/Siate surV

CONFIDENTIAL D_000640 Paoo1 DuncarNIIIe ASC P�lclan O..ollillg9f>co Sop! 28 2010.x1s 6/18/2ll1( Sworn Record 0254

Duncanville Surgery Center September 28, 2010 when ZariniRN means items is also reviewed b)'RN Resp • Completed Comments Marl< •

EOGETM Reportable Events lnfectlon rate ---- _________ I -- stte surgery Zarln/RN Done for surgery NOT FOR BLOCKS. Have had 2 wrongsites on pain cases 1 How does items being monitored compare to.EDGE items? ZarlniRN Done Participate in ASC OC renorting Wrong · Follow UP

Will EDGE reporting require PhysiCian behsvlor modification? zarin!RN Done No For hospitals · evaluate utnlzation review, in particular, medical necessity Za!WRN NA documentation for Observation cases and Inpatient Admissions I

Clinical Nurse Manager I Director Hal Mayo is Adiiiili No clinical manager-Cindv Rogers, RN does much of the work Management I LeadershiP AbUiW Need clinical manager-no colhesive quality program, no educationprogram. !Clinical skiDs I tenure Hal ls knowlegeable, althouah he does not see himself here long term II Medical Director Review Contract Dr. Anna Taker-contractiriplace (according to Hal), but not seen Specialty Colon and Rectal Suroetv _

Leadership Ability Reported as very good. She Is available and has the respect of MDs Anesthesia Anesthesia seems to be a slanlflcant problem. Some surgeons are not happywith coverage and want to brlll!l.in own .anesthesia IM.D - IPinnac!e __

"-'---- ! .'o<='--- I ·

-1 CRNAs :.=..---- �=: Re "!'. ep:oc:: rt•:; ()f CRNA controlliflg schedule and COV<1fBII&-OIO to salistacllon of surgeons. Arrangement Pfeij()rted to be '90% exclusive• with Pinnacle No s ou v or e me s to vlde r�an:: d s: n: v u: a:: � d: ll i:·� s:ha� c= m•e== . . ------ - .. � :: :: :: :: � �� � !� �] � ·�h�� � ��� re �ieW � if�� �� reau i��� ��iE� rn for oro BMI , :::: �= •� : cove ==� � tj� �� ,- : �eo 'with cl� � rra nnpatient ' "� � �i:�����;;:::::::::::::::::::t.��====� ASA none noted rev IW �aneslhesla ===-�� ----"'---·· - �ssues selecllon, steeoapnea I BMT mi.Rnt o P I..,.,inn ant> ,..,_ 1-3, BMl hiiih - ·· · - •

J..L. . Credentials Review tor timefiness (selected ffies lssuea noted NonSif on-sneer bvconrract e-usepnmarvsource anaAMADrome irining of re-credentia[ng very

General Comments (be sure to debrief with RN and comPare notes) --

Duncanv!Je Surge

They are closed on Tuesdays because of lacl< of volume. There are 18 partners. most are l3's. The partners are not committed to the center-most are splitters and this facility has had no distributions. l llinl< that !lis faci6ty will need a slgniftcant iomount of capilat and effort to bring up to USPI stanctanls. If the plan Is to close the facility and move 10 our DeSoto ASC tt can be run for� months. Even that will require improvement with the anesthesia situation and addressing the pressing issues with the sterilization equipment I I I

CONFIDENTIAL D_000641 Paga2 Duncanville ASC Physician Otle Olllgnce S&f)t 28 201O..xls 611 812014 Sworn Record 0255

EXHIBIT E Sworn Record 0256

R E DACT E D

From: Lance H ughes [mai!to:lhughes@bcmaustin.com] Sent: Wednesday, February 2.7, 2.013 1 :37 PM To: Zurelkat, Faris Subject: RE: Final Walk through and banding over the keys

You may or may not be aware tha t we have filed suit i n regards to Ten a nt ' s a ban d onment of t h e premises, failure to maintain the building systems, a n d fail ure t o com ply with t h e legal req uirements for o pe ra tion o f a surgery c enter will now re q uire exte nsive re nova tions that are c hargeable to Ten a n t u nd e r the Lease . If Tenant is interested in inspecting the premises a nd disc ussi n g the necessary sc ope of work, a nd payme nt� for modificati ons require d to us e the fa cility wit h a new tena nt, and for its intended use ( a surg ery c e nter) , please a dvise.

Lance R. H ughes Hughes Capital Management, I nc. 1301 Capital of Tx Hwy Suite A-300 Austin, Texas 78746 lhughes@hcmaustin.com Direct Lin e 512.615.9502 fx 512.328.0149

From: Zurelkat, Faris [ma!lto:fzureikat@uspi.com] Sent: Tuesday, Februa ry 26, 2013 12 :09 PM To: Lance Hughes Subject: Final Walk through and handing over the keys

Dear Sir,

W h e n would you be able to do the walk through a nd get t h e keys .

I was u n der the i m pression that the 261h was the date as per a letter you receiv e d from Case Lease Administra tio n.

Looking forwa rd t o your response.

Than k you,

CONFIDENTIAL 0_000297 Sworn Record 0257

Faris Zureikat, MBA, CASC Administrator North Texas Surgery Center 7992 Wes t Virginia Drive Dallas, TX 75237 P: 9 72-283-2400 F: 972-283-0099 C: 2 1 4-226-9384

Confidentiality Notice: This m essage and any attachments are for the sole use of the intended recipient (s} and may con tain information that is privileged and con fidential. If yo u are not the intended recipient or a person responsible for delivering this m essage to on intended recipient. yo u are hereby notified that any dissemination, distribution, or copying of this comm vnication is s tric tly prohibited. If yov are not the intended recipient or a person responsible for delivering this message to on intended recipient. please contact the sender immediately by reply email and destroy all copies of the original message.

CONFIDENTIALITY NOTICE: This message a n d any attachments are for the sole use of the intended reclpient(s). This message Is confidential a n d may a lso be privileged. If you a re not the I ntended recipient, please contact the sender imm ediately, delete the contents of this message and do not use It for any purpose.

CONFIDE NTIALITY NOTICE: This message and any attachments are for the sole use of the I ntended reclplent{s). This message Is confidential a n d m ay also be privileged. If you are not the Intended recipient, please contact the sender Im med iately, del ete the contents of this message a nd do not use It for any purpose.

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COI\1'II)�II:TIAi. o_v.:::C\t:\7 Sworn Record 0322

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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

H UG H ES 0030 1 Sworn Record 0330

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

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

Closing Date: Thirty (30) days after expiration of the Inspection Period.

Closing Cost: Seller shall provide title policy. Buyer may elect to obtain a survey at their cost.

Property Condition: Property is being sold "AS IS". Seller shall agree to Install a serviceable backup generatoli' and repair to servic�aok on autoclave.

MJneral Rights: Seller shall convey all mineral rights it bas to the Buyer at closing of escrow.

Contract Period: Within ten (10) busines� days of the Effective Date of this Letter of Intent, Purchaser and Seller shall enter into a binding Contract for Purchase and Sale (the "Contract"). Failure to reach an agreement will allow the Sellcz· to consider this agreement void and accept offers from other parties.

Broker Commission: Seller and Buyer acknowledge tbat Seller shall pay Jennifer Trab of Avignon Realty (Buyer Broker) a three (3) percent commission for the sale of the property or a 50/50 commission split. Seller shall pny all real estate commissions relating to tbe sale of the Property. The closing of this transaction is a condition precedent to this commission being earned by any broker.

Please note that this Letter of Intent will be withdrawn if Purchaser has not received your acknowledgement by April 1 9, 2013 at 5:00 p.m. CST.

If th e foregoing accurately reflects our discussions, please acknowledge same by returning a signed copy ofthis letter. Execution of this Letter ofintent by the undersigned agent in no way binds or obligates the Buyer or Seller of any of its principals.

Sincerely,

Agreed and Accepted: Buyer

By :, ________________

Printed: ________ hrn� l(!'h� CffJjr+) Dated: ________ Dated: f /te./1 3 � �� /'

L:Lance/Duncanvllle/PhanLOI Purchaser's I n itials

H U G H ES 0 0 1 3 0 Sworn Record 0334

EXHIBIT J Sworn Record 0335

ARMB R U S T & BR OWN, PLL C ATT O R N EYS A N D C O U N S E L O R S

100 CONGRESS AVENUE, SUITE 1300 AUSTIN, TEXAS 78701-2744 51 2-435-2300

FACSIMILE 51 2-435-2360 Cert ified A r t i c l e N u mber Mark L. Hawkins -

7 196 9008 90 4 0 1 4 83 7891 �

(512) 435-2309 mhawkins@abaustln.com SEN DERS R ECORD

February 7, 20 1 3 �END ERS RECO RD Baylor Surgicare at Duncanville, LLC Via Certified Mail, RRR and Attn: President Via Facsimile No. (9 72) 296-138 7 3 50 N. Saint Paul, Suite 2900 Dallas, Texas 7520 1 -4234

Texas Health Ventures Group, LLC Via Certified Mail, RRR and Attn: President Via Facsimile No. (972) 267-0084 1 53 0 5 Dallas Parkway, Suite 1 600-LB28 Addison, Texas 7500 1

Baylor Surgicare at Duncanville, LLC Via Certified Mail, RRR Texas Health Ventures Group, LLC c/o Registered Agent CT Corporation 350 N. St. Paul Street, Suite 2900 S E N D E R S R EC O R D -- 1 Dallas, Texas 7520 1

Re: Lease Agreement between Patricia Hughes, as landlord and Surgery Center of Duncanville, L.P. as tenant, dated June 1 , 2004 ("Lease") ; Assignment and Assumption of Lease and Landlord Consent between Patricia Hughes as landlord, Surgery Center of Duncanville, L.P. as assignor, and Baylor Surgicare at Duncanvile, LLC as assignee, dated November 1 , 20 1 0 ("Assignment"); and Lease Guaranty Agreement by Texas Health Ventures Group, LLC dated November 1 , 20 1 0 ("Guaranty").

Dear Sir or Madam:

I represent Patricia Hughes in connection with claims that are being made against Baylor Surgicare at Duncanville, LLC and Texas Health Ventures Group, LLC for breach of material covenants under the referenced Lease by B aylor Surgicare at Duncanville, LLC, including without limitation, the vacation and abandonment of the leased premises in violation of paragraph 24 of the Lease and in failing to maintain the necessary building systems as required under paragraph 1 4 of the Lease. It is particularly objectionable that Baylor Surgicare at Duncanville, LLC failed to maintain the facility ' s generator (that was owned by my client), removed it, gave it to a third party, and thereafter took steps to insure the closure of the surgery center. Knowing the consequences of such action, it is hard to believe that Baylor Surgicare at Duncanville, LLC ' s conduct was not malicious with designs of obtaining a competitive { W057 1 480. 1 } H U G H E S 0004 7 1 Sworn Record 0336

ARMBRUST & BROWN, PLLC Page2

advantage over a successor tenant. As you are aware and have acknowledged, these acts and omissions have compromised my client's ability to procure a replacement tenant without significant modifications to the space for the necessary licensing. At this time it is anticipated that the modifications to the premises alone will exceed $1,000,000.00.

In response to Brandy Dollenger's January 31, 2013 letter, my client does not consent to installation of a new generator or modifications to the premises, which will more than likely further disrupt my client's efforts to mitigate the inevitable loss.

If you have any interest in trying to assist in the mitigation of my client's losses, please advise; otherwise, I am instructed to initiate a lawsuit. Now that you have notice of a potential lawsuit, please takes steps to place a litigation hold on any documents or other evidence relating to the surgery center.

Very truly yours,

M� Mark L. Hawkins

MLH:klf

cc: Patricia Hughes

Brandy Dollenger

{WOS71480.1} HUGHES 000472 Sworn Record 0337

-=w· UNITED STIJTES ... POST.4L SERVICEw

Date Produced: 02/18/2013

WALZ CER T IF IED MA IL SOLUT IONS LLC

The following is the delivery information for Certified Mail™ item number 7196 9008 9040 1483 7723. Our records indicate that this item was delivered on 02/11/2013 at 09:19 a.m. in DALLAS, TX, 75201. The scanned image of the recipient information is provided below.

Signature of Recipient:

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HUGHES 000473 Sworn Record 0338

iif'11!11 UNTnOSTATES ,.-. POST�LSERVICE...

WALZ CERTIFIED MAIL SOLUTIONS LLC

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�- N· fJ'[flt!Jt_ Address of Recipient: :r;r,oo

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HUGHES 000474 Sworn Record 0339

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The following is the delivery information for Certified Mail™ item number 7196 9008 9040 1483 7891. Our records indicate that this item was delivered on 02/11/2013 at 11:00 a.m. in ADDISON, TX, 75001. The scanned image of the recipient information is provided below.

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HUGHES 000475 Sworn Record 0340

EXHIBITK Sworn Record 0341

ARMBRUST & BROWN, PLLC ATTORNEYS AND COUNSELORS

100 CONGRESS AVENUE, SUITE 1300 AUSTIN, TEXAS 78701-2744 512-435-2300

FACSIMILE 512·435-2360 Mark L. Hawkins (512) 435-2309 mhawkins@abaustin. com

June 21, 2013

VIA CERTIFIED MAIL, RRR

Nathan B. Baum Fulbright & Jaworski, L.L.P. - -----

2200 Ross Avenue, Suite 2800 SENDERS RECORD Dallas, Texas 75201

Re: Cause No. DC-13-02334-L; Patricia Hughes v. Desoto Surgicare Partners, Ltd. and Texas Health Ventures Group, LLC; In the 193rd Judicial District, Dallas County, Texas

Dear Mr. Baum:

Enclosed please find the following:

1. Plaintiff's Responses to Defendants' First Set of Requests for Admissions;

2. Plaintiff's Responses to Defendants' First Set of Interrogatories;

3. Plaintiff's Responses to Defendants' First Set of Requests for Production of Documents; and

4. CD with documents bates labeled HUGHES 00001-00444.

Mark L. Hawkins

MLH:klf Enclosures.

{W0585732. I} ·" Sworn Record 0342

Nathan B. Baum TO: Fulbright & Jaworski, L.L.P. 2200 Ross Avenue, Suite 2800 Dallas, TX 75201

REFERENCE: Hughes/Duncanville

7196 9008 9040 1811 9023 PS Form 3800 ' January 2005

RETURN RECEIPT Postage

Certified Fee - � '

l •2.:; SERVICE Return Receipt Fee . ' Restricted Delivery '•

Total Postage & Fe(/s: : ( . � ( G -.1 '

USPS• , :POSTMARK OR DATE • . .·'

Receipt for ··:- '

Certified Mail™ ..: , -- ':> · No Insurance Coverage Provided Do Not Use for International Mail

. -�---- -�-- -·-- -- - - - - - .. Sworn Record 0343 Sworn Record 0344

. UNITED STiiTES

Date Produced: 07/01/2013

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.

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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

8 *********************************************

ORAL DEPOSITION OF 9 FARIS ZUREIKAT 13 MAY 2014 10 VOLUME 1 *********************************************

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.

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

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

20 ALSO PRESENT: Ms. Stephanie Massman 21

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

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 .

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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

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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,

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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 .

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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

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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

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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 .

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 ?

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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

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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?

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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

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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

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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

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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 .

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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

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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?

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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 .

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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 - -

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 .

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

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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 ,

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 .

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

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

Conduct �renee �HwiOps 1c rev.ew DO ;and ir.msition Processes Mon 6/2110 Mon B/2110 8119110 S!lR..- l

i t to Seller On call. diSCUSS pain saeer1 process and� write w Thu !115110 Thu BIS/10 Schedule 6/30110@ 4:00p.m •...

Send e-rnad 1o Prqec1 Support Team tc notify cl newprc)Ecl Kinder SON:t run due dnqen<:e request l& v.kd 8141,0

8117f10 Nl\ . . . Moner.li1D Kinder 'Nod 814/10

H8\"C Oev orrcet lalk fO e.xpetJe:nceci :VmaJOUnd Oev Officer Wed8/4110 Kinder Heve local RVP 1alt: to f!):,Penenceci ll..lr.'laround RVP 1.\Qn 1!/2110 Hi M:>/�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 Wodnos

Document business office procent!S. for l�ition planl'ling and klt&l!'lal Con· Tu• 8117/10 F

Engage lhf'd p;my to perlor m a.Jrdrfliil and bining audil Monli/23/1 0 Go<>d repc

Manoge

On site visrt-m.a.naged care Tue A/17110 Frl !124110

Coni Tue 8/17110 Fri B/2DI10 Plmper Co"'""""' managed care prooos>es 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 woll

Kinder Run pMiscreens lfi�ers Bnd send to Pain Commnteo Tue 8/17110 Fri 9/10/10 Martin

Wed 9/15110 Send repotlro RVP and Pa1n Comm Coortlinator

Exloy Mcn9/13110 Mon 9113110 Coruy Hooks

On •ile visH:Iinlc81 Wed 9115/10 9113/10 Recer..d

Exley O.btaln Pain SaMn dearance hom Psln Committee

OOCI.Imonl clinie<�l review ard pfan tor transit\on and inlemal cantrof mpieme1 Tue 8117110 Too 91:28110 919110 Dr. Zsrln. Julio Gullderson and Carolyn£-loy will b9 visilil"l{ Tuo 9128110

Corolyn e>loy 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

TI>.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 Colo

Fri 1124110 Surgic.l Faeijilioa Only Mon9113110 Taylor Confentra call !o review .and app(ove befl9fit plans Fn 10/8110 Fri 10/8/10 10/7110 Schrouled revi""' on Tuuday. October 12th. Toyor

0 Materials Management Tut 8117110

Fri 911 !Y10 9r.!4i10 Sent repo� 01.1. 'Mil dO!&rmif)e slrutlurela!er.... 0 On site visit-materials management Tuo 8117110 1N.r 912/10 Eich

z Oocumenl mate.ril!ls management processe s tor transrtion pJanning 31ld tnter Fr1 Q/3/10 Eich

, Send rope� to f

mo -o

zo 01

-i� r-rw - ___, )>I'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 Pfvn

Recot�ci)O Cash to Posted Pmts to Net ReYentJe Cowmen! tin.;ncial procas,:es. {Qr 1fQns.itton planning and lnlcm.at COCTUollmt Fr\9124110 Pfooder

1.4on Sf.271!0 Wed 9129/10 1014/10 Changed WOI"Cflll in lhe C&PA not to mr;Jude WIC Ad)u•lrr Mon9113/10 Tue 9121/10 PfunOer

Prepare lolrge( cash c::a.5co:i¥tK;w-. Mon !ll13110 Prepore wt>rl

CalOJiata curren1 cash bum rate. rt a Tumarcund Kinder Mon 91:17110 Wed 9129/10 91291t0 NA WehiNechangedlhe'"Ord>nglntheC&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'i

D....., kip hi&lodcal "'"'" by Speci.Hy Co"lop His tort<� T......U. W&dll/111110 Mon 10/4110 Wed8118110 Fri 812711 0 Kildoer o...,�ap histori¢al cases by riO!lneial cla&S Fri 9110110 Kr.dor

Mon 1014/1C Perform mOl"lthly unl:il projed closes Fri9/10110 Oe""lap Ns!orica! P&L by month Fri8120110 Fri B/20110

Ilion 1 014110 Send to RVP. Oevelopmeni olr�CC�r and E-.e Kinder Confrtn recent f�c:Lal n'!&urt!!i .sup,oort offer valuation Thu 9130/10

Lealiew Fri 8/iCII10 IGnder Co"'4'1e!e f>artnerstop 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:..-.... Kind

Con!i'm accounl<>g lor f�cilily lea>

\Ned 9129/10 9129ft0 Received e-malf from C:hrisUJ. The Siemen&leaw is an Qf t.lor>S/13110 WaJ

Oblki FM\1 opinion on tease i"me. if ptrvliciilru 0tm n!B1 e&t.ats Coni'i'm acco�.mting for ecp.J"ment k:o�s.= Mar> 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

Fri 9117/10 S/2/10 Matt l

Perlorm UCC U

Mon9113110 MonWU/10 Fr19/24110

Preps� leg�� of physician arran�enls Legal Review Reel Es\al

Fri Wod 10120110 ilod 1o Funding

10.E/1 0 Sent new thln.lo: account form to Carol Kcd'l. Need bank a< Chonoe ol Ownership anti CXlN ,.gul•llon.s Tuoi!JI10 1011110 1011110 Jen Moran sel� new leg:>! en:/1)' BaylOr Surobreal D11r1

100/10 Since lhe

Prepare new stgMl� cerd on. r:urrenl bank ac:oo�t O�nnttw bonl

Complete Medicare �li«llion for change of

Wed 8118110 II ho3p�al partnof:l ;,. Bayk>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 t

Page< Sworn Record 0390

lf'l�ernal review mee11!'\Q Wlth RVf' and SVP Fo 10/8110 Fn 0 10 ApPro,.! Thu 1011.U10 luo 1011!/10 Prepare Boa

Board Appf'oval Thu 10/14/10

Presenile Board roc project approval T!-..101 1 �110 "loss Send1o RVP. SVP then COO lor "''"'""Pt\of to Boomsullm!Osion Fri 10115110 Tve 10/1!!/10 Mon Thu 101 1 4110 Thu 10114110 NA. Does nat requi� Moss Dtfln(tiY@ Agre•mena. Drafting .31nd Negerbtions. Ilion e/2110 Moo 10/11110

Sdle

e�ting entity, . ConhibuUon .a.nd Purt:ha.se Agreemenl Fr11011/10 Selle<

Mosher Motl9127110 Fri101 1110 Parfner&hlp or Oper;Mg Agreement Mon 812l10 �n 10/1/10 For buy 1'\S to be &vre USPI perron is ;,n officer. . Mosher Mon 812l10 Fri 10,/10

Tf'MI!i1h:ln c.ao wll:h. Symbion M�ement .1t.9reemeot iRuotw• outstJ..nding luu4rS prior to cfosi� 'lon 9/27110 lion 10111110 Mon$/:l7/10 Fri 1011110 Revie-w a-nd ,JQf!e on distribu1ions at eJos•ng .. amount and lo 'Whom Mon 10111110 Mon 101111 1 0 NA Kinder

Send l.agol Trenudion lnk>nna1ion 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 !

