Exhibit 10.30

MASTER LEASE AGREEMENT

BY AND AMONG

THE ENTITIES LISTED ON SCHEDULE 1-A ATTACHED HERETO,

collectively, jointly and severally, Lessor

AND

THE ENTITIES LISTED ON SCHEDULE 1-B ATTACHED HERETO,

collectively, jointly and severally, as Lessee

August 31, 2015

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Table of Contents

 

ARTICLE I

  DEFINITIONS      2   

ARTICLE II

  LEASED PROPERTY; TERM      22   

ARTICLE III

  RENT      23   

3.1

  Rent.      23   

3.2

  Additional Charges.      25   

3.3

  Rent and Payments under the Oklahoma Ground Lease.      25   

ARTICLE IV

  IMPOSITIONS      25   

4.1

  Payment of Impositions.      25   

4.2

  Adjustment of Impositions.      26   

4.3

  Utility Charges.      27   

4.4

  Insurance Premiums.      27   

ARTICLE V

  ABSOLUTE NET LEASE; NO TERMINATION; TERMINATION WITH RESPECT TO FEWER THAN ALL
PROPERTIES      27   

5.1

  Absolute Net Lease; No Termination.      27   

5.2

  Termination with Respect to Fewer than All Properties.      28   

ARTICLE VI

  OWNERSHIP OF LEASED PROPERTY AND PERSONAL PROPERTY      28   

6.1

  Ownership of the Leased Property.      28   

6.2

  Lessee’s Personal Property.      28   

ARTICLE VII

  CONDITION AND USE OF LEASED PROPERTY      29   

7.1

  Condition of the Leased Property.      29   

7.2

  Use of the Leased Property.      30   

7.3

  Lessor to Grant Easements.      31   

ARTICLE VIII

  LEGAL AND INSURANCE REQUIREMENTS      31   

8.1

  Compliance with Legal and Insurance Requirements.      31   

8.2

  Hazardous Materials.      32   

8.3

  Healthcare Laws.      33   

8.4

  Single Purpose Entity.      34   

8.5

  Organizational Covenants.      34   

8.6

  Representations and Warranties.      35   

ARTICLE IX

  REPAIRS; RESERVES; RESTRICTIONS      35   

9.1

  Maintenance; Repair and Remodel.      35   

9.2

  Reserves for Major Repairs.      36   

ARTICLE X

  CAPITAL ADDITIONS      37   

10.1

  Required Capital Additions.      37   

10.2

  Construction of Capital Additions to the Leased Property.      38   

10.3

  Capital Additions Financed by Lessee.      39   

10.4

  Capital Additions Funded by Lessor.      39   

10.5

  Salvage.      39   

ARTICLE XI

  LIENS      40   

ARTICLE XII

  PERMITTED CONTESTS      40   

12.1

  Permitted Contests.      40   

 

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ARTICLE XIII

  INSURANCE      41   

13.1

  General Insurance Requirements.      41   

13.2

  Additional Insurance.      45   

13.3

  Waiver of Subrogation.      45   

13.4

  Form of Insurance.      45   

13.5

  Increase in Limits.      47   

13.6

  Blanket Policy.      47   

13.7

  No Separate Insurance.      47   

13.8

  Insurance Required under Oklahoma Ground Lease.      48   

ARTICLE XIV

  FIRE AND CASUALTY      48   

14.1

  Insurance Proceeds.      48   

14.2

  Reconstruction in the Event of Damage or Destruction Covered by Insurance.   
  48   

14.3

  Reconstruction in the Event of Damage or Destruction Not Covered by Insurance.
     49   

14.4

  Lessee’s Personal Property.      50   

14.5

  Restoration of Lessee’s Property.      50   

14.6

  No Abatement of Rent.      50   

14.7

  Damage Near End of Term.      50   

14.8

  Termination of Right to Purchase.      50   

14.9

  Waiver.      50   

ARTICLE XV

  CONDEMNATION      51   

15.1

  Parties’ Rights and Obligations.      51   

15.2

  Total Taking.      51   

15.3

  Partial Taking.      51   

15.4

  Award Distribution.      51   

15.5

  Temporary Taking.      52   

ARTICLE XVI

  DEFAULT      52   

16.1

  Events of Default.      52   

16.2

  Additional Expenses.      59   

16.3

  Waiver.      60   

16.4

  Application of Funds.      60   

16.5

  Notices by Lessor.      60   

16.6

  Lessor’s Contractual Security Interest.      60   

ARTICLE XVII

  LESSOR’S RIGHT TO CURE      61   

ARTICLE XVIII

  PURCHASE OF THE LEASED PROPERTY      61   

ARTICLE XIX

  HOLDING OVER      62   

ARTICLE XX

  LESSOR CONSENT      62   

ARTICLE XXI

  RISK OF LOSS      63   

ARTICLE XXII

  INDEMNIFICATION      63   

ARTICLE XXIII

  ASSIGNMENT, SUBLETTING AND SUBLEASE SUBORDINATION      65   

23.1

  Assignment and Subletting.      65   

23.2

  Sublease Limitations.      66   

23.3

  Sublease Subordination and Non-Disturbance.      66   

 

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23.4

  Existing Subleases.      67   

ARTICLE XXIV

  OFFICER’S CERTIFICATES; FINANCIAL STATEMENTS; NOTICES AND OTHER CERTIFICATES
     67   

ARTICLE XXV

  INSPECTION AND FEES      70   

ARTICLE XXVI

  NO WAIVER      70   

ARTICLE XXVII

  REMEDIES CUMULATIVE      71   

ARTICLE XXVIII

  SURRENDER      71   

ARTICLE XXIX

  NO MERGER OF TITLE      71   

ARTICLE XXX

  TRANSFERS BY LESSOR AND MPT REAL ESTATE OWNER; SEVERANCE RIGHTS      71   

30.1

  Transfers by Lessor.      71   

30.2

  Severance Rights.      72   

ARTICLE XXXI

  QUIET ENJOYMENT      72   

ARTICLE XXXII

  NOTICES      73   

ARTICLE XXXIII

  APPRAISAL      74   

ARTICLE XXXIV

  PURCHASE RIGHTS      74   

34.1

  Lessee’s Option to Purchase.      74   

34.2

  Lessor’s Option to Purchase Lessee’s Personal Property.      75   

ARTICLE XXXV

  SUBSTITUTION RIGHTS      75   

35.1

  Lessee’s Property Substitution Right.      75   

35.2

  Conditions Precedent to Lessee’s Property Substitution Right.      75   

35.3

  Procedures for Property Substitution.      77   

ARTICLE XXXVI

  FINANCING OF THE LEASED PROPERTY      78   

ARTICLE XXXVII

  SUBORDINATION AND NON-DISTURBANCE      78   

ARTICLE XXXVIII

  LICENSES      79   

38.1

  Maintenance of Licenses.      79   

38.2

  No Transfers or Alterations of Licenses.      79   

38.3

  Notifications; Corrective Actions.      79   

38.4

  Termination of Lease.      80   

38.5

  Material Condition of Lease.      80   

ARTICLE XXXIX

  INTENTIONALLY OMITTED      81   

ARTICLE XL

  MISCELLANEOUS      81   

40.1

  General.      81   

40.2

  Bankruptcy Waivers.      81   

40.3

  Lessor’s Expenses.      82   

40.4

  Entire Agreement; Modifications.      82   

40.5

  Lessor Securities Offering and Filings.      82   

40.6

  Non-Recourse as to Lessor.      83   

40.7

  Covenants, Restrictions and Reciprocal Easements.      83   

40.8

  Force Majeure.      83   

40.9

  Management Agreements.      84   

40.10

  Lessee Non-Competition.      84   

40.11

  Lessor Non-Competition.      85   

40.12

  Governing Law.      86   

 

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40.13

  Jurisdiction and Venue.      86   

40.14

  True Operating Lease.      87   

40.15

  Regulatory Cooperation.      87   

40.16

  Compliance with Anti-Terrorism Laws.      88   

40.17

  Electronically Transmitted Signatures.      88   

40.18

  Waiver of Jury Trial.      88   

40.19

  Counterparts.      89   

40.20

  Survival.      89   

40.21

  Continuation of Defaults.      89   

40.22

  Specific Performance.      89   

40.23

  Joint Drafting.      89   

40.24

  Joint and Several Obligations.      89   

40.25

  Representations, Agreements and Covenants relating to Certain Facilities.     
89   

40.26

  Oklahoma Ground Lease.      90   

ARTICLE XLI

  MEMORANDUM OF LEASE      90   

 

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MASTER LEASE AGREEMENT

This MASTER LEASE AGREEMENT (the “Lease”) is dated this 31st day of August, 2015
(the “Initial Commencement Date”), and is by and among the entities listed on
Schedule 1-A attached hereto and made a part hereof by reference and
incorporation (collectively, jointly and severally, the “Lessor”), having their
principal office at 1000 Urban Center Drive, Suite 501, Birmingham, Alabama
35242, and the entities listed on Schedule 1-B attached hereto and made a part
hereof by reference and incorporation (collectively, jointly and severally, the
“Lessee”), having their principal office at 510 Corporate Drive, Suite 200,
Franklin, TN 37067.

STATEMENT OF INTENT

Subject to Articles V, XIV, XV, XXX and Section 16.1, this Lease constitutes one
unitary, indivisible, non-severable true lease of all the Leased Property. This
Lease does not constitute separate leases contained in one document each
governed by similar terms. The use of the expression “unitary lease” to describe
this Lease is not merely for convenient reference. It is the conscious choice of
a substantive appellation to express the intent of Lessor and Lessee in regard
to an integral part of this transaction, which is to accomplish the creation of
an indivisible lease. Lessor and Lessee agree that from an economic point of
view the portions of the Leased Property leased pursuant to this Lease
constitute one economic unit and that the Rent and all other provisions have
been negotiated and agreed to based upon a lease of all the portions of the
Leased Property as a single, composite, inseparable transaction. Except as
expressly provided in this Lease for specific isolated purposes (and in such
cases only to the extent expressly so stated), all provisions of this Lease,
including definitions, commencement and expiration dates, rental provisions, use
provisions, renewal provisions, breach, default, enforcement, termination and
assignment and subletting provisions, shall apply equally and uniformly to all
the Leased Property as one unit and are not severable. The economic terms of
this Lease would have been substantially different had separate leases or a
“divisible” lease been acceptable to Lessor. A default of any of the terms or
conditions of this Lease occurring with respect to any particular Property shall
constitute a default under this Lease with respect to all the Leased Property.
Except as expressly provided in this Lease for specific isolated purposes (and
in such cases only to the extent expressly so stated), Lessor and Lessee agree
that the provisions of this Lease shall at all times be construed, interpreted
and applied such that the intention of Lessor and Lessee to create a unitary
lease shall be preserved and maintained. Lessor and Lessee agree that for the
purposes of any assumption, rejection or assignment of this Lease under 11
U.S.C. Section 365 or any amendment or successor section thereof, this is one
indivisible and non-severable lease dealing with and covering one legal and
economic unit which must be assumed, rejected or assigned as a whole with
respect to all (and only all) the Leased Property.

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W I T N E S S E T H:

WHEREAS, MPT of Hartsville-Capella, LLC, MPT of McMinnville-Capella, LLC and MPT
of Muskogee-Capella, LLC, each a Delaware limited liability company
(collectively, “MPT Real Estate Owner”), are the current owners of that certain
real property more particularly described on Exhibits A-1 et seq. attached
hereto and incorporated herein by reference (collectively, the “Owned Land”),
and are also the current owners of all of the Leased Improvements (as
hereinafter defined) located on the Owned Land;

WHEREAS, pursuant to that certain Assignment and Assumption of Ground Lease
dated as of August 31, 2015 (the “Assignment of Ground Lease”), the Oklahoma
Lessee assigned to the Oklahoma Lessor all of its right, title and interest in,
to and under the Oklahoma Ground Lease (as hereinafter defined) whereby the
Oklahoma Lessor (i) holds a leasehold interest in the Oklahoma Ground Leased
Land (as hereinafter defined), and (ii) owns the improvements located on the
Oklahoma Ground Leased Land during the term of the Oklahoma Ground Lease (after
which time the improvements located on the Oklahoma Ground Leased Land revert to
the “Landlord” under the Oklahoma Ground Lease);

WHEREAS, contemporaneously herewith, MPT Real Estate Owner has leased the Land
(as hereinafter defined) and the Leased Improvements to Lessor pursuant to that
certain Master Lease Agreement, dated as of the date hereof (as the same may be
modified, amended or restated from time to time, the “Master Lease”); and

WHEREAS, Lessor desires to sublease the Land and Leased Improvements to Lessee,
and Lessee desires to sublease the same from Lessor, on the terms and conditions
hereinafter provided.

NOW, THEREFORE, the parties agree as follows:

ARTICLE I

DEFINITIONS

1.1 Certain Defined Terms. Capitalized terms used herein shall have the
respective meanings ascribed to them in this Section 1.1.

ACH: As defined in Section 3.1.

Acquisition Note: That certain Promissory Note, dated the date hereof, in the
original principal amount of Nine Hundred Eighty-Four Million Nine Hundred
Fifty-Eight Thousand Nine Hundred Ninety-Two and 53/100 Dollars
($984,958,992.53) made by Capella Holdings Acquisition Sub, Inc., a Delaware
corporation, in favor of MPT TRS (as herein defined), which has become the
obligation of Capella Holdings as successor by merger and operation of law, as
the same may be modified, amended and/or restated from time to time.

Additional Charges: As defined in Section 3.2.

 

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Adjustment Date: As defined in Section 3.1(b).

Affiliate: With respect to any Person (i) any Person that, directly or
indirectly, controls or is controlled by or is under common control with such
Person, (ii) any other Person that owns, beneficially, directly or indirectly,
10% or more of the outstanding capital stock, shares or equity interests of such
Person, or (iii) any officer, director, employee, partner, member, manager or
trustee of such Person or any Person controlling, controlled by or under common
control with such Person (excluding trustees and persons serving in similar
capacities who are not otherwise an Affiliate of such Person). For the purposes
of this definition, “control” (including the correlative meanings of the terms
“controlled by” and “under common control with”), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
through the ownership of voting securities or otherwise. Whenever the term
Affiliate is used to describe Lessor’s Affiliates, it shall not be deemed to
include Lessee, Health Holdings or any of Health Holdings’ subsidiaries.

Affiliate Lessee: Collectively, the Columbia Lessee and the Hot Springs Lessee.

Affiliate Separate Leases: Collectively, the Columbia Lease and the Hot Springs
Lease, in each case, as modified, amended or restated from time to time.

AIREA: The American Institute of Real Estate Appraisers, or any successor
organization.

Allocated Base Rent: As defined in Section 3.1(a).

Anti-Terrorism Laws: Any laws, statutes and regulations relating to terrorism or
money laundering, including Executive Order No. 13224 (effective September 24,
2001), the Patriot Act, the laws, statutes and regulations comprising or
implementing the Bank Secrecy Act, and the laws, statutes and regulations
administered by OFAC.

Auriga: As defined in Section 13.1(a).

Award: All compensation, sums or anything of value awarded, paid or received on
a total or partial Condemnation.

Bankruptcy Code: Chapter 11 U.S.C. § 101, et seq.

Base Rent: At any time the total Allocated Base Rent payable with respect to the
Properties for any period.

Blocked Person: Any Person: (a) listed in the annex to, or is otherwise subject
to the provisions of, Executive Order No. 13224, (b) a Person owned or
controlled by, or acting for or on behalf of, any Person that is listed in the
annex to, or is otherwise subject to the provisions of, Executive Order
No. 13224, (c) a Person with which any lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law, (d) a Person
that commits, threatens or conspires to commit or supports “terrorism” as
defined in Executive Order No. 13224, or (e) a Person that is named a “specially
designated national” or “blocked person” on the most current list published by
OFAC or other similar list.

 

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Borrower Affiliates: Collectively, Southwestern Medical Center, LLC, St. Mary’s
Real Property, LLC and Russellville Holdings, LLC, each a Delaware limited
liability company.

Business: With respect to each of the Properties, the operation of a general
acute care hospital facility thereon and, in each case, the engagement in and
pursuit and conduct of any business venture or activity incident thereto,
including any business that relates to the business currently conducted by the
Company (such as bariatric centers and/or health plans).

Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday that is not a
day on which money centers in the City of New York, New York are authorized or
obligated by law or executive order to close.

Capella Holdings: Capella Holdings, Inc., a Delaware corporation.

Capella Healthcare: Capella Healthcare, Inc., a Delaware corporation.

Capital Additions: With respect to each Property, (a) extraordinary renovations
or expansions of buildings, structures or other improvements currently located
on that Property (or on additional parcels added to such Property), (b) the
addition of one or more parcels of land to such Property (whether by purchase or
ground lease), or (c) the addition of one or more new buildings or additional
structures placed on such Property or any such additional parcels of land,
including, without limitation, the construction of a new wing or new story.

Capital Addition Cost: With respect to each Property, the cost of any Capital
Additions proposed to be made by Lessee with respect thereto. Such cost shall
include (a) the cost of construction of the Capital Additions, including site
preparation and improvement, materials, labor, supervision and certain related
design, engineering and architectural services, the cost of any fixtures, the
cost of construction financing, and miscellaneous costs requested by Lessee and
approved by Lessor, (b) if applicable, the cost of any land contiguous to such
Property purchased for the purpose of placing thereon the Capital Additions or
any portion thereof or for providing means of access thereto, or parking
facilities therefor, including the cost of surveying the same, (c) the cost of
insurance, real estate taxes, water and sewage charges and other carrying
charges for such Capital Additions during construction, (d) the cost of title
insurance, (e) reasonable fees and expenses of legal counsel, (f) filing,
registration and recording taxes and fees, (g) documentary stamp taxes, if any,
and (h) all reasonable costs and expenses of Lessor related to such Capital
Addition that are payable by Lessee hereunder, and the reasonable costs and
expenses of any Facility Lender which has committed to finance the Capital
Additions that are related to the construction of the Capital Additions,
including, but not limited to, (i) the reasonable fees and expenses of their
respective legal counsel, (ii) all printing expenses, (iii) the amount of any
filing, registration and recording taxes and fees, (iv) documentary stamp taxes,
if any, (v) title insurance charges, appraisal fees, if any, (vi) rating agency
fees, if any, and (vii) commitment fees, if any, charged by any Facility Lender
advancing or offering to advance any portion of the financing for such Capital
Additions.

 

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Cash Collections: Any and all payments received for patient related services
that are posted to Lessee’s accounting system for a Facility, including, without
limitation, any such payments received from patients, insurance companies,
managed care and preferred provider organizations, Medicaid, Medicare, or other
payors.

Casualty Impacted Property: As defined in Section 14.2(a).

CERCLA: As defined in the definition of “Hazardous Materials Law.”

Change of Control Transaction: Shall mean (a) Health Holdings ceasing to own One
Hundred Percent (100%) of Capella Holdings; (b) the current owners of Sunergeo
Health ceasing to own, directly or indirectly, at least Fifty Percent (50%) of
Sunergeo Health; (c) Michael A. Weichart ceasing to own at least Twenty-Five
Percent (25%) of Sunergeo Health; or (d) Capella Health Holdings, LLC ceasing to
own at least: (i) One Hundred Percent (100%) of the Oregon Lessee or the
Oklahoma Lessee, (ii) Ninety-Seven Percent (97%) of the South Carolina Lessee,
(iii) Ninety-Five Percent (95%) of the Hot Springs Lessee, or (iv) Ninety
Percent (90%) of the Columbia Lessee, in each case, without the prior written
consent of Lessor, which consent shall not be unreasonably withheld, conditioned
or delayed. For the avoidance of doubt, the entering into a written agreement
(unless the agreement is conditioned on Lessor’s approval or will not close
until after the expiration of the Term) or the granting of an option to acquire
Equity Interests or the issuance of debt convertible into Equity Interests shall
be deemed to be the issuance of Equity Interests for purposes of determining
whether a Change of Control Transaction has occurred.

CMS: As defined in Section 38.1.

Code: The United States Internal Revenue Code of 1986, as amended through the
date hereof, and all regulations thereunder. Any reference herein to a specific
section or sections of the Code shall be deemed to include a reference to any
corresponding provision of future law.

Columbia Lease: That certain Lease Agreement, dated of even date herewith,
between Columbia Lessor and Columbia Lessee, as modified, amended or restated
from time to time.

Columbia Lessee: Columbia Capital Medical Center Limited Partnership, a
Washington limited partnership.

Columbia Lessor: MPT of Olympia-Capella Hospital, LLC, a Delaware limited
liability company.

Collateral Assignment: That certain Collateral Assignment of Management
Agreement, dated of even date herewith, by and among Sunergeo Health,
Hartsville, LLC and MPT of Hartsville-Capella Hospital, LLC, as modified,
amended or restated from time to time.

 

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Combined Obligors: Collectively, Lessee, the Borrower Affiliates and the
Affiliates Lessees, in each case, as of the date hereof.

Combined Obligor Payments: For any period, the sum of the payment obligations of
all Combined Obligors under (a) this Lease, (b) the Affiliate Separate Leases
and (c) the Real Estate Note.

Commencement Date: The Initial Commencement Date, provided that as to any New
Property, Commencement Date shall mean the date that such New Property becomes
subject to this Lease.

Competing Business: As defined in Section 40.10.

Completion: With respect to the Required Capital Additions, the terms
“completion”, “complete construction”, “completion of construction” and similar
phrases mean, such time as Lessor receives (i) written certification from the
architect that the construction of the applicable Required Capital Addition has
been completed in all material respects in accordance with the final plans
therefor (as previously approved by Lessor), which certificate shall be in form
and substance reasonably satisfactory to Lessor and shall include the written
approval of Lessor’s construction inspector noted thereon, and (ii) if issued by
the applicable municipality with respect to the Required Capital Additions, a
certificate of occupancy for such Property.

Condemnation: Either (a) the exercise of any governmental power, whether by
legal proceedings or otherwise, by a Condemnor or (b) a voluntary sale or
transfer by Lessor to any Condemnor, either under threat of Condemnation or
while legal proceedings for Condemnation are pending, in all of the foregoing
cases with respect to any portion of the Leased Property.

Condemnor: Any public or quasi-public authority, or private corporation or
individual, having the power of Condemnation.

Consolidated Fixed Charges: For any period, for Capella Holdings and its
subsidiaries on a consolidated basis, an amount equal to the sum for such period
(a) rent payments, plus, (b) consolidated interest charges, plus
(c) consolidated maintenance capital expenditures, plus (d) consolidated funded
debt payments.

CPI: The Consumer Price Index, all urban consumers, all items, U.S. City
Average, published by the United States Department of Labor, Bureau of Labor
Statistics, in which 1982-1984 equals one hundred (100). If the Consumer Price
Index is discontinued or revised during the term of this Lease, such other
governmental index or computation with which it is replaced shall be used in
order to obtain substantially the same result as would be obtained if the Index
had not been discontinued or revised.

Credit Enhancements: With respect to each Property, all security deposits,
security interests, letters of credit, pledges, guaranties, prepaid rent or
other sums, deposits or interests held by Lessee, if any, with respect to such
Property, the Tenant Leases relating to such Property or the Tenants or
subtenants thereunder.

 

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Date of Taking: The date the Condemnor has the right to possession of the
property being condemned.

Declarations: As defined in Section 40.7.

Defaulted Property: As defined in Section 16.1B.

DHS: As defined in Section 38.1.

DHHS: As defined in Section 38.1.

Dollar Amount: As defined in Section 9.2.

EBITDAR: For any period, for Capella Holdings and its subsidiaries on a
consolidated basis, earnings before the deduction of interest, taxes,
depreciation and amortization and rent, as all of the items described in this
term are determined in accordance with GAAP.

Eliminated Property: As defined in Section 35.1.

Entered Property: As defined in Section 16.1A.

Environmental Indemnification Agreement: Collectively, (a) that certain
Environmental Indemnification Agreement, dated as of the date hereof, executed
and delivered by each Facility Lessee and each Guarantor to and in favor of
Lessor, Hot Springs Lessor, Columbia Lessor, MPT TRS and MPT Lenders, (b) that
certain Environmental Indemnification Agreement, dated of even date herewith,
between Columbia Lessee and Columbia Lessor, and (c) that certain Environmental
Indemnification Agreement, dated of even date herewith, between Hot Springs
Lessee and Hot Springs Lessor, in each case, as modified, amended and restated
from time to time.

Equity Constituents: With respect to any Person, as applicable, the members,
general or limited partners, shareholders, stockholders or other Persons,
however designated, who are the owners of the issued and outstanding equity or
ownership interests of such Person.

Equity Interests: With respect to any Person, the voting power, ownership, or
other equitable interests of such Person, including any interest represented by
any capital stock, convertible or participating debt instruments, membership
interest, partnership interest, or any similar interest therein.

Escalator: As defined in Section 3.1(b).

Event of Default: As defined in Section 16.1.

Existing Subleases: As defined in Section 23.4.

Extension Notice: As defined in Article II.

Extension Term(s): As defined in Article II.

 

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Facility: Each of the Oklahoma Facility, the Oregon Facility and the South
Carolina Facility, sometimes collectively referred to as the “Facilities.”

Facility Instrument: A note (whether secured or unsecured), loan agreement,
credit agreement, guaranty, security agreement, mortgage, deed of trust or other
agreement pursuant to which a Facility Lender has provided financing to Lessor
in connection with any portion of the Leased Property or any part thereof, or
funding provided to Lessee, if such funding is provided by Lessor or any
Affiliate of Lessor (other than any Obligors) or in connection with a Capital
Addition, and any and all renewals, replacements, modifications, supplements,
consolidations and extensions thereof.

Facility Lender: A holder (which may include any Affiliate of Lessor) of any
Facility Instrument.

Facility Lessee: The Oklahoma Lessee, with respect to the Oklahoma Property, the
Oregon Lessee, with respect to the Oregon Property, the South Carolina Lessee,
with respect to the South Carolina Property, and the Lessee party thereto, with
respect to any New Property.

Facility Lessor: The Oklahoma Lessor, with respect to the Oklahoma Property, the
Oregon Lessor, with respect to the Oregon Property, the South Carolina Lessor,
with respect to the South Carolina Property, and the Lessor party thereto, with
respect to any New Property.

Facility Loan: A loan made by a Facility Lender.

Fair Market Added Value: With respect to each Property, the Fair Market Value of
such Property, including all Capital Additions with respect thereto, less the
Fair Market Value of such Property determined as if no Capital Additions paid
for by Lessee had been constructed with respect thereto.

Fair Market Value: With respect to each Property, the Fair Market Value of such
Property, including all Capital Additions with respect thereto, (a) as shall be
determined in accordance with the appraisal procedures set forth in Article
XXXIII or in such other manner as shall be mutually acceptable to Lessor and
Lessee, and (b) which shall not take into account any reduction in value
resulting from any damage, destruction or condemnation of any part of such
Property or any indebtedness to which such Property is subject (other than
indebtedness owed to Lessor that is secured by the Leased Property) and which
encumbrance Lessee or Lessor is otherwise required to remove pursuant to any
provision of this Lease or agrees to remove at or prior to the closing of the
transaction as to which such Fair Market Value determination is being made. With
respect to each Property and notwithstanding anything contained in this Lease to
the contrary, any appraisal of such Property shall assume the Lease is in place
for a term of fifteen (15) years, and shall not take into account any purchase
options.

Fair Market Value Purchase Price: With respect to each Property, the Fair Market
Value of such Property, less the Fair Market Added Value with respect to such
Property.

 

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Financial Statements: For any fiscal year or other accounting period for each
Facility Lessee or Capella Holdings, balance sheets, statements of operations
and capital accounts, and statements of cash flows setting forth in comparative
form the corresponding figures for the year-earlier fiscal period.

Fixed Term: As defined in Article II.

Fixtures: All equipment, machinery, fixtures, and other items of real property,
including all components thereof, now and hereafter located in, on, or used in
connection with, and that are, in each case, permanently affixed to the Land, or
affixed or incorporated into the buildings and structures on the Land,
including, without limitation, all affixed furnaces, boilers, heaters,
electrical equipment, heating, plumbing, lighting, ventilating, refrigerating,
incineration, air and water pollution control, waste disposal, air-cooling and
air-conditioning systems and apparatus, sprinkler systems and fire and theft
protection equipment, and built-in oxygen and vacuum systems, all of which, to
the greatest extent permitted by law, are hereby deemed by the parties to
constitute real estate, together with all replacements, modifications,
alterations and additions thereto.

Force Majeure: As defined in Section 40.8.

Full Replacement Cost: As defined in Section 13.1.

GAAP: Generally accepted accounting principles in the United States as in effect
from time to time and applied consistently throughout the periods involved.

Governmental Body: Any United States federal, state or local, or any supra
national or non U.S., government, political subdivision, governmental,
regulatory or administrative authority, instrumentality, agency body or
commission, court, tribunal or judicial or arbitral body, in each case of
competent jurisdiction, including the Securities and Exchange Commission.

Guarantors: Collectively, Capella Holdings, Capella Healthcare and the other
“Guarantors” (as defined in the Guaranty) (it being understood, however, that
for purposes of this Lease, the term Guarantor shall not refer to any Facility
Lessees).

Guaranty: That certain Guaranty, dated as of the date hereof, executed and
delivered by the Guarantors in favor of Lessor, MPT TRS and the MPT Lenders, as
the same may be modified, amended, restated and/or supplemented from time to
time.

Hazardous Materials: Any asbestos or any substance containing asbestos and
deemed hazardous under any Hazardous Materials Law, the group of organic
compounds known as polychlorinated biphenyls, flammable explosives, radioactive
materials, infectious wastes, biomedical and medical wastes, chemicals known to
cause cancer or reproductive toxicity, radon gas, and any items included in the
definition of hazardous or toxic wastes, materials or substances under any
Hazardous Materials Laws.

 

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Hazardous Materials Laws: Each federal, state and local law and regulation
relating to pollution or protection of the environment, including ambient air,
surface water, ground water, land surface or subsurface strata, and natural
resources, and including each law and regulation relating to emissions,
discharges, releases or threatened releases of Hazardous Materials, or otherwise
relating to the manufacturing, processing, distribution, use, treatment,
generation, storage, containment (whether above ground or underground),
disposal, transport or handling of Hazardous Materials, and each law and
regulation with regard to record keeping, notification, disclosure and reporting
requirements respecting Hazardous Materials, including, without limitation, the
Resource Conservation and Recovery Act of 1976 (“RCRA”), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), as
amended by the Superfund Amendments and Reauthorization Act of 1986 (“SARA”),
the Hazardous Materials Transportation Act, the Federal Water Pollution Control
Act, the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act,
the Safe Drinking Water Act, and all similar federal, state and local
environmental statutes and ordinances, and the regulations, orders, and decrees
now or hereafter promulgated thereunder, in each case as amended from time to
time.

Health Benefit Laws: Laws relating to the licensure, certification,
qualification or authority to transact business relating to the provision of, or
payment for, or both the provision of and payment for, health benefits, health
care or insurance coverage, including ERISA, COBRA, HIPAA, SCHIP, Medicare,
Medicaid, CHAMPUS/TriCare, and laws relating to the regulation of workers
compensation and coordination of benefits.

Health Compliance Laws: All applicable laws pertaining to billing, kickbacks,
false claims, self-referral, claims processing, marketing, HIPAA security
standards for the storage, maintenance, transmission, utilization and access to
and privacy of patient information, and HIPAA and state standards for electronic
transactions and data code sets, including, without limitation, the False Claims
Act (31 U.S.C. Section 3729 et seq.), the Anti-Kickback Act of 1986 (41 U.S.C.
Section 51 et seq.), the Federal Health Care Programs Anti-Kickback Statute (42
U.S.C. Section 1320a-7a(b)), the Stark Law, the Civil Monetary Penalties Law (42
U.S.C. Section 1320a-7a), or the Truth in Negotiations (10 U.S.C. Section 2304
et seq.), Health Care Fraud (18 U.S.C. Section 1347), Mail Fraud (18 U.S.C
Section 1341), Wire Fraud (18 U.S.C. Section 1343), Theft or Embezzlement (18
U.S.C. Section 669), Fraud and False Statements (18 U.S.C. Section 1001), False
Statements Relating to Health Care Matters (18 U.S.C. Section 1035), and any
other applicable federal health care law or equivalent state statutes or any
rule or regulation promulgated by a Governmental Body with respect to any of the
foregoing, as any of the same may be amended, modified and/or restated from time
to time.

Health Holdings: Capella Health Holdings, LLC, a Delaware limited liability
company.

Healthcare Laws: Health Benefit Laws, Health Compliance Laws and Information
Privacy and Security Laws.

HIPAA: The Health Insurance Portability and Accountability Act of 1996, as the
same may be amended, modified or supplemented from time to time, and any
successor statute thereto, and any and all rules or regulations promulgated from
time to time thereunder.

 

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Hot Springs Lease: That certain Lease Agreement, dated of even date herewith,
between Hot Springs Lessor and Hot Springs Lessee, as modified, amended or
restated from time to time.

