Exhibit 10.1
CONSULTING AGREEMENT
     This Consulting Agreement (the “Agreement”) is entered into as of the 4th
day of August, 2006 (the “Effective Date”), by and between MEDCATH INCORPORATED,
a Delaware corporation (“MedCath”), and SSB SOLUTIONS (“Consultant”).
R E C I T A L S
     A. MedCath desires to retain Consultant as a consultant to MedCath;
     B. Consultant is willing to provide Consulting Services (defined below) to
MedCath as requested by MedCath and agreed upon by Consultant from time to time;
and
     C. The parties desire for Consultant to provide Consulting Services in
accordance with the terms and conditions set forth herein;
A G R E E M E N T
     NOW, THEREFORE, in consideration of the foregoing recitals and the promises
set forth herein, the parties hereto agree as follows:

1   RETENTION OF CONSULTANT.

     MedCath hereby retains Consultant to provide the Consulting Services and
Consultant hereby accepts and agrees to perform such Consulting Services
pursuant to the terms and conditions of this Agreement. Consultant shall
coordinate the performance of his Consulting Services with MedCath’s Chief
Executive Officer (the “CEO”) or other representatives as may be designated by
the CEO from time to time. Since a principal owner and an officer of Consultant,
Jacque J. Sokolov, M.D. (“Dr. Sokolov”) is also a director of MedCath, the
parties acknowledge that any compensation due hereunder is for Consulting
Services and not for any services which Dr. Sokolov may provide to MedCath in
his capacity as a member of the Board of Directors.

2.   OBLIGATIONS OF CONSULTANT.

     2.1 Consulting Services. Consultant shall perform services based upon the
following guidelines (the “Consulting Services”), which may be amended from time
to time upon the mutual written consent of MedCath and Consultant:
     (a) Each consulting assignment shall be proposed by the CEO and agreed upon
by Consultant at which time the CEO and Consultant shall agree the scope of the
assignment, the amount of Consultant’s time needed to complete the work, the
completion date, the location or MedCath facility on which the assignment is
focused and other relevant information;

 

--------------------------------------------------------------------------------

 

     (b) Since Dr. Sokolov is also a member of the Board of Directors of MedCath
Corporation, Consultant will inform other individuals or parties involved in
each assignment that Dr. Sokolov and Consultant are working in the capacity of
an independent consultant, and not in the capacity of a member of the Board of
Directors of MedCath Corporation;
     (c) In order to avoid conflicts of interest, Consultant will disclose to
the CEO if Consultant or any of its affiliates has or is seeking a business
relationship with any third party that might be involved in or be the subject of
any of the Consulting Services if MedCath or any of its affiliates is also
negotiating or seeking to enter into a relationship with such third party, in
which event Consultant shall not perform services under this Agreement for
MedCath or its affiliates.
     (d) Consultant will also first disclose to the CEO if Consultant or any of
its affiliates desires to provide services to, or to seek a business
relationship with, any third party that has a pre-existing relationship or
agreement or with MedCath or any of its affiliates. In such an event, only if
Consultant obtains CEO’s prior written consent, may Consultant enter into a
relationship or agreement with such third party, in which event such consulting
relationship shall be solely between Consultant and such third party who shall
be responsible for the payment of any fees due to Consultant. Consultant will
inform other individuals or parties involved in such arrangements that he is
working in the capacity of an independent consultant, and not in the capacity of
a member of the Board of Directors of MedCath Corporation. MedCath and its
affiliates shall have no liability or responsibility for any consulting work or
other relationship between Consultant and any other such third parties.

3   COMPENSATION.

     3.1 Fees. As compensation for the Consulting Services provided under this
Agreement, MedCath shall pay Consultant an hourly rate of $575.00 which amount
shall be paid for assignments approved hereunder. Consultant shall submit an
invoice each month accompanied by documentation which evidences the applicable
assignment, the time spent and description of duties performed by Consultant
during the month for which compensation is to be paid. All travel time will be
at the rate of $282.50 per hour and travel time shall not exceed more than 5
hours for each requested travel segment although most travel segments will be 2
to 4 hours. MedCath shall pay Consultant within thirty (30) days after receipt
and reasonable approval of each invoice by the CEO. Such invoices thereafter
shall be reviewed by the Audit Committee.
     3.2 Expenses. MedCath shall reimburse Consultant for his direct
out-of-pocket expenses reasonably incurred in connection with Consultant’s
performance of the Consulting Services, including reasonable travel expenses
based upon the travel and reimbursement policies and practices applicable to
MedCath’s employees.

