LEASE AGREEMENT

THIS LEASE AGREEMENT is made and entered into this 9th day of August, 2006 by
and between St. David's Healthcare Partnership L.P., L.L.P., ("Landlord") and
Horizon Mental Health Management, Inc., d/b/a Horizon Health Behavioral
Services, a Texas corporation, or its permitted assigns, ("Tenant").

Landlord, in consideration of the rents to be paid and the covenants and
agreements to be performed by Tenant as hereinafter set forth, hereby leases to
Tenant and Tenant hereby leases from Landlord, all of the second and third
floors consisting of 28,749 rentable square feet of space ("Premises"), of the
building located at 1025 East 32nd Street, Austin, Texas, 78765-2705 known as
St. David's Pavilion ("Building",) for the term and upon the conditions and
agreements hereinafter set forth ("Lease"). The Building is located upon land
more particularly described in Exhibit A-1 attached hereto and incorporated
herein. The floor plan of the Premises is more particularly shown on Exhibit A-2
attached hereto and incorporated herein. This Lease shall constitute a binding
agreement between the parties effective as of the date set forth above
("Effective Date").

In addition to the Premises, Tenant shall have the right, subject to such
reasonable rates and regulations of general applicability to tenants of the
Building as Landlord may promulgate from time to time, to use all parking areas,
driveways, entrance and exit accessways, and all other common areas and
facilities of the Building, including, without limitation, sidewalks and ramps,
landscaped areas, exterior stairways, elevators, common lobby, restrooms, and
any other improvements for the general use of, in common use with tenants,
patients and visitors of the Building.

SECTION 1. TERM/OPTIONS TO EXTEND

1.1 Term/Commencement Date. The commencement date of the term of this Lease
(hereinafter called the "Commencement Date') shall be that date on which all of
the following conditions are satisfied:

 a. The Landlord has completed the Landlord Work as described in, and in
    accordance with, Section 6.1 of this Lease;
 b. The Tenant has completed the Tenant Work as described and in accordance
    with, Section 6.1 of this Lease; and
 c. The Tenant has received all governmental approvals and licenses of any kind
    required to operate the Premises as a free-standing forty-eight bed
    psychiatric hospital and to receive reimbursement under federal and state
    health care programs.

The term shall continue after the Commencement Date for a period of fifteen (15)
years (such term, any extension or renewal thereof and any "Holdover Term", as
defined in Section 16.2, are each hereinafter referred to as the "Term"). "Lease
Year" shall be defined as each twelve consecutive month period throughout the
Term, beginning on the Commencement Date and each anniversary thereof.

1.2 Extension of Term. The Term of this Lease may be extended only upon the
mutual agreement of Landlord and Tenant. Tenant shall notify Landlord of its
desire to extend the Term in or before eighteen (18) months prior to the end of
the Term. In such event, Landlord and Tenant shall endeavor to negotiate in good
faith to make a decision with respect to whether the Term will be extended on or
before twelve (12) months prior to the end of the Term.

SECTION 2. RENT

2.1 Base Rent. During the Term, Tenant shall pay to Landlord "Annual Base Rent"
in the amounts set forth on Exhibit A attached hereto (such sum is hereafter
referred to as "Base Rent"), together with "Additional Rent" (as hereinafter
defined in Section 3). Base Rent shall be payable in twelve equal monthly
installments in advance without notice, demand, setoff or deduction and all such
installments shall be paid to Landlord or its Property Manager (hereafter
designated) in U.S. Dollars at the following address: 98 San Jacinto Blvd.,
#1810, Austin, TX 78701, or at such other address as Landlord may designate. The
Landlord's Property Manager is HCFD Realty Services. The first monthly
installment for Base Rent shall be due on the Commencement Date and, thereafter,
such monthly installments shall be due on the first day of each calendar month.
If Tenant's obligation to pay Base Rent relates to only a part of a month at the
beginning or the end of the Term, Tenant shall pay Landlord a proportionate part
of the applicable monthly installment for each such partial month, which shall
be payable at the same time as the first or last (as applicable) monthly
installment is due under this Lease.

2.2 Taxes on Rent. Tenant shall pay and be liable for all rental, sales and use
taxes or other similar taxes, if any, levied or imposed on Base Rent or
Additional Rent payments by any city, county, state or other governmental body
having authority. Such payments shall be in addition to all other payments
required to be paid to Landlord by Tenant under the terms of this Lease. Any
such payment shall be paid to Landlord concurrently with the payment of the Base
Rent or Additional Rent upon which such tax is based.

SECTION 3. ADDITIONAL RENT; OPERATING COSTS

3.1 Additional Rent. In addition to the Base Rent as set forth in Section 2
herein, Tenant shall pay Landlord "Additional Rent", any other sums owed by
Tenant pursuant to the terms of this Lease or otherwise arising in connection
with Tenant's occupancy of the Premises.

For purposes of this Lease, Base Rent and Additional Rent shall hereinafter be
collectively referred to as "Rent".

SECTION 4. USE OF PREMISES

4.1 Permitted Use. Tenant shall be permitted to use and occupy the Premises
during the term for the purposes of operating a psychiatric hospital and all
related activities incidental thereto, including, without limitation, behavioral
health outpatient programs, and for no other purpose (the "Hospital").

4.2 Prohibited Uses / Noncompetition.

(a) Without limiting the foregoing, Horizon covenants and agrees that the
provision of any medical or related service to or for any person that is not
incidental to and in connection with the treatment of patients of the Hospital
in accordance with the Permitted Use shall expressly not be permitted in the
Premises, including, without limitation, the following medical and related
services:

(i) outpatient or inpatient surgery services;

(ii) a birthing center;

(iii) an oncology treatment facility;

(iv) physical therapy services;

(v) respiratory therapy services;

a laboratory (including, without limitation, a pathology laboratory or a
clinical laboratory); and

(vii) diagnostic or therapeutic testing services, including without limitation,
all diagnostic imaging services, including without limitation:

A. fluoroscopy;

B. x-ray:

C. plane film radiography;

D. computerized tomography (CT);

E. ultrasound;

F. radiation therapy;

G. mammography and breast diagnostics;

H. nuclear medicine testing; and

I. magnetic resonance imaging;

(viii) long term acute care services

In addition, Tenant further covenants and agrees that, during the term of this
Lease, it shall not, directly or indirectly, manage, own or operate any service
or facility that provides any of the medical and other services listed in
Subparagraphs (i) through (viii) above in the Austin Texas metropolitan area.

(b) Landlord covenants and agrees that, during the term of this Lease, it shall
not, directly or indirectly, manage, own or operate any service or facility that
provides behavioral health or psychiatric services in the Austin, Texas
metropolitan area.

4.3 Compliance with Legal Requirements. Tenant shall act in accordance with and
not violate any restrictions or covenants of record affecting the Premises or
the Building. Tenant shall not use or occupy the Premises in violation of law or
of the Certificate of Use or Occupancy issued for the Building of which the
Premises are a part, and shall immediately discontinue any use of the Premises
which is declared by either any governmental authority having jurisdiction or
the Landlord to be a violation of any law, code, regulation or a violation of
said Certificate of Use or Occupancy. Tenant shall comply with any direction of
any governmental authority having jurisdiction which shall, by reason of the
nature of Tenant's use or occupancy of the Premises, impose any duty upon Tenant
or Landlord with respect to the Premises or with respect to the use or occupancy
thereof.