Hot Springs Lessee: Hot Springs National Park Hospital Holdings, LLC, a Delaware
limited liability company.

Hot Springs Lessor: MPT of Hot Springs-Capella Hospital, LLC, a Delaware limited
liability company.

Impartial Appraiser: As defined in Section 13.1.

Impositions: Collectively, with respect to each Property, all civil monetary
penalties, fines and overpayments imposed by state and federal regulatory
authorities (excluding all penalties or fines caused by the action or inaction
of any Lessor or MPT Real Estate Owner), all Real Estate Taxes, all state and
local sales and use taxes, single business, gross receipts, transaction
privilege, rent or similar taxes, all assessments, charges and costs imposed
under the Permitted Exceptions (including, without limitation, all penalties,
fines, damages, costs and expenses for any violation of or a default under any
of the Permitted Exceptions), franchise taxes (including but not limited to
taxes based on capital, net worth or assets), license, business entity, annual
report, registration and statutory representation fees and other taxes imposed
on any business entities, including limited partnerships, limited liability
companies and other “pass through” entities, and any such items imposed on
Lessor or Lessor’s Affiliates (including Lessor’s parent organizations), all
assessments for utilities, public improvements or benefits, ground rents, water,
wastewater, sewer, sanitary sewer or other rents and charges, excises, tax
levies, fees (including, without limitation, impact, development, license,
permit, inspection, authorization and similar fees), and all other governmental
charges, in each case whether general or special, ordinary or extraordinary, or
foreseen or unforeseen, of every character in respect of such Property, the Rent
relating thereto (including all interest and penalties thereon due to any
failure in payment by Lessee), and all other fees, costs and expenses which at
any time, during or in respect of the Term may be charged, assessed or imposed
on or in respect of or be a lien upon (a) MPT Real Estate Owner or Lessor or MPT
Real Estate Owner’s or Lessor’s interest in all or any portion of such Property,
(b) such Property or any part thereof or any rent therefrom or any estate,
right, title or interest therein, or (c) any occupancy, operation, use or
possession of, sales from, or activity conducted on, or in connection with, such
Property or the leasing or use of such Property or any part thereof.
Notwithstanding any provision hereof to the contrary, nothing contained in this
Lease shall be construed to require Lessee to pay (1) any tax based on net
income (whether denominated as a financial institutions or other tax) imposed on
Lessor or MPT Real Estate Owner, or (2) any transfer tax of Lessor or MPT Real
Estate Owner, or (3) any tax imposed with respect to the sale, exchange or other
disposition by Lessor or MPT Real Estate Owner of any Property or the proceeds
thereof or (4) except as expressly provided elsewhere in this Lease, any
principal or interest on any Lien on any Property, except to the extent that any
tax, assessment, tax levy or charge which Lessee is obligated to pay pursuant to
the first sentence of this definition and which is in effect at any time during
the Term is totally or partially repealed, and a tax, assessment, tax levy or
charge set forth in clause (1) or (2) is levied, assessed or imposed expressly
in lieu thereof, in which case the substitute tax, assessment, tax levy or
charge shall be deemed to be an Imposition.

 

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Information Privacy or Security Laws: The HIPAA Laws and any other laws
concerning the privacy and/or security of personal information, including but
not limited to the Gramm-Leach-Bliley Act, state data breach notification laws,
state health information privacy laws, the Federal Trade Commission Act and
state consumer protection laws.

Initial Commencement Date: As defined in the Preamble.

Insurance Premiums: As defined in Section 4.4.

Insurance Requirements: All terms of any insurance policy required by this Lease
and all requirements of the issuer of any such policy.

Interim Capital Addition Rent: As defined in Section 3.1(b).

Joint Commission: As defined in Article XXIV.

Land: The Oklahoma Land, the Oregon Land and the South Carolina Land, each
together with all hereditaments, easements, mineral rights, rights of way and
other appurtenances related thereto, and any other parcel of land acquired or
leased and made subject to this Lease.

Late Payment Penalty: Shall mean an amount equal to the product of Four Percent
(4%) and the amount of any overdue and unpaid amount under this Lease.

Lease: As defined in the Preamble.

Lease Assignments: Those certain Assignments of Rents and Leases, executed and
delivered by each Facility Lessee to and in favor of Lessor, MPT TRS and the MPT
Lenders, as each may be amended, modified and/or restated from time to time.

Lease Base: As to each Property, as defined on Schedule 3.1(a) attached hereto
and made a part hereof by reference and incorporation.

Lease Rate: A per annum rate equal to Eight Percent (8.0%), subject to the
Escalator as set forth in Section 3.1(b).

Leased Improvements: As defined in Article II(b).

Leased Property: Collectively, those items described in Article II, as well as
all Capital Additions thereto.

Legal Requirements: With respect to each Property and the conduct of the
Business thereon, all federal, state, county, municipal and other governmental
statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and
injunctions affecting such Property, Lessee’s operation of the Business on such
Property, or the construction, use or alteration of such Property

 

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(including, without limitation, the Americans with Disabilities Act and
Section 504 of the Rehabilitation Act of 1973), whether now or hereafter enacted
and in force, including any which may (a) require repairs, modifications, or
alterations in or to such Property, or (b) in any way adversely affect the use
and enjoyment thereof, and all permits, licenses, authorizations and regulations
relating thereto, and all covenants, agreements, restrictions and encumbrances
contained in any instruments, either of record or known to Lessee, at any time
in force affecting such Property.

Lessee: Collectively and jointly and severally, the Oklahoma Lessee, the Oregon
Lessee and the South Carolina Lessee, together with their respective successors
and permitted assigns.

Lessor: Collectively and jointly and severally, the Oklahoma Lessor, the Oregon
Lessor and the South Carolina Lessor, and their respective successors and
assigns.

Lessor Noncompete Period: As defined in Section 40.11.

Lessor’s Notice Address: As defined in Section 13.4.

Lessor Parties: As defined in Section 40.6.

Licenses: As defined in Article XXXVIII.

Liens: As defined in Article XXXVI.

LLC Agreement: That certain Limited Liability Company Agreement of Capella
Health Holdings, LLC, dated as of the date hereof, as modified, amended or
restated from time to time.

Major Event of Default: The occurrence of (i) an Event of Default under clause
(a) or (l) of Section 16.1; (ii) an Event of Default by Capella Holdings or
Capella Healthcare under clause (c) or (g) of Section 16.1; (iii) Events of
Default under clauses (b) through (j) of Section 16.1 with respect to three
(3) or more of the Facility Lessees or the Affiliate Lessees (under the same or
comparable “Events of Default” under and as defined in the Affiliate Separate
Leases); (iv) a “Major Event of Default” under and as defined in any Affiliate
Separate Lease; or (v) a “Major Event of Default” under and within the meaning
of the Real Estate Loan Agreement. It is understood and agreed that a monetary
default under the Acquisition Note or an Event of Default under Section 16.1(e)
shall be deemed to be a default with respect to all Facility Lessees.

Major Repairs: All repairs to the Leased Property of every kind and nature,
whether interior or exterior, structural or non-structural (including, without
limitation, all parking decks and parking lots), which extend the life of the
Leased Property (as opposed to being routine maintenance and repair
expenditures), as shall be necessary or appropriate from time to time during the
Term.

Management Agreement: Any contract or agreement for the provision of management
services to a Facility Lessee with respect to the operation of a hospital on the
applicable Property.

 

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Management Company: Any person, firm, corporation or other entity or individual
who or which will provide management services to a Facility Lessee with respect
to the operation of a hospital on a Property, which as of the date hereof for
all of the Properties, the parties acknowledge shall be Sunergeo Health.

Master Lease: As defined in the Recitals.

Material Obligation: Any obligation of any of the Guarantors or any Facility
Lessee (other than any obligations owing to Lessor or any of its Affiliates)
which is in excess of Three Million and No/100 Dollars ($3,000,000.00).

Medicaid: The medical assistance program established by Title XIX of the Social
Security Act (42 U.S.C. Sections 1396 et seq.) and any statute succeeding
thereto.

Medicare: The health insurance program for the aged and disabled established by
Title XVIII of the Social Security Act (42 U.S.C. Sections 1395 et seq.) and any
statute succeeding thereto.

Mortgage Loan Documents: The Real Estate Loan Agreement, the Real Estate Note
and the Real Estate Mortgages, as each may be modified, amended or restated from
time to time.

MPT: MPT Operating Partnership, L.P., an Affiliate of Lessor.

MPT Lenders: Collectively, MPT of Lawton-Capella Hospital, LLC and MPT of
Russellville-Capella Hospital, LLC, each a Delaware limited liability company.

MPT Real Estate Owner: As defined in the recitals.

MPT TRS: MPT Camaro Opco, LLC, a Delaware limited liability company.

New Property: Any real property (other than real property constituting a Capital
Addition to a Property that is already subject to this Lease) that becomes
subject to this Lease after the Initial Commencement Date.

Noncompete Period: As defined in Section 40.10.

Non-Competition Agreements: Means (a) that certain Non-Competition Agreement,
dated as of the date hereof, executed by Capella Holdings, Inc. and Capella
Healthcare, Inc. in favor of Lessor, MPT TRS and the MPT Lenders, and (b) that
certain Non-Competition Agreement, dated as of the date hereof, between Sunergeo
Health and MPT TRS, in each case, as amended, modified and/or restated from time
to time.

Obligations: As defined in the Security Agreement.

Obligation Documents: Individually and collectively, this Lease, the Mortgage
Loan Documents, the Acquisition Note, the Affiliate Separate Leases, the
Guaranty, the Pledge Agreement, the Environmental Indemnification Agreements,
the Security Agreement, the Non-Competition Agreements, the Subordination of
Management Agreement and the Collateral Assignment, as any of the same may be
modified, amended or restated from time to time.

 

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Obligors: Collectively, Lessee, the Borrower Affiliates and the Guarantors, and
their successors and permitted assigns.

OFAC: The U.S. Department of Treasury Office of Foreign Assets Control.

OFAC List: The list of specially designated nationals and blocked persons
subject to financial sanctions that is maintained and published by the U.S.
Treasury Department, Office of Foreign Assets Control and any other similar list
maintained and published by the U.S. Treasury Department, Office of Foreign
Assets Control pursuant to any law, including, without limitation, trade
embargo, economic sanctions, or other prohibitions imposed by Executive Order of
the President of the United States. The OFAC List currently is accessible
through the internet website http://www.treasury.gov/ofac/downloads/t11sdn.pdf.

Officer’s Certificate: With respect to each Facility Lessee, a certificate of
such Facility Lessee signed by the representative(s) authorized to so sign by
the governing body of such Facility Lessee, or any other person whose power and
authority to act has been properly authorized.

Oklahoma Assignment of Ground Lease: As defined in the recitals hereto.

Oklahoma Facility: That certain three hundred twenty (320)-licensed bed general
acute care hospital facility operated at the Oklahoma Land and related Leased
Improvements.

Oklahoma Land: Collectively, (a) the Oklahoma Owned Land, and (b) the Oklahoma
Ground Leased Land.

Oklahoma Lessee: Muskogee Regional Medical Center, LLC, a Delaware limited
liability company, together with its successors and permitted assigns.

Oklahoma Lessor: MPT of Muskogee-Capella Hospital, LLC, a Delaware limited
liability company, together with its successors and assigns.

Oklahoma Ground Lease: That certain Lease Agreement, dated as of April 3, 2007,
between Muskogee Medical Center Authority (doing business as Muskogee Regional
Medical Center), an Oklahoma public trust, as landlord, and MPT of
Muskogee-Capella, LLC (as successor-by-assignment from Oklahoma Lessee), as the
same may be modified, amended, restated or supplemented from time to time.

Oklahoma Ground Lease Rent: As defined in Section 3.3.

Oklahoma Ground Leased Land: That certain real property located in Muskogee,
Muskogee County, Oklahoma, as more particularly described on Exhibit A-4
attached hereto and made a part hereof by reference and incorporation, together
with all hereditaments, easements, mineral rights, rights of way and other
appurtenances related thereto.

 

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Oklahoma Ground Leased Property: The Oklahoma Ground Leased Land and related
Leased Improvements located thereon relating to the applicable Oklahoma
Facility.

Oklahoma Owned Land: That certain real property located in Muskogee, Muskogee
County, Oklahoma, as more particularly described on Exhibit A-1 attached hereto
and made a part hereof by reference and incorporation, together with all
hereditaments, easements, mineral rights, rights of way and other appurtenances
related thereto.

Oklahoma Property: The Oklahoma Land and related Leased Improvements located
thereon relating to the Oklahoma Facility.

Operating Agreements: With respect to each Facility Lessee, all written
agreements to which such Facility Lessee is a party with respect to the
ownership, operation or management of the Business at a Property, including,
without limitation, any and all service and maintenance contracts, management
agreements, equipment leases, consulting agreements, laboratory servicing
agreements, pharmaceutical contracts and physician, other clinician or other
professional services provider contracts, but excluding employment contracts and
any Participation Agreements, as the same may from time to time be amended,
restated, supplemented, renewed or modified.

Option Price: As defined in Section 14.2(a).

Oregon Facility: That certain eighty-eight (88)-licensed bed general acute care
hospital facility operated at the Oregon Property.

Oregon Land: That certain real property located in Willamette, Amhill County,
Oregon, as more particularly described on Exhibit A-2 attached hereto and made a
part hereof by reference and incorporation, together with all hereditaments,
easements, mineral rights, rights of way and other appurtenances related
thereto.

Oregon Lessee: Willamette Valley Medical Center, LLC, a Delaware limited
liability company, together with its successors and permitted assigns.

Oregon Lessor: MPT of McMinnville-Capella Hospital, LLC, a Delaware limited
liability company, together with its successors and assigns.

Oregon Property: The Oregon Land and related Leased Improvements located thereon
relating to the Oregon Facility.

Organizational Documents: With respect to any Person, the articles of
incorporation or organization, certificate of incorporation or formation or
other formation document, together with all other documents creating and
governing such Person, including stockholder agreements, limited liability
company or operating agreements, partnership agreements and bylaws.

 

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Other Credit Enhancements: As defined in Section 30.2.

Overdue Rate: On any date, the Lease Rate plus Five Percent (5%).

Participation Agreements: With respect to each Facility Lessee, all third-party
payor participation or reimbursement agreements, and provider numbers and
provider agreements, to which such Facility Lessee is a party relating to rights
to payment or reimbursement from, and claims against, private insurers, managed
care plans, employee assistance programs, Blue Cross and/or Blue Shield,
governmental authorities, Medicare, Medicaid and TRICARE, and other third-party
payors, as the same may from time to time be amended, restated, extended,
supplemented or modified, together with all rights, privileges and entitlements
thereunder.

Patriot Act: The Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56,
as the same may be amended, modified or restated from time to time.

Permitted Exceptions: As defined in Article II.

Person: An individual, a corporation, a limited liability company, a general or
limited partnership, an unincorporated association, a joint venture, a
Governmental Body or another entity or group.

Personal Property: With respect to a Facility Lessee, all of such Facility
Lessee’s consumable inventory and supplies, machinery, equipment, furniture,
furnishings, trailers, movable walls or partitions, computers, trade fixtures
and other tangible personal property (including all such items not permanently
affixed to the applicable Property), currently owned and acquired after the
execution of this Lease, and necessary, used, or useful in the operation of the
applicable Facility, but excluding any items within the definition of Fixtures.

Pledge Agreement: That certain Pledge Agreement, dated as of the date hereof, by
and among the Capella Holdings and the other “Pledgors” (as defined therein),
Capella Healthcare and the other “Pledge Obligors” (as defined therein), Lessor,
MPT TRS and the MPT Lenders, as the same may be amended, modified and/or
restated from time to time.

Primary Intended Use: As defined in Article VII.

Properties; Property: Individually and collectively, all of the Oklahoma
Property, the Oregon Property, the South Carolina Property and, following the
Initial Commencement Date, any New Property, each sometimes individually
referred to as a “Property.”

Property Substitution: As defined in Section 35.1.

Property Substitution Date: With respect to any applicable Property, the
effective date of a Property Substitution.

Proprietary Information: As defined in Article XXIV(j).

 

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RCRA: As defined in the definition of “Hazardous Materials Law.”

Real Estate Loan Agreement: That certain Real Estate Loan Agreement, dated as of
the date hereof, executed by the Borrower Affiliates and the MPT Lenders, as the
same may be modified, amended or restated from time to time.

Real Estate Note: The “Note” under and as defined in the Real Estate Loan
Agreement.

Real Estate Mortgages: The “Mortgages” under and as defined in the Real Estate
Loan Agreement.

Real Estate Taxes: All taxes, assessments and special assessments, and dues
which are levied or imposed during the Term upon the Leased Property.

Rent: Collectively, the Base Rent (as increased in accordance with the
provisions of Section 3.1(b)), the Oklahoma Ground Lease Rent and the Additional
Charges.

Rent Schedule: As defined in Section 3.1(c).

Required Capital Additions: As defined in Section 10.1.

Replacement Property: As defined in the definition of Substitute Property.

Request: As defined in Section 10.3(a).

Reserve: As defined in Section 9.2(a).

Reserve Cap: As defined in Section 9.2(a).

Reserve Payment Date: January 1, April 1, July 1 and October 1 of each year,
beginning with October 1, 2015 (provided, that an installment is due on the
Initial Commencement Date as provided in Section 9.2).

RFFE Loans: As defined in Article XVII.

SARA: As defined in the definition of “Hazardous Materials Law.”

Security Agreement: That certain Security Agreement, dated as of the date
hereof, among Lessor, MPT TRS, the MPT Lenders, Lessee, the Borrower Affiliates
and the other Obligors, as the same may be modified, amended, restated or
supplemented from time to time.

Severance Date: As defined in Section 30.2.

Severance Notice: As defined in Section 30.2.

Severed Lease: As defined in Section 30.2.

Severed Property: As defined in Section 30.2.

 

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Single Purpose Entity: With respect to each Facility Lessee, an entity which
(i) exists solely for the purpose of owning and/or leasing the Property operated
by such Facility Lessee and conducting the operation of the Business thereon,
including any business that relates to the business currently conducted by
Capella Holdings (such as bariatric centers and/or health plans), (ii) conducts
business only in its own name, (iii) does not engage in any business other than
the ownership and/or leasing of such Property and the operation of the Business
thereon, (iv) does not hold, directly or indirectly, any ownership interest
(legal or equitable) in any entity or any real or personal property other than
the interest in such Property and the other assets incident to the operation of
the Business, (v) does not have any funded debt other than as permitted by this
Lease or arising in the ordinary course of the Business and does not guarantee
or otherwise obligate itself with respect to the debts of any other person or
entity, other than as contemplated by this Lease, arising in the ordinary course
of the Business or approved by Lessor in writing, (vi) has its own separate
books, records, accounts, financial statements and tax returns, except that
financial statements of the individual Facility Lessees may be consolidated,
(vii) holds itself out as being a company separate and apart from any other
entity, and (viii) maintains all entity formalities independent of any other
entity.

South Carolina Facility: That certain one hundred sixteen (116)-licensed bed
general acute care hospital facility operated at the South Carolina Property.

South Carolina Land: That certain real property located in Hartsville,
Darlington County, South Carolina, as more particularly described on Exhibit A-1
attached hereto and made a part hereof by reference and incorporation, together
with all hereditaments, easements, mineral rights, rights of way and other
appurtenances related thereto.

South Carolina Lessee: Hartsville, LLC, a South Carolina limited liability
company, together with its successors and permitted assigns.

South Carolina Lessor: MPT of Hartsville-Capella Hospital, LLC, a Delaware
limited liability company, together with its successors and assigns.

South Carolina Property: The South Carolina Land and related Leased Improvements
located thereon relating to the South Carolina Facility.

State Regulatory Authorities: As applicable to each Facility, the state
licensing and certification agencies, together with all applicable statutes and
regulations, related to healthcare facilities in each respective state.

Subordination of Management Agreement: That certain Subordination of Management
Agreement, dated as of the date hereof, executed by Sunergeo Health and certain
of the Obligors in favor of Lessor, MPT TRS and the MPT Lenders, as the same may
be amended, modified, restated and/or supplemented from time to time.

Substitute Property: With respect to any Property, a fee interest in land and
improvements thereon which may be included in the Property Substitution, with
respect to

 

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which: (i) such improvements consist solely of a general acute care hospital
location (the “Replacement Property”), and which may also include medical office
buildings, clinics and other improvements either necessary for or commonly
associated with the operation of a Replacement Property or consented to by
Lessor in its sole and absolute discretion (provided, however, that if such
Replacement Property and related improvements shall have existed and have been
operated by an Affiliate of Lessee for not less than two (2) full years prior to
the proposed Property Substitution Date, then Lessor’s consent to such
Replacement Property and related improvements shall not be unreasonably
withheld, conditioned or delayed); (ii) financial records pertaining to such
operations (which records will include audited financial statements if
available) shall have been made available to Lessor; (iii) all certificates of
need, permits, approvals and authorizations pertaining to ownership and
operation of such land and improvements as Replacement Property shall be in full
force and effect, free of material defaults or notices of material default;
(iv) neither the Property Substitution nor the utilization of such land and
improvements in a Property Substitution will result in the realization of
taxable income or gain to MPT or its Equity Constituents under the Code, as
determined by MPT in its sole discretion; and (v) neither the Property
Substitution nor the utilization of such land and improvements in a Property
Substitution will jeopardize MPT’s status as a qualified real estate investment
trust under the Code, as determined by MPT in its sole discretion.

Sunergeo Health: Sunergeo Health Partners, LLC, a Delaware limited liability
company.

Taking: A taking or voluntary conveyance during the Term of all or part of any
Property, or any interest therein or right accruing thereto or use thereof, as
the result of, or in settlement of, any Condemnation or other eminent domain
proceeding affecting such portion of the Leased Property whether or not the same
shall have actually been commenced.

Tenant(s): The lessees, tenants, sublessees or subtenants under the Tenant
Leases, if any.

Tenant Leases: All leases, subleases, pharmacy leases and other rental
agreements (written or verbal, now or hereafter in effect), if any, including
any Existing Subleases as described in Section 23.1, pursuant to which any
Facility Lessee has granted or will grant a possessory interest in and to any
space in or any part of the Leased Property, or that otherwise provide rights
with respect to the Leased Property, and all Credit Enhancements, if any, held
in connection therewith.

Term: With respect to a particular Property, the actual duration of this Lease,
including the Fixed Term and the Extension Terms (if extended by Lessee).

Terminated Property: As defined in Section 16.1D.

Unsuitable for Its Use or Unsuitable for Its Primary Intended Use: As used
anywhere in this Lease, the terms “Unsuitable for Its Use” or “Unsuitable for
Its Primary Intended Use” shall mean that, with respect to any Property or part
thereof, by reason of damage or destruction or a partial Taking by Condemnation,
such Property cannot be operated on a commercially practicable basis for its
Primary Intended Use, taking into account, all relevant factors (including,
without limitation, anticipated repairs and/or restorations), and the effect of
such damage or destruction or partial Taking.

 

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USPAP: The Uniform Standards of Professional Appraisal Practice, as amended from
time to time.

Vacated Property: As defined in Section 16.1A.

1.2 Interpretation; Terms Generally. The definitions set forth in Section 1.1
and elsewhere in this Lease shall apply equally to both the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. Unless otherwise
indicated, the words “include”, “includes” and “including” shall be deemed to be
followed by the phrase “without limitation.” The words “herein”, “hereof and
“hereunder” and words of similar import shall be deemed to refer to this Lease
(including the Schedules and Exhibits) in its entirety and not to any part
hereof, unless the context shall otherwise require. All references herein to
Articles, Sections, Schedules and Exhibits shall be deemed to refer to Articles,
Sections and Schedules of, and Exhibits to, this Lease, unless the context shall
otherwise require. Unless the context shall otherwise require, any references to
any agreement or other instrument or statute or regulation are to it as amended
and supplemented from time to time (and, in the case of a statute or regulation,
to any corresponding provisions of successor statutes or regulations). Any
reference in this Lease to a “day” or number of “days” that does not refer
explicitly to a “Business Day” or “Business Days” shall be interpreted as a
reference to a calendar day or number of calendar days. If any action or notice
is to be taken or given on or by a particular calendar day, and such calendar
day is not a Business Day, then such action or notice shall be deferred until,
or may be taken or given on, the next Business Day. For all purposes hereunder,
whenever reference is made to “continuance” or “continuation” of an Event of
Default (or words of similar import), such reference shall mean that the
relevant Event of Default has not been waived in writing by the Lessor (or
Affiliate of Lessor) or (as to any Event of Default that is subject to cure)
cured within the applicable cure period.

1.3 Accounting Terms. All accounting terms not specifically defined herein shall
be construed in accordance with GAAP. Defined terms and calculations in
connection with the covenants and other provisions of this Lease, including
Section 16.1(k), shall be based upon and utilize GAAP applied in a manner
consistent with that used in preparing the financial statements referred to in
Article XXIV(b)(i)-(iii). If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in this Lease, and
Lessee shall so request, Lessor and Lessee shall negotiate in good faith to
amend such ratio or requirement to preserve the original intent thereof in light
of such change in GAAP; provided, that, until so amended, (a) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (b) Lessee shall provide to Lessor financial statements and
other documents required under this Lease or as reasonably requested hereunder
setting forth a reconciliation between calculations of such ratio or requirement
made before and after giving effect to such change in GAAP. Notwithstanding the
foregoing, (x) all financial statements

 

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delivered hereunder shall be prepared, and all financial covenants contained
herein shall be calculated, without giving effect to an election under Statement
of Financial Accounting Standards 159 (or any similar accounting principal)
permitting a Person to value its financial liabilities at the fair market value
thereof, and (y) any obligations of a Person under a lease (whether now existing
or entered into in the future) that is not (or would not be) a capital lease
obligation under GAAP as in effect on the Commencement Date, shall not be
treated as a capital lease obligation solely as a result of the adoption of
changes in GAAP outlined by the Financial Accounting Standards Board in its
press release dated March 19, 2009.

1.4 Certain Matters Relating to References to Leased Property. References herein
to “a portion” of the Leased Property (or words or phrases of similar import)
shall mean, unless the context clearly indicates otherwise, a specific Property.

ARTICLE II

LEASED PROPERTY; TERM

Upon and subject to the terms and conditions hereinafter set forth, Lessor
leases to Lessee and Lessee rents from Lessor all of Lessor’s rights and
interest in and to the following property (collectively, and as modified from
time to time pursuant to the terms of this Lease, the “Leased Property”):

(a) the Land; and

(b) the existing improvements on the Land and the buildings and any improvements
constructed on the Land, including, but not limited to, all buildings,
structures, Fixtures and other improvements of every kind, alleyways and
connecting tunnels, sidewalks, utility pipes, conduits and lines (on-site and
off-site), parking areas and roadways appurtenant to such buildings and
structures presently or hereafter situated upon the Land, Capital Additions and
all hereditaments, easements, rights of way and other appurtenances related
thereto (collectively, the “Leased Improvements”).

SUBJECT, HOWEVER, to all applicable matters of record and any other matters as
set forth on Exhibits B-1 et seq. (the “Permitted Exceptions”), Lessee shall
have and hold the Leased Property for a fixed term (the “Fixed Term”) commencing
on the Commencement Date and ending at midnight on the last day of the One
Hundred Eightieth (180th) full month after the Initial Commencement Date, unless
sooner terminated as herein provided.

So long as no Event of Default then exists and no event has then occurred which
with the giving of notice or the passage of time or both would constitute such
an Event of Default, Lessee shall have the option to extend the Fixed Term on
the same terms and conditions set forth herein for four (4) additional periods
of five (5) years each (each an “Extension Term”); it being understood and
agreed that Lessee’s exercise of any such extension option must apply to the
entire Leased Property. Lessee may exercise each such option by giving written
notice to Lessor at least one hundred eighty (180) days prior to the expiration
of the Fixed Term or Extension

 

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Term, as applicable (the “Extension Notice”). If, during the period following
the delivery of the Extension Notice to Lessor and prior to the effective date
of such extension, an Event of Default shall occur which is continuing on the
commencement date of the Extension Term, at Lessor’s option, the Term shall not
be so extended and Lessee shall be deemed to have forfeited all subsequent
options to extend the Fixed Term of this Lease. If Lessee elects not to exercise
its option to extend, all subsequent options to extend shall be deemed to have
lapsed and be of no further force or effect.

Notwithstanding the foregoing, this Lease is expressly made subject to the terms
and conditions of the Master Lease and the Oklahoma Ground Lease, copies of
which have been provided to Lessee prior to the execution hereof. MPT Real
Estate Owner has acknowledged and consented to the terms and provisions of this
Lease and Lessee’s rights as sublessee of the Leased Property, including,
without limitation, Lessee’s options to purchase the Leased Property as provided
herein. MPT Real Estate Owner has further agreed to cooperate with Lessor and
Lessee and to perform such acts and execute such agreements and instruments as
shall be necessary to effect the terms and provisions of this Lease, and to
comply with all requirements and perform all obligations pursuant to the Master
Lease. Notwithstanding anything to the contrary contained in this Lease, if
during the final Extension Term of this Lease, the Oklahoma Ground Lease expires
by its terms without Lessor or Lessee being able to negotiate an extension of
the term thereof acceptable to both parties, or Lessor rejects the Oklahoma
Ground Lease in a bankruptcy proceeding, the Base Rent shall be reduced in
accordance with Section 5.2. To the extent the Oklahoma Ground Lease has any
renewal options that cover a period during the Term, Lessee and Lessor agree
that Lessor shall exercise such renewal options.

ARTICLE III

RENT

3.1 Rent. During the Term, Lessee shall pay to Lessor, in advance and without
notice, demand, set off or counterclaim, in lawful money of the United States of
America, at Lessor’s address set forth herein or at such other place or to such
other person, firm or entity as Lessor may designate from time to time in
writing in accordance with Article XXXII, the Rent as provided in this Lease.
Lessor has the sole discretion to determine, the method of payment of Rent, and
will require that such payments initially be forwarded to Lessor utilizing the
Automated Clearing House (“ACH”) Network. Lessee shall take all reasonably
necessary steps and bear any and all reasonable costs associated with utilizing
ACH to timely deliver payments of Rent to Lessor. All payments of Rent made
through ACH remain payments of Rent and, as such, are subject to all terms and
conditions of this Lease, including, but not limited to, the default provisions.
With respect to each Facility, Rent shall be calculated and payable as follows:

(a) Allocated Base Rent. With respect to each Property, subject to adjustment as
provided herein (including adjustments set forth in Section 3.1(b) below),
Lessee shall pay to Lessor in advance on the first (1st) day of each calendar
month during the Term base rent allocated thereto (the “Allocated Base Rent”) in
an amount equal to the product of (i) the Lease

 

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Base for such Property as of the last day of the immediately preceding month (or
as of the Commencement Date with respect to the amount payable for the first
month of the Term), multiplied by (ii) the Lease Rate, divided by (iii) twelve
(12); provided, however, if the Commencement Date with respect to such Property
is other than the first day of a calendar month, Allocated Base Rent for the
period from the Commencement Date for such Property to the first day of the
first (1st) full month shall be prorated on a per diem basis based upon a three
hundred sixty (360) and shall be paid on the Commencement Date. Lessor and
Lessee acknowledge that the Allocated Base Rent is payable in advance and,
accordingly, with respect to additions to the Lease Base and Capital Additions
funded by Lessor with respect to any Property on or after the first (1st) day of
any month (and, therefore, not included in the calculation of the Allocated Base
Rent paid in advance for a particular month with respect to such Property),
Allocated Base Rent shall include a per diem Allocated Base Rent for the prior
month (prorated based upon a three hundred sixty (360) day year in the same
manner as set forth above) to be calculated by multiplying the amount of any
such advance by the Lease Rate for such Property. Lessor shall provide Lessee
with an invoice of such amounts prior to the first day of the next calendar
month (the “Interim Capital Addition Rent”); provided, however, Lessor’s failure
to provide Lessee with an invoice for the Interim Capital Addition Rent relating
to any Property prior to the first day of the next calendar month shall not
limit or affect the Lessee’s obligations hereunder to pay such Interim Capital
Addition Rent. Allocated Base Rent and Interim Capital Addition Rent relating to
each Property shall be payable in advance in equal, consecutive monthly
installments.

(b) Adjustment of Allocated Base Rent. With respect to each Property, commencing
on January 1, 2017, and continuing on each January 1 thereafter (each an
“Adjustment Date”) during the Term, the Lease Rate applicable to such Property
shall be increased (and in no event decreased) and shall be equal to the sum of
(i) the Lease Rate for such Property previously in effect, and (ii) the product
of such previous Lease Rate multiplied by the greater of (A) Two Percent
(2.0%) and (B) the percentage by which the CPI published for the month of
October prior to the applicable Adjustment Date shall have increased over the
CPI figure published for the month of October prior to the previous Adjustment
Date (the CPI figure published for the month of October 2015 shall be used in
connection with the recalculation on January 1, 2017) (such escalator used in
calculating the adjusted Lease Rate being referred to herein as the
“Escalator”); provided, however, that in no event shall the Escalator be greater
than Four Percent (4.0%) on any Adjustment Date. For any monetary increases or
adjustments that cannot be determined as of the applicable Adjustment Date due
to then unknown variables (such as CPI), such amounts shall become due (and
calculated retroactively to the Adjustment Date) and payable as of the time of
determination.

