EXHIBIT 10.5

SECOND AMENDED AND RESTATED

M A S T E R    L E A S E    A G R E E M E N T    NO. 5

DATED AS OF NOVEMBER 11, 2016

EXECUTED BY

VENTAS REALTY, LIMITED PARTNERSHIP,

AS LESSOR

AND

KINDRED HEALTHCARE, INC.

AND

KINDRED HEALTHCARE OPERATING, INC.,

AS TENANT

 

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TABLE OF CONTENTS

 

ARTICLE I      2      Section 1.1  

Leased Property

     2      Section 1.2  

Term

     3      Section 1.3  

Successor Lease

     3      Section 1.4  

ML1/2/4 Amendments

     5    ARTICLE II      6      Section 2.1  

Definitions

     6    ARTICLE III      34      Section 3.1  

Rent

     34      Section 3.2  

Intentionally omitted

     35      Section 3.3  

Additional Charges

     35      Section 3.4  

Survival

     36      Section 3.5  

Net Lease

     36    ARTICLE IV      36      Section 4.1  

Payment of Impositions

     36      Section 4.2  

Notice of Impositions

     37      Section 4.3  

Adjustment of Impositions

     37    ARTICLE V      38      Section 5.1  

No Termination, Abatement, etc.

     38    ARTICLE VI      38      Section 6.1  

Ownership of the Leased Properties

     38      Section 6.2  

Tenant’s Personal Property

     39    ARTICLE VII      39      Section 7.1  

Condition of the Leased Property

     39      Section 7.2  

Use of the Leased Property

     40      Section 7.3  

Granting of Easements, etc.

     50      Section 7.4  

Restrictive Covenant

     51    ARTICLE VIII      51      Section 8.1  

Compliance with Legal and Insurance Requirements, Instruments, etc.

     51      Section 8.2  

Legal Requirement Covenants

     52      Section 8.3  

Permitted Encumbrances

     52      Section 8.4  

Financial Covenants

     54      Section 8.5  

Measurement Transactions

     54      Section 8.6  

Liability for Losses

     54      Section 8.7  

Limited Right to Cure Certain Section 8.4 Failures

     55    ARTICLE IX      57      Section 9.1  

Maintenance and Repair

     57      Section 9.2  

Encroachments

     58   

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ARTICLE X      58     

Section 10.1

  Construction of Capital Alterations to the Leased Property(ies)      58     

Section 10.2

  Capital Alterations Financed by Tenant      59     

Section 10.3

  Capital Alterations Financed by Lessor      59     

Section 10.4

  Non-Capital Alterations      61     

Section 10.5

  Salvage      61     

Section 10.6

  Additional Requirements for Capital Alterations and Non-Capital Alterations   
  61     

Section 10.7

  Mortgagee’s Consent      63    ARTICLE XI      63     

Section 11.1

  Liens      63    ARTICLE XII      63     

Section 12.1

  Permitted Contests      63    ARTICLE XIII      64     

Section 13.1

  General Insurance Requirements      64     

Section 13.2

  Replacement Cost      67     

Section 13.3

  Additional Insurance      68     

Section 13.4

  Waiver of Subrogation      68     

Section 13.5

  Form Satisfactory, etc.      68     

Section 13.6

  Limits; Deductibles      69     

Section 13.7

  Blanket Policy      69     

Section 13.8

  No Separate Insurance      69     

Section 13.9

  Survival      69     

Section 13.10

  Insurance Company Ratings      70     

Section 13.11

  Commutation of Certain Insurance Policies      70    ARTICLE XIV      71     

Section 14.1

  Insurance Proceeds      71     

Section 14.2

  Reconstruction in the Event of Damage or Destruction Covered by Insurance     
71     

Section 14.3

  Reconstruction in the Event of Damage or Destruction Not Covered by Insurance
     72     

Section 14.4

  Tenant’s Property      73     

Section 14.5

  Restoration of Tenant’s Property      73     

Section 14.6

  No Abatement of Rent      73     

Section 14.7

  Restoration      73     

Section 14.8

  Notice      74     

Section 14.9

  Waiver      74    ARTICLE XV      74     

Section 15.1

  Definitions      74     

Section 15.2

  Parties’ Rights and Obligations      75     

Section 15.3

  Total Taking      75     

Section 15.4

  Partial Taking      75     

Section 15.5

  Restoration      75   

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Section 15.6

  Award-Distribution      75     

Section 15.7

  Temporary Taking      76    ARTICLE XVI      76     

Section 16.1

  Events of Default      76     

Section 16.2

  Certain Remedies      83     

Section 16.3

  Damages      83     

Section 16.4

  Certain Effects of Separate Lease      84     

Section 16.5

  Waiver      84     

Section 16.6

  Application of Funds      85     

Section 16.7

  Notice to Lessor      85     

Section 16.8

  Nature of Remedies      85     

Section 16.9

  Allocable Rent      85     

Section 16.10

  Special Remedies Provisions      85     

Section 16.11

  No Mediation or Arbitration      95     

Section 16.12

  Special Purchase Provisions      95    ARTICLE XVII      100     

Section 17.1

  Lessor’s Right to Cure Tenant’s Default      100    ARTICLE XVIII      101   
 

Section 18.1

  Provisions Relating to Purchase of the Leased Property      101    ARTICLE XIX
     101     

Section 19.1

  Exercise of Renewal Options      101     

Section 19.2

  Renewal Terms      103     

Section 19.3

  Fair Market Rental Determination      104     

Section 19.4

  Extended Period New Lease      104     

Section 19.5

  Revocation of Renewal Option Exercise      104     

Section 19.6

  Extension and Rebundling of Certain Facilities      105    ARTICLE XX      105
    

Section 20.1

  Holding Over      105    ARTICLE XXI      106     

Section 21.1

  Subordination      106     

Section 21.2

  Attornment      106     

Section 21.3

  Mortgagee Cure Rights      107     

Section 21.4

  Modifications      107     

Section 21.5

  Existing Ground Leases      107    ARTICLE XXII      109     

Section 22.1

  Notice to Lessor      109     

Section 22.2

  Definitions      109     

Section 22.3

  Consent of Leasehold Mortgagee Required      109     

Section 22.4

  Default Notice      109     

Section 22.5

  Procedure for Foreclosure on Default      110     

Section 22.6

  Assignment or Transfer in Lieu of Foreclosure      110     

Section 22.7

  Separate Lease      113   

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Section 22.8

  Separate Lease Properties      114     

Section 22.9

  Legal Proceedings      114     

Section 22.10

  Future Amendments      114     

Section 22.11

  Estoppel Certificate      114     

Section 22.12

  Notices      115     

Section 22.13

  Erroneous Payments      115     

Section 22.14

  Exercise by Leasehold Mortgagee of Remedies Against One or More Leased
Properties      115    ARTICLE XXIII      115     

Section 23.1

  Risk of Loss      115    ARTICLE XXIV      116     

Section 24.1

  Indemnification      116     

Section 24.2

  New Mexico Limitation on Indemnification      117    ARTICLE XXV      117     

Section 25.1

  Subletting and Assignment      117     

Section 25.2

  Attornment      131     

Section 25.3

  Sublease Limitation      132     

Section 25.4

  Leasehold Mortgagee Rights      132     

Section 25.5

  Kindred Change of Control Transaction      132     

Section 25.6

  IGT      132     

Section 25.7

  Kindred Hospital-Louisville      134    ARTICLE XXVI      135     

Section 26.1

  Financial Statements and Reporting      135     

Section 26.2

  Furnishing Notice      140     

Section 26.3

  Quarterly Meetings; Facility Level Meetings and Reviews      140     

Section 26.4

  Non-Ventas Lessors      142     

Section 26.5

  Additional Tenant Assistance      142     

Section 26.6

  Electronic Format      142     

Section 26.7

  Similar Reports      142     

Section 26.8

  Audit and Investigation Rights      142    ARTICLE XXVII      144     

Section 27.1

  Lessor’s Right to Inspect      144    ARTICLE XXVIII      144     

Section 28.1

  No Waiver      144    ARTICLE XXIX      144    ARTICLE XXX      144     

Section 30.1

  Acceptance of Surrender      144    ARTICLE XXXI      144     

Section 31.1

  No Merger of Title      144    ARTICLE XXXII      145     

Section 32.1

  Conveyance by Lessor      145   

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ARTICLE XXXIII

     145     

Section 33.1

  Quiet Enjoyment      145    ARTICLE XXXIV      145     

Section 34.1

  Notices      145    ARTICLE XXXV      146     

Section 35.1

  Appraisals      146     

Section 35.2

  Appointment of Appraisers      146     

Section 35.3

  Qualifications of Appraisers      147     

Section 35.4

  Appraisal Process      147     

Section 35.5

  Binding Nature      148     

Section 35.6

  Costs      148    ARTICLE XXXVI      148     

Section 36.1

  General REIT Provisions      148    ARTICLE XXXVII      149     

Section 37.1

  Intentionally Omitted      149     

Section 37.2

  Lessor’s Option to Purchase Tenant’s Personal Property      149   
ARTICLE XXXVIII      149     

Section 38.1

  Lessor May Grant Liens      149    ARTICLE XXXIX      150     

Section 39.1

  Environmental Indemnity      150    ARTICLE XL      150     

Section 40.1

  Miscellaneous      150     

Section 40.2

  Non-Recourse      151     

Section 40.3

  Transition of Operations      151     

Section 40.4

  Right to Enter      154     

Section 40.5

  Integration      154     

Section 40.6

  Severability      154     

Section 40.7

  Subject to Law      154     

Section 40.8

  Waivers      154     

Section 40.9

  Binding Character      155     

Section 40.10

  Modification      155     

Section 40.11

  Forbearance      155     

Section 40.12

  Lease Guaranty      155     

Section 40.13

  Intentionally omitted      155     

Section 40.14

  Confidentiality      155     

Section 40.15

  New Lease      159     

Section 40.16

  Partial Expiration/Termination      163     

Section 40.17

  Intentionally omitted      165     

Section 40.18

  Combination of Leases      165     

Section 40.19

  Unified Commercial Operating Lease      168     

Section 40.20

  Intentionally omitted      168     

Section 40.21

  No Credits      168   

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ARTICLE XLI

     168     

Section 41.1

 

Memorandums of Lease

     168   

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LIST OF EXHIBITS AND SCHEDULES

Exhibit A – Legal Descriptions of the Land

Exhibit B – Term/Commencement Date/Expiration Date/Portfolio #

Exhibit C – Allocation Schedule-Applicable Transferred Property Percentages

Exhibit D – Renewal Groups

Exhibit E – Leases

Exhibit F – Intentionally Omitted

Exhibit G – Form of Lease Guaranty

Exhibit H – Restrictive Covenants

Exhibit I – Form of Section 25.1.12(f) Guaranty

Schedule 2.1A – Base Patient Revenues- Certain Leased Properties

Schedule 2.1B – Intentionally omitted

Schedule 2.1C – Existing Ground Leases

Schedule 7.2.7 – Minimum Number of Hospital Care Beds

Schedule 7.2.8 – Minimum Number of Non-Banked Skilled Nursing Care Beds at
Certain Facilities

Schedule 16.1(m)A – Licensed Beds as of the Commencement Date

Schedule 16.1(m)B – Minimum Licensed Beds at Certain Facilities Due to
Involuntary Reduction

Schedule 25.1.7 – Certain Existing Subleases

Schedule 40.12 – Tenant – Affiliate Sublessees

 

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SECOND AMENDED AND RESTATED MASTER LEASE AGREEMENT NO. 5

THIS SECOND AMENDED AND RESTATED MASTER LEASE AGREEMENT NO. 5 (hereinafter this
“Lease”) is dated as of the 11th day of November, 2016 (the “Effective Date”),
and is between VENTAS REALTY, LIMITED PARTNERSHIP, a Delaware limited
partnership (together with its successors and assigns, “Lessor”), and KINDRED
HEALTHCARE, INC., a Delaware corporation formerly known as Vencor, Inc.
(“Kindred”), and KINDRED HEALTHCARE OPERATING, INC., a Delaware corporation
formerly known as Vencor Operating, Inc. (“Operator”; Operator, jointly and
severally with Kindred and permitted successors and assignees of Operator and
Kindred, “Tenant”).

RECITALS

A. Lessor and Tenant have heretofore entered into that certain Amended and
Restated Master Lease Agreement No. 5 dated September 30, 2013 (such agreement,
as heretofore amended (including that certain Amendment No. 2 to Amended and
Restated Master Lease Agreement No. 5 dated April 3, 2016 between Lessor and
Tenant (“Amendment No. 2”)), is herein referred to as “Existing ML5”).

B. Lessor and Tenant desire to amend and restate Existing ML5 in its entirety in
the manner hereinafter set forth.

C. Lessor and Tenant have heretofore entered into (1) that certain Second
Amended and Restated Master Lease Agreement No. 1 (such agreement, as heretofore
amended and as amended by the applicable ML1/2/4 Amendment referenced below, is
herein referred to as “ML1”) dated as of April 27, 2007, (2) that certain Second
Amended and Restated Master Lease Agreement No. 2 (such agreement, as heretofore
amended and as amended by the applicable ML1/2/4 Amendment referenced below, is
herein referred to as “ML2”) dated as of April 27, 2007, and (3) that certain
Second Amended and Restated Master Lease Agreement No. 4 (such agreement, as
heretofore amended and as amended by the applicable ML1/2/4 Amendment referenced
below, is herein referred to as “ML4”) dated as of April 27, 2007 (ML1, ML2 and
ML4 are sometimes collectively referred to herein as “ML1/2/4”) (as used in this
Lease, (a) relative to a particular Added Leased Property (as defined in the
recitals below), the term “Existing Master Lease” shall mean the lease (ML1, ML2
or ML4) under which such Added Leased Property was leased by Lessor to Tenant
immediately prior to the Effective Date and (b) relative to a particular Leased
Property, the terms “Ventas Subsidiaries”, “Original Lessor”, “Original Tenant”
and “Original Master Lease” shall have the same respective meanings in Existing
ML5, as amended and restated hereby, as in the applicable Existing Master Lease
for such Leased Property (in the case of an Added Leased Property) or in
Existing ML5 (in the case of the other Leased Properties; such other Leased
Properties under Existing ML5 are herein referred to as the “Original ML5 Leased
Properties”).

D. Included within ML1/2/4, as leased properties thereunder, are the long term
acute care hospitals commonly referred to as Kindred Hospital Westminster
(Facility No. 4842), Kindred Hospital San Diego (Facility No. 4848), Kindred
Hospital Kansas City (Facility No. 4612), Kindred Hospital Sycamore (Facility
No. 4615), Kindred Hospital Houston Northwest (Facility No. 4654), Kindred
Hospital Ontario (Facility No. 4807), Kindred Hospital South

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Florida Ft. Lauderdale (Facility No. 4645) and Kindred Hospital Houston
(Facility No. 4685) (the leased properties referenced in this recital are herein
referred to as the “Added Leased Properties”).

E. Effective as of the Effective Date (as defined in Section 2.1 below), Lessor
desires to continue to lease the aforesaid Added Leased Properties to Tenant,
and Tenant desires to continue to lease the aforesaid Added Leased Properties
from Lessor, but as Leased Properties under the terms and conditions of Existing
ML5, as amended and restated hereby.

F. Contemporaneously herewith, Lessor and Tenant are entering into that certain
Agreement Regarding Master Leases No. 3 (“ARML No. 3”) dated as of the Effective
Date, and this Lease is subject to the terms of such ARML No. 3.

G. Contemporaneously herewith, Lessor and Tenant are entering into that certain
Amendment No. 4 to Second Amended and Restated Master Lease Agreement No. 1,
that certain Amendment No. 2 to Second Amended and Restated Master Lease
Agreement No. 2 and that certain Amendment No. 4 to Second Amended and Restated
Master Lease Agreement No. 4, each dated as of the Effective Date (individually,
an “ML1/2/4 Amendment” and collectively the “ML1/2/4 Amendments”), which, among
other provisions, provide in certain circumstances for the transfer of Leased
Properties demised under ML1, ML2 and/or ML4 into this Lease.

NOW, THEREFORE, in consideration of the foregoing, and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Lessor and Tenant hereby amend and restate Existing ML5 in its
entirety (including, without limitation, adding the Added Leased Properties as
Leased Properties thereunder) as follows:

ARTICLE I

Section 1.1 Leased Property. Effective as of the Commencement Date for each
Leased Property, upon and subject to the terms and conditions hereinafter set
forth, Lessor leased, and as of the Effective Date hereby continues to lease, to
Tenant, and Tenant leased, and as of the Effective Date hereby continues to
lease, from Lessor, all of Lessor’s rights and interest in and to each of the
following:

(i) the tracts, pieces and parcels of land, as more particularly described in
Exhibit A attached hereto (collectively, the “Land”; each parcel of Land
described in Exhibit A, as amended from time to time, excluding those parcels
which have been transferred to a New Lease pursuant to Section 40.15 (including,
without limitation, a New Lease created pursuant to Section 22.7 hereof),
together with the related property described in clauses (ii) through (iv) below,
being referred to herein as a “Leased Property” and all of such parcels of Land,
together with all of such related property, being referred to herein
collectively as the “Leased Properties”),

(ii) all buildings, structures, Fixtures (as hereinafter defined) and other
improvements of every kind including, but not limited to, 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 situated upon the Land and Capital Alterations
(collectively, the “Leased Improvements”),

 

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(iii) all easements, rights and appurtenances relating to the Land and the
Leased Improvements, and

(iv) all permanently affixed equipment, machinery, fixtures, and other items of
real and/or personal property, including all components thereof, now and
hereafter located in, on or used in connection with, and permanently affixed to
or incorporated into the Leased Improvements, including, without limitation, all
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 hereto to constitute real estate, together with all replacements,
modifications, alterations and additions thereto, but specifically excluding all
items included within the category of Tenant’s Personal Property as defined in
ARTICLE II below (collectively the “Fixtures”),

SUBJECT, HOWEVER, to the Permitted Encumbrances (as defined in Section 2.1
hereof).

Section 1.2 Term. To have and to hold for (1) a fixed term (the “Fixed Term”)
commencing as provided in Existing ML5 or the Existing Master Lease, as
applicable, and ending, as to each Leased Property, at midnight on the Lease
Expiration Date relative to such Leased Property that is set forth on Exhibit B
attached hereto and made a part hereof (but subject to the terms of Section 19.6
hereof), and (2) the Extended Terms provided for in ARTICLE XIX, unless this
Lease is sooner terminated as hereinafter provided.

Section 1.3 Successor Lease

Section 1.3.1 As to each Added Leased Property, this Lease will succeed the
applicable Existing Master Lease relating thereto, and continue, amend and
restate such Existing Master Lease (as it relates to such Added Leased Property)
on the terms set forth in this Lease, as of the Effective Date, and Lessor and
Tenant hereby amend and restate Existing ML5 in its entirety as of the Effective
Date by executing this Lease. This Lease shall govern and control as to all
events, acts, omissions, liabilities and obligations first occurring, arising or
accruing from and after the Effective Date.

Section 1.3.2 Without limitation of the other provisions of this Section 1.3, as
to each Leased Property hereunder, the terms of the applicable Existing Master
Lease (and the applicable Original Master Lease as provided in such Existing
Master Lease) (in the case of the Added Leased Properties), and the terms of
Existing ML5 (and the applicable Original Master Lease and the applicable
Existing Master Lease, as such terms were used in Existing ML5) (in the case of
the other Leased Properties), shall continue to govern and control as to all
events, acts, omissions, liabilities and obligations occurring, arising and
accruing prior to the Effective

 

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Date, provided that, in the event that (1) prior to the Effective Date, (a) a
default or breach of the terms of such Existing Master Lease or Existing ML5, as
applicable, shall have occurred, (b) any act, event or omission to act shall
have occurred, or circumstance shall have arisen, relative to any Legal
Requirement, Authorization, Permitted Encumbrance or Superior Lease (each as
defined in Section 2.1 below) affecting any of the Leased Properties that is or
is potentially adverse to Lessor or Tenant, or (c) any casualty or condemnation
shall have occurred relative to any of the Leased Properties and (2) as of the
Effective Date, such default or breach remains uncured or such act, event,
omission to act or circumstance continues to be adverse or potentially adverse
to Lessor or Tenant or such casualty or condemnation has not been fully repaired
and restored with all claims on account thereof finally settled and paid and
with the affected Leased Property re-opened for use in accordance with its
Primary Intended Use (as defined in Section 7.2.2 hereof) and the other
provisions of this Lease, the provisions of this Lease relative to cure periods,
whether and when an Event of Default shall be deemed to have occurred, rights
and remedies on account of any breach or default or Event of Default, contest
rights, Lease enforcement rights, casualty, condemnation, insurance and
indemnification shall govern and control. Subject to the foregoing, (x) any
breach or default that occurs, arises or accrues under any Existing Master Lease
or Existing ML5, as applicable, as to a Leased Property hereunder prior to the
Effective Date and is not cured prior to such date is, and shall be deemed to
be, a breach or default under this Lease, to which the cure periods, rights and
remedies and other provisions of this Lease referenced in the preceding sentence
shall be applicable, and (y) with respect to any breach or default described in
subsection (x) above, although the cure periods, rights and remedies and other
provisions of this Lease referenced in the preceding sentence shall be
applicable, the portion of any cure period under applicable Existing Master
Lease or Existing ML5, as applicable, that has elapsed as of the Effective Date
shall be counted in determining whether and when the applicable cure period
under this Lease has expired (for example, if (A) a breach or default occurs
with respect to a Leased Property under the applicable Existing Master Lease, or
Existing ML5, relating thereto prior to the Effective Date, (B) such breach or
default remains uncured as of the Effective Date, (C) Tenant receives from
Lessor a written notice of default relative thereto prior to the Effective Date,
and (D) by the terms of this Lease, for a breach or default of the nature
assumed in this example a cure period of thirty (30) days following Tenant’s
receipt of written notice of default is allowed prior to such breach or default
becoming an Event of Default under this Lease, then, as to such breach or
default, an Event of Default shall occur if such breach or default is not cured
on or prior to the thirtieth (30th) day following Tenant’s receipt of the
aforesaid notice of default, notwithstanding that such notice was received prior
to the Effective Date).

Section 1.3.2.1 In the event that (1) prior to the Effective Date, (a) a default
or breach of the terms of any Existing Master Lease or Existing ML5, as
applicable, as to a Leased Property hereunder shall have occurred, (b) any act,
event or omission to act shall have occurred, or circumstances shall have
arisen, relative to any Legal Requirements, Authorization, Permitted
Encumbrances or Superior Lease (each as defined in Section 2.1 below) affecting
any of the Leased Properties that is or is potentially adverse to Lessor or
Tenant, or (c) any casualty or condemnation shall have occurred relative to any
of the Leased Properties and (2) prior to the Effective Date, such default or
breach has been cured or such act, event, omission to act or circumstance is no
longer adverse or potentially adverse to

 

4

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Lessor or Tenant or such casualty or condemnation has been fully repaired and
restored with all claims on account thereof finally settled and paid and with
the affected Leased Property re-opened for use in accordance with its Primary
Intended Use and the other provisions of this Lease, then no such default or
breach or other circumstance or matter described in the foregoing subsections
(a), (b) and (c) shall constitute an Event of Default under this Lease, and
neither party shall bring a claim against the other in respect of any such
default, breach, circumstance or matter, whether hereunder or under the
applicable Existing Master Lease or Existing ML5. Notwithstanding the foregoing,
subject to Section 1.3.2 above, neither party waives or releases, and neither
party shall be precluded from exercising, any rights or remedies (including,
without limitation, default rights and remedies) that it may have hereunder or
under any Existing Master Lease or Existing ML5 (i) on account of any
non-performance by the other party of indemnification obligations that such
other party has hereunder or under any Existing Master Lease or Existing ML5
relative to any default, breach, act, event, omission to act, circumstance,
casualty or condemnation referenced in subsection (a), (b), or (c) above or (ii)
if, and insofar as, the condition described in subsection (2) above is not, or
by reason of events occurring after the Effective Date is shown to have not
been, cured, repaired, restored, re-opened or otherwise satisfied.

Section 1.3.3 Intentionally Omitted.

Section 1.3.4 Intentionally Omitted.

Section 1.3.5 Nothing contained in this Section 1.3 shall limit or impair Ventas
Inc.’s or Tenant’s rights, duties and obligations under the Indemnity Agreement
(as defined in Section 2.1 below).

Section 1.3.6 Lessor and Tenant acknowledge that they have heretofore entered
into that certain Second Specific Property Lease Amendment (the “Walpole
Amendment”) dated December 19, 2002 relating to the Facility commonly known as
Harrington House Nursing and Rehabilitation Center, Walpole, Massachusetts
(MA-198; sometimes also referred to as MA-985), and agree that this Lease is not
intended to supersede the provisions of such Walpole Amendment (which instrument
remains in full force and effect), except that, insofar as the provisions of ML1
and/or Existing ML5 have been amended since such Walpole Amendment was entered
into (including amendments to such provisions resulting from the incorporation
of such Facility as a Leased Property under this Lease as provided in Existing
ML5) and such provisions are cross-referenced in such Walpole Amendment, the
aforesaid amended provisions, in the form they are set forth in this Lease,
shall apply for purposes of such Walpole Amendment (e.g. Section 7 of the
Walpole Amendment cross-references Section 8.3, Section 8.3.1 and Section 24.1
of ML1 and Section 14 of the Walpole Amendment cross-references Section 14.1 of
ML1; insofar as the provisions of such Sections of ML1 and/or Existing ML5 have
been amended since December 19, 2002 (including, as aforesaid, pursuant to
amendments resulting from the aforesaid incorporation of such Facility under
this Lease), such amended provisions, in the form set forth in this Lease, shall
apply).

Section 1.4 ML1/2/4 Amendments. Lessor and Tenant acknowledge and agree to the
terms of the ML1/2/4 Amendments and agree that if the Exercise of the Renewal
Option occurs

 

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with respect to any one or more Subject Facilities that are demised under ML1,
ML2 and/or ML4 as of the Effective Date, such Subject Facilities shall be
transferred into, and become Leased Properties under, this Lease. Such transfer
shall be self-operative and shall, automatically and without further action of
the parties, occur in accordance with the terms of the ML1/2/4 Amendments, ARML
No. 3 and this Lease. In such event, upon the written request of Lessor or
Tenant to the other party, Lessor and Tenant shall memorialize, in an instrument
reasonably acceptable to Lessor and Tenant, such transfer and the amendments to
this Lease resulting therefrom.

ARTICLE II

Section 2.1 Definitions. For all purposes of this Lease, except as otherwise
expressly provided or unless the context otherwise requires, (i) the terms
defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular, (ii) all accounting terms not
otherwise defined herein have the meanings assigned to them in accordance with
GAAP as at the time applicable; provided that, (x) all leases (including,
without limitation, this Lease) of Tenant or of the Seniormost Parent and their
respective Consolidated Subsidiaries that are or would be treated as operating
leases for purposes of GAAP as in effect on September 30, 2013, shall continue
to be accounted for as operating leases for all purposes hereunder, regardless
of any change to GAAP following September 30, 2013 which would otherwise require
such leases to be treated as Capital Leases, and (y) in addition to the
foregoing clause (x), if Tenant notifies Lessor that Tenant requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after September 30, 2013 in GAAP or in the application of GAAP on the
operation of such provision (or if Lessor notifies Tenant that Lessor requests
an amendment to any provision hereof for such purpose), regardless of whether
any such notice is given before or after such change in GAAP or in the
application of GAAP, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision is
amended by an amendment to this Lease that is satisfactory to Lessor and Tenant,
each in its sole discretion (with regard to this subsection (ii) and subsection
(iii) below, if any provision of this Lease is interpreted or applied, or any
covenants, computations, certifications, accounting definitions or financial
information is or are prepared, calculated or otherwise presented, on the basis
of GAAP as in effect on a date other than the then current date (“not-current
GAAP”) or if any assets, Indebtedness or liabilities are valued at “fair value”
(as described in subsection (iii) below), such interpretations, applications,
preparations, calculations, presentations and valuations shall also be prepared,
calculated and presented by Tenant and/or the Seniormost Parent, as applicable,
based upon then-current GAAP and as if the election referenced in subsection
(iii) below was in effect, and shall be accompanied by a reconciliation(s)
certified by the Chief Financial Officer or principal accounting officer of
Tenant or the Seniormost Parent, as applicable, evidencing and explaining the
differences between the then-current GAAP/election in effect results and the
aforesaid not-current GAAP/no election in effect results and any differences
between the results reflected in any financial statements delivered pursuant to
Section 26.1 hereof and any calculations, presentations, valuations or other
results or materials delivered by Tenant and/or the Seniormost Parent with
respect to its/their financial covenant compliance), (iii) notwithstanding any
other provision contained herein, all

 

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terms of an accounting or financial nature used herein shall be construed, and
all computations of amounts and ratios referred to herein shall be made, without
giving effect to any election under Financial Accounting Standards Board
Accounting Standards Codification 820 (or any other Financial Accounting
Standard having a similar result or effect) to value any assets, or any
Indebtedness or other liabilities, of Tenant, the Seniormost Parent or any of
its Consolidated Subsidiaries at “fair value,” as defined therein, (iv) all
references in this Lease to designated “Articles,” “Sections” and other
subdivisions are to the designated Articles, Sections and other subdivisions of
this Lease, (v) the words “herein,” hereof” and “hereunder” and other words of
similar import refer to this Lease as a whole and not to any particular Article,
Section or other subdivision and (vi) with respect to each of “Asset Sale,”
“Consolidated EBITDA,” “Consolidated Interest Expense,” “Consolidated Rental
Expense,” “Consolidated Total Indebtedness,” “Financial Covenant Compliance
Date,” “Fixed Charge Coverage Ratio” and “Total Leverage Ratio”, such terms
shall have the meanings assigned to them in Existing ML5 until the ARML No. 3
Payment Date and, from and after the ARML No. 3 Payment Date, shall have the
meanings assigned to them in this Article.

“ABL Credit Agreement”: That certain ABL Credit Agreement dated as of June 1,
2011, among Kindred, the lenders from time to time party thereto, JPMorgan Chase
Bank, N.A. as administrative agent and collateral agent, as amended, restated,
supplemented, refinanced, replaced or otherwise modified from time to time.

“Acquisition”: (i) Any Investment by the Seniormost Parent or any of its
Consolidated Subsidiaries in a Person whereby such Person becomes a Consolidated
Subsidiary of the Seniormost Parent or whereby such Person is merged with and
into the Seniormost Parent or a Consolidated Subsidiary or (ii) an acquisition
by the Seniormost Parent or any of its Consolidated Subsidiaries of the property
and assets of any Person (other than any then-existing Consolidated Subsidiary)
that constitutes substantially all of the assets of such Person, or any
division, line of business, Healthcare Facility or other business unit of such
Person.

“Added Leased Properties”: As defined in the recitals hereto.

“Additional Charges”: As defined in ARTICLE III.

“Additional Information”: As defined in Section 25.1.12(c).

“Adjusted Base Patient Revenues”: Base Patient Revenues from the applicable
specified Leased Properties, adjusted as follows. Without limitation of
Section 7.2.3 hereof, if a particular Facility or Facilities within the
applicable specified Leased Properties, for any period after December 31, 1999,
for any reason is closed, the Base Patient Revenues that correspond to any such
closed Facility or Facilities (and, in the case of a partial year closure, the
Base Patient Revenues that correspond to any such closed Facility or Facilities
for the days or months such Facility or Facilities were closed) shall be
excluded from Base Patient Revenues in order to arrive at “Adjusted Base Patient
Revenues” for such Leased Properties.

“Adjusted Consolidated Net Income”: For any period, Consolidated Net Income for
such period, adjusted to exclude therefrom, without duplication (x) gains or
losses from Asset Sales

 

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net of related tax effects, (y) any after-tax effect of income (loss) from
disposed or discontinued operations and any net after-tax gains or losses on
disposal of disposed, abandoned or discontinued operations pursuant to Financial
Accounting Standards Board Accounting Standards Codification 205-20 and (z) any
non-cash impairment charge or asset-write off in connection with any Kindred
Change of Control Transaction, Acquisition or Investment pursuant to Financial
Accounting Standards Board Accounting Standards Codification 350, 360 or 805, as
applicable.

“Affiliate”: Shall mean, with respect to any Person, any other Person directly
or indirectly controlling (including, but not limited to, all partners,
directors, officers and members of such Person), controlled by or under direct
or indirect common control with any such Person. A Person shall be deemed to
control a corporation, a partnership, a trust, or a limited liability company if
such Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such person, through the ownership
of voting securities, partnership interests or other equity interests.

“Amendment No. 2”: As defined in the recitals hereto.

“Ancillary Agreement”: As defined in Section 25.1.7.

“Applicable Required Number of Beds”: As defined in Section 7.2.7(b).

“Appraisal Notice”: As defined in Section 35.2.

“Arbitration Question”: As defined in Section 22.6(c).

“ARML No. 3”: As defined in the recitals hereto.

“ARML No. 3 Payment Date”: As defined in Section 25.1.13.

“Asset Sale”: Any sale, lease or other transfer (including any such transaction
effected by way of merger or consolidation) of any asset by the Seniormost
Parent or any Consolidated Subsidiary, including, without limitation, any Sale
and Leaseback Transaction, whether or not involving a Capital Lease, and any
sale or issuance of the Equity Interests of any Consolidated Subsidiary, but
excluding any sales, leases or other transfers excluded under the Existing
Credit Facilities.

“Authorizations”: As defined in Section 40.3.

“Award”: As defined in ARTICLE XV.

“Bankruptcy Plan”: That certain Fourth Amended Joint Plan Of Reorganization of
Vencor, Inc. And Affiliated Debtors Under Chapter 11 Of The Bankruptcy Code
dated as of December 14, 2000, filed on December 14, 2000 at docket no. 4031 in
the United States Bankruptcy Court for the District of Delaware in the cases
known as In re: Vencor, Inc., et al., Case Nos. 99-3199 (MFW) through 99-3327
(MFW), as confirmed by such Bankruptcy Court by Order dated March 16, 2001,
filed on March 16, 2001 at docket no. 5975.

 

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“Base Patient Revenues”: Patient Revenues from the applicable specified Leased
Properties (adjusted, in amounts agreed upon by Lessor and Tenant, relative to
so-called “Vencare programs”, but which adjustment shall not otherwise be made
in the calculation of “Patient Revenues”) for the twelve (12) month period
ending on December 31, 1999, as set forth on Schedule 2.1A attached hereto and
incorporated herein.

“Base Rent”: (i) For any period ending on or prior to the day preceding the
Effective Date, rent at the aggregate annual rate applicable under the Existing
Master Leases or Existing ML5, as applicable, relative to the Leased Properties
(which rent, for the avoidance of doubt, shall be payable under the applicable
Existing Master Leases and not payable under this Lease in the case of the Added
Leased Properties), (ii) for the period from the Effective Date through April
30, 2017, rent at an annual rate equal to One Hundred Thirty-Seven Million Eight
Hundred Twenty-Nine Thousand Two Hundred Ninety and 17/100 Dollars
($137,829,290.17) per annum, and (iii) for a particular Rent Calculation Year
thereafter, an annual rental amount equal to the sum of:

 

  (a) Number 1 and 4 Portfolio:

(i) for each Rent Calculation Year commencing prior to May 1, 2018, (A) the
Prior Period Number 1 and 4 Portfolio Base Rent, plus (B) if the Patient
Revenues relative to the Number 1 and 4 Portfolio for the calendar year
preceding the commencement of such Rent Calculation Year equaled or exceeded
seventy-five percent (75%) of the Adjusted Base Patient Revenues relative to
such Leased Properties, two and seven-tenths percent (2.7%) of the Prior Period
Number 1 and 4 Portfolio Base Rent; and

(ii) for each Rent Calculation Year commencing on or after May 1, 2018, (A) the
Prior Period Number 1 and 4 Portfolio Base Rent, plus (B) the sum of (x)(1) if
the CPI Increase, expressed as a percentage, applicable to such Rent Calculation
Year is 0.00% or less, zero, (2) if the product of three (3) times the CPI
Increase, expressed as a percentage, applicable to such Rent Calculation Year,
is greater than 4.00%, the product of 4% times the portion of the Prior Period
Number 1 and 4 Portfolio Base Rent that is allocated to Leased Properties that
have as their Primary Intended Use use as a nursing center (“SNF Leased
Properties”), and (3) in all other cases, the product of three (3) times the CPI
Increase, expressed as a percentage, applicable to such Rent Calculation Year
times the portion of the Prior Period Number 1 and 4 Portfolio Base Rent that is
allocated to SNF Leased Properties, plus (y) if the Patient Revenues relative to
the Hospital Leased Properties (as defined below) within the Number 1 and 4
Portfolio for the calendar year preceding the commencement of such Rent
Calculation Year equaled or exceeded seventy-five percent (75%) of the Adjusted
Base Patient Revenues relative to such Leased Properties, the product of two and
seven-tenths percent (2.7%) times the portion of the Prior Period Number 1 and 4
Portfolio Base Rent that is allocated to Leased Properties that have as their
Primary Intended Use use as a hospital (“Hospital Leased Properties”)

(the amount described in this subsection (a) with respect to a particular Rent
Calculation Year is herein referred to as the “Number 1 and 4 Portfolio Base
Rent Component”); plus

 

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  (b) Number 2 Portfolio:

(i) for each Rent Calculation Year commencing prior to May 1, 2018, (A) the
Prior Period Number 2 Portfolio Base Rent, plus (B) if the Patient Revenues
relative to the Number 2 Portfolio for the calendar year preceding the
commencement of such Rent Calculation Year equaled or exceeded seventy-five
percent (75%) of the Adjusted Base Patient Revenues relative to such Leased
Properties, the product of (x) the Prior Period Number 2 Portfolio Base Rent
times (y)(1) two and twenty-five hundredths percent (2.25%), if the CPI
Increase, expressed as a percentage, applicable to such Rent Calculation Year is
less than 2.25%, (2) four percent (4%), if the CPI Increase, expressed as a
percentage, applicable to such Rent Calculation Year is greater than 4%, or (3)
the CPI Increase, expressed as a percentage, applicable to such Rent Calculation
Year, in all other cases; and

(ii) for each Rent Calculation Year commencing on or after May 1, 2018, (A) the
Prior Period Number 2 Portfolio Base Rent, plus (B) the sum of (x)(1) if the CPI
Increase, expressed as a percentage, applicable to such Rent Calculation Year is
0.00% or less, zero, (2) if the product of three (3) times the CPI Increase,
expressed as a percentage, applicable to such Rent Calculation Year, is greater
than 4.00%, the product of 4% times the portion of the Prior Period Number 2
Portfolio Base Rent that is allocated to SNF Leased Properties, and (3) in all
other cases, the product of three (3) times the CPI Increase, expressed as a
percentage, applicable to such Rent Calculation Year times the portion of the
Prior Period Number 2 Portfolio Base Rent that is allocated to SNF Leased
Properties, plus (y) if the Patient Revenues relative to Hospital Leased
Properties within the Number 2 Portfolio for the calendar year preceding the
commencement of such Rent Calculation Year equaled or exceeded seventy-five
percent (75%) of the Adjusted Base Patient Revenues relative to such Leased
Properties, the product of (1) the portion of the Prior Period Number 2
Portfolio Base Rent that is allocated to Hospital Leased Properties times (2)(x)
two and twenty-five hundredths percent (2.25%), if the CPI Increase, expressed
as a percentage, applicable to such Rent Calculation Year is less than 2.25%,
(y) four percent (4%), if the CPI Increase, expressed as a percentage,
applicable to such Rent Calculation Year is greater than 4%, or (z) the CPI
Increase, expressed as a percentage, applicable to such Rent Calculation Year,
in all other cases

(the amount described in this subsection (b) with respect to a particular Rent
Calculation Year is herein referred to as the “Number 2 Portfolio Base Rent
Component”); plus

 

  (c) Number 5 Portfolio:

for each Rent Calculation Year, (i) the Prior Period Number 5 Portfolio Base
Rent, plus (ii)(A) if the CPI Increase, expressed as a percentage, applicable to
such Rent Calculation Year is 0.00% or less, zero, (B) if the CPI Increase,
expressed as a percentage, applicable to such Rent Calculation Year, is greater
than 4.00%, the product of 4% times the Prior Period Number 5 Portfolio Base
Rent, and (C) in all other cases, the product of the CPI Increase, expressed as
a percentage, applicable to such Rent Calculation Year times the Prior Period
Number 5 Portfolio Base Rent

 

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(the amount described in this subsection (c) with respect to a particular Rent
Calculation Year is herein referred to as the “Number 5 Portfolio Base Rent
Component”).

Notwithstanding the foregoing, (I) nothing contained in this definition shall
limit the applicability of Section 19.2 and Section 19.3 hereof and (II) the
Base Rent amounts referenced above are subject to adjustment as expressly
provided in other provisions of this Lease (e.g., due to the termination of this
Lease as it relates to Leased Property(ies) due to a casualty, condemnation or
an Event of Default, due to a combination of this Lease with another Lease
pursuant to Section 40.16 hereof, due to the transfer of Leased Properties
demised under ML1, ML2 and/or ML4 into this Lease as provided in the ML1/2/4
Amendments, ARML No. 3 and Section 1.4 of this Lease or due to a sale of a
Leased Property and the termination of this Lease on account thereof as
contemplated in ARML No. 3).

“BLS”: The Bureau of Labor Statistics, U.S. Department of Labor or any successor
thereto.

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

“Capital Alterations”: With respect to any Leased Property: (i) the addition of
one or more new buildings, or (ii) the annexation of one or more additional
structures to any portion of any of the Leased Improvements on such Leased
Property, or (iii) the material expansion or contraction of the existing
improvements on such Leased Property, or (iv) any alteration or modification
affecting the foundation, floor slab, roof or roof structure, curtain wall,
structural columns, beams or shafts or other structural components of any of the
Leased Improvements on such Leased Property (other than any alterations or
modifications affecting any of such components that do not in any material
respect adversely affect the design, efficacy and/or quality of any such
component), or (v) any alteration or modification affecting any of the
electrical, plumbing, life safety, heating, ventilating, air conditioning or
other operating systems serving any of the Leased Improvements on such Leased
Property (other than any alterations or modifications affecting any of such
systems that do not in any material respect adversely affect the design,
operating capacity, efficiency and/or quality of any such system), or (vi) any
alterations or modifications to a Leased Property, the cost of which (excluding
cosmetic refurbishing alterations or modifications, such as painting,
wallpapering or carpeting), when taken together with all other alterations and
modifications (excluding cosmetic refurbishing alterations or modifications)
performed on such Leased Property in the twelve (12) month period immediately
preceding the subject alterations or modifications, would exceed One Million
Dollars ($1,000,000) (in the case of alterations or modifications to hospital
facilities) or Five Hundred Thousand Dollars ($500,000) (in the case of
alterations or modifications to nursing center facilities or any other facility
not operated as a hospital). “Capital Alterations” shall include, without
limitation, (1) the construction of a new wing or new story on a Leased
Property, (2) the repair, replacement, restoration, remodeling or rebuilding of
the existing

 

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improvements on a Leased Property or any portion thereof, where the purpose and
effect of such work is to provide a functionally new facility needed to provide
services not previously offered, and (3) any expansion, construction, renovation
or conversion in order to increase the bed capacity of the Facility located on a
Leased Property, to change the purpose for which such beds are utilized or to
improve materially the quality of such Facility.

“Capital Alterations Cost”: The term “Capital Alterations Cost” shall mean the
cost of any Capital Alteration proposed to be made by Tenant at a Leased
Property, whether or not paid for by Tenant or Lessor. Such cost shall include
(a) the cost of construction of the Capital Alterations (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 approved by Lessor, (b)
if agreed to by Lessor in writing, in advance, the cost of any land contiguous
to a Leased Property that is (1) to become part of such Leased Property and (2)
is purchased for the purpose of placing thereon the Capital Alterations or any
portion thereof or of providing means of access to such Capital Alterations or
any existing improvements on such Leased Property or of providing parking
facilities for such Capital Alterations or such existing improvements, 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 Alterations
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 and Tenant and, if agreed to in advance by Lessor, any
Lending Institution which has committed to finance the Capital Alterations,
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 or
transfer taxes, if any, (v) title insurance charges and appraisal fees, if any,
(vi) rating agency fees, if any, and (vii) commitment fees, if any, charged by
any Lending Institution advancing or offering to advance any portion of the
financing for such Capital Alterations.

“Capital Lease”: A lease that would be capitalized on a balance sheet of the
lessee prepared in accordance with GAAP.

“Capital Lease Obligation”: The obligation to pay rent under any Capital Lease.

“Code”: The Internal Revenue Code of 1986, as amended.

“Combined Leased Properties”: The Leased Properties from time to time under this
Lease, together with the leased properties from time to time under the other
Combined Leases.

“Combined Leases”: The following that are from time to time in existence: ML5,
the other Leases and any other lease that derives from ML5 or the other Leases
(e.g. any New Lease entered into pursuant to Section 40.15 of this Lease
(including, without limitation, any Separate Lease entered into pursuant to the
terms of Section 22.7 hereof) or the corresponding sections of ML5 or any of the
other Leases or of any such New Lease).

 

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“Commencement Date”: As to the applicable Leased Property, the date set forth
opposite such Leased Property in the column “Commencement Date” on Exhibit B
attached hereto.

“Compliant Participation”: As defined in Section 25.6.

“Condemnation”; “Condemnor”: As defined in ARTICLE XV.

“Consolidated EBITDA”: For any period, Adjusted Consolidated Net Income for such
period plus, without duplication and to the extent deducted in determining
Adjusted Consolidated Net Income for such period (other than in the case of
clause (vii) below), the sum of (i) Consolidated Interest Expense, (ii) income
tax expense, (iii) depreciation, amortization and other similar non-cash
charges, (iv) non-cash compensation expense (less any cash paid during such
period in respect of non-cash compensation expense accrued during any prior
period), (v) expenses for deferred compensation and bonuses, deferred purchase
price or earn-out obligations payable in connection with any Kindred Change of
Control Transaction, Acquisition or Investment, (vi) any fees, costs and
expenses paid or payable by the Seniormost Parent and its Consolidated
Subsidiaries in connection with any Kindred Change of Control Transaction,
Acquisition or Investment, in each case, expensed or amortized in such period
and including fees, expenses or charges triggered by change of control
provisions and amounts payable to the agents and/or lenders in connection with
any related financing transactions, (vii) factually supportable and quantifiable
pro forma cost savings or expense reductions related to operational efficiencies
(including the entry into any material contract or arrangement), strategic
initiatives or purchasing improvements, and other cost savings, expense
reductions, improvements or synergies, in each case, reasonably expected by the
Seniormost Parent to be realized based upon actions initiated or expected to be
initiated in connection with, and within twelve (12) months after, the
consummation of any operational change or the acquisition or disposition that
(A) in each case has occurred prior to or during such period or (B) in the case
of any disposition, has qualified for reporting as a discontinued operation
pursuant to Financial Accounting Standards Board Accounting Standards
Codification 205-20 prior to or during such period (which cost savings, expense
reductions, improvements and synergies shall be calculated (x) on a Pro Forma
Basis as though such cost savings, expense reductions, improvements or synergies
had been realized on the first day of such period and (y) net of the amount of
actual benefits realized during such period from such actions); provided that
(1) the chief financial officer of the Seniormost Parent shall have certified to
Lessor that such cost savings, improvements, synergies and/or expense reductions
are reasonably quantifiable and reasonably anticipated to result from such
actions and (2) no cost savings, improvements, synergies or expense reductions
shall be added pursuant to this clause (vii) to the extent duplicative of any
expenses or charges relating to such cost savings that are included in clause
(v) above with respect to such period, (viii) losses attributable to new
operating units, facilities, lines of business, acquired assets and joint
ventures and similar arrangements and integration expenses, opening costs and
other startup costs or losses, in each case during the first twelve (12) months
of operation of such units, facilities, lines of business, acquired assets,
joint ventures or such similar arrangements or following such integration,
opening or startup, as applicable, in an aggregate amount not to exceed 2.5% of
Baseline Consolidated EBITDA (as defined below) for any period of four
consecutive fiscal quarters (with unused amounts in any period permitted to be
carried over to succeeding periods,

 

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but subject to a maximum of 4.0% of Baseline Consolidated EBITDA for any period
of four consecutive fiscal quarters), (ix) operating losses attributable to the
closure, divestiture or consolidation or planned closure, divestiture or
consolidation of any operating facilities, in each case, within twelve (12)
months following such closure, divestiture or consolidation or announcing the
commencement thereof in an aggregate amount not to exceed 3.25% of Baseline
Consolidated EBITDA for any period of four consecutive fiscal quarters and (x)
in connection with any disposition, the earnings realized from intercompany
transactions with operations that have qualified for reporting as discontinued
operations pursuant to Financial Accounting Standards Board Accounting Standards
Codification 205-20 during or prior to such period; provided that (I) the
aggregate amount added pursuant to the foregoing clauses (v) and (vii) shall not
exceed 12.5% of Baseline Consolidated EBITDA for any period of four consecutive
fiscal quarters and (II) Consolidated EBITDA shall be calculated so as to
exclude the effect of any income or expense that (x) is classified as
extraordinary in accordance with GAAP, (y) is disclosed separately as an unusual
or non-recurring item or is related to exit or disposal cost obligations in
accordance with ASC 420 or (z) represents the effect of an accounting change on
prior periods in accordance with GAAP. As used in this definition, “Baseline
Consolidated EBITDA” shall mean Consolidated EBITDA prior to giving effect to
amounts added back pursuant to the foregoing clauses (vii) through (x) for the
applicable period.

“Consolidated EBITDAR”: For any period, Consolidated EBITDA for such period
plus, to the extent deducted in determining Consolidated EBITDA for such period,
Consolidated Rental Expense.

“Consolidated Fixed Charges”: For any period, the sum of Consolidated Interest
Expense and Consolidated Rental Expense of the Seniormost Parent and its
Consolidated Subsidiaries for such period.

“Consolidated Interest Expense”: For any period, the interest expense of the
Seniormost Parent and its Consolidated Subsidiaries, determined on a
consolidated basis for such period; provided that Consolidated Interest Expense
shall not (i) include interest capitalized in accordance with GAAP, (ii) include
interest expense related to exit or disposal cost obligations in accordance with
ASC 420 or (iii) be reduced by any interest income.

“Consolidated Net Income”: For any period, the net income (or loss) of the
Seniormost Parent and its Consolidated Subsidiaries determined on a consolidated
basis for such period.

“Consolidated Rental Expense”: For any period, the total rental expense for
operating leases of the Seniormost Parent and its Consolidated Subsidiaries,
determined on a consolidated basis for such period; provided that Consolidated
Rental Expense shall (x) not be reduced by any rental income and (y) exclude any
lease termination charge that is disclosed separately as an unusual or
non-recurring item (but without duplication of any amount otherwise added to
Consolidated EBITDA).

“Consolidated Subsidiary”: With respect to any Person (the “parent”) at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial

 

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statements if such financial statements were prepared in accordance with GAAP as
of such date; provided, that Cornerstone shall not be considered a Consolidated
Subsidiary for purposes of this Agreement. Unless otherwise specified,
“Consolidated Subsidiary” means a Consolidated Subsidiary of the Seniormost
Parent.

“Consolidated Total Assets”: As of any date of determination, the total amount
of all assets of the Seniormost Parent and its Consolidated Subsidiaries,
determined on a consolidated basis in accordance with GAAP as of the last day of
the quarterly or annual period for which financial statements of Tenant were
most recently required to be delivered under Section 26.1(a) or Section 26.1(b)
hereof prior to such date of determination.

“Consolidated Total Indebtedness”: As of any date of determination, the
aggregate amount of Indebtedness of the Seniormost Parent and its Consolidated
Subsidiaries outstanding on such date, determined on a consolidated basis in
accordance with GAAP (but excluding the effects of any discounting of
Indebtedness resulting from the application of acquisition method accounting in
connection with any Kindred Change of Control Transaction, Acquisition or
Investment) consisting only of Indebtedness for borrowed money, unreimbursed
obligations under letters of credit, obligations in respect of Capital Leases
and debt obligations evidenced by promissory notes or similar instruments less
the cash and cash equivalents (in each case, free and clear of Liens other than
Liens securing such Indebtedness and Permitted Encumbrances (as defined in the
Existing Credit Agreements) that are nonconsensual Liens) of the Seniormost
Parent and its Consolidated Subsidiaries in an amount not to exceed $100,000,000
as of such date that would be required to be reflected on a consolidated balance
sheet in accordance with GAAP.

“Cornerstone” means Cornerstone Insurance Company, a Cayman Islands corporation.

“Cost of Living Index”: The Consumer Price Index for All Urban Consumers, U.S.
City Average (1982-1984 = 100), published by the BLS, or such other renamed
index. If the BLS changes the publication frequency of the Cost of Living Index
so that a Cost of Living Index is not available to make a Base Rent adjustment
as specified in this Lease, the Base Rent adjustment shall be based on the
percentage difference between the Cost of Living Index for the closest preceding
month for which a Cost of Living Index is available and the Cost of Living Index
for the same month of the preceding year as required by this Lease. If the BLS
changes the base reference period for the Cost of Living Index from 1982-84 =
100, the Base Rent adjustment shall be determined with the use of such
conversion formula or table as may be published by the BLS. If the BLS otherwise
substantially revises, or ceases publication of, the Cost of Living Index, then
a substitute index for determining Base Rent adjustments, issued by the BLS or
by a reliable governmental or other nonpartisan publication, shall be reasonably
selected by Lessor and Tenant.