4.4 Hazardous Acts; Waste; Nuisance. Tenant shall not do nor permit to be done
anything which will invalidate or increase the cost of any casualty and extended
coverage Insurance policy covering the Building and/or property located therein,
and shall comply with all rules, orders, regulations and requirements of the
appropriate Fire Rating Bureau or any other organization performing a similar
function. Tenant shall promptly upon demand reimburse Landlord for any
additional premium charged for such policy by reason of Tenant's failure to
comply with the provisions of this paragraph. Tenant shall not do nor permit
anything to be done in, on or about the Premises which would in any way obstruct
or interfere with the rights of other tenants or occupants of the Building, or
use or allow the Premises to be used for any immoral, unlawful or objectionable
purpose, nor shall Tenant maintain or permit any nuisance or commit or suffer to
be committed any waste in, on or about the Premises.

SECTION 5. BUILDING SERVICES AND MAINTENANCE

5.1. Landlord's Services. Landlord will provide all of the following utilities
and services:

(a) Landlord shall cause all utilities and services to be provided to the
Premises twenty-four (24) hours per day, seven (7) days per week including, but
not limited to, gas, electricity (including emergency power), water, sanitary
sewer, heating, ventilation and air conditioning, plumbing, telephone services
(including long distance services), lighting, and elevator services.

(b) Landlord shall cause security services to be provided to the Premises
twenty-four (24) hours per day, seven (7) days per week, to the same extent that
such services are presently provided elsewhere in St. David's Medical Center.

(c) If the Building is equipped with a central heating and air-conditioning
system that serves the rentable areas of the Building, heat and air-conditioning
as required for Tenant's comfortable use and occupancy of the Premises;

(d) Unless the Premises are equipped with a water heater, hot water at those
points of supply provided for the general use of Tenant and other tenants of the
Building;

(e) General janitorial services in and about the common areas of the Building;

(f) Light bulb replacement in the Premises and common areas of the Building:

(g) Elevator service;

(h) Exterior window cleaning, cleaning and snow and ice removal services for the
parking areas and walk ways serving the Building, to the extent deemed necessary
in Landlord's reasonable judgment; and

(i) Normal maintenance and servicing of lavatory facilities, toilets, sinks and
faucets located within the Premises; provided that Landlord shall not be
responsible for any repair, maintenance or servicing required on account of
misuse of any of the foregoing or the disposal of foreign materials or
substances not Intended to be disposed in toilets or sinks, all of which shall
be the sole responsibility of Tenant.

(j) Replacement and repair of furniture, fixtures and equipment that are to be
furnished pursuant to, and as described in the description of Landlord Work
contemplated in Section 6.1(a) hereof for Tenant's use in the Premises. Landlord
shall repair, maintain or replace such furniture, fixtures and equipment as the
same become obsolete or unsuitable for use through ordinary wear and tear,
provided that Tenant shall at its sole expense replace or repair any furniture,
fixtures and equipment damaged or destroyed by the negligence or willful
misconduct of Tenant, Tenant's employees and patients.

All such services shall be provided in a manner that is consistent with those
services provided in comparable buildings of similar usage, size and age which
are located within the local community.

5.2. Utility Services; Damage to Tenant's Property. Landlord reserves the
privilege of stopping any or all utility services in case of accident or
breakdown, or for the purpose of making alterations, repairs or improvements.
Landlord shall not be liable for the failure to furnish or delay in furnishing
any or all of such services when same is caused by or is the result of (a)
strikes, labor disputes, labor, fuel or material scarcity, or governmental or
other lawful regulations or requirements; (b) the failure of any corporation,
firm or person with whom the Landlord may contract for any such service, or for
any service incident thereto, to furnish any such service; (c) the making of any
alterations, repairs or improvements as described in the preceding sentence; (d)
any other cause other than the gross negligence of the Landlord; and the failure
to furnish any of such services in such event shall not be deemed or construed
as an eviction or relieve Tenant from the performance of any of the obligations
imposed upon Tenant by this Lease, including its obligation to pay Rent.
Landlord shall not be responsible for the failure of any equipment or machinery
to function properly on account of any such interruption of such services.
Tenant shall be solely responsible for and shall promptly pay all charges for
telephone and other communication services.

5.3. Medical and Hazardous Waste.

Subject to the terms and conditions of this Section 5.3, Landlord has agreed to
provide medical, special and infectious waste removal services for the Premises,
provided, however, that Tenant shall be responsible for medical, special and
infectious waste collection, maintenance and storage within the Premises, in
accordance with all applicable laws, regulations and orders, until such time as
Landlord's regular pick-up and removal of such waste from the Premises. Further,
Tenant shall not permit the mixing or disposal of any hazardous substances,
wastes or materials or any medical, special or infectious waste with the general
office refuse. Tenant shall not permit undue accumulations of garbage, trash,
rubbish or other refuse within the Premises and shall keep all refuse in proper
containers until disposal of such refuse.

Tenant shall not cause or permit the release or disposal of any hazardous
substances, wastes or materials, or any medical, special or infectious wastes,
on or about the Premises or the Building. Hazardous substances, wastes or
materials shall include those which are defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
USC Section 9601 et seq; the Resource Conservation and Recovery Act, as amended,
42 USC Section 6901 et seq; the Toxic Substances Control Act, as amended, 15 USC
Section 2601 et seq; and medical, special or infectious wastes shall include
those which are defined pursuant to the medical waste regulations which have
been promulgated by the Federal Government or the State in which the Premises
are located, and as further set forth in any state or local laws and ordinances,
and their corresponding regulations. Tenant shall comply with all rules and
policies set by Landlord, and with all federal, state and local laws,
regulations and ordinances which govern the use, storage and handling of
hazardous substances, wastes or materials and medical, special or infectious
wastes. Tenant shall indemnify, defend and hold Landlord harmless from and
against any claims or liability arising out of or connected with Tenant's
failure to comply with the terms of this Section 5.3, which terms shall survive
the expiration or earlier termination of this Lease

5.4 Landlord's Repairs. Except as provided in subparagraph 5,5(b), Landlord
shall maintain in good repair the Building, the common areas and facilities of
the Building used by Tenant, the mechanical, plumbing and electrical systems of
the Premises, the walls, floors, doors, windows and all structural elements of
the Premises (excepting painting and repair or replacement of floor or wall
coverings). Except as otherwise specifically provided in Section 5, Landlord
shall have no duty to maintain, repair, clean or service the Premises.

5.5. Tenant's Repairs.

(a) Tenant shall maintain the Premises in good repair and condition and shall
make all repairs and replacements and perform all maintenance necessary to keep
the Premises in such condition, except to the extent such maintenance, repairs
and replacements are to be provided by Landlord pursuant to this Section 5.

