SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE, CENTRAL JUSTICE CENTER INTEGRATED HEALTHCARE HOLDINGS, ) INC., ) ) Plaintiff, ) ) ) vs. ) NO. 07CC05895 ) ) ANIL SHAH, M.D.; AJAY G. MEKA, ) M.D.; SALMAN NAQVI, M.D.; and DOES ) 1 through 150, inclusive, ) ) Defendants. ) ____________________________________) ) AND RELATED CROSS-ACTIONS ) ____________________________________) Deposition of: BRUCE MOGEL VOLUME II Date and Time: Tuesday, February 24, 2009 11:17 a.m. Place: 3 Hutton Centre Drive, Suite 900 Santa Ana, California Reporter: Donna E. Boulger, CSR, RPR Certificate No. 6162 1 Deposition of BRUCE MOGEL, VOLUME II, taken 2 before Donna E. Boulger, Certified Shorthand Reporter, 3 Certificate No. 6162, and a Deposition Officer with 4 principal office in the County of Orange, commencing on 5 Tuesday, February 24, 2009, 11:17 a.m., at the Law Offices 6 of Callahan & Blaine, 3 Hutton Centre Drive, Suite 900, 7 Santa Ana, California. 8 APPEARANCES: 9 10 For the Plaintiff: 11 ENTERPRISE COUNSEL GROUP Attorneys at Law 12 BY: WILLIAM F. ZULCH, ESQ. Five Park Plaza, Suite 450 13 Irvine, California 92614 (949) 833-8550 14 15 For the Defendant/Cross-Complainant ANIL SHAH, M.D.: 16 CALLAHAN & BLAINE, APLC Attorneys at Law 17 BY: MARC P. MILES, ESQ. 17 3 Hutton Centre Drive, Suite 900 18 Santa Ana, California 92707 (714) 241-4444 19 20 For BRUCE MOGEL: 21 O'MELVENY & MYERS LLP Attorneys at Law 22 BY: MICHAEL G. YODER, ESQ. -AND- 23 BY: KATHERINE LINDSEY, ESQ. 23 610 Newport Center Drive, 17th Floor 24 Newport Beach, California 92660-6429 (949) 760-9600 25 (Appearances of counsel continue on the following page) 276 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 APPEARANCES (CONTINUED): 2 Also Present: JUDGE MICHAEL BRENNER, DISCOVERY REFEREE 3 JEANNIE SCHWARZE, Videographer KELLY THOMAS 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 277 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 I N D E X 2 WITNESS EXAMINATION PAGE 3 4 BRUCE MOGEL 5 BY MR. MILES 282 6 E X H I B I T S 7 EXHIBIT NUMBER PAGE 8 11 Letter to Maury DeWald from 428 Fred Siembieda, dated 9/12/06 9 (2 pages) 10 61 Letter to The Independent 332 Directors Integrated Healthcare 11 Holdings, Inc. from Larry B. Anderson, dated 1/9/06 (3 12 pages) 13 279 Email string between Bruce 356 Mogel and Anil Shah, among 14 others (2 pages) 15 282 Email string between Bruce 421 Mogel and Joey Lampariello, 16 among others (3 pages) 17 675 Photocopy of photograph (1 290 page) 18 18 676 Photocopy of photograph (1 300 19 page) 20 677 EMark Advertising Campaigns 301 Summary (20 pages) 21 21 678 Document with the heading 306 22 "Questions I received today from an interested party" (6 23 pages) 24 679 Multibill Optimized Billing to 309 Santiago Lopez from Daniel 25 Mckell, dated 8/25/08 (2 pages) 278 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 I N D E X - (CONTINUED) 2 3 E X H I B I T S 4 Exhibit Number Page 5 6 680 Document entitled, "E Mark Data 311 Value" (2 pages) 7 7 681 Emark Advertising Inc. Balance 313 8 Sheet As of March 31, 2008 (7 pages) 9 9 682 Emark Advertising Inc. Profit 317 10 and Loss January through March 2007 (8 pages) 11 11 683 Emark Advertising Inc. 319 12 Production Schedule (6 pages) 13 684 Email from B Mogel to Joey L, 321 dated 7/11/07 (1 page) 14 14 685 Letter to Honorable David A. 324 15 Paterson from Edolphus "Ed" Towns, dated 11/20/08 (9 pages) 16 16 686 Letter to Honorable David A. 331 17 Paterson from Edolphus "Ed" Towns, dated 11/20/08 (9 pages) 18 18 687 Email from Bruce Mogel to Joey 368 19 Lampariello, dated 9/29/08 (1 page) 20 20 688 Plaintiff Integrated Healthcare 369 21 Holdings' First Amended Complaint (63 pages) 22 22 689 Document entitled, "Analyzing 381 23 Emark Int revised 7/31/08.xls" (6 pages) 24 25 279 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 I N D E X - (CONTINUED) 2 3 E X H I B I T S 4 Exhibit Number Page 5 6 690 Email string between Bruce 425 Mogel and Gail Morales, dated 7 7/27/06 (2 pages) 8 9 10 INFORMATION REQUESTED 11 PAGE LINE 12 (None) 13 14 WITNESS INSTRUCTED NOT TO ANSWER 15 PAGE LINE 16 (None) 17 18 19 20 21 22 23 24 25 280 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Santa Ana, California - Tuesday, February 24, 2009 2 11:17 a.m. - 3:30 p.m. 3 * * * * * 4 VIDEOGRAPHER: Good morning. This is the 5 videotaped deposition of Bruce Mogel, Volume II, taken 6 at 3 Hutton Centre Drive, Suite 900, Santa Ana, 7 California, on Tuesday, February 24th, 2009, in the 8 matter of Integrated Healthcare Holdings, Inc., versus 9 Anil Shah, M.D., et al., case number 07 CC 05895. This 10 deposition is on behalf of the defendant and 11 cross-complainants. My name is Jeannie Schwarze with 12 Dean Jones Attorney Video Services of Los Angeles and 13 Santa Ana, California. This deposition is commencing at 14 11:17 a.m. 15 Would all present please identify themselves, 16 beginning with the deponent. 17 THE WITNESS: Bruce Mogel. 18 MR. YODER: Michael Yoder, counsel for 19 Mr. Mogel. 20 MS. LINDSEY: Katie Lindsey on behalf of Bruce 21 Mogel. 22 JUDGE BRENNER: Michael Brenner, discovery 23 referee appointed by Judge Lewis. 24 MS. THOMAS: Kelly Thomas, company 25 representative for IHHI. 281 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 MR. ZULCH: William Zulch on behalf of 2 Integrated Healthcare Holdings, Inc. 3 MR. MILES: And Marc Miles representing 4 Dr. Shah and OC-PIN. 5 6 BRUCE MOGEL, 7 called as a witness, having been first duly sworn, was 8 examined and testified as follows: 9 10 EXAMINATION 11 BY MR. MILES: 12 Q Mr. Mogel, welcome back. 13 A Thank you. 14 Q Do you remember the ground rules that we went 15 over a little bit during the first session of your 16 deposition? 17 A Pretty much. 18 Q Okay. If anything is confusing or you have a 19 question, will you please let me know throughout the 20 deposition? 21 A Okay. 22 Q Is there any reason why you can't give your 23 best testimony here today. 24 A No. 25 Q Have you taken any medication in the last 24 282 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 hours that would prevent you from giving your best 2 testimony here today? 3 A No. 4 Q When was the last time you spoke to Joey 5 Lampariello? 6 A Last week. 7 Q Okay. And what was the purpose for you 8 speaking to him last week? 9 A I believe it was on funding for IHHI. 10 Q What is your current role at IHHI? 11 A I'm a consultant. 12 Q And when does that consultant employment, if 13 you will, terminate? 14 A April 30th. 15 Q What are your current duties as a consultant 16 for IHHI? 17 A To help facilitate the transition with Ken 18 Westbrook as CEO in all areas that he needs. 19 Q And with respect to your conversations with 20 Mr. Lampariello last week, what did they pertain to? 21 A I believe they pertained to funding of IHHI. 22 Q Okay. Could you be more specific. 23 A Receiving accounts receivable monies. 24 Q Not refinancing or anything like that? 25 A No. 283 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Okay. What about sale of the real estate loan 2 or note. 3 A No. 4 Q Okay. Have you had any conversations with 5 Mr. Lampariello since your last deposition, about this 6 lawsuit? 7 A No. 8 Q None at all? 9 A No. 10 Q Have you had any conversations with 11 Mr. Lampariello in preparation for your testimony here 12 today? 13 A No. 14 Q Have you reviewed any documents in preparation 15 for your testimony here today? 16 A No. 17 Q Have you spoken with any of the other IHHI 18 board members in preparation for your testimony here 19 today? 20 A No. 21 Q Do you still maintain an office at the IHHI 22 headquarters? 23 A Yes. 24 Q Okay. Same office that you were always in? 25 A No. 284 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Okay. You have a different office? 2 A Yes. 3 Q Do you have a different computer? 4 A No. 5 Q Okay. Do you currently use a computer at IHHI? 6 A Yes. 7 Q Is it the Sony VAIO? 8 A Yes. 9 Q Do you also use a laptop? 10 A Yes. 11 Q And what is the make and model of the laptop? 12 A It's an Apple Air Book. 13 Q And how long have you had that? 14 A Since June of '08, approximately. 15 Q Where is that Apple laptop today? 16 A In my office. 17 Q At any point in time, did IHHI take that 18 laptop -- Apple laptop from you to inspect? 19 A Yes. 20 Q When did you get it back? 21 A I don't recall the date, but within 24 hours of 22 them taking it. 23 Q Okay. And when was that 24-hour period? 24 A I -- I don't recall. Maybe a month ago. 25 Q A month ago being toward the end of January? 285 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A I don't specifically recall. 2 Q Okay. What's your best estimate? 3 A About a month ago. 4 Q Okay. What was your understanding as to why 5 IHHI took that Apple laptop? 6 MR. YODER: Let me just note an objection, if I 7 might. The way you framed the question, it could be 8 calling for attorney-client communications, in terms of 9 information provided Mr. Mogel by me regarding 10 communications I had with IHHI's counsel. 11 So I just want to caution the witness, he can 12 answer as to his understanding, but not to disclose any 13 privileged communications with counsel. 14 MR. MILES: Fair enough. 15 THE WITNESS: To search for relevant documents. 16 BY MR. MILES: 17 Q Did IHHI inform you of the results of its 18 search? 19 A No. 20 Q Have you spoken with anyone at IHHI regarding 21 the results of that search? 22 A No. 23 Q Other than the Sony VAIO and the Apple laptop, 24 have you ever used any other laptop of IHHI? 25 MR. YODER: Let me just object. I think it was 286 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 covered in the first session of the deposition, so I'll 2 object on the grounds it's asked and answered. 3 MR. MILES: Okay. 4 JUDGE BRENNER: Overruled. 5 THE WITNESS: Yes. 6 BY MR. MILES: 7 Q Is that the Toshiba laptop? 8 A Yes. 9 Q Other than those three computers, did you ever 10 use any other laptop while at IHHI? 11 A No. 12 Q Have you ever used a Dell Vostro computer? 13 A Yes. Yes, I have. For a short period of time. 14 Q At IHHI? 15 A Yes, I did. 16 Q Okay. 17 A Yeah. 18 Q What period of time did you use the Dell Vostro 19 computer? 20 A I don't -- it was in between the Sony VAIO and 21 the -- the Apple Air. 22 Q Now, the Sony VAIO is a desktop, right? 23 A Yes. 24 Q And you used the Sony VAIO and Apple Air 25 concurrent with each other, at the same time, 287 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 essentially? 2 A Correct. 3 Q So when you say, "in between," what do you -- 4 A It was in between the Toshiba. I'm sorry. The 5 Toshiba laptop and the Apple Air. 6 Q What time period was that? 7 A I don't recall specifically. 8 Q Can you give me your best estimate? 9 A I really -- it would be prior to June of when I 10 received the Air, for probably a period of a month. 11 Q Okay. Prior to June 2008? 12 A Correct. 13 Q And did you use it for IHHI business? 14 A Yes. 15 Q Did you take it with you when you would travel 16 to and from Arizona? 17 A Yes. 18 Q Do you know where that Dell Vostro is today? 19 A Yes. 20 Q Where is it? 21 A I believe Steve Blake uses it. 22 Q Have you had any conversations with Mr. Blake 23 about producing documents off of that Dell Vostro in 24 connection with this lawsuit? 25 A No. 288 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Did you search the Dell Vostro to produce 2 documents in this case? 3 A No, I didn't. 4 Q Do you know if anyone did? 5 A I believe the company did. 6 Q IHHI? 7 A Yes. 8 Q What leads you to believe that? 9 A I believe I was told that it was searched. 10 Q By whom? 11 A I believe by my attorney. 12 Q Okay. Well, I don't want to get into that. 13 Other than your attorney, did anyone else tell 14 you that the Dell Vostro was searched? 15 A I don't believe so. 16 Q Do you know who searched the Dell Vostro? 17 A No. 18 Q Did anyone other than your attorney communicate 19 to you the results of the search of your Dell Vostro? 20 A No. 21 Q Do you know if any documents off of the Dell 22 Vostro were produced in connection with this litigation? 23 A I don't. 24 Q At any point in time, did you delete any Emark 25 documents off of your Apple Air? 289 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A I don't believe so. 2 Q Did you delete any documents off of your Apple 3 Air prior to giving it to IHHI to search? 4 A I might have. 5 Q Do you know if any of those documents related 6 to IHHI business? 7 A I don't believe so. 8 Q Just personal documents you would have deleted? 9 A I believe so. 10 Q The first document I'm going to show you here 11 today will be marked as Exhibit 675. 12 (Exhibit 675 marked for identification.) 13 MR. MILES: For the record, Exhibit 675 is a 14 one-page document, which has a picture of an individual 15 in the middle. 16 BY MR. MILES: 17 Q Do you recognize that individual? 18 A I believe that's Mike Delgado. 19 Q Okay. What is Mike Delgado's connection with 20 Emark, if any? 21 A I don't believe he has any. 22 Q What is your relationship with Mike Delgado? 23 A I have no real relationship with him. 24 Q How do you know that's Mike Delgado? 25 A From -- from meeting him. 290 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q How many times did you meet him? 2 A Half a dozen. 3 Q What was the purpose of those meetings? 4 A He does work for BSS Promotions and promoting 5 things. 6 Q And were you involved at all with BSS 7 Promotions? 8 A No. 9 MR. YODER: Let me object on relevance grounds 10 I think it goes beyond the issues that we're litigating 11 and, therefore, violates the consolidation and stay 12 order. 13 MR. ZULCH: Join. 14 JUDGE BRENNER: Mr. Miles what about it? 15 What's the relevance of it? 16 MR. MILES: Well, for the purposes of this 17 discussion, I'd ask that the witness be excused for my 18 offer of proof. 19 JUDGE BRENNER: Mr. Mogel, how about if you -- 20 could you just wait outside for a minute and let us have 21 this discussion. I hate to do that to you, but... 22 (Whereupon, Mr. Mogel left the 23 deposition room.) 24 MR. MILES: We have evidence, some of which 25 we've seen in this case so far, that has been used at 291 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 the depositions, some of which we'll probably see here 2 today that connect Mr. Mogel to Mike Delgado, BSS 3 Productions, Emark, Joey Lampariello, and kickbacks as 4 well. And one of the four financial issues that is 5 subject to this -- of the pending motion for summary 6 judgment is the relationship between Mr. Lampariello and 7 Mr. Mogel. And we've discussed Emark quite a bit. 8 This gentleman right here has a direct tie-in 9 to Emark, as does BSS promotions. 10 JUDGE BRENNER: All right. Anything further? 11 Mr. Zulch? You joined in the motion. 12 MR. ZULCH: Can you tell us what this 13 connection is? You say there is a connection between 14 Mike and Emark. 15 MR. MILES: Sure. And I don't want to belabor 16 the point because Mr. Yoder's right, we have seen that 17 before in the first deposition. And we can start 18 looking through some of these e-mails that deal with BSS 19 Promotions and Emark, all around the same time, talking 20 about the funding of the Medical Capital loan and money 21 distributions and things of that nature. 22 I've gone too far. 23 By the way, Spiegel & Utrera, the same company 24 who incorporated Emark and is the agent for service 25 process, also incorporated BSS Promotions, I think with 292 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 a similar address for their corporate entity. 2 MR. YODER: Are these the exhibits from the 3 first session of the deposition? 4 MR. MILES: That's correct. 5 Maybe I haven't used the BSS Promotions 6 documents just yet. 7 Actually, yeah. They may be in my stack to use 8 today. 9 JUDGE BRENNER: Well, I'll tell you what -- go 10 ahead, Counsel. 11 MR. YODER: Yes, Your Honor. My question is: 12 What's the foundation? I mean, I understand that 13 there's been questioning as to funding of Emark by Med 14 Cap, and Mr. Mogel's role in that, and we've allowed 15 questions on that subject. I don't recall seeing any 16 documents or having learned of any testimony that Med 17 Cap provided any financing to BSS, that Mr. Mogel was 18 involved in. 19 And they're starting out, these questions, very 20 broadly. You know, what's your relationship with BSS. 21 I don't know where that may or may not lead, but it 22 seems to me, if they have some issue that somehow Med 23 Cap has provided funding to BSS, and somehow Mr. Mogel 24 has benefited by that, I think they need to lay a 25 foundation first; otherwise, it's impossible really to 293 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 evaluate whether there is any relevance to these broad 2 questions about tell me about your relationship. 3 MR. MILES: Exhibit 292. 4 JUDGE BRENNER: I'll tell you what. Let me -- 5 MR. MILES: Your Honor, Exhibit 292, maybe it 6 escaped Mr. Yoder, but it provides everything that you 7 just mentioned. There's an e-mail from BSS Promotions 8 to Bruce Mogel and Joey Lampariello of Medical Capital 9 regarding Emark documents. 10 This also gets into Santiago Lopez, who just 11 yesterday Judge Lewis issued a bench warrant for 12 contempt for not showing up for deposition and producing 13 documents. He should be arrested shortly. 14 JUDGE BRENNER: All right. But this is a 15 discovery proceeding, it's a little broader than it 16 would -- relevancy issues we might see at trial. 17 Based on the representation of Mr. Miles, I'm 18 going to overrule the objection. 19 MR. MILES: Thank you, Your Honor. 20 Do you want to invite your client back in. 21 (Whereupon, Mr. Mogel returned to the 22 deposition room.) 23 BY MR. MILES: 24 Q Thank you for your patience. 25 Before you stepped out of the room, we were 294 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 talking about Exhibit 675, which you indicate is a 2 photograph of Mike Delgado. And I believe my last 3 question to you is: What is your relationship with 4 Mr. Delgado? 5 A I helped him, you know, look at some promotion 6 documents. 7 Q And you mentioned that you met him about a half 8 dozen times? 9 A I'd say that's about right. 10 Q Okay. Why were you being asked to look at some 11 promotion documents? 12 A To do some promotions for, you know, his -- for 13 BSS. 14 Q Okay. Did he explain to you why he was asking 15 you to look at those documents? 16 A Just wanted my feedback on them. 17 Q Okay. Do you have any history in the 18 promotions industry that would be beneficial to 19 Mr. Delgado or BSS Promotions? 20 A A little bit. From restaurant businesses. 21 Q Okay. Did you also promote a band at one point 22 in time? 23 A No. 24 Q Okay. Did you do any promotions in Las Vegas? 25 A No. 295 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q When's the last time you spoke with 2 Mr. Delgado? 3 A Months ago. I don't specifically recall. 4 Q With respect to what issue? 5 A Probably promotions. 6 Q Just generally? 7 A Yeah. Don't specifically recall. 8 Q Promoting what? 9 A Whatever he was promoting. I really don't 10 specifically recall. 11 Q No idea whatsoever? 12 A I don't specifically recall. 13 Q Okay. Does -- to your knowledge, does 14 Mr. Delgado have any business relationship with Emark? 15 A Not that I know of. 16 Q Do you know if BSS has any business 17 relationship with Emark? 18 A I don't believe so. 19 Q I just want to see if I can refresh your 20 recollection here. 21 I'm going to refer you to Exhibit 292, which we 22 discussed briefly during the first session of your 23 deposition. 