(c) Rent Schedule. From time to time during the Term, Lessor may, in its
reasonable discretion, calculate the Base Rent and Interim Capital Addition Rent
payable hereunder (the “Rent Schedule”), and provide a copy of such Rent
Schedule to Lessee. Base Rent, as calculated in accordance with Sections 3.1(a)
and 3.1(b) above, shall include Interim Capital Addition Rent and Allocated Base
Rent payable with respect to the entire Leased

 

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Property. The Rent Schedule shall be adjusted and substituted on a periodic
basis by Lessor, in its reasonable discretion, as the Interim Capital Addition
Rent and Base Rent are adjusted and calculated during the Term as provided
herein. Lessor’s failure to provide a copy of the Rent Schedule or substitute or
adjusted Rent Schedule shall not limit or affect the Lessee’s obligations
hereunder.

3.2 Additional Charges. In addition to the Base Rent and the Oklahoma Ground
Lease Rent that Lessee assumes or agrees to pay under this Lease, (a) Lessee
will pay and discharge as and when due and payable other amounts, liabilities,
obligations and Impositions related to the ownership, use, possession and
operation of the Leased Property, including, without limitation, all costs of
owning and operating each Facility, all Real Estate Taxes, Insurance Premiums,
maintenance and capital improvements, all violations of and defaults under any
of the Permitted Exceptions, and all licensure violations, civil monetary
penalties and fines, and (b) in the event of any failure on the part of Lessee
to pay any of those items referred to in clause (a) above, Lessee will also
promptly pay and reimburse Lessor, MPT Real Estate Owner and/or their respective
Affiliates for all such amounts paid by Lessor, MPT Real Estate Owner and/or
their Affiliates and promptly pay and discharge every fine, penalty, interest
and cost which may be added for non-payment or late payment of such items (the
items referred to in clauses (a) and (b) above being referred to herein
collectively as the “Additional Charges”), and Lessor shall have all legal,
equitable and contractual rights, powers and remedies provided in this Lease, by
statute, or otherwise, in the case of non-payment of the Additional Charges, as
in the case of the Base Rent. If any installment of Base Rent or Additional
Charges shall not be paid within five (5) Business Days after the applicable due
date, Lessee, in addition to all other obligations hereunder, will pay to Lessor
on demand as Additional Charges, a late charge computed at the Overdue Rate on
the amount of such installment from the due date of such installment to the date
of payment thereof, and a Late Payment Penalty with respect to such installment.
To the extent that Lessee pays any Additional Charges to Lessor pursuant to
clause (b) above or pursuant to any other requirement of this Lease, Lessee
shall be relieved of its obligation to pay such Additional Charges to the entity
to which they would otherwise be due. Nothing in this Section 3.2 limits the
provisions of Article XXII.

3.3 Rent and Payments under the Oklahoma Ground Lease. Lessee shall pay all rent
and all other charges and amounts due and payable under the Oklahoma Ground
Lease (collectively, the “Oklahoma Ground Lease Rent”) during the Term directly
to the “Landlord” thereunder as and when the same becomes due and payable as
required under the Oklahoma Ground Lease, and Lessee shall provide Lessor with
reasonable evidence of payment each month confirming that the Oklahoma Ground
Lease Rent has been timely paid.

ARTICLE IV

IMPOSITIONS

4.1 Payment of Impositions. Subject to and without limiting Article XII relating
to permitted contests, Lessee will pay, or cause to be paid, all Impositions
before any fine, penalty, interest or cost may be added for non-payment, with
such payments to be made directly to the

 

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taxing or assessing authorities, and Lessee will promptly furnish to Lessor
copies of official receipts or other satisfactory proof evidencing such
payments. Lessee’s obligation to pay such Impositions shall be deemed absolutely
fixed upon the date that any such Imposition becomes a lien upon the Leased
Property or any part thereof. If any such Imposition may lawfully be paid in
installments (whether or not interest shall accrue on the unpaid balance of such
Imposition), Lessee may, with Lessor’s consent, not to be unreasonably withheld,
conditioned or delayed, exercise the option to pay the same (and any accrued
interest on the unpaid balance of such Imposition) in installments and, in such
event, shall pay such installments during the Term (subject to and without
limiting Lessee’s right of contest pursuant to the provisions of Article XII) as
the same respectively become due. Lessor, at its expense, shall, to the extent
permitted by applicable law, prepare and file all tax returns and reports as may
be required by governmental authorities in respect of Lessor’s net income, gross
receipts, franchise taxes and taxes on its capital stock, and Lessee, at its
expense, shall, to the extent permitted by applicable laws and regulations,
prepare and file all other tax returns and reports in respect of any Imposition
as may be required by governmental authorities. If any refund shall be due from
any taxing authority with respect to any Imposition paid by Lessee, the same
shall be paid over to, or retained by, Lessee provided no Event of Default shall
have occurred and be continuing. Any such funds retained by Lessor due to an
Event of Default shall be applied as provided in Article XVI. Lessor and Lessee
shall, upon request of the other, provide any data (i) that is maintained by the
party to whom the request is made, and (ii) that pertains to the Leased
Property, as may be necessary to prepare any required returns and reports. In
the event that any Governmental Body classifies any property covered by this
Lease as personal property, Lessee shall file all personal property tax returns
in such jurisdictions where it may legally so file. Lessor, to the extent it
possesses the same, and Lessee, to the extent it possesses the same, will
provide the other party, upon request, with cost and depreciation records
necessary for filing returns for any property so classified as personal
property. In the event that Lessor is legally required to file personal property
tax returns, Lessee will be provided with copies of assessment notices
indicating a value in excess of the reported value in sufficient time for Lessee
to file a protest. After obtaining written approval from Lessor, which approval
shall not to be unreasonably withheld, conditioned or delayed, Lessee may, at
Lessee’s sole cost and expense, protest, appeal, or institute such other
proceedings as Lessee may deem appropriate to effect a reduction of real estate
or personal property assessments, and Lessor, at Lessee’s expense as aforesaid,
shall fully cooperate with Lessee in such protest, appeal, or other action.
Billings for reimbursement by Lessee to Lessor of personal property taxes shall
be accompanied by copies of a bill therefor and payments thereof which identify
the personal property with respect to which such payments are made.

4.2 Adjustment of Impositions. Impositions that are levied or assessed with
respect to the tax-fiscal period during which the Term terminates, unless Lessee
purchases the Leased Property pursuant to purchase options expressly provided
herein, if any, shall be adjusted and prorated between Lessor and Lessee,
whether or not such Imposition is imposed before or after such termination, and
Lessee’s obligation to pay its prorated share thereof shall survive such
termination.

 

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4.3 Utility Charges. Lessee will contract for, in its own name, and will pay or
cause to be paid all charges for electricity, power, gas, oil, sewer, water and
other utilities used in connection with the Leased Property during the Term,
including, without limitation, all impact and tap fees necessary for the
operation of the Facilities, except to the extent that such impact and tap fees
were or are to be paid by Lessor as part of the cost of a Capital Addition.

4.4 Insurance Premiums. Lessee shall contract for, in its own name, and shall
pay or cause to be paid all premiums for the insurance coverage required to be
maintained pursuant to Article XIII during the Term (the “Insurance Premiums”).

ARTICLE V

ABSOLUTE NET LEASE; NO TERMINATION;

TERMINATION WITH RESPECT

TO FEWER THAN ALL PROPERTIES

5.1 Absolute Net Lease; No Termination. The parties understand, acknowledge and
agree that this is an absolute net lease and this Lease shall yield to Lessor
the full amount of the installments of Base Rent and the payments of Additional
Charges throughout the Term. Lessee further acknowledges and agrees that all
charges, assessments or payments of any kind are due and payable without notice,
demand, set off or counterclaim (other than notices to Lessee that are expressly
required hereunder) and shall be paid by Lessee as they become due and payable.
Lessee shall remain bound by this Lease in accordance with its terms and shall
neither take any action without the consent of Lessor to modify, surrender or
terminate the same, nor seek nor be entitled to any abatement, deduction,
deferment or reduction of Rent (except as expressly provided herein), or set-off
against the Rent, nor shall the respective obligations of Lessor and Lessee be
otherwise affected by reason of (a) any damage to, or destruction of, any
Property from whatever cause or any Taking of any Property or any portion
thereof (except as expressly provided herein), (b) the lawful or unlawful
prohibition of, or restriction upon, Lessee’s use of the Leased Property, or any
portion thereof, or the interference with such use by any person, corporation,
partnership or other entity, or by reason of eviction by paramount title;
(c) any claim which Lessee has or might have against Lessor or by reason of any
default or breach of any warranty by Lessor under this Lease or any other
agreement between Lessor and Lessee, or to which Lessor and Lessee are parties,
(d) any bankruptcy, insolvency, reorganization, composition, readjustment,
liquidation, dissolution, winding up or other proceedings affecting Lessor or
any assignee or transferee of Lessor, or (e) any other cause whether similar or
dissimilar to any of the foregoing other than a discharge of Lessee from any
such obligations as a matter of law. Lessee hereby specifically waives all
rights, arising from any occurrence whatsoever, which may now or hereafter be
conferred upon it by law to (i) modify, surrender or terminate this Lease or
quit or surrender the Leased Property or any portion thereof, or (ii) entitle
Lessee to any abatement, reduction, suspension or deferment of the Rent or other
sums payable by Lessee hereunder, except as otherwise specifically provided in
this Lease. The obligations of Lessor and Lessee hereunder shall be separate and
independent covenants and agreements and the Rent and all other sums payable by
Lessee hereunder shall continue to be payable in all events unless the
obligations to pay the same shall be terminated pursuant to the express
provisions of this Lease or by termination of this Lease other than by reason of
an Event of Default.

 

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5.2 Termination with Respect to Fewer than All Properties. Wherever in this
Lease the action of terminating this Lease with respect to a particular Property
(or action of similar import) is described or permitted, such action shall mean
the termination of Lessee’s rights in and to such Property. Notwithstanding
anything in this Lease to the contrary, if this Lease shall be terminated by
Lessor or Lessee pursuant to rights granted hereunder with respect to any
particular Property, such termination shall not affect the Term of this Lease
with respect to the balance of the Leased Property relating to Properties not so
terminated and this Lease shall continue in full force and effect with respect
to such portion of the Leased Property, except that (a) the total Base Rent
payable hereunder shall be reduced by the amount of Allocated Base Rent with
respect to the Property as to which this Lease has been so terminated, (b) all
references herein to Leased Property shall thereafter no longer include such
terminated Property, (c) the terminated Property shall no longer be leased
hereunder, and (d) provided that all of Lessee’s obligations hereunder with
respect to such portion of the Leased Property (excluding unasserted contingent
indemnification obligations) have been paid in full to Lessor, the relevant
Facility Lessee shall no longer be a Facility Lessee hereunder or a party hereto
with respect to such Property (and for the avoidance of doubt, if all Properties
of a Facility Lessee shall have been so terminated, such Facility Lessee shall
no longer be a Facility Lessee hereunder or a party hereto); subject, however,
to Lessor’s right, in the event of any such termination because of an Event of
Default, to recover damages with respect to any such terminated Property.

ARTICLE VI

OWNERSHIP OF LEASED PROPERTY AND PERSONAL PROPERTY

6.1 Ownership of the Leased Property. Lessee acknowledges that the Leased
Property is the property of MPT Real Estate Owner (except that the Leased
Improvements located on the Oklahoma Ground Leased Land will revert to the
“Landlord” under the Oklahoma Ground Lease upon the expiration thereof), that
MPT Real Estate Owner has leased the Leased Property to Lessor and that Lessee
has only the right to the possession and use of the Leased Property as a
sublessee of Lessor and upon and subject to the terms, provisions and conditions
of this Lease, the Master Lease, the Oklahoma Ground Lease and the Existing
Subleases.

6.2 Lessee’s Personal Property. Lessee, at its expense, shall install, affix,
assemble and place on the Leased Property the Lessee’s Personal Property, which
Lessee’s Personal Property shall be subject to any security interests and liens
as provided in Section 16.6. Except for inventory or for removal because of
damage, obsolescence, upgrade or replacement, Lessee shall not, without the
prior written consent of Lessor (such consent not to be unreasonably withheld,
conditioned or delayed provided that no Event of Default then exists), remove
any of Lessee’s Personal Property from the Leased Property. Lessee shall provide
and maintain during the entire Term all such Lessee’s Personal Property as shall
be necessary to operate each Property in compliance in all material respects
with all licensure and certification requirements, in

 

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compliance in all material respects with all applicable Legal Requirements and
Insurance Requirements, and otherwise in accordance with customary practice in
the industry for the Primary Intended Use. Following the expiration or earlier
termination of this Lease with respect to any one or more of the Properties and
subject to Lessor’s option to purchase such Lessee Personal Property as provided
in Section 34.2, Lessee agrees that all of Lessee’s Personal Property relating
to such one or more Properties (for which Lessor has authorized removal as
provided above) not removed by Lessee within fifteen (15) days following the
expiration or earlier termination of this Lease with respect thereto shall be
considered abandoned by Lessee and may be appropriated, sold, destroyed or
otherwise disposed of by Lessor (at Lessee’s cost) with prior written notice
thereof to Lessee, without any payment to Lessee and without any obligation to
Lessee to account therefor. Lessee will, at its expense, restore the Leased
Property and repair all damage to the Leased Property caused by the installation
or removal of Lessee’s Personal Property, whether affected by Lessee, Lessor,
any Lessee lender, or any Facility Lender, unless caused by the gross negligence
or willful misconduct of Lessor or any Facility Lender.

ARTICLE VII

CONDITION AND USE OF LEASED PROPERTY

7.1 Condition of the Leased Property. Lessee acknowledges receipt and delivery
of possession of the Leased Property and that Lessee has examined and otherwise
has acquired knowledge of the condition of the Leased Property prior to the
execution and delivery of this Lease and has found the same to be in good order
and repair and satisfactory for its purpose hereunder. Lessee is leasing the
Leased Property “as is” and “where is” in its present condition. Lessee has not
relied on any representation or warranty by Lessor and hereby waives any claim
or action against Lessor in respect of the condition of the Leased Property.
LESSOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF
THE LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE,
SUITABILITY, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE,
AS TO QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING
AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY LESSEE. LESSEE ACKNOWLEDGES THAT
THE LEASED PROPERTY HAS BEEN INSPECTED BY LESSEE AND IS SATISFACTORY TO IT.
ACCORDINGLY, LESSEE HEREBY ACKNOWLEDGES THAT LESSOR HAS NOT MADE AND WILL NOT
MAKE, NOR SHALL LESSOR BE DEEMED TO HAVE MADE ANY WARRANTY OR REPRESENTATION,
WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ALL WARRANTIES THAT
THE LEASED PROPERTY IS FREE FROM VICES, DEFECTS AND DEFICIENCIES, WHETHER HIDDEN
OR APPARENT OR ANY WARRANTY AS TO THE FITNESS, DESIGN OR CONDITION OF THE LEASED
PROPERTY FOR ANY PARTICULAR USE OR PURPOSE OF SUCH LEASED PROPERTY. THE
PROVISIONS OF THIS SECTION 7.1 HAVE BEEN NEGOTIATED, AND ARE INTENDED TO BE A
COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES BY LESSOR, EXPRESS, IMPLIED OR
CREATED BY APPLICABLE LAW, WITH RESPECT TO THE CONDITION OF THE LEASED PROPERTY.

 

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7.2 Use of the Leased Property. Each Property shall be operated as a licensed
general acute care hospital facility and for such other legal ancillary uses as
may be necessary in connection with or incidental to such uses and, in each
case, subject to all covenants, restrictions, easements and all other matters of
record (including those set forth in the Permitted Exceptions) relating to the
applicable Property (collectively, the “Primary Intended Use”). Lessee shall
comply in all material respects with all Legal Requirements and shall maintain
all Licenses, including, but not limited to, Medicare and/or Medicaid
certifications, provider numbers and agreements, certificates of need,
governmental approvals, and full accreditation from all applicable governmental
authorities, if any, that are necessary for the operation of Business with
respect to the applicable Property consistent with the Primary Intended Use.

(a) Except as expressly authorized herein, Lessee shall not use any Property for
any use other than as provided herein, nor change the number or type of beds
within any Facility, in either case, without the prior written consent of
Lessor, not to be unreasonably withheld, conditioned or delayed.

(b) No use shall be made or permitted to be made of the Leased Property and no
acts shall be done which will cause the cancellation of any insurance policy
covering the Leased Property or any part thereof, nor shall Lessee sell or
otherwise provide to residents or patients therein, or permit to be kept, used
or sold in or about the Leased Property any article which is prohibited by law
or by the standard form of fire insurance policies, any other insurance policies
required to be carried hereunder, or fire underwriters regulations. Lessee
shall, at its sole cost, comply in all material respects with all of the
requirements, covenants and restrictions pertaining to the Leased Property,
including, without limitation, all of the Permitted Exceptions, and other
requirements of any insurance board, association, organization or company
necessary for the maintenance of the insurance, as herein provided, covering the
Leased Property and Lessee’s Personal Property.

(c) Lessee shall continuously operate the Leased Property only in accordance
with the Primary Intended Use and as a provider of goods and services incidental
thereto and Lessee shall maintain its certifications for reimbursement and
licensure and all accreditations.

(d) Lessee shall not commit or suffer to be committed any waste on the Leased
Property, or in any of the Facilities, nor shall Lessee cause or permit any
nuisance thereon.

(e) Lessee shall neither suffer nor permit the Leased Property or any portion
thereof, including any Capital Addition whether or not funded by Lessor, or
Lessee’s Personal Property, to be used in such a manner as (i) might reasonably
tend to impair Lessor’s (or Lessee’s, as the case may be) title thereto or to
any portion thereof, or (ii) may reasonably make possible a claim or claims of
adverse usage or adverse possession by the public, as such, or of implied
dedication of the Leased Property or any portion thereof.

 

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(f) With respect to each Property, Lessor shall have the right and option to
erect a sign on such Property stating that such Property is owned by MPT Real
Estate Owner. Such sign shall be in a size, and shall be erected in a location
acceptable to Lessor and MPT Real Estate Owner and approved by Lessee, which
approval shall not be unreasonably withheld, conditioned or delayed. Lessor
shall be responsible for all costs related to such signage and complying with
all Legal Requirements with respect to such signage.

7.3 Lessor to Grant Easements. From time to time during the Term, upon the
request of Lessee, and so long as no Event of Default then exists, and no event
has then occurred which with the giving of notice or the passage of time or both
would constitute such an Event of Default, Lessor may, in its reasonable
discretion, subject to the terms of the Master Lease and the Oklahoma Ground
Lease (if applicable), and at Lessee’s cost and expense, (a) grant easements and
other rights in the nature of easements, (b) release existing easements or other
rights in the nature of easements which are for the benefit of the Leased
Property or any portion thereof; (c) dedicate or transfer unimproved portions of
the Leased Property for road, highway or other public purposes; (d) execute
petitions to have the Leased Property or any portion thereof annexed to any
municipal corporation or utility district; (e) execute amendments to any
covenants and restrictions affecting the Leased Property or any portion thereof;
and (f) execute and deliver to any person any instrument appropriate to confirm
or effect such grants, releases, dedications and transfers (to the extent of its
interest in the Leased Property), but only upon delivery to Lessor of such
information as Lessor may reasonably require confirming that such grant,
release, dedication, transfer, petition or amendment is required for, and not
materially detrimental to, the proper conduct of the Primary Intended Use on the
Leased Property and does not reduce the value of the Leased Property or any
portion thereof.

ARTICLE VIII

LEGAL AND INSURANCE REQUIREMENTS

8.1 Compliance with Legal and Insurance Requirements. Subject to Article XII
relating to permitted contests, Lessee, at its expense, (a) shall comply in all
material respects with all Legal Requirements and Insurance Requirements
applicable to Lessee and the use, operation, maintenance, repair and restoration
of the Facilities and the Leased Property, whether or not compliance therewith
shall require structural change in any of the Leased Improvements or interfere
with the use and enjoyment of the Leased Property; (b) shall not use the Leased
Property and Lessee’s Personal Property for any unlawful purpose; (c) shall
procure, maintain and comply in all material respects with all Licenses and
other governmental approvals and authorizations required for any use of the
Leased Property and Lessee’s Personal Property then being made, and for the
proper erection, installation, operation and maintenance of the Leased Property
or any part thereof, including, without limitation, any Capital Additions; and
(d) shall use its commercially reasonable efforts consistent with its rights
under the Tenant Leases to cause all Tenants to acquire and maintain all
licenses, certificates, permits, provider agreements and other authorizations
and approvals necessary to operate in its customary manner any portion of the
Leased Property subleased to them for the Primary Intended Uses and any other
uses conducted on the Leased Property as may be permitted from time to time
hereunder, it being

 

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acknowledged by Lessor that any failure by any Tenant under this clause
(d) shall not cause (or be deemed to cause) a breach by Lessee of this
Section 8.1 unless Lessee has so failed to use commercially reasonable efforts.
Lessee’s use of the Leased Property, the use of all Lessee’s Personal Property
used in connection with the Leased Property, and the maintenance, alteration,
and operation of the same, and all parts thereof, shall at all times conform in
all material respects to all Legal Requirements. Upon Lessor’s request, Lessee
shall deliver to Lessor copies of all such Licenses and other approvals and
authorizations. Lessee shall indemnify and defend, at Lessee’s sole cost and
expense, and hold Lessor, MPT Real Estate Owner and their respective successors
and assigns harmless from and against and agrees to reimburse Lessor, MPT Real
Estate Owner and their respective successors and assigns with respect to any and
all claims, demands, actions, causes of action, losses, damages, liabilities,
costs and expenses (including, without limitation, reasonable attorneys’ fees
and court costs) of any and every kind or character, known or unknown, fixed or
contingent, asserted against or incurred by Lessor, MPT Real Estate Owner and
their respective successors and assigns, at any time and from time to time by
reason or arising out of any breach by Lessee of any of the provisions of this
Article VIII or any breach or violation by Lessee of any Legal Requirements,
including any and all such claims, demands, liabilities, damages, costs and
expenses relating to immaterial violations or breaches of this Section 8.1,
except to the extent arising solely as a result of the gross negligence or
willful misconduct of Lessor or MPT Real Estate Owner.

8.2 Hazardous Materials. Lessee shall ensure that the Leased Property and the
operation of the Business thereon complies in all material respects with all
Hazardous Materials Laws. Except for Hazardous Materials generated, used,
installed, manufactured, treated, handled, refined, produced, processed, stored
or disposed of in the normal course of business regarding the Primary Intended
Use or the conduct of the Business (which Hazardous Materials shall be handled
and disposed of in compliance in all material respects with all Hazardous
Materials Laws), Lessee shall not cause any Hazardous Materials to be installed,
used, generated, manufactured, treated, handled, refined, produced, processed,
stored or disposed of, or otherwise present in, on or under any Property or in
connection with the conduct of the Business thereon in a manner that could
result in a material violation of any Hazardous Materials Laws. Lessee shall
take commercially reasonable precautions to ensure that no activity shall be
undertaken on any Property or in connection with the operation of the Business
thereon which would cause (a) any Property to become a treatment, storage or
disposal facility of hazardous waste, infectious waste, biomedical or medical
waste, within the meaning of, or otherwise bring such Property within the ambit
of RCRA as a treatment, storage or disposal facility, (b) a release of Hazardous
Materials from any Property within the meaning of, or otherwise bring such
Property within the ambit of, and as would give rise to material liability under
CERCLA or SARA or any similar Hazardous Materials Laws, (c) the discharge of
Hazardous Materials into any watercourse, surface or subsurface of body of water
or wetland, or the discharge into the atmosphere of any Hazardous Materials,
except as authorized under a permit under any Hazardous Materials Laws, in a
manner that would give rise to a material liability under Hazardous Materials
Laws, or (d) a material violation or a material claim under RCRA, CERCLA, SARA
or any Hazardous Materials Laws. Lessee shall, at its sole cost, expense, risk
and liability, remove or cause to be removed from any

 

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Property all Hazardous Materials generated in connection with the Primary
Intended Use and as found in hospital and healthcare facilities, including,
without limitation, all infectious waste materials, syringes, needles and any
materials contaminated with bodily fluids of any type, character or description
of whatsoever nature to the extent required to comply in all material respects
with all Hazardous Materials Laws. Lessee shall not dispose of any such
infectious waste and Hazardous Materials in any receptacles used for the
disposal of normal refuse to the extent such disposal is not in compliance in
all material respects with any Hazardous Materials Laws. Lessee shall indemnify
and defend, at its sole cost and expense, and hold Lessor, MPT Real Estate Owner
and their respective successors and assigns, harmless from and against and to
reimburse Lessor and its successors and assigns with respect to any and all
claims, demands, actions, causes of action, losses, damages, liabilities, costs
and expenses (including, without limitation, reasonable attorney’s fees and
court costs) of any and every kind or character, known or unknown, fixed or
contingent, asserted against or incurred by Lessor, MPT Real Estate Owner and
their respective successors and assigns at any time and from time to time by
reason or arising out of any breach by Lessee of this Section 8.2 or any other
violation of this Section 8.2 by any Person other than Lessor, MPT Real Estate
Owner and their respective successors and assigns, including any and all such
claims, demands, liabilities, damages, costs and expenses relating to immaterial
violations or breaches of this Section 8.2, except to the extent arising as a
result of the gross negligence or willful misconduct of Lessor, MPT Real Estate
Owner and their respective successors and assigns.

8.3 Healthcare Laws.

(a) Lessor and Lessee acknowledge and agree that all compensation paid hereunder
between the parties has been determined by the parties through good-faith and
arm’s-length bargaining and is believed to represent fair market value for the
Leased Property. No payment made under this Lease is contingent on the referral
of any patient or any other business. Neither Lessor nor Lessee intends any
portion of the payments made under this Lease to influence or reward the
referral of any patients or other business that will be paid for from any state
or federal health care insurance programs, including Medicare or any state
Medical Assistance program.

(b) Lessee hereby covenants, warrants and represents to Lessor that throughout
the Term, each Facility Lessee shall: (a) be validly licensed, Medicare and/or
Medicaid certified, and, if required, accredited to operate the Facilities in
accordance with the applicable rules and regulations of the State in which the
applicable Facility is located, federal governmental authorities, and
accrediting bodies, including, but not limited to, DHHS and CMS; (b) be
certified by and the holder of valid provider agreements with Medicare/Medicaid
issued by DHHS, DHS and/or CMS and shall remain so certified and shall remain
such a holder of such licenses and Medicare and/or Medicaid certifications for
it to operate in accordance with the Primary Intended Use; (c) be in substantial
compliance with all state and federal laws, rules, regulations and procedures
with regard to the operation of the Facility operated by such Facility Lessee,
including, without limitation, substantial compliance under HIPAA; (d) operate
the Facility operated by such Facility Lessee in a manner consistent with
quality acute care services and sound reimbursement principles under the
Medicare and/or Medicaid programs and as

 

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required under state and federal law; and (e) not abandon, terminate, vacate or
fail to renew any license, certification, accreditation, certificate, approval,
permit, waiver, provider agreement or any other authorization which is required
or material for the lawful and proper operation of the Facility operated by such
Facility Lessee or in any way commit any act which will or could reasonably be
expected to cause any such license, certification, accreditation, certificate,
approval, permit, waiver, provider agreement or other authorization required to
operate a Facility to be revoked by any federal, state or local governmental
authority or accrediting body having jurisdiction thereof.

(c) Lessee represents, warrants and covenants that Lessee, this Lease and all
Tenant Leases are, and at all times during the Term will be, in compliance in
all material respects with all Healthcare Laws. In the event it is determined
that any provision of this Lease is in violation of the Healthcare Laws, the
parties in good faith shall renegotiate such provision so that same is in
compliance with all Healthcare Laws. Lessee shall add to all of its third party
agreements relating to any portion of the Leased Property, including, without
limitation, all Tenant Leases, that in the event it is determined that such
agreement and/or Tenant Lease is in violation of the Healthcare Laws, such
agreement and/or Tenant Lease shall be renegotiated so that same are in
compliance with all Healthcare Laws. Lessee shall indemnify and defend, at
Lessee’s sole cost and expense, and hold Lessor, MPT Real Estate Owner and their
respective successors and assigns, harmless from and against, and shall
reimburse Lessor, MPT Real Estate Owner and their respective successors and
assigns with respect to, any and all claims, demands, actions, causes of action,
losses, damages, liabilities, costs and expenses (including, without limitation,
reasonable attorneys’ fees and court costs) of any and every kind or character,
known or unknown, fixed or contingent, asserted against or incurred by Lessor,
MPT Real Estate Owner and their respective successors and assigns, at any time
and from time to time by reason, or arising out, of any breach by Lessee of any
of the provisions set forth in this Section 8.3 or any violation of any
Healthcare Laws by Lessee, including any and all such claims, demands,
liabilities, damages, costs and expenses relating to immaterial violations or
breaches of this Section 8.3.

8.4 Single Purpose Entity. Each Facility Lessee shall remain at all times during
the Term a Single Purpose Entity in accordance with the terms of this Lease.
Promptly following any written request by Lessor during the Term, each Facility
Lessee shall provide Lessor with evidence that such Facility Lessee is a Single
Purpose Entity and is in good standing in the state of its organization or
incorporation and in the state in which the portion of the Leased Property
relating to such Facility Lessee is located.

8.5 Organizational Covenants. Lessee shall not permit or suffer, without the
prior written consent of Lessor, which consent shall not be unreasonably
withheld, conditioned or delayed, (a) any material amendment or modification of
any Facility Lessee’s Organizational Documents or any material amendment or
modification of any Organizational Documents of any constituent entity within
such Facility Lessee, including, without limitation, any such amendment that
changes such Facility Lessee’s status as a Single Purpose Entity or any
amendment changing or modifying the governance or structure of, or changing the
manager or managing member of,

 

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such Facility Lessee; (b) any dissolution or termination of any Facility
Lessee’s existence or sale of substantially all of any Facility Lessee’s assets,
whether by sale, transfer, merger, consolidation or otherwise; or (c) a change
in any Facility Lessee’s state of formation or any Facility Lessee’s name.
Lessee has, simultaneously with the execution of this Lease, delivered to Lessor
a true and complete copy of each Facility Lessee’s Organizational Documents.
Lessee represents and warrants that the Organizational Documents (i) were duly
executed and delivered; and (ii) are in full force and effect, binding upon the
applicable Facility Lessee, and enforceable in accordance with their terms.

8.6 Representations and Warranties of Lessee. Each Facility Lessee is making the
representations and warranties set forth in Exhibit C attached hereto.

ARTICLE IX

REPAIRS; RESERVES

9.1 Maintenance; Repair and Remodel.

(a) Lessee, at its expense, will keep the Leased Property and all private
roadways, sidewalks and curbs appurtenant thereto (and Lessee’s Personal
Property) in good first class order and repair (whether or not the need for such
repairs occurs as a result of Lessee’s use, any prior use, the elements, the age
of the Leased Property or any portion thereof) and, except as otherwise provided
in Article XIV and Article XV, with reasonable promptness, will make all
necessary and appropriate repairs thereto of every kind and nature whether
interior or exterior, structural or non-structural, ordinary or extraordinary,
foreseen or unforeseen, or arising by reason of a condition existing prior to
the commencement of the Term (concealed or otherwise). All repairs shall, to the
extent reasonably achievable, be at least equivalent in quality to the original
work. Lessee will not take or omit to take any action the taking or omission of
which is reasonably likely to materially impair the value or the usefulness of
the Leased Property or any part thereof for the Primary Intended Use.

(b) Notwithstanding anything contained in this Lease to the contrary, from time
to time Lessee may remodel, modify and make additions to the Leased Property, or
any portion thereof, which remodeling, modifications and additions are not
Capital Additions (it being understood that Capital Additions are subject to the
requirements of Article X hereof) but which are necessary or advisable for the
Primary Intended Use and which permit Lessee to fully comply with its
obligations as set forth in this Lease. Lessee shall undertake any such actions
expeditiously and in a workmanlike manner and will not significantly alter the
character or purpose, or detract from the value or operating efficiency of, the
Leased Property nor significantly impair the revenue producing capability of the
Leased Property nor adversely affect the ability of Lessee to comply with the
provisions of this Lease.

(c) Lessee shall notify Lessor of any and all repairs, improvements, additions,
modifications and remodeling made to any portion of a particular Property in
excess of Three Million and No/100 Dollars ($3,000,000) during any consecutive
twelve (12) month period for the applicable Property and obtain consent from
Lessor (which consent shall not be unreasonably withheld, conditioned or
delayed) prior to making such repairs, improvements, additions, modifications or
remodeling.