(b) In addition. Tenant shall promptly repair, in a good and workmanlike manner,
any damage to the Premises or other part of the Building caused by any breach of
this agreement to maintain the Premises by Tenant, any misuse of the Premises or
any part thereof by Tenant, or any willful or negligent act or omission of
Tenant, or of any employee, agent or invitee of Tenant. If Tenant fails to do
so, Landlord shall have the right to repair any such damage and Tenant shall pay
Landlord for the cost of all such repairs, plus interest at the Interest Rate
(as defined in paragraph 21.9).

SECTION 6. ALTERATIONS

Initial Alterations.

Landlord and Tenant agree that the Premises shall be remodeled and renovated as
a condition precedent to the commencement of the Term. Such initial alternations
have not been determined as of the Effective Date. Landlord and Tenant agree to
mutually select an architect to design and determine the budgeted costs of such
remodeling and renovations. Tenant shall contract for and pay the costs and
expenses of such architectural services subject to the reimbursement obligations
of Landlord specified below. Such architect shall also allocate such budgeted
costs between Landlord and Tenant generally on the following basis:

Landlord shall be responsible for all physical plant renovations required to
satisfy licensing, life and safety codes, certificate of occupancy and Medicare
conditions of participation requirements for the Hospital, and for providing all
fixtures, furniture and equipment necessary to operate the patient areas, common
areas and administrative offices of the Hospital as described in a description
thereof to be prepared by the architect ("Landlord Work"); and

Tenant shall be responsible for all other necessary remodeling and renovations
to the Premises as described in a description thereof to be prepared by the
architect ("Tenant Work").

The parties shall work together in good faith to assist the architect in
performing such work and in making the allocation of the budgeted costs of such
work between Landlord and Tenant. Such allocation of costs must be mutually
approved by Landlord and Tenant.

6.2 Right of Termination. The cost of the Landlord Work has been estimated by
the parties to be $400,000. The cost of the Tenant Work has been estimated by
the parties to be $350,000. In the event that the actual cost of either the
Landlord Work or the Tenant Work exceeds 125% of the estimate therefore, then,
in such case either Landlord or Tenant, as the case may be, in its sole
discretion, may elect not to proceed and may elect to terminate this Lease by
giving written notice to the other party effective immediately in which case
this Lease shall be void and if no further force or effect and Landlord shall
reimburse Tenant for fifty percent (50%) of the costs and expenses of the
architect upon request.

6.3 Performance and Payment for Initial Alterations. In the event the parties
approve the initial alterations, the parties shall mutually document what
constitutes the Landlord Work and the Tenant Work. The parties shall mutually
select and approve a general contractor to perform the work and shall mutually
approve a construction contract for the performance of such work between such
contractor and Tenant. Tenant shall contract with such contractor and, subject
to the reimbursement obligation of Landlord specified below, shall pay all costs
and expenses to perform the Landlord Work and the Tenant Work. In addition, in
such event, the costs and expenses of the architect shall be allocated to
Landlord and Tenant based on the respect percentage that budgeted cost of the
Landlord Work and the Tenant Work, respectively, represents of the total project
cost and Landlord shall reimburse Tenant upon request for the costs and expenses
incurred in performing the Landlord Work and for its allocated share of the
costs and expenses of the architect.

In addition to the foregoing, the Landlord and Tenant further agree:

 a. Both Landlord and Tenant shall receive, review and approve the plans and
    specifications for the initial alterations.
    
 b. Tenant shall cause the initial alterations to be performed in accordance
    with the approved plans and specifications with diligence and in accordance
    with applicable laws, ordinances and regulations of governmental authorities
    and agencies having jurisdiction over the Premises that shall include at a
    minimum: CMS, JCAHO, life safety, professional standards, State of Texas
    licensing requirements, fire codes, and any other requirements by
    governmental or regulatory agencies concerning use of the space for the
    proposed Hospital and shall be sufficient to enable Tenant to receive all
    regulatory approvals necessary to operate the Hospital.

6.4 Subsequent Improvements. Other than the initial alterations contemplated in
Section 6.1, Tenant may not make any changes, additions, alterations,
improvements or additions to the Premises or attach or affix any articles
thereto without Landlord's prior written consent, which consent Landlord shall
not unreasonably withhold. All alterations, additions, or improvements which may
be made upon the Premises by Landlord or Tenant (except unattached trade
fixtures and office furniture and equipment owned by Tenant) shall not be
removed by Tenant, but shall become and remain the property of Landlord. All
alterations, improvements, and additions to the Premises (as permitted by
Landlord) shall be done only by Landlord or contractors or mechanics approved by
Landlord, and shall be at Tenant's sole expense and at such times and in such
manner as Landlord may approve. Any mechanics or materialmen's lien for which
Landlord has received a notice of intent to file or which has been filed against
the Premises or the Building arising out of work done for, or materials
furnished to or on behalf of Tenant, Its contractors or subcontractors shall be
discharged, bonded over, or otherwise satisfied by Tenant within ten (10) days
following the earlier of the date Landlord receives (a) notice of intent to file
a lien or (b) notice that the lien has been filed. If Tenant fails to discharge,
bond over, or otherwise satisfy any such lien, Landlord may do so at Tenant's
expense, and the amount expended by Landlord, including reasonable attorneys'
fees, shall be paid by Tenant within ten (10) days following Tenant's receipt of
a bill from Landlord.

Lessee's Personal Property

. All trade fixtures, machinery and equipment, furniture, furnishings, moveable
partitions and other personal property owned by Tenant and moved into or
installed on the Premises shall remain the property of Lessee and may be removed
by Lessee at any time during or at the end of the term hereof, provided that
Lessee repairs any damage to the Premises caused by such removal.

Signage

. Landlord shall provide all reasonably necessary and appropriate. interior
signage in the Building such as offices, room numbers and other appropriate
indicators. Tenant shall have the right to erect exterior signage on or about
the Building to notify community of the location and purpose of the Hospital, as
well as a notice indicating that no emergency room services are available at the
Hospital. Such exterior signage shall be compatible with existing exterior
signage. The location, size, color, form and style of all Tenant signage shall
be subject to the prior written consent of Landlord, which consent shall not be
unreasonably withheld.

Landlord agrees that Tenant may refer to the location of the Hospital as "at St.
David's Pavilion" in its marketing and advertising materials.

SECTION 7. DAMAGE TO PROPERTY - INJURY TO PERSONS; INSURANCE

7.1 Tenant's Indemnity. Tenant shall and hereby does indemnify and hold Landlord
harmless from and against any and all claims arising from: (a) Tenant's use or
occupancy of the Premises or the conduct of Tenant's business or profession; or
(b) any willful or negligent acts or omissions of Tenant, or of Tenant's agents,
employees, contractors or invitees. Tenant shall and hereby does further
indemnify, defend and hold Landlord harmless from and against all costs,
attorneys' fees, expenses and liabilities incurred in connection with any such
claim or any action or proceeding brought thereon. In case any action or
proceeding is brought against Landlord by reason of any such claim, Tenant upon
notice from Landlord, shall defend same at Tenant's expense by counsel
reasonably satisfactory to Landlord. Tenant, as a material part of the
consideration to Landlord, hereby assumes all risk of damage to property or
injury to persons in, upon or about the Premises from any cause other than
Landlord's negligence or intentional misconduct, and Tenant hereby waives all
claims in respect thereof against Landlord.

