AGREEMENT FOR PURCHASE AND SALE

AGREEMENT FOR PURCHASE AND SALE

     THIS AGREEMENT FOR PURCHASE AND SALE (“Agreement”) is made and entered into this 4th day of November, 2004 (the “Effective Date”) by and between THE HEART HOSPITAL OF MILWAUKEE, LLC, a Delaware limited liability company (“Seller”), MedCath Corporation, a Delaware corporation (collectively “MedCath”) solely for purposes of fulfilling its obligations under Section 17.A below and COLUMBIA ST. MARY’S, INC., a Wisconsin nonstock, not-for-profit corporation (“Purchaser”).

RECITALS

     A. Seller owns and operates The Heart Hospital of Milwaukee (the “Hospital”) and is the owner in fee simple of the real estate and the improvements located at 375 West River Woods Parkway in the City of Glendale, County of Milwaukee, Wisconsin, and

     B. Seller desires to sell to Purchaser the Hospital, which shall include, but not be limited to the Property (as hereinafter defined) and certain assets related to the Hospital and Purchaser desires to purchase the Property and certain assets related to the Hospital from Seller, pursuant to the terms and conditions of this Agreement.

     NOW, THEREFORE, for and in consideration of the covenants and agreements herein contained. Purchaser and Seller hereby agree as follows:

1. Purchase and Sale .

     On the Closing Date (as hereinafter defined), Purchaser shall purchase from Seller, and Seller shall sell, convey, assign and/or transfer to Purchaser, good, indefeasible and marketable title in and to the following real property and good and valid title to the following personal property:

     A.  Real Property and Improvements. Subject to Section 1.D below, all of the real estate and improvements owned by Seller and located at or adjacent to the address known as 375 West River Woods Parkway, City of Glendale, County of Milwaukee, Wisconsin (the “Property”) which shall include, but not be limited to the real estate described on attached Exhibit A- The Property shall include but not be limited to: (a) any and all buildings, structures and other improvements and fixtures situated on or attached to all or any portion of the Property; (b) all easements appurtenant to the Property and other easements, grants of right, licenses, privileges or other agreements for the benefit of, belonging to or appurtenant to the Property whether or not situated on the Property; and (c) all right, title and interest of Seller in and to any roads, access points, streets and ways, public or private, open or proposed, in front of or adjoining all or any part of the Property and serving the Property. Seller has provided to Purchaser any survey of the Property in Seller’s possession prior to the Effective Date.

     B.  Hospital Assets . Subject to Section 1.C below, the following assets owned by Seller and utilized by Seller to operate the Hospital as of the Effective Date (the “Assets”): (a) all medical equipment utilized by the Hospital to treat and render medical services to patients; (b) all computer hardware and software which is an integral part of the medical equipment, non- medical equipment and all building mechanical and security systems which is necessary to operate such medical equipment, non-medical equipment and building mechanical and security systems; (c) all furniture, fixtures and non-medical equipment; (d) inventory of the Hospital, which shall include, but not be limited to pharmaceuticals, surgical instruments, medical supplies, office supplies; textbooks and manuals related to the medical equipment, non-medical equipment and all building mechanical and security systems; (e) fork lifts and other machinery; (f) all Intellectual Property (as hereinafter defined), including without limitation all rights to the name, “The Heart Hospital of Milwaukee” and any and all derivations thereof; (g) Seller’s phone and facsimile numbers; (h) architectural drawings, surveys and “as built” drawings related to the Property; (i) to the extent legally assignable, all warranties benefiting the Hospital including but not limited to construction, architectural, mechanical, electrical and plumbing systems within the building and equipment warranties; (j) assets listed on the hard asset ledger provided to Purchaser and dated September 30, 2004; (k) Seller goodwill; and (1) any other tangible assets owned by Seller (including but not limited to motor vehicles, if any) and utilized to operate the Hospital as of the Effective Date.

