AMENDMENT TO CONTRIBUTION AND PURCHASE AGREEMENT

Exhibit 2.1

AMENDMENT TO

CONTRIBUTION AND PURCHASE AGREEMENT

This AMENDMENT TO CONTRIBUTION AND PURCHASE AGREEMENT (this “Amendment”), executed on this 9th day of February, 2012, to be effective as of December 15, 2011, is by and among USMD Holdings, Inc., a Delaware corporation (“Holdings”), Urology Associates of North Texas, L.L.P., a Texas limited liability partnership (“UANT”), UANT Ventures, L.L.P., a Texas limited liability partnership (“Ventures”), and USMD Inc., a Texas corporation (“USMD”), and is joined in for limited purposes by Xxxx X. House, M.D. and Xxxxxxx X. Xxxxxxxx, M.D. Each of the parties to this Agreement is individually referred to herein as a “Party” and collectively, as the “Parties.” Capitalized terms used herein that are not otherwise defined herein shall have the meanings ascribed to them in Article IX of the Agreement (as defined below).

WHEREAS, the parties previously entered into that certain Contribution and Purchase Agreement dated August 19, 2010 (the “Agreement”); and

WHEREAS, before the Closing Date, UANT will merge with a wholly-owned subsidiary of Ventures, with UANT surviving and being a wholly-owned subsidiary of Ventures (the “UANT Merger”); and

WHEREAS, Ventures, Holdings, and MCNT are parties to an agreement (the “MCNT Agreement”), under which MCNT will merge with a wholly-owned subsidiary of Ventures before the Closing Date with MCNT surviving and being a wholly-owned subsidiary of Ventures (the “MCNT Merger”); and

WHEREAS, Ventures, Holdings, and Impel are parties to an agreement (the “Impel Agreement”), under which Impel will merge with a wholly-owned subsidiary of Ventures before the Closing Date with Impel surviving and being a wholly-owned subsidiary of Ventures (the “Impel Merger”); and

WHEREAS, the Contributing USMD Holders desire to, before the Closing Date, contribute at least a portion of their USMD shares directly to Ventures in exchange for partnership interests in Ventures, rather than first contributing them to Holdings; and

WHEREAS, the parties have decided that, at the Closing Date, Ventures shall contribute all of its assets, including its ownership interests in USMD, UANT, MCNT, and Impel, in exchange for shares of common stock in Holdings, thereby eliminating the promissory note described in the Agreement as a portion of the consideration to be received by Ventures; and

WHEREAS, the Parties desire to amend the Agreement in certain other respects;

NOW, THEREFORE, the Parties hereby agree as follows:

1. Contribution by Ventures. In lieu of the contribution described in Section 1.1 of the Agreement, Ventures agrees to contribute, assign, transfer, convey and deliver, or cause to be contributed, assigned, transferred, conveyed and delivered, all of its assets, including all of the equity interests in USMD, UANT, MCNT, and Impel to Holdings in exchange for the consideration described in paragraph 3 of this Amendment.

2. Contribution by USMD Holders. In lieu of the provisions in Section 1.2 of the Agreement, USMD agrees to cause the USMD Holders to contribute their USMD shares as follows:

(a) Those USMD Holders listed on Schedule I as “Contributing USMD Holders” shall, before the Closing Date, contribute their USMD shares (excluding the USMD shares referred to in subparagraph (b) of this paragraph 2) to Ventures in exchange for Class B Partnership Interests in Ventures (the “USMD-Ventures Contribution”);

(b) Each of those USMD Holders listed on Schedule I as “Contributing USMD Holders” shall contribute 57,985 USMD shares to Holdings in exchange for the consideration described in paragraph 3 of this Amendment; and

(c) Those USMD Holders listed on Schedule I as not being “Contributing USMD Holders” (the “Non-Contributing USMD Holders”) shall contribute all of their USMD shares to Holdings in exchange for the consideration described in paragraph 3 of this Amendment.

The contributions to Holdings by Ventures, the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment, and the Non-Contributing USMD Holders are referred to herein as the “Contribution”.

3. Consideration. In lieu of the provisions in Section 1.4 of the Agreement, the Parties agree that the consideration for the Contribution shall be as follows:

(a) The aggregate consideration payable by Holdings for the Contribution shall be equal to 10,000,000 shares of common stock of Holdings (the “Holdings Shares”), of which (i) an aggregate of Nine Million (9,000,000) shares shall be issued to Ventures, the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment, and the Non-Contributing USMD Holders at Closing in the amounts and to the persons set forth in Schedule I, which, for avoidance of doubt, shall be issued in proportion to the pro rata percentages set forth next to the name of each person set forth in Schedule I (the “Pro Rata Percentages”), and (ii) an aggregate of One Million (1,000,000) shares (the “Adjustment Shares”) shall be issued to Xxxx X. House, M.D. and Xxxxxxx X. Xxxxxxxx, M.D., as Nominees for Ventures, the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment, and the Non-Contributing USMD Holders. The share certificate representing the Adjustment Shares shall be issued on the Closing Date but held by Holdings pending the adjustments described in subparagraph (b), below and shall be transferable only in accordance with subparagraph (e) below. The Adjustment Shares shall be shown as issued and outstanding on the balance sheet of Holdings on the date such shares are issued to Xxxx X. House, M.D. and Xxxxxxx X. Xxxxxxxx, M.D., as Nominees for Ventures, the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment, and the Non-Contributing USMD Holders, and shall be legally outstanding under applicable state law.