7.2 Landlord's Indemnity. Landlord shall and hereby does indemnify and hold
Tenant harmless from and against any and all claims arising from: any accident
or occurrence occurring within the Building (except the Premises) or the common
areas and facilities, arising out the negligence or intentional misconduct of
Landlord, or of Landlord's agents, employees, contractors or invitees. Landlord
shall and hereby does further indemnify, defend and hold Tenant harmless from
and against all costs, attorneys' fees, expenses and liabilities incurred In
connection with any such claim or any action or proceeding brought thereon. In
case any action or proceeding is brought against Tenant any such claim, Landlord
upon notice from Tenant, shall defend same at Landlord's expense by counsel
reasonably satisfactory to Tenant.

7.3 Insurance. Tenant shall, throughout the Term at its sole cost and expense,
provide and keep in force with responsible insurance companies (AM Bests rating
of A- or above) reasonably acceptable to landlord, insurance in respect to this
Lease and the Premises in the following amounts:  (a) commercial general
liability coverage of not less than $1,000,000 each occurrence, $1,000,000
products/completed operations, $1,000,000 personal/advertising injury and
$3,000,000 aggregate (b) property insurance under and an "all insured risk"
policy form covering the equipment, improvements and betterments and other
personal property in the Premises for damage caused by fire and other insured
perils (c)  umbrella coverage with limits not less than $5,000,000 per
occurrence and $5,000,000 policy aggregate and (d) builders risk coverage with
respect to the "Initial Alterations" described in Section 6.1 and any subsequent
alterations or construction work by Tenant under Section 6.4 above during the
period of such construction. The policies listed above shall include the Tenant
as a named insured on all policies and the landlord as additional insured for
liability coverage and loss payee for property and builders risk coverage.
Tenant shall require each construction contractor to carry insurance with limits
as outlined in section (a) and (c) above.

7.4 Waiver of Liability. Neither Landlord nor its agents shall be liable for any
damage to property entrusted to employees of the Building, nor for loss of or
damage to any property by theft or otherwise, nor for any injury or damage to
persons or property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water or rain which may leak from any part of the Building or from
the pipes, appliances or plumbing works therein or from the roof, street or
subsurface, or from any other place or resulting from dampness or any other
cause whatsoever, unless caused by or due to the negligence of Landlord, its
agents, servants or employees. Tenant shall give prompt notice to Landlord in
case of fire or accidents in the Premises or in the Building or of defects
therein or in the fixtures or equipment. Tenant hereby acknowledges that
Landlord shall not be liable for any interruption to Tenant's business for any
cause whatsoever, and that Tenant shall obtain Business Interruption Insurance
coverage should Tenant desire to provide coverage for such risk.

SECTION 8. DAMAGE OR DESTRUCTION

If the Premises are damaged by fire or other casualty (collectively "Casualty"),
the damage shall be repaired by and at the expense of Landlord, provided such
repairs can, in Landlord's opinion, be made within one hundred eighty (180) days
after the occurrence of such Casualty without the payment of overtime or other
premiums. If such repairs cannot, in Landlord's opinion, be made within one
hundred eighty (180) days. Landlord may, at its option, make them within a
reasonable time, and in such event this Lease shall continue in effect.
Landlord's election to make such repairs must be evidenced by written notice to
Tenant within sixty (60) days after the occurrence of the damage. If Landlord
does not so elect to make such repairs which cannot be made within one hundred
eighty (180) days, then either party may, by written notice to the other, cancel
this Lease as of the date of the Casualty. A total destruction of the Building
in which the Premises are located shall automatically terminate this Lease. In
the event Landlord makes such repairs, then until such repairs are completed,
the Rent shall be abated in proportion to the part of the Premises which is
unusable by Tenant in the conduct of Tenant's practice of medicine. However,
there shall be no abatement of Rent if the Casualty is due to the negligent acts
or omissions of Tenant or Tenant's employees or contractors.

SECTION 9. EMINENT DOMAIN

If the Building, the Premises or a material part of either shall be taken by any
authorized entity by eminent domain or by negotiated purchase under threat
thereof, so that the Premises shall become totally untenantable, this Lease
shall terminate as of the earlier of the date when title or possession thereof
is acquired or taken by the condemning authority and all rights of Tenant in
this Lease shall immediately cease and terminate. If a part of the Building or a
portion of the Premises shall be taken such that the Premises become only
partially untenantable, Base Rent shall be proportionately abated. All
compensation awarded for any taking (or the proceeds of negotiated sale under
threat thereof) whether for the whole or a part of the Building or the Premises,
shall be the property of Landlord, whether such proceeds or award is
compensation for loss or damage to Landlord's or Tenant's property or their
respective interests in the Premises, the Tenant hereby assigns all of its
Interest in any such award to Landlord. However, nothing contained herein shall
be deemed to give Landlord any interest In or require Tenant to assign to
Landlord any separate award expressly made to Tenant for: (a) the taking of
personal property and fixtures belonging to Tenant; (b) the interruption of or
damage to Tenant's business or profession; (c) the cost of relocation expenses
Incurred by Tenant; and (d) Tenant's unamortized cost of leasehold improvements;
provided that the making of any such award to Tenant shall not reduce or
diminish Landlord's award relating to such condemnation. Landlord may without
any obligation or liability to Tenant stipulate with any condemning authority
for a judgment of condemnation without the necessity of a formal suit or
judgment of condemnation, and the date of taking under this clause shall then be
deemed the date agreed to under the terms of said agreement or stipulation.

SECTION 10. ASSIGNMENT AND SUBLETTING

Tenant shall not directly or indirectly, sell, assign or transfer this Lease, in
whole or in part, or sublet the Premises or any part thereof, or permit the
Premises or any part thereof to be occupied by any person, corporation,
partnership, or other entity except Tenant or Tenant's employees, without the
prior written consent of Landlord in each instance; provided, however, Tenant
may assign this lease to an affiliate controlled by, controlling or under common
control with, Tenant. In addition, any such subletting or assignment transaction
shall be in all respects in compliance with the applicable provisions of the
Medicare Anti-Kickback Law, 42 USC 1320a-7(b)(1) and (2) and the Stark
Self-Referral Prohibition Act. 42 USC 1395nn et. seq., as the same may be
modified, supplemented or replaced from time to time, and all regulations
promulgated thereunder from time to time. Any sale, assignment, mortgage,
transfer or subletting of this Lease or the Premises which is not in compliance
with the provisions of this Section 10 shall be void. The consent by Landlord to
any assignment or subletting shall not be construed as relieving Tenant from
obtaining the express prior written consent of Landlord to any further
assignment or subletting or as releasing Tenant from any liability or obligation
hereunder, whether or not then accrued. Should Landlord permit any assignment or
subletting by Tenant and should the moneys received as a result of such
assignment or subletting (when compared to the moneys still payable by Tenant to
Landlord) be greater than would have been received hereunder had not Landlord
permitted such assignment or subletting, then the excess shall be payable by
Tenant to Landlord, it being the parties' intention that Landlord, and not
Tenant, shall be the party to receive any profit from any assignment or
subletting. In the event of any assignment or subletting approved by Landlord,
the assignee or sublessee shall assume all of Tenant's obligations under this
Lease and shall be bound to comply with all the terms and provisions of this
Lease and Tenant and such assignee or sublessee shall be jointly and severally
liable for the performance of Tenant's covenants under this Lease.

