<PAGE>   1
                                                                   EXHIBIT 10.29


                        TERMINATION AND RELEASE AGREEMENT


                  THIS TERMINATION AND RELEASE AGREEMENT (the "Agreement") is
entered into as of this 1st day of October, 2000 by and among HEART HOSPITAL OF
DTO, LLC, a North Carolina limited liability company (the "COMPANY"); DTO
MANAGEMENT, INC., a North Carolina corporation ("DTO MANAGEMENT"); FRANCISCAN
HEALTH SYSTEM OF THE OHIO VALLEY, INC., an Ohio non-profit corporation ("FHS");
and PROWELLNESS HEALTH MANAGEMENT SYSTEMS, INC., an Ohio corporation
("PROWELLNESS").

                                    RECITALS:

         A.       The Company was formed on April 18, 1997 upon the filing of
the Company's Articles of Organization;

         B.       DTO Management and certain Investor Members (as defined in the
Operating Agreement) entered into an Operating Agreement of Heart Hospital of
DTO, LLC on or about April 18, 1997 (the "Original Agreement") setting forth the
rights and obligations of Members of the Company;

         C.       In December 1997, FHS and the other Members of the Company
executed a First Amendment to Operating Agreement of Heart Hospital of DTO, LLC
(the "First Amendment") the purpose of which was to admit FHS as a Member of the
Company;

         D.       On or about July 27, 1998, ProWellness and the other Members
of the Company executed a Second Amendment to Operating Agreement of Heart
Hospital of DTO, LLC (the "Second Amendment") in which Mercy Health Ventures,
Inc. was admitted as a Member of the Company and FHS assigned its Membership
Interest to ProWellness. For purposes of this Agreement, the Original Agreement,
the First Amendment and the Second Amendment shall be collectively referred to
as the "Operating Agreement";

         E.       FHS and ProWellness have elected to cease the operation of
their hospital adjacent to the Dayton Heart Hospital and as a result thereof and
of certain other matters, disputes have arisen which the parties desire to
resolve in accordance with the terms hereof.

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

         1.       Termination of Membership. Effective as of October 1, 2000
(the "Termination Date") but subject to obtaining the approval required under
Section 3.3 of the Operating Agreement, FHS and ProWellness hereby convey to the
Company and forfeit and cancel all of their right, title and interest in the
Company, including, but not limited to, the Membership Interest of ProWellness
in the Company and any and all rights to any return of Capital Contributions,
its Capital Account and/or all distributions and allocations from the Company.
As of the Termination Date and subject to the terms of this Agreement,
ProWellness ceased to be a
<PAGE>   2

Member of the Company and is deemed to have withdrawn therefrom, and FHS and
ProWellness are released from their obligations and liabilities arising under
the Operating Agreement, other than their obligations set forth in Section 5.9
of the Operating Agreement which shall remain in full force and effect. Without
limitation, it is acknowledged and agreed that FHS and ProWellness have no
further liability arising from or related to any guarantee fee or their
obligation arising under Section 3.7(g) of the Operating Agreement. As of the
Termination Date, FHS and ProWellness no longer have the right to elect an
Investor Manager or to otherwise participate in the affairs or business of the
Company.

         The parties hereto acknowledge that they have no further obligation or
liability arising under the Standstill Agreement dated June 12, 2000 (the
"Standstill Agreement") except that the terms of paragraphs 3, 4 and 5 thereof
shall remain in full force and effect.

         The parties hereto further acknowledge that as part of the
consideration for the conveyance of all of the right, title and interest of FHS
and ProWellness in the Company as set forth above, the parties agree that they
have no further obligation or liability arising under that certain sublease
between the Company and FHS or its Affiliates regarding the space on the second
floor of the building located at 1530 Needmore Road, Dayton, Ohio.

         2.       Real Estate Matters.

                  (a)      Notwithstanding Section 1 above, the following
         agreements shall not be terminated as of the Termination Date and shall
         continue in full force and effect subject to those modifications agreed
         to by the parties as set forth herein (the "Real Estate Matters"):

                           (i)      Limited Warranty Deed from Meredith Ann
                  Trott, Trustee, to Heart Hospital of DTO, LLC dated June 1,
                  1998 and recorded June 4, 1998 in Microfiche No. 98-0369 A01
                  in the records of the Recorder of Montgomery County, Ohio;

                           (ii)     Joint Driveway Agreement with Cross Parking
                  and Sewer Easements between Franciscan Medical Center Dayton
                  Campus and Heart Hospital of DTO, LLC dated June 1, 1998 and
                  recorded June 4, 1998 in Microfiche No. 98-0369 A06 in the
                  records of the Recorder of Montgomery County, Ohio; and

                           (iii)    Storm Sewer Easement from Heart Hospital of
                  DTO, LLC to Franciscan Medical Center Dayton Campus dated June
                  1, 1998 and recorded June 4, 1998 in Deed Microfiche No.
                  98-0369 B08 in the records of the Recorder of Montgomery
                  County, Ohio.

