Document:

Exhibit 10.45

 

Exhibit
10.45

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT

OF 1933 AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE

DISPOSED OF UNLESS REGISTERED UNDER THAT ACT

OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

TANDEM HEALTH CARE, INC.

5% Promissory Note

Due June 30, 2005

			
	$572,500.00
	 	December 31, 2004

      TANDEM HEALTH CARE, INC., a Pennsylvania corporation (hereinafter called the “Company”), for
value received, hereby promises to pay to BEHRMAN BROTHERS MANAGEMENT CORP. (“Behrman”), or
registered assigns, the principal sum of FIVE HUNDRED SEVENTY TWO THOUSAND FIVE HUNDRED DOLLARS
($572,500), on June 30, 2005, (subject to the prepayment provisions set forth herein) and to pay
interest (computed on the basis of a 360-day year consisting of twelve 30-day months) from the date
hereof on the unpaid principal amount hereof at the rate of 5% per annum, commencing on February 1,
2005, until the principal amount hereof shall have become due and payable, whether at maturity or
by acceleration or otherwise, and thereafter at the rate of 7% per annum on any overdue principal
amount and (to the extent permitted by applicable law) on any overdue interest until paid.

      All payments of principal and interest on this Note shall be in such coin or currency of the
United States of America as at the time of payment shall be legal tender for payment of public and
private debts. If any payment on this Note is due on a day which is not a Business Day, it shall
be due on the next succeeding Business Day. For purposes of this Note, “Business Day” shall mean
any day other than a Saturday, Sunday or a legal holiday or day on which banks are authorized or
required to be closed in Chicago or New York.

      1. Loss, Theft, Destruction or Mutilation of Note. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of this Note, and, in the
case of any such loss, theft or destruction, upon receipt of an affidavit of loss and an indemnity
reasonably acceptable in form and substance to the Company from the holder thereof, or, in the case
of any such mutilation, upon surrender and cancellation of this Note, the Company will make and
deliver, in lieu of this Note, a new Note of like tenor and unpaid principal amount and dated as of
the date to which interest has been paid on this Note.

      2. Persons Deemed Owners; Holders. The Company may deem and treat the person in whose
name this Note is registered as the owner and holder of this Note for the purpose of receiving
payment of principal of and interest on this Note and for all other purposes whatsoever, whether or
not this Note shall be overdue. The term “holder,” as used herein, shall be deemed to mean the
person in whose name this Note is registered as aforesaid at such time.

      3. Prepayments.

 

 

            (a) Optional Prepayment. Upon notice given as provided in Section 3(c), the Company
may, at its option, prepay this Note, as a whole at any time or in part from time to time in
amounts which shall be integral multiples of $10,000, without premium or penalty, in any case
together with any accrued and unpaid interest thereon through the date of such prepayment.

            (b) Mandatory Prepayments.

      (i) Upon the consummation of an “Initial Public Offering” or a “Change of
Control” (in each case as such terms are defined in the Articles of Incorporation of
the Company, as amended through the date hereof, regardless of whether such Articles
of Amendment are subsequently amended), the Company shall prepay all outstanding
principal under this Note, together with all accrued but unpaid interest thereon,
such prepayment to be made concurrently with the consummation of such Initial Public
Offering or Change of Control (unless the Change of Control results from a
transaction to which the Company is not a party, in which case this Note shall be
prepaid as aforesaid within 20 days after the Company learns of such Change in
Control).

      (ii) In the course of obtaining financing from any third party (other than any
party affiliated with Behrman) for any acquisition of a skilled nursing facility, a
post-acute care service business or a business related to such businesses, the
Company shall use its best efforts to concurrently obtain sufficient additional
financing to prepay this Note. To the extent that such additional financing is
obtained, this Note shall be prepaid simultaneously with the closing of such
financing.

      (iii) Upon the funding of an additional amount from Behrman to the Maker, on or
before June 30, 2005.

            (c) Notice of Prepayment. The Company shall give written notice of any prepayment of
this Note or any portion hereof pursuant to Section 3(a) or Section 3(b) not less than one day
prior to the date fixed for such prepayment. Such notice of prepayment and all other notices to be
given to the holder of this Note shall be given by registered or certified mail to the person in
whose name this Note is registered at its address designated on the register maintained by the
Company on the date of mailing such notice of prepayment or other notice. Upon notice of
prepayment being given as aforesaid, the Company covenants and agrees that it will prepay, on the
date therein fixed for prepayment, this Note or the portion hereof, as the case may be, so called
for prepayment. A prepayment of less than all of the outstanding principal amount of this Note
shall not relieve the Company of its obligation to make scheduled payments of interest payable in
respect of the principal remaining outstanding on a quarterly basis.