24 And for the record, this is an e-mail from BSS 25 Promotions to you, and also to Joey Lampariello of 296 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Medical Capital, and Adam Field of Medical Capital, 2 dated October 23, 2006, at 5:29 p.m. The subject is 3 "Requested Emark docs." And it is from somebody 4 apparently named Mike. And there are a couple resumes, 5 one being Rolf Hirshman, and the other being Santiago 6 Lopez. 7 Have you seen that e-mail before? 8 A Yes, I have. 9 Q Okay. Does this refresh your recollection that 10 there's some connection between BSS Promotions and 11 Emark? 12 A I don't know what the relationship is between 13 BSS Promotions and Emark, but it's clear that this comes 14 from BSS Promotions regarding Emark. 15 Q When you received the e-mail which was 16 previously marked as Exhibit 292, what was your 17 understanding as to what you were supposed to do with 18 its contents? 19 A I don't think I had to do anything with it. 20 Q Did you have any knowledge as to why it was 21 being sent to you? 22 A I got copied on many documents from Emark. 23 Q Okay. But that one's sent directly to you, 24 right? 25 A Yes. 297 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 MR. YODER: Objection. It mischaracterizes the 2 document. 3 JUDGE BRENNER: Overruled. 4 BY MR. MILES: 5 Q That one is sent directly to you, correct? 6 A To me and to Joey. 7 Q Okay. And it's cc'd to Joey and Mr. Field, 8 right? 9 A Correct. 10 Q Do you have any understanding why BSS 11 Promotions sent that to you? 12 A As a copy or copying it to Mr. Lampariello and 13 Mr. Field. 14 Q Did you do anything with those documents once 15 you received them? 16 A I don't believe so. 17 Q Have you ever met Santiago Lopez? 18 A No. 19 Q Do you know what his connection is at Emark? 20 A I believe he's an officer at Emark. 21 Q How do you know that? 22 A From documents from Emark. 23 Q Documents you received from Emark? 24 A Yes. 25 Q Okay. Who from Emark would send you documents? 298 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A I get them from administrator mike Johnson. 2 Q Do you know if there's a relationship between 3 Mike Johnson and Mike Delgado? 4 A I don't believe so. 5 Q This e-mail here that we've been looking at, 6 Exhibit 292, has an e-mail address coming from BSS 7 Promotions. 8 Do you see that? 9 A Yes. 10 Q But then it's signed "Sincerely, Mike." 11 Do you see that? 12 A Yes. 13 Q Do you believe that to be Mike Johnson or Mike 14 Delgado? 15 A I would think that would be Mike Johnson. 16 Q Okay. So Mike Johnson is associated with BSS 17 Promotions, correct? 18 A I don't know that fact, other than he used that 19 e-mail address. 20 Q Do you know why he would have a BSS Promotions 21 e-mail address, if he wasn't associated with the 22 company? 23 A I -- I don't speculate as to that. I would 24 assume that he has that e-mail address for some 25 association. 299 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Okay. And Mike Delgado is also associated with 2 BSS Promotions, correct? 3 A Correct. 4 Q Okay. And BSS Promotions was sending you some 5 Emark documents, correct? 6 A Correct. 7 Q You don't know what relationship there is 8 between BSS Promotions and Emark? 9 A Correct. 10 Q None at all? 11 A I don't. 12 Q Okay. What does Emark Advertising do? 13 A I believe they do Internet advertising. 14 Q Any particular field? 15 A I believe they advertise -- or they do click 16 technology, they do adult industry. It's not really my 17 concern. 18 Q Okay. The next document I'll show you will be 19 marked as Exhibit 676. 20 (Exhibit 676 marked for identification.) 21 MR. MILES: For the record, Exhibit 676 is a 22 one-page document, reflecting a picture of a house. 23 BY MR. MILES: 24 Q Have you ever seen that house before? 25 A No. 300 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Have you ever been to the corporate 2 headquarters of Emark Advertising? 3 A No. 4 Q Is it your understanding that Medical Capital 5 loaned $5 million to Emark Advertising? 6 A I believe so. 7 Q Do you have any reason to believe that that's 8 Emark Advertising's corporate headquarters? 9 A No. 10 Q The next document I'll show you will be marked 11 as Exhibit 677. 12 (Exhibit 677 marked for identification.) 13 MR. MILES: For the record, Exhibit 677 is a 14 20-page document, which contains a number of different 15 documents within it. It is collectively Bates labeled 16 BMApple-1 through BMApple-20. 17 BY MR. MILES: 18 Q Have you had a chance to look at Exhibit 677? 19 A I've scanned through it. 20 Q Okay. It's been -- this document has been 21 produced in this case with the representation that this 22 was a deleted document recovered from your Apple laptop 23 computer. 24 Do you have any understanding as to what this 25 document is? 301 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A It looks like a campaigns summary. 2 Q Okay. Did you delete this document off of your 3 computer? 4 A I don't recall the document specifically at 5 all. 6 Q Okay. Do you recall deleting any Emark 7 documents off of your Apple computer? 8 A Not specifically, no. 9 Q How did you obtain this Emark campaigns 10 summary? 11 A Maybe I was copied on it or it was forwarded to 12 me. 13 Q From? 14 A Emark or Medical Capital or -- 15 Q Do you recall which? 16 A No. 17 Q Who at Medical Capital would have forwarded 18 this to you? 19 A I don't know. 20 Q Do you have -- what's your best estimate? Do 21 you have any idea? 22 A No. 23 Q When you received e-mails from someone at 24 Medical Capital regarding Emark, who would you receive 25 them from? 302 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A I received very few e-mails from Medical 2 Capital, maybe from Mr. Lampariello. 3 Q Okay. 4 A Or Joy or -- Dominguez. 5 Q If you had received this e-mail from -- or this 6 attachment and e-mail from Emark, who would it have been 7 from? 8 MR. YODER: Objection. Calls for speculation. 9 JUDGE BRENNER: Overruled. 10 THE WITNESS: Generally, Emark documents come 11 from the administrator at Emark. 12 BY MR. MILES: 13 Q Who's the administrator. 14 A I don't know. 15 Q So you received campaigns summary and financial 16 documents from Emark, but you don't know who they come 17 from? 18 MR. YODER: Objection. Mischaracterizes the 19 witness's testimony. Assumes facts not in evidence. 20 THE WITNESS: I get copied -- 21 JUDGE BRENNER: Overruled. 22 THE WITNESS: I get copied on documents that 23 are sent to Medical Capital from Emark. 24 BY MR. MILES: 25 Q Why? 303 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A I don't know. I don't need to. 2 Q I want to direct your attention to page 3. It 3 appears to be a list of the DC2 Server Production. 4 Do you see that? 5 A Yes. 6 Q Is this your understanding as to what Emark 7 Advertising is -- the Web sites that they're involved 8 with? 9 A I don't have an understanding of what Web sites 10 they're involved with. 11 Q Did you look at this document when you received 12 it? 13 A I don't believe so. 14 Q Why not? 15 A No reason for me to look at it. 16 Q Did you ever call up anyone at Emark and ask 17 why you were receiving it? 18 A No. 19 Q By the way, if you were to call someone at 20 Emark, who would you call? 21 A I don't call Emark. 22 Q Do you have any contact information for anyone 23 at Emark? 24 A I have -- don't contact anybody at Emark. 25 Q Okay. You were responsible for introducing 304 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Emark to Medical Capital, correct? 2 A Correct. 3 Q And you don't have any contact person for 4 anyone at Emark? 5 A Only via e-mail. 6 Q Okay. Only from an anonymous admin. address? 7 A Correct. 8 Q Okay. This document is dated -- or at least 9 the first page is dated August 5th, 2008. 10 Do you see that? 11 A Yes. 12 Q When was the last time you received information 13 regarding Emark? 14 A I don't recall. 15 Q Okay. Within the last couple months? 16 A This would be within the last couple months. 17 Q Okay. Are you receiving any type of commission 18 off of the business that Emark does? 19 A No. 20 Q Do you know what business relationship Medical 21 Capital has with Emark, if any? 22 A They're a client of -- Emark's a client of 23 Medical Capital. 24 Q Okay. Just a lender? 25 A Yes. As far as I know. 305 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q The next document I'll show you will be marked 2 as Exhibit 678. 3 (Exhibit 678 marked for identification.) 4 MR. MILES: Sorry. We're short on one copy is 5 all. I'll get you one. 6 For the record, Exhibit 678 is a six-page 7 document, which appears to be possibly two of the same 8 documents, collectively bearing the Bates label 9 BMApple-231 through BMApple-236. 10 BY MR. MILES: 11 Q I'll represent to you that this is another 12 document that was produced in this case, which was 13 apparently recovered as a deleted file from your Apple 14 laptop computer. 15 Have you ever seen this document before? 16 A I don't specifically recall. 17 Q Okay. I want to direct your attention to the 18 first page there. And it indicates -- has a question, 19 it says: Who are the principals and what is their 20 reputation? 21 Do you see that? 22 A Uh-huh. 23 Q Did you have any role in preparing this 24 document? 25 A None. 306 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q This document seems to suggest that Santiago 2 Lopez is 50 percent ownership and Medical Provider 3 Financial Corporation is 50 percent ownership. 4 Do you see that? 5 A Yes. 6 Q Did you have any understanding as to the 7 ownership of Medical Provider Financial? 8 A None. 9 Q Do you understand that Medical Provider 10 Financial is a subsidiary of Medical Capital? 11 A Yes. 12 Q Did you have any conversations with 13 Mr. Lampariello about a 50 percent ownership in Emark 14 Advertising? 15 A No. 16 Q Did you delete this document off of your 17 computer? 18 A I don't believe so. I don't recall. 19 Q Okay. Have you received any money from Emark 20 Advertising? 21 A No. 22 Q Have you received any money from Medical 23 Capital as a result of its business with Emark 24 Advertising? 25 A No. 307 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Have you ever heard of Santiago Lopez? 2 A Yes. 3 Q In what context? 4 A Emark. 5 Q Okay. What is your understanding as to 6 Santiago Lopez's role in Emark? 7 A He's an officer of the company. 8 Q Have you ever met him? 9 A No. 10 Q Have you ever spoken to him? 11 A No. 12 Q How do you know he's an officer in the company? 13 MR. ZULCH: Objection. Asked and answered. 14 JUDGE BRENNER: Overruled. 15 THE WITNESS: From Emark documents. 16 BY MR. MILES: 17 Q That you received from an anonymous Emark 18 e-mail address? 19 A I believe so, yes. 20 Q The next document I'll show you will be marked 21 as Exhibit 679. 22 Before we get there, though, where are Emark 23 Advertising servers located? 24 A I don't know. 25 Q Do you know if Emark has any connection to the 308 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Philippines? 2 A It might. I don't specifically know. 3 Q Do you know if Form Labs has any connection to 4 the Philippines? 5 MR. YODER: Objection. Relevance. 6 JUDGE BRENNER: What was the name there? 7 MR. YODER: Form Labs. 8 MR. MILES: Form Labs. 9 MR. YODER: That was the subject of a specific 10 ruling, Your Honor. 11 MR. MILES: Except Rolf Hirshmann of Form Labs 12 is also an officer of Emark Advertising. 13 JUDGE BRENNER: Well, overruled. 14 THE WITNESS: Repeat the question. 15 BY MR. MILES: 16 Q Sure. Do you know if Form Labs has any 17 business or does any business in the Philippines? 18 A I don't. 19 Q Next document I'll show you will be marked as 20 Exhibit 679. 21 (Exhibit 679 marked for identification.) 22 MR. MILES: For the record, Exhibit 679 is a 23 two-page document, entitled "Multibill Optimized 24 Billing." It also bears the Bates label BMApple-22 25 through -23, dated August 25, 2008. 309 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 BY MR. MILES: 2 Q And I'll again represent to you that this was a 3 document produced in this case that was recovered as a 4 deleted file from your Apple laptop computer. 5 Have you ever seen this document before? 6 A I don't believe so. 7 Q Okay. Do you recognize any of the contents? 8 A No. 9 Q Do you know what this document is? 10 A An evaluation of -- an evaluation of data. 11 Q For Emark's adult business? 12 A I would guess. 13 Q Other than adult or pornography sites, does 14 Emark engage in any other categories of Internet 15 advertising or click-through? 16 A I don't know. 17 Q Okay. Why was this document on your computer? 18 A I don't know. 19 Q No idea? 20 A It was probably copied to me. 21 Q From? 22 A I don't know. 23 Q There's an address for Emark Advertising, Inc., 24 4120 Van Horne Avenue in Los Angeles. 25 Do you see that? 310 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A Yes. 2 Q Okay. Have you ever been to that address? 3 A No. 4 Q Do you know if that address is the same address 5 that we saw in Exhibit 676? 6 A I don't. I haven't been there. 7 Q Were you involved in any due diligence process 8 with Medical Capital with respect to Medical Capital 9 providing a loan to Emark? 10 A No. 11 Q Did you have any conversations with 12 Mr. Lampariello about that loan? 13 A I'm sure I did. 14 Q Okay. What do you recall is the substance of 15 those conversations? 16 A I don't specifically recall. 17 Q The next document I'll show you will be marked 18 as Exhibit 680. 19 (Exhibit 680 marked for identification.) 20 MR. MILES: Exhibit 680 is a two-page document 21 entitled, "E Mark Data Value," dated August 25, 2008. 22 It's also Bates labeled BMApple-42 through -43. 23 BY MR. MILES: 24 Q I'll represent to you again that this was a 25 document produced in this case as having been recovered 311 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 as a deleted file from your Apple laptop computer. 2 Do you recognize this document? 3 A No, not specifically. 4 Q In looking at it, can you tell what it is? 5 A It looks like a valuation of data. 6 Q Why did you have this document on your 7 computer? 8 A I may -- it was copied to me, sent to me. 9 Q From whom? 10 A I don't recall. 11 Q Okay. And this was just as of last August, 12 right? 13 A Yes. 14 Q And you don't recall this document at all? 15 A No. Not specifically, no. 16 Q Do you recall deleting it? 17 A No. Not specifically, no. 18 Q Do you have a custom and practice of deleting 19 Emark documents off of your Apple laptop computer? 20 A No. 21 Q Let's put it another way: Do you know if there 22 are any documents on your Apple laptop computer relating 23 to Emark that weren't deleted by you? 24 A I don't know that I deleted any documents 25 specifically. 312 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Okay. 2 A I know that I don't keep many documents on my 3 Apple computer. 4 Q As you sit here today, do you know if there are 5 any Emark documents that are on your Apple laptop 6 computer? 7 A I don't believe so. 8 Q The next document I'll show you will be marked 9 as Exhibit 681. 10 (Exhibit 681 marked for identification.) 11 MR. MILES: For the record, Exhibit 681 is a 12 seven-page document, with the first page being Emark 13 Advertising Inc. Balance Sheet As of March 31, 2008. It 14 also bears the Bates label BMApple-44 through -50. 15 BY MR. MILES: 16 Q And so that I don't keep having to repeat 17 myself and we can speed up the deposition, I'll 18 represent that all of the documents that bear the Bates 19 label BMApple were produced in this case as -- and 20 represented that they were deleted files recovered from 21 your Apple laptop computer. 22 Directing your attention to Exhibit 681. Have 23 you ever seen this document before? 24 A I don't recall specifically. 25 Q Do you recall receiving Emark Advertising 313 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 balance sheets? 2 A No. Not specifically, no. 3 Q Did you ever request to receive their balance 4 sheets? 5 A No. 6 Q Why was this found on your computer? 7 A I don't know. Maybe it was forwarded to me, 8 copied to me. I don't know. 9 Q From whom? 10 A Emark. I don't know. 11 Q Do you know who at Emark? 12 A No. 13 Q Have you ever met anyone from Emark? 14 A Mike Johnson, you know, a couple of years ago. 15 Q So Mike Johnson's associated with Emark as 16 well? 17 A Yes. 18 Q So Mike Johnson's associated with BSS and 19 Emark, correct? 20 A I don't know Mike Johnson from BSS, but he did 21 have that e-mail address. 22 Q Okay. 23 A But... 24 Q So as far as you're concerned, Mike Johnson has 25 a BSS e-mail address, but you don't know if he's 314 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 associated with BSS? 2 A Correct. 3 Q And Mike Delgado is associated with BSS? 4 A Yes. 5 Q Is Mike Delgado also associated with Emark? 6 A Not that I know of. 7 Q Okay. Other than Mike Johnson, do you know 8 anyone at Emark Advertising? 9 A No. 10 Q Sir, why is it that you have Emark 11 Advertising's balance sheets and you don't know anyone 12 from the company except for Mike Johnson? 13 A I've been copied on a lot of Emark documents. 14 Q Why? 15 A Just as their practice, copying me on 16 documents. 17 Q Did you ever e-mail back and say, "Stop copying 18 me on your internal financial documents"? 19 A No. 20 Q Why not? 21 A I don't really pay attention to it. 22 Q What do you do with these e-mails, when you get 23 them? 24 A I -- I -- I don't know. Delete them. Don't 25 bother with them. Leave them. 315 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Okay. 2 A I don't give it much attention. 3 Q Have you ever sent any e-mails to anyone at 4 Emark Advertising? 5 A Yeah. I'm sure I have. 6 Q Okay. To what e-mail address? 7 A Administrator, postmaster, whatever they use. 8 Q Okay. And who did you understand would be 9 reading those e-mails when you sent them? 10 A I guess Mike Johnson. 11 Q What was the purpose for you sending e-mails to 12 Emark? 13 A Well, I don't specifically recall. 14 Q You don't recall any of the purposes? 15 A I would have to think about it, but for the 16 most part, maybe information that they were looking for 17 of things from Med Cap or -- but nothing of substance. 18 Q Okay. What information do you believe you 19 would have provided to Emark Advertising relating to Med 20 Cap? 21 A Contact names, contact numbers, things like 22 that. 23 Q Is this before the loan closed? 24 A Perhaps before; perhaps after. 25 Q Any other information you can recall providing 316 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 to Emark Advertising? 2 A Not specifically. 3 Q I'm not sure if I asked you this, but have you 4 ever spoken with anyone at Emark Advertising? 5 A Mike Johnson. 6 Q Okay. In his capacity as Emark Advertising? 7 A Yes. 8 Q What does Mike Johnson do at Emark Advertising? 9 A He -- what did he do at Emark Advertising? 10 I don't know, systems guy, finance guy. 11 Q Okay. That's your understanding? 12 A Uh-huh. 13 Q And when you say, "systems guy," what does that 14 mean? 15 A Computer guy. 16 Q Okay. Running some of these click-through 17 advertising? 18 A Yes. 19 Q The next document I'll show you will be marked 20 as Exhibit 681 -- I'm sorry, 682. 21 (Exhibit 682 marked for identification.) 22 MR. MILES: For the record, Exhibit 682 is an 23 eight-page document, which appears to include profit and 24 loss statements for Emark Advertising. It is also Bates 25 labeled BMApple-51 through -58. 