                  (b)      Notwithstanding anything herein to the contrary, by
         April 30, 2001, the restrictions placed upon the Hospital Property and
         contained in that certain Limited Warranty Deed described in Section
         2(a)(i) hereof shall be terminated effective as of the


                                       2
<PAGE>   3

         Termination Date and the parties hereto agree to execute and record a
         mutually acceptable instrument evidencing such termination.

                  (c)      By April 30, 2001, that certain Joint Driveway
         Agreement described in Section 2(a)(ii) hereof shall be modified as
         follows: (i) the cross-parking easements contained therein shall be
         terminated, (ii) FHS shall grant to the Company a temporary parking
         easement to permit patients and visitors to park in the surface parking
         lot across from the emergency room entrance of the Dayton Heart
         Hospital which shall remain in effect for so long as FHS or one of its
         affiliates owns fee simple title to such surface parking lot, and (iii)
         FHS shall grant to the Company all right, title and interest in and to
         three (3) signs as shown on Exhibit A attached hereto and Company shall
         be responsible for the maintenance of such signs.

                  (d)      By April 30, 2001, that certain Skywalk Easement
         between Franciscan Medical Center Dayton Campus and Heart Hospital of
         DTO, LLC dated June 1, 1998 and recorded June 10, 1998 in Microfiche
         No. 98-0386 D10 in the records of the Recorder of Montgomery County,
         Ohio shall be terminated as of the Termination Date and the parties
         hereto agree to execute and record a mutually acceptable instrument
         evidencing such termination.

                  (e)      FHS agrees to convey to the Company by limited
         warranty deed (the "Limited Warranty Deed") that certain parcel of land
         shown by the sketch attached hereto as Exhibit B (the "Parking
         Parcel"). The legal description for the Parking Parcel shall be
         mutually agreed upon by the parties and based upon a survey of the
         Parking Parcel and the real property on which the Dayton Heart Hospital
         is located (the "Hospital Property"), which survey shall be the
         responsibility of the Company. The Company shall obtain all necessary
         governmental approvals of the legal description for the Parking Parcel
         and, immediately upon notice of such approval from the Company, FHS
         shall deliver the Limited Warranty Deed to the Company. FHS agrees to
         cooperate with the Company (i) to finalize the legal description of the
         Parking Parcel, including, without limitation, obtaining any necessary
         governmental approvals, (ii) to combine the Parking Parcel with the
         Hospital Property, including, without limitation, any necessary
         governmental approvals and (iii) to obtain a title insurance policy for
         the Parking Parcel. The cost of the above-described survey, any
         necessary governmental approvals and the title insurance premium shall
         be the responsibility of the Company.

                  (f)      FHS hereby agrees to use its best efforts to pursue
         the abandonment of the disputed right-of-way along Edwin C. Moses
         Boulevard for the benefit of FHS and the Company.

         3.       Mutual Release.

                  (a)      FHS and ProWellness hereby release and discharge the
         Company, DTO Management and Affiliates of DTO Management and the other
         Members of the Company and their past and current Affiliates,
         directors, officers, trustees, employees, and attorneys from any and
         all claims, defenses setoffs, recoupments, grievances, injuries,


                                       3
<PAGE>   4

         controversies, debts, accounts, actions, causes of action, suits, sums
         of money, attorneys' fees, costs, damages, arbitrations, or demands
         whatsoever, known or unknown, in law or equity, under contract, tort,
         statute, regulation, or ordinance that FHS and ProWellness now have,
         ever had, or may have from the beginning of time until the date of this
         Agreement that arise out of or relate to (i) the Operating Agreement or
         the Membership of FHS and ProWellness or any other Person in the
         Company; (ii) the conduct of the affairs of the Company by DTO
         Management and Affiliates of DTO Management; and (iii) any
         representations or warranties made to FHS or ProWellness in connection
         with their entering into the Operating Agreement or any other agreement
         with the Company, DTO Management or the Affiliates of DTO Management;
         provided, however, that no party shall be released from any of its
         liabilities or obligations arising under or relating to (i) the terms
         of this Agreement or the exhibits hereto, (ii) the Real Estate Matters,
         or (iii) any party's rights to indemnification under the Operating
         Agreement with respect to claims made by a third party against a party
         hereto.

