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CAUSE NO.
SCHRAM MCDONNELL, LLC dba
AUSTIN ORTHOPEDIC
SPECIALISTS; RICHARD SCHRAM,
MD, PA; RICHARD SCHRAM MD,
individually; GEORGE
MUNDANTHANAM MD, PA;
GEORGE MUNDANTHANAM, MD,
individually; JOSH CRUM, MD, PA;
JOSH CRUM MD, individually; MARK
MCDONNELL, DPM, PA; MARK
MCDONNELL DPM, individually;
SOUTH OAKS FAMILY MEDICINE
PA; GEOFFREY COX MD,
individually; and ASHLEY STEIGLER
MD, individually
Plaintiffs,
Vv.
VENTAS, INC.; LILLIBRIDGE
HEALTHCARE REAL ESTATE
TRUST, LP; LHRET ASCENSION
AUSTIN PARTNER GP, LLC; LHRET
ASCENSION AUSTIN PARTNER IT
GP, LLC; LHRET ASCENSION
AUSTIN, LP; LHRET ASCENSION
AUSTIN II, LP; THL 191 JV, LLC;
LHRET 191, LLC; LILLIBRIDGE
HEALTHCARE SERVICES, INC.; and
DAN METEVIER
Defendants
Filed in The District Court
of Travis County, Texas
DEC 31 204
-1-GN-14- MAB AA em M
= )=1-GN=14-005444 Amaiia Rodriguez-MenWoza, Clerk
AOD LR UO UP UD OR COD LD LP UPD UD LD) LP) LP Lr UN UP) UD LP LO LP UP LD LD LP) OD LD LO oD LD
IN THE DISTRICT COURT OF
TRAVIS COUNTY, TEXAS
345TH yUDICIAL DISTRICT COURT
PLAINTIFFS’ ORIGINAL PETITION AND JURY DEMANDTO THE HONORABLE COURT:
1. This case is based on a lease-to-own, bait-and-switch con. The Defendants! fraudulently
induced Plaintiffs” to pay excessive rents and consideration in exchange for a promised option to
purchase equity interest in certain real estate Defendants leased to Plaintiffs. In reality
Defendants never intended to provide the opportunity to purchase equity as promised. Herein,
Plaintiffs bring claims against Defendants for fraud, violations of the Texas Securities Act,
negligence, conspiracy, and aiding and abetting.
I. DISCOVERY
2. Discovery is to be conducted under Level 3 of the Texas Rules of Civil Procedure and in
accordance with a scheduling order to be agreed upon by the parties and approved by this Court.
Tex. R. Civ. P. 190.4.
Il. PARTIES
3. Plaintiffs Schram McDonnell LLC dba Austin Orthopedic Specialists; Richard Schram,
MD, PA; Richard Schram, MD; George Mundanthanam MD, PA; George Mundanthanam, MD;
Josh Crum, MD, PA; Josh Crum, MD; Mark McDonnell, DPM, PA; Mark McDonnell, DPM;
South Oaks Family Medicine PA; Geoffrey Cox, MD; and Ashley Steigler MD are individuals
and affiliated professional associations and a limited liability company. They are all residents of
Travis County, Texas.
' Herein "Defendants" shall be used to refer collectively to all Defendants, i.e. Defendants Ventas, Inc.
Lillibridge Healthcare Real Estate Trust, LP; LHRET Ascension Austin Partner GP, LLC; LHRET Ascension
Austin Partner II GP, LLC; LHRET Ascension Austin, LP; LHRET Ascension Austin Il, LP; THL 191 JV, LLC;
LHRET 191, LLC; Lillibridge Healthcare Services, Inc., and Dan Metevier. "Lillibridge" shall be used to refer to
all of the business-entity Defendants, that is, all Defendants except Mr. Dan Metevier.
2 Herein "Plaintiffs" shall refer collectively to Plaintiffs Schram McDonnell LLC dba Austin Orthopedic
Specialists; Richard Schram, MD, PA; Richard Schram, MD; George Mundanthanam MD, PA; George
Mundanthanam, MD; Josh Crum, MD, PA; Josh Cram, MD; Mark McDonnell, DPM, PA; Mark McDonnell,
DPM; South Oaks Family Medicine, PA; Geoffrey Cox, MD; and Ashley Steigler, MD.
Plaintiffs’ Original Petition and Jury Demand Page |4, Defendant Ventas, Inc. is a foreign corporation, registered to do business in Texas, and it
may be served through its registered agent, CT Corporation System, at 1999 Bryan Street, Suite
900, Dallas, Texas 75201.
5. Defendant Lillibridge Healthcare Real Estate Trust, LP is a foreign limited partnership,
registered to do business in Texas, and it may be served through its registered agent, CT
Corporation System, at 1999 Bryan Street, Suite 900, Dallas, Texas 75201.
6. Defendant LHRET Ascension Austin Partner GP, LLC, is a foreign limited liability
company with its principal place of business in Texas and it may be served through its registered
agent, CT Corporation System, at 1999 Bryan Street, Suite 900, Dallas, Texas 75201.
7. Defendant LHRET Ascension Austin Partner II GP, LLC, is a foreign limited liability
company, with its principal place of business in Texas and it may be served through its registered
agent, CT Corporation System, at 1999 Bryan Street, Suite 900, Dallas, Texas 75201.
8. Defendant LHRET Ascension Austin, LP, is a foreign limited partnership, registered to
do business in Texas, and it may be served through its registered agent, CT Corporation System,
at 1999 Bryan Street, Suite 900, Dallas, Texas 75201.
9. Defendant LHRET Ascension Austin II, LP, is a foreign limited partnership, registered to
do business in Texas, and it may be served through its registered agent, CT Corporation System,
at 1999 Bryan Street, Suite 900, Dallas, Texas 75201.
10. Defendant THL 191 JV, LLC, is a foreign limited company, registered to do business in
Texas, and it may be served through its registered agent, CT Corporation System, at 1999 Bryan
Street, Suite 900, Dallas, Texas 75201.
Plaintiffs’ Original Petition and Jury Demand Page 2ll. Defendant LHRET 191, LLC, is a foreign limited company, registered to do business in
Texas, and it may be served through its registered agent, CT Corporation System, at 1999 Bryan
Street, Suite 900, Dallas, Texas 75201.
12. Defendant Lillibridge Healthcare Services, Inc. is a foreign corporation, registered to do
business in Texas, and it may be served through its registered agent, CT Corporation System, at
1999 Bryan Street, Suite 900, Dallas, Texas 75201.
13, Defendant Dan Metevier is a natural person and, on and information belief, he resides in
Dallas County, Texas. Mr. Metevier may be served at 5308 West Plano Parkway, Plano,
Texas 75093.
Il. JURISDICTION AND VENUE
14. All or a substantial part of the events or omissions giving rise to these claims occurred in
Travis County, Texas. See Tex. Civ. Prac. & Rem. Code § 15.002.
15. | The amount in controversy is in excess of the minimal jurisdictional limits of this Court.
Tex. Gov. Code § 24.007; see also Tex. Const. art. V, § 8.
16. Defendants (a) contracted by mail or otherwise with Texas residents and the contracts
called for performance, in whole or in part, in this state; (b) committed torts in whole or in part in
this state; and/or (c) on information and belief, have recruited Texas residents, directly or
through an intermediary located in Texas, for employment. Tex. Civ. Prac. & Rem.