“Coverage Ratio”: As to any one or more of the Combined Leased Properties, the
ratio of the EBITDARM generated by such Combined Leased Property(ies) to Base
Rent allocable thereto under the applicable Combined Leases, in each case for
the four (4) full calendar quarters ending not less than sixty (60) days prior
to the occurrence of a Section 16.10.3.1 New Lease Transaction, in the case of
Section 16.10.3.1, or prior to the date as of which the Coverage Ratio is being
measured, in all other cases.

 

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“CPI Increase”: For a particular Rent Calculation Year, the percentage increase
(rounded to two (2) decimal places), if any, in (a) the Cost of Living Index
published for the February immediately preceding the commencement of such Rent
Calculation Year, over (b) the Cost of Living Index published for the same month
of the year preceding the year during which the month referenced in subsection
(a) above occurs.

“Cure Expiration Date”: As defined in Section 8.7.1.

“Cure Right”: As defined in Section 8.7.1.

“Date of Taking”: As defined in ARTICLE XV.

“Disclosing Party”: As defined in Section 40.14.

“Disclosure Date”: As defined in Section 40.14.

“Disclosure Law”: As defined in Section 40.14.

“Disclosure Notice”: As defined in Section 40.14.

“Disclosure Notification Period”: As defined in Section 40.14.

“Draft Certificate”: As defined in Section 25.1.12(c).

“EBITDAR”: As to any particular Leased Property or Leased Properties, or any
hospital, nursing center or other facility not covered by this Lease (regardless
of the identity of the landlord or tenant of any such other facility) for a
particular period, the earnings before interest, taxes, depreciation,
amortization and rent, attributable to such Leased Property or Leased Properties
or such other facility, as applicable, for such period, as determined in
accordance with the customary methods, procedures and accounting principles from
time to time used in the health care industry.

“EBITDARM”: As to any particular Leased Property or Leased Properties, or any
hospital, nursing center or other facility not covered by this Lease (regardless
of the identity of the landlord or tenant of any such other facility) for a
particular period, the earnings before interest, taxes, depreciation,
amortization, rent and management fees, attributable to such Leased Property or
Leased Properties or such other facility, as applicable, for such period, as
determined in accordance with the customary methods, procedures and accounting
principles from time to time used in the health care industry.

“Effective Date”: As defined in the preamble hereof.

“Encumbrance”: As defined in Section 38.1.

 

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“Entity”: Any Person other than an individual.

“Equity Interest”: (i) in the case of a corporation, any shares of its capital
stock, (ii) in the case of a limited liability company, any membership interest
therein, (iii) in the case of a partnership, any partnership interest (whether
general or limited) therein, (iv) in the case of any other business entity, any
participation or other interest in the equity or profits thereof or (v) any
warrant, option or other right to acquire any Equity Interest described in the
foregoing clauses (i), (ii), (iii) and (iv).

“Event of Default”: As defined in Section 16.1.

“Excess CGL/PL Policies”: As defined in Section 13.11.

“Exercise of the Purchase Option”: Means the exercise of the “Purchase Option”
as defined in and in accordance with ARML No. 3.

“Exercise of the Renewal Option”: Means the exercise or deemed exercise of the
“Renewal Option” as defined in and in accordance with ARML No. 3.

“Existing Credit Agreements”: The Tenant Credit Agreements as in effect on the
Effective Date (without giving effect to any amendments, restatements or other
modifications thereto that occur after the Effective Date).

“Existing Ground Leases”: Those ground leases listed on Schedule 2.1C attached
hereto and made a part hereof, as the same may have been amended or modified in
writing after the Existing Lease Effective Date with the written consent of
Lessor and Tenant, each acting in its sole discretion.

“Existing IGT Agreements”: As defined in Section 25.6.

“Existing Lease Effective Date”: Shall mean April 20, 2001.

“Existing Master Lease”: As defined in the recitals hereto.

“Existing ML5”: As defined in the recitals hereto.

“Expired/Terminated Properties”: As defined in Section 40.16.

“Extended Term”: As defined in Section 19.1.

“Facility”: The facility being operated or proposed to be operated on the
applicable Leased Property.

“Facility Default”: An Event of Default that relates directly to one or more of
the Leased Properties and/or the Facilities operated thereon (such as, for
example only and without limitation, an Event of Default arising from a failure
to maintain or repair, or to operate for the Primary Intended Use, or to
maintain the required Authorizations for, one or more of the

 

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Facilities), as opposed to an Event of Default that, by its nature, does not
relate directly to any of the Leased Properties or Facilities (such as, for
example only and without limitation, an Event of Default arising from a breach
of Section 3.1(a)).

“Facility Mortgage”: As defined in Section 13.1.

“Facility Mortgagee”: As defined in Section 13.1.

“Facility Termination”: As defined in Section 40.3.

“Fair Market Added Value: The Fair Market Value (as hereinafter defined) of the
applicable Leased Property (including all Capital Alterations), less, if Tenant
has performed and financed a Capital Alteration to add a new building(s) to such
Leased Property, the Fair Market Value of such Leased Property determined as if
any such new building(s) had not been constructed.

“Fair Market Rental”: The annual amount per annum that a willing tenant would
pay, and a willing landlord would accept, at arm’s length, for leasing of the
Leased Properties (or, if applicable, any one or more, but less than all, of the
Leased Properties) for the period of the Term (including, without limitation,
any Extended Terms) remaining from and after the date as of which the Fair
Market Rental is being determined (e.g. as of the commencement of an Extended
Term, in the case of Section 19.2 and Section 19.3). The Fair Market Rental may
include therein such escalations of rent as would be paid by such a tenant, and
accepted by such a landlord, as part of an arm’s length transaction entered into
as of the aforesaid Fair Market Rental determination date; provided, however,
that, in addition to such other market factors as may be applicable in
determining the Fair Market Rental, the Fair Market Rental shall be determined
on the basis, and on the assumptions, that (a) the Fair Market Rental may not
include therein any rent, or method of rent calculation, that would adversely
affect any landlord by virtue of it being a real estate investment trust or the
ability of any such landlord to satisfy the requirements for maintaining its
status as a real estate investment trust (and, without limitation of the
foregoing, the Fair Market Rental shall not include any rent that would fail to
qualify as “rents from real property” for purposes of Section 856(d) of the
Code), (b) the Fair Market Rental amount is to be paid absolutely net to the
aforesaid landlord, without any rights of deduction, set-off or abatement, (c)
all of the Leased Properties as to which the Fair Market Rental is being
determined are in good condition and repair (given their respective ages and
prevailing health care industry standards with respect to what is considered
good condition and repair), without any deferred maintenance (but allowing for
ordinary wear and tear), are in material compliance with any and all applicable
laws, codes, ordinances and regulations and have in full force and effect, for
the benefit of the aforesaid tenant, the Facilities and the Leased Properties,
any and all necessary or appropriate material Authorizations for use thereof in
accordance with the respective Primary Intended Uses applicable thereto, (d) the
aforesaid tenant has complied, and shall be required to comply, with the
requirements of this Lease, including, without limitation, ARTICLE XXXVI hereof,
(e) the respective replacement costs of the Leased Properties as to which Fair
Market Rental is being determined are not determinative of the Fair Market
Rental of such Leased Properties, and (f) the aforesaid tenant shall have
available to it, with respect to each Leased Property as to which the Fair
Market Rental is being determined,

 

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such remaining Term as then remains, and such number of Extended Terms as then
remain unexercised, with respect to such Leased Property under the terms of this
Lease. Notwithstanding anything to the contrary contained in this Lease, “Fair
Market Rental” shall take into account, for each of the applicable Leased
Properties, the market conditions, market levels of EBITDARM, the ratio of
market levels of EBITDARM to market levels of rent, and the actual levels of
EBITDARM at the applicable Leased Properties, in each case that are prevailing
or measured, as applicable, as of the date as of which the Fair Market Rental is
being determined, as well as historical levels of EBITDARM at the applicable
Leased Properties (including the EBITDARM of the Leased Properties measured as
of the Effective Date).

“Fair Market Value”: The price that a willing buyer not compelled to buy would
pay a willing seller not compelled to sell for the applicable Leased Property,
including all Capital Alterations, and (a) assuming the same is unencumbered by
this Lease, (b) determined in accordance with the appraisal procedures set forth
in ARTICLE XXXV or in such other manner as shall be mutually acceptable to
Lessor and Tenant, and (c) not taking into account any reduction in value
resulting from any indebtedness to which such Leased Property is subject except
as expressly provided hereinbelow. In determining such Fair Market Value the
positive or negative effect on the value of the Leased Property attributable to
the interest rate, amortization schedule, maturity date, prepayment penalty and
other terms and conditions of any encumbrance which is not removed at or prior
to the closing of the transaction as to which such Fair Market Value
determination is being made shall be taken into account.

“Fair Market Value Purchase Price”: The Fair Market Value of the Leased Property
less the Fair Market Added Value.

“Fiscal Year”: The twelve (12) month period from January 1 to December 31.

“Final Appraiser”: As defined in Section 35.2.

“Financial Covenant Compliance Date”: The date of consummation of any Kindred
Change of Control Transaction and each Quarterly Covenant Compliance Date.

“Fixed Charge Coverage Ratio”: At any Financial Covenant Compliance Date, the
ratio of (x) Consolidated EBITDAR for the four consecutive fiscal quarters ended
on or immediately prior to such Financial Covenant Compliance Date for which
Tenant has delivered Financial Statements pursuant to Section 26.1(a) or Section
26.1(b), as applicable (the “Reference Period”) to (y) Consolidated Fixed
Charges for the Reference Period; provided that Cornerstone shall be disregarded
for purposes of determining the Fixed Charge Coverage Ratio. The foregoing
calculation shall be made on a Pro Forma Basis.

“Fixed Term”: As defined in Section 1.2.

“Fixtures”: As defined in Section 1.1.

 

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“Fund”: Shall mean one or more institutional and multi-investment investment
funds or private equity funds (in each case, as such terms are used in the
investment community) or any similar Entity or Entities (whether or not
regulated as such).

“GAAP”: Shall mean generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting profession), or in such
other statements by such entity as may be in general use by significant segments
of the U.S. accounting profession.

“Guarantee”: Any obligation of or by any Person (the “guarantor”), contingent or
otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, and including
any obligation of the guarantor, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment thereof, (ii) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, (iii) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (iv) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term “Guarantee” shall not include endorsements
for collection or deposit in the ordinary course of business.

“Guarantor”: Each subtenant that is an Affiliate of Tenant to which a Leased
Property or any portion thereof is subleased, including, without limitation, as
of the Effective Date, the Affiliates of Tenant that are referenced on Schedule
40.12 attached hereto and incorporated herein.

“Healthcare Facility”: (i) A hospital, outpatient clinic, nursing center,
assisted or independent living community, long-term care facility or any other
facility that is used or useful in the provision of healthcare or custodial care
services, (ii) any healthcare business affiliated or associated with a
Healthcare Facility (as defined in clause (i)) or (iii) any business related or
ancillary to the provision of healthcare services or the operation of a
Healthcare Facility (as defined in clause (i)) including, but not limited to,
pharmacy supply and services, contract therapy services, as well as hospice and
home care services.

“Hospital Competitor”: As defined in Section 7.2.7.

“Hospital Facility”: As defined in Section 7.2.7.

“IBNR claims”: As defined in Section 13.11.

“IGT Program”: As defined in Section 25.6.

 

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“Impositions”: Shall mean for each applicable Leased Property, collectively, all
taxes (including, without limitation, all taxes imposed under the laws of the
State, as such laws may be amended from time to time, and all ad valorem, sales
and use, single business, gross receipts, transaction privilege, rent or similar
taxes as the same relate to or are imposed upon any rents from the applicable
Leased Property or upon Tenant or its business conducted upon the applicable
Leased Property, but excluding any tax based on the net income or net profit of
Lessor derived from any such rents), assessments (including, without limitation,
all assessments for public improvements or benefits, whether or not commenced or
completed prior to the Existing Lease Effective Date and whether or not to be
completed within the Term), ground rents arising under any of the Existing
Ground Leases, water, sewer or other rents and charges, excises, tax levies,
fees (including, without limitation, 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 the applicable Leased Property or any rents
therefrom or the business conducted thereon by Tenant (including all interest
and penalties thereon due to any failure in payment by Tenant), which at any
time prior to, during or in respect of the Term hereof may be assessed or
imposed on or in respect of or be a lien upon (a) Lessor or Lessor’s interest in
such Leased Property, (b) such Leased 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, or sales from, an activity conducted on, or in
connection with such Leased Property or the leasing or use of such Leased
Property or any part thereof by Tenant; provided, however, nothing contained in
this Lease shall be construed to require Tenant to pay (1) any tax based on net
income (whether denominated as a franchise or capital stock or other tax)
imposed on Lessor or any other person or (2) any transfer, or net revenue tax of
Lessor or any other person or (3) any tax imposed with respect to the sale,
exchange or other disposition by Lessor of the applicable Leased Property or the
proceeds thereof, except to the extent that any tax, assessment, tax levy or
charge, which Tenant is obligated to pay pursuant to the preceding provisions of
this definition and which is in effect at any time during the Term hereof 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.

“Indebtedness”: For any Person, without duplication, (i) all obligations of such
Person for borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person to pay the deferred purchase price of property or services, (iv) all
Capital Lease Obligations of such Person, (v) all obligations of such Person to
purchase securities which arise out of or in connection with the sale of the
same or substantially similar securities, (vi) all obligations of such Person
(whether contingent or noncontingent) to reimburse any lender or other Person in
respect of amounts paid under a letter of credit, banker’s acceptance or similar
instrument, (vii) all obligations secured by a Lien on any asset of such Person,
whether or not such Indebtedness is otherwise an obligation of such Person, and
(viii) all Guarantees by such Person of obligations of another Person (each such
Guarantee to constitute Indebtedness in an amount equal to the maximum amount of
such other Person’s obligations Guaranteed thereby); provided that neither (a)
trade accounts payable nor (b) amounts owed to patients or residents arising in
the ordinary course of business nor (c) obligations arising in respect of
insurance policies or performance or surety bonds which are not themselves
Guarantees of Indebtedness (nor drafts, acceptances or similar instruments

 

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evidencing the same nor obligations in respect of letters of credit supporting
the payment of the same) nor (d) guarantees of any obligation of the Seniormost
Parent or a Consolidated Subsidiary pursuant to an operating lease shall
constitute Indebtedness.

“Indemnity Agreement”: That certain Agreement of Indemnity-Third Party Leases,
dated as of April 30, 1998, from Tenant and its Affiliates to Ventas, Inc.,
which Indemnity Agreement remains in full force and effect in accordance with
its terms and is hereby reaffirmed and ratified.

“Insurance Requirements”: All terms of any insurance policy required by this
Lease with respect to the applicable Leased Property and all requirements of the
issuer of any such policy.

“Interest Rate Agreement”: Any interest rate swap agreement, interest rate cap
agreement, synthetic cap, collar or floor or other financial agreement or
arrangement to or under which the Seniormost Parent or any Consolidated
Subsidiary is a party and that is designed to protect against fluctuations in
interest rates or to reduce the effect of any such fluctuations.

“Investment”: With respect to any Person, any investment by such Person in any
other Person, whether by means of share purchase, capital contribution, loan,
advance, purchase of Indebtedness, payment in respect of a Guarantee of
Indebtedness, time deposit or otherwise. For purposes of covenant compliance,
any Investment by the Seniormost Parent or a Consolidated Subsidiary in any
Person other than the Seniormost Parent or a Consolidated Subsidiary shall be
deemed outstanding at all times after it is made and the amount of any
Investment at any time shall be the amount actually invested (measured at the
time made), without adjustment for subsequent changes in the value of such
Investment, net of any cash return to the Seniormost Parent or a Consolidated
Subsidiary representing a return of capital or proceeds of a sale or other
realization with respect to such Investment.

“Kindred”: As defined in the preamble hereof.

“Kindred Change of Control Transaction”: The consummation of any acquisition of
all or substantially all of the voting securities of (i) Kindred or any Entity
of which Kindred is a direct or indirect subsidiary, provided that any
transaction under this clause (i) that does not result in the change of the
Seniormost Parent Control Person shall not be deemed a Kindred Change of Control
Transaction or a change of control (by way of example, a transfer of Kindred
from one wholly-owned subsidiary of the Seniormost Parent to another
wholly-owned subsidiary of the Seniormost Parent shall not be deemed a Kindred
Change of Control Transaction or a change of control) or (ii) the then
applicable Seniormost Parent Control Person, in each case whether the
consideration consists of securities or cash and whether the structure is a
merger, transfer of stock or a tender or exchange offer followed by a second
step merger; it being understood that, if the acquiror in a tender or exchange
offer commits, at the time of such tender or exchange offer, to conduct a second
step merger upon completion of such tender or exchange offer (subject to the
conditions that a shareholders meeting shall have occurred at which the acquiror
may vote such voting securities to adopt the merger and the absence of any
order, legal restraint or law prohibiting the merger), then each of the
consummation of such tender or exchange offer and the consummation of the second
step merger shall also be deemed a Kindred Change of Control Transaction (but
the transaction fee payable in accordance with

 

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Section 25.1.12(d) shall be payable on or before the consummation of the tender
or exchange offer and shall not be payable in connection with the second step
merger). For the avoidance of doubt, no sale of any or all of the assets of
Kindred, any Entity of which Kindred is a direct or indirect subsidiary or any
Seniormost Parent (other than the sale of all or substantially all of the voting
securities of Kindred, any Entity of which Kindred is a direct or indirect
subsidiary or any Seniormost Parent in accordance with the terms of this Lease)
shall constitute a Kindred Change of Control Transaction.

“known claim”: As defined in Section 13.11.

“Land”: As defined in Section 1.1.

“Lease”: As defined in the preamble hereof.

“Lease Guaranty”: A guaranty of certain obligations of Tenant under this Lease
executed and delivered by each Guarantor substantially in the form of Exhibit G
annexed hereto.

“Lease Year”: Shall mean May 1 through April 30 of each year of the Term.

“Leased Improvements”; “Leased Property”; “Leased Properties”: Each as defined
in Section 1.1.

“Leasehold Mortgage”: As defined in Section 22.2(a).

“Leasehold Mortgagee”: As defined in Section 22.2(b).

“Leases”: Collectively, this Lease and all of those certain leases listed in
Exhibit E attached hereto.

“Legal Requirements”: As to the applicable Leased Property, all federal, state,
county, parish, municipal and other governmental statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions affecting such
Leased Property or the maintenance, construction, use, operation or alteration
thereof, whether now or hereafter enacted and in force, including, without
limitation, (i) any licensure requirements, certification requirements under
applicable federal and/or state cost reimbursement programs, including Medicare
and Medicaid (provided the applicable Facility participates in such
reimbursement), building codes and zoning regulations, (ii) any which may (x)
require repairs, modifications or alterations in or to such Leased Property or
(y) in any way adversely affect the use and enjoyment thereof, and (iii) all
permits, licenses, certificates of need, authorizations and regulations
necessary to operate such Leased Property for its Primary Intended Use.

“Lending Institution”: Any insurance company, federally insured commercial or
savings bank, national banking association, savings and loan association, credit
union, employees’ welfare, pension or retirement fund or system, corporate
profit sharing or pension trust, college or university, endowment fund, real
estate investment trust, or other institutional lender or financial enterprise,
including, without limitation, any corporation qualified to be treated for
federal tax purposes as a real estate investment trust, having a net worth of at
least $50,000,000 acting on its own behalf or as agent on behalf of other
Lending Institutions.

 

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“Lessor”: Ventas Realty, Limited Partnership, a Delaware limited partnership and
its successors and assigns.

“Lessor’s Management Group”: Shall mean Debra A. Cafaro, T. Richard Riney and
Nicholas W. Jacoby.

“LIBO Rate”: On any day, the offered rate per annum for Dollar deposits in the
London Interbank Offered Market for contracts with a three-month term, as
reported in The Wall Street Journal on the last Business Day of the calendar
month immediately preceding such day. If The Wall Street Journal shall cease to
report such offered rate, then the LIBO Rate, on any day, shall be the aforesaid
offered rate per annum as of the last Business Day of the calendar month
immediately preceding such day, determined by Citibank, N.A., or any successor
thereof, as the aforesaid offered rate per annum as of such last Business
Day. If the aforesaid offered rate is determined by reference to The Wall Street
Journal, the same shall be based upon the effective rate per annum for the
aforesaid contracts entered into such number of days prior to the day for which
the aforesaid offered rate is being reported by The Wall Street Journal as is
used by The Wall Street Journal. If the aforesaid offered rate is determined
based upon the rate determined by Citibank, N.A., or any successor thereof, the
same shall be based upon the effective rate per annum for the aforesaid
contracts entered into as of approximately 11:00 a.m. (London time) two (2)
Business Days prior to the day for which the aforesaid offered rate is being
determined by Citibank, N.A., or any successor thereof.

“Lien”: With respect to any asset, (i) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset or any other arrangement (other than a right of set-off, recoupment,
counterclaim or similar right) the economic effect of which is to give a
creditor preferential access to such asset to satisfy its claim, including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and mechanic’s, materialmen’s and other similar liens and
encumbrances, (ii) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (iii) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.

“Litigation Costs”: All costs reasonably incurred by Lessor in connection with
the enforcement of any provision of this Lease and/or in connection with any
third-party claim against Lessor or any Leased Property arising on account of or
in connection with any default or Event of Default hereunder by Tenant,
including, without limitation, costs reasonably incurred by Lessor in
investigating, settling and/or prosecuting claims and for attorney’s and legal
assistant fees and expenses, court costs and fees and consultant and witness
fees and expenses.

“Master Lease Leased Properties”: The properties that, as of the Effective Date,
were Leased Properties under ML5.

 

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“Measurement Transaction”: As defined in Section 8.5.

“Medicaid”: A state program of medical aid established under Title XIX of the
Social Security Act of 1965, as amended, and any successor statute thereto and
any successor programs.

“Medicare”: The program of medical care benefits provided under Title XVIII of
the Social Security Act of 1965, as amended, and any successor statute thereto
and any successor programs thereto.

“ML1/2/4”: As defined in the recitals hereto.

“ML1/2/4 Amendment”; “ML1/2/4 Amendments”: As defined in the recitals hereto.

“ML5”: That certain Second Amended and Restated Master Lease Agreement No. 5
dated as of the Effective Date by and among Ventas Realty, Limited Partnership,
Kindred and Operator.

“ML Leases”: The following that are from time to time in existence: ML5 and any
other lease of any Master Lease Leased Property(ies) that derives from ML5 (e.g.
any New Lease entered into pursuant to Section 40.15 of this Lease (including,
without limitation, any Separate Lease entered into pursuant to the terms of
Section 22.7 hereof) or the corresponding sections of ML5 or of any such New
Lease).

“Monthly IGT Share Amount”: As defined in Section 25.6.

“New Lease”: As defined in Section 40.15.

“1998 Plan of Reorganization”: As defined in Section 16.11.

“Non-Capital Alterations”: As defined in Section 10.4.

“Number 1 and 4 Portfolio”: As of a particular date, those facilities identified
on Exhibit B hereto as Portfolio #1 or Portfolio #4 facilities that are and
remain demised under this Lease as of such date.

“Number 2 Portfolio”: As of a particular date, those facilities identified on
Exhibit B hereto as Portfolio #2 facilities that are and remain demised under
this Lease as of such date.

“Number 5 Portfolio”: As of a particular date, those facilities identified on
Exhibit B hereto as Portfolio #5 facilities that are and remain demised under
this Lease as of such date.

“Number 1 and 4 Portfolio Base Rent Component”: As defined in the definition of
Base Rent.

“Number 2 Portfolio Base Rent Component”: As defined in the definition of Base
Rent.

“Number 5 Portfolio Base Rent Component”: As defined in the definition of Base
Rent.

 

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“Officer’s Certificate”: A certificate of Tenant (or the Seniormost Parent or a
Guarantor, if so provided in this Lease) signed by the chairman of the board of
directors, the president, any vice president, the secretary, the treasurer, the
chief operating officer, the chief financial officer, the general counsel or any
other officer authorized to so sign by the board of directors or by-laws of
Tenant (or of the Seniormost Parent or a Guarantor, if applicable as described
above), or the general partner or managing member of Tenant (or of the
Seniormost Parent or a Guarantor, if applicable as described above), as
applicable, or any other person whose power and authority to act has been
authorized by delegation in writing by any person duly authorized to make such
delegation of authority.

“Operator”: As defined in the preamble hereof.

“Overdue Rate”: On any date, a rate equal to 2% per annum above the Prime Rate,
but in no event greater than the maximum rate then permitted under applicable
law, provided, however, that, upon the occurrence of any Event of Default, the
Overdue Rate, when applied to any Accrued Rent, Accrued Rent Interest or Unpaid
Accrued Rent, shall equal, on any date, a rate equal to the LIBO Rate plus 700
basis points per annum, but in no event greater than the maximum rate then
permitted under applicable law. Interest at the aforesaid rates shall be
determined for actual days elapsed based upon a 360 day year.

“Paragraph Seven Notification Period”: As defined in Section 40.14.

“Partial Expiration/Termination Date”: As defined in Section 40.16.

“Partial Expiration/Termination Days”: As defined in Section 40.16.

“Patient Revenues”: Revenues generated from the sale of goods or services at or
through the Leased Properties, whether by Tenant or any subtenant or licensee of
Tenant, or any other party, which revenues are primarily derived from services
provided to patients (including, without limitation, revenues received or
receivable for the use of or otherwise by reason of all rooms, beds and other
facilities provided, meals served, services performed or goods sold at the
Leased Properties, but excluding revenues received by Tenant as rent or other
consideration from a permitted assignment of this Lease or any part thereof or a
permitted sublease of any Leased Property(ies) or any part thereof), and which
revenues shall be measured and computed using substantially the same methodology
as during the period between April 30, 1998 (in the case of the Added Leased
Properties) or April 27, 2007 (in the case of the other Leased Properties) and
the Effective Date and net of contractual adjustments of governmental and other
third party payors.

“Payment Date”: Any due date for the payment of the installments of any
component of Rent payable under this Lease.

“Permissible Reduction Percentage”: As defined in Section 16.1.

“Permitted Alteration”: Any Capital Alteration or Non-Capital Alteration to a
Facility or Leased Property that is permitted pursuant to the terms of this
Lease.

 

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“Permitted Encumbrances”: (a) all easements, covenants, conditions,
restrictions, agreements and other matters with respect to the Leased Properties
that were of record as of the Commencement Date; (b) all easements, covenants,
conditions, restrictions, agreements and other matters with respect to the
Leased Properties, whether or not of record, that are executed by Tenant or
approved or consented to in writing by Tenant; (c) any easement or utility
agreement entered into by Lessor with respect to a Leased Property(ies) after
the Existing Lease Effective Date, subject to Tenant’s consent, in its sole
discretion; (d) any agreement required pursuant to any Legal Requirement entered
into by Lessor with respect to a Leased Property(ies) after the Existing Lease
Effective Date, subject to Tenant’s consent, not to be unreasonably withheld,
conditioned or delayed; (e) any matter affecting title to the Leased Properties
or any portion thereof that is permitted under Section 7.3 or Section 9.2; and
(f) any other matters affecting title to the Leased Properties or any portion
thereof caused by Tenant or its assignees or sublessees or their respective
agents or employees, provided, however, that, for purposes of Section 24.1
below, “Permitted Encumbrances” shall not include any Superior Lease (other than
the Existing Ground Leases), any Facility Mortgage or other lien created by
Lessor or its agents or employees or any Leasehold Mortgage and, for purposes of
Section 8.3 below, “Permitted Encumbrances” shall not include any Superior
Lease, any Facility Mortgage or other lien created by Lessor or its agents or
employees or any Leasehold Mortgage.

“Permitted Internal Reorganization”: An internal reorganization of Seniormost
Parent whereby either (i) a wholly-owned subsidiary of Seniormost Parent or (ii)
a newly formed Entity formed solely for the purpose of engaging in such internal
reorganization that has engaged in no other business activities and has no other
liabilities becomes the new Seniormost Parent and no material liabilities are
incurred (other than liabilities that the old Seniormost Parent would not
otherwise have been prohibited from incurring hereunder) and no equity interests
are issued or sold to third parties in connection with such transaction.

“Person”: Any individual, sole proprietorship, corporation, general partnership,
limited partnership, limited liability company or partnership, joint venture,
association, joint stock company, bank, trust, estate, unincorporated
organization, any federal, state, county, or municipal government (or agency or
political subdivision thereof), endowment fund or other form of entity.

“Plans and Specifications”: As defined in Section 10.1.

“Previous Period Unreported Claims”: As defined in Section 13.1.4.

“Primary Intended Use”: As defined in Section 7.2.2.

“Prime Rate”: On any date, a rate equal to the annual rate on such date
announced by Citibank, N.A., or any successor thereof, to be its prime rate.

“Prior Period Number 1 and 4 Portfolio Base Rent”: As of any date, the annual
rate of Base Rent that was allocated to the Number 1 and 4 Portfolio and in
effect immediately prior to the commencement of the Rent Calculation Year
containing such date. For example, for the Rent Calculation Year commencing on
May 1, 2019, if, as of April 30, 2019, the annual Base Rent for

 

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all of the Facilities was $100,000,000.00 per annum and $25,000,000.00 of such
$100,000,000.00 was allocated to the Number 1 and 4 Portfolio, the Prior Period
Number 1 and 4 Portfolio Base Rent would be equal to $25,000,000.00 per annum.

“Prior Period Number 2 Portfolio Base Rent”: As of any date, the annual rate of
Base Rent that was allocated to the Number 2 Portfolio and in effect immediately
prior to the commencement of the Rent Calculation Year containing such date.

“Prior Period Number 5 Portfolio Base Rent”: As of any date, the annual rate of
Base Rent that was allocated to the Number 5 Portfolio and in effect immediately
prior to the commencement of the Rent Calculation Year containing such date.

“Pro Forma Basis”: For purposes of making calculations, reporting and
determining compliance with any financial covenant hereunder, compliance as of
any Financial Covenant Compliance Date will be determined after making the
following pro forma adjustments:

(a) pro forma effect will be given to any Indebtedness incurred during or after
the Reference Period to the extent the Indebtedness is outstanding or is to be
incurred on such Financial Covenant Compliance Date as if the Indebtedness had
been incurred on the first day of the Reference Period;

(b) pro forma calculations of interest on Indebtedness bearing a floating
interest rate will be made as if the rate in effect on the Financial Covenant
Compliance Date (taking into account any Interest Rate Agreement applicable to
the Indebtedness if the Interest Rate Agreement has a remaining term of at least
twelve (12) months) had been the applicable rate for the entire Reference
Period;

(c) Consolidated Interest Expense related to any Indebtedness no longer
outstanding or to be repaid or redeemed on the Financial Covenant Compliance
Date will be excluded;

(d) pro forma effect will be given to:

(i) any Kindred Change of Control Transaction;

(ii) the creation of Consolidated Subsidiaries; and

(iii) the acquisition or disposition of Entities, properties, divisions or lines
of businesses by the Seniormost Parent and its Consolidated Subsidiaries,
including any acquisition or disposition of Entities, properties, divisions or
lines of business since the beginning of the Reference Period by a Person that
became a Consolidated Subsidiary after the beginning of the Reference Period;

in each case, that have occurred since the beginning of the Reference Period as
if such events had occurred, and, in the case of any disposition, the proceeds
thereof applied, on the first day of the Reference Period; and

(e) with respect to any Kindred Change of Control Transaction, Acquisition or
Investment that has occurred since the beginning of the Reference Period, pro
forma effect shall also be given to reasonable good faith projections provided
by Tenant as if such projections had been realized on the first day of the
Reference Period so long as (1) Tenant has articulated a reasonable basis for
such projections and (2) Tenant has provided Lessor with such backup for such
projections reasonably requested by Lessor.

 

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For purposes of determining Consolidated Interest Expense, Consolidated Rental
Expense and Consolidated Total Indebtedness, any discontinuation of discontinued
operations as defined under Financial Accounting Standards Board Accounting
Standards Codification 205-20 occurring during the Reference Period shall be
given effect in accordance with that standard. To the extent that pro forma
effect is to be given to an acquisition or disposition of an Entity, property,
division or line of business, the pro forma calculation will be based upon the
most recent four full fiscal quarters for which the relevant financial
information is available (including cost savings to the extent such cost savings
would be consistent with the definition of “Consolidated EBITDA”).

“Property Transfer Date”: As defined in Section 40.15.

“Public Company Trade”: An issuance of common equity securities by the
Seniormost Parent or transfer of the common equity securities of the Seniormost
Parent by the Seniormost Parent Control Person, in each case, so long as the
Seniormost Parent is a Publicly Listed Entity prior to, and is reasonably
expected to remain a Publicly Listed Entity for at least the six (6) months
following, such issuance or transfer.

“Publicly Listed Entity”: An Entity the common equity securities of which are
listed or quoted on the New York Stock Exchange, NASDAQ National Market or other
U.S. national securities exchange registered with the Securities and Exchange
Commission.

“Purchase Option EBITDAR”: As defined in Section 16.12.5.

“Qualified Arbitrator”: As defined in Section 22.6(c).

“Qualified Successor”: As defined in Section 40.3.

“Quarterly Covenant Compliance Date”: The last day of each fiscal quarter of the
Seniormost Parent ending after the consummation of any Kindred Change of Control
Transaction for which Tenant has delivered Financial Statements pursuant to
Section 26.1(a) or Section 26.1(b), as applicable.

“Recipient”: As defined in Section 40.14.

“Reference Period”: As defined in the definition of “Fixed Charge Coverage
Ratio.”

“Reimbursement Period”: As defined in Section 40.3.

“REIT”: As defined in Section 36.1.1.

 

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“REIT Requirements”: As defined in Section 36.1.1.

“Renewal Group”: As defined in Section 19.1 hereof.

“Rent”: Collectively, Base Rent and Additional Charges (as defined in Section
3.3 hereof).

“Rent Calculation Year”: A period from May 1 of any year through April 30 of the
following year.

“Sale and Leaseback Transaction”: With respect to any Person, an arrangement
whereby such Person enters into a lease of property previously transferred by
such Person to the lessor.

“Second Lease”: As defined in Section 40.18.

“Section 7.2.7(m) Number”: As defined in Section 7.2.7(m).

“Section 16.10.3.1 New Lease Transaction”: As defined in Section 16.10.3.1.

“Section 16.10.1 Number”: As defined in Section 16.10.1.

“Section 16.10.2.3 Proviso”: As defined in Section 16.10.2.3.

“Section 16.10.3.2 Number”: As defined in Section 16.10.3.2.

“Section 16.10.3.3 Lease”: As defined in Section 16.10.3.3.

“Section 16.12 Notice”: As defined in Section 16.12.2.

“Section 25.1.12(f) Guarantor”: As defined in Section 25.1.12(g).

“Section 25.1.12(f) Guaranty”: As defined in Section 25.1.12(f).

“Section 40.3 Notice”: As defined in Section 40.3.

“Section 40.18 Date”: As defined in Section 40.18.

“Section 40.18 Lease”: As defined in Section 40.18.

“Security Deposit”: As defined in Section 8.7.1.

“Senior Lender”: The lender(s) under the Tenant Credit Agreements from time to
time.

“Senior Officer’s Certificate”: An Officer’s Certificate of Tenant (or of the
Seniormost Parent or a Guarantor, if so provided in this Lease) signed by the
chairman of the board of directors, the president, the chief operating officer
or the general counsel of Tenant (or of the Seniormost Parent or a Guarantor, if
applicable as described above), or a Person having such title or the equivalent
thereof in the general partner or the managing member of Tenant (or of the
Seniormost Parent or a Guarantor, if applicable as described above).

 

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“Seniormost Parent”: The Seniormost Parent Control Person; provided, however,
that if the Seniormost Parent Control Person is a Fund or the general partner(s)
thereof, the Seniormost Parent shall instead be, individually or collectively,
the Subsidiary Entity(ies) directly owned by such Fund that directly or
indirectly controls Tenant or, if there is no such Subsidiary Entity, the
Seniormost Parent shall be Tenant. As of the Effective Date, the Seniormost
Parent is Kindred.

“Seniormost Parent Control Person”: The Entity that directly or indirectly
controls Tenant and that is not controlled by any other single Entity, or Tenant
if there is no such Entity; provided, however, that if Tenant is directly or
indirectly controlled by the general partner(s) of a Fund, the Seniormost Parent
Control Person shall be such general partner(s).

“Separate Lease”: As defined in Section 22.7.

“SN Competitor”: As defined in Section 7.2.8.

“SN Facility”: As defined in Section 7.2.8.

“State”: The State or Commonwealth in which the applicable Leased Property is
located.

“Subject Facilities”: As defined in ARML No. 3.

“Sublease Rent Payments”: As defined in Section 25.1.7.

“Subsidiaries”: The corporations or other entities of which securities or
similar ownership interests representing (i) ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
or (ii) a majority of the economic interest therein, are at the time directly or
indirectly owned by Tenant or any Guarantor (individually, a “Subsidiary”).

“Subsidiary Entity”: With respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent. Unless otherwise specified, a
“Subsidiary Entity” means a subsidiary of the Seniormost Parent.

“Superior Lease”: Any ground lease or other lease to which the applicable Leased
Property is subject.

 

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“Superior Lessor”: The lessor under any ground lease or other lease to which the
applicable Leased Property is subject.

“Superior Mortgage”: As defined in Section 21.1.

“Superior Mortgagee”: As defined in Section 21.1.

“Suspension Period”: As defined in Section 40.14.

“Taking”: A taking or voluntary conveyance during the Term of all or part of the
applicable Leased 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 Leased Property whether or not the same
shall have actually been commenced.

“Tax Refund Escrow Agreement”: The Tax Refund Escrow Agreement referenced in the
Bankruptcy Plan, as the same is hereafter amended, modified or supplemented, in
each case with the written consent of Lessor, in its sole discretion.

“Tenant”: As defined in the preamble hereof.

“Tenant Credit Agreements”: Each of the ABL Credit Agreement and the Term Loan
Credit Agreement.

“Tenant’s Personal Property”: All motor vehicles, machinery, equipment,
furniture, furnishings, movable walls or partitions, computers or trade fixtures
or all other personal property, and consumable inventory and supplies, now owned
or hereafter acquired by Tenant and located on the applicable Leased Property or
used or useful in Tenant’s business on such Leased Property, including without
limitation all modifications, replacements, alterations and additions to such
personal property installed at the expense of Tenant, except items, if any,
included within the definition of Fixtures.

“Term”: Collectively for each applicable Leased Property, the Fixed Term and any
Extended Terms, to the extent properly exercised pursuant to the provisions of
ARTICLE XIX, unless earlier terminated pursuant to the provisions of this Lease.

“Term Loan Credit Agreement”: That certain Term Loan Credit Agreement dated as
of June 1, 2011, among Kindred, the lenders from time to time party thereto and
JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, as
amended, restated, supplemented, refinanced, replaced or otherwise modified from
time to time.

“Total Leverage Ratio”: With respect to any Reference Period, the ratio of (i)
(x) Consolidated Total Indebtedness as of the last day of such Reference Period
plus (y) Consolidated Rental Expense for such period multiplied by six (6) to
(ii) Consolidated EBITDAR for such Reference Period; provided that Cornerstone
shall be disregarded for purposes of determining the Total Leverage Ratio. The
foregoing calculation shall be made on a Pro Forma Basis.

 

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“Transferred Property(ies)”: As defined in Section 40.15.

“Transferred Property Percentage(s)”: As of the Effective Date, the respective
Transferred Property Percentages for each of the Leased Properties demised under
this Lease are as set forth on Exhibit C attached hereto and made a part hereof.
Each time after the Effective Date that the Base Rent owing under this Lease
changes (e.g., due to an escalation of the Base Rent as set forth in the
definition of “Base Rent”, due to the splitting off from this Lease of a Leased
Property(ies) pursuant to a New Lease under Section 40.15 hereof, due to the
termination of this Lease as it relates to a Leased Property(ies) due to a
casualty, condemnation or an Event of Default, due to a combination of this
Lease with another lease pursuant to Section 40.16 hereof, due to the transfer
of Leased Properties demised under ML1, ML2 and/or ML4 into this Lease as
provided in the ML1/2/4 Amendments, ARML No. 3 and Section 1.4 of this Lease or
due to a sale of a Leased Property and the termination of this Lease on account
thereof as contemplated in ARML No. 3), the respective Transferred Property
Percentages for each of the Leased Properties demised under this Lease, and
Exhibit C to this Lease, shall, automatically and without further action of the
parties, be revised so that the Transferred Property Percentage for each such
Leased Property shall be equal to the percentage, calculated as of the effective
date of such change in Base Rent owing under this Lease, that the Base Rent
allocated to such Leased Property comprises of the aggregate Base Rent for all
Leased Properties under this Lease (and the aggregate of all such Transferred
Property Percentages shall equal 100%). For purposes of the foregoing, in the
case of any increase in Base Rent as of the commencement of a Rent Calculation
Year, the amount of any increase in (1) the portion of the Number 1 and 4
Portfolio Base Rent Component that relates to SNF Leased Properties, (2) the
portion of the Number 1 and 4 Portfolio Base Rent Component that relates to
Hospital Leased Properties, (3) the portion of the Number 2 Portfolio Base Rent
Component that relates to SNF Leased Properties, (4) the portion of the Number 2
Portfolio Base Rent Component that relates to Hospital Leased Properties or (5)
the Number 5 Portfolio Base Rent Component shall be allocated among the Leased
Properties comprising, respectively, the SNF Leased Properties in the Number 1
and 4 Portfolio, the Hospital Leased Properties in the Number 1 and 4 Portfolio,
the SNF Leased Properties in the Number 2 Portfolio, the Hospital Leased
Properties in the Number 2 Portfolio and the Leased Properties in the Number 5
Portfolio, in each case in proportion to the respective amounts of Base Rent
that were allocated to such Leased Properties (the Leased Properties described
in subsection (1), (2), (3), (4) or (5) above, as applicable) immediately prior
to such increase in Base Rent. For example, if (i) the Base Rent as of April 30,
2019 is $100,000,000.00, (ii) the Number 1 and 4 Portfolio Base Rent Component
as of such date is $25,000,000.00 (of which $2,000,000.00 is allocated to SNF
Leased Properties in such portfolio and $23,000,000.00 is allocated to Hospital
Leased Properties in such portfolio), (iii) as of May 1, 2019 the Base Rent
hereunder increases to $102,500,00.00, (iv) the Number 1 and 4 Portfolio Base
Rent Component increases by $701,000.00 as of May 1, 2019 (for example, 2.7% of
the $23,000,000.00 Number 1 and 4 Portfolio Base Rent Component allocated to
Hospital Leased Properties (i.e., $621,000.00), plus 4% of the $2,000,000.00
Number 1 and 4 Portfolio Base Rent Component allocated to SNF Leased Properties,
as of such date) and (v) Hospital Leased Property A included in the Number 1 and
4 Portfolio has allocated thereto as of April 30, 2019 $2,000,000.00 of Base
Rent (so that, as of April 30, 2019, the Transferred Property Percentage for
such Hospital Leased Property A is 2.0000% ($2,000,000.00 divided by
$100,000,000.00)),

 

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(a) 8.69565% of such $621,000.00 Hospital Leased Properties Number 1 and 4
Portfolio Base Rent Component increase (i.e., $54,000.00 ($2,000,000.00 divided
by $23,000,000.00 (i.e., 8.69565%) times $621,000.00)) would be allocated to
such Hospital Leased Property A and (b) as of May 1, 2019, the Transferred
Property Percentage for such Hospital Leased Property A would be 2.0039%
($2,054,000.00 divided by $102,500,000.00).

“Unaffiliated Entity”: As defined in Section 40.15(a)(viii).

“Unavoidable Delays”: Delays due to strikes, lockouts, inability to procure
materials, power failure, acts of God, governmental restrictions, enemy action,
civil commotion, fire, unavoidable casualty or other causes beyond the control
of the party responsible for performing an obligation hereunder, provided that
lack of funds shall not be deemed a cause beyond the control of either party
hereto unless such lack of funds is caused by the failure of the other party
hereto to perform any obligations of such party, under this Lease, or any
guaranty of this Lease, including any obligation to provide financing undertaken
by Lessor pursuant to ARTICLE X below.

“Unsuitable For Its Primary Intended Use”: A state or condition of the Facility
located at the applicable Leased Property such that, by reason of damage or
destruction, or a partial taking by condemnation, in the good faith judgment of
Tenant, the Facility cannot be operated on a commercially practicable basis for
its Primary Intended Use taking into account, among other relevant factors, the
number of usable beds affected by such damage or destruction or partial taking;
provided, however that such Facility shall not be deemed to be “Unsuitable For
Its Primary Intended Use” if such Leased Property can, within one (1) year after
the occurrence of such damage, destruction or taking, be restored to
substantially the same state and condition as existed immediately prior to such
damage, destruction or taking.

“Ventas Lessor”: A lessor that is Ventas, Inc. and/or Ventas Realty, Limited
Partnership and/or any successor to either of them (by merger or otherwise)
and/or any Affiliate of Ventas, Inc. or Ventas Realty, Limited Partnership or
any such successor.

ARTICLE III

Section 3.1 Rent. Tenant shall pay to Lessor, in lawful money of the United
States of America which shall be legal tender for the payment of public and
private debts, at Lessor’s address set forth in Section 34.1 below or at such
other place or to such other person(s), firm(s) or corporation(s) as Lessor from
time to time may designate in writing, Base Rent and Additional Charges during
the Term, including, without limitation, any Extended Terms, as hereinafter
provided. Any rental escalations required under this Lease to be made on the
May 1 immediately following the Effective Date, or any subsequent May 1, shall
be made on such May 1, in the full amount required as if all of the Leased
Properties had been under this Lease for a full year, notwithstanding that the
period from the Effective Date or the date a particular Leased Property(ies)
commenced to be demised under this Lease, as applicable, to such succeeding
May 1 may be less than one full year. Lessor may, by written notice to Tenant at
any time and from time to time, elect to require that Rent (or portions thereof
designated by Lessor) that is payable to Lessor hereunder be paid by wire
transfer of immediately available funds to such wire transfer account(s) as
Lessor may specify in writing.

(a) Base Rent. Base Rent shall be payable, in the manner provided in Section 3.1
above, in advance in equal, consecutive monthly installments, on the first day
of each calendar month of the Term, including, without limitation, any Extended
Terms; provided, however, that the first and last monthly payments of Base Rent
shall be prorated as to any partial month (subject to adjustment as provided in
Section 10.3(b)(iv) below).

(b) Base Rent Determinations. Promptly after the publication of the Cost of
Living Index for the month that is two (2) months prior to the month containing
the last day of a particular Rent Calculation Year (e.g. the month of February,
in the case of a Rent Calculation Year ending on April 30), Lessor shall
calculate the CPI Increase and the Base Rent for the next Rent Calculation Year
and submit its determination of Base Rent for the next Rent Calculation Year to
Tenant, which determination shall be final, absent manifest errors in such
determination by Lessor of which Tenant provides Lessor written notice within
ten (10) Business Days after Tenant’s receipt of such determination. At either
party’s written request, following the determination of Base Rent for a
particular Rent Calculation Year, both parties shall, not later than five (5)
Business Days after the non-requesting party’s receipt of such request, execute
and enter into a written instrument memorializing the amount of such Base Rent.

 

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Section 3.2 Intentionally omitted.

Section 3.3 Additional Charges. In addition to Base Rent payable with respect to
the Leased Properties, Tenant shall pay and discharge as and when due and
payable the following (collectively “Additional Charges”):

(1) Impositions. Tenant shall pay all Impositions before any fine, penalty,
interest or cost may be added for non-payment, such payments to be made directly
to the taxing authorities where feasible or, if otherwise required by law, to
Lessor, and shall promptly upon request, furnish to Lessor copies of official
receipts or other satisfactory proof evidencing such payments. If any such
Imposition may, at the option of the taxpayer, lawfully be paid in installments
(whether or not interest shall accrue on the unpaid balance of such Imposition),
subject to the terms of any applicable Facility Mortgage, Tenant may exercise
the option to pay 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 as the same may become due and before any fine, penalty,
premium, further interest or cost may be added thereto.

(2) Utility Charges. Tenant shall pay all charges for electricity, power, gas,
oil, water, sanitary and storm sewer, refuse collection, medical waste disposal
and other utilities used or consumed in connection with each Leased Property
during the Term.

(3) Insurance Premiums. Tenant shall pay all premiums for the insurance coverage
required to be maintained pursuant to ARTICLE XIII hereof.

 

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(4) Other Charges. Tenant shall pay all other amounts, liabilities and
obligations that Tenant assumes or agrees to pay under this Lease, including,
without limitation, all agreements to indemnify Lessor under Section 12.1 and
Section 24.1 and any and all fees, costs and expenses incurred by Tenant in the
operation of its business at the Facility.

(5) Late Payment of Rent. If any installment of Base Rent or Additional Charges
(but only as to those Additional Charges which are payable directly to Lessor or
Lessor’s agent or assignee) shall not be paid within five (5) Business Days
after its due date, Tenant will pay to Lessor on demand a late charge (to the
extent permitted by law) computed at the Overdue Rate (or at the maximum rate
permitted by law, whichever is the lesser) on the amount of such installment,
from the due date of such installment to the date of payment thereof.

To the extent that Tenant pays any Additional Charges to Lessor pursuant to any
requirement of this Lease, Tenant shall be relieved of its obligation to pay
such Additional Charges to the entity to which they would otherwise be due. If
any Facility Mortgagee shall so require, or if any Additional Charges shall not
be paid to a third party payee within five (5) Business Days after its due date,
Lessor may at any time thereafter, at Lessor’s option, require Tenant to deposit
into an escrow account under the sole dominion and control of Lessor (or the
applicable Facility Mortgagee), on the first day of each and every month, an
amount sufficient to insure that such escrow account shall contain an amount
sufficient to make such payment on its next due date, in which event Lessor
shall make all future payments for such expense from the escrow account. In the
event of any failure by Tenant to pay any Additional Charges when due, Tenant
shall promptly pay and discharge, as Additional Charges, every fine, penalty,
interest and cost that may be added for non-payment or late payment of such
items. Lessor shall have all legal, equitable and contractual rights, powers and
remedies provided either in this Lease or by statute or otherwise in the case of
non-payment of Rent.

Section 3.4 Survival. Tenant’s obligation to pay any Rent owing hereunder with
respect to any period on or prior to the expiration or termination of this Lease
(including, without limitation, any Extended Terms), as this Lease applies to
any or all of the Leased Properties, shall survive any such expiration or
termination.

Section 3.5 Net Lease. The Rent shall be paid absolutely net to Lessor, without
any rights of deduction, set-off or abatement, so that this Lease shall yield to
Lessor the full amount of the installments of Base Rent and Additional Charges,
throughout the Term, including, without limitation, any Extended Terms. This
Lease is intended to be and shall be construed as an absolutely net lease
pursuant to which Lessor shall not, under any circumstances or conditions,
whether presently existing or hereafter arising, and whether foreseen or
unforeseen by the parties, be required to make any payment or expenditure of any
kind whatsoever or be under any other obligation or liability whatsoever, except
as expressly set forth herein.

ARTICLE IV

Section 4.1 Payment of Impositions. Subject to ARTICLE XII relating to permitted
contests, Tenant shall pay all Impositions as set forth in Section 3.3. Tenant’s
obligation to pay such Impositions shall be deemed absolutely fixed upon the
date such Impositions become a lien

 

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upon the Leased Property or any part thereof. 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
Tenant, 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 in respect of any Imposition paid by
Tenant, the same shall be paid over to or retained by Tenant if no Event of
Default shall have occurred hereunder 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 Tenant shall, upon request of the other, provide such
data as is maintained by the party to whom the request is made with respect to
the Leased Property as may be necessary to prepare any required returns and
reports. In the event governmental authorities classify any property covered by
this Lease as personal property, Tenant 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 Tenant, 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. Where Lessor is legally required to file personal property tax
returns, Tenant will be provided with copies of assessment notices indicating a
value in excess of the reported value in sufficient time for Tenant to file a
protest. Tenant may, upon notice to Lessor, at Tenant’s option and at Tenant’s
sole cost and expense, protest, appeal, or institute such other proceedings as
Tenant may deem appropriate to effect a reduction of real estate or personal
property assessments and Lessor, at Tenant’s expense as aforesaid, shall fully
cooperate with Tenant in such protest, appeal, or other action (including,
without limitation, signing all required forms and documents reasonably
necessary for Tenant to file and prosecute such appeal, protest or other
action), provided that Tenant shall indemnify Lessor from and against all
losses, claims, damages, costs and expenses (including, without limitation,
reasonable attorneys’ fees) arising after the Existing Lease Effective Date
suffered or incurred by Lessor and caused by such cooperation, including,
without limitation, signing or providing any such forms and documents). Billings
for reimbursement by Tenant 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.

Section 4.2 Notice of Impositions. Lessor shall give prompt notice to Tenant of
all Impositions payable by Tenant hereunder of which Lessor at any time has
knowledge, but Lessor’s failure to give any such notice shall in no way diminish
Tenant’s obligations hereunder to pay such Impositions.

