Document:

Exhibit 10.51

 

Exhibit 10.51

 
  

Receivables Purchase Agreement

Dated as of December 30, 2004

among

SELCO Service Corporation, 

as Lessor,

Key Corporate Capital Inc., 

as Administrative Agent,

and

Key Corporate Capital Inc., 

as Purchaser

 
  

 

 

Table
of Contents

	 	 	 	 	 
	SECTION
	HEADING	 	PAGE	 

	 	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	Section 1.1. Definitions; Interpretation
	 	 	1	 
	ARTICLE II AMOUNT AND TERMS OF PURCHASERS’ COMMITMENTS
	 	 	2	 
	Section 2.1 Purchase Facility
	 	 	2	 
	Section 2,2 Purchases
	 	 	2	 
	Section 2.3. Certificates
	 	 	2	 
	Section 2.4. Mandatory Prepayments
	 	 	2	 
	Section 2.5. Return on Capital; Payment Dates
	 	 	2	 
	Section 2.6. Pro Rata Treatment and Payments
	 	 	3	 
	Section 2.7. Computation of ROC
	 	 	3	 
	Section 2.8. Mutilated, Destroyed, Lost or Stolen Certificates
	 	 	3	 
	Section 2.9. Security
	 	 	4	 
	ARTICLE III CONDITIONS PRECEDENT
	 	 	4	 
	Section 3.1. Conditions to Effectiveness
	 	 	4	 
	Section 3.2. Conditions to each Purchase
	 	 	4	 
	ARTICLE IV PAYMENTS AND DISTRIBUTIONS
	 	 	4	 
	Section 4.1. Payments and Distributions
	 	 	4	 
	ARTICLE V RECEIVABLES PURCHASE AGREEMENT EVENTS OF DEFAULT
	 	 	5	 
	Section 5.1. Receivables Purchase Agreement Events of Default
	 	 	5	 
	Section 5.2. Remedies
	 	 	6	 
	ARTICLE VI CERTAIN REMEDIAL MATTERS; RELEASE
	 	 	7	 
	Section 6.1. Certain Remedial Matters
	 	 	7	 
	Section 6.2. Release of Property, etc.
	 	 	7	 
	ARTICLE VII THE ADMINISTRATIVE AGENT
	 	 	8	 
	Section 7.1. Appointment
	 	 	8	 
	Section 7.2. Delegation of Duties
	 	 	8	 
	Section 7.3. Exculpatory Provisions
	 	 	8	 
	Section 7.4. Reliance on Communications
	 	 	9	 
	Section 7.5. Notice of Default
	 	 	9	 
	Section 7.6. Non-Reliance on Administrative Agent and Other Purchasers
	 	 	10	 

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	Section 7.7. [Intentionally Reserved]
	 	 	10	 
	Section 7.8. Administrative Agent in its Individual Capacity
	 	 	10	 
	Section 7.9. Successor Administrative Agent
	 	 	10	 
	ARTICLE VIII MISCELLANEOUS
	 	 	11	 
	Section 8.1. Amendments and Waivers
	 	 	11	 
	Section 8.2. Notices
	 	 	11	 
	Section 8.3. No Waiver; Cumulative Remedies
	 	 	11	 
	Section 8.4. Survival of Representations and Warranties
	 	 	11	 
	Section 8.5. Successors and Assigns; Assignment by Lessor
	 	 	11	 
	Section 8.6. Adjustments
	 	 	11	 
	Section 8.7. Counterparts
	 	 	12	 
	Section 8.8. Severability
	 	 	12	 
	Section 8.9. Intention
	 	 	12	 
	Section 8.10. Governing Law
	 	 	12	 
	Section 8.11. Limitations on Recourse to Lessor
	 	 	12	 

Attachments to Receivables Purchase Agreement:

Exhibit A
— Form of Certificate

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Receivables
Purchase Agreement

     This Receivables Purchase Agreement dated as of December 30, 2004 (as amended,
supplemented, amended and restated or otherwise modified from time to time, this “Receivables
Purchase Agreement”)is entered into by and among SELCO Service Corporation, an Ohio
corporation, as Lessor (the “Lessor”), Key Corporate Capital Inc., as Administrative
Agent (the “Administrative Agent”), and
Key Corporate Capital Inc., and each other
purchaser from time to time of the undivided percentage ownership interests in the Purchased
Interests, as Purchasers (individually, a “Purchaser”
and, collectively, the “Purchasers”)

W
i t n e s s e t h :

     Whereas, pursuant to the Participation Agreement, dated as of even date
herewith (as amended, supplemented, amended and restated or otherwise modified from time to time,
the “Participation Agreement”), among the Lessee, the Guarantor, the Lessor, the Purchasers and
the Administrative Agent, the Purchasers and the Lessor have agreed to finance the acquisition by
the Lessor of the Properties;

     Whereas, each Purchaser, upon receipt of a Funding Request, on the terms and subject
to the conditions set forth herein (including Article III), shall make available to the Lessor
such Purchaser’s Pro Rata Share of the undivided ownership interests in the Purchased Interests to
be acquired in connection with the requested Advance;

     Whereas, the Lessor desires to lease the Properties to the Lessee and the Lessee
desires to lease the Properties from the Lessor;

     Whereas,  the Lessor is willing to provide a portion of the funding of the costs of the
acquisition of the Properties;

     Whereas,  the Purchasers are willing to provide the remaining portion of the funding of the
costs of the acquisition of the Properties by purchasing undivided percentage ownership interests
in the Purchased Interests; and

     Now Therefore, in consideration of the mutual agreements contained in this
Receivables Purchase Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:

Article
I

Definitions

     Section 1.1. Definitions; Interpretation. Capitalized terms used but not otherwise
defined in this Receivables Purchase Agreement have the respective meanings specified in Appendix
A to the Participation Agreement; and the rules of interpretation set forth in Appendix A to the
Participation Agreement shall apply to this Receivables Purchase Agreement.

 

 

			
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Article II

Amount and Terms of
Purchasers’ Commitments

     Section 2.1.
Purchase Facility. On the terms and conditions set forth herein and in the
Participation Agreement (including, without limitation, Section 15.15 thereof), from the date
hereof until the Maturity Date, each Purchaser hereby agrees to purchase its Pro Rata Share of the
Purchased Interests from time to time offered by the Lessor. Under no circumstances shall the
Purchasers make any such purchase if, after giving effect to such purchase, (i) the aggregate
outstanding Capital would exceed the aggregate of all Purchaser Commitments or (ii) such
Purchaser’s outstanding Capital would exceed its Purchaser Commitment.

     Section 2.2.
Purchases. Upon receipt by the Administrative Agent of the Funding Request in
accordance with Section 3.4(a) of the Participation Agreement, the Lessor shall be deemed to have
requested of each Purchaser a purchase by such Purchaser of its Pro Rata Share of Purchased
Interests related to the aggregate Capital portion of the Advance requested by the Funding
Request. On the terms and subject to the conditions of this Receivables Purchase Agreement and the
Participation Agreement (including the satisfaction of the applicable conditions precedent set
forth in Article VI of the Participation Agreement), each Purchaser will purchase from the Lessor
on the Acquisition Date set forth in the Funding Request its Pro Rata Share of such Purchased
Interests.

     Section 2.3.
Certificates. Each purchase by a Purchaser of its Pro Rata Share of the Purchased
Interests shall be evidenced by a certificate of the Lessor substantially in the form of Exhibit A
hereto, with appropriate insertions as to date, Pro Rata Share and Capital equal to the Purchaser
Commitment of such Purchaser as set forth on Schedule I to the Participation Agreement. Each
Purchaser is hereby authorized to record the date and amount of each purchase made by such
Purchaser, the date and amount of each payment or prepayment of Capital thereof on the schedule
annexed to and constituting a part of the Certificates payable to it and any such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded absent manifest
error; provided, that the failure to make any such recordation or any error in such recordation
shall not affect the Lessor’s obligations hereunder or under such Certificate. Each Certificate
shall (i) be dated the Acquisition Date, (ii) be stated to mature on the Maturity Date and (iii)
provide for the payment of ROC in accordance with this Receivables Purchase Agreement.

     Section 2.4.
Mandatory Prepayments. All amounts payable by the Lessee pursuant to Article XV,
XVI, XVIII or XX of the Master Lease shall be used to prepay and be applied to the Purchaser
Balance in the manner set forth in Section 4.3 and
Article VII of the Participation Agreement.

     Section 2.5.
Return on Capital; Payment Dates. (a) The Capital shall earn a return
(hereinafter the “ROC”) for each day during each Rent Period with respect thereto at a rate per
annum equal to the Adjusted Eurodollar Rate applicable to Capital for such day.

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     (b) If all or any portion of the Purchaser Balance shall not be paid when due (whether at
the Expiration Date, by acceleration or otherwise), such overdue amount shall bear interest at
a rate per annum which is equal to the Overdue Rate. Amounts accruing pursuant to this clause
(b)shall be payable from time to time on demand. Upon the occurrence and during the continuance of an Event of Default, the Capital and, to the extent permitted by law, ROC thereon and any
other amounts owing hereunder or under the other Operative Documents shall bear interest,
payable on demand, at the Overdue Rate.

     (c) During the Lease Term, ROC on outstanding Capital shall be payable in arrears on
each Scheduled Payment Date.

     (d) The Capital shall be repaid in full on the Expiration Date. Prior thereto, a portion of
the aggregate amount of Capital outstanding shall be repaid on each Fixed Rent Payment Date in
the amount set forth opposite such Fixed Rent Payment Date under the
heading “Amount Applied to Capital” on Schedule VI to the Participation Agreement.

     (e) Each prepayment of the Capital shall be accompanied by accrued ROC the date of
such prepayment on the amount prepaid, plus any applicable
Break Costs.

     Section 2.6. Pro Rata Treatment and Payments. Except as otherwise provided in Article VII of
the Participation Agreement, each payment (including each prepayment) by the Lessor relating to
the Purchased Interests shall be made pro rata among the Purchasers according to their respective
Pro Rata Shares. Subject to Article IV and Section 8.6 herein, all payments (including
prepayments) relating to the Purchased Interests to be made by the Lessor hereunder and under the
Certificates, whether on account of principal, ROC otherwise, shall be made without setoff or
counterclaim and shall be made by the Lessor (or pursuant to the Master Lease, by the Lessee) to
the Administrative Agent, for the benefit of the Purchasers, prior to 11:00 a.m., New York City
time, to the Account (or to such other office as may be designated by the Administrative Agent
from time to time in a written notice pursuant to Section 15.3 of the Participation Agreement) in
funds consisting of Dollars which shall be immediately available on the scheduled date when such
payment is due. Payments received after 11:00 a.m., New York City time, on the date due shall be
deemed received on the next succeeding Business Day and shall be subject to ROC the Overdue Rate
as provided in Section 2.5(b) above.

     Section 2.7.
Computation of ROC. ROC shall be calculated on the basis of a 360-day year for
the actual days elapsed. The Administrative Agent shall, as soon as practicable, notify the
Lessee, the Lessor and the Purchasers of each determination of the Adjusted Eurodollar Rate. The
Administrative Agent shall, monthly during the Lease Term, notify the Lessee, the Lessor and the
Purchasers of the effective date and the amount of each such change in interest rate.