(b) The allocation of the Adjustment Shares between Ventures, the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment, and the Non-Contributing USMD Holders shall be determined following the Closing based upon changes in the relative value of the contributions to Holdings made by (i) Ventures (after accounting for the MCNT Merger, the Impel Merger, the UANT Merger and the USMD-Ventures Contribution), (ii) the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment, and (iii) the Non-Contributing USMD Holders (it being agreed that the value of the contribution to Holdings made by the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment and the Non-Contributing USMD Holders shall be based only on the value of USMD represented by the shares of common stock of USMD contributed to Holdings by the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment the Non-Contributing USMD Holders pursuant to this Agreement and not that portion of the value of USMD contributed to Ventures by the Contributing USMD Holders pursuant to the USMD-Ventures Contribution), in each case between December 31, 2010 and 11:59 p.m. local time in Dallas, Texas on the Closing Date (the “Schedule 1.4 Adjustments”). For illustration only, Schedule I and Schedule 1.41 indicate that, on the Closing Date, 68,663 of the Adjustment Shares would be issued to the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment and the Non-Contributing USMD Holders and 931,337 of the Adjustment Shares would be issued to Ventures. The relative consideration set forth in Schedule 1.41 has been derived in part from the fair market values of the respective business lines of USMD, Ventures, MCNT, and Impel as determined by valuations conducted by an independent third party valuation company.

The Schedule 1.4 Adjustments shall be calculated as follows:

(i) to reflect any changes since December 31, 2011 in “Total Subsidiary Level Debt,” “USMD Corporate Level Debt,” “Ventures/UANT Corporate Level Debt,” “Impel Level Debt,” and “MCNT Corporate Level Debt,” as set forth in Columns D, F, G, H, and I, respectively, of Schedule 1.41;

(ii) to reflect any changes since September 30, 2011 in ownership percentages of the assets or investments held by either USMD, Ventures/UANT, Impel, and MCNT, as reflected in Columns J, L, N, and P, respectively, of Schedule 1.41;

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(iii) to reflect on Schedule 1.41 the amount of any “Deferred Payment Obligations” of USMD, Ventures/UANT, Impel, and MCNT as set forth in Cells K62, M62, O62, and Q62, respectively. Such amounts shall be calculated in accordance with the Schedule 1.4 Deferred Payment Obligations as defined in Article IX;

(iv) to reflect the amount of any “Net Working Capital Adjustments” of USMD, Ventures/UANT, Impel, and MCNT in Cells D75 of Schedule 1.42, D68 of Schedule 1.43, D75 of Schedule 1.44, and D75 of Schedule 1.45, respectively; and

(v) to reflect on Schedule 1.41 the amount of any mutually approved capital expenditures (A) since December 31, 2010 relating to fixed assets of the UANT clinical practice and (B) since September 30, 2011 relating to fixed assets or mutually approved capital contributions of USMD, Ventures/UANT, Impel, and MCNT as set forth in Cells K65, M65, O65, and Q65, including without limitation approved capital expenditures for equipment, building or tenant improvements.

(c) For the purposes of computing the adjustments, if any, pursuant to subsection (b) above, no adjustments to the Adjusted Equity Values reflected on Row 69 of Schedule 1.41 shall be made to the extent of any amounts already included in the calculations set forth in Rows 62-65 and Row 67 of Schedule 1.41, and the following provisions shall be applicable:

(i) No later than the later of (i) ninety (90) days following the Closing Date, or (ii) five (5) business days following the final determination of any adjustments to consideration under each of the MCNT Agreement and Impel Agreement, Ventures shall prepare and deliver to Holdings and the USMD Holder Representative a calculation of the Schedule 1.4 Adjustments, based upon its, and MCNT’s and Impel’s financial statements at and as of the Closing Date. Ventures shall provide the USMD Holder Representative, and Holdings shall provide to Ventures, any information and back-up materials reasonably requested by the requesting Party with respect to the Schedule 1.4 Adjustments.

(ii) The USMD Holder Representative shall have thirty (30) days following receipt of Ventures’s calculations of Schedule 1.4 Adjustments to notify Ventures of any dispute of any item contained therein, which notice shall set forth in reasonable detail the basis for such dispute. At any time within such thirty (30)-day period, the USMD Holder Representative shall be entitled to agree with any or all of the items set forth in Ventures’s calculation of the Schedule 1.4 Adjustments.

(iii) If the USMD Holder Representative does not notify Ventures of any such dispute within such thirty (30)-day period, or notifies Ventures of its agreement with Ventures’s calculations, Ventures’s calculations of the Schedule 1.4 Adjustments shall be final and binding on the Parties.

(iv) If the USMD Holder Representative notifies Ventures of any such dispute within such thirty (30)-day period, the Schedule 1.4 Adjustments shall be resolved as follows:

(A) The USMD Holder Representative and Ventures shall jointly determine the extent of any Schedule 1.4 Adjustments as promptly as practicable.

(B) In the event that the USMD Holder Representative and Ventures are unable to agree upon any of the Schedule 1.4 Adjustments, the Parties shall submit such matter to the Dallas, Texas office of Xxxxx Xxxxxxxx LLP (or if such firm is unwilling or unable to serve, another nationally recognizable accounting firm mutually agreed upon by the Parties), who shall make the final determination with respect to the correctness of the proposed Schedule 1.4 Adjustments in light of the terms and provisions of this Agreement, with such determination being final and binding on the Parties.

Notwithstanding anything herein to the contrary, the Schedule 1.4 Adjustments as set forth in subparagraphs (i) through (v) of paragraph 3(b) as they relate to MCNT and Impel shall be determined pursuant to each of the MCNT Agreement and Impel Agreement and shall be final and binding on the Parties hereto for purposes of any adjustments to the consideration made pursuant hereto.

(d) The allocation of the Adjustment Shares in accordance with this Section 1.4 shall be the Parties’ sole and exclusive basis for allocating Holdings Shares as a result of the relative values of the contributions to Holdings made by (i) Ventures (after accounting for the MCNT Merger, the Impel Merger, the UANT

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Merger and the USMD-Ventures Contribution), (ii) the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment, and (iii) the Non-Contributing USMD Holders. Any allocation of the Adjustment Shares in favor, or to detriment, of Ventures, the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment, or the Non-Contributing USMD Holders shall be made in accordance with such Person’s Pro Rata Percentage.