Code § 17.042.
17. Additionally, Defendants have continuing and systematic contacts in Texas or sufficient
minimum contacts with Texas such that the maintenance of suit here does not offend traditional
notions of justice and fair play. Defendants purposefully directed their activities toward Texas;
availed themselves of the benefits and privileges of conducting said activities in Texas; and the
controversy arises out of or is related to these contacts with Texas.
Plaintiffs’ Original Petition and Jury Demand Page 318. Reserving all rights to amend, pursuant to Rule 47 of the Texas Rules of Civil Procedure,
Plaintiff secks monetary relief of over $1,000,000. Tex. R. Civ. P. 47.
Iv. FACTS
19. Defendants conned Plaintiffs into paying exorbitant rents by promising them an
opportunity to purchase equity interests in certain real estate investments. It turns out they never
intended to fulfill their promises. Despite repeated assurances, Defendants refused to honor the
option to purchase equity interests.
20. The Defendants’ are all in the business of real estate investment. Lillibridge* develops
medical office buildings; often refer to by the acronym “MOB.” Defendant Dan Metevier was
the Vice President of Development of Lillibridge. Plaintiffs are medical doctors and affiliated
professional associations and business entities.
21. In December 2006, on behalf of Lillibridge, Dan Metevier made a presentation to
Plaintiffs regarding an investment opportunity in a proposed MOB real estate development
project on the Seton Southwest Campus in Austin, Texas. Attached hereto as Exhibit A is a true
and correct copy of a prospectus Mr. Metevier presented to Plaintiffs, which includes detailed
pro forma and analyses concerning the benefits of the investment.
22. In return for contributing extensively to improvements, paying rent approximately 50%
above market value, and agrecing to a 10-year lease term (2 times the average), Mr. Metevier
and Lillibridge promised Plaintiffs an option to purchase equity. Mr. Metevier and Lillibridge
+ Defendants Lillibridge Healthcare Real Estate Trust, LP; LHRET Ascension Austin Partner GP, LLC;
LHRET Ascension Austin Partner II GP, LLC; LHRET Ascension Austin, LP; LHRET Ascension Austin II, LP;
THL 191 JV, LLC; LHRET 191, LLC; Lillibridge Healthcare Services, Inc. are all subsidiaries of Defendant Ventas
Inc., a publically traded real estate investment trust ("REIT").
‘"Lillibridge" shall be used to refer to all of the business-entity Defendants, that is, all Defendants except
Mr. Dan Metevier.
Plaintiffs’ Original Petition and Jury Demand Page 4represented that all of the excessive costs that could otherwise be avoided, were going to be
offset and justified by the fruits of the equity interest.
23. Based upon the Defendants’ representations, the Plaintiffs agreed to the onerous terms
and entered into various lease agreements with Lillibridge, an example of which is attached
hereto as Exhibit B.
24. The parties had anticipated that Lillibridge would permit Plaintiffs to exercise the option
to purchase before December of 2008. However, construction progressed slowly and 2008 came
and went without any offering.
25. — In response to several inquiries, Mr. Metevier and Lillibridge assured the Plaintiffs that
the time to exercise the option would soon come. Attached hereto as Exhibit C is an email from
Mr. Metevier to some Plaintiffs affirming and re-asserting the promised equity opportunity:
All-
There have been several questions lately regarding the timing of
providing offering documents for the ownership of the buildings
on the campus of Seton Southwest. ... Itis still the absolute intent
of the owning entity to provide an offering to the physician tenants
of both buildings on the Seton Southwest campus. Therefore, there
will be an amendment to the Lease to modify the date to
December 31, 2010 by which an offering will be provided. . . .
Dan Metevier
Vice President Development Operations
Lillibridge
Ex. C: Email from D. Metevier, Jan. 13, 2009 (emphasis in original).
26. However, December 2010 came and went and still Plaintiffs were not permitted to
purchase the equity interest. Lillibridge gave excuses and promised that Plaintiffs would be
permitted to exercise their options as soon as occupancy reached a certain level.
Plaintiffs’ Original Petition and Jury Demand Page 527. On December 18, 2014, Lillibridge declared for the first time that it had no obligation to
provide Plaintiffs with the option to purchase equity, nor for that matter that it ever had any
intention to do so.
Vv. CAUSES OF ACTION
28. All conditions precedent to the Plaintiffs’ right to recovery have been performed,
occurred, or been waived or excused,
29, The foregoing facts are incorporated by reference into each of the causes of action below.
30. To the extent they conflict, the claims and allegations herein are pled in the alternative.
A. Breach of Contract
31. Plaintiffs had valid and enforceable contracts with Defendants. Plaintiffs performed,
tendered performance, or were excused from performing all of their respective contractual
obligations under contracts.
32. By the aforementioned acts and omissions, Defendants breached and or repudiated the
contracts, causing Plaintiffs financial injury.
B. Promissory Estoppel
33. Defendants made promises to Plaintiffs, who reasonably, substantially, and foreseeably
relied on those promises to their detriment and injustice can only be avoided by enforcing
Defendants’ promises.
Cc Common Law Fraud
34. Defendants made false representations of material facts to the Plaintiffs and made false
promises with the intention of not fulfilling them. Defendants knew the representations and
promises were false when made or they made them recklessly, as positive assertions, and without
knowledge of their truth.
Plaintiffs’ Original Petition and Jury Demand Page 635. Defendants made the false representations and promises with the intent that the Plaintiffs
act on them or refrain from action, and the Plaintiffs did rely on them to their detriment.
36. Defendants concealed from or failed to disclose material facts to the Plaintiffs.
Defendants knew the Plaintiffs were ignorant of these facts and that they did not have an equal
opportunity to discover the facts. Defendants had a duty to disclose the material facts to the
Plaintiffs but were deliberately silent.
37. Defendants concealed and failed to disclose these material facts intending to induce the
Plaintiffs to take some act or refrain from acting. Plaintiffs did in fact rely on the nondisclosures
and were injured as a result of acting in ignorance of the undisclosed facts.
D. Statutory Fraud — Texas Business and Commercial Code Section 27.01
38. In the context of transactions involving stock and real estate, Defendants made false
representations of past or existing material facts or made false promises with the intention of not
fulfilling the promises,
39. Defendants made these misrepresentations and false promises with actual awareness of
their falsity for the purpose of inducing Plaintiffs to enter into contracts.
40. Defendants had actual awareness of the falsity of each other’s false representations and
promises, failed to disclose the falsity to Plaintiffs, and benefited from the false representation
and promises and nondisclosures.
41. Plaintiffs relied on Defendants’ false representations and promises, entered into contracts,
and have suffered injury as a result.
42. Because Defendants acted with actual awareness of the falsity of the representations and
promises and benefited from not disclosing the falsity of each other’s false representations and
promises, they are liable for actual and exemplary damages. See Tex. Bus. & Com.
Code § 27.01.
Plaintiffs’ Original Petition and Jury Demand Page 7E. Money Had and Received
43. Defendants hold money which in equity and good conscience belongs to Plaintiffs.
F. Unjust Enrichment
44. Defendants obtained a benefit from Plaintiffs by the taking of an undue advantage.
G. Constructive Fraud
45. By the acts and omissions complained of hercin, Defendants have breached legal and
equitable duties owed to Plaintiffs. Irrespective of moral guilt, the law declares such acts and
omissions fraudulent because of the tendency to deceive others, to violate confidence, or to
injure public interests.