     Section 2.8.
Mutilated, Destroyed, Lost or Stolen Certificates. (a) If any Certificate shall
become mutilated, destroyed, lost or stolen, then upon the written request of the affected
Purchaser, the Lessor shall execute and deliver to the affected
Purchaser, a new Certificate. Such
new Certificate shall be: (i) recorded in the name in which such mutilated, destroyed, lost or
stolen Certificate was recorded; (ii) in the same original face amount as such mutilated,
destroyed, lost or stolen Certificate; and (iii) dated the date of such mutilated, destroyed, lost
or

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stolen
Certificate. If the Certificate being replaced has become mutilated, it shall be
surrendered to the Lessor. If the Certificate being replaced has been destroyed, lost or stolen,
the affected Purchaser shall furnish to the Lessor such security or indemnity as reasonably may be
required by it to save the Lessor harmless from any loss and evidence satisfactory to the Lessor
of the destruction, loss or theft of such Certificate and the ownership thereof. Upon request, the
Administrative Agent shall advise the affected Purchaser, of: (i) the aggregate principal amount
of, and the aggregate accrued ROC on, such mutilated, destroyed, lost or stolen Certificate that
was paid to the affected Purchaser, thereof at any time prior to the delivery of such new
Certificate; and (ii) the date to which ROC on such mutilated, destroyed, lost or stolen
Certificate had been paid to the affected Purchaser, thereof at the time of such delivery.

     (b) Any duplicate Certificate issued pursuant to this Section 2.8 shall constitute complete
and indefeasible evidence of ownership of such Certificate, as if originally issued, whether or
not the lost, stolen or destroyed Certificate shall be found at any time.

     Section 2.9. Security. The obligations and duties of the Lessor under this Receivables
Purchase Agreement are secured by the Mortgage and the Assignment of
Lease and Rent. Upon a
Receivables Purchase Agreement Event of Default, the Administrative Agent (for the ratable benefit
of the Purchasers) shall have all rights and remedies available as provided herein, in the
Mortgage and in the Assignment of Lease and Rent.

Article III

Conditions Precedent

     Section 3.1.
Conditions to Effectiveness. This Receivables Purchase Agreement shall be
effective on the Acquisition Date upon satisfaction of the conditions precedent set forth in
Sections 2.1 and 6.1 of the Participation Agreement.

     Section 3.2.
Conditions to each Purchase. The obligation of each Purchaser to make any
purchase requested to be made by it on any date with respect thereto is subject to the
satisfaction of the applicable conditions precedent thereto set forth in Sections 2.1 and 6.1 of
the Participation Agreement.

Article IV

Payments and Distributions

     Section 4.1 Payments and Distributions. All payments to be made by the Lessor
hereunder, and all payments due and payable to the Purchasers pursuant to any other Operative
Document, shall be paid to the Account and distributed by the Administrative Agent to the
Participants in accordance with Article VII of the Participation Agreement.

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Article V

Receivables Purchase Agreement Events of Default

     Section 5.1. Receivables Purchase Agreement Events of Default. The occurrence of any one
or more of the following events (whether such event shall be voluntary or involuntary or come
about or be effected by operation of law or pursuant to or in compliance with any judgment, decree
or order of any court or any order, rule or regulation of any administrative or governmental body)
shall constitute a “Receivables Purchase Agreement Event of Default”:

     (a) Any (i) default in the payment when due of Capital or (ii) default, and
such default shall continue unremedied for a period of five (5) Business Days, in the
payment when due of any ROC on the Capital or (iii) default, and such default shall
continue unremedied for a period of twenty (20) days after the Lessor’s receipt of
notice of such default, in the payment of any other amounts owing by the Lessor hereunder or
under any other Operative Document to which it is a party; or

     (b) The Lessor shall default in the due performance or observance by it of any
term, covenant or agreement contained in this Receivables Purchase Agreement or the Certificates or any other Operative Document to which it is a party (other than those
referred to in clause (a) above), and such default shall have continued unremedied for
a period of at least thirty (30) days after the Lessor’s receipt of notice of such
default, or if such default cannot reasonably be cured within such thirty (30) day period, such additional period as is necessary to remedy such default, not to exceed ninety (90)
days; or

     (c) Any representation, warranty or statement made or expressly deemed made by the Lessor herein or in any other Operative Document, or in any statement or
certificate delivered pursuant hereto or thereto, shall prove to be untrue in any
material respect on the date as of which made or expressly deemed made and such default shall
have continued unremedied for a period of at least thirty (30) days after the
Lessor’s receipt of notice of such default, or if such default cannot reasonably be cured
within such thirty (30) day period, such additional period as is necessary to remedy such
default, not to exceed ninety (90) days; or

     (d) Any Lease Event of Default shall have occurred and be continuing; or

     (e) The Lessor shall commence a voluntary case concerning itself under the
Bankruptcy Code; or an involuntary case is commenced against the Lessor and the
petition is not dismissed within ninety (90) days after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge of,
all or substantially all of the property of the Lessor and is not removed within ninety (90)
days; or the Lessor commences any other proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or
similar law of any jurisdiction whether now or hereafter in effect relating to the Lessor; or
there is commenced against the Lessor any such proceeding which remains undismissed for a

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period of ninety (90) days; or the Lessor is adjudicated insolvent or bankrupt which
adjudication is not withdrawn or reversed within ninety (90) days; or any order for relief
or other order approving any such case or proceeding is entered which order is not withdrawn
or reversed within ninety (90) days; or the Lessor suffers any appointment of any custodian
or the like for it or any substantial part of its property to continue undischarged or
unstayed for a period of ninety (90) days; or the Lessor makes a general assignment for the
benefit of creditors; or any corporate action is taken by the Lessor for the purpose of
effecting any of the foregoing and in the case of any of the foregoing, there is a delay or
disruption whether prior to or following the expiration of any of the foregoing time periods
of any amounts payable to the Purchasers and the Administrative Agent under this Receivables
Purchase Agreement or any of the other Operative Documents.

     Section 5.2. Remedies. (a) To the maximum extent permitted by law, upon the occurrence of any
Receivables Purchase Agreement Event of Default, (i) if such event is a Receivables Purchase
Agreement Event of Default specified in clause (e) of
Section 5.1 above or arises out of a Lease
Event of Default specified in Section 16.1(i) of the Master Lease, the Commitments of all
Purchasers shall automatically and immediately terminate and the Purchaser Balance shall
immediately become due and payable, and (ii) if such event is any other Receivables Purchase
Agreement Event of Default, any or all of the following actions may be taken: (x) the Required
Purchasers may, by notice to the Lessor, declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate and (y) with the consent of the Required
Purchasers, the Administrative Agent may, or upon the request of the Required Purchasers, the
Administrative Agent shall, by notice to the Lessor, declare the Purchaser Balance to be due and
payable forthwith, whereupon the Purchaser Balance shall immediately become due and payable (any
of the foregoing occurrences or actions referred to in clause (i) or (ii) above, an
“Acceleration”). Except as expressly provided above in this Article V, presentment, demand,
protest and all other notices of any kind are hereby expressly waived.

     (b) Upon the occurrence of any Receivables Purchase Agreement Event of Default and
at any time thereafter so long as any Receivables Purchase Agreement Event of Default shall be
continuing, the Administrative Agent shall, upon the written instructions of the Required Purchasers, exercise any or all of the rights and powers and pursue any and all of the
remedies available to it hereunder and (subject to the terms thereof) under the other Receivables
Documents and the Master Lease and shall have any and all rights and
remedies available under the Uniform Commercial Code or any other provision of law.

     (c) Upon the occurrence of any Receivables Purchase Agreement Event of Default and
at any time thereafter so long as any Receivables Purchase Agreement Event of Default shall be
continuing, the Administrative Agent (upon written direction from the Required Purchasers) may
proceed to protect and enforce the Receivables Documents and the other Operative Documents,
as applicable, by suit or suits or proceedings in equity, at law or in bankruptcy, and whether
for: (i) the specific performance of any covenant or agreement herein or therein contained, (ii) in
execution or aid of any power herein or therein granted, (iii) foreclosure hereunder or
thereunder, (iv) the appointment of a receiver or receivers for any Property, (v) the recovery of judgment
for

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the obligations secured hereby or thereby or (vi) the enforcement of any other proper,
legal or equitable remedy available under Applicable Law.

     (d) With respect to the occurrence and continuance of any Lease Event of Default, the Lessor
agrees that the Administrative Agent or any Purchaser may give notice of such Lease Event of
Default on behalf of the Lessor to the Lessee.

     (e) Notwithstanding the foregoing provisions of this Section 5.2, the Administrative Agent shall
not have the right to exercise any of its rights or remedies under this Section 5.2 against the
Lessor unless it shall also, at the written direction of the Required Purchasers, exercise a remedy
(as then permitted and as the Required Purchasers shall direct) under the Master Lease.

Article VI

Certain Remedial Matters; Release

     Section 6.1. Certain Remedial Matters. Notwithstanding any other provision of this
Receivables Purchase Agreement, any other Receivables Document or the Assignment of Lease and
Rent, the Lessor shall at all times retain the right, but not to the exclusion of the
Administrative Agent, (A) to receive from the Lessee all notices, certificates and other documents
and all information that the Lessee is permitted or required to give or furnish to the “Lessor”
pursuant to the Lease, the Participation Agreement or any other Operative Document, (B) to provide
such insurance as the Lessee shall have failed to maintain and (C) subject to the other applicable
provisions of this Receivables Purchase Agreement, to perform for the Lessee under Article XVII of
the Master Lease.

     Section 6.2.
Release of Property, etc. (a) If the Lessee shall at any time purchase any
Property pursuant to Article XV or XVIII of the Master Lease, or if any Property shall be sold in
accordance with, and the Lessee otherwise satisfies each of the obligations and conditions set
forth in, Article XX of the Master Lease, then, upon application of such amounts to repay the
Capital pursuant to Article II and the Administrative Agent’s and the Purchasers’ receipt of all
accrued ROC and any other payments due and owing from the Lessee to the Administrative Agent and
the Purchasers on such date, including without limitation pursuant to Article XIII of the
Participation Agreement, such Property shall be released from the Lien in favor of the Purchasers
created by the Assignment of Lease and Rent to the extent relating to such Property and the
applicable Mortgage without delivery of any instrument or performance of any act by any party.

     (b) Upon the termination of the Purchasers’ Commitments and the payment in full of the Capital
and all other amounts owing by the Lessor hereunder or under any other Receivables Document, the
Properties shall be released from the Lien in favor of the Purchasers created by the Assignment of
Lease and Rent and the Mortgage without delivery of any instrument or performance of any act by any
party.

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     (c) Upon request of the Lessor or the Lessee following a release of any Property described in
clause (a) or (b) above, the Administrative Agent shall at the Lessee’s sole cost and expense
execute and deliver to the Lessor or the Lessee such documents as the Lessor or the Lessee shall
reasonably request to evidence such release.

Article VII

The Administrative Agent

     Section 7.1. Appointment. Each Purchaser hereby designates and appoints the
Administrative Agent as agent and servicer of such Purchaser to act as specified herein and in the
other Operative Documents, and each such Purchaser hereby authorizes the Administrative Agent as
the agent and servicer for such Purchaser, to take such action on its behalf under the provisions
of this Receivables Purchase Agreement and the other Operative Documents and to exercise such
powers and perform such duties as are expressly delegated by the terms hereof and of the other
Operative Documents, together with such other powers as are reasonably incidental thereto. Such
delegation of authority shall include the execution and delivery by the Administrative Agent of
release instruments in recordable form releasing the Lien of the Mortgage and the Assignment of
Lease and Rent in accordance with the Operative Documents. Notwithstanding any provision to the
contrary elsewhere herein and in the other Operative Documents, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Purchaser, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Receivables Purchase Agreement or any of
the other Operative Documents, or shall otherwise exist against the Administrative Agent. The
provisions of this Article VII are solely for the benefit of the Administrative Agent and the
Purchasers and no other Person shall have any rights as a third party beneficiary of the provisions
hereof. In performing its functions and duties under this Receivables Purchase Agreement and the
other Operative Documents, the Administrative Agent shall act solely as Administrative Agent of the
Purchasers and does not assume and shall not be deemed to have assumed any obligation or
relationship of agency or trust with or for the Lessor, the Lessee or
any other Person.

