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Exhibit 10.26.2

 
FIRST AMENDMENT TO MASTER LEASE

This FIRST AMENDMENT TO MASTER LEASE (the "Amendment") is entered into as of
December  1 , 2006 (the "Effective Date") by and among NATIONWIDE HEALTH
PROPERTIES, INC., a Maryland corporation ("Landlord"); SUMMERVILLE AT CAMELOT
PLACE LLC, a Delaware limited liability company, SUMMERVILLE AT HILLEN VALE LLC,
a Delaware limited liability company, and SUMMERVILLE AT LAKEVIEW LLC, a
Delaware limited liability company (individually and collectively, "Existing
Tenant"); SUMMERVILLE AT RIDGEWOOD GARDENS LLC, a Delaware limited liability
company ("Additional Tenant" and, together with Existing Tenant, "Tenant"); and
SUMMERVILLE SENIOR LIVING, INC., a Delaware corporation ("Guarantor").

RECITALS

A.            Landlord, as lessor, and Existing Tenant, as lessee, are parties
to that certain Master Lease dated as of October 2, 2006 (the "Master Lease"),
pursuant to which, among other things, Landlord leases to Existing Tenant the
"Premises" described therein. Initially capitalized terms used but not otherwise
defined in this Amendment shall have the meanings given to them in the Master
Lease.

B.    In connection with the Master Lease, Landlord and Existing Tenant are also
parties to that certain Letter of Credit Agreement of even date with the
Original Lease (the "LC Agreement"), pursuant to which, among other things,
Existing Tenant posted with Landlord the Letter or Letters of Credit described
therein as partial collateral for the performance of its obligations under the
Master Lease.

C.           Pursuant to that certain Amended and Restated Guaranty of Lease of
even date with the Original Lease (the "Guaranty"), Guarantor, among other
things, guaranteed to Landlord the performance by Existing Tenant of its
obligations under the Master Lease and LC Agreement.

D.           Pursuant to that certain Purchase and Sale Agreement dated as of
October 5, 2006 ("Purchase Agreement") by and among Landlord, as buyer, and
Ridgewood Gardens Health Investors, LLC, a Virginia limited liability company,
and Salem Realty Investors, L.L.C., a North Carolina limited liability company,
collectively as seller (collectively, "Seller"), Landlord agreed to acquire,
among other things, fee title to that certain real property located at 2001
Ridgewood Drive in Salem, Virginia and all improvements thereon, which is
presently operated as a seventy-four (74) unit, seventy-eight (78) bed assisted
living facility (the "Additional Facility").

E.     Additional Tenant desires to lease the Additional Facility from Landlord
upon the closing of Landlord's acquisition thereof. Accordingly, Landlord and
Tenant desire to amend the Master Lease to, among other things: (i) join the
Additional Tenant to the Master Lease, (ii) add the Additional Facility to the
Premises demised thereunder, and (iii) make certain other revisions and
modifications, all as more particularly set forth herein. In connection
therewith, Guarantor desires to affirm to Landlord its obligations under the
Guaranty notwithstanding the amendment of the Master Lease set forth in this
Amendment.

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AGREEMENT

NOW, THEREFORE, taking into account the foregoing Recitals, and in consideration
of the mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1.           Joinder of Additional Tenant; Addition of Additional Premises.
Additional Tenant is hereby joined to the Master Lease as a Tenant thereunder.
The Additional. Facility and associated Landlord Personal Property are hereby
added to the Premises demised under the Master Lease.

2.           Amendments to Master Lease. The Master Lease is hereby specifically
amended as set forth in this Section 2.

(a)           Exhibit A and Exhibit B attached hereto are hereby added to and
incorporated into Exhibit A and Exhibit B, respectively, of the Master Lease.

(b)           Schedule 1 and Schedule 2 of the Master Lease are hereby deleted
in their entirety and substituted with Schedule 1 and Schedule 2 attached
hereto.