Fri Fri10Jlll10 Fri1018110

send <>-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 d

Re-run nel re'lenvo ana¥sis Send USPI and EDGE ln!TO ptes...,tationsto llVP for uoo on Day 1 Mcni0/11/10 Wed 1011J/10 Kinder Men 10111110 Wed 10113110 Send to accot.ntng post dose for tf:venue rooogritlon I<"lOder

Kinder Pn>pa!olo c.harogo led!$ on t.Jcility. � w;ommled Flillllll/10 Fri 1 018/'1 0 Wod 10/20110 Kinder

Be �lire to irt

lltg!n Tnnalllon Send out "PP"""'I me01o per slsndard dis11ibution �SI Thu 10121110 Thu1001110 Kinder ilon 212111 11

GUPLIProperty. Thu 10121110

previou& Thu 10121110 Wed 10127110 Haydsn Add Ia USP!Ins""'""" Policy eonunerbl Insurance pc�tk:s.;. Thu 11111110 We� 1218110 'M>fl< 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 corpor

F Thu 11118110

Old entity nee fll)' n place''" emplo)"'e ...,.ing letm. Then. L"ll•l FriiOIUI10 Obtain mnute Dook5 and be sure they are on site ri 10/2ij/10 Thu 111111110 Kinder Thu 111111110 Kinder \Mod tiJVrT� any premus partnerships. if necessary Fri 1012WIO lnformoHon T.ehnolo!IY r;; 1illz1111·o Frifll-4111 0 rder router 2IS1d cirwit Fri 10/2ijl10 Thu 111<1/10 Riffe

1M tali roul\or an<1 awn Riffe Review deleied impiernernation phm Mlh RVP culd Admirli3trator Fri 1 1 15110 Thu 11111110

Cortflllll IZld'erstaodha by center of USPI e-m8il fllt-en1icm policy Fri 11112/10 Thu 12flll10 Riffe

CoMe£! to USPI ret.wnr1c Fri 1211.410 Deletes> 180 d8y.s lnbox. 60 dlJYS Oe'e.tod ttems. 90 days Sent II< Kinder

Fn Fri 12124110 1 Mon 12121110 Fri1filf1 Riffe Mon 1/11l111 Riffe

facoily. Tax t.:>ur P_.. ior <::Ontinuad llc:t:en: at1)' retired patWsnt accou.'ltiOg s�tams 111<1111

Meeiing IO'i!h Aa:ounling lo rev;,.. tem�s or o�reements Accounting a Ccrpc:Jrate level Thu 10/Z1/10 Fri 1115110

Review distributions m•de al clooing. amount i0'1d to .mom made ll!on1111110 Mon 1111110 end CcrPQrsle accoun11ng: ne«< an Kinde<

Prepvr• brfget c::a•h •nd woc1ting QPrlel bvo up Thu 10/21110 Thu 10121110 Kinder

T"" Re!Lms- determine who will be responsb!e lor short year. proor 10 USPI eftediYe • Man 1111no Fri 1115/10 K(nder Fri 101211110 Fri Hl/29110 Kinder Fri 1/2 1 1 11

Exley Trwooury Fri 10/29110 B-.nk Account Prt 10129!10 frll/21111

Send deP<>srt str;>s for new ban!< accoun11o

fdey Submit new signature card to change signers en �k. ao:v\Jnt Fri 1012ll110 Fri 12/24110 Koch

NoUy ele

0 Upclote accepfobl

Nolify credit C¥C! rnerduml$ or new ateount or c.hange venders 0 Men 1/J/11 Motll/31 1 1 EJdcy

z Mon 12121110 Fri 1121111 Koch

., Thu 1 0/21110 Thu 211711 1

-o Ac:<:auntmg- Facility level

o r Oracle General I.e Thu 10/21110 Fri1ZJ2A/10

mo zo Page3

_,� - --.J )>N r en Sworn Record 0391

Surge..,- Center or Duncanv1He Sun 10110/10

et up ates esource Noilml:$

Send hi&torical month1y P&L to accounling with monthly cases 0 lor new company T�v 10121110 Thu1 111110 Mart111 Fri 101291tO Fri 10129110 Send lo fa<:ility acx;oum;nt an� lO Matt K�no ill Corp ACC\g Kinder load historical P&l into Oracle Men 11/1/10 Fn t115110 Kline Provide pmforma to accounting for bvdget inpJt Fri 1012SJ10 Facility and c.orporale

Se:l'\d hls1oricat balanc::t! sheet to fo.ciW.y .occcx...m,nt Fri 1a/29110 !Gnd

Foi"'Watrl e--mailfrorn Seie r with emfiog ba&::alce stleet to Co:-p Ac:clogs Men 1111110 &;n Bloyed and lisa R<>

Send bank reco"cil:Btions and statements 1o BCCOtAltan!: tor mo11lh PftOf to dose Fri 10129110 Be surw to �t full Vendor rn.rne and add'es� roc OS chec.t.;s..- Kinder lo•d oponing balane<� •lleel Tue 11/V10 Plunder

Obtain ful.,.ndor name. address aM EINISSN lor ouotarwJing checlt5 Fri 12124110 F ar clts prior ta effer:tiYe dow, need 1\.111 dato in case !hey need !o l> Monlf/!!110 Fri 10129110

Estubli>h prolotx>lfor oxpenses refOiod to old onmy ..-.:1 r

Faclify Controller"-";! mc�tt;y reporting need$ Kinder

Thu 11118/10 RIIP submib; Support Cerd.or tid

RVP lc add center to hi.lb!< fir.ar&ia! repo<1s lis! io S"""e Aooess Fri 1Q/29/10 Kinder Fri 10129110 Pfur.der

Train center p.,..onrello oblsin mootl\ly linanda! statements Fri 1tl26110 Fr11�112110

Review inrerrompa� bill (mo .1) Vla conference CI'IS wilhAdmil'\i&tralor and lead Phys1 Exley Exley

Ro...., intercomp•ny biD (mo 2) >ia con!e�ence col with MminlsU•tor and lead Physi Tl'wJ 1/2011t Fri 11126/lO Fri 11126/10 Thu 12};!3110

Tl'wJ 2/1711t Pfund«

R......., inlen:omp•ny biK (mo 3) >i• conference caD with Admini$\llolor omc:f leod Physi Fri 12/24110 Pfund.,. Fri 1 f.21H1 Plunder ' Ofact. Aecounto Poyablo Men 12127110 Fri 11l1111 Sot up Oracle NP Men 12/VIlO Wed 1212\J110 Ploodor

Request user ac.cess to Ol'ilde AP and GL Designate indMdual rcspoi\Sible lor atG

Bagin enceri1g ...erdors Fd 121J1110 S<:hodule!ra� Men 1/3111 Mon 11311t Ex..,_ Fri 1itt.l11 Exley

Payron one! Employ., llent.rrts Men t/10/t1 Cancel allcnC�ards in nime of center Fri 1121111 After rlln'l' PfJtCY cash is established, post P.P conversion Exley

Set up cenfer on H;.e �tt !.�on 1117111 .lion 1/JI/11

Establish responsibWly for payroll and arngloytee bencfrts .al center Reher1 Frl1C/t9/10 Thu 11/4110 ConlaCILUO'elio Robinson

Rehort Fd 10/l9110

Compro!e PAF for ""Y �• mcM'lg """'••P. mgt eo !IInder

Eslablish frst dale on USP PllY�<�II Fn t012'31to

On:lcr Ktcno>lln< clod< Fri 10129110

Kinder Fri 10/lS/10

Thu t1/4f10 Thu 11rng r•sl doy on USP payroU

Conduot initiolerrc>loyoe boMfil pnosan!B1ioru Thu 1120111 Trail! tis!! on AOP E�l,.pnos Tue 12/14/10 Reinerl

Sel up and complete omp\o)'ee bcnefol entormenl Frtt11',;i10 Tue 11<5111 Reinert

First doy on USPI psyrci r...., 1/Z5 11 1 Mon11311t1 Reinert Mon 1124111 Mon 112•111 Reinert Refmbunenwnt Thu 11/ll/tO

Create or update ma� ca� grids' Fri 1009110 Frl10/29110 Notity of ,....fox 10 and c:l'longe of owne11hlp. � appicablo Fri 10129110 Thv 111251t0 Pimper

Fn 10129110 ThtJ 11/25110 Pimper Review free schedu� Yersu� other t;ellta� in the area to de..lCI'Tl'lllle if changes are neEc Thu 1 11251t 0 Pirnper 6I.AIInn110ft'iel' Frt 1115110 Thu 12IJIJ/1 Q Sem e-Oll"' Kinder Train c;er1!or staff on new processes ilnQ roports required to moe! US PI >landard dose r.... t21281JO Thu 12JJ(ll10 Edey

Tl'wJ 1212110 Matorl&k !ol0111gement Thu12f.IJ10 Mon 2128/11 Thu 12W,O Wait until new DEA h;u been r�d

Eich Eich Send Mlir:B oftenn!na!lon to currenl GPO

Perform phy!;al counl of ma dical W)lPly inventory Sero:1 notice to HPG to acid t o USPI CC<1lrad Fri 12/J/10 Frl1213/10 Eich

Notify vtrrdors ol c;hange ar owne�lp. n not on GPO p

Convert to HPG cunlracis Moo 1216JtO Tue 12/7110 Eich

Train on L.t:Se of systam for inventoty Mcn2r.!SJ11 Mon 21261'11 Eich

Notlty NC!1011:I Roge1s to add �er to tJtillfy conlrattor r*vih.l' procm;s Tue 2/8111 Men 2121!111 Eich FJi 12/JI10 FJi 12/3110 Kinder

Gene,•l Thui0/21110 Wtd 1/1t/11

Thu 10(21110 Thu 10121110 lnciude pt.n:N$e elloc:ltion 5CIIcdulo Adm!nillTI!fcn Thu 1 012 111 0 Mon 12/8110

Present employee benefits powl!r poirrl Exley Send cumplaled par1ner.ship raster to Kn·11 Tillef

Review expectatioos wrtt\AQmtnis.trarot, re\l'iew EDGE aod K.oowiEDGE Exley Kir�er E.slllblish and corrlJct m...tlr1! will\ confer's staff l=ri 10129110

Est!lbhh diJie ror Adminirtra!:or onentat;on at Home OffiCII Thu 10(21110 Exi

0 Exley Thu 10121/tO

0 Communicate and lll'JiidatEr rnmplience with US PI documenl re::ention Stcmdllrds Tue 1112110 Tuo 11/21HJ

z Review QOYemirrg bOOy by l•ws and mEdical slaff by tows Compare to nu� ap o.grmr.t to d�n'nlne if cha:nges Posl comp�cm:;e p�ter In faciHty Fri 1111sno Mailed byl�lia in H001e Office

Rniewand tiiec:usro rocetis for distributions unck!r USP! and hOW lhisjs COOfdtr'IB Exl Mtr1111'8110 Exroy

:!!,o Tuc !1/30110 Mon 12.4i/10 are needed Exley

o Page 4 Moo 11/t/10 Mon 1111110

mo zo -;� -" :t>N rm Sworn Record 0392

Sun 10110/10

Fri 11126110 One montll po>l close. tc bo lead by RVP Notes esource

Wed 1/ISI11 cc. Paralegal an llledlcaid. CEA. CUA. JCIMAiiC, Phfln'llk) Names e.vle'W new cpemtin.g agreement w ad'rr.mi:s1r&U>r Fr 11125110 Exley Notify governmtntal agenclu of nftlf legal name and fall10 Thu ID/21/10 State department o1 he>!HfJ Thu10f<1110 Wed 1111(1110 Reed lOCill bus1ness ftcense Thu 10121110 Wed 10127110 �y MedicaJe n.., t0f28/10 Wed 11110110 Reed

El<'.ey

Wed 1218110 If MO. tnclude Seller POA DEA n.., 11125110 Wed 1211110 Still e OEA or squiviilkfnt 1'1'<.1 1212110 Edoy ThiJ 121!!110 Wed 12122/10

Wed 1112111 AleldJe n Wll! send oul no&oe fo ace

Exley El

State las,. device regis\ralon Thu 12123110 Wed 12129/1 a

Exley 6ohanrd

X-Ray 1 Radclcgy licen.e ThiJ 12!23110 Wr:d 12129110 Thu 1:2123110 Wed 12129110 Fn 10t2911D Thu 11/4/10

E•ley Name Changeluuea F ri 10/2S/10 Mon 11/1110 EJ

Exley Pat ient fotms Mon 11/1110

Exley Medica1 records torms Fri 1or2B'10 Fri 10129110

Exley Signage ,.., 1114110 Fri 10/29/10 ,.., 1114110

Portne,.hlp McoUng !.ego Send Adminislrator list of atreements 1o be reviewed for potenlial changes Fri 10129/10 1h..r 1114110 Contracts to be rvwd by aclmt1- Procssses\O.cQuloilions

Establish dale'"' !nt mooting Exley Thu 10121110

Exley �11/J/10

Mon 1111110 Fri 10129/10 ffl 10129110

Prepo!Jfl!! for and di5CJSS initial physician �adef'3hip Sur\lery EJ

Exley . ,.., 10121/10 Fr110�10

Fri t115r10 At end ol firs\90 da'(S. pest clwe: Conla<:t Cmdy Klein Sol•• Fn1D/liii1G

Schedule EDGE tr.tinng and im!>1errwmla1icn Conc!Ud ftrot PAll meeting Fri 10129110 Fri 10/Z9110 fri 11/5110 Exley

Obtain fin

Oistri!Mv deve!opmonl closing bi'tdorto RVP, SVP. Ad•ni't, Hosp Paf1n.... COO P�pare devolopmenl closing bindef Fri 12/J/10 Thu 12116110 �ndar Fn 12111110 Thu 12f231t0 K>nder Pot! Transition Con! Ca!l to Debrief on Process Fri 11/5110 Fri 1115110 Ktnder Mon 111810 Mon 1 !/8110 Alen c� mgt ol on Hne surwy taque!llto bo rec:eivad Kinder No\>ty Of98nizabonol Development to sood SUNoy 1 Nof Or ft

I '

() 0 z ..,

zo o, PogoS

-i� - ..... )>N r ...., Sworn Record 0393

EXHIBIT P Sworn Record 0394

CAUSE NO. DC-13-02334-L

PATRICIA HUGHES, § IN THE DISTRICT COURT Plaintiff § § v. § § RD DESOTO SURGICARE PARTNERS, LTD., § 193 JUDICIAL DISTRICT TEXAS HEALTH VENTURES GROUP, § LLC, UNITED SURGICAL PARTNERS § INTERNATIONAL, INC., § Defendants. § DALLAS COUNTY, TEXAS

PLAINTIFF'S SECOND REQUEST FOR PRODUCTION TO DEFENDANTS

TO: Defendants DESOTO SURGICARE PARTNERS, LTD., TEXAS HEALTH VENTURES GROUP, LLC, and UNITED SURGICAL PARTNERS INTERNATIONAL, INC. by and through their counsel of record, Nathan B. Baum, Fulbright & Jaworski, L.L.P., 2200 Ross Avenue, Suite 2800, Dallas, Texas 75201.

Pursuant to Rule 196 of the Texas Rules of Civil Procedure Plaintiff serves this its

Requests for Production of Documents. In response to the Requests for Production, you are

requested to produce responsive documents or items to the undersigned counsel of record at the

address indicated below within the time period provided by the Texas Rules of Civil Procedure.

All of these discovery requests are continuing and require reasonable supplementation.

DEFINITIONS

I. Documents. The term "Document" is defined to be synonymous in meaning and

equal in scope to the usage of this phrase in Texas Rule of Civil Procedure 192.3(b). A draft or a

non-identical copy is a separate document within the meaning of this term. The term

"Document" also includes electronically or magnetically stored data, which may be produced in

any format convenient for Defendant. TEX. R. Crv. P. 196.4.

2. Concerning. The term "Concerning" means relating to, referring to, describing,

evidencing or constituting.

{W0631142.1} Sworn Record 0395

3. Defendant or You. The terms "Defendant" or "You" mean and refer to DESOTO

SURGICARE PARTNERS, LTD., TEXAS HEALTH VENTURES GROUP, LLC, and

UNITED SURGICAL PARTNERS INTERNATIONAL, INC., as well as all other persons

acting or purporting to act on their behalf, including any attorney or other representative.

4. Plaintiff The term "Plaintiff' means and refers to PATRICIA HUGHES, as well

as all other persons acting or purporting to act on her behalf, including any attorney or other

representative, including but not limited to: Lance Hughes, Hughes Capital Management, and its

employees or representatives.

5. Premises. The term the "Premises" means and refers to the land, building, and

improvements located at 1018 East Wheatland Road, Duncanville, Texas 75116.

6. Lease. The term the "Lease" means and refers to the Lease Agreement entered

into between Patricia Hughes and Surgery Center of Duncanville, LP on or about June 1, 2004,

and any amendments, modifications, assignments, or guaranties thereof, including but not

limited to (a) the Assignment and Assumption of Lease and Landlord Consent entered into by

and among Patricia Hughes, Surgery Center of Duncanville, LP, and Baylor Surgicare at

Duncanville, LLC on or about November 1, 2010; and (b) the Lease Guaranty Agreement

entered into by Texas Health Ventures Group, LLC as guarantor for the benefit of Patricia

Hughes on or about November 1, 2010.

REQUESTS FOR PRODUCTION

16. The "acquisition file" identified by Jarod Moss on Page 32, Line 15 of his deposition testimony.

RESPONSE:

17. The "closing binder for [the] acquisition" identified by Jarod Moss on Page 32, Line 18 of his deposition testimony.

{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.

19. The "approval memo" identified by Jarod Moss on Page 37, Line 15 of his deposition testimony.

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.

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"

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.

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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

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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

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]!! ••• • � IBJ l li\/,i]� •

c f:'l

St�rijong Barnett Little, Inc. An::hi!ecture I Planning / Interior Desigo. / Cons�lting

Da�G; December 21 , 20 1 1

To: Lance Hughes; Hughes Capital ·

Management SIIJlbject: Duncanville Amb ulatory Surgery Center

Project 201 1 36.00 Du ncanville ASC Code Deficiency Study File #: 3 . 0

Duncanville Ambulatory Surgery Center

S B l h a s b e e n commissioned t o study the req u i red code compliance needed for the building to h ave modification completed for reopening of the faci l ity. T h is report only id entifies the defi ciencies according to auth orities havi n g jurisdiction over the project. AHJ for the Duncanvil le A.SC wi l l be the Texas Department of State Health Servi ces (TDSHS - ASC Licensing Rules), NFPA 1 01 Life Safety Code, Texas Department of License and Regulation (TDLR - Hand i capped Accessibil ity), and the City of D u ncanville for model building and building system cod es references and the basis of this deficiency study.

Th e building reviewed is a 1 story existing facil ity of approximately 9,969 SF located at 1 0 1 8 W. Wheatland Rd in D uncanvill e , Texas, consisting of four (4) OR's with typical prep, recovery, waiting, adm in, typical s u pport, central sterile, equipment and locker rooms etc. for a functional Surgery Center. The existing s ite accommodates thirty-six (36) standard parking s paces with fo ur {4} accessible parking spaces. The roof is m inimally sloped �kith applied mem brane roofi ng over existing modified bituminous roof system . There are two existing canopy systems in place for drop off and discharge .

We have noted the arch itectural deficiencies with bold text and corres ponding plan note numbering in the context of relevant TDSHS code requirements :

TDSHS ASC Rules (State AHJ):

(d) Spatial requirements.

{1) Administration and public areas .

(A) Entrance. Entrances shail be located at grade level , be accessible to indivi duals with disabilities, and be protected against inclement weather from the point of passenger loading/unloading to the building entrance. [1] The existing ca nopies do not protect passenger from inclement weather s i nce they do not extend out over wh ere a car could pull u p .

(B) Waiting area. A waiting area o r lobby shall b e provi ded within the A S C and include having the

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following rooms and items :

(iii) access to potable drinking water. (2] Assume user Will provide bottled water since there is no water cooler.

(F) Medical records area. The medical records area shall have adequate space for reviewing, dictating,

optical disc), the medical records area shall have adequate space for transcribing records in the electronic sorti11g, or recording records. If electronic imaging devices are employed (i.e., microfilm, digital, or

format. Medical record storage space shal l be located-within a secure designated area under direct visual supervision of administrative staff. [3] Th e Medical Records area is not secure; it is open to th e remainder of the Recepti on 1 Administrative area.

(G) General storage room.

(i) A minimum of30 square feet per operating room shall be provided exclusive of soiled holding, sterile supplies, clean storage, drug storage, locker rooms, and surgical equipment storage. General storage may be located in one or more rooms or closets, and shal l be l ocated outside of the patient treatment areas_ [4] This area of 1 20 square feet does not exist; it would need to be provided "outside of the patient treatment areas" per the rules.

(H) Wheelchair storage space or alcove. Storage space for wheelchairs shall be provided and shall be out of the direct line of traffic . [5] Th e loveseat needs to be removed from this alcove.

{2) Engineering services and equipment areas. Equipment rooms with adequate space shall be provided for mechanical and electrical equipment. These areas shal! be separate from public, patient, and staff areas. [6] The engineering areas are accessed through the Supply Room . A door from the exterior may be required to satisfy the State.