H. Negligence and Gross Negligence
46. Defendants owed the Plaintiffs a duty to exercise reasonable care and/or a duty to
exercise the standard of care that a professional of ordinary prudence in this field would have
used under similar circumstances
a. to avoid foreseeable risk of injury to the Plaintiffs;
b. to prevent or mitigate the harm to the Plaintiffs that was at least partially
caused by Defendants’ own conduct, respectively;
c. in making representations and in ascertaining the accuracy of information
provided to the Plaintiffs;
d. in hiring, supervising, and/or retaining employees and/or agents; and
e. to avoid placing the Plaintiffs in risk of harm caused by foreseeable criminal
activity.
47. Defendants breached their duties, which proximately caused the Plaintiffs injury.
48. When viewed objectively from Defendants’ standpoint at the time of the acts and
omissions complained of herein, the degree of risk to Plaintiffs was extreme considering the
probability and magnitude of the potential harm. Tex. Civ. Prac. & Rem. Code § 41.001 (11).
Plaintiffs’ Original Petition and Jury Demand Page 849. Defendants had actual, subjective awareness of the risk involved and acted with specific
intent to cause substantial harm or injury to Plaintiffs or with conscious indifference to the rights,
safety, and welfare of Plaintiffs. Tex. Civ. Prac. & Rem. Code § 41.001(7), (11).
L Negligent Misrepresentation
50. | Defendants made misrepresentations to Plaintiffs in the course of Defendants’ business or
in a transaction in which they had an interest. Defendants supplied false information for the
guidance of others.
51. Defendants did not exercise reasonable care or competence and/or that standard of care
that a professional of ordinary prudence in this field would have used under similar
circumstances when obtaining or communicating the information.
52. Plaintiffs justifiably relied on the representations and the misrepresentations caused the
Plaintiffs injury.
53. When viewed objectively from Defendants’ standpoint at the time of the acts and
omissions complained of herein, the degree of risk to the Plaintiffs was extreme considering the
probability and magnitude of the potential harm. Tex. Civ. Prac. & Rem. Code § 41.001 (11).
54, Defendants had actual, subjective awareness of the risk involved and acted with specific
intent to cause substantial harm or injury to the Plaintiffs or with conscious indifference to the
rights, safety, and welfare of Plaintiffs. Tex. Civ. Prac. & Rem. Code § 41.001(7), (11).
J. Violations of the Texas Securities Act
55. The equity investment opportunities offered and sold by Defendants constitute the sale or
offer for sale of securities, as those terms are defined under Section 581-4(A) of the Texas
Securities Act (hereinafter “TSA”). Tex. Rev. Civ. St. art. 581, § 4A.
Plaintiffs’ Original Petition and Jury Demand Page 956. Defendants offered and sold securities to the Plaintiffs by means of untruc statements of
material facts or omissions of material facts necessary in order to make the statements made, in
light of the circumstance under which they were made, not misleading. See Id. at § 33A(2).
57. Control persons are jointly and severally liable with the seller or issuer of a security for
violations of § 33A. Tex. Rev. Civ. St. art. 581, § 33F(1). Likewise, those who materially aid a
seller with the intent to deceive or defraud or with reckless disregard to the truth or the law are
also jointly and severally liable. Id. § 33F(2).
58. “The TSA does not require a buyer to prove reliance on the seller’s misrepresentation or
omission, nor does it require proof of scienter or have a causation requirement.” In re Enron
Corp. Sec., Derivative & ERISA Litig., 761 F. Supp. 2d 504, 544 (S.D. Tex. 2011); see also
Busse v. Pac. Cattle Feeding Fund No. 1, Ltd. 896 S.W.2d 807, 815 (Tex. App.—Texarkana
1995, writ denied).
59, Loss causation, comparative fault, and mitigation are not defenses to securities fraud
under § 33A. Duperier v. Tex. State Bank, 28 S.W.3d 740, 753-54 (Tex. App.—Corpus Christi
2000, pet. dism’d by agr.).
K. Aiding & Abetting and Joint-Tortfeasor Liability
60. Defendants committed tortious acts and omissions as detailed herein. Defendants had
knowledge that each other’s acts and omissions constituted tortious conduct. Each Defendant
intended to assist, induce, and encourage and did assist, induce, and encourage each other in the
commission of the tortious conduct. Such assistance, inducement, and encouragement were
substantial factors in causing the torts. Consequently, each Defendant is jointly and severally
liable for the tortious conduct of each other Defendant.
Plaintiffs’ Original Petition and Jury Demand Page 10L. Conspiracy
61. Defendants were members of a combination of two or more persons. The object of the
combination was to accomplish unlawful purposes or lawful purposes by unlawful means. The
members had a meeting of the minds on the objects or courses of action. One or more of the
members committed an unlawful, overt act to further the objects or courses of action and the
Plaintiffs suffered injury as a proximate result of the wrongful acts.
M. Exemplary Damages
62. Defendants are liable for exemplary damages because (1) the harm for which the
Plaintiffs seek redress results from fraud, malice, or gross negligence, Tex. Civ. Prac. & Rem.
Code § 41.003(a); and/or (2) Defendants had actual awareness of the falsity of the
aforementioned material representations and promises, Tex. Bus. & Com. Code § 27.01(c), (d).
N. Attorney’s Fees
63. On both statutory and equitable grounds, Plaintiffs seek reasonable and necessary
attorney’s fees, costs, and expenses resulting from this lawsuit, the filing of which was
necessitated by the misconduct complained of herein. Tex. Bus. & Com. Code §§ 27.01(e); Tex.
Civ. P. & Rem. Code §§ 38.001, et. seg; Tex. Rev. Civ. St. art. 581, § 33D(3).
VI. DISCOVERY RULE
64. Plaintiffs were kept in the dark about the offering and continually promised that it would
be forthcoming. If and to the extent required, Plaintiffs plead the application of the
discovery rule.
Vil. JURY DEMAND
65. Plaintiffs hereby demand a trial by jury and tender the requisite fee herewith.
Plaintiffs’ Original Petition and Jury Demand Page 11VOL PRAYER
66. — For the foregoing reasons, Plaintiffs ask the Court to issue a citation for Defendants to
appear and answer, and respectfully request that Plaintiffs be awarded a judgment against
Defendants and the following relief:
a. Actual, direct, special, and consequential damages;
b. Exemplary, punitive, and statutory damages;
c, Attormey’s fees, costs, and recoverable expenses;
d. Pre- and post-judgment interest; and
e. All other and further relief at law or in equity to which Plaintiffs may show
themselves justly entitled.
Respectfully submitted,
‘TAYLOR DUNHAM AND RODRIGUEZ LLP
301 Congress Avenue
Suite 1050
Austin, Texas 78
Telephone: (5,
Facsimile: (.