     Section 7.2.
Delegation of Duties. The Administrative Agent may execute any of its duties
hereunder or under the other Operative Documents by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters
pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

     Section 7.3.
Exculpatory Provisions. Neither the Administrative Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in connection herewith or in
connection with any of the other Operative Documents (except for its or such Person’s own gross
negligence or willful misconduct), or (ii) responsible in any manner to any of the Purchasers for
any recitals, statements, representations or warranties contained herein or in any of the other
Operative Documents or in any certificate, report, statement or other document referred to or
provided for in, or received by the Administrative Agent under or in connection

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herewith or in connection with the other Operative Documents, or enforceability or sufficiency of
any of the other Operative Documents, or for any failure of any party (not including the
Administrative Agent) to any Operative Document to perform its obligations hereunder or
thereunder. The Administrative Agent shall not be responsible to any Purchaser for the
effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of this
Receivables Purchase Agreement, or any of the other Operative Documents or for any
representations, warranties, recitals or statements made herein or therein or made by the Lessee
or the Lessor in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection herewith or therewith
furnished or made by the Administrative Agent to the Purchasers or by or on behalf of the Lessee
or the Lessor to the Administrative Agent or any Purchaser or be required to ascertain or inquire
as to the performance or observance of any of the terms, conditions, provisions, covenants or
agreements contained herein or therein or as to the use of the proceeds of the purchases or of the
existence or possible existence of any Default or Event of Default or to inspect the properties,
books or records of the Lessee or the Lessor.

     Section 7.4.
Reliance on Communications. The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Lessee), independent accountants and
other experts selected by the Administrative Agent with reasonable care. The Administrative Agent
may deem and treat the Purchasers as the owner of their respective interests hereunder for all
purposes unless a written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent in accordance with Section 12.1 of the Participation
Agreement. The Administrative Agent, acting in its capacity as Administrative Agent, shall be
fully justified in failing or refusing to take any action under this Receivables Purchase
Agreement or under any of the other Operative Documents unless it shall first receive such advice
or concurrence of the Required Purchasers as it deems appropriate or it shall first be indemnified
to its satisfaction by the Purchasers against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting, hereunder or under
any of the other Operative Documents in accordance with a request of the Required Purchasers and
such request, and any action taken or failure to act pursuant thereto shall be binding upon all
the Purchasers (including their successors and assigns).

     Section 7.5. Notice of Default. The Administrative Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default unless the Administrative Agent has
received notice from a Purchaser, the Lessor or the Lessee referring to the Operative Document,
describing such Default or Event of Default and stating that such
notice is a “notice of default.”
In the event that the Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Purchasers. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be directed by the Required Purchasers.

-9-

 

			
	Tandem Health Care of Ohio, Inc.
	 	Receivables Purchase Agreement

     Section 7.6.
Non-Reliance on Administrative Agent and Other Purchasers. Each Purchaser
expressly acknowledges that neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to
it and that no act by the Administrative Agent or any affiliate thereof hereafter taken, including
any review of the affairs of the Lessee or the Lessor shall be deemed to constitute any
representation or warranty by the Administrative Agent to any
Purchaser. Each Purchaser represents
to the Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Purchaser, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the business, assets,
operations, property, financial and other conditions, prospects and creditworthiness of the Lessee
and the Lessor and made its own decision to make its purchases hereunder and enter into this
Receivables Purchase Agreement. Each Purchaser also represents that it will, independently and
without reliance upon the Administrative Agent or any other Purchaser, and based on such documents
and information as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this Receivables
Purchase Agreement, and to make such investigation as it deems necessary to inform itself as to
the business, assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Lessee and the Lessor. Except for notices, reports and other documents
expressly required to be furnished to the Purchasers by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any Purchaser with any
credit or other information concerning the business, operations, assets, property, financial or
other conditions, prospects or creditworthiness of the Lessee or the Lessor which may come into
the possession of the Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.

     Section 7.7.
[Intentionally Reserved].

     Section 7.8. Administrative Agent in its Individual Capacity. The Administrative Agent and
its Affiliates may make loans to, accept deposits from and generally engage in any kind of business
with the Lessee and the Lessor as though the Administrative Agent were not Administrative Agent
hereunder. With respect to the purchases made and all Obligations owing to it, the Administrative
Agent shall have the same rights and powers under this Receivables Purchase Agreement as any
Purchaser and may exercise the same as though it were not Administrative Agent, and the terms
“Purchaser” and “Purchasers” shall include the Administrative Agent in its individual capacity.

     Section 7.9. Successor Administrative Agent. The Administrative Agent may, at any time,
resign upon twenty (20) days’ written notice to the Purchasers and the Lessee and be removed with
cause by the Purchasers upon thirty (30) days’ written notice to the Administrative Agent. Upon
any such resignation or removal, the Required Purchasers shall have the right (which shall, so
long as no Default or Event of Default shall have occurred, be subject to the Lessee’s prior
approval, which shall not be unreasonably withheld or delayed) to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so appointed by such
Purchasers, and shall have accepted such appointment, within thirty (30) days after the notice of
resignation or notice of removal, as appropriate, then the retiring Administrative Agent shall
select a successor Administrative Agent provided such successor is a

-10-

 

			
	Tandem Health Care of Ohio, Inc.
	 	Receivables Purchase Agreement

Purchaser hereunder or a commercial bank organized under the laws of the United States of America
or of any State thereof and has a combined capital and surplus of at least $100,000,000 or an
Affiliate of any such commercial bank. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor, such successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations as
Administrative Agent under this Receivables Purchase Agreement and the other Operative Documents.
Notwithstanding the foregoing, the provisions of this Article VII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative Agent under this
Receivables Purchase Agreement.

Article VIII

Miscellaneous

     Section 8.1. Amendments and Waivers. Neither this Receivables Purchase Agreement, any
other Operative Document, nor any terms hereof or thereof may be amended, supplemented or modified
except in accordance with the provisions of Section 15.5 of the Participation Agreement.

     Section 8.2. Notices. All notices, requests and demands to or upon the respective parties
hereto shall be given in accordance with Section 15.3 of the Participation Agreement.

     Section 8.3. No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or any Purchaser, any right, remedy, power or
privilege hereunder or under the other Receivables Documents shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by
law.

     Section 8.4.
Survival of Representations and Warranties. All representations and warranties
made hereunder, in the other Receivables Documents and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution and delivery of
this Receivables Purchase Agreement and the Certificates and the
making of the purchases hereunder.

     Section 8.5.
Successors and Assigns; Assignment by Lessor. This Receivables Purchase
Agreement shall be binding upon and inure to the benefit of the Lessor, each Purchaser, the
Administrative Agent, each future holder of a Certificate and their respective successors and
permitted assigns; provided that the Lessor may not assign its rights or obligations hereunder
except in accordance with Article XII of the Participation
Agreement. All assignments and
participations by the Purchasers shall be subject to Article XII
of the Participation Agreement.

     Section 8.6 Adjustments. If any Purchaser (a “Benefited Purchaser”) shall at any time receive
any payment of all or part of its Capital, or ROC thereon, or receive any of the Collateral

-11-

 

			
	Tandem Health Care of Ohio, Inc.
	 	Receivables Purchase Agreement

in respect thereof (whether voluntarily or involuntarily, by setoff, or otherwise), in a greater
proportion than any such payment to or Collateral received by any other Purchaser entitled
thereto, if any, in respect of such other Purchaser’s Capital, or ROC thereon, such Benefited
Purchaser shall purchase for cash from the other Purchasers such portion of each such other
Purchaser’s Capital, or shall provide such other Purchaser with the benefits of any such
Collateral, or the proceeds thereof, as shall be necessary to cause such Benefited Purchaser to
share the excess payment or benefits of such Collateral or proceeds ratably with the other
Purchasers; provided, however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefited Purchaser, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but without ROC.

     Section 8.7.
Counterparts. This Receivables Purchase Agreement may be executed by one or
more of the parties to this Receivables Purchase Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be deemed to constitute
one and the same instrument. A set of the copies of this Receivables Purchase Agreement signed by
all the parties shall be lodged with the Administrative Agent.

     Section 8.8. Severability. Any provision of this Receivables Purchase Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

     Section 8.9. Intention. This Receivables Purchase Agreement and the other Operative Documents
represent the agreement of the Lessor, the Administrative Agent and the Purchasers with respect to
the subject matter hereof, and there are no promises, undertakings, representations or warranties
by the Administrative Agent or any Purchaser relative to subject matter hereof not expressly set
forth or referred to herein or in the other Operative Documents.

     Section 8.10. Governing Law. This Receivables Purchase Agreement and the
Certificates and the rights and obligations of the parties under this Receivables Purchase
Agreement and the Certificates shall be governed by, and construed and interpreted in accordance
with, the internal laws of the State of Ohio.

     Section 8.11.
Limitations on Recourse to Lessor. The parties hereto agree that except as
specifically set forth herein or in any other Operative Document, the Lessor shall not have any
personal liability whatsoever to the Administrative Agent or any Purchaser or their respective
successors and assigns for any claim based on or in respect hereof or any of the other Operative
Documents or arising in any way from the transactions contemplated hereby or thereby and recourse,
if any, shall be solely had against the Collateral, including the Properties but excluding the
Excepted Payments payable to the Lessor and the Supplemental Collateral; provided, however, that
the Lessor shall be liable (a) for its own willful misconduct or gross negligence, (b) breach of
any of its representations, warranties or covenants under the Operative Documents, or (c) any
Lessor Liens attributable to it. It is understood and agreed that, except as provided in the
preceding sentence: (i) the Lessor shall not have any personal liability under any of the Operative
Documents as a result of acting pursuant to and consistent with any of the Operative

-12-

 

			
	Tandem Health Care of Ohio, Inc.
	 	Receivables Purchase Agreement

Documents; and (ii) all such personal liability of the Lessor is expressly waived and released as a
condition of, and as consideration for, the execution and delivery of the Operative Documents by
the Lessor.

-13-

 

     In Witness Whereof, the parties hereto have caused this Receivables Purchase
Agreement to be duly executed and delivered by their proper and duly authorized officers as of the
day and year first above written.

	 	 	 	 	 
	 	SELCO Service Corporation, as Lessor

 	 
	 	By:  	/s/ Donald C. Davis
 	 
	 	 	Donald C. Davis  	 
	 	 	Its Vice President 	 
	 
	 	Key Corporate Capital Inc., as 

   Administrative Agent

 	 
	 	By:  	/s/ Florentina Djulvezan 	 
	 	 	Florentina Djulvezan 	 
	 	 	Its Vice President 	 
	 
	 	Key Corporate Capital Inc., as Purchaser

 	 
	 	By:  	/s/ Florentina Djulvezan 	 
	 	 	Florentina Djulvezan 	 
	 	 	Its Vice President 	 
	 

(Receivables Purchase Agreement)

 

 

Exhibit A

to Receivables Purchase Agreement

Form of Certificate

			
	$                    
	 	                    , 2004

     For Value Received, the undersigned, SELCO Service Corporation, an
Ohio corporation, as Lessor (the “Lessor”), has sold (subject to the penultimate paragraph
of this Certificate) to                      (the “Purchaser”) on the date hereof, an undivided
percentage ownership interest in the Purchased Interests, the Capital
amount of
                    
Dollars ($                     ) pursuant to that certain Receivables Purchase
Agreement dated as of December 30, 2004 (together with all amendments, supplements,
amendments and restatements and other modifications, if any, from time to time thereafter
made thereto, the “Receivables Purchase Agreement”), among the Lessor, Key Corporate
Capital Inc., as Administrative Agent, and the various financial institutions (including
the Purchaser) as are, or may from time to time become, parties thereto.