2

--------------------------------------------------------------------------------

 

     3.3 Income and Employment Taxes. Consultant shall be solely responsible for
payments and reporting of all taxes on compensation in whatever form paid
hereunder, in accordance with the requirements of applicable law.

4   TERM AND TERMINATION.

     4.1 Term. This Agreement shall continue from month to month until
terminated as provided in Section 4.2 below, the term of this Agreement (the
“Term”).
     4.2 Termination.
     (a) This Agreement shall be terminated as follows:
     (i) By either party by written notice to the other party of a breach by
such party of any material provisions of this Agreement which breach is not
cured within 15 days of written notice thereof; or
     (ii) At any time without cause upon thirty (30) days prior written notice
to the other party hereto.
     (b) Termination of this Agreement shall not release or discharge either
party from any obligation, debt or liability which shall have previously accrued
and remain to be performed on or after the date of termination, including but
not limited to payment of fees due to Consultant for work performed prior to the
effective date of termination.

5   NON-DISCLOSURE, NEW DEVELOPMENTS AND NON-SOLICITATION.

     5.1 Non-Disclosure. The Consultant acknowledges and agrees that the
information provided to the Consultant both before and after the Effective Date
by MedCath or any of its affiliated hospitals, facilities, clinics, medical
practices or any of their officers, directors or investors (individually, an
“Affiliate” and collectively, the “Affiliates”) including, without limitation,
agreements governing Affiliates, the MedCath business model, the ownership
structure of MedCath or any Affiliate, all patient information, the terms of
this Agreement, all policies and procedures of MedCath or any of its Affiliates,
information relating to the medical, clinical and administrative operations of
any MedCath facility, all MedCath financial information, MedCath’s strategic,
business and marketing plans, credentialing information, utilization
information, all plans and designs for any MedCath facility, terms of any
provider agreements, terms of any facility agreements, relationships with
vendors, and terms of other agreements to which MedCath is a party, the identity
of all investors in MedCath or any of its Affiliates, all records, files,
reports and documents pertaining to services rendered by Consultant hereunder
shall constitute “Confidential Information” and shall remain the property of
MedCath. During the term of this Agreement and at all times thereafter, the
Consultant shall not use for his own benefit nor allow to be used for the
benefit of any other party, directly or indirectly, any of the Confidential
Information and shall keep all such information confidential and shall not
disclose it to any other party other than at the direction of MedCath. The
Consultant acknowledges that the Confidential Information is unique and
proprietary to MedCath and provides a significant competitive

3

--------------------------------------------------------------------------------

 

advantage to MedCath which would be lost if the Consultant does not fulfill his
obligations hereunder. The restrictions of this Section shall not apply to
information which (i) is generally available to the public other than as a
result of a breach by Consultant of the confidentiality provisions contained
herein, (ii) becomes available on a non-confidential basis from a source other
than Consultant or MedCath, or (iii) which is required to be disclosed by law or
pursuant to court order.
     If Consultant desires to obtain any Confidential Information or any
Development (as defined below) and/or to use it or any for any purpose other
than for the benefit of MedCath, Consultant shall make a request therefore to
the CEO whose written consent may be given or withheld in his discretion.
     5.2 New Developments. Consultant agrees that any and all developments and
work product created by Consultant in the course of Consultant’s performance
under this Agreement or arising from the performance by Consultant under this
Agreement, including but not limited to methods of doing business, transaction
structures, terms of agreements, patentable inventions and any material which
may be protected by copyright, trademark, service mark, or other intellectual
property protection (hereinafter a “Development” or if more than one, the
“Developments”) shall be the exclusive property of MedCath, without any
obligation of payment to Consultant. Consultant shall not use any such
Developments other than for the benefit of MedCath and other than at the
MedCath’s written direction.
     5.3 Non-Solicitation of Employees. During the term of this Agreement and
for two (2) years after the termination hereof for any reason, without the
consent of the other party hereto, neither party shall, and shall not permit its
Affiliates to solicit for hire, or to hire, as an employee any individual who
was employed by either a party hereto or by one of its Affiliates during the
term of this Agreement unless such individual’s employment was first terminated
by a party hereto.
     5.4 Remedies. If there is a breach or threatened breach of the provisions
of this Section 5 of this Agreement, in addition to other remedies at law or
equity, the non-breaching party shall be entitled to injunctive relief. The
parties desire and intend that the provisions of this Section 5 shall be
enforced to the fullest extent permissible under the law and public policies
applied, but the unenforceability or modification of any particular paragraph,
subparagraph, sentence, clause, phrase, word, or figure shall not be deemed to
render unenforceable the remainder of this Section 5. Should any such paragraph,
subparagraph, sentence, clause, phrase, word, or figure be adjudicated to be
wholly invalid or unenforceable, a court with applicable authority is hereby
authorized to “blue pencil” or modify this Section 5 or any portion hereof so
that the balance of this Section 5 shall thereupon be modified in order to
render the same valid and enforceable and the unenforceable portion of this
Section 5 shall be deemed to have been deleted from this Agreement.