 

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(d) Except as otherwise expressly provided in this Lease, Lessor shall not under
any circumstances be required to build or rebuild any improvements on the Leased
Property, or to make any repairs, replacements, alterations, restorations, or
renewals of any nature or description to the Leased Property, whether ordinary
or extraordinary or capital in nature, structural or non-structural, foreseen or
unforeseen, or to make any expenditure whatsoever with respect thereto in
connection with this Lease, or to maintain the Leased Property in any way.

(e) Nothing contained in this Lease and no action or inaction by Lessor shall be
construed as (i) constituting the consent or request of Lessor, expressed or
implied, to any contractor, subcontractor, laborer, materialman or vendor for
the provision or performance of any labor or services or the furnishing of any
materials or other property for the construction, alteration, addition, repair
or demolition of or to the Leased Property or any part thereof, or (ii) giving
Lessee any right, power or permission to contract for, or permit the performance
of, any labor or services or the furnishing of any materials or other property
in such fashion as would permit the making of any claim against Lessor in
respect thereof or to make any agreement that may create, or in any way be the
basis for, any right, title, interest, lien, claim or other encumbrance upon the
estate of Lessor in the Leased Property or any portion thereof.

(f) Unless MPT Real Estate Owner or Lessor conveys any of the Leased Property to
Lessee pursuant to the provisions of this Lease, Lessee will, upon the
expiration or prior termination of the Term, vacate and surrender the Leased
Property to Lessor in the condition in which the Leased Property was originally
received from Lessor, except as improved, constructed, repaired, rebuilt,
restored, altered or added to as permitted or required by the provisions of this
Lease and except for (i) ordinary wear and tear (subject to the obligation of
Lessee to maintain the Leased Property in good order and repair during the
entire Term), (ii) damage caused by the gross negligence or willful misconduct
of Lessor, and (iii) damage or destruction as described in Article XIV or
resulting from a Taking as described in Article XV, which Lessee is not required
by the terms of this Lease to repair or restore.

9.2 Reserves for Major Repairs.

(a) Beginning on the Initial Commencement Date and on each Reserve Payment Date
thereafter during the Term, Lessee shall deliver to Lessor quarterly deposits
with respect to each Facility in an amount equal to the product of (i) One
Thousand and No/100 Dollars ($1,000.00) (the “Dollar Amount”), multiplied by
(ii) the number of beds placed in service or use at each such Facility as of the
most recent Adjustment Date (collectively, the “Reserve”); provided, that the
first such deposit on the Initial Commencement Date shall be for the period from
the Initial Commencement Date through October 1, 2015 and shall be prorated
based on a three hundred sixty (360) day year. The aggregate amount of the
Reserve shall not exceed an amount equal to twelve (12) times the amount that
was required to be paid on the most recent Adjustment Date

 

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(the “Reserve Cap”) (and installments otherwise required under this
Section 9.2(a) shall be reduced to the extent that the amount thereof plus the
amount of the Reserve held by Lessor on the applicable Reserve Payment Date
exceeds the Reserve Cap). For payments prior to the first Adjustment Date, the
number of beds in service or in use at each such Facility shall be assumed to be
the following: for the Oregon Facility, eighty-eight (88), for the Oklahoma
Facility, three hundred twenty (320), and for the South Carolina Facility, one
hundred sixteen (116), with the total beds placed in service or in use at all of
the Facilities as of the Initial Commencement Date being five hundred
twenty-four (524). On each Adjustment Date after the Initial Commencement Date,
the number of beds shall be determined by the actual number of beds placed in
service or certified to be available for use in connection with such Facilities
as of such Adjustment Date, which shall not be reduced without the prior written
consent of Lessor.

(b) The Reserve shall be held by Lessor in an interest bearing account for the
purpose of making Major Repairs to the applicable portions of the Leased
Property. Lessor shall advance to or reimburse Lessee for Major Repairs, limited
to the amount of the Reserve, upon Lessor’s receipt from Lessee of documentation
of such costs that is sufficient in Lessor’s reasonable judgment. Beginning on
January 1, 2017 and on each Adjustment Date thereafter during the Term, the
applicable Dollar Amount shall be increased by the greater of (i) Two Percent
(2.0%) of the prior year’s applicable Dollar Amount, and (ii) the percentage by
which the CPI published for the month of October prior to the applicable
Adjustment Date shall have increased over the CPI figure published for the month
of October prior to the previous Adjustment Date (the CPI figure published for
the month of October 2015 shall be used in connection with the recalculation on
January 1, 2017); provided, however, that in no event shall such increase be
more than Four Percent (4.0%) on any Adjustment Date. The amounts in the Reserve
shall be used as described above to pay for Major Repairs, or, in the event
Lessee fails to make any required non-Major Repairs hereunder, Lessor may use
funds in the Reserve for that purpose.

(c) Lessee hereby grants to Lessor a first priority security interest in all
monies deposited into the Reserve. At Lessor’s request, Lessee shall, as soon as
practicable, execute all documents necessary to effect such security interest in
all monies deposited into the Reserve. So long as no Event of Default has
occurred and no event has then occurred which, with the giving of notice or
passage of time or both, would constitute an Event of Default hereunder, any
amounts remaining in the Reserve at the expiration of this Lease shall be
returned to Lessee; provided, however, if an Event of Default has occurred, or
any event has then occurred which with the giving of notice or passage of time
or both would constitute an Event of Default hereunder, Lessor may retain all
amounts remaining in the Reserve and shall apply such amounts to any damages
incurred by Lessor or used to pay outstanding Obligations.

ARTICLE X

CAPITAL ADDITIONS

10.1 Required Capital Additions. The parties acknowledge and agree that Lessor
shall provide the funds for Capital Additions relating to the South Carolina
Facility as further

 

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described on Schedule 10.1 attached hereto (the “Required Capital Addition”),
which funding shall not exceed the Maximum Funding Amount (as defined on
Schedule 10.1). Lessee shall cause the Completion of the Required Capital
Addition in compliance in all material respects with applicable Legal
Requirements and Healthcare Laws and the terms of this Lease, no later than the
Required Completion Date (as defined on Schedule 10.1), unless Lessor and Lessee
shall mutually agree in writing to another completion date with respect thereto.
Subject to the terms and conditions of this Lease, Lessor and Lessee agree that
the Required Capital Addition shall be deemed Capital Additions funded by Lessor
for all purposes of this Lease. Lessor shall not be responsible for cost
overruns necessary to complete the Required Capital Addition and, to the extent
such overruns are not borne by the applicable Third Party Contractor (as defined
on Schedule 10.1), Lessee shall be responsible for and shall fund all cost
overruns necessary to complete the Required Capital Addition.

10.2 Construction of Capital Additions to the Leased Property.

(a) If no Event of Default has occurred, and no event has then occurred which
with the giving of notice or passage of time or both would constitute an Event
of Default hereunder, and be continuing, Lessee shall have the right, upon and
subject to the terms and conditions set forth below, to construct or install
Capital Additions on any Property with the prior written consent of Lessor, not
to be unreasonably withheld, conditioned or delayed (it being understood that
Lessor has approved the Required Capital Additions). Lessee shall not be
permitted to create any Lien on such Property in connection with such Capital
Addition, except as provided in Section 10.3. In order to obtain Lessor’s prior
written consent, Lessee shall submit to Lessor in writing a proposal setting
forth in reasonable detail any such proposed Capital Addition. In addition,
Lessee shall promptly furnish to Lessor such additional information relating to
such proposed Capital Addition as Lessor may reasonably request. Lessor shall
have ten (10) days following receipt of the last information so requested
relating to the proposed Capital Addition to respond whether Lessor has approved
of such proposed Capital Addition, it being agreed that failure to timely
respond shall be deemed a rejection of the proposed Capital Addition.

(b) Prior to commencing construction of any Capital Addition, Lessee shall first
request Lessor to provide funds to pay for such Capital Addition in accordance
with the provisions of Section 10.4 (it being understood that Lessor has agreed
to fund the Required Capital Additions in accordance with Section 10.1). If
Lessor declines or is unable to provide such funding, the provisions of
Section 10.3 shall apply. Notwithstanding any other provision of this Article X
to the contrary, no Capital Additions shall be made without the consent of
Lessor, which consent may be withheld in Lessor’s sole discretion, if the
proposed Capital Addition would, in the reasonable judgment of Lessor,
materially diminish the value of such Property. Furthermore, no Capital Addition
shall be made which would tie in or connect any portion of a particular Property
and/or any Leased Improvements thereon with any other improvements on property
adjacent to such Property (and not part of the Land covered by this Lease)
including, without limitation, tie-ins of buildings or other structures or
utilities, unless Lessee shall have obtained the prior written approval of
Lessor, which approval may be granted or withheld in Lessor’s sole discretion.
As to all other Capital Additions which are not described in the

 

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immediately preceding two sentences, Lessor’s consent shall not be unreasonably
withheld, conditioned or delayed. All proposed Capital Additions shall be
architecturally integrated and consistent with the applicable Property as
determined in the reasonable discretion of Lessor.

10.3 Capital Additions Financed by Lessee. If Lessee provides or arranges to
finance any Capital Addition (except for Capital Additions arranged by Lessee
but funded by Lessor), this Lease shall be and hereby is amended to provide as
follows:

(a) There shall be no adjustment in the Base Rent by reason of any such Capital
Addition.

(b) Such Capital Addition shall revert to, and become the property of MPT Real
Estate Owner upon the expiration or termination of this Lease with respect to
the applicable Property (unless Lessee purchases such Property as provided
herein).

In connection with any such Capital Addition financed by Lessee, Lessee shall be
permitted to place a Lien on such Capital Addition as collateral for Lessee’s
financing, provided, that, in the reasonable determination of Lessor such Lien
shall not materially interfere with Lessor’s ability to finance the applicable
Property; it being understood and agreed, however, that (i) Lessor and Lessee
shall cooperate in good faith to properly divide such Capital Addition from the
applicable Property and to grant such easements and use restrictions as shall be
necessary to avoid any disruption of Lessee’s Business on such Property; (ii) to
the extent not inconsistent with the provisions of this Section 10.3, such
Capital Addition shall remain subject to the other terms and provisions of this
Lease; and (ii) upon the expiration or termination of this Lease with respect to
such Property (unless Lessee purchases such Property as provided in Articles
XIV, XV or XXXIV), Lessee, at its sole cost and expense, shall cause all such
Lien(s) to be released from such Capital Addition and within ten (10) Business
Days after such expiration or termination.

10.4 Capital Additions Funded by Lessor. If Lessee desires for Lessor to fund a
Capital Addition, Lessee shall request the same by submitting to Lessor a
written request, including a written proposal setting forth in reasonable detail
any such proposed Capital Addition (a “Request”) (it being understood that
Lessor has agreed to fund the Required Capital Additions in accordance with
Section 10.1). In addition, Lessee shall promptly furnish to Lessor such
additional information relating to such proposed Capital Addition as Lessor may
reasonably request. Lessor shall have thirty (30) days following receipt of the
last of the information so requested to respond to Lessee as to whether Lessor
will fund the proposed Capital Addition, including the proposed terms thereof
and the terms of any amendments to this Lease to be executed in connection
therewith; it being agreed that Lessor’s failure to timely respond shall be
deemed a rejection of the Request to provide the funding for such proposed
Capital Addition. Lessor may, but shall be under no obligation to, provide the
funds necessary to meet the Request.

10.5 Salvage. All materials that are scrapped or removed in connection with the
making of either Capital Additions or repairs hereunder shall be or become the
property of Lessee, and Lessee shall remove the same at its sole cost and
expense.

 

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ARTICLE XI

LIENS

Subject to the provisions of Article XII relating to permitted contests, Lessee
will not directly or indirectly create or allow to remain and will promptly
discharge at its expense any lien, encumbrance, attachment, title retention
agreement or claim upon any Property or any attachment, levy, claim or
encumbrance in respect of the Rent, any amounts held in the Reserve, or any
funds or amounts that are or will be provided by Lessor or its Affiliates to
Lessee at any time during the Term in accordance with this Lease; excluding,
however, (a) the Master Lease; (b) this Lease; (c) the Permitted Exceptions;
(d) restrictions, liens and other encumbrances which are consented to in writing
by Lessor, or any easements granted pursuant to the provisions of Section 7.3;
(e) liens for those taxes of Lessor which Lessee is not required to pay
hereunder; (f) liens for Impositions or for sums resulting from noncompliance
with Legal Requirements so long as (1) the same are not yet payable or are
payable without the addition of any fine or penalty or (2) such liens are in the
process of being contested as permitted by Article XII; (g) liens of mechanics,
laborers, materialmen, suppliers or vendors for sums either disputed or not yet
due, provided that (i) the payment of such sums shall not be postponed for more
than sixty (60) days after the completion of the action giving rise to such lien
and such reserve or other appropriate provisions as shall be required by law or
GAAP shall be been made therefore, or (ii) any such liens are in the process of
being contested as permitted by Article XII; (h) Tenant Leases; (i) Liens which
are permitted in accordance with Section 10.2 hereof; and (j) any liens which
are the responsibility of Lessor pursuant to the provisions of Article XXXVI of
this Lease. Except as otherwise permitted under Section 10.2, Lessee shall not
mortgage or grant any interest or security interest in, or otherwise assign, any
part of Lessee’s rights and interests in this Lease or any Property during the
Term.

ARTICLE XII

PERMITTED CONTESTS

12.1 Permitted Contests. After obtaining prior written approval from Lessor, not
to be unreasonably withheld, conditioned or delayed, Lessee, at Lessee’s
expense, may contest, by appropriate legal proceedings conducted in good faith
and with due diligence, the amount, validity or application, in whole or in
part, of any Imposition, Legal Requirement, Insurance Requirement, lien,
attachment, levy, encumbrance, charge or claim not otherwise permitted by
Article XI, provided that (a) in the case of an unpaid Imposition, lien,
attachment, levy, encumbrance, charge or claim, the commencement and
continuation of such proceedings shall suspend the collection thereof from
Lessor and from the Leased Property (or if not so suspended, clause (b) shall be
true); (b) neither the Leased Property nor any Rent therefrom nor any part
thereof or interest therein would, as determined in Lessor’s reasonable
discretion, be in any immediate danger of being sold, forfeited, attached or
lost; (c) in the case of a Legal Requirement, Lessor would not be in any
immediate danger of civil or criminal liability for failure to comply therewith
pending the outcome of such proceedings; (d) in the event that any such contest
shall involve a sum of money or potential loss in excess of One Million and
No/100 Dollars ($1,000,000.00), then, in any such event, the applicable Facility
Lessee shall deliver to

 

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Lessor an Officer’s Certificate from a duly authorized officer of the applicable
Facility Lessee regarding the matters set forth in clauses (a), (b) and (c), to
the extent applicable (it being understood if the relevant amount involved in
such contest (or the potential loss) is less than such amount, no such
certification is required); (e) in the case of a Legal Requirement and/or an
Imposition, lien, encumbrance or charge involving potential loss in excess of
One Million and No/100 Dollars ($1,000,000.00), Lessee shall give such
reasonable security as may be demanded by Lessor to insure ultimate payment of
the same and to prevent any sale or forfeiture of the affected Property or the
Rent by reason of such non-payment or non-compliance; provided, however, the
provisions of this Article XII shall not be construed to permit Lessee to
contest the payment of Rent (except as to contests concerning the method of
computation or the basis of levy of any Imposition or the basis for the
assertion of any other claim) or any other sums payable by Lessee to Lessor
hereunder; (f) in the case of an Insurance Requirement, the coverage required by
Article XIII shall be maintained; and (g) if such contest be finally resolved
against Lessor or Lessee, Lessee shall, as Additional Charges due hereunder,
promptly pay the amount required to be paid, together with all interest and
penalties accrued thereon, or comply with the applicable Legal Requirement or
Insurance Requirement. Lessor, at Lessee’s expense, shall execute and deliver to
Lessee such authorizations and other documents as may reasonably be required in
any such contest and, if reasonably requested by Lessee or if Lessor and MPT
Real Estate Owner so desire, Lessor shall join as a party therein. Lessee shall
indemnify and hold Lessor and MPT Real Estate Owner harmless against any
liability, cost or expense of any kind that may be imposed upon Lessor and MPT
Real Estate Owner in connection with any such contest and any loss resulting
therefrom.

ARTICLE XIII

INSURANCE

13.1 General Insurance Requirements.

(a) During the Term, Lessee shall at all times keep the Leased Property and
Lessee’s Personal Property, insured against loss or damage from such causes as
are customarily insured against, by prudent owners of similar facilities.
Without limiting the generality of the foregoing, and subject to the provisions
below, Lessee shall obtain and maintain in effect throughout the Term with
respect to the Leased Property the kinds and amounts of insurance described
below. This insurance shall be written by insurance companies (i) reasonably
acceptable to Lessor (Lessor acknowledging that Auriga Insurance Group
(“Auriga”) is acceptable to Lessor for the provision of the coverages described
in subsections (vii) and (viii) below), (ii) that are rated at least an “A-VIII”
or better by Best’s Insurance Guide (except for Auriga, for which no rating is
required), and (iii) unless otherwise approved by Lessor, authorized, licensed
and qualified to do insurance business in the state in which the Leased Property
is located. The aggregate amount of coverage by a single company must not exceed
Five Percent (5%) of the insurance company’s policyholders’ surplus. Lessee will
pay or cause to be paid all Insurance Premiums for the insurance coverage
required to be maintained pursuant to this Article XIII during the Term. The
commercial property, rental value and business interruption policies shall name
Lessor and MPT Real Estate Owner (and any other entity that Lessor may deem
reasonably necessary) as

 

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additional insureds and loss payees as respects coverage afforded the Leased
Property under standard Insurance Services Offices (ISO) commercial property
insurance endorsements CP1219 and CP1503, or manuscript equivalents, and as
additional insureds and loss payees under boiler and machinery and any other
property insurance policy. Except as provided below with respect to commercial
general liability, professional liability and excess or umbrella liability
policies, all other coverage policies shall name Lessor and MPT Real Estate
Owner (and any other entity that Lessor may deem reasonably necessary) as
additional insureds as respects liability arising from Lessee’s use, occupancy
or maintenance of the Leased Property. The commercial general liability,
professional liability and the excess or umbrella liability policies shall name
Lessor and MPT Real Estate Owner (and any other entity that Lessor may deem
reasonably necessary) as named insureds. All property, business interruption and
boiler and machinery losses shall be payable to Lessor and/or Lessee as provided
in Article XIV. Each insurance policy required hereunder must, unless otherwise
expressly provided herein (w) provide primary insurance without right of
contribution from any other insurance carried by Lessor, (x) contain express
permission for Lessee to enter into a waiver of subrogation rights in favor of
Lessor, or any right of setoff or counterclaim against any insured party
thereunder including Lessor, (y) permit Lessor to pay premiums at Lessor’s
discretion, and (z) as respects any third party liability claim brought against
Lessor, obligate the insurer to defend Lessor as a named insured thereunder. In
addition, the property, business interruption and boiler and machinery policies
shall name as an insured loss payee all Facility Lenders as their interests
appear, if any, by way of a standard or other acceptable form of mortgagee’s
loss payable endorsement. Any loss adjustment in excess of One Million Dollars
($1,000,000) shall require the written consent of Lessor and each affected
Facility Lender. Evidence or verification (as defined herein) of insurance
and/or Impositions shall be deposited with Lessor and, if requested, with any
Facility Lender. With respect to each Property, the policies required hereunder
relating to Lessee and such Property, including the Leased Improvements and
Lessee’s Personal Property relating thereto, shall insure against the following
risks:

(i) Commercial Property insurance written on a broad “all risk” policy form
covering physical loss or damage to the Leased Property including building and
improvements and betterments. Insured perils shall include, but not be limited
to, terrorism (only if the applicable Property is located inside metropolitan
city limits with population exceeding 5,000,000). Unless otherwise provided such
coverage shall be in an amount equal to the “Full Replacement Cost” (as herein
defined) value basis to the extent of the full insurable replacement value of
each Property to be determined by Lessor. The policy shall not exclude coverage
for subsidence. The policy exclusion applicable to faulty or defective design,
workmanship or materials shall not apply to resultant damage to otherwise sound
property. The policy must provide a sublimit of at least One Hundred Thousand
and No/100 Dollars ($100,000.00) to cover reasonable expenses incurred by the
insured or loss payee for professional services necessary to measure, quantify
or determine the amount of any loss covered by this subparagraph (i), such as
appraisers, auditors, accountants, architects, and engineers (such expenses
shall not include the insured’s or loss payee’s own employees or public
adjusters). Unless otherwise provided

 

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hereunder, all policy deductibles shall be borne in full by Lessee and must not
exceed, per occurrence, an amount in excess of Three Percent (3%), of the
insurable value of such Property as determined by Lessor. Further, in the event
of a loss, Lessee shall abide by all provisions of the insurance contract,
including proper and timely notice of the loss to the insurer. Lessee further
agrees that it will notify Lessor of any loss in the amount of One Million
Dollars ($1,000,000) or greater and that no claim at or in excess of One Million
Dollars ($1,000,000) shall be settled without the prior written consent of
Lessor, which consent shall not be unreasonably withheld, conditioned or
delayed.

(ii) Flood and earthquake insurance shall be required only in the event that a
Property is located in a flood plain or earthquake zone. Such insurance to be in
an amount equal to the lesser of (A) $50,000,000 or (B) the Applicable Option
Price, subject to no more than a Five Percent (5%) per location per occurrence
deductible and such policy shall include coverage for subsidence.

(iii) Rental Value insurance using standard ISO endorsement CP 1503, or its
equivalent, as respects rental value coverage on such Property. Such endorsement
shall require property insurer to send notice of cancellation or non-renewal to
Lessor per Section 13.4.

(iv) Business interruption insurance covering lost earnings and continuing
expenses, less rents due Lessor to the extent covered under subparagraph
(iii) above, in an amount sufficient to cover not less than the aggregate amount
of Lessee’s earnings during (1) the actual time required to rebuild such
Property following loss or damage, or (2) twelve (12) months, whichever is
longer, plus an additional extended period of indemnity of not less than ninety
(90) days shall be provided. Coverage shall be written on an “actual loss
sustained” form, for the same perils and other events as described in
subparagraph (v) below.

(v) Commercial General Liability in a primary amount of at least One Million and
No/100 Dollars ($1,000,000.00) per occurrence, bodily injury for injury or death
of any one person and for Property Damage for damage to or loss of the property
of others, subject to a Two Million and No/100 Dollars ($2,000,000.00) annual
aggregate policy limit applicable separately to such Property for all bodily
injury and property damage claims, occurring on or about such Property or in any
way related to such Property, including but not limited to, any swimming pools
or other rehabilitation and recreational facilities or areas that are located on
such Property otherwise related to such Property. All allocated loss adjustment
expenses, including defense costs, shall be in addition to the policy limits
required above. Such policy shall include coverages found on the ISO Commercial
General Liability Policy form CG 0001, occurrence policy form, current edition,
with deductible amounts reasonably acceptable to Lessor. Lessee shall be
responsible for funding all deductibles and retentions, including those which
may be applicable to Lessor as an additional insured thereunder.

 

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(vi) Automobile and vehicle liability insurance coverage for all owned,
non-owned, leased or hired automobiles and vehicles in a primary limit amount of
One Million and No/100 Dollars ($1,000,000.00) per occurrence for bodily injury
and property damage. All allocated loss adjustment expenses, including defense
costs, shall be in addition to the policy limits required above.

(vii) Umbrella liability insurance in the minimum amount of Ten Million and
No/100 Dollars ($10,000,000.00) for each occurrence and aggregate combined
single limit for all liability. The umbrella shall follow form with the primary
commercial general liability with respect to providing primary and
non-contributory coverage to Lessor as an additional insured when required by
written contract or agreement. The umbrella liability policy shall name in its
underlying schedule the policies of commercial general liability,
automobile/vehicle liability, professional liability and employer’s liability
under the workers compensation policy.

(viii) Professional liability insurance for Lessee and all employed
professionals (including any physicians) in an amount, with respect to each
Facility, of not less than One Million and No/100 Dollars ($1,000,000.00) per
individual claim and Three Million and No/100 Dollars ($3,000,000.00) annual
aggregate. All contractors, agents and other persons (including physicians) who
perform professional services for Lessee shall meet such required minimum
insurance requirements of One Million and No/100 Dollars ($1,000,000.00) per
individual claim and Three Million and No/100 Dollars ($3,000,000.00) annual
aggregate.

(ix) Employee Dishonesty coverage covering all employees with a limit of
insurance, with respect to each Facility, of not less than Two Hundred Fifty
Thousand and No/100 Dollars ($250,000.00) per claim.

The term “Full Replacement Cost” as used herein, shall mean the actual
replacement cost thereof from time to time (not to be less than the aggregate
amount of the Option Prices) as to the Leased Property in its entirety,
including increased cost of construction endorsement, less exclusions provided
in the normal fire insurance policy. In the event either Lessor or Lessee
believes that the Full Replacement Cost has increased or decreased at any time
during the Term, it shall have the right to have such Full Replacement Cost
re-determined by an impartial third party, hereinafter referred to as the
“Impartial Appraiser.” If the Lessor and Lessee are unable to agree on the
selection of an Impartial Appraiser, each party shall select one appraiser, and
the two appraisers so selected shall jointly select the Impartial Appraiser. The
party desiring to have the Full Replacement Cost so re-determined shall
forthwith, on receipt of such determination by such Impartial Appraiser, give
written notice thereof to the other party. The determination of such Impartial
Appraiser shall be final and binding on the parties, and Lessee shall forthwith
increase, or may decrease, the amount of the insurance carried pursuant to this
Article XIII, as the case may be, to the amount so determined by the Impartial
Appraiser. Lessee shall pay the fee, if any, of the Impartial Appraiser.

 

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(b) Intentionally Omitted.

13.2 Additional Insurance. In addition to the insurance described above, Lessee
shall at all times maintain adequate worker’s compensation insurance coverage
for all persons employed by Lessee on the Leased Property, to the extent
required by all applicable local, state and federal laws. Notwithstanding
anything contained herein to the contrary, Lessor shall not be prohibited, at
its sole cost and expense, from purchasing and maintaining such additional
insurance as it may reasonably determine to be necessary to protect its interest
in all or any portion of the Leased Property.

13.3 Waiver of Subrogation. Lessee hereby waives any and all rights of recovery
against Lessor, its officers, agents and employees, for all injury, loss of or
damage to persons or property, howsoever caused, including loss of use, to the
extent such injury, loss or damage is covered or should be covered by required
insurance or any other insurance maintained by Lessee, including sums within
deductibles, retentions or self-insurance applicable thereto. This waiver
applies to all first party property, business interruption, equipment, vehicle
and workers compensation claims (unless prohibited under applicable state
statutes), as well as third party liability claims. This waiver shall be in
addition to, and not in limitation or derogation of, any other waiver or release
contained in this Lease with respect to loss of, or damage to, property of the
parties hereto. In as much as the above waiver precludes the assignment of any
aforesaid claim by way of subrogation to an insurance company, Lessee agrees to
give to each insurance company providing coverage under this Lease prompt
written notice of the terms of said waiver, and to have said insurance policies
properly endorsed, if necessary, to prevent the invalidation of said insurance
coverage by reason of said waivers. Lessee shall indemnify Lessor against any
loss or expense, including reasonable attorneys’ fees, resulting from the
failure to obtain such waiver from the insurer, if required.

13.4 Form of Insurance. All of the policies of insurance referred to herein
shall be written in form reasonably satisfactory to Lessor and by insurance
companies reasonably satisfactory to Lessor. Lessee shall pay all of the
premiums therefor (except as otherwise provided herein), and shall deliver
“verification” of insurance to Lessor as set forth below. All binders and
policies delivered to Lessor as required in this Section 13.4 shall also include
a statement of insured values and locations for all properties under such
blanket policies that share coverage limits. Verification of insurance as used
herein is defined as follows:

(a) At least five (5) Business Days prior to the applicable Commencement Date,
and thereafter, at least ten (10) Business Days prior to any insurance policy
expiration date, Lessee shall provide verification of required insurance
coverage for the following year which shall include the following:

(i) an ACORD 75 insurance binder, or similar type of insurance binder acceptable
to Lessor, for each policy providing evidence of insurance coverage of the types
and in the amounts required hereunder and naming Lessor and MPT Real Estate
Owner (and any other entity that Lessor may deem reasonably necessary) as
additional

 

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insureds and loss payees with respect to property, rental value and business
interruption insurance, naming Lessor and MPT Real Estate Owner (and any other
entity that Lessor may deem reasonably necessary) as named insureds with respect
to commercial general liability, professional liability and excess or umbrella
insurance, and naming Lessor and MPT Real Estate Owner (and any other entity
that Lessor may deem reasonably necessary) as additional insureds with respect
to all other required policies, together with a sample or pro forma of each
policy (if required by Lessor), together with written confirmation of each
insurer’s obligation to provide notice of cancellation or non-renewal of each;

(ii) a copy of property statement of values if Lessee maintains blanket
insurance covering facilities other than the Leased Property; and

(iii) a summary of insurance program showing significant coverage limits,
sublimits, deductibles and retentions.

(b) Thereafter, no later than the date that is sixty (60) days after the
Commencement Date and any such insurance policy expiration date, Lessee shall
provide further verification of insurance, which verification shall include
(i) true and certified copies of the required insurance policies including
blanket or specific endorsements reflecting the appropriate status of Lessor and
MPT Real Estate Owner as additional insureds, loss payees and/or named insureds,
as the case may be, and providing notice of cancellation or non-renewal under
the required insurance; and (ii) a copy of the property statement of values if
Lessee maintains blanket insurance covering facilities other than the Leased
Property.

(c) In the event Lessee does not provide timely or proper verification, or does
not maintain the insurance required hereunder or pay the premiums as required
hereunder, Lessor shall be entitled after notice to Lessee, but shall have no
obligation, to obtain such insurance and pay the premiums therefor, which
premiums shall be repayable to Lessor promptly following request by Lessor (but
in no event later than fifteen (15) days after delivery of such request), and
failure to adhere to those repayment provisions shall constitute an Event of
Default. Lessee shall use commercially reasonable efforts to cause any insurance
policies, endorsements and/or binders or certificates to omit language that
provides such insurer will “endeavor to” give notice before same may be altered,
allowed to expire, or canceled. Notwithstanding anything contained herein to the
contrary, all policies of insurance required to be obtained by Lessee hereunder
shall provide (i) that such policies will not lapse, terminate, be canceled, or
be amended or modified to reduce limits or coverage terms unless and until
Lessor has received not less than thirty (30) days’ prior written notice at
Lessor’s notice address as specified in this Lease (the “Lessor’s Notice
Address”), with a simultaneous copy to (A) MPT Operating Partnership, L.P.,
Attention: Its President, 1000 Urban Center Drive, Suite 501, Birmingham,
Alabama 35242, and (B) McGriff, Seibels & Williams, Inc., Attention: John F.
Carter, 2211 7th Avenue South, Birmingham, Alabama 35233, and (ii) that in the
event of cancellation due to non-payment of premium, the insurer will provide
not less than ten (10) days’ prior written notice to Lessor at Lessor’s Notice
Address, with a simultaneous copy to (A) MPT Operating Partnership, L.P.,
Attention: Its President, 1000 Urban Center Drive, Suite 501, Birmingham,
Alabama 35242, and (B) McGriff, Seibels & Williams, Inc., Attention: John F.
Carter, 2211 7th Avenue South, Birmingham, Alabama 35233.

 

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13.5 Increase in Limits. In the event that Lessor shall at any time in its
reasonable discretion deem the limits of the personal injury, property damage or
general public liability insurance then carried to be insufficient, the parties
shall endeavor to agree on the proper and reasonable limits for such insurance
to be carried and such insurance shall thereafter be carried with the limits
thus agreed on until further change pursuant to the provisions of this
Section 13.5. If the parties shall be unable to agree thereon, the proper and
reasonable limits for such insurance to be carried shall be determined by an
impartial third party selected by the parties.

13.6 Blanket Policy. Notwithstanding anything to the contrary contained in this
Article XIII, Lessee’s obligations to carry the insurance provided for herein
may be brought within the coverage of a so-called blanket policy or policies of
insurance carried and maintained by Lessee provided that:

(a) Any such blanket policy or policies are acceptable to and have been approved
by Lessor, which approval shall not be unreasonably withheld;

(b) Any such blanket policy or policies shall not be changed, altered or
modified without the prior written consent of Lessor, which consent shall not be
unreasonably withheld, conditioned or delayed; and

(c) Any such blanket policy or policies shall otherwise satisfy the insurance
requirements of this Article XIII (including the requirement of thirty
(30) days’ written notice before the expiration or cancellation of such policies
as required by Section 13.4) and shall provide for deductibles in amounts
acceptable to Lessor. Any aggregate policy limits within such blanket insurance
policies shall apply separately to each Property.