            (d) Interest After Date Fixed for Prepayment. If this Note or a portion hereof is
called for prepayment as herein provided, this Note or such portion shall cease to bear interest on
and after the date fixed for such prepayment unless, upon presentation for such purpose, the
Company shall fail to pay this Note or such portion, as the case may be, in which event this Note
or such portion, as the case may be, and, so far as may be lawful, any overdue installment of

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interest, shall bear interest on and after the date fixed for such prepayment and until paid
at the rate per annum provided herein.

            (e) Surrender of Note; Notation Thereon. Upon any prepayment of a portion of the
principal amount of this Note, the holder hereof, at its option, may require the Company to execute
and deliver at the expense of the Company (other than for transfer taxes, if any), upon surrender
of this Note, a new Note registered in the name of such person or persons as may be designated by
such holder for the principal amount of this Note then remaining unpaid, dated as of the date to
which the interest has been paid on the principal amount of this Note then remaining unpaid, or may
present this Note to the Company for notation hereon of the payment of the portion of the principal
amount of this Note so prepaid.

      4. Events of Default. If any one or more of the following events, herein called
“Events of Default,” shall occur (for any reason whatsoever, and whether such occurrence shall, on
the part of the Company or any of its subsidiaries, 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
a court of competent jurisdiction or any order, rule or regulation of any administrative or other
governmental authority) and such Event of Default shall be continuing:

      (i) default shall be made in the payment of the principal of this Note when and
as the same shall become due and payable, whether at maturity or at a date fixed for
prepayment or repurchase (including default of any optional or mandatory prepayment
in accordance with the requirements of Section 3) or by acceleration or otherwise;
or

      (ii) default shall be made in the payment of any installment of interest on
this Note according to its terms when and as the same shall become due and payable;
or

      (iii) default shall be made in the due observance or performance of any other
covenant, condition or agreement on the part of the Company to be observed or
performed pursuant to the terms hereof or of the Securities Purchase Agreement,
dated as of December 28, 2004 (the “Purchase Agreement”) among the Company, Behrman
Capital II L.P. and Strategic Entrepreneur Fund II, L.P., and such default shall
continue for 30 days after written notice thereof, specifying such default and
requesting that the same be remedied; or

      (iv) any representation or warranty made by or on behalf of the Company herein
or in the Purchase Agreement shall prove to have been false or incorrect in any
material respect on the date on or as of which made; or

      (v) the entry of a decree or order for relief by a court having jurisdiction in
the premises in respect of the Company or any of its subsidiaries in any involuntary
case under the federal bankruptcy laws, as now constituted or hereafter amended, or
any other applicable federal or state bankruptcy, insolvency or other similar laws,
or appointing a receiver, liquidator, assignee, custodian,

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trustee, sequestrator (or similar official) of the Company or any of its
subsidiaries for any substantial part of any of their property or ordering the
winding up or liquidation of any of their affairs and the continuance of any such
decree or order unstayed and in effect for a period of 30 consecutive days; or

      (vi) the commencement by the Company or any of its subsidiaries of a voluntary
case under the federal bankruptcy laws, as now constituted or hereafter amended, or
any other applicable federal or state bankruptcy, insolvency or other similar laws,
or the consent by any of them to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of the Company or any of its subsidiaries for any substantial part of any
of their property, or the making by any of them of any general assignment for the
benefit of creditors, or the failure of the Company or of any of its subsidiaries
generally to pay its debts as such debts become due, or the taking of corporate
action by the Company or any of its subsidiaries in furtherance of or which might
reasonably be expected to result in any of the foregoing;

      (vii) a default or an event of default as defined in any instrument evidencing
or under which the Company or any of its subsidiaries has outstanding at the time
any indebtedness in excess of $1,000,000 in aggregate principal amount shall occur
and as a result thereof the maturity of any such indebtedness shall have been
accelerated so that the same shall have become due and payable prior to the date on
which the same would otherwise have become due and payable and such acceleration
shall not have been rescinded or annulled within 20 days; or

      (viii) the liquidation, dissolution or winding up (whether voluntary or
involuntary) of the Company;

then the holder hereof may, at its option, by a notice in writing to the Company declare this Note
to be, and this Note shall thereupon be and become, immediately due and payable together with
interest accrued hereon, without diligence, presentment, demand, protest or further notice of any
kind, all of which are expressly waived by the Company to the extent permitted by law.