Section 4.3 Adjustment of Impositions. Impositions imposed in respect of the
tax-fiscal period during which the Term terminates or expires shall be adjusted
and prorated between Lessor and Tenant, whether or not such Imposition is
imposed before or after such termination or expiration, and Tenant’s obligation
to pay its prorated share thereof shall survive such termination or expiration.

 

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ARTICLE V

Section 5.1 No Termination, Abatement, etc. Except as otherwise specifically
provided in this Lease, Tenant, to the extent permitted by law, 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, or set-off against the Rent, nor shall the respective obligations of
Lessor and Tenant be otherwise affected by reason of (a) any damage to, or
destruction of, any Leased Property or any portion thereof from whatever cause
or any Taking of any Leased Property or any portion thereof, (b) the
interruption or discontinuance of any service or utility servicing any Leased
Property, (c) the lawful or unlawful prohibition of, or restriction upon,
Tenant’s use of any Leased Property, or any portion thereof, the interference
with such use by any person, corporation, partnership or other entity, or by
reason of eviction by paramount title, (d) any claim which Tenant 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 Tenant, or to
which Lessor and Tenant are parties, (e) any bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution, winding up
or other proceedings affecting Lessor or any assignee or transferee of Lessor,
(f) any revocation, suspension or non-renewal of any license, permit, approval
or other Authorization necessary to operate any Facility, (g) any withholding,
non-payment, reduction or other adverse change respecting any Medicare, Medicaid
or other reimbursements due or available to Tenant with respect to any Facility,
or (h) for any other cause whether similar or dissimilar to any of the foregoing
other than a discharge of Tenant from any such obligations as a matter of
law. Tenant 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 Tenant to any abatement,
reduction, suspension or deferment of the Rent or other sums payable by Tenant
hereunder. The obligations of Lessor and Tenant hereunder shall be separate and
independent covenants and agreements and the Rent and all other sums payable by
Tenant hereunder shall continue to be payable in all events unless the
obligations to pay the same shall be terminated by termination of this Lease as
to any Leased Property other than by reason of an Event of Default.

ARTICLE VI

Section 6.1 Ownership of the Leased Properties. Tenant acknowledges that the
Leased Properties are the property of Lessor and that Tenant has only the right
to the exclusive possession and use of the Leased Properties upon and subject to
the terms and conditions of this Lease. Notwithstanding anything to the contrary
contained in this Lease or the Joinder hereto by Ventas, Inc., in the case of
any easement or other rights that are appurtenant to any property owned by
Lessor, Tenant agrees that neither Lessor nor Ventas, Inc. makes any
representation or warranty relative to Lessor’s title thereto or whether such
appurtenances are encumbered, and neither Lessor nor Ventas, Inc. shall be
obligated to discharge any liens or encumbrances with respect to, or otherwise
to defend, Lessor’s right, title and interest, if any, in any such
appurtenances. Tenant agrees that such appurtenances shall constitute Permitted
Encumbrances, as to which Tenant shall have the obligations set forth in Section
8.3 and Section 24.1 of this

 

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Lease, provided that Tenant shall not be obligated to defend or preserve any
such appurtenances against any mortgages or other liens created by the owner of
the property burdened by the aforesaid appurtenances that are senior in priority
to Lessor’s aforesaid appurtenant rights.

Section 6.2 Tenant’s Personal Property. Tenant may (and shall as provided
hereinbelow), at its expense, install, affix or assemble or place on any parcels
of the Land or in any of the Leased Improvements, any items of Tenant’s Personal
Property and Tenant shall, subject to the conditions set forth below and except
for any Tenant’s Personal Property that is purchased by Lessor pursuant to
Section 37.2 below, remove the same upon the expiration or any prior termination
of the Term. Tenant shall provide and maintain during the entire Term all such
Tenant’s Personal Property as shall be necessary in order to operate each
Facility in compliance with all licensure and certification requirements, in
compliance with all applicable Legal Requirements and Insurance Requirements and
otherwise in accordance with customary practice in the industry for the Primary
Intended Use. Lessor acknowledges that Leasehold Mortgagee has a security
interest in Tenant’s Personal Property and, upon the expiration or earlier
termination of this Lease as it relates to a Leased Property, Lessor agrees to
permit Leasehold Mortgagee to enter on such Leased Property in order to remove
such Tenant’s Personal Property, so long as Leasehold Mortgagee, at no expense
to Lessor, repairs or causes to be repaired, any damage to such Leased Property
caused by any such removal, and further agrees to subordinate, and hereby
subordinates, to the lien of Leasehold Mortgagee on such Tenant’s Personal
Property any lien Lessor has thereon. All of Tenant’s Personal Property not
removed by Tenant or Leasehold Mortgagee within twenty-one days following the
expiration or earlier termination of this Lease with respect to the applicable
Leased Property where such Tenant’s Personal Property is located or sold to
Lessor pursuant to Section 37.2 below shall be considered abandoned by Tenant
and Leasehold Mortgagee and may be appropriated, sold, destroyed or otherwise
disposed of by Lessor without first giving notice thereof to Tenant or Leasehold
Mortgagee and without any payment to Tenant or Leasehold Mortgagee and without
any obligation to account therefor or otherwise dispose of the same in
accordance with applicable law. Tenant will, at its expense, restore such Leased
Property to the condition required by Section 9.1(d), including repair of all
damage to the Leased Property caused by the removal of Tenant’s Personal
Property, whether effected by Tenant, Leasehold Mortgagee or Lessor.

ARTICLE VII

Section 7.1 Condition of the Leased Property. Tenant acknowledges receipt and
delivery of possession of each Leased Property and that Tenant has examined and
otherwise has 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 purposes hereunder. Tenant is leasing the
Leased Property “as is” in its present condition. Tenant 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, DESIGN OR
CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE AS TO THE QUALITY OF
THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL
SUCH RISKS ARE TO BE BORNE BY TENANT. TENANT ACKNOWLEDGES THAT THE LEASED
PROPERTY HAS BEEN INSPECTED BY TENANT AND IS SATISFACTORY TO IT.

 

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Section 7.2 Use of the Leased Property.

Section 7.2.1 Tenant shall maintain or cause to be maintained all licenses,
permits, approvals and other Authorizations needed to use and operate for its
Primary Intended Use (or any other use permitted under the terms of this Lease)
each Leased Property and the Facility located at each such Leased Property under
and in accordance with all applicable local, state and federal laws and all
applicable state and federal programs including but not limited to appropriate
certifications for reimbursement and licensure. All of such Authorizations
shall, to the maximum extent permitted by law, relate and apply exclusively to
one or more of the Leased Properties and/or the Facilities operated thereon.
Tenant acknowledges and agrees that, subject to applicable law, the certificates
of need issued for the Facilities are appurtenant to such Facilities, both
during and following the termination or expiration of the Term. In jurisdictions
where the certificate of need is issued to Tenant or its subtenant, as the
Facility operator, Tenant agrees that it shall cooperate with Lessor, in
accordance with Section 40.3 hereof, to turn over all of Tenant’s rights in
connection with such certificate of need to Lessor or its designee.

Section 7.2.2 After the Commencement Date and during the entire Term, Tenant
shall use each Leased Property and the Leased Improvements thereof as a hospital
or a nursing center and each Facility that was being used as a hospital on the
Commencement Date shall continue to be used as a hospital during the entire Term
and each Facility that was being used as a nursing center on the Commencement
Date shall continue to be used as a nursing center during the entire Term (such
use being the applicable Leased Property’s “Primary Intended Use”). Tenant shall
not use the applicable Leased Property or any portion thereof for any other use
without the prior written consent of Lessor, which consent shall not be
unreasonably withheld, delayed or conditioned. No use shall be made or permitted
to be made of the applicable Leased Property, and no acts shall be done, that
will cause the cancellation of any insurance policy covering such Leased
Property or any part thereof, nor shall Tenant sell or otherwise provide to
occupants or patients therein, or permit to be kept, used or sold in or about
such Leased Property any article which may be prohibited by law or by the
standard form of fire insurance policies, or any other insurance policies
required to be carried hereunder, or fire underwriters regulations. Tenant
shall, at its sole cost, comply with all of the requirements pertaining to the
applicable Leased Property or other improvements of any insurance board,
association, organization or company necessary for the maintenance of insurance,
as herein provided, covering such Leased Property and Tenant’s Personal
Property.

Section 7.2.3 Tenant shall during the Term operate continuously each Leased
Property in accordance with all applicable federal, state and local laws as a
provider of health care services in accordance with its Primary Intended Use and
maintain its certifications for reimbursement and licensure and its
accreditation, if compliance with accreditation standards is required to
maintain the operations of the Facility and if a failure to comply would
adversely affect operations of the Facility.

 

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Section 7.2.4 Tenant shall not commit or suffer to be committed any waste on any
Leased Property, or in any Facility, nor shall Tenant cause or permit any
nuisance thereon. Tenant shall not take or omit to take any action, the taking
or omission of which may materially impair the value or the usefulness of such
Leased Property or any part thereof for its Primary Intended Use. Without
limitation of the foregoing provisions, Tenant shall not (a) enter into any
contract, agreement or other instrument, or establish any other arrangement,
relating to the operation, repair, maintenance, replacement, construction,
alteration, insuring, assignment or subletting, or otherwise affecting the value
or usefulness, of any Leased Property or any part thereof, whether with
Affiliates of Tenant or any other Person, that is on non-market or non-arm’s
length terms and conditions (provided, however, that, notwithstanding the
foregoing, Tenant may enter into contracts, agreements or other instruments, or
enter into other arrangements, that are on non-market or non-arm’s length terms
and conditions relative to a particular Facility provided and on the condition
that the same will, in the reasonable business judgment of Tenant, have a de
minimus impact on the value, usefulness, operations, EBITDAR and EBITDARM of
such Facility) or (b) require any Leased Property to bear or pay, or allocate to
any Leased Property for accounting or other purposes (including, without
limitation, the determination of EBITDAR or EBITDARM for any Leased Property), a
share of any costs or expenses that relate to such Leased Property and any other
property (including, without limitation, other Combined Leased Properties) that
is non-market or otherwise constitutes a disproportionate share of such costs
and expenses under the applicable facts and circumstances.

Section 7.2.5 Tenant shall neither suffer nor permit any Leased Property or any
portion thereof, including any Capital Alteration whether or not financed by
Lessor, or Tenant’s Personal Property, to be used in such a manner as (i) might
reasonably tend to impair Lessor’s (or Tenant’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 applicable Leased Property or any portion thereof.

Section 7.2.6 Nothing contained in this Section 7.2 shall be deemed to prevent
Tenant from (i) voluntarily withdrawing from the Medicaid program, and
voluntarily de-activating its certification for participation therein, as the
same apply to a Facility(ies), or (ii) voluntarily reducing the number of beds
at a Facility(ies) as to which a certification for reimbursement under the
Medicaid program is applicable (but without affecting Tenant’s certification for
participation in the Medicaid program as to any such Facility(ies) and without
reducing the number of beds at any Facility(ies) as to which a certification for
participation in the Medicaid program is applicable below any legally required
minimum number of beds), or (iii) voluntarily reducing the number of beds at a
Facility(ies) as to which a certification for reimbursement under the Medicare
program is applicable (but without affecting Tenant’s certification for
participation in the Medicare program as to any such Facility(ies) and without
reducing the number of beds at any Facility(ies) as to which a certification for
participation in the Medicare program is applicable below any legally required
minimum number of beds), in each case if and so long as, in accordance with any
and all laws, statutes, rules, regulations and orders applicable to the Medicaid
and Medicare programs and certifications for participation therein and to any
such Facility(ies), Tenant or any successor operator of such Facility(ies) may
at any time at its election, without the necessity of any governmental approval
or additional Authorization

 

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(other than routine governmental re-inspections of such Facility(ies) and any
ministerial approvals and other Authorizations), as applicable depending upon
whether subsection (i), (ii) and/or (iii) above is applicable, (a) promptly
rejoin the Medicaid program, and re-activate its certification for participation
in the Medicaid program, at any such Facility(ies) and/or (b) promptly
re-activate its certification for participation in the Medicaid program and/or
Medicare program, as applicable, as to any beds as to which a voluntary
reduction under subsection (ii) and/or (iii) above is applicable. At the time,
and as a condition, of any such voluntary withdrawal and de-activation, or
voluntary reduction, by Tenant and thereafter within twenty (20) days after
receipt of a written request therefor from Lessor from time to time (but not
more often than twice in any calendar year, unless, after Lessor has made two
(2) such requests in a calendar year, a change(s) in Legal Requirements becomes
effective, or Lessor obtains knowledge of other facts or circumstances,
suggesting a possible violation of this Section 7.2.6), Tenant shall deliver to
Lessor a Senior Officer’s Certificate, in form and substance reasonably
satisfactory to Lessor, certifying that Tenant has made diligent inquiry
relative to the applicable Legal Requirements and has consulted with its legal
counsel and, based on the foregoing, certifies that Tenant has complied, and
continues to comply, with the provisions of this Section 7.2.6 in connection
with such voluntary withdrawal and de-activation and/or voluntary reduction.

Section 7.2.7 Notwithstanding anything to the contrary contained in this Section
7.2, in the case of each Facility that is operated as a hospital as the Primary
Intended Use (a “Hospital Facility”), Lessor agrees that, subject to the
requirements of this Section 7.2.7, a portion of the licensed beds at such
Hospital Facility may be converted from being beds that are licensed for the
delivery of hospital care into beds that are licensed for the delivery of
skilled nursing care. Conversion of licensed beds as aforesaid shall be
permitted at a particular Hospital Facility provided and on the condition that
all of the following requirements are satisfied:

(a) If Tenant desires to convert licensed beds at a Hospital Facility as
permitted in this Section 7.2.7, not less than thirty (30) days prior to
commencing to seek any necessary Authorizations therefor and/or making any
Alterations required in connection therewith, Tenant shall so notify Lessor in
writing, and such notice shall include therein, or have delivered therewith, (i)
detailed descriptions of (w) (1) the licensed bed changes and conversions
proposed by Tenant, including, without limitation, Tenant’s projected timetable,
and projected completion date, for such licensed bed changes and conversions,
(2) the number of beds licensed for the delivery of hospital care that are to be
converted to beds licensed for the delivery of skilled nursing care, (3)
Tenant’s plans for obtaining the necessary Authorizations for such conversions
(including, without limitation, whether and to what extent Tenant intends and
expects to accomplish such conversions through the voluntary removal from
service (“banking”) of the aforesaid hospital care beds as described below and,
if not, why such banking will not be utilized by Tenant), (4) which specific
Authorizations Tenant expects it will need (e.g. new Medicare and/or Medicaid
certifications, new licenses for skilled nursing care beds, etc.), (5) Tenant’s
projected timetable for obtaining all necessary Authorizations and (6) whether
and to what extent Tenant intends and expects to sell any such hospital care
beds as described below, (x) the Permitted Alterations to the affected Hospital
Facility that Tenant intends to make in connection with such conversions, and
(y) Tenant’s

 

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projections, budgets and/or other estimates of the cost of the aforesaid
Permitted Alterations and of all other costs of implementing such changes and
conversions and of the projected impact of such changes and conversions upon the
EBITDAR of the affected Hospital Facility (broken down by line item) and upon
Tenant’s earnings per share, (ii) evidence reasonably satisfactory to Lessor
establishing and demonstrating that the proposed changes and conversions will
satisfy all of the requirements of this Section 7.2.7, and (iii) a Senior
Officer’s Certificate certifying that Tenant has made diligent inquiry and has
consulted with its legal counsel and, based upon the foregoing, certifying that
the licensed bed changes and conversions proposed by Tenant will satisfy all of
the requirements of this Section 7.2.7, that Tenant expects to accomplish such
licensed bed changes and conversions without relying upon the proviso contained
in subsection (b)(i) below (or, if Tenant expects to rely upon such proviso, so
certifying and further certifying that the requirements of such proviso shall be
satisfied by Tenant in a timely manner) and that the information contained in
the aforesaid notice or delivered therewith is true and correct in all material
respects. Tenant shall further submit and deliver to Lessor, promptly following
Lessor’s request therefor, such supplemental information and documentation
relative to the proposed licensed bed changes and conversions as Lessor may
reasonably request from time to time;

(b) (i) The aggregate number of beds that are licensed at such Hospital Facility
for the delivery of hospital care and, as and to the extent permitted by this
Section 7.2.7, skilled nursing care must at all times be equal to or greater
than (x) the number of licensed beds that, if not for the provisions of this
subsection (b)(i), Tenant would be obligated to maintain at such Hospital
Facility in order to avoid causing an Event of Default to arise under Section
16.1(m) hereof (exclusive of Section 16.1(m)(v) hereof) (the “Applicable
Required Number of Beds”), minus (y) twenty percent (20%) of the amount, if any,
by which the Applicable Required Number of Beds at such Hospital Facility
exceeds the number of beds that are licensed at such Hospital Facility for the
delivery of hospital care (provided, however, that, for purposes of this
subsection (b)(i) and Section 16.1(m) hereof, no Event of Default shall be
deemed to exist under such Section 16.1(m) if (1) the aforesaid aggregate number
of licensed beds at such Hospital Facility (A) falls below the required number
of licensed beds calculated as provided in subsections (x) and (y) above and (B)
is restored and returned to, and thereafter maintained at, an aggregate number
of licensed beds at such Hospital Facility that is equal to or greater than the
required number of licensed beds calculated as provided in subsections (x) and
(y) above within one hundred-eighty (180) days after the condition referenced in
subsection (x) first arises and (2) during any period that the condition
referenced in subsection (i)(1)(A) above exists with respect to such Hospital
Facility, the condition referenced in such subsection (i)(1)(A) of this Lease,
or in the corresponding Section 7.2.7(b)(i)(1)(A) of any other ML Lease, exists
with respect to not more than one (1) other Hospital Facility that is included
within the Master Lease Leased Properties that remain subject to any of the ML
Leases) (For example, assume that (W) a particular Hospital Facility has 100
beds licensed for the delivery of hospital care, (X) the Applicable Required
Number of Beds for such Hospital Facility is 90 licensed beds, (Y) Tenant
delicenses or sells 30 beds licensed for the delivery of hospital care in
compliance with all of the requirements of this Section 7.2.7 (other than this
subsection (b)(i)) and (Z) the condition referenced in subsection (i)(1)(A) of
this Lease, and in the corresponding Section 7.2.7(b)(i)(1)(A) of all other ML
Leases, exists with respect to no other

 

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Hospital Facility included within the Master Lease Leased Properties that remain
subject to any of the ML Leases, then, pursuant to this Section 7.2.7(b)(i), the
aggregate number of licensed beds at such Hospital Facility must at all times
(or, if the above-described proviso is applicable, then, before the expiration
of the time frame referenced in subsection (B) above) be equal to or greater
than 86 licensed beds (90 beds – (20% x (90 beds – 70 beds)) = 90 beds – (20% x
20 beds) = (90 beds – 4 beds) = 86 licensed beds), so that such Hospital
Facility would need to obtain licensure for 16 beds licensed for the delivery of
skilled nursing care, to go with the remaining 70 beds licensed for the delivery
of hospital care, in order to comply with this subsection (b)(i)), and (ii) no
other Event of Default shall exist under this Lease;

(c) The number of beds that are licensed for the delivery of hospital care at
such Hospital Facility must at all times be equal to or greater than the minimum
number of hospital care beds that is required at such Hospital Facility as set
forth on Schedule 7.2.7 attached hereto and made a part hereof;

(d) The aggregate number of beds at such Hospital Facility, and at all other
Hospital Facilities that are included within the Master Lease Leased Properties
and remain subject to any of the ML Leases, that are licensed for the delivery
of hospital care must at all times be equal to or greater than ninety percent
(90%) of the aggregate number of licensed beds, as of the Commencement Date as
shown on Schedule 16.1(m)(A) of the applicable ML Lease(s) of such Hospital
Facilities, at all such Hospital Facilities;

(e) The requirements of subsection (m) hereof must at all times be satisfied;

(f) Any conversion of licensed beds that occurs with respect to a Hospital
Facility pursuant to the terms of this Section 7.2.7 must be completed (i.e. in
accordance with the requirements of this Section 7.2.7, (i) beds licensed for
the delivery of hospital care have been sold or delicensed, (ii) new licensure
for beds licensed for the delivery of skilled nursing care has been obtained
(and, if the proviso set forth in subsection (b) (i) above has been relied upon
by Tenant, the number of licensed beds must have been restored and returned to
the number of licensed beds required as provided in subsection (b)(i)(1)(B)
above), and (iii) the capital expenditures, alterations, modifications and other
improvements required pursuant to subsection (j) hereof have been completed) not
later than eighteen (18) months prior to the then applicable Expiration Date for
such Hospital Facility;

(g) To the extent reasonably practicable, Tenant shall accomplish any conversion
permitted under this Section 7.2.7, and Tenant shall use commercially reasonable
efforts to accomplish any such conversion, by (i) obtaining new licensure for
the beds that are to be licensed for the delivery of skilled nursing care in
accordance with all applicable Legal Requirements and (ii) voluntarily removing
from service (“banking”) hospital care beds in accordance with the requirements
of Section 16.1(m)(i) hereof;

(h) Insofar as Tenant is unable, despite its commercially reasonable efforts, to
accomplish any conversion permitted under this Section 7.2.7 in accordance with
subsection (g) above, then, prior to delicensing hospital care beds in
compliance with this Section 7.2.7, Tenant may sell that number of beds that are
licensed for the delivery of hospital care as will

 

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not cause a violation of subsections (c), (d), (e), (f) and (g) above (with
eighty percent (80%) of the net proceeds after out-of-pocket expenses received
by Tenant from any such sale to be shared with, and paid to, Lessor within ten
(10) Business Days after the date that any such proceeds are received by
Tenant), and, in such regard, Tenant agrees that it shall not directly or
indirectly cause any such hospital care beds to be sold or otherwise transferred
to any entity in which Tenant has any direct or indirect financial interest,
except with Lessor’s prior written consent, in its sole discretion. At Tenant’s
option, Tenant may elect not to attempt to sell the aforesaid beds or to cease
its efforts to sell the aforesaid beds, and, in such event, Tenant shall
promptly so notify Lessor and Lessor shall thereafter be entitled, at its option
for a period of sixty (60) Business Days from receipt of Tenant’s aforesaid
notice (and, in addition to such sixty (60) Business Days, such additional time
period as may be necessary to obtain any necessary regulatory approvals for any
proposed sale, so long as Lessor demonstrates reasonably diligent efforts to
obtain such regulatory approvals), to attempt to sell any or all of the
aforesaid beds, and, if it succeeds in gaining such regulatory approvals and in
making any such sale, Lessor shall be entitled to retain all proceeds from any
such sale, subject, in the case of any such sale of beds by Lessor to a person
or entity (a “Hospital Competitor”) that intends to license and use the
purchased beds at a hospital that competes locally with the Hospital Facility
from which such purchased beds arose or another hospital facility of Tenant or
its Affiliates, to the following additional requirements and conditions: (w)
before completing any such sale, Lessor shall first notify Tenant in writing of
the material terms of the Hospital Competitor’s purchase offer for such beds,
including a copy of any letter of intent; (x) Tenant shall have ten (10)
Business Days following receipt of such notice to notify Lessor in writing that
Tenant desires to purchase such beds on the purchase offer terms specified in
Lessor’s aforesaid notice; (y) if Tenant so notifies Lessor of its desire to
purchase such beds, Lessor shall (1) notify Tenant in writing that (A) it has
decided not to sell such beds, in which event Tenant shall immediately cause the
delicensure of such beds, or (B) it has decided to continue its efforts to sell
such beds, in which event Lessor shall have an additional five (5) Business Days
after receipt of Tenant’s aforesaid notice of its desire to purchase such beds
within which to sell such beds to a person or entity that is not a Hospital
Competitor or to deliver to Tenant another notice of a Hospital Competitor’s
purchase offer pursuant to subsection (w) above (and, thereupon, subsections
(x), (y) and (z) of this subsection (h) shall again apply (except that the time
frame for Tenant’s response pursuant to any reapplication of such subsection (x)
shall be shortened from ten (10) Business Days to five (5) Business Days (the
time frame for any reapplication of subsection (y)(1)(B) above shall remain five
(5) Business Days))), or (2) notify Tenant in writing that Lessor will sell such
beds to Tenant, in which event (A) Lessor shall sell, and Tenant shall purchase,
such beds on the purchase offer terms specified in Lessor’s aforesaid notice,
(B) Lessor shall be entitled to retain all proceeds from such sale and (C)
Tenant shall immediately cause the delicensure of such beds (and, if Lessor does
not provide a notice to Tenant pursuant to subsection (1) or (2) above within
five (5) Business Days following Lessor’s receipt of Tenant’s notice evidencing
its desire to purchase such beds, Lessor shall be deemed to have elected to sell
such beds as provided in subsection (2) above); and (z) if Tenant does not
notify Lessor in writing of its desire to purchase such beds as provided in
subsection (x) above within ten (10) Business Days following Tenant’s receipt of
Lessor’s notice described in subsection (w) above, Lessor shall be free to
consummate the sale of such beds to the aforesaid Hospital Competitor on the
same terms, in all material respects, as were described in its aforesaid notice
pursuant to subsection (w) above;

 

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(i) In connection with any sale of beds that is contemplated pursuant to this
Section 7.2.7, each of Lessor and Tenant agrees to cooperate with the other
party in such manner, and to execute such documents, as may be reasonably
necessary or appropriate in order to facilitate or implement any sale of such
beds by such other party;

(j) All alterations, modifications or other improvements to an affected Hospital
Facility that Tenant makes in connection with any conversion of licensed beds
that is permitted by the terms of this Section 7.2.7 must qualify as Permitted
Alterations under, and must be conducted in compliance with the requirements of,
ARTICLE X hereof, and Tenant agrees to make such capital expenditures, and to
make such alterations, modifications and other improvements to an affected
Hospital Facility, as are reasonable and necessary in connection with any such
conversion;

(k) Following any conversion of licensed beds that is permitted by the terms of
this Section 7.2.7, without limitation of its other information and reporting
requirements set forth in ARTICLE XXVI hereof and elsewhere in this Lease,
Tenant shall thereafter, as to each Hospital Facility affected by any such
conversion, include in its financial reports for such Hospital Facility reports
that separately breakdown the Patient Revenues and other revenues (itemized by
payor type), and the operating expenses with necessary allocation as reasonably
determined by Tenant, attributable to beds licensed for the delivery of hospital
care, and beds licensed for the delivery of skilled nursing care, at such
Hospital Facility;

(l) Tenant shall, as Additional Rent, reimburse Lessor for all reasonable
out-of-pocket costs or expenses paid or incurred by Lessor, including, without
limitation, costs or expenses paid or incurred by Lessor to professional
consultants or advisors, in connection with Lessor’s review or evaluation of any
notice, proposal, Authorizations, or other information supplied by Tenant to
Lessor pursuant to this Section 7.2.7 and/or monitoring of Tenant’s compliance
with this Section 7.2.7. Tenant shall reimburse Lessor for any such costs or
expenses within ten (10) Business Days after the presentation by Lessor to
Tenant of invoices therefor; and

(m) Notwithstanding anything to the contrary contained in this Section 7.2 or
elsewhere in this Lease, Tenant agrees that, from and after the Effective Date,
the aggregate number of beds licensed for the delivery of hospital care that (i)
are sold or delicensed pursuant to Section 7.2.7 of any ML Lease or (ii) are
otherwise sold or delicensed in any manner or for any reason, in the case of
either of subsection (i) or (ii) at any time while the Hospital Facility(ies) to
which such licensed beds relate are or were leased pursuant to any ML Lease
(even if any such Hospital Facility ceases to be leased pursuant to any ML
Lease), must at all times be equal to or less than 284 such beds (the
“Section 7.2.7(m) Number”).

 

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Section 7.2.8 Notwithstanding anything to the contrary contained in this Section
7.2, Lessor agrees that licensed beds at each Facility that is referenced on
Schedule 7.2.8 hereof (a “SN Facility”) may be voluntarily removed from service
(“banked”) or de-licensed, provided and on the condition that all of the
following requirements are complied with and satisfied:

(a) If Tenant desires to voluntarily remove from service or de-license beds at a
Facility referenced on Schedule 7.2.8 as permitted in this Section 7.2.8, not
less than thirty (30) days prior to commencing to voluntarily remove from
service or de-license any such beds, Tenant shall so notify Lessor in writing,
and such notice shall include therein, or have delivered therewith, (i) detailed
descriptions of (x) the voluntary removals from service and/or de-licensing of
beds at such Facility that are proposed by Tenant, including, without
limitation, whether and to what extent Tenant intends and expects to accomplish
such bed changes through the voluntary removal from service of beds as described
below (and, if not, why such voluntary removals from service will not be
utilized by Tenant) and whether and to what extent Tenant intends and expects to
sell any licensed beds as described below, and (y) Tenant’s projections, budgets
and/or other estimates of the cost of implementing such bed changes and of the
projected impact of such bed changes upon the EBITDAR of the affected Facility
(broken down by line item) and upon Tenant’s earnings per share, (ii) evidence
reasonably satisfactory to Lessor establishing and demonstrating that the
proposed bed changes will comply with and satisfy all of the requirements of
this Section 7.2.8, and (iii) a Senior Officer’s Certificate certifying that
Tenant has made diligent inquiry and has consulted with its legal counsel and,
based upon the foregoing, certifying that the bed changes proposed by Tenant
will comply with and satisfy all of the requirements of this Section 7.2.8 and
that the information contained in the aforesaid notice or delivered therewith is
true and correct in all material respects. Tenant shall further submit and
deliver to Lessor, promptly following Lessor’s request therefor, such
supplemental information and documentation relative to the proposed bed changes
as Lessor may reasonably request from time to time;

(b) (i) Subject to, and without limitation of, Section 16.1(m)(iv) hereof, the
number of licensed beds at such Facility must at all times be equal to or
greater than the number of licensed beds that must be maintained by Tenant at
such Facility in order to avoid causing an Event of Default to arise under
Section 16.1(m) hereof and (ii) no other Event of Default shall exist under this
Lease;

(c) The number of beds at such Facility that are licensed for the delivery of
skilled nursing care, and not voluntarily removed from service (“banked”) as
described in Section 16.1(m)(i) hereof, must at all times be equal to or greater
than the minimum number of non-banked skilled nursing care beds that is required
at such SN Facility as set forth on Schedule 7.2.8 attached hereto and made a
part hereof;

(d) To the extent reasonably practicable, Tenant shall accomplish any bed
changes permitted under this Section 7.2.8, and Tenant shall use commercially
reasonable efforts to accomplish any such bed changes, by voluntarily removing
from service, rather than de-licensing, licensed beds at such Facility (and, for
such purpose, although the requirements of subsections (a), (b), (c) and (d) of
Section 16.1(m)(i)(3) shall apply, and continue to apply, to any such voluntary
removal from service, the twenty-five percent (25%) limitation set forth in such
Section 16.1(m)(i)(3) shall not apply if all of the other requirements of this
Section 7.2.8 are met), and, following any such voluntary removal from service,
Tenant shall continue to comply with the requirements of such subsections (a),
(b), (c) and (d) of such Section 16.1(m)(i)(3);

 

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(e) Insofar as Tenant is unable, despite its commercially reasonable efforts, to
accomplish any bed changes permitted under this Section 7.2.8 in accordance with
subsection (d) above, then, prior to delicensing skilled nursing care beds in
compliance with this Section 7.2.8, Tenant may sell the licensed beds that are
not voluntarily removed from service as described in subsection (d) above (with
fifty percent (50%) of the net proceeds after out-of-pocket expenses received by
Tenant from any such sale to be shared with, and paid to, Lessor within ten (10)
Business Days after the date that any such proceeds are received by Tenant),
and, in such regard, Tenant agrees that it shall not directly or indirectly
cause any such licensed beds to be sold or otherwise transferred to any entity
in which Tenant has any direct or indirect financial interest, except with
Lessor’s prior written consent, in its sole discretion. At Tenant’s option,
Tenant may elect not to attempt to sell the aforesaid licensed beds or to cease
its efforts to sell the aforesaid licensed beds, and, in such event, Tenant
shall promptly so notify Lessor and Lessor shall thereafter be entitled, at its
option for a period of sixty (60) Business Days from receipt of Tenant’s
aforesaid notice (and, in addition to such sixty (60) Business Days, such
additional time period as may be necessary to obtain any necessary regulatory
approvals for any proposed sale, so long as Lessor demonstrates reasonably
diligent efforts to obtain such regulatory approvals), to attempt to sell any or
all of the aforesaid beds, and, if it succeeds in gaining such regulatory
approvals and in making any such sale, Lessor shall be entitled to retain all
proceeds from any such sale, subject, in the case of any such sale of beds by
Lessor to a person or entity (a “SN Competitor”) that intends to license and use
the purchased beds at a skilled nursing facility that competes locally with the
SN Facility from which such purchased beds arose or another skilled nursing
facility of Tenant or its Affiliates, to the following additional requirements
and conditions: (w) before completing any such sale, Lessor shall first notify
Tenant in writing of the material terms of the SN Competitor’s purchase offer
for such beds, including a copy of any letter of intent; (x) Tenant shall have
ten (10) Business Days following receipt of such notice to notify Lessor in
writing that Tenant desires to purchase such beds on the purchase offer terms
specified in Lessor’s aforesaid notice; (y) if Tenant so notifies Lessor of its
desire to purchase such beds, Lessor shall (1) notify Tenant in writing that (A)
it has decided not to sell such beds, in which event Tenant shall immediately
cause the delicensure of beds, or (B) it has decided to continue its efforts to
sell such beds, in which event Lessor shall have an additional five (5) Business
Days after receipt of Tenant’s aforesaid notice of its desire to purchase such
beds within which to sell such beds to a person or entity that is not a SN
Competitor or to deliver to Tenant another notice of a SN Competitor’s purchase
offer pursuant to subsection (w) above (and, thereupon, subsections (x), (y) and
(z) of this subsection (e) shall again apply (except that the time frame for
Tenant’s response pursuant to any reapplication of such subsection (x) shall be
shortened from ten (10) Business Days to five (5) Business Days (the time frame
for any reapplication of subsection (y)(1)(B) above shall remain five (5)
Business Days))), or (2) notify Tenant in writing that Lessor will sell such
beds to Tenant, in which event (A) Lessor shall sell, and Tenant shall purchase,
such beds on the purchase offer terms specified in Lessor’s aforesaid notice,
(B) Lessor shall be entitled to retain all proceeds from such sale and (C)
Tenant shall immediately cause the delicensure of such beds (and, if Lessor does
not provide a notice to Tenant pursuant to subsection (1) or (2)

 

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above within five (5) Business Days following Lessor’s receipt of Tenant’s
notice evidencing its desire to purchase such beds, Lessor shall be deemed to
have elected to sell such beds as provided in subsection (2) above); and (z) if
Tenant does not notify Lessor in writing of its desire to purchase such beds as
provided in subsection (x) above within ten (10) Business Days following
Tenant’s receipt of Lessor’s notice described in subsection (w) above, Lessor
shall be free to consummate the sale of such beds to the aforesaid SN Competitor
on the same terms, in all material respects, as were described in its aforesaid
notice pursuant to subsection (w) above;

(f) In connection with any sale of beds that is contemplated pursuant to this
Section 7.2.8, each of Lessor and Tenant agrees to cooperate with the other
party in such manner, and to execute such documents, as may be reasonably
necessary or appropriate in order to facilitate or implement any sale of such
beds by such other party;

(g) All alterations, modifications or other improvements to an affected Facility
that Tenant makes in connection with any bed change that is permitted by the
terms of this Section 7.2.8 must qualify as Permitted Alterations under, and
must be conducted in compliance with the requirements of, ARTICLE X hereof, and
Tenant agrees to make such capital expenditures, and to make such alterations,
modifications and other improvements to an affected Facility, as are reasonable
and necessary in connection with any such bed change; and

(h) Tenant shall, as Additional Rent, reimburse Lessor for all reasonable
out-of-pocket costs or expenses paid or incurred by Lessor, including, without
limitation, costs or expenses paid or incurred by Lessor to professional
consultants or advisors, in connection with Lessor’s review or evaluation of any
notice, proposal, Authorizations, or other information supplied by Tenant to
Lessor pursuant to this Section 7.2.8 and/or monitoring of Tenant’s compliance
with this Section 7.2.8. Tenant shall reimburse Lessor for any such costs or
expenses within ten (10) Business Days after the presentation by Lessor to
Tenant of invoices therefor.

(i) Nothing contained in this Lease shall affect the respective rights and
obligations of Lessor and Tenant under that certain letter dated January 22,
2008 relating, among other matters, to the Standard Banking Requirements
referenced therein, to the extent that such letter references any Leased
Property hereunder, and such letter remains in full force and effect.

Section 7.2.9 With reference to Section 7.2.7 and Section 7.2.8 hereof, Lessor
agrees that Tenant’s rights to convert licensed beds on the terms set forth in
Section 7.2.7 hereof and/or voluntary remove from service or delicense beds on
the terms set forth in Section 7.2.8 hereof do not replace Tenant’s rights to
delicense beds as and to the extent permitted by Section 16.1(m) hereof. For
example, assume that a particular SN Facility had 100 licensed beds as of the
Commencement Date, that, for purposes of this example, at all times the
Permissible Reduction Percentage applicable to such Facility is 10% (so that,
pursuant to Section 16.1(m) hereof, a reduction in the number of licensed beds
to 90 beds would not cause a default under Section 16.1(m)), that such SN
Facility is not listed on Schedule 16.1(m)B hereof and that the minimum number
of non-banked skilled nursing care beds that is required at such SN Facility as
set forth on Schedule 7.2.8 is 95 beds. If, in accordance with the terms of

 

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Section 7.2.8 hereof, the number of licensed beds at such SN Facility is reduced
to 95 beds, neither Section 7.2.7 nor Section 7.2.8 hereof would prohibit
Tenant, pursuant to Section 16.1(m) hereof, from thereafter allowing an
additional 5 beds to be delicensed. On the other hand, if Tenant first allowed 5
beds to be delicensed pursuant to Section 16.1(m) hereof, Tenant could not
thereafter proceed under Section 7.2.8 hereof if such proceeding would result in
the loss of licensure of any bed, as 95 beds is the minimum as described above
(but Tenant could still allow the number of beds to be further reduced from 95
beds to 90 beds pursuant to Section 16.1(m), without causing a default under
such Section 16.1(m)).

Section 7.3 Granting of Easements, etc.

Section 7.3.1 Lessor and Tenant will, from time to time so long as no Event of
Default has occurred and is continuing, at the request of the other party and at
such requesting party’s cost and expense (but subject to the approval of the
non-requesting party, which approval shall not be unreasonably withheld, delayed
or conditioned, and provided, however, that if the non-requesting party has not
responded to any such request of the requesting party within 30 days after
receipt thereof, such request shall be deemed approved), (i) grant easements and
other rights in the nature of easements, (ii) release existing easements or
other rights in the nature of easements which are for the benefit of the
applicable Leased Property, (iii) dedicate or transfer unimproved portions of
the applicable Leased Property for road, highway or other public purposes, (iv)
execute petitions to have the applicable Leased Property annexed to any
municipal corporation or utility district, (v) execute amendments to any
covenants and restrictions affecting the applicable Leased Property and (vi)
execute and deliver to any person any instrument appropriate to confirm or
effect such grants, releases, dedications and transfers (to the extent of its
interests in the applicable Leased Property), but only upon delivery of all
documentation the non-requesting party reasonably shall deem necessary and, if
Lessor is the requesting party, only if such grant, release, dedication,
transfer, petition or amendment (a) is not detrimental to the proper conduct of
the business of Tenant on the applicable Leased Property and (b) does not
materially reduce the value of the Leased Property, as reasonably determined by
Tenant, and, if Tenant is the requesting party, only if such grant, release,
dedication, transfer, petition or amendment does not materially reduce the value
of the Leased Property, as reasonably determined by Lessor.

Section 7.3.2 Notwithstanding anything to the contrary contained in
Section 7.3.1, Section 8.3 and Section 24.1 or elsewhere in this Lease, in the
case of any easement or license for a cell tower, antenna, satellite dish or
other telecommunications equipment, a parking lot or a billboard or other
signage (a) that is entered into pursuant to Section 7.3.1 hereof at the written
request of Lessor and (b) from which profit is generated and all of such profit,
and any reimbursements of out of pocket costs and expenses incurred by Lessor in
connection therewith, are payable to Lessor, without any obligation of Lessor to
pay, or credit, any of the same to Tenant, (i) Tenant shall be obligated under
this Section 7.3, Section 8.3 and Section 24.1 and the other provisions of this
Lease only to refrain from taking, and to prevent its assignees and sublessees,
and the agents, employees, contractors, invitees, licensees and concessionaires
of Tenant and its assignees and sublessees, from taking, any action that would
cause or result in a breach, default, violation or termination of any such
easement or

 

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license and (ii) Lessor shall protect, indemnify, save harmless and defend
Tenant from and against all out of pocket costs and expenses (including, without
limitation, Litigation Costs), to the maximum extent permitted by law, incurred
by Tenant due to any liabilities, obligations, claims, damages, penalties or
causes of action asserted against Tenant primarily by reason of any such
easement or license and not arising due to any breach by Tenant of its
obligations under subsection (i) above.

Section 7.4 Restrictive Covenant. Tenant agrees to comply, and to cause each
Restricted Party (as defined in Exhibit H attached hereto and made a part
hereof) to comply, with the terms and conditions set forth in Exhibit H.

ARTICLE VIII

Section 8.1 Compliance with Legal and Insurance Requirements, Instruments,
etc. Subject to ARTICLE XII relating to permitted contests, Tenant, at its
expense, will promptly (a) comply with all material Legal Requirements and
Insurance Requirements in respect of the use, operation, maintenance, repair and
restoration of the applicable Leased Property, whether or not compliance
therewith shall require structural changes in any of the Leased Improvements or
interfere with the use and enjoyment of such Leased Property, and (b) procure,
maintain and comply with all licenses, certificates of need and other
Authorizations required for any use of the applicable Leased Property and
Tenant’s Personal Property then being made, and for the proper erection,
installation, operation and maintenance of the applicable Leased Property or any
part thereof, including without limitation any Capital Alterations. In addition,
Tenant shall promptly send to Lessor any material deficiency report Tenant
receives from any federal, state or local licensure board or certification
agency or authority with respect to any Facility if Tenant has not cured such
deficiency within the applicable cure period.

Section 8.1.1 Authorization Non-Compliance. In the event that Tenant shall
receive notice from any federal, state or local agency or authority that Tenant
is not in compliance with any material Legal Requirement, license, permit,
approval, certificate of need, certification for reimbursement under Medicare or
Medicaid (with respect to any Facility that participates in such programs) or
other Authorization, Tenant shall promptly send notice to Lessor and Tenant
shall either (a) remedy any condition causing such noncompliance within any cure
period allowed therefor by the applicable agency or authority (or, if no such
cure period shall be allowed or specified by the applicable agency or authority,
promptly and diligently following Tenant’s receipt of such notice and, in any
event, prior to the final unappealable revocation of any license, permit,
approval, certificate of need, certification for reimbursement or other
Authorization) or (b) prior to the expiration of such cure period (or if no such
cure period shall be allowed or specified by the applicable agency or authority,
promptly following receipt of such notice and, in any event, prior to the final
unappealable revocation of any license, permit, approval, certificate of need,
certification for reimbursement or other Authorization), commence appropriate
proceedings to contest such notice, and, thereafter, diligently pursue such
contest until there is a final unappealable determination, all in accordance
with the provisions of Section 8.2 and Section 12.1 hereof.

 

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Section 8.2 Legal Requirement Covenants. Subject to the provisions of
ARTICLE XII relating to permitted contests, Tenant covenants and agrees that
none of the Leased Properties nor any of Tenant’s Personal Property shall be
used for any unlawful purpose, and Tenant shall acquire and maintain, or cause
to be acquired and maintained, all licenses, certificates, permits, provider
agreements, approvals and other Authorizations needed to operate the applicable
Leased Property in its customary manner for the Primary Intended Use, and any
other use conducted on such Leased Property as may be permitted from time to
time hereunder. Subject to ARTICLE XII, Tenant further covenants and agrees that
Tenant’s use of each Leased Property and maintenance, alteration, and operation
of the same, and all parts thereof, shall at all times conform to all applicable
local, state, and federal laws, ordinances, rules and regulations unless the
same are held by a court of competent jurisdiction to be unlawful. Tenant may,
however, upon prior written notice to Lessor, contest the legality or
applicability of any law, ordinance, rule or regulation, or any other Legal
Requirement or any licensure, certification or other Authorization decision
(including, without limitation, any notice of non-compliance referred to in
Section 8.1.1 hereof) or other Authorization if Tenant, at Tenant’s own expense,
maintains such action in good faith, by appropriate proceedings and with due
diligence, and on a regular basis fully informs Lessor of the status of, and
material developments in, any such contest and furnishes Lessor with such
additional documents and information concerning such contest as Lessor may
reasonably request from time to time. If, by the terms of any such law,
ordinance, rule or regulation or any Legal Requirement or any such licensure,
certification or other Authorization decision or any applicable court order or
stay, compliance therewith pending the prosecution of any such proceeding may
legally be delayed (a) without the incurrence of any lien, charge or liability
of any kind against the applicable Facility or Lessor’s interest therein, (b)
without any loss of licensure, certification or other Authorization that would
materially and adversely impair Tenant’s ability to continue to operate the
affected Facility in accordance with its Primary Intended Use during Tenant’s
contest, and (c) without subjecting Lessor to any liability, civil or criminal,
for failure so to comply therewith, Tenant may delay compliance therewith until
the final unappealable determination of such proceeding, provided, however, if
any such lien, charge or civil or criminal liability would be incurred by reason
of any such delay, Tenant may nonetheless contest as aforesaid and delay as
aforesaid provided that such delay would not subject Lessor to criminal
liability and Tenant (i) furnishes to Lessor security reasonably satisfactory to
Lessor against any loss or injury by reason of such contest or delay, (ii)
prosecutes the contest with due diligence and in good faith, and (iii) keeps
Lessor informed, and provides additional documentation and information, relative
to such contest as described above. Following the final unappealable
determination of any such proceeding adversely to Lessor or Tenant, Tenant shall
comply with all requirements of such determination in accordance with Section
12.1(g).

Section 8.3 Permitted Encumbrances.

Section 8.3.1 Subject to Section 7.3.2 hereof, Tenant shall, at its own cost and
expense, fully observe, perform and comply with all Permitted Encumbrances as
the same apply to or bind Lessor or any of the Leased Properties. Subject to
Section 7.3.2 hereof, Tenant shall not cause, or permit its respective agents,
employees, contractors, invitees, subtenants, licensees, concessionaires or
assigns (whether or not permitted hereunder) to cause, whether by

 

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act or omission, any breach of, default under or termination of any Permitted
Encumbrance applicable to or binding upon Lessor or any of the Leased
Properties. Notwithstanding anything to the contrary contained in Section 16.1
or elsewhere in this Lease but subject to Section 7.3.2 hereof, an Event of
Default shall be deemed to have occurred under this Lease on account of Tenant’s
breach of this Section 8.3.1, when, but only if, (a) Tenant’s breach of this
Section 8.3.1 also results in a breach or default of an obligation under a
Permitted Encumbrance, (b) such Permitted Encumbrance breach or default is not
cured by Tenant on or prior to the expiration of the cure period, if any,
applicable to such breach or default by the terms of the instrument creating
such Permitted Encumbrance (or such longer cure period as may be expressly
authorized by an order of a court of competent jurisdiction), and (c) on account
of such Permitted Encumbrance breach or default, a real property interest, or a
covenant, condition, restriction, license or other beneficial right, created
under such Permitted Encumbrance and benefiting Lessor or a Leased Property is
terminated or otherwise lost or at material risk of being terminated or
otherwise lost. Lessor agrees that, in the event Lessor receives any written
notice of default from a party to a Permitted Encumbrance, Lessor shall promptly
forward a copy thereof to Tenant. Tenant agrees that, if Lessor, at its option,
elects to cure an Event of Default by Tenant under this Section 8.3.1, such cure
shall not excuse Tenant from, or be deemed a cure of, such Event of Default, nor
shall Tenant’s reimbursement to Lessor of any costs and expenses incurred by
Lessor in effecting any such cure be deemed a cure of any such Event of Default,
provided, however, that, notwithstanding the foregoing, even after the
occurrence of such an Event of Default by Tenant and/or Lessor’s cure thereof,
Lessor agrees to accept Tenant’s cure thereof, or reimbursement of Lessor’s
costs and expenses to effect such cure, provided, and on the condition, that
Lessor has not, prior thereto, terminated this Lease as it affects the Leased
Property to which such Permitted Encumbrance relates or dispossessed Tenant from
such Leased Property. Nothing contained in this Section 8.3 shall limit or
impair Lessor’s indemnification rights under Section 24.1 below.

Section 8.3.2 If (a) a Permitted Encumbrance breach or default of the nature
described in Section 8.3.1(a) above occurs, and (b) on account thereof, if the
same is not cured, the condition referenced in Section 8.3.1(c) above would, or
is likely to, be satisfied, Tenant agrees that, notwithstanding anything to the
contrary contained in Section 17.1 below or elsewhere in this Lease, Lessor may,
but shall not be obligated to, in its discretion and regardless of whether
Tenant is proceeding to cure, or attempting to cure, the Permitted Encumbrance
breach or default referenced in Section 8.3.1(a) above or whether the cure
period referenced in Section 8.3.1(b) above has expired or is likely to expire
before completion of necessary cure efforts, take such actions as it deems
necessary or appropriate to attempt to cure such Permitted Encumbrance breach or
default, provided, however, that, if the breach or default referenced in
subsection (a) above has applicable thereto, by the express terms of the
applicable Permitted Encumbrance, a stated period to cure the same, Lessor
agrees not to commence to cure such breach or default unless and until one-half
(1/2) of the aforesaid stated cure period has elapsed. If Lessor so proceeds to
attempt to cure any such Permitted Encumbrance breach or default, Tenant agrees,
within fifteen (15) days following receipt of a written demand therefor and
reasonable supporting documentation, to reimburse Lessor for the reasonable
amount of all costs and expenses incurred by Lessor in curing, or attempting to
cure, any such Permitted Encumbrance breach or default.

 

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Section 8.4 Financial Covenants. Tenant covenants and agrees that, at each
Financial Covenant Compliance Date:

Section 8.4.1 The Fixed Charge Coverage Ratio shall not be less than 1.25:1.00.

Section 8.4.2 The Total Leverage Ratio shall not be greater than 6.00:1.00.

Section 8.5 Measurement Transactions. Tenant covenants and agrees that, from and
after any Kindred Change of Control Transaction, Tenant shall cause the
Seniormost Parent, not later than the date of consummation of any of the
following actions by the Seniormost Parent or any of its Consolidated
Subsidiaries, in each case other than any such action to the extent involving
solely the Seniormost Parent and/or one or more Consolidated Subsidiaries (by
way of example: excluding from transactions described in Section 8.5.1 below the
amount of any intercompany Indebtedness between two Consolidated Subsidiaries;
and excluding from transactions described in Section 8.5.2 below the amount of
any dividend by a Consolidated Subsidiary to the extent paid to the Seniormost
Parent, but including for purposes of Section 8.5.2 the amount of such dividend
paid by such Consolidated Subsidiary to an Entity that is not a Consolidated
Subsidiary) (each, a “Measurement Transaction”), to provide a certification to
Lessor pursuant to an Officer’s Certificate from the Chief Financial Officer of
the Seniormost Parent in the form required under Section 26.1(w) hereof, stating
that, at the time of taking such action and immediately after giving effect
thereto, (a) no Event of Default has occurred and is continuing and (b) on a Pro
Forma Basis, each of the financial covenants set forth in Section 8.4 has been
satisfied:

Section 8.5.1 the incurrence of Indebtedness in one or a series of related
transactions from and after the immediately preceding Quarterly Covenant
Compliance Date in an aggregate principal amount outstanding at the date of
measurement in excess of the greater of (i) $100,000,000 and (ii) 2.0% of
Consolidated Total Assets;

Section 8.5.2 the declaration or payment of dividends or distributions in
respect of any Equity Interests of Seniormost Parent or any such Consolidated
Subsidiary in an aggregate amount for any such Entity during the period from and
after the immediately preceding Quarterly Covenant Compliance Date exceeding the
greater of (i) $50,000,000 and (ii) 1.25% of Consolidated Total Assets;

Section 8.5.3 the making or acquisition of any Investment in one or a series of
related transactions from and after the immediately preceding Quarterly Covenant
Compliance Date in an aggregate amount outstanding at the date of measurement in
excess of the greater of (i) $100,000,000 and (ii) 2.0% of Consolidated Total
Assets.