Notwithstanding any provisions herein to the contrary, Landlord may terminate
this Lease upon ten (10) days prior written notice to Tenant in the event that a
"Precluded Transferee" acquires (i) an equitable or beneficial interest in an
equity or ownership interest in Tenant, or (ii) acquires a use, license,
sublease, lease or other possessory interest in the Premises. For purposes
hereof, "Precluded Transferee" shall mean and include: any person, entity, or
individual that (i) owns or owns an interest in an acute care hospital or a
rehabilitation hospital located within one hundred (100) miles of the Premises,
or (ii) is engaged in the operation of a health maintenance organization,
physician practice management group, or any other health care business the
principal operations of which are, at the time in question, competitive with the
operations of Landlord, the owner of Landlord, HCA Inc., and/or any affiliate of
any the foregoing entities, and (b) any person or entity that is affiliated with
any person or other entity described in clause (a), above.

SECTION 11. ACCEPTANCE OF PREMISES

By taking possession of the Premises on the Commencement Date, Tenant shall be
deemed to have accepted the Premises in its "as-is" condition and acknowledged
that the Premises are in satisfactory condition and repair.

SECTION 12. DEFAULTS

12.1. Events of Default. The occurrence of any of the following shall constitute
a material default and breach of the Lease:

(a) The vacating or abandonment of the Premises by Tenant.

(b) A failure by Tenant to pay when due Rent or any other payment required to be
made by Tenant hereunder within ten (10) days after written notice by Landlord
to Tenant of such default.

(c) A failure to maintain the insurance required pursuant to Section 7 of this
Lease and the failure to cure such default within ten (10) days after written
notice thereof by Landlord to Tenant.

(d) A violation of the terms of Section 10 of this Lease.

(e) A failure to provide any declaration, document or instrument required
pursuant to Section 18 of this Lease within the time period set forth in such
Section.

(f) A failure by Tenant to observe and perform any other obligation under this
Lease to be observed or performed by Tenant, other than payment of any Rent,
within thirty (30) days after written notice by Landlord to Tenant specifying
wherein Tenant has failed to perform such obligation; provided, however, that if
the nature of Tenant's obligation is such that more than 30 days are required
for its performance, then Tenant shall not be deemed to be in default if it
shall commence such performance within such 30-day period and thereafter
diligently prosecute the same to completion by not later than 90 days after
Tenant receives Landlord's written notice.

(g) The making by Tenant or any guarantor of this Lease of any general
assignment for the benefit of creditors; the filing by or against Tenant or such
guarantor of a petition to have Tenant or such guarantor adjudged a bankrupt or
the filing of a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Tenant
or such guarantor, the same is dismissed within sixty (60) days); the
appointment of a trustee or receiver to take possession of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in this Lease,
where possession is not restored to Tenant within thirty (30) days; or the
attachment, execution or other judicial seizure of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this Lease, where such
seizure is not discharged within thirty (30) days.

12.2 Landlord's Default. Landlord shall not be deemed to be in default in the
performance of any obligation required to be performed by it hereunder unless
and until it has failed to perform such obligation within thirty (30) days after
written notice by Tenant to Landlord specifying wherein Landlord has failed to
perform such obligation. Provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for its
performance, then Landlord shall not be deemed to be in default if it shall
commence such performance within such thirty (30) day period and thereafter
diligently prosecute the same to completion.

Tenant's Right to Terminate

. Notwithstanding any provision in this Agreement to the contrary, at any time
after the first twelve months of the Lease Term Tenant may terminate this Lease
upon one hundred twenty (120) days prior written notice to Landlord, subject to
the conditions precedent that as of the effective date of termination set forth
in Tenant's notice, Tenant shall have paid to Landlord (i) all monetary
obligations of Tenant under the Lease pertaining to the period up to and
including the effective date of termination, (ii) the then unamortized costs and
expenses of the Landlord Work, (iii) an amount equal to $6,708 times the number
of months from the specified termination date to the end of the Eleventh Lease
Year of the Term, up to a maximum of 120 months, and (iv) a Lease termination
fee of $150,000.

SECTION 13. REMEDIES

13.1 Remedies. In the event an event of default occurs on the part of Tenant as
set forth in Section 12, Landlord may exercise one or more of the following
described remedies, in addition to all other rights and remedies available at
law or in equity, whether or not stated in this Lease:

(a) Upon the occurrence of an event of default on Tenant's part as set forth in
Section 12, Landlord may continue this Lease in full force and effect and shall
have the right to collect Rent when due, and Landlord may re-enter the Premises
with or without legal process and relet them, or any part of them, to third
parties for Tenant's account, and Tenant hereby expressly waives any and all
claims for damages by reason of such re-entry, as well as any and all claims for
damages by reason of any distress warrants or proceedings by way of
sequestration which Landlord may employ to recover said rents. Tenant shall be
liable immediately to Landlord for all costs Landlord Incurs in reletting the
Premises, including, without limitation, brokers' commissions, expenses of
remodeling the Premises required by the reletting, attorneys' fees and costs and
like costs. Reletting can be for a period shorter or longer than the remaining
Term of this Lease, and in no event shall Landlord be under any obligation to
relet the Premises. On the dates such rent is due. Tenant shall pay to Landlord
a sum equal to the Rent due under this Lease, less the rent Landlord receives
from any reletting. No act by Landlord allowed by this paragraph shall terminate
the Lease unless Landlord notifies Tenant in writing that Landlord elects to
terminate the Lease.

(b) At any time after the occurrence of an event of default by Tenant as
described in Section 12, Landlord may terminate this Lease. Upon termination,
Landlord shall have the right to collect an amount equal to: all expenses
incurred by Landlord in recovering possession of the Premises, including
reasonable attorneys' fees and costs; all reasonable costs and charges for the
care of the Premises while vacant; all renovation costs incurred in connection
with the preparation of the Premises for a new tenant; all past due Rent which
is unpaid, plus interest thereon at the Interest Rate (as defined in Section
21.9); and an amount by which the entire Rent for the remainder of the Term
exceeds the loss of Rent that Tenant proves could have been reasonably avoided.

13.2 Additional Remedies. Should any of these remedies, or any portion thereof,
not be permitted by the laws of the state in which the Building is located, then
such remedy or portion thereof shall be considered deleted and unenforceable,
and the remaining remedies or portions thereof shall be and remain in full force
and effect. Landlord may avail itself of these as well as any other remedies or
damages allowed by law. All rights, options and remedies of Landlord provided
herein or elsewhere by law or in equity shall be deemed cumulative and not
exclusive of one another.

SECTION 14. ADDITIONAL RESPONSIBILITIES OF TENANT

14.1 Responsibility of Patient Treatment. All patients receiving services within
the Leased Premises shall be patients of Tenant and shall be admitted by Tenant
and registered as Tenant's patients. Tenant shall be solely responsible for the
determination, the planning and the implementation of treatment for patients
admitted to the Hospital. Tenant shall establish and maintain a separate medical
record for each patient treated in the Hospital, which shall be a medical record
of Tenant. Tenant agrees to provide patient care to its patients in accordance
with the standard for psychiatric hospitals in the community in which the
Hospital is located.