6   ACCESS TO BOOKS AND INFORMATION.

     Consultant shall make this Agreement and the books, documents and records
pertaining to Consulting Services provided under this Agreement available to the
Secretary of Health and

4

--------------------------------------------------------------------------------

 

Human Services, the Comptroller General, or their duly authorized
representatives as required by law for four (4) years after the termination of
this Agreement.

7   MISCELLANEOUS.

     7.1 No Conflict; Compliance with Laws. Consultant represents that he is not
subject to any pre-existing obligation that would conflict with the terms of
this Agreement or restrict or prevent Consultant from performing his obligations
hereunder. Consultant shall perform his duties under this Agreement in
accordance with (a) all applicable federal and state statutes and regulations
and (b) all applicable MedCath policies, procedures and directives as may be in
effect from time to time.
     7.2 Independent Contractor. It is mutually understood that Consultant will
perform his duties and obligations hereunder as an independent contractor and
not as a partner, joint venture, or employee of MedCath.
     7.3 Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of North Carolina without regard to its
conflict of laws principles.
     7.4 Severability. If any provision of this Agreement shall be declared
invalid or illegal for any reason whatsoever, then notwithstanding such
invalidity or illegality, the remaining terms and provisions of this Agreement
shall remain in full force and effect in the same manner as if the invalid or
illegal provision had not been contained herein.
     7.5 Entire Agreement and Amendment. This Agreement contains all of the
terms and conditions agreed upon by the parties with respect to the subject
matter hereof. No other understanding regarding the subject matter of this
Agreement shall be deemed to exist or to bind either party. No alteration or
modification of this Agreement, including the exhibits attached hereto, shall be
valid unless made in writing and executed by each of the parties hereto.
     7.6 Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all of the parties had signed the same
document. Such executions may be transmitted to the parties by facsimile and
such facsimile execution shall have the full force and effect of an original
signature. All fully executed counterparts, whether original executions or
facsimile executions or a combination, shall be construed together and shall
constitute one and the same agreement.
     7.7 Assignment; Binding Effect. Consultant shall not assign any rights or
delegate any duties under this Agreement without the prior written consent of
MedCath. Any unauthorized attempted assignment by Consultant shall be null and
void and of no force or effect. MedCath shall have the right to assign any
rights or delegate any duties under the Agreement upon written notice to
Consultant, to any party controlled by, controlling, or under common ownership
with MedCath. This Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective successors and representatives. Any
assignment

5

--------------------------------------------------------------------------------

 

permitted under this Section shall have no effect on the terms of this
Agreement, including Section 3, unless expressly agreed in a written amendment
to this Agreement.
     7.8 Notices. Any notices or written communications to be given hereunder by
either party to the other shall be deemed to be received by the intended
recipient (a) when delivered personally, (b) the day following delivery to a
nationally recognized overnight courier service with proof of delivery, or
(c) three days after mailing by certified mail, postage prepaid with return
receipt requested, in each case addressed to the parties as set forth below:

     
If to Consultant:
  SSB Solutions
5685 N. Scottsdale Rd., Ste E-100
Scottsdale, AZ 85250
Attention: Jacque J. Sokolov, MD
 
   
If to MedCath:
  MedCath Incorporated
10720 Sikes Place, Suite 300
Charlotte, North Carolina 28277
Attention: CEO

Any party may change the address for notice by notifying the other party, in
writing, of the new address.
     7.9 Waiver of Breach. No waiver of any of the provisions of this Agreement
shall be deemed to be or shall constitute a waiver of any other provision
hereof, nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
     7.10 Survival. The covenants contained in Sections 5 and 6 shall survive
any termination or expiration of this Agreement for any reason.
[SIGNATURES ON FOLLOWING PAGE]

6

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
date first above written.

         
 
  MEDCATH INCORPORATED
 
       
 
  By:   /s/ O. Edwin French
 
       
 
  Name:   O. Edwin French

 
       
 
  Title:   President and CEO
 
       
 
       
 
  SSB SOLUTIONS
 
       
 
  By:   /s/ Jacque J. Sokolov, M.D.
 
      Jacque J. Sokolov, M.D.

7