Section 8.6 Liability for Losses. Notwithstanding anything to the contrary
contained herein or in the Section 25.1.12(f) Guaranty to the contrary, Lessor
and its Affiliates may not collect any direct, consequential, punitive or other
type of damages from Tenant or any Section 25.1.12(f) Guarantor solely due to
any breach of Section 8.4 or Section 8.5, provided, that, notwithstanding such
damages limitation, Tenant hereby acknowledges that any breach of

 

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Section 8.4 or Section 8.5 shall constitute an Event of Default hereunder to the
extent and at the times provided for herein, and, upon the occurrence of any
such Event of Default, Lessor shall have and retain all rights and remedies
under this Lease, including, without limitation, damages claims, on account of
any such Event of Default (exclusive of any right to collect damages solely due
to a breach of Section 8.4 or Section 8.5). For example, if a breach occurs
under Section 8.4 or Section 8.5 hereof and an Event of Default occurs on
account thereof, although Lessor may not collect damages from Tenant or a
Section 25.1.12(f) Guarantor solely on account thereof as described above,
because of the occurrence of an Event of Default, Lessor shall have, and retain,
all rights and remedies relative to acceleration of rent, collection of rental
deficiencies, dispossession of Tenant, termination of the Lease as it relates to
a Leased Property(ies), collection of Litigation Costs and collection of damages
due to, for example, the termination of this Lease as it relates to a Leased
Property(ies) or the condition of a Leased Property(ies) upon any such
termination or a breach of a surviving indemnification obligation following any
such termination, and all other rights and remedies (exclusive of any right to
collect damages solely due to a breach of Section 8.4 or Section 8.5 hereof),
that would be available to Lessor if the breach that resulted in an Event of
Default arose other than due to a breach of Section 8.4 or Section 8.5.

Section 8.7 Limited Right to Cure Certain Section 8.4 Failures.

Section 8.7.1 From and after the ARML No. 3 Payment Date, and notwithstanding
anything to the contrary contained in Section 16.1(y), in the event that Tenant
fails to comply with any covenant in Section 8.4 as of any Quarterly Covenant
Compliance Date, at any time until the expiration of the 10th Business Day after
the due date of the related Officer’s Certificate required under Section 26.1(w)
(such date, the “Cure Expiration Date”), Tenant shall have the right to deposit
an amount of cash with Lessor, or, at the option of Lessor, provide a letter of
credit in a face amount issued by a bank acceptable to Lessor and amend this
Lease to provide for customary LC protections and procedures reasonably
requested by Lessor (each such deposit or letter of credit, individually and
collectively, as the context requires, the “Security Deposit”) pursuant to the
terms and conditions of Sections 8.7.2, 8.7.3 and 8.7.4 below (collectively, the
“Cure Right”) and the covenants in Section 8.4 shall be recalculated giving
effect to the following pro forma adjustments:

(a) Consolidated EBITDA shall be deemed increased with respect to the Reference
Period ending on such Quarterly Covenant Compliance Date and any future
Reference Periods by an amount equal to the aggregate outstanding amount of the
Security Deposits held by Lessor; and

(b) if, after giving effect to the foregoing pro forma adjustment, Tenant shall
then be in compliance with the covenants in Section 8.4, Tenant shall be deemed
to have satisfied such covenants as of such Quarterly Covenant Compliance Date
with the same effect as though there had been no failure to comply therewith at
such date, and any applicable breach or default of the covenants in Section 8.4
that had occurred shall be deemed cured for the purposes of this Lease.

 

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Notwithstanding anything herein to the contrary, (i) in each four consecutive
fiscal quarter period there shall be at least two fiscal quarters in which the
Cure Right is not exercised, (ii) during the term of this Lease, the Cure Right
shall not be exercised more than five (5) times, and (iii) for purposes of this
Section 8.7.1, the amount of each Security Deposit shall not exceed the minimum
amount that when used to increase Consolidated EBITDA shall cause each of the
covenants in Section 8.4 to be complied with.

Section 8.7.2 Security Deposit. Any Security Deposit shall be held by Lessor as
security for the full and faithful performance by Tenant of each and every term,
provision, covenant and condition of this Lease and shall be deemed to be the
property of Lessor. Upon the occurrence of an Event of Default, Lessor may, but
shall not be required to, use, apply or retain the whole or any part of the
Security Deposit for the payment of any Rent in default or for any other sum
that Lessor may expend or be required to expend by reason of Tenant’s default,
including, without limitation, any damages or deficiency in the reletting of the
Leased Properties, whether such damages or deficiency accrue before or after
summary proceedings or other re-entry by Lessor. Tenant shall not be entitled to
any interest on the Security Deposit and Lessor may commingle the Security
Deposit with its other funds. In case of a sale or transfer of the Leased
Properties by Lessor, or any cessation of Lessor’s interest therein, whether in
whole or in part, Lessor may pay over any unapplied part of the Security Deposit
(or, in the case of any such partial transfer or cessation, such portion as
Lessor allocates to such part of the Leased Properties, in its sole discretion)
to the successor owner of the Leased Property(ies), and from and after such
payment, Lessor shall be relieved of all liability with respect thereto. The
provisions of the preceding sentence shall apply to every subsequent sale or
transfer of the Leased Properties or any part thereof.

Section 8.7.3 Restoration of Security Deposit. In the event that, at any time or
from time to time, the Security Deposit (or any portion thereof) is applied, on
account of any Event(s) of Default by Tenant hereunder or as otherwise expressly
provided in this Lease, Tenant shall replenish said Security Deposit in full,
within ten (10) days after demand therefor, by paying to Lessor the amount of
the Security Deposit so applied. Tenant’s failure to timely replenish and
restore the Security Deposit as aforesaid shall be an Event of Default. Subject
to Section 8.7.4, if: (a) no Event of Default has occurred and is continuing
hereunder and (b) Tenant has performed and satisfied all of its obligations
under this Lease (including, without limitation and as applicable, its
obligations relative to any transfer of operations pursuant to Section 40.3
hereof), then the Security Deposit, or the remaining unapplied portion thereof,
shall be paid or returned to Tenant within ninety-three (93) days after the
expiration or termination of this Lease and the surrender of the Leased
Properties to Lessor in the condition required hereunder; provided, however,
that Lessor may retain an amount of the Security Deposit, as it shall reasonably
determine, to secure the payment of any Rent and the performance of any
remaining obligations under this Lease, the amount of which Lessor is then
unable to determine finally (and Lessor shall return any such retained amount to
Tenant promptly following the final determination of such Rent amount and the
full payment thereof to Lessor and the full performance of such remaining
obligations under this Lease). The Security Deposit shall not be deemed an
advance payment of Rent or a measure of Lessor’s damages for any default
hereunder by Tenant, nor shall it be a bar or defense to any action that Lessor
may at any time commence against Tenant.

 

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Section 8.7.4 Return of Security Deposit. Lessor shall return to Tenant any
Security Deposit within thirty (30) days after written request therefor;
provided that:

(a) no Event of Default has occurred and is continuing;

(b) as of the four (4) most recent consecutive Quarterly Covenant Compliance
Dates, Tenant would have complied with the covenants in Section 8.4 hereof
without giving effect to any deemed increase to Consolidated EBITDA from the
Security Deposits; and

(c) Tenant shall have delivered an Officer’s Certificate from the Chief
Financial Officer of the Seniormost Parent setting forth calculations in
reasonable detail demonstrating compliance with clause (b) above, together with
such attached backup information as Lessor may reasonably request.

ARTICLE IX

Section 9.1 Maintenance and Repair.

(a) Tenant, at its expense, shall keep each Leased Property and all private
roadways, sidewalks and curbs appurtenant thereto and which are under Tenant’s
control (and Tenant’s Personal Property) in good order and repair, reasonable
wear and tear excepted (whether or not the need for such repairs occurs as a
result of Tenant’s use, any prior use, the elements or the age of such Leased
Property, Tenant’s Personal Property, or any portion thereof), and, except as
otherwise provided in ARTICLE XIV, shall promptly make all necessary and
appropriate repairs and replacements 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 made in good, workmanlike and first-class
manner, in accordance with all applicable federal, state and local statutes,
ordinances, by-laws, codes, rules and regulations relating to such work. Tenant
will not take or omit to take any action the taking or omission of which might
materially impair the value or usefulness of the applicable Leased Property or
any part thereof for its Primary Intended Use.

(b) Lessor shall not under any circumstances be required to build or rebuild any
improvements on any Leased Property, or to make any repairs, replacements,
alterations, restorations or renewals of any nature or description to the
applicable Leased Property, whether ordinary or extraordinary, structural or
non-structural, foreseen or unforeseen, or to make any expenditure whatsoever
with respect thereto, in connection with this Lease, or to maintain any Leased
Property in any way, except as expressly provided herein. Tenant hereby waives,
to the extent permitted by law, the right to make repairs at the expense of
Lessor pursuant to any law in effect at the time of the execution of this Lease
or thereafter enacted.

(c) Except as expressly set forth in this Lease, nothing contained in this Lease
and no action or inaction by Lessor shall be construed as (i) constituting the
consent or request of Lessor, express or implied, to any contractor,
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or for the 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 any Leased Property or any part thereof, or (ii) giving
Tenant 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 any Leased Property, or any portion thereof.

(d) Tenant will, upon the expiration or prior termination of the Term, vacate
and surrender the applicable Leased Property to Lessor in the condition in which
such Leased Property was originally received from Lessor, except as repaired,
rebuilt, restored, altered or added to as permitted or required by the
provisions of this Lease and except for ordinary wear and tear (subject to the
obligation of Tenant to maintain the Leased Property in good order and repair
during the entire Term).

(e) Tenant shall establish and maintain any reserve accounts reasonably required
by a Superior Mortgagee for deferred maintenance conditions and for capital
expenditures at the Leased Property.

Section 9.2 Encroachments. If any of the Leased Improvements on any Leased
Property shall, at any time, encroach upon any property, street or right-of-way
adjacent to such Leased Property, then, promptly upon the request of Lessor or
at the behest of any person affected by any such encroachment, Tenant shall, at
its expense, subject to its right to contest the existence of any encroachment
and, in such case, in the event of any adverse final determination, either (i)
obtain valid and effective waivers or settlements of all claims, liabilities and
damages resulting from each such encroachment, whether the same shall affect
Lessor or Tenant, or (ii) make such changes in the Leased Improvements, and take
such other actions, as Tenant, in good faith exercise of its judgment deems
reasonably practicable, to remove such encroachment, including, if necessary,
the alteration of any of the Leased Improvements, and in any event take all such
actions as may be necessary in order to be able to continue the operation of the
Leased Improvements for the Primary Intended Use substantially in the manner and
to the extent the Leased Improvements were operated prior to the assertion of
such encroachment. Any such alteration shall be made in conformity with the
applicable requirements of ARTICLE X. Tenant’s obligations under this Section
9.2 shall be in addition to and shall in no way discharge or diminish any
obligation of any insurer under any policy of title or other insurance and
Tenant shall not be entitled to a credit for any sums recovered by Lessor under
any such policy of title or other insurance.

ARTICLE X

Section 10.1 Construction of Capital Alterations to the Leased
Property(ies). Tenant shall not, without the prior written consent of Lessor,
which consent, except as expressly set forth below relative to tie in/connecting
Capital Alterations of the nature described below, shall not be unreasonably
withheld, delayed or conditioned, construct or install Capital Alterations on
any Leased Property. In the event that Tenant wishes to construct or install any
Capital

 

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Alteration, Tenant shall submit to Lessor in writing a proposal setting forth in
reasonable detail such Capital Alteration and shall provide to Lessor for
approval such plans and specifications, permits, licenses, contracts,
construction schedules, construction budgets and other information concerning
the proposed Capital Alteration as Lessor may reasonably request showing in
reasonable detail the scope and nature of the Capital Alteration that Tenant
desires to construct (collectively the “Plans and Specifications”). It is the
intent of the parties hereto that the level of detail shall be comparable to
that which is referred to in the architectural profession as “design development
drawings” as opposed to working or biddable drawings. Without limiting the
generality of the foregoing, such proposal shall indicate the approximate
projected cost of constructing such Capital Alteration and the use or uses to
which it will be put. In the event that Lessor consents in writing to any
Capital Alteration, prior to commencing construction of any Capital Alteration,
Tenant shall first request Lessor to provide funds to pay for such Capital
Alteration in accordance with the provisions of Section 10.3. If Lessor declines
or is unable to provide such financing on terms acceptable to Tenant, Tenant
shall provide to Lessor, prior to commencement of any construction, proof
reasonably acceptable to Lessor that Tenant has sufficient capital to complete
the construction. Furthermore, no Capital Alteration shall be made which would
tie in or connect any Leased Improvements on a Leased Property with any other
improvements on property adjacent to such Leased Property (and not part of the
Land covered by this Lease) including, without limitation, tie-ins of buildings
or other structures or utilities, unless Tenant shall have obtained the prior
written approval of Lessor, which approval in Lessor’s sole discretion may be
granted, withheld, delayed or conditioned. Tenant shall reimburse Lessor for all
reasonable costs and expenses incurred by Lessor in reviewing the proposal and
the Plans and Specifications for a Capital Alteration and for inspecting the
applicable Leased Property and otherwise monitoring the construction of the
Capital Alteration, including, without limitation, the reasonable cost of
engaging consultants to assist Lessor in connection with any or all of the
foregoing.

Section 10.2 Capital Alterations Financed by Tenant. If Tenant provides or
arranges such financing, there shall be no adjustment in Base Rent by reason of
any such Capital Alteration.

Section 10.3 Capital Alterations Financed by Lessor.

(a) Tenant shall request that Lessor provide or arrange financing for a Capital
Alteration by providing to Lessor such information about the Capital Alteration
as Lessor may reasonably request including without limitation all information
referred to in Section 10.1 above. Lessor may, but shall be under no obligation
to, obtain the funds necessary to meet the request. Within sixty (60) days after
receipt of a request, Lessor shall notify Tenant as to whether it will finance
the proposed Capital Alteration and, if so, the terms and conditions upon which
it would do so, including the terms of any amendment to this Lease. In no event
shall the portion of the projected Capital Alterations Cost comprised of land,
if any, materials, labor charges and fixtures be less than ninety percent (90%)
of the total amount of such cost. Tenant may withdraw its request by notice to
Lessor at any time before or after receipt of Lessor’s terms and conditions. If
Tenant desires to accept Lessor’s offer to finance the proposed Capital
Alteration, Tenant shall notify Lessor within thirty (30) days after Tenant’s
receipt of Lessor’s offer.

 

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(b) If Lessor agrees to finance the proposed Capital Alteration, Tenant shall
provide Lessor with the following prior to any advance of funds:

(i) all customary or other reasonably required loan documentation;

(ii) any information, certificates, licenses, permits or documents requested by
either Lessor or any third party lender with whom Lessor has agreed or may agree
to provide financing which are necessary to confirm that Tenant will be able to
use the Capital Alteration upon completion thereof in accordance with the
Primary Intended Use, including all required federal, state or local government
licenses and approvals;

(iii) an Officer’s Certificate and, if requested, a certificate from Tenant’s
architect, setting forth in reasonable detail the projected (or actual, if
available) cost of the proposed Capital Alteration;

(iv) an amendment to this Lease, duly executed and acknowledged, in form and
substance reasonably satisfactory to Lessor and Tenant, providing for (1) any
change in the Rent that is set forth in Lessor’s offer to finance and accepted
by Tenant, any change in the legal description of the Land, and any change in
Exhibit C hereof (including any and all allocations of Rent and Transferred
Property Percentages contained therein) that is appropriate on account of any
change in the Rent as aforesaid (specifically, Lessor’s and Tenant’s agreed upon
changes to the Base Rent allocable to the affected Leased Property(ies), if any,
shall be incorporated into an amended Exhibit C, and the Transferred Property
Percentages allocable to all of the Leased Properties shall then be recalculated
and incorporated into such amended Exhibit C) and (2) any other Lease amendments
as may be necessary or appropriate;

(v) a deed (in the customary form used to convey commercial properties within
the relevant jurisdiction) conveying title to Lessor to any land acquired for
the purpose of constructing the Capital Alterations free and clear of any liens
or encumbrances except those approved by Lessor, accompanied by a final as-built
survey thereof satisfactory to Lessor if reasonably required by Lessor;

(vi) endorsements to any outstanding policy of title insurance, if any, covering
the applicable Leased Property or commitments therefor satisfactory in form and
substance to Lessor (A) updating the same without any additional exception
except as may be permitted by Lessor; and (B) increasing the coverage thereof by
an amount equal to the Fair Market Value of the Capital Alteration (except to
the extent covered by the owner’s policy of title insurance referred to in
subsection (vii) below);

(vii) if appropriate, (A) an owner’s policy of title insurance insuring fee
simple title to any land conveyed to Lessor pursuant to subsection (v) free and
clear of all liens and encumbrances except those approved by Lessor and (B) a
lender’s policy of title insurance satisfactory in form and substance to Lessor
and the lending institution advancing any portion of the Capital Alterations
Cost;

 

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(viii) if deemed necessary by Lessor, an M.A.I. appraisal of the Leased Property
indicating that the value of the applicable Leased Property upon completion of
the Capital Alteration exceeds the Fair Market Value thereof prior thereto by an
amount not less than 95% of the Capital Alterations Cost; and

(ix) such other certificates (including, but not limited to, endorsements
increasing the insurance coverage, if any, at the time required by
Section 13.1), documents, opinions of counsel, appraisals, surveys, certified
copies of duly adopted resolutions of the Board of Directors of Tenant
authorizing the execution and delivery of the lease amendment and any other
instruments as may be reasonably required by Lessor and any lending institution
advancing or reimbursing Tenant for any portion of the Capital Alterations Cost.

(c) Upon making a request to finance a Capital Alteration, if and when such
financing is actually consummated, Tenant shall pay or agree to pay all
reasonable costs and expenses of Lessor and any Lending Institution which has
committed to finance such Capital Alteration paid or incurred by them in
connection with the financing of the Capital Alterations, including, but not
limited to, (i) the reasonable fees and expenses of their respective 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 and survey charges, appraisal fees, if any, and rating agency fees, if
any, (vi) any other applicable consulting fees (including without limitation
engineering and environmental), and (vii) commitment fees, if any.

Section 10.4 Non-Capital Alterations. Tenant shall have the right to make
additions, modifications or improvements to any Leased Property which are not
Capital Alterations (“Non-Capital Alterations”) from time to time as it, in its
discretion, may deem to be desirable for its uses and purposes, provided that
such action will not alter the character or purpose or detract from the value or
operating efficiency thereof and will not impair the revenue producing
capability of the affected Leased Property or adversely affect the ability of
Tenant to comply with the provisions of this Lease. The cost of such Non-Capital
Alterations, modifications or improvements to a Leased Property shall be paid by
Tenant.

Section 10.5 Salvage. All materials which are scrapped or removed in connection
with the making of either Capital Alterations permitted by Section 10.1 or
Non-Capital Alterations permitted by Section 10.4 or repairs required by
ARTICLE IX shall be or become the property of Lessor or Tenant depending on
which party is paying for, or providing the financing for, such work.

Section 10.6 Additional Requirements for Capital Alterations and Non-Capital
Alterations. Tenant shall comply with the following requirements in connection
with Permitted Alterations:

(a) In the case of Capital Alterations, the Permitted Alteration shall be made
substantially in accordance with the Plans and Specifications submitted to
Lessor, to the extent applicable.

 

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(b) The Permitted Alterations and the installation thereof shall comply with all
applicable Legal Requirements and all Insurance Requirements.

(c) The Permitted Alterations shall be performed in a good and workmanlike
manner, shall not impair the value or the structural integrity of the applicable
Leased Property, and shall be free and clear of mechanic’s liens.

(d) Intentionally omitted.

(e) Tenant shall, at Tenant’s expense, obtain a builder’s completed value risk
policy of insurance insuring against the risks of physical loss, including
collapse and transit coverage, in a nonreporting form, covering the total value
of the work performed, and equipment, supplies and materials, and insuring
initial occupancy. Lessor and any Facility Mortgagee shall be additional named
insureds of such policy. Lessor shall have the right to approve the form and
substance of such policy, which approval shall not be unreasonably withheld,
delayed or conditioned.

(f) Tenant shall pay the premiums required to increase the amount of insurance
coverages required by ARTICLE XIII to reflect the increased value of the
applicable Leased Property resulting from the Permitted Alterations, and shall
deliver to Lessor a certificate evidencing the increase in coverage.

(g) In the case of Capital Alterations, Tenant shall, not less than sixty (60)
days after completion of the Capital Alterations, deliver to Lessor a revised
“as-built” set of Plans and Specifications for the Capital Alterations in form
and substance reasonably satisfactory to Lessor.

(h) In the case of Capital Alterations, Tenant shall, not later than thirty (30)
days after Lessor sends an invoice, reimburse Lessor for any reasonable costs
and expenses, including attorneys’ fees and architects’ and engineers’ fees,
incurred in connection with reviewing proposed Capital Alterations and ensuring
Tenant’s compliance with the terms of this ARTICLE X.

(i) All Capital Alterations and Non-Capital Alterations shall, without payment
by Lessor at any time (other than as expressly agreed by Lessor pursuant to
Section 10.3 above), be included under the terms of this Lease and upon
expiration or earlier termination of this Lease shall pass to and become the
property of Lessor free and clear of all encumbrances, other than Permitted
Encumbrances.

(j) Except as expressly agreed by Lessor and Tenant pursuant to Section
10.3(b)(iv) above, (1) there shall be no adjustment in Base Rent by reason of
any Capital Alteration or Non-Capital Alteration and (2) no Capital Alteration
or Non-Capital Alteration shall be treated by Lessor or Tenant as rent, or
amounts in lieu of rent, paid by Tenant, or any other kind of gross income to
Lessor, for income tax purposes.

 

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Section 10.7 Mortgagee’s Consent. Tenant shall not commence construction of any
Capital Alteration until Lessor shall have obtained the consent of any
applicable Facility Mortgagee or Superior Lessor, if such consent is
required. Lessor agrees to use commercially reasonable efforts to obtain
promptly any such consent, if such consent is necessary.

ARTICLE XI

Section 11.1 Liens. Subject to the provisions of ARTICLE XII relating to
permitted contests, Tenant 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 Leased Property or any
attachment, levy, claim or encumbrance in respect of the Rent, not including,
however, (a) Permitted Encumbrances, (b) restrictions, liens and other
encumbrances which are consented to in writing by Lessor, or any easements
granted pursuant to the provisions of this Lease, (c) liens for those taxes of
Lessor which Tenant is not required to pay hereunder, (d) subleases permitted by
ARTICLE XXV, (e) 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, (f) liens of mechanics,
laborers, materialmen, suppliers or vendors for sums either disputed in good
faith or not yet due, provided that (1) the payment of such sums shall not be
postponed under any related contract 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 have been made
therefor or (2) any such liens are in the process of being contested as
permitted by ARTICLE XII, and (g) any liens which are the responsibility of
Lessor pursuant to the provisions of ARTICLE XXXVIII. Notwithstanding the
foregoing, Tenant shall bond over any lien affecting the applicable Leased
Property if Lessor shall reasonably request, or if any applicable Facility
Mortgagee shall so require.

ARTICLE XII

Section 12.1 Permitted Contests. Tenant, on its own or on Lessor’s behalf (or in
Lessor’s name), but at Tenant’s expense, may contest, by appropriate legal
proceedings conducted in good faith and with due diligence, the amount or
validity or application, in whole or in part, of any Imposition or any Legal
Requirement or any 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 applicable Leased Property, (b) neither the
applicable Leased Property nor any Rent therefrom nor any part thereof or
interest therein would be reasonably likely to be in 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 criminal liability for failure to comply
therewith pending the outcome of such proceedings and the contest provisions of
Section 8.2 have been satisfied, (d) Tenant shall indemnify and hold harmless
Lessor from and against any cost, claim, damage,

 

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penalty or reasonable expense, including reasonable attorneys’ fees, incurred by
Lessor in connection therewith or as a result thereof, (e) in the case of a
Legal Requirement and/or Imposition, lien, encumbrance or charge, Tenant shall
give such reasonable security as may be demanded by Lessor to insure ultimate
payment of or compliance with the same and to prevent any sale or forfeiture of
the affected Leased 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 Tenant 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 Tenant 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 is resolved against Lessor or Tenant by a final unappealable
determination, Tenant shall, as Additional Charges due hereunder, pay to the
appropriate payee the amount required to be paid, together with all interest and
penalties accrued thereon, within ten (10) days after such determination (or
within such shorter period as may be required by the terms of such
determination), and comply, within any cure period allowed therefor by the
applicable agency or authority (or if no such cure period shall be allowed or
specified by the applicable agency or authority, promptly and diligently
following the effective date of such determination and, in any event, prior to
the final unappealable revocation of any license, permit, approval, certificate
of need, certificate for reimbursement or other Authorization), with the
applicable Legal Requirement, Insurance Requirement, plan of correction or other
remedial requirements of the applicable agency or authority; provided, however,
that this subsection (g) is not intended, and shall not be construed, to afford
Tenant any cure or grace period beyond the effective date of any final
unappealable determination, unless and only to the extent that (i) such
determination specifically conditions the imposition or taking effect of the
adverse legal, regulatory or other consequences in issue upon Tenant’s failure
to make a specified payment or to take specified compliance, curative or
remedial action following the effective date of such determination or (ii)
Tenant is proceeding diligently and in good faith to effect an assignment or
sublet under Section 25.1.11 hereof and the applicable agency(ies) or
authority(ies) is not enforcing such final order, pending consummation of such
assignment or sublet. Lessor, at Tenant’s expense, shall execute and deliver to
Tenant such authorizations and other documents as may reasonably be required in
any such contest, and, if reasonably requested by Tenant or if Lessor so
desires, Lessor shall join as a party therein. Tenant shall indemnify and save
Lessor harmless against any liability, cost or expense of any kind that may be
imposed upon Lessor in connection with any such contest and any loss resulting
therefrom.

ARTICLE XIII

Section 13.1 General Insurance Requirements. During the Term, Tenant shall at
all times keep each Leased Property, and all property located in or on any
Leased Property, including Leasehold Improvements, Fixtures and Tenant’s
Personal Property, insured with the kinds and amounts of insurance described
below. This insurance shall be written by companies authorized to do insurance
business in the State in which the applicable Leased Property is located,
provided, however, that the insurers or reinsurers issuing policies covering
general liability and/or professional liability claims (or providing reinsurance
coverage with respect to such claims) need only to have such authorizations to
do insurance business as are required by

 

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applicable law. All companies providing insurance required by the terms of this
ARTICLE XIII (including, without limitation, any Captive Insurance Company) must
have a rating at least as high as the rating required by any applicable Facility
Mortgagee. The policies must name as loss payee (i) the holder of any mortgage,
deed of trust or other security agreement (“Facility Mortgagee”) securing any
Encumbrance placed on the applicable Leased Property in accordance with the
provisions of ARTICLE XXXVIII (“Facility Mortgage”) by way of a standard form of
mortgagee’s loss payable endorsement or (ii) if no such Facility Mortgage
encumbers the applicable Leased Property, Lessor and, in the case of any
commercial general liability and/or umbrella liability insurance coverages, must
name Lessor and any Superior Mortgagee(s) as additional insureds. Losses shall
be payable to Lessor and/or Superior Mortgagee as provided in ARTICLE XIV. Any
loss adjustment shall require the written consent of Lessor, Tenant, Leasehold
Mortgagee and Facility Mortgagee whenever the loss exceeds twenty percent (20%)
of the Facility’s Fair Market Value. Evidence of insurance shall be deposited
with Lessor and, if requested, with any Superior Lessor, Leasehold Mortgagee and
Facility Mortgagee(s). If any provision of any Facility Mortgage requires
deposits of insurance premiums to be made with such Facility Mortgagee, Tenant
shall either pay to Lessor monthly the amounts required and Lessor shall
transfer such amounts to each Facility Mortgagee, or, pursuant to written
direction by Lessor, Tenant shall make such deposits directly with such Facility
Mortgagee. The policies on each Leased Property, including the Leasehold
Improvements, and Fixtures and Tenant’s Personal Property, shall insure against
the following risks:

Section 13.1.1 Loss or damage by fire, vandalism and malicious mischief,
extended coverage perils commonly known as “All Risk”, including flood, the
backup of sewers and drains, earthquake, breakage of plate glass and all
physical loss perils including but not limited to sprinkler leakage, in an
amount not less than one hundred percent (100%) of the then full replacement
cost thereof (as defined below in Section 13.2), subject to no coinsurance
requirement or on an agreed amount basis;

Section 13.1.2 Broad form comprehensive boiler and machinery insurance, on a
blanket repair and replace basis, with limits for each accident in an amount not
less than one hundred percent (100%) of the then full replacement cost (as
defined in Section 13.2) of the Leased Property;

Section 13.1.3 Business Interruption insurance on a Business Interruption, Gross
Profits or Gross Rents form, including all standing charges, with a period of
indemnity of no less than twelve (12) months, resulting from loss or damage as
described in Section 13.1.1 or Section 13.1.2, subject to no coinsurance
requirement or on an agreed amount basis;

Section 13.1.4 Claims for bodily injury, including death resulting therefrom,
personal injury and property damage on an occurrence basis, under a policy of
commercial general liability (“CGL”) insurance (including, without limitation,
broad form property damage and broad form contractual liability) for a limit of
not less than Fifty Million and No/100 Dollars ($50,000,000.00) per occurrence,
combined single limit. Relative to the insurance referenced in this
Section 13.1.4, Tenant shall be permitted to use a claims made policy form
rather than an occurrence based policy form for its primary, and/or its excess
liability, CGL insurance, only if:

(a) an occurrence based form of primary or excess liability, as applicable, CGL
insurance policy cannot be obtained solely because occurrence based forms of
primary or excess liability, as applicable, CGL insurance are not offered in the
insurance market place for for-profit hospital and/or nursing center companies
or

(b) a majority of the five (5) largest (determined by revenue) companies
(exclusive of Tenant) in the for-profit hospital and/or nursing center industry
maintain claims made forms of primary or excess liability, as applicable, CGL
insurance for their primary or excess liability, as applicable, CGL insurance
policies.

 

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(For example, relative to the foregoing conditions, if occurrence based forms of
primary CGL insurance are offered in the insurance market place for for-profit
hospital and/or nursing center companies, but Tenant is unable to obtain an
occurrence based form of excess liability CGL insurance solely because
occurrence based forms of excess liability CGL insurance are not offered in the
insurance market place for for-profit hospital and/or nursing center companies,
and a majority of the aforesaid five largest companies maintain occurrence based
forms of primary CGL insurance and claims made forms of excess liability CGL
insurance, a claims made form of excess liability CGL insurance would be
permitted subject to compliance with the other requirements of this
Section 13.1.4, but a claims made form of primary CGL insurance would not be
permitted). Prior to making any such switch to or renewing any claims made
policy, Tenant shall be obligated to provide to Lessor supporting evidence
demonstrating the existence of condition (a) or (b), and the sufficiency of such
evidence shall be subject to the advance written approval of Lessor, in its
reasonable discretion. If Tenant so switches to a claims made form of policy, in
addition to complying with the requirements referenced below in this
Section 13.1.4, Tenant shall be obligated to switch back to occurrence based
coverage at the end of the then current claims made policy term unless condition
(a) or (b) exists as demonstrated by supporting evidence reasonably approved in
advance and in writing by Lessor. If Tenant satisfies the above referenced tests
for switching to, or continuing to maintain, a claims made form of policy, any
claims made policy that it purchases must include therein the right to purchase
a “tail” that insures against so called “incurred but not reported claims” for a
period of at least three (3) years following the expiration of such claims made
policy. In addition, from and after any such switch to a claims made form of
policy, Tenant must, after the expiration of each claims made policy that Tenant
obtains, as to each such expiring claims made policy, either:

(i) continue to insure Lessor and all Facility Mortgagees and Superior Lessors
with the required amount of primary and/or excess liability, as applicable
depending upon the nature of such expiring claims made policy, CGL insurance
coverage, on a claims made policy form that includes coverage against all
so-called “incurred but not reported claims” relating to any period on or prior
to the expiration of the expiring policy (“Previous Period Unreported Claims”),
an additional ten (10) years following the expiration of such expiring claims
made policy (which coverage may be obtained, for example, (A) through the
renewal or rolling-over of a claims made based CGL policy providing the required
amounts of coverage and including coverage against Previous Period Unreported
Claims for consecutive 1-year periods for such ten (10) year period, or (B)
through the purchase of a three (3) year claims made based CGL “tail” policy

 

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providing the required amounts of coverage and including coverage against
Previous Period Unreported Claims followed by purchases of claims made based CGL
policies providing the required amounts of coverage and including coverage
against all Previous Period Unreported Claims for consecutive 1-year periods for
the remaining seven (7) years of such ten (10) year period) (in connection with
the purchase of claims made CGL insurance coverage pursuant to this subsection
(i), any claims made CGL insurance coverage that is obtained by Tenant may
exclude therefrom any claims incurred during any period that an occurrence based
form of primary or excess liability, as applicable depending on the nature of
the expiring claims made policy, CGL insurance policy providing the required
amounts of coverage and insuring Lessor and all Facility Mortgagees and Superior
Lessors was in effect), or

(ii) insure Lessor and all Facility Mortgagees and Superior Lessors by obtaining
the required amount of primary and/or excess liability, as applicable, CGL
insurance on an occurrence based policy form that includes therein as insured
claims all claims (x) incurred prior to the inception of such occurrence based
CGL insurance policy and after the latest of (1) April 27, 2007 (in the case of
the Added Leased Properties) or October 1, 2014 (in the case of the other Leased
Properties), (2) the date that is ten (10) years prior to the inception of such
occurrence based CGL insurance policy or (3) the day preceding the date that
Tenant, pursuant to the terms of this Section 13.1.4, first switched to a claims
made form of primary or excess liability, as applicable depending on the nature
of such expiring claims made policy, CGL insurance policy (relative to the
period described in this subsection (ii)(x), any occurrence based CGL policy
that is obtained by Tenant pursuant to this subsection (ii) may exclude
therefrom any claims incurred during any period that an occurrence based form of
primary or excess liability, as applicable depending on the nature of the
expiring claims made policy, CGL insurance policy providing the required amounts
of coverage and insuring Lessor and all Facility Mortgagees and Superior Lessors
was in effect) and (y) not yet reported prior to such inception;

Section 13.1.5 Claims arising out of malpractice in an amount not less than
Twenty Five Million and No/100 Dollars ($25,000,000.00) for each person and for
each claim in the aggregate;

Section 13.1.6 Intentionally Omitted;

Section 13.1.7 Intentionally Omitted;

Section 13.1.8 Loss or damage commonly covered by blanket crime insurance
including employee dishonesty, loss of money orders or paper currency,
depositor’s forgery, in commercially reasonable amounts acceptable to Lessor for
a limit of not less than Five Million and No/100 Dollars ($5,000,000.00).

Section 13.2 Replacement Cost. The term “full replacement cost,” as used herein,
shall mean the actual replacement cost of the property requiring replacement
from time to time including an increased cost of construction endorsement,
without reduction or deduction for

 

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depreciation. Tenant shall have the full replacement cost redetermined by an
accredited appraiser approved by Lessor (which approval shall not be
unreasonably withheld, delayed or conditioned), hereinafter referred to as
“impartial appraiser”, every five years during the Term, and at such other times
that either party believes that full replacement cost has increased or
decreased. Tenant shall forthwith, on receipt of such determination by such
impartial appraiser, give written notice thereof to Lessor. The determination of
such impartial appraiser shall be final and binding on the parties hereto, and
Tenant shall forthwith increase, or may decrease, the amount of the insurance
carried pursuant to this Section, as the case may be, to the amount so
determined by the impartial appraiser. Each party shall pay one-half ( 1⁄2) of
the fee, if any, of the impartial appraiser.

Section 13.3 Additional Insurance. In addition to the insurance described above,
Tenant shall maintain such additional insurance as may reasonably be required
from time to time by any Facility Mortgagee and, further, shall at all times
maintain adequate worker’s compensation insurance coverage for all persons
employed by Tenant on each Leased Property. Such worker’s compensation insurance
shall be in accordance with the requirements of applicable local, state and
federal law.

Section 13.4 Waiver of Subrogation. Lessor and Tenant agree that (insofar as and
to the extent that such agreement may be effective without invalidating or
making it impossible to secure insurance coverage from responsible insurance
companies doing business in the State) with respect to any property loss that is
covered by insurance then being carried by Lessor or Tenant, respectively, the
party carrying such insurance and suffering said loss releases the other of and
from any and all claims with respect to such loss where such insurance is valid
and collectible respecting any such loss; and they further agree that their
respective insurance companies shall have no right of subrogation against the
other on account thereof, even though extra premium may result therefrom.
Nothing contained herein is intended, nor shall it be construed, to require that
Lessor maintain any insurance coverage.

Section 13.5 Form Satisfactory, etc. All of the policies of insurance referred
to in this Section shall be written in form satisfactory to Lessor and any
Superior Lessor and Facility Mortgagee and by insurance companies satisfactory
to Lessor and any Superior Lessor and Facility Mortgagee. Lessor agrees that it
will not unreasonably withhold, delay or condition its approval as to the form
of the policies of insurance or as to the insurance companies selected by
Tenant. Tenant shall pay all of the premiums therefor not later than the earlier
of the date which is thirty (30) days after Tenant’s receipt of an invoice
therefor or the due date of the applicable premium, and shall deliver such
policies or certificates thereof to Lessor prior to their effective date (and,
with respect to any renewal policy, prior to the expiration of the existing
policy), and in the event of the failure of Tenant either to effect such
insurance in the names herein called for or to pay the premiums therefor, or to
deliver such policies or certificates thereof to Lessor and each Superior Lessor
and Facility Mortgagee at the times required, Lessor shall be entitled, but
shall have no obligation, to effect such insurance and pay the premiums
therefor, which premiums shall be repayable to Lessor upon written demand
therefor, and failure to repay the same shall constitute an Event of Default
within the meaning of Section 16.1(c). Each insurer mentioned in this Section
shall agree, by endorsement on the policy or policies issued by it, or by

 

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independent instrument furnished to Lessor and any Superior Lessor and Facility
Mortgagee, that it will give to Lessor thirty (30) days’ written notice before
the policy or policies in question shall be materially altered, allowed to
expire or canceled.

Section 13.6 Limits; Deductibles. In the event that either party shall at any
time deem the limits of the personal injury or property damage public liability
insurance then carried to be either excessive or insufficient or in the event
that Lessor shall at any time deem the deductible amount under any insurance
then carried by Tenant pursuant to this ARTICLE XIII to be excessive, the
parties shall endeavor to agree on the proper and reasonable limits or
deductible amount, as applicable, for such insurance to be carried; and such
insurance shall thereafter be carried with the limits or deductible amount, as
applicable, thus agreed on until further change pursuant to the provisions of
this Section. If the parties shall be unable to agree thereon, the proper and
reasonable limits or deductible amount, as applicable, for such insurance to be
carried shall be determined by an impartial third party selected by the parties.
Nothing herein shall permit the amount of insurance to be reduced below, or the
deductible amount under any insurance carried by Tenant pursuant to this
ARTICLE XIII to be increased above, the amount or amounts required by any of the
Facility Mortgages or by any Superior Lessor.

Section 13.7 Blanket Policy. Notwithstanding anything to the contrary contained
in this Section but subject to any requirements of any applicable Facility
Mortgagee, Tenant’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 Tenant; provided, however, that the coverage
afforded Lessor will not be reduced or diminished or otherwise be different from
that which would exist under a separate policy meeting all other requirements of
this Lease by reason of the use of such blanket policy of insurance, and
provided further that the requirements of this ARTICLE XIII are otherwise
satisfied. Lessor agrees that the blanket coverage described in Schedule 13.7 of
Existing ML5 satisfied the requirements of Section 13.1 as of September 30,
2013.

Section 13.8 No Separate Insurance. Tenant shall not on Tenant’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, 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 Superior Lessors and Facility Mortgagees, are
included therein as additional insureds, and the loss is payable under said
insurance in the same manner as losses are payable under this Lease. Tenant
shall immediately 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.

Section 13.9 Survival. All of Tenant’s obligations under this ARTICLE XIII or
otherwise relating to obtaining, and maintaining, claims made coverages, and/or
switching back to occurrence based coverage, shall survive the expiration or
termination of this Lease as it applies to any or all of the Leased Properties.

 

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Section 13.10 Insurance Company Ratings. Notwithstanding anything to the
contrary contained in this ARTICLE XIII, but without limitation of (a) any
rights of any Facility Mortgagee and/or Superior Lessor and/or (b) any
provisions of this ARTICLE XIII, or any other provisions of this Lease, that
require Tenant to comply with any requirements of, or satisfy, or obtain the
approval or consent of, any Facility Mortgagee and/or Superior Lessor, Lessor
agrees that (i) subject to subsection (ii) below, Lessor shall not require that
any insurance company that is providing general liability and/or professional
liability insurance required by this ARTICLE XIII have a financial strength
rating higher than A-, or a financial size category rating higher than IX, as
such ratings are set forth from time to time in the most current ratings of A.
M. Best Company, provided, however, that, if A.M. Best Company materially lowers
its criteria for financial strength and/or financial size category ratings, this
Section 13.10 shall no longer apply, and (ii) Lessor shall permit general
liability and/or professional liability insurance required by this ARTICLE XIII
to be provided by a Captive Insurance Company, but only if and to the extent
that such Captive Insurance Company, and the amount, form and all other matters
relating to such insurance, fully comply with all of the requirements of this
ARTICLE XIII (other than this Section 13.10).

Section 13.11 Commutation of Certain Insurance Policies. Notwithstanding
anything to the contrary contained in this ARTICLE XIII, Lessor agrees that:

(a) With respect to Tenant’s excess liability policies covering general
liability and professional liability claims (“Excess CGL/PL Policies”) for (i)
the period from January 1, 2003 through January 1, 2004 for claims of up to
$7,000,000.00 in excess of $3,000,000.00 (i.e. claims in excess of $3,000,000.00
and less than $10,000,000.00), (ii) the period from January 1, 2004 through
January 1, 2006 for claims of up to $8,000,000.00 in excess of $2,000,000.00,
and (iii) the period from January 1, 2006 through January 1, 2008 for claims of
up to $9,000,000.00 in excess of $1,000,000.00, Tenant shall be entitled to
obtain commutation return premiums from the insurer(s) under such policies,
provided and on the conditions that: (1) in the case of any claim that, if not
for the commutation referenced above, would have been covered by such policies
and that is (or has been) reported, or otherwise is (or becomes) known, to
Tenant (sometimes referred to herein as a “known claim”), Tenant shall establish
and maintain cash reserves with respect to any such known claim in a manner and
at a monetary level that is consistent with the most stringent of (x) GAAP (to
the extent the same are applicable), (y) generally accepted actuarial principles
and practices and (z) the estimated liability principles and practices employed
by Tenant and/or any Captive Insurance Company(ies) of Tenant with respect to
known claims not covered by insurance during the period from January 1, 2006 to
December 31, 2006, and (2) in the case all claims (other than known claims)
(sometimes referred to herein as “incurred but not reported claims” or “IBNR
claims”) that, if not for the commutation referenced above, would have been
covered by such policies, Tenant shall establish and maintain accrued liability
reserves in its books and records for the estimated amount of such IBNR claims
in a manner and at a monetary level that is consistent with the most stringent
of (x) subsection (1)(x) above, (y) subsection (1)(y) above and (z) the
estimated liability principles and practices employed by Tenant and/or any
Captive Insurance Company(ies) of Tenant with respect to IBNR claims not covered
by insurance during the period from January 1, 2006 to December 31, 2006; and

(b) With respect to Tenant’s Excess CGL/PL Policies (i) for the period from
January 1, 2003 through January 1, 2006 for claims of up to $90,000,000.00 in
excess of $10,000,000.00, Tenant shall be entitled to obtain commutation return
premiums from the insurer(s) under such policies, provided and on the conditions
that, in the case of any claims, whether known claims or IBNR claims, that, if
not for the commutation referenced above, would have been covered by such
policies, Tenant shall establish and maintain cash reserves with respect to all
such claims in a manner and at a monetary level that is consistent with the most
stringent of (i) subsection (a)(1)(x) above, (ii) subsection (a)(1)(y) above and
(iii) the estimated liability principles and practices employed by Tenant and/or
any Captive Insurance Company(ies) of Tenant with respect to known claims, and
IBNR claims, not covered by insurance during the period from January 1, 2006 to
December 31, 2006.

 

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ARTICLE XIV

Section 14.1 Insurance Proceeds. All proceeds payable by reason of any loss or
damage to the applicable Leased Property, or any portion thereof, and insured
under any policy of insurance required by ARTICLE XIII (excluding Business
Interruption Insurance, as described in Section 13.1.3, covering Tenant’s
obligations under this Lease for the payment of Rent, the disposition of the
proceeds of which is described below) shall be paid to Lessor or a third party
designated by Lessor and held by Lessor or such third party in trust 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 or such third party from time to time for the
reasonable costs of such reconstruction or repair. Any excess proceeds of
insurance remaining after the completion of the restoration or reconstruction
shall be paid to Tenant upon completion of any such repair and restoration,
except that, in the event neither Lessor nor Tenant is required or elects to
repair and restore as aforesaid, all such insurance proceeds shall be retained
by Lessor free and clear (except as otherwise provided in Section 14.2.4). All
salvage resulting from any risk covered by insurance shall belong to Lessor
except that any salvage relating to Tenant’s Personal Property shall belong to
Tenant. All proceeds of the aforesaid Business Interruption Insurance shall be
paid to Lessor or a third party designated by Lessor and held by Lessor or such
third party in trust. Business Interruption Insurance proceeds shall be applied
first towards payment of any Rent that is due to Lessor as of the date such
proceeds are received by Lessor or such third party, and the balance of such
proceeds shall be immediately paid to Tenant, except if and to the extent that
the same have been paid by the insurer as a prepayment on account of Rent to
become due under this Lease in which event Lessor or such third party shall hold
any such funds in trust and apply such funds to such Rent as the same becomes
due.

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

Section 14.2.1 If, during the Term, any Leased Property is totally or partially
destroyed from a risk covered by the insurance described in ARTICLE XIII and the
Facility located thereon is rendered Unsuitable for Its Primary Intended Use,
Tenant shall either (A) restore the Facility to substantially the same condition
as existed immediately before the damage or destruction, or (B) offer to acquire
the applicable Leased Property from Lessor for a purchase

 

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price equal to the Fair Market Value Purchase Price of the Leased Property
immediately prior to such damage or destruction. In the event Lessor does not
accept Tenant’s aforesaid offer to purchase, Tenant may (i) withdraw its offer
to purchase the Leased Property and proceed to restore the Facility to
substantially the same condition as existed immediately before the damage or
destruction or (ii) provided and on the conditions that, at the time of such
damage or destruction, Tenant had in full force and effect the insurance
required under Section 13.1.1 and Section 13.1.2 above, there exists no defense
to, or limitation upon, the insurer’s coverage of such damage or destruction
under such insurance, and Tenant pays to Lessor, on or prior to the hereinafter
described termination, the amount of any deductible or other uninsured portion
of the loss resulting from any such damage or destruction, terminate this Lease
as to such Leased Property, in which event Lessor shall be entitled to retain
the insurance proceeds.

Section 14.2.2 If, during the Term, any Leased Property is totally or partially
destroyed from a risk covered by the insurance described in ARTICLE XIII, but
the Facility located thereon is not thereby rendered Unsuitable for its Primary
Intended Use, Tenant shall restore such Facility to substantially the same
condition as existed immediately before the damage or destruction. Such damage
or destruction shall not terminate this Lease as to such Leased Property.

Section 14.2.3 If the cost of the repair or restoration of any Leased Property
exceeds the amount of proceeds received by Lessor from the insurance required
under ARTICLE XIII, Tenant shall be obligated to contribute any excess amounts
needed to restore such Leased Property. Prior to commencement of construction,
Tenant shall either (a) provide Lessor with an irrevocable, unconditional,
freely transferable letter of credit issued by a Lending Institution, in the
full amount of such difference and in form and substance acceptable to Lessor
(and Lessor shall be entitled to draw thereon if Tenant fails to proceed
diligently with such construction or to pay its contractors for such
construction in a timely manner or to renew or extend such letter of credit at
any time the same is scheduled to expire within forty-five (45) days, and the
funds from any such draw shall be held in trust and be disbursed by Lessor as
provided in subsection (b) below and elsewhere in this ARTICLE XIV), or (b) pay
such difference to Lessor, to be held in trust by Lessor, together with any
other insurance proceeds, for application to the cost of repair and restoration.

Section 14.2.4 In the event Lessor accepts Tenant’s offer to purchase the
applicable Leased Property as provided above, this Lease shall terminate as to
the applicable Leased Property upon payment of the purchase price and the
provisions of Section 40.16 hereof shall apply. Upon receipt of the purchase
price from Tenant, Lessor shall remit to Tenant all insurance proceeds
pertaining to such Leased Property then held in trust by Lessor or any third
party designated by Lessor and shall assign to Tenant all of Lessor’s rights in
and to any insurance proceeds payable on account of such damage or destruction.

Section 14.3 Reconstruction in the Event of Damage or Destruction Not Covered by
Insurance. If during the Term any Leased Property and the Facility located
thereon is totally or partially destroyed from a risk not covered by the
insurance described in ARTICLE XIII, whether or not such damage or destruction
renders the Facility Unsuitable for Its Primary Intended Use, Tenant shall
restore the Facility to substantially the same condition it was in immediately
before such damage or destruction and such damage or destruction shall not
terminate this Lease as to such Leased Property.

 

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Section 14.4 Tenant’s Property. All insurance proceeds payable by reason of any
loss of or damage to any of Tenant’s Personal Property or Permitted Alterations
financed by Tenant shall be paid to Tenant and Tenant shall hold such insurance
proceeds in trust to pay the cost of repairing or replacing damaged Tenant’s
Personal Property or Permitted Alterations financed by Tenant.

Section 14.5 Restoration of Tenant’s Property. If Tenant is required or elects
to restore the applicable Leased Property as provided in Section 14.2 or Section
14.3, Tenant shall also restore all alterations and improvements made by Tenant,
Tenant’s Personal Property and all Capital Alterations financed by Tenant.

Section 14.6 No Abatement of Rent. This Lease shall remain in full force and
effect and Tenant’s obligation to make payments of Rent and to pay all other
charges required under this Lease shall remain unabated during the Term
notwithstanding any damage involving any Leased Property (provided that Lessor
shall credit against such payments any amounts paid to Lessor as a consequence
of such damage under any business interruption insurance obtained by Tenant);
provided, however, that, effective upon the purchase of any Leased Property or
termination of this Lease as to the applicable Leased Property pursuant to and
in accordance with Section 14.2, this Lease shall terminate as to such Leased
Property and the provisions of Section 40.16 hereof shall apply. The provisions
of this ARTICLE XIV shall be considered an express agreement governing any cause
of damage or destruction to the applicable Leased Property and, to the maximum
extent permitted by law, no local or state statute, law, rule, regulation or
ordinance in effect during the Term which provides for such a contingency shall
have any application in such case.

Section 14.7 Restoration. If Tenant is required or elects to restore the
applicable Leased Property as provided in Section 14.2 or Section 14.3, Tenant
shall promptly repair, rebuild, or restore the applicable Leased Property, so as
to make such Leased Property at least equal in value to such Leased Property as
it existed immediately prior to such occurrence and as nearly similar to it in
character as is practicable and reasonable. Prior to commencing such repairs or
rebuilding, Tenant shall submit to Lessor for Lessor’s approval, which approval
shall not be unreasonably withheld, delayed or conditioned, Plans and
Specifications pursuant to Section 10.1. Promptly after receiving Lessor’s
approval of the Plans and Specifications, Tenant shall commence repairs and
rebuilding and will prosecute the repairs and rebuilding to completion with
diligence, subject, however, to strikes, lockouts, acts of God, embargoes,
governmental restrictions, and other causes beyond Tenant’s reasonable control.
Subject to the provisions of any applicable Facility Mortgage, Lessor shall make
available to Tenant the insurance proceeds (net of all administrative and
collection costs, including reasonable attorneys’ fees) paid to Lessor for such
repair and rebuilding as it progresses. Payments shall be made against
certification of the architect approved by Lessor (which approval shall not be
unreasonably withheld. delayed or conditioned) responsible for the supervision
of the repairs and rebuilding that the work had been performed substantially in
conformance with the Plans and Specifications and the value of the work in place
is equal to not less than 110% of the aggregate

 

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amount advanced by Lessor for the payment of such work. Prior to commencing the
repairing and rebuilding, Tenant shall deliver to Lessor for Lessor’s approval a
schedule setting forth the estimated monthly draws for such work. Subject to the
provisions of any applicable Facility Mortgage, Lessor shall contribute to such
payments out of the insurance proceeds being held in trust by Lessor an amount
equal to the proportion that the total net amount so held by Lessor bears to the
total estimated cost of repairing and rebuilding, multiplied by the payment by
Tenant on account of such work. Lessor may, however, withhold ten percent (10%)
from each payment until the work has been completed and proof has been furnished
to Lessor that no lien or liability has attached or will attach to the
applicable Leased Property or to Lessor in connection with repairing and
rebuilding.

Section 14.8 Notice. If during the Term any Leased Property and/or the Facility
located thereon is totally or partially damaged or destroyed, and the
restoration and repair of such damage or destruction is in Tenant’s reasonable
estimation likely to cost in excess of $200,000.00 in the aggregate, then Tenant
shall provide Lessor with written notice of such damage or destruction within
fifteen (15) days after Tenant’s discovery thereof. The notice requirement of
this Section 14.8 shall apply regardless of whether such damage or destruction
is from a risk covered by the insurance described in ARTICLE XIII, and
regardless of whether such damage or destruction renders the Facility Unsuitable
for Its Primary Intended Use.