     For purposes of this Agreement, “Intellectual Property” shall mean and include: (a) trademarks, service marks, logos, trade names and corporate names and registrations and applications for registration thereof; (b) copyrights and registrations and applications for registration thereof; (c) mask works and registrations and applications for registration thereof; (d) internet websites, internet domain names and e-mail addresses exclusively relating to the Hospital; (e) other proprietary rights relating to any of the foregoing (including without limitation remedies against infringements thereof and rights of protection of interest therein under the laws of all jurisdictions); and (f) copies and tangible embodiments thereof, together with any developments or enhancements thereof.

     C.  Excluded Assets . Notwithstanding anything to the contrary contained in this Agreement, the Assets shall not include any cash; cash equivalents; marketable securities; intercompany receivables; accounts receivable; minute or corporate record books relating to Seller; business records unless specified in Section l.B above; insurance policies of Seller; assets of any employee health or benefit plan; any vendor, service or other contract to which Seller is a party unless listed within the Assumed Liabilities (as hereinafter defined); all computer hardware and software not identified as “Assets” in Section l.B above, patient records, all manuals or information relating to methods of doing business, clinical protocols, procedures and policies which have been developed for use by MedCath Incorporated for use in substantially all of its affiliated hospitals and all other intangible assets of Seller.

     D.  Conveyance of Additional Medical Office Building Property . Notwithstanding anything herein to the contrary. Purchaser acknowledges that, prior to Closing, Seller will convey to Glendale Medical Development Partners, LLC, as the owner of the parcel adjacent to the Hospital upon which an office building is being constructed, an approximately three (3) foot strip of land upon which the office building is encroaching (the “Encroachment Parcel”).

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Purchaser represents and covenants that such conveyance will not adversely affect the Property or its use and occupancy and will be in compliance with all laws, rules, regulations and ordinances and shall not breach or violate any existing agreement with or relating in any way to the City of Glendale, the Community Development Authority of the City of Glendale or Glendale Medical Development Partners, LLC. In connection therewith, Purchaser also acknowledges that Seller and Glendale Medical Development Partners, LLC will, prior to Closing: (i) enter into any necessary amendments, if any, to existing agreements so that such conveyance does not violate said agreements including but not limited to that certain Reciprocal Easement and Protective Covenant Agreement and (ii) deliver to Purchaser all documents relating to Seller’s conveyance of the Encroachment Parcel to Glendale Medical Development Partners, LLC.

2. Exclusion of Liabilities and Obligations .

     Except for Assumed Liabilities (as defined herein), Purchaser does not assume, and shall not be obligated to pay, perform or discharge any taxes, debts, liabilities or any other obligations of Seller or its Members, partners, officers or employees of any kind or nature, whether actual, contingent or approved, known or unknown as of the Closing Date (the “Excluded Liabilities”), including, without limitation the following: (a) obligations relating to environmental liabilities relating to the Property or the Assets which resulted from actions or omissions prior to Closing; (b) Seller’s workers’ compensation account or premiums, employee compensation, pension, profit sharing, deferred compensation or other qualified or non-qualified benefit programs (including Seller’s group health insurance plan); (c) liabilities for current or deferred income taxes, taxes in any way related to the Property, the Hospital, Seller’s personal property or the Assets relating to periods through Closing; (d) any contract liabilities or obligations or claims not expressly included within the Assumed Liabilities, including by way of example, professional service agreements, medical director agreements, written employment contracts and written agreements with the City of Glendale or any division of said municipality (i.e., Community Development Authority), except for those certain ongoing obligations of Seller under the Development Agreement (as defined in Section 12.F below) which Purchaser shall be obligated to assume (the “Development Agreement Obligations”); (e) liabilities for medical malpractice or other claims related to tortious, reckless or intentional acts claimed in any way against the Hospital or any of its employees, staff, owner’s, members, partners, agents, contractors, vendors, patients or guests which resulted from actions or omissions prior to Closing; (f) utility charges through the Closing Date; (g) any liabilities arising under any payor contracts or programs, including without limitation, the Medicare and Medicaid programs, including recapture or recoupment of previously paid or reimbursed expenses and liabilities for false claims; (h) obligations and liabilities arising from Seller ceasing operations, including without limitation, liability under state or federal plant closing laws; and (i) accounts payable of any kind unless included within the Assumed Liabilities.