By:
dt aylordunham.com
Isabelle M. Antongiorgi
State Bar No. 24059386
ima@taylordunham.com
ATTORNEYS FOR PLAINTIFFS
Plaintiffs’ Original Petition and Jury Demand Page 1212/04/2006 19:04 FAX 972 931 89866 MBC 003/017
AMPLE HOSPITAL
ANYWHERE, USA
‘MOB DEVELOPMENT 101’
PRESENTED BY:
DAN METEVIER
VICE PRESIDENT: DEVELOPMENT
>
Lillibridge
5308 West Plano Parkway
} Plano, Texas 75093
800.433.1005
December, 2006
Exhibit A12/04/2006 19:04 FAX 972 9331 8¥66 MBL Way UUs vee
MOB-101
Useful Terms
= Triple net rent (NNN)
—- Rental cost without any expenses
. Full service rent
- Rental cost including the triple net rent plus all operating expenses
« Gross squate feet (GSF)
- Total area of the building to the outside of the outside walls
. Rentable square feet (RSF)
- Actual area occupied, plus pro rata factor for the common spaces (corridors, lobby, etc}
. Usable square feet (USF)
- Actual area occupied inside of your sutte, measured to the centerline of demising walls
« Shell building
- Base building, plus finish-out of common area
. Sulte finish allowance .
+ Monies allocated fo build-out (tenant fit-up) — your ust
« Professional services and development fees
- Architectural, engineering, real-estate services, project management, and construction
administration
. Hard construction costs
+ Gost to build physical structure, including interlor build-out and site work as required
. Soft construction costs
- Allcosts over and above the hard construction costs to determine “total project costs”
. Debt service .
to cover first mortgage.
Return on equity
- The return paid on invested capital
facancy and reserves
- Lender required fund to cover any vacancies or capital projects during term of mortgage;
Partner's money — returned as additional cash flow if not used wert
. Capitalization rate
~ Rate of retum used to calculate the value of cash flow; net operating i income (NNN rent —
vacancy and reserves) + capitalization rate = value
The financial projections
on the following pages are
representative of a typical
project, and do not
represent the projections
of any spécific project..
Construction cast and
financing assumptions will
vary from project to
project. .
THE TOTAL HEALTHCARE,
Lillibridge REAL ESTATE SOLUTION
Exhibit A
a12/04/2006 19:04 FAX 972 931 8966
(gj005/017
MOB-1041
Pro Forma Economic Analysis
a oP A
Physician
Project Profile: Offices
Gross Square Feet 45,000
Rentable Square Feet 41,000
Usabla Square Feet 37,000
Required Parking Spaces 250
Hatd Construction Costs
‘Building Shell/Porte Cochere $72.50 /GSF - fo $3,139,000
‘Suite Finish Allowance $5300 MSF \LS. 1,962,900
«Site Work Allowance 1,042,000
Connector . 210,000
1@ Allowance 75,000
*Furnishings and Graphles Allowance 25,000
Construction Soft Costs 135,000
“Contingency 100,000
»Professional Service Fees 865,600
Total Hard Construction Costs $7,354,500
Soft Construction Costs:
«Legal Fees $100,000
“Appraisal Fees 10,000
«Lender Inspection Fees 42,000
‘Title Insurance 0.50% 38,700
aFinancing Fee 3.00% 186,000
*Construction Interest 8.00% 12 MOS. 248,000
Total Soft Construction Costs 594,700
Total Project Costs $7,949,200
Financing:
*First Mottgage 75% $5,981,800
Equity Contribution 25% 1,987,300
Total Financed 7,949,200
Annual Expenses
Debt Service 7.00% 30 YRS, 476,000 ©
*Capital Reserves 7.00% 56,000
Return on Equity _ 11.95% 226,000
“Ground Rent (_ x
on Physician Tenants:
Capitalization Rate wa 1,000 ASF $48,162
ad 2,000 RSF $96,324
Projected Value $15,908,759 8,000 RSF $144,487
4,000 ASF $192,649
Projected Sates Price 5759 5,000 ASF $240,811
Less: 6,000 ASF $288,973
Expenses @ 3% ($477,263) 7,000 RSF $337,136
Debt Balance ($7,768,018) 8,000 RSF $385,298
Retum of Equit: ($4,277,096) 9,000 RSF $433,460
10,000 RSF $481,622
Proceeds from Sale $3,386,382 ©
Estimated Effective Rents Jf ‘\
Stated Rent Cash Fiow B.0.E. / ffective Rent
Const. $0.00 $3.18 5.23% ($3.18)
Year 1 $19.49 $1.46 2.40% $48,038
Year 2 $19.99 $4.29 7.05% $15.70
Year3 $20.49 $5.37 8.83% $16.12
Year 4 $20.99 $5.67 9.32% \ $15.32
Year 5 $21.49 $6.63 10.90% $14.86
Year 6 $21.99 $6.10 10.03% $15.89
Year7 $22.49 $6.54 10.75% $15.95
Year8 $22.99 $7.81 12.84% $15.18
Year 9 $23.49 $7.90 12.88% $16.59
Year 10 $23.99 $8.37 13.75% $15.62
Total Rent $217.40 $63.30 9.46% $154.10
Total Effective Rent Per 1,000 RSF $154,097
Less Distribution at Sale Per 1,000 RSF ($48,162)
Net Effective Total Rent Per 1,000 RSF $105,935
Net Effective Rent Per Rentable Square Foot $10.59
: (NOTE: No tax implications have been considered in this analysts.)
a
THE TOTAL HEALTHCARE,
Lillibridge AEAL ESTATE SOLUTION ™
Exhibit -
= we : |L2/vaszuuo 2¥;UD BAA ylyZ SL BEEK MNBL
IQU14/017
al
MO8-101
$s I nt
EQUITY INVESTMENT: RETURN CALCULATION
Shares Purchased 2,000 Ps+
x Investment/Share : x $60.83/ BS
Required Investment $121,660
CASH-ON-CASH RETURN
Original Equity ($121,660)
10-Year Gash Flow: , $126,606
2,000 Shares [se
aA
Sale Proceeds: . vol!
$48.16 x 2,000 Shares \ $96,924
' Retum of Original Equity /Lo,52¥ tena \ $121,668)
Sag} :
Total Net Proceeds lor. Jeg $222,980.0
Total Cashon-Cash Fletum tas.r4% 220030
“(Ales
11-Year Average Annual Cash-on-Cash Return 18.32%
DOES NOT CONSIDER INTEREST EXPENSE (IF EQUITY IS BORROWED) OR INCOME TAX
CONSEQUENCES/BENEFITS |
we He
Lillibridge Fea estate SOLUTON™
TOTAL HEALTHOARE, . W
Exhibit A12/04/2006 19:05 FAX 972 931 8966 HMBC WQULD/0L4
ll MOB-104
CONDOMINI DON’
FOR
MEDICAL OFFICE BUILDINGS
meee ereyaTeloYunl tat tlt eas -Goendominium- ——
Seton Southwest investment program
2 messages
Dan Metevier T 6 Jan 13, 2009 bt 4:14 PM
To: “Richard Schram, MD" , "Geoff Cox, MD" , Barbara House
a
Cc: Mary Faria , "John A. Dudick, Jr.” , Kk) y DickefSon
All-
There have been several questions lately regarding the timing of providing offering documents for
the ownership of the buildings on the campus of Seton Southwest. We recognize that Articte 20.22
of the Lease reflects, in part, that a Covered Offering would commence prior to December 31,
2008. Due to the protracted delay in commencing with the construction of the new building, that
clause was not modified in any of the eases to reflect an extended date. It i Nh
ne own entity D
to December 31, 2010 by which an o' provided.—Fhis Will provide us with an
opportunity to make available ownership opportunities to new physician tenants as well as those
tenants who will be expanding their suites in the existing building.
