Exhibit 10.1
ASSIGNMENT AND ASSUMPTION AGREEMENT
     This Assignment and Assumption Agreement (the “Agreement”) is made and is
effective as of 11:59 p.m. the 31st day of December, 2008 (the “Effective Date”)
by and between MedCath Partners, llc, a North Carolina limited partnership (the
“Assignor”), Cape Cod Cardiac Cath, Inc., a Massachusetts charitable corporation
(the “Assignee”), Cape Cod Hospital, a Massachusetts charitable corporation
(“the Hospital”) solely for the obligations of the Hospital expressly set forth
herein and CAPE COD CARDIOLOGY SERVICES, LLC, a North Carolina limited liability
company (the “Company”). All capitalized terms used herein and not defined
herein shall have the respective meanings ascribed to such terms in that certain
Operating Agreement of the Company dated as of September 30, 2002, by and
between the Assignee and the Assignor (as amended, the “Operating Agreement”).
     WHEREAS, the Assignor and the Assignee are the only members of the Company;
     WHEREAS, pursuant to Section 11.04 of the Operating Agreement the Assignee
has exercised its right to acquire, and the Assignor has agreed to sell,
transfer and assign to the Assignee, all of Assignor’s right, title and interest
as a member of the Company, representing a fifty-one percent (51%) interest in
the Company (the “Purchased Interest”);
     WHEREAS, the Assignee has agreed to assume all of the obligations of the
Assignor with respect to the Purchased Interest pursuant to the Operating
Agreement; and
     WHEREAS, in connection with the transfer of the Purchased Interest, the
Assignee’s sole shareholder, the Hospital has agreed to guarantee all of the
Company’s obligations to the Assignor pursuant to the Equipment Lease dated as
of October 20, 1995 by and between the Company (as successor to Cape Cod
Cardiology Services, L.P.), as lessee, and the Assignor, as lessor (as amended
from time to time including without limitation as of the date hereof, the
“Lease”);
     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, subject to the terms of the
Purchase Agreement, the parties hereto hereby act and agree as follows:
     1. Assignment. Subject to the terms and conditions of this Agreement,
Assignor hereby assigns, transfers and sets over to the Assignee, effective from
and after the Effective Date, all of such Assignor’s existing and future rights,
title and interest of every nature in and to the Purchased Interest, free and
clear of any and all liens and encumbrances.
     2. Assumption. Effective on and after the Effective Date, the Assignee
hereby accepts the foregoing assignment and assumes all of the obligations and
liabilities of Assignor with respect to the Purchased Interest pursuant to the
Operating Agreement.
     Company agrees, and Assignee and Hospital agree to cause Company, to pay
all liabilities and obligations of Company whether contingent or absolute,
existing or hereafter arising, known or unknown, disclosed or undisclosed, to
any third party as they come due and acknowledge that Assignor shall have no
liability or obligation therefore.

 

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     3. Purchase Price. The parties hereby agree that the purchase price for the
Purchased Interest is $6,880,848.00 (the “Purchase Price”), payable in cash by
wire transfer on the Effective Date. Upon Assignor’s receipt of the full amount
of the Purchase Price from the Assignee, Assignor shall acknowledge such payment
in writing delivered to Assignee.
     4. Lease; Guaranty. The parties acknowledge and agree that the Lease is
amended as follows: (a) attached hereto as Exhibit A is a schedule of the
equipment that is covered by the Lease as of the Effective Date and the payment
schedule therefor, (b) the term of Lease shall continue with respect to each
Group of equipment shown on Exhibit A for as long as lease payments are due with
respect to such Group of equipment, (c) Section 14 of the Lease is hereby
amended to permit either lessor or lessee to pledge their rights in the Lease to
lenders of such parties or their affiliates as collateral for loans or other
financing made to such parties by such lenders, subject however to the rights of
the other party to the Lease, (d) Sections 17 and 18 are hereby deleted from the
Lease, (e) the notice address for lessor is 10720 Sikes Place, Suite 300,
Charlotte, NC 28277, Attention: President and (f) Assignor is the lessor under
the Lease. Except as set forth above, the Lease remains in full force and effect
     The Hospital hereby unconditionally guarantees to Assignor all of the
obligations and liabilities of the Company pursuant to the Lease. This is a
guarantee of payment and not of collection. In the event that the Assignor is
not paid any amount when due under the Lease, Assignor may exercise all of its
rights and remedies directly against the Hospital as guarantor without any
requirement that it first exhaust or exercise any rights and remedies against
the Company.
     5. Distributions; Advances; Additional Amounts Due Assignor. In addition to
the Purchase Price, contemporaneously with the execution of this Agreement and
as a further condition to the effectiveness hereof, the Assignor shall cause the
Company to pay to Assignor the following amounts:
     (a) $860,725.00 representing Assignor’s estimated share of the Company’s
undistributed profits through November, 2008, it being agreed that Assignor’s
share of the Company’s undistributed profits for December, 2008 shall be paid as
part of the adjustment process described at the end of this Section 5;
     (b) $58,031.00 representing the lease payments due under the Lease with
respect to January, 2009;
     (c) $77,085.00 representing an estimate of the reimbursement for payroll
and employee benefits due to the Transferred Employees through December 27, 2008
to be paid by Assignor on behalf of the Company, it being agreed that Assignor
also will pay payroll and benefits due to the Transferred Employees for the
remainder of December, 2008, the cost of which shall be paid to Assignor as part
of the adjustment process described at the end of this Section 5 ; and
     (d) $13,599.00 representing an additional amount which the parties
acknowledge is due to Assignor.