(e) Once the allocation of the Adjustment Shares in accordance with this Section 1.4 has been finally determined, Xxxx X. House, M.D. and Xxxxxxx X. Xxxxxxxx, M.D. shall endorse the certificate representing the Adjustment Shares (or execute a separate stock power transferring such shares) to Ventures, the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment, and the Non-Contributing USMD Holders in accordance with such determination, and Holdings shall deliver the certificate to its transfer agent with instructions to reissue the Adjustment Shares to Ventures, the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment, and the Non-Contributing USMD Holders. In no event shall the reissuance of the Adjustment Shares to Ventures, the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment, and the Non-Contributing USMD Holders occur later than five years following the Closing. Neither Ventures, the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment, the Non-Contributing USMD Holders, Holdings, Xxxx X. House, M.D. nor Xxxxxxx X. Xxxxxxxx shall transfer, pledge, hypothecate or encumber any Adjustment Shares or rights to receive Adjustment Shares except that once the allocation of the Adjustment Shares in accordance with this Section 1.4 has been finally determined, they may transfer and allocate the Adjustment Shares in accordance with and pursuant to this Section 1.4.

(f) During the entire period the Adjustment Shares are held by Xxxx X. House, M.D. and Xxxxxxx X. Xxxxxxxx, M.D., as Nominees for Ventures, the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment, and the Non-Contributing USMD Holders: (i) all dividends paid on any Adjustment Share will be distributed when received by Xxxx X. House, M.D. and Xxxxxxx X. Xxxxxxxx, M.D. to Ventures, the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment, and the Non-Contributing USMD Holders in proportion to the Pro Rata Percentages and (ii) all voting rights of the Adjustment Shares shall be exercisable by Xxxx X. House, M.D. and Xxxxxxx X. Xxxxxxxx, M.D. at the direction of and on behalf of Ventures, the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment, and the applicable Non-Contributing USMD Holders in proportion to the Pro Rata Percentages in the same manner as such shares would be entitled to such voting rights upon the reissuance of the Adjustment Shares to Ventures, the Contributing USMD Holders making contributions described in paragraph 2(b) of this Amendment, and the Non-Contributing USMD Holders under Section 1.4(e).

(g) This Section 3 of this Amendment and Section 1.4 of the Agreement are intended to comply with the requirements set forth in Section 2.02 of Revenue Procedure 84-42, 1984-1 C.B. 521.

4. Options. Section 1.7(b) of the Agreement is amended to read in its entirety as follows:

On the Closing Date, Holdings shall grant to Ventures options to purchase a number of shares of Holdings common stock equal to the number of shares of Holdings common stock that the holders of the USMD Granted Shares are entitled to receive pursuant to Section 1.7(a) above, at an exercise price equal to the quotient of (i) $3.00 divided by (ii) the Conversion Ratio. Such options shall expire five years from the date of issuance under the Holdings Equity Plan and shall be held by Ventures for the benefit of the Class A limited partners.

5. Tax Treatment. Section 11.6 of the Agreement is amended to read as follows:

The parties to this Amendment agree that, for United States federal income tax purposes the Contribution is intended to be, and shall be characterized as, an exchange qualifying under Section 351 of the Internal Revenue Code of 1986, as amended (the “Code”).

6. Issuance of Class B Partnership Interests. The Class B Partnership Interests in Ventures to be issued to the Contributing USMD Holders shall be based upon the relative values of the USMD shares contributed by them to Ventures as compared with the values of Ventures, UANT, MCNT, and Impel, as finally determined pursuant to this Amendment, the MCNT Agreement, and the Impel Agreement.

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7. Additional Definition. “USMD Holder Representative” means Xxxx Xxxxx, M. D.

8. Listing Application. Section 5.6 of the Agreement is amended to read as follows:

Holdings shall, as soon as practicable, prepare and submit to NASDAQ a listing application with respect to the listing on the Nasdaq Capital Market of the Holdings Shares issuable pursuant to the Contribution, and shall use its best efforts to obtain, prior to the Closing, approval for the listing of the Holdings Shares on the Nasdaq Capital Market, or another stock exchange agreed to in writing by the Parties, subject in either case to official notice of issuance.

9. Conditions Precedent to Obligations of USMD.

(a) Section 6.2 of the Agreement is amended to read as follows:

All of the representations and warranties made by Ventures, UANT and Holdings in this Agreement and in all certificates and other documents delivered by Ventures, UANT or Holdings to USMD pursuant hereto, shall have been true and correct in all material respects as of the date hereof, and shall be true and correct in all material respects at the Closing Date, with the same force and effect as if such representations and warranties had been made at and as of the Closing Date, except for changes permitted or contemplated by this Agreement, changes approved in writing by USMD and Holdings or any failure of any such representations and warranties to be true and correct in all material respects at the Closing Date solely as result of the consummation of the Impel Merger and/or the MCNT Merger on the Closing Date.

(b) Section 6.7 of the Agreement is amended to read as follows:

The S-4 Registration Statement shall have been declared effective by the SEC and NASDAQ shall have approved the listing on the Nasdaq Capital Market of the Holdings Shares issuable pursuant to the Contribution or such shares shall have been approved for listing on another stock exchange agreed to in writing by the Parties.

10. Conditions Precedent to Obligations of Ventures and UANT. Section 7.7 of the Agreement is amended to read as follows:

The S-4 Registration Statement shall have been declared effective by the SEC and NASDAQ shall have approved the listing on the Nasdaq Capital Market of the Holdings Shares issuable pursuant to the Contribution or such shares shall have been approved for listing on another stock exchange agreed to in writing by the Parties.

11. Subsequent Transfers of UANT Business Units. Section 8.9(b) of the Agreement is hereby deleted.

12. Survival of Representations, Warranties and Covenants. The first sentence of Section 8.12 of the Agreement is hereby deleted.

13. D&O Coverage. Holdings (or a third party at the direction of Holdings), at Holding’s sole expense, will pay at the Closing an amount sufficient to enable UANT to purchase “tail” coverage for a period of six (6) years following the Closing Date under the directors and officers liability insurance policy of UANT, as in effect on the Closing Date, up to an aggregate amount not to exceed $55,000.