Section 14.9 Waiver. Tenant hereby waives any statutory rights of termination
which may arise by reason of any damage or destruction of the applicable Leased
Property which Tenant is obligated to restore or may restore under any of the
provisions of this Lease.

ARTICLE XV

Section 15.1 Definitions.

Section 15.1.1 “Condemnation” means, as to any Leased Property, (a) the exercise
of any governmental power, whether by legal proceedings or otherwise, by a
Condemnor, (b) a voluntary sale or transfer by Lessor to any Condemnor, either
under threat of condemnation or while legal proceedings for condemnation are
pending and (c) a taking or voluntary conveyance of all or part of such Leased
Property, or any interest therein, or right accruing thereto or use thereof, as
the result or in settlement of any condemnation or other eminent domain
proceeding affecting such Leased Property.

Section 15.1.2 “Date of Taking” means, as to the applicable Leased Property, the
date the Condemnor has the right to possession of such Leased Property, or any
portion thereof, in connection with a Condemnation.

Section 15.1.3 “Award” means all compensation, sums or anything of value
awarded, paid or received on a total or partial condemnation.

Section 15.1.4 “Condemnor” means any public or quasi-public authority, or
private corporation or individual, having the power of condemnation.

 

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Section 15.2 Parties’ Rights and Obligations. If during the Term there is any
taking of all or any part of the applicable Leased Property by Condemnation, the
rights and obligations of the parties shall be determined by this ARTICLE XV.

Section 15.3 Total Taking. If any Leased Property is totally taken by
condemnation, this Lease shall terminate as to such Leased Property on the Date
of Taking, in which event the provisions of Section 40.16 hereof shall apply.

Section 15.4 Partial Taking. If a portion of any Leased Property is taken by
Condemnation, this Lease shall remain in effect as to such Leased Property if
the Facility located thereon is not thereby rendered Unsuitable for Its Primary
Intended Use, but if the Facility is thereby rendered Unsuitable for its Primary
Intended Use, this Lease shall terminate as to such Leased Property on the Date
of Taking, in which event the provisions of Section 40.16 hereof shall apply.

If as a result of any such partial taking by Condemnation, this Lease is not
terminated as provided above, Tenant’s obligation to make payments of Rent and
to pay all other charges required under this Lease shall remain unabated during
the Term notwithstanding such Condemnation (provided that Lessor shall credit
against such payments any amount of any Award attributable to Tenant’s business
interruption).

Section 15.5 Restoration. If there is a partial taking of the applicable Leased
Property and this Lease remains in full force and effect pursuant to Section
15.4, Tenant at its cost shall accomplish all necessary restoration.

Section 15.6 Award-Distribution.

(a) In the event of any partial taking of any Leased Property, the entire Award
shall belong to and be paid to Lessor, except that, subject to the rights of the
Facility Mortgagees, Tenant shall be entitled to receive from the Award, if and
to the extent such Award specifically includes such item, the following:

(i) A sum attributable to the Capital Alterations paid for by Tenant; and

(ii) A sum specifically attributable to Tenant’s Personal Property and any
reasonable removal and relocation costs included in the Award; and

(iii) A sum specifically attributable to the cost of restoring the Leased
Property in accordance with Section 15.5 hereof.

(b) In the event of a total taking of any Leased Property, the Award shall be
divided between Lessor and Tenant in such proportions relative to the appraised
values of their relative estates determined in accordance with Section 35.1
taking into account the value of improvements owned by Lessor and Permitted
Alterations paid for by Tenant. Tenant shall also receive a sum specifically
attributable to Tenant’s Personal Property and any reasonable removal and
relocation costs included in the Award.

 

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Section 15.7 Temporary Taking. The taking of any Leased 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 Base
Rent shall not be abated or reduced during such period of taking.

ARTICLE XVI

Section 16.1 Events of Default. The occurrence of any one or more of the
following events shall constitute an “Event of Default” under this Lease:

(a) if a default by Tenant shall occur under the Indemnity Agreement and, in the
case of a monetary default, such default is not cured within a period of five
(5) days after receipt of notice from Lessor or, in the case of a non-monetary
default, such default is not cured within a period of thirty (30) days after
receipt of notice from Lessor, unless such default cannot with due diligence be
cured within a period of thirty (30) days, in which case such period of time
shall be extended to such period of time (not to exceed 180 days) as may be
necessary to cure such default with all due diligence, provided that such cure
is completed within 180 days (this subsection (a) shall not apply if and for so
long as Lessor is neither Ventas Realty, Limited Partnership, nor Ventas, Inc.
nor an Affiliate of either of such entities), or

(b) if Tenant shall fail to make payment of the Rent or any other sum payable
under or pursuant to the terms of this Lease when the same becomes due and
payable and such failure is not cured within a period of five (5) days after
receipt of notice from Lessor, or

(c) if Tenant shall fail to observe or perform any term, covenant or condition
of this Lease not specifically provided for in this Section 16.1 and such
failure is not cured within a period of thirty (30) days after receipt of notice
from Lessor, unless such failure cannot with due diligence be cured within a
period of thirty (30) days, in which case such period of time shall be extended
to such period of time (not to exceed 180 days) as may be necessary to cure such
default with all due diligence provided that such cure is completed within 180
days, or

(d) if Tenant shall fail to observe or perform any term, covenant or agreement
on its part to be performed or observed pursuant to Section 8.1.1, Section 11.1,
the last sentence of Section 8.2, Section 12.1(g) or Section 13.1, or

(e) any Guarantor shall fail to observe or perform any term, covenant or
agreement on its part to be performed or observed pursuant to any Lease
Guaranty, and such failure shall not be cured within any applicable cure period
provided in such Lease Guaranty, or

(f) there shall occur a final unappealable determination by applicable federal,
state or local authorities of Tenant’s non-compliance with Legal Requirements
applicable to a Facility located on any Leased Property, or of the revocation of
any license, permit, approval or other Authorization (including, without
limitation, any certificate of need) required for the lawful operation of the
Facility located on any Leased Property in accordance with its Primary Intended
Use, or any other circumstances under which Tenant is required by a final

 

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unappealable determination of any such authority to cease operations of such
Facility in accordance with its Primary Intended Use as currently operated
(provided, however, that, without limitation of Section 12.1(g) hereof, before
any such determination becomes final and unappealable, Tenant shall have the
right to contest the same in accordance with Section 8.1.1, Section 8.2 and
Section 12.1(a)-(f) hereof), or

(g) any material representation or warranty made by or on behalf of Tenant or
any Guarantor or Section 25.1.12(f) Guarantor under or in connection with this
Lease or any document, certificate or agreement delivered in connection with
this Lease shall prove to have been false or misleading in any material respect
on the day when made or deemed made, or

(h) if any Tenant, any Guarantor or any Section 25.1.12(f) Guarantor shall:

(i) admit in writing its inability to pay its debts generally as they become
due,

(ii) file a petition in bankruptcy or a petition to take advantage of any
insolvency act,

(iii) make an assignment for the benefit of its creditors,

(iv) consent to the appointment of a receiver of itself or of the whole or any
substantial part of its property, or

(v) file a petition or answer seeking reorganization or arrangement under the
Federal bankruptcy laws or any other applicable law or statute of the United
States of America or any State thereof, or

(i) any petition shall be filed by or against any Tenant or any Guarantor or any
subsidiary of either or any Section 25.1.12(f) Guarantor under Federal
bankruptcy laws, or any other proceeding shall be instituted by or against any
Tenant or any Guarantor or such subsidiary or any Section 25.1.12(f) Guarantor
seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation,
reorganization, arrangement, adjustment or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for any Tenant or any
Guarantor or such subsidiary or any Section 25.1.12(f) Guarantor, or for any
substantial part of the property of any Tenant or any Guarantor or such
subsidiary or any Section 25.1.12(f) Guarantor, and such proceeding is not
dismissed within ninety (90) days after institution thereof, or any Tenant or
any Guarantor or such subsidiary or any Section 25.1.12(f) Guarantor shall take
any action to authorize or effect any of the actions set forth above in this
subsection (i) (this subsection (i) shall not apply to the appointment of a
receiver, trustee, custodian or other similar official in any proceeding(s)
other than bankruptcy, reorganization, insolvency and other creditors’ rights
proceedings of the nature referenced in this subsection (i)), or

(j) if any Tenant or any Guarantor or Section 25.1.12(f) Guarantor shall be
liquidated or dissolved, or shall begin proceedings toward such liquidation or
dissolution, or

 

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(k) if the estate or interest of Tenant in any 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 30 days after receipt by Tenant of notice thereof from
Lessor, (unless Tenant shall be contesting such lien or attachment in good faith
in accordance with ARTICLE XII hereof), or

(l) if any receiver, trustee, custodian or other similar official is appointed
for any Tenant, any Guarantor, any Section 25.1.12(f) Guarantor or any of the
Facilities and any such appointment is not dismissed prior to the entry of a
final, unappealable order approving such appointment (provided, however, that
this subsection (l) shall not apply to any such official appointed in
bankruptcy, reorganization, insolvency or other creditors’ rights proceedings of
the nature referenced in subsection (i) above), and, in the case of the
appointment of any such official as to whom this subsection (l) does apply,
prior to the entry of a final unappealable order approving the appointment of
such official and denying any requested dismissal thereof, without limitation of
Section 12.1(g) hereof, no Event of Default shall be deemed to have occurred
under this subsection (l) so long as Tenant is contesting such appointment in
accordance with Section 8.2 and Section 12.1(a)-(f) hereof), or

(m) Subject to Section 16.10 hereof:

(i) Subject to subsection (iv) below, an Event of Default shall occur hereunder
if the number of licensed beds for any Facility is reduced by more than the
Permissible Reduction Percentage (as hereinafter defined) applicable to such
Facility of the number of licensed beds in such Facility on the Commencement
Date (which number of licensed beds, as of the Commencement Date and after
adjusting for the effect of subsection (m)(i)(1) below, Tenant represents and
warrants to Lessor is as set forth in Schedule 16.1(m)A attached hereto and made
a part hereof) (provided, however, that, (1) for purposes of this subsection
(m), in the case of the Leased Property known as Kindred Hospital – Chicago
North (Facility No. 4637), the number of licensed beds in the Facility at such
Leased Property on the Commencement Date shall be deemed to equal one hundred
sixty-five (165), (2) intentionally omitted, and (3) the voluntary removal from
service (so called “bed banking” or “banking”) of not more than twenty-five
percent (25%) of the number of licensed beds in a particular Facility on the
Commencement Date shall not constitute a reduction of licensed beds for purposes
of this subsection (m), if and for so long as, for purposes of this subsection
(3), (a) any such beds that are voluntarily removed from service by Tenant are
removed from service with the approval of all applicable governmental
authorities, (b) such beds continue to be considered “licensed beds” by the
applicable governmental authorities, (c) after diligent inquiry relative to the
applicable Legal Requirements and after consultation with its legal counsel,
Tenant is not aware of any reason why the applicable regulatory authorities
would not authorize such reintroduction by Tenant or any successor operator at
the end of the bed banking period, in the discretion of Tenant or such successor
operator, as applicable, and without the necessity of any governmental approval
or reapproval or additional Authorization (other than routine governmental
re-inspections of such Facility(ies) and any ministerial approvals, re-approvals
or other Authorizations), and (d) at the time, and as a condition,

 

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of any such voluntary removal and thereafter within twenty (20) days after
receipt of a written request therefor from Lessor from time to time (but not
more often than twice in any calendar year, unless, after Lessor has made two
(2) such requests in a calendar year, a change(s) in Legal Requirements becomes
effective, or Lessor obtains knowledge of other facts or circumstances,
suggesting a possible violation of subsection (a), (b) or (c) above or of the
other provisions of this Section 16.1(m)), Tenant shall deliver to Lessor a
Senior Officer’s Certificate, in form and substance reasonably satisfactory to
Lessor, certifying that Tenant has made diligent inquiry relative to the
applicable Legal Requirements and has consulted with its legal counsel and,
based on the foregoing, certifies that Tenant has complied, and continues to be
in compliance, with the provisions of subsections (a), (b) and (c) above and the
other provisions of this Section 16.1(m)); and

(ii) As used in this subsection (m), the “Permissible Reduction Percentage” for
a particular Facility shall equal the lesser of (1) ten percent (10%) or (2) the
difference between twenty-five percent (25%) and the percentage of licensed beds
at such Facility on the Commencement Date that, as of the calculation date, have
been voluntarily removed from service by Tenant in accordance with subsection
(m)(i)(3) above, provided, however, that (x) in the case of the Facility known
as Kindred Hospital – Chicago North (Facility No. 4637), the reference in
subsection (m)(ii)(1) above shall equal five percent (5%) (reduced from ten
percent (10%), (y) intentionally omitted, and (z) in the case of any Facilities
listed on Schedule 16.1(m)B attached hereto and made a part hereof as to which
any involuntary reduction in the number of licensed beds has occurred in
compliance with subsection (m)(iii) below, the reference in subsection
(m)(ii)(1) above shall equal, as of any date, subject to subsection (m)(iii)(5)
below, the greater of (A) five percent (5%) or (B) that percentage, not greater
than ten percent (10%), calculated by subtracting from the number of licensed
beds at such Facility as of such date the number of licensed beds set forth in
the “95% of Minimum” column of Schedule 16.1(m)B as it applies to such Facility
and then dividing the result of such subtraction by the number of licensed beds
at such Facility as of such date. (For example, if Tenant voluntarily removes
from service, in accordance with the requirements of subsection (m)(i)(3) above,
fifteen percent (15%) or less of the aforesaid licensed beds at a particular
Facility as to which neither subsection (m)(ii)(x) nor (m)(ii)(y) nor (m)(ii)(z)
above applies, the “Permissible Reduction Percentage” would equal ten percent
(10%) for such Facility, but if, for example, Tenant voluntarily removes from
service, in accordance with the requirements of subsection (m)(i)(3) above,
twenty percent (20%) of the aforesaid licensed beds at such Facility, the
“Permissible Reduction Percentage” applicable to such Facility would equal five
percent (5%) (i.e., under subsection (m)(ii)(2) above, 25%-20%=5%). Also, for
example, if a particular Facility listed on Schedule 16.1(m)B had, as of the
Commencement Date, 120 licensed beds, such Facility had not lost any licensed
beds other than 38 licensed beds lost through an involuntary reduction that
complies with subsection (m)(iii) below (so that, as of a particular date, such
Facility has 82 licensed beds), and Schedule 16.1(m)B sets forth 80 licensed
beds in the “Minimum Number of Licensed Beds” column as it applies to such
Facility and 76 licensed beds in the “95% of Minimum” column as it applies to
such Facility, the

 

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percentage referenced in the foregoing subsection (m)(ii)(z) would equal 7.317%
(82 licensed beds minus 76 licensed beds equals 6 licensed beds and 6 licensed
beds divided by 82 licensed beds equals 7.317%, which is greater than the 5.0%
referenced in subsection (m)(ii)(z)(A) above); and

(iii) The provisions of this subsection (m)(iii) shall not apply to any of the
Leased Properties other than the particular Leased Properties referenced on
Schedule 16.1(m)B: An involuntary reduction of the nature referenced in
subsection (m)(iii)(1) below in the number of licensed beds for any Facility
listed on Schedule 16.1(m)B below the minimum number of licensed beds set forth
in the “Minimum Number of Licensed Beds” column of Schedule 16.1(m)B as it
applies to such Facility shall constitute an Event of Default under this Section
16.1(m)), but, notwithstanding any voluntary removal from service of licensed
beds, an involuntary reduction in the number of licensed beds for any of the
particular Facilities listed on Schedule 16.1(m)B down to, but not below, the
minimum number of licensed beds set forth in the “Minimum Number of Licensed
Beds” column of Schedule 16.1(m)B as it applies to such Facility shall not
constitute an Event of Default under this Section 16.1(m)) provided and on the
conditions that (1) the involuntary reduction is required by the applicable
state regulatory authority primarily because of physical space limitations at
the applicable Facility and any such physical space limitations are not the
result of any alterations to the Facility made after the Existing Lease
Effective Date; (2) Tenant uses its best efforts and due diligence to contest
through all available processes (but not including any obligation on Tenant’s
part to make physical alterations to the affected Facility) the involuntary
reduction and, in regular and timely consultation with Lessor, explores other
alternatives (e.g. sale or banking of the licensed beds that are the subject of
such involuntary reduction, with any such sale of beds to be subject to the
prior written approval of Lessor, in its sole discretion, and with all proceeds
from any such sale to be paid, and belong, to Lessor); (3) Tenant provides
written notice to Lessor of such involuntary reduction within two (2) Business
Days of Tenant’s receipt of notice of the involuntary reduction and allows
Lessor, if it so desires in its sole discretion, to participate in the contest
of such involuntary reduction and, if it so desires in its sole discretion, to
require that Tenant allow Lessor, at Tenant’s cost, to control such contest
(including, without limitation, prosecuting legal proceedings in Lessor’s and/or
Tenant’s name); (4) Tenant shall not settle any contest of any such involuntary
reduction without Lessor’s prior written consent, in its sole discretion; and
(5) following any such involuntary reduction as to a particular Facility listed
on Schedule 16.1(m)B and whether or not Tenant has complied with the preceding
conditions (1), (2), (3) and (4), Tenant shall in no event voluntarily reduce
the number of licensed beds at such Facility by any amount, and

(iv) Notwithstanding anything to the contrary contained in this subsection (m),
if and to the extent that Tenant voluntarily removes from service and/or
de-licenses beds at a Facility referenced on Schedule 7.2.8 hereof in accordance
with Section 7.2.8 hereof and, in the case of any such beds that are voluntarily
removed from service, provided further that the requirements of subsections (a),
(b), (c) and (d) of subsection (m)(i)(3) above are, and at all times continue to
be, met, such voluntary removal from service and/or de-licensing, as applicable,
shall not constitute, or be treated as, a breach of this subsection (m) or an
Event of Default under this Lease, and

(v) Notwithstanding anything to the contrary contained in this subsection (m),
if to the extent that the aggregate number of beds at a particular Hospital
Facility that are licensed for the delivery of hospital care or skilled nursing
care is reduced below the Applicable Required Number of Beds for such Hospital
Facility in accordance with Section 7.2.7 hereof, such reduction shall not
constitute, or be treated as, a breach of this subsection (m) or an Event of
Default under this Lease (and, in such regard, if the proviso included in
Section 7.2.7(b)(i) hereof is applicable, no breach of this subsection (m), and
no Event of Default, shall be deemed to exist under this subsection (m) if the
requirements of subsections (1) and (2) included in such proviso are complied
with and satisfied), or

 

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(n) if Tenant shall become subject to regulatory sanctions and Tenant has failed
to cure or satisfy such regulatory sanctions (including, without limitation,
through payment of any such sanctions, if the same are monetary in nature)
within its specified regulatory cure period in any material respect with respect
to any Facility (provided, however, that, without limitation of Section 12.1(g)
hereof, prior to the imposition of such sanctions on Tenant by final
unappealable order of any governmental agency or authority, no Event of Default
shall be deemed to have occurred under this subsection (n) so long as Tenant is
contesting the imposition of such sanctions in accordance with Section 8.2 and
Section 12.1(a)-(f) hereof), or

(o) if, except pursuant to the terms hereof, Tenant voluntarily ceases
operations on any Leased Property, or

(p) if Tenant shall fail to observe or perform any term, covenant or other
obligation of Tenant set forth in ARTICLE XXVI hereof and such failure is not
cured within a period of ten (10) days after receipt of notice thereof from
Lessor, or

(q) subject to Section 16.10 hereof, there shall occur a revocation of
certification for reimbursement under Medicare or Medicaid with respect to any
Facility that participates in such programs and, within one hundred twenty (120)
days following such revocation, Tenant fails to have its aforesaid certification
fully restored (provided, however, that Tenant shall be given an additional
sixty (60) days beyond the aforesaid one hundred twenty (120) day period to have
its aforesaid certification fully restored if, on or prior to the aforesaid one
hundred twentieth (120th) day, Tenant delivers to Lessor a Senior Officer’s
Certificate, in form and substance reasonably satisfactory to Lessor, certifying
that (i) the only requirement that remains unsatisfied in order for Tenant to
have its aforesaid certification fully restored is a re-inspection of the
applicable Facility by the applicable regulatory authority, and (ii) Tenant has
made diligent inquiry relative to the applicable Legal Requirements and has
consulted with its legal counsel and, based on the foregoing, certifies that
Tenant is not aware of any reason why Tenant will not pass its aforesaid
re-inspection, or why Tenant’s aforesaid certification will not be fully
restored, in each case within the aforesaid additional sixty (60) day period),
or

(r) an Event of Default shall occur as described in Section 8.3.1 above, or

 

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(s) an Event of Default shall occur as described in Section 21.5.1 below, or

(t) if Tenant shall exercise a purchase option relative to a Leased Property in
accordance with Section 16.12 hereof and thereafter fail to purchase the subject
Leased Property, and otherwise perform and discharge its duties, liabilities and
obligations on account of such exercise, strictly in accordance with the terms
and conditions of Section 16.12 hereof, or

(u) an Event of Default (as defined in either Tenant Credit Agreement) arising
from the failure to pay principal or interest with respect to any indebtedness
owing under or pursuant to the Tenant Credit Agreements, or any other event of
default arising from the failure to pay principal or interest with respect to
any other indebtedness for borrowed money of Tenant with an aggregate
outstanding principal amount equal to or exceeding $50 million, shall have
occurred, or

(v) the acceleration of the maturity of any indebtedness for borrowed money of
Tenant with an aggregate outstanding principal amount equal to or exceeding $50
million, shall have occurred, or

(w) if Tenant shall fail to observe or perform any term, covenant or other
obligation of Tenant set forth in Section 7.2.7 or Section 7.2.8 hereof, or

(x) a Kindred Change of Control Transaction shall occur and Tenant has not
complied with the requirements of Section 25.1.12, or

(y) a failure to comply with the covenants in Section 8.4 and such failure shall
not have been remedied pursuant to Section 8.7 on or prior to the Cure
Expiration Date or is not capable of being remedied pursuant to Section 8.7, or

(z) if any Event of Default (as defined in the Section 25.1.12(f) Guaranty)
shall have occurred, or

(aa) if Tenant shall fail to observe or perform any term, covenant or agreement
on its, or any Restricted Party’s, part to be performed or observed pursuant to
Section 7.4 or Exhibit H hereto and such failure is not cured within a period of
thirty (30) days after receipt of notice from Lessor, or

(bb) if any Event of Default shall have occurred under any of ML1, ML2 and/or
ML4 or any lease that derives from any of the foregoing leases or this Lease
(other than any such lease with an Unaffiliated Entity).

Upon the occurrence of any Event of Default, Lessor may, at its option,
terminate this Lease (i) in the case of any Event of Default, as to all Leased
Properties and/or (ii) if such Event of Default is a Facility Default, as to any
of the Leased Property(ies) to which such Event of Default relates, by giving
not less than ten (10) days’ notice of such termination and upon the expiration
of such 10-day period or other time period fixed in such notice, if any, during
which

 

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10-day or other time period Tenant shall have no right to cure the Event of
Default in question, the Term shall terminate as to all Leased Properties or as
to the Leased Property(ies) to which such Event of Default relates, as specified
in such notice, all rights of Tenant under this Lease shall cease as to the
Leased Property(ies) so specified, and, if the Leased Property(ies) so specified
are less than all of the Leased Properties, the provisions of Section 40.16
hereof shall apply. Lessor shall have all rights at law and in equity available
to Lessor as a result of Tenant’s breach of this Lease, subject to Section
16.10.

Tenant shall pay, to the maximum extent permitted by law, as Additional Charges
all Litigation Costs as a result of any Event of Default hereunder.

Section 16.2 Certain Remedies. If an Event of Default shall have occurred (and
the event giving rise to such Event of Default has not been cured within the
curative period relating thereto, if any, as set forth in the applicable
subsection of Section 16.1 above or elsewhere herein), whether or not this Lease
has been terminated pursuant to Section 16.1, Tenant shall, to the maximum
extent permitted by law, if and to the extent required by Lessor so to do,
immediately surrender to Lessor the Leased Property(ies) as to which the Lease
has been or may be terminated pursuant to Section 16.1 and quit the same, and
Lessor may enter upon and repossess the Leased Properties by reasonable force,
summary proceedings, ejectment or otherwise, and may remove Tenant and all other
persons and any and all personal property from the Leased Properties subject to
rights of any occupants or patients and to any requirement of law.

Section 16.3 Damages. To the extent permitted by law, neither (a) the
termination of this Lease pursuant to Section 16.1, (b) the repossession of any
or all of the Leased Properties or any portion thereof, (c) the failure of
Lessor to relet any or all of the Leased Properties or any portion thereof, (d)
the reletting of any or all of the Leased Properties or any portion thereof, nor
(e) the failure of Lessor to collect or receive any rentals due upon any such
reletting, shall relieve Tenant of any of its liability and obligations
hereunder, all of which shall survive any such termination, repossession or
reletting. In the event of any such termination, subject to Section 16.4 below,
Tenant shall forthwith pay to Lessor, at Lessor’s option, as liquidated damages
with respect to Rent for each Leased Property as to which such termination has
occurred, either:

(A) the sum of:

(i) the unpaid Rent allocable to each such Leased Property in accordance with
Section 16.9 hereof which had been earned at the time of termination, which Rent
and other sums shall bear interest at the lesser of the Overdue Rate and the
maximum annual rate permitted by law from the date when due until paid; and

(ii) whether or not Lessor previously collected any amounts pursuant to clause
(B) below, the then net present value (computed using a discount rate equal to
the Prime Rate) of the amount of unpaid Rent allocable to each such Leased
Property in accordance with Section 16.9 hereof for the balance of the Term
following the date of termination (excluding, however, any period following
termination on account of which Lessor previously collected Rent pursuant to
clause (B) below) without any obligation or deemed obligation on the part of
Lessor to mitigate damages, or

 

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(B) each installment of Rent allocable to each such Leased Property in
accordance with Section 16.9 hereof and other sums payable with respect to each
such Leased Property by Tenant to Lessor under this Lease as the same becomes
due and payable, which Rent and other sums shall bear interest at the lesser of
the Overdue Rate and the maximum annual rate permitted by law from the date when
due until paid, to the extent that such Rent and other sums exceed the rent and
other sums actually collected by Lessor for the corresponding period pursuant to
any reletting of each such Leased Property (without any obligation or deemed
obligation on the part of Lessor to mitigate damages).

In case of any Event of Default, re-entry, expiration and dispossession by
summary proceedings or otherwise, Lessor may, with or without terminating this
Lease, (a) relet any or all of the Leased Properties or any part or parts
thereof, either in the name of Lessor or otherwise, for a term or terms which
may, at Lessor’s option, be equal to, less than or exceed the period which would
otherwise have constituted the balance of the Term and may grant concessions or
free rent to the extent that Lessor considers advisable and necessary to relet
the same, and (b) make such reasonable alterations, repairs and decorations in
the applicable Leased Property or any portion thereof as Lessor, in its sole
judgment, considers advisable and necessary for the purpose of reletting the
applicable Leased Property; and such reletting and the making of such
alterations, repairs and decorations shall not operate or be construed to
release Tenant from liability hereunder as aforesaid (subject to Section 16.3(B)
above if and to the extent the same is applicable). Lessor shall in no event be
liable in any way whatsoever for failure to relet any Leased Property, or, in
the event that any Leased Property is relet, for failure to collect the rent
under such reletting. To the fullest extent permitted by law, Tenant hereby
expressly waives any and all rights of redemption granted under any present or
future laws in the event of Tenant’s being evicted or dispossessed, or in the
event of Lessor’s obtaining possession of any Leased Property, by reason of the
violation by Tenant of any of the covenants and conditions of this Lease.

Section 16.4 Certain Effects of Separate Lease. Lessor agrees that, in the event
this Lease is terminated as to a particular Leased Property and immediately
thereafter a Separate Lease is entered into with respect to such Leased Property
pursuant to Section 22.7 below, (a) Lessor shall not proceed against Tenant
under Section 16.3(A) above relative to such Leased Property unless and until an
Event of Default shall occur under such Separate Lease and (b) Rent collected by
Lessor under any such Separate Lease relative to such Leased Property shall be
credited by Lessor against the amounts owing to Lessor under Section 16.3(B)
above relative to such Leased Property. Nothing contained in this Section 16.4
shall affect or impair Lessor’s rights under Section 16.3(A) and Section 16.3
(B) above relative to other Leased Properties.

Section 16.5 Waiver. If this Lease is terminated pursuant to Section 16.1,
whether in whole or, in the case of any Facility Default, in part, Tenant
waives, to the maximum extent permitted by applicable law, (a) any right of
redemption, re-entry or repossession, (b) any right to a trial by jury in the
event of summary proceedings to enforce the remedies set forth in this
ARTICLE XVI, and (c) the benefit of any moratorium laws or any laws now or
hereafter in force exempting property from liability for rent or for debt.

 

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Section 16.6 Application of Funds. Any payments received by Lessor under any of
the provisions of this Lease during the existence or continuance of any Event of
Default (and such payment is made to Lessor rather than Tenant due to the
existence of an Event of Default) shall be applied to Tenant’s obligations in
the order which Lessor may determine or as may be prescribed by the laws of the
State where the applicable Leased Property is located.

Section 16.7 Notice to Lessor. If Tenant or any subtenant receives a notice of
any material regulatory deficiency from any regulatory agency, Tenant shall
deliver a copy of such notice to Lessor in accordance with Section 34.1.

Section 16.8 Nature of Remedies. To the maximum extent permitted by law, the
rights and remedies of Lessor and Tenant under this Lease, at law and in equity
shall be cumulative and may be exercised concurrently or successively, on one or
more occasions, as Lessor or Tenant, as applicable, deems appropriate in its
sole discretion, as often as occasion therefor arises. To the maximum extent
permitted by law, each such right and remedy shall be in addition to all other
such rights and remedies, and the exercise by Lessor or Tenant, as applicable,
of any one or more of such rights and remedies shall not preclude the
simultaneous or subsequent exercise of any or all other such rights and
remedies. Without limiting the generality of the foregoing, liquidated damages
in respect of Rent provided for in clauses (A) and (B) of Section 16.3 hereof,
and in Section 20.1 hereof, shall be payable by Tenant in addition to, and not
in lieu of, any other damages suffered by Lessor in connection with any default
or Event of Default by Tenant (including, without limitation, Litigation Costs
and costs of reletting).

Section 16.9 Allocable Rent. For purposes of this Lease, without limitation of
Section 40.15 or Section 40.16 hereof, (a) the Additional Charges allocable to a
Leased Property shall be the Additional Charges with respect to such Leased
Property, and (b) the Base Rent allocable to a Leased Property shall be the
product of (i) the amount of the Base Rent, multiplied by (ii) the Transferred
Property Percentage for such Leased Property as set forth in Exhibit C (as
modified from time to time in accordance herewith).

Section 16.10 Special Remedies Provisions. The intention of this Section 16.10
is to set forth certain special provisions applicable to Events of Default under
Section 16.1(m) and/or Section 16.1(q) of this Lease and to Lessor’s rights and
remedies upon the occurrence of such Events of Default. This Section 16.10 has
no application to other Events of Default under this Lease and is not intended
to alter or limit Lessor’s rights and remedies with respect to such other Events
of Default or, except as specifically set forth in this Section 16.10, for any
other purpose. Subject to the foregoing, Lessor and Tenant agree that,
notwithstanding anything to the contrary contained in this Lease:

Section 16.10.1 For purposes of this Lease, subject to Section 16.10.3.1 and
Section 16.10.3.2 below, references to the “Section 16.10.1 Number” shall, as of
a particular date, mean and refer to (a) the number 1 (if the number of Leased
Properties as to which this Lease remains in full force and effect as of such
date equals twenty (20) or less), (b) the number

 

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2 (if the number of Leased Properties as to which this Lease remains in full
force and effect as of such date equals between twenty-one (21) and forty (40),
both inclusive), or (c) the number 3 (if the number of Leased Properties as to
which this Lease remains in full force and effect as of such date equals
forty-one (41) or more).

Section 16.10.2

Section 16.10.2.1 If the Section 16.10.1 Number applicable to this Lease, as
determined pursuant to Section 16.10.1 above, equals one (1), the following
provisions shall apply:

If, and for so long as, one or more Events of Default of the nature referenced
in Section 16.1(m) and/or Section 16.1(q) of this Lease has occurred and is
continuing (as described below), Lessor shall be entitled to exercise all rights
and remedies available to it under this Lease on account of any then continuing
Event of Default under Section 16.1(m) and/or Section 16.1(q) provided that
Lessor may only exercise termination and/or dispossession rights and remedies on
account of such Section 16.1(m) and/or Section 16.1(q) Event(s) of Default
against either (i) any one or more of the Leased Properties to which such
Event(s) of Default relate or (ii) all Leased Properties covered by this Lease.

Section 16.10.2.2 If the Section 16.10.1 Number applicable to this Lease, as
determined pursuant to Section 16.10.1 above, equals two (2) or more, the
following provisions shall apply:

If, and for so long as, an Event of Default of the nature referenced in Section
16.1(m) and/or Section 16.1(q) of this Lease has occurred and is continuing (as
described below) with respect to fewer than the Section 16.10.1 Number (as
determined pursuant to Section 16.10.1 hereof) of the Leased Properties, then,
on account of any Event of Default under Section 16.1(m) and/or Section 16.1(q)
of this Lease, Lessor may not exercise any termination and/or dispossession
rights and remedies available to it under this Lease on account of such Section
16.1(m) and/or Section 16.1(q) Event(s) of Default against any Leased Property
other than the Leased Property to which the aforesaid Event of Default
relates. If, however, an Event of Default of the nature referenced in such
Section 16.1(m) and/or Section 16.1(q) of this Lease has occurred and is
continuing (as described below) with respect to the Section 16.10.1 Number or
more Leased Properties, Lessor shall be entitled to exercise all rights and
remedies available to it under this Lease on account of any then continuing
Event of Default under Section 16.1(m) and/or Section 16.1(q), provided that
Lessor may only exercise termination and/or dispossession rights and remedies on
account of such Section 16.1(m) and/or Section 16.1(q) Event(s) of Default
against either (i) any one or more of the Leased Properties to which such
Event(s) of Default relate or (ii) all Leased Properties covered by this Lease.

Section 16.10.2.3 For purposes of Section 4.1, Section 16.1(m), Section 16.1(q),
Section 16.10, Section 17.1, Section 19.1, Section 25.1.1, Section 25.1.2 and
Section 25.1.3 of this Lease, if an Event of Default shall occur under
Section 16.1(m) and/or Section 16.1(q) of this Lease, except as otherwise agreed
in writing by Lessor, in its sole and

 

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absolute discretion, the same shall be deemed to be “continuing” at all times
from and after the date that such Event of Default first arises (including,
without limitation, at all times from and after the date that Lessor terminates
this Lease as it applies to the Leased Property to which the aforesaid Event of
Default relates or dispossesses Tenant from such Leased Property), unless, prior
to the date that Lessor terminates this Lease as it applies to the Leased
Property to which the aforesaid Event of Default relates or dispossesses Tenant
from such Leased Property, such Event of Default is cured “in-kind” by
rectifying and reversing the particular event, circumstance or condition that
constitutes or causes such Event of Default; provided (the “Section 16.10.2.3
Proviso”), however, that, if the applicable Section 16.10.1 Number, as
determined pursuant to Section 16.10.1 above, equals two or more, if (a) an
Event of Default of the nature referenced in Section 16.1(m) and/or Section
16.1(q) of this Lease has occurred and is continuing (as described above) with
respect to fewer than the Section 16.10.1 Number of the Leased Properties and
(b) Lessor has terminated this Lease as it applies to a Leased Property to which
an aforesaid Event of Default relates or has dispossessed Tenant from such
Leased Property, then, for purposes of Section 4.1, Section 17.1,
Section 25.1.1, Section 25.1.2 and Section 25.1.3, the aforesaid Event of
Default relating to such Leased Property shall not be deemed to be “continuing”
as to Leased Properties other than such terminated or dispossessed Leased
Property; in such event, the rights and remedies available to Lessor or the
limitation of Tenant’s rights under such sections which arise in the case of a
continuing Event of Default shall apply only to the Leased Property on which the
Event of Default under Section 16.1(m) and/or Section 16.1(q) has occurred, as
illustrated by Examples 5, 6 and 7 of Section 16.10.5 below.

Section 16.10.2.4 The limitations on Lessor’s rights and remedies set forth in
this Section 16.10.2: (a) apply only to Events of Default under Section 16.1(m)
and/or Section 16.1(q) of this Lease and not to any other Events of Default
under this Lease, (b) apply only to Lessor’s termination and dispossession
rights and remedies on account of Events of Default under Section 16.1(m) and/or
Section 16.1(q) of this Lease and, subject to the terms of the Section 16.10.2.3
Proviso, not to any other rights and remedies available to Lessor on account of
any such Events of Default, and (c) do not change any of the other provisions of
this Lease as they may relate to Events of Default under Section 16.1(m) and/or
Section 16.1(q) of this Lease (e.g. pursuant to Section 24.1(d) of this Lease,
Tenant shall remain obligated to indemnify Lessor with respect to any such
Section 16.1(m) and/or Section 16.1(q) Event of Default).

Section 16.10.3 The intention of this Section 16.10.3 is to set forth special
rules regarding the calculation of the Section 16.10.1 Number and thereby to
limit the ability of Lessor and Tenant, through transactions of the specified
nature described in this Section 16.10.3, to evade certain of the intended goals
of this Section 16.10.

Section 16.10.3.1 Notwithstanding Section 16.10.1 above, if (a)(i) a New Lease
under Section 40.15 hereof (other than a New Lease that is a Separate Lease
created under Section 22.7 hereof) is created from this Lease or (ii) this Lease
constitutes a New Lease created under Section 40.15 of another lease demising
any of the Master Lease Leased Properties (other than a New Lease that is a
Separate Lease created under Section 22.7 of such other lease) and (b) as of the
date immediately prior to such New Lease creation transaction (a

 

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“Section 16.10.3.1 New Lease Transaction”), under this Lease (if subsection
(a)(i) above is applicable) or the other lease referenced in subsection (a)(ii)
above (if subsection (a)(ii) above is applicable) one or more Events of Default
of the nature referenced in Section 16.1(m) and/or Section 16.1(q) of such lease
had occurred and were continuing (as described in Section 16.10.2.3 hereof or of
such other lease, as applicable) with respect to any of the Master Lease Leased
Properties covered hereby or thereby, as applicable, then, the Section 16.10.1
Number that would otherwise apply to this Lease, but for the terms of this
Section 16.10.3.1, shall be increased by one (1) if and only if all of the
following conditions are met relative to this Lease:

(x) As of the date immediately following the aforesaid Section 16.10.3.1 New
Lease Transaction, an Event of Default of the nature referenced in Section
16.1(m) and/or Section 16.1(q) of this Lease (whether this Lease is the New
Lease, or the lease from which a New Lease is created, involved in the aforesaid
Section 16.10.3.1 New Lease Transaction) has occurred and is continuing (as
described in Section 16.10.2.3 hereof) with respect to a number of the Leased
Properties then covered by this Lease that equals or exceeds the Section 16.10.1
Number that would be applicable to this Lease as of such date (assuming, for
purposes of this subsection (x), that this Section 16.10.3.1 is not applicable);
and

(y) For the four (4) full calendar quarters ending not less than sixty (60) days
prior to the aforesaid Section 16.10.3.1 New Lease Transaction, (1) the Leased
Properties, if any, that continue to be covered by this Lease (whether this
Lease is the New Lease, or the lease from which a New Lease is created, involved
in the aforesaid Section 16.10.3.1 New Lease Transaction) and have as their
Primary Intended Use use as a hospital have a Coverage Ratio that is fifteen
percent (15%) or more higher than the Coverage Ratio of all of the Master Lease
Leased Properties that are covered by this Lease and the other lease involved in
the aforesaid Section 16.10.3.1 New Lease Transaction or (2) the Leased
Properties, if any, that continue to be covered by this Lease and have as their
Primary Intended Use use as a nursing center have a Coverage Ratio that is ten
percent (10%) or more higher than the Coverage Ratio of all of the Master Lease
Leased Properties that are covered by this Lease and the other lease involved in
the aforesaid Section 16.10.3.1 New Lease Transaction; and

(z) No Event(s) of Default (other than Section 16.1(m) and/or Section 16.1(q)
Events of Default) have occurred and are continuing under this Lease.

Example 1: Assume this Lease covers 25 Leased Properties and that no Event of
Default under Section 16.1(m) and/or Section 16.1(q) or any other provision of
this Lease has occurred or is continuing. Assume further that a New Lease
covering 10 Leased Properties and not constituting a Separate Lease under
Section 22.7 is created from this Lease pursuant to Section 40.15 hereof. This
Section 16.10.3.1 would not apply, and the Section 16.10.1 Number applicable to
this Lease would be determined pursuant to Section 16.10.1(a) hereof (because
this Lease would then cover 15 Leased Properties), without any adjustment
pursuant to this Section 16.10.3.1, because requirement (b) above is not
met. The Section 16.10.1 Number for this Lease would equal one (1). For the
aforesaid New Lease (because such New Lease would cover 10 Leased Properties),
the Section 16.10.1 Number would also equal one (1).

 

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Example 2: Same assumed facts as in Example 1, except that, as of the date
immediately prior to the Section 16.10.3.1 New Lease Transaction referenced in
Example 1, an Event of Default under Section 16.1(m) and/or Section 16.1(q) had
occurred and was continuing with respect to one (1) Leased Property and such
Leased Property remains a part of this Lease (thus satisfying requirement (b)
above). Requirement (x) above would be met as to this Lease, because,
immediately following the assumed Section 16.10.3.1 New Lease Transaction, an
Event of Default under Section 16.1(m) and/or Section 16.1(q) would exist under
this Lease with respect to one (1) Leased Property, and such number of Leased
Properties equals the Section 16.10.1 Number that would be applicable to this
Lease as a 15 Leased Properties lease, assuming, for purposes of requirement (x)
above, that this Section 16.10.3.1 is not applicable. Also, requirement (z)
above would be met, as assumed in Example 1. Accordingly, in the circumstances
of Example 2, a review of Coverage Ratios pursuant to subsection (y) above would
be needed in order to determine whether a change in the Section 16.10.1 Number
applicable to this Lease is mandated by this Section 16.10.3.1. On the other
hand, for the aforesaid New Lease (because such New Lease would cover 10 Leased
Properties and because requirement (x) above is not met), the Section 16.10.1
Number would equal one (1).

Example 3: Same assumed facts as in Example 2. Assume further that the Coverage
Ratios of the hospitals and nursing centers that remain subject to this Lease,
determined for the four (4) full calendar quarters ending not less than sixty
(60) days prior to the assumed Section 16.10.3.1 New Lease Transaction, equal,
respectively, 1.575:1 and 1.500:1 and that the Coverage Ratios of the hospitals
and nursing centers included in the 25 Leased Properties that were covered by
this Lease immediately prior to the aforesaid transaction, for the same period,
equal, respectively, 1.500:1 and 1.450:1. In the circumstances of this Example
3, this Section 16.10.3.1 would not apply, and the Section 16.10.1 Number
applicable to this Lease would be determined pursuant to Section 16.10.1(a)
hereof (because this Lease would then cover 15 Leased Properties), without any
adjustment pursuant to this Section 16.10.3.1, because requirement (y) above is
not met. The Section 16.10.1 Number for this Lease would equal one (1). For the
aforesaid New Lease, for the reasons stated in Example 2, the Section 16.10.1
Number would also equal one (1).

Example 4: Same assumed facts as in Example 2. Assume further that the Coverage
Ratios of the hospitals and nursing centers that remain subject to this Lease,
determined for the four (4) full calendar quarters ending not less than sixty
(60) days prior to the assumed Section 16.10.3.1 New Lease Transaction, equal,
respectively, 1.575:1 and 1.653:1 and that the Coverage Ratios of the hospitals
and nursing centers included in the 25 Leased Properties that were covered by
this Lease immediately prior to the aforesaid transaction, for the same period,
equal, respectively, 1.500:1 and 1.450:1. In the circumstances of this Example
4, the Section 16.10.1 Number that is applicable to this Lease immediately
following the assumed Section 16.10.3.1 New Lease Transaction, would, pursuant
to this Section 16.10.3.1, be increased from one (1) to two (2), because both
requirement (a) and requirement (b) above are met, and all of requirement (x)
(as described in Example 2), requirement (y) (because the Coverage Ratio for
nursing centers covered by this Lease is fourteen percent (14%) higher (1.45 x.
1.14 = 1.653) than the Coverage Ratio for all nursing centers covered by the
pre-transaction 25 Leased Properties lease) and requirement (z) (as described in
Example 2) above are met. For the aforesaid New Lease, for the reasons stated in
Example 2, the Section 16.10.1 Number would equal one (1).

 

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Section 16.10.3.2 Notwithstanding Section 16.10.1 above, if (a) this Lease is,
pursuant to Section 40.18 hereof, the Section 40.18 Lease (as defined in Section
40.18) and (b) as a result of Section 16.1(m) and/or Section 16.1(q) Events of
Default that had occurred and were continuing under this Lease and the other
lease(s) involved in the Section 40.18 lease combination transaction immediately
prior to such transaction, immediately following the transaction pursuant to
which this Lease became a Section 40.18 Lease, an Event of Default of the nature
referenced in Section 16.1(m) and/or Section 16.1(q) of this Lease has occurred
and is continuing (as described in Section 16.10.2.3 hereof) with respect to a
number of the Leased Properties then covered by this Lease (the
“Section 16.10.3.2 Number”) that equals or exceeds the Section 16.10.1 Number
that would be applicable to this Lease as of such date (assuming, for purposes
of this subsection (b), that this Section 16.10.3.2 is not applicable), and (c)
immediately following the transaction pursuant to which this Lease became a
Section 40.18 Lease, no Event of Default (other than Section 16.1(m) and/or
Section 16.1(q) Events of Default) has occurred and is continuing under this
Lease, then, the Section 16.10.1 Number that would otherwise apply to this
Lease, but for the terms of this Section 16.10.3.2, shall be increased by one
(1) (and provided further that, if requirements (a), (b) and (c) above are met
and this Lease, as the Section 40.18 Lease, (X) covers forty-one (41) or more
Leased Properties and the Section 16.10.3.2 Number for this Lease, as the
Section 40.18 Lease, exceeds three (3), then the Section 16.10.1 Number
applicable to this Lease shall be adjusted to equal the aforesaid Section
16.10.3.2 Number plus one (1) or (Y) covers twenty-one (21) to forty (40), both
inclusive, Leased Properties and the number (the “Subsection Y Number”) equal to
the Section 16.10.3.2 Number for this Lease, as the Section 40.18 Lease, minus
the number of Leased Properties, if any, as to which, following such lease
combination transaction, Tenant will continue to have an available and
exercisable purchase option under Section 16.12 exceeds two (2), then the
Section 16.10.1 Number applicable to this Lease shall be adjusted to equal the
Subsection Y Number plus one (1) or (Z) covers twenty (20) or less Leased
Properties and the number (the “Subsection Z Number”) equal to the
Section 16.10.3.2 Number for this Lease, as the Section 40.18 Lease, minus the
number of Leased Properties, if any, as to which, following such lease
combination transaction, Tenant will continue to have an available and
exercisable purchase option under Section 16.12 exceeds one (1), then the
Section 16.10.1 Number applicable to this Lease shall be adjusted to equal the
Subsection Z Number plus one (1)).

Example 1: Assume that a lease covering 50 Master Lease Leased Properties is
subdivided into Lease A covering 35 Master Lease Leased Properties and Lease B
covering 15 Master Lease Leased Properties and that no Event of Default under
Section 16.1(m) and/or Section 16.1(q) or any other provision has occurred or is
continuing under either of such leases. Assume further that, pursuant to
Section 40.18, such two (2) leases are combined and that Lease A is the Section
40.18 Lease. This Section 16.10.3.2 would not apply, and the Section 16.10.1
Number applicable to Lease A would be determined pursuant to Section 16.10.1(c)
hereof (because Lease A would then cover 50 Master Lease Leased Properties),
without any adjustment pursuant to this Section 16.10.3.2, because, although
requirements (a) and (c) above are met relative to Lease A, requirement (b)
above is not met as to Lease A.

 

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Example 2: Same assumed facts as in Example 1, except assume three (3) Master
Lease Leased Properties are subject to continuing Section 16.1(m) and/or Section
16.1(q) Events of Default immediately prior to the assumed Section 40.18
transaction, 2 of which are within the 35 Master Lease Leased Properties Lease A
and 1 of which is within the 15 Master Lease Leased Properties Lease B.
Immediately following the assumed Section 40.18 transaction, the recombined 50
Master Lease Leased Properties Lease A would have included therein 3 Master
Lease Leased Properties that are subject to continuing Section 16.1(m) and/or
Section 16.1(q) Events of Default, which number equals the Section 16.10.1
Number that would be applicable to the combined 50 Master Lease Leased
Properties Lease A pursuant to Section 16.10.1(c) above, but for this
Section 16.10.3.2, and therefore, pursuant to Section 16.10.3.2, the
Section 16.10.1 Number that is applicable to the combined Lease A would be
increased from three (3) to four (4).

Example 3: Same assumed facts as in Example 1, except assume four (4) Master
Lease Leased Properties are subject to continuing Section 16.1(m) and/or Section
16.1(q) Events of Default immediately prior to the assumed Section 40.18
transaction, 2 of which are within the 35 Master Lease Leased Properties Lease A
and 2 of which are within the 15 Master Lease Leased Properties Lease
B. Immediately following the assumed Section 40.18 transaction, the recombined
50 Master Lease Leased Properties Lease A would have included therein 4 Master
Lease Leased Properties that are subject to continuing Section 16.1(m) and/or
Section 16.1(q) Events of Default, which number exceeds the Section 16.10.1
Number that would be applicable to the combined 50 Master Lease Leased
Properties Lease A pursuant to Section 16.10.1(c) above, but for this
Section 16.10.3.2. Requirements (a), (b) and (c) above are met relative to Lease
A, and, in addition, Lease A meets the requirements of the proviso at the end of
Section 16.10.3.2. Therefore, pursuant to Section 16.10.3.2, the Section 16.10.1
Number that is applicable to the combined Lease A would equal five (5) (i.e. the
Section 16.10.3.2 Number plus one).

Section 16.10.3.3 If a Separate Lease is created under Section 22.7 of any lease
of any of the Master Lease Leased Properties and, at the time such lease is
created an Event of Default under Section 16.1(m) and/or Section 16.1(q) has
occurred and is continuing with respect to any Master Lease Leased Property(ies)
included in such Separate Lease or, within two (2) years thereafter, such an
Event of Default arises under such Separate Lease with respect to any Master
Lease Leased Property(ies) included in such Separate Lease, then, for all
purposes of each Section 16.10.3.3 Lease (as hereinafter defined), (a) any such
Event of Default under such Separate Lease shall also be considered an Event of
Default under Section 16.1(m) and/or Section 16.1(q) of any lease (a
“Section 16.10.3.3 Lease”) that, or that derives from a lease that, at any time
during the two (2) years that preceded the creation of such Separate Lease,
included any Master Lease Leased Property included in such Separate Lease and as
to which such a Section 16.1(m) and/or Section 16.1(q) Event of Default has
occurred and is continuing under such Separate Lease and (b) each Master Lease
Leased Property as to which such a Section 16.1(m) and/or Section 16.1(q) Event
of Default has occurred and is continuing under such Separate Lease shall, for
all purposes of Section 16.10 and Section 19.1(b) of each Section 16.10.3.3
Lease, be counted as a leased property as to which a Section 16.1(m) and/or
Section 16.1(q) Event of Default had occurred and was continuing the same as if
a Section 16.1(m) and/or Section 16.1(q) Event of Default had occurred and was
continuing under such Section 16.10.3.3 Lease relative to a Master Lease Leased
Property included in such Section 16.10.3.3 Lease.

 

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Example 1: Assume that a lease of 15 Master Lease Leased Properties includes
Property A as to which a Section 16.1(m) Event of Default has occurred and is
continuing and that, on account of an Event of Default under such lease, Lessor
terminates such lease as it applies to Property A, so that the remaining lease
covers 14 Master Lease Leased Properties. Assume further that, pursuant to
Section 22.7 of such lease, a Separate Lease under Section 22.7 is entered into
with a leasehold mortgagee or its designee relative to Property A. As a result
of Section 16.10.3.3, the Section 16.1(m) Event of Default relative to Property
A will also be considered an Event of Default under Section 16.1(m) of the
aforesaid remaining lease of 14 Master Lease Leased Properties and Property A
will, for all purposes of Section 16.10 and Section 19.1(b) of such remaining
lease, be counted as a leased property as to which a Section 16.1(m) Event of
Default had occurred and was continuing the same as if a Section 16.1(m) Event
of Default had occurred and was continuing under such remaining lease relative
to a Master Lease Leased Property included in such remaining lease.