(3) Examination room. An examination room is not required, but when provided, the room shall have:

[7] There are several challenges with this room . First of all, the plan labels this room as an "exam room" but the s!gnage on the door states it is a "special procedures." Exam rooms do not have gases (per Table 3 of the Rules); this room has gases on the wal l . If this room appears to be somethi n g more than "exam," the State will inquire of the owners how it is to be used . Second, if this room requires gurney access, the corridor leading to this room is not 8' wide. Third, a toilet may not be permitted to be accessed d i rectly off. of this room ( bas ed on previo us conversations with the State on a differe nt project.} If the use of this room requires the patient to prep and recover, additional stations will need to be provided in the appropriate areas . If this room is a "Treatment Room" in reality, there are issues as well -­ including the req uirement for an additional soi!ed utility room which can be accessed from the non-steri!e side {see below).

Rebecca Read called back from the State and left me a detailed message. The following is added based on this information : The Exam Room can not have direct access to a Toilet as it currently does for

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infection control reasons. DSHS does not have a specific fine item for "Special Procedure " rooms; however they do have some specific requirements if the ASC has one even though one of them is not minimum square footage or clearance. A seamless floor and hard ceiling are required, A thennostat and humidistat gages need to be provided in the room. Two low air returns are required, and air supply must come from the ceiling. There can be no drain or waste line above the ceiling unless there is a secondary protection system in place; likewise, it can not be located beneath an exercise or recreation room (we're safe from the latter, I don 't have a clue about the fonner.) If digital equipment Is used, a 2-p.ane/ film illuminator is not required; if digital equipment is not used, a 2-panel film illuminator in the room is minimum. Four receptacles have to be on the critical branch as well as one nonnal outlet. With regards to medical gases, a Special Procedures Room needs at least 2 Oxygen, 2 Vacuum, 1 Air The Special Procedure room needs to be positive . . . and it needs at least one recovery station.

If this room is used for Endoscopy, there are similar requirements . . . and a Endoscopy work mom is needed (probably near the Endo Room rather than assuming dirty scopes are taken through to the Decontam Room within the Surgical Suite. The tables in the back of th e ASC rules book do address specific requirements for med gas and air flow which would need to be addressed.

So, our "owner" needs to tei! us how we are to look at this room that is labeled "Exam" on the plan but "Special Procedure " on the door before we can really cite deficiencies unless you are willing to cite both . . .

(A) a minimum clear floor area of at least 80 square feet exclusive of fixed or moveable cabinets, counters, or shelves; and

(B) a work cou.1ter with space for writing and a hand washing fixture with hands-free o perable controls.

(4) Janitor's closet. In addition to the j anitor's closet exclusive to the surgery suite, a sufficient number ofjanitor's closets shall be provided throughout the faci l ity to maintain a clean and sanitary environment . The closet shal l contain a fioor receptor or service sink and storage space for housekeeping suppiies and equipment.

(5) Laboratory. [8] The area desig n ated "blood draw" on the plans is not a separate room ; rather it appea rs to be a n u rse work a rea within the Prep area . if the latter assum pti on is correct, it is assumed that lab servi ces are co ntra cted If the latter assum ption is not true, a .

"room" needs to be provided per the code as it is written.

(A) General. Laboratory services shall be provided within t h e ASC o r through a contract or other arrangement with a hospital or accredited laboratory.

(B) Off-site linen processing. When iinen is processed off site, the following rooms or items shall be provided:

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(i) a storage room for clean linen located within the surgical suite. Clean linen storage may be combined with the clean work room; and [9] There is not space within the clean work room in the surgery suite to store linen ; the clean linen closet in the Prep area would need to have shelf I cart for clean linen - right now, there are outdated supplies in this room.

(ii) a soiied linen holding �com or area located within the surgical suite. Soiled linen holding may be combined with the soiled workroom. [1 0] The only place to accommodate soiled linen is in the Prep area; it is currently filled with bio-hazardous wastes that need to be removed and stored in separate (nonexistent place).

(7) Medical wast.e processing. Space and facilities shall be provided for the safe storage and disposal of waste as appropriate for the material being bandied and in compliance with all applicable rules and regulations. [1 11 This space needs to be provided ; one was not found.

(8) Pharmacy. A pharmacy work room or alcove shall be provided and l ocated separate from patient and public areas and under the direct supervision of staff. A work counter, refrigerator, medi cation storage, and locked storage for biologicals and drugs shall be provided. A hand washing fixture with hands-free operable controls shall be located in the pharmacy room or alcove. [12] The pharmacy was locked and could not be accessed. The plans s how there to be a counter with sink in this space, however this could not be confirmed. What was observed was that the corridor to this room was not at least 4' wide and the door was not at least a 3' wide door. From an accessibility perspective, there is not s ufficient door ·

clearance for this door.

(9) Postoperative recovery suite.

(B) Postanes1hesia care unit . A minimum of one patient station per operating room, plus one additional station, shall be provided.

(i) In a multiple-bed postoperative recovery area, the clearance between the side of a bed/gurney and a walVpartition shall be a m inimum ofthree feet. The clearance between sides ofbeds/gumeys shall be a minimum offour feet six inches. The minimum distance at the foot of the bed/gurney shall not be less than six feet for single load area/room or nine feet for double load area/room. Four feet ofthe passage space at the foot of the bed may be shared between two beds/gurneys. The fixed and moveable cabinets and shelves shall not encroach upon the bed/gurney clear floor space/area. [13] These required clearances do not exist. The primary clearance issue is one of width; therefore the number of stations would need to be reduced fro m 8 to 5, maybe 6 (which would satisfy post-op for OR stations assuming "special procedure" patients are not recovered in this area).

{D)Hand washing fixture. One ha..TJd washing fixture with hands -free operable controls shall be provided for every four recovery beds or fraction tlrereof in open wards . Fixtures shall be uniformly distributed. One hand washing fixture shall be provided within each single-bed recovery room. [14] There are not enough handwash i ng fixtures to m eet this ratio.

(ii) When an open or ward area for extended observation is provided, the minimum clearance from the bed or recliner to the side wall shall not be less than three feet; and a space offour feet shall be provided

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at the foot of each bed or recliner. The minimum clearance between beds or recliners shal l not be less than three feet. [15] Number of recliners will be limited by clearances .

(1 0) Preoperative patient holding room.

(A) General. A preoperative holding area shall be provided and a.rranged in a one-way trar1ic pattern so that patients entering from outside the surgical suite can change, gown, a."ld move directly into the restricted corridor ofthe surgical suite. The holding area shall be separate from the postoperative recovery suite and the restri cted corridor.

(B) Patient station. A minimum of one patient station per operating room shall be provi ded . (1 6] Four are provided for the four operating rooms ; none is provided for the "special procedure" room.

(ii) In a multiple-bed preoperative holding area, a minimum area of 60 square feet shall be provided for each patient station. The m it1imum clearance from the gurney or bed to a si dewall shall net be less than three feet A space of four feet shall be provided at the foot of the gurney or bed and the minimum clearance between gurneys or beds shall not be less than four feet six inches . [17]The spacing for stretcher locations on the s outh wall n eeds to be �djusted to meet these clearances and the gurneys can not be wider than 30" (which works for typical stretchers}.

(iii) Space shall be made available for storing and securing patient's personal effects . [1 8] There are no lockers provided as indicated on the drawings .

(iv) One hand washing fixture w ith hands-free operable controls shall be provided for every four preoperative beds or fraction thereof in open wards. Fixtures shall be uniform ly d istributed. One hand washing fixture shal l be provrded within each single-bed preoperative holding room. [19] The only handwashing fixture i n this area is in the "blood draw" area (see separate note under "Laboratory".) Since the space does not meet laboratory requirements, this sink should suffice; if however, a Laboratory I Blood Draw room is desired by the Owner, an additional handwashlng sink will need to be added to comply.

(12) Soiled workroom. fn addition to the soiled workroom provided in the surgical suite, a separate soiled workroom(s) shall be required when a treatment room is provided, except as al lowed in subpa.--agraph (B) ofthis paragraph.

(A) Special requirements. The workroom(s) shall contain a clinical sink or equivalent flushing type fixture, work counter, designated space for waste and linen receptacles, and a hand washing fixture with hands-free operable controls. [20J if the "Special P rocedures" Room is really a "Treatment room", a separate Soiled workroom needs to be p rovided to be in com pliance.

(B) Shared functions. The soiled workroom required in support of a treatment room may be combined with a surgical suite soiled work room with two means of entry. A separate door into the soi led workroom shall serve a treatment room located outside the surgical suite.

(13) S urgical staff clothing change area.

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{A) Surgical staffchanging rooms. Appropriately sized areas shall be provided for male a�d female personnel working within the surgical suite. These areas shall contaln lockers, showers, toilets, hand washing fixtures with hands-free operable controls, and space to change into scrub suits and boots. Separate locker/changing rooms shali be provided for male and female staff. The shower and toilet room(s) may be unisex. These areas shall be arra.'1ged to provide a traffic pattern so that personnel entering from outside the surgical suite can shower, ch�mge, and move directly into the restricted areas of the s-..rcrgi al suite. [21] The male changing room has the correct traffic pattern the female changing room does not. (Females can not m ove directly into the restricted area of the surgical s uite upon exit from this room as there is only one door in and out.) Neither h ave a cceptable showers from an accessi bility perspective. The male room does not have a bench; the bench is the I ncorrect s ize and in the clearance for the shower in the femal e room (accessibility issues from the stance ofTDLR).

(B) Surgical staff lounge. When a surgical staff lounge is provided, the lounge shall be located to permit t'le use without leaving the surgical suite and may be accessed from the clothing changing rooms. The surgical staff lounge shall not have direct access from outside the surgical suite. When the lounge is remote from the clothing change rooms, toilet facilities and a hand washing fixture with hands-free operable controls accessible from the lounge shall be provided, [22) It is assumed that the staff lounge provided is not for surgical staff based on the location ofthe door. IF surgical staff were to use this room, they would have to go back through the staff changing rooms into the restricted corridor or relocate th e door to this lounge shuttin g It off from the Recovery area.

(14) Sterilizing facilities. A system for sterilizing equipment and supplies shall be provided. Sterilizing procedures may be done on site or off site, or disposables may be used to satisfY functional needs.

(A) Off-site sterilizing. When sterilizing is provided off site and disposables and prepackage surgical supplies are used, the following rooms shall be provided near the operating room. [231 Look at (B) s i nce current plan accommodates Sterilization ; if modifications are made to this plan and a decision is made to have off-site sterilization, this will need to be reviewed agai n .

(ii) Clean workroom. A clean workroom shall be provided for the exclusive use ofthe surgical suite. The workroom shall contain a work counter with space for receiving, disassembiing and organizing clean supplies, storage cabinets or shelving, and a hand washing fixture with hands-free operable controls. [24) The existing room does n ot have a ha ndwas hing fixture, storage cabinets or shelving.

(iii) Sterilizer equipment Sterilizer equipment shall be locateri in a separate room convenient to the operating room(s), in a.'l alcove adjacent to the restricted corridor, or in the clean workroom. [25] There is one sterilizer in the clean workroom ; t.'l e (flash) sterilizer in the Sterile Storage area is questionable as to if it can remain or needs to be relocated .

(B) On-site sterilizing facilities. When sterilizing facilities provided on site they shall be located near the operating room and are

provide the following rooms .

(i) Receiving/decontamination room. The receiving/ decontamination room shall b e physically separate from all other areas of the surgical suite. The room shall include a work counter(s) or table(s), clinical s!n...l( or equivalent flushing type fixture, equipment for initial washing/disinfection, and a hand washing

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fixture with ha.rds-free operable controls. Pass-through dutch doors, windows, and washer/sterilizer decontaminators shall serve in delivering m aterial to the clean workroom . The receiving/decontamination room may be combined with the surgical suite soiled workroom. [26} 1n the existing facility, this is a combined room . There is not a handwashi ng fixture with hands-free controls; see note below about insufficient space.

(ii) Clean/assembly workroom. The clean/assembly workroom shall include a counter(s) or table(s) with space for organizing, assembl ing, a:1d packaging of medical/surgical supplies and equipment, equipment for terminal sterilizing, a:1d a hand washing fixture with hands-free operable controls. Clean and soiled work areas shall be physically separated. [27] No handwashing fixture is provided.

(iii) Sterile storage. A storage room for clean and sterile supplies shall be provided. The storage room shall have adequate areas and counters for breakdown of manufacturers' clean/sterile medical/surgical supplies, This room may be combined with the cleari assembly/workroom. [28] This is a separate room; no counter is p rovided .

(iv) Cart storage room or alcove. The storage space for distribution carts shali be adjacent to clean and sterile storage area(s) and close to main distribution p oints . [29] This area does not exist; it is assumed that since each OR opens to the Sterile Storage that the State will accept no designated space.

(15) Surgical suite. The surgical suite shall be arranged to precl ude unrelated traffic through the suite. The surgical suite shall contain at least one operating room and all surgical service areas required under subparagraph (B) of this paragraph.

(A) Operating room . The operating room(s) shall have a clear floor area of at least 240 square feet exclusive of fixed or moveable cabinets, counters, or shelves. The minimum clear dimension between built-in cabinets, counters, and shelves shall be 1 4 feet.

(B) Surgicai service areas.

(i) Restricted corridor. The restricted corridor shall serve as the primary passageway for staff and patients witl:rln the surgical suite. The following rooms and areas shall have direct access to the restricted corridor:

(VII) equipment storage; [30]There is no "equipment storage" room ; this needs to be created I p rovided.

(VTII) sterilizing facilities; However, if this [31] As drawn, the flash sterilizer is okay in the sterile storage room. room were to become an Equipment Storage room, it would h ave to be relocated.

(X) area for emergency crash cart. [32] None designated ; a spot needs to be designated within the OR area.

(ii) Soiled workroom. A soiied workroom shall be provided for the exclusive use ofthe surgical suite st.a.ff. The workroom shall contain a clinical sink or equivalent flushing type fixture, work counter, designated space for waste and linen receptades, and a hand washing fixture with hands-free operable controls. The soiled workroom shall not have directconnectionwith operating room(s) or othe� steriie

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activity room(s). [33] Withi n the existing room, there is no s pace for waste and linen receptacles ; the room would need to be enlarged or an additional room would need to be provide d . No hands-free handwashing fixture.

(iii) Clean linen storage. A storage room or alcove shall be provided for storing clean linen . [341 Area needs to be designated (or room created and designated)

(iv) Scrub facilities. A scrub station shall be located in t'1e restricted corridor within five feet of the entrance of each operating room . One scrub station with dual faucets with hands free operable controls may serve two operating rooms if the scrt.Jb stations are located adjacent to the entrance of both operating rooms. Scrub facilities shall be arranged to minil'flize any incidental splatter on nearby personnel, medica! equipment, or supply carts. Viewing panels shall be provided for observation of the surgi cal room interior. The scrub sinks sba!l be recessed out of the main traffic areas. The scrub sink al cove shal l be iocated within the restricted areas ofthe surgical suite. Scrub sinks shall not be located inside the sterile area. [351 For two of the OR's, the scrub station Is not within 5' of the doors to the OR's.

(vi) Equipment storage. A room, alcove, or designated area sha!l be provided for stori ng equipment and supplies used in the surgical suite. The storage room or area shall be a minimum of 50 square feet per operating room. [36J This area (200 square feet minimum for 4 OR's} needs to be provided; it does not exist withi n the surgical suite. Based on conversation with the State, access into "General Storage" from the P rep area will not s uffice.

(viii) Area for emergency crash cart. An area or alcove located out oftraffic and convenient to the operating room(s) shall be provided for an emergency crash cart. [37] Area needs to be designated.

(ix) Stretcher storage area. An area or alcove shall be located convenient for use and out of the direct line of traffic for the storage of stretchers as requi red. Stored stretchers shall not encroach on corridor widths. [38] Area needs to be created to comply.

( 1 6) Treatment room . [39] See notes above under "Exam Room" as it is called "Special Procedures." If the Owner desires a "Treatm ent Room" in lieu of an "Exam" or "Special Procedures" room, this section of the rules will apply.

(A) A treatment room is not required, but when provided, it shail be used only for minor procedures.

(B) If inhalation anest1esia is adm inistered in the treatment room, the room shall comply with NFPA 99, § 14.4.1 requirements for an anesthetizing iocation.

(C) The treatment room shall have a clear floor area of at l east 1 20 square feet exclusive of fixed or moveable cabinets, counters, or shelves.

(D) The treatment room shall contain an examination table, a counter for writing, and a hand washing fixture with hands-free operable controls.

Arlington, TX 7601 1 Fax: 81 7.46 1 . 1 362 Steri!ng Barnett Uttle, Inc. 1000 Ballpark Way, Suite 200 Phone: 817.792. 2 1 00 Page S of 1 1

H U G H ES 00096 Sworn Record 0414

(iii) Corridors.

(I) Public corridor. The minimum clear and unobstructed width of a public corridor shal l be at least four feet. [40) The corridor into the Pharmacy does not meet this requirement.

(IV) The minimum clear and unobstructed width ofthe communicating corridor shall be eight feet. [41] If patients are taken to the "Exam" / "Special Proced ures" room via gurney, the ·

corridors are not wide enough. It is assumed that patients do not access this room from the toilet which needs to be closed off from this room for infection control purposes.,

(v)Door swing. Doors, except doors to spaces such as small closets which are not subject to occupancy, shall not swing into corridors in a manner that might obstruct traffic flow or reduce the required corridor width. Large walk-in type closw.s are considered as occupiable spaces. [42] As occupiable spaces, the room which a re marked "Tras h" and "Linen" do not h ave 5' of depth for turning I accessibility.

(E) Hand washing facilities. Location and arrangement of fitti ngs for hand washing facil ities shall permit their proper use and operation. Hand washing fixtures with hands-free controls shall be provided in each examination room, treatment room, preoperative area, postoperative recovery suite, extended observation room or area, soiled utility room, fluoroscopy room, clean work room, and toilet room. Particular care shall be given to the clearances required for blade-type operating handles. Lavatories and hand washing facilities shall be securely anchored to withstand an applied vertical load of not iess than 250 pounds on the front of the fixture. In additi on to the specifi c areas noted, hand washing facilities shall be conveniently located for staffuse in rooms and areas noted under spatial requirements in subsection (d) of this section and throughout the center where patient ca.re services are provided. [43] Handwashing facilities are not provided in the extended observation rooms or area .

(H) Signage. A sign shall be posted at the entrance to each toilet/restroom to identify the facility for public, staff, or patient use. [44] Signage does not designate users .

(3) Floor finishes.

(A) Flooring shall be easy to clean and have wear resistance appropriate for the location involved. Floors that are subject to traffic while wet (such as shower and bath areas, and simi l ar work areas) shall have a nonslip surface. In all areas frequently subject to wet cleaning methods, floor materials shall not be physically affected by germicidai and cleaning soluti ons . The following are acceptable floor finishes:

(i) painted concrete for mechanical, electrical, communication rooms, and janitor's closets; [45] General application for floor finishes was VCT. Existing VCT in poor shape.

(ii) vinyl and vinyl composition tiles and sheets tiles for offices, lobbies, administ"'ative areas, storage, staff and public toilet rooms, examination rooms, support spaces, and nontreatment areas; [46} VCT flooring needs to be replaced In P rep a nd Recovery areas where it is cracked and de-laminating from the floor substrate.

(iii) monolithic or seamless flooring shall be provided for ali operating rooms, special procedure rooms, treatment rooms, patient toilet rooms, soiled workrooms, and steril izing facility(ies). Seamless flooring shall be impervious to water, caved and installed integ;."'al with the base, tightly sealed to the wal l, and

Arlington, TX 7601 1 Fax: 8 1 7.46 1 . 1 362 Sterling Barnett Little, Inc. 1000 Ballpark Way, Suite 200 Phone: 81.7.792. 2100 Page 9 of 1 1

H U G H ES 00097 Sworn Record 0415

without voids that can harbor insects or retain dirt particles. The base shall not be less then six inches in height. Welded joint :tiooring is acceptable; [47] "Special Proced ure," patient toilet rooms,and Sterile Stores (with sterilizer) a nd Soi led room do not have seamless flooring. Seamless flooring, where provided, does not h ave 6" cove.

(4) Wall fmishes. Wall finishes shall be smooth, washable, moisture resistant, and cleanable by standard housekeeping practices. Walt finishes shall be in compliance with the requirements ofNFPA 1 0 l , §38.3.3, relating to fla:ne spread.

(A) Finishes at plumbing fixtures. Wall finishes shall be water-resistant in the immediate area of plumbing fixtures, [48} Wall finishes need changed to comply.

(B) Wet cleaning methods. Wall finishes in areas subject to frequent wet cleaning methods shall be impervious to water, tightly sealed, and without voids. [49] VCT in prep area needs replaced ; cracks are not impervious . . .

(5) Ceiling finishes. All occupied rooms and spaces shall be provided with finished ceilings, unless otherwise noted. Ceilings which are a part of a rated roof/ceiling assembiy or a floor/ceiling assembly shall be constructed of listed components and installed in accordance with the listing . Three types of ceilings that are required in various areas of the ASC are:

(C) monolithic ceilings. Ceilings which are monolithic from wal i to wall (painted solid gypsum wallboard), smooth and without fissures, open joints, or crevices and with a washabl e and moisture impervious finish shail be provided in the operating rooms, special procedure rooms, and steri lizing facilities. [50] "Special Procedure" room does not have monolithic ceilin g ; Steri l e stores (where flash sterilizer is located} does not have monolithic cei l i ng .

TDLR Regulations (State AHJ)

1. [51} All Door knobs primarily located i n the older non renovated portion of the existing build ing needs to be repl aced to lever type h a rdwa re. 2. [52] Curb Ramps for patient d rop off and curb ramps fo r h a ndicapped parking do not comply. S l ope, texture and contrasting color for ramp surface are not present on existing ramps. 3. [53] Handicapped parking s pace s ignage was noncom pli ant in mounting height, location and s i g n ag e configuration 4. [54] Handica pped parking space striping needs restrip i ng 5. [55] Countertop in staff iounge at sink is required to be 34" h i g h in l ieu of the 36" counter c urrently existing. 6. [56] There are severa� existing door locations which do not have the proper door clearances for wall adjacencies .