     ROC shall be paid on the outstanding amount of Capital from time to time outstanding
from the date hereof until the Expiration Date (whether by acceleration or otherwise) and,
after the Expiration Date, until paid, in the amount and on the dates specified in the
Receivables Purchase Agreement.

     Payments of both Capital and ROC are to be made without setoff or counterclaim in
Dollars in same day or immediately available funds to the Account specified in Schedule II
to the Participation Agreement (or to such other account as the Administrative Agent may
from time to time designate in a written notice to the Lessor).

     This Certificate is one of the Certificates referred to in, and evidences the
undivided percentage ownership interests in the Purchased Interests purchased under, the
Receivables Purchase Agreement and the Participation Agreement, to which reference is made
for a description of the Collateral for this Certificate and for a statement of the terms
and conditions on which the Lessor is permitted and required to make prepayments and
repayments of the Capital evidenced by this Certificate and on which such Capital may be
declared to be or automatically become immediately due and payable.

     Transfer, assignment or pledge of this Certificate or any ROC herein is subject to the
provisions of the Participation Agreement.

     Capitalized terms used but not otherwise defined herein have the respective meanings
specified in the Receivables Purchase Agreement.

     The liability of the Lessor under this Certificate is subject, without limitation, to
the restrictions on recourse set forth in Section 8.11 of the Receivables Purchase
Agreement, all of which, by acceptance of this Certificate, the Purchaser hereby consents.

 

 

			
	Tandem Health Care of Ohio, Inc.
	 	Receivables Purchase Agreement

     This Certificate shall be deemed to be a contract made under and governed by
the internal laws of the State of Ohio.

	 	 	 	 	 
	 	SELCO Service Corporation, as 

    Lessor

 	 
	 	By:  	 	 
	 	 	Donald C. Davis     	 
	 	 	Its Vice President 	 
	 

VI-2Exhibit 10.52

 

Exhibit 10.52

	 	 	 
	 

	 	KEYBANK
NATIONAL ASSOCIATION

CONFIRMATION

	 	 	 
	To:

	 	TANDEM HEALTH CARE OF OHIO, INC.
	 
	 	 
	 

	 	CHERRINGTON CORPORATE CENTER
	 

	 	800 CONCOURSE PKWAY S. SUITE 200
	 

	 	MAITLAND, FL 32751
	 
	 	 
	Attn:

	 	407-571-1509 JEFF ALEXANDER
	Fax:

	 	GENE CURCIO 407-571-1599
	 
	 	 
	Duplicate
	 	 
	Confirm to:

	 	sstraw@tandemhealthcare.com
	Client ID:

	 	6500207-SYLVAN
	 
	 	 
	From:

	 	KEYBANK NATIONAL ASSOCIATION
	Date:

	 	03-May-05
	Our Ref:

	 	132994/132994

The purpose of this letter agreement is to set forth the terms and conditions of the Swap
Transaction entered into between KEYBANK NATIONAL ASSOCIATION and TANDEM HEALTH CARE OF OHIO, INC,
on the Trade Date specified below (the “Swap Transaction”). This letter agreement constitutes a
“Confirmation” as referred to in the Swap Agreement
specified below.

     1. The definitions and provisions contained in the 2000 ISDA Definitions as published by the
International Swaps and Derivatives Association, Inc. (the “Definitions”) are incorporated into
this Confirmation.

     If you and we are parties to an ISDA Master Agreement as published by the International Swap
Dealers Association, Inc. and the Schedule to such agreement that
sets forth the general terms and
conditions applicable to Swap Transactions between us (a “Swap Agreement”), this Confirmation
supplements, forms a part of, and is subject to, such Swap Agreement.
If you and we are not yet
parties to a Swap Agreement, this Confirmation will be a complete valid legal binding agreement
between us as supplemented by the general terms and conditions set forth in the standard form ISDA
Master Agreement copyright 1992 by the International Swap Dealers Association, Inc. (“standard ISDA
form”). All provisions contained or Incorporated by reference in such Swap Agreement shall govern
this Confirmation except as expressly modified below. In the event of any inconsistency between
this Confirmation and the Definitions or the Swap Agreement or the standard ISDA form if a Swap
Agreement has not been entered into between us, this Confirmation will govern.

     This Confirmation will be governed by and construed in accordance with the laws of the State
of New York, without reference to choice of law doctrine, provided that this provision will be
superseded by any choice of law provision in the Swap Agreement.

     2. This
Confirmation constitutes a Rate Swap Transaction under the Swap Agreement and the
terms of the Rate Swap Transaction to which this Confirmation relates are as follows:

1

 

TANDEM
HEALTH CARE OF OHIO, INC.

Our Ref: 132994/132994

 

	 	 	 
	Notional Amount:

	 	$29,820,000.00 USD Amortizing by $50,000.00 per month
	 
	 	 
	Trade Date:

	 	03-May-05
	 
	 	 
	Effective Date:

	 	05-May-05
	 
	 	 
	Termination Date:

	 	30-Dec-09
	 
	 	 
	Fixed Amounts:
	 	 
	Fixed Rate Payer:

	 	TANDEM HEALTH CARE OF OHIO, INC.
	 
	 	 
	Fixed Rate Payer

Payment Dates:

	 	Commencing 31-May-05 and monthly thereafter on the last calendar
day of the month up to and including the Termination Date, subject to
adjustment in accordance with Following Business Day
Convention.
	 
	 	 
	Period End Dates:

	 	Monthly on the last calender day of the month commencing 3l-May-05.
	 
	 	 
	Fixed Rate:

	 	7.47000%
	 
	 	 
	Fixed Rate Day 

Count Fraction:

	 	Act/360
	 
	 	 
	Floating Amounts:
	 	 
	Floating Rate Payer:

	 	KEYBANK NATIONAL ASSOCIATION
	 
	 	 
	Floating Rate Payer

Payment Dates:

	 	Commencing 31-May-05 and monthly thereafter on the last
calendar day of the month up to and including the Termination Date,
subject to adjustment in accordance with Following Business Day
Convention.
	 
	 	 
	Period End Dates:

	 	Monthly on the last calender day of the month commencing 31-May-05.
	 
	 	 
	Floating Rate for

Initial Calculation
	 	 
	Period including spread:

	 	To Be Determined
	 
	 	 
	Floating Rate Option:

	 	USD-LIBOR-BBA
	 
	 	 
	Designated Maturity:

	 	1-Month
	 
	 	 
	Spread:

	 	3.0000%
	 
	 	 
	Floating Rate Day 

Count Fraction:

	 	Act/360
	 
	 	 
	Reset Dates:

	 	The first day of each Floating Rate
Payer Calculation Period.

2

 

TANDEM
HEALTH CARE OF OHIO, INC.

Our Ref: 132994/132994

 

	 	 	 
	Calculation Agent:

	 	KEYBANK NATIONAL ASSOCIATION
	 
	 	 
	Business days:

	 	London and New York
	 
	 	 
	Other Terms

and Conditions:
	 	 

          For the purposes of Section 5 (b) (iii) of this Agreement it shall be an
“Additional Termination Event” with Party B being the Affected Party, if Party B
(i) does not amend the Participation Agreement dated December 30, 2004 between
Party A and Party B to include the Swap Transaction in the definition of
Obligations, by June 3, 2005 or (ii) the failure of Party B to enter into a Credit
Support Document with terms and provisions acceptable to Party A in its sole
discretion.

	 	 	 
	Payment Method:

	 	FEDWIRE
	 
	 	 
	Please pay us at:

	 	KEYBANK NATIONAL ASSOCIATION 

ATTN: DERIVATIVE OPERATIONS 155300 
	We will pay you at:

	 	NATIONAL CITY BANK OF PENNSYLVANIA

FOR THE ACCOUNT OF TANDEM HEALTH CARE OF OHIO, INC.

Please
confirm the foregoing correctly sets forth the terms of our Agreement by executing the copy
of this Confirmation enclosed for that purpose and returning it to us.

	 	 	 	 	 	 	 
	 	 	Regards,	 	 
	 
	 	 	 	 	 	 
	 	 	KEYBANK NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Frank Purnell	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:
	 	Frank Purnell	 	 

	 	 	 
	Accepted and Confirmed as

of the Trade Date
	 	 
	 
	 	 
	TANDEM HEALTH CARE OF OHIO, INC.

	 	 
	 
	 	 
	/s/ Eugene R. Curcio
 

	 	 

3

 

(Local Currency—Single Jurisdiction)

ISDA®

International Swap Dealers Association, Inc.

MASTER AGREEMENT

Dated as of:  May 26, 2005 

KeyBank National Association and Tandem Health Care of OHio, Inc

have entered and/or anticipate entering into one or more transactions (each a “Transaction”)
that are or will be governed by this Master Agreement, which includes the schedule (the
“Schedule”), and the documents and other confirming evidence (each a “Confirmation”) exchanged
between the parties confirming those Transactions.

Accordingly, the parties agree as follows:—

1. Interpretation

(a) Definitions. The terms defined in Section 12 and in the Schedule will have the
meanings therein specified for the purpose of this Master Agreement.

(b) Inconsistency. In the event of any inconsistency between the provisions of the Schedule
and the other provisions of this Master Agreement, the Schedule will prevail. In the event of any
inconsistency between the provisions of any Confirmation and this Master Agreement (including the
Schedule), such Confirmation will prevail for the purpose of the relevant Transaction.

(c) Single Agreement. All Transactions are entered into in reliance on the fact that this Master
Agreement and all Confirmations form a single agreement between the parties (collectively referred
to as this “Agreement”), and the parties would not
otherwise enter into any Transactions.

2. Obligations

(a) General Conditions.

(i) Each party will make each payment or delivery specified in each Confirmation to be made by
it, subject to the other provisions of this Agreement.

(ii) Payments under this Agreement will be made on the due date for value on that date in the place
of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in
freely transferable funds and in the manner customary for payments in the required currency. Where
settlement is by delivery (that is, other than by payment), such delivery will be made for receipt
on the due date in the manner customary for the relevant obligation unless otherwise specified in
the relevant Confirmation or elsewhere in this Agreement.

(iii) Each obligation of each party under Section 2(a)(i) is subject to (1) the condition precedent
that no Event of Default or Potential Event of Default with respect to the other party has occurred
and is continuing, (2) the condition precedent that no Early Termination Date in respect of the
relevant Transaction has occurred or been effectively designated and (3) each other applicable
condition precedent specified in this Agreement.

Copyright © 1992 by International Swap Dealers Association, Inc

Second Printing          

 

 

(b) Change of Account. 
Either party may change its account for receiving a payment or delivery
by giving notice to the other party at least five Local Business Days prior to the scheduled date
for the payment or delivery to which such change applies unless such other party gives timely
notice of a reasonable objection to such change.

