(SOKOLOV SOKOLOV BURGESS LOGO) [g92232g9223200.gif]

Healthcare Management Consulting • Project Development • Ventures

February 5, 2004

Mr. John T. Casey
President and CEO
MedCath Corporation
10720 Sikes Place, Suite 300
Charlotte, NC 28277

Re:  Addendum to Engagement Letter dated 10/30/03

Dear John:

You recently requested that SSB provide you with an Addendum letter to our
Engagement Letter dated October 30, 2003. You have asked SSB to furnish
additional services related to several projects that go beyond the scope of the
original Engagement. Specifically, you have asked for our help in the following
areas:

1.   Additional strategic planning activities, including one or more additional
planning sessions; my attendance at the February Board meeting to help present
and defend the recommendations developed over the past three months by your
management team (with our assistance); and possible assistance in developing
slides and other materials for the Board meeting.   2.   Assistance with
organizing and facilitating a retreat of hand-picked hospital industry leaders
and members of MedCath’s senior management team, to be held this spring in
Scottsdale. The purpose of the retreat is to explain MedCath’s new strategy and
get feedback and input from the attendees.   3.   A joint planning effort
involving MedCath and the Arizona Heart Institute, addressing win/win
opportunities for the two organizations; transition planning for AHI; etc.

Chairman: Jacque J. Sokolov, MD
5685 N. Scottsdale Rd., Ste E-100, Scottsdale, AZ 85250
Tel: 480-707-4521 - JJSPSO@aol.com

             
President: Mike Treacy
  Managing Consultant: Chris Schaefer   Managing Consultant: Ted Schwab   Sr.
Admin Consultant: Martha Valverde
1287 Tressler Drive
  8006 North Bridge Way   16 A - Dudley Avenue   15 Venezia
Fort Washington, PA 19034
  Maumee, Ohio 43537   Venice, California 90291   Newport Coast, CA
Tel: 215-542-2412
  Tel: 419-865-1948   Tel: 310-401-0068   Tel: 562-595-9595 Ext: 8
miketreacy@att.net
  adbeckcons@worldnet.att.net   tjschwab@earthlink.net   hcca@pacbell.net

 

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Addendum to MedCath Engagement Letter
February 5, 2004
Page 2

The purpose of this Addendum is to address the first two items. The third item
will be addressed in a separate “joint” Engagement Letter addressed to you and
Ted Diethrich, MD.

Addendum Terms

Additional Strategic Planning Activities

For this category of consulting services, we discussed the following guidelines:

•   For additional planning sessions along the lines of the four that have
already taken place (and that were contemplated by the original Engagement
Letter), our fee arrangement will be the same as described in that
letter—$12,500 per session, which covers preparation, attendance at the session,
and documentation of next steps, assignments, etc.   •   For other activities,
we will charge on a time and materials basis. For this purpose, we will use
hourly consulting rates consistent with our original Engagement Letter. These
hourly rates range from $95 for analyst support to $350 for Mike Treacy to $495
for me.

Leadership Retreat

For the leadership retreat, we will charge on a time and materials basis. Hourly
rates for people who could potentially be involved in this activity include $75
for Sue Pearce (administrative assistant), $95 for analyst support, $350 for
Mike Treacy, and $495 for myself.

Once we get a more defined plan for the retreat, including a more precise
indication of the role that you wish SSB to play, and the resources you wish to
draw on from SSB, we can provide you with a budget estimate encompassing all
activities for the retreat.

Other Terms

All other terms are the same as those set forth in the October 30, 2003,
Engagement Letter.

 

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Addendum to MedCath Engagement Letter
February 5, 2004
Page 3

Closing

If you agree to the terms of this Addendum, please sign both enclosed copies and
return one to me as soon as possible.

On behalf of SSB, let me thank you for this opportunity to continue our work
with MedCath. We have greatly enjoyed the strategic planning project and are
looking forward to the additional activities outlined in this letter.

Sincerely,

SOKOLOV, SOKOLOV, BURGESS

-s- Jacque J. Sokolov [g92232g9223201.gif]

By: Jacque J. Sokolov, MD
Chairman

The undersigned agrees to the engagement of Sokolov, Sokolov, Burgess according
to the terms described in this Engagement Letter.

    MEDCATH CORPORATION

             
By:
  /s/ John T. Casey

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  Date:   4/19/04

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  John T. Casey        

  President and CEO