317 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 BY MR. MILES: 2 Q Have you ever seen this document before? 3 A I don't specifically recall. 4 Q What is your understanding as to what this 5 document is? 6 A Looks like a P&L. 7 Q Did you review it when you received it? 8 A I don't believe so. 9 Q Okay. Did you delete it off of your computer? 10 A Not that I recall specifically. 11 Q Okay. Who did you receive this document from? 12 A Perhaps Emark, on a copy. I don't specifically 13 recall. 14 Q Did you talk to anyone at Emark concerning 15 this? 16 A No. 17 Q Did you forward this profit and loss statement 18 over to Medical Capital? 19 A I -- not that I recall. 20 Q Did you have any conversations with Joey 21 Lampariello regarding the profit and loss statements 22 from Emark? 23 A No. 24 Q Why was this document on your computer? 25 A I -- like I said, I guess it was forwarded to 318 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 me. 2 Q Did you do anything with it when you received 3 it? 4 A No, not that I recall. 5 Q Did you ask the person who forwarded it to you 6 why you were receiving it? 7 A No. 8 Q The next document I'll show you will be marked 9 as Exhibit 683. 10 (Exhibit 683 marked for identification.) 11 MR. MILES: Exhibit 683 is a six-page document 12 entitled, "Emark Advertising Production Schedule," which 13 also bears the Bates label BMApple-225 through -230. 14 BY MR. MILES: 15 Q Do you recognize this document? 16 A Not specifically. 17 Q What is your understanding as to what Exhibit 18 683 is? 19 A It looks like a production schedule. 20 Q Did you review it when you received it? 21 A I don't believe so. 22 Q Why not? 23 A It doesn't really pertain to me. 24 Q What was your understanding as to why Emark 25 Advertising was sending you its production schedule? 319 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A I don't know. Perhaps I got copied on it. 2 Q From who? 3 A From Emark. 4 Q Okay. Anyone specific at Emark? 5 A Not that I recall, no. 6 Q Just that anonymous Emark e-mail address? 7 A Yes. 8 Q Did you have any conversations with anyone at 9 Emark regarding this production schedule? 10 A No. 11 Q Did you e-mail back asking why you were 12 receiving Emark's internal production schedule? 13 A No. 14 Q Did you forward the production schedule over to 15 Mr. Lampariello? 16 A Not that I recall. 17 Q Did you have conversations with Mr. Lampariello 18 about Emark's production schedule? 19 A No. 20 Q Why did you delete this file? 21 A I don't know that I did. 22 Q You believe it still might be on your computer? 23 A It might be. 24 Q Did you tell me earlier you didn't keep any 25 Emark documents on your computer? 320 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A Obviously, I did. 2 Q Okay. Unless you deleted them and they were 3 recovered, right? 4 A Yes. 5 Q The next document I'll show you will be marked 6 as Exhibit 684. 7 (Exhibit 684 marked for identification.) 8 MR. MILES: For the record, Exhibit 684 is a 9 one-page document, which appears to be the text from an 10 e-mail. Looking at the top, it appears to be from Bruce 11 Mogel to Joey L. at Medical Capital, dated July 11, 12 2007, at 18:35. It is also Bates labeled BMApple-259. 13 BY MR. MILES: 14 Q Have you ever seen this e-mail before? 15 A I'm sure I have, but I don't specifically 16 recall. 17 Q Okay. Does it appear to be an e-mail that you 18 sent to Mr. Lampariello on or about July 11, 2007? 19 A Yes. 20 Q I want to direct your attention to the contents 21 of it, in the middle there, where it says, quote: I 22 will definitely hang in there. I want to be able to 23 report to E that you have transferred 5,000 -- $500,000 24 to Tony, close quote. 25 Do you see that? 321 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A Yes. 2 Q What does that relate to? 3 A I don't specifically recall. Probably funding 4 for E from Medical Capital. 5 Q And E is Emark? 6 A I'm guessing, yeah. 7 Q Who's Tony? 8 A I have no idea. 9 Q So you wanted to report $500,000 to a Tony, and 10 you don't know who that Tony is? 11 A I assume that he works for Med Cap. I don't 12 specifically recall. 13 Q Why would you be asking Joey at Med Cap to 14 report to Tony at Med Cap about a funding? 15 A I -- I don't recall. 16 Q Is it your understanding that Tony works at 17 Emark? 18 A I don't know that. 19 Q What's Tony's last name? 20 A I don't know that either. 21 Q Did you ever report to Tony about a $500,000 22 funding? 23 A Not that I recall. 24 Q How many $500,000 fundings have you reported to 25 anyone in the last year? 322 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A With IHHI. 2 Q Okay. Other than IHHI. 3 A I don't believe any. 4 Q Okay. Would this have stood out in your mind? 5 A No, it doesn't stand out in my mind 6 specifically. 7 Q Okay. Going on in your e-mail here, it says, 8 quote: Then it is just a matter of turning it around. 9 When will that happen, close quote. 10 Do you see that? 11 A Yes. 12 Q What did you mean by that? 13 A I don't know. 14 Q No idea at all? 15 A I don't specifically recall. 16 Q Do you generally recall what this relates to? 17 A No. Just, it looks like funding for Emark. 18 Q Why did you delete this e-mail off your 19 computer? 20 A I don't remember this being on my computer 21 from -- just an e-mail. I -- I don't specifically 22 recall. 23 Q Is that your e-mail account, B. Mogel at AOL 24 dot com? 25 A Uh-huh. 323 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Any reason to believe you didn't sign this 2 e-mail? 3 A No. 4 Q Do you have a pattern and practice of deleting 5 e-mails relating to Emark? 6 A No, not specifically. It seems strange, 7 though, that it's dated July 2007, and it's on my Apple. 8 Q Uh-huh. 9 A I didn't have that Apple then. 10 Q Okay. Now, if this document was maintained on 11 your AOL account at the time you had the Apple, couldn't 12 you have downloaded it? 13 A I could have opened it; I don't know if I 14 downloaded it. 15 Q Okay. The next document I'll show you will be 16 marked as Exhibit 685. 17 (Exhibit 685 marked for identification.) 18 MR. MILES: For the record, Exhibit 685 is a 19 multiple-page document, which appears to be from Ed 20 Towns, member of congress of the United States House of 21 Representatives, dated November 20, 2008. It is also 22 Bates labeled BMApple-24 through -32. 23 BY MR. MILES: 24 Q Have you ever seen this document before? 25 A I believe so. 324 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Okay. What is it? 2 A It's a letter about Parkway Hospital closure. 3 Q What is -- 4 A I think Med Cap owned this or financed this 5 hospital. 6 Q Okay. Did you introduce Medical Capital to 7 Parkway Hospital? 8 A No. 9 Q Did you introduce Medical Capital to Concordia 10 Health Alliance? 11 A No. 12 Q Do you know if Medical Capital actually funded 13 this hospital or was looking to fund the hospital? 14 A I believe they funded this hospital. 15 Q Okay. Was that for the purpose of saving it as 16 it was being closed? 17 A Not specifically sure. 18 Q What was your involvement with respect to 19 Medical Capital funding the Parkway Hospital loan? 20 A None. 21 Q Why was this document on your computer? 22 A I guess I was copied it or sent it. 23 Q From whom? 24 A Medical Capital. 25 Q Mr. Lampariello? 325 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A Perhaps. 2 Q Okay. Did you have any involvement whatsoever 3 in the Parkway Hospital Medical Capital loan? 4 A No. 5 Q Did you receive any compensation as a result of 6 that loan? 7 A No. 8 Q Did you have any conversations with 9 Mr. Lampariello about Parkway Hospital? 10 A I have. 11 Q Okay. And what did you discuss with him in 12 that regard? 13 A I believe he told me it was closing. 14 Q That was it? 15 A Yes. 16 Q Now, this was just a few months ago, November 17 20, 2008, right? 18 A Uh-huh. 19 Q And you don't remember receiving this document? 20 A Not specifically, no. 21 Q Have you ever been interviewed by the FBI in 22 connection with an investigation? 23 A I don't believe so. 24 Q Have you ever been investigated by anyone -- 25 I'm sorry, interviewed by anyone from the SEC regarding 326 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 an investigation relating to your work at IHHI? 2 A Yes. 3 Q Okay. When was that interview from the SEC? 4 MR. YODER: If I might just ask for a brief 5 break. I'm concerned about privilege issues. Mr. Mogel 6 was acting on behalf of the hospital at the time, I know 7 had communications with attorneys for the hospital at 8 the time. And I wasn't involved, and so really don't 9 know the background, and am concerned that I don't want 10 to not be objecting in a way that would allow privileged 11 information to be disclosed. 12 It would be fine if I just caution Mr. Mogel. 13 He's not a lawyer, though, so I do have some concerns 14 that we're treading into areas that are going to involve 15 attorney-client communications. 16 JUDGE BRENNER: All right. Do you want to take 17 a quick break? 18 MR. YODER: If I could, please. 19 JUDGE BRENNER: All right. 20 MR. MILES: We'll go off the record. 21 JUDGE BRENNER: Off record. 12:09 p.m. 22 (Recess taken.) 23 VIDEOGRAPHER: Returning to record. 12:32 p.m. 24 BY MR. MILES: 25 Q Before we took a break, you had indicated that 327 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 you were interviewed by the SEC in connection with an 2 investigation. Do you remember that? 3 A Yes. 4 Q Okay. Who interviewed you? 5 A Several people from the SEC. 6 Q When? 7 A I want to say it was probably late 2005, early 8 2006. 9 Q Okay. What was your understanding as the 10 purpose of the SEC's investigation? 11 MR. YODER: Let me just note an objection. To 12 the extent that's asking for the witness to disclose 13 attorney-client communications, I would object to the 14 question to that extent and instruct the witness not to 15 answer in a way that would be disclosing such 16 communications. 17 THE WITNESS: Okay. 18 JUDGE BRENNER: Well, all right. With that 19 caveat, I think Mr. Mogel understands that we've just 20 had a break for you to -- you two to discuss those 21 issues, so go ahead Mr. Mogel. 22 THE WITNESS: My belief is that it was a -- an 23 informal inquiry, not an investigation. 24 BY MR. MILES: 25 Q Okay. That having been said, what was your 328 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 understanding as to why this informal inquiry was being 2 made? 3 MR. YODER: Same objection. 4 THE WITNESS: I believe that there was an 5 anonymous complaint of some nature, but I don't know, 6 and it prompted an informal inquiry. 7 BY MR. MILES: 8 Q What were the subject matters that the 9 representatives from the SEC interviewed you on? 10 A They just asked about our general business, 11 what our strategies were. Just -- just wanted to 12 understand our business. 13 Q Did they indicate what the anonymous complaint 14 was? 15 A I don't believe so. 16 Q Did you ask them? 17 A I believe that would have been discussed with 18 my attorneys. 19 Q Okay. Did you ask the SEC what the anonymous 20 complaint was? 21 A No. 22 Q And no one from the SEC told you? 23 A No, not that I recall. 24 Q How many interviews or meetings did you have 25 with anyone from the SEC? 329 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A One. 2 Q Did you say the end of 2005, beginning of 2006? 3 A I believe that's right. 4 Q Any follow-up communications with the SEC? 5 A As it pertains to the informal inquiry? 6 Q Yes. 7 A No. 8 Q Did you receive any letters saying that the 9 case is closed or the inquiry is closed, anything of 10 that nature? 11 A No. But there was never a formal inquiry. It 12 was -- everything was informal. 13 Q Okay. And other than from communications with 14 your attorney, you don't know what the substance of the 15 anonymous complaint was? 16 A No. 17 Q And in the interview process with the SEC, it 18 wasn't revealed to you what the anonymous complaint was? 19 A No. 20 Q Other than that one occasion, has anyone else 21 from the SEC interviewed you? 22 A No. 23 Q What about the Santa Ana Police Department? 24 A No. 25 Q You haven't been interviewed by the Santa Ana 330 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Police Department within the last six months? 2 A No. 3 Q The next document I'll show you will be marked 4 as Exhibit 686. 5 (Exhibit 686 marked for identification.) 6 MR. MILES: For the record, Exhibit 686 is a 7 multiple-page document. Again, it appears to be from Ed 8 Towns, member of the U.S. House of Representatives, to 9 David A. Paterson, dated November 20, 2008. It also 10 bears the Bates label BMApple-33 through -41. 11 BY MR. MILES: 12 Q Have you had a chance to look at this document? 13 A Quickly. 14 Q Okay. Do you know if there are any differences 15 between Exhibit 686 and 685, without going line by line? 16 A It looks to be the same document. 17 Q Did IHHI ever conduct an investigation of you? 18 A Yes. 19 Q How many times? 20 A Two times. 21 Q When was the first investigation? 22 A I want to say it was right around January of 23 '06. 24 Q Do you know what sparked that first 25 investigation of you? 331 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A A letter from Larry Anderson. 2 Q Okay. Let's take a look at that. 3 The next document I'll show you was previously 4 marked as Exhibit 61. 5 (Exhibit 61 marked for identification.) 6 MR. MILES: For the record, Exhibit 61 is a 7 three-page document, which appears to be from Larry 8 Anderson, as president of IHHI, to the independent 9 directors of IHHI, dated January 9, 2006, re: Bruce 10 Mogel. It also bears the Bates label SHAH-221 through 11 -223. 12 BY MR. MILES: 13 Q Is this the letter that you're referring to? 14 A Yes. 15 Q And you've seen this letter before, correct? 16 A Yes, I have. 17 Q Okay. Did anyone from IHHI interview you with 18 respect to its first investigation? 19 A No, I don't believe so. 20 Q Okay. How did you know IHHI was conducting an 21 investigation of you? 22 A Through their attorneys. 23 Q Whose attorneys? 24 A IHHI's attorneys. 25 Q Okay. IHHI's attorneys told you that? 332 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A Yes. 2 Q And who are those attorneys? 3 A I -- let me correct that. I -- maybe Fernando 4 Niebla told me that they were conducting an 5 investigation. Hard for me to recall specifically. 6 Q Okay. What did he tell you in that regard? 7 A That they were hiring Paul Hastings, Bill 8 Simpson from Paul Hastings to conduct an investigation 9 based on Larry's letter. 10 Q Okay. Did you ask Mr. Niebla why? 11 A Yes. 12 Q What did he say? 13 A It's based on Larry's accusations. 14 Q What's contained in Exhibit 61? 15 A Yes. 16 Q Okay. Did Mr. Niebla ask you any specific 17 questions about the contents of Mr. Anderson's 18 January 2006 letter? 19 A I don't believe so. 20 Q Did anyone else at IHHI ask you specific 21 questions about Anderson's letter? 22 A I don't believe so. 23 Q Did anyone at Paul Hastings ask you about the 24 contents of Mr. Anderson's letter? 25 A Yes. 333 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Who? 2 A Bill Simpson. And there was a second gentleman 3 whose name I don't recall. 4 Q Was that a face-to-face meeting? 5 A Yes. 6 Q Do you recall when it was? 7 A No. 8 Q What was discussed during that meeting? 9 A They asked me questions about some of these 10 allegations and they asked me questions about several 11 different things. I don't really recall all of it. 12 Q Okay. What else do you recall? 13 A They asked me questions about a couple of 14 lawsuits. 15 Q Okay. I think we talked about some of those 16 before, but one we might not have covered is you 17 mentioned earlier in your testimony here today you were 18 involved in the restaurant business? 19 A Yes. 20 Q Okay. Were you ever sued as a result of that 21 restaurant business? 22 MR. ZULCH: Objection. Irrelevant. Beyond the 23 stay order of Judge Lewis of December 7, 2008. 24 MR. YODER: Join. 25 JUDGE BRENNER: Seems to be, Mr. Miles. 334 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Sustained. 2 BY MR. MILES: 3 Q What lawsuits that you just mentioned did 4 Mr. Simpson ask you about? 5 A A lawsuit that was filed against Alta 6 Healthcare, which I was never served on but had my name 7 on it. 8 Q Any others? 9 A Yeah. Perhaps -- I -- I don't recall 10 specifically. There might have been a -- a lawsuit that 11 they asked me about from a company named Sysco, so -- 12 but I don't recall specifically if that was part of it. 13 Q How many times have you been sued? 14 MR. YODER: Objection. Relevance. Goes beyond 15 the scope. 16 JUDGE BRENNER: Well, I think that -- 17 overruled. 18 THE WITNESS: I'm not really sure about how 19 many lawsuits there are in these cases here, so can I 20 exclude those in my answer? 21 BY MR. MILES: 22 Q Certainly. I believe you're only named in one, 23 but -- 24 A Okay. 25 Q -- excluding what you're sitting here for 335 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 today. 2 A I would say three times, maybe four. 3 Q Always the defendant? 4 A No. 5 Q You were the plaintiff against Mr. Siembieda? 6 A Correct. 7 Q Have you ever -- any other lawsuits you're the 8 plaintiff? 9 MR. YODER: Same objection, Your Honor. It's 10 going far beyond the scope. 11 JUDGE BRENNER: All right. Well, sustained. 12 BY MR. MILES: 13 Q I want to direct your attention to Exhibit 61, 14 if I could. And more specifically, page 2. Down at the 15 bottom paragraph, it starts off: More recently.... 16 Do you see that? 17 A Yes. 18 Q Okay. Can you please read that to yourself, as 19 I'll be asking you questions about it. 20 Have you had a chance to read it? 21 A Yes. 22 Q Did Mr. Simpson ask you questions about that 23 particular allegation in Mr. Anderson's letter. 24 A I don't specifically recall. 25 Q Do you recall providing Mr. Simpson with any 336 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 information regarding the allegations from Mr. Anderson, 2 that the Merrill Lynch/Laurus deal died because of your 3 background check? 4 A I -- I don't specifically recall. 5 Q Did you ever contact anyone at Merrill Lynch 6 concerning that issue? 7 MR. ZULCH: Objection. Vague. 8 JUDGE BRENNER: Overruled. 9 THE WITNESS: Regarding Mr. Anderson's 10 accusation? 11 BY MR. MILES: 12 Q Yes, sir. 13 A No. 14 Q When you read Mr. Anderson's letter, and 15 particularly the allegation that IHHI couldn't obtain 16 refinancing through Merrill Lynch and Laurus because of 17 your background, did you do anything about that? 18 MR. ZULCH: Can you read that back, please, 19 just how that phrased. 20 (Whereupon, the record was read by the 21 reporter as follows: 22 "Q When you read Mr. Anderson's 23 letter, and particularly the 24 allegation that IHHI couldn't obtain 25 refinancing through Merrill Lynch and 337 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Laurus because of your background, 2 did you do anything about that?") 3 THE WITNESS: I -- I don't specifically recall 4 what my actions were. 5 BY MR. MILES: 6 Q Did you talk to anyone about that allegation? 7 A I'm sure, but specifically, I -- I'm not -- I'm 8 not recalling. 9 Q Generally, what do you recall about talking to 10 somebody concerning this allegation? 11 A I don't recall -- 12 MR. YODER: You're excluding his counsel, I 13 take it? 14 MR. MILES: Always. 