(c)
Netting. If on any date amounts would otherwise be payable:—

(i) In the same currency; and

(ii) In respect of the same Transaction

by each party to the other, then, on such date, each party’s obligation to make payment of any such
amount will be automatically satisfied and discharged and, if the aggregate amount that would
otherwise have been payable by one party exceeds the aggregate amount that would otherwise have
been payable by the other party, replaced by an obligation upon the party by whom the larger
aggregate amount would have been payable to pay to the other party the excess of the larger
aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount will be determined
in respect of all amounts payable on the same date in the same currency in respect of such
Transactions, regardless of whether such amounts are payable in
respect of the same Transaction.
The election may be made in the Schedule or a Confirmation by specifying that subparagraph (ii)
above will not apply to the Transactions identified as being subject to the election, together with
the starting date (in which case subparagraph (ii) above will not, or will cease to, apply to such
Transactions from such date). This election may be made separately for different groups of
Transactions and will apply separately to each pairing of branches or offices through which the
parties make and receive payments or deliveries.

(d) Default Interest; Other Amounts. Prior to the occurrence or effective designation of an Early
Termination Date in respect of the relevant Transaction, a party that defaults in the performance
of any payment obligation will, to the extent permitted by law and subject to Section 6(c), be
required to pay interest (before as well as after judgment) on the overdue amount to the other
party on demand in the same currency as such overdue amount, for the period from (and including)
the original due date for payment to (but excluding) the date of actual payment, at the Default
Rate. Such interest will be calculated on the basis of daily compounding and the actual number of
days elapsed. If, prior to the occurrence or effective designation of an Early Termination Date in
respect of the relevant Transaction, a party defaults in the performance of any obligation required
to be settled by delivery, it will compensate the other party on demand if and to the extent
provided for in the relevant Confirmation or elsewhere in this
Agreement.

3. Representations

Each party represents to the other party (which representations will be deemed to be repeated by
each party on each date on which a Transaction is entered into) that:—

(a)
 Basic Representations.

(i) Status. It is duly organised and validly existing under the laws of the jurisdiction of
its organisation or incorporation and, if relevant under such laws, in good standing;

(ii) Powers. It has the power to execute this Agreement and any other documentation relating to
this Agreement to which it is a party, to deliver this Agreement and any other documentation
relating to this Agreement that it is required by this Agreement to deliver and to perform its
obligations under this Agreement and any obligations it has under any Credit Support Document to
which it is a party and has taken all necessary action to authorise such execution, delivery and
performance;

2

 

(iii) No Violation or Conflict. Such execution, delivery and performance do not violate or conflict
with any law applicable to it, any provision of its constitutional documents, any order or judgment
of any court or other agency of government applicable to it or any of its assets or any contractual
restriction binding on or affecting it or any of its assets;

(iv)
Consents. All governmental and other consents that are required to have been obtained by it
with respect to this Agreement or any Credit Support Document to which it is a party have been
obtained and are in full force and effect and all conditions of any such consents have been
complied with; and

(v) Obligations Binding. Its obligations under this Agreement and any Credit Support Document to
which it is a party constitute its legal, valid and binding obligations, enforceable in accordance
with their respective terms (subject to applicable bankruptcy, reorganisation, insolvency,
moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability,
to equitable principles of general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).

(b) Absence of Certain Events. No Event of Default or Potential Event of Default or, to its
knowledge, Termination Event with respect to it has occurred and is continuing and no such event or
circumstance would occur as a result of its entering into or performing its obligations under this
Agreement or any Credit Support Document to which it is a party.

(c) Absence of Litigation. There is not pending or, to its knowledge, threatened against it or any
of its Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal,
governmental body, agency or official or any arbitrator that is likely to affect the legality,
validity or enforceability against it of this Agreement or any Credit Support Document to which it
is a party or its ability to perform its obligations under this Agreement or such Credit Support
Document.

(d) Accuracy of Specified Information. All applicable information that is furnished in
writing by or on behalf of it to the other party and is identified for the purpose of this Section
3(d) in the Schedule is, as of the date of the information, true, accurate and complete in every
material respect.

4. Agreements

Each party agrees with the other that, so long as either party has or may have any obligation
under this Agreement or under any Credit Support Document to which it is a party:—

(a) Furnish Specified Information. It will deliver to the other party any forms, documents
or certificates specified in the Schedule or any Confirmation by the date specified in the Schedule
or such Confirmation or, if none is specified, as soon as reasonably
practicable.

(b) Maintain Authorisations. It will use all reasonable efforts to maintain in full force
and effect all consents of any governmental or other authority that are required to be obtained by
it with respect to this Agreement or any Credit Support Document to which it is a party and will
use all reasonable efforts to obtain any that may become necessary in the future

(c) Comply with Laws. It will comply in all material respects with all applicable laws and
orders to which it may be subject if failure so to comply would materially impair its ability to
perform its obligations under this Agreement or any Credit Support
Document to which it is a party.

5. Events of Default and Termination Events

(a) Events of Default. The occurrence at any time with respect to a party or, if applicable,
any Credit Support Provider of such party or any Specified Entity of such party of any of the
following events constitutes an event of default (an “Event of Default”) with respect to such
party:—

3

 

(i) Failure to Pay or Deliver. Failure by the party to make, when due, any payment under this
Agreement or delivery under Section 2(a)(i) or 2(d) required to be made by it if such failure is
not remedied on or before the third Local Business Day after notice of such failure is given to the
party;

(ii) Breach of Agreement. Failure by the party to comply with or perform any agreement or obligation
(other than an obligation to make any payment under this Agreement or delivery under Section
2(a)(i) or 2(d) or to give notice of a Termination Event) to be complied with or performed by the
party in accordance with this Agreement if such failure is not remedied on or before the thirtieth
day after notice of such failure is given to the party;

(iii) Credit Support Default.

(1) Failure by the party or any Credit Support Provider of such party to comply with or perform
any agreement or obligation to be complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable grace period has elapsed;

(2) the expiration or termination of such Credit Support Document or the failing or ceasing of
such Credit Support Document to be in full force and effect for the purpose of this Agreement (in
either case other than in accordance with its terms) prior to the satisfaction of all obligations
of such party under each Transaction to which such Credit Support Document relates without the
written consent of the other party; or

(3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in
whole or in part, or challenges the validity of, such Credit Support Document;

(iv) Misrepresentation. A representation made or repeated or deemed to have been made or repeated
by the party or any Credit Support Provider of such party in this Agreement or any Credit Support
Document proves to have been incorrect or misleading in any material respect when made or repeated
or deemed to have been made or repeated;

(v) Default
under Specified Transaction. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party (1) defaults under a Specified Transaction and, after
giving effect to any applicable notice requirement or grace period, there occurs a liquidation of,
an acceleration of obligations under, or an early termination of, that Specified Transaction, (2)
defaults, after giving effect to any applicable notice requirement or grace period, in making any
payment or delivery due on the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at least three Local
Business Days if there is no applicable notice requirement or grace period) or (3) disaffirms,
disclaims, repudiates or rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act on its behalf);

(vi) Cross
Default. If “Cross Default” is specified in the Schedule as applying to the party, the
occurrence or existence of (1) a default, event of default or other similar condition or event
(however described) in respect of such party, any Credit Support Provider of such party or any
applicable Specified Entity of such party under one or more agreements or instruments relating to
Specified indebtedness of any of them (individually or collectively) in an aggregate amount of not
less than the applicable Threshold Amount (as specified in the Schedule) which has resulted in such
Specified indebtedness becoming, or becoming capable at such time of being declared, due and
payable under such agreements or instruments, before it would otherwise have been due and payable
or (2) a default by such party, such Credit Support Provider or such Specified Entity (individually
or collectively) in making one or more payments on the due date thereof in an aggregate amount of
not less than the applicable Threshold Amount under such agreements or instruments (after giving
effect to any applicable notice requirement or grace period);

4

 

(vii) Bankruptcy. The party, any Credit Support Provider of such party or any applicable
Specified Entity of such party:—

(1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes
insolvent or is unable to pay its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment, arrangement or composition with
or for the benefit of its creditors; (4) institutes or has instituted against it a proceeding
seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such proceeding or petition instituted or
presented against it, such proceeding or petition (A) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making of an order for its winding- up or
liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days
of the institution or presentation thereof; (5) has a resolution passed for its winding-up,
official management or liquidation (other than pursuant to a consolidation, amalgamation or
merger); (6) seeks or becomes subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all
or substantially all its assets; (7) has a secured party take possession of all or substantially
all its assets or has a distress, execution, attachment, sequestration or other legal process
levied, enforced or sued on or against all or substantially all its assets and such secured party
maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in
each case within 30 days thereafter; (8) causes or is subject to any event with respect to it
which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events
specified in clauses (1) to (7) (inclusive); or (9) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the foregoing acts; or

(viii) Merger Without Assumption. The party or any Credit Support Provider of such party
consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its
assets to, another entity and, at the time of such consolidation, amalgamation, merger or
transfer:—

(1) the resulting, surviving or transferee entity fails to assume all the obligations of
such party or such Credit Support Provider under this Agreement or any Credit Support Document to
which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably
satisfactory to the other party to this Agreement; or

(2) the benefits of any Credit Support Document fail to extend (without the consent of the
other party) to the performance by such resulting, surviving or transferee entity of its
obligations under this Agreement.

(b) Termination Events. The occurrence at any time with respect to a party or, if applicable, any
Credit Support Provider of such party or any Specified Entity of such party of any event specified
below constitutes an illegality if the event is specified in (i) below, and, if specified to be
applicable, a Credit Event Upon Merger if the event is specified pursuant to (ii) below or an
Additional Termination Event if the event is specified pursuant to (iii) below:—

(i) Illegality. Due to the adoption of, or any change in, any applicable law after the date on
which a Transaction is entered into, or due to the promulgation of, or any change in, the
interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a result of a breach by the
party of Section 4(b)) for such party (which will be the Affected Party):—

(1) to perform any absolute or contingent obligation to make a payment or delivery or to receive a
payment or delivery in respect of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or

5

 

(2) to perform, or for any Credit Support Provider of such party to perform, any contingent or
other obligation which the party (or such Credit Support Provider) has under any Credit Support
Document relating to such Transaction;

(ii)
Credit Event Upon Merger. If “Credit Event Upon
Merger” is specified in the
Schedule as applying to the party, such party (“X”), any Credit Support Provider of X or any
applicable Specified Entity of X consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the creditworthiness of the resulting,
surviving or transferee entity is materially weaker than that of X, such Credit Support Provider or
such Specified Entity, as the case may be, immediately prior to such action (and, in such event, X
or its successor or transferee, as appropriate, will be the Affected Party); or

(iii) Additional Termination Event. If any “Additional Termination Event” is specified in the
Schedule or any Confirmation as applying, the occurrence of such event (and, in such event, the
Affected Party or Affected Parties shall be as specified for such Additional Termination Event in
the Schedule or such Confirmation).

(c) Event of Default and Illegality. If an event or circumstance which would otherwise constitute
or give rise to an Event of Default also constitutes an Illegality, it will be treated as an
Illegality and will not constitute an Event of Default.

6. Early Termination

(a)
Right to Terminate Following Event of Default. If at any time an Event of Default
with respect to a party (the “Defaulting Party”) has occurred and is then continuing, the other
party (the “Non-defaulting Party”) may, by not more than
20 days notice to the Defaulting Party
specifying the relevant Event of Default, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all outstanding Transactions. If, however,
“Automatic Early Termination” is specified in the Schedule as applying to a party, then an Early
Termination Date in respect of all outstanding Transactions will occur immediately upon the
occurrence with respect to such party of an Event of Default specified in Section 5 (a)(vii)(1),
(3), (5), (6) or, to the extent analogous thereto, (8), and as of the time immediately preceding
the institution of the relevant proceeding or the presentation of the relevant petition upon the
occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(4) or,
to the extent analogous thereto, (8).