13.7 No Separate Insurance. Lessee shall not, on Lessee’s own initiative or
pursuant to the request or requirement of any third party, take out separate
insurance concurrent in form or contributing in the event of loss with that
required in this Article XIII to be furnished by, or which may reasonably be
required to be furnished by, Lessee, or increase the amounts of any then
existing insurance by securing an additional policy or additional policies,
unless all parties having an insurable interest in the subject matter of the
insurance, including in all cases Lessor and all Facility Lenders, are included
therein as additional insureds and the loss is payable under said insurance in
the same manner as losses are required to be payable under this Lease. Lessee
shall promptly notify Lessor of the taking out of any such separate insurance or
of the increasing of any of the amounts of the then existing insurance by
securing an additional policy or additional policies.

 

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13.8 Insurance Required under Oklahoma Ground Lease. Lessee shall obtain and
maintain all insurance required to be maintained by the tenant pursuant to the
Oklahoma Ground Lease and provide Lessor with evidence of same.

ARTICLE XIV

FIRE AND CASUALTY

14.1 Insurance Proceeds. All proceeds payable by reason of any loss or damage to
the Leased Property, or any portion thereof, and insured under any policy of
insurance required by Article XIII shall be paid to Lessor and held by Lessor in
trust (subject to the provisions of Section 14.7) and shall be made available
for reconstruction or repair, as the case may be, of any damage to or
destruction of the Leased Property, or any portion thereof, and shall be paid
out by Lessor from time to time for the reasonable cost of such reconstruction
or repair. Any excess proceeds of insurance remaining after the completion of
the restoration or reconstruction of the Leased Property, or any portion thereof
(or in the event neither Lessor nor Lessee is required or elects to repair and
restore, all such insurance proceeds), shall be retained by Lessor free and
clear upon completion of any such repair and restoration except as otherwise
specifically provided below in this Article XIV. All salvage resulting from any
risk covered by insurance shall belong to Lessor except that any salvage
relating to Capital Additions paid for by Lessee as described in Section 10.2 or
to Lessee’s Personal Property shall belong to Lessee as provided in Section
10.4.

14.2 Reconstruction in the Event of Damage or Destruction Covered by Insurance.

(a) Except as provided in Section 14.7, with respect to any Property, if during
the Term such Property is totally or partially destroyed from a risk covered by
the insurance described in Article XIII and such Property is thereby rendered
Unsuitable for its Primary Intended Use (the “Casualty Impacted Property”),
Lessee shall elect, by giving written notice to Lessor within sixty (60) days
following the date of such destruction, one of the following: (i) to restore
such Casualty Impacted Property to substantially the same condition as existed
immediately before the damage or destruction, or (ii) so long as no Major Event
of Default then exists, to purchase such Casualty Impacted Property from Lessor
for the applicable Option Price, in which case all insurance proceeds payable
pursuant to Section 14.1 with respect to the Casualty Impacted Property shall be
paid over to, or retained by, Lessee and, the total Base Rent payable hereunder
shall be reduced in accordance with Section 5.2, or (iii) so long as the damage
or destruction was not caused by the gross negligence of Lessee, its agents,
servants, employees or contractors, to terminate this Lease with respect to the
Casualty Impacted Property and, in this event, the total Base Rent payable
hereunder shall be reduced in accordance with Section 5.2, Lessor shall be
entitled to retain the insurance proceeds, and Lessee shall pay to Lessor on
demand, the amount of any deductible or uninsured loss arising in connection
therewith. In the event Lessee purchases such Casualty Impacted Property
pursuant to this Section 14.2(a), the terms set forth in Article XVIII shall
apply and the sale/purchase must be closed within ninety (90) days after the
date of the written notice from Lessee to Lessor of Lessee’s intent to purchase,
unless a different closing date is agreed upon in writing by Lessor and Lessee.
For purposes of

 

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any appraisal conducted in accordance with this Section, such appraisal shall
not take into account the damage or destruction giving rise to Lessee’s rights
hereunder. The “Option Price” for each Property shall be shall be an amount
equal to the greater of (A) the Fair Market Value Purchase Price of such
Property and (B) the Lease Base for such Property, as increased by an amount
equal to the annual rate of increase in the CPI on each Adjustment Date.

(b) Except as provided in Section 14.7, with respect to any Property, if, during
the Term, such Property is totally or partially destroyed from a risk covered by
the insurance described in Article XIII, but such Property is not thereby
rendered Unsuitable for its Primary Intended Use, Lessee shall restore such
Property to substantially the same condition as existed immediately before the
damage or destruction. Such damage or destruction shall not terminate this Lease
with respect to such Property; provided, however, if Lessor determines in its
reasonable discretion that Lessee cannot within a reasonable time obtain all
necessary governmental approvals, including building permits, licenses,
conditional use permits and any certificates of need, after good-faith, diligent
efforts to do so, in order to be able to perform all required repair and
restoration work and to operate such Property for its Primary Intended Use in
substantially the same manner as immediately prior to such damage or
destruction, so long as no Major Event of Default then exists, Lessee shall have
the option, by giving written notice to Lessor within sixty (60) days following
the date of such damage or destruction, to purchase such Property for a purchase
price equal to the applicable Option Price (less the amount of any insurance
proceeds held by Lessor). In the event Lessee purchases such Property pursuant
to this Section 14.2(b), the terms set forth in Article XVIII shall apply and
the sale/purchase must be closed within ninety (90) days after the date of the
written notice from Lessee to Lessor of Lessee’s intent to purchase, unless a
different closing date is agreed upon in writing by Lessor and Lessee.

(c) With respect to each Property, if the cost of the repair or restoration of
such Property exceeds the amount of insurance proceeds received by Lessor,
Lessee shall be obligated to contribute any excess amount needed to restore such
Property prior to use of the insurance proceeds. Such amount shall be paid by
Lessee to Lessor (or a Facility Lender if required) to be held in trust together
with any other insurance proceeds for application to the cost of repair and
restoration.

(d) With respect to each Property, in the event Lessee elects to purchase such
Property pursuant to this Section 14.2, this Lease shall terminate with respect
to such Property upon payment of the purchase price and transfer of title to
such Property to Lessee, the Base Rent shall be reduced in accordance with
Section 5.2, and Lessor shall transfer to Lessee its rights in or remit to
Lessee all insurance proceeds being held in trust by Lessor or the Facility
Lender on or prior to the closing of Lessee’s purchase of such Property.

14.3 Reconstruction in the Event of Damage or Destruction Not Covered by
Insurance. Except as provided in Section 14.7 and without limiting Section 14.2,
if during the Term a Property is totally or partially damaged or destroyed from
a risk not covered by the insurance described in Article XIII but that would
have been covered if Lessee carried the insurance

 

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customarily maintained by, and generally available to, the operators of
reputable health care facilities in the region in which such Property is
located, then, whether or not such damage or destruction renders such Property
Unsuitable for its Primary Intended Use, Lessee shall, at its sole cost and
expense, restore such Property to substantially the same condition it was in
immediately before such damage or destruction and such damage or destruction
shall not terminate this Lease with respect to such Property.

14.4 Lessee’s Personal Property. All insurance proceeds payable by reason of any
loss of or damage to any Lessee’s Personal Property or any Capital Addition
financed by Lessee shall be paid to Lessee to pay the cost of repairing or
replacing the damage to Lessee’s Personal Property or the Capital Additions
financed by Lessee.

14.5 Restoration of Lessee’s Property. If Lessee is required or elects to
restore any Property as provided in Sections 14.2 or 14.3, Lessee shall also
restore all alterations and improvements made to Lessee’s Personal Property with
respect thereto and all Capital Additions paid for by Lessee with respect
thereto.

14.6 No Abatement of Rent. This Lease shall remain in full force and effect, and
Lessee’s obligation to pay Rent and all other charges required by this Lease
shall remain unabated during any period required for repair and restoration.

14.7 Damage Near End of Term. Notwithstanding any provisions of Sections 14.2
(but without limiting Lessee’s rights under Section 14.2(a)) or 14.3 to the
contrary, if damage to or destruction of any Property occurs during the last
twenty-four (24) months of the Term, and if such damage or destruction cannot be
fully repaired and restored within six (6) months immediately following the date
of such loss as determined in Lessor’s reasonable discretion, either party shall
have the right to terminate this Lease with respect to such Property by giving
notice to the other within thirty (30) days after the date of damage or
destruction, in which event Lessor shall be entitled to retain the insurance
proceeds and Lessee shall pay to Lessor on demand the amount of any deductible
or uninsured loss arising in connection therewith; provided, however, that any
such notice given by Lessor shall be void and of no force and effect if Lessee
exercises an available option to extend the Term for one (1) Extended Term
within thirty (30) days following receipt of such termination notice.

14.8 Termination of Right to Purchase. Any termination of this Lease with
respect to a Property pursuant to this Article XIV shall cause any right to
purchase granted to Lessee with respect to such Property under any other
provisions of this Lease to be terminated and to be without further force and
effect.

14.9 Waiver. Lessee hereby waives any statutory or common law rights of
termination which may arise by reason of any damage to or destruction of any
portion of the Leased Property.

 

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ARTICLE XV

CONDEMNATION

15.1 Parties’ Rights and Obligations. If during the Term there is any Taking of
all or any part of a Property or any interest in this Lease relating to such
Property by Condemnation, the rights and obligations of the parties shall be
determined by this Article XV.

15.2 Total Taking. If there is a Taking of all of a Property by Condemnation,
this Lease shall terminate with respect to such Property on the Date of Taking.

15.3 Partial Taking. If there is a Taking of a part, but not all, of a Property
by Condemnation, this Lease shall remain in effect with respect to such Property
if such Property is not thereby rendered Unsuitable for its Primary Intended
Use. If, however, such portion of such Property is thereby rendered Unsuitable
for its Primary Intended Use, Lessee shall either (a) restore such portion of
such Property, at its own expense and to the extent possible, to substantially
the same condition as existed immediately before the partial Taking, (b) so long
as no Major Event of Default then exists, acquire such Property from Lessor for
a purchase price equal to the applicable Option Price (in which event this Lease
shall terminate with respect to such Property upon payment of such Option Price
and the Base Rent payable hereunder shall be reduced in accordance with
Section 5.2), or (c) terminate this Lease with respect to such Property (in
which event the Base Rent payable hereunder shall be reduced in accordance with
Section 5.2). Lessee shall exercise its option by giving Lessor notice thereof
within sixty (60) days after Lessee receives notice of the Taking. In the event
Lessee exercises the option to purchase with respect to such Property pursuant
to this Section 15.3, the terms set forth in Article XVIII shall apply and the
sale/purchase must be closed within thirty (30) days after the date of the
written notice from Lessee to Lessor of Lessee’s intent to purchase, unless a
different closing date is agreed upon in writing by Lessor and Lessee. For
purposes of any appraisal conducted in accordance with this Section 15.3, such
appraisal of the Fair Market Value shall not take into account the Taking giving
rise to Lessee’s rights hereunder.

15.4 Award Distribution. In the event Lessee exercises the purchase option with
respect to a particular Property as described in Section 15.3(b), the entire
Award shall belong to Lessee so long as no Major Event of Default then exists,
and Lessor agrees to assign to Lessee all of its rights to the Award. In any
other event, the entire Award shall belong to and be paid to Lessor; provided,
however, that if this Lease is terminated pursuant to this Article XV with
respect to such Property, Lessee shall be entitled to receive a sum attributable
to Lessee’s Personal Property relating thereto and any reasonable removal and
relocation costs, provided in each case the Award specifically includes such
items. If Lessee is required or elects to restore such Property, Lessor agrees
that the Award shall be used for that restoration, and it shall hold such
portion of the Award in trust for application to the cost of the restoration.
Notwithstanding any provision of this Lease to the contrary, any Award retained
by Lessor and not used for restoration shall be credited against the applicable
Option Price.

 

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15.5 Temporary Taking. The Taking of any Property or any part thereof by
military or other public authority shall constitute a Taking by Condemnation
only when the use and occupancy by the Taking authority has continued for longer
than six (6) months. During any such six (6)-month period all the provisions of
this Lease shall remain in full force and effect and the Rent with respect to
such Property shall not be abated or reduced during such period of Taking.

ARTICLE XVI

DEFAULT

16.1 Events of Default. The occurrence of any one or more of the following
events (individually, an “Event of Default”) shall constitute Events of Default
hereunder:

(a) if Lessee shall fail to make a payment of the Rent or any other monetary
obligation when the same becomes due and payable by Lessee under this Lease
(including, but not limited to, any failure to make Reserve deposits and the
failure to pay Insurance Premiums or Impositions) and the same shall remain
unpaid for more than five (5) days following receipt by Lessee of written notice
thereof from Lessor; provided however, in no event shall Lessor be required to
give more than two (2) such written notices hereunder during any consecutive
twelve (12) month period; or

(b) if Lessee shall fail to observe or perform in any material respect (without
duplication of any materiality qualifier herein) any other term, covenant or
condition of this Lease and such failure is not cured by Lessee within a period
of thirty (30) days after receipt by Lessee of written notice thereof from
Lessor (except that in the event Lessee shall fail to comply with any request
pursuant to Sections 38.3 and 38.4 hereof, and such failure shall continue for
five (5) days after receipt by Lessee of such request from Lessor), unless such
failure cannot with due diligence be cured within a period of thirty (30) days
(in Lessor’s reasonable discretion), in which case such failure shall not be
deemed to continue so long as Lessee commences to cure such failure within the
thirty (30) day period and proceeds with due diligence to complete the curing
thereof within sixty (60) days after receipt by Lessee of Lessor’s notice of
default (or such longer period as is reasonably required in the determination of
Lessor to effect such cure if Lessee is diligently proceeding to do so);
provided however, in no event shall Lessor be required to give more than two
(2) notices and cure period for Lessee’s failure to observe or perform the same
(or repetitive) covenant or condition in any consecutive twelve (12) month
period; or

(c) if (i) any Facility Lessee or any Guarantor shall admit in writing its
inability to pay its debts as they become due; or (ii) any Facility Lessee or
any Guarantor shall file a petition in bankruptcy as a petition to take
advantage of any insolvency act; or (iii) any Facility Lessee or any Guarantor
shall be declared insolvent according to any law; or (iv) any Facility Lessee or
any Guarantor shall make any general assignment for the benefit of its
creditors; or (v) if the estate or interest of any Facility Lessee in the Leased
Property or any part thereof shall be levied upon or attached in any proceeding
and the same shall not be vacated or discharged within the later of ninety
(90) days after commencement thereof or sixty (60) days after receipt by Lessee
of written notice thereof from Lessor (unless Lessee shall be contesting such
lien or attachment in

 

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good faith in accordance with Article XII); or (vi) any petition shall be filed
against any Facility Lessee or any Guarantor to declare such Facility Lessee or
such Guarantor bankrupt, to take advantage of any insolvency act, or to delay,
reduce or modify such Facility Lessee’s or such Guarantor’s capital structure
and the same shall not be removed or vacated within ninety (90) days from the
date of its creation, service or attachment; or (vii) any Facility Lessee or any
Guarantor shall, after a petition in bankruptcy is filed against it, be
adjudicated a bankrupt, or a court of competent jurisdiction shall enter an
order or decree, with or without the consent of such Facility Lessee or such
Guarantor, as the case may be, appointing a trustee, examiner or receiver of
such Facility Lessee or such Guarantor or the whole or substantially all of its
property, or approving a petition filed against such Facility Lessee or such
Guarantor seeking reorganization or arrangement of such Facility Lessee or such
Guarantor under the federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state thereof, and such judgment,
order or decree shall not be vacated or set aside or stayed within ninety
(90) days from the date of the entry thereof; or

(d) if any Facility Lessee shall have any of its Licenses (as defined in Article
XXXVIII) or participation or certification in Medicare or Medicaid or any
material other third party payor program is terminated by the applicable
government program for fraud or violation of the terms of such program; or

(e) a Change of Control Transaction shall occur with respect to any Facility
Lessee or any Guarantor which is not approved by Lessor in advance;

(f) if, with respect to any Property, (i) the applicable Facility Lessee that
operates the Business at such Property abandons or vacates same (such Facility
Lessee’s absence therefrom for thirty (30) consecutive days shall constitute
abandonment), or (ii) the applicable Facility Lessee fails to continuously
operate such Business on such Property in accordance with the terms of this
Lease;

(g) if any Facility Lessee or any of the Guarantors shall be liquidated or
dissolved, or shall begin proceedings toward such liquidation or dissolution, or
shall, in any manner, permit the sale or divestiture of substantially all of its
assets, or any such Facility Lessee or any such Guarantor shall enter into an
agreement respecting same; or

(h) if an “Event of Default” shall occur under and as defined in the Real Estate
Loan Agreement or a monetary default or a material non-monetary default shall
occur under any other Obligation Document (other than this Lease) which is not
waived in writing or cured within the cure period as provided therein; or

(i) if any default or event of default shall occur under the Oklahoma Ground
Lease which is not waived in writing or cured within the applicable cure period
as provided therein; or

(j) if a default or event of default occurs with respect to any Material
Obligation of any Facility Lessee or any Guarantor and such default or event of
default is not waived in writing or cured within the applicable cure period
provided by the document evidencing the Material Obligation; or

 

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(k) if a monetary or a material non-monetary default shall occur under the LLC
Agreement and such failure is not cured or waived in writing within a period of
thirty (30) days after receipt by Lessee of written notice thereof from Lessor,
unless, with respect to any material non-monetary default, such failure cannot
with due diligence be cured within a period of thirty (30) days (in Lessor’s
reasonable discretion), in which case such failure shall not be deemed to
continue so long as a cure is commenced within the thirty (30) day period and
such cure is diligently pursued to completion within sixty (60) days after
receipt by Lessee of Lessor’s notice of default (or such longer period as is
reasonably required in the determination of Lessor to effect such cure if such
cure is being diligently pursued); provided however, in no event shall Lessor be
required to give more than two (2) notices and cure periods for failures to
observe or perform the same (or repetitive) covenant or condition in any
consecutive twelve (12) month period; or

(l) if, at any time during the Term, for two (2) consecutive calendar quarters:

(i) EBITDAR shall be less than One Hundred Twenty-Five Percent (125%) of the
Combined Obligor Payments (as determined utilizing the trailing twelve
(12) month operating and financial results of Capella Holdings and its
subsidiaries and measured on a calendar quarterly basis; or

(ii) EBITDAR shall be less than One Hundred Five Percent (105%) of Consolidated
Fixed Charges (as determined utilizing the trailing twelve (12) month operating
and financial results of Capella Holdings and its subsidiaries and measured on a
calendar quarterly basis).

With respect to Section 16.1(l)(i) and (ii) above, it is understood and agreed
that Lessor and Lessee agree to work together in good faith to adjust such
covenants after the Initial Commencement Date to reflect future acquisitions of
real property joined under this Lease or securing the obligations under the Loan
Agreement.

If an Event of Default has occurred, Lessor shall have the right at its
election, then or at any time thereafter, to pursue any one or more of the
following remedies, in addition to any remedies which may be permitted by law,
by other provisions of this Lease or otherwise, without notice or demand, except
as hereinafter provided:

A. If Lessee deserts, abandons or vacates any Property (the “Vacated Property”),
Lessor may enter upon and take possession of either (i) the Vacated Property; or
(ii) if there has occurred a Major Event of Default, any one or more (including
all, if so elected by Lessor) of the Properties, regardless of whether such
Event of Default emanated from or related primarily to a single Property
(whether one or more, and whether pursuant to clause (i) or (ii), the “Entered
Property”), to protect it from deterioration and continue to demand from Lessee
Rent and other charges as provided in this Lease, without any obligation to
relet (except to the extent required

 

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by applicable law); but if Lessor does relet the Entered Property (on such terms
and conditions as Lessor, in its sole discretion, shall deem reasonable), such
action by Lessor shall not be deemed an acceptance of Lessee’s surrender of the
Entered Property unless Lessor expressly notifies Lessee of such acceptance in
writing, Lessee hereby acknowledging that Lessor shall otherwise be reletting as
Lessee’s agent and Lessee furthermore hereby agreeing to pay to Lessor on demand
any deficiency that may arise between the Rent and other charges as provided in
this Lease and that are actually collected by Lessor relating to the Entered
Property.

B. Lessor, or anyone acting on Lessor’s behalf, may without notice or demand to
Lessee, either (i) enter the Property from which such Event of Default emanated
or to which such Event of Default related primarily; or (ii) if there has
occurred a Major Event of Default, enter any one or more (including all, if so
elected by Lessor) of the Properties, regardless of whether such Event of
Default emanated from or related primarily to a single Property (whether one or
more, and whether pursuant to clause (i) or (ii), the “Defaulted Property”), by
force, if necessary, to the extent permitted by applicable laws and regulations
without liability to action for prosecution or damages for such entry or for the
manner thereof, and do whatever Lessee is obligated or permitted to do under
this Lease. Lessee hereby releases and discharges Lessor and its agents from all
claims, actions, suits, damages and penalties for or by reason of any such
entry. Lessee agrees to reimburse Lessor on demand for all expenses, including,
without limitation, reasonable attorneys’ fees and expenses, that Lessor may
incur in effecting compliance with Lessee’s obligations under this Lease, and
Lessee further agrees that Lessor shall not be liable for any damages resulting
to Lessee from such action.

C. Lessor may immediately terminate Lessee’s right of possession of the
Defaulted Property, but not terminate this Lease with respect to the Defaulted
Property, and without notice or demand, except as may be required by applicable
law, enter upon such Defaulted Property or any part thereof and take absolute
possession of the same, and at Lessor’s sole option may relet such Defaulted
Property or any part thereof for such terms and such rents as Lessor may
reasonably elect. In the event of such reletting, the rent received by Lessor
from such reletting shall be applied in the manner set forth in Section 16.4,
and Lessee shall satisfy and pay any deficiency upon demand therefor from time
to time. Any entry into and possession of the Defaulted Property by Lessor shall
be without liability or responsibility to Lessee and shall not be in lieu of or
in substitution for any other legal rights of Lessor hereunder. Lessee further
agrees that Lessor may file suit to recover any sums due under the terms of this
Lease and that no recovery of any portion due Lessor hereunder shall be any
defense to any subsequent action brought by Lessor for any other amounts not
reduced to judgment in favor of Lessor. Reletting any portion of the Defaulted
Property relating to any one or more of the Properties shall not be construed as
an election on the part of Lessor to terminate this Lease with respect to such
Defaulted Property and, notwithstanding any such reletting without termination,
Lessor may at any time thereafter elect to terminate this Lease for default with
respect to the Defaulted Property.

D. Lessor may terminate this Lease with respect to the Defaulted Property
(whether one or more, the “Terminated Property”), by written notice to Lessee,
in which event Lessee

 

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shall immediately surrender to Lessor such Terminated Property, and if Lessee
fails to do so, Lessor may, without prejudice to any other remedy which Lessor
may have for possession or arrearages in Rent or any other payments under this
Lease (including any interest and payment penalty which may have accrued
pursuant to the terms of this Lease), enter upon and take possession of such
Terminated Property and expel or remove the applicable Facility Lessee and any
other Person who may be occupying such Terminated Property or any part thereof,
by force, if necessary, to the extent permitted by applicable laws and
regulations without being liable for prosecution or any claim for damages
therefor. Except as otherwise may be required by applicable law or as otherwise
expressly required under this Lease, Lessee hereby waives any statutory
requirement of prior written notice for filing eviction or damage suits for
nonpayment of Rent or any other payments under this Lease. In addition, Lessee
agrees to pay to Lessor on demand the amount of all loss and damage which Lessor
may suffer by reason of any termination effected pursuant to this Section 16.1D,
which loss and damage shall be determined, at Lessor’s option, by either of the
following alternative measures of damages:

(i) Until Lessor is able to relet such Terminated Property, although Lessor
shall be under no obligation to attempt to do so (unless required by applicable
law), Lessee shall pay to Lessor, on or before the first day of each calendar
month, the monthly rentals and other charges provided in this Lease relating to
such Terminated Property. After such Terminated Property has been relet by
Lessor, Lessee shall pay to Lessor on the tenth (10th) day of each calendar
month the difference between the monthly rentals and other charges provided in
this Lease related to such Terminated Property for the preceding calendar month
(had this Lease not been terminated) and those actually collected by Lessor with
respect to such reletting for that month. If it is necessary for Lessor to bring
suit to collect any deficiency, Lessor shall have the right to allow such
deficiencies to accumulate and to bring an action on several or all of the
accrued deficiencies at one time. Any such suit shall not prejudice in any way
the right of Lessor to bring a similar action for any subsequent deficiency or
deficiencies. Any amount collected by Lessor from subsequent Tenants related to
such Terminated Property for any calendar month in excess of the monthly Rent
(including Additional Charges) herein allocated to such Terminated Property had
this Lease not been terminated with respect thereto shall be credited to Lessee
in reduction of Lessee’s liability for any calendar month for which the amount
collected by Lessor will be less than the monthly Rent (including Additional
Charges) herein allocated to such Terminated Property had this Lease not been
terminated with respect thereto such Terminated Facility, but Lessee shall have
no right to any excess other than the above described credit.

(ii) When Lessor desires, Lessor may demand a final settlement with respect to
such Terminated Property. Upon demand for a final settlement, Lessor shall have
a right to, and Lessee hereby agrees to pay, the difference between the total of
all monthly Rent (including Additional Charges) allocated to such Terminated
Property for the remainder of the Term and the reasonable rental value thereof
for such period, with such difference to be discounted to present value at a
rate equal to the 5-Year U.S. Treasury Rate plus Two Percent (2%) per annum in
effect upon the date of determination.

 

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If Lessor elects to exercise the remedies prescribed in subsections A or B
above, this election shall in no way prejudice Lessor’s right at any time
thereafter to cancel said election in favor of the remedy prescribed in
subsection D or elsewhere in this Lease. Similarly, if Lessor elects to compute
damages in the manner prescribed by subsection D(i) above, this election shall
in no way prejudice Lessor’s right at any time thereafter to demand a final
settlement in accordance with subsection D(ii). Pursuit of any of the above
remedies shall not preclude pursuit of any other remedies prescribed in other
sections of this Lease and any other remedies provided by law or equity.
Forbearance by Lessor to enforce one or more of the remedies herein provided
upon an Event of Default shall not be deemed or construed to constitute a waiver
of such default.

E. In the event that Lessor has either repossessed a Vacated Property pursuant
to subsection A, repossessed a Defaulted Property pursuant to subsection C, or
terminated this Lease with respect to one or more (or all, if so elected by
Lessor) Defaulted Properties pursuant to subsection D, and Lessor elects to
enter upon such portion of the Leased Property as provided herein, Lessor may
change, alter, and/or modify the door locks on all entry doors of such portion
of the Leased Property, thereby permanently excluding Lessee and its officers,
principals, agents, employees, representatives and invitees therefrom. Lessor
shall not thereafter be obligated to provide Lessee with a key to such portion
of Leased Property at any time, regardless of any amounts subsequently paid by
Lessee; provided, however, that in any such instance, during Lessor’s normal
business hours and at the convenience of Lessor, and upon receipt of written
request from Lessee accompanied by such written waivers and releases as Lessor
may reasonably require, Lessor may either (at Lessor’s option) (1) escort Lessee
or its authorized personnel to such Leased Property to retrieve any personal
belonging or other property of Lessee not subject to any applicable Lessor’s
lien or security interest, or Lessor’s right of purchase as provided in
Section 34.2, or (2) obtain a list from Lessee of such personal property not
subject to any applicable Lessor’s lien or security interest that Lessor intends
to remove, whereupon Lessor shall remove such property and make it available to
Lessee at a time and place designated by Lessor. However, if Lessor elects
option (2), Lessee shall pay, in cash in advance, all reasonable costs and
expenses estimated by Lessor to be incurred in removing such property and making
it available to Lessee and all moving and/or storage charges theretofore
incurred by Lessor with respect to such property (plus an additional Seven
Percent (7%) thereof to cover Lessor’s administrative costs). If Lessor elects
to exclude Lessee from any Defaulted Property (or all of the Defaulted
Properties if so elected by Lessor) without repossessing or terminating pursuant
to the foregoing provisions of this Lease, then Lessor shall not be obligated to
provide Lessee a key to re-enter such Property or Properties until such time as
all delinquent Rent has been paid in full and all other defaults, if any, have
been completely cured to Lessor’s satisfaction (if such cure occurs prior to any
actual repossession or termination), and Lessor has been given assurance
reasonably satisfactory to Lessor evidencing Lessee’s ability to satisfy its
remaining obligations under this Lease. To the extent permitted by law, the
foregoing provision shall override and control any conflicting provisions of any
applicable statute governing the right of a lessor to change the door locks of
commercial leases.

F. In addition to any other available remedies, Lessor may, at Lessor’s option
and in accordance with the Subordination of Management Agreement and/or the
Collateral Assignment, require Lessee to cancel the Management Agreement with
respect to any one or more of the Facilities and to replace the Management
Company managing any such one or more Facilities with a company acceptable to
Lessor.

 

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G. In addition to any other available remedies, at Lessor’s option, with respect
to each Defaulted Property or Entered Property, Lessor shall have those rights
(i) to purchase Lessee’s Personal Property in the manner provided in
Section 34.2 hereof and (ii) to effect a transfer of the Licenses pursuant to
the terms of Article XXXVIII hereof.

H. If this Lease or any part hereof is assigned, or if the Leased Property, or
any part thereof is relet, Lessee hereby irrevocably constitutes and appoints
Lessor as Lessee’s agent to collect the rents and all other sums due by such
assignee or Tenant and apply the same to the Rent due hereunder without in any
way affecting Lessee’s obligation to pay any unpaid balance of Rent due
hereunder.

I. Proceed as a secured party under the provisions of the Uniform Commercial
Code against the goods and other personal property related to the Entered
Property or the Defaulted Property, including Lessee’s Personal Property located
on such Entered Property or such Defaulted Property, in which Lessor has a
security interest.

J. Exercise any and all other rights and/or remedies granted or allowed to
landlords by any existing or future statute or other law of the applicable State
where the Entered Property or the Defaulted Property, as applicable, is located.

K. In the event, and only in the event, that applicable law requires Lessor to
attempt to mitigate damages following the termination of Lessee’s rights under
this Lease with respect to any one or more of the Properties as provided in
subsection D(i) above, Lessor shall use reasonable efforts to the extent
required by applicable law to relet such Property or Properties on such terms
and conditions as Lessor, in its sole good faith judgment, may determine
(including, without limitation, a lease term different than the Term, rental
concessions, alterations and repair any such Property); provided, however, that,
with respect to any such Property or Properties (i) Lessor shall not be
obligated to relet such Property before leasing other vacant space owned or
operated by Lessor, (ii) Lessor reserves the right to refuse to lease such
Property to any potential tenant that does not meet Lessor’s reasonable
standards and criteria for leasing any other comparable space owned or operated
by Lessor (it being understood and agreed that it shall be deemed reasonable for
Lessor to refuse to lease to a prospective tenant who owns, leases or operates a
business similar to that conducted on such Property in the County where such
Property is located), and (iii) Lessor shall not be obligated to undertake any
greater efforts to relet such portion of the Leased Property than Lessor
utilizes to lease any other vacant space owned or operated by Lessor. In any
proceeding in which Lessor’s efforts to mitigate damages and/or its compliance
with this subsection is at issue, Lessor shall be presumed to have used
reasonable efforts to mitigate damages and Lessee shall bear the burden of proof
to establish that such reasonable efforts were not used.

 

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L. No receipt of moneys by Lessor from Lessee after a termination of this Lease
with respect to any one or more of the Properties or of Lessee’s rights under
this Lease by Lessor with respect thereto shall reinstate, continue or extend
the Term of this Lease with respect to such one or more Properties or affect any
notice theretofore given to Lessee, or operate as a waiver of the right of
Lessor to enforce the payment of Rent and any related amounts to be paid by
Lessee to Lessor then due or thereafter falling due, it being agreed that after
the commencement of suit for possession of any such Property, or after final
order or judgment for the possession of any such Property, Lessor may demand,
receive and collect any moneys due or thereafter falling due without in any
manner affecting such suit, order or judgment, all such money collected being
deemed payments on account of the use and occupation of any such Property or, at
the election of Lessor, on account of Lessee’s liability hereunder. Lessee
hereby waives any and all rights of redemption provided by any law, statute or
ordinance now in effect or which may hereafter be enacted.

M. No right or remedy herein conferred upon or reserved to Lessor is intended to
be exclusive of any other right or remedy, and every right and remedy shall be
cumulative and in addition to any other legal or equitable right or remedy given
hereunder, or at any time existing. The failure of Lessor to insist upon the
strict performance of any provision or to exercise any option, right, power or
remedy contained in this Lease shall not be construed as a waiver or a
relinquishment thereof for the future, and no acceptance of full or partial
payment of Rent or any other payment due under the terms of this Lease during
the continuance of any such breach shall constitute a waiver of any such breach
or any such term. To the extent permitted by law, no waiver of any breach shall
affect or alter this Lease, which shall continue in full force and effect with
respect to any other then existing or subsequent breach. Lessor and Lessee agree
that no waiver shall be effective hereunder unless it is in writing.