3. Assumed Liabilities .

     In addition to the Purchase Price (as hereinafter defined) and as further consideration provided by Purchaser for the transactions contemplated within this Agreement, Purchaser agrees to assume the liabilities set forth below which shall be referred to as the “Assumed Liabilities”:

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     A. Leasehold obligations of Seller and the Members of Seller, to Glendale Medical Development Partners, LLC, as office tenants for the office building being constructed by Glendale Medical Development Partners, LLC, on the parcel adjacent to the Hospital (the “MOB Leases”); provided such leasehold liabilities are (i) binding on Seller and/or its Members as of the Effective Date, without contingency; (ii) transferred and assigned to Purchaser in a form reasonably acceptable to Purchaser; and (iii) are listed on attached Exhibit B.

     B. Leasehold liabilities of Seller, for furniture, fixtures and medical/non-medical equipment (excluding computers) utilized by Seller to operate the Hospital (the “Equipment Leases”) provided such leasehold liabilities are (i) binding on Seller as of the Effective Date, without contingency; (ii) transferred and assigned to Purchaser in a form reasonably acceptable to Purchaser; and (iii) are listed on attached Exhibit B.

     C. Reciprocal Easement and Protective Covenant Agreement dated March 3, 2004 between Seller and Glendale Medical Development Partners, LLC.

     D. The Development Agreement Obligations of Seller.

     E. Seller shall be responsible for obtaining all necessary third-party consents, if any (the “Consents”) for the transfer of the Assumed Liabilities to Purchaser.

4. Purchase Price .

     A. The aggregate purchase price for the Property and the Assets shall be $42,500,000 (the “Purchase Price”). The Purchase Price shall be payable to Seller at Closing by wire transfer or other funds acceptable to Seller.

     B. No later than fifteen (15) business days after the Effective Date, Seller shall deliver a written proposal to Purchaser allocating the Purchase Price, subject to Purchaser’s approval which shall not be unreasonably withheld, conditioned or delayed.

5. Purchaser’s Inspection of Property .

     A.  Access to the Property. Commencing on the Effective Date and continuing through Closing (the “Access Period”), Purchaser, its representatives, agents and contractors shall, at all reasonable times, have the privilege of going upon the Property, as needed, to inspect, examine and test the Property and the Assets, including, but not limited to conducting investigations of the physical status of the Property and the engineering of the Property. This privilege shall also include, but not be limited to, the right to obtain any relevant information necessary to determine subsurface and topographic environmental conditions (including Phase I and Phase II testing if necessary), soil tests, asbestos analysis and mold sampling, all of which tests, studies and reviews shall be performed at Purchaser’s sole cost and expense. Any damage to the Property resulting from Purchaser’s inspections or testing of the Property, including disturbance of the surface or subsurface soils of the land, shall be restored, at Purchaser’s sole cost and expense, to substantially the condition existing as of the Effective Date.

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     B Seller to Provide Documents . Seller represents and warrants that it has provided to Purchaser, prior to the date hereof, copies of any and all documents that are material to the ownership and/or operation of the Property and the Assets, in Seller’s possession, or in the possession of third parties but accessible by Seller, which shall include, but not be limited to the following: appraisals, environmental reports, surveys, soil condition reports, as-built drawings, engineering and/or architectural drawings of the improvements and mechanical, electrical or plumbing systems on the Property and all documents and/or leases that are material to the Assumed Liabilities including, but not limited to, the MOB Leases and the Equipment Leases. If the transaction contemplated within this Agreement does not close, Purchaser shall return all documents to Seller within five (5) business days from the date this Agreement is terminated.