Example 2: Assume that a lease of 15 Master Lease Leased Properties includes no
properties as to which a Section 16.1(m) and/or Section 16.1(q) Event of Default
has occurred and is continuing and that, on account of an Event of Default under
such lease, Lessor terminates such lease as it applies to Property A, so that
the remaining lease covers 14 Master Lease Leased Properties. Assume further
that, pursuant to Section 22.7 of such lease, a Separate Lease under Section
22.7 is entered into with a leasehold mortgagee or its designee relative to
Property A. Assume further that several months later a Section 16.1(m) Event of
Default arises relative to Property A. As a result of Section 16.10.3.3, the
Section 16.1(m) Event of Default relative to Property A will also be considered
an Event of Default under Section 16.1(m) of the aforesaid remaining lease of 14
Master Lease Leased Properties and Property A will, for all purposes of Section
16.10 and Section 19.1(b) of such remaining lease, be counted as a leased
property as to which a Section 16.1(m) Event of Default had occurred and was
continuing the same as if a Section 16.1(m) Event of Default had occurred and
was continuing under such remaining lease relative to a Master Lease Leased
Property included in such remaining lease.

Example 3: Same assumed facts as in Example 2, except assume further that the 15
Master Lease Leased Properties lease referenced in such example was formed
several months prior to the creation of the Separate Lease as the result of the
division of a 60 Master Lease Leased Properties lease into two leases, the
aforesaid 15 Master Lease Leased Properties lease and a 45 Master Lease Leased
Properties lease. As a result of Section 16.10.3.3, the Section 16.1(m) Event of
Default relative to Property A will also be considered an Event of Default under
Section 16.1(m) of both the remaining lease of 14 Master Lease Leased Properties
and the aforesaid 45 Master Lease Leased Properties lease and Property A will,
for all purposes of Section 16.10 and Section 19.1(b) of such remaining lease
and such 45 Master Lease Leased Properties lease, be counted as a leased
property as to which a Section 16.1(m) Event of Default had occurred and was
continuing the same as if a Section 16.1(m) Event of Default had occurred and
was continuing under such remaining lease relative to a Master Lease Leased
Property included therein and under such 45 Master Lease Leased Properties lease
relative to a Master

 

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Lease Leased Property included therein. This is because, several months prior to
the creation of the Separate Lease, Property A was included in the aforesaid 60
Master Lease Leased Properties lease and both the 14 Master Lease Leased
Properties lease and the 45 Master Lease Leased Properties lease derive from
such 60 Master Lease Leased Properties lease.

Section 16.10.4 Lessor shall have no obligation of any kind or nature to accept,
or to treat as a default cure, any monetary or other form of cure in lieu of the
mandated “in-kind”, Facility-specific cure. For example, even if Lessor, in its
sole and absolute discretion, receives, and accepts, full monetary compensation
from Tenant on account of all damages suffered by Lessor due to the loss of
certification for reimbursement under Medicaid at a particular Facility and
whether such receipt occurs through a voluntary arrangement or through the
exercise of any remedy hereunder, the Section 16.1(q) Event of Default arising
from such loss of certification shall, unless Lessor otherwise agrees in
writing, in its sole and absolute discretion, for purposes of Section 4.1,
Section 16.1(q), Section 16.10, Section 17.1, Section 19.1, Section 25.1.1,
Section 25.1.2 and Section 25.1.3 of this Lease, subject, if the Section 16.10.1
Number is 2 or greater, to the Section 16.10.2.3 Proviso, be considered to be
“continuing” unless, prior to termination of this Lease as it applies to such
Facility, or dispossession of Tenant from such Facility, as described in
Section 16.10.2.3 above, such certification for such Facility is fully
restored. Nothing contained in this Section 16.10 shall limit or affect the
provisions of this ARTICLE XVI providing that Lessor has no obligation or deemed
obligation to mitigate damages on account of any default by Tenant.

Section 16.10.5 The following examples are intended to illustrate further the
application of this Section 16.10:

Example 1: If an Event of Default occurs under Section 16.1(m) hereof because
the number of licensed beds at a particular Facility has been reduced to a
number below the required number of licensed beds for such Facility, such Event
of Default shall be deemed to be “continuing” for purposes of Section 4.1,
Section 16.1(m), Section 16.10, Section 17.1, Section 19.1, Section 25.1.1,
Section 25.1.2 and Section 25.1.3 of this Lease, subject, if applicable, to the
Section 16.10.2.3 Proviso, unless, prior to termination of this Lease as it
applies to such Facility, or dispossession of Tenant from such Facility, as
described in Section 16.10.2.3 above, the number of licensed beds at such
Facility is returned to the required number.

Example 2: If an Event of Default of the type described in Example 1 has
occurred and is continuing (as described above) with respect to a Leased
Property, and Lessor has terminated this Lease as it applies to the Leased
Property to which such aforesaid Event of Default relates or Lessor has
dispossessed Tenant from such Leased Property, then, if the Section 16.10.1
Number applicable to this Lease equals two (2) or more and Events of Default of
the nature referenced in Section 16.1(m) and/or Section 16.1(q) of this Lease
have occurred and are continuing (as described above) with respect to fewer than
the Section 16.10.1 Number of the Leased Properties, such Event of Default, for
purposes of Section 4.1, Section 17.1, Section 25.1.1, Section 25.1.2 and
Section 25.1.3, shall not be deemed to be “continuing” as to any other Leased
Properties; in such event, the rights and remedies available to Lessor or the
limitation of Tenant’s rights under such sections which arise in the case of a
continuing Event of Default shall apply only to the Leased Property on which the
Event of Default under Section 16.1(m) has occurred (as illustrated in Examples
5, 6 and 7 below).

 

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Example 3: If an Event of Default occurs under Section 16.1(q) hereof due to a
loss of Medicaid certification at a particular Facility, such Event of Default
shall be deemed to be “continuing” for purposes of Section 4.1, Section 16.1(q),
Section 16.10, Section 17.1, Section 19.1, Section 25.1.1, Section 25.1.2 and
Section 25.1.3 of this Lease, subject, if applicable, to the Section 16.10.2.3
Proviso, unless, prior to termination of this Lease as it applies to such
Facility, or dispossession of Tenant from such Facility, as described above,
such Facility’s certification for reimbursement under Medicaid is fully
restored.

Example 4: If an Event of Default of the type described in Example 3 has
occurred and is continuing (as described above) with respect to a Leased
Property, and Lessor has terminated this Lease as it applies to the Leased
Property to which such aforesaid Event of Default relates or Lessor has
dispossessed Tenant from such Leased Property, then, if the Section 16.10.1
Number applicable to this Lease equals two (2) or more and Events of Default of
the nature referenced in Section 16.1(m) and/or Section 16.1(q) of this Lease
have occurred and are continuing (as described above) with respect to fewer than
the Section 16.10.1 Number of the Leased Properties, such Event of Default, for
purposes of Section 4.1, Section 17.1, Section 25.1.1, Section 25.1.2 and
Section 25.1.3, shall not be deemed to be “continuing” as to any other Leased
Properties; in such event, the rights and remedies available to Lessor or the
limitation of Tenant’s rights under such sections which arise in the case of a
continuing Event of Default shall apply only to the Leased Property on which the
Event of Default under Section 16.1(q) has occurred (as illustrated in Examples
5, 6 and 7 below).

Example 5: If (i) an Event of Default of the nature referenced in Section
16.1(m) and/or Section 16.1(q) of this Lease has occurred and is continuing (as
described above) with respect to Leased Property X and no other Leased
Properties, (ii) Lessor has terminated this Lease as it applies to Leased
Property X or dispossessed Tenant from such Leased Property X, (iii) the
Section 16.10.1 Number applicable to this Lease exceeds 1 (so that
Section 16.10.2.2 is applicable and, in light of subsections (i) and (ii) of
this Example, requirements (a) and (b) of the Section 16.10.2.3 Proviso are
met), and (iv) pursuant to Section 4.1, a refund shall be due from a taxing
authority in respect of an Imposition paid by Tenant relative to Leased Property
X, then Tenant would not receive such refund and such refund would be retained
by Lessor and applied as provided in ARTICLE XVI, but Tenant would continue to
be paid or retain (as provided in Section 4.1) any Imposition refund from Leased
Properties other than Leased Property X.

Example 6: If (i) an Event of Default of the nature referenced in Section
16.1(m) and/or Section 16.1(q) of this Lease has occurred and is continuing (as
described above) with respect to Leased Property X and no other Leased
Properties, (ii) Lessor has terminated this Lease as it applies to Leased
Property X or dispossessed Tenant from such Leased Property X, and (iii) the
Section 16.10.1 Number applicable to this Lease exceeds 1 (so that
Section 16.10.2.2 is applicable and, in light of subsections (i) and (ii) of
this Example, requirements (a) and (b) of the Section 16.10.2.3 Proviso are
met), then, pursuant to Section 17.1, Lessor would be entitled, to the extent
permitted by law, to enter on Leased Property X for the purpose of curing such
continuing Event of Default, but Lessor would not be entitled to exercise the
remedies provided in Section 17.1 with respect to any other Leased Properties.

 

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Example 7: If (i) an Event of Default of the nature referenced in Section
16.1(m) and/or Section 16.1(q) of this Lease has occurred and is continuing (as
described above) with respect to Leased Property X and no other Leased
Properties, (ii) Lessor has dispossessed Tenant from Leased Property X, (iii)
the Section 16.10.1 Number applicable to this Lease exceeds 1 (so that
Section 16.10.2.2 is applicable and, in light of subsections (i) and (ii) of
this Example, requirements (a) and (b) of the Section 16.10.2.3 Proviso are
met), and (iv) Tenant desires to sublet, pursuant to Section 25.1.2(ii), up to
an aggregate of 20% of the rentable square footage of each of Leased Properties
X and Y without obtaining the consent of Lessor, then Tenant would not be
entitled to sublet any portion of Leased Property X without the consent of
Lessor, but Tenant would be entitled to sublet such portion of Leased Property Y
without obtaining the consent of Lessor.

Example 8: Same assumed facts as in Example 7, except that the
Section 16.10.1 Number applicable to this Lease equals 2, and an Event of
Default of the nature referenced in Section 16.1(m) has also occurred and is
continuing relative to another of the Leased Properties. Section 16.10.2.2 would
be applicable, but requirement (a) of the Section 16.10.2.3 Proviso would not be
met. Tenant would not be entitled to sublet any portion of Leased Property X or
Leased Property Y without the consent of Lessor.

Section 16.11 No Mediation or Arbitration. Notwithstanding anything to the
contrary set forth herein or in that certain Agreement and Plan of
Reorganization dated as of April 30, 1998 by and between Ventas and Vencor
Healthcare, Inc. (“1998 Plan of Reorganization”), (a) upon any Event of Default
by Tenant, Lessor shall be entitled to proceed immediately to enforce its rights
and remedies pursuant to this ARTICLE XVI and the other terms of this Lease, (b)
neither any Event of Default, nor the rights and obligations of Tenant and
Lessor under this Lease, shall be subject to mediation or arbitration of any
kind, and (c) the provisions of ARTICLE VI of the 1998 Plan of Reorganization
shall not apply to this Lease or any of the Combined Leases.

Section 16.12 Special Purchase Provisions. It is the intention of this Section
16.12 to set forth specific provisions that, in limited circumstances, for a
limited number of times and only in connection with the occurrence of Events of
Default under Section 16.1(m) and/or Section 16.1(q) of this Lease, allow Tenant
a non-renewing right to purchase a Leased Property(ies) and thereby to reduce
the number of Leased Properties as to which Section 16.1(m) and/or Section
16.1(q) Events of Default continue to exist to below the applicable Section
16.10.1 Number, and, by doing so strictly on the terms and conditions provided
in this Section 16.12, thereby to avoid the exercise by Lessor of termination
and/or dispossession rights and remedies against all Leased Properties covered
hereby on account of such Section 16.1(m) and/or Section 16.1(q) Event(s) of
Default. Tenant’s purchase rights as set forth in this Section 16.12 are not
applicable to any other Events of Default or in any other circumstances and are
strictly limited in number and non-renewing.

 

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Section 16.12.1

Section 16.12.1.1 If the number of Leased Properties as to which this Lease is
in full force and effect equals twenty (20) or less, subject to
Section 16.12.1.2 below, a purchase option will be exercisable by Tenant on
account of a Section 16.1(m) and/or Section 16.1(q) Event of Default with
respect to only one (1) Leased Property in the aggregate during the Term, after
which no further purchase option under this Section 16.12 will be available to,
or exercisable by, Tenant.

Section 16.12.1.2 If the number of Leased Properties as to which this Lease is
in full force and effect equals twenty-one (21) to forty (40), both inclusive, a
purchase option will be exercisable by Tenant on account of a Section 16.1(m)
and/or Section 16.1(q) Event of Default with respect to only one (1) Leased
Property in the aggregate during the Term, after which no further purchase
option under this Section 16.12 will be available to, or exercisable by, Tenant,
and provided that, if (a) this Lease at any time was in full force and effect
with respect to twenty-one (21) to forty (40), both inclusive, Leased Properties
and at such time Tenant exercised a purchase option under this Section 16.12 and
on account of a Section 16.1(m) and/or Section 16.1(q) Event of Default with
respect to a Leased Property and (b) this Lease thereafter is in full force and
effect with respect to less than twenty-one (21) Leased Properties due to
creation of a Separate Lease under Section 22.7, a casualty or condemnation
termination relative to a Leased Property(ies) or for any other reason (other
than Lessor’s unilateral creation of a New Lease under Section 40.15), no
further purchase option under this Section 16.12 will be available to, or
exercisable by, Tenant.

Section 16.12.1.3 If the number of Leased Properties as to which this Lease is
in full force and effect equals forty-one (41) or more, then, notwithstanding
anything to the contrary contained in this Section 16.12, this Section 16.12
shall not apply, and no purchase option will be available to, or exercisable by,
Tenant on account of a Section 16.1(m) and/or Section 16.1(q) Event of Default.

Section 16.12.1.4 For all purposes of this Section 16.12, once a purchase option
is exercised relative to a Leased Property(ies), it may not be revoked, and it
shall exhaust Tenant’s available purchase options, as described in
Section 16.12.1.1 and Section 16.12.1.2, as applicable, above, to the extent of
the number of Leased Properties as to which such exercise applies.

Section 16.12.1.5 No purchase option will be available to, or exercisable by,
Tenant on account of any Event of Default under this Lease other than Section
16.1(m) and/or Section 16.1(q) Events of Default.

Section 16.12.2 If (a) an Event of Default under Section 16.1(m) and/or Section
16.1(q) of this Lease has occurred and is continuing (as described in
Section 16.10.2.3 hereof) with respect to a number of the Leased Properties
covered by this Lease that equals or exceeds the Section 16.10.1 Number that is
applicable to this Lease and (b) Lessor intends to exercise termination and/or
dispossession rights and remedies against all Leased Properties covered by this
Lease on account of such Event(s) of Default and (c) no Events of Default (other
than Section 16.1(m) and/or Section 16.1(q) Events of Default) have occurred and
are continuing under this Lease, then, unless (i) Tenant has previously
exhausted its available purchase

 

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option(s) (as described in Section 16.12.1.1 or Section 16.12.1.2, as
applicable, above) or (ii) if Tenant has any remaining purchase option(s), by
exercising the same Tenant would not be able to reduce the number of Leased
Properties as to which an Event of Default under Section 16.1(m) and/or Section
16.1(q) of this Lease has occurred and is continuing (as described in
Section 16.10.2.3 hereof) to a number fewer than the Section 16.10.1 Number that
is applicable to this Lease:

(x) Lessor will provide to Tenant a written notice (a “Section 16.12 Notice”)
that Lessor intends to exercise termination and/or dispossession rights and
remedies against all Leased Properties covered by this Lease on account of such
Section 16.1(m) and/or Section 16.1(q) Events(s) of Default. If the number of
Leased Properties as to which an Event of Default under Section 16.1(m) and/or
Section 16.1(q) has occurred and is continuing exceeds the number of Leased
Properties as to which a purchase option remains available to Tenant and, by
exercising its available purchase option(s), Tenant would be able to reduce the
number of Leased Properties as to which an Event of Default under
Section 16.1(m) and/or Section 16.1(q) of this Lease has occurred and is
continuing to a number fewer than the Section 16.10.1 Number that is applicable
to this Lease, the aforesaid Section 16.12 Notice shall specify as to which
Leased Property(ies) a purchase option shall be applicable. Otherwise, the
purchase option will apply to each Leased Property as to which a Section 16.1(m)
and/or Section 16.1(q) Event of Default has occurred and is continuing.

(y) If Tenant desires to exercise its purchase option, Tenant must so notify
Lessor in writing within seven (7) days of its receipt of the aforesaid Section
16.12 Notice relating thereto and Tenant must exercise such purchase option
against all Leased Properties as to which the purchase option is applicable as
provided in subsection (x) above. If Tenant does not so exercise its purchase
option, Tenant shall be deemed to have waived its purchase option relative to
all of the Leased Properties to which the same is applicable.

(z) If Lessor provides a Section 16.12 Notice as aforesaid, all of the
references in the penultimate paragraph of Section 16.1 of this Lease to 10 days
shall be revised so that any notice of termination given by Lessor as provided
in such penultimate paragraph shall take effect no sooner than three (3)
Business Days following the later of (1) Lessor’s giving of its notice of
termination or (2) the expiration of Tenant’s seven (7) day period, as provided
in subsection (y) above, relative to such Section 16.12 Notice, and not
otherwise be restricted as to the effective date thereof by such penultimate
paragraph.

Section 16.12.3 If Tenant exercises a purchase option relative to a particular
Leased Property(ies), the closing with respect thereto will occur within
forty-five (45) days of Tenant’s receipt of the applicable Section 16.12 Notice.
At such closing, Lessor will, by special warranty deed (or, if a particular
Leased Property is subject to an Existing Ground Lease, by a special warranty
assignment, rather than a special warranty deed), convey to Tenant or its
designee all of Lessor’s right, title and interest in the subject Leased
Property(ies) (or, if a

 

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particular Leased Property is subject to an Existing Ground Lease, in the
subject Existing Ground Lease), subject to the Permitted Encumbrances, and will
cause to be released any Facility Mortgage(s) or other liens created by Lessor
or its agents or employees relative to the subject Leased Property(ies) (and, if
Lessor is unable to cause such release(s) as of the initially scheduled closing
date, the closing date shall be extended as necessary to allow Lessor additional
time to cause such release(s)), and Tenant will pay in cash, to or as directed
by Lessor, the purchase price therefor, as described in Section 16.12.5 below,
subject, if applicable as described below, to a credit against the purchase
price in favor of Tenant and in the amount, if any, described below. Such
conveyance will be on an “AS IS”, “WITH ALL FAULTS” basis and without any
representation or warranty (except as set forth in the aforesaid special
warranty deed (or, if applicable as described above, the aforesaid special
warranty assignment)). If consummation of any such conveyance would result in a
violation or breach of any Existing Ground Lease or other Permitted Encumbrance,
or of the terms or conditions of any applicable Authorization or reimbursement
or provider agreement, Tenant shall be obligated, at its expense and as a
condition to Lessor’s obligation to close, to obtain, in form and substance
reasonably satisfactory to Lessor, any consents or approvals as may be necessary
to avoid any such violation or breach. At such closing, Tenant shall execute and
deliver to Lessor an instrument pursuant to which Tenant shall represent and
warrant to, and covenant with, Lessor that (a) Tenant is purchasing the subject
Leased Property(ies) with the intention of selling the same and (b) Tenant’s
acquisition from Lessor will qualify as an acquisition of assets “solely for
rental or investment purposes” that is exempt from the notification and waiting
period requirements of the Hart-Scott-Rodino Act, as amended (15 U.S.C. §18a et.
seq.) under (16 C.F.R. §802.5). Upon the occurrence of such closing, this Lease
will terminate, in accordance with Section 40.16, insofar as it applies to the
purchased Leased Property(ies), but all accrued obligations, or obligations that
survive termination, with respect to the purchased Leased Property(ies) shall
survive such termination. Relative to the foregoing, if Tenant closes with
respect to a particular Leased Property strictly in accordance with the terms
and conditions provided in this Section 16.12, and, prior to such closing,
Lessor has sued, and collected damages from, Tenant on account of a
Section 16.1(m) and/or Section 16.1(q) Event of Default relative to such Leased
Property, Tenant shall be entitled to a credit against the purchase price for
such Leased Property equal to a sum, not to exceed the purchase price, equal to
(a) the amount of the damages so collected by Lessor from Tenant in the
aforesaid lawsuit, less (b) the amount of all attorneys’ fees, court costs,
witness fees and other costs and expenses incurred by Lessor in connection with
such lawsuit or Section 16.1(m) and/or Section 16.1(q) Event of Default.

Section 16.12.4 If Tenant exercises a purchase option relative to a Leased
Property(ies), and closes with respect thereto strictly in accordance with the
terms and conditions provided in this Section 16.12, then, for purposes of
Section 16.1 and Section 16.10 of this Lease, the Section 16.1(m) and/or Section
16.1(q) Event of Default relative to the purchased Leased Property(ies) will be
deemed to have been cured (but without limitation of Lessor’s indemnity rights
under Section 24.1 hereof and other rights and remedies that survive the
applicable termination of this Lease that results from Tenant’s purchase of such
Leased Property(ies)), but, for purposes of Section 16.12.1.1 and
Section 16.12.1.2, Tenant will have exhausted that number of its available
purchase options as equals the number of Leased Properties as to which it has so
exercised its purchase option. If, as a result of such cure, the

 

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number of the Leased Properties as to which an Event of Default under Section
16.1(m) and/or Section 16.1(q) of this Lease is reduced to a number fewer than
the Section 16.10.1 Number that is applicable to this Lease, Lessor will, for so
long as such condition continues to exist, be precluded from exercising
termination and/or dispossession rights and remedies against all Leased
Properties covered by this Lease on account of the then remaining Event(s) of
Default under Section 16.1(m) and/or Section 16.1(q) of this Lease, but not on
account of any other Event of Default under this Lease.

Section 16.12.5 The purchase price for each Leased Property as to which a
purchase option is exercised by Tenant will be separately determined for each
Leased Property and will equal, at Lessor’s separate election for each Leased
Property, either (a) the sum calculated by dividing the Base Rent per annum
applicable to such Leased Property for the year next following the applicable
closing date by six percent (6.0%) or (b) the product of ten (10.0) times the
Purchase Option EBITDAR, as hereinafter defined, for such Leased Property. The
Purchase Option EBITDAR for a particular Leased Property will equal the highest
twelve (12) consecutive month EBITDAR for such Leased Property occurring during
the period commencing three (3) years prior to (i) the first day of the month
during which a Section 16.1(m) Event of Default first occurred with respect to
such Leased Property or (ii) the first day of the month during which a
revocation of certification for reimbursement under Medicare or Medicaid first
occurred with respect to such Leased Property, whichever is earlier, and ending
on the last day of the month preceding the month during which the closing occurs
with respect to such Leased Property. For example, if Tenant exercises a
purchase option relative to a particular Leased Property, the closing with
respect thereto occurs on April 15, 2015, a Section 16.1(m) Event of Default
arose on January 14, 2015, such Leased Property was decertified for Medicare on
July 15, 2014 and a Section 16.1(q) Event of Default arose on account thereof on
November 12, 2014, the period referenced above would commence on July 1, 2011
and end on March 31, 2015.

Section 16.12.6 If this Lease and a Second Lease are combined as provided in
Section 40.18 of this Lease, for purposes of determining whether any further
purchase option is available to Tenant in such combined lease and, if so, as to
how many Leased Properties such an option is available, all purchase option
exercises that occurred under this Lease and the Second Lease prior to such
combination shall be counted the same as if they occurred under the combined
lease.

Section 16.12.7 Notwithstanding anything to the contrary contained in this
Section 16.12, this Section 16.12 will be included in the Lease and be effective
only if and for so long as inclusion thereof does not cause this Lease to be
considered a capital lease, rather than an operating lease, for all accounting,
tax and legal purposes, as determined by the independent auditors for both
Lessor and Tenant.

Section 16.12.8 The following examples are intended to illustrate further the
application of this Section 16.12:

Example 1: Assume that, within a lease of 25 Master Lease Leased Properties, no
Events of Default exist other than Events of Default under Section 16.1(m)
and/or Section 16.1(q) that

 

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have occurred and are continuing relative to Property A and Property B and that
Lessor provides a Section 16.12 Notice on account thereof, which notice
specifies Property A as the property as to which Tenant’s one (1) available
purchase option (pursuant to the number limitation set forth in
Section 16.12.1.2) shall be available. Assume further that Tenant exercises its
purchase option relative to Property A and closes its purchase of Property A in
strict accordance with the terms and conditions provided in this Section 16.12.
On account of such exercise, Tenant would have exhausted its purchase option
rights under such lease, and, on account of such purchase, (a) the
Section 16.1(m) and/or Section 16.1(q) Event of Default relative to Property A
would have been cured, leaving Property B as the only leased property as to
which a continuing Section 16.1(m) and/or Section 16.1(q) Event of Default
continues, and (b) because the Section 16.10.1 Number applicable to such lease
would equal 2, the continuation of a Section 16.1(m) and/or Section 16.1(q)
Event of Default with respect to Property B and no other leased properties would
not, pursuant to the terms of Section 16.10.2.2, be sufficient to permit Lessor
to exercise termination and/or dispossession rights and remedies against any
leased property other than Property B.

Example 2: Same assumed facts as in Example 1 and assume further that an
additional Section 16.1(m) Event of Default arises under such lease with respect
to Property C. Lessor would be permitted to exercise termination and/or
dispossession rights and remedies against all leased properties under such
lease, in accordance with Section 16.10.2.2, because the number of such
Section 16.1(m) and/or Section 16.1(q) Events of Default under such lease would
equal 2 (Property B and Property C), which number equals the Section 16.10.1
Number applicable to such lease. Also, because Tenant has exhausted its purchase
option rights under such lease as described on Example 1, Section 16.12 would no
longer be applicable to grant Tenant any purchase option rights and Lessor would
be permitted to exercise such termination and/or dispossession rights and
remedies against all leased properties under such lease without providing any
Section 16.12 Notice to Tenant or additional purchase option to Tenant.

Example 3: Assume that, within a lease of 10 Master Lease Leased Properties, no
Events of Default exist other than Events of Default under Section 16.1(m)
and/or Section 16.1(q) that have occurred and are continuing relative to
Property X and Property Y. Lessor would not be obligated to provide a Section
16.12 Notice to Tenant prior to exercise of termination and/or dispossession
rights and remedies against all leased properties under such lease. A lease of
10 leased properties is eligible for a purchase option with respect to 1 leased
property during the Term (Section 16.12.1.1). Even if Tenant exercised such 1
purchase option and closed thereunder, a Section 16.1(m) and/or Section 16.1(q)
Event of Default would continue to exist under such lease and the precondition
to an exercisable purchase option, and receipt of a Section 16.12 Notice,
referenced in Section 16.12.2(ii) would therefore not be met.

ARTICLE XVII

Section 17.1 Lessor’s Right to Cure Tenant’s Default. If an Event of Default
shall have occurred and be continuing, 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 Tenant, and may, to the extent permitted by law, enter upon any or
each Leased Property or any portion thereof for the purpose of curing such Event
of Default and take all such action thereon as, in Lessor’s opinion, may be
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or appropriate in connection with curing such Event of Default. No such entry
shall be deemed an eviction of Tenant. All reasonable sums so paid by Lessor and
all reasonable costs and expenses (including, without limitation, reasonable
attorneys’ fees and expenses, in each case, to the maximum extent permitted by
law) so incurred, together with interest thereon (to the maximum extent
permitted by law) as Additional Charges hereunder at the Overdue Rate from the
date on which such sums or expenses are paid or incurred by Lessor, shall be
paid by Tenant to Lessor on demand. The obligations of Tenant and rights of
Lessor contained in this Article shall survive the expiration or earlier
termination of this Lease. Nothing contained in this Section 17.1 shall limit or
impair Lessor’s rights and remedies under Section 8.3.2 or Section 21.5.2.

ARTICLE XVIII

Section 18.1 Provisions Relating to Purchase of the Leased Property. In the
event Tenant purchases any Leased Property from Lessor pursuant to any of the
terms of ARTICLE XIV hereof, Lessor shall, upon receipt from Tenant of the
applicable purchase price, together with full payment of all Rent due and
payable or other charges due and payable with respect to any period ending on or
before the date of the purchase, deliver to Tenant an appropriate deed or other
conveyance (in the customary form used to convey commercial properties within
the relevant jurisdiction) conveying the entire interest of Lessor in and to
such Leased Property to Tenant free and clear of all encumbrances other than (i)
those that Tenant has agreed hereunder to pay or discharge, (ii) those mortgage
liens, if any, which Tenant has agreed in writing to accept and to take title
subject to and (iii) Permitted Encumbrances. The difference between the
applicable purchase price and the total of the encumbrances assumed or taken
subject to shall be paid in cash to Lessor or as Lessor may direct, in federal
or other immediately available funds except as otherwise mutually agreed by
Lessor and Tenant other than as specifically provided above, such Leased
Property shall be conveyed to Tenant on an “as is” basis, and in its then
physical condition. Closing of any such sale shall be contingent upon and
subject to Tenant 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 Tenant to obtain all such approvals and consents, any options to
extend the Term of this Lease which otherwise would have expired during the
escrow period to such proposed sale shall be deemed to remain in effect for 30
days after termination of the escrow or other arrangement covering the closing
of such proposed sale. All expenses of such conveyance, including, without
limitation, the cost of title examination or standard coverage title insurance,
if reasonably required under the circumstances then existing, attorneys’ fees
incurred by Lessor in connection with such conveyance and release, and transfer
taxes, shall be paid by Lessor. Recording fees shall be paid for by Tenant. Upon
the closing of any such sale, the provisions of Section 40.16 hereof shall
apply.

ARTICLE XIX

Section 19.1 Exercise of Renewal Options. Tenant is hereby granted the right to
renew this Lease, with respect to all, but not less than all, of those Leased
Properties within the applicable group as shown on Exhibit D annexed hereto
(herein, a “Renewal Group”) for three (3), 5-year option renewal terms
(collectively, the “Extended Terms” and each an “Extended

 

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Term”) upon giving written notice to Lessor of each such renewal at least one
(1) year but not more than eighteen (18) months prior to the termination of the
then current Term applicable to such Renewal Group, provided and on the
conditions that, at the time Tenant gives a renewal notice as set forth above
relative to a Renewal Group and at the time of the commencement of the
applicable Extended Term for such Renewal Group, (a) an Event of Default (other
than any Facility Defaults of the nature referenced in Section 16.1(m) and/or
Section 16.1(q) of this Lease) shall not have occurred and be continuing (as
described in Section 16.10.2.3 above) under this Lease and (b) Facility Defaults
of the nature referenced in Section 16.1(m) and/or Section 16.1(q) of this Lease
shall not have occurred and be continuing (as described in Section 16.10.2.3
above) with respect to the Section 16.10.1 Number or more Leased
Properties. Tenant may not exercise its option for more than one Extended Term
at a time. If Tenant exercises a renewal option as aforesaid relative to a
Renewal Group, Tenant may nevertheless revoke such exercise, if and so long as
the requirements of Section 19.5 below are strictly complied with. For purposes
of this Section 19.1, if an Event of Default shall occur under Section 16.1(m)
and/or Section 16.1(q) of this Lease, whether the same is, or is deemed to be,
“continuing” shall be determined as provided in Section 16.10 above.
Notwithstanding the foregoing provisions, it is further agreed by Lessor and
Tenant that Tenant shall not have any right to renew this Lease with respect to
any Leased Property that is within Renewal Group number 3 shown on Exhibit D
annexed hereto, but, as to any Leased Property that becomes part of, and is
assigned to, Renewal Group number 2 as provided in Section 19.6 below, Tenant
shall have the renewal rights relative to all, but not less than all, of such
Renewal Group number 2 (including any such Leased Property that has become part
of, and been assigned to, such Renewal Group number 2 as provided in such
Section 19.6) that are described above.

Example 1: If (i) an Event of Default of the nature referenced in Section
16.1(m) and/or Section 16.1(q) of this Lease has occurred and is continuing (as
described in Section 16.10.2.3 above) with respect to Leased Property X and no
other Leased Properties, (ii) Lessor has terminated this Lease as it applies to
Leased Property X or dispossessed Tenant from such Leased Property X, (iii) the
Section 16.10.1 Number applicable to this Lease exceeds 1 (so that the condition
referenced in Section 19.1(b) is met), and (iv) Tenant desires to renew this
Lease, pursuant to Section 19.1, with respect to a Renewal Group which does not
include Leased Property X, then Tenant would be entitled to renew this Lease
with respect to all of the Leased Properties in such Renewal Group. See the
following examples for examples of Lessor’s and Tenant’s respective rights
relative to renewal of the Renewal Group that includes Leased Property X.

Example 2: Same assumed facts as in Example 1, except assume that Lessor has not
terminated this Lease as it applies to Leased Property X, but Lessor has
dispossessed Tenant from Leased Property X, and that the Renewal Group that
Tenant desires to renew includes Leased Property X. Tenant would be entitled to
renew this Lease with respect to all of the Leased Properties in such Renewal
Group, but any such renewal would include renewal of Leased Property X. Section
19.1 does not create any right allowing Tenant to renew less than all of a
Renewal Group as to which this Lease remains in effect. As to Leased Property X,
Tenant has been dispossessed, not terminated, and therefore any renewal would
need to include Leased Property X.

 

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Example 3: Same assumed facts as in Example 2, except assume that Lessor has
terminated this Lease as it applies to Leased Property X. Tenant would be
entitled to renew this Lease with respect to all of the Leased Properties in the
Renewal Group that formerly included Leased Property X, without being obligated
to renew this Lease as to Leased Property X. Due to the termination of this
Lease as it applies to Leased Property X, the aforesaid Renewal Group no longer
includes Leased Property X, and Tenant is entitled to renew this Lease as to all
of the Renewal Group as to which this Lease remains in effect.

Example 4: Same assumed facts as in Examples 1, 2, and 3, except that, in each
case, assume that the applicable Section 16.10.1 Number is 1. Tenant would not
be entitled to renew this Lease as to any Renewal Group included in this Lease,
as the condition referenced in Section 19.1(b) would not be met in each of such
Examples.

Example 5: Same assumed facts as in Example 3, except assume that the
Section 16.10.1 Number applicable to this Lease is 2 and that a Section 16.1(m)
Event of Default has occurred and is continuing with respect to Master Lease
Leased Property Y included in a Separate Lease as to which this Lease is a
Section 16.10.3 Lease and as to which Section 16.10.3(a) and Section 16.10.3(b)
are applicable. Tenant would not be entitled to renew this Lease as to any
Renewal Group included in this Lease. The aforesaid Section 16.1(m) Event of
Default under such Separate Lease relative to Master Lease Leased Property Y
would count as a Section 16.1(m) Event of Default under this Lease the same as
if Master Lease Leased Property Y was included in this Lease, and, after
aggregating such Section 16.1(m) Event of Default relative to Master Lease
Leased Property Y with the Section 16.1(m) Event of Default relative to Leased
Property X, the condition referenced in Section 19.1(b) would not be met.

Section 19.2 Renewal Terms. During each Extended Term, all of the terms and
conditions of this Lease shall continue in full force and effect, subject,
however, to the following provisions. In the first Extended Term, Base Rent
shall be calculated using the method applicable during the last year of the
Fixed Term. For the avoidance of doubt, as of the Effective Date, the next
Extension Term for all Leased Properties hereunder (and the next Extension Term
for any Leased Property that becomes part of, and is assigned to, Renewal Group
number 2 as provided in Section 19.6 below) shall be the first such Extension
Term for such Leased Property and Base Rent shall therefore be calculated as
specified in the foregoing sentence. In the case of each Extended Term after the
first Extended Term, if the portion of Base Rent applicable to the applicable
Renewal Group (based upon the aggregate Transfer Property Percentages for the
Leased Properties in such Renewal Group) for the first year of any such Extended
Term is less than Fair Market Rental of such Renewal Group (as determined in
accordance with this Section 19.2 and Section 19.3 hereof), then Base Rent for
such year for such Renewal Group shall be an amount equal to such Fair Market
Rental. If Base Rent for such first year of any such Extended Term for such
Renewal Group is based upon Fair Market Rental as determined pursuant to this
Section 19.2 and Section 19.3 hereof, the Base Rent in the remaining years of
such Extended Term and any subsequent Extended Terms for such Renewal Group
(subject, however, to the re-application of this Section to the first year and
subsequent years of any subsequent Extended Term) shall be escalated as is
determined and required by the terms of the Fair Market Rental determination for
such Renewal Group.

 

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Section 19.3 Fair Market Rental Determination. At any time within thirty (30)
days after receipt from Tenant of a notice of renewal under Section 19.1 hereof
(other than a notice of renewal for the first Extended Term), Lessor may, by
written notice to Tenant, request that Fair Market Rental of the applicable
Renewal Group, and Fair Market Rental of each Leased Property within such
Renewal Group, be determined by appraisal under the procedures of ARTICLE XXXV
hereof and in such event such Fair Market Rentals shall be so determined in
accordance with the procedures of such ARTICLE XXXV. Lessor’s failure to deliver
such notice to Tenant within thirty (30) days after receiving Tenant’s notice of
renewal shall preclude Lessor from any claim that Base Rent for the first year
of the Extended Term to which such notice of renewal relates for the applicable
Renewal Group is less than Fair Market Rental of such Renewal Group, and
thereafter Base Rent for such Renewal Group for such Extended Term (but only for
that particular Extended Term) shall be determined as set forth in the
definition of “Base Rent” set forth in Section 2.1 hereof, without any
application of Section 19.2. If Lessor has timely delivered such notice to
Tenant, and thereafter Fair Market Rental of the applicable Renewal Group is
determined under ARTICLE XXXV hereof, the determination of whether such
appraised Fair Market Rental is higher than Base Rent applicable to the
applicable Renewal Group shall be made by Lessor, in its sole and exclusive
discretion, which determination shall be binding on Lessor and Tenant and not
subject to further review.

Section 19.4 Extended Period New Lease. If Base Rent for a Renewal Group for the
first year of any Extended Term after the first Extended Term is based upon Fair
Market Rental as determined pursuant to Section 19.2 and Section 19.3 hereof,
then effective as of the first day of such Extended Term, such Renewal Group
shall be transferred from this Lease to a New Lease entered into pursuant to,
and otherwise in compliance with, the terms and conditions of Section 40.15
hereof and this Lease shall be amended as set forth in such Section 40.15. Such
New Lease shall include therein an Exhibit C that allocates the aggregate Base
Rent payable thereunder to the individual Leased Properties covered by such New
Lease, and assigns Transferred Property Percentages to such Leased Properties,
in a manner that is consistent with the respective Fair Market Rentals of such
Leased Properties as determined pursuant to Section 19.2 and Section 19.3
hereof.

Section 19.5 Revocation of Renewal Option Exercise. In the event (a) Tenant
exercises a renewal option relative to a Renewal Group in accordance with
Section 19.1 above, (b) such renewal option relates to an Extended Term for such
Renewal Group other than the first Extended Term applicable to such Renewal
Group, and (c) Lessor, in accordance with Section 19.3 above, requests that Fair
Market Rental of the applicable Renewal Group, and Fair Market Rental of each
Leased Property within such Renewal Group, be determined by appraisal under the
procedures of ARTICLE XXXV hereof, Tenant may revoke its aforesaid exercise,
provided and on the condition that, whether or not the Fair Market Rental
determinations referenced in subsection (c) above have been completed, Tenant
must notify Lessor of its revocation of its aforesaid exercise not less than one
(1) year prior to the termination of the then current Term applicable to such
Renewal Group; provided, however, if Tenant gives its written renewal notice to
Lessor in accordance with Section 19.1 above on or before the date which is
seventeen (17) months prior to the termination of the then current Term
applicable to such Renewal Group, then Tenant shall have until the earlier of
(i) nine (9) months prior to the termination of the then

 

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current Term applicable to such Renewal Group and (ii) fifteen (15) days after
the date upon which the Fair Market Rental determinations referenced in
subsection (c) above have been completed to notify Lessor of its revocation. In
the event Tenant so revokes its aforesaid exercise relative to a Renewal Group,
Tenant’s remaining renewal option(s) relative to such Renewal Group shall be
deemed to have been irrevocably waived and terminated.

Section 19.6 Extension and Rebundling of Certain Facilities. Notwithstanding
anything to the contrary contained in this Article XIX or elsewhere in this
Lease, in the event that, in the case of any Subject Facility, this Lease or
ML1/2/4, as applicable, has not been terminated due to the sale of such Subject
Facility in accordance with the terms of ARML No. 3 by on or prior to April 30,
2018, then, automatically as of April 30, 2018, without further action of the
parties and as part of the transfer of Leased Properties demised under ML1, ML2
and/or ML4 into this Lease that is referenced in the ML1/2/4 Amendments, the
Exercise of the Renewal Option shall have occurred and, accordingly, (a) the
Lease Expiration Date for each such Subject Facility shall be changed and
extended to April 30, 2025, (b) Exhibit B and Exhibit D of this Lease shall be
amended to add thereto each such Subject Facility that is demised under ML1/2/4
as of the Effective Date and to reflect such change and extension of the Lease
Expiration Date for each such Subject Facility (whether the same is demised
under this Lease or ML1/2/4 as of the Effective Date) and (c) Exhibit D shall
further be amended to assign each such Subject Facility that is demised under
ML1/2/4 as of the Effective Date, and each such Subject Facility that is under
Renewal Group number 3 of this Lease as of the Effective Date, to Renewal Group
number 2 shown therein so that each such Subject Facility shall, on and after
April 30, 2018 and for all purposes of this Lease, be a part of, and have
assigned thereto, Renewal Group number 2. The foregoing provisions are
self-operative, but, upon the written request of Lessor or Tenant to the other
party, Lessor and Tenant shall memorialize, in an instrument reasonably
acceptable to Lessor and Tenant, the amendments and changes described in this
Section 19.6.

ARTICLE XX

Section 20.1 Holding Over. If Tenant shall for any reason remain in possession
of any Leased Property after the expiration of the Term or earlier termination
of the Term (other than solely due to Lessor’s failure, on or prior to (a) the
ninetieth (90th) day preceding the expiration of the Term as to such Leased
Property or (b) if this Lease is terminated prior to such expiration due to
Lessor’s default, the earlier termination of the Term as to such Leased
Property, to have notified Tenant that Lessor has procured a Qualified Successor
for such Leased Property), such possession shall, at the option of Lessor in its
sole discretion as to each such Leased Property, be as a month-to-month tenant
during which time Tenant shall pay as rental each month (which rental
constitutes liquidated damages with respect to Rent, and not a penalty for the
period to which it relates), one and one-half times the aggregate of (i)
one-twelfth of the annual amount of Base Rent payable as of the end of the
preceding Term and, in the case of a month-to-month tenancy as to less than all
of the Leased Properties, allocable to the Leased Property(ies) in question in
accordance with Section 16.9 hereof; (ii) all Additional Charges accruing during
the month and (iii) all other sums, if any, payable by Tenant pursuant to the
provisions of this Lease with respect to the Leased Property(ies) in
question. During such period of month-to-month tenancy, Tenant shall be
obligated to perform and observe all of the terms, covenants and

 

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conditions of this Lease with respect to the Leased Property(ies) in question,
but shall have no rights hereunder other than the right, to the extent given by
law to month-to-month tenancies to continue its occupancy and use of the
applicable Leased Property. Subject to Section 40.3, nothing contained herein
shall constitute the consent, express or implied, of Lessor to the holding over
of Tenant after the expiration or earlier termination of this Lease.

ARTICLE XXI

Section 21.1 Subordination. This Lease and all rights of Tenant hereunder are
subject and subordinate to all Facility Mortgages and all Superior Leases which
may now or hereafter affect Lessor’s interest in the applicable Leased Property
and any interest of any Superior Lessor (all such leases and mortgages,
collectively, the “Superior Mortgages”), and to all renewals, modifications,
consolidations, replacements and extensions of the Superior Mortgages, provided,
however, that, in the case of any Superior Mortgages (other than the Existing
Ground Leases), Tenant’s aforesaid subordination shall be conditioned on
Tenant’s receipt of a so-called “non-disturbance” agreement in favor of Tenant
from any such Superior Lessor (other than the Superior Lessors under the
Existing Ground Leases) or Superior Mortgagee (defined below) on such Superior
Lessor’s or Superior Mortgagee’s commercially reasonable standard form. This
Section shall be self-operative and no further instrument of subordination shall
be required. In confirmation of such subordination, Tenant agrees to execute and
deliver promptly any commercially reasonable form of instrument (in recordable
form, if requested) that Lessor, any Superior Lessor or the holder of any
Superior Mortgage (a “Superior Mortgagee”) may request to evidence such
subordination. Lessor shall use its reasonable efforts to obtain from each
currently existing Facility Mortgagee, if any, a so-called “non-disturbance”
agreement in favor of Tenant on such Facility Mortgagee’s standard form.

Section 21.2 Attornment. If the interests of Lessor under this Lease are
transferred by reason of, or assigned in lieu of, foreclosure or other
proceedings for enforcement of any such Superior Mortgage, or if any Superior
Lease shall be terminated then Tenant shall, at the option of such purchaser,
assignee or any Superior Lessor, as the case may be, (x) attorn to such party
and perform for its benefit all the terms, covenants and conditions of this
Lease on Tenant’s part to be performed with the same force and effect as if such
party were the landlord originally named in this Lease, or (y) enter into a New
Lease with such party, as landlord, pursuant to Section 40.15 hereof for the
remaining Term and otherwise on the same terms and conditions of this Lease
except that such successor landlord shall not be (i) liable for any previous
act, omission or negligence of Lessor under this Lease; (ii) subject to any
counterclaim, defense or offset which theretofore shall have accrued to Tenant
against Lessor; (iii) bound by any previous modification or amendment of this
Lease or by any previous prepayment of more than one month’s rent, unless such
modification, amendment or prepayment shall have been approved in writing by the
Superior Lessor or the Superior Mortgagee through or by reason of which such
successor landlord shall have succeeded to the rights of Lessor under this Lease
or, in case of any such prepayment, such prepayment of rent has actually been
delivered to such successor landlord; or (iv) liable for any security deposited
pursuant to this Lease unless such security has actually been delivered to such
successor landlord. Nothing contained in this Section shall be construed to
impair any right otherwise exercisable by any such owner, holder or lessee.

 

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Section 21.3 Mortgagee Cure Rights. If any act or omission by Lessor would give
Tenant the right, immediately or after lapse of time, to cancel or terminate
this Lease or to claim a partial or total eviction, or abatement of rent, setoff
or counterclaim not otherwise expressly permitted by the terms of this Lease,
Tenant will not exercise any such right until (i) it has given written notice of
such act or omission to each Superior Mortgagee whose name and address shall
have previously been furnished to Tenant, by delivering notice of such act or
omission addressed to each such party at its last address so furnished, (ii)
Lessor shall have failed to cure the same within the time limits set forth in
this Lease, and (iii) following the giving of such notice, no Superior Mortgagee
and no Superior Lessor shall have remedied such act or omission (x) in the case
of an act or omission which is capable of being remedied without possession of
this Leased Property, within the cure period available to Lessor under this
Lease plus sixty (60) days and (y) in the case of any act or omission which is
incapable of being remedied without possession of the applicable Leased
Property, within sixty (60) days following the date on which possession is
obtained (either by such Superior Mortgagee or Superior Lessor or by a receiver
in an action commenced by such Superior Mortgagee or Superior Lessor), provided
a Superior Mortgagee or Superior Lessor has promptly commenced action to obtain
possession and shall diligently pursue such action to completion and provided
further that such Superior Mortgagee or Superior Lessor shall, with reasonable
diligence, give Tenant notice of its intention to, and commence and continue to,
remedy such act or omission or cause the same to be remedied.

Section 21.4 Modifications. Tenant shall execute any modification of this Lease
requested by any Superior Mortgagee or prospective Superior Mortgagee to cause
the terms of this Lease to conform with customary and reasonable mortgage
financing requirements, provided that such modifications (i) do not materially
adversely increase the obligations of Tenant hereunder or materially diminish
Tenant’s rights under this Lease or materially impair the right of a Leasehold
Mortgagee, (ii) do not increase Rent payable hereunder, and (iii) are requested
by any such Superior Mortgagee or prospective Superior Mortgagee only at the
time of its initial loan advance or any subsequent extension of the maturity
date of its loan or material modification of the terms of its loan. Tenant will
not unreasonably withhold, delay or condition its consent to such modification,
provided subsections (i), (ii) and (iii) above are complied with.

Section 21.5 Existing Ground Leases.

Section 21.5.1 Tenant shall, at its own cost and expense, fully observe, perform
and comply with all of the obligations of Lessor, as lessee, under all Existing
Ground Leases, including, without limitation, all obligations relating to use of
the Leased Properties, payment of ground rents, taxes, assessments and utility
charges, maintenance and alterations of the Leased Properties and assignment and
subletting. Tenant shall not cause, or permit its respective agents, employees,
contractors, invitees, subtenants, licensees, concessionaires or assigns
(whether or not permitted hereunder) to cause, whether by act or omission, any
breach of, default under or termination of any Existing Ground
Lease. Notwithstanding anything to the contrary contained in Section 16.1 or
elsewhere in this Lease, an Event of Default shall be deemed to have occurred
under this Lease on account of Tenant’s breach of this Section 21.5.1, when, and
only if, (i) Tenant’s breach of this Section 21.5.1 also results in a breach or
default of an obligation under an Existing Ground Lease and (ii) such Existing
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default is not cured by Tenant on or prior to the expiration of the cure period,
if any, applicable to such breach or default by the terms of such Existing
Ground Lease (or such longer cure period as may be expressly authorized by an
order of a court of competent jurisdiction), and (iii) if the Existing Ground
Lease breach or default referenced in subsection (i) above is a non-monetary,
non-material breach or default of the Existing Ground Lease, on account of such
Existing Ground Lease breach or default, such Existing Ground Lease is at
material risk of being terminated or has been terminated. Lessor agrees that, in
the event Lessor receives any written notice of default from the ground lessor
under any Existing Ground Lease, Lessor shall promptly forward a copy thereof to
Tenant, and, in the event Lessor’s Management Group obtains actual knowledge (as
opposed to, and not including, constructive, imputed, assumed or other
knowledge, and without any obligation to investigate or otherwise make inquiry)
of any breach or default by the ground lessee under any Existing Ground Lease,
then, unless Lessor’s Management Group has the aforesaid actual knowledge that
Tenant already has knowledge of such breach or default, Lessor shall promptly
notify Tenant in writing of such breach or default. Lessor further agrees that
Lessor shall timely exercise any options to renew or extend contained in the
Existing Ground Leases, as and to the extent necessary from time to time so that
each Existing Ground Lease shall not expire prior to the expiration or
termination of this Lease as it applies to the Leased Property affected by such
Existing Ground Lease (including any Extended Terms applicable to such Leased
Property). Tenant agrees that, if Lessor, at its option, elects to cure an Event
of Default under this Section 21.5.1, such cure shall not excuse Tenant from, or
be deemed a cure of, such Event of Default, nor shall Tenant’s reimbursement to
Lessor of any costs and expenses incurred by Lessor in affecting any such cure
be deemed a cure of any such Event of Default, provided, however, that,
notwithstanding the foregoing, even after the occurrence of such an Event of
Default by Tenant and/or Lessor’s cure thereof, Lessor agrees to accept Tenant’s
cure thereof, or reimbursement of Lessor’s costs and expenses to effect such
cure, provided, and on the condition, that Lessor has not, prior thereto,
terminated this Lease as it affects the Leased Property to which such Existing
Ground Lease relates or dispossessed Tenant from such Leased Property. Nothing
contained in this Section 21.5 shall limit or impair Lessor’s indemnification
rights under Section 24.1 below.

Section 21.5.2 If (a) an Existing Ground Lease breach or default of the nature
described in Section 21.5.1(i) above occurs, and (b) in the case of a
non-monetary, non-material Existing Ground Lease breach or default, on account
thereof, if the same is not cured, the condition referenced in
Section 21.5.1(iii) above would, or is likely to, be satisfied, Tenant agrees
that, notwithstanding anything to the contrary contained in Section 17.1 above
or elsewhere in this Lease, Lessor may, but shall not be obligated to, in its
discretion and regardless of whether Tenant is proceeding to cure, or attempting
to cure, the Existing Ground Lease breach or default referenced in
Section 21.5.1(i) above or whether the cure period referenced in
Section 21.5.1(ii) above has expired or is likely to expire before completion of
necessary cure efforts, take such actions as it deems necessary or appropriate
to attempt to cure such Existing Ground Lease breach or default, provided,
however, that, if the breach or default referenced in subsection (a) above has
applicable thereto, by the express terms of the applicable Existing Ground
Lease, a stated period to cure the same, Lessor agrees not to commence to cure
such breach or default unless and until one-half (1/2) of the aforesaid stated
cure period has elapsed. If Lessor so proceeds to attempt to cure any such
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Tenant agrees, within fifteen (15) days following receipt of a written demand
therefor and reasonable supporting documentation, to reimburse Lessor for the
reasonable amount of all costs and expenses incurred by Lessor in curing, or
attempting to cure, any such Existing Ground Lease breach or default.

ARTICLE XXII

Section 22.1 Notice to Lessor. If Tenant shall mortgage Tenant’s interest in one
or more Leased Properties to a Lending Institution in accordance with the terms
of this Lease, and if the holder of the Leasehold Mortgage shall provide Lessor
with a true copy of the Leasehold Mortgage and the name and address of the
Leasehold Mortgagee (as hereinafter defined) and Lessor shall approve the
Leasehold Mortgage, Lessor and Tenant agree that the provisions of this Section
shall apply in respect to the Leasehold Mortgage. In the event of any assignment
of a Leasehold Mortgage or in the event of a change of address of a Leasehold
Mortgagee or of an assignee of a Leasehold Mortgage, notice of the new name and
address shall be provided to Lessor.