(b) Right to Terminate Following Termination Event.

(i) Notice. If a Termination Event occurs, an Affected Party will, promptly upon becoming
aware of it, notify the other party, specifying the nature of that Termination Event and each
Affected Transaction and will also give such other information about that Termination Event as the
other party may reasonably require.

(ii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) occurs and there are two
Affected Parties, each party will use all reasonable efforts to reach agreement within 30 days
after notice thereof is given under Section 6(b)(i) on action to
avoid that Termination Event.

(iii)
Right to Terminate. If:—

(1) an
agreement under Section 6(b)(ii) has not been effected with respect to all
Affected Transactions within 30 days after an Affected Party gives notice under Section 6(b)(i); or

(2) an Illegality other than that referred to in Section 6(b)(ii), a Credit Event Upon
Merger or an Additional Termination Event occurs,

either party in the case of an Illegality, any Affected Party in the case of an Additional
Termination Event if there is more than one Affected Party, or the party which is not the Affected
Party in the case of a Credit Event Upon Merger or an Additional Termination Event if there is only
one Affected Party may, by not more than 20 days notice to the other party and provided that the
relevant Termination Event is then continuing, designate a day not earlier

6

 

than the day such
notice is effective as an Early Termination Date in respect of all Affected
Transactions.

(c) Effect of Designation.

(i) If notice designating an Early Termination Date is given under Section 6(a) or (b), the Early
Termination Date will occur on the date so designated, whether or not the relevant Event of Default
or Termination Event is then continuing.

(ii) Upon the occurrence or effective designation of an Early Termination Date, no further payments
or deliveries under Section 2(a)(i) or 2(d) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount,
if any, payable in respect of an Early Termination Date shall be determined pursuant to Section
6(e).

(d) Calculations.

(i) Statement. On or as soon as reasonably practicable following the occurrence of an Early
Termination Date, each party will make the calculations on its part,
if any, contemplated by
Section 6(e) and will provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any amount payable under
Section 6(e)) and (2) giving details of the relevant account to which any amount payable to it is
to be paid. In the absence of written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such quotation will be
conclusive evidence of the existence and accuracy of such quotation.

(ii)
Payment Date. An amount calculated as being due in respect of any Early Termination Date under
Section 6(e) will be payable on the day that notice of the amount payable is effective (in the case
of an Early Termination Date which is designated or occurs as a result of an Event of Default) and
on the day which is two Local Business Days after the day on which notice of the amount payable is
effective (in the case of an Early Termination Date which is designated as a result of a
Termination Event). Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment), from (and including) the
relevant Early Termination Date to (but excluding) the date such amount is paid, at the Applicable
Rate. Such interest will be calculated on the basis of daily compounding and the actual number of
days elapsed.

(e) Payments on Early Termination. If an Early Termination Date occurs, the following provisions
shall apply based on the parties’ election in the Schedule of a payment measure, either “Market
Quotation” or “Loss”, and a payment method, either the
“First Method” or the “Second Method”. If
the parties fail to designate a payment measure or payment method in the Schedule, it will be
deemed that “Market Quotation” or the “Second Method”, as the case may be, shall apply. The amount,
if any, payable in respect of an Early Termination Date and determined pursuant to this Section
will be subject to any Set-off.

(i) Events of Default. If the Early Termination results from an Event of Default:—

(1)
First Method and Market Quotation. If the First Method and Market Quotation apply, the
Defaulting Party will pay to the Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the Terminated
Transactions and the Unpaid Amounts owing to the Non-defaulting Party over (B) the Unpaid Amounts
owing to the Defaulting Party.

(2)
First Method and Loss. If the First Method and Loss apply, the Defaulting Party will
pay to the Non-defaulting Party, if a positive number, the Non-defaulting Party’s Loss in respect
of this Agreement.

7

 

(3)
Second Method and Market Quotation . If the Second Method and Market Quotation apply,
an amount will be payable equal to (A) the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated Transactions and the Unpaid Amounts owing to the
Non-defaulting Party less (B) the Unpaid Amounts owing to the Defaulting Party if that amount is
a positive number, the Defaulting Party will pay it to the Non-defaulting party; if it is a
negative number, the Non-defaulting Party will pay the absolute value of that amount to the
Defaulting Party.

(4) Second Method and Loss. If the Second Method and Loss apply, an amount will be payable
equal to the Non-defaulting Party’s Loss in respect of this
Agreement. If that amount is a positive
number, the Defaulting Party will pay it to the Non- defaulting Party; if it is a negative number,
the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party.

(ii)
Termination Events. If the Early Termination Date results from a Termination Event:—

(1) One Affected Party. If there is one Affected Party, the amount payable will be
determined in accordance with Section 6(e)(i)(3), if Market
Quotation applies, or Section 6(e)(i)(4), if Loss applies, except that, in either case, references to the Defaulting Party and to
the Non-defaulting Party will be deemed to be references to the Affected Party and the party which
is not the Affected Party, respectively, and, if Loss applies and fewer than all the Transactions
are being terminated, Loss shall be calculated in respect of all
Terminated Transactions.

(2) Two Affected Parties. If there are two Affected Parties: —

(A) If Market Quotation applies, each party will determine a Settlement Amount in respect of the
Terminated Transactions, and an amount will be payable equal to (i) the sum of (a) one-half of the
difference between the Settlement Amount of the party with the higher Settlement Amount (“X”) and
the Settlement Amount of the party with the lower Settlement Amount (“Y”) and (b) the Unpaid
Amounts owing to X less (ii) the Unpaid Amounts owing to Y; and

(B) If Loss applies, each party will determine its Loss in respect of this Agreement (or, if
fewer than all the Transactions are being terminated, in respect of all Terminated Transactions)
and an amount will be payable equal to one-half of the difference between the Loss of the party
with the higher Loss (“X”) and the Loss of the party with the lower Loss (“Y”).

If the amount payable is a positive number, Y will pay it to X; if it is a negative number, X will
pay the absolute value of that amount to Y.

(iii) Adjustment for Bankruptcy. In circumstances where an Early Termination Date occurs because
“Automatic Early Termination” applies in respect of a party, the amount determined under this
Section 6(e) will be subject to such adjustments as are appropriate and permitted by law to reflect
any payments or deliveries made by one party to the other under this Agreement (and retained by
such other party) during the period from the relevant Early Termination Date to the date for
payment determined under Section 6(d)(ii).

(iv) Pre-Estimate. The parties agree that if Market Quotation applies an amount recoverable under
this Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such amount is payable
for the loss of bargain and the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any additional damages as a
consequence of such losses.

8

 

7. Transfer

Neither this Agreement nor any interest or obligation in or under this Agreement may be transferred
(whether by way of security or otherwise) by either party without the prior written consent of the
other party, except that: —

(a) a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation
with, or merger with or into, or transfer of all or substantially all its assets to, another entity
(but without prejudice to any other right or remedy under this Agreement); and

(b) a party may make such a transfer of all or any part of its interest in any amount payable to it
from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

8. Miscellaneous

(a) Entire Agreement. This Agreement constitutes the entire agreement and understanding of the
parties with respect to its subject matter and supersedes all oral communication and prior writings
with respect thereto.

(b) Amendments. No amendment, modification or waiver in respect of this Agreement will be effective
unless in writing (including a writing evidenced by a facsimile transmission) and executed by each
of the parties or confirmed by an exchange of telexes or electronic messages on an electronic
messaging system.

(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations
of the parties under this Agreement will survive the termination of any Transaction.

(d)  Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies and
privileges provided In this Agreement are cumulative and not exclusive of any rights, powers,
remedies and privileges provided by law.

(e)  Counterparts and Confirmations.

(i) This Agreement (and each amendment, modification and waiver in respect of it) may be
executed and delivered in counterparts (including by facsimile transmission), each of which
will be deemed an original.

(ii) The parties intend that they are legally bound by the terms of each Transaction from
the moment they agree to those terms (whether orally or otherwise). A Confirmation shall be
entered into as soon as practicable and may be executed and delivered in counterparts
(including by facsimile transmission) or be created by an exchange of telexes or by an
exchange of electronic messages on an electronic messaging system, which in each case will
be sufficient for all purposes to evidence a binding supplement to this Agreement. The
parties will specify therein or through another effective means that any such counterpart,
telex or electronic message constitutes a Confirmation.

(f) No Waiver of Rights. A failure or delay in exercising any right, power or privilege in respect
of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of
any right, power or privilege will not be presumed to preclude any subsequent or further exercise,
of that right, power or privilege or the exercise of any other right, power or privilege.

(g)
Headings. The headings used in this Agreement are for convenience of reference only and are not
to affect the construction of or to be taken into consideration in interpreting this Agreement.

9. Expenses

A Defaulting Party will, on demand, indemnify and hold harmless the other party for and against
all reasonable out-of-pocket expenses, including legal fees, incurred by such other party by
reason of the enforcement and protection of its rights under this Agreement or any Credit Support
Document to

9

 

which the Defaulting Party is a party or by reason of the early termination of any
Transaction, including, but not limited to, costs of collection.

10. Notices

(a) Effectiveness. Any notice or other communication in respect of this Agreement may be given in
any manner set forth below (except that a notice or other communication under Section 5 or 6 may
not be given by facsimile transmission or electronic messaging system) to the address or number or
in accordance with the electronic messaging system details provided (see the Schedule) and will be
deemed effective as indicated:—

(i) if in writing and delivered in person or by courier, on the date it is
delivered;

(ii) if sent by telex, on the date the recipient’s answerback is
received;

(iii) if sent by facsimile transmission, on the date that transmission is received by a
responsible employee of the recipient in legible form (it being agreed that the burden of
proving receipt will be on the sender and will not be met by a transmission report
generated by the sender’s facsimile machine);

(iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent
(return receipt requested), on the date that mail is delivered or its delivery is
attempted; or

(v) if sent by electronic messaging system, on the date that electronic message is
received,

unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a
Local Business Day or that communication is delivered (or attempted) or received, as applicable,
after the close of business on a Local Business Day, in which case that communication shall be
deemed given and effective on the first following day that is a Local Business Day.

(b) Change of Addresses. Either party may by notice to the other change the address, telex or facsimile number or electronic messaging system details at which notices or other communications
are to be given to it.

11. Governing Law and Jurisdiction

(a) Governing Law. This Agreement will be governed by and construed in accordance with the law
specified in the Schedule.

(b) Jurisdiction. With respect to any suit, action or proceedings relating to this Agreement
(“Proceedings”), each party irrevocably:—

(i) submits to the
jurisdiction of the English courts, if this Agreement is expressed to
be governed by English law, or to the non-exclusive jurisdiction of the courts of the
State of New York and the United States District Court located in the Borough of Manhattan
in New York City, if this Agreement is expressed to be governed by the laws of the State
of New York; and

(ii) waives any objection which it may have at any time to the laying of venue of any
Proceedings brought in any such court, waives any claim that such Proceedings have been
brought in an inconvenient forum and further waives the right to object, with respect to
such Proceedings, that such court does not have any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in any other
jurisdiction (outside, if this Agreement is expressed to be governed by English law, the
Contracting States, as defined in Section 1 (3) of the Civil Jurisdiction and Judgments Act 1982
or any modification, extension or re-enactment thereof for the time being in force) nor will the
bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in
any other jurisdiction.