14.2 Tenant's Personnel. Tenant shall provide all personnel required to operate
the Hospital.

14.3 Tenant's Compensation to Personnel. Tenant has responsibility for its
personnel providing services at the Hospital and will be responsible for their
salaries, benefits, and all deductions required of employers by state, federal
and local laws, including deductions for social security and withholding taxes,
and contributions for unemployment compensation funds, and shall maintain
workers' compensation insurance in accordance with applicable state law.

14.4 Tenant's Medical Staff.

(a) Tenant hereby represents and warrants to Landlord that the agreement between
Tenant and any physician serving the Hospital as a medical director and/or
program medical director (hereinafter collectively referred to as the "Medical
Director") shall (i) be set out in writing signed by the Lessee and the Medical
Director, and specify the services covered by such agreement; (ii) cover all the
services by the Medical Director to Tenant; (iii) contemplate services from the
Medical Director that do not exceed those that are reasonable and necessary in
order for Tenant to operate the Hospital; (iv) provide for a term of at least
one (1) year; and, (v) provide that Lessee shall pay the Medical Director a fee
for his or her services that shall be based on documented hours worked and
services provided, paid at the prevailing hourly rate paid to physicians in the
community for comparable medico-administrative services and not taking into
account the volume or value of any referrals the Medical Director may make to
the Hospital.

(b) Only those physicians who have been granted privileges on the Hospital's
medical staff may admit patients to the Hospital. All Hospital patient service
activities shall be subject to and in accordance with Tenant's medical staff
bylaws.

14.5 Tenant's Cooperation. Tenant shall use its best efforts to ensure that the
patients admitted to the Hospital do not interfere with the operation of St.
David's Medical Center or with the performance of Landlord's duties hereunder.

14.6 Tenant's Non-discrimination. Tenant shall not, in the performance of its
duties hereunder, discriminate on the basis of sex, race, religion, disability,
age, creed, color, veteran status or national origin with respect to the
performance of service for patients in the Hospital, or with respect to the
hiring, placement and management of its personnel.

14.7 Certification and Accreditation. Tenant shall obtain and maintain (i)
accreditation of the Hospital by the Joint Commission on Accreditation of
Healthcare Organizations ("JCAHO") or an equivalent organization reasonably
acceptable to both parties (an "Equivalent Organization"); (ii) certification as
a psychiatric hospital under the Medicare program; and (iii) all necessary state
licenses. Lessee shall pay all related application fees and associated costs in
connection with such accreditation, certification and state licensure. Lessee
shall perform all of its obligations under this Agreement in accordance with
applicable federal, state and local laws and regulations. Tenant shall perform
all acts necessary to maintain the Hospital as a psychiatric hospital for
purposes of Medicare certification and state licensure. Landlord shall cooperate
with and not hinder Tenant's efforts in obtaining and maintaining certification,
licensure and accreditation.

14.8 Patient Billing. All decisions with respect to billing patients and third
party payors for services provided in the Premises shall be made by Tenant.

SECTION 15. RIGHT OF ACCESS

Upon reasonable notice to Tenant, Landlord and its agents shall have free access
to the Premises during all reasonable hours for the purpose of inspection, to
make reasonable repairs as required hereunder (provided, however, Landlord shall
have no obligation as a result of such examination to make any repairs other
than expressly set forth herein), and to exhibit the same to prospective
purchasers, lenders or tenants. Landlord and its agents shall have access to the
Premises at any time without prior notice in the event of an emergency.

SECTION 16. END OF TERM

16.1 Surrender of Premises. At the termination or expiration of the Term of this
Lease, Tenant shall surrender the Premises to Landlord in as good condition and
repair as at the Commencement Date, reasonable wear and tear accepted, and will
leave the Premises broom-clean. If not then In default, Tenant shall have the
right prior to said termination to remove any equipment, furniture, trade
fixtures or other personal property placed in the Premises by Tenant, provided
that Tenant promptly repairs any damage to the Premises caused by such removal.

16.2 Holdover.

(a) In the event that Tenant holds over and remains in possession of the
Premises after the expiration of the Term, this Lease shall be extended
automatically for an additional term of one year (each such one year term, a
"Holdover Term") on the same terms and conditions as contained in this Lease,
except as provided otherwise in this Section 16.2. Annual Base Rent for each
Holdover Term (the "New Base Rent"), shall be (I) the amount of Base Rent
payable at the end of the immediately preceding Term, which shall be subject to
adjustment in accordance with same formula and at the same intervals as provided
for such preceding Term, or (ii) if Landlord determines, in its reasonable
judgment, that such amount is not consistent with fair market value, the amount
equal to the fair market rental value of the Premises, on an annual basis. Such
fair market rental value shall be determined by Landlord based on a survey of
rental rates being charged in the market area which encompasses the Building for
space comparable to the Premises (taking into account the quality, age, floor
level, quality of tenant improvements provided and other relevant factors) and
assuming lease terms which allocate responsibility for taxes, insurance and
other costs of operating, maintaining and repairing the Building and the
Premises in the same manner as this Lease. Subject to Tenant's right to
terminate this Lease during a Holdover Term provided in Section 16,2(c),
Landlord's determination of such New Base Rent shall be incontestably binding on
Tenant.

(b) Landlord shall notify Tenant in writing of the New Base Rent for the
Premises as promptly as reasonably possible after the commencement of a Holdover
Term. Until such notice is received, Tenant shall continue to pay Base Rent at
the rate in effect immediately prior to the expiration of the preceding Term of
this Lease. Beginning on the first day of the next month after Tenant receives
Landlord's notice and thereafter for the remainder of the Holdover Term, Tenant
shall pay New Base Rent in equal monthly installments and such first payment
shall also include an additional sum representing a retroactive adjustment with
respect to any month or months of such Holdover Term for which Base Rent had
been paid In the amount in effect for the preceding Term, so that Landlord shall
have received rent for such months at the rate of the New Base Rent.

(c) Notwithstanding anything to contrary set forth in Section 16.2(a), either
Landlord or Tenant may terminate this Lease at any time during a Holdover Term
by giving the other party not less than 30 days advance written notice, and on
or before the effective date of such termination Tenant shall have vacated and
surrendered the Premises and both parties shall be released of all liabilities
arising or accruing under this Lease following the effective date of such
termination and surrender of the Premises to Landlord in the manner provided in
Section 16,1; provided that if this Lease is terminated during a Holdover Term,
Landlord and Tenant shall not enter into a new lease for the Premises prior to
one year after commencement of such Holdover Term.

SECTION 17. TRANSFER OF LANDLORD'S INTEREST

In the event of any transfer or transfers of Landlord's interest in the Premises
or in the real property of which the Premises are a part, the transferor shall
be automatically relieved of any and all obligations and liabilities on the part
of Landlord accruing from and after the date of such transfer.