Section 22.2 Definitions.

(a) The term “Leasehold Mortgage” as used in this Section shall include a
mortgage, a deed of trust, a deed to secure debt, or other security instrument
by which Tenant’s leasehold estate is mortgaged or otherwise transferred, to
secure a debt. “Leasehold Mortgage” shall be deemed to refer to all of the
Leasehold Mortgages delivered to secure a debt.

(b) The term “Leasehold Mortgagee” as used in this Section shall refer to any
and all holders of a Leasehold Mortgage approved by Lessor pursuant to the terms
hereof.

Section 22.3 Consent of Leasehold Mortgagee Required. No cancellation or
surrender (other than a termination following the occurrence of an Event of
Default) and no amendment to or modification of, this Lease shall be effective
as to the Leasehold Mortgagee without the prior written consent of such
Leasehold Mortgagee, unless an amendment or modification is not reasonably
likely to result in a material adverse effect on the rights of the Leasehold
Mortgagee, the lien of the Leasehold Mortgages, or the value of the leasehold
interest demised hereunder.

Section 22.4 Default Notice. Lessor, upon providing Tenant any notice of: (a)
default under this Lease or (b) a termination of this Lease, in whole or in
part, shall at the same time provide a copy of such notice to the Leasehold
Mortgagee. From and after the time such notice has been given to a Leasehold
Mortgagee, the Leasehold Mortgagee shall have the same period, after the giving
of such notice upon it, for remedying any default or acts or omissions which are
the subject matter of such notice or causing the same to be remedied, as is
given Tenant after the giving of such notice to Tenant, plus (i) except if
subsection (ii) below is applicable, thirty (30) days to remedy, commence to
remedy or cause to be remedied the defaults or acts or omissions which are the
subject matter of such notice specified in any such notice, provided that such
defaults are capable of being cured by the Leasehold Mortgagee or on behalf of
the Leasehold Mortgagee, or (ii) fifteen (15) days to remedy any Rent defaults
which are the subject matter of such notice specified in any such notice. Lessor
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instigation of the Leasehold Mortgagee as if the same had been done by
Tenant. Tenant authorizes each Leasehold Mortgagee to take any such action at
the Leasehold Mortgagee’s option and does hereby authorize entry upon the Leased
Properties by the Leasehold Mortgagee for such purpose. If Leasehold Mortgagee
has failed to cure Tenant’s default within the above-mentioned time period,
Lessor may exercise its rights and remedies specified in Section 16.2,
Section 16.3 and Section 17.1.

Section 22.5 Procedure for Foreclosure on Default.

(a) If the Leasehold Mortgagee has commenced taking steps to acquire or sell
Tenant’s interest in this Lease by foreclosure of the Leasehold Mortgage or
other appropriate means, the Leasehold Mortgagee shall provide Lessor notice of
the same and shall prosecute the same to completion with due diligence.

(b) Following Lessor’s receipt of such notice and so long as the Leasehold
Mortgagee continues to prosecute to completion with due diligence such
foreclosure or other means of acquiring or selling Tenant’s interest in this
Lease, and provided that the Leasehold Mortgagee complies with its obligations
under subsection (c) below, this Lease shall not then terminate, and the time
for completion by such Leasehold Mortgagee of its proceedings shall continue so
long as such Leasehold Mortgagee is enjoined or stayed and thereafter for so
long as such Leasehold Mortgagee proceeds to complete steps to acquire or sell
Tenant’s interest in this Lease by foreclosure of the Leasehold Mortgage or by
other appropriate means with reasonable diligence and continuity. Nothing in
this Section 22.5, however, shall be construed to extend this Lease beyond the
original term thereof, as extended by any options to extend the term of this
Lease properly exercised by Tenant or a Leasehold Mortgagee in accordance with
ARTICLE XIX nor to require a Leasehold Mortgagee to continue such foreclosure
proceedings after the default by Tenant has been cured. If the default by Tenant
shall be cured and the Leasehold Mortgagee shall discontinue such foreclosure
proceedings, this Lease shall continue in full force and effect as if Tenant had
not defaulted under the Lease.

(c) In addition, during such period, the Leasehold Mortgagee shall pay or cause
to be paid the rent, additional rent and other monetary obligations of Tenant
under this Lease as the same become due, and continue its good faith efforts to
perform, or cause to be performed, all of Tenant’s other obligations under this
Lease.

Section 22.6 Assignment or Transfer in Lieu of Foreclosure.

(a) For the purposes of this Section 22.6, the making of a Leasehold Mortgage
shall not be deemed to constitute an assignment or transfer of this Lease or of
the leasehold estate hereby created, nor shall any Leasehold Mortgagee, as such,
be deemed to be an assignee or transferee of this Lease or of the leasehold
estate hereby created so as to require the Leasehold Mortgagee, as such, to
assume the performance of any of the terms, covenants or conditions on the part
of Tenant to be performed hereunder, but the purchaser at any sale of this Lease
and of the leasehold estate hereby created in any proceedings for the
foreclosure of any Leasehold Mortgage, or the assignee or transferee of this
Lease and of the leasehold estate hereby created under any instrument of
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Mortgage, shall be deemed to be an assignee or transferee within the meaning of
this Section 22.6, and shall be deemed to have agreed to perform all of the
terms, covenants and conditions on the part of Tenant to be performed hereunder
from and after the date of such purchase and assignment.

(b) Prior to any such purchase or assignment pursuant to a foreclosure or
similar proceeding, or any transaction in lieu thereof, the Leasehold Mortgagee
shall notify Lessor of the proposed transferee and obtain Lessor’s written
consent to such purchase or assignment. Subject to any state or other
governmental requirements, Lessor shall not unreasonably withhold, condition or
delay its consent to any sale or assignment, provided that (a) the purchaser or
assignee (1) shall be a creditworthy entity with sufficient financial stability
to satisfy its financial obligations under the Lease, (2) shall have not less
than four years experience in operating health care facilities for the purpose
of the applicable Facility’s Primary Intended Use, (3) has a favorable business
and operational reputation and character and (4) shall assume in writing and
agree to keep and perform all of the terms of this Lease on the part of Tenant
to be performed hereunder from and after the date of such purchase and
assignment and (b) an original counterpart of each such purchase and sale
agreement or instrument of assignment or transfer in lieu of foreclosure of any
Leasehold Mortgage, duly executed by Tenant and such purchaser or assignee, as
the case may be, in the form and substance satisfactory to Lessor, shall be
delivered promptly to Lessor. Lessor’s obligation to consent to a sale or
assignment is subject to any reasonable approval rights of any Facility
Mortgagee.

(c) (i) In the event of any dispute between Lessor and any Leasehold Mortgagee
or Tenant regarding whether Lessor has unreasonably withheld, conditioned or
delayed its consent to any sale or assignment in violation of Section 22.6(b) or
whether the other requirements of Section 22.6(b) have been satisfied (the
questions of whether Lessor has so violated Section 22.6(b) and/or whether the
aforesaid other requirements of Section 22.6(b) have been satisfied are herein
referred to collectively as the “Arbitration Question”), as their sole remedy on
account of any such dispute, Lessor may initiate an arbitration under this
Section 22.6(c) by written notice to Tenant and such Leasehold Mortgagee, or
such Leasehold Mortgagee or Tenant may initiate an arbitration under this
Section 22.6(c) by written notice to Lessor, in each case to decide the
Arbitration Question.

(ii) In such event, within ten (10) days following the issuance of any such
arbitration initiation notice, each of Lessor and such Leasehold Mortgagee (for
itself and Tenant) shall appoint a Qualified Arbitrator (as defined below), and,
within seven (7) days following the appointment of such two (2) Qualified
Arbitrators, such two (2) Qualified Arbitrators shall appoint a third Qualified
Arbitrator. If either Lessor or such Leasehold Mortgagee (for itself and Tenant)
shall fail to appoint a Qualified Arbitrator within the aforesaid ten (10) day
period, the Qualified Arbitrator appointed by the other shall alone proceed to
determine the Arbitration Question. If the two (2) Qualified Arbitrators
appointed by Lessor and such Leasehold Mortgagee (for itself and Tenant) are
unable to agree within the aforesaid seven (7) day period upon a third Qualified
Arbitrator, then either Lessor or such Leasehold Mortgagee (for itself and
Tenant), upon written notice to the other, may apply for such appointment to the
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Arbitration Association in New York City (or any organization successor thereto)
in accordance with the rules then prevailing of the American Arbitration
Association (or such successor organization) and, if the American Arbitration
Association (or such successor organization) shall fail to appoint said third
Qualified Arbitrator within fifteen (15) days after such request is made, then
either Lessor or such Leasehold Mortgagee (for itself and Tenant) may apply, on
notice to the other to the Supreme Court, New York County (or any other court in
New York City having jurisdiction) for the appointment of such third Qualified
Arbitrator.

(iii) The three (3) Qualified Arbitrators that are so appointed (or the single
Qualified Arbitrator appointed by Lessor or such Leasehold Mortgagee (for itself
and Tenant) in the limited circumstance referenced above) shall decide the
Arbitration Question within fifteen (15) days following their or his
appointment.

(iv) Each of Lessor and such Leasehold Mortgagee (for itself and Tenant) shall
be entitled to present evidence and arguments to the arbitrator(s). If either
Lessor or such Leasehold Mortgagee (for itself and Tenant) submits one or more
affidavits as part of its submission, the submitting party agrees, if requested
by the other party, to produce such affiants for cross-examination under oath on
the record at the hearings before the arbitrator(s). There shall be no
pre-hearing discovery of any sort, unless specifically ordered by the
arbitrator(s) upon a finding that such discovery is essential to the
decision-making process. The parties to the arbitration shall conduct the
arbitration in a cooperative spirit, in good faith, and in a manner designed to
achieve expedition and economy.

(v) The determination of the Arbitration Question by the three (3) Qualified
Arbitrator(s) (or the single Qualified Arbitrator acting alone as above
provided) shall be conclusive upon Lessor, such Leasehold Mortgagee and Tenant
and a final, unappealable judgment rendered by such arbitrator(s) relative to
the Arbitration Question may be entered in any court having appropriate
jurisdiction. The arbitrator or arbitrators, as the case may be, shall be
required to give written notice to Lessor, such Leasehold Mortgagee and Tenant
stating his or their determination relative to the Arbitration Question, and
shall furnish to each of Lessor, such Leasehold Mortgagee and Tenant a signed
copy of such determination.

(vi) Each of Lessor and such Leasehold Mortgagee (for itself and Tenant) shall
pay its own counsel fees and the witness fees and similar expenses of preparing
for its presentation of evidence and arguments at the arbitration hearing(s) and
of making such presentation. Lessor and such Leasehold Mortgagee (for itself and
Tenant) shall equally share any fees payable to the arbitrator(s), provided,
however, that the three (3) Qualified Arbitrators (or the single Qualified
Arbitrator acting alone as above provided) shall have the authority to award
costs to the prevailing party in the arbitration if such arbitrator(s) finds
that the non-prevailing party acted in bad faith in connection with any
arbitration hereunder.

(vii) As used in this subsection (c), the term “Qualified Arbitrator” means a
person or entity that is neither an Affiliate of Lessor, such Leasehold
Mortgagee or Tenant nor interested in any financial manner in the outcome of the
Arbitration Question or in Lessor, Tenant or any Leasehold Mortgagee and has at
least ten (10) years experience as an owner or operator of nursing centers or
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American Health Care Association and/or the Federation of American Health
Systems or any successor organizations thereto or as a senior executive officer
of a publicly traded healthcare real estate investment trust.

Section 22.7 Separate Lease. In the event of any termination of this Lease, in
whole or in part, Lessor agrees to enter into a new lease (“Separate Lease”) of
the Leased Property(ies) in question with the Leasehold Mortgagee or its
designee for the remainder of the term of this Lease, effective as of the date
of termination, at the rent and additional rent, and upon the terms, covenants
and conditions (including all options to renew but excluding requirements which
are not applicable or which have already been fulfilled) identical to this
Lease, provided:

(a) The Leasehold Mortgagee shall make written request upon Lessor for such
Separate Lease within sixty (60) days after the date the Leasehold Mortgagee
receives Lessor’s notice of termination of this Lease given pursuant to
Section 22.4.

(b) At the time of the execution and delivery of such Separate Lease, the
Leasehold Mortgagee or its designee shall pay or cause to be paid to Lessor any
and all sums which would at the time of execution and delivery thereof be due
pursuant to this Lease but for such termination and, in addition thereto, all
reasonable expenses, including reasonable attorneys’ fees, which Lessor shall
have incurred by reason of such termination and the execution and delivery of
the Separate Lease and which have not otherwise been received by Lessor from
Tenant or other party in interest under Tenant. Upon the execution of such
Separate Lease, Lessor shall allow to the tenant named therein as an offset
against the sums otherwise due under this Section 22.7(b) or under the Separate
Lease, an amount equal to the net income derived by Lessor from the Leased
Properties during the period from the date of termination of this Lease to the
date of the beginning of the lease term of such Separate Lease. In the event of
a controversy as to the amount to be paid to Lessor pursuant to this
Section 22.7(b), the payment obligation shall be satisfied if Lessor shall be
paid the amount not in controversy, and the Leasehold Mortgagee or its designee
shall agree to pay any additional sum ultimately determined to be due plus
interest at the Overdue Rate and such obligation shall be adequately secured.

(c) Such Separate Lease shall be deemed to be a New Lease and the provisions of
Section 40.15 shall apply.

(d) The Leasehold Mortgagee or its designee shall agree to remedy any of
Tenant’s defaults of which said Leasehold Mortgagee was notified by Lessor’s
notice of termination given pursuant to Section 22.4 and which are reasonably
susceptible of being so cured by Leasehold Mortgagee or its designee.

(e) The tenant under such Separate Lease shall have the same right, title and
interest in and to the Leased Properties to which such Separate Lease relates
and the buildings and improvements thereon as Tenant had under this Lease.

 

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(f) The tenant under any such Separate Lease shall be liable to perform the
obligations imposed on Tenant by such Separate Lease only during the period such
tenant under such Separate Lease has ownership of such leasehold estate.

(g) Notwithstanding anything to the contrary contained in this Section 22.7, in
connection with obtaining a New Lease with respect to a particular Leased
Property as provided herein and in Section 40.15, (i) if, prior to the effective
date of any such New Lease, Lessor has exercised its right to collect amounts
from Tenant with respect to such Leased Property pursuant to Section 16.3(A)(ii)
hereof, in order to cure existing monetary defaults relative to such Leased
Property, Leasehold Mortgagee or its designee shall not be obligated to pay to
Lessor any amount on account of the net present value of any Rent allocable to
such Leased Property for the period from and after the effective date of such
New Lease, but instead shall pay such Rent for such period at the time and in
the manner set forth in such New Lease and consistent with ARTICLE III hereof;
and (ii) Leasehold Mortgagee or its designee shall not be required to cure any
non-monetary defaults by Tenant that are not reasonably susceptible of being
cured by Leasehold Mortgagee or its designee.

Section 22.8 Separate Lease Properties. If more than one Leasehold Mortgagee
shall request a Separate Lease pursuant to Section 22.7(a) as to the same Leased
Property(ies), Lessor shall enter into such Separate Lease with the Leasehold
Mortgagee whose mortgage is prior in lien, or with the designee of the Leasehold
Mortgagee. Lessor, without liability to Tenant or any Leasehold Mortgagee with
an adverse claim, may rely upon a mortgagee title insurance policy or policies
issued by a responsible title insurance company as the basis for determining the
appropriate Leasehold Mortgagee who is entitled to such Separate Lease.

Section 22.9 Legal Proceedings. Lessor shall give each Leasehold Mortgagee
prompt notice of any legal proceedings between Lessor and Tenant involving
obligations under this Lease. Each Leasehold Mortgagee shall have the right to
intervene in any such proceedings and be made a party to such proceedings, and
the parties hereto do hereby consent to such intervention. In the event that any
Leasehold Mortgagee shall not elect to intervene or become a party to any such
proceedings, Lessor shall give the Leasehold Mortgagee notice of, and a copy of
any decision made in, any such proceedings, which shall be binding on all
Leasehold Mortgagees not intervening after receipt of notice of such
proceedings.

Section 22.10 Future Amendments. In the event on any occasions hereafter Tenant
seeks to mortgage the leasehold estate created hereby, Lessor agrees to amend
this Lease from time to time to the extent reasonably requested by a Lending
Institution proposing to make Tenant a loan secured by a first lien upon
Tenant’s leasehold estate, provided that such proposed amendments do not
adversely affect the rights of Lessor or its interest in the Leased
Properties. All reasonable expenses incurred by Lessor in connection with any
such amendment shall be paid by Tenant.

Section 22.11 Estoppel Certificate. Lessor and Tenant shall, without charge, at
any time and from time to time hereafter, within ten (10) days after written
request of the other party to do so, certify by written instrument duly executed
and acknowledged to any mortgagee or purchaser, or proposed Leasehold Mortgagee
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any other person, firm or corporation specified in such request: (a) as to
whether this Lease has been supplemented or amended, and if so, the substance
and manner of such supplement or amendment; (b) as to the validity and force and
effect of this Lease; (c) as to the existence of any Event of Default hereunder;
(d) as to the existence of any offsets, counterclaims or defenses hereto on the
part of either party; (e) as to the commencement and expiration dates of the
Term of this Lease; and (f) as to any other matters as may be reasonably so
requested. Any such certificate may be relied upon by the other party and any
other person, firm or corporation to whom the same may be exhibited or
delivered, and the contents of such certificate shall be binding on the party so
certifying.

Section 22.12 Notices. Notices from Lessor to the Leasehold Mortgagee shall be
mailed to the address furnished Lessor pursuant to Section 22.1 and those from
the Leasehold Mortgagee to Lessor shall be mailed to the address designated
pursuant to the provisions of Section 34.1 hereof. Such notices, demands and
requests shall be given in the manner described in Section 34.1 and shall in all
respects be governed by the provisions of that section.

Section 22.13 Erroneous Payments. No payment made to Lessor by a Leasehold
Mortgagee shall constitute agreement that such payment was, in fact, due under
the terms of this Lease; and a Leasehold Mortgagee having made any payment to
Lessor pursuant to Lessor’s wrongful, improper or mistaken notice or demand
shall be entitled to the return of any such payment or portion thereof provided
such Leasehold Mortgagee shall have made demand therefor not later than one year
after the date of its payment.

Section 22.14 Exercise by Leasehold Mortgagee of Remedies Against One or More
Leased Properties. Lessor acknowledges that each of the Leased Properties is
covered, and may in the future be covered, by a separate Leasehold Mortgage and
that, due to the fact that the applicable law of each jurisdiction differs as to
the procedures (including, without limitation, the periods for notices of sale
to be published) for the exercise by a Leasehold Mortgagee of remedies under a
Leasehold Mortgage and that certain of the Leasehold Mortgages may be of Leased
Properties located in jurisdictions that are subject to anti-deficiency
judgment, election of remedies and/or one-form-of-action statutes making it
advisable for a Leasehold Mortgagee to exercise remedies with respect to such
Leased Properties in a certain order, the Leasehold Mortgagee may be required
under applicable law to, or due to applicable remedial limitations including
those described above, may reasonably elect to exercise remedies against less
than all of the Leased Properties at a particular time and/or may elect, or may
be required by applicable law, to exercise remedies against the Leased
Properties in a particular order. Therefore, Lessor agrees that its obligations
under this ARTICLE XXII are applicable to each Leased Property. For example,
Lessor may be asked to enter into a Separate Lease with respect to less than all
of the Leased Properties pursuant to Section 22.7 and/or Lessor may be asked to
approve a proposed transferee of a particular Leased Property pursuant to
Section 22.6(b).

ARTICLE XXIII

Section 23.1 Risk of Loss. During the Term of this Lease, the risk of loss or of
decrease in the enjoyment and beneficial use of each Leased Property in
consequence of the damage or destruction thereof by fire, the elements,
casualties, thefts, riots, wars or otherwise, or

 

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in consequence of foreclosures, attachments, levies or executions (other than by
Lessor and those claiming from, through or under Lessor) is assumed by Tenant,
and, in the absence of gross negligence, willful misconduct or breach of this
Lease by Lessor pursuant to Section 38.1, Lessor shall in no event be answerable
or accountable therefor nor shall any of the events mentioned in this Section
entitle Tenant to any abatement of Rent.

ARTICLE XXIV

Section 24.1 Indemnification. Notwithstanding the existence of any insurance
provided for in ARTICLE XIII, and without regard to the policy limits of any
such insurance, Tenant will protect, indemnify, save harmless and defend Lessor
from and against all liabilities, obligations, claims, damages, penalties,
causes of action, costs and reasonable expenses (including, without limitation,
Litigation Costs), to the maximum extent permitted by law, imposed upon or
incurred by or asserted against Lessor by reason of: (a) any accident, injury to
or death of persons or loss of or damage to property occurring on or about any
Leased Property or adjoining sidewalks, including without limitation any claims
of malpractice, (b) any use, misuse, non-use, condition, maintenance or repair
by Tenant or anyone claiming under Tenant, including agents, contractors,
invitees or visitors of any Leased Property or Tenant’s Personal Property, (c)
any Impositions (which are the obligations of Tenant to pay pursuant to the
applicable provisions of this Lease), (d) any failure on the part of Tenant or
anyone claiming under Tenant to perform or comply with any of the terms of this
Lease, (e) subject to Section 7.3.2 hereof, any failure by Tenant to observe,
perform and comply with the terms of any Existing Ground Lease or other
Permitted Encumbrance applicable to or binding upon Lessor or any of the Leased
Properties or any breach of, default under or termination of any such Existing
Ground Lease or other Permitted Encumbrance caused, whether by act or omission,
by Tenant or its agents, employees, contractors, invitees, subtenants,
licensees, concessionaires or assigns (whether or not permitted hereunder), and
(f) the non-performance of any of the terms and provisions of any and all
existing and future subleases of any Leased Property to be performed by the
subtenant thereunder. Any amounts which become payable by Tenant under this
Section shall be paid within ten (10) days after liability therefor on the part
of Tenant is determined by litigation or otherwise, and if not timely paid,
shall bear interest (to the extent permitted by law) at the Overdue Rate from
the date of such determination to the date of payment. Tenant, at its expense,
shall contest, resist and defend any such claim, action or proceeding asserted
or instituted against Lessor or may compromise or otherwise dispose of the same
as Tenant sees fit. Nothing herein shall be construed as indemnifying Lessor
against its own negligent acts or omissions or willful misconduct. If at any
time Lessor shall have notice of a claim, Lessor shall give reasonably prompt
written notice of such claim to Tenant; provided that (i) Lessor shall have no
liability for a failure to give notice of any claim of which Tenant has
otherwise been notified or has knowledge and (ii) the failure of Lessor to give
such a notice to Tenant shall not limit the rights of Lessor or the obligations
of Tenant with respect to such claim except to the extent that Tenant incurs
actual expenses or suffers actual monetary loss as a result of such failure.
Tenant shall have the right to control the defense or settlement of any claim,
provided that (A) Tenant shall first confirm in writing to Lessor that such
claim is within the scope of this indemnity and that Tenant shall pay any and
all amounts required to be paid in respect of such claim and (B) if the
compromise or settlement of any such claim shall not result in the complete
release of Lessor

 

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from the claim so compromised or settled, the compromise or settlement shall
require the prior written approval of Lessor. Lessor shall have the right to
approve counsel engaged to defend such claim and, at its election and sole cost
and expense, shall have the right, but not the obligation, to participate in the
defense of any claim.

Lessor shall indemnify, save harmless and defend Tenant from and against all
liabilities, obligations, claims, damages, penalties, causes of action, costs
and expenses imposed upon or incurred by or asserted against Tenant as a result
of the gross negligence or willful misconduct of Lessor under and in connection
with this Lease.

Tenant’s and Lessor’s respective duties, liabilities and obligations under this
Article shall survive the expiration or termination of this Lease as to any or
all of the Leased Properties. For example, if (x) John Doe is injured in a
slip-and-fall accident that occurs at Leased Property A on January 1, 2015 and
of which Lessor has no notice or knowledge, (y) this Lease terminates for any
reason on March 1, 2015 with respect to Leased Property A, and (z) on July 1,
2015, John Doe begins a lawsuit against Lessor on account of the aforesaid
accident, then, notwithstanding such termination, Tenant’s indemnification and
other obligations with respect to such accident and lawsuit under subsection (a)
above and the other provisions of this Article shall survive such termination
with respect to Leased Property A.

Section 24.2 New Mexico Limitation on Indemnification. To the extent, if at all,
that N.M. Stat. Ann. § 56-7-1 is applicable to any agreement to indemnify in
this Lease, or any related documents, such an agreement to indemnify will not
extend to liability, claims, damages, losses or expenses, including fees of
lawyers, arising out of (i) the preparation or approval of maps, drawings,
opinions, reports, surveys, change orders, designs or specifications by an
indemnitee or the agents or employees of the indemnitee or (ii) the giving of or
the failure to give directions or instructions by the indemnitee, or the agents
or employees of the indemnitee, where such giving or failure to give directions
or instructions is the primary cause of bodily injury to persons or damage to
the property.

ARTICLE XXV

Section 25.1 Subletting and Assignment.

Section 25.1.1 Notwithstanding anything to the contrary contained in this Lease
but subject to Section 25.1.2, Section 25.1.11, Section 25.1.12 (as such
Section 25.1.12 is limited by the terms of Section 25.1.13 hereof) and
Section 25.4 below, Tenant shall have no right, directly or indirectly, to
assign this Lease in part under any circumstances. Subject to the foregoing,
except as expressly provided herein, Tenant shall not, without the prior written
consent of Lessor, which consent shall not be unreasonably withheld, delayed or
conditioned so long as no Event of Default has occurred and is continuing
hereunder, assign this Lease in its entirety or mortgage, pledge, hypothecate,
encumber or otherwise transfer any interest in this Lease in whole or in part or
sublease all or any part of any Leased Property or suffer or permit this Lease
or the leasehold estate created hereby or thereby or any other rights arising
under this Lease to be assigned in its entirety or to be transferred, mortgaged,
pledged, hypothecated or encumbered, in whole or in part, whether voluntarily or
involuntarily or by operation of law, or

 

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permit the use or occupancy of any Leased Property to be offered or advertised
for assignment or subletting except as hereinafter provided. For purposes of
this Section 25.1, an assignment of this Lease shall be deemed to include any
change in control of any Tenant (without limitation, and subject to the terms,
of Section 25.1.13 hereof, other than in a Kindred Change of Control
Transaction), as if such change in control or transaction were an assignment of
this Lease. Changes in control of any Tenant shall include, without limitation,
(a) a change in the Seniormost Parent Control Person, (b) a change in the
composition of the board of directors (or, for any Entity that is not a
corporation, any comparable governing body) of any Tenant, any Guarantor, any
Section 25.1.12(f) Guarantor or any Fund or any direct or indirect subsidiary of
any Fund of which any Section 25.1.12(f) Guarantor is a direct or indirect
subsidiary such that at the end of any period of twelve (12) consecutive months
the persons constituting a majority of such board of directors are not the same
as the persons constituting a majority at the start of such period (or persons
appointed by such majority), (c) the sale or other disposition by (i) any Fund
or any direct or indirect subsidiary of any Fund of which any Section 25.1.12(f)
Guarantor is a direct or indirect subsidiary of its direct or indirect
controlling interest in such Section 25.1.12(f) Guarantor if such sale or other
disposition results in a change of the Seniormost Parent Control Person, (ii)
any Section 25.1.12(f) Guarantor of its direct or indirect controlling interest
in Tenant if such sale or other disposition results in a change of the
Seniormost Parent Control Person, or (iii) Tenant of all or any part of its
interest in any Guarantor if such sale or other disposition results in a change
of the Seniormost Parent Control Person that directly or indirectly controls
such Guarantor, (d) the sale or other disposition of all or substantially all of
the assets of the Seniormost Parent Control Person, any Section 25.1.12(f)
Guarantor, any Guarantor or any Tenant (other than a bona fide pledge in
connection with a financing approved by Lessor), and (e) a merger or
consolidation involving any Guarantor, any Tenant, any Section 25.1.12(f)
Guarantor or any Fund or any direct or indirect subsidiary of any Fund of which
any Section 25.1.12(f) Guarantor is a direct or indirect subsidiary which
results in the stockholders of the Seniormost Parent Control Person immediately
prior to such event owning less (directly or indirectly) than 50% of the capital
stock of the surviving entity or any public parent of the surviving entity. For
purposes of this Section 25.1 (and, for the avoidance of doubt, all of the
subsections of this Section 25.1 other than Section 25.1.13), without
limitation, and subject to the terms, of Section 25.1.13, (x) a Kindred Change
of Control Transaction shall not constitute an assignment or subletting of this
Lease, and (y) subject to the provisions set forth in Section 25.1.12 (as such
Section 25.1.12 is limited by the terms of Section 25.1.13 hereof), Lessor’s
consent shall not be required for the consummation of a Kindred Change of
Control Transaction. For purposes of this Section 25.1, a sublease of all or any
part of any Leased Property shall be deemed to include any concessionaire
agreement, license agreement or other agreement involving use or possession of
all or any part of any Leased Property.

Section 25.1.2 Subject to the provisions of Section 25.3 below and any other
express conditions or limitations set forth herein, so long as no Event of
Default has occurred and is continuing hereunder, Tenant may, without the
consent of Lessor, (i) assign this Lease in its entirety or sublet all or any
part of any Leased Property to any Affiliate of Tenant, or (ii) sublet up to an
aggregate of 20% of the rentable square footage of any Facility (x) in the
normal course of the Primary Intended Use such as but not limited to leasing of
space for major moveable equipment or functional departments such as pathology,
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(y) to concessionaires or other third party users or operators of portions of
the Leased Property, provided that, in the case of both clauses (i) and (ii)
above, the assignee or subtenant in question is duly licensed and possessed of
all Authorizations necessary for the conduct of its activities and the operation
of such Leased Property or portion thereof in accordance with all applicable
laws. So long as no Event of Default has occurred and is continuing hereunder,
Lessor shall not unreasonably withhold, delay or condition its consent to any
other subletting of the Leased Properties in whole or in part or assignment of
this Lease in its entirety, provided that (a) in the case of a subletting, (1)
the subtenant shall comply with the provisions of Section 25.2, and (2) if the
subtenant is an Affiliate of any Tenant, the subtenant shall execute and deliver
to Lessor a Lease Guaranty in accordance with Section 40.12 hereof, (b) the
assignee or subtenant (1) shall be a creditworthy entity with sufficient
financial stability to satisfy its obligations under the Lease, (2) shall have
not less than four years experience in operating health care facilities for the
purpose of the applicable Facility’s Primary Intended Use, (3) has a favorable
business and operational reputation and character, (4) has all licenses,
permits, approvals and other Authorizations required to operate the Leased
Property(ies) in question for the Primary Intended Use (or any other use
permitted under the terms of this Lease), and (5) in the case of an assignment,
shall assume in writing and agree to keep and perform all of the terms of this
Lease on the part of Tenant to be kept and performed and shall be, and become,
jointly and severally liable with Tenant for the performance thereof, (c) an
original counterpart of each such sublease and assignment and assumption, duly
executed by Tenant and such subtenant or assignee, as the case may be, in the
form and substance satisfactory to Lessor, shall be delivered promptly to
Lessor, and (d) in case of either an assignment or subletting, Tenant 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
covenants and conditions to be performed by Tenant hereunder. Lessor’s
obligation to consent to a subletting or assignment is subject to any reasonable
approval rights of any Facility Mortgagee.

Section 25.1.3 If this Lease is assigned or if any Leased Property or any part
thereof is sublet (or occupied by any entity other than Tenant and its
employees), Lessor, after an Event of Default occurs and so long as it is
continuing, may collect the rents from such assignee, subtenant or occupant, as
the case may be, and apply the net amount collected to the Rent herein reserved,
but no such collection shall be deemed a waiver of the provisions set forth in
Section 25.1.1, the acceptance by Lessor of such assignee, subtenant or
occupant, as the case may be, as a tenant or release of Tenant from the future
performance of its covenants, agreements or obligations contained in this Lease.

Section 25.1.4 No subletting or assignment shall in any way impair the
continuing primary liability of Tenant hereunder, and no consent to any
subletting or assignment in any particular instance shall be deemed a waiver of
the prohibition set forth in this Section 25.1. No assignment, subletting or
occupancy shall affect the Primary Intended Use. Any subletting, assignment or
other transfer of Tenant’s interest in this Lease in contravention of this
Section 25.1 shall be void at Lessor’s option.

Section 25.1.5 If Tenant shall desire to assign this Lease or sublet all (but
not a portion) of any Leased Property other than an assignment or sublease to an
Affiliate, it shall

 

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first submit in writing to Lessor a notice (“Tenant’s Notice”) indicating (a)
the name of the proposed assignee or subtenant, (b) the material terms of the
proposed assignment or sublease, (c) the nature and character of the business
which the proposed assignee or subtenant will conduct at the applicable Leased
Property, (d) reasonable financial data concerning the proposed assignee or
subtenant, and (e) the effective date of the proposed assignment or the
commencement date and expiration date of the proposed sublease. Tenant shall
additionally submit to Lessor any other information concerning the proposed
assignment or sublease which Lessor may reasonably request and, prior to the
effective date of any assignment permitted hereunder or the commencement date of
any sublease permitted hereunder, Tenant shall deliver to Lessor evidence
reasonably satisfactory to Lessor that the assignee or subtenant has all
licenses, permits, approvals and other Authorizations necessary to operate each
Leased Property for the Primary Intended Use (or any other use permitted under
the terms of this Lease). Except to the extent such subletting or assignment is
authorized under Section 25.1.11 below, if such notice is given, Lessor may, at
its option, terminate this Lease as to the applicable Leased Property, in which
event, the provisions of Section 40.16 hereof shall apply. Lessor shall exercise
its option by notice to Tenant within 30 days after Tenant’s Notice (or receipt
by Lessor of all information reasonably requested by Lessor pursuant to this
Section 25.1.5), and during such 30-day period, Tenant shall not have the right
to assign this Lease or sublet such space.

Section 25.1.6 If Lessor exercises its option under Section 25.1.5 to terminate
this Lease, this Lease shall terminate (either as to each Leased Property or as
to the applicable Leased Property, whichever is applicable) on the date which is
60 days following Tenant’s Notice or on such later date as may be specified in
Tenant’s Notice, all Rent allocable to the Leased Property(ies) in question in
accordance with Section 16.9 hereof shall be paid and apportioned to the date of
such termination and the provisions of Section 40.16 hereof shall apply in the
event this Lease remains in effect as to any Leased Properties. If Lessor shall
exercise its options under Section 25.1.5, Lessor may, and shall have no
liability to Tenant if Lessor shall, lease to Tenant’s prospective subtenant or
assignee.

Section 25.1.7 (a) Except in the case of an assignment or sublet pursuant to
Section 25.1.2(i) hereof and subject to subsections (b) and (c) below, Tenant
shall pay to Lessor, as Additional Charges, (i) as and when received by Tenant,
80% of any consideration (including, without limitation, capital stock, stock
options or warrants, license fees and all other forms of remuneration) received
on account of any assignment and (ii) 80% (50%, rather than 80%, in the case of
the existing subleases scheduled on Schedule 25.1.7 attached hereto and made a
part hereof, as such subleases were in effect on December 14, 2000 and only for
the remaining term thereof, it being agreed that, if any such sublease was or is
extended (other than pursuant to the terms of sublease extension rights in
existence as of December 14, 2000), or after December 14, 2000 was or is
materially amended, for the extension term, or after any such material
amendment, the applicable percentage in this subsection (ii) shall be 80%, not
50%) of the excess of:

(x) any rents, additional charges, or other consideration (including, without
limitation, capital stock, stock options or warrants, license fees and all other
forms of remuneration) payable to Tenant under any

 

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sublease, after deducting therefrom brokerage commissions and legal fees paid by
Tenant in connection with such subletting, over (y) the sum of (1) a share of
the Base Rent, real estate taxes and assessments, insurance premiums and charges
for utility usage that, on a monthly basis, are owing with respect, or otherwise
allocable, to the applicable Leased Property (with such share to be equal to (A)
if the applicable sublease relates primarily to use of areas within the
Facility(ies) located on the applicable Leased Property, the product of the
total of the aforesaid Base Rent, real estate taxes and assessments, insurance
premiums and utility usage charges owing with respect, or allocable, to the
applicable Leased Property for a particular month times a fraction, the
numerator of which is the number of rentable square feet under the applicable
sublease and the denominator of which is the aggregate number of rentable square
feet in the Facility(ies) located on the applicable Leased Property, and (B) if
the applicable sublease relates primarily to use of areas outside the
Facility(ies) located on the applicable Leased Property, that portion of the
aforesaid real estate taxes, insurance premiums and charges for utility usage as
are, in the reasonable judgment of Tenant (and with supporting documentation to
be delivered to Lessor upon written request), attributable to the areas outside
the Facility(ies) located on the applicable Leased Property), plus (2) the
amount (amortized, if applicable, as described below) of the actual out of
pocket costs, if any, incurred by Tenant (on behalf of itself and, to the extent
related to “Sublease Rent Payments” (as defined below), on behalf of Lessor’s
80% (or 50%, if applicable as described above) share thereof) from time to time
during the applicable sublease and directly attributable to (aa) extending
telephone service to the portion of the applicable Leased Property that is
subleased per the applicable sublease or (bb) performing repairs to the portion
of the applicable Leased Property that is subleased per the applicable sublease
(and, for purposes of this subsection (2) and the calculation of “Sublease Rent
Payments”, as hereinafter defined, (X) in the case of any costs of the nature
referenced in this subsection (2) that, in accordance with GAAP, are treated as
capital costs, such costs shall be amortized on a straight line basis over the
longer of the useful life of the improvements or repairs to which such costs
relate or the initial term of the applicable sublease, and in each month the
amortized amount of such costs shall be deemed to have been incurred by Tenant,
and (Y) in the case of all other costs of the nature referenced in this
subsection (2), such costs shall be treated as incurred by Tenant as and when
expended),

 

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(such excess of (ii)(x) over (ii)(y) is referred to herein as the “Sublease Rent
Payments”). Lessor’s share, as aforesaid, of any such Sublease Rent Payments
shall be paid by Tenant to Lessor as and when the Sublease Rent Payments are
received by Tenant; provided, however, that:

(cc) within sixty (60) days after the end of each calendar year, Tenant shall
deliver to Lessor a Senior Officer’s Certificate certifying the amount of
Lessor’s share of Sublease Rent Payments for the preceding calendar year and
setting forth how such amount was calculated and containing a detailed breakdown
of the revenues and expenses used in making such calculation, and, within thirty
(30) days after Lessor’s receipt of such certificate, if the aggregate amount
paid by Tenant to Lessor during such preceding calendar year on account of
Lessor’s share of Sublease Rent Payments for such year exceeds the amount of
Lessor’s share as shown in such certificate, then, subject to subsection (dd)
below, Lessor shall pay the overage to Tenant, and, if the aggregate amount paid
by Tenant to Lessor during such preceding calendar year on account of Lessor’s
share of Sublease Rent Payments for such year is less than the amount of
Lessor’s share as shown in such certificate, Tenant shall pay such deficiency to
Lessor. Lessor shall be entitled, upon three (3) Business Days prior written
notice and within normal business hours, to review, and make abstracts from and
copies of, Tenant’s books, accounts and records relative to Tenant’s subleases
of any Leased Property and the calculation of Lessor’s share of Sublease Rent
Payments for any period; and

(dd) for purposes of subsection (cc) above and the other provisions of this
Section 25.1.7, Lessor’s share of Sublease Rent Payments shall in no event be a
negative number and, for all purposes of subsection (cc) above and the other
provisions of this Section 25.1.7, for any calendar year in which the amount
referenced in subsection (ii)(x) above for such year is less than the amount
referenced in subsection (ii)(y) above for such year, the “Sublease Rent
Payments” shall be deemed to equal zero for such year. (For example, if Tenant
subleases a portion of a Leased Property, subsection (ii) above is applicable
thereto, during a particular calendar year Sublease Rent Payments are received
by Tenant in the aggregate amount of $100.00, and during such calendar year
Tenant paid to Lessor the following monthly amounts on account of Lessor’s share
of Sublease Rent Payments: for each of the months January through July, $20.00
(i.e.: $140.00 in aggregate) and for each of the months August through December,
$0.00, then, within thirty (30) days after Lessor’s receipt of Tenant’s
aforesaid Senior Officer’s Certificate for such calendar year, Lessor would be
obligated to pay to Tenant $60.00, representing the overage of the aggregate
amount received by Lessor during such calendar year ($140.00) over Lessor’s
share of the Sublease Rent Payments for such calendar year ($80.00 or 80% of
$100.00). Alternatively, if the preceding facts are assumed except that, during
the subject calendar year, the amount referenced in subsection (ii)(x) above is
less than the amount referenced in subsection (ii)(y) above by $50.00, then,
pursuant to subsection (dd) above, the Sublease Rent Payments for such calendar
year shall be deemed to equal $0.00, and, consequently, within thirty (30) days

 

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following receipt of Tenant’s aforesaid Senior Officer’s Certificate for such
calendar year, Lessor would be obligated to pay to Tenant $140.00, representing
the overage of the aggregate amount received by Lessor during such calendar year
($140.00) over Lessor’s share of the deemed Sublease Rent Payments for such
calendar year ($0.00 or 80% of $0.00)).

In the event of a foreclosure by a Leasehold Mortgagee as to a particular Leased
Property(ies), Lessor’s right to 80% (50%, in the circumstances described above
relative to the existing subleases scheduled on Schedule 25.1.7 hereof) of such
Sublease Rent Payments relating to such Leased Property(ies) shall be
subordinate to such Leasehold Mortgagee’s right of payment. In the event of an
assignment or sublet pursuant to Section 25.1.2(i) hereof, the provisions of
this Section 25.1.7 shall apply to any further assignment or sublet to a person
or entity that is not an Affiliate of Tenant.

(b) Notwithstanding anything to the contrary provided in this Lease, in the
event Tenant enters into a sublease, license agreement, easement or other
agreement (an “Ancillary Agreement”) pursuant to which a third party is given
the right to access, maintain or operate on any Leased Property, any antenna,
cell tower, satellite dish, cable or wire installation, or other communication
or telecommunication equipment, any billboard or signage, or any facility or
service not within the primary scope of Tenant’s business as it was conducted on
the Existing Lease Effective Date, Tenant shall pay Lessor, as Additional
Charges as and when payable to Tenant, 80% of any consideration (including,
without limitation, capital stock, stock options or warrants, license fees and
all other forms of remuneration) received on account of such Ancillary
Agreement. At the request of Lessor, Tenant shall direct the third party in any
Ancillary Agreement to pay Lessor’s 80% share of such consideration directly to
Lessor. No such Ancillary Agreement shall be entered into by Tenant without the
prior written consent of Lessor, which consent shall not be unreasonably
withheld, delayed or conditioned so long as Tenant complies with the applicable
requirements of subsections (a) through (d) of Section 25.1.2 above.

(c) Notwithstanding anything to the contrary contained in subsection (a)(ii)
above, Lessor shall not be entitled to any Sublease Rent Payments on account of
any sublease of space within a Leased Property for a flower shop, beauty salon,
barber shop, gift shop, restaurant, cafeteria, coffee shop, snack shop or the
like or any other concessionaires (which term shall not include, without
limitation, medical offices and clinics and other providers of medical services)
typically found in nursing centers or hospitals (as applicable depending upon
the Primary Intended Use of the particular Leased Property) (including those
subleases of the nature referenced in this subsection (c) existing at the Leased
Properties as of the Existing Lease Effective Date), so long as the aggregate
square footage of such Leased Property that is subleased for such uses does not
exceed twenty percent (20%) of the rentable space within the Facility(ies)
located on such Leased Property.

Section 25.1.8 Any assignment and/or sublease must provide that (a) it shall be
subject and subordinate to all of the terms and conditions of this Lease, (b)
the use of the applicable Leased Property shall be restricted to the applicable
Primary Intended Use and shall not conflict with any Legal Requirement,
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Lease, (c) no sublessee or assignee shall be permitted to further sublet all or
any part of the applicable Leased Property or assign this Lease or its sublease
except as expressly provided in this Lease and (d) in the event of cancellation
or termination of this Lease for any reason whatsoever or of the surrender of
this Lease whether voluntary, involuntary or by operation of law, prior to the
expiration date of such sublease, including extensions and renewals granted
thereunder, at Lessor’s option, the subtenant shall make full and complete
attornment to Lessor for the balance of the term of the sublease, which
attornment shall be evidenced by an agreement in form and substance reasonably
satisfactory to Lessor and which the subtenant shall execute and deliver within
5 days after request by Lessor, its successors or assigns and the subtenant
shall waive the provisions of any law now or hereafter in effect which may give
the subtenant any right of election to terminate the sublease or to surrender
possession in the event any proceeding is brought by Lessor to terminate this
Lease.

Section 25.1.9 Any assignment of this Lease or sublease of the applicable Leased
Property in contravention of the express terms of this ARTICLE XXV shall be
voidable at Lessor’s option and the acceptance of rent by Lessor from any such
unauthorized assignee or subtenant shall not constitute a recognition or
acceptance of the tenancy of such unauthorized assignee or subtenant.

Section 25.1.10 Tenant shall pay to Lessor, within ten (10) Business Days after
request therefor, all costs and expenses, including without limitation
reasonable attorneys’ fees, incurred by Lessor in connection with any request by
Tenant to assign this Lease or sublet the applicable Leased Property.

Section 25.1.11 Notwithstanding the other prohibitions and restrictions on
assignment and subletting contained in this Section 25.1, provided Tenant shall
have complied with the notice and information requirements of Section 25.1.5
above, Tenant shall have the right to assign or sublet to a non-Affiliate (x)
without the consent of Lessor, not more than ten percent (10%) in the aggregate
of the Master Lease Leased Properties which are nursing centers and (y) with
Lessor’s consent (which consent shall not be unreasonably withheld, delayed or
conditioned), not more than two (2) Master Lease Leased Properties which are
hospitals, but only if either (i) the applicable regulatory authorities have
threatened, or commenced proceedings, to revoke Tenant’s Medicaid or Medicare
certification for reimbursement or other Authorizations necessary to operate
such nursing center or hospital Leased Property, as applicable, or (ii) Tenant
cannot profitably operate such Leased Property, in which event:

(a) such assignment and/or subletting shall comply in all respects with clauses
(a) through (d) of the second sentence of Section 25.1.2 above (upon Tenant’s
request, Lessor agrees to provide an estoppel certificate certifying that, to
the best of Lessor’s knowledge, such clauses (a) through (d) have been satisfied
or, if such is not the case to the best of Lessor’s knowledge, certifying the
manner in which such clauses have not been satisfied to the best of Lessor’s
knowledge);

(b) Lessor shall give such assignee or subtenant assurances of quiet enjoyment,
in accordance with a mutually satisfactory non-disturbance and attornment
agreement, such that so long as such assignee or subtenant pays Rent allocable
to such Leased Property and

 

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otherwise complies with all covenants and obligations of Tenant under this Lease
with respect to such Leased Property, no other default under this Lease shall
affect or give rise to any right to terminate its leasehold of such Leased
Property; and

(c) any default by such assignee or subtenant in the payment of Rent or in
complying with all other covenants and obligations of Tenant with respect to
such Leased Property shall continue to constitute a default under this Lease,
entitling Lessor to all its rights and remedies hereunder.

To the extent that any of the Master Lease Leased Properties are the subject of
a New Lease derived, directly or indirectly, from ML5, Tenant shall continue to
have the right to assign or sublet such Master Lease Leased Properties upon
compliance with this Section 25.1.11 or the corresponding section of such New
Lease, as applicable, but such right to assign or sublet, whether under
Section 25.1.11 of ML5 or the corresponding section of any and all New Leases
derived, directly or indirectly, from ML5, shall never exceed ten percent (10%)
in the aggregate of the nursing centers included within the Master Lease Leased
Properties or two (2) hospitals included within the Master Lease Leased
Properties.

Section 25.1.12 Notwithstanding any provision of this Lease to the contrary but
without limitation, and subject to the terms, of Section 25.1.13 hereof, no
Kindred Change of Control Transaction shall be permitted under this Lease unless
each of the following conditions has first been satisfied in full:

(a) immediately prior to such Kindred Change of Control Transaction, no Event of
Default shall have occurred and be continuing under this Lease, and no Event of
Default shall result from the occurrence of such Kindred Change of Control
Transaction;

(b) Tenant is, giving effect to such Kindred Change of Control Transaction, in
compliance with the financial covenants set forth in Section 8.4 on a Pro Forma
Basis;

(c) no more than ten (10) Business Days and no fewer than five (5) Business Days
prior to the consummation of the Kindred Change of Control Transaction, Tenant
shall provide to Lessor an unexecuted, draft Officer’s Certificate from the
Chief Financial Officer of the Seniormost Parent, certifying that the conditions
referenced in subsections (a) and (b) above have been satisfied as of the date
of the consummation of such Kindred Change of Control Transaction (the “Draft
Certificate”). If the Draft Certificate does not contain reasonably appropriate
backup information as to the certification related to item (b) above, then
Lessor shall have the right, within three (3) Business Days of receipt of such
Draft Certificate, to request by written notice to Tenant such additional backup
information as Lessor reasonably determines is necessary to make the
certification related to item (b) (“Additional Information”). On the date of the
consummation of such Kindred Change of Control Transaction, Tenant shall provide
a final, executed version of the Draft Certificate (certifying that the
conditions referenced in subsections (a) and (b) above have been satisfied as of
the date of the consummation of such Kindred Change of Control Transaction),
together with such Additional Information that Lessor has requested;

 

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(d) on or prior to the date of the consummation of such Kindred Change of
Control Transaction, Tenant shall have paid to Lessor a transaction fee in an
amount equal to 10% of the annual Base Rent in effect as of the date of the
consummation of the Kindred Change of Control Transaction;

(e) if (A) the Seniormost Parent immediately prior to such a Kindred Change of
Control Transaction is not a publicly traded Entity and (B) the Seniormost
Parent immediately following such a Kindred Change of Control Transaction is not
a publicly traded Entity, then, immediately following such Kindred Change of
Control Transaction, in the reasonable determination of Lessor:

(i) the Seniormost Parent, either directly or through the composition of its
board of directors (or, for any Entity that is not a corporation, any comparable
governing body) or senior executive officers, shall have not less than four
years experience in operating health care facilities for the purpose of the
respective Primary Intended Uses of the Leased Properties;

(ii) the Seniormost Parent or, if applicable, the general partner(s) of the Fund
or Funds that control the Seniormost Parent shall have a favorable business and
operational reputation and character; and

(iii) to the extent required by law, each of the Seniormost Parent and Tenant
shall have all licenses, permits, approvals and other Authorizations required to
operate the Leased Property(ies) for their respective Primary Intended Use (or
any other use permitted under the terms of this Lease);

(f) concurrently with the consummation of such Kindred Change of Control
Transaction, the Seniormost Parent shall execute either, at the Seniormost
Parent’s election, (i) a joinder to this Lease in form and substance reasonably
satisfactory to Lessor, pursuant to which such Seniormost Parent shall become a
Tenant hereunder or (ii) a guaranty of the obligations of Tenant under this
Lease in the form attached hereto as Exhibit I (such guaranty, the “Section
25.1.12(f) Guaranty”); provided, that, if, as a result of such Kindred Change of
Control Transaction, any Tenant ceases to exist or is succeeded or replaced by
another Entity (whether by merger, stock sale or otherwise), then, concurrently
with such Kindred Change of Control Transaction, such Entity (whether or not the
Seniormost Parent) shall be required to join this Lease as a Tenant;

(g) notwithstanding anything contained herein or in the Section 25.1.12(f)
Guaranty to the contrary, the guarantor under the Section 25.1.12(f) Guaranty
(the “Section 25.1.12(f) Guarantor”) shall be released from all obligations and
liabilities under the Section 25.1.12(f) Guaranty that arise from and after the
date of any Kindred Change of Control Transaction that is consummated subsequent
to the date of such Section 25.1.12(f) Guaranty and in accordance with the terms
hereof, with such release to become effective, and to be conditioned, upon the
execution contemporaneously with such subsequent Kindred Change of Control
Transaction by the Seniormost Parent (as such exists immediately following such
subsequent Kindred Change of Control Transaction) of a joinder or a Section
25.1.12(f) Guaranty in accordance with the provisions of Section 25.1.12(f); and

(h) the terms of Section 25.1.13 hereof have been complied with by Tenant.

 

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Tenant hereby waives any right to characterize, object to or contest the payment
required under this Section 25.1.12 as a penalty and agrees that such payments
do not constitute a penalty.