16.2 Additional Expenses. It is further agreed that, in addition to payments
required pursuant to Section 16.1 above and the provisions of Section 40.3,
Lessee shall compensate Lessor and its Affiliates for (a) all reasonable
expenses incurred by Lessor and its Affiliates in enforcing the provisions of
this Lease and in repossessing the Leased Property or any portion thereof
(including among other expenses, any increase in insurance premiums caused by
the vacancy of all or any portion of the Leased Property); (b) all reasonable
expenses incurred by Lessor and its Affiliates in reletting (including among
other expenses, repairs, remodeling, replacements, advertisements and brokerage
fees); (c) all concessions granted to a new Tenant or Tenants upon reletting
(including among other concessions, renewal options); (d) Lessor’s and its
Affiliates’ reasonable attorneys’ fees and expenses arising from or related to
an Event of Default; (e) all losses incurred by Lessor and its Affiliates as a
direct or indirect result of such Event of Default (including, among other
losses, any adverse action by Facility Lenders); and (f) a reasonable allowance
for Lessor’s administrative efforts, salaries and overhead attributable directly
or indirectly to such Event of Default and Lessor’s pursuing the rights and
remedies provided herein and under applicable law.

 

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16.3 Waivers.

(a) If this Lease is terminated pursuant to Section 16.1, Lessee waives, to the
extent permitted by applicable law, (i) any right of redemption, re-entry or
repossession; (ii) any right to a trial by jury in the event of summary
proceedings to enforce the remedies set forth in this Article XVI; (iii) the
benefit of any laws now or hereafter in force exempting property from liability
for rent or for debt; and (iv) any statutory requirement of prior written notice
for filing eviction or damage suits for nonpayment of Rent or any other payments
under this Lease. Lessee acknowledges and agrees that no waiver by Lessor of any
provision of this Lease shall be deemed to have been made unless made under
signature of an authorized representative of Lessor.

(b) To the extent permitted by applicable law, Lessee waives any and all rights
or defenses arising by reason of: (i) any “one action” or “anti-deficiency” law
or any other law which may prevent Lessor from bringing any action, including a
claim for deficiency, against Lessee or any one or more of the Facility Lessees
or Guarantors, before or after Lessor’s commencement or completion of any
foreclosure or similar action or actions, either judicially or by exercise of a
power of sale; (ii) any election of remedies by Lessor which destroys or
otherwise adversely affects Lessee or any one or more of the Facility Lessee’s
or Guarantor’s subrogation rights or rights to proceed against any Person for
reimbursement, including, without limitation, any loss of rights Lessee or
Guarantors may suffer by reason of any law limiting, qualifying, or discharging
the Obligations (as defined in the Security Agreement), if any, (iii) any
disability or other defense of any other Person, other than payment in full in
legal tender, of the Obligations; (iv) any right to claim discharge of the
Obligations on the basis of unjustified impairment of any collateral for the
Obligations; (v) any defenses given to guarantors, sureties, and/or co-makers at
law or in equity other than actual payment and performance of the Obligations;
or (vi) any action by Lessor or its Affiliates to enforce its rights and
remedies under this Lease, the Mortgage Loan Documents and the other Obligation
Documents.

16.4 Application of Funds. Any payments otherwise payable by or to Lessee which
are received by Lessor under any of the provisions of this Lease during the
existence or continuance of any Event of Default shall be applied to Lessee’s
obligations in the order which Lessor may reasonably determine.

16.5 Notices by Lessor. The provisions of this Article XVI concerning notices
shall be liberally construed insofar as the contents of such notices are
concerned, and any such notice shall be sufficient if reasonably designed to
apprise Lessee of the nature and approximate extent of any default, it being
agreed that Lessee is in as good or a better position than Lessor to ascertain
the exact extent of any default by Lessee hereunder.

16.6 Lessor’s Contractual Security Interest. In order to secure the payment of
all Rent due and to become due hereunder and the faithful performance of this
Lease by Lessee and to secure all other obligations, indebtedness and
liabilities of Lessee to Lessor, now existing or hereafter incurred,
contemporaneously with the execution of this Lease, Lessee has executed the
Security Agreement granting Lessor certain liens and security interests as
therein described. The liens and security interests granted to Lessor pursuant
to the Security Agreement are given in addition

 

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to and cumulative to any statutory landlord lien. All exemption laws are hereby
waived in favor of such lien and security interest and in favor of Lessor’s
statutory landlord lien. Upon the occurrence of an Event of Default by Lessee,
Lessor shall have the remedies set forth in the Security Agreement, in addition
to all remedies available at law or in equity and the remedies set forth in this
Lease.

ARTICLE XVII

LESSOR’S RIGHT TO CURE

Subject to the provisions of Article XII relating to permitted contests, if
Lessee shall fail to make any payment, or to perform any act required to be made
or performed under this Lease and to cure the same within the relevant time
periods provided in Section 16.1, or if a breach or default or event of default
occurs with respect to any Material Obligation, including, without limitation,
any Material Obligation relating to any receivables or working capital loan or
financing provided to Lessee (collectively the “RFFE Loans”), and such default
or event of default is not cured or waived within the applicable cure period
provided in the document evidencing such Material Obligation, after written
notice to Lessee, Lessor, without waiving or releasing any obligation or Event
of Default, may (but shall be under no obligation to) at any time thereafter
make such payment or perform such act for the account and at the expense of
Lessee, and may, to the extent permitted by law, enter upon any portion of the
Leased Property for such purpose and take all such action thereon as, in
Lessor’s opinion, may be necessary or appropriate therefor. No such entry shall
be deemed an eviction of Lessee. All sums so paid by Lessor and all reasonable
costs and expenses (including, without limitation, reasonable, documented,
out-of-pocket attorneys’ fees and expenses, in each case, to the extent
permitted by law) so incurred, together with a late charge thereon (to the
extent permitted by law) at the Overdue Rate from the date on which such sums or
expenses are paid or incurred by Lessor until reimbursed, shall be paid by
Lessee to Lessor on demand.

ARTICLE XVIII

PURCHASE OF THE LEASED PROPERTY

In the event Lessee purchases any Property pursuant to the terms of this Lease,
Lessor shall, upon receipt from Lessee of the applicable purchase price,
together with full payment of any unpaid Rent, including, without limitation,
any unpaid Additional Charges and any other amounts owed by Lessee or its
Affiliates to Lessor, MPT Real Estate Owner and their respective Affiliates, due
and payable with respect to any period ending on or before the date of the
purchase, cause MPT Real Estate Owner to deliver to Lessee an appropriate
special warranty deed or other similar instrument of conveyance conveying the
entire interest of MPT Real Estate Owner in and to such Property to Lessee in
the condition as received from Lessee, free and clear of all encumbrances other
than (a) those that Lessee has agreed hereunder to pay or discharge; (b) those
mortgage liens, if any, which Lessee has agreed in writing to accept and to take
title subject to; (c) any other Liens permitted to be imposed on such Property
under the provisions of Article XXXVI which are assumable at no cost to Lessee
or to which Lessee may take subject without cost to Lessee; and (d) any matters
affecting such Property on or as of the applicable

 

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Commencement Date. The positive difference, if any, between the applicable
purchase price and the total of the monetary encumbrances assigned or taken
subject to shall be paid in cash to MPT Real Estate Owner, or as MPT Real Estate
Owner may direct, in federal or other immediately available funds except as
otherwise mutually agreed by MPT Real Estate Owner and Lessee. The closing of
any such sale shall be contingent upon and subject to Lessee obtaining all
required governmental consents and approvals for such transfer and if such sale
shall fail to be consummated by reason of the inability of Lessee to obtain all
such approvals and consents, any options to extend the Term of this Lease which
otherwise would have expired during the period from the date when Lessee elected
or became obligated to purchase such portion of the Leased Property until
Lessee’s inability to obtain the approvals and consents is confirmed shall be
deemed to remain in effect for thirty (30) days after the end of such period.
All expenses of such conveyance, including, without limitation, the cost of
title examination or standard coverage title insurance, survey, reasonable
attorneys’ fees incurred by Lessor and MPT Real Estate Owner in connection with
such conveyance, transfer taxes, prepayment penalties, and any other reasonable
fees of any Facility Lender with respect to any Facility Instrument, recording
fees and similar charges shall be paid by Lessee.

ARTICLE XIX

HOLDING OVER

If Lessee shall for any reason remain in possession of any Property after the
expiration of the Term or any earlier termination of the Term with respect to
thereto, such possession shall be as a tenancy at will, during which time Lessee
shall pay, as rental each month, one and one-half (1-1/2) times the aggregate of
(a) one-twelfth (1/12) of the aggregate Allocated Base Rent relating to such
Property payable with respect to the last complete twelve (12)-month period
prior to the expiration of the Term; (b) all Additional Charges relating to such
Property accruing during the month, and (c) all other sums, if any, payable by
Lessee pursuant to the provisions of this Lease with respect to such Property.
During such period of tenancy, Lessee shall be obligated to perform and observe
all of the terms, covenants and conditions of this Lease, but shall have no
rights hereunder other than the right, to the extent given by law to tenancies
at will, to continue its occupancy and use of such Property. Nothing contained
herein shall constitute the consent, express or implied, of Lessor to the
holding over of Lessee after the expiration or earlier termination of this
Lease.

ARTICLE XX

LESSOR CONSENT

Whenever MPT TRS, in its capacity as a Member under the LLC Agreement has
approved pursuant to Section 4.12 of the LLC Agreement any item that requires
Lessor’s approval hereunder or has provided consent pursuant to the LLC
Agreement with respect to any item that requires Lessor’s consent hereunder,
Lessor will be deemed to have approved or consented to such item hereunder.

 

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ARTICLE XXI

RISK OF LOSS

During the Term, the risk of loss of, or decrease in, the enjoyment and
beneficial use of the Leased Property in consequence of the damage or
destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise, or in consequence of foreclosures, attachments, levies or executions
(other than by Lessor and those claiming from, through or under Lessor) is
assumed by Lessee and, Lessor shall in no event be answerable or accountable
therefor nor shall any of the events mentioned in this Article XXI entitle
Lessee to any abatement of Rent except as specifically provided in this Lease.

ARTICLE XXII

INDEMNIFICATION

NOTWITHSTANDING THE EXISTENCE OF ANY INSURANCE OR SELF INSURANCE PROVIDED FOR IN
ARTICLE XIII, AND WITHOUT REGARD TO THE POLICY LIMITS OF ANY SUCH INSURANCE OR
SELF INSURANCE, IN ADDITION TO ANY OTHER INDEMNIFICATION OBLIGATIONS OF LESSEE
AND GUARANTORS AS PROVIDED IN THIS LEASE, LESSEE WILL PROTECT, INDEMNIFY, SAVE
HARMLESS AND DEFEND LESSOR AND MPT REAL ESTATE OWNER FROM AND AGAINST ALL
LIABILITIES, OBLIGATIONS, CLAIMS, DAMAGES, PENALTIES, CAUSES OF ACTION, COSTS
AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES AND
EXPENSES) TO THE EXTENT PERMITTED BY LAW), IMPOSED UPON OR INCURRED BY OR
ASSERTED AGAINST LESSOR AND MPT REAL ESTATE OWNER BY REASON OF: (A) ANY
ACCIDENT, INJURY TO OR DEATH OF PERSONS OR LOSS OF PERSONAL PROPERTY OCCURRING
ON OR ABOUT THE LEASED PROPERTY OR ADJOINING SIDEWALKS, INCLUDING WITHOUT
LIMITATION ANY CLAIMS OF MALPRACTICE DURING THE TERM OR WHICH RELATE TO THE
PERIOD OF LESSEE’S POSSESSION DURING THE TERM, (B) ANY USE, MISUSE, NO USE,
CONDITION, MAINTENANCE OR REPAIR BY LESSEE OF THE LEASED PROPERTY DURING THE
TERM OR WHICH RELATE TO THE PERIOD OF LESSEE’S POSSESSION DURING THE TERM,
(C) ANY IMPOSITIONS (WHICH ARE THE OBLIGATIONS OF LESSEE TO PAY PURSUANT TO THE
APPLICABLE PROVISIONS OF THIS LEASE), (D) ANY FAILURE ON THE PART OF LESSEE TO
PERFORM OR COMPLY WITH ANY OF THE TERMS OF THIS LEASE, (E) THE NON-PERFORMANCE
OF ANY OF THE TERMS AND PROVISIONS OF ANY AND ALL EXISTING AND FUTURE SUBLEASES
OF THE LEASED PROPERTY TO BE PERFORMED BY THE LANDLORD (LESSEE) THEREUNDER
DURING THE TERM OR WHICH RELATE TO THE PERIOD OF LESSEE’S POSSESSION DURING THE
TERM, (F) ANY AND ALL LAWFUL ACTION THAT MAY BE TAKEN BY LESSOR OR MPT REAL
ESTATE OWNER IN CONNECTION WITH THE ENFORCEMENT OF THE PROVISIONS OF THIS LEASE,
WHETHER OR NOT SUIT IS FILED IN CONNECTION WITH SAME, OR IN CONNECTION WITH
LESSEE OR

 

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A GUARANTOR AND/OR ANY PARTNER, JOINT VENTURER, MEMBER OR SHAREHOLDER THEREOF
BECOMING A PARTY TO A VOLUNTARY OR INVOLUNTARY FEDERAL OR STATE BANKRUPTCY,
INSOLVENCY OR SIMILAR PROCEEDING, (G) WITH RESPECT TO EACH PROPERTY, TO THE
EXTENT ARISING DURING THE TERM OR WHICH RELATE TO THE PERIOD OF LESSEE’S
POSSESSION DURING THE TERM, ANY (I) TO THE EXTENT ARISING DURING THE TERM,
ENCROACHMENTS ONTO OR FROM ADJACENT PROPERTIES; (II) VIOLATIONS OF SET-BACK,
BUILDING OR SIDE LINES; (III) ENCROACHMENTS ONTO ANY EASEMENTS OR SERVITUDES
LOCATED ON SUCH PROPERTY; (IV) PENDING OR THREATENED BOUNDARY LINE DISPUTES;
(V) PORTIONS OF SUCH PROPERTY LOCATED IN A FLOOD PLAIN OR IN AN AREA DEFINED AS
A WETLAND UNDER APPLICABLE STATE OR FEDERAL LAW; (VI) CEMETERIES OR GRAVESITES
LOCATED ON, WITHIN OR UNDER SUCH PROPERTY; OR (VII) MINE SHAFTS UNDER SUCH
PROPERTY OR ANY OTHER LATENT DEFECTS, SUCH AS SINKHOLES, REGARDING OR AFFECTING
SUCH PROPERTY, (H) ANY GRANTS, CONVEYANCES OR TRANSFERS OF ANY INTERESTS OR
RIGHTS IN OR TO THE LEASED PROPERTY (INCLUDING, WITHOUT LIMITATION, EASEMENTS,
RIGHTS-WAY, RESTRICTIONS) MADE BY LESSEE OR ANY OTHER PERSON WHICH ARE NOT
APPROVED BY LESSOR PRIOR TO PLACING THE SAME OF RECORD ON THE LEASED PROPERTY,
INCLUDING, WITHOUT LIMITATION, THOSE PRIOR TO THE LESSOR TAKING TITLE TO THE
LEASED PROPERTY, (I) TO THE EXTENT ARISING DURING THE TERM, THE IMPROVEMENTS
HAVING INSUFFICIENT ACCESS TO A PUBLIC RIGHT OF WAY OR FAILING TO BE IN
COMPLIANCE WITH ALL RULES, REGULATIONS AND ORDINANCES OF ALL GOVERNMENTAL
AUTHORITIES HAVING JURISDICTION OVER THE IMPROVEMENTS AND THE LAND, INCLUDING,
WITHOUT LIMITATION, THOSE PERTAINING TO ZONING AND PARKING, (J) ANY FAILURE ON
THE PART OF LESSEE TO PERFORM OR COMPLY WITH ANY OF THE TERMS OF THE OKLAHOMA
GROUND LEASE AS REQUIRED UNDER THE TERMS OF THIS LEASE, AND (K) ANY REVERSION OF
THE APPLICABLE LEASED IMPROVEMENTS UNDER OKLAHOMA GROUND LEASE TO THE “LANDLORD”
THEREUNDER DURING THE FIXED TERM OR DURING ANY EXTENSION TERM EXERCISED
HEREUNDER BY LESSEE. ANY AMOUNTS WHICH BECOME PAYABLE BY LESSEE UNDER THIS
ARTICLE XXII SHALL BE PAID WITHIN FIFTEEN (15) DAYS AFTER DEMAND THEREFOR BY
LESSOR AND/OR MPT REAL ESTATE OWNER AND, IF NOT TIMELY PAID, SHALL BEAR A LATE
CHARGE (TO THE EXTENT PERMITTED BY LAW) AT THE OVERDUE RATE FROM THE EXPIRATION
OF SAID FIFTEEN (15) DAY PERIOD UNTIL THE DATE OF PAYMENT AND A LATE PAYMENT
PENALTY ON SUCH AMOUNT. LESSEE, AT ITS EXPENSE, SHALL CONTEST, RESIST AND DEFEND
ANY SUCH CLAIM, ACTION OR PROCEEDING ASSERTED OR INSTITUTED AGAINST LESSOR OR
MPT REAL ESTATE OWNER AND MAY COMPROMISE OR OTHERWISE DISPOSE OF THE SAME,
SUBJECT TO THE APPROVAL OF LESSOR

 

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AND MPT REAL ESTATE OWNER. NOTHING HEREIN SHALL BE CONSTRUED AS INDEMNIFYING
LESSOR OR MPT REAL ESTATE OWNER AGAINST THEIR OWN GROSSLY NEGLIGENT ACTS OR
OMISSIONS OR WILLFUL MISCONDUCT.

ARTICLE XXIII

ASSIGNMENT, SUBLETTING AND SUBLEASE SUBORDINATION

23.1 Assignment and Subletting.

(a) Lessee shall not assign this Lease without Lessor’s prior written consent.
Lessor shall not unreasonably withhold, condition or delay its consent to any
assignment, provided, that (i) such assignee shall assume in writing and agree
to keep and perform all of the terms of this Lease on the part of Lessee to be
kept and performed; and (ii) an original counterpart of the assignment, duly
executed by Lessee and such assignee in form and substance reasonably
satisfactory to Lessor, shall be delivered promptly to Lessor; it being
understood and agreed, however, that if, in connection with any such assignment,
Lessee desires that Lessor release Lessee from its obligations under this Lease,
Lessor’s review and approval of any assignee shall be in Lessor’s sole and
absolute discretion. The parties agree that Lessor’s failure or refusal to
approve an assignment to an assignee that does not have the operating
characteristics reasonably satisfactory to Lessor shall be reasonable on its
face. Notwithstanding anything contained in this Lease to the contrary, any
assignment must be of all of Lessee’s right, title and interest in and to this
Lease and the Leased Property such that this Lease is not severed with respect
to any one or more of the Properties. The parties agree that Lessor’s failure or
refusal to approve an assignment to an assignee without the required operating
strengths shall be reasonable on its face.

(b) Lessee shall not sublease any portion of a particular Property if such
Tenant Lease would exceed Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00) in annual rent without Lessor’s prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed. Lessee
agrees that (i) each Tenant Lease shall comply with the provisions of this
Article XXIII, (ii) subject to Section 23.4, a copy of each such Tenant Lease,
duly executed by Lessee and such Tenant in form and substance reasonably
satisfactory to Lessor, shall be delivered promptly to Lessor and (iii) Lessee
shall remain primarily liable, as principal rather than as surety, for the
prompt payment of the Rent and for the performance and observance of all of the
obligations, covenants and conditions to be performed by Lessee hereunder and
under all of the other documents executed in connection herewith. Any
modifications, amendments and restatements of any Tenant Leases (but excluding
renewals and extensions) hereafter entered into (other than those having less
than Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) in annual rent)
must be approved by Lessor in accordance with this Article XXIII. In no event
shall Lessee sublease all or substantially all of any Property without Lessor’s
prior written consent, which may be withheld in Lessor’s sole discretion.

 

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23.2 Sublease Limitations. In addition to the sublease limitations as set forth
in Section 23.1, above, and notwithstanding anything contained in this Lease to
the contrary, Lessee shall not sublet the Leased Property on any basis such that
the rental to be paid by the Tenant thereunder would be based, in whole or in
part, on either (a) the income or profits derived by the business activities of
the Tenant, or (b) any other formula such that any portion of the Tenant Lease
rental received by Lessor would fail to qualify as “rents from real property”
within the meaning of Section 856(d) of the Code, or any similar or successor
provision thereto. Moreover, Lessee shall not sublet any portion of the Leased
Property for a term extending beyond the Fixed Term without the express consent
of Lessor. In addition, all Tenant Leases shall comply in all material respects
with the Healthcare Laws. Lessor and Lessee acknowledge and agree that all
Tenant Leases entered into relating to the Leased Property, whether or not
approved by Lessor, shall not, without the prior written consent of Lessor, be
deemed to be a direct lease between Lessor and any Tenant. Lessee agrees that
all Tenant Leases must include provisions to the effect that (i) such sublease
is subject and subordinate to all of the terms and provisions of this Lease, to
the rights of Lessor hereunder, and to all financing documents relating to any
Facility Loan in connection with the Leased Property, (ii) in the event this
Lease shall terminate or be terminated before the expiration of the Tenant
Lease, the Tenant will, at Lessor’s option, exercisable at any time in Lessor’s
discretion, attorn to Lessor and waive any right the Tenant may have to
terminate the sublease or to surrender possession thereunder as a result of the
termination of this Lease, (iii) in the event of a termination of this Lease
with respect to all or the applicable Property, at Lessor’s option, exercisable
at any time in Lessor’s discretion, the sublease may be terminated or left in
place by Lessor, (iv) Tenant shall from time to time upon request of Lessee or
Lessor furnish within twenty (20) days from request an estoppel certificate in
form and content reasonably acceptable to Lessor or any Facility Lender relating
to the Tenant Lease, (v) in the event the Tenant receives a written notice from
Lessor or Lessor’s assignees, if any, stating that an Event of Default under
this Lease has occurred, the Tenant shall, to the extent specified in such
notice, thereafter be obligated to pay all rentals accruing under said Tenant
Lease directly to the Person giving such notice, or as such Person may direct,
and such Tenant shall be entitled to conclusively rely on such notice (all
rentals received from the Tenant by Lessor or Lessor’s assignees, if any, as the
case may be, shall be credited against the amounts owing by Lessee under this
Lease), and (vi) such Tenant Lease shall at all times be subject to the
obligations and requirements as set forth in this Article XXIII.

23.3 Sublease Subordination and Non-Disturbance.

(a) At any time during the Term, except with respect to the Existing Subleases,
within twenty (20) days following written request by Lessor with respect to any
Tenant, Lessee shall cause any applicable Tenant to execute and deliver to
Lessor (a) an estoppel certifying such matters as Lessor may reasonably request,
including, without limitation, that such Tenant Lease is unmodified and in full
force and effect (or setting forth the modifications), the term and expiration
thereof and the dates to which the Rent has been paid; and/or (b) a
subordination, non-disturbance and attornment agreement relating to the
applicable Tenant Lease, which subordination, non-disturbance and attornment
agreement shall be in form mutually satisfactory to Lessor and Lessee.

 

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(b) Within twenty (20) days from the date of request of Lessor, a Facility
Lender or Lessee, with respect to any Tenant, Lessee shall use commercially
reasonable efforts to cause such Tenant and Lessor shall cause such Facility
Lender to enter into a written agreement in a form reasonably acceptable to such
Facility Lender and such Tenant whereby (i) such Tenant subordinates the Tenant
Lease and all of its rights and estate thereunder to each such mortgage or deed
of trust that encumbers the Leased Property or any part thereof and agrees with
each such Facility Lender that such Tenant will attorn to and recognize such
Facility Lender or the purchaser at any foreclosure sale or any sale under a
power of sale contained in any such mortgage or deed of trust, as the case may
be, as Lessor under this Lease for the balance of the Term then remaining,
subject to all of the terms and provisions of the Tenant Lease and (ii) such
Facility Lender shall agree that Tenant shall not be disturbed in peaceful
enjoyment of the applicable portion of the Leased Property nor shall the
applicable Tenant Lease be terminated or canceled at any time, except as
specified in the applicable Tenant Lease.

23.4 Existing Subleases. Notwithstanding anything contained herein to the
contrary, Lessor and Lessee acknowledge that there currently exist certain
leases or subleases on the Leased Property as described on Exhibit D
(collectively the “Existing Subleases”). Lessor hereby consents to the Existing
Subleases. Any material modifications, amendments and restatements of the
Existing Subleases or any Tenant Lease hereafter entered into (but excluding
renewals and extensions that do not otherwise materially modify or amend the
relevant Existing Sublease or Tenant Lease) must be approved by Lessor in
accordance with this Article XXIII.

ARTICLE XXIV

OFFICER’S CERTIFICATES; FINANCIAL STATEMENTS; NOTICES AND OTHER CERTIFICATES

(a) At any time and from time to time within twenty (20) days following written
request by Lessor, each Facility Lessee shall furnish to Lessor an Officer’s
Certificate certifying that this Lease is unmodified and in full force and
effect (or that this Lease is in full force and effect as modified and setting
forth the modifications) and the dates to which the Rent has been paid. Any such
Officer’s Certificate furnished pursuant to this Article may be relied upon by
Lessor and MPT Real Estate Owner and any prospective purchaser of the Leased
Property.

(b) Each Facility Lessee shall furnish, or cause to be furnished, to Lessor the
following statements, notices and certificates in such form and detail as Lessor
may reasonably require:

(i) within one hundred twenty (120) days after the end of each year, audited
Financial Statements of such Facility Lessee and Capella Holdings (which
Financial Statements may be provided on a consolidated basis so long as such
consolidated Financial Statements provide a supplementary schedule of such
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operating results and balance sheet and statements of operations and of cash
flows) and, if such Facility Lessee owns any assets or conducts any other
operations other than the Business, then of the Facility separately, prepared by
a nationally recognized accounting firm or an independent certified public
accounting firm reasonably acceptable to Lessor, which statements shall include
balance sheets and statements of operations and of cash flows, all in accordance
with GAAP for the year then ended; and

(ii) within (x) sixty (60) days after the end of the fourth quarter of each year
and (y) forty-five (45) days after the end of each other quarter, current
balance sheets and quarterly statements of operations and of cash flows of such
Facility Lessee and Capella Holdings, and, if such Facility Lessee owns any
assets or conducts any other operations other the Business, then of its Facility
separately, certified to be true and correct by an officer of such Facility
Lessee; and

(iii) within thirty (30) days after the end of each month, current balance
sheets, monthly income statements and cash flows (if available or produced in
the ordinary course of business) of such Facility Lessee and statistics of its
Facility, including, but not limited to, the number of patient discharges, the
number of inpatient days, the case mix index, the payor sources for inpatient
days (by inpatient days), outpatient utilization by service (ER, non-ER), and,
statements of Cash Collections for each such month; and

(iv) within thirty (30) days after the end of each calendar year, a list of the
names, specialties, and ages of all active medical staff members of the Facility
operated by such Facility Lessee, certified to be true and correct by an officer
of such Facility Lessee; and

(v) within ten (10) days after receipt, any and all notices (regardless of form)
from any and all licensing and/or certifying agencies that any license or
certification, including, without limitation, the Medicare and/or Medicaid
certification and/or managed care contract relating to the Facility operated by
such Facility Lessee is being downgraded to a substandard category, revoked, or
suspended, or that action is pending or being considered to downgrade to a
substandard category, revoke, or suspend such Facility’s license or
certification; and

(vi) with reasonable promptness, such other information respecting the financial
condition and affairs of such Facility Lessee, Capella Holdings and their
respective Affiliates as Lessor may reasonably request from time to time.

(c) Upon Lessor’s request, each Facility Lessee and Capella Holdings shall
furnish to Lessor a certificate in form reasonably acceptable to Lessor
certifying that no Event of Default then exists and to Lessee’s knowledge no
event has occurred (that has not been cured) and no condition currently exists
that would, but for the giving of any required notice or expiration of any
applicable cure period, constitute an Event of Default, or disclosing that such
an event or condition, if any, exists.

 

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(d) Within five (5) Business Days after receipt, each Facility Lessee shall
furnish to Lessor copies of all written notices and demands from any third-party
payor, including, without limitation, Medicare and/or Medicaid, concerning any
overpayment which will or could reasonably be expected to require a repayment or
a refund in excess of Three Million and No/100 Dollars ($3,000,000.00) with
respect to such Facility Lessee.

(e) Each Facility Lessee shall furnish to Lessor prompt written notice of, and
any information related to, any governmental investigations of such Facility
Lessee or the Guarantors (or any of their respective Affiliates), or any
inspections or investigations of the Facility operated by such Facility Lessee
which are conducted by the United States Attorney, State Attorney General, the
Office of the Inspector General of the Department of Health and Human Services,
or any other Governmental Body, and provide to Lessor, on a monthly basis,
ongoing status reports (in form and content acceptable to Lessor) of any such
government investigations;

(f) Each Facility Lessee shall furnish to Lessor within five (5) Business Days
after receipt thereof copies of all pre-termination notices from Medicare and/or
Medicaid, all notices of adverse events or deficiencies as defined by the
regulations and standards of the state Medicare and/or Medicaid certification
agency, the Joint Commission (formerly known as the Joint Commission on the
Accreditation of Healthcare Organizations) (the “Joint Commission”) or the
equivalent accrediting body relied upon by such Facility Lessee in the operation
of the Facility operated by such Facility Lessee or any part thereof, except if
any termination, adverse event or deficiency referenced in such notice would not
result in a material adverse effect on Lessee, the Properties and the Business
taken as a whole.

(g) With respect to each Facility, such Facility Lessee shall furnish to Lessor
promptly upon receipt thereof copies of all notices that such Facility Lessee,
any Guarantor or their respective Affiliates are not, with respect to such
Facility, in compliance with the Standards for Privacy of Individually
Identifiable Health Information and the Transaction and Code Set Standards which
were promulgated pursuant to HIPAA.

(h) Each Facility Lessee shall provide to Lessor promptly written notice of any
default or event of default with respect to any Material Obligation of such
Facility Lessee, including any RFFE Loan, and upon Lessor’s request, such
Facility Lessee or any Guarantor shall furnish to Lessor a certificate in form
reasonably acceptable to Lessor certifying that, with respect to each Material
Obligation, no event of default or, to such Facility Lessee or Guarantor’s
knowledge, default then exists thereunder.

(i) Lessor reserves the right to require such other financial information from
Lessee at such other times as it shall deem reasonably necessary. All financial
statements and information must be in such form and detail as Lessor shall from
time to time, but not unreasonably, request.

(j) As to any information provided by any Facility Lessee to Lessor pursuant to
this Article XXIV (“Proprietary Information”), neither Lessor, nor its agents,
representatives,

 

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employees, partners, members, officers or directors will disclose any
Proprietary Information unless prior consent to such disclosure is obtained from
Lessee, which consent may be withheld, conditioned or delayed at Lessee’s sole
discretion. Lessor shall hold in strict confidence and shall disclose
Proprietary Information only to Lessor’s employees, agents, attorneys,
accountants, consultants, investors, potential investors, lenders, potential
lenders, purchasers, potential purchasers and service providers who have a
reason to know such Proprietary Information in order to assist Lessor. Neither
Lessor nor any of its employees, agents, attorneys, accountants, consultants,
investors, potential investors, lenders or service providers shall disclose
Proprietary Information to any other person or entity except in connection with
any tax, regulatory or loan securitization obligations or use Proprietary
Information for its or their benefit or for any purpose not expressly agreed
upon in writing by Lessee. The obligation hereunder to maintain the
confidentiality of Proprietary Information and to refrain from use of
Proprietary Information for any purposes not agreed upon shall not expire. The
foregoing restriction on the dissemination of Proprietary Information shall not
apply to any Proprietary Information which (i) is disclosed in a printed
publication available to the public or is otherwise in the public domain through
no act of the party to whom the Proprietary Information has been provided,
(ii) is approved for release by written authorization of an officer of the party
to whom the Proprietary Information belongs or (iii) is required to be disclosed
by proper order of a court of competent jurisdiction after adequate notice to
the party to whom the Proprietary Information belongs in order to allow that
party to seek a protective order therefor.

ARTICLE XXV

INSPECTIONS

Upon reasonable prior written notice, Lessee shall permit Lessor, or its
designated Affiliate, and their respective authorized representatives to inspect
the Leased Property during usual business hours subject to any security, health,
safety or confidentiality requirements of Lessee, any governmental agency, any
Insurance Requirements relating to the Leased Property, or imposed by law or
applicable regulations, except that, in the event of an emergency, Lessor shall
have the right to inspect the Leased Property upon reasonable notice (which in
this circumstance may be verbal) under the circumstances to Lessee.