International Codes - IBC, IPC (City AHJ)

1. [57) Restripin g needed for fire lane striping 2. [58] No exterior access p rovided to the fire riser room for fire department access . 3. [59) No overflow roof drains a re p rovided on the existi ng roof drain syste m .

Sterling Barnett Little, Inc. 1 000 Balloa:k Way, S uite 200 Arlington, TX 7601 1 Phone: 817.792.2100 Fax: 817.46 1 . 1 362 Page 10 of 1 1

H U G H E S 00098 Sworn Record 0416

from: Rob Hudson

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Sterling Barnett uttle, Inc. 1 000 Ballpark Way, Suite 200 Arlington, TX 76011 Phone: 81 7.792.2100 Fax: 81 7.461 . 1 362 Page 1 1 of 1 1

H UG H ES 00099 Sworn Record 0417

Report

CONDITION ASSESSMENT Duncanville ASC Duncanville, Texas December 13, 201 1

INTRODUCTION On December 1 3, 201 1 , representatives from Fratto Engineering, Inc. and Ste;ling Barnett Little, Inc. visited. the existing Outpatient Surgery Center located at 1 01 8 E. Wheatland Rd in Duncanville, Texas. This ASC is currently not licensed.

The team was asked to perform a surface review of the facility and its systems. The intent of this report is to outline the code and operational deficiencies observed d u ring this walk through. It is not a comprehensive review of all systems and no testing, destructive d emo:it!on, etc. was performed.

ELECTRICAL SYSTEMS

Code Deficiencies

�» A fire alarm pull station was not !ocated at the exit from the main Lobby. A pull station was located around the comer in a Corridor, but this may not satisfy the fire marshal.

• Fire alarm strobes are not located in the Toilets in the Locker Rooms.

• A fire alarm strobe was not located in the Break Room.

• There are several rooms that have a light switch controlling normal fixtures and a light switch controlling emerge ncy fixtures installed in the same box with a common cover plate. It should be confirmed that there is a divider in the box and that th e normal and emergency wiring do not occupy the same space.

• The 2x4 light fixtu res above the Nurse Station communicate to the above ceiling plenum.

• The exterior egress light fixtures only have one lamp.

o There is only one light fixture on emergency in Waiting, and lt is at the back of the room. It is possible that a local inspector will require a light cioser to the exit doo r.

There are no battery operated emergency lights in the ORs.

o There are no light fixtures con nected to normal power in the ORs.

• There are no light fixtures connected to normal power in the OR Corridors.

• There a re no light fixtures con nected to normal power in the Decontamination rooms.

H U G H ES 00 1 00 Sworn Record 0418

Report • The re are no receptacles connected to normal power in the ORs.

• There are no receptacles connected to normal power in the OR Corridors .

• Dedicated emergency circuits are not provided for each Recovery Bed.

• The bed location in 23 Hour only has one emerg ency receptacle and no normal receptacle.

• There is BX cable used for circuits connected to the life safety panel.

• There is BX cable used for circuits connected to the critical panel.

• The fire dampers are connected to the life safety panel.

• There is one ATS fo r the life safety and critical and one for the equipment branch in lieu of one ATS for each of the three branches.

The gen erator has been removed along with feeders to the emerg ency d istribution panel and the ATSs. •

• A generator annun ciator panel is not present at a 24 hour location.

Operational Deficiencies

• The recessed can fixtures are designed for incandescent lamps and are currently lamped with compact fluorescents.

• The 4-way light switches in the back OR Corridor do not work properly.

• The fine isolation monitor for OR-2 is not operational.

., The line isolation monitor for OR-4 is not operational.

The LIMs for O R-3 and the x-ray isolation panel have been replaced. The LIMs in the other ORs a re likely at the end of their useful life. •

• The remote test buttons located in each OR for the x-ray LIM are not operational.

• The electrical panels are Federal Pacific and parts will be d ifficult to find.

• The main panel is located outside.

• The emerg ency distribution panel is located outside.

• The nurse call system is beyond its useful life.

PLUMBING SYSTEMS

• The sinks in the staff and patient Toilets do not have goose neck faucets.

• Each bed location in Recovery only has 1 vacu um outlet in lieu of 3.

• Tne bed location in 23 hour Recovery does not have medical gas outlets.

• The Special Procedure room only has 1 oxygen outlet in lieu of 2.

• The Special Procedure room only has 1 vacuum outlet in lieu of 2 .

H U G H ES 00 1 0 1 Sworn Record 0419

_______ Report • Only one medical gas master alarm panel was observed .

• The medical gas alarm panels did not have pressure gauges.

• Non medical air outlets were not observed. However, a medical air com pressor was added in the sterilizer room adjacent to the electrical room. It is dou btfu l that this system meets new non medical air code.

• Given the age of the medical gas system and the recent changes in NFPA, it is likely that significant portions of the medical gas system do not meet current code.

MECHANICAL SYSTEMS

o The Business Office Manag er's Office does not have return air.

• The Corridor at the west exit has a 2x2 grille that communicates to the plenum.

• Two roof top units that appear to serve non patient space a re located above Recove:-y. Both units are set up for non ducted plenum return and the air path is above the Recovery ceHing. This is unusual and some inspectors may d eem this a code violation.

" The light fixtures in the OR suite Corridors are used for plenum return.

" A humidistat is not installed in OR-2.

• Plexigla s shields have been suspended below the supply air diffusers in the ORs. This creates a large horizontal surface that collects dust and debris and is difficult to keep sterile. it is likely that that distribution pattern of the diffusers is unaccepta ble to the surgeon and support team.

O perational Deficiencies

• The exhaust fans were not operational.

• The hum idifiers are located above the ceilings. This makes maintenance difficult.

• The final filters a re located above the ceiling in the supply d uct work. This makes changing filters difficult, and it has to be done in a critical care space like Recovery.

• The thermostat in OR-2 is not operational.

• The thermostat controlling the unit serving the OR Corridors was not observed.

• Rooftop units 6 and 8 serving two of the ORs are beyond their useful life.

• Roof top unit 8 has its outside air opening less than 3 feet above the roof.

• Roof to;:> 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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EXHIBITS Sworn Record 0447

Lance Hughes From: Bob Richey [brichey3@tx.rr.com} Sent: Thursday, January 10,2013 9:37AM To: Lance Hughes Subject: Duncanville Surgery Center Proposal Attachments: CCE01102013_0000.pdf

Good morning, Lance. Attached is the proposal for the renovation to Duncanville Surgery Center. I have included the spread sheet with the individual divisions of work a!ong with the clarifications, alternates for your review, schedule and my bid t abulation sheets showing the subcontractor pricing for each division. !fyou have any questions, please give me a call today ( 817-307-4792 ) . I will be tied up tomorrow working on a propos al that turns in at 2:00pm. I'll certainly be available after that time. I appreciate the opportunity of working with you on the Duncanville project.

Bob

H U G H ES 00410 Sworn Record 0448

DUNCANVILLE SURGERY CENTER January 9, 2013

General Conditions 86,065 • Demolition Sltework 3,500 Concrete 11,375 Masonry 5,800 Steel 4,300 Carpentry 17,2 06 Thermal - Moisture Protection 4,400 Doors 16,403 Finishes 83,513 Specialties 5,905 Special Construction 18,240 Mechancal 149,128 Electrical 149,530

555,365 8.25% renovation tax 45,818

601,183

H UGHES 00411 Sworn Record 0449

General Conditions Duncanville Surgery Center Labor Material Total Permit 1,500 1,500 Project Manager 20 weeks - $3,450/week 69,000 69,000 Travel 25 miles/day X 100 days- 2,500 X.S7 1,425 1,425 - Schedule included Construction Photos -$6.!Xl/week X 20 weeks 120 120 Temporary Toilets -100.00/month- 4 months 400 400 Safety/First Aid 200 200 Temporary Fire Protection ·Recharge 200 200 Barricades 100 100 Storage Trailer -180.00/month X 4 months 720 72 0 Field Office E�epenses 125 125 Printing -125 X 5 sets 625 625 Postage - Delivery 200 200 Fuel-QIJ,Generator 100 100 Small Tool Purchase 300 300 Equipment Rental 300 300 General C�eanup 720 720 Dumpster 10 X 500.00 5,000 5,000 Final Clean -10,000 square feet X $0.50 .5,000 s,ooo As Built Plans Included included Included O&MManual Included 30 30

69720 16,345 86,065

H U G HES 00412 Sworn Record 0450

Duncanville Surgery Center Labor Material Sub Total Demolition/Sitework Miscellaneous Demo 2000 2,000 Interior Demo - Rice [)rywall Pavement Marking 1,200 1,200 Lawn Sprinkler System· East Side 300 300

2000 300 1200 3,500

Concrete Miscellaneous Concrete 11,245 11,245 Sealed Concrete 100 30 130

100 30 11,245 11,375

Masonry CMU @Column 5,800 5,800 Sawcut�Toothln 2 openings Medallions

Steel 4,300 4,300 Columns+ 2 angle iron headers

Carpentry Bolts/Screws 200 200 Interior Blocking 300 150 450 Miscellaneous Carpentry -Allowance 1,200 1,200 Framing- Canopy 10,270 10,2 70 MJIIwork 5,086 5,086

1500 350 15356 17206

Roofing Roofing 3,400 3,400 Fire caulking 500 500 1,000

500 500 3,400 4,400

H U G H ES 00413 Sworn Record 0451

Labor Material Sub Total Doors and Windows Hollow Metal Frames 3,495 3,495 P. Lam Doors 3,072 3,072

Door Hardware/Install 2,880 69S6 9836

2880 13,523 16,403

Finishes Lathe-Plaster 7,000 7,000

Drywall 23,500 23,500

Floor Covering 35,565 35,565

Paint 17,448 17,448

83,513 83,513

Specialties Wall & Corner Guards 1 ,000 1,200 2,200

Cubicle Curtain Track 1,020 480 1,500

Toilet Accessories 470 745 1,215

Lockers 790 200 990

3,280 2,625 5,905

Special Construction Fire Alarm 7,400 7,400

Fire Sprinkler 10/840 10,840

1 8,240 18,240

Mechanical Medical Gas 77,801 77,801

Plumbing 40,1 50 40,150

HVAC 24,427 24,427

Test and Balance 6,750 6,750

149,128 149,128

Electrica i 132,045 132,045

Nurse Call 17,485 17,485

149,530 149,530

H U G H ES 0041 4 Sworn Record 0452

DUNCANVILLE SURGERY CENTER CLARIFICATIONS JANUARY 9, 2013

1. We exclude the upgrading of the existing telephone and data system. 2. We exclude the painting of the exterior plaster finish. 3. We exclude the furnishing of new cubicle curtains. 4. We have priced all new doors as plastic laminate finish to match the surgical suite doors. 5. We have priced the new door hardware with Sargent hardware. 6. We have priced the existing VCT flooring in the existing toilets to remain. 7. We were unable to r eceive a price from the facility's fire alarm contractor. A fire alarm price from Ideal Fire and Security is included. 8. We exclude adding expansion joints for the new door frames. The existing walls do not have expansion joints at the door frame locations. 9. The new ductwork for the surgical staging corridor may need to be revised due to the existing sprinkler main in the same a rea. 10. We have priced the new drywall partitions to penetrate the ceilings as opposed to the detail showing the partitions to stop below the acoustical ceiling.

H U G H ES 004 1 5 Sworn Record 0453

DUNCANVILLE SURGERY CENTER AlTERNATES JANUARY 9, 2013

1. Cost to dean the remaining Items in the existing reception and offices 101, 102, 103, 104 and 105. $520.00 2. Cost to remove the existing vinyl composition tile noted to remain as existing and furnish and install new vinyl composition tile and cove base. $7,247.00 3. Cost to repaint the existing OR ceilings with latex paint. $1,011.00

4. Cost to clean and reseal the existing 16 wood doors. $2,322.00

H U G H ES 004 1 6 Sworn Record 0454

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EXHIBITT Sworn Record 0459

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ASSIGNMENTAND ASSUMPTION OF LEASE AND LANDLORD CONSENT

This ASSIGNMENT AND ASSUMPTION OF LEASE AND LANDLORD CONSENT C'Assigrunent and Consent'j is entered into effective as of November l, 2010 (''Effective Date"), by and among PATRICIA HUGHES (''Landlord''), SURGERY CENTER OF DUNCANVILLE, L.P., a Texas limited partnership, flkla Duncanville Surgery Center, L.P. ("Assignor''), and BAYLOR SURGICARE AT DUNCANVILLE, LLC, a Texas limited liability company ("Assigneej.

RECITALS:

A. Landlord, as landlord, and Assignor, as tenant, are parties to that certain Lease Agreement h dated June 1, 2004 ("Lease"). Pursuant to the Lease, Landlord has leased to Assignor space currently containing approximately 1 0,000 rentable square feet (''Premises) located at I 018 I

I East Wheatland Road, Duncanville, Texas 75116. Capitalized terms not defined herein shall have the meanings assigned to them in the Lease.

B. On June 1, 2004, Symbion, Inc. executed a Lease Guaranty Agreement whereby Symbion, Inc. guaranteed the obligations ofAssignor under the Lease. l

C. Assignor desires to assign, and Assignee desires to assume, all of Assignor's right. title and I interest in and to the Lease, and Assignor and Assignee have requested Landlord's consent l to such assignment and assumption. I

� D. Landlord has agreed to give such consent upon the terms and conditions contained in this Assign.iJlent and Consent.

E. Concurrently with the execution of this Assignment and Consent, Texas Health Ventures Group L.L.C., a Texas limited liability company that is an indirect member of Assignee

("TING"), is assuming the pet'$0nal guariinty obligations of Symbion, Inc. under the Lease. I NOW l.11J.<.REFORE, in consideration of the foregoing recitals which by this reference are I incorporated herein and other good and valuable consideration, the receipt and sufficiency ofwhich are hereby acknowledged, Landlord, Assignor and Assignee agree and represent as follows: l

I 1. Assignment. Assignor hereby assigns to Assignee all of Assignor's right, title, and interest under the Leaseand in and to the Premises as therein defined for and during the remainder of the Tenn of the Lease.

2. Represeptati�. Assignee hereby represents and warrants to Landlord as follows: (a) .· l ,, _

398296_l.DOC

H U G H ES 00001 Sworn Record 0460

(i) Assignee bas full power ru;1d authority to enter into this Assignment and Consent and to perform its obligations under this Assignment and Consent and the Lease;

(u) Assigned is a limited liability company duly organized, validly existing and in good standing under the laws of the State ofTcocas;

(iii) The execution ofthis Assignment and Consent bas been approved by all necessary action of the Assignee, and upon execution of this Assignment and Consent, it will be valid, binding and enforceable against the Assignee;

(Iv) The person signing this Assi:gnment and Consent has the authority to execute this Assignment and Consent on beha1f of Assignee; and

(v) The execution of this Assignment and Consent does not violate any agreement to which Assignee is a party, any law, rule or regu]ation of any governmental authority, or its certificate of fonna!ion or company agreement

(b) Assignor and Landlord each represent, warrant and acknowledge to Assignee as

follows:

(l) Each bas full power and authority to enter into this Assignment and Consent;

(u) Each bas not trlm.Sferred or conveyed its interest in the Lease to any person or entity, collaterally or otherwise;

(iii) Attached hereto as Exhibit A is a complete and· f!(;Curate copy of the Lease (including all amendments thereto), and except as set forth on Exhibit A. there are no written or oral amendments, modifications. side letters, agreements, or other understandings with regard thereto;

(iv) The Lease is in full force and effect and Assignor and Landlord are not in default under the Lease. Assignor and Landlord have not received notice that they are in default under the Lease.. Assignor and Landlord have no current knowledge of any facts which would give rise to a or Assignor under the Lease; breach or default by Landlord I lI {v) Rent under the Lease has been paid through October 31, 201 0; and I 1 (vi) Assignor and Landlord acknowledge that this Assignment and Consent will be relied upon by Assignee and its successors and assigns in i i connection with its acquisition of Tenant's interest under the Lease.

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398.296_1.DOC 2

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.. l ... I I H U G H E S 00002 Sworn Record 0461

3. Assumption. Assignee, for itself and its successors and assigns, hereby assumes and agrees to perform and be bound by all of 1he covenants, agreements, provisions, conditions and obligations of the tenant under the Lease, as and to the extent any such covenant, agreement, provision, condition and obligation arises on or after the Effective Date; f provided. however, that Landlord and Assignor hereby expressly covenant and agree that I neither Assignee nor any of Assignee's related parties d'Jl!.ll under any circUlllStances or at I any time be liable, responsible or obligated for any of Assignor's or any of Assignor's I related parties' obligations, covenants, indemnities, claims, liabilities, duties, or agreements in, under, to, or in connection with the Lease that arise, accrue or are incurred prior to the Effective Date regardless of when they may be asserted, alleged, claimed, �- ' brought, or discovered, including, without limitation, reconciliations or undercharges of Additional Rent, or any similar charge or expense for any periods prior to the Effective Date, even if they are not ascertainable or calculated tmtil after the Effective Date (collectively, the "Prior Claims"), but Assignor shall remain solely liable and obligated for all Prior Claims, and Assignor hereby expressly agrees to INDEMNIFY, DEFEND, and HOLD Assignee and Assignee's related parties HARMLESS from and against any and all Prior Claims.

4. Financial Statements. Within ninety (90) days from the end of each calendar year during the Lease Term. Assignee agrees to provide Landlord with a.nnual unaudited financial statements certified by an officer or manager ofAssignee.

5. Acceptance of Premises; Landlord's Diselaimer. ASSIGNEE ACKNOWLEOOES AND AGREES THAT IT HAS CONDUC'IED ITS OWN INDEPENDENT INVESTIGATION AND INSPECTION OF AIL ASPECI'S OF 1HE PREMISES AND THAT IT IS RELYING ON SUCH INDEPENDENT INVESTIGATION AND INSPECTION IN EXECUTING THIS ASSIGNMENT AND CONSENT AND ASSUMING TilE OBLIGATIONS OF THE TENANT UNDER THE LEASE PURSUANT TO SECTION 3, AND, EXCEPT AS EXPRESSLY PROVIDED HEREIN, IS NOT RELYlNG ON ANY INFORMATION PROVIDED BY LANDLORD IN DETE.RMIN1NG WHETilER. TO ASSUME TilE OBLIGATIONS OF 1ENANT UNDER THE LEASE PURSUANT TO SECTION 3. .1\SSIGNEE FURTHER ACKNOWl-EDGES THAT IT IS Fl.ULY AND COMPLETELY SATISFIED TIIAT THE PREMISES ARE SATISFACTORY IN AIL RESPECTS FOR ASSIGNEE' S INTENDED USE. ASSIGNEE FURl'HER ACKNOWLEDGES AND AGREES 1HAT EXCEPT AS EXPRESSLY PROVIDED HEREIN, LANDLORD HAS NOT MADE. DOES NOT MAKE AND SPECJFICAI.LY DISCLAIMS ANY AND AIL REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACIER WHATSOEVER. WHE1HER. EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, lI

I PRESENT OR FUTIJRE, OF, AS TO. CONCERNING OR WITH RESPEcr TO THE PREMISES, AND ASSIGNEE HEREBY WAIVES ANY SUCH REPRESENTATION, WARRANTY, PROMISE, COVENANT, AGREEMENT OR GUARANTY EXCEPT THOSE EXPRESSLY PROVIDED HEREIN. NO'IWITifSTANDING ANYTIIING HEREIN TO THE CONTRARY, ASSIGNEE IS EXECUTING THIS ASSIGNMENT AND CONSENT, ASSUMING 1BE OBUGATIONS OF 11IE TENANT UNDER TilE � 398296_l.DOC

H U G H ES 00003 Sworn Record 0462

lEASE PURSUANT TO SEL'TION 3 AND ACCEPTING THE PREMISES "AS IS", "WHERE IS", AND Wl'IH AU. FAULTS AND SPECIFICALLY AND EXPRESSLY WITIIOUT ANY WARRANTIES, REPRESENTATIONS OR GUARANTEES, EITHER EXPRESS OR IMPLIED, OF ANY KIND, NATURE, OR TYPE WHATSOEVER FROM OR ON BEHAlF OF THE LANDLORD, EXCEP1 THOSE EXPRESSLY PROVIDED HERElN.

6. Amendments to Lease. Landlord and Assignee hereby agree m amend the Lease as follows:

a. Address of Premises. Notwithstanding anything contained in the Lease to 1he contrary, Landlord and Assignee acknowledge and agree that the correct address of the Premises is 1018 Bast Wheatland Road {not 1017 East Wheatland Road), I l Duncanville, Texas 75 166, and all references in the Lease to the address of the Premises are changed to HHS East Wheatland Road. I r b. Section 36 - Renewal Option. The seoond sentence of Section 36 is hereby amended to read as follows:

"In older- to exercise each Renewal Option, Tenant must give Landlord written notice of the exercise of the Renewal Option at least twelve (12) months prior to the expiration ofthe initial Term or the first Renewal Term, as applicable."

7. Conditional Release ofAssignor. Upon the execution of this Assignment and Consent by all parties hereto. Assignor shall be relieved and released flbtn its obligations under the Lease- arising after the Effective Date; provided. however, Assignor specifically acknowledges and agrees that it remains responsible to Landlord for the discharge and penoritiance of any and all duties and obligations to be performed and/or discharged by the tenant under the Lease prior to the Effective Date,. including, but not limited to, the Prior Claims.

8. Release of Landlord. As part of tlte consideration fer Landlord consenting to this Assignment and Consent, Assignor, on behalf of itself and its successors and assigns. IWeby releases Landlord and her heirs, succesrs so and assigns of and from any and all claims, liabilities, obligations, demands, damages. actions and causes of action of any and every nature whatsoever relating to the Lease or the Premises. and -waives and releases any claim which Assignor now has or may have against Landlord arising out ofor relating to the Lease or the Premises, or any and all acts, omissions or events relating thereto occurring prior to the execution ofthis Assignment and Consent. l . I 9. Landlord's Coosent . In reliance upon the agreements and representations contained in this Assignment and Consent, .Landlord hereby consents tn the assignment and assumption 1 contained herein. This Assignment and Consent shall not constitute a waiver of the I obligation of the tenant under the U1lse to obtain the Landlord's consent to any subsequent i assignment, sublease or other transfer under the Lease. L l l

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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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1 H U G H ES 00005 Sworn Record 0464

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I I IN WITNESS WHEREOF, Landlord, Assignor and Assignee have executed this Assignment and Consent on the day and year first above written.