In the interim, we are working through potential increased occupancies in both buildings on the
campus that will result in a more stabilized occupancy for purposes of inserting into the offering
documents,
Please do not hesitate to contact me in the event you have any questions.
Dan
Dan Metevier
Vice President Development Operations
LILLIBRIDGE,
5308 West Plano Parkway
Exhibit C
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CAUSE NO. SCHRAM MCDONNELL, LLC dba AUSTIN ORTHOPEDIC SPECIALISTS; RICHARD SCHRAM, MD, PA; RICHARD SCHRAM MD, individually; GEORGE MUNDANTHANAM MD, PA; GEORGE MUNDANTHANAM, MD, individually; JOSH CRUM, MD, PA; JOSH CRUM MD, individually; MARK MCDONNELL, DPM, PA; MARK MCDONNELL DPM, individually; SOUTH OAKS FAMILY MEDICINE PA; GEOFFREY COX MD, individually; and ASHLEY STEIGLER MD, individually Plaintiffs, Vv. VENTAS, INC.; LILLIBRIDGE HEALTHCARE REAL ESTATE TRUST, LP; LHRET ASCENSION AUSTIN PARTNER GP, LLC; LHRET ASCENSION AUSTIN PARTNER IT GP, LLC; LHRET ASCENSION AUSTIN, LP; LHRET ASCENSION AUSTIN II, LP; THL 191 JV, LLC; LHRET 191, LLC; LILLIBRIDGE HEALTHCARE SERVICES, INC.; and DAN METEVIER Defendants Filed in The District Court of Travis County, Texas DEC 31 204 -1-GN-14- MAB AA em M = )=1-GN=14-005444 Amaiia Rodriguez-MenWoza, Clerk AOD LR UO UP UD OR COD LD LP UPD UD LD) LP) LP Lr UN UP) UD LP LO LP UP LD LD LP) OD LD LO oD LD IN THE DISTRICT COURT OF TRAVIS COUNTY, TEXAS 345TH yUDICIAL DISTRICT COURT PLAINTIFFS’ ORIGINAL PETITION AND JURY DEMANDTO THE HONORABLE COURT: 1. This case is based on a lease-to-own, bait-and-switch con. The Defendants! fraudulently induced Plaintiffs” to pay excessive rents and consideration in exchange for a promised option to purchase equity interest in certain real estate Defendants leased to Plaintiffs. In reality Defendants never intended to provide the opportunity to purchase equity as promised. Herein, Plaintiffs bring claims against Defendants for fraud, violations of the Texas Securities Act, negligence, conspiracy, and aiding and abetting. I. DISCOVERY 2. Discovery is to be conducted under Level 3 of the Texas Rules of Civil Procedure and in accordance with a scheduling order to be agreed upon by the parties and approved by this Court. Tex. R. Civ. P. 190.4. Il. PARTIES 3. Plaintiffs Schram McDonnell LLC dba Austin Orthopedic Specialists; Richard Schram, MD, PA; Richard Schram, MD; George Mundanthanam MD, PA; George Mundanthanam, MD; Josh Crum, MD, PA; Josh Crum, MD; Mark McDonnell, DPM, PA; Mark McDonnell, DPM; South Oaks Family Medicine PA; Geoffrey Cox, MD; and Ashley Steigler MD are individuals and affiliated professional associations and a limited liability company. They are all residents of Travis County, Texas. ' Herein "Defendants" shall be used to refer collectively to all Defendants, i.e. Defendants Ventas, Inc. Lillibridge Healthcare Real Estate Trust, LP; LHRET Ascension Austin Partner GP, LLC; LHRET Ascension Austin Partner II GP, LLC; LHRET Ascension Austin, LP; LHRET Ascension Austin Il, LP; THL 191 JV, LLC; LHRET 191, LLC; Lillibridge Healthcare Services, Inc., and Dan Metevier. "Lillibridge" shall be used to refer to all of the business-entity Defendants, that is, all Defendants except Mr. Dan Metevier. 2 Herein "Plaintiffs" shall refer collectively to Plaintiffs Schram McDonnell LLC dba Austin Orthopedic Specialists; Richard Schram, MD, PA; Richard Schram, MD; George Mundanthanam MD, PA; George Mundanthanam, MD; Josh Crum, MD, PA; Josh Cram, MD; Mark McDonnell, DPM, PA; Mark McDonnell, DPM; South Oaks Family Medicine, PA; Geoffrey Cox, MD; and Ashley Steigler, MD. Plaintiffs’ Original Petition and Jury Demand Page |4, Defendant Ventas, Inc. is a foreign corporation, registered to do business in Texas, and it may be served through its registered agent, CT Corporation System, at 1999 Bryan Street, Suite 900, Dallas, Texas 75201. 5. Defendant Lillibridge Healthcare Real Estate Trust, LP is a foreign limited partnership, registered to do business in Texas, and it may be served through its registered agent, CT Corporation System, at 1999 Bryan Street, Suite 900, Dallas, Texas 75201. 6. Defendant LHRET Ascension Austin Partner GP, LLC, is a foreign limited liability company with its principal place of business in Texas and it may be served through its registered agent, CT Corporation System, at 1999 Bryan Street, Suite 900, Dallas, Texas 75201. 7. Defendant LHRET Ascension Austin Partner II GP, LLC, is a foreign limited liability company, with its principal place of business in Texas and it may be served through its registered agent, CT Corporation System, at 1999 Bryan Street, Suite 900, Dallas, Texas 75201. 8. Defendant LHRET Ascension Austin, LP, is a foreign limited partnership, registered to do business in Texas, and it may be served through its registered agent, CT Corporation System, at 1999 Bryan Street, Suite 900, Dallas, Texas 75201. 9. Defendant LHRET Ascension Austin II, LP, is a foreign limited partnership, registered to do business in Texas, and it may be served through its registered agent, CT Corporation System, at 1999 Bryan Street, Suite 900, Dallas, Texas 75201. 10. Defendant THL 191 JV, LLC, is a foreign limited company, registered to do business in Texas, and it may be served through its registered agent, CT Corporation System, at 1999 Bryan Street, Suite 900, Dallas, Texas 75201. Plaintiffs’ Original Petition and Jury Demand Page 2ll. Defendant LHRET 191, LLC, is a foreign limited company, registered to do business in Texas, and it may be served through its registered agent, CT Corporation System, at 1999 Bryan Street, Suite 900, Dallas, Texas 75201. 12. Defendant Lillibridge Healthcare Services, Inc. is a foreign corporation, registered to do business in Texas, and it may be served through its registered agent, CT Corporation System, at 1999 Bryan Street, Suite 900, Dallas, Texas 75201. 13, Defendant Dan Metevier is a natural person and, on and information belief, he resides in Dallas County, Texas. Mr. Metevier may be served at 5308 West Plano Parkway, Plano, Texas 75093. Il. JURISDICTION AND VENUE 14. All or a substantial part of the events or omissions giving rise to these claims occurred in Travis County, Texas. See Tex. Civ. Prac. & Rem. Code § 15.002. 15. | The amount in controversy is in excess of the minimal jurisdictional limits of this Court. Tex. Gov. Code § 24.007; see also Tex. Const. art. V, § 8. 16. Defendants (a) contracted by mail or otherwise with Texas residents and the contracts called for performance, in whole or in part, in this state; (b) committed torts in whole or in part in this state; and/or (c) on information and belief, have recruited Texas residents, directly or through an intermediary located in Texas, for employment. Tex. Civ. Prac. & Rem. Code § 17.042. 