6. Title .

     Purchaser has obtained a preliminary title commitment for the Property issued by a title company licensed to issue title insurance in the State of Wisconsin (the “Title Company”). At Closing, Seller shall convey and transfer to Purchaser good, indefeasible, fee simple and marketable title to the Property free and clear of all liens and encumbrances except municipal zoning ordinances, recorded building and use restrictions and covenants and general taxes levied in the year of Closing (the “Permitted Title Exceptions”). Such conveyance and transfer by Seller to Purchaser shall also be sufficient to enable the Title Company to issue its extended coverage ALTA Owner’s Policy of Title Insurance with the standard exceptions therein deleted (the “Title Policy”) in the amount of the Purchase Price allocated to the Property, subject only to the Permitted Title Exceptions. Seller agrees not to further alter or encumber in any way, title to the Property or Assets after the Effective Date.

7. Closing .

     The closing of the purchase and sale contemplated in this Agreement shall take place on a date determined by Seller which is prior to December 15, 2004, but in no event shall the closing be earlier than two (2) days after Seller has ceased operations (the “Closing Date” or “Closing”). The Closing shall take place at the offices of Purchaser or at such other time, such other place, or on such other date as may be mutually agreed upon by the parties.

     A.  Deliverables . At Closing. Seller shall deliver to Purchaser all of Seller’s Deliverables required of Seller as set forth in Section 9, below, and Purchaser shall deliver to Seller the Purchase Price.

     B.  Possession . Seller shall deliver possession of the Property and Assets to Purchaser, at Closing, free and clear of any and all encumbrances except for the Assumed Liabilities and the Permitted Title Exceptions.

     C.  Transfer Taxes . Seller shall pay any transfer tax or any like or similar transfer tax or imposition due upon the transfer of the Property or the Assets.

     D.  Seller’s Closing Costs . Seller shall pay the costs of any cure of title defects required of Seller hereunder, the cost of the title examination, title endorsements and premium

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insuring Purchaser’s fee simple interest in the Property, and the fees and expenses of Seller’s attorneys.

     E.  Purchaser’s Closing_Costs . Purchaser shall pay the recording costs, costs of any investigations, studies and appraisals conducted by Purchaser, and the fees and expenses of Purchaser’s attorneys.

     F.  Closing Fees . Seller shall pay the fees charged by the Title Company in connection with closing and any escrow services which may be provided by the Title Company,

8. Adjustments .

     The following items shall be credited, debited and otherwise adjusted through the Closing Date and the resulting calculations shall be an adjustment to the Purchase Price, payable at Closing, unless otherwise so provided.

     A.  Taxes . All (i) ad valorem and real estate taxes with respect to the Property and (ii) all personal property taxes related to the Assets, accrued or payable for the current year, shall be prorated as of the Closing Date with Seller receiving a credit for any such taxes paid in advance for any period after the Closing Date or with Purchaser receiving a credit for the period prior to and including the Closing Date for which such taxes have not been paid by Seller. Seller shall pay all assessments contemplated with respect to or levied upon the Property prior to Closing. In the event that tax bills for the current year’s taxes are not available on the Closing Date, taxes shall be prorated based upon the tax bills for the previous year and increased or decreased based upon any known increase or decrease in the assessed valuation or the tax rate. Seller and Purchaser hereby agree that the parties shall, if necessary, re-prorate the taxes when actual tax bills for the current year are available after the Closing.

     B.  Utility Charges . Any utility charges that have been billed prior to the Closing Date shall be paid by Seller before Closing; all such charges that have accrued but are not billed prior to the Closing Date, shall be charged to Seller, as accrued through the Closing Date, as a credit against the Purchase Price.

     C.  Other Liens and Encumbrances . On or before the Closing Date, Seller shall cause any and all assessments, liens, and encumbrances affecting the Property and Assets, which are not Permitted Title Exceptions, including without limitation, any mechanic’s lien, security interest, mortgage or deed of trust, to be satisfied and released. The proceeds due at Closing may be applied by Purchaser or Seller to satisfy or pay any assessments, liens, encumbrances, interests or other charges affecting the Property, which are to be paid, satisfied or released pursuant to this Agreement,

9. Conveyances and Deliveries at Closing .

     On the Closing Date, Seller shall execute and deliver or cause to be delivered to Purchaser the following, which shall be referred to as “Seller’s Deliverables”;

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     A. Bill of Sale. A bill of sale transferring and conveying to Purchaser good title to the Assets, free and clear of all liens, security interests and exceptions of any kind and nature whatsoever,

     B. Assignment and Assumption of Assumed Liabilities. An assignment and assumption of all rights and obligations arising from all Assumed Liabilities assumed by and assigned to Purchaser by Seller, in a form reasonably acceptable to Purchaser and in compliance with Section 3, above. Seller shall also deliver all necessary third-party consents for Purchaser to assume the Assumed Liabilities.