IANDWRi>,-;diiZ � I

I Patricia Hughes

Il ASSIGNOR: SURGERY CENTER OF DUNCANVD.LE. L.P., FIK/A DUNCANVU,LE SURGERY CENTER, L.P.

�=· -------

Nmne:. __________________

Tffie:.___________________

ASSIGNEE: BAYLOR SURGICARE AT DUNCANVILLE, LLC Ii By.:____________________ I Name.: Tirl��--- _-------­

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I I I l - I � 398296_1.DOC .6 I HUG H ES 00006 I Sworn Record 0465

IN WITNESS WHEREOF, Landlord, Assignor and Assignee have exeotted this Assignment and Consent on the day and year first above written.

LANDWRD: Patricia Hughes

ASSIGNOR: SURGERY CENTER OF DUNCANVILLE, L.P., F/KIA DUNCANVILLE SURGERY CENTER. L.P. ' --

ASSlGNEE: BAYLOR SURGICARE AT DUNCANVn..LE. LLC

By:.___________________ Noooo.� · -------- ------ - ----

T�e:. ____ __ ______________

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I HUG H E S 00007 Sworn Record 0466

IN WITNESS WHEREOF. J...andlo.o:l Assignor and Assignee have executed this Assignment and Consent on the day and year first above written.

LANDLORD: Patricia Hughes

ASSIGNOR: SURGERY CENI'ER OF DUNCANVILLE. L.P., F/I{/A DUNC.ANVILLE SURGERY CENTER., L.P.

�------­ f ll �------- rme:.

. __________________

ASSIGNEE: BAYLOR SURGICARE AT DUNCANVILLE, LLC II I

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I 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 l

.JUNE 1. 2004 !

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r TABLE OF COJ\'TENTS

1. Granting Clause... . .-................-.....-................................................................-.... 2 ..... . ..

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4. ...... . ..

Base Rent ...... . . .. . . - .... .......-... ........_, _____, ...... . . . ... ............. ......... .. . . ......... .... . .......... 3

5. .... . .

Ute �- . .. .. . . ..,,.� ......-..... .. ___ __.,.. ___ _.. ,._.. .. -....-. ... -.......... ................,., .................... ............4 6. CPI .Atljusbnmt . .. .. . .. . ... .. . ... .. . ... . ....... . ._ .. . ... . . . .. . . .. . .- .. . .. .. . 5 . . .. .. - .. ... ... ..... . -. . . ._.. ... . .. . . .. . . .

. .. .

7. Additional Rent . . . . .. . . ....... . . .. . .... . .... .... ._. . ... . . . . ..,_. .. .. . 6 .. _.,__,.,......_ . , . .. ..- · · · .. . .. ... .. . ...

.. . . ........... .. .. .... . . .. . 6 . . . .

8. Utili1ies._.�............. .... .... .. .. . -... . . .. . .. .-. . .. . . . .- .. ... . .... . .. . . _ ,, . .... . .. . _. ..

.. . .. . . .

9. T� ···----····---··--············-- ·····-···-·.... ..... . ..... ... ..... . .. -.......-........-........;....-.......... . ..... ......... .. 6

10. Insuraru:e .. .. .. ...._.____ ,.. .... .. . . ..: . . . ... . . . . . .. . .... . .. ..-. ... -. . ...... . 7 .... . .. .... . ... .. ..... . . .. .. .. . ....... ._____

11. Waiver of Subrogation .... . . ... . . . . -. .. . ..... . .. . .. . . . .. . . .. . ...... ... . 7 . . . ... . ........ -... .... . . -.... ... .. .. .. . .. ,.,,__

12. Irtdernnifica.tiOil - . . .... .._.,.. ... . -.. .,. ___ ......... --8 . - •--..• ••.o-·•-.. ...... -• .. . ... .�� .-u••••••t••••"•••••-••••••-•• •._- .... l Landlord R.epaits . . . .. ... . . . . . .-..........-...............................................9 .

! 13. . .. ... ... .. .. ..... .... . .. . .

.. ... . ..... ..

14. Te:IISilt's Repairs., ......... ............ .... . .. .. ... - .. . ...-.•. ,"-··· ..···· -........ -..... ............................ 9 •...... . ... . .-..... 4..

Tenant--Made Altenrtions and Tnde Fixtnres .. . . . . . .... . . . . .. -..........-...........9 .

I 15. ... . ... . ... . .. . .. .. ... .

16. 17. Condemnation .. ; . ... . ... . . ... . ... . .... . ... . ... . .. ... . ... .. .. ...... .. m .... .... .. ..... ....... . .. . . ,, .... , .. lO .... . . .. . ..... .. .

R.cstonrtion , ...

18. .._............................................. . . . . ....................................... .. .� .. . .. 1 1 .. . . ..... . . .

19. Assignment and Subletting . ... .. . ......-............................... .._. . .. . ...-.................. 1 1 .. . .. ... .. ...

20. Inspection and .Acctss . . .. .- . ... .. -12 .. ..... .. ..... . . . .. � . ..

. ..... . .. .. . .. ... .. . . .... .. .... . . ...... ..... ...... .... . . ....... .-. ..

21. Quiet Enjoyment ... ... . ... .... ��·····........ .. . ... ..... . ... .. . -.......... . 12 ..._. .. . ...... . . -............_ . . . ..

.. . . ... .. ... .. 12

I 22. Sun-e:ndcr .. .. .... . . ....... .. .. .. . . ... .. . .... ..__,. . .. .. . . . . .... . .. . ._ , ____.._,., . . .... .. . . .. ._ .. ..... . ._ .. .

23. Bolding Ovl::r .. .... . . .-............ ______,. . . . .. . . . . . ..- . . .. . . . ..........._ .. . . .. . .. .. . _ ... . 13 .. ......... ....... . ...

Events of Default . .

24. . ._ . ... . . ..... . . ... .. .... . ...... . .... . . .. . -............... 13 . .. .. . ..... .. .....

! · --· ------ . .... ... . .. .

25. latldlord's Remedies . .. ... ...... . ..... . ... . . . .. .. . .. ... -.....-................................. ........................... 1 4

2�. Ttmant's,�es!LiJnitation ofLiability ......... . .. . . ... .-................ 15 -. . . ...... . . .... . ...,_. ......

27. . . .

&Ibordination. .. .. . .. . . . .. . 16 f ....... . .. .....-�-·4··-····-···-···..- - ,... ... . ... ...... ..... ... . .._ . ....... ..... . l--· .... ··-,... .. .. . . ..._... . . ......

28. Mechanic's Lic:ns ............................................................ ................ . . . .1 6 -- .. . .. ... . .._ , __ ._ . . ..

29. Esmppel Certificates . ... . . .. ... . . .... .. . .. ..-.................... . ...... ..... .. . ....... . - . . ......... .... . . ....... .... . . 1 7

30. Environmental Rc:quirernents. . . .. .. ... . .. . . .. ... .,............................ 17 .... . .. . ... .. ...-.................. . _ .

31. lndependent Covenants . .. . .... . ... . . . . -................................ 18 ·- ··-- --·· -.... .. ... . .. .. . ... . . .

. . .. .. .. .... . .. .. .. ..... . . ..

32. No Security Services . . .... ... . .. . . .... .. . . . ... ....... � . 18 . ... . . . ... . . .... .. .. .. ... . .. _ .. . ... .... . ... . .. . . .. .

33. Fon;c Majeure .. . . . . . .. . . . .�.. . . . ..... . .. ........ .. . -. .. . .. . 18 . .�. .. . . . ... .. ... . . . -. . . .- . ....., . . . _.� . .. ... ....... . . �

34. Brolrers .. . . ... ... ... . . . . � .. .. _. .. . -......-........................ ...-. . . ....... . . . . . . . .-......... .... .... ............... 1 8

35. l..andlord"s Lien/Security Interest . . . .. . . . .. .. . . ... .. . 19 ..... . -..-·. . . ..... .._ .•,_,,, .... .. .... . . _ . ......

... ..

.. . . .. .. .. .. . . . . . .. 19 .. ....

36. Renewal Optian. . . . ... . . .. ... .. . .. _ . .... . .. . ..... . . .. ... . ... _.............- . . .. . . . ._,,,....

20 . . .. ..

37. OrgmiDtion and Power . .. . ... . . -...... .... . . ............................... -....-. . . . ._....... .. . . .. . . ._, ___,.

38. Miscelbmeous............ . . ... , ..._. ..... ..... -...--.•-................................ .- ................. . ....... 20

I .. ... .

I l I L I J

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 tn

reduction of $50,000.00) as part of the Lease Buy Down (as I hereinafter defmed). Further, on or befare September 1. 2004, I Landlotd agrees to refund to Tenant $16,800.00, which l represents an overpayment of Base Rent by Tenant for June, I July and August, 2004 as part ofthe Lease Buy Down.. �I f r

. j � I J

H U G H ES 0 00 1 2 Sworn Record 0471

Beginning on March 1. 2005. and wntinuing thnmgb February 28, 2008, the Base Rmlt will be adjusted io re1lcct tho Lease Buy·Down (as hereina'fter defined) resnlting ftom the Heal.thsooth SeUiement Agreement (as hereinafter defined} and shall be $20,416.67 per month (based on $24.50 per square foot per yen) (the "Adjusted Base Renf').

Beginning on March l, 2008, and continuing throllgh February 2i. 2013, the Adjusted Base Rent shall be $20,416.67 per month. plus ihB: CPI Adjuslme:nt (as hereinafter defined) which CPI Adjustmem man be del.ennined as if tho Base Rent ($24,33 1.69 per month). not tho A4justed Base Rent, was in effect in February, 2008 {without adjustment fur the Leaso Buy­ Down).

lL�e Buy-Down: As part of an agn:cment (the "Healthsouth Settlement Agreement") by and among Landlord. Heallhsouth Sl.ll'gel.JI CenW:r of Duncanville. L.P., Healthsouth Properties Corporation and Healthsouth Corporation (the "Prior Tenant Parties"). the Prior Tenant Parties are paying certain amounts ro Landlord as consideration for � renninatkm of tho prior .le2se snd as consideration for Landlord agreeing to the Adjusted Base R.a:tc in this Lease (the "'Lease Buy-Down'").

Ambulatnzy, day or ompatient surgery centl:r, appllrtenant office and administrative fitcilily. [See Seetion 3]

Tenant will have two (2) five-year nmowai options (oacb a "Renewal Term"). The Base Rate during the first five--year Reii.eWil Tenn {Mai"Qh 1. 2013 - Febnia'ty 28, 2018) shall be (i) tho Base Rate {$24,331.69 per month), phls (ii} the CPI Acljustment on the Base Rate determined on March 1, 2008. plus (iii) an additional CPI Aqjustmem on the Base Rate (as P�i :Wjusted for the CP! Adjustment) detmmincd on March 1. 2013. The Base Rate 4uring tbe second five-year Renewal Term m.l1 be adjusted based on the CPl Adjustment on M8rclt 1, 2018. [See Sec1ion36]

None

Guarantor: Symbion, Inc., a Delaware ecrporation, pursuant to a Lease Guaranf;y Agreement attacbed hereto as Exhibitv.

A,ddendum1 - Move Out Ccmllions i &J!ihit"A"' - Legal Description Exht'hlt:B,. - Insuranoe Requirements J2rbihit"C" - Certificato oftho Secretary §YliNt'V- Lease OUamnty

H U G H E S 000 1 3 Sworn Record 0472

. - Exhibit "E"- Certificate ofthe Secretary Symbion, Inc. Exhibit "F" - Landlord's Lien Waiver, Estoppel and Agreement

1. Granting Chiuse. In ronsideration of the obligation of Tenant to pay Rent as herein provided, and in consideration of the other tetms, covenants, and conditians hereof, Landlord leases ro Tenant, and Tenant talces from Landlord, the Premises, to have and to hold for the I...eae Tenn. subject to the terms, oovt::Da.IIt:s and conditions ofthe Lease.

2. Acc!:J!tanceofPremises. TENANT ACKNOWLEDGES AND AGREES THAT IT HAS CONDUCTED ITS OWN INDEPENDENT INVESTIGATJON A._l'ID INSPECTION OF ALL ASPECTS OF THE PREMISES AND TI:IAT IT IS RELYING ON SUCH INDEPENDENT INVESTIGATION AND INSPECTION IN EXECUTING THIS LEA.SE. AND I8 NOT RELYING ON ANY ft.!FORMATION PROVIDED BY LANDLORD IN DETERMINING WHETHER TO LEASE TilE PREMISES. TENANT FURTiiER ACKNOWLEDGE$ THAT IT IS FUllY AND COMPLETELY SATISFJED THAT THE PREMISES ARE SATISFACTORY IN AIL RESPECTS FOR TENANT'S I !.:.

INTENDED US.H. TENANT FURTHER ACKNOWLEDGES AND AGREES THAT LANDLORD HAS NOT MADE. DOES NOT MAKE AND SPECJFICALLY DJSCI.AIMS ANY AND ALL REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR I GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHEIHER. EXPRESS OR l IMPLlED, ORAL OR WRI'ITEN, PAST, PRESENT OR FUTtJRE, OF, AS TO, CONCERNING OR WITH RESPECT TO THE PREMJSES, AND TENANT HEREBY WAIVES ANY SUCH � .. REPRESENTATION, WARRANTY, PRO:MISE, COVENANT, AGREEMENT OR GUARANTY. � I NOTWITHSTANDING ANYTHING HEREIN TO TIIE CONTRARY, LANDLORD IS LEASING TilE PREMISES TO TENANT "AS IS". "WHERE IS , AND WITH ALL FAULTS AND SPEC1FICAI.J..Y AND EXPRESSLY wmiOUT ANY WARR.ANTIES, REPRESBN'fATIONS OR GUARANTEES, l EITHER EXPRESS OR IMPLIED, OF ANY KIND, NATIJRE, OR TYPE WHATSOEVER FROM OR ON BEHALF OF "THE LANDLORD.

3. Use. Tenant may use the � subject to and in acoordance with the rerms, I,. covenants and conditions set forth in this Lease, and applicable governmental regulations, restrictions and pen:nitting. solely for the Permitted Use. Tenant and Tenant's agents will not: {i) do or permit to be .. J l

I done in or about the Premises, nor bring to, keep or permit to be brought or kept in fuc Premises, aeyfhing which is promoired by or will in any way conflict with any law, statute, ordinance or govermDl:Jlta) rule or regulation which is now in force or which may be enacted or promulgated afu:r the Date of Lease; (ii) do or permit anything to be done in or about the Premises which is ds.ngerous to persons or property; or (iii) cause. maintain or penni t any nuisance in, on or about the Premises or I commit « sllow to be committed any waste in. on or about the Premises. Tenant shall procure at its sole expense and risk any permits and licenseB required for the transaction of business in the Premises At i1s sole cost and expense, Tenant .will promptly comply with (a) all laws, statutes., ordinances and I I governmental rules. regulations or requirements now in force or in force on or after the Commencement Date of the · · regarding the operation ofTepant's business and the use, condition. eonfigwation and occupancy of the Premises; (b) the ce:rtificate of occupancy issued for the Premises and (c) any recorded

I covenants, conditions and restrictions. if any, which affect the use, condition. conf:igumtion and occupancy of the Premises. Tenant, at its sole expense, shall use and occupy the Premises in oompliance with all laws, including, without limitation, the .Americans With Disabilities AJ:t, orders, judgments. onfimmees, -regulllfions, codes, directives, permits, licenses, covenants and restrictions now or hereafter

,. ��PP&ahle to the Premises (collectively, "Legal RequirementsH). Tenant shall, at its expense, make any alterations or modifications, within or without the Pmniscs that are required by Legal Requirements related to Tenant's use or occupatian ofthe Premises.

3 . . l I

..�. I l H U G H ES 000 1 4 Sworn Record 0473

4. Base Rent. Terumt shall pay to Landlord the Base Rent (and 1hc Adjustt\d Base Rent as adjusted for the Lease Buy-Down). as specified above. For purposes of this � all future refer� to Base Rent shall include, as app&able .A4jttsted Base Rent. Base Rent shall be payable in monthly � as specified above, in advance, wilhout � notice, deduction. offset or count.erclaim, on or before the first day of each and every calendar month during the Term; provided. however, the installment ofBase Rent payable for the first fuJI calendar month ofthe Term shall be due and payabk: at the time ofexecution and delivery of this Lease. Any payment �m�de by Tenant to Landlord on account ofBase Rent rri.ay be c:re.dited by Landlord to the payment ofany htc charges then due and payable and to any Base Re-nt or Additional Rent (as defined in §t:ction 1) then past due before being ctedjted to Base Rent currently due. No eodorsement or statement oo a cbeclc or letter .acoompanying a check or payment shall be considered an accord and satisfaction, or prejudice Landlord's right to recover the balance or pursue available :remedies. Tc:nant shall pay Base Rent and all Additional Rent by (i) good check or in la�l cumncy of the United Slates of America to such address as Landlord designafa in writing 1n Tenant. or (ii) electronically via automatic debit or wire transfer to such account as Landlord designa1es ! in writing to Tenant. 1f the Term cOlDIIlCil.CeS on a day other than the first day of a calendar month or r I rerminates on a day other than the last day of a calendar month, the monthly Base Rent and Additional Rent shall be prorated based upon the number ofdays in such calendar :month. Tenant•s covenant to pay Rent and the obligation of Tenant to perfonn Tena:nt's other covenants and duties hereunder constitute I independent, unoonditional obligations to be paformed at all times provided for 'hereunder, save and I eXcept only when an abatement thereof or reduction therein is expressly provided fur and not otherwise.

may cause 5. La1e Charges. Late Qpgges and Default futerest Tenant's failure to pay rent promptly Landlord to incur unanticipated costs. The exact amount of such costs are impractical or I extremely difficult to ascertain. Such costs may include, but are not limited to, processing and accounting charges and late cllarges which may be imposed on Landlord by lillY gnnm.d lease,. mortgage or deed of trust encumbering the Property. Tberefon; if Landlord does not teeeive any monthly Installment of Base

f Rent. any Additional Rent. or any other amount whioh becomes owing by Tenant to Landlord under the provisions of thi$ Lease within ten (10) days after it becomes due (without in any way implying Uildloro's ctmSmt ·w siiCh late pa)li.ile:rit). Teil"ant' shllll pay Landlord a late charge equal to five perecnt (5%) of the overdue amount. as compensation for Landlord's processing such late payment. Tho parties agree that such late charge represents a fitir and :reasonabk: estimate of the costs .Landlord will incur by I teaS01l of such late payment. Acceptance of QUCb late payment cbarge by I..andlom sball in no event , I constitute a \vaiver ofTenant's defiwlt. if any. witb respect to &>neh averdue amount, nor prevent Landlord from exercising any of the other rights and remedies granted by this Lease. fn addition to the late �ha:rge provided above, if any S1IDl of money due Landlord under tbis Lease is not paid on its due date, it sbaU bear interest from its due date at the rate of eighteen percent (18.0"Al) per annum until paid ("Default Interest"). Without limiting the generaliiy oftbe foregoing. in order fur Tenant or any lcndet ofTenant to cure any mcmetmy aemnlt hereunder, the payment of accrued Default In.1emit VI-ill be required w cure such default .. I ' ! In event shall the no aggregate of the interest to be paid by Tenant, plus any other amounts paid in connection with the tra:o.saction evi&nced hereby which would under tppli<:able law be deemed "interest", ever exceed the maximum amount of interest which. under applicable law, could be lawfully charged 1n Tenant hereunder. Landlord and Tenant specifically intend and agree to limit contractually tbe interest payable beretmdcr to not :more than the amount determined at the maxitnum lawful nonllSI.Irious I ! rate of. interest ("u any) which under applicable law is permitted to be charged from time to time ('IDe l "Maximum Ratej. !'hcrefore. none ofthe tmns of this Lease shall ever be oonstrued to create a contract r· w pay interest at a rate in excess of the MaxiilUlll'1 Rate. and Tenant shall not be liable for intcm:st in excess of that determined at the Maxinn.nn Rare., and the provisions of this Section shall control all other t

4 , . '

' '

H U G H ES 000 1 5 Sworn Record 0474

provisions of this Lease. Ifany amount of interest takM or received by Landlord shall be in excess Gfthe maximum amount of inrerest which. under applicable law, coufd lawfully have. been coUected under this Lease, then the excess shall be deemed to have been the result of a mathema1ica1 error by Landlord and Tenant and &hall be refunded promptly to Tenant. If Tenant fails in two (2) consecutive :months to make rental pa:ymcnts ten (10) days after due, Landlord in order to reduce its administrative costs, may require, by giving notice to Tenant (and in addition to any late charges accruiDg P\l]'Suant to this Section, as well as any other rights and remedies accruing under this Lease or aVIU1able to Landlord m law or equity), that Base Rent be payable quarterly in � instead af monthly.

6. CPI Adinstmeg,t. On March I, 2008, the A4justed Base Rate shall be i.�ed by the increasein the CPJ index (as described below) ftom Febnutry, 2003 to Februaty, 2008. H Tenant exercises the Rc:iewal Option. then on March 1, 2013, the Base Rent shall be increased by the increase in the CPI index from January, 2008 to January. 2013, and on Mamh 1, 2018, the Base Rent shall be increased by the incxnse in the CPI :index from January, 2013 to January, 20 18.