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     No later than January 15, 2009 Company, Hospital and Assignor shall
reasonably agree upon the final amounts due to Assignor (x) for Assignor’s share
of the Company’s profits for the year to date through the Effective Date that
have not previously been distributed to Assignor, and (y) under subsection
(c) above. Any adjusting payments due from one party to another shall be paid in
cash no later than January 20, 2009. Hospital agrees that it is jointly and
severally liable with the Company for any adjusting payments due to Assignor
under the terms of this Section 5.
     The Assignor acknowledges and agrees that except as set forth above: (i) it
has received all distributions from the Company to which it is entitled in
respect of the Purchased Interest and that neither the Company nor the Assignee
shall be required to make any further distributions or payments to the Assignor
in respect of the Purchased Interest; (ii) neither it nor any of its Affiliates
has made any advances or other loans to the Company that remain outstanding, and
(iii) except for amounts due to the Assignor pursuant to the Lease or under the
terms of this Agreement, no future payments are owed by the Company or the
Assignee (or any of its Affiliates) to the Assignee or any of its Affiliates.
     6. Employees.
     (a) The parties acknowledge and agree that attached hereto as Exhibit B is
a list of the individuals employed by the Assignor (or its affiliate) that are
currently providing services to the Company and their respective hire dates and
job code descriptions. Effective on the Effective Date, the Assignor (or its
affiliate) shall terminate the employment of such employees, and the Company (or
the Hospital) shall offer employment to all such employees. Such offer shall be
in a comparable position. For purposes of this Agreement, any such employees who
accept employment with the Company (or the Hospital) shall be referred to as the
“Transferred Employees.” The compensation and terms of employment for the
Transferred Employees will governed by the existing policies and/or Collective
Bargaining Agreements of the Company and/or the Hospital. Any Transferred
Employee who does not become a member of a Collective Bargaining Unit will be
employed on an “at-will” basis by the Company or the Hospital pursuant to
applicable policies and procedures of that respective entity.
     (b) The Company or the Hospital shall provide (or cause to be provided) to
all Transferred Employees employee benefits, plans and programs that are
substantially comparable to the benefits, plans and programs provided to
similarly situated employees of the Assignee. For purposes of eligibility and
vesting under any such plans or programs provided by the Company/Hospital, each
Transferred Employee shall be credited with all of his or her service with the
Assignor and its affiliates. In addition, for purposes of each such Assignee
plan or program that is a health or welfare plan, to the extent permitted under
the terms of such plan or program and in accordance with the non-discrimination
rules under the Health Insurance Portability and Accountability Act of 1996, as
amended (“HIPAA”), the Assignee shall waive (or cause to be waived) any waiting
period and any pre-existing condition or restriction for Transferred Employees
and their dependents.
     (c) The Company or the Hospital shall employ and retain for such period of
time following the Effective Date such number of Transferred Employees as shall
be necessary in its reasonable opinion to avoid any potential liability by the
Assignor (or any