15 THE WITNESS: I don't recall having 16 conversations with -- specifically with anybody about 17 these accusations because they're false. 18 BY MR. MILES: 19 Q Okay. 20 A So -- but other than my lawyer, I don't 21 specifically recall. 22 Q Let's look at the middle of the paragraph on 23 page 2 down at the bottom, on the right-hand start -- 24 side, it starts off with Bruce. And it says, quote: 25 Bruce did not elaborate on what more was said, but 338 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 confessed that based on his background, the Merrill deal 2 did not go forward, close quote. 3 Do you see that? 4 A Uh-huh. 5 Q Did you make such a confession? 6 A No. 7 Q Did you ever make a statement that Merrill 8 Lynch or Laurus couldn't or wouldn't refinance IHHI 9 because of your background? 10 A No. 11 Q Okay. Do you know if that is true, that they 12 refused to finance it because of your background? 13 A They refused to finance because of a lack of 14 equity. 15 Q It had nothing to do with your background? 16 A No. 17 Q When that accusation was made against you, did 18 you talk to Mr. Anderson about it? 19 A I don't believe I confronted him directly, for 20 the benefit of the company. 21 Q So this false statement was made about you 22 concerning Merrill Lynch, but you didn't do anything 23 about it? 24 MR. ZULCH: Objection. Misstates the 25 testimony. Assumes facts. 339 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 MR. YODER: Join. 2 JUDGE BRENNER: Overruled. 3 Go ahead. You can answer, Mr. Mogel. 4 THE WITNESS: I did not see this letter until 5 sometime after it was distributed and handed out. So 6 I -- I think at the time that I did actually see it was 7 at the end of the investigation. 8 BY MR. MILES: 9 Q Okay. How many meetings did you have with 10 anyone at Paul Hastings concerning the first 11 investigation of you? 12 A One or two. 13 Q By the first meeting, had you seen Exhibit 61? 14 A I -- I don't recall. 15 Q What else do you recall Mr. Simpson asking you 16 during his investigation of you the first time? 17 A I think he asked me about -- about Alta 18 Healthcare. 19 It's a long time ago. I really don't recall 20 the specific questions. 21 Q Do you recall anything else other than Alta? 22 A Not specifically. 23 Q How about generally? 24 A I mentioned the lawsuits. No, I don't 25 really -- don't really recall more than that. 340 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q I want to direct your attention to the second 2 page of Mr. Anderson's letter. And in the first 3 paragraph there, there's a reference to Jimmy Abrams. 4 Do you see that? 5 A Yes. 6 Q Do you know who Jimmy Abrams is? 7 A Yes. 8 Q Who is he? 9 A The COO of a company called Med Line. 10 Q And what's Med Line's relationship to IHHI? 11 A They're a vendor. 12 Q Are they still a vendor today? 13 A Yes. 14 Q Okay. What do they provide for IHHI? 15 A Hospital supplies, medical supplies. 16 Q Did you ever receive a personal loan from Med 17 Line? 18 A No. 19 Q I want to direct your attention to the middle 20 of that paragraph, after it says: ...one of our 21 vendors..., it goes on to say, quote: ...Jimmy told Jim 22 Ligon that DCHC could never do a deal with IHHI so long 23 as Bruce Mogel was the CEO because of what he did there. 24 Do you see that? 25 A Yes. 341 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Okay. Do you believe that to be a false 2 statement? 3 A Yes. 4 Q Did you have any conversations with Bill 5 Simpson about that allegation, during his investigation 6 of you? 7 A I don't specifically recall. 8 Q Why do you believe that to be a false 9 statement? 10 A I didn't do anything wrong there. 11 Q But you don't know whether or not Mr. Abrams 12 told Mr. Ligon that? 13 A I don't know whether or not Mr. Ligon told 14 Mr. Anderson that either. 15 Q Okay. Well, my question was: You don't know 16 if Mr. Abrams told Mr. Ligon that? 17 A I don't believe that he did. 18 Q Did you have any conversations with Mr. Abrams 19 concerning that issue? 20 A Not that I recall. 21 Q Even after receiving this letter, did you 22 contact Mr. Abrams and tell him that that was false? 23 A I don't believe that Mr. Abrams would have said 24 that. 25 Q But you don't know as you sit here today? 342 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A No, I don't know specifically. 2 Q I want to direct your attention to the next 3 paragraph on page 3 of Mr. Anderson's letter. And it 4 deals with EBITDA and EBT projections. 5 Can you please read that to yourself briefly, 6 as I'll be asking you questions about it. 7 A Sure. 8 Q At any point in time, did you give Mr. Anderson 9 incorrect EBT or EBITDA projections? 10 A There were multiple sets of projections as they 11 got refined. I'm not sure which ones here he is 12 referencing. He may have used older projections or 13 unperfected projections. 14 Q Who would have given him the unperfected 15 projections? 16 A I believe he had almost all the projections we 17 had -- I mean, the company had. 18 Q Do you recall giving Mr. Anderson projections 19 with respect to the possible Berggruen investment? 20 A Not specifically, no. 21 Q Do you remember generally? 22 A No, I don't remember generally giving him 23 projections. 24 Q Okay. Do you remember at any point in time 25 Mr. Anderson coming back to you, and you providing him 343 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 with different projections than you gave him the first 2 time? Do you remember that issue coming up at all? 3 A I remember there -- I remember him coming back 4 with projections or asking for projections for -- that 5 were revised, and that they were different than the 6 projections he was handing out. 7 Q The projections he was handing out, where did 8 he get those from, if you know? 9 A I'm not sure. 10 Q Did he get them from you? 11 A It's possible. 12 Q How about the revised projections? Did he get 13 them from you? 14 A From myself or Steve Blake. 15 Q Did all of IHHI's refinancing efforts go 16 through you? 17 A I -- general -- 18 MR. ZULCH: Let me object. It's overbroad, 19 vague, ambiguous. 20 JUDGE BRENNER: Overruled. 21 THE WITNESS: I touched a lot of the 22 refinancing efforts, but I am sure there were 23 refinancing efforts by other parties that I didn't 24 touch, as well. 25 /// 344 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 BY MR. MILES: 2 Q Do you remember sending out e-mails saying that 3 all refinancing efforts need to go through you? 4 A I was assigned by the board as the point person 5 for refinancing for IHHI. 6 Q My question was slightly different. 7 Do you recall sending out e-mails saying that 8 all refinancing efforts must come from you? 9 A I -- I do, at the direction of the finance 10 committee. And then I also -- there was also an e-mail 11 sent out that the finance committee should be involved 12 and talk to anybody as well as me. 13 Q Is that after the Donika Schnell incident? 14 A Yes. 15 Q Who on the finance committee told you that all 16 refinancing should go through you? 17 A Maury DeWald and Fernando Niebla. 18 Q Do you know which one out of those two? 19 A I believe both agreed to it. 20 Q Okay. I'm asking you who told you that. 21 A I believe it was at a board meeting. 22 Q Okay. Did Berggruen eventually invest money 23 into IHHI? 24 A No. 25 Q Are you aware of why not? 345 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A Yes. 2 Q Why not? 3 A Members of OC-PIN did not want to be diluted in 4 their stock position and the Berggruen investment would 5 have diluted their position. 6 Q Did the members of OC-PIN have the opportunity 7 to accept or reject the Berggruen investment? 8 A Yes. 9 Q How so? 10 A There was a meeting between Jennifer -- I'm 11 struggling -- 12 Q Stewart? 13 A Stewart, correct, Larry Anderson, and members 14 of OC-PIN to discuss the Berggruen proposal. 15 Q But ultimately, wasn't it IHHI's decision as to 16 whether or not to accept that money? 17 A I don't believe -- well, it might have been, 18 but Dr. Shah came back with other members of the IHHI 19 board, who were also members of OC-PIN, saying that they 20 wouldn't accept it. 21 Q Who at IHHI made the decision to accept or not 22 accept the Berggruen investment? 23 A The board. 24 Q The board of IHHI? 25 A Yes. 346 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Okay. Not the board of OC-PIN? 2 A Correct. 3 Q So how did OC-PIN reject the Berggruen 4 investment? 5 A Well, the members -- there were members of 6 OC-PIN who were on the board of IHHI, who had enough 7 seats to stop or start any investment, and I guess 8 through their preference to protect OC-PIN as opposed to 9 taking an investment in IHHI, they voted against things. 10 Q How do you know that's the reason? 11 A I was told by members of OC-PIN that they 12 didn't like the Berggruen proposal because it diluted 13 their position -- their ownership position of IHHI. 14 Q Who introduced Berggruen to IHHI? 15 A Todd Jadwin. 16 Q Who is Todd Jadwin? 17 A Todd Jadwin is an investment advisor for -- 18 what's the name of the company? I forget the name of 19 the company. 20 Q Did IHHI hire Todd Jadwin? 21 A Yes. 22 Q Who introduced Todd Jadwin to IHHI? 23 A I don't -- he might have come through Larry. 24 He might have come through another investor relation 25 firm we were working with. I don't recall specifically. 347 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Did you personally introduce any potential 2 equity investors to IHHI? 3 A Yes. 4 Q Who? 5 A Laurus. 6 Q Anyone else? 7 A Who else? Laurus. Fortress. 8 Q Anyone else? 9 A And Silver Point. 10 Q I'm sorry? 11 A Silver Point. 12 Q When did you make the introduction of Laurus to 13 IHHI? 14 A I'm going to say it was middle of 2005. 15 Q Did Laurus invest money into IHHI? 16 A No. 17 Q Are you aware of the reasons why not? 18 A The Laurus deal, which was also brought to our 19 board, required significant dilution on the part of 20 OC-PIN, and there was -- the board members of IHHI who 21 were also members of OC-PIN did not want to be diluted. 22 Q Was there a vote of the IHHI board to approve 23 or reject the Laurus equity investment? 24 A I believe there was. 25 Q And it's your understanding that that vote did 348 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 not carry? 2 A I believe so. 3 Q Who did you know at Laurus to be able to make 4 that introduction to IHHI? 5 A I met Phillip Valieri and Eugene Grimm. 6 Q What about with respect to Fortress? Who did 7 you know at Fortress to make that introduction? 8 A I -- I don't recall how the Fortress people 9 came to me. I -- I don't specifically recall. 10 Q But you're confident that you introduced 11 Fortress to IHHI? 12 A Yes. On the first time. They came around 13 later from another company. 14 Q When was the first time? 15 A Probably also late '05, early '06. 16 Q Did Fortress invest equity into IHHI? 17 A No. 18 Q Do you know why not? 19 A I -- I don't specifically recall. 20 Q Okay. Do you know if there was a board vote on 21 the Fortress proposed investment? 22 A No. 23 Q No, there was not? 24 A There was no board vote on the -- on the 25 Fortress. 349 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q And you don't know why it got -- never got to a 2 board vote? 3 A I don't believe that we ever got a specific 4 hard-money proposal from them. 5 Q Did you get a specific hard-money proposal from 6 Laurus? 7 A Yes. 8 Q How much? 9 A I -- I'd have to look at the documents. I 10 don't recall. 11 Q Do you know if that was a binding commitment or 12 nonbinding? 13 A I don't recall. 14 Q What about Silver Point? When did Silver Point 15 get introduced to IHHI? 16 A Probably around the same time, end of '05, 17 beginning of '06 the first time. 18 Q Who did you know at Silver Point to be able to 19 make that introduction? 20 A The guy's name was Zach Zeitlin. 21 Q How do you know Zach Zeitlin? 22 A I met him through -- I -- I don't recall. I -- 23 I met him through -- with somebody else, I just -- 24 specifically, I don't recall. 25 Q Okay. Did Silver Point invest into IHHI? 350 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A No. 2 Q Are you aware of the reasons why not? 3 A No. 4 Q Was there ever a board vote to accept or reject 5 the Silver Point proposed equity investment? 6 A No. 7 Q How much was Silver Point looking to invest? 8 A Again, I -- I don't recall. I don't know that 9 I had a -- a -- a term sheet or agreement from them. 10 Q Do you think Fortress submitted a term sheet? 11 A They might have. I -- I don't recall 12 specifically. 13 Q So out of these three, you're only sure that 14 Laurus submitted a term sheet? 15 A Correct. 16 Q Okay. Did you introduce any possible lenders 17 to IHHI? 18 A Yes. 19 Q Who? 20 A GE, HBCC, Fortress also had a debt division, 21 GMAC, Merrill, CapSource. Might be more, as I think 22 about it, but... 23 Q Was HBCC looking to loan money prior to the 24 closing with Tenet? 25 A Yes. 351 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Had HBCC looked to loan money after the closing 2 with Tenet? 3 A They came back later on, but they ended up 4 getting bought out and were never serious about it. 5 Q After the closing, did HBCC ever submit a term 6 sheet to IHHI? 7 A Not that I recall. 8 Q What about Fortress? Did Fortress ever submit 9 a term sheet with respect to debt financing? 10 A I believe they might have. 11 Q Would it be in the same time period that you 12 described earlier? 13 A It could be. I -- I don't specifically recall. 14 Q What about GMAC? Did GMAC ever provide a term 15 sheet to IHHI for refinancing? 16 A I don't believe so. 17 Q And GE, when did you introduce GE to IHHI? 18 A Prior to the Tenet close and again after the 19 Tenet close. 20 Q After the Tenet close would have been 2005? 21 A Correct. 22 Q And GE passed on the deal at that time? 23 A Both times. 24 Q Okay. Well, I want to -- only want to focus on 25 the 2005 time period. 352 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A Yes. 2 Q Is it your understanding that Matthew Cutler 3 brought GE to IHHI the second time? 4 A No. Probably the third time. 5 Q Okay. Who brought GE the second time? 6 A I believe they came back the second time, after 7 the close. And then Cutler was in '07? 8 Q Uh-huh. 9 A So there was one more time in there where they 10 talked to us. 11 Q Okay. You introduced CapitalSource to IHHI? 12 A Yes. 13 Q Who did you know at CapitalSource to be able to 14 make that introduction? 15 A John Delaney. And there's another name, which 16 is on the tip of my tongue. 17 Q When was this introduction made? 18 A Prior to -- prior to closing the deal and after 19 closing the deal. 20 Q When after closing the deal? 21 A Probably that time period, end of '05, middle 22 of '05. 23 Q When CapitalSource was looking to provide 24 financing in '06 and '07, was that a result of your 25 introduction or somebody else's? 353 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A CapitalSource came back to us with CB Capital, 2 and maybe even Todd Jadwin. I don't recall 3 specifically. 4 Q And CB Capital's Chris Baclawski? 5 A Yes. 6 Q Do you know how Chris Baclawski came to IHHI? 7 A We would get, you know, calls -- a lot of calls 8 about people wanting to do lending broker things, do 9 stuff like that. I'm sure he was one of those calls. 10 Q But you didn't bring CB Capital to IHHI, did 11 you? 12 A I met with him at the early meetings. Yes. 13 Q I understand. But did you introduce CB Capital 14 to IHHI initially? 15 A No. I don't believe so. I think they 16 introduced themselves. I think they cold-called us. 17 Q Okay. The next document I'll show you was 18 previously marked as Exhibit 279. 19 Actually, before we get there, do you remember 20 anything else about Paul Hastings' first investigation 21 of you in 2006, other than what you've described here 22 today? 23 A Other than that at the end of the 24 investigation, they found nothing. 25 Q Okay. How do you know they found nothing? 354 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A I was told that by Fernando Niebla. 2 Q What did Mr. Niebla tell you? 3 A They found nothing. 4 Q That was it? 5 A Yes. 6 Q Two words, found nothing? 7 A No. Three: They found nothing. 8 Q Okay. Did you inquire any further of 9 Mr. Niebla? 10 A I'm sure we had a conversation, but I don't 11 specifically recall. 12 Q Was there any report from Paul Hastings, that 13 you were aware of? 14 A Not that I saw. 15 Q Okay. Are you aware of any report that you 16 might not have seen? 17 A No. Not -- not -- no. 18 Q Did you have any conversations with Mr. Simpson 19 concerning the results of his investigation? 20 A No. 21 Q Other than Mr. Niebla, did you have any 22 conversations with anyone else concerning the results of 23 Paul Hastings' first investigation? 24 A Not that I recall. 25 Q Were you represented by separate counsel at 355 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 that time? 2 A No, I wasn't. 3 Q Now getting to the next document, which was 4 previously marked as Exhibit 279. 5 (Exhibit 279 marked for 6 identification.) 7 MR. MILES: Oops. That's my copy. Here. Let 8 me do this. 9 For the record, Exhibit 279 is a two-page 10 document reflecting an e-mail chain, with the top e-mail 11 on the first page being from Bruce Mogel to Anil Shah, 12 among others, dated May 1, 2006, at 4 -- I'm sorry, 13 1:42 p.m. It is also Bates labeled IHHI -10875 and 14 -10876. 15 BY MR. MILES: 16 Q Do you recognize this e-mail chain? 17 A Not specifically, no. 18 Q Directing your attention to the top. Does that 19 appear to be a true and accurate e-mail that you sent to 20 Dr. Shah on or about May 1, 2006? 21 A Yes. 22 Q Okay. 23 A It does. 24 Q Okay. I want to direct your attention to the 25 second sentence there. It says, quote: Considering of 356 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 the equity and financing options that we are looking at 2 in the near future we all think that we should not enter 3 into any exclusivity agreement that would guaranty 4 Marcus & Milichap a 9/10ths percent fee for the list of 5 vendors provided for the next 18 months, close quote. 6 Do you see that? 7 A Yes. 8 Q Who was Marcus & Milichap? 9 A I'm guessing a broker. 10 Q I don't want you to guess or speculate. 11 Do you have any independent knowledge as you 12 sit here today as to who they were? 13 A Do you mind if I read through the whole chain? 14 Q Oh, absolutely. Take your time. 15 A Okay. I don't specifically recall this. 16 Q Okay. You mentioned in this e-mail that, 17 apparently, you didn't want to enter into an exclusivity 18 agreement because of some of the equity and financing 19 options that we're looking at in the near future. 20 Do you see that? 21 A Yes. 22 Q Do you remember what equity or financing 23 options were available at that time? 24 A During that time frame, I know that Larry and I 25 were looking at a lot of equity and debt players with 357 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 both CB Capital and Todd Jadwin. And as I read through 2 the whole chain, I'm certain that -- I'm not certain -- 3 based on the comment, their agreement recalls -- would 4 call that for an 18-month period, no matter what 5 happens, they would get paid if we did a deal with any 6 one of these vendors, because we probably had some 7 relationships or might have been working with some of 8 them, there was -- we didn't want to sign up and have to 9 double pay any type of commission. 