17. Additionally, Defendants have continuing and systematic contacts in Texas or sufficient minimum contacts with Texas such that the maintenance of suit here does not offend traditional notions of justice and fair play. Defendants purposefully directed their activities toward Texas; availed themselves of the benefits and privileges of conducting said activities in Texas; and the controversy arises out of or is related to these contacts with Texas. Plaintiffs’ Original Petition and Jury Demand Page 318. Reserving all rights to amend, pursuant to Rule 47 of the Texas Rules of Civil Procedure, Plaintiff secks monetary relief of over $1,000,000. Tex. R. Civ. P. 47. Iv. FACTS 19. Defendants conned Plaintiffs into paying exorbitant rents by promising them an opportunity to purchase equity interests in certain real estate investments. It turns out they never intended to fulfill their promises. Despite repeated assurances, Defendants refused to honor the option to purchase equity interests. 20. The Defendants’ are all in the business of real estate investment. Lillibridge* develops medical office buildings; often refer to by the acronym “MOB.” Defendant Dan Metevier was the Vice President of Development of Lillibridge. Plaintiffs are medical doctors and affiliated professional associations and business entities. 21. In December 2006, on behalf of Lillibridge, Dan Metevier made a presentation to Plaintiffs regarding an investment opportunity in a proposed MOB real estate development project on the Seton Southwest Campus in Austin, Texas. Attached hereto as Exhibit A is a true and correct copy of a prospectus Mr. Metevier presented to Plaintiffs, which includes detailed pro forma and analyses concerning the benefits of the investment. 22. In return for contributing extensively to improvements, paying rent approximately 50% above market value, and agrecing to a 10-year lease term (2 times the average), Mr. Metevier and Lillibridge promised Plaintiffs an option to purchase equity. Mr. Metevier and Lillibridge + Defendants Lillibridge Healthcare Real Estate Trust, LP; LHRET Ascension Austin Partner GP, LLC; LHRET Ascension Austin Partner II GP, LLC; LHRET Ascension Austin, LP; LHRET Ascension Austin II, LP; THL 191 JV, LLC; LHRET 191, LLC; Lillibridge Healthcare Services, Inc. are all subsidiaries of Defendant Ventas Inc., a publically traded real estate investment trust ("REIT"). ‘"Lillibridge" shall be used to refer to all of the business-entity Defendants, that is, all Defendants except Mr. Dan Metevier. Plaintiffs’ Original Petition and Jury Demand Page 4represented that all of the excessive costs that could otherwise be avoided, were going to be offset and justified by the fruits of the equity interest. 23. Based upon the Defendants’ representations, the Plaintiffs agreed to the onerous terms and entered into various lease agreements with Lillibridge, an example of which is attached hereto as Exhibit B. 24. The parties had anticipated that Lillibridge would permit Plaintiffs to exercise the option to purchase before December of 2008. However, construction progressed slowly and 2008 came and went without any offering. 25. — In response to several inquiries, Mr. Metevier and Lillibridge assured the Plaintiffs that the time to exercise the option would soon come. Attached hereto as Exhibit C is an email from Mr. Metevier to some Plaintiffs affirming and re-asserting the promised equity opportunity: All- There have been several questions lately regarding the timing of providing offering documents for the ownership of the buildings on the campus of Seton Southwest. ... Itis still the absolute intent of the owning entity to provide an offering to the physician tenants of both buildings on the Seton Southwest campus. Therefore, there will be an amendment to the Lease to modify the date to December 31, 2010 by which an offering will be provided. . . . Dan Metevier Vice President Development Operations Lillibridge Ex. C: Email from D. Metevier, Jan. 13, 2009 (emphasis in original). 26. However, December 2010 came and went and still Plaintiffs were not permitted to purchase the equity interest. Lillibridge gave excuses and promised that Plaintiffs would be permitted to exercise their options as soon as occupancy reached a certain level. Plaintiffs’ Original Petition and Jury Demand Page 527. On December 18, 2014, Lillibridge declared for the first time that it had no obligation to provide Plaintiffs with the option to purchase equity, nor for that matter that it ever had any intention to do so. Vv. CAUSES OF ACTION 28. All conditions precedent to the Plaintiffs’ right to recovery have been performed, occurred, or been waived or excused, 29, The foregoing facts are incorporated by reference into each of the causes of action below. 30. To the extent they conflict, the claims and allegations herein are pled in the alternative. A. Breach of Contract 31. Plaintiffs had valid and enforceable contracts with Defendants. Plaintiffs performed, tendered performance, or were excused from performing all of their respective contractual obligations under contracts. 32. By the aforementioned acts and omissions, Defendants breached and or repudiated the contracts, causing Plaintiffs financial injury. B. Promissory Estoppel 33. Defendants made promises to Plaintiffs, who reasonably, substantially, and foreseeably relied on those promises to their detriment and injustice can only be avoided by enforcing Defendants’ promises. Cc Common Law Fraud 34. Defendants made false representations of material facts to the Plaintiffs and made false promises with the intention of not fulfilling them. Defendants knew the representations and promises were false when made or they made them recklessly, as positive assertions, and without knowledge of their truth. Plaintiffs’ Original Petition and Jury Demand Page 635. Defendants made the false representations and promises with the intent that the Plaintiffs act on them or refrain from action, and the Plaintiffs did rely on them to their detriment. 36. Defendants concealed from or failed to disclose material facts to the Plaintiffs. Defendants knew the Plaintiffs were ignorant of these facts and that they did not have an equal opportunity to discover the facts. Defendants had a duty to disclose the material facts to the Plaintiffs but were deliberately silent. 37. Defendants concealed and failed to disclose these material facts intending to induce the Plaintiffs to take some act or refrain from acting. Plaintiffs did in fact rely on the nondisclosures and were injured as a result of acting in ignorance of the undisclosed facts. D. Statutory Fraud — Texas Business and Commercial Code Section 27.01 38. In the context of transactions involving stock and real estate, Defendants made false representations of past or existing material facts or made false promises with the intention of not fulfilling the promises, 39. Defendants made these misrepresentations and false promises with actual awareness of their falsity for the purpose of inducing Plaintiffs to enter into contracts. 40. Defendants had actual awareness of the falsity of each other’s false representations and promises, failed to disclose the falsity to Plaintiffs, and benefited from the false representation and promises and nondisclosures. 41. Plaintiffs relied on Defendants’ false representations and promises, entered into contracts, and have suffered injury as a result. 