     C. Special Warranty Deed. A Special Warranty Deed transferring and conveying to Purchaser marketable fee simple title to the Property, free and clear of all liens and encumbrances, except only the Permitted Title Exceptions.

     D. Non-Foreign Person Affidavit. An affidavit from Seller in form reasonably satisfactory to Purchaser, certifying that Seller is not a foreign person or entity or non-resident alien under Section 1445 of the Internal Revenue Code of 1986, as amended.

     E. Title Commitment. The Title Policy (or a final markup of the title insurance commitment accepted by Purchaser) at the Closing.

     F. Affidavit of Title. Such affidavits (including but not limited to an owner’s affidavit of liens and possession), gap indemnity agreements, and other evidence of title from Seller, as may be required by the Title Company, on or in forms customarily used by the Title Company, in order to enable the Title Company to issue the Title Policy subject only to the Permitted Title Exceptions, without the standard exceptions and without exception for mechanics or materialmen’s liens, other statutory liens, or for the rights of parties in possession, and with such endorsements or affirmative coverage as Purchaser shall reasonably require.

     G. Lien Waivers. Fully executed lien waivers for all materials and labor supplied to Seller for work performed at the Property within twelve (12) months of the Closing.

     H. Closing Statement. A closing statement accurately setting forth the prorations and adjustments to the Purchase Price as required by this Agreement and such disbursements from the sale proceeds as shall be necessary to pay such costs, and satisfy such liens, taxes, assessments and other encumbrances as required by this Agreement.

     I. Certificate. A statement certifying that (a) all obligations, agreements, promises, and covenants to be performed by Seller under this Agreement have been duly performed; and (b) the warranties, representations and covenants by Seller made pursuant to this Agreement are still true as of the Closing Date.

     J. Assignment of Warranties. To the extent warranties are assignable, an assignment of warranties for the Property shall be included in the Bill of Sale, which shall include but not be limited to, any warranties related to the construction of the improvements on the Property, transferring and assigning to Purchaser all right, title, claim and interest in and to

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any warranties or guarantees concerning the Property which have not by their terms expired, together with the originals of any agreements or certificates evidencing the same.

     K.  Noncompetition Agreements. Noncompetition Agreements from the members of Seller (and including MedCath ) to the extent required by Purchaser and in form attached hereto as Exhibit C.

     L.  Lease Termination Agreement. A lease termination agreement for the lease between Seller and Wilson Heart Care Associates, Ltd. dated April 30, 2004.

     M.  Certificate of Compliance. A Certificate of Compliance issued by the City of Glendale pursuant to all applicable ordinances.

     N.  Assignment of Rights and Privileges Under Declaration. An assignment of Seller’s rights and privileges under the Declaration of Restrictive Covenants of the Community Development Authority of the City of Glendale dated the 10 ^th day of May, 2004, and recorded as Document No. 8280600.

10. Seller’s Representations, Warranties and Covenants.

     Seller, as of the date of execution of this Agreement by Seller, represents, warrants and covenants to and with Purchaser as follows (for purposes of this Section 10, the term “Seller’s Knowledge” or “Knowledge” means knowledge that the following individuals actually knew or should have known: the President or the Vice Presidents of the Hospital or the President or any Vice President of MedCath Incorporated or MedCath Corporation):

     A.  Title to Property and Assets. Seller is the owner of good, fee simple, indefeasible and marketable title to the Property and good and valid title to the Assets, free and clear of all liens, claims, encumbrances and restrictions of any kind and nature, except for the Permitted Title Exceptions. As of the Closing, except for the Assumed Liabilities, there are no leases, licenses, option agreements, rights of first refusal or purchase agreements affecting the Property or the Assets, or any parties having any right to possession of the Property or the Assets, and there are no other parties in possession of the Property or the Assets other than Seller.