6.1 CPIDefinition. The CPI referred to above is the "Consumer Price Index fur All Urban Consumers, South Region, Population Size Class A. Commodity and Servfue Group, All Items Index - 1982-84 = 100", as published by the U.S. Department of Labor, Bureau of Statistics. Such iitdc:x can nonnally be obtained from any public Iibt'a!y or from the Bureau of Business Resem:ch at the University of Texas at Austin. If no index. is issued covering the dates in question, then the index published immediately prior to such dates shall be used for purposes of calculation until Clll1'e!lt index is available.

6.2 CPIBaseyear Chanw;. If the base year Qf the above CPI changes, the formula descnDed above shall be adjusted to canfunn to the new base so that the calculations shall have the same results as ifmade on the CPI descnbed above. l

. 6.3 CP1 Cessation. If the publication of tbc above CPI ceases, Landlord and Tenant shall agree to a substitute index and formula wbieh will produce as close as possible tlu: f!2JI\e results as I the application of the CPL If landlOrd and Tenant fail to so agree. a &Ubstitute index or formula shall be detenoined by binding arbitration. In such event, Landlord and Tenant shall each appoint an arbitrator, I· and the two appointed arbitrators shall elect a third. or if they cannot agree upon a third arbitrator, either party may petition a court of oo� jurisdiction for the appointment ofa third arbitrator. Cost of the I I above arbitration shall be borne eqmilly by Landlord and Tmant

6.4 �1 . · 1m I tation.. At Landlord's option, any caiculation or adjustment of Base Rent may be delayed. Landlord's delay in implenmnting such increases shall not waive Landlord's right thm:m, and the most recent monthly rent figure shall continue to be paid during such I I I delay. If Landlord delays in timely caleulating such adjustment, the Base Rent increases shall become ! due seven {7) days after written notice to Tenant

6.5 Calculationofiru:tt;ase. The CPI Adjustment will be calcW.ated as follows: I I In March, 2008:

I CPI forJanuary.2008 Base Rent $24,931.69Jmonth x CPI for January, 2003

I In Man:h, 2013 (for purposes of dctexmi.ning Base Rent for the first Renewal Term):

5 . I ·J.

H U G H ES 000 16 Sworn Record 0475

Base Rent ($24,93 1.69) plus CPIforlanu.a[y.2ill3 the March, 2008 CPI Adjustment X CP! far January, 2008

In March, 2018 (for purposes ofdetennining Base Rent for the second Renewal Tenn):

Base Rent for epiforJgmmry. 2018 Fm Renewal Term CPl for Jmmary, 2<>13

7. AdditionalRent This U4se is a "Triple Net " Lease. which means that Tenant shall be obligated to pay for all real estate taxes and other impositions (as described in Paragraph 9), all insurance premiums. (as described in Paragraph 10). all repairs, maintenance and replacements to the Premises (as descn"bed in Paragraph 14). all utilities to the Premises {as described in Paragraph 8). 8lld all other cosrs and expenses relate

I 8. sprinkler services, refuse and trash collection. and other utilities and services used on the Premises, all maintenance charges far utilities, and water and storm and/or sanitaxy sewer charges or othc:c similar charges for utilities imposed by any go'Vm'l!l\elllta entity or utility provider (whether billed directly to Tenant or to Landlord), together with any taxes, pe.nalties. charges or the 1� pertaining to Tenant's use of the Premises. No infi:mlption or wlure of utilities shall constitute an eviction or disturbance of 1 � Tenant's use and possession of the Premises or a breach of arry of Landlord's obligations or render I

I Landlord liable for damages or entitle Tenant to be relieved :!rom my of its obligations (including the obligation to pay Rent). fn the event of any interruption or ma.lfun.cti

9. Taxes. Tenant shall pay all Taxes that accrue against tho Premises during the Lease � l Term. except that Taxes for any partial caJendar year dming the Lease Tenn. shall be prorated and Tenant shall be responsible for that pro rata portion covering the portion of the year this Lease is in force. To the extent tbat taxes are paid by Landlord in anyyear, Tenant shall reimburse Landlord within 30 days notice from Landlo..ll! that the monies have been expended by Landlord and � due .from Tenant. Tenant agrees to pay Landlord, as Additional .Rent, 1/12 ofanticipated Taxes for the Premises in advance as reasonably estimated by Landlord, such payments to be made on the first day of each calendar month. beginning on the Commencement Date. Landlord shall refund any wused portions of escrowed taxes or apply to next year's escalations at Tenant's option. If any such tax « excise is levied or assessed directly against I Tenant. ilien Tenant shall be responsible for and shall pay the same at such times and in such m.atlllCT, as the taxing authority shall require. Tenant &hall be liable for all taxes levied or assessed against any ! personal property or fixtures placed in tbe Pxemises, whether levied or assessed against Landlord or , I Tenant. If any of Tenanfs personal property is taxed with the Premises, Tenant sball pay Landlord the taxes for the pen;onal property within fifteen (15) days after Tenant receives a written s1al:ement from j j Landlord for such personal property taxes. j I l "Taxes" as used herein, ahall mean all ad valorem 1nes. assessments, special assessments, personal property taxes, transit taxes. excises, levies, license and permit fees {but not :including license or permit fees associated with the production of revenue for Landlord, such. as permit feea required for I leasehold improvmrents for other tenants and all other similar charges. if any, which are levied, assessed, t

I or imposed upon or becomes due and payable in connection with a lien upon all or :any portion of the

6 !

H U G H ES 000 1 7 j Sworn Record 0476

.•.

Premises and the improvements or facilities used in connection therewith. and rentals and receipts therefrom and all taxes of whatsoever nature imposed in substitution for or in lieu of any of the t.axes, assests smen or other charges included in this definition of taxes, excluding only franclrise, death and income taxes of Landlard(but not excluding such taxes ifimposed in the future either wholly or partially in lieu ofpresent real estate, ad vaim-em or similar taxes). Taxes sball also include any fees payable to tax consultants md attorneys for consultation and contesting taxes.

Landlard may contest by appropriate legal proceedings the amount. vall�, or application f>f any Taxes or liens thereof: If Tenant desires to contest au;y assessment of any Taxes which Tenant is required to pay hereunder and gives Landlord written notice of this intention. then Tenant may contest the assessment by appropriate proceedings diligently conducted in good faith without being in default hereunder; provided. however, if Tenant does not, as a part ofsuch contest, pay such Taxes under protest. Tenant shall pay the amount of contested Taxes and the penalty and interest expected to accrue thereon into an interest bearing escrow IICCOUIIt under the control of Landlord, which Landlord shall utilize to pay all Taxes and other sums fmaliy determined to be due. Tenant shall immediately indemnify and hold Landlord harmless :from all expenses and damages (including attorneys' fees and costs and court com) :resulting from 5DCh contest At no cost to Landlord, La.ndlonLs.hall coopmte with Tenant in their efforts to contest any a.ssessment of Tax.

Ir Whichever party receives any Tax bill attributable to the Premises aniJ./or any notice of inm:ase of assessment of the Premises � forwani a copy of said Tax bill to the other party witlrin fifu:en {15) days of such party's receipt of same. 10. Insurance.

10.1 Required Policies. Teillltll will, at its sole expense, procure and maintain the insurance coverages set forth in Exhibit "B" attached bereto and made a part hereof fur all purposes. lI I Tenant will, at its sole cost and expense, comply with such requirements during the tenn ofthe Lease. I I 10.2 Minimum Requirements. The covmages set forth in Exhibit :'B" are the minimum requirements and not a determination as to all of the coverages and maximum limits Terumt should carry. Th.e failure of Landlord to demand full compliance by Tenant with respect to the minimum co� outlined in Exhibit "B" will not constitute a waivt:r by Landlord with respect to Tenant's obligation to maintain stroh co�w--s. Landkml will purchase such other insurance poliuiea !!!!dlor endorsements or increase the policy limits of any policy set forth on Exhibit "B". if required by any l mortgagee. l

10.3 Special Remedy. Tenant's failure to obtain and maintaiD. the required insumnce , I will oonstitute a breach of. and de:fuult under, this I..case. If Tenant fails to :remedy such breach within I five (5) days after notice from Landlord. Landlord may, in addition to any ather remedy available to l

I.- Landlord, at Landlord's option, purchase such inSlll'lUlCe, at Tenant's expense, and Tenant will promp6y remit to Landlord the cost of such insumnce as Additional Rent Tenant will indemnifY the Landlord Parties (as bt:reinaftcr defmed) against any claims arising from Tenant's failure to purchase and/or maintain the insurance coverages required by this Leue.

11. Waiver of Subrogation. Neither Landlord nor Tenant shall be liable (by way of subrogation or otherwise) to the other party (or to any insu:rance company insuring the other party for any loss oc damage to any of the property of Landlord or Te&llil'lt, B! the case maybe, to the extent and only to I loL lJ the e.xli:.n1 actually covered by insurance even though such loss or damage might have been caused by the negligence of the Landlord or Tenant or their respective employees. agents, servants or invitees. This !

7 j I .·

H U G H ES 0 00 1 8 Sworn Record 0477

provision shall be i n effect only so long as the applicable insurance policies contain a clause or endorsement to the effect !hat the aforementioned wai� shall not affect the right of the insured to n:ccwer under such policies; and each party shall use its best efforts (including payment of an additional pnmium) to have its insurance policies contain a waiver of subroga1ion clause. Landlord and Tenant covenant and agree to obtain a waiver of 8Ubrogation frotn its �ve insurance cmicrs and have such waiver contained in all policies of i:nsur2nce reqnired to be obfained under this Lease. In the

12. !ndemnification.

12. 1 Definitions. The "Tenant Parties" are Tenant and its shareholders, members, managers, partners. directois. officers, employ=s. agents. confra<:tors, licensees and �. The ''Landlord Parties" are Landlord, the Landlord's property manager, Landlord's mortgagee(s) and any affiliates or .subsidiaries of the:: fOJegOiog, and all of tbcir respective shareholders, Jlll:lllbers. maoage.rs, partners. directors, officers, employees, agents, con1:!11cto:rs, licensees and invitees. "Claims'" means all foo:seeable and unforeseeable damages (inclnding actiJal, consequential, and punitive). losses, injuries, penalties, disb� cost&, charges, assests,. snxn legJli costs and expenses (including coort costs, attomeys' fees, experts' fees or other expenses incurred in investigatfug. preparing, prosecuting or settling any legal action or proceeding or arbitration. mediation, or other method of alkmative dispme �soluti

12.2 Scope of Indeuuitjes and Waivm. All indemnities, waivers and obligation. to defend, where'Ver contained in this Lease, (i) are independent of, and wi1l not be limited by, each otbet ot a'ny insurance obligations in this Lease (whether or not complied with} or damages or ·.

benefits payable under wada:l:3 oompensation or other employee benefit acts, and (ii) will survive the expiratioo of this Lease unlll an relatx:d Claims against tru: beneficiaries are fully and finally barred by applicable law. All applicable law affecting the validity or enfuroeabilil;y of any indemnity, waiver or obligation to defend t;OD.IBined in this Leare is made a part of sucb provision and will opem1l: to amend such Indemnity. waiver or obligation to defend m the minimum extent necessary to bring the provision i:nto conformity with Applicable Law a:nd cause the provision, as modified, to continue in full fine and effect. AU lNDBMNifiES. WAIVERS AND OBIJGATIONS TO DEFEND CONTAINED IN PARAGRAPH 1 2.3 WILL BE ENFORCED TO THE FULL.EST EXTENT PERMilTED BY APPLlCABLE LAWFORTIIEBENEFITOFLANDLORD P.ARIIES. EVEN IF 1lffi .AP.PLlCABLE Cl.AlM lS CAUSED BY1BEACilVEOR.PASSlVE NEGI.l3lN:E OR,SOLE,JOJNf, CCN:lJRltENI' OR

I INDIRECTLY, 1N WHOLE OR IN PART. OR AlLEGED TO ARISE FROM (A) lNJUR.Y

., l H U G H ES 000 1 9 Sworn Record 0478

SUFFERED BY ANY PAR1Y AND OCCURRING IN 1HE PREMISES; (B) INIDRY CAUSED BY A TENANr PAR1Y AND OCCURRING OUTSIDE THE PREMISES, ANDJOR. (q HARM TO, IMPAIRMENT OR WSS OF, OR IMPAIRMENT OR LOSS OF USE OF, PROPERTY, INCLUDING INCOME SUFFERED BY ANY PAR1Y INSIDE TIIE PREMISES OR CAUSED OR SUFFERED BY A TENANT PAR'IY OUTSIDE THE PREMISES. 'TENANT AGREES TO DEFEND TilE LANDWRD PARTIES IN LITIGATION, ARBITRATION, MEDIATION OR OTHER PROCEEDING. WITH COUNSEL REASONABLY ACCEPTABLE TO LANDLORD, AND PAY ALL COSTS ASSOCATION wrrn -nm PREPARATION OR PROSECUTION OF SUCH DEFENSE.

13. landlord Repairs- Except for damage catl8ed by Tenant, its employees. agents, contractors, customers or invitees, during the term of this Lease. Landlord shall. at its � repair and maintain in good structntal and workmanlike condition the roo� c:x.terior" walls. interior load bearing I walla i.nd foundation. Tenao.t: shall promptly give L;mdlord written notice of any repair requ.fred by Landlord pursuant to this Paragraph 13, after which Landlord shall have a reasonable opportunity to l repair. Except for Landlord's specific repair obligations set forth in this Section 13, Tenant acknowledges and agrees that Landlord shall have no other obligatiOliS under this Lease to repair or 1- maintain any portion ofthe Premises or the systems lot:ated in the Premises.

. 14. Ten!!Jlt'sRepairs. Subject tn Landlord's limited repair obligations dcscnbed in Paragraph l 13, and subject tn the provisions of Paragraphs 1 7 and 1 8, Tenant, at its expense. shall repair, replace and maintain in good condition all portions of the Premises and all areas, improvements and systems exclusively serving the Premises, including electric, plumbing, water and wastewater lines and related systems, fire sprinklers and fire protectimt systems, entries, interior and exterior doors, ceilings, � I windows, interior and extmor walls, and heating, ventilation and lrir conditioning systems. Such repairs and replacements include capital expenditures and repairs whose bcnclit may extend beyond the Lease J Tenn. Tenant also shall maintain, at its expense. in good order, condition and repair, the driveways, sidewalks, parking lots and landscaping installed by Landlord or Tenant on the Premises and a j responsible for removing aey trnsb or debris in any of such areas. Heating, ventilation and air - t oondftioning systi:ins and' otlici' mechanical and buildmg systems serving the Premises shall be 1- maintained at Tenanfs expense pursuant to maintenance service contracts entcted in!O by Tenant or, at j Landlord's electi

I Tenant, its agents, contractors, or invitees and any repair that benefits only the Premises.

lS. Tenant-Made Alterations and Trade Fixb.ttes. Any alterations, additions. or improvements made by or on behalf of Tenant to the Premises ("Tenant-Made Alterat:ionsfl) sbai1 be I subject to Landlord's prior written consent which shall not be unreasonably withheld, delayed or l conditioned. Tenant shall cause. at its expense, all Tenant-Made Altt:tations to comply with insurance requilemtnts and with Legal Requirements and shall construct at its expense any alteration or modification required by Legal Requirements as a result of any Tenant-Made Altcra.tions. AD Tenant­ iI

) Made Alterations shaU be constructed in a good and workmanlike manner by con1Iactors reasonably acceptable to Landlord and only good grades of materials 'Shall be used. All plans and speeificlltioos for any Tenant-Made Alterations shall be submitted to Landlmd for its written approval. Landlord may monitor construction of the Tenant-Made Alterations. Landlord's right to review plans and specifications and 1X) monit

sucll plans and specifications or OODStruction comply with Legal Requiremcmts. Tenant shall provide Landlord with the identities and mailing addresses of all contractors and subcontractors performing work or supplying matt:ria1s, prior to beginning such constmction, and Landlord may post on and about the

Premises notices of non-responSJ."bility pursuant to applicable law. Tcm.nt shall make reasonable arrangements to assure payment far the completion of an work :free and clear of liens and shall. provide certificates of insurance for worker's compensation. if requin:d, and other coverage in amOunts and from an inslli1!D.CC company satisfactory tu Landlord protecting Landlord against liability for personal injmy or

property damage during construction. Upon surrender ofthe Preuriscs, all Tenant-Made Altctations and any leasehold improvements constructed by Landlord or Tenant shall remain on the Premises 11.8 Landlnnf's property, except to the exk:nt Landlord requires removal at Tenant's expense of any such items or Landlord and Tenant ha.vo otherwise agreed in writing in connection with LandlOrd's consent to my Tenant-Made Alterations. Tenant shall Iepajr any damage caused by such removaL

Tenant. at its own cost and expense and without Landlord's prior approval, may erect such shelves, bins, equipment and trade fixtures (collectively "Trade Fixtures") in the ordinary course of its I ! !:. business provided that such items do not alter the basic character of the Premises, do not overload or damage the Premises, and may be removed witbout injuzy to 1he Premisea, and the construction, erection. and ins1al1ation thereof complies with an Legal R.equircments and with Landlord's requirements set forth above. Tenant may remove its 'Trade Fixtures. supplies, movable fumiture and equipment not attached to the Premises provided: ·(a) removal is made prior to the expiration or termination of this Lease; (b) Tenant is not in def3u1t of any obligation or covenant under this Lease at the time of removal; and (c) Tenant promptly repairs all damage caused by removal All other property at the Premises and any alteration or addition to the l'remises and any other article attached or affixed to the floor. wan or ceiling of the Premises shall remain upon and be sun:endeted -with the Premises at the expiration or termination of this Lease, including specifically, without limitation, the genentor, all ceiling ·and wall mounted surgical lights. the medical gas lines, valves and CO!ltainers, and the autoclaving, Tenant hereby waiving an rights to any payment ar compensation. If however. Landlord so requests in writing. Tenant will, prior to expiration or teiminaf:ion of this Lease. TCIIliJVC any and all Tmde Fixtures, alterations, additions, equipment and property placed or· installed by it in the Premises and will repair any damage caused by s\ieh. remo\ial. If any property not belonging to Landlord remains at the Leased Premises after 1he expiration or termination of the term of thi6 Lease, Tenant hereby authorizes Landlord to dispose of the I· I property as Landlord ms.y desire without liability to Tenant if the property belongs to Tenant. If the Pfopel'iy does not belong to Tenant, Tenant agrees to indemnity, de:fund and hold Landlord haonless from all suits. actions, Jisbility, !ass, damages and cxpensea in cormection with any removal, exmise of

I dominion over and/or disposition of such property by Landlord.

16. � Tenant shall not IDi!ke any changes to the exterior of the Premises, install any exterior lights. or painting. ar erect or install .any exterior signs. without Landlotd's prior written consent which shall not be unreasonably withheld. delayed or conditioned. Upon Sllt'l'C1lcler or vacating of the Pn:miaes, Tenant &ball have removed aU signs and repair. paint, and/or replace the building facial surface

)�� to which its signs are attached. Tenant shall obtain all applicable govemmartal permits and awmvals for sign and exterior treatmenls.

17. C�on. If any part of tbe building located on the Premises, or a substantial portion of the parking for the Premises, should be taken. for any publio QI" quasi--public use under governmental law, ord�. or regulation, or by right of eminent domain. or by private purchase m lieu thereof (a "Taking" or "Taken"), and tbe Taking wonld prevent or materially interfere with Tenant's usc otthe Premises, then Tenant shall have the right te:rminate this Lease by giving written notice of !illch election to .l..andlord; provided. howewr, such termination shall not be effeeti.ve until 81.1Ch time as the Taking has been finalized. Base Rent and Additional Rent shall be apportioned as of date of the final I! 10 ' I H U G H ES 00021 Sworn Record 0480

.. 1 I

·' I I

I Taking. If part of the Premises shall be Taken, and this Lease is nGt terminated as provided above, the Base Rent payable hereunder during the unexpired Lease Term shall be reduced to such extent as may be fair and reasonable under lhe circumstances. In the event of any such Taking. Landlord shall be entitled to receive 1he entire price or award fu:mt any such Taking for the Pmnises (exclnding however any Tenant's Premises Expansion as described in Section 15 above) without any payment to Tenant. and

I Tenant hereby assigns to Landlord Tenant's interest, ifany, in such awmrl. Tenant shall have the right, to 1bt; extent that same shall not dhmnish Landlord's a'W8t'd. to make a separate claim against the condcTnaing authority (but not Landlord) for such compensation as may be separately awmled or

I n:cover:abl e by Tenant for Tenant's Premises Expansion and fur moving expenses and damage to Tenant's Trade Fl.XtuR&. if a sepante award for I!UCb items is made to Tenant.

18. Casualty;JWstoration. If at any time during the Lease Term the Premises are damaged by a fire or other casua.Ity, Landlord shall notify Tenant witl:rin sixty (60) days after such damage as to the amount of time Landlord reasonably estimates it will take to resmre the Premises. If the restoration time is estimated to exceed twdve (12} months, either Landlord or Tenant may eJect to terminate this Lease upon notice to the other party given no later than thirty (30) days after Landlord's notice.. If neither party elec1s to taminate this Lease or if Landlord estimates that restoration will talre twelve (12) mcmths or less, tbeo, subject to receipt of sufficient insurance proceeds. landlord shall promptly restore the Premises, c:Jtcluding the :improvements installed by Tenant, subject to delays arising from the collection of insurance proceeds or from Force Majeure events. Tenant, at Tenant's expense, shaU promptly perform, subject to ddays arising from the collection of insurance proceerls, or from Foroo Majeure

I events. all repairs or restoration not required to be c:lone by Landlord and shall promptly re-auer the Premises and commence doing business in accordanee with this Lease. Notwi.1hstanding the foregoing, either party may terorlnate this Lease if !he Ptemises are damaged during the last year of the Lease Tenn. and Landlord reasonably estimates that it will take IJ'IOte than one month to repair such damage. Tenant shall pay to Landlord with respect to any damage to the Premises caused by Temmt the amount of the I cou:anercially reallOlllllb e deductible lDlda Landlord's insurance policy within ten. (10) days after presentment of Landlord's invoice. Base Rent and Additional Rmt shall be abated for the pet.lod of�air I I and restoratioo in the proportion which tbt area of the Premises, if any, which is not usable by Tenant I I bears to the total area of the ·Premises. Such abatement shall be the sole remedy ofTenant, and except .as t provided herein. Tenant waives any right to k:rminate the Lease by reason ofdamage or casualty Ws&.