14. New Definitions. The following definitions are added to Article IX of the Agreement:

“Impel” means Impel Management Services, L.L.C., a Texas limited liability Company.

“MCNT” means The Medical Clinic of North Texas, P.A., a Texas Professional Association.

“Schedule 1.4 Deferred Payment Obligations” means, in the case of UANT and Ventures, those certain deferred payments payable to Xxx Xxxxxx, M.D.P.A., Xxxxxx Xxxxxxx, M.D.P.A., Xxxxxx Xxxxxx, M.D.P.A., and Xxxx Xxxxxx, M.D.P.A.

15. Revised Definitions. At Article X, the defined term, “Schedule III Deferred Payment Obligations” shall be deleted. In addition, the definitions of the defined terms below shall be revised so that such terms shall be defined as follows:

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“Conversion Ratio” means the quotient of (a) the number set forth in Cell K72 of Schedule 1.41after the completion of the Schedule 1.41 Adjustments, divided by (b) the number of shares of USMD common stock outstanding immediately prior to the Closing.

“Outside Closing Date” means August 31, 2012.

16. Expenses. Section 8.2 of the Agreement is amended to read as follows:

8.2. Expenses. Except as provided in Section 8.1 and in the second paragraph of this Section 8.2, each Party shall pay its own expenses incurred in connection with this Agreement and the Transactions, whether or not the Agreement or the Transactions are consummated.

Holdings shall pay all filing fees in connection with all pre-transaction notifications required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976, as amended, and the rules and regulations promulgated thereunder, in connection with the Transactions (including, without limitation, the UANT Merger, the MCNT Merger, and the Impel Merger).

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to Contribution and Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

HOLDINGS
USMD Holdings, Inc., a Delaware corporation
By:		/s/ Xxxx Xxxxx, M.D.
Name: Xxxx Xxxxx, M.D.
Title: President
USMD
USMD Inc., a Texas corporation
By:		/s/ Xxxx Xxxxx, M.D.
Name: Xxxx Xxxxx, M.D.
Title: Chairman and Chief Executive Officer
UANT
Urology Associates of North Texas, L.L.P., a Texas limited liability partnership
By:		/s/ Dr. Xxxx XxXxxxx
Name: Dr. Xxxx XxXxxxx
Title: Authorized Partner
By:		/s/ Xx. Xxxxxxx Xxxxxxx
Name: Xx. Xxxxxxx Xxxxxxx
Title: Authorized Partner
By:		/s/ Xx. Xxxxx Xxxxxxxxxx
Name: Xx. Xxxxx Xxxxxxxxxx
Title: Authorized Partner
By:		/s/ Xx. Xxx Xxxxxxxxx
Name: Xx. Xxx Xxxxxxxxx
Title: Authorized Partner

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to Contribution and Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

VENTURES
UANT Ventures, L.L.P., a Texas limited liability partnership
By:		/s/ Dr. Xxxx XxXxxxx
Name: Dr. Xxxx XxXxxxx
Title: Authorized Partner
By:		/s/ Xx. Xxxxxxx Xxxxxxx
Name: Xx. Xxxxxxx Xxxxxxx
Title: Authorized Partner
By:		/s/ Xx. Xxxxx Xxxxxxxxxx
Name: Xx. Xxxxx Xxxxxxxxxx
Title: Authorized Partner
By:		/s/ Xx. Xxx Xxxxxxxxx
Name: Xx. Xxx Xxxxxxxxx
Title: Authorized Partner
JOINED SOLELY FOR THE PURPOSES OF SECTION 3:
/s/ Xxxx X. House, M.D.
Xxxx X. House, M.D.
/s/ Xxxxxxx X. Xxxxxxxx, M.D.
Xxxxxxx X. Xxxxxxxx, M.D.

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Schedule I to Amendment to Contribution and Purchase Agreement