      Without limiting the foregoing, the Company hereby waives any right to trial by jury in any
legal proceeding related in any way to this Note and agrees that any such proceeding may, if the
holder so elects, be brought and enforced in the Supreme Court of the State of New York for New
York County or the United States District Court for the Southern District of New York and the
Company hereby waives any objection to jurisdiction or venue in any such proceeding commenced in
such court. The Company further agrees that any process required to be served on it for purposes
of any such proceeding may be served on it, with the same effect as personal service on it within
the State of New York, by registered mail addressed to it at its office set forth in Section 7.02
of the Purchase Agreement.

      5. Suits for Enforcement. In case any one or more of the Events of Default specified
in Section 4 of this Note shall happen and be continuing (subject to any applicable cure period

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expressly set forth herein), the holder of this Note may proceed to protect and enforce its
rights by suit in equity, action at law and/or by other appropriate proceeding, whether for the
specific performance of any covenant or agreement contained in this Note or in aid of the exercise
of any power granted in this Note, or may proceed to enforce the payment of this Note or to enforce
any other legal or equitable right of the holder of this Note. In case of any default under this
Note, the Company will pay to the holder hereof reasonable collection costs and reasonable
attorneys’ fees, to the extent actually incurred.

      6. Remedies Cumulative. No remedy herein conferred upon the holder of this Note is
intended to be exclusive of any other remedy and each and every such remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter existing at law or
in equity or by statute or otherwise.

      7. Remedies Not Waived. No course of dealing between the Company and the holder of
this Note or any delay on the part of the holder hereof in exercising any rights hereunder shall
operate as a waiver of any right of the holder of this Note.

      8. Covenants Bind Successors and Assigns. All the covenants, stipulations, promises
and agreements in this Note contained by or on behalf of the Company shall bind its successors and
assigns, whether so expressed or not.

      9. Governing Law. This Note shall be governed by and construed in accordance with the
laws of the State of New York.

      10. Headings. The headings of the sections and paragraphs of this Note are inserted
for convenience only and do not constitute a part of this Note.

[The Remainder of this Page has been Intentionally Left Blank]

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      IN WITNESS WHEREOF, Tandem Health Care, Inc. has caused this Note to be signed in its
corporate name by one of its officers thereunto duly authorized and to be dated as of the day and
year first above written.

	 	 	 	 	 
	 	TANDEM HEALTH CARE, INC.

 	 
	 	By:  	/s/ Lawrence R. Deering
 	 
	 	 	Lawrence R. Deering 	 
	 	 	Chairman and Chief Executive OfficerExhibit 10.46

 

	 	 	 	 	 

Exhibit
10.46

PROMISSORY NOTE

			
	December 31, 2004
	 	$8,516,000.00
	Troy, Michigan
	 	 

     OP THERAPY, INC. (“Borrower”), for value received, promises to pay to the order of THE MOBILE
MEDICAL GROUP, INC., a Michigan corporation (“Holder”), at 2301 W. Big Beaver Road, Suite 777,
Troy, Michigan 48084, Attn: Steven P. Schubiner, or at such other place as Holder may from time to
time designate in writing, the principal amount of $8,516,000.00 in lawful money of the United
States, together with interest on the unpaid principal balance as provided for below, and together
with all costs of collections, including reasonable attorneys’ fees, whether or not suit is
instituted, to enforce this Note. The unpaid principal balance shall bear interest from the date
hereof in lawful money of the United States, on the basis of a year of 360 days for the actual
number of days elapsed in a month, at a rate equal to 8.00% per year. Notwithstanding anything to
the contrary contained in this Note, (i) upon the occurrence of an Event of Default (as defined
below) or after the Maturity Date (as defined below), the unpaid principal balance shall bear
interest at a rate of 11% per annum, (ii) the principal amount of this Note and the related
determination of interest is subject to adjustment in accordance with Section 14.1 of the APA (as
defined below) and (iii) payment under this Note is subject to the right of offset set forth in
Section 11.9 of the APA.

     Accrued interest on this Note shall be payable on the first day of each month commencing on
February 1, 2005.