                  (b)      The Company, DTO Management and Affiliates of DTO
         Management hereby release and discharge FHS and ProWellness and their
         past and current Affiliates, directors, officers, trustees, employees,
         and attorneys from any and all claims, defenses, setoffs, recoupments,
         grievances, injuries, controversies, debts, accounts, actions, causes
         of action, suits, sums of money, attorneys' fees, costs, damages,
         arbitrations, or demands whatsoever, known or unknown, in law or
         equity, under contract, tort, statute, regulation, or ordinance that
         the Company, DTO Management and Affiliates of DTO Management now have,
         ever had, or may have from the beginning of time until the date of this
         Agreement that arise out of or related to (i) the Operating Agreement
         or the Membership of DTO Management and Affiliates of DTO Management or
         any other Person in the Company; (ii) the participation in the conduct
         of the affairs of the Company by FHS and ProWellness; (iii) any
         representations or warranties made to the Company, DTO Management and
         Affiliates of DTO Management or other Members in connection with their
         entering into the Operating Agreement or any other agreement with the
         Company, FHS or ProWellness; provided, however, that no party shall be
         released from any of its liabilities or obligations arising under or
         relating to (i) the terms of this Agreement or the exhibits hereto,
         (ii) the Real Estate Matters, (iii) Section 5.9 of the Operating
         Agreement shall continue to apply to FHS, ProWellness and their
         Affiliates, but shall not apply to an unrelated third party as a result
         of such third party's purchase of any real property from FHS,
         ProWellness or their Affiliates, (iv) paragraphs 3, 4 and 5 of the
         Standstill Agreement or (v) any party's rights to indemnification under
         the Operating Agreement with respect to claims made by a third party
         against a party hereto. Further, this release is not intended to
         benefit any person not a party to this Agreement or expressly
         identified in this paragraph unless such party is an Affiliate of FHS.

                  (c)      Each of the parties hereto shall use their
         commercially reasonable efforts not to, and to cause their respective
         affiliates and representatives not to disparage the other parties
         hereto or their business or operations.


                                       4
<PAGE>   5

         4.       Access to Medical Records.

                  (a)      FHS and ProWellness have arranged for a third party
         record storage facility ("Storage Facility") to store and maintain
         medical records of FHS and ProWellness. FHS and ProWellness hereby
         agree to make, and shall cause Storage Facility to make, available to
         the Company, DTO Management and their Affiliates medical records
         pertaining to patients of Company as Company may reasonably request
         from time to time for reasonable purposes including, but not limited
         to, litigation, third party payor audits and disputes, compliance with
         the requirements of applicable standards of the Joint Commission on
         Accreditation of Healthcare Organizations (the "JCAHO") and state and
         federal laws and regulations, including without limitation, the
         Medicare Conditions of Participation and the Medicaid State Plan.

                  (b)      FHS and ProWellness shall cooperate, and shall cause
         Storage Facility to cooperate, with the Company, DTO Management and
         their Affiliates to ensure that the Company, DTO Management and their
         Affiliates have reasonable access to the medical records as set forth
         at (a) above in a timely manner. This cooperation shall include, but
         not be limited to, ensuring the continued access to FHS and ProWellness
         and their Affiliates' information and records notwithstanding the
         discontinuation of the provision of services by FHS or ProWellness or
         their Affiliates' or the dissolution or termination of the corporate
         existence of FHS or ProWellness or their Affiliates'.

         5.       Severability. Each provision of this Agreement is intended to
be severable. If any term or provision hereof shall be determined by a court of
competent jurisdiction to be illegal or invalid for any reason whatsoever, such
provision shall be severed from this Agreement and shall not affect the validity
of the remainder of this Agreement. Furthermore, in lieu of each such invalid or
unenforceable provision, there shall be added automatically as part of this
Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be legal, valid and enforceable, and this
Agreement shall be deemed reformed accordingly.

         6.       Attorneys' Fees. Each party shall be responsible for its own
legal fees related to negotiation and execution of this Agreement. In the event
any of the parties hereto shall institute any action or proceeding against any
of the other parties hereto relating to this Agreement, any unsuccessful party
in such action or proceeding shall reimburse each successful party for its
reasonable disbursements incurred in connection therewith and for its reasonable
attorney's fees.

         7.       Waiver; Consents. No consent or waiver, express or implied, by
any party hereto to or of any breach or default by any other party in the
performance by the other of its obligations hereunder shall be valid unless in
writing and no such consent or waiver shall be deemed or construed to be a
consent or waiver to or of any other breach or default in the performance by
such other party of the same or any other obligations of such party hereunder.
Failure on the part of any party to complain of any act or failure to act of the
other party or to declare any other party in default, irrespective of how long
such failure continues, shall not constitute a waiver by such party of its
rights hereunder. The granting of any consent or approval in any other instance
by or on behalf of FHS or ProWellness or the Company or DTO


                                       5
<PAGE>   6

Management shall not be construed to waive or limit the need for such consent in
any other or subsequent instance.

         8.       Governing Law. This Agreement shall be governed by the
substantive laws of the State of North Carolina without reference to its
conflict of laws principles.