ARTICLE XXVI

NO WAIVER

Any provision of this Lease or Exhibits hereto may be amended or waived only in
a writing signed by the parties hereto. No waiver of any provision hereunder or
any breach or default thereof shall extend to or affect in any way any other
provision or prior or subsequent breach or default.

 

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ARTICLE XXVII

REMEDIES CUMULATIVE

To the extent permitted by law, each legal, equitable or contractual right,
power and remedy of Lessor or Lessee now or hereafter provided either in this
Lease or by statute or otherwise shall be cumulative and concurrent and shall be
in addition to every other right, power and remedy and the exercise or beginning
of the exercise by Lessor or Lessee of any one or more of such rights, powers
and remedies shall not preclude the simultaneous or subsequent exercise by
Lessor or Lessee of any or all of such other rights, powers and remedies.

ARTICLE XXVIII

SURRENDER

No surrender to Lessor of this Lease or of the Leased Property, or of any part
thereof or interest therein, shall be valid or effective unless agreed to and
accepted in writing by Lessor, and no act by Lessor or any representative or
agent of Lessor, other than such a written acceptance by Lessor, shall
constitute an acceptance of any such surrender.

ARTICLE XXIX

NO MERGER OF TITLE

There shall be no merger of this Lease or of the leasehold estate created hereby
by reason of the fact that the same person, firm, corporation or other entity
may acquire, own or hold, directly or indirectly, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate and (b) the fee estate in the Leased Property.

ARTICLE XXX

TRANSFERS BY LESSOR AND MPT REAL ESTATE OWNER; SEVERANCE RIGHTS

30.1 Transfers by Lessor. Lessee acknowledges that MPT Real Estate Owner may
sell its interest in the Leased Property in whole or in part, and that Lessor
may assign its interest in this Lease in whole or in part, in any such case,
without Lessee’s prior written consent or approval. If MPT Real Estate Owner,
Lessor or any successor owner of any Property shall convey such Property in
accordance with the terms hereof, other than as security for a debt, the grantee
or transferee of such Property shall expressly assume all obligations of Lessor
hereunder arising or accruing from and after the date of such conveyance or
transfer, and Lessor or such successor owner, as the case may be, shall
thereupon be released from all future liabilities and obligations of Lessor
under this Lease relating to such Property arising or accruing from and after
the date of such conveyance or other transfer and all such future liabilities
and obligations shall thereupon be binding upon the new owner. Lessee agrees
that any successor purchaser may exercise any and all rights of Lessor;
provided, however, such successor purchaser shall be subject to the same
restrictions imposed upon Lessor hereunder. Subject to the execution by a
prospective purchaser of a written confidentiality agreement on terms reasonably
acceptable to Lessee, Lessor may divulge to any such prospective purchaser all
information, reports, financial statements, certificates and documents obtained
by it from Lessee.

 

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30.2 Severance Rights. Notwithstanding the unitary nature of this Lease, Lessor
may at any time and from time to time cause this Lease to be severed with
respect to any one or more of the Properties (each, a “Severed Property”). If
Lessor shall desire to sever this Lease pursuant to this Section 30.2, Lessor
shall deliver written notice (each, a “Severance Notice”) to Lessee not less
than thirty (30) days prior to the date that this Lease shall be severed with
respect to the Severed Property or Severed Properties identified in the
Severance Notice (such date identified in a Severance Notice, a “Severance
Date”). The Severance Notice shall specify the Severed Property and the
Severance Date. Effective upon a Severance Date, the applicable Severed Property
shall no longer be part of the Leased Property under this Lease and such Severed
Property shall be deemed to be and shall be leased by Lessor to Lessee for the
amount of Rent allocable to such Severed Property pursuant to a separate lease
(a “Severed Lease”) upon the same terms and conditions as provided in this Lease
(except for such provisions as by their terms are not applicable to such Severed
Property); it being agreed, however, that the liability of the applicable lessor
under the Severed Lease shall be limited to such lessor’s interest in the
Severed Property. The portion of the Base Rent allocable to the Severed Property
shall be the Allocated Base Rent for such Severed Property. Effective upon the
Severance Date, the Rent payable with respect to each Severed Property shall no
longer be payable by Lessee under this Lease and shall instead be payable under
the Severed Lease applicable to such Severed Property. Effective on the
Severance Date, the parties shall enter into the Severed Lease, and an amendment
of this Lease, and an amendment of the applicable other Obligation Documents
that assures that Lessor receives security and credit enhancements for both the
Severed Lease and this Lease as so amended, comparable to that existing prior to
the severance (the “Other Credit Enhancements”). For so long as Lessor under
this Lease shall be the lessor under a Severed Lease, any such Severed Lease and
the related Other Credit Enhancements shall be deemed “Obligation Documents” for
all purposes under this Lease, any Event of Default under such Severed Lease or
Other Credit Enhancements shall constitute an Event of Default under this Lease,
and any Event of Default under this Lease or the other Obligation Documents
shall constitute an Event of Default under such Severed Lease. Lessor will
prepare the Severed Lease, the Other Credit Enhancements, the Lease amendment
and, if necessary, the amendments to the other applicable Obligation Documents
with respect to each Severed Property consistent with the provisions of this
Section 30.2 and the parties agree to execute and deliver or cause to be
executed and delivered.

ARTICLE XXXI

QUIET ENJOYMENT

So long as Lessee shall pay all Rent as the same becomes due and shall fully
comply with all of the terms of this Lease and fully perform its obligations
hereunder, Lessee shall peaceably and quietly have, hold and enjoy the Leased
Property for the Term hereof, free of any claim or other action by Lessor or
anyone claiming by, through or under Lessor, but subject to the Permitted
Exceptions, any Facility Loan and all liens and encumbrances of record. No
failure by

 

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Lessor to comply with the foregoing covenant shall give Lessee any right to
cancel or terminate this Lease, or to fail to pay any other sum payable under
this Lease, or to fail to perform any other obligation of Lessee hereunder.
Notwithstanding the foregoing, Lessee shall have the right by separate and
independent action to pursue any claim it may have against Lessor as a result of
a breach by Lessor of the covenant of quiet enjoyment contained in this Article
XXXI.

ARTICLE XXXII

NOTICES

All notices, demands and other communications to be given or delivered under or
by reason of the provisions of this Lease shall be in writing and shall be
deemed to have been given (a) when personally delivered, (b) when transmitted
via telecopy (or other facsimile device) to the number set out below if the
sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), (c) the day following the day
(except if not a Business Day then the next Business Day) on which the same has
been delivered prepaid to a reputable national overnight air courier service or
(d) the third Business Day following the day on which the same is sent by
certified or registered mail, postage prepaid. Notices, demands and
communications, in each case to the respective parties, shall be sent to the
applicable address set forth below, unless another address has been previously
specified in writing:

 

if to Lessee:

  

c/o Capella Holdings, Inc.

510 Corporate Drive, Suite 200

Franklin, TN 37067-2662

Attn: Michael Wiechart

Neil Kunkel

Fax: (615) 764-3038

  

with a copy to:

  

Kirkland & Ellis LLP

300 North LaSalle Street

Chicago, IL 60654

Attn: Margaret A. Gibson, P.C., John G. Caruso and

Christopher M. Thomas

Fax: (312) 862-2200

  

if to Lessor:

  

c/o MPT Operating Partnership, L.P.

1000 Urban Center Drive, Suite 501

Birmingham, Alabama 35242

Attn: Legal Department

Fax: (205) 969-3756

  

 

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with a copy to:

  

Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

420 20th Street North

1400 Wells Fargo Tower

Birmingham, Alabama 35203

Attn: Thomas O. Kolb, Esq.

Fax: (205) 322-8007

  

or to such other address with respect to a party as such party notifies the
other in writing as above provided.

ARTICLE XXXIII

APPRAISAL

If it becomes necessary to determine the Fair Market Value, the Fair Market
Value Purchase Price or the Fair Market Added Value of any Property, each party,
within ten (10) Business Days following the date of the event which makes such
determination necessary, shall, by notice to the other, appoint an appraiser
(each of whom must be a member of the AIREA and adhere to the USPAP standards in
the preparation of the appraisal). The appraisers thus appointed shall appoint a
third appraiser (such third appraiser must also be a member of the AIREA and
adhere to the USPAP standards in the preparation of the appraisal) and such
third appraiser shall appraise such Property to determine the Fair Market Value
Purchase Price or Fair Market Added Value thereof; provided, however, that if a
party fails to appoint an appraiser within such required period, the sole
appraiser appointed shall conduct the appraisal and the parties shall use
commercially reasonable efforts to cause such appraisal to be completed within
forty-five (45) days following the event which makes such determination
necessary. This provision for determination by appraisal shall be specifically
enforceable to the extent such remedy is available under applicable law, and any
determination hereunder shall be final and binding upon the parties except as
otherwise provided by applicable law. Lessor and Lessee shall each pay one-half
(1/2) of all costs and expenses incurred in connection with such appraisal. Any
appraisal shall assess the Fair Market Value Purchase Price or Fair Market Added
Value of the applicable Property as of the date of the event which makes such
assessment necessary.

ARTICLE XXXIV

PURCHASE RIGHTS

34.1 Lessee’s Option to Purchase. So long as (i) at the time of the giving of
the notification described below no Event of Default has occurred and is
continuing, and no event has then occurred which with the giving of notice or
the passage of time or both would constitute an Event of Default, and (ii) no
Event of Default has occurred and is continuing at the time of the closing of
the purchase described below, at the expiration of the Term of this Lease,
Lessee shall have the option, to be exercised by written notice to the Lessor no
sooner than five hundred forty-five (545) days, and no later than three hundred
sixty-five (365) days, prior to the expiration of the Term of this Lease, to
purchase the entire Leased Property, and not less than the

 

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entire Leased Property, at a purchase price equal to the Option Price for the
entire Leased Property. In the event Lessee exercises the option to purchase the
Leased Property as provided in this Section 34.1, (i) the terms set forth in
Article XVIII shall apply, (ii) Lessee shall continue paying Rent as required
under this Lease until the purchase is closed, and (iii) the sale/purchase shall
be closed following the expiration of the Term and within thirty (30) days after
such expiration of the Term.

34.2 Lessor’s Option to Purchase Lessee’s Personal Property. With respect to any
Facility, upon prior written notice to Lessee, Lessor shall have the option to
purchase all (but not less than all) of the Facility Lessee’s Personal Property
relating to such Facility, if any, at the expiration or earlier termination of
this Lease with respect to such Facility, for an amount equal to the lesser of
(i) the depreciated cost of Lessee’s Personal Property relating to such
Facility, or (ii) the net sound insurable value thereof (current replacement
cost less accumulated depreciation on the books of Lessee pertaining thereto),
as determined in the good faith, reasonable discretion of Lessor, subject to,
and with appropriate price adjustments for, all equipment leases, conditional
sale contracts, security interests and other encumbrances to which such Lessee’s
Personal Property is subject. Notwithstanding anything contained in this
Section 34.2 to the contrary, the options to purchase granted under this
Section 34.2 do not pertain to any of the Licenses, it being understood and
agreed that all matters relating to the transfer of the Licenses are addressed
in Article XXXVIII.

ARTICLE XXXV

SUBSTITUTION RIGHTS

35.1 Lessee’s Property Substitution Right. Subject to its satisfaction of the
conditions precedent to such right set forth in Section 35.2 and to all other
terms and conditions hereof, Lessee is hereby granted the right, at any time
during the Term, so long as no Event of Default then exists, and no event has
then occurred which with the giving of notice or the passage of time or both
would constitute an Event of Default, (a) to cause this Lease to be amended to
release any Property (the “Eliminated Property”) from this Lease and to convey
the same to Lessee or its Affiliate, concurrently with (b) the conveyance of a
Substitute Property to Lessor and the execution of an amendment adding such
Substitute Property to the Leased Property under this Lease (a “Property
Substitution”).

35.2 Conditions Precedent to Lessee’s Property Substitution Right. The right of
Lessee to effect a Property Substitution is subject to satisfaction by Lessee,
or waiver by Lessor, in its sole and absolute discretion, of each of the
following:

(a) Lessee shall have given Lessor notice of such proposed Property Substitution
not less than sixty (60) days prior to the proposed Property Substitution Date.
Any notice from Lessee to Lessor concerning a proposed Property Substitution
shall include the following:

(i) notice of the Property Substitution Date proposed by Lessee and Lessee’s
Affiliate proposed to be the operator of the Substitute Property;

 

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(ii) the Fair Market Value of the Substitute Property is not less than the Fair
Market Value of such Eliminated Property, as determined in the good faith,
reasonable discretion of Lessor;

(iii) a title insurance commitment from a title insurance company of recognized
standing undertaking to issue to Lessor or its designee, at Lessee’s expense, an
ALTA Owner’s extended coverage policy of title insurance with respect to the
proposed fee real property interests included in the Substitute Property and in
the amount of the Fair Market Value thereof, confirming that upon conveyance
thereof to Lessor or its designee, such transferee will hold good and marketable
title to the proposed Substitute Property, free and clear of title defects,
liens, encumbrances and burdens which are not acceptable to such transferee in
its sole discretion;

(iv) a written Phase I Environmental Assessment (and if necessary, a Phase II
Assessment) of the proposed Substitute Property, prepared by an environmental
consulting firm reasonably acceptable to Lessor not more than one hundred twenty
(120) days prior to the proposed Property Substitution Date;

(v) a current as-built survey of the real property included in the proposed
Substitute Property;

(vi) an engineering and architectural inspection of the buildings and other
improvements included in the proposed Substitute Property prepared by an
engineering firm reasonably acceptable to Lessor not more than one hundred
twenty (120) days prior to the proposed Property Substitution Date, confirming
that the proposed Substitute Property is in a good and safe condition and does
not require modifications or repairs costing more than Two Percent (2%) of the
Fair Market Value thereof during the first (1st) twelve (12) months after the
effective date of such Property Substitution;

(vii) a list of all material leases and contracts pertaining to the proposed
Substitute Property, together with copies of any such agreements which have a
term of more than one (1) year or which involve payment of consideration in
excess of Fifty Thousand and No/100 Dollars ($50,000) in any twelve (12) month
period;

(viii) a list of all material accreditations, permits, authorizations and
approvals of accreditation agencies and federal, state and local agencies
pertaining to the proposed Substitute Property and to the Hospital location and
related facilities located and operated thereon, together with copies of all
such accreditation, permits, authorizations and approvals;

 

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(ix) a copy of the most recent Joint Commission survey of the Hospital location
operated on the proposed Substitute Property; and

(x) financial information concerning the Substitute Property sufficient to
demonstrate the financial performance of the Substitute Property either (A) in
form and level of detail acceptable to Lessor in its sole and absolute
discretion, or (B) if Lessee’s Affiliate shall have operated the Substitute
Property for at least the preceding two (2) fiscal years, presented in a form
and level of detail reasonably acceptable to Lessor;

(b) the proposed Substitute Property shall have a Fair Market Value of no less
than the Fair Market Value of the Eliminated Property, as determined in the good
faith, reasonable discretion of Lessor; and

(c) the acquisition of the proposed Substitute Property shall have been approved
by MPT’s Board of Directors in accordance with its then existing general
underwriting guidelines for investments in hospitals and related facilities in
effect at such time.

35.3 Procedures for Property Substitution. On the Property Substitution Date,
Lessee and Lessor and/or their respective Affiliates shall take the following
actions:

(a) Lessee and Lessor will execute instruments in mutually agreeable form
(i) terminating the Lease with respect to the Eliminated Property, except for
such obligations which expressly survive any such termination, and adding such
Substitute Property to the Leased Property under this Lease;

(b) Lessor will convey the Eliminated Property to Lessee or its designee on an
“as is” and “where is” basis in the manner and on the terms set forth in Article
XVIII;

(c) Lessee or its Affiliate will convey the Substitute Property to Lessor or its
Affiliate by special warranty deed, which conveyance will be accompanied by ALTA
Owner’s title insurance policy as contemplated by Section 35.2(a)(iii) above;
and

(d) Lessee, its Affiliates and the Guarantors shall deliver to Lessor the Other
Credit Enhancements as shall be necessary to provide Lessor with the security
and credit enhancements comparable, in Lessor’s reasonable discretion, to those
provided in the other Obligation Documents which pertain to the Substitute
Lease.

As soon as practicable after the Property Substitution Date, Lessee will
reimburse Lessor and its Affiliates for all documented, out-of-pocket expenses
incurred by Lessor and its Affiliates in connection with such Property
Substitution.

 

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ARTICLE XXXVI

FINANCING OF THE LEASED PROPERTY

Lessor agrees that, if it grants or creates any mortgage, lien, encumbrance or
other title retention agreement (“Liens”) upon any Property after the
Commencement Date, Lessor will obtain an agreement from the holder of each such
Lien whereby such holder agrees (a) to give the Facility Lessee which operates
such Property the same notice, if any, given to Lessor of any default or
acceleration of any obligation underlying any such Lien or any sale in
foreclosure of such Lien, (b) to permit such Facility Lessee, after twenty
(20) days’ prior written notice, to cure any such default on Lessor’s behalf
within any applicable cure period, (c) to permit such Facility Lessee to appear
with its representatives and to bid at any foreclosure sale with respect to any
such Lien, (d) that, if subordination by such Facility Lessee is requested by
the holder of each such Lien, to enter into an agreement with such Facility
Lessee containing the provisions described in Article XXXVII, and (e) to execute
and deliver to such Facility Lessee a written agreement consenting to this Lease
and agreeing that, notwithstanding any such other Facility Instrument or any
default, expiration, termination, foreclosure, sale, entry or other act or
omission thereunder, such Facility Lessee shall not be disturbed in peaceful
enjoyment of such portion of the Leased Property nor shall this Lease be
terminated or canceled at any time, except in accordance with Article XVI as a
result of an Event of Default. No Facility Lessee shall be subordinated to the
holder of a Lien unless both conditions of clause (d) and (e) above are met.

ARTICLE XXXVII

SUBORDINATION AND NON-DISTURBANCE

At the request from time to time by one or more Facility Lenders with respect to
any Facility Lessee, within twenty (20) days from the date of request, such
Facility Lessee shall execute and deliver within such twenty (20)-day period, to
such Facility Lender, an estoppel certificate along with a written agreement in
form and content reasonably acceptable to such Facility Lender and Facility
Lessee whereby, as to any Property of such Facility Lessee encumbered by a
Facility Instrument of such Facility Lender, such Facility Lessee subordinates
this Lease and all of its rights and estate hereunder to each such Facility
Instrument and agrees with each such Facility Lender that such Facility Lessee
will attorn to and recognize such Facility Lender or the purchaser at any
foreclosure sale or any sale under a power of sale contained in any such
Facility Instrument, as the case may be, as Lessor under this Lease with respect
to such Property for the balance of the Term then remaining, subject to all of
the terms and provisions of this Lease; provided, however, that the applicable
MPT Real Estate Owner and each such Facility Lender simultaneously executes and
delivers to such Facility Lessee a written agreement in form and content
reasonably acceptable to such Facility Lender and Facility Lessee consenting to
this Lease and agreeing that, notwithstanding any such other mortgage, deed of
trust, right, title or interest, or any default, expiration, termination,
foreclosure, sale, entry or other act or omission under, pursuant to or
affecting any of the foregoing, such Facility Lessee shall not be disturbed in
peaceful enjoyment of such Property nor shall this Lease be terminated or
canceled at any time, except as a result of an Event of Default.

 

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ARTICLE XXXVIII

LICENSES

38.1 Maintenance of Licenses. With respect to each Facility, each Facility
Lessee (a) shall maintain at all times during the Term and any holdover period,
(i) the Operating Agreements, (ii) the Participation Agreements and (iii) all
applicable federal, state and local governmental licenses, approvals,
qualifications, variances, certificates of need, franchises, accreditations,
certificates, certifications, consents, permits and other authorizations and
contracts, including provider numbers and provider agreements with governmental
or quasi-governmental entities and other third parties, which may be necessary
for the operation of the Facility operated by such Facility Lessee for the
Primary Intended Use, or required for certification and participation under
Medicare and Medicaid legislation and regulations, the provider programs of the
State Regulatory Authorities for each particular Facility (“DHS”), the United
States Department of Health and Human Services (“DHHS”), and the Centers for
Medicare and Medicaid Services (“CMS”), and/or state or federal Title XVIII
and/or Title XIX provider programs applicable for each such Facility (the items
described in this subsection (iii), collectively, the “Licenses”) (provided,
however, no Facility Lessee shall be required to maintain any Operating
Agreements or Participation Agreements unless such agreements are required for
participation in Medicare and Medicaid programs and/or required for the
maintenance of federal, state and local licenses); (b) shall remain in
compliance with all state and federal laws, rules, regulations and procedures
with regard to the operation of the Facility operated by such Facility Lessee,
including, without limitation, HIPAA and the regulations promulgated by the
State Regulatory Authorities, as applicable for each such Facility, as they may
from time to time exist; and (c) shall operate the Facility operated by such
Facility Lessee in a manner consistent with quality acute care services and
sound reimbursement principles under the Medicare and/or Medicaid programs and
as required under state and federal law.

38.2 No Transfers or Alterations of Licenses. Except in connection with a
permitted assignment of this Lease, Lessee covenants and agrees that during the
Term it shall not, without the prior written consent of Lessor, which consent
shall not be unreasonably withheld, conditioned or delayed, (a) sell, move,
modify (including, without limitation, the establishment of a “provider-based”
network or similar arrangement), cancel, surrender, transfer, assign, sell,
relocate, pledge, secure, convey or in any manner encumber any License, or
(b) effect or attempt to effect any change in the license category or status of
any Facility or any part thereof.

38.3 Notifications; Corrective Actions. Each Facility Lessee shall notify Lessor
in writing within five (5) Business Days after such Facility Lessee’s receipt of
any notice, action, proceeding or inquiry of any governmental agency, bureau or
other authority, whether federal, state or local, of any kind, nature or
description, which could adversely affect any material License for the Facility
operated by such Facility Lessee, or the ability of such Facility Lessee to
maintain its status as the licensed and accredited operator of such Facility, or
which alleges any material noncompliance with any law. At the time of delivery
of such notification to Lessor, such Facility Lessee shall furnish Lessor with a
copy of any and all such notices or inquiries. Each Facility Lessee shall act
diligently to correct any deficiency or deal effectively with any

 

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“adverse action” or other proceedings, inquiries or other governmental actions,
so as to maintain the Licenses and Medicare and/or Medicaid certification,
status for the Facility operated by such Facility Lessee in good standing at all
times. No Facility Lessee shall agree to any settlement exceeding Four Million
and No/100 Dollars ($4,000,000.00) or other action with respect to such
proceedings or inquiries which affects the use of all or any portion of the
Leased Property or any part thereof for the Primary Intended Use without the
prior written consent of Lessor, which consent shall not be unreasonably
conditioned or delayed.

38.4 Termination of Lease. UPON THE TERMINATION OF THIS LEASE OR LESSEE’S RIGHT
OF POSSESSION HEREUNDER WITH RESPECT TO ANY ONE OR MORE PROPERTIES (ASSUMING
LESSEE DOES NOT PURCHASE THE LEASED PROPERTY AS PROVIDED HEREIN), WITHOUT ANY
ADDITIONAL CONSIDERATION TO ANY FACILITY LESSEE, THE APPLICABLE FACILITY LESSEE
SHALL, FOR REASONABLE PERIODS OF TIME AFTER SUCH TERMINATION, USE ITS BEST
EFFORTS TO FACILITATE AN ORDERLY TRANSFER OF THE OPERATION AND OCCUPANCY OF SUCH
PROPERTY TO LESSOR OR ITS DESIGNEE, AND SUCH COOPERATION SHALL INCLUDE, WITHOUT
LIMITATION, (1) SUCH FACILITY LESSEE’S EXECUTION AND SUBMISSION TO THE
APPROPRIATE AUTHORITY OF ANY AND ALL DOCUMENTS REQUIRED TO EFFECT THE TRANSFER,
ISSUANCE OR ASSIGNMENT TO LESSOR OR ITS DESIGNEE OF ANY AND ALL LICENSES,
INCLUDING ALL MEDICARE AND MEDICAID PROVIDER NUMBERS AND PROVIDER AGREEMENTS,
(2) SUCH FACILITY LESSEE’S MAINTENANCE OF THE EFFECTIVENESS OF ANY AND ALL SUCH
LICENSES UNTIL SUCH TIME AS ANY NEW LICENSES NECESSARY FOR ANY NEW LESSEE OR
OPERATOR TO OPERATE THE FACILITY OPERATED BY SUCH FACILITY LESSEE HAVE BEEN
ISSUED, AND (3) THE TAKING OF SUCH OTHER ACTIONS AS REASONABLY REQUESTED BY
LESSOR OR REQUIRED BY APPLICABLE LAW; IT BEING UNDERSTOOD AND AGREED THAT THE
PERFORMANCE OR EXERCISE OF ANY OF THE FOREGOING RIGHTS, REMEDIES, DUTIES AND
OBLIGATIONS SHALL BE WITHOUT ANY ADDITIONAL CONSIDERATION TO SUCH FACILITY
LESSEE.

38.5 Material Condition of Lease. IT IS AN INTEGRAL CONDITION OF THIS LEASE, AND
A MATERIAL INDUCEMENT TO LESSOR’S AGREEMENT TO ENTER INTO THIS LEASE, THAT EACH
FACILITY LESSEE ACKNOWLEDGES AND AGREES TO COOPERATE WITH AND ASSIST LESSOR
AND/OR ITS DESIGNEE IN CONNECTION WITH ANY TRANSFER OF THE LICENSES OR THE
OPERATIONS OF THE FACILITIES IN ACCORDANCE WITH THIS ARTICLE XXXVIII. INCLUDING,
WITHOUT LIMITATION, IN CONNECTION WITH A TERMINATION OF THIS LEASE OR REMOVAL OF
LESSEE FROM POSSESSION OF ONE OR MORE PROPERTIES IN THE MANNER SET FORTH IN
SECTION 38.4 ABOVE, WHICH COOPERATION AND ASSISTANCE SHALL BE WITHOUT ANY
ADDITIONAL CONSIDERATION TO LESSEE.

 

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ARTICLE XXXIX

INTENTIONALLY OMITTED

ARTICLE XL

MISCELLANEOUS

40.1 General. If any term or provision of this Lease or any application thereof
shall be invalid or unenforceable, the remainder of this Lease and any other
application of such term or provision shall not be affected thereby. If any late
charges provided for in any provision of this Lease are based upon a rate in
excess of the maximum rate permitted by applicable law, the parties agree that
such charges shall be fixed at the maximum permissible rate. All the terms and
provisions of this Lease shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns (subject to Article XXIII);
provided, however, that (a) this Lease shall not inure to the benefit of any
assignee pursuant to an assignment which violates the terms of this Lease and
(b) neither this Lease nor any other document or agreement contemplated under
this Lease shall be deemed to confer upon any Person not a party to this Lease
any rights or remedies contained in this Lease. The headings in this Lease are
for convenience of reference only and shall not limit or otherwise affect its
meaning.

40.2 Bankruptcy Waivers.

(a) Unitary and Non-Severable Lease. The parties agree that for the purposes of
any assumption, rejection or assignment of this Lease under 11 U.S.C.
Section 365 or any amendment or successor section thereof, this is one
indivisible and non-severable lease dealing with and covering one legal and
economic unit which must be assumed, rejected or assigned as a whole with
respect to all (and only all) the Leased Property covered hereby.

(b) Relief from Stay. Lessee acknowledges and agrees that in the event any
Lessee or any Leased Property relating to any Facility shall become the subject
of any bankruptcy or insolvency estate, then (i) Lessee shall not oppose any
request by Lessor to obtain an order from the court granting relief from the
automatic stay pursuant to Section 362 of the Bankruptcy Code so as to permit
the exercise of all rights and remedies pursuant to this Lease, and (ii) the
occurrence or existence of any Event of Default under this Lease shall, in and
of itself, constitute “cause” for relief from the automatic stay pursuant to the
provisions of Section 362(d)(1) of the Bankruptcy Code, based on the fact that
the non-existence of a bankruptcy proceeding was a material inducement for the
entry by Lessor into this Lease.

(c) Automatic Stay. Lessee hereby waives the stay imposed by 11 U.S.C.
Section 362(a) as to actions by the Lessor against each Facility. Lessee
acknowledges and agrees that in the event of the filing of any voluntary or
involuntary petition in bankruptcy by or against Lessee, it shall not assert or
request that any other party assert that the automatic stay provided by
Section 362 of the Bankruptcy Code shall operate or be interpreted to stay,
interdict, condition, reduce or inhibit the ability of Lessor to enforce any
rights or remedies held by virtue of the Lease or applicable law.

 

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(d) Patient Care Ombudsman. Lessee hereby agrees (i) to use its best efforts to
contest the necessity of the appointment of a Patient Care Ombudsman for such
Facility as that term is defined in 11 U.S.C. Section 333, and/or (ii) to join
with Lessor in requesting a waiver of or contesting the appointment of such a
Patient Care Ombudsman.

40.3 Lessor’s Expenses. In addition to the other provisions of this Lease,
including, without limitation, Section 16.2 hereof, Lessee agrees and shall pay
and/or reimburse Lessor and its Affiliates’ reasonable documented, out-of-pocket
costs and expenses, including, without limitation, the costs and expenses of
reports and investigations and reasonable legal fees and expenses attributable
to an Event of Default and Lessor’s pursuing the rights and remedies provided
herein and under applicable law, incurred or resulting from or relating to
(a) requests by Lessee for approval or consent under this Lease or any other
Obligation Document (including any consents relating to management, the placing
of liens on Lessee’s Personal Property and any intercreditor issues which arise
in connection with any Material Obligation), (b) any circumstances or
developments which give rise to Lessor or its Affiliates’ right of consent or
approval under this Lease or any other Obligation Document, (c) circumstances
resulting from any action or inaction by Lessee contrary to the lease
provisions, (d) any Property Substitution, (e) a request for changes, including,
but not limited to, (i) the permitted use of the Leased Property,
(ii) alterations and improvements to the Leased Improvements, (iii) subletting
or assignment, and (iv) any other changes in the terms, conditions or provisions
of this Lease or any other Obligation Document, and (f) enforcement by Lessor or
its Affiliates of any of the provisions of this Lease or any other Obligation
Document. Such expenses and fees shall be paid by Lessee within thirty (30) days
of the submission of a statement for the same or such amount(s) shall be subject
to a late charge computed at the Overdue Rate from the expiration of said thirty
(30) day period to the date of payment, plus a Late Payment Penalty with respect
to such unpaid amount.

40.4 Entire Agreement; Modifications. This Lease, together with all exhibits,
schedules and the other documents referred to herein, embody and constitute the
entire understanding between the parties with respect to the transactions
contemplated herein, and all prior and contemporaneous agreements,
understandings, representations and statements (oral or written) are merged into
this Lease. Neither this Lease, any exhibit or schedule attached hereto, nor any
provision hereof or thereof may be modified or amended except by an instrument
in writing signed by Lessor and Lessee.

40.5 Lessor Securities Offering and Filings. Notwithstanding anything contained
herein to the contrary, Lessee shall, at Lessor’s sole costs and expense,
cooperate with Lessor in connection with any securities offerings and filings,
or Lessor’s efforts to procure or maintain financing for, or related to, the
Leased Property, or any portion thereof and, in connection therewith, Lessee
shall furnish Lessor, in a timely fashion, with such financial and other
information (including audited financial statements and consents of auditors) as
Lessor shall reasonably request. Lessor shall reimburse the Lessee for any and
all reasonable incremental costs (i.e., reasonable costs not otherwise incurred
by the Lessee with respect to the normal preparation of such financial
statements for other purposes) incurred in furnishing, or causing its

 

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accountants to furnish, such financial statements and consents. Lessor may
disclose that Lessor has entered into this Lease with Lessee and may provide and
disclose information regarding this Lease, Lessee, the Guarantors, the Leased
Property and each Facility, and such additional information which Lessor may
reasonably deem necessary, to its proposed investors in such public offering or
private offering of securities, or any current or prospective lenders with
respect to such financing, and to investors, analysts and other parties in
connection with earnings calls and other normal communications with investors,
analysts, and other parties. Upon reasonable advance notice, Lessor, its legal
and financial representatives, and any lender providing financing for all or any
portion of the Leased Property shall have the right, subject to the execution of
a written confidentiality agreement on terms reasonably acceptable to Lessor,
such lender and Lessee, to access, examine and copy all agreements, records,
documentation and information relating to Lessee, the Guarantors, and such
Leased Property, and to discuss such affairs and information with the officers,
employees and independent public accountants of Lessee as often as reasonably
necessary. The additional costs of Lessee in complying with the foregoing shall
be reimbursed to Lessee by Lessor.