(c)            Section 2.1(a),and and .(cl of the Master Lease are hereby
deleted and substituted with the following:

"2.1 Initial Term Rent.

(a)    During the Initial Term, the annual "Minimum Rent" shall be an amount
equal to the sum of (i) Landlord's Camelot Investment multiplied by eight and
sixty one-hundredths percent (8.60%), (ii) Landlord's Lakeview/HillenVale
Investment multiplied by eight and seventy one-hundredths percent (8.70%), and
(iii) Landlord's Ridgewood Investment multiplied by eight and seventy
one-hundredths percent (8.70%) (each rate, the "Lease Rate" for such Facility),
payable in advance in twelve (12) equal monthly installments. Commencing with
the second (2nd) Lease Year and continuing thereafter during the Term (excluding
the first Lease Year of any Renewal Term), Tenant agrees to pay "Additional
Rent" to Landlord monthly in advance together with the payment of Minimum Rent.
Such Additional Rent (which shall be expressed as an annual amount but shall be
payable in equal monthly installments) shall be equal to the sum of (i) the
Additional Rent for the immediately preceding Lease Year and (ii) the product of
(A) the Minimum Rent and Additional Rent due for the immediately preceding Lease
Year and (B) the lesser of (x) three percent (3.0%) or (y) a percentage equal to
five (5) times the percentage increase (the "CPI Increase") in the United States
Department of Labor, Bureau of Labor Statistics Consumer Price Index for All
Urban Wage Earners and Clerical Workers, United States Average, Subgroup "All
Items" (1982 –1984 =100) (the "CPI"). In no event shall the CPI Increase be a
negative number. The applicable CPI Increase shall be calculated annually for
each Lease Year by comparing the CPI in effect on the first calendar day of the
Lease Year for which Additional Rent is being calculated to the first calendar
day of the immediately preceding Lease Year.

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(b)           As used herein, (i) "Landlord's Camelot Investment" means
Landlord's investment in the Facility located at 49-A Leisure Lane, Medina, Ohio
(the "Camelot Facility") in the amount of Ten Million Six Hundred Sixty-Five
Thousand Dollars ($10,665,000),p/us any amounts advanced by Landlord pursuant to
Section 8.6  with respect to the Camelot Facility, plus any other amount that,
in accordance with any other term or provision of this Master Lease, is to be
added to Landlord's Camelot Investment, and minus any amount that, in accordance
with any term or provision of this Master Lease, is to be subtracted from
Landlord's Camelot Investment; (ii) "Landlord's Lakeview/HillenVale Investment"
means Landlord's investment in (A) the Facility located at 4000 Lakeview
Crossing, Groveport, Ohio (the "Lakeview Facility"), and (B) the Facility
located at 1615 Yauger Road, Mt. Vernon, Ohio (the "HillenVale Facility"), in
the aggregate amount of Twenty-Two Million Two Hundred Eighty Thousand Dollars
($22,280,000), plus any amounts advanced by Landlord pursuant to Section 8.6
with respect to the Lakeview Facility and/or HillenVale Facility, plus any other
amount that, in accordance with any other term or provision of this Master
Lease, is to be added to Landlord's Lakeview/HillenVale Investment, and minus
any amount that, in accordance with any term or provision of this Master Lease,
is to be subtracted from Landlord's Lakeview/HillenVale Investment; and A
"Landlord's Ridgewood Investment" means Landlord's investment in the Facility
located at 2001 Ridgewood Drive, Salem, Virginia (the "Ridgewood Facility") in
the amount of Eleven Million Two Hundred Thousand Dollars ($11,200,000), plus
any amounts advanced by Landlord pursuant to Section 8.6  with respect to the
Ridgewood Facility, plus any other amount that, in accordance with any other
term or provision of this Master Lease, is to be added to Landlord's Ridgewood
Investment, and minus any amount that, in accordance with any term or provision
of this Master Lease, is to be subtracted from Landlord's Ridgewood Investment.