10 Q Yeah. I understand the exclusivity concern. 11 But what I'm asking you is: What equity and financing 12 options were available at that time so that you weren't 13 going to get into an agreement with Marcus & Milichap? 14 A I am sure we were looking at numerous equity 15 and debt players out there during that time. 16 Q Can you recall any of those numerous ones? 17 A I gave you some of them there. We were in 18 New York talking to equity players, Brown, Brothers, 19 Harriman, 20 Q And I want to make sure my question is clear. 21 I'm not talking about over the whole period, I'm talking 22 about at this point in time, in or about May of 2006, 23 when it's not recommended to sign an agreement to Marcus 24 & Milichap, who else was out there? 25 A I don't have a specific recollection as to that 358 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 point in time, who I was talking to at that moment. 2 Q Okay. 3 A But I do use the language that we are looking 4 at, and I've copied Steve Blake, Larry on this, so we're 5 probably all involved in looking at this. 6 So I -- I reviewed the document with Steve 7 Blake and Larry Anderson. 8 So I think we're hesitant to enjoin in this, 9 but specifically which vendors around May 1st of '06, I 10 don't recall. 11 Q Yeah. And that's what I wanted to know. Do 12 you have any recollection? 13 A I -- no. Specifically, I couldn't tell you. 14 Q Okay. 15 A If I were to go through documents from them, or 16 journals, I probably could. 17 Q Did you keep any journals while at IHHI? 18 A No. 19 Q So what journals would you be looking at? 20 A A calendar or -- 21 Q Did you a keep a calendar at IHHI? 22 A Did I keep a -- yeah. There was a calendar on 23 my computer, I believe. 24 Q Through Microsoft Outlook? 25 A I believe so. 359 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Have you produced that calendar in this 2 lawsuit? 3 A I don't know. 4 Q Do you still have that calendar, as you sit 5 here today? 6 A I -- I don't know, going back that far, if it 7 exists. 8 Q Do you remember deleting any portion of your 9 Outlook calendar? 10 A No, not specifically. 11 Q Was there a second investigation by Paul 12 Hastings, of you? 13 A Yes. 14 Q And when was that? 15 A That was last year. 16 Q 2008? 17 A Yes. 18 Q When did it begin, to your knowledge? 19 A Around July. 20 Q How did you first learn that Paul Hastings was 21 again investigating you? 22 A I believe I was told by the legal affairs 23 committee that they were conducting an investigation. 24 Q Who on the legal affairs committee? 25 A I don't recall specifically. 360 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Who was on the legal affairs committee at that 2 time? 3 A Bill Thomas, Judge Jameson, and the third 4 member is -- I'm not sure if it's Fernando or Maury. I 5 haven't thought about it for a little bit. 6 Q What were you told by the legal affairs 7 committee concerning the investigation of you in 2008? 8 A That based on accusations in a lawsuit that was 9 filed, that they were going to investigate me. 10 Q Were you told anything else? 11 A Not that I recall specifically. 12 Q Did anyone from the legal affairs committee 13 interview you in connection with the investigation in 14 2008? 15 A I don't think so. I think I was interviewed by 16 lawyers. 17 Q Bill Simpson again? 18 A I believe so. Yes. 19 Q Anyone else? 20 A There was another attorney there, whose name I 21 don't recall at the moment. 22 Q Mr. Owens? 23 A Jim Owens. 24 Q Jim Owens? 25 A There you go. 361 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Did you meet with him face to face? 2 A Yes. 3 Q Where? 4 A In IHHI corporate office. 5 Q How many times did you meet with Mr. Simpson 6 and/or Mr. Owens? 7 A Once. 8 Q How long did the meeting last? 9 A Five minutes. 10 Q Was anyone else present? 11 A No. 12 Q Were you represented by counsel during that 13 meeting? 14 A No. 15 Q What did you talk about in those five minutes? 16 MR. YODER: Object to the question. It's 17 overbroad. And the way it's framed, it's asking for 18 material that's not relevant, that's within the scope of 19 the stay on the other claims. 20 That investigation was broader than just the 21 financing matters and did include some of the matters 22 that had been consolidated off and stayed. And I think 23 the way the question's framed, it's necessarily calling 24 for an answer that would delve into those matters. 25 And part of my concern, Your Honor, just so you 362 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 understand, is that that line has been drawn. And I 2 know that it may not be completely black and white, but 3 we really have not tried to go into these other issues 4 regarding Dr. Fitzgibbons and all the rest of that. 5 We've really tried to focus on preparing our client for 6 the issues that really are supposed to go to trial in 7 April. And so I really do object to attempts to try to 8 get into this other material. 9 MR. ZULCH: And I join in that objection. 10 This -- this again seeks to replow the ground 11 that was before Your Honor in motions to compel as to 12 the depositions of Bill Simpson and Judge Jameson, and 13 is still up before Judge Lewis. 14 I still don't know if he's made a definitive 15 ruling following your recommendations not to get into 16 this area, based on the Desaigoudar case and other 17 authority we cited at that time, regarding the special 18 litigation regarding community defense. So it is 19 legally irrelevant and privileged. 20 MR. MILES: And it is relevant. 21 JUDGE BRENNER: Why don't you just rephrase it, 22 Mr. Miles. 23 MR. MILES: Okay. It is relevant because there 24 was an investigation and Mr. Mogel has moved for summary 25 judgment based upon this investigation. So the inquiry 363 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 goes to the adequacy of the investigation. 2 BY MR. MILES: 3 Q You had a five-minute conversation with 4 Mr. Simpson during Paul Hastings' investigation of you? 5 A Approximately. 6 Q Okay. Any other conversations with 7 Mr. Simpson? 8 A That was directly between me and them? No. 9 Q Okay. Any indirect conversations with 10 Mr. Simpson? 11 MR. YODER: Let me just note an objection on 12 attorney-client privilege grounds, that to the extent 13 there were communications with counsel that were related 14 to Mr. Mogel through counsel, the content of those 15 communications would be privileged. And to the extent 16 that Mr. Mogel's aware that there were conversations, I 17 don't know that disclosing that would violate the 18 privilege. 19 So as long as there's no argument that the 20 privilege is waived by at least letting him answer the 21 foundational questions, then I have no issue with it. 22 MR. MILES: And I think we set the foundation 23 up already, that Mr. Mogel testified that he wasn't 24 represented by counsel. 25 MR. YODER: Subsequently is what we're talking 364 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 about. Your question was not limited to that moment in 2 time when that meeting took place. 3 BY MR. MILES: 4 Q I want to focus your attention not to last 5 week, but at the time that Paul Hastings was 6 investigating you in 2008, did you have any indirect 7 communications with Mr. Simpson? 8 MR. YODER: I'll note the same objection and 9 just make the same request. Again, I don't -- 10 MR. MILES: Okay. 11 MR. YODER: -- know what you mean by "indirect 12 communication." But I have no problem with the witness 13 identifying his knowledge that there were communications 14 through counsel; I do have a problem in terms of you 15 asking questions that get into the contents of those 16 communications. 17 MR. MILES: Okay. 18 JUDGE BRENNER: Do you understand that, 19 Mr. Mogel? 20 THE WITNESS: I think I can answer it. 21 JUDGE BRENNER: All right. 22 THE WITNESS: At the time that I was in the 23 meeting, I didn't have a lawyer; after the meeting, I 24 did hire an attorney. 25 /// 365 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 BY MR. MILES: 2 Q Who did you hire? 3 A I talked to Doug Barrett, I believe is his 4 name. And then I think I ultimately hired Larry 5 Wallraven. 6 Q Larry who? 7 A Wallraven. 8 Q Did Mr. Wallraven represent you in connection 9 with the investigation by Paul Hastings in 2008? 10 A Yes. 11 Q Other than communications that went through 12 your lawyer, did you have any indirect communications 13 with Mr. Simpson? 14 A No. 15 Q Do you recall what was discussed -- well, 16 strike that. 17 During the five-minute meeting that you had 18 with Mr. Simpson, did you discuss any allegations 19 relating to you possibly blocking refinancing? 20 A No. 21 Q During that five-minute interview with 22 Mr. Simpson, did you discuss any issues relating to the 23 allegations concerning an improper relationship between 24 you and Mr. Lampariello? 25 A No. 366 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q During that five-minute interview with 2 Mr. Simpson, did you discuss any issues with respect to 3 the allegation that you blocked raising any new capital? 4 A No. 5 Q Did you ever learn the results of the 6 investigation by Paul Hastings? 7 A Yes. It's -- yes, I did. 8 Q Okay. Who did you learn the results from? 9 A My attorney. 10 Q Is that Mr. Wallraven? 11 A Yes. 12 Q Was there a report associated with Mr. -- I'm 13 sorry, with Paul Hastings' investigation? 14 A To -- a report to Mr. Wallraven? 15 Q Well, do you know if Paul Hastings prepared a 16 report as a result of its investigation of you in 2008? 17 A Yes. 18 Q Have you ever seen that report? 19 A Yes. 20 Q Okay. Did you share that report with anyone 21 other than your attorney? 22 A No. 23 Q Did you ever send it to Medical Capital? 24 A No. 25 Q Did you ever share it with Mr. Lampariello? 367 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A No. 2 Q The next document I'll show you will be marked 3 as Exhibit 280. 4 MR. YODER: 280? 5 MR. MILES: 280. 6 I'm sorry. That's wrong. 7 MR. ZULCH: Is this a new one, Marc? 8 MR. MILES: Yeah. 687. 9 (Exhibit 687 marked for identification.) 10 MR. MILES: For the record, Exhibit 687 is a 11 one-page e-mail, which appears to be from Bruce Mogel to 12 Joey Lampariello, dated September 29, 2008, at 13 10:10 a.m., the subject is: FW Paul Hastings Report. 14 BY MR. MILES: 15 Q Do you recognize this e-mail, Mr. Mogel? 16 A No, not specifically. 17 Q Did you forward the Paul Hastings report to 18 Joey Lampariello? 19 A No. I never received it electronically. 20 Q Okay. Do you know what this e-mail relates to? 21 A No. 22 Q And I'll represent this is an e-mail that was 23 produced by Mr. Lampariello and Medical Capital. 24 Do you recall sending this e-mail? 25 A No. 368 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Do you know what is referred to there, where it 2 says: FW Paul Hastings Report? 3 A No, I don't. 4 Q And you mentioned you never received it 5 electronically? 6 A Correct. 7 Q How did you receive it? 8 A Hard copy. 9 Q Okay. Can you describe how thick it was. 10 A An inch thick. 11 Q Had you ever seen it on a computer screen 12 before? 13 A Never. 14 Q Did you have any conversations with 15 Mr. Lampariello about the contents of Paul Hastings' 16 report? 17 A No. 18 Q The next document I'll show you will be marked 19 as Exhibit 688. 20 (Exhibit 688 marked for identification.) 21 MR. MILES: For the record, Exhibit 688 is a 22 lawsuit entitled, "Plaintiff Integrated Healthcare 23 Holdings' First Amended Complaint." 24 BY MR. MILES: 25 Q I'll represent that this complaint is being 369 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 attached as Exhibit 688 without the voluminous 2 attachments to the exhibit. 3 I want to direct your attention to the last 4 page, Mr. Mogel, page 63. 5 Is that your signature there under the 6 verification? 7 A Yes. 8 Q Okay. And did you sign it on or about 9 March 19, 2008? 10 A I did. 11 Q Did you read the First Amended Complaint before 12 you executed the verification? 13 A Yes. 14 Q I want to direct your attention to page 7. And 15 more specifically, about halfway down, paragraph 21, it 16 looks like it starts out at line 10 and a half. 17 Can you read those two sentences for me, 18 please. 19 A Yes. 20 Q There's reference to a personal guarantee 21 there. 22 Do you see that? 23 A Yes. 24 Q What is your understanding as to the reference 25 to the personal guarantee referenced in the complaint? 370 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A That Dr. Shah and his wife signed personally to 2 guarantee the payment of the Chapman lease as -- 3 Q Did -- okay. 4 A As part of their -- part of their consideration 5 for stock and other things he received from OC-PIN and 6 IHHI. 7 Q And it mentions that Shah later reneged on this 8 part of the overall deal. 9 Do you see that? 10 A Uh-huh. 11 Q And that fellow OC-PIN investors refused to 12 approve the refinancing package. 13 Do you see that? 14 A Yes. 15 Q Okay. And was that the June 12, 2007 meeting 16 to approve the Med Cap refinancing? 17 A I believe so. 18 Q Did Dr. Shah ever indicate that he was not 19 going to sign the refinancing documents unless his 20 personal guarantee was eliminated? 21 A Yes. 22 Q Who did he say that to? 23 A Several people. I believe he said it at a 24 board meeting. 25 Q Okay. Which one? 371 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A I don't specifically recall. 2 Q Did he ever say it to you? 3 A Did he ever -- I believe he said it to the 4 board. 5 Q Were you there when he said it to the board? 6 A I believe so. 7 Q Because you were a board member at that time? 8 A Yes. 9 Q What did he say in that regard? 10 A That he wanted to get out -- in any refinancing 11 package, that he wanted his personal guarantee 12 eliminated. 13 Q And who did he give the personal guarantee to? 14 A The property owner. 15 Q Wouldn't the property owner have needed to 16 consent to release Dr. Shah? 17 A Absolutely. 18 Q Okay. So how was IHHI going to get him out of 19 his personal guarantee? 20 A I -- you'd have to ask Dr. Shah that. 21 Q Well, did he make any specific demands that 22 anyone at IHHI take over that personal guarantee? 23 A No. 24 Q Did he make any demands that IHHI as a company 25 take over that personal guarantee? 372 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A I think he just demanded that we renegotiate 2 that personal guarantee out of the loan, out of 3 Saunders. 4 Q Did he say he was going to refuse to sign the 5 Medical Capital refinancing documents unless that was 6 done? 7 A For that, and because he said it was not in the 8 best interest -- or, no, because he has a fiduciary 9 obligation to OC-PIN and PCHI and he would not re-sign 10 the documents for those reasons as well. 11 Q And that relates to the PCHI/IHHI lease 12 dispute? 13 A I guess, among others things. 14 Q I want to direct your attention to page 8 of 15 the First Amended Complaint, more specifically, 16 paragraph 26. Ask you if you could read that to 17 yourself, please. Just on page 8. 18 MR. YODER: Paragraph 26, Counsel? 19 MR. MILES: Correct. 20 MR. YODER: He's asking questions about the 21 paragraph. You should look at the following pages too, 22 Mr. Mogel, because it goes on to page 9 as well. 23 MR. MILES: Feel free. I'll only ask you about 24 the portion on page 8. 25 /// 373 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 THE WITNESS: Okay. 2 BY MR. MILES: 3 Q About halfway through that first sentence, it 4 says: ...Shah and OC-PIN originally promised to 5 contribute approximately 30 million in cash equity to 6 IHHI to fund IHHI's down payment to Tenet.... 7 Do you see that? 8 A Yes. 9 Q Are you aware of any document in which Shah 10 promised to invest any money into IHHI? 11 A Shah individually? 12 Q That's correct. 13 A I believe all the documents were for OC-PIN. 14 Q Okay. 15 A And that Shah's investment would have been into 16 OC-PIN, and OC-PIN's investment would have been into 17 IHHI. 18 Q So OC-PIN had the obligation to invest the 19 30 million into IHHI? 20 A The representations that were made by Dr. Shah 21 was that OC-PIN had $30 million. Dr. Shah spoke for 22 OC-PIN. 23 Q I understand. But in this sentence here, it 24 says Shah and OC-PIN. 25 Do you see that? 374 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A Shah is the spokesperson for OC-PIN. 2 Q Okay. So. 3 A Or is the manager of OC-PIN. 4 Q Did Shah ever promise to contribute -- strike 5 that. 6 Did Shah personally ever promise to contribute 7 approximately 30 million in cash equity to IHHI? 8 A Shah always said that he had $20 million in 9 addition to whatever OC-PIN raised. I don't believe I 10 ever saw it on a document, but he consistently said, "I 11 have 20 million." 12 Q Okay. Irrespective of how much he told you he 13 had, did Shah ever promise to contribute approximately 14 30 million in cash equity to IHHI? 15 A Shah, as part of OC-PIN, as the spokesperson 16 for OC-PIN. 17 Q Okay. And OC-PIN is a separate entity. I 18 understand he's a spokesperson. I'm talking about Shah 19 individually. 20 Did Shah ever promise to contribute 21 approximately 30 million in cash equity to IHHI? 22 MR. ZULCH: Objection. Assumes facts, when you 23 say they're separate entities, contrary to your client's 24 testimony. 25 JUDGE BRENNER: Overruled. 375 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 MR. MILES: Go ahead. 2 THE WITNESS: I believe -- 3 MR. YODER: Wait, wait, wait there's an 4 objection so -- 5 JUDGE BRENNER: Yeah. Overruled. 6 MR. YODER: -- let the judge rule. 7 THE WITNESS: I believe Shah promised to put 8 20 million in that was personal money. 9 BY MR. MILES: 10 Q Into who or what? 11 A Into the IHHI deal, through OC-PIN. 12 Q Well, you lost me there for a second. I don't 13 want to talk about OC-PIN, okay? I just want to talk 14 about Shah. 15 To your knowledge, did Shah ever promise to put 16 any money, personally and directly, into IHHI. 17 A Personally and directly into IHHI? 18 He agreed to -- or told us that he would fund 19 $20 million into the deal. How that gets to IHHI, I 20 think, is through OC-PIN, but he promised to bring in 21 $20 million. 22 Q Okay. I'm going to ask you again: Did 23 Dr. Shah personally and directly promise to invest any 24 money whatsoever into IHHI? 25 MR. YODER: Objection. Asked and answered. 376 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 THE WITNESS: That's how I'm going to answer 2 it. 3 MR. YODER: Wait a minute. 4 MR. MILES: Calls for a yes or no. 5 JUDGE BRENNER: I know. But hold on a minute, 6 Mr. Miles. Let's just -- 7 MR. YODER: Your Honor, he's answered the 8 question. The facts are the facts. Counsel can 9 characterize it however he wants, but that's what he's 10 attempting to do. 11 JUDGE BRENNER: I'll overrule the objection 12 because I don't think he's actually answered Mr. Miles' 13 question. 14 THE WITNESS: One more time. Shah personally? 15 BY MR. MILES: 16 Q Sure. And I'll -- I don't want to confuse you. 17 I'll make sure it's very clear here. I'm not talking 18 about any investment that Shah may have made into OC-PIN 19 and then OC-PIN may have made into IHHI. I want to know 20 did Shah ever promise to invest directly and personally 21 into IHHI? 22 A Directly and personally? 