		USMD Common Stock Held				“Contributing USMD Holder”		USMD Shares Contributed to Ventures				USMD Shares Contributed to Holdings				Pro Rata Percentage
Xxxx Xxxxx			5,664,196			Yes			5,664,196								0.0000
H.P. Hezmall			3,664,196			Yes			3,606,211				57,985				0.0684
Xxxxx Xxxxx			3,661,196			Yes			3,603,211				57,985				0.0684
Xxxx Xxxxxxxx			3,655,196			Yes			3,597,211				57,985				0.0684
Xxxxx Xxxxx			1,832,528			Yes			1,774,543				57,985				0.0684
Xxxxxxx Xxxxxxxx			1,714,195			Yes			1,656,210				57,985				0.0684
Xxxxx Xxxxxxxxxx			1,252,584			No			—				1,252,584				1.4769
Xxxxxxx Xxxx			931,005			Yes			873,020				57,985				0.0684
Xxxxxxxxxxx Xxxxxxxx			721,900			Yes			663,915				57,985				0.0684
Xxxx House			540,864			Yes			482,879				57,985				0.0684
Xxxx Xxxxx			446,686			Yes			446,686								0.0000
Xxx Xxxx			330,000			Yes			272,015				57,985				0.0684
Xxxx Xxxxx			284,640			No			—				284,640				0.3356
Xxxxxxx X. Xxxxxxxx			281,276			No			—				281,276				0.3316
Xxxx Profit Sharing Plan			255,164			No			—				255,164				0.3009
Xxxxxxx Xxxxxx			192,150			Yes			192,150								0.0000
Xxx Xxxxxxxxx			191,645			Yes			191,645								0.0000
Xxxx Xxxxx			178,131			Yes			178,131								0.0000
Xxxxxxx Xxxxxxx			154,168			No			—				154,168				0.1818
Xxx Xxxxxxx			150,547			Yes			150,547								0.0000
Xxxxxxx Xxxxxx			87,292			No			—				87,292				0.1029
Xxxxxx Xxxxxxxx			77,593			No			—				77,593				0.0915
Xxx Xxxxxxxxx			65,000			No			—				65,000				0.0766
Xxxxxxxx X. Xxxxx			63,393			Yes			63,393								0.0000
Xxxxx Xxxxx			59,407			No			—				59,407				0.0700
Xxxxxxx XxXxxxxxxx			50,678			No			—				50,678				0.0598
Xxx Xxxxxxxx			50,000			Yes			50,000								0.0000
Xxxxxx X. True			48,495			No			—				48,495				0.0572
Xxxxx X. Xxxx			48,495			No			—				48,495				0.0572
X.X. Xxxxxxx, M.D.			43,487			No			—				43,487				0.0513
Xxxxxx Xxxxx			42,363			Yes			42,363								0.0000
Xxxx Xxxxx			40,467			Yes			40,467								0.0000
Xxxx Xxxxx			38,797			No			—				38,797				0.0457
G. Xxxxx Xxxxxx			35,644			No			—				35,644				0.0420
Xxxxx Xxxxx			35,644			No			—				35,644				0.0420
Xxxxx Xxxx			35,000			No			—				35,000				0.0413
Xxxx Xxxxxxx			35,000			No			—				35,000				0.0413
Ashton Flp			30,000			No			—				30,000				0.0354
Xxxxx Xxxxxxx			29,098			No			—				29,098				0.0343
Xxxxxxx Likker, M.D.			28,990			No			—				28,990				0.0342
Xxxxx Xxxxxxxx			25,000			No			—				25,000				0.0295
Xxxxx Xxxxxx			25,000			No			—				25,000				0.0295
Xxxx X. Xxxxxxx, III			23,763			No			—				23,763				0.0280
Xxxx X. Xxxxxxx			19,399			No			—				19,399				0.0229
Xxxxx X. Xxxxxxx			19,399			No			—				19,399				0.0229
Xxxxx X. Xxxx			19,398			No			—				19,398				0.0229
Xxxxx Xxxxxx			12,000			Yes			12,000								0.0000

Xxxx Xxxxxxx			11,881				No				—				11,881				0.0140
Xxxxxxx Xxxxxx			10,000				No				—				10,000				0.0118
Xxxxx Xxxxxx			10,000				No				—				10,000				0.0118
Xxxx Xxxxxxx			10,000				No				—				10,000				0.0118
Xxxxx Xxxxxxxxx			10,000				No				—				10,000				0.0118
Xxxxx Xxxxxxx			7,072				No				—				7,072				0.0083
Xxxxxx Xxxx			5,365				No				—				5,365				0.0063
Xxxx Xxxxxxxx			5,000				No				—				5,000				0.0059
Xxx Xxxxxx			5,000				No				—				5,000				0.0059
XX Xxxxxxxxx			5,000				No				—				5,000				0.0059
Xxxx Xxxxx			5,000				No				—				5,000				0.0059
Xxxxx Xxxx			5,000				No				—				5,000				0.0059
Xx Xxxxxx			5,000				No				—				5,000				0.0059
Xxxx Xxxxxxx			5,000				No				—				5,000				0.0059
Xxxxxxxx Xxxxxxxxx			5,000				No				—				5,000				0.0059
Xxxxx Xxxxx			5,000				No				—				5,000				0.0059
Xxxx Xxxxxxxxx			4,000				No				—				4,000				0.0047
Xxxxx Xxx			3,564				No				—				3,564				0.0042
Xxxxx Xxxxxx			3,255				No				—				3,255				0.0038
Xxxxxxxx Xxxxxxxx Xxxxxxxx, M.D., P.A.			57,985				No				—				57,985				0.0684
Xxxxxxxx X. Xxxxx, M.D., P.A.			57,985				No								57,985				0.0684
Xxxxx X. Xxxx, M.D., P.A.			57,985				No				—				57,985				0.0684
Xxxxxxx X. Xxxxxxxxxx, M.D., P.A.			57,985				No				—				57,985				0.0684
Xxxxxxx X. Xxxxx-Xxxxxx, M.D., P.A.			34,789				No				—				34,789				0.0410
Xxxxxx X. Xxxxx, M.D., P.A.			57,985				No								57,985				0.0684
Xxxxx Xxxxxx-Xxxxx M.D.P.A.			50,251				No				—				50,251				0.0592
Xxxx Xxx-An Chan, M.D., P.A.			57,985				No				—				57,985				0.0684
Xxxxx Xxxxxx M.D., P.A.			57,985				No				—				57,985				0.0684
M. Xxxxxxx Xxxxxxx, M.D., P.A.			57,985				No								57,985				0.0684
Xxxxx X Xxxxxxx MD PA			57,985				No				—				57,985				0.0684
Xxxxxx X. Xxxxxxx, M.D., P.A.			57,985				No				—				57,985				0.0684
Xxxxxxx X. Xxxx, M.D., F.A.C.S., P.A.			57,985				No				—				57,985				0.0684
S. Xxxxxx Xxxxxx, MD PA			50,251				No				—				50,251				0.0592
Xxxxxxx X. Xxxxxx, M.D., P.A.			57,985				No				—				57,985				0.0684
Xxx X. Xxxxxxxxx, M.D., P.A.			57,985				No				—				57,985				0.0684
Xxxx X. House, M.D., P.A.			57,985				No								57,985				0.0684
Xxxx X. Xxxxxxxxx, MD, PA			57,985				No				—				57,985				0.0684
J. Xxxxxx Xxxxxxx, M.D., P.A.			57,985				No				—				57,985				0.0684
E. Xxxx Xxxxxx, M.D., P.A.			57,985				No				—				57,985				0.0684
Xxxx X. Xxxxx, M.D., P.A.			57,985				No								57,985				0.0684
Xxxxxx X. Xxx MD PA			57,985				No				—				57,985				0.0684
Cleburne Urology Associates, P.A. (Xxxxxx Xxxxxx)			57,985				No				—				57,985				0.0684
Xxxx Xxxx XxXxxxx, M.D., P.A.			57,985				No				—				57,985				0.0684
X.X. Xxxxx III, M.D., P.A.			57,985				No				—				57,985				0.0684

