Exhibit 10.1

 

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April 24, 2015

Gary L. Rudin President

and COO USMD

Holdings

6333 North State Highway

Dallas, Texas 75038

Dear Gary,

This letter is an offer by Rudish Consulting Solutions, LLC, (“RCS LLC or RCS”)
to USMD Holdings (“USMD”) to provide certain interim management services
described or referred to herein (“Services”). USMD may accept this offer and
create a legally-binding agreement (“Agreement”) by signing where indicated on
the final page.

This letter outlines:

•   Our Understanding of the Situation and Objectives

•   Project Scope and Resources

•   Timetable

•   Compensation and Working Relationship

•   client’s Responsibilities

•   Other Terms and Conditions

Our Understanding of the Situation and Objectives

USMD leadership has identified the need for an interim Chief Financial Officer
(“CFO”) to lead the company’s finance and accounting organization and implement
a number of changes in infrastructure and reporting that have been identified by
external consultants, to assume on an interim basis the CFO’s obligations
regarding public reporting and financial compliance/controls associated with
same, and to be available, as needed, to communicate with USMD’s auditors,
outside accountants, attorneys, Board of Directors, and professionals retained
to assist the finance and accounting organization. The Interim CFO must be a
seasoned financial executive who meets the experience and subject matter
knowledge requirements of this position, and must have demonstrated experience
in assessing the performance of finance and accounting activities and
implementing the changes necessary to improve performance.

It is anticipated that the services of the interim CFO will be required for
three (3) to six (6) months depending upon the timing associated with
stabilizing the organization and completing a search for a permanent CFO,
including the time necessary to assure a smooth transition.

 

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Project Scope and Resources

RCS will provide the following resources:

 

•   An experienced financial executive, Michael Dooley, who meets with the your
approval to serve as interim Chief Financial Officer in accordance with company
directives and subject to oversight by the USMD’s CEO and Chairman, John M.
House M.D.

 

•   Oversight for this interim management engagement will be provided by Michael
B. Loscalzo, RCS’s President and Managing Director. Mr. Loscalzo will be
available via telephone, email and on-site visit as needed.

The interim CFO will report to the CEO and Chairman of USMD Holdings and will
perform all of the duties normally assigned to that position in accordance with
a job description to be provided to RCS. It is understood and agreed that the
interim CFO will have overall responsibility for the finance and accounting
organization. It is further understood that the interim CFO being supplied by
RCS will not serve as a voting member of the company’s governing body.

After the initial fifteen (15) days, USMD and RCS will define specific,
mutually-acceptable performance objectives with corresponding time frames.
Michael Loscalzo will work with the leadership of USMD and Michael T. Dooley to
establish the performance objectives and will partner with the leadership of
USMD to monitor progress.

Timetable

RCS is prepared to begin this project on or about May 4th, 2015, provided that
it has received this signed Agreement and first month’s payment.

RCS offers maximum flexibility regarding the duration of this Agreement. This
Agreement will have an initial term of three (3) months commencing on the date
that the interim CFO begins providing Services. You will have the option to
extend the term of this agreement for additional (and sequential) monthly
periods. In order to exercise this option(s), you must give written notice to
RCS at least thirty (30) days in advance of the expiration date and must not be
in default of any of its obligations under this Agreement. RCS will have the
option to terminate this Agreement after the initial term of three (3) months by
giving notice to USMD at least thirty (30) days in advance of the expiration
date of any existing term.

Compensation and Working Relationship

Fees: The fee for the Services to be provided by the Interim CFO is $55,000 per
month. This fee includes management oversight services by Michael B. Loscalzo.

 

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The above monthly rate is based on Mr. Dooley being on site at least four and a
half days per week (consecutive) with scheduled telephone availability at other
times. It is understood that occasionally an additional day on site may be
required. Days on site will be coordinated with USMD to meet the needs of the
company.

The above monthly rate takes into account: variations in the number of work days
per month, major holidays, overtime and occasional weekend work expected from a
senior executive of the organization, with other minor fluctuations in hours
worked from month-to-month. Mr. Dooley will devote his best efforts and the
needed time to fulfill the obligations of serving as Interim CFO.

The above fee is payable on the first day of each contract month, in advance. A
contract month begins on the day of the month that is the first day that
Services are provided. There are no hidden costs for these interim management
services, and there are no added service fees or overhead allocated by RCS. Any
additional services USMD may wish to purchase from RCS will be charged on the
basis of a price quoted only if and when USMD desires such services and agrees
in writing to RCS’s performance of them.

Expenses: In addition to the payment of fees, USMD will reimburse RCS for
expenses associated with the interim CFO and scheduled oversight visits,
including but not limited to travel, lodging, meals and other expenses
reasonably and necessarily incurred in the performance of the Services. All
expense reimbursement payments are due within twenty (20) days of invoice.
Expenses will be invoiced in accordance with RCS Corporate Expense Reimbursement
Policy (available upon request).

