Indiana University Health Paoli Inc.

“Line 6: The sole member of Indiana University Health Paoli, Inc. ("IU Health Paoli") is Indiana University Health Bloomington, Inc. ("IU Health Bloomington"), a 501(c)(3) tax-exempt organization. Line 7A: The Board of Directors of the IU Health Paoli shall consist of nine (9) directors. Five (5) directors shall be appointed by IU Health Bloomington and four (4) shall be appointed by the Orange County Commissioners. One (1) of the Commissioners' appointments shall be an active member of IU Health Paoli's medical staff. No IU Health Paoli employees may be directors except for employed physicians Line 7B: IU Health Bloomington shall have the followed reserved powers, which shall be exercisable alone and in all events by IU Health Bloomington: - To approve the election of officers; - To approve the appointment of the President/Chief Executive Officer and to take action to remove the President/Chief Executive Officer; - To approve appointment of a Treasurer and to take action to remove the Treasurer; - To authorize the establishment or acquisition of any subsidiaries, affiliates or joint venture arrangements or acquisition of substantially all of the assets of any other business or entity; - To approve annual capital and operating budgets; - To authorize any unbudgeted operating or capital budget items or deviations, including any issuance or guarantee of any unbudgeted debt, greater than the budgeted amount by $100,000 for any individual item or $300,000 per fiscal year in the aggregate; - To authorize any agreement to act as primary obligor, or to serve as a guarantor, surety or co-obligor with respect to the debt of any other person, to borrow amounts from third-party lenders, or to loan money to any person; - To authorize any pledge of, or grant any security interest or mortgage in, otherwise encumber, any tangible assets in excess of an appropriate monetary threshold, other than in the ordinary course of business or pursuant to an approved budget or strategic plan; - To authorize any merger, consolidation, reorganization, sale or transfer of all or substantially all of its assets; - To approve any corporate action involving the sale or transfer of assets in excess of One Hundred Thousand Dollars ($100,000); - To authorize any voluntary declaration of bankruptcy, plan of dissolution, any liquidating distribution of assets or other action related to its dissolution or liquidation; - To approve any management agreement for the management of all or a substantial part of the Corporation's operations; - To appoint five of the nine members of the Corporation's Board of Directors subject to the following limitations: one director appointed by the Member shall be a member of the active medical staff (excluding visiting specialists) of the Corporation and two of the remaining four appointments by the Member shall be Orange County, Indiana, residents; - To approve any strategic plans and amendments thereto, which will be integrated with the Member's and Indiana University Health, Inc.'s strategic plans; - To approve managed care contracts; - To approve any action to terminate acute care services or to close the hospital operated by the Corporation; and - To approve any amendments to the Articles of Incorporation or By-laws of the Corporation.”

“Indiana University Health Paoli, Inc. has established the following process for reviewing Form 990: The Form 990 and related schedules are reviewed by the Chief Financial Officer. After the Chief Financial Officer approves the Form 990 and related schedules, a finalized complete Form 990 is made available to each board member on a protected intranet site prior to filing the form with the IRS. Each member is informed of the availability of the tax department to answer any questions.”

“Indiana University Health Paoli, Inc. ("IU Health Paoli") is part of the Indiana University Health, Inc. ("IU Health") system. As the sole member and controlling parent of IU Health Bloomington, Inc., the sole member and controlling parent of IU Health Paoli, IU Health and its board of directors have mandated that certain policies be followed to ensure greater standardization throughout the system. Thus, IU Health Paoli's Board of Directors was not required to separately adopt a conflict of interest, whistleblower, document retention and destruction and joint venture policies because IU Health's Board of Directors had already adopted and required these policies to be followed by its subsidiaries.”

“Indiana University Health Paoli, Inc. ("IU Health Paoli") has a Conflict of Interest Policy, the purpose of which is, to protect IU Health Paoli's interests when it is contemplating entering into a transaction or arrangement that might benefit the private interest of an officer or director. Each employee, including those employed by related entities, officer and member of the board of directors is required to annually sign a statement which affirms that such person (1) has received a copy of the conflict of interest policy; (2) has read and understands the policy; (3) has agreed to comply with the policy; and (4) understands and acknowledges that the Corporation is a tax-exempt organization and that in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes. The policy requires all forms be submitted for review and approval. Failure to complete and update the questionnaire and failure to disclose interests that should be disclosed, may subject the individual to disciplinary actions, including dismissal. Board members with a conflict of interest cannot participate in any decision related to that conflict.”

“The CEO/Top Management Official for Indiana University Health Paoli, Inc. ("IU Health Paoli") is employed by Indiana University Health Bloomington, Inc. ("IU Health Bloomington"). IU Health Bloomington has the following process for determining compensation: IU Health Bloomington has a formal written policy governing the compensation for its CEO, CFO, and all other members of its senior leadership group ("SLG"). The policy provides that the compensation and/or benefits for the SLG are to be reviewed on an annual basis, with any changes approved, by the Compensation Committee. The Compensation Committee is comprised of independent members and members of IU Health Bloomington's administrative staff shall not be present while discussions are being held. Any proposed changes in compensation and/or benefits for the SLG that come before the Compensation Committee are required to be reasonable and market competitive based upon market comparability data supplied by an independent compensation consulting firm directly hired by the Compensation Committee. Written minutes of the Compensation Committee's meetings shall be kept, containing a list of the members involved in the decision-making process, documentation of the independence of such members, and what decisions were made. Following approval by the Compensation Committee, any changes are then disclosed to the Board of Directors at its next regularly scheduled meeting. IU Health Paoli has a process in place to determine the compensation for its other officers and key employees on an annual basis. IU Health Paoli utilizes data from the Indiana Hospital Association ("IHA") annual compensation survey as well as information regarding the difficulty of filling jobs in the local labor market to update the hospital's wages. At that time, each of the administrative leaders' salaries are reviewed for market appropriateness in relation to the IHA database with appropriate ranges being determined by length of service and experience in the field. Management decisions with regard to determining compensation are subject to the review and approval of the Compensation Committee and Board of Directors.”

“Indiana University Health Paoli, Inc.'s ("IU Health Paoli") Articles of Incorporation are available to the public through the Indiana Secretary of State's web-site. IU Health Paoli's conflict of interest policy is described on Form 990, Schedule O. IU Health Paoli is a consolidated subsidiary in the consolidated financial statements for Indiana University Health, Inc. ("IU Health"). The consolidated financial statements for IU Health are available to the public through its bond filings.”

“Line 11g includes amounts paid for the following: Shared Services/Professional Fees - $954,896”

“During 2013, Indiana University Health Paoli, Inc. recorded the following other changes in net assets or fund balances: Equity Transfers (Additional Paid-in-Capital in Affiliate): -427,176”