SECTION 18. ESTOPPEL CERTIFICATE, ATTORNMENT, AND NON-DISTURBANCE

18.1 Estoppel Certificate. Within ten (10) days following receipt of Landlord's
written request, Tenant shall deliver, executed in recordable form, a
declaration to any person designated by Landlord: (a) ratifying this Lease; (b)
stating the commencement and termination dates of the Lease; and (c) certifying
(I) that this Lease is In full force and effect and has not been assigned,
modified, supplemented or amended (except by such writings as shall be stated):
(ii) that all conditions under this Lease to be performed by Landlord have been
satisfied (stating exceptions, If any); (iii) that no defenses, credits or
offsets against the enforcement of this Lease by Landlord exist (or stating
those claimed); (iv) the sum of advance Rent, if any, paid by Tenant; (v) the
date to which Rent has been paid; (vi) the amount of security deposited with
Landlord; and (vii) such other information as Landlord reasonably requires.
Persons receiving such statements of Tenant shall be entitled to rely upon them.

18.2 Sale of Landlord's Interest. In the event of the sale or assignment of
Landlord's interest in the Premises or the Building or if the holder of any
existing or future mortgage, deed to secure debt, deed of trust, or the lessor
under any existing or future underlying lease pursuant to which Landlord is the
lessee, shall hereafter succeed to the rights of Landlord under this Lease, then
at the option of such successor, Tenant shall attorn to and recognize such
successor as Tenant's landlord under this Lease, and shall promptly execute and
deliver any instrument that may be necessary to evidence such attornment. If any
such successor requests such attornment, this Lease shall continue in full force
and effect as a direct lease between such successor, as Landlord and Tenant,
subject to all of the terms, covenants and conditions of this Lease, regardless
of whether Tenant executes and delivers the instrument requested by such
successor landlord.

 

18.3 Subordination and Non-Disturbance.

This Agreement is and shall be subordinate to any encumbrance or mortgage now
affecting title to the Land. Tenant shall, upon Landlord's request from time to
time, execute a subordination, non-disturbance and attornment agreement,
prepared at Landlord's sole cost and expense, in a form reasonably acceptable to
Tenant, stating whether this Agreement is in full force and effect, that the
Tenant is then in possession of the Premises and paying the full Lease rental,
that no rental payments have been made in advance except as therein stated, and
stating the commencement date of the original term of this Agreement. So long as
Tenant is not in default in the payment of Rent or in the performance of any of
the terms of this Agreement beyond any applicable cure period, Tenant's
possession of the Premises and Tenant's rights and privileges under this Lease
including any renewal hereof shall not be diminished or interfered with by the
mortgagee or any other holder or holders of notes or other encumbrances.

SECTION 19. NOTICES

(a) Any notice required or permitted to be given hereunder shall be in writing
and may be given by: (I) hand delivery and shall be deemed given on the date of
delivery; (ii) registered or certified mail and shall be deemed given the third
day following the date of mailing; or (iii) overnight delivery and shall be
deemed given the following day.

(b) All notices to Tenant and to Landlord as follows (or to any other address
that Tenant / Landlord shall designate in writing):

(a) If to Tenant: With a copy to:

Horizon Health Hospital Services, Inc. Horizon Health Hospital Services, Inc.

2941 S. Lake Vista Drive 2941 S. Lake Vista Drive

Lewisville, TX 75067 Lewisville, TX 75067

Attention: President Attention: General Counsel

(b) If to Landlord: With a copy to:

St. David's Healthcare HCA -- The Healthcare Company

98 San Jacinto Blvd., #1800 One Park Plaza

Austin, TX 78702 Nashville, TN 37203
Attention: Administration Attention: Vice President, Real Estate

And

St. David's Medical Center

919 East 32nd Street

Austin, TX 78705

Attention: Administration

SECTION 20. PURCHASED SERVICES

Simultaneously with the execution of this Lease, the parties shall execute and
deliver an agreement with respect to certain services to be purchased by Tenant
from the Landlord in the form of Exhibit B attached hereto ("Services
Agreement"). The parties agree and stipulate that (i) an event of default under
the Services Agreement whereby Tenant owes $75,000 or more to Landlord and which
is not timely cured in accordance with the provisions thereof shall be deemed a
material default and breach of this Lease, and (ii) a default under this Lease
that is not timely cured in accordance with the provisions hereof shall be
deemed an event of default under the Services Agreement.

SECTION 21. MISCELLANEOUS PROVISIONS

21.1 Attorneys' Fees. In the event that suit is brought by either party against
the other for a breach or default under the terms of this Lease, the prevailing
party shall be entitled to reasonable attorneys' fees, which sum shall be fixed
by the court.

21.2 Time of Essence. Time is of the essence with respect to the performance of
every provision of this Lease.

21.3 Headings; Certain Definitions. The Section and paragraph captions contained
in this Lease are for convenience only and shall not be considered in the
construction or interpretation of any provision hereof. The word "Term" as used
herein, shall be deemed to include, where applicable, any extended or renewal
term. The word "Landlord" means the owner of the Building from time to time, and
in the event of any sale, conveyance or lease of the Building, the Landlord
shall be released from all covenants and conditions as Landlord hereunder and
without further agreement between the parties, the purchaser, lessee or other
transferee of the Building shall be deemed to have assumed all covenants and
conditions of Landlord hereunder. No consent of Tenant shall be required in the
event of any such sale, conveyance or lease of the Building which is made
subject to this Lease, or to any sale or conveyance of the Building pursuant to
which Landlord leases the Building back from such purchaser or other transferee,
in which case this Lease shall remain in full force and effect as a sublease
between Landlord, as sublessor and Tenant, as sublessee.

21.4. Incorporation of Prior Agreements; Amendments. This Lease and the Exhibits
attached hereto and incorporated herein contain all of the agreements of the
parties hereto with respect to any matter covered or mentioned in this Lease,
and no prior agreement or understanding pertaining to any such matter shall be
effective for any purpose. No provision of this Lease may be amended or added to
except by an agreement in writing signed by the parties hereto or their
respective successors in interest.

21.5. Waiver of Subrogation. Landlord and Tenant hereby mutually waive any and
all rights of recovery against one another based upon the negligence of either
Landlord or Tenant or their agents or employees for real or personal property
loss or damage occurring to the Premises or to the Building or any part thereof
or any personal property located therein from perils which are able to be
insured against in standard fire and extended coverage, vandalism and malicious
mischief and sprinkler leakage insurance contracts (commonly referred to as "All
Risk"), whether or not such insurance is actually carried. If either party's
insurance policies do not permit this waiver of subrogation, then such party
will obtain such a waiver from its insurer at its sole expense.