         9.       Modification of Agreement. This Agreement constitutes the
entire agreement among the parties hereto. To be effective, any modification of
this Agreement must be in writing and executed by all of the parties to this
Agreement.

         10.      Headings. The headings of the Sections of this Agreement are
inserted for convenience of reference only and shall not in any manner affect
the construction or meaning of anything herein contained or govern the rights or
liabilities of the parties hereto.

         11.      Interpretation. Whenever the context requires, all words used
in the singular number shall be deemed to include the plural and vice versa, and
each gender shall include any other gender. The use herein of the word
"including," when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation," or
"but not limited to," or words of similar import) is used with reference
thereto, but rather shall be deemed to refer to all other items or matters that
could reasonably be included within the broadest possible scope of such general
statement, term, or matter.

         12.      Notices. All notices, requests, and communications required or
permitted hereunder shall be in writing and shall be sufficiently given and
deemed to have been received upon personal delivery or, if mailed, upon the
first to occur of actual receipt or seventy-two (72) hours after being placed in
the United States mail, postage prepaid, registered or certified mail, return
receipt requested, addressed to the parties as follows:

                  Company:              Heart Hospital of DTO, LLC
                                        707 S. Edwin C. Moses Blvd.
                                        Dayton, OH  45408
                                        Attention:  President

                  DTO Management:       DTO Management
                                        c/o MedCath Incorporated
                                        10720 Sikes Place, Suite 300
                                        Charlotte, North Carolina  28277
                                        Attention:  President, Hospital Division

                  Copy to:              Moore & Van Allen PLLC
                                        100 N. Tryon Street, Suite 4700
                                        Charlotte, North Carolina  28202-4003
                                        Attention:  Hal A. Levinson, Esq.


                                       6
<PAGE>   7

                  FHS or ProWellness:   Dinsmore & Shohl, LLP
                                        1900 Chemed Center
                                        225 E. Fifth Street
                                        Cincinnati, Ohio  45202
                                        Attention:  Clifford A. Roe, Jr., Esq.

Notice of a change in address of one of the parties shall be given in writing to
the other party as provided above, but shall be effective only upon actual
receipt.

         13.      Counterparts; Effectiveness. This Agreement and all
reproductions of an executed original (with reproduced signatures) shall be
deemed to be original counterparts of this Agreement.

         14.      Interpretation. This Agreement is the result of negotiations
between the parties hereto and shall not be construed against any party as a
consequence of its role, or the role of its counsel, in the drafting of this
Agreement.

         15.      Arbitration. Other than with respect to any claim or action
for equitable or injunctive relief, any controversy, dispute or disagreement
arising out of or relating to this Agreement, or the breach thereof, shall be
settled by binding arbitration, which shall be conducted in Columbus, Ohio in
accordance with the American Arbitration Association's Commercial Arbitration
Rules, and judgment on the award rendered by the arbitrator may be entered into
any court having jurisdiction thereof.

         16.      Defined Terms. All capitalized terms not defined herein shall
have the definitions ascribed to such terms in the Operating Agreement unless
context dictates otherwise.


                                       7
<PAGE>   8



         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

                                 HEART HOSPITAL OF DTO, LLC

                                 By:      /s/ signature illegible
                                      ---------------------------------------
                                          President


                                 DTO MANAGEMENT, INC.

                                 By:      /s/ signature illegible
                                      ---------------------------------------
                                          President, Hospital Division


                                 FRANCISCAN HEALTH SYSTEM OF THE
                                 OHIO VALLEY, INC

                                 By:      /s/ signature illegible
                                      ---------------------------------------

                                 Title:   Acting President and CEO
                                       --------------------------------------


                                 PROWELLNESS HEALTH MANAGEMENT
                                 SYSTEMS, INC.

                                 By:      /s/ signature illegible
                                      ---------------------------------------

                                 Title:   Acting President & CEO
                                       --------------------------------------

Consented To:

[***]









[***] These portions of this exhibit have been omitted and filed separately with
the Commission pursuant to a request for confidential treatment.


                                       8
<PAGE>   9



The undersigned acknowledges and agrees to be bound by the terms of this
Agreement.

                                 FRANCISCAN MEDICAL CENTER-DAYTON CAMPUS

                                 By:      /s/ signature illegible
                                    ------------------------------------

                                 Title:   Acting President and CEO
                                       ---------------------------------

                                 Date:    3/30/01
                                      ----------------------------------


                                       9
<PAGE>   10



                                    EXHIBIT A

                                      Signs




[Plat attached of Dayton Heart Hospital].


                                       A-1

<PAGE>   11



                                    EXHIBIT B

                          Sketch of the Parking Parcel

[Plat attached of Parking Parcel.]


                                       A-2