42. Because Defendants acted with actual awareness of the falsity of the representations and promises and benefited from not disclosing the falsity of each other’s false representations and promises, they are liable for actual and exemplary damages. See Tex. Bus. & Com. Code § 27.01. Plaintiffs’ Original Petition and Jury Demand Page 7E. Money Had and Received 43. Defendants hold money which in equity and good conscience belongs to Plaintiffs. F. Unjust Enrichment 44. Defendants obtained a benefit from Plaintiffs by the taking of an undue advantage. G. Constructive Fraud 45. By the acts and omissions complained of hercin, Defendants have breached legal and equitable duties owed to Plaintiffs. Irrespective of moral guilt, the law declares such acts and omissions fraudulent because of the tendency to deceive others, to violate confidence, or to injure public interests. H. Negligence and Gross Negligence 46. Defendants owed the Plaintiffs a duty to exercise reasonable care and/or a duty to exercise the standard of care that a professional of ordinary prudence in this field would have used under similar circumstances a. to avoid foreseeable risk of injury to the Plaintiffs; b. to prevent or mitigate the harm to the Plaintiffs that was at least partially caused by Defendants’ own conduct, respectively; c. in making representations and in ascertaining the accuracy of information provided to the Plaintiffs; d. in hiring, supervising, and/or retaining employees and/or agents; and e. to avoid placing the Plaintiffs in risk of harm caused by foreseeable criminal activity. 47. Defendants breached their duties, which proximately caused the Plaintiffs injury. 48. When viewed objectively from Defendants’ standpoint at the time of the acts and omissions complained of herein, the degree of risk to Plaintiffs was extreme considering the probability and magnitude of the potential harm. Tex. Civ. Prac. & Rem. Code § 41.001 (11). Plaintiffs’ Original Petition and Jury Demand Page 849. Defendants had actual, subjective awareness of the risk involved and acted with specific intent to cause substantial harm or injury to Plaintiffs or with conscious indifference to the rights, safety, and welfare of Plaintiffs. Tex. Civ. Prac. & Rem. Code § 41.001(7), (11). L Negligent Misrepresentation 50. | Defendants made misrepresentations to Plaintiffs in the course of Defendants’ business or in a transaction in which they had an interest. Defendants supplied false information for the guidance of others. 51. Defendants did not exercise reasonable care or competence and/or that standard of care that a professional of ordinary prudence in this field would have used under similar circumstances when obtaining or communicating the information. 52. Plaintiffs justifiably relied on the representations and the misrepresentations caused the Plaintiffs injury. 53. When viewed objectively from Defendants’ standpoint at the time of the acts and omissions complained of herein, the degree of risk to the Plaintiffs was extreme considering the probability and magnitude of the potential harm. Tex. Civ. Prac. & Rem. Code § 41.001 (11). 54, Defendants had actual, subjective awareness of the risk involved and acted with specific intent to cause substantial harm or injury to the Plaintiffs or with conscious indifference to the rights, safety, and welfare of Plaintiffs. Tex. Civ. Prac. & Rem. Code § 41.001(7), (11). J. Violations of the Texas Securities Act 55. The equity investment opportunities offered and sold by Defendants constitute the sale or offer for sale of securities, as those terms are defined under Section 581-4(A) of the Texas Securities Act (hereinafter “TSA”). Tex. Rev. Civ. St. art. 581, § 4A. Plaintiffs’ Original Petition and Jury Demand Page 956. Defendants offered and sold securities to the Plaintiffs by means of untruc statements of material facts or omissions of material facts necessary in order to make the statements made, in light of the circumstance under which they were made, not misleading. See Id. at § 33A(2). 57. Control persons are jointly and severally liable with the seller or issuer of a security for violations of § 33A. Tex. Rev. Civ. St. art. 581, § 33F(1). Likewise, those who materially aid a seller with the intent to deceive or defraud or with reckless disregard to the truth or the law are also jointly and severally liable. Id. § 33F(2). 58. “The TSA does not require a buyer to prove reliance on the seller’s misrepresentation or omission, nor does it require proof of scienter or have a causation requirement.” In re Enron Corp. Sec., Derivative & ERISA Litig., 761 F. Supp. 2d 504, 544 (S.D. Tex. 2011); see also Busse v. Pac. Cattle Feeding Fund No. 1, Ltd. 896 S.W.2d 807, 815 (Tex. App.—Texarkana 1995, writ denied). 59, Loss causation, comparative fault, and mitigation are not defenses to securities fraud under § 33A. Duperier v. Tex. State Bank, 28 S.W.3d 740, 753-54 (Tex. App.—Corpus Christi 2000, pet. dism’d by agr.). K. Aiding & Abetting and Joint-Tortfeasor Liability 60. Defendants committed tortious acts and omissions as detailed herein. Defendants had knowledge that each other’s acts and omissions constituted tortious conduct. Each Defendant intended to assist, induce, and encourage and did assist, induce, and encourage each other in the commission of the tortious conduct. Such assistance, inducement, and encouragement were substantial factors in causing the torts. Consequently, each Defendant is jointly and severally liable for the tortious conduct of each other Defendant. Plaintiffs’ Original Petition and Jury Demand Page 10L. Conspiracy 61. Defendants were members of a combination of two or more persons. The object of the combination was to accomplish unlawful purposes or lawful purposes by unlawful means. The members had a meeting of the minds on the objects or courses of action. One or more of the members committed an unlawful, overt act to further the objects or courses of action and the Plaintiffs suffered injury as a proximate result of the wrongful acts. M. Exemplary Damages 62. Defendants are liable for exemplary damages because (1) the harm for which the Plaintiffs seek redress results from fraud, malice, or gross negligence, Tex. Civ. Prac. & Rem. Code § 41.003(a); and/or (2) Defendants had actual awareness of the falsity of the aforementioned material representations and promises, Tex. Bus. & Com. Code § 27.01(c), (d). N. Attorney’s Fees 63. On both statutory and equitable grounds, Plaintiffs seek reasonable and necessary attorney’s fees, costs, and expenses resulting from this lawsuit, the filing of which was necessitated by the misconduct complained of herein. Tex. Bus. & Com. Code §§ 27.01(e); Tex. Civ. P. & Rem. Code §§ 38.001, et. seg; Tex. Rev. Civ. St. art. 581, § 33D(3). VI. DISCOVERY RULE 64. Plaintiffs were kept in the dark about the offering and continually promised that it would be forthcoming. If and to the extent required, Plaintiffs plead the application of the discovery rule. Vil. JURY DEMAND 65. Plaintiffs hereby demand a trial by jury and tender the requisite fee herewith. Plaintiffs’ Original Petition and Jury Demand Page 11VOL PRAYER 66. — For the foregoing reasons, Plaintiffs ask the Court to issue a citation for Defendants to appear and answer, and respectfully request that Plaintiffs be awarded a judgment against Defendants and the following relief: a. Actual, direct, special, and consequential