Xxxx X. Xxxxxx, M.D., P.A.			57,985				No				—				57,985				0.0684
Xxxxxxxxxxx Xxxx, M.D., P.A.			57,985				No				—				57,985				0.0684
Xxxx Xxxxx, M.D., P.A.			57,985				No								57,985				0.0684
V. Xxxx Xxxxx, M.D., P.A.			57,985				No								57,985				0.0684
Xxxx X. Xxxxxx, M.D., P.A.			57,985				No				—				57,985				0.0684
Xxxxxxx X. Xxxx, P.A.			57,985				No				—				57,985				0.0684
Xxxxx X. Xxxxxxxxx, M.D., P.A.			57,985				No								57,985				0.0684
Xxxxxx X Xxxxxxx M.D.P.A.			57,985				No				—				57,985				0.0684
Xxxxxxx X. Xxxxxxx, M.D., P.A.			57,985				No				—				57,985				0.0684
Xxxxx X. Xxxxxxxx, M.D., P.A.			57,985				No				—				57,985				0.0684
Xxx Xxxxxxxx, M.D., P.A.			57,985				No				—				57,985				0.0684
Xxxxx-Xxxxxxx Tchetgen, M.D., P.A.			57,985				No				—				57,985				0.0684
Xxxxx X Xxxxxxx M.D., P.A.			57,985				No				—				57,985				0.0684
Xxxxxx X. Xxxxxxxx, M.D., P.A.			57,985				No				—				57,985				0.0684
Xxxxx X. Xxxxxx, M.D., P.A.			57,985				No								57,985				0.0684
Xxxxx X. Xxxxxxxxxx M.D., P.A			57,985				No				—				57,985				0.0684
Xxxxx X. Xxxx, M.D., P.A.			57,985				No				—				57,985				0.0684
			29,707,912								23,560,793				6,147,119				7.2478
Ventures																			92.7522

Schedule 1.41

		A		B		C				D				E				F				G				H				I				J				K				L				M				N				O				P				Q
		Entity				Total Enterprise Value				Total Subsidiary Level Debt (+/-  Net working capital excess (deficit)				Total Enterpise Value Less Subsidiary Level Debt				USMD Corporate Level Debt				Ventures/ UANT Corporate Level Debt				Impel Corporate Level Debt				MCNT Corporate Level Debt				USMD Enterprise Value								UANT Enterpise Value								Impel Enterprise Value								MCNT Enterpise Value
																																		% Own				$ Value				% Own				$ Value				% Own				$ Value				% Own				$ Value
5
6		USMD
7				USMD Arlington			165,280,000				(40,956,000)				124,324,000																				5.00%				6,216,200				23.4368%				29,137,567
8				USMD FW Hospital			49,000,000				(17,529,000)				31,471,000																				20.00%				6,294,200				10.8565%				3,416,649
9
10				USMD Hospital Division			31,880,000								31,880,000																				100.00%				31,880,000
11				USMD Cancer Division			27,450,000								27,450,000																				100.00%				27,450,000
12				Willowbrook Cancer			10,870,000				0				10,870,000																				0.00%				0
13
14				USMD Litho Division
15				Management			5,550,000								5,550,000																				100.00%				5,550,000
16				Minority Partnership Interests			9,920,000				(117,000)				9,803,000				(7,220,000)																*Varies				9,803,000
17
18				USMD Inc Holding Company Debt															(730,000)
19
20		Ventures
21				UANT
22				Cancer			46,290,000								46,290,000								(5,172,000)																				100%				46,290,000
23				Imaging			4,730,000								4,730,000								(291,000)																				100%				4,730,000
24				Lab			7,890,000								7,890,000								(60,000)																				100%				7,890,000
25				Research			880,000								880,000																												100%				880,000
26				Practice			5,370,000								5,370,000								(7,907,000)																				100%				5,370,000
27
28				UANT Owned:
29				MetroStone Management			9,160,000								9,160,000																												88.5472%				8,110,924
30				Xxxxxx Xxxxx Management			9,030,000								9,030,000																												31.4453%				2,839,514
00				Xxxxx Xxxxx Stone Management			5,580,000				(90,000)				5,490,000																												30.00%				1,647,000
32				Waxahachie Surgery Center																																							4.51%				41,000
33				US Urology																																							0.00%				0
34				Linked Urology Research Network																																							0.00%				0
35
36				UANT Ventures
37				Baylor Carrolton																																							0.00%				0
00				Xxxxx Xxxxx Hospital																																							0.88%				180,000
39				Neo—Alliance																																							0.00%				0
40
41				UANT Ventures (Corporate Debt)																			(560,668)
42				UANT Lithotripsy (Corporate Debt)																			(561,000)
43
44		Impel
45				Impel Management Services, L.L.C.			6,562,000								6,562,000																																				100%				6,562,000
46				Impel Consulting Experts			3,653,000								3,653,000																																				100%				3,653,000
47				Impel (Corporate Debt)																							(313,163)
48
49		MCNT
50				Clinical Lab (TBD by VMG)											0																																												100%				0
51				Imaging (TBD by VMG)											0																																												100%				0
52				Other (TBD by VMG)											0																																												100%				0
53				Other (TBD by VMG)											0																																												100%				0
54				Other (TBD by VMG)											0																																												100%				0
55				Total MCNT (Per HCI)			57,300,000								57,300,000																																												100%				57,300,000
56				MCNT (Corp Debt & Deferred Comp Plans)																											(13,472,086)
57
58				Total			456,395,000				(58,692,000)				397,703,000				(7,950,000)				(14,551,668)				(313,163)				(13,472,086)								87,193,400								110,532,654								10,215,000								57,300,000
59
60		Total Gross Enterprise Value																																					87,193,400								110,532,654								10,215,000								57,300,000
61		Adjustments:
62				Deferred Payout Obligations (as defined in Section 1.4(c)(iii) of the     Agreement)																																			0																								—
63				Net Working Capital Adjustment (as defined in Section 1.4(c)(iv) of     the Agreement)																																			6,142,131								727,993								1,861,966								(854,489)
64				Surplus Assets (subset of working capital adjustment)																																			0								—								1,460,624								2,530,141
65				Approved Capital Expenditures (as defined in Section 1.4(c)(v) of the     Agreement)																																			0								2,941,982								0
66		Adjusted Net Enterprise Value (Purchase Price)																																					93,335,531								114,202,629								13,537,590								58,975,662
67				Less: Indebtedness (columns F,G, H, I)																																			(7,950,000)								(14,551,668)								(313,163)								(13,472,086)
68
69		Value of Contribution to Holdings																																					85,385,531								99,650,961								13,224,427								45,503,566
70
71		Relative Value of Contribution to Holdings																																					35.027880%								40.880016%								5.425083%								18.667020%
72		Number of Shares of Holdings Stock																																					3,502,788								4,088,002								542,508								1,866,702