10

 

(c) Waiver of Immunities. Each party
irrevocably waives, to the fullest extent permitted by
applicable law, with respect to itself and its revenues and assets (irrespective of their use or
intended use), all immunity on the grounds of sovereignty or other similar grounds from (i) suit,
(ii) jurisdiction of any court, (iii) relief by way of injunction, order for specific performance
or for recovery of property, (iv) attachment of its assets (whether before or after judgment) and
(v) execution or enforcement of any judgment to which it or its revenues or assets might otherwise
be entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the
extent permitted by applicable law, that it will not claim any such
immunity in any Proceedings.

12. Definitions

As used in this Agreement:—

“Additional
Termination Event” has the meaning specified in Section 5(b).

“Affected Party” has the meaning specified in Section 5(b).

“Affected
Transactions”  means (a) with respect to any Termination Event consisting of an
Illegality, all Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.

“Affiliate” means, subject to the Schedule, in relation to any person, any entity controlled,
directly or indirectly, by the person, any entity that controls, directly or indirectly, the
person or any entity directly or indirectly under common control with the person. For this
purpose, “control” of any entity or person means ownership of a majority of the voting power of
the entity or person.

“Applicable Rate” means:—

(a) in respect of obligations payable or deliverable (or which would have been but for Section
2(a)(iii)) by a Defaulting Party, the Default Rate;

(b) in respect of an obligation to pay an amount under Section 6(e) of either party from and after
the date (determined in accordance with Section 6(d)(ii)) on which that amount is payable, the
Default Rate;

(c) in respect of all other obligations payable or deliverable (or which would have been but for
Section 2(a)(iii)) by a Non-defaulting Party, the Non-default Rate; and

(d) in all other cases, the Termination Rate.

“consent” includes a consent, approval, action, authorisation, exemption, notice, filing,
registration or exchange control consent.

“Credit Event Upon Merger” has the meaning specified in Section 5(b).

“Credit Support Document” means any agreement or instrument that is specified as such in this
Agreement.

“Credit Support Provider” has the meaning specified in the Schedule.

“Default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual
cost) to the relevant payee (as certified by it) if it were to fund or of funding the relevant
amount plus 1% per annum.

“Defaulting Party” has the meaning specified in Section 6(a).

“Early Termination Date” means the date determined in accordance with Section 6(a) or 6(b)(iii).

“Event of Default” has the meaning specified in Section 5(a) and, if applicable, in the Schedule.

11

 

“Illegality”
has the meaning specified in Section 5(b).

“law” includes any treaty, law, rule or regulation and “lawful” and “unlawful” will be construed
accordingly.

“Local Business Day” means, subject to the Schedule, a day on which commercial banks are open for
business (including dealings in foreign exchange and foreign currency deposits) (a) in relation to
any obligation under Section 2(a)(i), in the place(s) specified in the relevant Confirmation or, if
not so specified, as otherwise agreed by the parties in writing or determined pursuant to
provisions contained, or incorporated by reference, in this Agreement, (b) in relation to any other
payment, in the place where the relevant account is located, (c) in relation to any notice or other
communication, including notice contemplated under Section 5(a)(i), in the city specified in the
address for notice provided by the recipient and, in the case of a notice contemplated by Section
2(b), in the place where the relevant new account is to be located and (d) in relation to Section
5(a)(v)(2), in the relevant locations for performance with respect to such Specified Transaction.

“Loss” means, with respect to this Agreement or one or more Terminated Transactions, as the case
may be, and a party, an amount that party reasonably determines in good faith to be its total
losses and costs (or gain, in which case expressed as a negative number) in connection with this
Agreement or that Terminated Transaction or group of Terminated Transactions, as the case may be,
including any loss of bargain, cost of funding or, at the election of such party but without
duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from any of them). Loss
includes losses and costs (or gains) in respect of any payment or delivery required to have been
made (assuming satisfaction of each applicable condition precedent) on or before the relevant Early
Termination Date and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3) or
6(e)(ii)(2)(A) applies. Loss does not include a party’s legal fees and out-of-pocket expenses
referred to under Section 9. A party will determine its Loss as of the relevant Early Termination
Date, or, if that is not reasonably practicable, as of the earliest date thereafter as is
reasonably practicable. A party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant markets.

“Market Quotation” means, with respect to one or more Terminated Transactions and a party making
the determination, an amount determined on the basis of quotations from Reference Market-makers.
Each quotation will be for an amount, if any, that would be paid to such party (expressed as a
negative number) or by such party (expressed as a positive number) in consideration of an
agreement between such party (taking into account any existing Credit Support Document with
respect to the obligations of such party) and the quoting Reference Market-maker to enter into a
transaction (the “Replacement Transaction”) that would have the effect of preserving for such
party the economic equivalent of any payment or delivery (whether the underlying obligation was
absolute or contingent and assuming the satisfaction of each applicable condition precedent) by
the parties under Section 2(a)(i) in respect of such Terminated Transaction or group of Terminated
Transactions that would, but for the occurrence of the relevant Early Termination Date, have been
required after that date. For this purpose, Unpaid Amounts in respect of the Terminated
Transaction or group of Terminated Transactions are to be excluded but, without limitation, any
payment or delivery that would, but for the relevant Early Termination Date, have been required
(assuming satisfaction of each applicable condition precedent) after that Early Termination Date
is to be included. The Replacement Transaction would be subject to such documentation as such
party and the Reference Market-maker may, in good faith, agree. The party making the determination
(or its agent) will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different time zones) on or
as soon as reasonably practicable after the relevant Early Termination Date. The day and time as
of which those quotations are to be obtained will be selected in good faith by the party obliged
to make a determination under Section 6(e), and, if each party is so obliged, after consultation
with the other. If more than three quotations are provided, the Market Quotation will be the
arithmetic mean of the quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will be the quotation
remaining after disregarding the highest and lowest quotations. For this purpose, if more than one
quotation has the same highest value or lowest value, then one of such quotations shall be
disregarded. If fewer than three quotations are provided, it will be deemed that the

12

 

Market Quotation in respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.

“Non-default Rate” means a rate per annum equal to the cost (without proof or evidence of any
actual cost) to the Non-defaulting Party (as certified by it) if it were to fund the relevant
amount.

“Non-defaulting Party” has the meaning specified in Section 6(a).

“Potential Event of Default” means any event which, with the giving of notice or the lapse of time
or both, would constitute an Event of Default.

“Reference Market-makers” means four leading dealers in the relevant market selected by the party
determining a Market Quotation in good faith (a) from among dealers of the highest credit standing
which satisfy all the criteria that such party applies generally at the time in deciding whether
to offer or to make an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.

“Scheduled Payment Date” means a date on which a payment or delivery is to be made under Section
2(a)(i) with respect to a Transaction.

“Set-off” means set-off, offset, combination of accounts, right of retention or withholding or
similar right or requirement to which the payer of an amount under Section 6 is entitled or
subject (whether arising under this Agreement, another contract, applicable law or otherwise) that
is exercised by, or imposed on, such payer.

“Settlement Amount” means, with respect to a party and any Early Termination Date, the sum of:—

(a) the Market Quotations (whether positive or negative) for each Terminated Transaction or group
of Terminated Transactions for which a Market Quotation is determined; and

(b) such party’s Loss (whether positive or negative and without reference to any Unpaid Amounts)
for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation
cannot be determined or would not (in the reasonable belief of the party making the determination)
produce a commercially reasonable result.

“Specified Entity” has the meaning specified in the Schedule.

“Specified Indebtedness” means, subject to the Schedule,
any obligation (whether present or future,
contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money.

“Specified Transaction” means, subject to the Schedule, (a) any transaction (including an
agreement with respect thereto) now existing or hereafter entered into between one party to this
Agreement (or any Credit Support Provider of such parry or any applicable Specified Entity of such
party) and the other party to this Agreement (or any Credit Support Provider of such other party
or any applicable Specified Entity of such other party) which is a rate swap transaction, basis
swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign exchange transaction,
cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency
rate swap transaction, currency option or any other similar transaction (including any option with
respect to any of these transactions), (b) any combination of these transactions and (c) any
other transaction identified as a Specified Transaction in this Agreement or the relevant
confirmation.

13

 

“Terminated Transactions” means with respect to any Early Termination Date (a) if resulting from
a Termination Event, all Affected Transactions and (b) if resulting from an Event of Default, all
Transactions (in either case) in effect immediately before the effectiveness of the notice
designating that Early Termination Date (or, if “Automatic Early Termination” applies, immediately
before that Early Termination Date).

“Termination Event” means Illegality or, if specified to be applicable, a Credit Event Upon Merger
or an Additional Termination Event.

“Termination Rate” means a rate per annum equal to the arithmetic mean of the cost (without proof
or evidence of any actual cost) to each party (as certified by such party) if it were to fund or
of funding such amounts.

“Unpaid Amounts” owing to any party means, with respect to an Early Termination Date, the aggregate
of (a) in respect of all Terminated Transactions, the amounts that became payable (or that would
have become payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to
such Early Termination Date and which remain unpaid as at such Early Termination Date and (b) in
respect of each Terminated Transaction, for each obligation under Section 2(a)(i) which was (or
would have been but for Section 2(a)(iii)) required to be settled by delivery to such party on or
prior to such Early Termination Date and which has not been so settled as at such Early Termination
Date, an amount equal to the fair market value of that which was (or would have been) required to
be delivered as of the originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such amounts, from (and
including) the date such amounts or obligations were or would have been required to have been paid
or performed to (but excluding) such Early Termination Date, at the Applicable Rate. Such amounts
of interest will be calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above shall be
reasonably determined by the party obliged to make the determination under Section 6(e) or, if each
party is so obliged, it shall be the average of the fair market values reasonably determined by
both parties.

IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below
with effect from the date specified on the first page of this
document.

	 	 	 
	KeyBank National Association
	 	Tandem Health Care of Ohio, Inc
	 	 	 
	(Name of Party)
	 	(Name of Party)

	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Frank Kuriakuz
	 	 	 	By:
	 	/s/ Eugene R. Curcio
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: Frank Kuriakuz
	 	 	 	 	 	Name: Eugene R. Curcio
	 

	 	Title: Vice President
	 	 	 	 	 	Title: CFO & Treasurer
	 

	 	Date: May 26, 2005
	 	 	 	 	 	Date: 8/26/05

14

 

SCHEDULE TO THE MASTER AGREEMENT

dated as of May 26, 2005

between KeyBank National Association and Tandem Health Care of Ohio, Inc

				
	(“Party
A”)

	 	(“Party B”)

Part 1. Termination Provisions.

(a) “Specified Entity” means in relation to Party A for the purpose of:

	 	 	 	 	 
	 

	 	Section 5(a)(v),
	 	None
	 
	 	 	 	 
	 

	 	Section 5(a)(vi),
	 	None
	 
	 	 	 	 
	 

	 	Section 5(a)(vii),
	 	None
	 
	 	 	 	 
	 

	 	Section 5(b)(ii),
	 	None

	 	 	 	 	 
	 	 	and in relation to Party B for the purpose of:
	 
	 	 	 	 
	 

	 	Section 5(a)(v),
	 	Any current or future Affiliate of Party B
	 
	 	 	 	 
	 

	 	Section 5(a)(vi),
	 	Any current or future Affiliate of Party B
	 
	 	 	 	 
	 

	 	Section 5(a)(vii),
	 	Any current or future Affiliate of
Party B
	 
	 	 	 	 
	 

	 	Section 5(b)(ii),
	 	Any current or future Affiliate of Party B

	(b)	 	“Specified Transaction” will have the meaning specified in Section 12 of this Agreement.
	 
	(c)	 	The “Cross Default” provisions of Section 5(a)(vi) will apply to Party B.
	 
	(d)	 	“Specified Indebtedness” will have the meaning
specified in Section 12 of this Agreement.
	 