     The entire unpaid principal balance of, and any unpaid accrued interest on, this Note shall be
paid in full on December 31, 2009 (the “Maturity Date”). Notwithstanding anything to the contrary
contained in this Note, unless due and payable sooner as a result of the occurrence of an Event of
Default or at maturity, all of the remaining outstanding balance of principal of, and interest on,
this Note, if any, then unpaid shall become immediately due and payable without notice or demand,
upon the closing of: (a) an Initial Public Offering (as defined below) or (b) a Sale Transaction;
provided, however, if the Initial Public Offering or the Sale Transaction shall take place prior to
the time it is determined whether or not this Note shall be reduced by a Reduction Amount (as
defined in the APA), then Borrower may escrow, in an interest bearing account for the benefit of
Holder, to be maintained by an independent third party reasonably acceptable to both Borrower and
Holder, $4.0 million of the principal balance of this Note. Such monies shall remain in escrow
until the Reduction Amount is determined. If there is no Reduction Amount, the entire amount
escrowed plus accrued interest shall be paid to Holder. If there is a Reduction Amount, then the
amount of the Reduction Amount, plus any interest actually paid on that portion of the principal
balance of this Note represented by the Reduction Amount (the “Reduction Amount Interest”), plus
any accrued interest on the Reduction Amount and the Reduction Amount Interest, shall be paid to
Borrower, and the balance of the escrow, including any accrued interest on such balance, shall be
paid to Holder. Borrower and Holder shall equally split the costs of any such escrow.

     All payments on this Note shall be applied first to accrued interest then due and the
remainder to the unpaid principal balance. This Note may be prepaid in whole or in part without
penalty or premium.

 

 

     Borrower represents and warrants to the Lender that:

            (1) Borrower has all requisite power and authority to enter into this Note and to perform its
obligations hereunder; and this Note has been duly authorized, executed and delivered by Borrower
and constitutes a valid and legally binding obligation of Borrower, enforceable against Borrower in
accordance with its terms;

            (2) there are no actions, proceedings or investigations pending or, to Borrower’s knowledge,
threatened against or involving Borrower which (a) question the validity of this Note or any action
taken or to be taken by Borrower pursuant hereto, or (b) individually or in the aggregate, impair
in any material way or involve any substantial possibilities, so far as Borrower can foresee, of
impairing in any material way Borrower’s ability to perform its obligations under this Note;

            (3) the execution, delivery and performance by Borrower of this Note do not violate or result
in any violation of or conflict with or constitute a default under or result in the creation of, or
impose any obligation on Borrower to create, any encumbrance, on any of the undersigned’s
properties or assets pursuant to, any provision of any agreement, indenture or other instrument, or
of any license, permit or other authorization or of any judgment, decree, order, law, statute,
ordinance or governmental role or regulation applicable to Borrower;

            (4) no consent, approval, order or authorization of, or registration, declaration or filing
with, any governmental or public body or authority on the part of Borrower, is required for the
valid execution, delivery and performance of this Note;

            (5) neither this Note, nor any other document furnished to Holder by or on behalf of Borrower
pursuant hereto or in connection with any of the transactions consummated concurrently herewith
contains or will contain, as of its date, any untrue statement of a material fact or omits to state
or will omit to state, as of its date, a material fact necessary in order to make the statements
contained herein and therein not misleading; and there are no facts known to Borrower which,
individually or in the aggregate, impair in any material way or involve any substantial possibility
(so far as Borrower can foresee) of impairing in any material way Borrower’s ability to perform its
obligations under this Note, which have not been disclosed herein or in the documents famished to
Holder by or on behalf of Borrower pursuant hereto; and

            (6) Borrower’s exact legal name, entity type, and state of organization are set forth on the
signature page hereof.

     An Event of Default shall mean the occurrence or existence of one or more of the following
described events:

            (A) Borrower shall default in the payment of any principal of, or interest on, this Note when
due, whether at maturity, demand by acceleration or otherwise and such default shall continue
unremedied for five (5) days after notice from Holder to Borrower; or

            (B) A default or event of default shall occur at any time under the terms of any other
agreement involving borrowed money or the extension of credit or any other indebtedness under which
Borrower or Guarantor may be obligated as a borrower or guarantor in excess of

2

 

Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) in the aggregate, and such default or event of default:
(i) consists of the failure to pay (beyond any period of grace permitted with respect thereto or
unless waived) any such indebtedness when due (whether at stated maturity, by acceleration or
otherwise) or (ii) permits or causes the acceleration of any such indebtedness (unless such right
shall have been waived), unless in the case of any of the foregoing, such default or event of
default is being contested in good faith and by appropriate proceedings, diligently conducted;

            (C) Any representation or warranty made herein or in the Guaranty (as defined below) by
Borrower or the Guarantor shall prove to have been false or misleading in any material respect as
of the time made; or

            (D) A final judgment which, with other final judgments against Borrower or the Guarantor
exceeds an aggregate of $250,000 shall have been entered against Borrower or the Guarantor, if,
within 30 days after the entry thereof, such judgment shall not have been discharged or execution
thereof stayed pending appeal; or

            (E) Any default under, or institution of foreclosure or other proceedings by a third party to
enforce any lien or security interest of any kind upon the assets of Borrower, or any portion
thereof, unless Borrower is contesting such in good faith and has made reserves for loss if
recommended by its independent certified accountants; or

            (F) Borrower or the Guarantor shall fail generally to pay its debts as they become due; or

            (G) A proceeding shall have been instituted in a court having jurisdiction in the premises
seeking a decree or order for relief in respect of Borrower or of the Guarantor in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect,
or for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of Borrower or the Guarantor, or for any substantial part of their respective
property, or for the winding-up or liquidation of their respective affairs, and such proceeding
shall not have been dismissed within 60 days after the institution thereof; or

            (H) Borrower or the Guarantor shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order
for relief in an involuntary case under any such law, or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of Borrower or of the Guarantor, or for any substantial part of their respective
property, or shall make a general assignment for the benefit of creditors, or
shall take any action in furtherance of, or indicating their respective consent to, approval
of or acquiescence in, any of the foregoing.

     Upon the occurrence of an Event of Default, all of the remaining outstanding balance of
principal of, and interest on, this Note, if any, then unpaid shall become immediately due and
payable without notice or demand.

3

 

     It is the intention of Borrower and Holder to conform strictly to the usury laws now or
hereafter in force in the State of Michigan and any interest payable under this Note shall be
subject to reduction to the amount not in excess of the maximum non-usurious amount allowed under
the usury laws of Michigan as now or hereafter construed by the courts having jurisdiction over
such matters. In all events, the aggregate of all interest, if any, (whether designated as
interest or otherwise) contracted for, chargeable, or receivable under this Note or any other
instrument or other document executed in connection with this Note shall under no circumstances
exceed the maximum legal rate; and if it does, then it shall be deemed a mistake and such excess
shall be canceled automatically and if theretofore paid, rebated to Borrower or credited on the
principal amount of the Note, or if the Note has been repaid, then such excess shall be rebated to
Borrower.

     Borrower, and any endorser and guarantors, hereby jointly and severally waive presentment,
protest and demand, notice of protest, demand and dishonor and non-payment of this Note, and
expressly agree that the maturity of this Note, and any payment hereunder, may be extended from
time to time without in any way affecting the liability of Borrower or such endorser or guarantors.

     This Note, made in the State of Michigan, shall be governed and construed according to the
internal laws of Michigan.

     “APA” means that certain Asset Purchase Agreement, dated October 28, 2004, between Borrower
and Holder.

     “Initial Public Offering” means the first public offering of any of the capital stock of the
Guarantor (or any Subsidiary), pursuant to an effective registration statement under the Securities
Act.

     “Guarantor” means Tandem Health Care, Inc., a Pennsylvania corporation.

     “Guaranty” means the Guaranty of even date herewith given by Guarantor to Holder.

     “Sale Transaction” means a sale (whether by merger, recapitalization, consolidation,
reorganization, combination, asset purchase, or otherwise) of more than 50% of all of Borrower’s
and/or the Guarantor’s outstanding capital stock, or of substantially all of the assets of Borrower
and/or the Guarantor to any independent third party.

     “Securities Act” means the Securities Act of 1933, as amended.

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     “Subsidiary” shall mean any corporation, limited liability company, partnership or other
entity of which the Guarantor, directly or indirectly, holds a majority of the voting stock or
voting power, or a majority of the capital, profits or other economic interests therein.

	 	 	 	 	 
	 	 	OP THERAPY, INC., a Michigan corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Lawrence R. Deering
	 

	 	 	 	 
	 	 	Name: Lawrence R. Deering
	 	 	Title: Chairperson and Chief Executive Officer

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