Schedule 1.41

Schedule 1.42

USMD Net Working Capital Adjustments

		A		B		C				D				E
3		Accounts		Comments		USMD Inc Consolidated Management Company				USMD Inc Consolidated Management Company
4						Sept 30 2011				Acquisition Date
5		Cash					8,983,693
6		Management Fee AR (Hospital & Litho & CTC)					1,744,118
7		Allowance for Doubtful Accounts
8		Management Fee AR (CTC)
9		Federal Income Tax Refund
10		Deferred Tax Asset					177,245
11		AR Other Net of Allowance					23,575
12		Prepaids and Other Current Assets					340,979
13		Total Current Assets		Ties to G/L			11,269,610				—
14
15		Accounts Payable					120,871
16		Related Party Payable					5,940
17
18
19
20		Total Intercompany Receivable from LP					126,811
21
22		Intercompany Payable/(Receivable):					(294,493	)
23		Due to Matrx
24		Due From USL
25		Due From Admin Svcs		Portion is attributable to Arl/FW/Litho LP
26		Due from CTC
27		Due to USMD Inc
28		Due to Admin
29		Total Intercompany		Subject to Reconciliation of LP related Exps			(294,493	)
30
31		Accrued Interest Payable		TBD whether included or excluded			—
32		Accrued Expenses		Subject to review for completeness			3,287,177
33
34		Accrued Franchise Tax
35		Federal Taxes Payable
36		State Taxes Payable
37		Total Accrued Liabilities					3,287,177
38
		Accrued Payroll Liabilities:
40		Accrued Payroll					1,187,392
41		Accrued PTO
42		Payroll Related Liabilities
43		Total Accrued Payroll					1,187,392				—
44
45		Current Portion of Debt		Excluded from Calculation
46		Total Current Liabilities		Ties to G/L			4,306,887				—
47
48		Net Working Capital					6,962,723				—				A
49
50		USMD Inc Net Working Capital Settlement Target
51
52						USMD Inc
53						9/30/11 YTD				Annualized
54
55		Management Fee Revenue					13,473,381				17,964,508
56		Arlington Staff Pass Through Revenue					4,143,438				5,524,584
57		Fort Worth Staff Pass Through Revenue					1,707,193				2,276,257
58		CTC Staff Pass Through Revenue					2,057,133				2,742,844
59		Physicists Revenue					2,307,241				3,076,321
60		Salary Processing Fee Revenue					29,420				39,227
61		Total Net Revenue (not incl. interest)					23,717,806				31,623,741
62
63		Less:
64
65		Arlington Staff Pass Through Revenue		Reimbursement of Cost (Contra Expense)			4,143,438				5,524,584
66		Fort Worth Staff Pass Through Revenue		Reimbursement of Cost (Contra Expense)			1,707,193				2,276,257
67		CTC Staff Pass Through Revenue		Reimbursement of Cost (Contra Expense)			2,057,133				2,742,844
68		Salary Processing Fee Revenue		Reimbursement of Cost (Contra Expense)			29,420				39,227
69		Total Cost Reimbursement (I.E Contra Expense)					7,937,184				10,582,912
70
71		Adjusted Net Revenue					15,780,622				21,040,829
72
73		Net Working Capital Target = Net Revenue @ 3.9%					615,444				820,592				B
74
75		Actual Net Working Capital Adjustment to Purchase Price as of Acquisition Date									6,142,131				A-B