	(e)	 	“Threshold Amount” means $100,000.
	 
	(f)	 	The “Credit Event Upon Merger” provisions of Section 5(b)(ii) will apply to Party B.

	 
	(g)	 	The “Automatic Early Termination” provision of Section 6(a) will not apply to Party A or Party
B.
	 
	(h)	 	Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement: 

(i) Second Method and Market Quotation payment method will apply.
	 
	(i)	 	Additional Termination Event: For the purpose of Section 5(b)(iii) of this Agreement, it
shall be an “Additional Termination Event” with Party B being the Affected Party if (i) the
loan or other indebtedness in connection with which a Transaction is entered into by Party B
for the purpose or with the effect of altering the net combined payment of Party B from a
floating to fixed or a fixed to floating rate basis is repaid, in whole or in part, whether
upon acceleration of principal, at maturity, or otherwise, or for any other reason ceases to
be an obligation of Party B, with or without the consent of Party A, or (ii) any Credit
Support Document expires, terminates, or ceases to be in full force and effect for the purpose
of this Agreement unless this Agreement is expressly amended in writing to reflect that it is
no longer a Credit Support Document hereunder.

Page 1

 

 

Part 2. Agreement to Deliver Documents.

For
the purpose of Section 4(a) of this Agreement, Party B agrees to deliver the following
documents:

	(a)	 	A certificate of an  authorized officer of Party B evidencing the necessary corporate
authorizations, resolutions, and approvals with respect to the execution, delivery and
performance of this Agreement, and certifying the names, true signatures, and authority of the
officer(s) signing this Agreement and executing Transactions hereunder.
	 
	(b)	 	Quarterly and annual financial statements of Party B when requested by Party
A.
	 
	(c)	 	IRS Form W-9 of Party B when requested by Party A.

Part 3. Miscellaneous.

	(a)	 	Addresses for Notices: For the purpose of Section 10(a) of this Agreement

Address for notices or communications to Party A:

Address:
127 Public Square, OH-01-27-0405, Cleveland, Ohio 44114-1306

Attention: Interest Rate Risk Management

Facsimile
No.: (216) 689-4737           Telephone No.: 216-689-4071

Address for notices or communications to Party B:

Address: 800 Concourse Parkway South, Suite 200 Maitland, FL 32751

Attention: Gene Curcio

Facsimile No.: 407-5711599           Telephone No.: 407-571-1550

	(b)	 	Calculation Agent. The Calculation Agent is Party A.
	 
	(c)	 	Credit Support Document: In relation to Party B means: Amended and Restated Guaranty Dated as
of March 30, 2005 made by Tandem Health Care, Inc. in favor of SELCO Service Corporation, as
Lessor, KeyBank National Association, as Administrative Agent, KeyBank National Association
and the other Various Financial Institutions Identified Therein, as Purchasers, KeyBank
National Association, as WC Lender, KeyBank National Association, as Hedge Provider, 2)
Amended and Restated Open-End Mortgage, Assignment of Leases and Rents and Security Agreement
from Tandem Health Care of Ohio, Inc., Mortgagor and SELCO Service
Corporation,  as Lessor to KeyBank National Association, as Collateral Agent,
Intercreditor And Collateral Agency Agreement dated as of March 30, 2005, by and
among KeyBank National Association, as Administrative Agent under the Receivables
Purchase Agreement dated as of December 30, 2004 among SELCO Service Corporation, the Prior
Administrative Agent and the purchasers party thereto, KeyBank National Association,
as WC Lender under the Working Capital Loan Agreement dated as of March 30, 2005 among
Tandem Health Care of Ohio, Inc., as borrower, the WC Guarantors party thereto, and the WC
Lender, and KeyBank National Association, as hedge provider under the Hedging Agreement
in connection with the Hedging Program, the “Hedge Provider”  and the Purchasers

Page 2

 

 

	 	 	and Lessor signatory thereto, First Omnibus Amendment dated as of March
30, 2005, among, Tandem Health Care, Inc. a Pennsylvania corporation, Tandem
Health Care of Ohio, Inc., an Ohio corporation, the Guarantors signatory thereto;
Key Equipment Finance
Inc. (formerly known as Key Corporate Capital Inc.),
individually as the Prior Purchaser and also as the Prior Administrative Agent (as thereinafter defined); SELCO Service Corporation, as Lessor and KeyBank National Association,
as Purchaser and as a WC Lender and also as Administrative Agent and Collateral Agent,
Participation Agreement dated December 30, 2004 among Party B as Lessee, Tandem Health Care,
Inc. as Guarantor, SELCO Service corporation, as Lessor, Key Corporate Capital
Inc., as Purchaser and Key Corporate Capital as Administrative Agent as may be amended from
time to time; and any guarantee, security agreement, or other document in effect from time
to time that, by its terms, guarantees, secures or otherwise supports the performance of
Party B’s obligations under this Agreement.
	 
	(d)	 	Credit Support Provider: Tandem Health Care, Inc., tandem Health Care
of crestline, inc. Tandem Health Care, of north royalton, Inc, Tandem
Health Care of massilon, inc., Tandem Health Care of piketon, inc., Tandem
Health Care of maumee, inc. Tandem Health Care of bellville, inc. Tandem
Health Care of tallmadge, inc. Tandem Health Care of mount vernon, inc.
	 
	(e)	 	Governing Law. This Agreement will be governed by and construed in accordance with the
laws of the State of New York without reference to choice of law doctrine.
	 
	(f)	 	Definitions. Section 12 is modified as follows:

	 	(i)	 	“Default Rate” means Prime +2%.

	(g)	 	Payments.

Party A will make payments to Party B by transfer to the account of Party B at KeyBank
National Association (Account Number: Please provide ___).

Party B will make payments to Party A by transfer from the account of Party B at KeyBank
National Association (Account Number: Please provide ___), and Party A is
irrevocably authorized to debit such account for each such payment (it being understood
that Party B will at all times maintain sufficient balances in such account for such
purposes).

Part 4.
Other Provisions.

	(a)	 	Additional Representations. Party B represents to Party A (which representation will be
deemed to be repeated by Party B on each date on which a Transaction is entered into) that
it, or any Credit Support Provider, has (A) if a corporation, partnership, proprietorship,
limited liability company or trust, (1) total assets exceeding $10,000,000 or (2) a net worth
exceeding $1,000,000 and is entering into the Transaction in connection with the conduct of
its business or to manage the risk associated with an asset or liability owned or incurred in
the conduct of its business, or (B) if an individual, total assets exceeding (1) $10,000,000
or (2) $5,000,000 and who is entering into the Transaction to manage the risk associated with
an asset owned or liability incurred, or reasonably likely to be owned or incurred, by the
individual.

Page 3

 

 

	(b)	 	Event of Default. Each Party agrees to notify the other party of the occurrence of
any Event of Default or Potential Event of Default immediately upon learning of the occurrence
thereof.
	 
	(c)	 	Disclaimer. In entering into this Agreement:

	 	1.	 	Party B understands that there is no assurance as to the direction in which interests
rates in financial markets may move in the future and that Party A makes no covenant,
representation, or warranty in this regard or in regard to the suitability of the terms of
the Agreement or any Transaction to the particular needs and financial situation of Party
B.
	 
	 	2.	 	Party B has made its own independent, informed decision to enter into this Agreement
and any Transaction.
	 
	 	3.	 	Party B represents, which representation shall be deemed repeated with respect to and
at the time of each Agreement and Transaction, that (A) it has had the opportunity,
independently of Party A and Party A’s affiliates, officers, employees, and agents, to
consult its own financial advisors and has determined that it is in
Party B’s interest to
enter into the Agreement and any Transaction, (B) it is capable of assuming and assumes
the risks of any Transaction and (C) it is capable of assuming and assumes all risks
(financial and otherwise) associated with any Transaction, including but not limited to,
Market Risk (defined as the risk that the Transaction may increase or decrease in value
with a change in, among other things, interest rates or the yield curve), and Liquidity
Risk (defined as the risk that the Transaction cannot be closed out of or disposed of
quickly at or near its value).
	 
	 	4.	 	Party A is not acting as a fiduciary for or advisor to Party B in respect of any
Transaction.
	 
	 	5.	 	Party B is not relying on any communications (written or oral) of Party A as
investment advice or as a recommendation to enter into this
Transaction, it being
understood that information and explanations related to the terms and conditions of this
Agreement and any Transaction shall not be considered investment advice or a
recommendation to enter into this Transaction.
	 
	 	6.	 	Party B is capable of assessing the terms, conditions and risks (on its own behalf or
through independent professional advice) of this Agreement and any Transaction and
understands and accepts such terms, conditions and risks.

	(d)	 	Waiver of Jury Trial. Each party hereby irrevocably waives, to the fullest extent permitted
by applicable law, any and all rights it may have to trial by jury in respect of any
proceedings arising out of or relating to this Agreement or any Transaction and acknowledges
that it and the other party have been induced to enter into this Agreement by, among other
things, these mutual waivers.
	 
	(e)	 	Set-off. The right to exercise a Set-off against any amount otherwise payable in respect of
an Early Termination Date pursuant to Section 6(e) may be applied solely at the election of
the Non- Defaulting Party in the case of an Event of Default, and by the party other than the
Affected Party in the case of a Termination Event or Additional Termination Event, whether or
not such party is the payer or payee of an amount determined pursuant to Section 6. If an
obligation is unascertained, such party may in good faith estimate that obligation and
exercise a Set-off in respect of the estimate, subject to the relevant party accounting to the
other party when the obligation becomes ascertained.
	 
	(f)	 	Small Business Administration Loans. If this Agreement relates to an interest rate swap on a
loan guaranteed by the Small Business Administration, then Party B acknowledges that the
Small Business Administration is not a party to this Agreement and does not guaranty it. In
the event that the Small Business Administration is called upon to honor its guaranty to Party
A, Party B’s debt will be determined by the terms of the loan, including the variable interest
rate provision.

Page 4

 

 

	(g)	 	Superceded Agreement. This Agreement and Schedule to the
Agreement supersede the ISDA
Master Agreement and the related Schedule dated February 24,
2000 and entered into by Tandem
Health Care of Ohio, Inc. and KeyBank National Association
“Former Agreement”. This Agreement
and the Schedule to the Agreement govern all future Transactions between the parties as well as
the currently outstanding Confirmation dated May 3, 2005 with an initial notional amount of
$29,820,000 and a maturity date of December 30, 2009 that was originally entered into under the
Former Agreement.
	 
	(h)	 	Optional Termination Event. At any time during the term of any transaction, Party B shall
have, and Party A shall not have, the right to terminate any Transaction on any New York and
London Business Day (the “Optional Termination Date”). Party A shall calculate the fair market
value for the Transaction. The fair market value shall be paid by the relevant party on the
Optional Termination Date with no further rights or obligations of either party, except for
the obligation to make payment of the value. Party B is the Affected Party.
	 
	(h)	 	Termination. Party B acknowledges that upon an early termination of a Transaction under the
Master Agreement, Schedule and any related Confirmations
(collectively, the “Master Agreement”)
between Party A and Party B, monies may be owed by Party B to Party A or by Party A to Party
B.

	 	 	 
	KeyBank National Association
	 	Tandem Health Care of Ohio, Inc
	 	 	 

	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Frank Kuriakuz
	 	 	 	By:
	 	/s/ Eugene R. Curcio
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: Frank Kuriakuz
	 	 	 	 	 	Name: Eugene R. Curcio
	 

	 	Title: Vice President
	 	 	 	 	 	Title: CFO & Treasurer

Page 5

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