19. Assignmentand Subletting. Tenant shall not assign this Lease or sublease the Premises or any part thereof without Landlord's prior written CQI18enf. whlch consent shall not be unreasonably withheld. delayed, or conditioned; provided. however, that Landlord's consent shall be subject to and I. conditional upon the following: (i) no Event ofDefault bas occurred, md no event bas occurred which, with the passage of time, shall COIIl8l:itute m Event of Default; (ii) Tenant pays to Landlord all of Landlonl's costs and expenses. including legal fees, in connection with the review and approval of any I prop0$ed assignee or subtenant; (iii) Landlord has received and has had a reasonable opportunity to review all documents and agreement executed or to be executed between Tenant end the propo!ed I I aSBignce or subtenant; (iv) the proposes assigDee or subtenant bas assumed all of !he Tenant's obligations under this Lease in a fonn and content acceptable to Landlord; (v) the proposed assignee or subtenant has, in the reasonable judgment of Landlord, a net worth equal to the net worth of Tenant as of the ·c:latc ! of this Lease, or is otherwise satisfactory 1o Landlord, and bas a !llrtisfactory history of opemting I l properties similar to the Premises; and (vi) the proposed assignee or subtenant has. in the reasanab1e judgment of Landlord, a satisfactory credit history and prqfcssiODal .reputation and character. Tenant will submit in writing to Landlord: (1) the name and address of the proposed assignee or subtenant; (2) a � of1he proposed agn:e.mctlt ofusignm� or sublease; (3) reasonably satisfactory information

-I as to the nantre and character of the proposed assignee cr subtenam. and as to the natL1fe ofits proposed use of tbe Premises if different from the eurrent use; (4) banking, financial ar other credit infonnation

" 11 I l I

H U G H ES 00022 Sworn Record 0481

reasonably sufficient to enable Landlord to determine the financial responsibility and character of the proposed assignee or subtenant; and (S) any otherinftmnation reasonably requested by Landlord. For purposes of this Paragraph 19, a tnmsfet of she ownership interests controlling Tenant shall be deemed an assignment of this Lease unless such ownecslrlp interests are publicly traded. Notwithstanding the abo� Tenant may assign or sublet the Premises. or any part thereof, to any eruity controlling Tenant, controlled by Tenant or utule:r common control with Tenant (a "Tenant Affiliate"), without the prior written consent of Landlord; provided, however, Tenant and any guara:ntor or surety of Tenant's obligation& under this Leaae shall at aU times remain fully respons1ble and liable fOJ: the payment ofthe rent and for compliance with all of Tenant's other obligations under this Lease.

Tenant shall reimburse Landlord for all of Landlord's reasonable out-of-pocket expenses in connection wifu any assignment or sublease.

Upon Landlonfs receipt ofTenant's written notice ofa desire to assign or sublet the J!K:mises, or

t any part thereof (other than to a Tenant Afliliate), Landlord :may, by giving written notice to Tenant within tbirty (30) days after receipt of Tenani's noOO; tmxrinate this Lease with respect to tbe space deseribed in Tenant's notice, as of the date specified in Tenant's notice for the commencement of the proposed assignment or sublease.

Notwi1'hstanding any assignment or subletting, Tenant and any guuantor or surety of Teoanfs obligations under this Lease shall at all times remain fully responsible and liable for 1he payment of the

I rent and for compliance with all of Tenant's otber obligations under this Lease (regardless of whether Landlord's approval has been obtained for any such assigmnents or subletting). In the event that the: Rent due and payab1e by a subtenant or assignee (or a combination of the Rent payabl8 tmde.r such sublea£e or sssignment plus any bonus or other consideration or incllknt thereto) excwis the Rent payable under this Lease for the Premises (excluding 1mwevet any Rent Tenant receives for the Tenant's Premises &pansicm), then Tenant shall be bound and obligated to pay Landlord as additional rem hereunder one­ l half (112) of aU such ex.cess rental and other excess consideration within ten {10) days foTiowing receipt I thereOf by Tenant; proVided, hOWem-, Tenant shall not be obligated to pay my portion of Rent received on Tenant's Premises Expansion. t· In the �vent of a permitted assignment or sublease, upon a default by Tenant hereunder Landlord may collect rent from the assignee, subtenant, cr other occupant and, ro::cept to the extent set furth in the I I preceding pamgraph, apply the amount collected to the next Rent payable hereunder; and all sueh rentals collecled by T\:tlillt shall be held in trust fur Landlord and immediately forwarded to Landlosd. No such , transaction or col!eetion of Rent or application thereof by Landlord, however, .shall be deemed a waiver of these provisions or a rehlase of Tmant from the :further performance by Tenant of its covenants,. I duties, or obligations hereunder.

Tenant shall not mortgage. pledge, or � its leasehold m.tcreat or grant any � or license within the Premises and any attempt to do any ofthe foregoing shaH be void and ofno efiect

20. l'll§pection and Apcess. Landlord and its agents, representatives. and i:ontractors 7Jlay ente:r the Premises at any reasonable time to inspect the Premises and to make llllCh repairs as may be i required or permitted pursuant to this Lease and fot any other business purpose. Laru.ilord and Landlord's representatives may enter the Premises during business hours for the pmpose of showing !he Pmnises to ! f. prospective ptJreha.sers and, during the last six (6) :ro.onths of the Lease Term, to prospective tenants. l During the last six (6) months of the Lease Tenn, Landlord may erect a suitable sign em the l'n:mises stating the Premises are aVllllable to lease. Landlord may grant easemtmts, make public dedications, i I 12 I . I

I H U G H E S 00023 Sworn Record 0482

designate oommon areas and create restrictions on ar about the Premises. provided that no such easement. dedication, deaiguation or :rmriction materially interferes with Tenant's usc or occupancy of the Premises. At Landlord's request. Tenant shall execute such :i.nstnnnents as may be necessary for sucb easements, dedications or restrictions.

·21. QuietEnjoyment. Tenant shall. subject to ibe tenns of this L=se. at all times during 1he Lease Term, have peaceful and quiet enjoyment of the Premises against any person claiming by. through or under Lanillord.

22. Syrrcsdm-. Upon temlination of the Lease Term or earlier tEonination of Tenant's right

I of possession, Tenant r.ha.ll surrender the Pmnises to Landlord in the same condifion as �ved, broom clean, ordinary wear and war and casual1y loss and cmxiemnation covered by Panlgra:phs 16 and 1 7 euepted, and in accordance with Addendum 1 attached hereto and made a part hereof for all purposes. All obligations of Tenant hereunder not tully perfOllllOd as of the tennination of� Lease Term sba11 survive the t.emlination of the Lease Term. including, without limitation, indemnity obligations, payment obligations with respect to Additional Rent and obligations CODGeming the oondition and repair of the Premises. r 23. HqJrlingQyq. If Tenant retaills posseson si of the Premises after the termination of the !

I Lease Tenn. then unless otherwise agreed in writing by Landlord. such possession shall be subject to immediate termination by Landlord at any time, and all of the other terms and provisions of this Lease (excluding any expansion or l'e31.eW3l option or other sftnilar right or option) shall be app&ablc during such holdover period, except that Tenant shall pay Landlord from time to time, upon demand, as .Base Rent for the holdover period, an amount equal to one hundred fifty percent (1 50%) of the Base Rent in i effect on the tmnination da1e, computed on a monthly basis for each month or pan thereof during such holding over. All other payments slWl continue under the ter:ms of 1his Lease. In addition, Tenant shall I be liable for all damages incurred by Landlord as a result of such holding over by Te:nant. No holding over by Tenant, whether with or without consent of Landlord. shall operate to extend this Lease, except as othcnvise expressly pro-vided in writing. and this Paragraph 23 shall not be construed as consent for I Tenant to retain possesonsi ofthe Premises.

24. Events of Default Each of the following eVI:!lts sha1I be an event of default (''Event of Defauh") by Tenant under this Lease: (a) Tenant shall fail to pay any installment of Base Rent, Additional Rent or any other payment required herein when due. and such failure shall continue for a period of ten (10) days from the date such payment was due.

(b) Tenant or any guarantor or surety of Tenant's obligations hereunder sbal1 (A) make a general assignment for 1hc bene:fit of creditms; {B) oomrrumce any case, proceeding or other action seeking to have an order for relief entered on its behalf as a d.ebtar or to adjudicate it as ba!.Uropt. or insolvent, or seeking reorganization. ammgement, adjusQnent, liquidation. dissolution or composition

of its or its debts or �ng appointment of a receiver. trustee. custodian or other similar of&ials for it or for all of any substmtial part of its property {collectively a "proceeding for relief"); (C) become the subject of any proceeding for relief which is not dismissed within 180 days ofits filing or entry; -or (D) die or suffer a legal disability (if Tenant, guarantor, or surety is an individnal) or be dissolved or otherwise fail to maintain its legal existence (if Tenant, guanmtor or surety is a corporation, partnership or other entity).

H U G H E S 00024 Sworn Record 0483

(c) Tesumt shall abandon or vacate the Premises for a period of seven (7) days or I I I,

I more whether or not Tenant is in monetary or other default under this Lease. (d) Any insurance required to be maintained by Tenant pursuant to this Lease shall

II be caneeUed or terminated or shall expire or shall be reduced or materially changed, �t. in each case, following any applit:able cure period and as otherwise per.mitted in this Lease.

{e) Temmt shall assign, sublease, or ttansfer its interest in or with respect to this Lease, except as otherwise pelJllitkd in this Lease. I

lr {f) Tenant shall fail tG d.i.sc1Jmge or post surety acceptabJc to Landlord any lien placed upon the Premises in violation of this Lease within thirty (30) days after any such lien or encumbxance is filed against the Premises.

(g) Tenant shall fail to comply with any provision of this Lease other than those specifically referred to in this Paragraph 24, and, except as otherwise expressly provXled bercin. such ddiwlt !ihall continue fur more than thirty (30) days after Landlord shall have given Tenant written notice of swh defiwlt. provided in the event the default is of such a l'latllre that cannot be cured within thirty (30) days. Tenant shall bave commenced to cure witlrin t1le thirty {30) day period and diligently proceeds to cure suclt ddault.

25. Landlorg's Remedies.. Upon each occu:m:nce of an Event of Default and for so long as such Event ofDefault shall be contirntiug, Landlord may, at its election, tmninate this Lease or 1erminate Tenant's right ofpossession, witlwat terminating this Lease (but Tenant slutil n:n'l8in liable as hen:inafter provided) and/or pursue any other u:medies at law or in equity. Upon the tcmination of this Lease or ten:n:inlrtion of Tenant's right of possession, it &ball be lawful for Landlord, without fon:mtl demand or notice of any kind, to re-enter the Premises by � clisposscssiQil proceedings or any other action or proceeding anthorizcd by law and to remove Tenant and all persons and property therefrom. IfLandlord re-enters the Premises, Landlord shall have the right to alter or modify locks or fences and other security devices at the Leased Premises and remove Tenants property and the property of others located· within the Leased Premises. The provisions of this Paragraph 25 shall override and comml any eooflicting ! I provisions of Section 93.002 of the Texas Property Code, as wen au.ny succe'SSOr statutc gover.ning the right of a landlord to change the door locks ofa tenant under a commercial kase. If Landlonl tenninates this Lease, Landlord miiY recover from Tenant the sum of (i) all Base Il. Rent and all other am

I whole or any part of the Premises, including without limitation brokerage fees and/or leasing commissions incurred by landlmd, and costs of Im!Oving and storing Ten.ant's or any other occupani's property. repairing, altering. remodeling, or otherwise altering the Premiaes into a condition acceptable to a new tenant or tenants, and all other reasonable e.x:pcl�JleS incurred by Landlord in pursuing its. remedies. i including reasooablc attorneys' fees and court costs; and (ii) the excess of tbe then present valuc of the Base Rent and other amounta payable by Tenant under this Lease as would otherwise have been required j ttl be paid by Tenant to Landlord during the period following the termination of this Lea.se measured I from the date of such tc:mrina.tion to the expiration da1e stated in this Lease, over the pret;mt value ofmy f net amounts which Tenant establishes Landlord can reasonably expect 1o recover by reletting the Premises for such period. taking into oonsideration the availability of accepl:abk tenants and other IDaiket conditions affecting teasing. Such -prese:nt values shall be calculated at a discount rate equal to the ninet:y­ (90) day U.S. Treasury bill rate at the date of such tcnnination. I l 14 ,.... . ·�

H U G H ES 00025 Sworn Record 0484

If Landlord terminates Tenantts right of possession (but not this Lease). Landlord may, but &haT! be under no obligation to. relet the Premises for the account of Tenant for such rent and upon such terms as shalf be satisfactory to Landlord without thereby releasing Tenant from any liability 'hereunder and

wilhout demand or notice ofany kind to Tc:mmt. For the purpose of such reletting, Landlord is a� to make any repairs, changes. allr:rations, or additions in or to the Premises as Landlord dec::tns reasOlUlbly necessazy or desirable. If the Premises are not relet, then Tenant shall pay to Landlord as damages a sum equal to · the amount of the rental reserved in this Lease for such period or periods. plus the eost ofrc:covering possts8ian of the Pmnises (mcluding reumable attorneys' fees and costs of suit) the tmpaid Base Rent and other amounts accrued hereunder at the time of repossesn, sio and the costs incurred in any attempt by Laudlord to relet the Premises. If the Premises are relet and a sufficient SUil1 shall not be realized from such reletting after first deducting thereftom, for retention by Landlord, the unpaid Base Rent and other amounts acCIUcd hereunder at the time of rcletting. the COif of recovering po11session including atromeys' fees and costs of suit), aU of the costs and cxpe.nse of rcpaiiB, changes, alterations, and additions, the expense ofsuch relcrtiDg (including. without limitation, brolcem.ge fees and leasing commiso si ns) and the cost of collection of the rent accruing therefrom to Batisfy the Rm1 provided for in this Lease to be paid, then Tenant shall immediatcly satisfY and pay any such deficiency. Any such payments due Landhm:l shall be made upon demand from time to time and Tenant agrees that Landlord may file suit to recover any &'l.ttnS falling due frmn time to time. Notwithstanding any such reletting with

Exercise by Landlord ofany one or more remedies hereunder gramed ot otherwise llWllable shall not be deemed to be an acceptance of sutrendet of the Premises and/01' a termination of this Lease by Landlord. whd:her by agreement ar by operation of law, it being unclerstood that such sun-ender and/or termination can be effected only by the written agreement of Landlord and Tenant Any law, usage. or custom to !he contraiy notwithstanding, Landlord shall have the right at all times to enforce the provisions of this Lease in strict accordance with the ten:ns hereof; and the failure of Landlord at any time to enforce' its rights under this Lease strictly in accordance with same shall nor be construed as having created a custom in any way or manner contrary to the specific tcnns, provisions, and covenants of this lease or as having modified the same. Tenant and Landlord further agree that forbcarant:c or waiver by Landlord to enforce one or mere ofim rights pursuant to this Lease or at law or in equity, shall not be a waiver of Landlord's right to enforce one or morn of its rights in connection with any subsequent defiwlt. A receipt by Landlord of.Rent or other payment with knowledge Df the bn:ach of any covenant hereof sbaU not be deemed a waiwr ofsuch. breach, and no waiver by Landlord of any provision of this Lease sball be deemed to have been made unless expressed in writing and signed by Landla:d. To tbe greatest extent pemritted by law. Tenantwaives the service ofnotice oflandlord's intention to ro-enb:r as provided for in any s1atutc. or to institute legal proceedings to tbat end, and also waives all ri ght of redemption in case Tenant shall be dispossessed by 11 judgtl'lt!l1t or by warrant of any court or judge. The terms "enter: •re-enter," "entry," or "re-entry,o as used in this Lease, are not restricted to their Ux:hnical legal meani.ng$. Any re'!otting of the Premises shall be on suc:h ter:m5 and conditions as Landlord in its sole discretion may determine (including, without limitation. a teun di£ftrent than the remaining Lease Tenn. rental cancessions,. alterations and repair of the Premises. rental ofless 1ban the entire Premises to any tenant}. Landloni shall not be liable, nor shall Tcmant ' s obligations hereunder be diminished because ofLandlord's failure to relet the Premises or collect tent due in respect of such relctting.

If Tenant f$ils to make any payment. petfoo:.n any obligation or cure any default bereunder within ' I the time pt:nnitted. Landlord, without being under any obligation to do so and without thereby waivin,r such flrilure or defuult, may make the payment, perform such obligation and/or remedy such default for the account of Tenant (and enter the Premises for sueh purpose). Tenant agrees to pay Landlord. upon r-· 15 [ ,, ..

H U G H ES 00026 Sworn Record 0485

/' ..

demand, all costs, expenses and disbursements {including reasonable attorney's fees) incurred by Landlord in taking such remedial action. I

-�� lI 26. Tenant] Remedies/Limitation ofLiability. Landlord shall not be in default hereunder unless landlord fails·to perform any of its obligations hereunder within thirty (30) days after written notice from Tenant speci� such failure (unless such performance will, due to the natmc of the obligation, require a period oftime-in ClCI:eSS of thirty (30) days, and. then only after such period oftime as is reasonably necessary to cure the default as long as Undlord is diligently attempting to cure such

I default). Under l'lO citcumstances wbal90ever shall Landlord ever be liable to Tenant for con.seqnentiB.l damages or special damages. All obtigations ofLandlord under this Lease will be binding upon Landlord only during the period of its ownet&hip of tbe Prenliscs and not tb.ereaftel'. The te:rm "t-andloni" in this Lease sbaU mean only the owner. for the time being ofthe Premises, and in the event of 1he transfer by such owner of its intere.t in the Premises, such owner shall thereupon be released and discharged from all obligations of Landlord lht:rcafte.r accruing, but such obligations shall be binding during tbe Lease Term upon eacb new owner for the duration of such owner's ownership. Any liability ofLandlord under 1his Lease shall be limited solely to itt intelat in the Premises, and in no event shall any personal liability be asserted against Landloul in � with this Lease nor shall any recourse be bad to any � other property or assets of Landlord. Under no c:ircum.stances whatsoever shall Landlord ever be liable I -I heteunda for consequential damages or special damages.

In the event of any act or omission by Landlord which would give Tenant the right to =cercise any remedy « take any other action against Landlord, Tenant shall not exerci!ic any such right until (i) it shall have given notice. by registered or certified mail, of such act or onrlssion to the Landlord's lc.mb­ I rLandloro's Mortgagee") whose name and address shall have been furnished to Tenant in writing. at the last address so t.Umlshed, and [n) the period of time allowed LancDord for remedying such act or I omission plus an additional reasonable period but. in any event, not less than thirty (30) days, shall have elapsed following the giving ofsuch notice, provided tbat following the giving of such notice, J..andlord I or Landlord's Mortgagee shall, with reasonable diligence, have co.mmc::nccd and continued to remedy such act or omission ac to cause the same to be remedied. All of tile rights and remedies provided in this tease fer the benetit of Laiu:llord's MOrtgagee shall likewise be understoOd to inure to the bc;1efit of1be successors and assigns of Landlord's Mortgagee.

1:7. Subonfination. This Lease and Texwrt's interest snd rights hereunder are and shall be subject and subordinate at all time£; ro the lien of any mortgage,. now existing or hereafter created on or against the Premises. and all amendments, restatements, f'CileWll)s., modifications, ccmsolidations, refinancing. assignments and extensions thereof. without the neu.ssity of my furtller ius1rument ac act on the part of Teraant Tenant agrees, at the election of the Landlord's Mortgagee, to attorn to any such holder. Tenant agrees upon demand to execute, acknow1edge and deliver such instruments, confirming such subordination and attornment as sball be requested by any Landlord's Mortgagee. In the event Tenant fails to execute any such instruments witlrin ten (10) days, the Tenant hereby appoints Landkmi as a.ttorney.in-fact fur Tenant irrevocably (such power of attorney being coupled with an intc:rest) to

execute, acknowledge aDd deliver any such instrument(a) for and in the name of the Tenant md to CIIUSe I arry StiCh instrume:nt(s) to be recorded. Notwithstanding the foregoing, any Landlord's Mortgagee may at my time subordinate its mortgage to this I..easc, without Tenant's consent, by notice in writing to Tenant, ! I and the:'eupon this Lease shall be deemed prior to such mortgage without regard to their R:SpeCtive dates of execution, delivery or recording and in that event such Landlord's Mortgagee shall have the same rights with respect to this Lease as though this Lease bad been executed prier to the execution, delivery I and recording of such mortgage and had been assigned to such landlord's Mortgagee. The term �mortgage". whenever- used in this Lease, shall be deemed to include deed$ of trust. security assignments I I 16

H U G H ES 00027 Sworn Record 0486

and any other encumbrances, and any reference to the Landlord's Mortgagee shall be deemed to include the beneficiary � a deed of trust.