(c)           Concurrently with any increase or decrease in Landlord's Camelot
Investment, Landlord's Lakeview/HillenVale Investment and/or Landlord's
Ridgewood Investment during the Term as described in Section 2.1(b), the Rent
then due and payable for the balance of the applicable Lease Year and Term shall
be recalculated and reset based on the adjusted amount of Landlord's Camelot
Investment, Landlord's Lakeview/HillenVale Investment and/or Landlord's
Ridgewood Investment, as the case may be."

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(d)            The dollar amount of the "Security Deposit" set forth in Section
4(a) of the Master Lease is hereby amended and restated to read "Five Hundred
Seventy-Three Thousand Three Hundred Twenty-Five Dollars ($573,325)".

(e)            Section 4(c) and (d) of the Master Lease are hereby deleted and
substituted with the following, and the following Section 4(e) and (f) are
hereby added and incorporated into the Master Lease:

"4.    Security Deposit: Guaranty.

(c)            If at any time following January 31, 2011, the Camelot Rent
Coverage Ratio is less than 1.20 to 1, Tenant shall from time to time make
deposits, which may be in the form of cash or supplemental letters of credit
meeting the requirements of the Letter of Credit Agreement (the "Camelot
Supplemental Deposits"), to Landlord pursuant to Section 4(e) until such time as
the total amount of the Security Deposit is increased as a result of such
Camelot Supplemental Deposits by the amount of One Hundred Fifty-One Thousand
Four Hundred Thirty-Five Dollars ($151,435); provided, however, Tenant's
obligation to make such Camelot Supplemental Deposits shall not apply with
respect to any Measuring Period for which the Camelot Rent Coverage Ratio equals
or exceeds 1.20 to 1. As used herein, "Camelot Rent Coverage Ratio" means, as of
the date of determination, the ratio of (i) the EBITDARM for the Camelot
Facility for the Measuring Period, minus (A) an assumed management fee equal to
five percent (5%) of the Gross Revenues generated during such Measuring Period
from the Camelot Facility, and (B) one-half of the applicable annual CapEx
Amount for the Camelot Facility at the commencement of the Measuring Period,
multiplied by the aggregate number of assisted living units at the Camelot
Facility, to (ii) the total amount of the Minimum Rent and Additional Rent due
with respect to the Camelot Facility for the Measuring Period pursuant to the
terms of this Master Lease.

(d)            If at any time following June 30, 2010, the Ridgewood Rent
Coverage Ratio is less than 1.20 to 1, Tenant shall from time to time make
deposits, which maybe in the form of cash or supplemental letters of credit
meeting the requirements of the Letter of Credit Agreement (the "Ridgewood
Supplemental Deposits"), to Landlord pursuant to Section 4(e) until such time as
the total amount of the Security Deposit is increased as a result of such
Supplemental Deposits by the amount of Eighty-Four Thousand Seven Hundred Fifty
Dollars ($84,750); provided, however, Tenant's obligation to make such Ridgewood
Supplemental Deposits shall not apply with respect to any Measuring Period for
which the Ridgewood Rent Coverage Ratio equals or exceeds 1.20 to 1. As used
herein, "Ridgewood Rent Coverage Ratio" means, as of the date of determination,
the ratio of (i) the EBITDARM for the Ridgewood Facility for the Measuring
Period, minus (A) an assumed management fee equal to five percent (5%) of the
Gross Revenues generated during such Measuring Period from the Ridgewood
Facility, and (B) one-half of the applicable annual CapEx Amount for the
Ridgewood Facility at the commencement of the Measuring Period, multiplied by
the aggregate number of assisted living units at the Ridgewood Facility, to (ii)
the total amount of the Minimum Rent and Additional Rent due with respect to the
Ridgewood Facility for the Measuring Period pursuant to the terms of this Master
Lease.