     B.  Compliance of Property With Zoning and Other Laws. To Seller’s Knowledge, the Property and the Assets, including without limitation all improvements thereon, conform to and comply with all applicable zoning, building code and applicable law and ordinances and regulations for operation as a hospital where the failure to so comply would have a material adverse effect on the Property or the Assets and Seller has not received any written notification from any governmental or public authority that the Property or the Assets violate any existing laws or that any work is required to be done upon or in connection with the Property or the Assets to comply with any applicable law.

     C.  Environmental Matters. Seller has not used, nor authorized, nor knowingly allowed the use of the Property or the Assets, and to Seller’s Knowledge, and except as disclosed in any environmental reports delivered to Purchaser or obtained by Purchaser, the Property or the Assets have never been used for the generating, handling, treatment, storage, disposal or release

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of any hazardous substance, hazardous material, hazardous waste, solid waste, toxic substance, petroleum or petroleum products, asbestos, radioactive materials, lead-based paint or other words of similar import (herein collectively referred to as “Hazardous Substances”) referred to or defined as such under any applicable local, state or federal law, statute, ordinance, requirement or regulation relating to public health and safety, the protection of the environment or the discharge of solid, liquid or gaseous waste into the environment or the placement of structures or materials into any waters or otherwise affecting the environment (hereinafter collectively referred to as “Environmental Laws”), except for Hazardous Substances used, stored or disposed of in the ordinary course of Seller’s business in compliance with applicable Environmental Laws. Seller has not used, nor authorized, nor Knowingly allowed the use of the Property or the Assets, and, to Seller’s Knowledge and except as disclosed in any environmental reports delivered to Purchaser or environmental reports obtained by Purchaser, the Property or the Assets have never been used, in any manner other than in material compliance with all Environmental Laws. In addition, Seller represents and warrants the following with respect to the period of time during which Seller has owned the Property:

     (i) Seller has received no written notice and to Seller’s Knowledge, there are no claims, actions, suits, proceedings or investigations related to Hazardous Substances pending or threatened against Seller with respect to the ownership, use, condition, or operation of the Property or the Assets, in any court or before or by any federal, state or other governmental or quasi-governmental agency or private arbitration tribunal (hereinafter collectively referred to as “Environmental Litigation”);

     (ii) To Seller’s Knowledge, no release, discharge, spillage or disposal not in compliance with Environmental Laws of any Hazardous Substance (i) has occurred (except for releases, discharges, spillage or disposal which have been investigated, removed or remediated to the extent required by applicable Environmental Law, or (ii) is occurring at the Property;

     (iii) To Seller’s Knowledge and except as may be disclosed in any environmental reports delivered to Purchaser, no soil or water in or under or adjacent to the Property is contaminated by any Hazardous Substance, in any manner or degree requiring further investigation, removal or remediation under applicable Environmental Laws;

     (iv) All waste originating at or from the Property or the Assets containing any Hazardous Substance generated, used, handled, stored, treated or disposed of (directly or indirectly) by Seller and any of Seller’s current or former affiliates and by Seller’s contractors has been disposed of in compliance with all applicable Environmental Laws;

     (v) To Seller’s Knowledge and except as may be disclosed in any environmental reports delivered to Purchaser or obtained by Purchaser, the Property has never been used as a landfill, dump, service station or dry cleaning facility.

     D.  Ownership and Condition of Assets. Seller has no Knowledge of any material problems or defects in any of the Assets or the Property. Commencing on the Effective Date and continuing through Closing, Seller shall maintain and utilize all inventory for operation of the

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Hospital at substantially the same levels as in the ordinary course of the Hospital’s business. Seller shall not sell, transfer or use Seller’s supplies, consumables, pharmaceuticals and other inventory outside of its ordinary course of business, or otherwise cause the value of Seller’s supplies, consumables, pharmaceuticals and other inventory to substantially decrease from the value as stated on the year to date August 2004 financial statement previously given to Purchaser by Seller, without the written consent of Purchaser.