Schedule 1.42

Schedule 1.43

UANT Net Working Capital Adjustments

		A		B		C				D		E		F				G				H
1 2 3		Accounts		Comments		UANT & UANT Ventures Excluding Clinic				UANT & UANT Ventures Excluding Clinic				UANT Clinic & Video				UANT Clinic & Video
4						Sept 30 2011				Acquisition Date				Sept 30 2011				Acquisition Date
5		Cash					2,935,213
6		Net Patient AR		Subject to GAAP Collectibility Assessment			3,634,477
7		Allowance for Doubtful Accounts
8		Deposits
9
10
11		AR Other					537,178
12		Prepaids and Other Current Assets					629,789
13		Total Current Assets		Ties to G/L			7,736,657			—					—				—
14
15		Accounts Payable					(10,271	)
16
17		Accrued Interest Payable		Not included in the calculation
18		Accrued Expenses		Subject to review for completeness			1,425,409
19		Accrued Bonus		Subject to review for completeness/Achievablity
20		Accrued Franchise Tax
21		Partner Withdraw Payable					113,898
22		State Taxes Payable
23		Total Accrued Liabilities					1,539,307			—					—				—
24
25		Accrued Payroll Liabilities:
26		Accrued Payroll					1,865,283
27		Accrued PTO
28		Payroll Related Liabilities
29		Total Accrued Payroll					1,865,283			—					—				—
30
31		Current Portion of Debt		Excluded from Calculation
32		Total Current Liabilities		Ties to G/L			3,394,319			—					—				—
33
34		Net Working Capital					4,342,338			—		A			—				—				X
35
36		UANT L.P.& UANT Ventures L.L.C. Inc Net Working Capital Settlement Target
37
38						UANT & UANT Ventures
39										9/30/11 YTD
40		UANT CTC Revenue								12,174,806
41		UANT Imaging Revenue								1,151,459
42		UANT Lab Revenue								2,643,607
43		UANT Research Revenue								475,982
46
47		Total Net Revenue (not incl. interest)					—			16,445,854
48
49		Less:
54
55		Total Adjustments					—			—
56
57		Adjusted Net Revenue Annualized					—			21,927,805
58
59		Net Working Capital Target = (Net Rev @ 3.9% )					—			855,184		B
60
61		UANT Clinic AR from VMG Report																	2,849,700
62		UANT Inventory from VMG Report																	152,000
63		UANT Accrued Expenses from VMG Report																	(239,000	)
64		Adjustment for Video NWC TBD by VMG (This number will be provided at later date, s/be immaterial)																	(3,540	)
65		Net Working Capital Target = (Predetermined Target Established by VMG)																	2,759,160				Y
66				Working Capital Adjustment of Columns D and G						3,487,153		A-B							(2,759,160	)			X-Y
67
68		Actual Net Working Capital Adjustment to Purchase Price as of Acquisition Date								727,993		(Cell D66 + G66)

Schedule 1.43

Schedule 1.44

Impel Net Working Capital Adjustment

		A		B		C				D				E
3		Accounts		Comments		Impel
4						Sept 30 2011				Acquisition Date
5		Cash					2,081,358				TBD
6											TBD
7											TBD
8											TBD
9											TBD
10		Total Cash					2,081,358
11
12											TBD
13		Mgmt Fee AR					442,102				TBD
14		AR					10,891				TBD
15		AR Other					9,982				TBD
16		Prepaid					86,806				TBD
17		Intercompany AR					230,956				TBD
18		Note Receivable from MCNT		Applied to surplus asset schedules to be consistent with HCI							TBD
19		Deposits					66,450
20		Cash Surrender Value of Insurance		Applied to surplus asset schedules to be consistent with HCI
21		Other current assets
22		Total Current Assets					2,928,545				—
23
24		Accounts Payable					2,642				TBD
25
26		Accrued current liabilities					173,709
27		Accrued Interest Payable									TBD
28		Franchise tax (margin tax)					16,225				TBD
29		Accrued Payroll (A comp)		PTO liability is not adjusted monthly			600,076				TBD
30		Accrued 401k					1,092				TBD
31		Federal Taxes Payable		Not adjusted monthly							TBD
32		Deferred Revenue					26,610				TBD
33		Total Accrued Liabilities					817,712
34
35
36
37
38
39
40
41
42
43
44											TBD
45											TBD
46		Total Current Liabilities					820,354
47
48		Net Working Capital					2,108,191				—			A
49				Impel Net Working Capital Settlement Target
50
51						Impel & Ice
52						YTD				Annualized
53		Impel revenue					4,735,100				6,313,466
54		ICE revenue									—
55		Total Net Revenue (not incl. interest)					4,735,100				6,313,466
56
57
58
59
60
61
62
63
64
65
66
67		Less:
68
69							—				—
70
71		Adjusted Net Revenue					4,735,100				6,313,466
72
73		Net Working Capital Target = Net Revenue @ 3.9% per HCI analysis					184,669				246,225			B
74
75		Net Working Capital Adjustment to Purchase Price									1,861,966			A-B

Schedule 1.44

Schedule 1.45

MCNT Net Working Capital Adjustments

		A		B		C				D				E
3		Accounts		Comments		MCNT
4						Sep 30 2011				Acquisition Date
5		Cash					864,755				TBD
6											TBD
7		Cash Restricted for LOC collateral					3,000,000				TBD
8											TBD
9		Total Cash					3,864,755
10
11
12		Other AR					(173,909	)			XXX
00		Xxx Xxxxxxx XX					8,440,748				TBD
14		Inventory		Mostly pharmacy at 45+ clinics			528,407				TBD
15		Prepaids					359,892				TBD
16		Intercompany Receivable from Impel									TBD
17		Deposits					68,198				TBD
18		Deferred Tax Asset		MCNT requested that DTA be excluded (USMD agreed if uant/usmd is consistent)
19		Total Current Assets					13,088,091				—
20
21		Accounts Payable					1,928,223				TBD
22		Intercompany payable to Impel					200,938
23		Accrued Interest Payable									TBD
24		Accrued Expenses					1,479,801				TBD
25		Accrued Payroll		PTO liability is not adjusted monthly			5,942,535				TBD
26		FIT Payable					34,087
27		401k payable					87,102
28		Accrued Franchise Tax					108,967				TBD
29		Federal Taxes Payable					—				TBD
30
31
32
33
34
35
36
37
38
39
40
41		Deferred Rent		Excluded from calc ok if consistent with UANT/USMD							TBD
42		Total Accrued Liabilities					7,652,492
43
44		Loans to shareholders					—				XXX
00		XXX									XXX
46		Total Current Liabilities					9,781,653
47
48		Net Working Capital					3,306,438				—				A
49
50				Net Working Capital Settlement Target
51
52						Sep 30 2011
53						YTD				Annualized
54		Professional Fee Revenue									—
55		Ancillary Revenue									—
56		Total Net Revenue (not incl. interest)					80,017,821				106,690,428
57
58		Less:
59
60
61
62
63
64
65
66
67		Total Cost Reimbursement (I.E Contra Expense)					—				—
68
69		Adjusted Net Revenue					80,017,821				106,690,428
70
71		Net Working Capital Target = Net Revenue @ 3.9%					3,120,695				4,160,927
72
73		Net Working Capital Target Subject to update from actual LOC balance									4,160,927				B
74
75		Net Working Capital Adjustment to Purchase Price									(854,489	)			A-B

16