damages; b. Exemplary, punitive, and statutory damages; c, Attormey’s fees, costs, and recoverable expenses; d. Pre- and post-judgment interest; and e. All other and further relief at law or in equity to which Plaintiffs may show themselves justly entitled. Respectfully submitted, ‘TAYLOR DUNHAM AND RODRIGUEZ LLP 301 Congress Avenue Suite 1050 Austin, Texas 78 Telephone: (5, Facsimile: (. By: dt aylordunham.com Isabelle M. Antongiorgi State Bar No. 24059386 ima@taylordunham.com ATTORNEYS FOR PLAINTIFFS Plaintiffs’ Original Petition and Jury Demand Page 1212/04/2006 19:04 FAX 972 931 89866 MBC 003/017 AMPLE HOSPITAL ANYWHERE, USA ‘MOB DEVELOPMENT 101’ PRESENTED BY: DAN METEVIER VICE PRESIDENT: DEVELOPMENT > Lillibridge 5308 West Plano Parkway } Plano, Texas 75093 800.433.1005 December, 2006 Exhibit A12/04/2006 19:04 FAX 972 9331 8¥66 MBL Way UUs vee MOB-101 Useful Terms = Triple net rent (NNN) —- Rental cost without any expenses . Full service rent - Rental cost including the triple net rent plus all operating expenses « Gross squate feet (GSF) - Total area of the building to the outside of the outside walls . Rentable square feet (RSF) - Actual area occupied, plus pro rata factor for the common spaces (corridors, lobby, etc} . Usable square feet (USF) - Actual area occupied inside of your sutte, measured to the centerline of demising walls « Shell building - Base building, plus finish-out of common area . Sulte finish allowance . + Monies allocated fo build-out (tenant fit-up) — your ust « Professional services and development fees - Architectural, engineering, real-estate services, project management, and construction administration . Hard construction costs + Gost to build physical structure, including interlor build-out and site work as required . Soft construction costs - Allcosts over and above the hard construction costs to determine “total project costs” . Debt service . to cover first mortgage. Return on equity - The return paid on invested capital facancy and reserves - Lender required fund to cover any vacancies or capital projects during term of mortgage; Partner's money — returned as additional cash flow if not used wert . Capitalization rate ~ Rate of retum used to calculate the value of cash flow; net operating i income (NNN rent — vacancy and reserves) + capitalization rate = value The financial projections on the following pages are representative of a typical project, and do not represent the projections of any spécific project.. Construction cast and financing assumptions will vary from project to project. . THE TOTAL HEALTHCARE, Lillibridge REAL ESTATE SOLUTION Exhibit A a12/04/2006 19:04 FAX 972 931 8966 (gj005/017 MOB-1041 Pro Forma Economic Analysis a oP A Physician Project Profile: Offices Gross Square Feet 45,000 Rentable Square Feet 41,000 Usabla Square Feet 37,000 Required Parking Spaces 250 Hatd Construction Costs ‘Building Shell/Porte Cochere $72.50 /GSF - fo $3,139,000 ‘Suite Finish Allowance $5300 MSF \LS. 1,962,900 «Site Work Allowance 1,042,000 Connector . 210,000 1@ Allowance 75,000 *Furnishings and Graphles Allowance 25,000 Construction Soft Costs 135,000 “Contingency 100,000 »Professional Service Fees 865,600 Total Hard Construction Costs $7,354,500 Soft Construction Costs: «Legal Fees $100,000 “Appraisal Fees 10,000 «Lender Inspection Fees 42,000 ‘Title Insurance 0.50% 38,700 aFinancing Fee 3.00% 186,000 *Construction Interest 8.00% 12 MOS. 248,000 Total Soft Construction Costs 594,700 Total Project Costs $7,949,200 Financing: *First Mottgage 75% $5,981,800 Equity Contribution 25% 1,987,300 Total Financed 7,949,200 Annual Expenses Debt Service 7.00% 30 YRS, 476,000 © *Capital Reserves 7.00% 56,000 Return on Equity _ 11.95% 226,000 “Ground Rent (_ x on Physician Tenants: Capitalization Rate wa 1,000 ASF $48,162 ad 2,000 RSF $96,324 Projected Value $15,908,759 8,000 RSF $144,487 4,000 ASF $192,649 Projected Sates Price 5759 5,000 ASF $240,811 Less: 6,000 ASF $288,973 Expenses @ 3% ($477,263) 7,000 RSF $337,136 Debt Balance ($7,768,018) 8,000 RSF $385,298 Retum of Equit: ($4,277,096) 9,000 RSF $433,460 10,000 RSF $481,622 Proceeds from Sale $3,386,382 © Estimated Effective Rents Jf ‘\ Stated Rent Cash Fiow B.0.E. / ffective Rent Const. $0.00 $3.18 5.23% ($3.18) Year 1 $19.49 $1.46 2.40% $48,038 Year 2 $19.99 $4.29 7.05% $15.70 Year3 $20.49 $5.37 8.83% $16.12 Year 4 $20.99 $5.67 9.32% \ $15.32 Year 5 $21.49 $6.63 10.90% $14.86 Year 6 $21.99 $6.10 10.03% $15.89 Year7 $22.49 $6.54 10.75% $15.95 Year8 $22.99 $7.81 12.84% $15.18 Year 9 $23.49 $7.90 12.88% $16.59 Year 10 $23.99 $8.37 13.75% $15.62 Total Rent $217.40 $63.30 9.46% $154.10 Total Effective Rent Per 1,000 RSF $154,097 Less Distribution at Sale Per 1,000 RSF ($48,162) Net Effective Total Rent Per 1,000 RSF $105,935 Net Effective Rent Per Rentable Square Foot $10.59 : (NOTE: No tax implications have been considered in this analysts.) a THE TOTAL HEALTHCARE, Lillibridge AEAL ESTATE SOLUTION ™ Exhibit - = we : |L2/vaszuuo 2¥;UD BAA ylyZ SL BEEK MNBL IQU14/017 al MO8-101 $s I nt EQUITY INVESTMENT: RETURN CALCULATION Shares Purchased 2,000 Ps+ x Investment/Share : x $60.83/ BS Required Investment $121,660 CASH-ON-CASH RETURN Original Equity ($121,660) 10-Year Gash Flow: , $126,606 2,000 Shares [se aA Sale Proceeds: . vol! $48.16 x 2,000 Shares \ $96,924 ' Retum of Original Equity /Lo,52¥ tena \ $121,668) Sag} : Total Net Proceeds lor. Jeg $222,980.0 Total Cashon-Cash Fletum tas.r4% 220030 “(Ales 11-Year Average Annual Cash-on-Cash Return 18.32% DOES NOT CONSIDER INTEREST EXPENSE (IF EQUITY IS BORROWED) OR INCOME TAX CONSEQUENCES/BENEFITS | we He Lillibridge Fea estate SOLUTON™ TOTAL HEALTHOARE, . W Exhibit A12/04/2006 19:05 FAX 972 931 8966 HMBC WQULD/0L4 ll MOB-104 CONDOMINI DON’ FOR MEDICAL OFFICE BUILDINGS meee ereyaTeloYunl tat tlt eas -Goendominium- —— Seton Southwest investment program 2 messages Dan Metevier T 6 Jan 13, 2009 bt 4:14 PM To: “Richard Schram, MD" , "Geoff Cox, MD" , Barbara House a Cc: Mary Faria , "John A. Dudick, Jr.” , Kk) y DickefSon All- There have been several questions lately regarding the timing of providing offering documents for the ownership of the buildings on the campus of Seton Southwest. We recognize that Articte 20.22 of the Lease reflects, in part, that a Covered Offering would commence prior to December 31, 2008. Due to the protracted delay in commencing with the construction of the new building, that clause was not modified in any of the eases to reflect an extended date. It i Nh ne own entity D to December 31, 2010 by which an o' provided.—Fhis Will provide us with an opportunity to make available ownership opportunities to new physician tenants as well as those tenants who will be expanding their suites in the existing building. In the interim, we are working through potential increased occupancies in both buildings on the campus that will result in a more stabilized occupancy for purposes of inserting into the offering documents, Please do not hesitate to contact me in the event you have any questions. Dan Dan Metevier Vice President Development Operations LILLIBRIDGE, 5308 West Plano Parkway Exhibit C http://mail.google.com/mail/?ui=2&ik=405b9ad | 6e&view=pt&search=inbox&th=! 1ed212.... 1/26/2009