All fee and expense reimbursement payments are due within twenty (20) days of
invoice to: Rudish Consulting Solutions, LLC

5601 Rico Drive

Boca Raton FL 33478

Electronic (ACH) payment is also accepted; please contact our office for
details.

RCS reserves the right to suspend its performance of the Services at any time
that any fee or expense reimbursement has not been paid in full when due. Any
suspension of Services will not extend the term of this Agreement and it may
adversely impact on RCS’s ability to meet deadlines.

Client’s Responsibilities

The interim CFO will report to John House M.D. CEO of USMD Holdings, who will
provide oversight and direction as appropriate and who will be responsive to
requests for timely decisions on matters essential to the provision of the
Services by RCS.

USMD will provide work space, equipment and secretarial support normally
provided to a senior executive of the organization.

 

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Other Terms and Conditions

Taxes: If any state or local taxing authority imposes a sales or use or similar
tax on the compensation to be paid to RCS under this Agreement, the payment of
that tax shall be the sole responsibility of USMD. This provision shall not
apply to any income tax assessed against RCS.

RCS’s advisors have indicated that for engagements longer than twelve months,
there may be state or federal tax implications associated with expense
reimbursement. In the unlikely event that this engagement extends beyond twelve
months and this results in any of RCS’s employees or contractors being assessed
income tax on travel expense reimbursement related to this engagement, USMD
agrees to reimburse RCS for the costs associated with satisfying this additional
tax liability.

Other Resources: If during the first thirty (30) days of this Agreement RCS’s
review of the situation at the USMD indicates that additional management,
advisory, or consulting resources are required to assure that the objectives of
the engagement are met in the desired time frame, RCS will work with USMD to
determine the source of those additional resources or the expectations of USMD
will be modified accordingly.

Termination: If either party believes that the other is not fulfilling its
obligations under this Agreement in some material respect and it intends to
terminate this Agreement if the situation is not corrected, it must give the
other party a written notice which describes the situation in reasonable detail.
The party which receives the notice shall have thirty (30) days to correct the
situation. If the situation is not corrected within that time, the party which
sent the notice may immediately terminate the Agreement by giving a written
notice of termination to the other party. If this Agreement is terminated in
that way, it shall be of no further force and effect except with respect to
accrued obligations and liabilities.

Either party may terminate this Agreement without cause upon no less than thirty
(30) days’ written notice of termination to the other, but such notice may not
be sent within the first sixty (60) days of this Agreement.

In the event of termination for any reason, USMD will pay RCS for all reasonable
and necessary fees and expenses accrued throughout the effective date of
termination.

Confidentiality: RCS shall treat all non-public information obtained as part of
this engagement as confidential and shall not, without written authorization
from USMD release or share such information with any third party, except as may
be required by law. This obligation shall survive the termination of this
Agreement.

Non-disparagement: RCS agrees that it will use its best efforts to support and
promote the interest and reputation of USMD, its subsidiaries and other
affiliates in the community; that it will not disparage USMD or any of its
affiliates, or any of the people or the organizations connected with it; and
that it will not otherwise do or say anything that could disrupt the good morale
of the employees of USMD, its subsidiaries and other affiliates or otherwise
harm its interest or reputation, other than as required by law.

 

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Response to Subpoenas: If as a result of this engagement RCS or any of its
personnel are legally compelled to either give testimony or produce documents or
both in any court, investigative or regulatory proceeding (including any form of
discovery related thereto), USMD will reimburse RCS at its usual per diem basis
together with all necessary expenses associated with such activity. RCS will
immediately notify USMD of any such demand for testimony or the production of
documents, but RCS will be under no obligation to seek to quash or otherwise
limit the scope of such a demand.

Corporate Compliance: RCS adopts a position of “zero tolerance” for
non-compliance with legal requirements applicable to the business or activities
of USMD. Accordingly, USMD represents to RCS that it has established and is
maintaining an appropriate Corporate Compliance Program and that the resources
of that Program will be available to RCS’s personnel in dealing with any
potential compliance issues. If during the course of this engagement, RCS
reasonably believes that there are compliance related issues that are not being
addressed or resolved by USMD to RCS’s satisfaction, RCS will discuss the matter
with USMD. At any time following that discussion, RCS will have the right to
terminate this engagement on 15 days advance written notice to USMD if RCS
reasonably believes that there are material compliance issues that USMD is not
addressing or resolving to RCS’s satisfaction.

Restriction on Use of Personnel: RCS expends significant time and resources in
securing the services of the personnel that it assigns to its engagements with
its clients. Accordingly, RCS stands to suffer significant financial harm if
personnel that it assigns to provide services to a client should be employed or
otherwise engaged to provide services directly by that client. Therefore, USMD
(and its related organizations) agrees that it will not solicit or otherwise
offer employment or any other compensable relationship to any person whose
services are provided by RCS to USMD under this agreement. If USMD should wish
to employ or otherwise directly engage the services of any person whose services
were supplied to it by RCS under this agreement, it must first contact RCS. RCS
may be willing, depending on circumstances, to negotiate the release of such
person.