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(e)            The Supplemental Deposits to be made by Tenant in accordance with
Section 4(c) and (d) above shall be due on the thirtieth (30th) day of each
calendar month (or last day of the month, in the case of February) following the
Measuring Period in which the actual Camelot Rent Coverage Ratio or Ridgewood
Rent Coverage Ratio, as applicable, fails to equal or exceed 1.20 to 1. The
Supplemental Deposits shall be equal to five percent (5%) of the Gross Revenues
from the Camelot Facility or Ridgewood Facility, as applicable, for the calendar
month immediately preceding the date on which each Supplemental Deposit is due
or such lesser amount as is required to fulfill the requirements of Section 4(c)
and (d) above.

(f)            As used herein, "Gross Revenues" means all of the revenues of the
applicable Facility or Facilities other than the proceeds of the sale of any of
the applicable Facility's or Facilities' equipment which has become worn out or
obsolete, all insurance awards and condemnation proceeds, sales, use and
occupancy or other taxes on receipts required to be accounted for by Tenant to
governmental authorities and non­recurring revenues as reasonably approved by
Landlord. As used herein, "EBITDARM" means, for any Measuring Period, the net
income (or loss) of Tenant for such Measuring Period to the extent derived from
the operation of the applicable Facility or Facilities, adjusted to add thereto
any amounts deducted in determining such net income (or loss) for (v) interest
expense, (w) income tax expense, (x) depreciation and amortization expense, (y)
rental expense, and (z) management fee expense, in each case determined in
conformity with generally accepted accounting principles, consistently applied."

(f)            The second sentence of Section 8.3 of the Master Lease is hereby
deleted and substituted with the following:

"As used herein, the "Applicable Annual Reserve" means:

Age of Facility (Years)
 
Applicable Annual Reserve
   
> 80 Units
<80 Units
Zero through Three
 
$ 200.00
$ 300.00
Four through Seven
 
$ 300.00
$ 400.00
Eight or more Years
 
$ 450.00
  $ 550.00"

(g)            The third sentence of  Section 13.4 of the Master Lease is hereby
deleted and substituted with the following:

"All sums so paid by Landlord and all necessary and incidental costs and
expenses (including reasonable attorneys' fees and expenses) incurred in
connection with the performance of any such act by it, together with interest at
the Agreed Rate from the date of the making of such payment or the incurring of
such costs and expenses, shall at Landlord's option either be payable by Tenant
to Landlord on demand or added to Landlord's Camelot Investment, Landlord's
Lakeview/HillenVale Investment, and/or Landlord's Ridgewood Investment, as the
case maybe."
 
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(h)            The forth sentence of Section 18 of the Master Lease is hereby
deleted and substituted with the following:

"In the event this Master Lease is terminated as to any Facility under this
Section 18, then the Minimum Rent and Additional Rent due hereunder shall be
shall be reduced by the product of (x) the amount of the then current Minimum
Rent and Additional Rent, and (y) a fraction, the numerator of which is the
amount received by Landlord as a result of the Complete Taking and the
denominator of which is the sum of Landlord's Camelot Investment, Landlord's
Lakeview/HillenVale Investment and Landlord's Ridgewood Investment."

2.            Tax Impound and CapEx-Expenditures. From and after the date
Landlord acquires fee title to the Ridgewood Facility, the Ridgewood Facility
shall be added as a portion of the Premises leased to Tenant under the terms of
the Master Lease. Accordingly, with each payment of Minimum Rent payable by
Tenant with respect to the Ridgewood Facility, Tenant shall make tax impound
deposits and CapEx Reserve deposits for the Ridgewood Facility in accordance
with the terms of Section 5.2 and Section 8.3 of the Master Lease.

3.            Amendment to LC Agreement. hi the LC Agreement and Exhibit A to
the LC Agreement, all references to "Four Hundred Three Thousand Eight Hundred
Twenty-Five Dollars ($403,825)" as the Letter of Credit Amount are hereby
deleted and replaced with "Five Hundred Seventy-Three Thousand Three Hundred
Twenty-Five Dollars ($573,325)".