40.6 Non-Recourse as to Lessor. Anything contained herein to the contrary
notwithstanding, any claim based on, or in respect of, any liability of Lessor
under this Lease shall be enforced only against the Leased Property and any
proceeds therefrom and not against any other assets, properties or funds of
(i) Lessor, (ii) any director, officer, general partner, member, shareholder,
limited partner, beneficiary, employee, representative, contractor or agent of
Lessor or any of its Affiliates (collectively, the “Lessor Parties”) (or any
legal representative, heir, estate, successor or assign of Lessor or any of the
Lessor Parties), (iii) any predecessor or successor partnership or corporation
(or other entity) of Lessor or any of the Lessor Parties, either directly or
through Lessor or the Lessor Parties, or (iv) any person or entity affiliated
with any of the foregoing. In no event shall Lessor or any of the Lessor Parties
be liable for indirect, incidental, consequential, special, punitive or
exemplary damages, regardless of the form of action, whether in contract, tort
or otherwise, and even if such party has been advised of the possibility of such
damages.

40.7 Covenants, Restrictions and Reciprocal Easements. Subject to the Master
Lease and the Oklahoma Ground Lease, and Lessee’s consent, which consent shall
not be unreasonably withheld, conditioned, or delayed, and notwithstanding
anything herein to the contrary, Lessor shall have the right, but not the
obligation, to place of record all covenants, restrictions and reciprocal
easements on all or any portion of the Land (collectively, the “Declarations”)
which Lessor deems reasonably necessary for the ownership of any Property, with
such Declarations to be in form and content acceptable to Lessor in its
reasonable discretion.

40.8 Force Majeure. Except for Rent and other monetary obligations payable
pursuant to the terms of this Lease (which shall not be extended or excused), in
the event that Lessor or Lessee shall be delayed, hindered in or prevented from
the performance of any act required under this Lease by reason of strikes,
lockouts, labor troubles, or other industrial disturbances, inability to procure
materials, failure of power, unavailability of any utility service, restrictive
governmental laws or regulations, acts of public enemies, war, blockades, riots,
insurrections, earthquakes, fires, storms, floods, civil disturbances,
weather-related acts of God, failure to act, or default of

 

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another party, or other reason beyond Lessor’s or Lessee’s control (individually
“Force Majeure”), then performance of such act shall be excused for the period
of the delay, and the period of the performance of any such act shall be
extended for a period equivalent to the period of such delay. Within ten
(10) Business Days following the occurrence of Force Majeure, the party claiming
a delay due to such event shall give written notice to the other setting forth a
reasonable estimate of such delay.

40.9 Management Agreements. Lessee shall not engage, terminate or remove any
Management Company, without Lessor’s prior written consent, which consent shall
be in Lessor’s sole discretion; provided, however, that Lessor hereby approves
Sunergeo Health as the current Management Company for the Facilities. At the
request of Lessor, from time to time Lessee shall execute and deliver a
subordination agreement relating to any Management Agreement entered into after
the date hereof, which shall be in substantially the form of the Subordination
of Management Agreement attached hereto as Exhibit E (the “Subordination
Agreement”). Lessee shall execute and deliver such Subordination Agreement to
Lessor within ten (10) Business Days after Lessor’s request. Lessee agrees that
execution of a subordination agreement in substantially the form of the
Subordination Agreement shall be a precondition to Lessee entering into any
future Management Agreement. Lessee shall require any Management Company to
execute and deliver to Lessor within ten (10) Business Days from Lessor’s
request an estoppel certificate, as required by Lessor and/or any Facility
Lender, in such form and content as is reasonably acceptable to Lessor and/or
such Facility Lender.

40.10 Lessee Non-Competition.

(a) Each Facility Lessee agrees that while the Lease is in place and, if such
Lease is terminated due to an Event of Default by Lessee, then for a period of
three (3) years thereafter (the “Noncompete Period”), no Facility Lessee shall,
directly or indirectly, acquire, finance, guarantee indebtedness, own, lease,
manage, develop or provide services in connection with the acquisition,
ownership, operation or development of any real estate located within ten
(10) miles of any point on or within any Property, which real estate is used in
a Competing Business. Any violation of the provisions of this Section 40.10
shall suspend the Noncompete Period for the duration of such violation.
“Competing Business” shall mean any healthcare business which involves the
provision of general acute care services, long term care services,
rehabilitation services and skilled nursing; provided, however, that the
foregoing shall not prohibit any Facility Lessee from acquiring, owning,
operating or developing real estate, the acquisition, ownership, operation or
development of which by such Facility Lessee will not have an adverse effect on
the applicable Property, the ability of such Facility Lessee to perform its
obligations under this Lease, or the ability of each of the Borrower Affiliates
to perform their obligations under the Mortgage Loan Documents, all as
determined in the reasonable discretion of Lessor and MPT Real Estate Owner.

(b) Lessee agrees that the restrictions contained herein are reasonable and
necessary to protect the legitimate interests of Lessor and MPT Real Estate
Owner, and that any violation of the provisions would result in damages which
cannot be adequately compensated by money

 

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alone. Lessee agrees that Lessor and MPT Real Estate Owner will be entitled to
injunctive or other equitable relief without proving actual damages or posting
any bond in the event of any violation of the restrictions contained herein;
provided, however, that the foregoing shall not limit or be construed to
prohibit or limit the right of Lessor and MPT Real Estate Owner to pursue any
other legal and equitable remedies available to it on account of such breach or
violation, including the recovery of damages from Lessee.

(c) If any court shall hold that the duration or scope of this Section 40.10
(geographic or otherwise) is unreasonable or invalid, then the provisions of
this Section 40.10 shall remain in effect for whatever time period or geographic
area that such court does not declare to be unreasonable or invalid. In
addition, if any court shall hold that the duration or scope (geographic or
otherwise) of this Section 40.10 is unreasonable or invalid, then, to the extent
permitted by law, the court may prescribe a maximum duration or scope
(geographic or otherwise) that is judicially enforceable and not unreasonable
and the parties agree to accept such judicial determination, which the parties
agree shall be substituted in place of any and every judicially unenforceable
provision of this Section 40.10, and that this Section 40.10, as so modified,
shall be fully enforceable as if originally executed in such manner.

(d) The terms of this Section 40.10 are intended to comply with all applicable
rules and regulations of all governmental and regulating authorities.
Accordingly, the parties agree to renegotiate, in good faith, any term,
condition or provision of this Section 40.10 determined to be in contravention
of any regulation, policy or law of any such authority. All other provisions
hereof shall remain enforceable to the fullest extent permitted by law.

40.11 Lessor Non-Competition.

(a) Each Facility Lessor agrees that while the Lease is in place (the “Lessor
Noncompete Period”) no Facility Lessor shall, directly or indirectly, acquire,
finance, guarantee indebtedness, own, lease, manage, develop or provide services
in connection with the acquisition, ownership, operation or development of any
real estate located within ten (10) miles of any point on or within (i) any
Property subject to this Lease, (ii) any “Property” subject to an Affiliate
Separate Lease or (iii) any “Property” subject to a Real Estate Mortgage, which
real estate or any portion thereof is utilized as a general acute care hospital
or ambulatory surgery center. Any violation of the provisions of this
Section 40.11 shall suspend the Lessor Noncompete Period for the duration of
such violation; provided, however, that the foregoing shall not prohibit any
Facility Lessor from acquiring, owning, operating or developing real estate, the
acquisition, ownership, operation or development of which by such Facility
Lessor will not have an adverse effect on the applicable Property, the ability
of Lessee to perform its obligations under this Lease, or the ability of each of
the Borrower Affiliates to perform their obligations under the Mortgage Loan
Documents, all as determined in the reasonable discretion of Lessee.

(b) Lessor agrees that the restrictions contained herein are reasonable and
necessary to protect the legitimate interests of Lessee and that any violation
of the provisions would result

 

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in damages which cannot be adequately compensated by money alone. Lessor agrees
that Lessee will be entitled to injunctive or other equitable relief without
proving actual damages or posting any bond in the event of any violation of the
restrictions contained herein; provided, however, that the foregoing shall not
limit or be construed to prohibit or limit the right of Lessee to pursue any
other legal and equitable remedies available to it on account of such breach or
violation, including the recovery of damages from Lessor.

(c) If any court shall hold that the duration or scope of this Section 40.11
(geographic or otherwise) is unreasonable or invalid, then the provisions of
this Section 40.11 shall remain in effect for whatever time period or geographic
area that such court does not declare to be unreasonable or invalid. In
addition, if any court shall hold that the duration or scope (geographic or
otherwise) of this Section 40.11 is unreasonable or invalid, then, to the extent
permitted by law, the court may prescribe a maximum duration or scope
(geographic or otherwise) that is judicially enforceable and not unreasonable
and the parties agree to accept such judicial determination, which the parties
agree shall be substituted in place of any and every judicially unenforceable
provision of this Section 40.11, and that this Section 40.11, as so modified,
shall be fully enforceable as if originally executed in such manner.

(d) The terms of this Section 40.10 are intended to comply with all applicable
rules and regulations of all governmental and regulating authorities.
Accordingly, the parties agree to renegotiate, in good faith, any term,
condition or provision of this Section 40.10 determined to be in contravention
of any regulation, policy or law of any such authority. All other provisions
hereof shall remain enforceable to the fullest extent permitted by law

40.12 Governing Law. THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND
PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PRINCIPLES.
NOTWITHSTANDING THE FOREGOING, ALL PROVISIONS OF THIS LEASE RELATING TO THE
CREATION OF THE LEASEHOLD ESTATE AND ALL REMEDIES SET FORTH IN ARTICLE XVI
RELATING TO THE RECOVERY OF POSSESSION OF THE LEASED PROPERTY (SUCH AS AN ACTION
FOR UNLAWFUL DETAINER OR OTHER SIMILAR ACTION) SHALL BE GOVERNED BY, CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE LEASED
PROPERTY IS LOCATED.

40.13 Jurisdiction and Venue. LESSOR AND LESSEE CONSENT TO PERSONAL JURISDICTION
IN THE STATE OF DELAWARE. EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION 40.13,
LESSOR AND LESSEE AGREE THAT ANY ACTION OR PROCEEDING ARISING FROM OR RELATED TO
THIS LEASE SHALL BE BROUGHT AND TRIED EXCLUSIVELY IN THE STATE OR FEDERAL COURTS
OF DELAWARE. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
OBJECTION TO THE LAYING OF VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT. LESSOR AND LESSEE EXPRESSLY ACKNOWLEDGE THAT DELAWARE IS A FAIR,
JUST AND REASONABLE FORUM

 

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AND AGREE NOT TO SEEK REMOVAL OR TRANSFER OF ANY ACTION FILED BY THE OTHER PARTY
IN SAID COURTS. FURTHER, LESSOR AND LESSEE IRREVOCABLY AND UNCONDITIONALLY WAIVE
ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY
CERTIFIED MAIL ADDRESSED TO A PARTY AT THE ADDRESS DESIGNATED PURSUANT TO
ARTICLE XXXII SHALL BE EFFECTIVE SERVICE OF PROCESS AGAINST SUCH PARTY FOR ANY
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT MAY BE ENFORCED IN ANY OTHER
COURT TO WHOSE JURISDICTION ANY OF THE PARTIES IS OR MAY BE SUBJECT.
NOTWITHSTANDING THE FOREGOING, THE PARTIES FURTHER AGREE THAT ALL ACTIONS AND
PROCEEDINGS RELATING TO THE CREATION OF THE LEASEHOLD ESTATE AND ALL REMEDIES
RELATING TO THE RECOVERY OF POSSESSION OF ALL OR ANY PORTION OF THE LEASED
PROPERTY (SUCH AS AN ACTION FOR UNLAWFUL DETAINER OR OTHER SIMILAR ACTION) MAY
BE BROUGHT IN ANY STATE OR FEDERAL COURT OF THE STATE WHERE THE APPLICABLE
PORTION OF THE LEASED PROPERTY IS LOCATED.

40.14 True Operating Lease. Lessor and Lessee agree that this Lease is intended
as, and shall for all purposes (other than for accounting purposes under GAAP)
constitute a true operating lease and not a capital lease or financing and
nothing herein shall be construed as conveying to Lessee any right, title or
interest in or to the Leased Property or to any remainder or reversionary
estates in the Leased Property held by any Person, except, in each instance, as
a lessee. Under no circumstances shall this Lease be regarded as an assignment
of all of Lessor’s interest in and to the Leased Property; instead, Lessor and
Lessee shall have the relationship between them of Lessor and Lessee, pursuant
to the terms and provisions of this Lease. In no event shall Lessee or any
Affiliate of Lessee claim depreciation, amortization or interest deductions as
owner of any portion of the Leased Property for United States federal, state or
local income tax purposes (except as to Capital Additions not funded by Lessor).
It is an integral condition of this Lease, and a material inducement to Lessor’s
agreement to enter into this Lease, that Lessee agrees (other than for
accounting purposes under GAAP) this Lease is an operating lease and not a
capital lease or financing. Neither Lessor nor Lessee shall assert, and each
hereby waives, any right to demand, request or plead for the re-characterization
of this Lease or any other Obligation Document, whether or not in a proceeding
related to any bankruptcy or insolvency of Lessor or Lessee.

40.15 Regulatory Cooperation. If, in the reasonable judgment of MPT Real Estate
Owner or Lessor, MPT TRS, an Affiliate of Lessor, is prohibited by any laws or
regulations from owning all or any portion of its equity interest in Health
Holdings or from possessing or exercising any of its rights under the LLC
Agreement, then the parties shall restructure Lessor’s relationship with Lessee,
including possible modifications of this Lease and the other Obligation
Documents, so as to preserve the existing business and financial relationships
among them, provided any

 

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such modifications do not materially increase Lessee’s obligations under this
Lease or the Obligation Documents or materially diminish Lessee’s rights under
this Lease or the Obligation Documents. Lessor shall fully reimburse Lessee and
its Affiliates for any and all reasonable out-of-pocket costs, expenses or
liabilities arising out of, connected with or in any manner related to such
restructuring.

40.16 Compliance with Anti-Terrorism Laws. Lessor hereby notifies Lessee that
pursuant to the requirements of certain Anti-Terrorism Laws (including, without
limitation, the Patriot Act) and Lessor’s policies and practices, Lessor is
required to obtain, verify and record certain information and documentation that
identifies Lessee, its principals and Affiliates, which information includes the
name and address of Lessee, its principals and Affiliates, and such other
information that will allow Lessor to identify such parties in accordance with
the Anti-Terrorism Laws (including, without limitation, the Patriot Act). Lessee
will not, directly or indirectly, knowingly enter into any lease for the
operation of any part of a Facility or any other lease or any material contracts
with any person listed on the OFAC List. Lessee shall promptly notify Lessor if
Lessee has knowledge that Lessee or any of its principals or Affiliates or any
Guarantor is listed on the OFAC List or (a) is convicted on, (b) pleads nolo
contendere to, (c) is indicted on, or (d) is arraigned and held over on charges
involving money laundering or predicate crimes to money laundering. Lessee will
not, directly or indirectly (i) conduct any business or engage in any
transaction or dealing with any Blocked Person, including, without limitation,
the making or receiving of any contribution of funds, goods or services to or
for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked pursuant
to Executive Order No. 13224, any similar executive order or other
Anti-Terrorism Law, or (iii) engage in or conspire to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in Executive Order No. 13224, or
other Anti-Terrorism Law.

40.17 Electronically Transmitted Signatures. In order to expedite the execution
of this Lease, telecopied signatures or signatures sent by electronic mail may
be used in the place of original signatures on this Lease. The parties intend to
be bound by the signatures of the telecopied or electronically mailed
signatures, and hereby waive any defenses to the enforcement of the terms of
this Lease based on the form of the signature. Following any facsimile or
electronic mail transmittal, the party shall promptly deliver the original
instrument by reputable overnight courier in accordance with the notice
provisions of this Lease.

40.18 Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY LAW, LESSOR AND
LESSEE HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS LEASE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY OR ANY EXERCISE
OF ANY PARTY OF THEIR RESPECTIVE RIGHTS HEREUNDER OR IN ANY WAY RELATING TO THIS
LEASE OR THE LEASED PROPERTY (INCLUDING ANY CLAIM OR DEFENSE ASSERTING THAT THIS
LEASE WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS
A MATERIAL INDUCEMENT FOR LESSOR TO ENTER INTO THIS LEASE.

 

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40.19 Counterparts. This Lease may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same instrument.

40.20 Survival. Notwithstanding any provision of this Lease to the contrary, the
parties acknowledge and agree that, all claims against, and liabilities of,
Lessee or Lessor which relate to acts or omissions prior to the date of
expiration or termination of this Lease, and the covenants and obligations under
this Lease which expressly relate to periods after the expiration or earlier
termination of Lessee’s tenancy under this Lease, including, without limitation,
all indemnification obligations and those covenants and obligations described in
Sections 8.1 (final sentence only), 8.3 (final sentence only), 16.2, 38.4, 38.5
and 40.3, and Articles XVIII, XIX and XXII, shall survive such expiration or
earlier termination.

40.21 Continuation of Defaults. Notwithstanding any provision hereof to the
contrary, whenever in this Lease the phrases “continuing,” “continuation of” or
similar words or phrases are used in connection with Events of Default,
defaults, or events which with notice or passage of time would constitute Events
of Default, such phrases or words shall not be construed to create any right in
the Lessee to have additional periods of time to cure such defaults or Events of
Default other than those specific cure periods provided in this Lease.

40.22 Specific Performance. In addition to any rights and remedies available to
the parties hereunder or at law, each party shall be entitled to bring an action
for specific performance and to seek other equitable relief in connection with
any breach or violation, or any attempted breach or violation, of the provisions
of this Lease.

40.23 Joint Drafting. The parties hereto and their respective counsel have
participated in the drafting and redrafting of this Lease and the general rules
of construction which would construe any provisions of this Lease in favor of or
to the advantage of one party as opposed to the other as a result of one party
drafting this Lease as opposed to the other or in resolving any conflict or
ambiguity in favor of one party as opposed to the other on the basis of which
party drafted this Lease are hereby expressly waived by all parties to this
Lease.

40.24 Joint and Several Obligations. Each Facility Lessee shall be jointly and
severally liable for all of the liabilities and obligations of Lessee under this
Lease. Additionally, each Facility Lessee acknowledges and agrees that all of
the representations, warranties, covenants, obligations, conditions, agreements
and other terms contained in this Lease shall be applicable to and shall be
binding upon and enforceable against any one or more Facility Lessees.

40.25 Representations, Agreements and Covenants relating to Certain Properties.
Further representations, agreements and covenants regarding certain of the
Properties are set forth on Schedule 40.25 attached hereto and are hereby
incorporated herein by reference.

 

89

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40.26 Oklahoma Ground Lease. MPT Real Estate Owner has subleased the Oklahoma
Ground Leased Property to the Oklahoma Lessor and the Oklahoma Lessor hereby
subleases the Oklahoma Ground Leased Property to Lessee subject to the terms of
the Oklahoma Ground Lease and solely for the purpose of using the Oklahoma
Ground Leased Property in connection with the operation of the Oklahoma Facility
located thereon. Lessee shall perform and fulfill all of Lessor’s obligations
and responsibilities under the Oklahoma Ground Lease from and after the date
hereof and Lessee accepts, assumes and agrees to comply with, perform and
observe all of the terms, conditions, provisions, limitations and obligations
contained in the Oklahoma Ground Lease to be performed on the part of the Lessor
as lessee therein, including the payment of rent required under the Oklahoma
Ground Lease. Lessor and Lessee acknowledge and agree that in the event this
Lease is terminated or canceled for any reason (i) the Oklahoma Ground Lease and
all right, title and interest thereunder shall automatically revert to Lessor
pursuant to the Master Lease (provided, however, in the event Lessee has failed
to perform and pay all obligations under the Oklahoma Ground Lease, Lessee shall
indemnify and hold Lessor harmless for all such obligations as provided in
Article XXII hereof), and (ii) Lessee shall, immediately upon request by Lessor,
sign, acknowledge, provide and deliver to Lessor any and all documents,
instruments or other writings (all in recordable form) which are or may become
necessary, proper and/or advisable to cause the Oklahoma Ground Lease to revert
to Lessor as provided herein. Lessee shall not, without Lessor’s prior written
consent, which consent may be granted or denied in Lessor’s sole discretion
(i) assign, transfer or convey any interest, right or obligation in, to or under
the Oklahoma Ground Lease, (ii) sublease any portion of the Oklahoma Ground
Leased Property, (iii) terminate, modify, amend, restate or change in any way
the Oklahoma Ground Lease, or (iv) exercise any option to purchase the Oklahoma
Ground Leased Property. Lessee agrees that it will promptly upon receipt forward
to Lessor copies of all notices, requests, demands and other correspondence and
documents directed to and/or received from the Oklahoma Ground Lease Lessor.

ARTICLE XLI

MEMORANDUM OF LEASE

Lessor and Lessee shall, promptly upon the request of either, enter into a short
form memorandum of this Lease, in form suitable for recording under the laws of
the state in which the Leased Property is located, in which reference to this
Lease, the Term and all options contained herein, shall be made. The party
requesting recording shall pay any recording taxes and other costs in connection
therewith.

[Signatures appear on following pages.]

 

90

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IN WITNESS WHEREOF, the parties have caused this Lease Agreement to be executed
by their respective officers thereunto duly authorized.

 

LESSOR:

MPT OF HARTSVILLE-CAPELLA

HOSPITAL, LLC

MPT OF MCMINNVILLE-CAPELLA

HOSPITAL, LLC

MPT OF MUSKOGEE-CAPELLA HOSPITAL, LLC

By:   MPT Development Services, Inc. Its:   Sole Member of each above-referenced
entity By:   /s/ R. Steven Hamner Name:   R. Steven Hamner Its:   Executive Vice
President and CFO

[Sublease]

 

--------------------------------------------------------------------------------

LESSEE: HARTSVILLE, LLC By: Carolina Pines Holdings, LLC Its: Managing Member
By:   /s/ Michael A. Wiechart Name: Michael A. Wiechart Title: Chief Executive
Officer and President

MUSKOGEE REGIONAL MEDICAL

CENTER LLC

By:   /s/ Michael A. Wiechart Name: Michael A. Wiechart Title: Chief Executive
Officer and President

WILLAMETTE VALLEY MEDICAL

CENTER, LLC

By:   /s/ Michael A. Wiechart Name: Michael A. Wiechart Title: Chief Executive
Officer and President

[Sublease]

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Exhibit A-1

Oklahoma Owned Land

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Exhibit A-2

Oregon Land

--------------------------------------------------------------------------------

Exhibit A-3

South Carolina Land

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Exhibit A-4

Oklahoma Ground Leased Land

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Exhibit B-1

Permitted Exceptions – Oklahoma Owned Land

--------------------------------------------------------------------------------

Exhibit B-2

Permitted Exceptions – Oregon Land

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Exhibit B-3

Permitted Exceptions – South Carolina Land

--------------------------------------------------------------------------------

Exhibit B-4

Permitted Exceptions – Oklahoma Ground Leased Land

--------------------------------------------------------------------------------

Exhibit C

Lessee Representations and Warranties

Each Facility Lessee hereby represents and warrants to Lessor, jointly and
severally, that:

(a) it has full legal right, power and authority to enter into this Lease, to
incur the obligations provided for herein, and to execute and deliver the same
to Lessor;

(b) this Lease has been duly executed and delivered by such Facility Lessee and
constitutes such Facility Lessee’s valid and legally binding obligation,
enforceable against it in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, and similar laws affecting the enforcement of
creditor’s rights or contractual obligations generally and, as to enforcement,
to general principles of equity, regardless of whether applied in a proceeding
at law or in equity;

(c) no approval or consent of any foreign, federal, state, county, local or
other governmental or regulatory body, and no approval or consent of any other
person is required in connection with the execution and delivery by such
Facility Lessee of this Lease or the consummation and performance by such
Facility Lessee of the transactions contemplated hereby, except such approvals
or consents as shall have been obtained on or prior to the Initial Commencement
Date; and

(d) the execution and delivery of this Lease and the obligations created hereby
have been duly authorized by all necessary proceedings on the part of such
Facility Lessee, and will not conflict with or result in the breach or violation
of any of the terms or conditions of, or constitute (or with notice or lapse of
time or both would constitute) a default under the governing documents of such
Facility Lessee, any instrument, contract or other agreement to which it is a
party or by or to which such Facility Lessee or any of its assets or properties
are bound or subject; or any statute or any regulation, order, judgment or
decree of any court or governmental or regulatory body.

--------------------------------------------------------------------------------

Exhibit D

Existing Subleases

Oklahoma Facility:

 

Landlord Name    Tenant Name    Address of Premises    Lease Agreement

Muskogee

Regional Medical

Center, LLC

  

Diagnostic

Laboratory of

Oklahoma, L.L.C.

  

3502 West Okmulgee

First Floor

Muskogee, OK

   Lease Agreement for Medical Office dated 01/24/2012

Muskogee

Holdings, LLC

  

Muskogee Regional

Medical Center,

LLC

  

300 Rockefeller Dr.

Muskogee, OK 74401

   Space Lease Proposal dated 05/01/2009

Muskogee

Regional Medical

Center, LLC

  

Mahammed Amer

Mahayni, M.D.

  

3502 West Okmulgee

First Floor

Muskogee, OK K74401

  

Lease Agreement for Medical Office dated ;

Renewal of Agreement or Contract dated 2014;

Renewal of Agreement or Contract dated 01/19/2015

Muskogee

Holdings, LLC

  

Muskogee Regional

Medical Center,

LLC

  

3204 West Okmulgee

Muskogee, OK

   Lease Agreement dated 05/07/2009

Muskogee

Regional Medical

Center, LLC

   John V. Tedesco   

3506 West Okmulgee

Suite 3504

Muskogee, OK 74401

   Lease Agreement for Medical Office dated 04/11/2013

Muskogee

Regional Medical

Center, LLC

  

Tulsa Paini

Consultants, Inc.

  

3204 West Okmulgee

Suite 3204

Muskogee, OK 74401

   Lease Agreement for Medical Office dated

Oregon Facility:

 

Landlord Name    Tenant Name    Address of Premises    Lease Agreement

Willamette Valley

Medical Center, LLC

  

Salem Brain

& Spine LLC

  

254 NE Norton Lane

McMinnville, OR 97128

   Medical Office License Agreement dated 4/27/2015

South Carolina Facility:

 

Landlord Name    Tenant Name    Address of Premises    Lease Agreement

Hartsville HMA,

LLC

  

Lifetime Hearing

Services, Inc.

  

696 Medical Park Dr.

Part of 2nd Floor

Hartsville, SC 29550

   Medical Office Building Lease dated 9/1/14

--------------------------------------------------------------------------------

Exhibit E

Subordination of Management Agreement

[Refer to attachment.]

--------------------------------------------------------------------------------

Schedule 1-A

MPT of Hartsville-Capella Hospital, LLC;

MPT of McMinnville-Capella Hospital, LLC; and

MPT of Muskogee-Capella Hospital, LLC;

each a Delaware limited liability company, collectively, jointly and severally,
as Lessor.

--------------------------------------------------------------------------------

Schedule 1-B

Hartsville, LLC, a South Carolina limited liability company;

Muskogee Regional Medical Center LLC, a Delaware limited liability company; and

Willamette Valley Medical Center, LLC, a Delaware limited liability company;

collectively, jointly and severally, as Lessee.

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Schedule 3.1(a)

Lease Bases

The “Lease Base” for each of the Properties are as follows:

 

Property

        Lease Base  

Oklahoma Property

      $ 60,000,000   

•    Oklahoma Owned Land

   $13,433,000   

•    Oklahoma Ground Leased Property

   $46,567,000   

Oregon Property

      $ 110,000,000   

South Carolina Property

      $ 50,000,000   

and, in each case, plus all costs and expenses not included in such sum which
are incurred or paid in connection with the purchase and lease of each of the
Properties, including, but not limited to legal, appraisal, title, survey,
environmental, seismic, engineering and other fees and expenses paid in
connection with the inspection of the Properties and each Facility, and paid to
advisors and brokers (except to the extent such items are paid by the Lessees),
and shall include the costs and Capital Additions funded by Lessor (and Lessor’s
Affiliates) as provided in Sections 10.1 and 10.4 of this Lease with respect to
each Property. Notwithstanding any provision hereof, no item shall be included
in the Lease Base for purposes of this Lease to the extent that such item is
paid separately by Lessees or is subject to a separate loan repayment obligation
of Lessees.

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Schedule 10.1

Required Capital Addition

Lessor and Lessee agree to work together in good faith to agree upon the
description of the work for the Required Capital Addition, the Maximum Funding
Amount and the Required Completion Date, as soon as practicable after the
Initial Commencement Date and to update this Schedule 10.1 (the “Schedule
Update”). The amount of all out-of-pocket expenditures made by Lessee prior to
the Schedule Update with respect to the Required Capital Addition (excluding
costs for equipment and other non-real estate items), shall be reimbursed to
Lessee and included in the applicable Lease Base for such Property, unless
otherwise mutually agreed by Lessor and Lessee.

South Carolina Property:

 

[Description to be added]

    

Maximum Funding Amount:

 

 

  

Required Completion Date:

 

 

  

With respect to the Required Capital Addition, the following terms and
conditions shall apply:

(a) Lessee agrees to pay or reimburse all of Lessor’s reasonable, out-of-pocket
costs and expenses paid or incurred in connection with such Required Capital
Addition, including the reasonable costs of any construction consultant engaged
by Lessor; provided, however, that such costs and expenses may be included in
the budget for such Required Capital Addition, subject to the Maximum Funding
Amount.

(b) Lessee shall submit to Lessor a draw request in form reasonably acceptable
to Lessor not less than twenty (20) days before the date on which Lessee desires
a funding.

(c) Lessee shall have the sole right to designate and/or approve the general
contractor, developer, architect, construction company, engineer and other
parties that will participate in the construction and development of such
Required Capital Addition (each a “Third Party Contractor”). Lessee shall
control the preparation and negotiation of the definitive agreements with Third
Party Contractors but shall not execute any definitive agreements (after the
Commencement Date) with such Third Party Contractor’s without the giving Lessor
a reasonable opportunity to review and comment to such definitive agreements
prior to execution.

(d) Lessee shall not authorize or permit any material change, modification,
supplement or substitution to any construction contract, architect agreement,
the site plan, the plans and specifications (or any working drawings), or the
scope of work pursuant to any of the foregoing, without the prior written
consent of Lessor, which shall not be unreasonably withheld, conditioned or
delayed.

--------------------------------------------------------------------------------

(e) Lessee shall submit to Lessor copies of all approvals, governmental
approvals and permits necessary for such Required Capital Addition.

(f) Lessee shall provide Lessor with all other customary documentation for
projects similar in cost and scope of such Required Capital Addition, including
without limitation, all executed contracts, collateral assignments of
construction contracts, lien waivers, and certificates of insurance and
insurance policies required under the construction contract for such Required
Capital Addition, showing Lessor as named obligee, additional insured and loss
payee.

--------------------------------------------------------------------------------

Schedule 40.25

State Specific Provisions

 

(a) Oklahoma: None.

 

(b) Oregon: As to the Oregon Property, with respect to the exercise of any
purchase option provided to Lessee under this Lease, including, without
limitation, under Articles XIV, XV and XXXIV, Lessor and Lessee acknowledge the
following statutory warning for the State of Oregon:

ORS 93.040 WARNING: BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON
TRANSFERRING FEE TITLE SHOULD INQUIRE ABOUT THE PERSONS RIGHTS, IF ANY, UNDER
ORS 195.300, 195.301 AND 195.305 TO 195.336 AND SECTIONS 5 TO 11, CHAPTER 424,
OREGON LAWS 2007, SECTIONS 2 TO 9 AND 17, CHAPTER 855, OREGON LAWS 2009, AND
SECTIONS 2 TO 7, CHAPTER 8, OREGON LAWS 2010. THIS INSTRUMENT DOES NOT ALLOW USE
OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE
LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON
ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR
COUNTY PLANNING DEPARTMENT TO VERIFY THAT THE UNIT OF LAND BEING TRANSFERRED IS
A LAWFULLY ESTABLISHED LOT OR PARCEL, AS DEFINED IN ORS 92.010 OR 215.010, TO
VERIFY THE APPROVED USES OF THE LOT OR PARCEL, TO DETERMINE ANY LIMITS ON
LAWSUITS AGAINST FARMING OR FOREST PRACTICES, AS DEFINED IN ORS 30.930, AND TO
INQUIRE ABOUT THE RIGHTS OF NEIGHBORING PROPERTY OWNERS, IF ANY, UNDER ORS
195.300, 195.301 AND 195.305 TO 195.336 AND SECTIONS 5 TO 11, CHAPTER 424,
OREGON LAWS 2007, SECTIONS 2 TO 9 AND 17, CHAPTER 855, OREGON LAWS 2009, AND
SECTIONS 2 TO 7, CHAPTER 8, OREGON LAWS 2010.

 

(c) South Carolina: None