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of its affiliates) for a violation of the Workers Adjustment and Retraining
Notification Act (or under any similar state or local law) arising from the
Assignee’s (or its affiliate’s) failure to notify such Transferred Employees of
a mass layoff or plant closing (as defined by such Act or similar state of local
law). This provision will not prevent the Company or the Hospital from
terminating a Transferred Employee who fails to satisfy performance expectations
and/or commits misconduct after the Effective Date.
     (d) The Hospital, Assignee and the Company assume all obligations and
liabilities to all Transferred Employees with respect their accrued PTO as of
the Effective Date. The Assignor shall provide to the Hospital not later than
January 5, 2009 the number of hours of accrued PTO for each Transferred Employee
as of the Effective Date. The Assignor will be responsible for paying all wages
and benefits (other than accrued PTO) to, and withholding and paying all related
taxes for, all of the employees listed on Exhibit B through the Effective Date
in accordance with applicable law, the cost of which shall be paid to Assignor
as set forth in Section 5 above.
     7. Assignor Representations and Warranties. The Assignor herby represents
and warrants to the Assignee as follows:
     (a) Organization. The Assignor is a limited liability company duly
organized, validly existing, and in good standing under the laws of the State of
North Carolina, with full power and authority to conduct its business as it is
now being conducted.
     (b) Purchased Interest. The Assignor is the record and beneficial owner and
holder of the Purchased Interest, free and clear of all liens and encumbrances.
Other than the Operating Agreement, there are no contracts, whether written or
oral, relating to the issuance, sale, or transfer of the Purchased Interest.
     (c) Enforceability; No Conflict; Authority. This Agreement constitutes the
legal, valid, and binding obligation of the Assignor, enforceable against the
Assignor in accordance with its terms, except as such enforceability may be
limited by the availability of equitable remedies or defenses and by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally. The Assignor has the absolute and
unrestricted right, power, authority and capacity to execute and deliver this
Agreement and to perform its obligations under this Agreement. Neither the
execution and delivery of this Agreement by the Assignor nor the consummation or
performance of the transaction contemplated hereby by the Assignor will give any
person the right to prevent, delay or otherwise interfere with such transactions
pursuant to:

  (i)  
any provision of the organizational documents of the Assignor;
    (ii)  
any resolution adopted by the members or governing body of the Assignor;
    (iii)  
any law or court order to which the Assignor or any Assignor Affiliate may be
subject; or

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  (iv)  
any contract to which the Assignor or any Assignor Affiliate is a party or by
which the Assignor or any Assignor Affiliate may be bound.

The Assignor is not and will not be required to obtain any consent from any
person in connection with the execution and delivery of this Agreement or the
consummation or performance of the transaction contemplated hereby.
     (d) Certain Proceedings. There is no pending action, written demand, charge
or grievance, arbitration, cause of action, lawsuit, claim, complaint, criminal
prosecution, governmental or other examination or investigation, audit (other
than regular audits of financial statements by outside auditors), inspection,
hearing, administrative or other proceeding (collectively, a “Proceeding”) that
has been commenced against the Assignor and that challenges, or may have the
effect of preventing, delaying, making illegal or otherwise interfering with,
the transaction contemplated hereby. To the Assignor’s knowledge, no such
Proceeding has been threatened.
     (e) Disclosure. The monthly reports on the financial performance arising
from the operations of the Company for the period since October 1, 2007 that the
Assignor has delivered to the Assignee (the “Assignor Reports”) are true and
correct in all material respects. No representation or warranty or other
statement made by the Assignor in this Agreement or otherwise in connection
herewith contains any untrue statement or omits to state a material fact
necessary to make any of them, in light of the circumstances in which it was
made, not misleading.
     8. Indemnification. Assignor will indemnify and hold harmless Assignee and
Hospital and its representatives, members, officers, trustees and Affiliates
(collectively, the “Indemnified Assignee Persons”) for, and will pay to the
Indemnified Assignee Persons the amount of, any loss, liability, claim, damage
(excluding all lost profits and incidental and consequential damages but
including diminution in value with respect to the computation of the Purchase
Price pursuant to Section 11.04 of the Operating Agreement), expense (including
costs of investigation and defense and reasonable attorneys’ fees) whether or
not involving a third-party claim (collectively, “Damages”), arising, directly
or indirectly, from or in connection with any breach of any representation or
warranty made by the Assignor in this Agreement or any covenant or obligation of
the Assignor in this Agreement. The remedies provided in this Section 8,
together with the rights (a) to require Assignor’s specific performance of its
obligations pursuant to this Agreement, and (b) to enjoin Assignor from engaging
in conduct or activities that breach any such obligations, will be the exclusive
remedies that may be available to the Assignee or the other Indemnified Assignee
Persons.
     Company, Assignee and Hospital (the “Cape Cod Parties”) jointly and
severally agree to indemnify and hold harmless Assignor and its representatives,
members, officers, trustees and Affiliates (collectively, the “Indemnified
Assignor Persons”) for, and will pay to the Indemnified Assignor Persons the
amount of any Damages arising, directly or indirectly, from or in connection
with any breach of any representation or warranty made by any of the Cape Cod
Parties in this Agreement or any covenant or obligation of any of the Cape Cod
Parties in this Agreement. The remedies provided in this Section 8, together
with the rights (a) to require