     E.  Employee Benefit Plans. The phrase, “Employee Benefit Plans,” shall be defined as all employee benefit plans, programs, written agreements or handbooks (including, without limitation, those providing any bonus, deferred compensation, excess benefits, profit sharing, pension, thrift, savings, salary continuation, severance, retirement, supplemental retirement, short- or long-term disability, dental, vision care, hospitalization, major medical, life insurance, accident insurance, vacation, holiday and/or sick leave pay, tuition reimbursement, executive perquisite or other employee benefits) under which or to which Seller contributes to or for the benefit of present and former members, employees, consultants and other agents of Seller or has so contributed at any time. All of the Employee Benefit Plans in all material respects have been, and up to the Closing Date will continue to be, in compliance, both with respect to plan operation and documentation, with ERISA, COBRA, the Internal Revenue Code, as amended, the Americans with Disabilities Act, as amended, the Health Insurance Portability and Accountability Act of 1996, as amended, the Equal Pay Act of 1963, as amended, the Age Discrimination in Employment Act of 1967, as amended, Title VII of the Civil Rights Act of 1964, as amended, all other federal or state laws regulating employment and employee benefits, and all regulations and rulings issued by government agencies responsible for the administration or enforcement of one or more of those laws. To Seller’s Knowledge, no Employee Benefit Plan, nor any trust created thereunder, nor any trustee or administrator thereof, nor any other “disqualified person” or “party in interest,” has engaged in a “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Code. Neither Seller nor any other fiduciary of an Employee Benefit Plan has breached any duty owed by Seller or the fiduciary to the participants and beneficiaries of the Employee Benefit Plan. There are no actions, suits or claims pending or, to Seller’s Knowledge, threatened (other than normal claims for benefits) against any Employee Benefit Plan or the assets thereof.

     F.  Authority. Seller and MedCath have the full power and authority to enter into and perform their obligations under the terms of this Agreement and this Agreement is the valid and legally binding obligation of Seller and MedCath, enforceable in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or similar law or general principles of equity.

     G.  Compliance with Laws and Contracts. From the Effective Date through Closing, Seller shall continue to comply in all material respects with all laws, ordinances, regulations and orders relating to the Property and the Assets (including, without limitation, the Environmental Laws) and Seller shall further comply in all material respects with the requirements of all liens and encumbrances, agreements and other contractual arrangements to which the Property, Seller or the Assets are subject and make all payments required to be paid thereunder.

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     H.  Notice of Revision of Representations Due to Discovery of New Facts. Seller shall notify Purchaser promptly if, prior to the Closing Date, Seller becomes aware of the existence of any fact, transaction, event or occurrence which has made or could reasonably be expected to make any of the warranties and representations of Seller under this Agreement not true with the same force and effect as if made on or as of the date hereof.

     I.  Agreements Regarding Property. From the Effective Date through Closing, except pursuant to this Agreement and as contemplated in Section 1.D above, Seller shall not (a) transfer any interest in the Property or the Assets, (b) create any easements, liens, mortgages or encumbrances affecting the Property or Assets, (c) enter into any development or other agreements affecting the Property, or enter into any leases relating to the Property or the Assets, (d) enter into any service, supply, maintenance or other contracts pertaining to the Property or Assets that cannot be canceled without penalty at or before Closing (except as consented to in writing by Purchaser) or (e) permit any changes to the zoning classification of the Property (except as consented to in writing by Purchaser).

     J.  Notice and Defense of Actions. From the Effective Date through Closing, Seller shall promptly deliver to Purchaser notice of, and if the same could reasonably be expected to adversely affect the Property, shall defend, at Seller’s sole expense, all actions, suits, claims, demands and other proceedings or matters affecting the Property, or the