MEDCATH CORP
EXHIBIT 10.69
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<TYPE>EX-10.69
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<FILENAME>g05398exv10w69.htm
<DESCRIPTION>EXHIBIT 10.69
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;10.69</B>
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AMENDMENT AGREEMENT</B>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS AMENDMENT AGREEMENT (this &#147;<U>Amendment</U>&#148;) is made and entered into as of the
5<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> day of December, 2006, by and between MEDCATH CORPORATION, a Delaware corporation
(the &#147;<U>Company</U>&#148;), and THOMAS K. HEARN (the &#147;<U>Executive</U>&#148;).
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>STATEMENT OF PURPOSE</U>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company and the Executive are parties to an Amended and Restated Employment Agreement
dated September&nbsp;30, 2005, as amended by a First Amendment thereto dated September&nbsp;1, 2006 (the
&#147;<U>Employment Agreement</U>&#148;). The Employment Agreement provides that the Executive is entitled
to certain severance payments in the event of the Executive&#146;s termination prior to or following a
&#147;Change in Control&#148; of the Company. The Company and the Executive have also entered into equity
award agreements (collectively, the &#147;<U>Grant Agreements</U>&#148;) which granted the Executive stock
options and restricted stock awards under the Company&#146;s equity incentive plans. The Grant
Agreements provide that the stock options and awards will become fully vested, exercisable and free
of any resale restrictions upon a &#147;Change in Control&#148; of the Company. The Employment Agreement and
the Grant Agreements currently include in the definition of &#147;Change in Control&#148; a sale of voting
control in the Company by Kohlberg Kravis Roberts &#038; Co., LLC (&#147;<U>KKR</U>&#148;) or Welsh, Carson,
Anderson &#038; Stowe VII, L.P. (&#147;<U>WCAS</U>&#148;) or any their affiliates.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On November&nbsp;3, 2006, KKR, WCAS and their affiliates completed a secondary offering of a
portion of the shares of common stock held by them, and as a result, they ceased to own voting
control of the Company. The Company and the Executive desire to amend the definition of &#147;Change in
Control&#148; in the Employment Agreement and the Grant Agreements to make it clear that a &#147;Change in
Control&#148; will occur if any person (other than KKR, WCAS and their affiliates) acquires voting
control of the Company, whether or not the acquisition of such voting control results from a sale
of Company stock by KKR, WCAS or their affiliates.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, the Company and the Executive hereby agree that the definition of &#147;Change in
Control&#148; in the Employment Agreement and the Grant Agreements is amended effective as of the date
hereof to read as follows:
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&#147;For purposes of this Agreement, &#147;<B>Change in Control</B>&#148; means:
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(i)&nbsp;Sales of all or substantially all of the assets of the Company,
MedCath Holdings Corp. or MedCath Incorporated to an individual,
partnership, corporation, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental authority or other
entity (a &#147;<U>Person</U>&#148;) who is not an affiliate of Kohlberg Kravis
Roberts &#038; Co., LLC (&#147;<U>KKR</U>&#148;) or Welsh, Carson, Anderson &#038; Stowe, VII,
L.P. (&#147;<U>WCAS</U>&#148; and together with KKR, the &#147;<U>Partnerships</U>&#148;);
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(ii)&nbsp;Any &#147;person&#148; or &#147;group&#148; (as such terms are used in Section 13(d)
or 14(d) of the Securities Exchange Act of 1934 and the rules thereunder)
other than either of the Partnerships acquires and becomes the
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&#147;beneficial owner&#148; (as defined in Rules&nbsp;13d-3 and 13d-5 under the
Securities Exchange Act of 1934), directly or indirectly, of 50% or more of
the voting stock of the Company, MedCath Holdings Corp. or MedCath
Incorporated; or
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) A merger or consolidation of the Company, MedCath Holdings Corp.
or MedCath Incorporated into another Person which is not an affiliate of
either of the Partnerships;
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><U>provided</U>, <U>however</U>, that in the event that the Company, MedCath
Holdings Corp. or MedCath Incorporated is merged with another company controlled by
either of the Partnerships or their affiliates and, if the chief executive officer
of the surviving entity (or the ultimate parent) is not a person who has held the
position of chief executive officer of the Company for at least six months, such an
event shall be deemed a Change in Control.&#148;
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as expressly or by necessary implication amended hereby, the Employment Agreement and
the Grant Agreements shall continue in full force and effect.
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the Company and the Executive have caused this Amendment to be executed as
of the day and year first above written.
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    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">MEDCATH CORPORATION<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>

<TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/
O. EDWIN FRENCH&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">O. Edwin French, President&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD colspan="3" align="left">EXECUTIVE<DIV align="left" style="font-size: 20pt">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
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<TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/
THOMAS K. HEARN&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Thomas K. Hearn&nbsp;</TD>
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