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Assignee’s specific performance of its obligations pursuant to this Agreement,
and (b) to enjoin Assignee from engaging in conduct or activities that breach
any such obligations, will be the exclusive remedies that may be available to
the Assignor or the other Indemnified Assignor Persons, except as may arise
under the Lease and the guaranty thereof as set forth in Section 4 hereof.
     9. Expenses. Except as otherwise expressly provided in this Agreement, each
party to this Agreement will bear its respective expenses incurred in connection
with the preparation, execution, and performance of this Agreement and the
transaction contemplated hereby, including all fees and expenses of agents,
representatives, counsel, and accountants. Each party will cause the Company not
to incur any out-of-pocket expenses in connection with this Agreement.
     10. Further Assurances. The parties agree to furnish upon request to each
other such further information, to execute and deliver to each other such other
documents, and to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of this Agreement.
Assignor agrees to provide the books and records of the Company to the Cape Cod
Parties no later than January 20, 2009.
     11. Successors and Assigns. This Agreement shall inure to the benefit of
the parties hereto and their respective successors and assigns, and nothing in
this Agreement shall be construed to create any rights or obligations except
among the parties hereto, and no person or entity shall be regarded as a
third-party beneficiary of this Agreement.
     12. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the Commonwealth of Massachusetts without regard to its
choice of law principles. This Agreement may be executed in one or more
counterparts, and by the parties hereto in separate counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
     13. Arbitration. Any dispute, controversy or claim arising out of or in
connection with, or relating to, this Agreement or any breach or alleged breach
hereof shall, upon the request of any party involved, be submitted to, and
settled by, arbitration in the City of Boston, Commonwealth of Massachusetts,
pursuant to the commercial arbitration rules then in effect of the American
Arbitration Association (or at any time or at any other place or under any other
form of arbitration mutually acceptable to the parties so involved). Any award
rendered shall be final and conclusive upon the parties and a judgment thereon
may be entered in the highest court of the forum, state or federal, having
jurisdiction. The arbitrator shall have the authority to require each party’s
specific performance of its obligations hereunder and to enjoin each party from
engaging in conduct or activities that breach such party’s obligations
hereunder. The expenses of the arbitration shall be borne equally by the parties
to the arbitration, provided that each party shall pay for and bear the cost of
its own experts, evidence and counsel’s fees, except that in the discretion of
the arbitrator, any award may include the cost of a party’s counsel if the
arbitrator expressly determines that the party against whom such award is
entered has caused the dispute, controversy or claim to be submitted to
arbitration as a dilatory tactic.

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     14. Entire Agreement. This Agreement supersedes all prior agreements
between the parties with respect to its subject matter and constitutes a
complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter. This Agreement may not be amended
except by a written agreement executed by the parties hereto.
     15. Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
     16. Assignments, Successors, and No Third Party Rights. Neither party may
assign any of its rights or obligations under this Agreement without the prior
consent of the other party, which consent may be granted or denied in such other
party’s sole discretion, except that the Assignee may assign any of its rights
or obligations under this Agreement to the Hospital or any of its Affiliates and
Assignor may assign of its rights or obligations under this Agreement to the
MedCath Incorporated or any of its Affiliates. Subject to the preceding
sentence, this Agreement will apply to, be binding in all respects upon, and
inure to the benefit of the successors and permitted assigns of the parties.
     17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
     18. Tax Matters. The Assignor and the Assignee acknowledge that, in
connection with the transactions contemplated by this Agreement, the Company’s
status as a partnership for federal and state income tax purposes will terminate
as of the Effective Date, and the Assignor shall promptly prepare and timely
file the final federal and state partnership tax returns of the Company for the
tax period ending on the Effective Date.

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     IN WITNESS WHEREOF, this Assignment and Assumption Agreement has been
executed under seal as of the date first above written.

         
 
ASSIGNEE:
 
       
 
  CAPE COD CARDIAC CATH, INC.
 
       
 
  By:   /s/ Michael G. Jones
 
       
 
  Name:   Michael G. Jones
 
  Title:   Clerk
 
       
 
ASSIGNOR:
 
       
 
  MEDCATH PARTNERS, LLC
 
       
 
  By:   /s/ Jeff Hinton
 
       
 
  Name:   Jeff Hinton
 
  Title:   Chief Financial Officer
 
       
 
COMPANY:
 
       
 
  CAPE COD CARDIOLOGY SERVICES, LLC
 
       
 
  By: Cape Cod Cardiac Cath, Inc.
 
       
 
  By:   /s/ Michael G. Jones
 
       
 
  Name:   Michael G. Jones
 
  Title:   Clerk
 
       
 
HOSPITAL:
 
       
 
  CAPE COD HOSPITAL
 
       
 
  By:   /s/ Richard F. Salluzzo
 
       
 
  Name:
Title:   Richard F. Salluzzo
President and Chief Executive Officer