EX-10.1






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.



 









 





     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