28. Mechanic's Lieng. Tenant has no express or i:cnplied authority to create or place any lien or encurnbmlce of any kind upon, or in any mannte to bind the interest of Landlord or Tenant in, the Premises or to charge the rentals payable hereunder for any claim in favor of any person dealing .,..'ith Tenant, including those who may furnish materials or perform labor for any CQl:l$tructjon or Rpairs. Tenant covenants and agrees 1ha.t it will pay or cause to be paid all sums legally due and payable by it on account of any labor perfonned or materials furnished in connection with any work performed on tbe Premises and that Tenant will indeiilllify, defend and hold Landlord bannless from all Joss, cost or expense based on or arisiDg out of asserted claims or liens against the leasehold estate or against the interest of Landlord in the Preinises or under this Lease. Tenant shall give Landlord immediate 'WI:ittat notice of the placing of any lien or encumbtance &gainst the Premises and cause such lien or encumbrance to be discharged within thirty (30) days of the filing or recording thereof; provided. however, Terumt may contest such liens or encumbl'l!.llCCS as long as such contest prevents foreclosure of the: lien or etiC1llllbrance and Tenant causes such lien or encumbrance to be bonded or insured in a Jilal'lllCf satisf3ctoxy to Landlord within such thirty (30) day period. r of 29. Landlord. EstoppelCertificates. Temmt agrees, from time to time. within ten {10) days a1ru request to execute and deliver to Landlord or Lsndlord's designees any estoppel ocrtificate requested by Landlord stating that this Lease iS in full force and effect, the date to whiclt Rent has been I I paid, that I..andlGrd is not in default hetc:Ul'tder (or specifYing in detail the nature of Landlord's default), the termination date of this Lease and such other matters pertaining to this Lease as may be requested by Landlord. Te!Wlt's obligation to furnish ea.c:h estoppel certificate in a timely .tasbion is a material. inducement for Landlord's execution of this Lease. No cure or grace period provided in this Lease shall ! apply to Tc:rumt's obligations to timely deliver an estoppel certificate. Tenant hereby inevocably appoints LandlOI'd as its attorney-in-fact to execute on ils behalf and in its name any such estoppel certificate if !

I Tenant fails to execute and deliver the estoppel certificate within ten (10) days after Landlord's wri� request. 30. Enyironmentat Requirements. Except for "FFazarus rO Material&" (hereafter defined) contained in products used by Tenant in de minimis quantities for ordinary cleaning purposes or tUiCd in the normal operations of a surgery center and as permitted by "Environmental Requirements• (hereafter defined). Tenant shall not-permit ()1' cause any party to bring any Hazardous Materials upon the Premises I or transport, stare. UBe, generate. manufacture or release lillY Haza.rdous Materials in or about the Premises without Landlord's prior written consent. Tenant. at its sole cost and expense, shaU operate its I business in the Premises in strict compliance with all Environmental Requirements and shall n:mediatc in a � satisfactory to Landlotd any Ha2ardous Mareria1s released on or from the Premises by Tenant. I its agents. employees. contractors, subtenants or invitees. Tenant shall complete and ce:rticy to disclosure s1:lttei:l:lent as requested by Landlord from time to time rel:ating to Tenant's mmsportation, storage, use. genera:tion. manufacture or release of HazardoDs Mattrials on the Premises. The term "Environmental Requireme:ms" means all applicable present and future statutes, regulations. ordinances, rules, codes. judgments, orders or other similar enactmentB of any govemmcnlal authority or agency regtJlating or relating tn health, safety, or environmental conditions on, unde:r, or about 1he Premises or the environment, including without limitation, the fOllowing: the Comprehensive Environmental Response, Compensation and liability Act; � Resource Conservation and Recovery Act; and all state and 'local counterparts tbacto, and any regulations or policies promulgated or issued thereunder. The tl:ml "Hazan:lous Materials" means and includes my substance, material, waste. pollutant, or containment listed or defined as hazardous or toxic, undel' any Environmental Requirements, asbestos and petrol.eum., includmg crude oil or any fraction thetcc:f. natural gas liquids. liquefied natural gas, or synthetic gas

H U G H ES 00028 Sworn Record 0487

. .

usable for :fuel (or mixtures of natural gas and such synthetic gas). As defmed in Environmental Requirements, Tenant is and shall be deemed to be the "operator of Tenant's facility and the owner" of all Ha2ardoos Materials brought on the Premises by Tenant, its agents, employees, contractors or invitees, and the wastes, by-products, or residues generated, resulting. or produced therefrom,

Tenant $ball indemni!Y, defend, md hold Landlord battnlcss from and against any and all losses - j (including, without limitation, diminution in value of 1he Premises and loss of rr:ntlll income from the Premises). claims. demands, actions. suits, dnmages (including, without limitation, punitive damages). expenses (incllldi:ng. withoot limitation, remediation. removal, repair, corrective acticn, or cleanup expenses), and costs {including, without limitation, actual attorneys' fees, consultant fees or expert fees and including. without limitation, removal or management of any asbestos brought into the property or disturbed in breac-h of the requirements of this Paragraph 30, regardless of whether such removal or management is required by law) which are brought or recoverable against, or suffered or incUI:rcd 'by Landlord as a res.ult ofany release ofHazardous Materials for which Tenant is obligated to n:mediatc as provided above or any other breach of the requirements under this Paragraph 30 · by Tenant, its agents, employees. contractor&,. subtenants, assignees ar invitees. rega:rdkss ofwhether Tenant b¥1 knowledge of mch noncompliance. The obligations ofTenant 1.IJlder this .Paragraph 30 shall survive any termination of l � this Lease. I Landlord shall have access to, and a right to perform inspections end tests of, the Premises to determine Tenant's compliance with En\'ironmental Requirements. its obligations under this Paragraph 30, or the environmental condition of the Premises. AJ;cc:ss shall be granted to Landlord upon Landtord's prior notice to Tenant and at such times so as to minimize, so far as may be :mlSOtlable under the circumstances, any disturbance to Tenanfs operations. Such inspections and tests shall be conducted at Landlord's expense. lll'lless such inspedious or tests reveal that Tenant bas not complied with any Enviromne:nta1 Requirement, in which case Tenant shall reimburse Landlord for the reasonable cost of such inspection and tests. Landlord's receipt of _or satisfaction with any environmental assestsmen in no way waives u.ny rights that landlord holds against Tenant.

31. Independent Covenants. The obligation of Tenant to pay all Rent and other sums provided under this Lease to be paid by Tenant and the obligation of Tenant to perform Tenant's other covenants and duties under this Lease constitute indepmdent, unoondltional obligatimJS to be perlbnned at all times provided fur under tlris Lease. Tenant waives any right to assert. as either a claim or defense, that LandiOtd is obligated to pcdbrm or i3 liable fur the nonpe�formance of my implied covenant or implied duty of Landlord not c:xp.ressly set forth in this Lease. Tenant agrees to pCifurm. an of its obligations hereunder (including, without limi1ation. the obligation to pay rent}, irrespective of any breach or alleged breach by Landlord of any such implied wammty. Tenant agrees that Landlord shall incur no liability to Tenant by reason of any defect in tho Leased Premises, whether apparent or latent. Tenant waives and relinquishes all rights which Tenant might haw 1x> claim any nature of lien l (prejudgim:nt or otherwise} against any rent or other SUJnS payable by Tenant under this Lease. I 32. NoSecuritySeryice. Tenant acknowledges and agrees that Landlord is not providing any security services with respect to the Premises and tllat Landlord shall not be liable to Trmant for, and Tenant waives any claim against Landlord with respect to, any loss by theft cr any other damage suffered i ,I or incuned by Tenant in connection with any unauthorized entry into the Prc:mises or any otber breach of · security with respect tc tbe Premises.

33. ForceMiieure· Neither Landlord nor Tenant shall be held responsible for delays in the 1 performance of their respective obligations hereunder (other than the payment of Rent) when ca.used by strikes. lockouts, labor �. acts of God. inability to obtain labor or materials or reasonable I 18 - l. j I !' H U G H ES 00029 Sworn Record 0488

substitutes. governmental n'l'Strictions. governmental regulations, governmentd controls, delay in issuance ofpermits, enemy or hostile goverm:nental action, civil commotion, fire or other casualty, and other causes beyond the reasonable control of Landlord ("Force Majeure").

34. llm,km.. Tenant represents end Wl!Il'Bllts that it has dealt with no broker, agent or other person in connection with this tnmsaction, and that no broker. agent or other person brought about this transaction, ifany, and Tenant agn::es to indemnify, defend and hold Landlord hamlless from and against any claims by any other broker, agent or other person claiming commission of other fonn of oompensation by virtue ofhavjng dealt with regard to this leasing trans.e.ction.

35. Land1om's Lien/Security Itlterest: Subordination: Tenant Financing. To secure the payment of all Rent due and to become due hereunder and the faithful performance of all the other covenants ofthis Lease required by Tenant to be petfor:med, Tenant hereby gives to Landlord an express contract lien on and security intl!rest in aU property, chatlcls. trade and other fixtures, equiprrumt, inventory. contract rights, accounts receivable or merchandise which may be placed in the Premises and I also upon all proceeds thereof, and the proceeds of any insurance whichmay accrue to Tenant by reason of damage to or destruction ofany such. property, as security fur all of Tenant'i obligations hereunder, including. without limitation. the obligation to pay Rc:nt. AU exemption laws are hereby waived by r Tenant. This lien and security interest are giw:n in addition to any Laudlord's statutory lien(s) and shall be cumulative thereto. Tenant authorizes Landlord to execute and file Unifunn Commercial Code ! i financing statements relating to the aforesaid security interest If an Event of Default occurs, then Landlord will be entitleil to exercise any or all rights and remedies under the Uniform Commeroial Code, this Lease or by law and may sell any of the property described above at a public or private sale upon 10 days notice to Tenant, which notice Tenant stipulates is. adequate and reasonable. Notwithstanding the foregoing. Landlord subordinates the forgoing contract lien. security interest and statutmy Landlord's lien to the liens and security interests granted by Tenant in favor of Bank of America, ARC Financial Services Cotpcxation or Tenant's other third party lenders.

Tenant shall have the right during the Term !I) subject Tenant•s leasehold interest in the Premises and its interest in any improvements made at Tenant's � (except tn the e'lctent. such improve:menu become the property of Landlord under the terms of this Lease) to one or more mortgages, deeds oftrust, assignments of least; security agreement or other methods of financing or refinancing (a "Tenant Mortgage," any bolder of whicl1 is referted to as a "'Tenant Mortgagee"}, or to any one or more e.Uensions, modifioetions or renewals or replacements of a Tenant Mortgage. Tenant shall. immediately notifY Landlord in writing of the name mld address of any Tenant Mortgagee. In connection with such financing or refinancing by Tenant. Landlord agrees to execute and deliver to Tenant Mortgagee a II

II L1mdlord's Lien Waiver. Estoppel and Agreement .subsnmtially in the fonn attached hereto as Exhibit .:f:, All such Tenant financing shall be subordinate to this Lease and any financing placed on the Premises by Landlord as contemplated by Section 27 of this Lease.

36. Renewal Ootion. Provided that w Event of Defimlt then exists and no condition exists which with the passage of time or tho giving of notice or both would constitute an Event of Default pursua:nt to fuis Lease, and subject to Tenant being in full compliance with the terms of this Lease, Tenant .shall 'have the right and option (the '1tenewaJ Option) to renew and extend this Lease - with I I respect to all ofthe Premises for two (2) renewal terms of five (5) years each. fn order to exercise each Renewal Option, Tenant must give I...andlord written notice of the exercise of tbe Renewal Option no earlier than twelve (12) months, and no latl!r than nine (9) months prior to the expiration of the initial I

Tenn m- the first Renewal Term, as applicable. Failure by Temmt to notifY Landlord in writing of Tenant's election to exerciSe a Renewal Option herein granted within the time limits set forth for such r I i

19 I J • l

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

37. Qrganizatinn md Powg.

(a) Tenant represents and warrants to Landlord that T(.tWlt is a Texas limited part:ne:rahip, duly organized and validly existing under the laws of the State of Delaware and in good standing. and is al.ltb.orWxl to do business in the State of Texas ani! in good standing in the State ofTexas, (b) has paid all franchise and other taxes, if any, required to maintain its cmparate e.xisteru:e, and (c) is not the aubject of voluntary or involuntary proceedings for the forfeiture of its Certificate of Incorporation in the State of Delaware, or ita Certificate of Authority in the State of Texas, oa- for its dissolution. Tenant represents I I and warrants to Landlord that Tenant's Geneml Partner, Premier Am.bula:tmy Surgery Cenlt:r of Dtm.canville, Inc. (''Premier") is a Delaware corporation. duly organized and validly existing Under the laws of the State of Delaware and in good standing, and is authorized to do business in the Stare ofTexas an4 in good standing in the State of Texas, (b) has paid all franchise and other Wtes, if any, required to ma.intain its corporate exis1enee, and (c) is not the subject ofvolo.ntary ar involuntary proceedings for the forfeiture of its Certificate oflncoxporation in the State ofDelaware, el'itJJ�ei'A!Idie�·iB��� Ste:teof� or for ita dissolution. Tenant represents and warrants to Landlord that Symbion. Inc., the l! Guarantor, is a DelaWliR\ coxporation, duly' organized and validly existing under the laws of the State of I

Il Delaware and in good standing, il&d i6 !Mhsfialed w gg wsiaesa iA tbe� SUI!R ofl'exa$ and io good •

$1lmdinginthe-State ef1=eJeas, (b) has paid all fumchise and otb.e:r taxes, jf any, required to maintain. its corpo:rate existence, s.nd (c) is not the subject of voluntllry or i.nwluntaiy proceedings for the forfeiture of its Certificate of Incotporation in the State of Delaware, or its Certificate of Authority in the State of Texas. or for its dissolution. Tenant represents and warrant! to Landlord that this Lease is a valid and

20 1 I i

H U G H ES 0 0 0 3 1 Sworn Record 0490

legally binding obligation of Tenant. enforceable in accordmK:e with its terms. Simultaneously with the execution and delivery of this Lease, Tenant shall deliva a fully executed Certificate of tbe Secretaxy of Premier, as the General l'ar1nel- ofTe.nant, with attached resolutions of its COl'))Oiate board. indicating tbe authority of the persan executing this lease on behalf ofPremier, in its capacity as the General. Parmer of Tenant, substantially in the furm attached hereto as Exhibit 11C". Simultaneously with the execution and delivery of this Lease, Tenant shalt deliver a fully executed Lease Guaranty Agreement in !he form atmdled hereto as Exhibit "D". signed by a duly authorized officer of Symbion. Inc the Guarantor, .•

together with a Cc:rtificate of the Secn:taiy of Symbion. Inc with attached resolutions oi its cozporate .•

board, indicating the authority of the person ex.ecuting the Lease Guaranty Agreement on behalf of Guarantor, substantially in the form attached hereto as Exhibit ''E".

(b) Landlord :represents and warrants to Tenant that this Lease is a valid and 1egal]y binding obligation ofLandlord, enforceabl e in accordance with its terms.

3&. Misce11aneous.

I (a) If and when induded within the term "Tenant," as used in this iostrumcnt, there is more than one person. firm or corpotation, each shall be jointly and SCVCBlly liable for the obligations of Tenant. I

(b) Any notice, demand. or other communication requ.ired to be given or to be served upon any party hereunder shall be in writing and delivered to the person to whom the notice is directed. either: (i) In person; (u) by United States Mail, s.s a certified item wilh return receipt� (iii) deli'YCRd by a nationally rccogni2:ed delivecy service (including express mail or overnight delivery senriees), or (w) sent by telex. teleoopy or e-mail Notices, dcnands or othtr communic:ations de1M:red by fax or e-mail &hall be deemed givm on !be date sent as lotig as sent prior to 5:00 p.m. Austin. Texas time and the sender has a fax or e-mail confinnatiml of receipt by tlw recipient at the fax mnnbe:r or e­

II mail address set forth haein. Arry notice, demand or other <:OJDmtl!!ication sent by ovemig'ht deliv=y shall be deemed to have been given and received on the next businesa day. Any notice, demand, or other communication given other than by certified or registered mail, return receipt requested, shall be deemed to have been given and received when actually delivered during normal business hours 1o the address of the party to whom it is ll.ddresed s as set forth at the beginning of this Lease. Either party hereto may

change its address for notice by giving the other party ten days' advance written notice of81X:h change of addres.s

(c) Except as otherwise expressly provided in this Lesue or DS otherwise rcquin:d by i

I 1aw, Landlord �ins the absolute right to withhold any consan: or approval.

(d) Neither this Lease nor a memorandum oflease shall be filed by or oti behalf of Tenant in any public reccrd.. Landlord may � and file, and, upon request by Landlord, Tenant will ! execute, a memorandum of lease. ' l (e) The nonnal. rule of conli1ructio.n 1o the effect that any ambiguities are to be resolved against the party drBfting thi.ll instrument shall not be employed in the inte:Ipretation of this Lease or any exhibits or mnendments hereto. l (f) The sulmrission by Landlord to Tenant of this Lease shall have no binding furce or effect, shall not constitute an option for the leasing ofthe Premises, nor confer any right or iznposc any I i obligations upon either party unt:J1 execution of this Lease by both parties. i 21

H U G H ES 00032 Sworn Record 0491

(g) This Lease constitutes the complete agreement of Landlord 8lld Tenant with respect to the subject matter- hereof. No representationg, inducements, promises or agreements, oral or written, have been made by Landlord or Tenant, or anyone acting on behalfofLandlord or Tenant. which are not contafued herein, and any prior agn:ements, promises, negutiations. or representations are superseded by this Lease. This Leasi: may not be amended except by an instrument in writing signed by both parties hereto.

(h) If any clause or provision of this Lease is illegat invalid ar unenforceable under present or future laws, then and in lbat event. it is the intention of the parties hereto that the temainder of this Lease shall not be affected thereby. It is also the intmtion of the parties to this Lease that in lieu of each clause or provision of this Lease that is illegal. invalid or unenforceable, there be added, as a pt.rt of this Leax. a olause or provision .as similar in terms to suclL illegal, invalid or unmforccahlc clause or provision as may be possible and be legal, valid and enforceable.

(i) If Landlocd shall institute proceedings against Tenant and a compromise or settlement thereof shall be made., thesame shall not constitute a waiver ofany other covenant. condition or agreement bercin contained, nor of any of Landlord's rights hereunder. No waiver by Landlord of any

breach shall operate as a waiver of such covenant, condition or agreenumt i� or of any subsequent bn:adl tben:of: No payment of Rent by Tenant or acceptance of Rent by Landlord shall operate as a waiver of any breach or default by Tenant under this Lease. No payment by Tenant or receipt by Landlord of a lesser amount than the ll!Onthly installment ofRent herein stipulated shall be deemed to be other than a paj'mcnt on accotmt of the earliest unpaid Rent. nor $hall any endorsement or statement on any check or communication accompanying a check for the payment of Rent be det-:med an II.CGOI'd and satisfaCtion, and Landlord nmy accept such ch£ck or payment without prejudic� to Landlord's right to .recover the balance ofsuch Rent or to pursue my otbet" remedy provided in this Lease. No act, omission, reletting or I'CH'Jltry by Landlord, and no acceptance by Landlord of keys from Tenant, ahall be considered an acceptance of a surrender of tbe Lease. shall be construed as an actual or -cons1ructiw: ev:iotion of!enant, or an election on the part of Landlord to terminate this Lease unless a writU:n notice I I

of such intention is given to Tenant by Landlord.

(j) Words of any gender used in tbis Lease shall be held and construed to include I. my other gender, and words in the singular number aha1l be held to include the plural, unless the context ! otherwise .requires. The caption& inserted in this Lease .are for convenience only and in no way define, limit or otherwise describe the grope or intent offhis Lease, or any provision bc:reof, or in any way affect .. l the interpretation ofthis Lease. I

I (k) Nothing contained in this Lease shall be deemed or construed to cn:ate a partnership or joint venwrc of or between Landlord and Tenant, or to create any other relationship between Landlord and Tenant other than that of landlord and tenant.

(1) 'l'his Lease sball be construed under and enforced 'in accordance with !he laws of the State of Texas, and 1111 obligations of the parties hereto created by this Lease are pcrfonnable in Dallas County. Texas.

(m) If either Landlord or Tenant �s, engages in, or threatens to commenee or engage in MY legal action or proceeding against the other party {including, without limitation, litigation or arbitration) arising out of or in connection with the Lease or the Premises (including, without limitation (a) the enforcement or int:erpretation of either party's rights or obligations under this Lease (whether in contract, tort. or both) or (b) the declaration ofany rights or obligations Wlder thia Lease), the prevailing party Wil be entitled to recover from the losing party reasonable attorneys' fees, mgether

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H U G H ES 00033 Sworn Record 0492

.. I! .I with aey costs and expenses, incurred in any such action or proceeding, including any attorneys' fees, costs, and expenses incurred on collection and on appeal.

(n) Tsme is of the essence as to tbe perfonnance of Tenant's obligations under this I I

(o) All exhibits and addenda attached hereto are hereby incorporated into this Lease and made a part he.reof. In tire event of any conflict between such cxln"bils or adden<1a and the terms of I I this Lease, such exhibits or addenda shall control. l

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l 23 ,, . I I ! H U GH E S 00034 Sworn Record 0493

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1N WITNESS WHEREOF, Landlord and Tenant have e:x.ecuted this lease 118 ofthe day and year I I first above written.

LANDLORD: II !

TENANT: I � l I Surgery Center ofDuncanville, L.P., a Texas limited partnership I By: Premier Ambulatory Surgezy Center ofDuncanvi!Ie, Inc., a Delaware corporation, Its General Part.ne1: l I f

I I I I Ir I I

H U G H E S 00035 Respectfully submitted,

By: /s/ Katherine D. Mackillop 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

3 CERTIFICATE OF SERVICE The undersigned counsel hereby certifies that a copy of Volume 2 of the Sworn Record for Petition for Writ of Mandamus was served in compliance with Texas Rule of Appellate Procedure 9.5 on February 9, 2015, upon the following:

Honorable Carl Ginsberg, Judge, 193rd District Court George L Allen Sr. Courts Building 600 Commerce Street Dallas, TX 75202 Respondent Via FedEx

Mr. Mark L. Hawkins Mr. Bruce Scrafford Mr. Andrew York ARMBRUST & BROWN, PLLC 100 Congress A venue, Suite 1300 Austin, TX 78701 Attorneys for Real-Party-In-Interest PATRICIA HUGHES Via e-Service/e-Mail mhawkins@abaustin.com bscrafford@abaustin.com ayork@abaustin.com

/s/ Katherine D. Mackillop Katherine D. Mackillop

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