21.6. Waiver. No waiver by Landlord or Tenant of any breach or default of any
term, agreement, covenant or condition of this Lease shall be deemed to be a
waiver of any other term, agreement, covenant or condition hereof or of any
subsequent breach by Landlord or Tenant of the same or any other term,
agreement, covenant or condition. Landlord's consent to or approval of any act
by Tenant requiring Landlord's consent or approval shall not be deemed to render
unnecessary the obtaining of Landlord's consent to or approval of any subsequent
act of Tenant, whether or not similar to the act so consented to or approved. No
act or thing done by Landlord or Landlord's agents during the Term of this Lease
shall be deemed an acceptance of a surrender of the Premises, and no agreement
to accept such a surrender shall be valid unless in writing and signed by
Landlord. The subsequent acceptance of Rent shall not be deemed a waiver of any
preceding breach by Tenant of any agreement, covenant or obligation of Tenant or
any other term or condition of this Lease. No delay in billing or any failure to
bill Tenant for any Rent, nor any inaccurate billing of Rent shall constitute a
waiver by Landlord of its right to collect and to enforce Tenant's obligation to
pay the full amount of Rent due and payable under this Lease, as the same may be
adjusted or increased from time to time.

21.7 Accord and Satisfaction. No payment by Tenant or receipt by Landlord of an
amount less than is due hereunder shall be deemed to be other than payment
towards or on account of the earliest portion of the amount then due by Tenant
nor shall any endorsement or statement on any check or payment (or in any letter
accompanying any check or payment) be deemed an accord and satisfaction (or
payment in full), and Landlord may accept such check or payment without
prejudice to Landlord's right to recover the balance of such amount or pursue
any other remedy provided herein.

21.8. Quiet Enjoyment. Landlord shall warrant and defend Tenant in the quiet
enjoyment and possession of the Premises throughout the Term, subject to the
terms, conditions and limitations set forth in this Lease.

21.9. Late Charge. If any monthly installment of Base Rent or any payment of
Additional Rent is not paid within ten (10) days after such installment or
payment is due and payable (the "Late Payment Date"), Tenant shall, upon demand,
pay Landlord (i) a late charge in the amount of 2% of the amount owing as
compensation to Landlord for its increased costs of handling such late payment,
and (ii) interest on the unpaid balance from the date due until paid at the rate
of interest (the "Interest Rate") equal to the prime rate of interest as
published by The Wall Street Journal from time to time, plus 4% per annum, with
each change in such prime rate being effective on the date such change is
published.

21.10. Binding Effect. This Lease shall be binding upon, and inure to the
benefit of the parties hereto, their heirs, successors, assigns, executors and
administrators. However, nothing in this Section shall be deemed to amend the
provisions of Section 10 on Assignment and Subletting,

 

21.11. Relationship of Parties. The parties agree that neither Landlord nor
Tenant is an independent contractor or an agent or representative of the other.
Nothing contained herein is intended, nor shall it be construed or deemed, to
make Landlord and Tenant partners or joint venturers. It is expressly understood
and agreed that each party shall be responsible for its own agents and employees
and that neither party shall make any claim against the other for contribution
or payment of work or vacation pay, sick leave, retirement benefits, social
security contributions, disability or unemployment insurance benefits or
employee benefits of any kind or nature with respect to their own agents or
employees.

21.12. Governing Law. This Lease shall be governed by the laws of the state
where the Building is located.

21.13. Regulatory Matters.

(a) Landlord and Tenant enter into this Lease with the intent of conducting
their relationship and implementing the agreements contained herein in full
compliance with applicable federal, state and local law, including without
limitation, the Medicare/Medicaid Anti-Kickback statute (the "Anti-Kickback
Law") and Section 1877 of the Social Security Act (the "Stark Law"), as amended.
Notwithstanding any unanticipated effect of any of the provisions of this Lease,
neither party will intentionally conduct itself under the terms of this Lease in
a manner that would constitute a violation of the Anti-Kickback Law or the Stark
Law. Without limiting the generality of the foregoing, Landlord and Tenant
expressly agree that nothing contained in this Lease shall require either party
to refer any patients to the other, or to any affiliate or subsidiary of the
other.

(b) If any legislation, regulation or government policy is passed or adopted,
the effect of which would cause either party to be in violation of such laws due
to the existence of any provision of this Lease, then Landlord and Tenant agree
to negotiate in good faith for a period of 90 days to modify the terms of this
Lease to comply with applicable law. Should the parties hereto fail to agree
upon modified terms to this Lease within this time, either Landlord or Tenant
may immediately terminate this Agreement by giving written notice to the other
party.

(c) Tenant represents and warrants to Landlord that Tenant (i) is not currently
excluded, debarred or otherwise ineligible to participate in Medicare or any
federal health care program under section 1128 and 1128A of the Social Security
Act or as defined in 42 U.S.C. Sec. 1320a-7b(f) (the "Federal Health Care
Programs"); (ii) has not been convicted of a criminal offense related to the
provision of healthcare items or services but has not yet been excluded,
debarred, or otherwise declared ineligible to participate in any Federal Health
Care Program; and (iii) is not under investigation or otherwise aware of any
circumstances which may result in Tenant being excluded from participation in
any Federal Health Care Program. The foregoing representation shall be an
ongoing representation and warranty during the term of this Lease and Tenant
shall immediately notify Landlord of any change in the status of the
representation and warranty set forth in this Section, at which time Landlord
will have the right to immediately terminate this Lease.

21.14 Confidential Information. Deleted by agreement of the parties.

SECTION 22. CONFIDENTIALITY OF PROTECTED HEALTH INFORMATION

For purposes of this Section of this Lease, "protected health information", or
PHI, shall have the meaning defined by the Standards for Privacy of Individually
Identifiable Health Information, 45 C.F.R. Part 160 and Subparts A and E of Part
164 (the "Privacy Standards"), as promulgated by the Department of Health and
Human Services ("HHS") pursuant to the Administrative Simplification provisions
of the Health Insurance Portability and Accountability Act of 1996 ("HIPAA").
Tenant agrees to reasonably safeguard PHI from any intentional or unintentional
disclosure in violation of the Privacy Standards by implementing appropriate
administrative, technical and physical safeguards to protect the privacy of PHI.
Tenant further agrees to implement appropriate administrative, technical and
physical safeguards to limit incidental disclosures of PHI, including
disclosures to Landlord, its subcontractors and agents. The parties agree that
neither the Landlord nor its contractors, subcontractors or agents shall need
access to, nor shall they use or disclose, any PHI of Tenant. However, in the
event PHI is disclosed by Tenant or its agents to Landlord, its, contractors,
subcontractors or agents, regardless as to whether the disclosure is inadvertent
or otherwise, Landlord agrees to take reasonable steps to maintain, and to
require its contractors, subcontractors and agents to maintain, the privacy and
confidentiality of such PHI. The parties agree that the foregoing does not
create, and is not intended to create, a "business associate" relationship
between the parties as that term is defined by the Privacy Standards.

SECTION 23. ADDENDA

The following Addenda and/or Riders which have been signed by Landlord and
Tenant are attached to this Lease and made a part hereof: Addendum A, Rules and
Regulations; Addendum B, Guaranty; and the First Addendum.

 

IN WITNESS WHEREOF

, the parties have duly executed this Lease the day and year first above
written.

 

TENANT:

Horizon Health Hospital Services, Inc.

 

By: /s/ Frank Baumann

(Signature)

Name: Frank Baumann

Its: President President

 

LANDLORD:

St. David's Healthcare Partnership L.P., L.L.P.

By: /s/ Malcolm Belisle

(Signature)

Name: Malcolm Belisle

 

Its: VP Corporate Services