4.           Enforcement of Rights. Landlord has the right to enforce the
covenants, representations and warranties of Seller under the Purchase Agreement
with respect to the Additional Facility; provided, however, Landlord agrees upon
request of Tenant either to enforce the same against Seller at Tenant's cost and
expense or, to the extent assignable, to assign its rights thereto in order to
enable Tenant to enforce the same against Seller.

5.           Reaffirmation of Obligations.

(a)           Notwithstanding the amendments to the Master Lease contained
herein, Tenant and Landlord each hereby acknowledges and reaffirms its
respective obligations under the Master Lease (as modified hereby), the LC
Agreement and all other documents executed by such party in connection
therewith.

(b)           Notwithstanding the amendments to the Master Lease contained
herein, Guarantor hereby acknowledges and reaffirms its obligations under the
Guaranty and all documents executed by Guarantor in connection therewith, and
further agrees that any reference made in the Guaranty to the Master Lease or
any terms or conditions contained therein shall mean such Master Lease or such
terms or conditions as amended by this Amendment.

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6.           Interpretation. This Amendment shall be construed as a whole and in
accordance with its fair meaning. Headings are for convenience only and shall
not be used in construing meaning.

7.    Further Instruments. Each party will, whenever and as often as it shall be
reasonably requested so to do by another party, cause to be executed,
acknowledged or delivered any and all such further instruments and documents as
may be necessary or proper, in the reasonable opinion of the requesting party,
in order to carry out the intent and purpose of this Amendment.

8.           Incorporation of Recitals. The Recitals to this Amendment are
incorporated hereby by reference.

9.           Counterparts. This Amendment may be executed in counterparts, all
of which executed counterparts shall together constitute a single document.
Signature pages may be detached from the counterparts and attached to a single
copy of this document to physically form one document.

10.          Attorneys' Fees. In the event of any dispute or litigation
concerning the enforcement, validity or interpretation of this Amendment, or any
part thereof, the losing party shall pay all costs, charges, fees and expenses
(including reasonable attorneys' fees) paid or incurred by the prevailing party,
regardless of whether any action or proceeding is initiated relative to such
dispute and regardless of whether any such litigation is prosecuted to judgment.

11.          Effect of Amendment. Except as specifically amended pursuant to the
terms of this Amendment, the terms and conditions of the Master Lease shall
remain unmodified and in full force and effect. In the event of any
inconsistencies between the terms of this Amendment and any terms of the Master
Lease, the terms of this Amendment shall govern and prevail.

12.          Entire Agreement. This Amendment contains the entire agreement
between the parties relating to the subject matters contained herein. Any oral
representations or statements concerning the subject matters herein shall be of
no force or effect.

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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.

TENANT: 
       
SUMMERVILLE AT CAMELOT PLACE LLC,
 
a Delaware limited liability company
       
By:
/s/ Granger Cobb
   
Granger Cobb
   
President
       
SUMMERVILLE AT HILLEN VALE LLC,
 
a Delaware limited liability company
       
By:
/s/ Granger Cobb
   
Granger Cobb
   
President
       
SUMMERVILLE AT LAKEVIEW LLC,
 
a Delaware limited liability company
       
By:
/s/ Granger Cobb
   
Granger Cobb
   
President
       
SUMMERVILLE AT RIDGEWOOD GARDENS LLC,
 
a Delaware limited liability company
       
By:
/s/ Granger Cobb
   
Granger Cobb
   
President
       
GUARANTOR:
       
SUMMERVILLE SENIOR LIVING, INC.,
 
a Delaware corporation 
       
By:
/s/ Granger Cobb
   
Granger Cobb
   
President
       
LANDLORD;
       
NATIONWIDE HEALTH PROPERTIES, INC.,
 
a Maryland corporation
       
By:
/s/ David Snyder
 
Name:
David Snyder
 
Title:
Vice President & Controller
 

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