23 He promised to invest $20 million into the 24 deal. The vehicle of that, I'm going to say, was 25 nebulous. I believe it was through OC-PIN. 377 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q What leads you to believe that? 2 A Because the transactional documents were 3 through OC-PIN. 4 Q Do you believe that OC-PIN had an obligation to 5 invest money into IHHI? 6 A Yes. 7 Q Do you understand that in this lawsuit, IHHI 8 has not sued OC-PIN for failing to invest any money? Do 9 you understand that? 10 A Yes. 11 Q Okay. Do you understand that Dr. Shah had an 12 obligation to invest any money directly into IHHI? 13 MR. YODER: Objection. Asked and answered. 14 MR. ZULCH: Join. 15 JUDGE BRENNER: Well -- 16 THE WITNESS: That Shah -- 17 MR. YODER: Wait, wait, wait. When there's an 18 objection -- 19 JUDGE BRENNER: Hold on a second. Could you 20 reread the question just for one second. 21 (Whereupon, the record was read by the 22 reporter as follows: 23 "Q Okay. Do you understand that 24 Dr. Shah had an obligation to invest 25 any money directly into IHHI?") 378 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 JUDGE BRENNER: Well, overruled. 2 BY MR. MILES: 3 Q Yes or no? 4 A I believe Shah had an obligation to invest 5 $20 million into the deal. 6 MR. MILES: Move to strike as nonresponsive. 7 And if I may, Your Honor, half of this 8 complaint is Shah didn't put in money. 9 JUDGE BRENNER: I understand it pretty well, 10 actually. 11 MR. MILES: There's no obligation for Shah to 12 put in money. OC-PIN had the obligation to it. They 13 haven't sued OC-PIN. They're trying to tag Shah for 14 this, and yet we haven't seen one shred of evidence Shah 15 had to invest even a single penny into the company. 16 This is the CEO of the company, and we need to 17 nail this down whether or not he believes Shah had an 18 obligation, independent of IHHI, to invest any money 19 into the company. And all we're getting is, "Well, 20 yeah, through OC-PIN." 21 JUDGE BRENNER: What he's essentially saying -- 22 well, I don't want to put words in anybody's mouth, but 23 I think it's about as good as it's going to get for you 24 right now, Mr. Miles. That's apparently -- you know, 25 you've asked the question three or four times. I 379 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 understand your concern. 2 Mr. Mogel, did you ever see any piece -- any 3 paperwork, any document wherein Shah agreed to 4 personally put money into IHHI? 5 THE WITNESS: I -- I -- specifically, I -- I 6 don't think so. That there was, you know, a document 7 formatted where the -- the situation was that at all 8 times into this transaction, Dr. Shah represented that 9 he had $20 million to invest in the deal, and he was 10 raising more, and there would be $30 million in there. 11 And that was his contention, you know, that he had 12 20 million. When the deal finally came down, there 13 wasn't that $20 million. 14 JUDGE BRENNER: All right. 15 THE WITNESS: But the representation didn't 16 come from any other member of OC-PIN. 17 VIDEOGRAPHER: Counsel, I'm out of tape. 18 JUDGE BRENNER: All right. So we're really, 19 essentially, off the record. 20 MR. ZULCH: Off the videotape. 21 JUDGE BRENNER: Not to put too fine a point on 22 it. We've been in session now a little over an hour. 23 MR. MILES: Let's take a break. 24 JUDGE BRENNER: 1:30. 25 VIDEOGRAPHER: Off video. 1:39. 380 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 This concludes tape 1. 2 (Recess taken.) 3 VIDEOGRAPHER: Returning to record. 2:21 p.m. 4 This begins tape 2. 5 BY MR. MILES: 6 Q The next document I'll -- welcome back, 7 Mr. Mogel. I'm sorry. How was your lunch? 8 A It was good. And yours? 9 Q Short. 10 A Yes. 11 Q The next document I'll show you will be marked 12 as Exhibit 688. 13 A I'm sorry. This one here is 688. 14 Q Well, then the next document will be 689. 15 (Exhibit 689 marked for identification.) 16 MR. MILES: For the record, Exhibit 689 is a 17 four-page -- a six-page document. The last four pages 18 is a document that I believe we've seen earlier today, 19 and it is "Pursuant to Loan and Security Agreement," 20 dated 10/6/06. The first two pages is a meta-data 21 analysis of the actual meta file. That's what I want to 22 direct your attention to. 23 BY MR. MILES: 24 Q I'm not going to -- 25 MR. YODER: This doesn't have a Bates number. 381 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 MR. MILES: Correct. 2 MR. YODER: Where did this come from? 3 MR. MILES: It came from the -- the documents 4 that we talked about here today were Bates labeled by 5 IHHI. They also produced the documents in native 6 format, i.e., in their PDF, their text, their Excel 7 format. This is just one of the Excel documents that 8 was attached earlier. And we can find the Bates label 9 earlier -- I mean, later. 10 BY MR. MILES: 11 Q But I want to direct your attention to the top 12 of this document. And at the top, just for the record, 13 it says, "Analyzing Emark Int revised 7/31/08 Excel 14 file." 15 Looking down, it says there: Author. 16 Do you see that? 17 A Uh-huh. 18 Q And it says: Carol. 19 A Uh-huh. 20 Q Do you know who Carol is? 21 A No. 22 Q What is your wife's name? 23 A Carol. 24 Q I want to direct your attention further down to 25 "Company." It says: MMG. 382 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Do you see that? 2 A Uh-huh. 3 Q Have you ever been associated with any company 4 with those initials? 5 A Mogel Management Group. 6 Q Did your wife have any involvement with Emark? 7 A No. 8 Q Okay. I asked you earlier about you and your 9 involvement, whether you received any money from Emark. 10 A Uh-huh. 11 Q Did your wife, Carol, receive any money from 12 Emark? 13 A No. 14 Q To your knowledge, does she have any 15 involvement with Emark whatsoever? 16 A No. 17 Q Okay. Have you had any discussions with your 18 wife about Emark? 19 A No. 20 Q I want to direct your attention back to the 21 lawsuit that IHHI filed and that you signed as being 22 true and accurate and under the penalty of perjury, and 23 more specifically, back on page 8. And this is Exhibit 24 688. 25 A Uh-huh. 383 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q The last line references a prospectus that is 2 attached to the full version of the complaint. 3 A Uh-huh. 4 Q Is that the private placement memorandum from 5 OC-PIN? 6 A I believe so. 7 Q Okay. When was the first time you saw that 8 PPM? 9 A Probably 2005 or 2004. 10 Q Before or after the closing with Tenet? 11 A I think the first time I saw it was before. 12 Q Okay. How much in advance of the closing with 13 Tenet did you first see that? 14 A I don't know. 15 Q I want to direct your attention to page 9 of 16 the First Amended Complaint. And down in paragraph 28. 17 Please take a moment to look at that paragraph. 18 A Okay. 19 Q It seems to indicate that OC-PIN and Shah 20 contractually gave up their rights as IHHI's then 21 majority shareholder to unilaterally change or determine 22 the compensation -- composition of IHHI's board and 23 management. 24 Do you see that? 25 A Yes. 384 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q How did they contractually give up those 2 rights? 3 A Because they did not have the majority of the 4 board of directors. 5 Q What I'm focusing on is it says they 6 contractually gave up their rights. 7 Do you know of any contract that they entered 8 into giving up those rights? 9 A I believe that in some of the rescission and 10 restructuring agreements that they had, based on the 11 shortfall of equity, that there were some pieces that 12 they gave up. 13 Q And the rescission and restructuring agreement, 14 that was prior to the closing of Tenet, right? 15 A Prior to the close. There was also maybe, 16 like, rescission and restructuring was prior to the 17 close. At the close, when they failed to deliver all 18 the money, there were changes to the amount of stock 19 that they got. 20 Q Did OC-PIN -- and when you say, "they," do you 21 mean Shah and OC-PIN? 22 A Yes. 23 Q Did Shah get any stock? 24 A I believe he did. 25 Q Okay. Individually from IHHI? 385 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A No. Individually from OC-PIN. 2 Q Okay. Do you know if Dr. Shah owns any IHHI 3 shares? 4 A I believe he has in his name -- or I believe is 5 it in OC -- I believe it's in OC-PIN's name. 6 Q Okay. So OC-PIN got the shares, right? 7 A But Shah has control over whatever percentage 8 he has in OC-PIN. 9 Q Because he's a member? 10 A He's the beneficial owner of it. 11 Q Along with 35 other doctors, right? 12 A Based on the percentage of their investment or 13 what they contracted to. 14 Q Okay. Let's go at this again. 15 Does Dr. Shah -- was Dr. Shah given any IHHI 16 shares directly? 17 A I believe Dr. Shah is the beneficial owner of 18 IHHI shares through his agreement with OC-PIN. 19 Q Okay. If -- 20 A So does that mean he got them directly? If he 21 has control over them, then, yes, they're his. 22 Q Does IHHI have a list of its shareholders? 23 A Yeah. 24 Q Okay. And IHHI only allows its shareholders 25 into annual shareholder meetings, correct? 386 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A Correct. 2 Q Would we find Dr. Shah's name on the list of 3 IHHI shareholders? 4 A No. 5 Q Is that because IHHI doesn't directly own any 6 shares of IHHI's -- I'm sorry, Dr. Shah does not own any 7 shares of IHHI stock directly? 8 A Again, I believe he's the beneficial owner of 9 shares of IHHI stock, in the name of OC-PIN. 10 Q Have you ever seen Dr. Shah's name on the list 11 of IHHI shareholders? 12 A No. 13 Q I want to direct your attention to page 9 of 14 the First Amended Complaint, and more specifically, 15 paragraph 27. Please feel free to read the whole thing. 16 I'm going to only ask you a question about the first 17 sentence. 18 A Okay. 19 Q Looking about halfway through the sentence, it 20 says: IHHI was forced to utilize, and did in fact 21 utilize, its above-described $30 million line of 22 credit - credit originally attended -- intended to fund 23 IHHI's operations - to avoid a default under the terms 24 of IHHI's agreement with Tenet. 25 Do you see that? 387 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A Yes. 2 Q What default are you referring to there? 3 A The failure to close the -- the loan and the 4 transaction. 5 Q Okay. So the failure to close as opposed to a 6 default, right? 7 A It would have defaulted on our loan 8 agreement -- I mean, on our -- on our purchase 9 agreement. 10 Q Okay. Did you have a purchase agreement with 11 Tenet prior to closing? 12 A Yeah. 13 Q Okay. And what would IHHI have lost if they 14 hadn't closed, if anything? 15 A Whatever the hard money deposits were, been 16 liable for legal fees, all kinds of things. 17 Q Was there a $20 million hard money deposit? 18 A $10 million. 19 Q $10 million. 20 And who arranged for that $10 million to be 21 deposited into escrow? 22 A Originally, Dr. Chaudhuri, and then at close, 23 there was an exchange of funds between OC-PIN and 24 Chaudhuri. 25 Q Did Dr. Shah ever arrange for any money to be 388 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 put into escrow so that IHHI could close its deal with 2 Tenet? 3 A I believe he did. 4 Q Okay. I want to direct your attention to page 5 10. And at the top, paragraph 29, the first sentence 6 says: In the latter regard, the $80 million acquisition 7 loans explicitly restricted the right of IHHI's 8 shareholders, including OC-PIN and Shah, to remove or 9 replace certain key IHHI officers or members of IHHI's 10 board without Med Cap's prior written consent. 11 Do you see that? 12 A Uh-huh. 13 Q And were you one of those key officers or 14 directors that the shareholders couldn't remove without 15 Med Cap's prior written consent? 16 A Yes. 17 Q Down at the bottom, on page 10, take a moment 18 to look at that last paragraph there. 19 A Okay. 20 Q Was it your understanding that Med Cap did not 21 want a physician-dominated board? 22 A Med Cap wanted an independent board. 23 Q Which -- well, what do you mean here where it 24 says: Non-physician dominated professional management? 25 A Wanted a professional management team in there 389 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 that wouldn't be conflicted with the inherent conflict 2 between hospitals and physicians, in terms of 3 management. 4 Q And did anyone at Medical Capital express that 5 to you? 6 A I believe so. 7 Q And that was Mr. Lampariello? 8 A I believe so. 9 Q I want to direct your attention now to page 11, 10 paragraph 31. 11 A Okay. 12 Q Do you believe that the inability to deliver 13 $20 million affected the interest rate that Med Cap gave 14 to IHHI? 15 A Yes. 16 Q How so? 17 A It caused us to go into default. 18 Q Okay. I'm talking at the time of closing. 19 A No. Because Med Cap agreed to give them more 20 time to raise the $20 million. 21 Q So at the time of closing, did the interest 22 rate change at all from what was proposed before the 23 closing? 24 A No. Because they agreed to put in money 90 25 days later. 390 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Okay. And did IH -- Medical Capital ever raise 2 that interest rate? 3 A Yes. When we went into default. 4 Q Okay. And did Medical Capital credit IHHI back 5 that default interest rate? 6 A I believe they did, some of it or all of it. 7 Q Speaking of which, did IHHI suffer any damages 8 as a result of any conduct by Dr. Shah? 9 A I -- I would say yes. 10 Q Okay. What damages did IHHI suffer? 11 A We were forced to borrow more money in order to 12 continue operations. And the company had to pay 13 additional interest because of the lack of equity -- 14 promised equity that was infused -- that was never 15 infused into the company. 16 Q Any other damages? 17 A Company received bad press from its defaults, 18 lost credibility with lenders. 19 Q Anything else? 20 A We entered a second default because of 21 Dr. Shah's refusal to sign the refinancing package. We 22 ended up signing a deal that was not as good as the 23 original deal, which cost the company millions of 24 dollars more. 25 Q Anything else? 391 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A I think that in general, you know, the 2 company's reputation was damaged. 3 Q Who made the decision to file the lawsuit 4 against Dr. Shah? 5 A The management team. 6 Q Which would include yourself? 7 A Yes. 8 Q And who else? 9 A Larry Anderson, Steve Blake. 10 Q Isn't it true that the board of directors 11 didn't approve the lawsuit at the time it was filed? 12 A It was filed without the approval of the board 13 of directors, but I wouldn't say that they didn't 14 approve it. I don't know that it went to a vote for 15 them. 16 Q Okay. You mentioned that one of the damages 17 that you claim Dr. Shah allegedly caused IHHI was that 18 IHHI was forced to borrow more money, and thus pay 19 additional interest, correct? 20 A Correct. 21 Q Is that with respect to the $10.7 million loan? 22 A No. That's -- in my initial account of that 23 was because there wasn't $20 million in equity, we were 24 forced to immediately go into our working capital line 25 of credit in order to fund operations. 392 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Did IHHI subsequently settle that claim with 2 OC-PIN via an amendment to the stock purchase agreement? 3 A We had an amendment to the stock purchase 4 agreement where they had more time to put in money for 5 shares of stock and on a pro rata basis. 6 Q And do you remember if that amendment contained 7 releases for OC-PIN? 8 A I -- I believe it probably did. 9 Q Isn't that why IHHI never sued OC-PIN for this 10 alleged inability to come up with $30 million? 11 A Hard for me to answer that. I'm not really 12 sure if -- if that's why -- if that's why they never 13 sued OC-PIN for that. 14 Q Well, you authorized the lawsuit against Shah. 15 Why didn't you sue OC-PIN also? 16 A We sued Dr. Shah, Meka, and Naqvi. 17 Q I know. 18 A Okay. 19 Q The question was: There -- this complaint is 20 replete with allegations about OC-PIN not putting in 21 $30 million. Why didn't IHHI also sue Dr. Shah, as a 22 co-tortfeasor? 23 JUDGE BRENNER: I think you misspoke. 24 THE WITNESS: Why didn't they sue -- 25 /// 393 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 BY MR. MILES: 2 Q I'm sorry. IHHI sue OC-PIN? 3 A I would have to talk to my attorney about that. 4 Q Okay. Do you have any understanding as you sit 5 here today? 6 A I believe you might be correct, but I'd have to 7 talk to my attorney about that. 8 Q What about bad press as a result of the 9 defaults? Do you attribute that to Dr. Shah? 10 A The defaults cause bad press. Yes. 11 Q Okay. Who put IHHI into default? 12 A Medical Capital. 13 Q What was the reason the first time? 14 A Failure to deliver the -- the equity. 15 Q What about the 999 building? Wasn't there a 16 failure to acquire the 999 condos? 17 A I believe that was part of the default as well. 18 Q And IHHI didn't acquire those 999 condos, 19 right? 20 A But part of it was returning money or acquiring 21 the condos. 22 Q And IHHI didn't do either? 23 A Well, IHHI couldn't acquire the condos, nor did 24 OC-PIN provide any of the money. 25 Q What about the second default? Why was that? 394 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A Because we hadn't repaid the loans and we 2 hadn't signed up unanimously on the refinancing. 3 Q Have you ever seen a single document that says 4 that Medical Capital put IHHI into default because there 5 was not a unanimous vote? 6 A I believe that the refinancing needed unanimous 7 consent from the board, as required by Medical Capital. 8 Q My question was entirely different. 9 Have you ever seen a document that says that 10 Medical Capital put IHHI into default because the vote 11 wasn't unanimous? 12 A I'd have to review those documents. 13 Q As you sit here today, do you recall a single 14 document? 15 A Not specifically. 16 Q Okay. And you also mentioned credibility with 17 lenders. Do you remember that? 18 A Yes. 19 Q How did Dr. Shah affect IHHI's credibility with 20 lenders? 21 A Because we were never properly equitized. 22 Q So how does that cause credibility with 23 lenders? 24 A Well, when you're a new company and you're not 25 probably equitized, and you end up in default, most new 395 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 lenders want to stay away from that situation because 2 it's a very high risk. 3 Q Okay. Did that cause any monetary damage to 4 IHHI? 5 A If we would have refinanced at cheaper rates, 6 yes. 7 Q Do you think that's speculative? 8 A Yes. Yeah. I would say it's speculative. 9 Q You mentioned the second default also caused -- 10 Dr. Shah allegedly caused damage to IHHI, correct? 11 A Yes. 12 Q Because he refused to sign the Med Cap 13 refinancing documents? 14 A Correct. 15 Q Was there a place for Dr. Shah to sign on the 16 refinancing documents for IHHI? 17 A I believe so. 18 Q Okay. Did IHHI ultimately sign those 19 refinancing documents? 20 A Yes. 21 Q And get them into Medical Capital on time? 22 A I believe so, yes. 23 Q So how did Dr. Shah cause damage in that 24 regard? 25 A There needed to be unanimous signatures on 396 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 them. 2 Q Who was authorized to sign those refinancing 3 documents on behalf of IHHI? 4 A I believe it needed to be -- it needed 5 unanimous board consent. I was authorized or Larry 6 Anderson was authorized to sign on behalf of IHHI, and 7 it also needed the consent and signatures of PCHI and 8 the other involved credit parties. 