Safe Working Environment: USMD will provide the employees and other personnel of
RCSs with a safe working environment when they are on the premises of USMD
including an environment that is free of unlawful discrimination or harassment.

Record Retention: It is the policy of RCS to retain for a period of twelve
(12) months following the end of interim management engagements all work papers,
interview notes, draft reports, and other documentation that may have been
created by it in connection with the engagement. At the end of such twelve
(12) month period it is the standard practice of RCS to destroy all such
material that remains in its possession at the end of the engagement.

 

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Standard of Care and Indemnity: RCS cannot guarantee or assure the achievement
of any particular performance objective, nor can RCS guarantee or assure any
particular outcome for USMD or any other person as a result of this Agreement or
the performance of the Services. In providing the Services, RCS shall exercise
reasonable care, and RCS, its officers, directors, agents, employees and outside
consultants, if any, will not be liable to USMD (or any parent, subsidiary or
affiliate, director or officer thereof) for any loss, financial or otherwise,
which may result to USMD (or any parent, subsidiary, affiliate, director or
officer thereof) as a result of the Services or the methods by which the
Services were provided, unless such a loss is the direct result of an
intentional act of fraud or dishonesty. USMD, at its expense, agrees to
indemnify, defend and hold harmless RCS, its officers, directors, agents,
employees and outside consultants, if any, with respect to any and all demands,
claims or suits brought or threatened by any person or entity as a result of any
alleged action or inaction pertaining to the provision of the Services of this
Agreement. This obligation will include all attorneys’ fees and other costs of
defense.

Directors and Officers Liability Insurance: At the expense of USMD, the company
will cover RCS’s interim CFO under its directors and officers liability
insurance policy. RCS may suspend its performance of the Services if USMD fails
to provide acceptable written proof of this coverage upon request. The terms and
conditions of the D&O coverage must be reasonably acceptable to RCS at all times
that this Agreement is in effect.

Professional Liability Insurance: USMD will name the interim CFO under its
professional liability contract.

If these terms are acceptable, please sign both copies and return one signed
copy to:

Rudish Consulting Solutions, LLC

5601 Rico Drive

Boca Raton, Florida 33478

We look forward to assisting you during this important time.

Sincerely,

 

/s/ Michael B. Loscalzo Michael B. Loscalzo President and Managing Director For
Rudish Consulting Solutions, LLC

 

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AGREED AND ACCEPTED:

For Rudish Consulting Solutions

 

SIGNATURE:   /s/ Michael B. Loscalzo NAME: Michael B. Loscalzo TITLE: President
and Managing Director DATE: April 17, 2015 For USMD Holdings SIGNATURE:   /s/
Gary Rudin by Chris Carr NAME: Gary Rudin, President, by permission signed by
Chris Carr DATE: April 30, 2015

 

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Biographies of Key RCS Professionals

Michael T. Dooley

Interim Chief Financial Officer

Michael is an experienced financial executive with extensive experience in not
for profit and investor owned healthcare. He began his career with Peat Marwick
in Albany New York where he served as a staff auditor and Supervising Senior.

He spent several years with Hospital Corporation of America (“HCA”) where he
served a rotation in Colnbrook UK as a Contract Compliance Officer and as A
District Controller with responsibility for acute care hospitals in New York,
New Jersey and Rhode Island and finally the CFO of HCA largest owned hospital in
Richmond Virginia.

Michael served as the founding Chief Financial Officer of the Franciscan Health
System, a nine hospital faith based multihospital system headquartered in Tampa
Florida. He played a key role in the creation of Catholic Health East, a
successor organization to the Franciscan Health System.

Following his work with Franciscan Health and Catholic Health East Michael
served as the CFO of the Hospital Division of MedCath where he prepared the
organization for a recapitalization that was eventually funded by KKK. Since
then he has served in a number of interim roles including assignments as the
Regional CFO for Bon Secours Health System, the CFO of University Community
Hospital in Tampa assignments in Alabama and Michigan and an assignment for
Hunter Partners in Washington DC.

Michael B. Loscalzo

President and Managing Director RCS LLC

Engagement Partner

Michael is a senior healthcare financial executive with experience in directing
and managing transactions, restructurings and turnarounds and in providing
advisory and engagement management services

Prior to joining Rudish Consulting Solutions he was a Principal and founder of
The Hunter Group and its successor Hunter Partners. At the Hunter Group and
Hunter Partners he served as an interim executive in a number of turnaround
assignments and directed a number of large, complex engagements. He has served
as the CFO, COO or CEO at a number of healthcare organizations including a
publicly traded health care services company.

Michael’s earlier positions included Senior Vice President at Cain Brothers & C.
a Health Care Investment Banking and Financial Advisory firm, the CFO of a major
teaching hospital, the interim CEO of an academic faculty practice plan, the COO
of a faith based multi hospital system and a Senior Manager in the Audit
Division of Arthur Anderson & Co.

He is a visiting lecturer and member of the adjunct faculty at Duke University
and a frequent guest speaker.

 

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