9 Q Did PCHI sign the Medical Capital refinancing 10 documents? 11 A Ultimately, in the second round, everybody did. 12 Q No. I'm not -- 13 A In the first round, I'm not sure who signed and 14 who didn't. When we didn't get unanimous consent from 15 our board, we were certain that it wouldn't go through. 16 Q Do you know who the co-manager of PCHI was in 17 June of 2007? 18 A The co-managers? 19 Q I'm sorry. The -- yeah. One of the 20 co-managers. 21 A I think it would be Dr. Shah and Dr. Chaudhuri. 22 Q Do you know where Dr. Chaudhuri was on June 12, 23 2007? 24 A No, I don't. 25 Q Had you ever heard that he was out of the 397 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 country? 2 A Very possible. 3 Q Okay. Do you know if there was anyone 4 available to sign on behalf of PCHI on June 12, 2007? 5 A Sometimes Dr. Chaudhuri has given his attorney 6 the ability, with a limited power of attorney, to sign 7 documents. 8 Q You mean Bill Thomas? 9 A Yes. 10 Q Do you know if Bill Thomas as in Buenos Aires 11 that day? 12 A No, I don't. 13 Q Do you know if anyone that was in the country 14 and available to sign on behalf of Dr. Chaudhuri on 15 June 12, 2007? 16 A I'm not sure that the documents weren't able to 17 be signed by Dr. Chaudhuri. 18 Q I'm sorry? 19 A I'm not sure that the documents weren't able to 20 be signed by Dr. Chaudhuri. 21 Q Well, was it your understanding that they had 22 to be signed by all the credit parties by that June 12, 23 2007 deadline? 24 A We needed unanimous consent of the board, I 25 believe, on that date. And that the documents -- if we 398 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 had unanimous consent, then the documents could be 2 signed and sent in, but, I mean, certainly, you know, 3 it's possible for them to get documents signed no matter 4 where they are in the world. 5 Q My question was slightly different. 6 Did all of the credit parties have to sign the 7 Medical Capital refinancing documents by June 12, 2007? 8 A I'm not certain. 9 Q Okay. Do you know if IHHI had to sign by that 10 deadline? 11 A I believe so. I'm -- you know, I'd have to 12 look at the documents again. 13 Q But as you sit here today, you don't know 14 whether or not all the other credit parties had to sign 15 as well? 16 A My recollection is that the board of directors 17 needed unanimous approval of the documents for us to 18 stave off default, and that didn't happen. As opposed 19 to the other signing days and times, I -- I don't have 20 specific recollection. It is possible that some of the 21 signatures could have been post closing events, and that 22 might have been allowed. I don't specifically recall. 23 Q Did IHHI get unanimous consent for refinance of 24 Medical Capital? 25 A In the second. 399 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q In June of 2007? 2 A No. 3 Q Why did IHHI then send -- sign the refinancing 4 documents and send them to Medical Capital? 5 A I don't specifically recall. 6 Q Prior to June 12, 2007, was Dr. Chaudhuri and 7 Bill Thomas attempting to exercise some of their 8 warrants? 9 A Prior to June 12th. 10 I -- I don't specifically recall dates. I know 11 that they have made -- or had agreements to exercise 12 chunks of their warrants at different times. 13 Q Do you recall a time period where IHHI was 14 refusing to allow Dr. Chaudhuri and Bill Thomas to 15 exercise their warrants? 16 A I believe at some point we did. 17 Q And do you believe that was before June 12, 18 2007? 19 A I don't specifically recall. 20 Q Do you know if once the default occurred on 21 June 12, 2000 -- or June 13, 2007, Dr. Chaudhuri and 22 Bill Thomas were then able to exercise their warrants? 23 A I believe the amount of warrants that they 24 could exercise increased under the terms of default. 25 Q So as soon as the default occurred, 400 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Dr. Chaudhuri and Bill Thomas were able to exercise more 2 warrants? 3 A Yeah. I believe so. 4 Q Is it your understanding that Dr. Chaudhuri and 5 Bill Thomas benefited from the default in June of 2007? 6 A I don't know if I would call it benefited, but 7 I believe they were able to exercise more warrants. 8 Q Do you think that would be a benefit for them? 9 A I think that still remains to be seen. 10 Q Fair enough. 11 Other than possibly Dr. Chaudhuri and Bill 12 Thomas, did anyone else on earth benefit from the 13 June 2007 default? 14 A Did anybody benefit? No, I don't think anybody 15 benefited. 16 Q Okay. Except for possibly Dr. Chaudhuri and 17 Bill Thomas because they were able to exercise more 18 warrants? 19 MR. ZULCH: Objection. Calls for speculation. 20 Asked and answered. 21 JUDGE BRENNER: Overruled. 22 THE WITNESS: I don't believe anybody else 23 benefited. And I'm still not sure that they benefited. 24 BY MR. MILES: 25 Q Okay. You're referring to the fact that 401 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 they -- the price of the stock today? 2 A Uh-huh. Yes. 3 Q But they were able to acquire more stock at 4 that time? 5 A Yes, they were. 6 Q Okay. In your list of damages here that you 7 claim Dr. Shah caused IHHI, you mentioned that -- that 8 the deal that was done with Medical Capital was not as 9 good as the original deal. Correct? 10 A Correct. 11 Q How was it not as good? 12 A The terms on the second refinancing had some 13 higher interest rates. 14 Q What leads you to believe that? 15 A I -- my recollection. 16 Q Okay. Anything else? 17 A There was default monies paid, I believe. 18 Q Have you read Mr. Lampariello's deposition in 19 this case? 20 A No. 21 Q Do you know if IHHI gave back that default 22 interest that was charged in 2007? 23 A If IHHI gave it back? 24 Q I'm sorry. Med Cap gave it back? 25 A Med Cap gave it back. 402 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q And you believe that there was a higher 2 interest rate in the October refinancing as opposed to 3 the June proposal? 4 A I believe the terms were not as good. I'd have 5 to lay them side by side to truly remember, but I 6 believe that some of the interest rates may have gone up 7 a little bit or that the terms weren't as good for IHHI. 8 Q Other than the interest rate, what terms do you 9 think were not as good? 10 A I think that the term of the loan might have 11 been different. I -- I'd have to look at them side by 12 side. They're relatively long, complex documents. 13 Q Sure. And I can appreciate that, and we can 14 certainly do it. I'm just following up on a statement 15 that you said that, that the terms were not as good the 16 second time around and that's caused damage to IHHI. 17 What is your basis for making that statement? 18 A Having to continue the loan at the old rates, 19 plus having to pay default interest, which was returned, 20 and then getting future documents -- or a future 21 agreement of the second agreement done after the higher 22 loan rates were paid for a period of time. And I -- 23 again, I don't believe the loan rates were as good. 24 Q You mentioned reputation as well. 25 How has any of the acts of Dr. Shah affected 403 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 the reputation of IHHI? 2 A Well, whenever a company goes into a default or 3 is not properly equitized, the vendors in the community 4 around the hospital become nervous. 5 Q And that is premised upon your belief that 6 Dr. Shah caused both defaults, correct? 7 A Correct. 8 Q And it's premised upon your belief that 9 Dr. Shah caused IHHI to not receive enough equity 10 originally? 11 A Correct. 12 Q Okay. I want to direct your attention to page 13 12 of the complaint, which has been marked as Exhibit 14 688. And more specifically, paragraph 34. 15 A Okay. 16 Q Directing your attention to the first 17 paragraph. It says: Shortly after IHHI obtained the 18 $10.7 million (working capital) loan, IHHI's management 19 began to seek out and investigate alternative long-term 20 lenders to replace/refinance the short-term and high 21 interest $90.7 million loans. 22 Do you see that? 23 A Yes. 24 Q Is that an accurate statement? 25 A I believe so. 404 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q When did IHHI obtain the $10.7 million loan? 2 A Was that October? 3 Q How about December? 4 A December? Okay. 5 Q Is it your understanding that the $10.7 million 6 loan closed in December of 2005? 7 A I believe so. 8 Q And at that point in time -- well, strike that. 9 Why did IHHI's management wait until 10 December 2005 to begin seeking out alternative 11 financing? 12 MR. ZULCH: Objection. Assumes facts. 13 THE WITNESS: It -- 14 JUDGE BRENNER: Overruled. 15 THE WITNESS: We didn't. We looked for 16 alternate financing before as well. 17 BY MR. MILES: 18 Q Okay. Well, let's look back at the allegation 19 on paragraph 34. It says: Shortly after IHHI obtained 20 the $10.7 million (working capital) loan, IHHI's 21 management began to seek out and investigate alternative 22 long-term lenders to replace/refinance the short-term 23 and high interest $90.7 million loans. 24 Do you see that? 25 A Yes. 405 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Okay. And I believe you just indicated that 2 the $10.7 million loan was in December 2005. 3 A Okay. 4 Q Why did IHHI's management wait until 5 December 2005 to begin seeking out alternative 6 financing? 7 MR. ZULCH: Objection. Argumentative. Assumes 8 facts. 9 JUDGE BRENNER: Overruled. 10 MR. YODER: Also asked and answered. 11 JUDGE BRENNER: Overruled. 12 THE WITNESS: Okay. We didn't. 13 BY MR. MILES: 14 Q So is that sentence that we're looking at here 15 not accurate? 16 A No. It's accurate. We -- after -- when you're 17 in a transaction, we closed that transaction that we 18 were in. And then maybe it should say we began again to 19 seek out, but we constantly looked for cheaper 20 financing. 21 Q That's what I'm trying to figure out. This 22 statement here in the complaint, which was verified by 23 you under the penalty of perjury, seems to suggest that 24 it wasn't until December 2005 until IHHI's management, 25 which includes you, began to seek out alternative 406 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 financing. 2 Are you telling me that you started looking for 3 alternative financing before December of 2005? 4 A Yes. We always talked to possible debt and 5 equity people. 6 Q So is this statement not exactly accurate, 7 then? 8 A I think the statement is accurate. 9 Q How do you reconcile the two? 10 MR. ZULCH: Objection. Argumentative. Assumes 11 facts. Asked and answered. 12 JUDGE BRENNER: Overruled. 13 THE WITNESS: The management looked for 14 alternative financing prior to the 10.7. When we went 15 in and closed the $10.7 million loan, we focused our 16 attention on making sure that that loan got closed, and 17 then we began to seek out alternative financing again. 18 BY MR. MILES: 19 Q Okay. 20 A I don't know if the process actually ever 21 stopped. 22 Q Okay. Let's look at the next sentence, then. 23 It says: To this end, on February 2, 2006, IHHI entered 24 into a consulting agreement with CB Capital Partners. 25 Do you see that? 407 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A Yes. 2 Q Is that an accurate statement? 3 A I believe so. 4 Q Okay. Prior to entering into a contract with 5 CB Capital Partners, what did IHHI do to seek out 6 alternative financing? 7 A Contact other debt and equity lenders. We were 8 not specifically waiting for CB Capital Partners to do 9 everything that they -- to be the only source. So Larry 10 Anderson, myself contacted, visited, and tried to come 11 up with different sources for debt and equity. 12 Q All of that happened before entering into an 13 agreement with CB Capital Partners? 14 A Absolutely. 15 Q And when you entered into an agreement with CB 16 Capital, was there an exclusivity provision with them? 17 A For the lenders that they listed in their 18 documents, yes. 19 Q Okay. And it indicates in paragraph 35 that 20 IHHI also retained the services of Todd Jadwin. 21 A Correct. 22 Q When did that occur? 23 A Sometime at or mid-2006. I don't recall 24 specifically. 25 Q Okay. What's your best estimate? 408 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A First half of 2006. 2 Q And Todd Jadwin brought Berggruen to IHHI? 3 A Yes. 4 Q Looking at the last sentence of paragraph 35 of 5 the First Amended Complaint. It says: Following the 6 meeting, Shah, Ludmir/Meka and Naqvi announced that they 7 would not support Berggruen's investment as they did not 8 believe it was in the "best interest" of OC-PIN. 9 Do you see that? 10 A Yes. 11 Q Is that an accurate statement? 12 A As reported to me by Larry Anderson. 13 Q Okay. That's my next question: To whom did 14 those doctors make that announcement? 15 A Larry Anderson. 16 Q Okay. What did Mr. Anderson tell you in that 17 regard? 18 A That at the meeting, that they said that they 19 wouldn't support it. 20 Q Did Dr. Shah ever tell you that directly? 21 A I believe he did. 22 Q When? 23 A I believe at a board meeting. 24 Q Which one? 25 A I don't specifically know. 409 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q How about the time frame? 2 A The board meeting after the meeting with 3 Berggruen, and I don't recall the specific timing of 4 that. 5 Q Direct your attention to the next paragraph of 6 the first amended complaint, which is paragraph 36. The 7 first sentence says: Over time, IHHI's board and 8 management became aware of other investors interested in 9 infusing additional capital into IHHI in return for 10 IHHI's issuance of stock. 11 Do you see that? 12 A Yes. 13 Q Who were those other investors? 14 A People that CB Capital had interest in or had 15 brought to us or Todd Jadwin had brought to us. 16 Q Who? 17 A I'd have to take a look through all the 18 documents. 19 Q As you sit here today, can you name any of 20 those other investors? 21 A Marwit Capital. There was a -- I -- I'd have 22 to go through the -- the list to -- to give you my -- my 23 good recollection. 24 Q What list would that be? 25 A There's a regular recurring list of people from 410 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 CB Capital, with ongoing conversations for what their 2 interest is. 3 Q So what you're referring to there is the list 4 that CB Capital had provided to you? 5 A The list from CB Capital, list from Todd 6 Jadwin. 7 Q Okay. Any other source of information we could 8 look to to find out who these other investors were that 9 were interested in infusing additional capital? 10 A No. I would -- I would think those would be 11 the most comprehensive. 12 Q Okay. So Marwit Capital, the CB Capital list, 13 and any list that Todd Jadwin had? 14 A Uh-huh. Correct. 15 Q Looking at the top of page 13, it says, quote: 16 IHHI is informed and believes, and thereon alleges, that 17 their collective resolve to block the admission of new 18 equity investors stemmed from the fact that such deals 19 would have diluted their individual percentage holdings 20 in IHHI. 21 Do you see that? 22 A Yes. 23 Q And when it says, "their" and "them," who are 24 you referring to? 25 A Dr. Shah, Naqvi, Meka, OC-PIN. 411 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q And what leads you to this belief? 2 A That they were resistant to anything would 3 have -- which would have diluted their own issue. 4 Q What about KSR? 5 A They didn't do the KSR deal. 6 Q You mean they didn't consummate it? 7 A Right. 8 Q Okay. But didn't OC-PIN bring the KSR 9 investment to IHHI? 10 A Yes, they did. 11 Q And didn't Medical Capital refuse the KSR 12 money? 13 A I -- I don't believe that that's the right way 14 to quantify it. I believe that KSR refused to -- to do 15 proper disclosure to Medical Capital and they couldn't 16 take the money. 17 Q Have you ever seen a letter from Medical 18 Capital saying something to the effect that they did not 19 approve the equity investment from KSR? 20 A I don't recall. I might have. 21 Q Do you recall any instruction from Medical 22 Capital whatsoever not to accept the KSR money? 23 A I believe we received a requirement that they 24 needed to fill out certain questionnaires and things as 25 a controlling interest. 412 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q The KSR money was actually put into escrow, 2 correct? 3 A I -- I have -- I'm not certain. 4 Q You don't remember? 5 A I -- I don't know that I ever received that 6 escrow. 7 Q Okay. Well, we can look at some documents 8 later. 9 A Okay. 10 Q I'm just trying to shortcut it. 11 Okay. Looking back at the complaint, page 13, 12 starting at line 3, continues on. It says: Indeed, the 13 only instances where Shah is known to have indicated his 14 support for the infusion of new capital for stock is 15 where Shah personally would have ended up owning a 16 bigger stake in IHHI, OC-PIN or both. 17 Do you see that? 18 A Yes. 19 Q Okay. What instances are you talking about 20 there? 21 A Where any of the equity that -- coming in, he 22 would -- or any of the stock that were being issued, he 23 would partake in. I believe, actually, in the KSR deal, 24 that he had a deal to gain more stock for himself in 25 there as well. 413 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Okay. Any other specific instances you can 2 recall? 3 A When Shah and OC-PIN offered documents without 4 proof of any type of funding, they were always about 5 getting more stock for Shah or OC-PIN. 6 Q Any other instances? 7 A Not that I recall specifically. 8 Q Looking a little further down on page 13, 9 toward the end of paragraph 37, it mentions that Shah 10 has a personal grudge against you. 11 Do you see that? 12 A Yes. 13 Q Do you believe that to be true? 14 A Yes. 15 Q Okay. Why do you believe Dr. Shah had a 16 personal grudge against you? 17 A Because Dr. Shah, on numerous times, requested 18 that management perform -- you know, do specific things, 19 which management refused to. 20 Q Okay. Can you give me examples. 21 A Certainly. Dr. Shah asked that we pay him rent 22 for a parking lot which he owns, which we had an 23 easement to and had no contractual obligation to pay 24 rent. And IHHI didn't do that. 25 Dr. Shah asked that we take patients from the 414 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Coastal Communities Hospital and contract with -- that 2 needed CT scans, and contract with him to do the CT 3 scans. 4 He wanted us to hire Dan Frank as a consultant. 5 We didn't do that. 6 He wanted certain contracts with physicians to 7 be put into facilities, and the -- we turned them over 8 to the medical executive committees or the physicians at 9 the local facilities to make those decisions rather than 10 just pushing them in. He didn't like that. 11 Off the top of my head, those are my quick 12 recollections. 13 Q Okay. With respect to the parking lot, this is 14 a parking lot that Dr. Shah owns, right? 15 A Correct. 16 Q And it's next door to Coastal Communities? 17 A Correct. 18 Q And you mentioned an easement. Is it your 19 understanding that the Coastal Communities patients used 20 the parking lot? 21 A My understanding is, is that when we purchased 22 Coastal Communities Hospitals, we purchased the easement 23 into that parking lot, with a right for us to use it, be 24 that for patients or for employees. I'm not sure that I 25 have that clearly delineated, but part of the purchase 415 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 price was that easement. 2 Q Okay. And the CT scan, that's a CT scanner 3 that's in Dr. Shah's office, right? 4 A Correct. 5 Q Which is next door to Coastal Communities? 6 A Correct. 7 Q And Coastal Communities doesn't have a CT 8 scanner? 9 A No, they do. 10 Q Okay. Why was Dr. Shah wanting the patients to 11 go to his CT scanner? 12 A He has a higher level CT scanner. But there's 13 a lot of difficulty with taking in-patients from 14 hospital to across the parking lot and having the right 15 type of support pieces there. And if our CT scanner was 16 adequate for the type of diagnostics that would be 17 needed, how do you determine between which CT scanner to 18 take them to, unless requested by a physician? 19 We did actually spend money in trying to create 20 a policy and procedure to do that, but we ultimately 21 never did. 22 Q And you think that was one of the reasons that 23 caused Dr. Shah a personal grudge against you? 24 A Yes. 25 Q These business decisions translated into a 416 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 personal grudge? 2 A I believe so. 3 Q What about hiring Dan Frank? Why did Dr. Shah 4 want IHHI to hire Dan Frank? 5 A Dan Frank is a friend of Dr. Shah. And 6 although he was very, very disliked by much of the 7 management in IHHI, not including myself, but other 8 people from previous business relationships, they -- 9 they felt very uncomfortable with him being there, and 10 Dr. Shah felt he would be an asset. 11 Ultimately, when he came on, I took several 12 resignations from people, and we couldn't hire him. We 13 couldn't bring him on. It would have been too damaging 14 to the company. 15 Q What was he going to be hired as a consultant 16 to do? 17 A My recollection is something about, you know, 18 perhaps physician relationships, contract development, 19 business development, something along those various.... 20 Q And what about this last one, contracts of 21 physicians in the hospitals? How did that lead to 22 Dr. Shah having a personal grudge against you? 23 A He had several physicians which he wanted to 24 have contracts for either emergency rooms, or 25 directorships, or things of that nature, and assumed 417 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 that we could just for -- you know, just decree those 2 changes. We went through the medical staffs of the 3 hospitals, and most of those changes didn't go through. 4 Some of them did, but a lot of them didn't. 5 Q I want to direct your attention to the First 6 Amended Complaint again. On page 16, paragraph 38, it 7 says, quote: By July 2006, in large part as a result of 8 Shah, Ludmir and Naqvi's above-described opposition to 9 the admission of new equity investors, IHHI had not 10 secured alternative financing to replace the 11 $90.7 million loans. 12 Do you see that? 13 A Yes. 14 Q Do you believe that Shah prevented IHHI from 15 securing alternative financing to replace the 16 $90.7 million loans? 17 A I believe that he opposed Berggruen, which was 18 interested in doing equity and debt. 19 Q And any other equity investors that Dr. Shah 20 opposed, which would lead to IHHI not securing 21 alternative financing? 22 A Laurus. 23 Q Any others? 24 A I think those were the two major equity people 25 that were there. 418 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q In the summer of 2006, Shah introduced Fred 2 Siembieda to IHHI? 3 A Correct. 4 Q That wasn't the first time Fred Siembieda had 5 done any work for IHHI, right? 6 A No. I believe it was. 7 Q Okay. Did Fred Siembieda have any role in 8 arranging or introducing Medical Capital originally to 9 IHHI? 10 A Not as far as -- not from IHHI's side. We were 11 introduced by Jim Ligon's wife, Phyllis Ligon. 12 Q Do you know that Medical Capital paid Fred 13 Siembieda $200,000 for that introduction? 14 MR. ZULCH: Objection. Assumes facts with 15 reference to, quote, that introduction, unquote. 16 JUDGE BRENNER: Overruled. 17 THE WITNESS: Fred Siembieda did not introduce 18 myself, Jim Ligon, or Larry Anderson to Medical Capital. 19 BY MR. MILES: 20 Q Had you heard that Medical Capital paid Fred 21 Siembieda $200,000 for the original loan that Med Cap 22 gave to IHHI? 23 A I don't believe that's true. 24 Q Okay. And you haven't read the deposition of 25 Mr. Lampariello, right? 419 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A No. 2 Q Did IHHI act at all on Mr. Siembieda's term 3 sheet that was proposed in August of 2006? 4 A I believe they did, yes. 5 Q Okay. How so? 6 A I believe Mr. Siembieda made due diligence 7 requests, and they were given to Steve Blake, and Steve 8 gave him information. 9 Q Were you involved in that due diligence 10 inquiry? 11 A It mostly would have been Steve Blake. 12 Q Did IHHI obtain any financing or refinancing 13 through Fred Siembieda? 14 A No, they didn't. 15 Q Do you know why not? 16 A You know what? Specifically, I don't think 17 that we ever got a, you know, term agreement from him -- 18 term sheet from him. 19 Q Never got a term sheet from Mr. Siembieda? 20 A Maybe a term sheet, but I don't think we got 21 anything that our finance committee approved or -- I 22 don't -- actually, specifically, I don't recall exactly 23 what he produced. 24 Q Okay. We're going to catch up with this First 25 Amended Complaint later, but I want to get through some 420 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 of these documents, since we're in this time period. 2 So the next document I'll show you will be 3 marked as Exhibit 282 -- what was previously marked as 4 Exhibit 282. 5 (Exhibit 282 marked for identification.) 6 MR. MILES: For the record, Exhibit 282 is a 7 three-page document, which appears to reflect a two-page 8 e-mail chain and a one-page attachment, with the top 9 e-mail on the first page being from Bruce Mogel to Joey 10 Lampariello, dated June 5, 2006, at 9:45 a.m. This is 11 also Bates label MCC-5942 through -5944. 12 BY MR. MILES: 13 Q Have you had a chance to look over this 14 exhibit? 15 A Yes. 16 Q Does this appear to be a true and accurate copy 17 of an e-mail that you sent to Mr. Lampariello on June 5, 18 2006? 19 A It appears so, yes. 20 Q Okay. And is it your understanding that this 21 relates to OC-PIN's request for a shareholder meeting? 22 A Yes. 23 Q Why were you sending that request over to 24 Mr. Lampariello? 25 A He needs to be, you know, aware of board 421 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 meetings, shareholders meetings, things like that. 2 Q At this point in time, had IHHI agreed to 3 notice the special shareholder meeting demanded by 4 OC-PIN? 5 A I don't believe so. 6 Q So a meeting hadn't been set yet? 7 A No. 8 Q So why did Mr. Lampariello need to know about a 9 meeting that hadn't been set yet? 10 A He needed to know that there was a request for 11 a shareholders' meeting. 12 Q Is there a requirement in any document that 13 indicates that he needs to know about such request? 14 A I think that, you know, anytime a company 15 operates very close to a zone of insolvency, they have 16 an obligation to their lender to make sure that they're 17 aware of critical happenings. And OC-PIN calling for a 18 shareholders' meeting would be one of those things. 19 Q Why? 20 A Because it could have an effect on the board of 21 directors of the company, on the outcome of the company, 22 on perhaps loan covenants. I just -- he has an 23 obligation -- we have an obligation to make sure he's 24 aware of those critical things. 25 Q Did you seek Mr. Lampariello's advice as to 422 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 whether or not to allow OC-PIN to have a special 2 shareholder meeting? 3 A No. I believe this was just informative. 4 Q Okay. Looking at your e-mail to him, it says: 5 We need to discuss. Please call. 6 A Yes. 7 Q Do you see that? 8 A Yes. 9 Q Did he call? 10 A Specifically, I don't recall, but I -- I would 11 say yes. 12 Q Did you have a conversation with him about 13 OC-PIN's request for a special shareholder meeting? 14 A I think mostly informative, that OC-PIN's 15 requesting a shareholders' meeting. 16 Q Okay. Anything else? 17 A Not that I recall. 18 Q Did you tell him why you believed the 19 shareholder meeting was being requested? 20 A I don't recall. 21 Q Did you tell him that you thought it might 22 violate some of the loan covenants? 23 A I think anytime somebody calls for a 24 shareholders' agreement -- meeting, there has to be some 25 kind of underlying theme to what it is. I didn't know 423 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 specifically at that time. 2 Q Did Mr. Lampariello tell you not to allow 3 OC-PIN to have a shareholder meeting? 4 A No. 5 Q Did IHHI allow OC-PIN to have a shareholder 6 meeting? 7 A I believe we turned down their request. 8 Q Okay. And did they make subsequent requests? 9 A I believe so. 10 Q And you turned down every one? 11 A I believe Larry Anderson did most of the work 12 on that. 13 Q Okay. But IHHI turned down every request? 14 A Well, you said did I turn it down. I believe 15 Larry Anderson did most of the work on that. 16 Q Okay. IHHI management turned it down? 17 A Management, board of directors. 18 Q Did the board of directors ever vote to 19 determine whether or not there should be a special 20 shareholder meeting? 21 A I don't recall specifically, but I'm sure they 22 were informed about it. 23 Q But did they ever make a decision to reject 24 OC-PIN? 25 A I don't specifically recall. 424 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Do you know who Gail Morales is? 2 A Sounds familiar. I -- I'm not certain. 3 Q The next document I'll show you will be marked 4 as Exhibit 690. 5 (Exhibit 690 marked for identification.) 6 MR. MILES: For the record, Exhibit 690 is a 7 two-page document, which appears to reflect an e-mail 8 chain between Bruce Mogel and Gail Morales, dated 9 July 27, 2006. 10 BY MR. MILES: 11 Q Let me know when you've had a chance to look 12 this over. 13 A Okay. I've reviewed it. 14 Okay. 15 Q Does it refresh your recollection as to who 16 Gail Morales is? 17 A She works for Medical Capital. 18 Q What is this referral request that was being 19 discussed in July of 2006? 20 A She was -- wanted a -- was probably proposing 21 financing to a hospital, and sometimes I -- they would 22 use me as a reference. 23 Q And did you always give Medical Capital a good 24 reference? 25 A I gave them an accurate reference. 425 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 Q Okay. Was it good or bad? 2 A It was accurate. 3 Q Okay. Was it negative? 4 MR. ZULCH: Objection. Overbroad. 5 THE WITNESS: It was accurate. 6 JUDGE BRENNER: Overruled. 7 BY MR. MILES: 8 Q Okay. I understand it can be accurate. I can 9 understand it's accurate. But was it accurate -- a 10 negative accurate referral or an accurate positive 11 referral? 12 MR. ZULCH: Objection. 13 THE REPORTER: I'm sorry. I didn't hear the 14 objection. 15 MR. ZULCH: Objection. Ambiguous. 16 MR. YODER: If there's an objection, just wait. 17 THE WITNESS: Okay. 18 MR. YODER: And give Judge Brenner a chance to 19 rule. 20 MR. ZULCH: I'm objecting that it's ambiguous 21 because he's using, as phrased, "it" to possibly 22 represent many references. 23 JUDGE BRENNER: Overruled. 24 THE WITNESS: Okay. 25 MR. YODER: The question is? 426 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 THE WITNESS: Well, I have the question. 2 It can just be accurate. It doesn't have to be 3 good or bad, you can just be factual. 4 BY MR. MILES: 5 Q Okay. Well, I disagree with you. I think you 6 can be accurate and be -- give a negative accurate 7 referral or you can be accurate and give a positive 8 accurate referral. 9 The referrals that you provided on behalf of 10 Medical Capital, putting aside whether or not they're 11 accurate, I've got your take on that, were they positive 12 or were they negative? 13 A I tried to remain as neutral as possible in a 14 referral. They would ask me about doing business with 15 them. 16 Q And what would you say? 17 A It depends on the question. 18 Q Okay. Did you -- this shouldn't be that tough. 19 I mean, how many times did they use you as a 20 referral? 21 A I don't know. Twice, three times, maybe, 22 total. 23 Q And when you talked to those hospitals, did you 24 give a positive referral or a negative referral? 25 A I -- I would say that the accurate referral 427 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 that I got had some positives and some negatives. 2 Q What negatives were there? 3 A Negatives would be cost of money; positive 4 would be ability to work with the staff there. 5 Q Such as Mr. Lampariello? 6 A No, such as Joy, Laura. They were pretty 7 readily accessible. 8 Q Was Mr. Lampariello readily accessible? 9 A Sometimes; sometimes not. 10 Q Did you feel you had a pretty good relationship 11 with Mr. Lampariello? 12 A Yes. I felt that I had a good business 13 relationship with him. 14 Q Okay. But not a personal relationship with 15 him? 16 A No. Business relationship. 17 Q The next document I'll show you will be -- or 18 was previously marked as Exhibit 11. 19 (Exhibit 11 marked for identification.) 20 MR. MILES: For the record, Exhibit 11 is a 21 two-page document, which appears to be from Fred 22 Siembieda at Maximum Healthcare, Inc. to Maury DeWald, 23 dated, in handwriting, August 28, 2006. 24 BY MR. MILES: 25 Q Have you ever seen this document before? 428 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A I believe so. 2 Q Was this IHHI's -- I'm sorry. Was this Fred 3 Siembieda's term sheet? 4 A I think -- I don't think it's a term sheet. 5 Q Okay. Well, how would you categorize this? 6 A A letter. A letter of intent. 7 Q Okay. Is that different than a term sheet? 8 A I think so. 9 Q How so? 10 A It says: Letter of interest. 11 Up here, it says letter of interest. 12 Q Well, you've seen a lot of term sheets in this 13 case. Is a letter of interest different? 14 A Term sheets generally have some pretty specific 15 numbers on them. 16 Q Okay. 17 A A letter of interest don't necessarily have a 18 lot of specific numbers on them. 19 Q Specific numbers like the loan amount and the 20 interest rates? 21 A Who's lending, you know, what the -- what the 22 closing costs are, you know, a lot of things in there. 23 Q Did IHHI ever execute a document like Fred 24 Siembieda's letter of interest? 25 MR. ZULCH: Objection. Vague. 429 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 JUDGE BRENNER: Overruled. 2 THE WITNESS: I don't know. It's hard to 3 compare what is like that. We have -- 4 BY MR. MILES: 5 Q Okay. Let me rephrase. 6 A Okay. 7 Q Did IHHI ever execute a letter of interest with 8 Fred Siembieda in 2006? 9 A I'm not certain whether or not this was ever 10 executed. 11 Q If it wasn't, why not? 12 A I -- I don't specifically know. I know that we 13 did some due diligence for him, we gave him some 14 information, and I don't recall specifically what came 15 back. 16 Q Did you have an opportunity to analyze the 17 proposal from Fred Siembieda? 18 A I'm sure I looked at it. Yes. 19 Q Okay. What was your opinion of it? 20 A I think that when I look at an equity 21 investment of 15 million to be demonstrated in escrow 22 once on-site due diligence begins, I'd like to see that 23 money, and I don't believe we ever did. 24 Q Did on-site due diligence ever begin? 25 A I know that they did some due diligence. I'm 430 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 not sure if they ever got on-site with it, but I know 2 that they did do some due diligence. 3 Q Wasn't on-site due diligence going to begin 4 after IHHI executed the letter of interest? 5 A And I'm not certain that they ever executed it. 6 Q Right. So the on-site due diligence never 7 began? 8 A And there's a lot of sources here, Merrill, 9 CapSource, CIT, that are being considered. I think I 10 probably would have liked to see it pinned down to one 11 that he was making headway with. I don't know that we 12 ever heard back after his due diligence, for what he 13 thought. 14 Q Now, those names you listed, where are you 15 referring to those? 16 A Paragraph 2. 17 Q Okay. There are three possible funding sources 18 there, right? 19 A Yes. 20 Q And you wanted to have it narrowed down, right? 21 A I think a -- ultimately, they would have to 22 provide a term sheet, so I'd like to see how far along 23 we are with that. 24 Q How about with CB Capital, didn't they have a 25 big long list of potential funding sources also? 431 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 A Yes. They had a very long list of potential 2 funding sources. 3 Q And yet you signed the agreement with CB 4 Capital, right? 5 A We signed the agreement with CB Capital prior 6 to Maximum Healthcare. There could have even been some 7 conflicts between the two of these. 8 We may have closed the deal with CapSource and 9 had to pay CB Capital, as well as Maximum Healthcare. 10 MR. YODER: When you get to a breaking point, 11 Marc, if we could take a break. 12 MR. MILES: Sure. Now is a breaking point. 13 MR. YODER: Okay. 14 MR. MILES: Why don't we take a break. 15 THE WITNESS: Very good. 16 VIDEOGRAPHER: Off record. 3:27 p.m. 17 (Recess taken.) 18 MR. MILES: Why don't we go on the record. 19 We're going to conclude today's deposition 20 session. And we'll use the same stipulation that we did 21 at the end of the first volume of Mr. Mogel's 22 deposition, with the only change that he will have seven 23 days from his receipt of the deposition transcript by 24 which to review it, make changes, if necessary, and 25 execute it under the penalty of perjury. 432 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 MR. ZULCH: So stipulated. 2 MR. YODER: That's fine. 3 VIDEOGRAPHER: Videotaped deposition of Bruce 4 Mogel is being adjourned at 3:30 p.m. 5 This concludes tape 2 of 2. Thank you. 6 * * * * * 7 (Deposition proceedings concluded at 3:30 p.m.) 8 -oOo- 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 433 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 I, the undersigned, say I have read the foregoing 2 deposition and declare under penalty of perjury that the 3 foregoing is true and correct. 4 Executed this _______day of ___________, 20__, 5 at__________________________,______________________. 6 7 8 9 10 ____________________________ 11 BRUCE MOGEL VOLUME II 12 13 14 15 16 17 18 19 20 21 22 23 24 25 434 SIMPSON DEPOSITION SERVICES (800) 505-9994 1 I, DONNA E. BOULGER, CSR #6162, a Certified 2 Shorthand Reporter within and for the State of California, 3 do hereby declare: 4 That pursuant to 2093(b) CCP, I administered the 5 oath to the deponent; 6 That the foregoing deposition was taken before me 7 at the time and place set forth and was taken down by me 8 in shorthand and thereafter transcribed into typewriting 9 under my direction and supervision; 10 That the foregoing deposition is a full, true and 11 correct transcript of my shorthand notes so taken. 12 I further declare that I am neither counsel for nor 13 related to any of the parties to said action nor in any 14 way interested in the outcome thereof. 15 I declare under penalty of perjury this 5th 16 day of March, 2009, that the foregoing is true and correct. 17 18 19 ___________________________________ DONNA E. BOULGER, CSR #6162 20 CERTIFIED SHORTHAND REPORTER 21 22 23 24 25 435 SIMPSON DEPOSITION SERVICES (800) 505-9994