Section 25.1.13 Notwithstanding anything to the contrary contained in Section
25.1.1, Section 25.1.12, Section 25.5 and/or elsewhere in this Lease, until such
time (the “ARML No. 3 Payment Date”) as Lessor has sold all of the Subject
Facilities, and Lessor has received the full $700,000,000 purchase price
therefor, in each case as provided in, and in accordance with the terms of, ARML
No. 3 and the respective PSAs (as such term is defined in ARML No. 3) relative
to such Subject Facility, the provisions of Section 25.1.12 of this Lease shall
not be applicable and, without limitation of the foregoing, (a) a Kindred Change
of Control Transaction shall be deemed to be an assignment of this Lease that
requires Lessor’s consent, (b) an assignment of this Lease shall be deemed to
include any change in control of any Tenant, as if such change in control or
transaction were an assignment of this Lease, (c) changes in control of any
Tenant shall include, without limitation, each of the transactions, changes and
other matters described in subsections (a) through (e), both inclusive, of
Section 25.1.1 hereof, and (d) the provisions of Section 25.1.1 and
Section 25.1.7 of ML1, ML2 and/or ML4, as applicable, shall continue to apply
and be in full force and effect (and such provisions are hereby incorporated
into this Lease, and, in the event of any conflict between the provisions of
Section 25.1.1 and Section 25.1.7 of ML1, ML2 and ML4 and the provisions of
Section 25.1.1 and Section 25.1.7 of this Lease, until the ARML No. 3 Payment
Date, the provisions of such Section 25.1.1 and Section 25.1.7 of ML1, ML2 and
ML4 shall govern). Lessor agrees that, upon the occurrence of the ARML No. 3
Payment Date, the following amendments to this Lease shall, automatically,
immediately and without further action of the parties, become effective:

(a) The definition of “Kindred Change of Control Transaction” shall be amended
and restated in its entirety to read as follows:

““Kindred Change of Control Transaction: The consummation of any of the
following:

 

  (i) A merger, consolidation or similar transaction involving the Seniormost
Parent that results in either (a) those beneficial owners of voting stock of the
Seniormost Parent (as of immediately prior to such transaction) that continue to
hold shares in substantially the same proportion as their beneficial ownership
immediately before such transaction collectively beneficially owning, directly
or indirectly, less than 50% of the outstanding voting stock of the Seniormost
Parent (as of immediately following the consummation of such transaction) or (b)
members of the board of directors (or analogous governing body) of the
Seniormost Parent (as of immediately prior to the consummation of such
transaction) constituting less than 50% of the members of the board of directors
(or analogous governing body) of the Seniormost Parent (as of immediately
following the transaction);

 

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  (ii) An acquisition or disposition, directly or indirectly, of capital stock
of the Seniormost Parent that results in either (a) those beneficial owners of
voting stock of the Seniormost Parent (as of immediately prior to the
consummation of such transaction) that continue to hold shares in substantially
the same proportion as their beneficial ownership immediately before such
transaction collectively beneficially owning, directly or indirectly, less than
50% of the outstanding voting stock of the Seniormost Parent (as of immediately
following the consummation of such transaction), (b) other than in a Permitted
Internal Reorganization, any “person” or “Group” as such terms are used in
Section 13(d) and 14(d) of the Exchange Act (other than an Entity 50% or more of
the outstanding voting stock of which is collectively beneficially owned (as of
immediately following such transaction) by beneficial owners of Seniormost
Parent (as of immediately prior to the consummation of such transaction) in
substantially the same proportion as their beneficial ownership of Seniormost
Parent immediately before such transaction) becoming the “beneficial owner” (as
defined in Rules 13-3 and 13d-5 under the Exchange Act), directly or indirectly,
of more than 50% of the total outstanding voting securities of the Seniormost
Parent or (c) members of the board of directors (or analogous governing body) of
the Seniormost Parent (as of immediately prior to the consummation of such
transaction) comprising less than 50% of the members of the board of directors
(or analogous governing body) of the Seniormost Parent (as of immediately
following the transaction);

 

  (iii) A sale or other disposition of all or substantially all of the assets of
the Seniormost Parent and its Subsidiaries, taken as a whole, to any Person;

 

  (iv) A sale or other disposition of all or substantially all of the assets of
Tenant, each Guarantor and their respective Subsidiaries, taken as a whole, to
any Person; or

 

  (v) A sale or other disposition (other than any transaction described in
clauses (i) – (iv) above), in one or more related transactions, of assets of the
Seniormost Parent and its Subsidiaries representing, by fair market value,
greater than 50% of the aggregate assets of the Seniormost Parent and its
Subsidiaries, taken as a whole, as of immediately prior to the consummation of
the first such sale or disposition, provided that such disposed assets shall
not, in any circumstances, include any direct or indirect interest in this Lease
or in any Tenant or Guarantor.”

(b) The definition of “Seniormost Parent” shall be amended and restated in its
entirety to read as follows:

“Seniormost Parent”: The Seniormost Parent Control Person; provided, however,
that if:

 

  (i)

the Seniormost Parent Control Person is a Fund or the general partner(s)
thereof, or if all or substantially all of the voting securities of the
Seniormost Parent Control Person are beneficially owned by one or more Funds,
the Seniormost Parent shall instead be, individually or collectively, the
Subsidiary Entity(ies)

 

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  directly owned by such Funds that directly or indirectly controls Tenant or,
if there is no such Subsidiary Entity, the Seniormost Parent shall be Tenant;
provided, however, that at the written election of Tenant delivered in
accordance with the terms of this Lease, under the circumstances described in
this clause (i) the Seniormost Parent may be designated as a direct or indirect
Subsidiary (the “Designated Seniormost Parent”) of the Entity that otherwise
would be Seniormost Parent (the “Bypassed Seniormost Parent”) in connection with
the creation of a “multi-tiered” holding company structure if and only for so
long as (A) the Bypassed Seniormost Parent and (B) each and every Subsidiary of
the Bypassed Seniormost Parent that directly or indirectly holds any equity
interest in the Designated Seniormost Parent (each, a “Bypassed Subsidiary”) (x)
does not own, and has not owned, any properties or assets other than cash or
debt or equity interests in the Designated Seniormost Parent and each applicable
Bypassed Subsidiary and (y) is not engaged in, and has not engaged in, any
activities or operations other than financing activities and the ownership of
such equity interests; provided, further, that if either of clause (x) or (y) in
the precedent proviso is not true at any time with respect to the Bypassed
Seniormost Parent or any Bypassed Subsidiary, then the immediately preceding
proviso shall automatically terminate and cease to have any effect, and Tenant
covenants and agrees that it will notify Lessor in writing of such failure to be
true as promptly as practicable thereafter, and shall as promptly as practicable
cause the Seniormost Parent (which, for the avoidance of doubt, shall be the
entity that previously was the Bypassed Seniormost Parent) to execute either, at
the Seniormost Parent’s election, (I) a joinder to this Lease in form and
substance reasonably satisfactory to Lessor, pursuant to which such Seniormost
Parent shall become a Tenant hereunder or (II) a Section 25.1.12(f) Guaranty;
and

 

  (ii) Tenant is directly or indirectly controlled by a Publicly Listed Entity,
which Publicly Listed Entity is itself directly or indirectly controlled by the
Seniormost Parent Control Person, the Seniormost Parent shall be such Publicly
Listed Entity.

(c) Section 8.5 of the Lease shall be deleted in its entirety, and shall be
replaced with “Intentionally Omitted.”

(d) The definition of “Financial Covenant Compliance Date” shall be amended and
restated in its entirety to read as follows:

“Financial Covenant Compliance Date”: The date of consummation of any Kindred
Change of Control Transaction and each Quarterly Covenant Compliance Date.”

(e) Section 25.1.1(a) of this Lease shall be amended by adding at the end
thereto “(unless such change results in the Seniormost Parent Control Person
becoming Seniormost Parent and is solely the result of a Public Company Trade)”.

(f) Section 25.1.1(c)(iii) of this Lease shall be amended by adding at the end
thereto “(excluding in each of subclauses (c)(i), (c)(ii) and (c)(iii) a
transaction in which the Seniormost Parent Control Person becomes Seniormost
Parent solely as the result of a Public Company Trade)”.

 

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(g) Section 25.1.12(a) of this Lease shall be amended and restated in its
entirety to read as follows: “immediately prior to such Kindred Change of
Control Transaction, (i) without limitation of subsection (ii) below, no
non-monetary Event of Default shall have occurred and be continuing under this
Lease, and no Event of Default shall result from the occurrence of such Kindred
Change of Control Transaction, in each case which Event of Default could
reasonably be expected to have a material adverse effect on (x) the business or
financial position or results of operations of Tenant, any Section 25.1.12(f)
Guarantor or the Seniormost Parent, or (y) the ability of Tenant or any Section
25.1.12(f) Guarantor to perform, or of Lessor to enforce, the terms of this
Lease or any Section 25.1.12(f) Guaranty, as applicable, and (ii) no Event of
Default shall have occurred and be continuing with respect to Tenant failing to
make payment of the Rent pursuant to the terms of this Lease when the same
becomes due and payable (subject to the applicable notice and cure provisions of
Section 16.1(b))”;

(h) Subsections (i) and (ii) of Section 25.1.12(e) of this Lease shall be
deleted and replaced with “intentionally omitted”;

(i) Subsection (iii) of Section 25.1.12(e) of this Lease shall be amended by
adding thereto, before the words “licenses, permits, approvals”, the word
“material”; and

(j) Section 25.1.12(f) of this Lease shall be amended by adding thereto, after
the words “merger, stock sale”, a comma and the words “asset sale”.

(k) A new Section 25.1.14 of this Lease shall be inserted to read as follows:

“Section 25.1.14. Fall-Away of Certain Covenants Following a Kindred Change of
Control Transaction with a Creditworthy Entity.

(a) From and after the occurrence of any Kindred Change of Control Transaction
(i) where the Seniormost Parent of the counterparty (treating, for purposes of
such definition and the definitions embedded therein, such counterparty as
“Tenant”) is an Entity that, immediately prior to the consummation of such
Kindred Change of Control Transaction, is a Creditworthy Entity and (ii) that
results in the Seniormost Parent being a Creditworthy Entity as of (and giving
full effect to) the consummation of such Kindred Change of Control Transaction,
then beginning on the first date as of which such Kindred Change of Control
Transaction has been consummated and the requirements of Section 25.1.12 in
connection therewith have been satisfied (the “Fall-Away Date”), until the
Reversion Date (if any), and subject to Section 25.1.14(d) below, Sections 8.4,
25.1.12(a), 25.1.12(b), 25.1.12(c), 25.1.12(d) and 25.1.12(e) (the “Suspended
Covenants”) shall be suspended (the period during which the Suspended Covenants
are suspended, the “Fall-Away Period”). For the avoidance of doubt, nothing in
this Section 25.1.14 shall limit the obligations of the

 

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Seniormost Parent in connection with such Kindred Change of Control Transaction
to enter into a joinder to this Lease or deliver a Section 25.1.12(f) Guaranty
as contemplated by Section 25.1.12(f).

(b) If a subsequent Kindred Change of Control Transaction occurs at any time
following the Fall-Away Date and as of (and giving full effect to) such
subsequent Kindred Change of Control Transaction the Seniormost Parent is not a
Creditworthy Entity, then the Suspended Covenants shall be reinstituted
effective as of and from the date such subsequent Kindred Change of Control
Transaction is consummated (the “Reversion Date”).

(c) Tenant shall provide an Officer’s Certificate to Lessor indicating the
occurrence of any Fall-Away Date or Reversion Date.

(d) Notwithstanding subsection (a) of this Section 25.1.14 or anything else
herein to the contrary, irrespective of whether the Fall-Away Date has occurred
or a Fall-Away Period is ongoing: (1) in connection with any Kindred Change of
Control Transaction described in clause (iv) of the definition thereof (as
amended pursuant to Section 25.1.13(a)) (a “Unit Sale”) (x) where the Seniormost
Parent of the counterparty (treating, for purposes of such definition and the
definitions embedded therein, such counterparty as “Tenant”) is an Entity that,
immediately prior to the consummation of such Unit Sale, is a Creditworthy
Entity and (y) that results in the Seniormost Parent being a Creditworthy Entity
as of (and giving full effect to) the consummation of such Unit Sale,
Sections 25.1.12(d), 25.1.12(f) and 25.1.12(g) shall apply to such Unit Sale;
and (2) with respect to any other Unit Sale, Section 25.1.12 shall apply to such
Unit Sale.

(l) The following defined terms shall be inserted in their proper alphabetical
order in Section 2.1:

“Creditworthy Entity” means any Entity that, as of the applicable date, (a) has
a market capitalization in excess of $3 billion and (b) has a corporate credit
rating of Ba2 or better by Moody’s and BB or better by S&P (or, if either such
entity ceases to rate such Entity for reasons outside of the control of such
Entity, the equivalent investment grade credit rating from any other “nationally
recognized statistical rating organization” within the meaning of Section
3(a)(62) of the Exchange Act selected by Lessor as a replacement agency).

“Moody’s” means Moody’s Investors Service, Inc. and any successor to the rating
agency business thereto.

“S&P” means Standard & Poor’s Ratings Services, a division of S&P Global, Inc.,
and any successor to the rating agency business thereto.

Section 25.2 Attornment. Tenant shall insert in each sublease permitted under
Section 25.1 provisions to the effect that (a) such sublease is subject and
subordinate to all of the terms

 

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and provisions of this Lease and to the rights of Lessor hereunder (except to
the extent such subtenant is entitled to quiet enjoyment assurances under
Section 25.1.11 above), (b) in the event this Lease shall terminate before the
expiration of such sublease, the subtenant thereunder will, at Lessor’s option,
attorn to Lessor and waive any right the subtenant may have to terminate the
sublease or to surrender possession thereunder, as a result of the termination
of this Lease, and (c) in the event the subtenant receives a written notice from
Lessor or Lessor’s assignees, if any, stating that an Event of Default has
occurred, the subtenant shall thereafter be obligated to pay all rentals
accruing under said sublease directly to the party giving such notice, or as
such party may direct. All rentals received from the subtenant by Lessor or
Lessor’s assignees, if any, as the case may be, shall be credited against the
amounts owing by Tenant under this Lease.

Section 25.3 Sublease Limitation. Anything contained in this Lease to the
contrary notwithstanding, Tenant shall not sublet the Leased Property on any
basis such that the rental to be paid by the subtenant thereunder would be
based, in whole or in part, on either (i) the income or profits derived by the
business activities of the subtenant, or (ii) any other formula such that any
portion of the sublease 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.

Section 25.4 Leasehold Mortgagee Rights. Nothing contained in this ARTICLE XXV
shall limit or impair any rights of the Leasehold Mortgagee under ARTICLE XXII,
including, without limitation, any such rights to obtain a Leasehold Mortgage
upon less than all of the Leased Properties and, in the circumstances referenced
in Section 22.7, to obtain a Separate Lease as to less than all of the Leased
Properties.

Section 25.5 Kindred Change of Control Transaction. Without limitation, and
subject to the terms, of Section 25.1.13 hereof, nothing in this Lease shall
prevent multiple Kindred Change of Control Transactions, so long as each such
Kindred Change of Control Transaction complies with the requirements set forth
in this Lease.

Section 25.6 IGT.

(a) Tenant shall not allow any Facility to participate in any IGT Program,
including entering into any agreement with respect thereto, unless (i) Landlord
approves of such participation in its sole and absolute discretion, or (ii)
Tenant’s participation is a Compliant Participation. Subject to Section 25.6(g),
this Section 25.6 does not diminish or abrogate any other requirements
(including consent rights) that may exist under this Lease with respect to
specific parts of such participation, e.g., approval rights with respect to
specific agreements.

(b) The following terms shall have the meanings ascribed to them below:

“Compliant Participation” means Tenant’s participation in an IGT Program
pursuant to agreements that have all of the following characteristics:

(i)

(x) If possible, Tenant subleases the Facility pursuant to a sublease that
otherwise complies with all applicable terms and conditions in this

 

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Lease (subject to Section 25.6(g)), such that in each month, such amount of such
sublease rents paid to Landlord pursuant to Section 25.1.7 of this Lease are set
to be equivalent to the Monthly IGT Share Amount for such month;

(y) Or if the sublease described in clause (x) is not possible to implement, the
parties acting reasonably, have agreed on, and are able to implement, an
alternate structure that achieves the substantially same distribution of
economic benefits as contemplated by clause (x);

(ii) Tenant’s participation, taking account of the provisions of this Lease,
would not result in Landlord receiving any rent or other amounts that do not
qualify as “rents from real property” within the meaning of Section 856(d) of
the Code and the U.S. Department of Treasury Regulations (the “Regulations”) and
Landlord shall have received a legal opinion from counsel of its choosing that
any amounts it receives will be treated as “rents from real property” within the
meaning of Section 856(d) of the Code. Should the Code or the Regulations, or
interpretations of them by the Internal Revenue Service contained in Revenue
Rulings, be changed so that any such amounts no longer qualify as “rent from
real property” for the purposes of Section 856(d) of the Code and the
Regulations, then such amounts shall be adjusted so that they will qualify,
provided however that any adjustments required pursuant to this subsection (ii)
shall be made so as to produce the equivalent (in economic terms) amounts as
payable prior to the adjustment;

(iii) Tenant’s participation has not been structured in such a way as to evade
payments to Landlord contemplated by this Section 25.6;

(iv) Landlord and Tenant have each received such other documentation and entered
into such agreements as Landlord may reasonably require; and

(v) Tenant and Landlord have agreed on the Monthly IGT Share Amounts for each
applicable month.

“IGT Program” means an intergovernmental transfer program pursuant to which a
Facility (including any person or entity operating such Facility) receives a
greater Medicaid reimbursement rate.

(c) Prior to commencement of any Compliant Participation, Landlord and Tenant
shall reasonably and mutually determine for each remaining month during the term
of this Lease (including any renewal or extension periods) what amount (for each
month, the “Monthly IGT Share Amount”) is 20% of the expected increase in gross
revenue that is attributable to Tenant’s participation in the IGT Program.

(d) With respect to any assignment or sublet that relates to an IGT Program, the
references in Section 25.1.7 of this Lease to “80%” shall be deemed to be
references to “100%.” For example, if an IGT Program involved Tenant subleasing
a Facility to a hospital, Landlord would receive all of the amount by which such
sublease rent exceeded the rent under this Lease with respect to such Facility.

(e) Article XXXVI of this Lease is deemed to apply to this Section 25.6.

 

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(f) Any Fair Market Rental determination pursuant to Article XXXV of this Lease
shall be made assuming that the Facility does not participate in the IGT
Program.

(g) With respect to subleases that relate to Compliant Participations, (i) in
lieu of satisfying the requirements set forth in Sections 25.1.2(b), 25.1.8(d)
and 25.2 of this Lease, such subleases and their subtenants must be acceptable
to Landlord in Landlord’s reasonable discretion, and (ii) in lieu of the
specific deliverables required pursuant to Section 25.1.5 of this Lease, Tenant
shall make such additional information available as Landlord may reasonably
request, and (iii) Landlord shall not have the right to terminate this Lease as
provided in the penultimate sentence of Section 25.1.5 in response to a Tenant’s
Notice relating to such a sublease.

(h) Lessor and Tenant acknowledge and agree that (i) prior to the Effective
Date, Lessor and Tenant entered into an Agreement and Consent to Sublease dated
as of December 31, 2013 with Hancock Regional Hospital relating to certain
Leased Properties and an Agreement and Consent to Sublease dated as of December
31, 2013 with Columbus Regional Hospital relating to certain Leased Properties
(such instruments, as they may have been amended prior to the Effective Date,
are herein referred to as the “Existing IGT Agreements”), and (ii)
notwithstanding the amendment and restatement of Existing ML5 pursuant to the
terms of this Lease and notwithstanding the changes to Existing ML5 resulting
from such amendment and restatement, the Existing IGT Agreements shall remain in
full force and effect and, for purposes of, and as used in, such Existing IGT
Agreements, the “Master Lease” and “Lease Guaranty” referred to in each such
Existing IGT Agreement shall mean and refer to, respectively, this Lease and the
Lease Guaranty that Kindred Nursing Centers Limited Partnership has delivered,
or will be delivering, with respect to this Lease and the Leased Properties
affected by the Existing IGT Agreements (and, without limitation of the
foregoing, Lessor and Tenant acknowledge and agree that their intention relative
to each Existing IGT Agreement remains as set forth in the last sentence of
Section 3.2 of each Existing IGT Agreement (relating to the amount to be
received by Lessor in each Lease Year of the respective Subleases referenced in
the Existing IGT Agreements)).

Section 25.7 Kindred Hospital-Louisville. Relative to the Facility commonly
known as Kindred Hospital- Louisville (Facility #4633), Tenant requested
Lessor’s consent to Tenant’s sub-subleasing to Operator of the portion of such
Facility which was previously sub-subleased to Peak 10 Xodiax, Inc. (and is
commonly known as the “data center’) for use by Operator as a call center for
potential patients to discuss care options, find Tenant locations and obtain
advice on insurance and other payment issues. In response to Tenant’s request
and pursuant to Amendment No. 2, Lessor granted such consent to such use of such
Facility by Operator, as a sub-sublessee, and agreed that, as Operator is
already a Tenant under this Lease, Lessor would not require a Lease Guaranty
from Operator pursuant to Section 40.12 of this Lease. Except as provided above
relative to providing a Lease Guaranty, the requirements of this Lease relating
to subleasing shall remain applicable to Tenant’s aforesaid sub-sublease to
Operator. In addition, also relative to such Kindred Hospital- Louisville
Facility, Tenant requested Lessor’s consent to Tenant’s sub-subleasing of 65
parking spaces to Norton Properties, Inc. as provided in the draft sub-sublease
theretofore delivered by Tenant to Lessor. Pursuant to Amendment No. 2, Lessor
granted such consent to such sub-sublease to Norton Properties, Inc., subject to
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compliance with the requirements of subsections (a), (b), (c) and (d) of
Section 25.1.2 of this Lease and the other applicable provisions of this Lease
that impose requirements on subleases and subtenants.

ARTICLE XXVI

Section 26.1 Financial Statements and Reporting. Each Tenant shall maintain, and
cause the Seniormost Parent to maintain, for itself and, with respect to Tenant,
Tenant’s Subsidiaries and, with respect to the Seniormost Parent, the Seniormost
Parent’s Consolidated Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and shall provide Lessor with, or cause to
be provided to Lessor, the following information:

(a) As soon as available but in no event later than forty-five (45) days after
the close of each fiscal month and within fifty (50) days after the close each
of the first three fiscal quarters, for Tenant, an unaudited consolidated
balance sheet and statement of operations as of the close of each such period
and the related unaudited consolidated statements of income, cash flows and
stockholders equity for such period and for the year to date of Tenant and its
Subsidiaries, and, for the Seniormost Parent, an unaudited consolidated balance
sheet and statement of operations as of the close of each such period and the
related unaudited consolidated statements of income, cash flows and stockholders
equity for such period and for the year to date of the Seniormost Parent and its
Consolidated Subsidiaries (collectively, “Financial Statements”), setting forth
in each case in comparative form the corresponding figures for the previous
year, all prepared in accordance with GAAP and all certified in an Officer’s
Certificate of Tenant or the Seniormost Parent, as applicable, to Lessor as
being complete and accurate to the best of Tenant’s or the Seniormost Parent’s
knowledge, as applicable, subject to normal year end adjustments;

(b) Within one hundred (100) days after the close of each Fiscal Year, (i) for
Tenant, consolidated Financial Statements, in each case with accompanying notes
and schedules, prepared in accordance with GAAP and audited by a firm of
independent certified public accountants of recognized standing selected by
Tenant, which accountants shall have issued an audit report thereon (an audit
report shall in all events be issued with respect to the Seniormost Parent (as
described below), but, if Tenant is not the Seniormost Parent, in lieu of the
above referenced audit report with respect to Tenant, the audit report with
respect to the Seniormost Parent may instead include therein an unaudited
supplemental report and information setting forth and disclosing the
consolidating information relating to Tenant (but not including a Tenant balance
sheet and financial statement footnotes), and, in such event, Tenant shall cause
to be delivered to Lessor such supporting and/or other backup information
relating to such supplemental report and information as Lessor may reasonably
request from time to time) and, for the Seniormost Parent, consolidated
Financial Statements, in each case with accompanying notes and schedules,
prepared in accordance with GAAP and audited by a firm of independent certified
public accountants of recognized standing selected by the Seniormost Parent,
which accountants shall have issued an audit report thereon; and (ii) an
Officer’s Certificate of Tenant certifying to Lessor the amount of Patient
Revenues for such Fiscal Year for each Facility, for all of the Facilities in
the aggregate under this Lease and for all of the Facilities in the aggregate
under all of the Leases, and attaching reasonably detailed documentation
thereof;

 

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(c) Within fifty (50) days after the close of each of the first three fiscal
quarters, and within one hundred (100) days after the close of each Fiscal Year,
the following information and data for each Facility, in each case in paper
format or electronic computer format: (1) income statements that include,
without limitation, a breakdown of Patient Revenues and other revenues itemized
by payor type and a breakdown of operating expenses to the extent reasonably
available under the then current facility operation reports, but including, at a
minimum, itemization of Facility rental expense, overhead charges or management
fees, bad debt expense and any material non-recurring charges; and (2) patient
census by payor type;

(d) As soon as available but in no event later than sixty (60) days following
the commencement of each Fiscal Year, annual budgets for the operation during
such Fiscal Year of each Facility, of all Facilities in the aggregate under this
Lease and of all Facilities in the aggregate under all of the Leases, and to the
extent reasonably available, a breakdown of projected Patient Revenues and other
revenues itemized by payor type and a breakdown of projected operating expenses
itemized to reflect, at a minimum, Facility rental expense, overhead charges or
management fees, bad debt expense and any non-recurring charges;

(e) Within one hundred (100) days after the close of each Fiscal Year, or
otherwise upon request by Lessor in connection with a proposed sale or
refinancing of a Facility or Facilities by Lessor, for Tenant, the Seniormost
Parent and each Guarantor, as applicable, an Officer’s Certificate of Tenant,
the Seniormost Parent or each Guarantor, as applicable, certifying to Lessor and
Lessor’s designees (which certificate may be relied upon by Lessor and any
prospective purchaser or mortgagee of any Leased Property) the following
information:

(i) this Lease is unmodified and is in full force and effect (or that this Lease
is in full force and effect as modified and setting forth the modifications);

(ii) the dates to which Rent has been paid;

(iii) all Facilities are in good standing with respect to all necessary federal,
state and local licenses, permits and other Authorizations;

(iv) each Facility that participates in the Medicare program is in compliance
with the terms of its Medicare Provider Agreement and in good standing with the
Medicare program;

(v) each Facility that participates in the Medicaid program is in compliance
with the terms of its Medicaid Provider Agreement and in good standing with the
Medicaid program;

(vi) the current number of licensed beds at each Facility; and

(vii) Tenant and each applicable Guarantor or Section 25.1.12(f) Guarantor is
not in default in the performance of this Lease, its Lease Guaranty or its
Section 25.1.12(f) Guaranty, as applicable, or if an Event of Default exists,
specifying the same in reasonable detail;

 

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at the request of Lessor, together with complete and accurate copies (originals
of which shall be made available for inspection upon request by Lessor) of all
licenses, permits and other Authorizations necessary to operate the Facilities
in accordance with all applicable laws;

(f) As soon as reasonably available, copies of any Forms 10K, 10Q and 8K and any
other annual, quarterly, monthly or other reports, copies of all registration
statements and any other public information which any Seniormost Parent, Tenant
or any of their respective Subsidiaries files with the Securities and Exchange
Commission or any other governmental authority;

(g) Promptly upon the furnishing thereof to the shareholders of any Tenant or
any Seniormost Parent, copies of all statements, reports, notices and proxy
statements so furnished;

(h) Such supplements to the foregoing documents and such other information and
reports (including, without limitation non-financial information), as any Senior
Lender, any Facility Mortgagee or any Superior Mortgagee may reasonably request,
provided such supplements, and such information and reports, are consistent with
the types of supplements, reports and information generally utilized by such
institutions within the financing industry;

(i) (i) on a monthly basis during the Term, (x) a consolidated monthly cash flow
report of Tenant and its Subsidiaries and (y) a consolidated monthly patient
census report (reported separately for hospitals and nursing centers) for
Tenant, (ii) all other information, reports, materials and certificates that are
from time to time delivered, pursuant to the requirements of any loan documents
that are from time to time binding upon Tenant or the Seniormost Parent or any
of Tenant’s Subsidiaries or any Subsidiaries of the Seniormost Parent that
directly or indirectly control Tenant, by Tenant or the Seniormost Parent or any
of their aforesaid Subsidiaries to any of the Senior Lenders, or any of the
holders of any other loan documents evidencing or securing borrowed indebtedness
of Tenant or the Seniormost Parent or any of their aforesaid Subsidiaries, or
any of their respective agents, representatives or consultants, with all such
information, reports, materials and certificates to be delivered to Lessor at
the same time and in the same manner as the same are delivered to any of the
Senior Lenders, any of the aforesaid holders and/or any of their respective
agents, representatives or consultants, (iii) on a monthly basis during the
Term, a monthly consolidated survey deficiency summary report, with such report
to be in substance (but not necessarily in form) consistent with the report
dated October 2000 that was delivered to Lessor and listing each of the Master
Lease Leased Properties and indicating for each Master Lease Leased Property
whether any survey, citation or report alleging a deficiency that is material in
relation to such Master Lease Leased Property (using the October 2000 report as
a baseline) has been issued with respect thereto during the period covered by
such report and, if so, setting forth the identity of the agency or authority
that issued such citation or report, a description of the alleged material
deficiency and the timetable or deadline for curing the same (and, promptly
following receipt of a written request therefor from Lessor to Tenant, Tenant
shall further deliver to Lessor any Facility-specific survey reports requested
by Lessor), (iv) promptly following receipt of a

 

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written request therefor from Lessor to Tenant, copies of any Facility-specific
environmental, engineering or other reports or studies that are in Tenant’s or
the Seniormost Parent’s possession or control and so requested by Lessor and (v)
within ten (10) Business Days following receipt of Lessor’s written request
therefor, a copy, to the extent available and prepared, of any report, study or
other document that Tenant or the Seniormost Parent may from time to time
prepare, or have prepared on its behalf, that assigns asset ratings or other
grades or rankings to any or all of the Master Lease Leased Properties;

(j) If Lessor is a Ventas Lessor, within fifty (50) days following the close of
each fiscal quarter, a Senior Officer’s Certificate setting forth whether any
Event(s) of Default under Section 16.1(m) and/or Section 16.1(q) of this Lease
or any other lease demising any of the Master Lease Leased Properties has
occurred and is continuing (as described in Section 16.10) and, if so,
specifying the Master Lease Leased Property(ies) at which such Event(s) of
Default has so occurred and is continuing;

(k) Within three (3) Business Days following Tenant’s or the Seniormost Parent’s
receipt thereof, if and to the extent relating to the Leased Properties, true,
correct and complete copies of all professional negligence, malpractice and/or
general liability actuarial studies, reports and/or analyses prepared from time
to time for or by Tenant or the Seniormost Parent or at Tenant’s or the
Seniormost Parent’s direction other than those prepared by its independent
auditors;

(l) Within sixty (60) days after the close of each fiscal quarter, for any
insurance company owned or controlled by Tenant or the Seniormost Parent (a
“Captive Insurance Company”), an unaudited balance sheet and statement of
operations as of the close of each such period and the related unaudited
statements of income, cash flows and stockholders equity for such period and for
the year to date of each Captive Insurance Company, setting forth in each case
in comparative form the corresponding figures for the previous year, all
prepared in accordance with GAAP and all certified in an Officer’s Certificate
to Lessor as being complete and accurate to the best of Tenant’s and the
Seniormost Parent’s knowledge, subject to normal year end adjustments;

(m) Within one hundred eighty (180) days after the close of each Fiscal Year,
for each Captive Insurance Company, a balance sheet and statement of operations
as of the close of such Fiscal Year and the related statements of income, cash
flows and stockholder’s equity for such Fiscal Year, in each case with
accompanying notes and schedules, prepared in accordance with GAAP and audited
by a firm of independent certified public accountants of recognized standing
selected by Tenant, which accountants shall have issued an audit report thereon;

(n) Contemporaneously with the Effective Date, copies of the organizational
documents, including, without limitation, any amendments thereto prior to the
Effective Date, for each Captive Insurance Company, and, within five (5)
Business Days following entry into any subsequent amendment thereof, a true,
correct and complete copy of any such amendment;

(o) Within sixty (60) days following the end of each quarter during the Term, if
and to the extent relating to the Leased Properties, reports, as of such
quarter-end, (i) indicating the

 

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amount of the then current “total loss pick” set for professional negligence and
malpractice claims against the Seniormost Parent, Tenant and their respective
Subsidiaries and Affiliates and the then current breakdown of such “total loss
pick” (x) between claims incurred and reported and claims incurred but not yet
reported and (y) among claims incurred, whether or not reported, that are (1)
insured by the Captive Insurance Company(ies), (2) insured by insurers other
than a Captive Insurance Company, and (3) not insured by a Captive Insurance
Company or another insurer, (ii) indicating the amount to be reserved by the
Seniormost Parent and Tenant at the aforesaid then current “total loss pick” for
claims, whether or not reported, that are uninsured or that are insured by the
Captive Insurance Company(ies) and a reasonably detailed explanation of how such
reserved amount was calculated and determined, (iii) identifying the portion of
the reserve amount referenced in subsection (ii) above that will be funded, and
the portion of such reserve that will not be funded, to the Captive Insurance
Company(ies) by the Seniormost Parent or Tenant, and (iv) confirming that the
amount to be funded to the Captive Insurance Company(ies) by the Seniormost
Parent or Tenant is being funded on budget or, if there is a shortfall in the
funding of the amount to be funded, detailing the Seniormost Parent’s or
Tenant’s plan for funding such shortfall to the Captive Insurance Company(ies),
and, in addition, in each monthly Officer’s Certificate delivered by Tenant
pursuant to subsection (a) above, Tenant shall include therein a certification
that each of the Seniormost Parent and Tenant is recording general and
professional liability costs, on a monthly basis, in a manner consistent with
the most recent actuarial valuations;

(p) On or prior to the date which is one hundred (100) days following the end of
each Fiscal Year, a report that allocates all professional negligence and
malpractice liability expenses incurred by Tenant, any Seniormost Parent and
their respective Subsidiaries and Affiliates during such preceding Fiscal Year
to each Facility under this Lease, to each of the other Facilities under the
Leases and to all other healthcare-related facilities of Tenant, any Seniormost
Parent and their respective Subsidiaries and Affiliates that are not leased by
Tenant under the Leases and that explains the methodology of such allocation in
reasonable detail;

(q) Within thirty (30) days following the end of each month during the Term,
Medicaid Rate Variance Reports, as of such month-end, prepared by Tenant for the
Facilities under this Lease, and under all of the Leases, that are skilled
nursing facilities, which report shall be substantially in the form delivered by
Tenant to Lessor on May 14, 2003 or another form reasonably acceptable to
Lessor, and, within forty-five (45) days following the end of each month during
the Term, the “Dennis Henson Medicaid Rate Report,” or a substantially similar
report reasonably acceptable to Lessor, each as of such month-end, providing a
state by state evaluation and prediction of Medicaid rates;

(r) Within forty-five (45) days following the end of each month during the Term,
operating reports, as of such month-end, for each Facility under this Lease, and
under each of the Leases, and for all Facilities under each of the Leases, and
under all of the Leases, in the form delivered to Lessor on May 14, 2003 or
another form reasonably acceptable to Lessor;

(s) Within thirty (30) days following the end of each month during the Term, a
“QA Management Activity Report”, as of such month-end, prepared by Tenant for
each Facility under this Lease, and under each of the Leases, in the form
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2003 or another form reasonably acceptable to Lessor, and, relative thereto,
promptly following Tenant’s receipt of a written request therefor from Lessor,
true, correct and complete copies of any survey deficiency reports and/or plans
of correction relative to any of the aforesaid Facilities designated by Lessor;

(t) Within sixty (60) days after the commencement of each Fiscal Year, an annual
capital expenditures budget for such Fiscal Year, relating only to the Leased
Properties, in the form delivered to Lessor on May 14, 2003 or another form
reasonably acceptable to Lessor and, within fifteen (15) days after any material
amendment to such annual capital expenditures budget, a true, correct and
complete copy of such amendment;

(u) Within forty-five (45) days following the end of each month during the Term,
a capital expenditures report, as of such month-end, relative to each Facility
under this Lease, and under all of the Leases, in the form delivered to Lessor
on May 14, 2003 or another form reasonably acceptable to Lessor, and, including
with each such report, project level expenditure detail by Facility;

(v) Within thirty (30) days after the close of each of the first three fiscal
quarters, and within thirty (30) days after the close of each Fiscal Year, a
report, in form reasonably acceptable to Lessor, regarding changes in the number
of licensed beds and so-called “banked beds”, at each Facility, at all
Facilities in the aggregate under this Lease and at all Facilities in the
aggregate under all of the Leases; and

(w) Within fifty (50) days after the close of each of the first three fiscal
quarters of each Fiscal Year, and within one hundred (100) days after the close
of each Fiscal Year, in each case ending after a Kindred Change of Control
Transaction, an Officer’s Certificate from the Chief Financial Officer of the
Seniormost Parent setting forth in reasonable detail such calculations as are
required to establish whether Tenant is in compliance with the financial
covenants set forth in Section 8.4, and stating whether such financial covenants
have been complied with, together with such attached backup information as
Lessor may reasonably request.

Section 26.2 Furnishing Notice. Within five (5) days after Tenant receives
notice or otherwise obtains knowledge of any of the following occurrences,
Tenant shall give written notice thereof in the form of an Officer’s Certificate
to Lessor, which notice shall set forth details of the occurrence referred to
therein and shall state what action Tenant has taken, and proposes to take, with
respect thereto:

(a) any written notice of termination or suspension of any Facility from
participation in the Medicare or Medicaid program; and

(b) any written notice of non-renewal of any license or other Authorization
affecting any of the Facilities or its operation (including copies thereof).

Section 26.3 Quarterly Meetings; Facility Level Meetings and Reviews. On a
quarterly basis, Tenant shall permit, and cause the Seniormost Parent to permit,
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Lessor shall make, and cause the Seniormost Parent to make, appropriate
arrangements for, Lessor and/or its representatives to discuss the affairs,
operations, finances and accounts of Tenant, any Seniormost Parent and their
respective Subsidiaries and Affiliates with, and be advised as to the same by,
senior officers of Tenant and the Seniormost Parent (and such of Tenant’s and
the Seniormost Parent’s independent accountants and other financial advisors as
would be relevant to the topic of the particular meeting), all as Lessor may
deem appropriate for the purpose of verifying any report(s) delivered by Tenant
to Lessor under this Lease or for otherwise ascertaining compliance with this
Lease by Tenant or the business, operational or financial condition of Tenant,
any Seniormost Parent and/or their respective Subsidiaries and Affiliates (to
the extent relevant for ascertaining compliance with this Lease or to the extent
relevant to the operations of any Leased Property(ies)) and/or any of their
respective Facilities. Without limitation of the foregoing, from time to time
promptly following receipt of written notice from Lessor to Tenant (and in any
event within ten (10) Business Days of such receipt), Tenant shall permit, and
cause the Seniormost Parent to permit, and shall make, and cause the Seniormost
Parent to make, appropriate arrangements for, Lessor and/or its representatives
or designees to discuss the business, operational and financial condition of
specific Facility(ies) designated by Lessor with, and be advised as to the same
by, appropriate personnel of Tenant, the Seniormost Parent and their respective
Subsidiaries and Affiliates having operational and accounting responsibilities
for the Facility(ies) so specified by Lessor and to review, and make abstracts
from and copies of, the books, accounts and records of Tenant, the Seniormost
Parent and their respective Subsidiaries and Affiliates relative to any such
Facility(ies), in each case provided, and on the condition, that any such
discussions or reviews, abstracting or copying shall not materially interfere
with Tenant’s or the Seniormost Parent’s business operations relative to any
affected Facility(ies). Unless otherwise agreed in writing by Lessor and Tenant
or the Seniormost Parent, as applicable, all of the discussions, reviews,
abstracting and copying referenced in this Section 26.3 shall occur during
normal business hours. Relative to the foregoing matters, (a) Tenant agrees that
those officers and managerial-level employees of Tenant, the Seniormost Parent
and their respective Subsidiaries and Affiliates as are reasonably designated by
Lessor shall attend the above described quarterly and/or Facility level meetings
and reviews, (b) each of the aforesaid quarterly meetings and reviews shall,
unless otherwise agreed by Lessor and Tenant, occur on the first Tuesday that is
more than fifteen (15) days following the earlier of (x) the date of filing or
(y) the filing due date of the Form 10Q or 10K, as applicable, that Tenant or
the Seniormost Parent is required to file (if both Tenant and the Seniormost
Parent are publicly traded Entities, then Tenant and the Seniormost Parent, as
applicable, shall have the filing due date that is required in order to comply
with the requirements of the Securities and Exchange Commission or any other
governmental authority, and the later of such filing due dates shall apply under
this clause (y)) following the close of the quarter-to-be-reviewed (or, if
neither Tenant nor the Seniormost Parent is a publicly traded Entity, on or
before the seventy-fifth (75th) day following the close of the
quarter-to-be-reviewed), and (c) the aforesaid Facility level meetings and
reviews shall, unless otherwise agreed by Lessor and Tenant, occur
simultaneously with the aforesaid quarterly meetings and reviews and, in
addition, from time to time at other times designated by Lessor upon ten (10)
Business Days written notice to Tenant.

 

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Section 26.4 Non-Ventas Lessors. Notwithstanding anything to the contrary
contained in this ARTICLE XXVI, if and for so long as the lessor under this
Lease is not a Ventas Lessor, Tenant (a) shall not be required under this Lease
to provide to such non-Ventas Lessor Facility-specific information related to
Facilities or Leased Properties which are not included in this Lease, (b) shall
exclude from consolidated facility information that is required under Section
26.1 of this Lease facility information which relates to Facilities or Leased
Properties not included in this Lease, and (c) shall continue to be required to
provide information relative to Tenant and the Seniormost Parent, as opposed to
Leased Properties and Facilities, on the same basis as such information is
provided to a Ventas Lessor.

Section 26.5 Additional Tenant Assistance. Tenant agrees that Tenant’s and the
Seniormost Parent’s chief executive officer and chief financial officer shall be
made available by Tenant, upon two (2) Business Days (five (5) Business Days, if
an in-person meeting is required) prior verbal and electronic notice from
Lessor, to hold meetings with, make presentations to and/or answer questions and
inquiries by investment advisers, analysts, underwriters, bankers and other
lenders, rating agencies and other persons and organizations designated by
Lessor in connection with transactions conducted by Lessor from time to
time. Tenant and the Seniormost Parent shall not be required to incur any
out-of-pocket expenses (other than nominal expenses) in connection with any such
request by Lessor.

Section 26.6 Electronic Format. All reports, statements and other materials
delivered by or on behalf of Tenant or any Seniormost Parent to Lessor under
this ARTICLE XXVI shall be delivered to Lessor in electronic format, if
available.

Section 26.7 Similar Reports. If Tenant or any Seniormost Parent shall at any
time begin to prepare new or additional reports, statements or other materials
containing the same or similar information as is contained in any of the
reports, statements or other materials that Tenant is required to deliver to
Lessor by the terms of the other Sections of this ARTICLE XXVI, Tenant shall
deliver, or cause the Seniormost Parent to deliver, such new or additional
reports, statements or other materials to Lessor, promptly following Tenant’s or
the Seniormost Parent’s preparation of the same.

Section 26.8 Audit and Investigation Rights. Without limitation of Tenant’s
other obligations as set forth in this ARTICLE XXVI, Lessor shall have the
right, at its expense and upon delivery of ten (10) Business Days written notice
to Tenant from time to time, to audit, and/or prepare or perform such other
operational, accounting or financial reviews, abstracts, reports and other
investigations (including, without limitation, investigations of Tenant’s
compliance with Section 7.2.4 hereof) as Lessor chooses of or relating to, the
books, records and accounts of Tenant, any Seniormost Parent and Tenant’s
Subsidiaries (and, to the extent relevant for verifying any report(s) delivered
to Lessor under this Lease or for otherwise ascertaining compliance with this
Lease or to the extent relevant to the operations of any Leased Property(ies),
Tenant’s and the Seniormost Parent’s Affiliates and the Seniormost Parent’s
Subsidiaries) and/or relative to any Facility(ies) designated by Lessor from
time to time (including, without limitation, appraisals), provided, however,
without limitation of Lessor’s rights pursuant to ARTICLE XXVI (other than this
Section 26.8) or other provisions of this Lease and solely for purposes of this
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pursuant to this Section 26.8 shall not require Tenant or the Seniormost Parent
to provide to Lessor (a) that portion of any confidential materials prepared
internally by Tenant or the Seniormost Parent or by a third party on behalf of
Tenant or the Seniormost Parent regarding whether to exercise renewal rights
under this Lease or analyzing the Fair Market Value or Fair Market Rental of the
Leased Properties, including analyses of appraisals or documents similar thereto
(but Tenant agrees that, notwithstanding the foregoing or anything to the
contrary in this Section 26.8, Lessor shall have the right pursuant to this
Section 26.8 to obtain copies of, and to review and investigate, any appraisals
or documents similar thereto prepared by appraisers or other third parties), (b)
employment and/or employee records, (c) that portion of any litigation files
that constitutes privileged material that is protected by the attorney-client
privilege, and (d) confidential and proprietary analysis of the above referenced
books, records and accounts prepared (i) for a bona fide business purpose, (ii)
in the ordinary course of business, (iii) not for the purpose of evading
Lessor’s rights under this Section 26.8, and (iv) solely for use by Tenant’s or
the Seniormost Parent’s Board of Directors or officers of Tenant or the
Seniormost Parent having a title of Senior Vice President or higher (except, in
the case of each of the foregoing subsections (b) through (d), if Lessor would
otherwise have a right to obtain such materials pursuant to the provisions of
this Lease (other than this Section 26.8)). Lessor shall not require or perform
any act that would cause Tenant, any Seniormost Parent or any of their
respective Subsidiaries or Affiliates to violate any laws, regulations or
ordinances relating to employment records or intended to protect the privacy
rights of Tenant’s or the Seniormost Parent’s employees or healthcare patients,
including, but not limited to, the Health Insurance Portability and
Accountability Act of 1996, as amended. Any such investigation instituted by
Lessor shall commence promptly ten (10) Business Days after Tenant’s receipt of
Lessor’s aforesaid written notice (unless Lessor otherwise agrees in
writing). The foregoing activities shall be conducted by Lessor through agents,
employees, representatives or designees of its choosing, and Tenant shall
reasonably cooperate (and shall cause the Seniormost Parent and its and the
Seniormost Parent’s independent accountants and other financial advisors to
reasonably cooperate) with all of such activities. Such activities shall be
conducted in a manner that does not materially interfere with Tenant’s or the
Seniormost Parent’s business operations or the business operations relative to
any affected Facility(ies). Lessor shall be obligated to reimburse Tenant and
the Seniormost Parent and their aforesaid independent accountants and other
financial advisors for any out-of-pocket expenses incurred by Tenant or the
Seniormost Parent or on Tenant’s or the Seniormost Parent’s behalf in connection
with providing any such cooperation. Tenant may provide Lessor with a monthly
statement of the expenses to be reimbursed by Lessor pursuant to this Section
26.8, and Lessor shall reimburse such expenses to Tenant or the Seniormost
Parent, as applicable, within ten (10) Business Days after receipt of such
written demand accompanied by reasonable supporting documentation. Unless
otherwise agreed in writing by Lessor and Tenant, Lessor’s aforesaid activities
shall occur during normal business hours. Lessor’s aforesaid activities may
include, without limitation, performing audits of, or other operational,
accounting or financial reviews or reports relating to, the EBITDAR and/or
EBITDARM of a particular Facility(ies) for a particular past or future period(s)
and the terms and conditions of contracts with Tenant’s and the Seniormost
Parent’s Affiliates and Subsidiaries and/or other Persons for the provision of
particular goods and services to a particular Facility(ies).

 

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ARTICLE XXVII

Section 27.1 Lessor’s Right to Inspect. Tenant shall permit Lessor, any then
current or prospective Superior Mortgagee or other lender to Lessor, any then
current or prospective investment banker, mortgage broker or other professional
engaged by Lessor, any prospective purchaser of any Leased Property or any
interest in Lessor or any Affiliate of Lessor and/or, only during any permitted
exhibition period under Section 40.4 below, any prospective lessee, and its and
their respective authorized representatives, to enter upon and conduct a
physical inspection of any Leased Property during usual business hours and,
except in an emergency, upon not less than three (3) Business Days prior notice,
subject to any security, health, safety or confidentiality requirements of any
governmental agency or insurance requirement relating to the Leased Properties,
or imposed by law or applicable regulations and provided that no such entry or
inspection shall materially interfere with Tenant’s business operations within
the affected Leased Property(ies). Nothing contained in this Section 27.1 shall
limit or impair Lessor’s right to enter upon and inspect the Leased Properties,
or any of Lessor’s other rights or remedies, upon the occurrence of any Event of
Default by Tenant.

ARTICLE XXVIII

Section 28.1 No Waiver. No failure by Lessor or Tenant to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach thereof, and no acceptance of full or partial payment
of Rent during the continuance of any such breach, shall constitute a waiver of
any such breach or of 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.

ARTICLE XXIX

Intentionally omitted.

ARTICLE XXX

Section 30.1 Acceptance of Surrender. No surrender to Lessor of this Lease or of
any Leased Property or any part of any thereof, or of any interest herein or
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 XXXI

Section 31.1 No Merger of Title. There shall be no merger of this Lease or of
the leasehold estate created thereby 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 any
Leased Property.

 

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ARTICLE XXXII

Section 32.1 Conveyance by Lessor. Lessor may, without the consent or approval
of Tenant, sell, transfer, assign, convey or otherwise dispose of any or all of
the Leased Properties. If Lessor or any successor owner of any Leased Property
shall sell, transfer, assign, convey or otherwise dispose of any Leased Property
in accordance with the terms hereof other than as security for a debt, and the
purchaser, grantee, assignee or transferee of the Leased Property shall
expressly assume all obligations of Lessor hereunder with respect to such Leased
Property arising or accruing from and after the date of such sale, conveyance,
transfer, assignment or other disposition and shall be reasonably capable of
performing the obligations of Lessor hereunder, 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 with respect to such Leased Property
arising or accruing from and after the date of such sale, conveyance, transfer,
assignment or other disposition as to such Leased Property and all such future
liabilities and obligations with respect to such Leased Property shall thereupon
be binding upon such purchaser, grantee, assignee or transferee. Lessor agrees
to deliver to Tenant and any Leasehold Mortgagee, promptly following the
consummation of any such sale, conveyance, transfer, assignment or other
disposition (other than as security for a debt), written notice of such sale,
conveyance, transfer, assignment or other disposition and, if applicable, a copy
of the aforesaid assumption agreement. In the event of any such sale, transfer,
assignment, conveyance or other disposition (other than as security for a debt)
of less than all of the Leased Properties, the provisions of Section 40.15
hereof shall apply.

ARTICLE XXXIII

Section 33.1 Quiet Enjoyment. So long as Tenant 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 and thereunder, Tenant shall peaceably and
quietly have, hold and enjoy each 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 all Permitted Encumbrances, including, without
limitation, liens and encumbrances of record as of the Existing Lease Effective
Date or otherwise permitted to be created by Lessor hereunder, liens as to the
obligations of Lessor that are either not yet due or which are being contested
in good faith and by proper proceedings, and liens hereafter consented to by
Tenant. No failure by Lessor to comply with the foregoing covenant shall give
Tenant any right to cancel or terminate this Lease or abate, reduce or make a
deduction from or offset against the Rent or any other sum payable under this
Lease, or to fail to perform any other obligation of Tenant
hereunder. Notwithstanding the foregoing, Tenant 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 Section.

ARTICLE XXXIV

Section 34.1 Notices. All notices, demands, requests, consents, approvals and
other communications hereunder shall be in writing and delivered or mailed (by
registered or certified mail, return receipt requested or reputable nationally
recognized overnight courier service and postage prepaid), addressed to the
respective parties, as follows:

 

  (a) if to either Tenant:

Kindred Healthcare, Inc.

Kindred Healthcare Operating, Inc.

680 South 4th Avenue

Louisville, Kentucky 40202-2612

Attention: Chief Financial Officer

 

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with a copy to:

Kindred Healthcare, Inc.

Kindred Healthcare Operating, Inc.

680 South 4th Avenue

Louisville, Kentucky 40202-2612

Attention: General Counsel

 

  (b) if to Lessor:

Ventas Realty, Limited Partnership

c/o Ventas, Inc.

353 N. Clark Street, Suite 3300

Chicago, Illinois 60654

Attention: Legal Department

with a copy to:

Ventas Realty, Limited Partnership

c/o Ventas, Inc.

353 N. Clark Street, Suite 3300

Chicago, Illinois 60654

Attention: Asset Management

or to such other address as either party may hereunder designate, and shall be
effective upon receipt.

ARTICLE XXXV

Section 35.1 Appraisals. In the event that it becomes necessary to determine the
Fair Market Rental of the Leased Properties or any thereof or the allocation of
Base Rent among the Leased Properties or any thereof, or the Transferred
Property Percentages applicable to the Leased Properties or any thereof, to be
contained in Exhibit C hereto or the Fair Market Value or Fair Market Value
Purchase Price of any property, in each case for any purpose of this Lease, and
the parties cannot agree amongst themselves on such values, allocations or
percentages, the procedures of this ARTICLE XXXV shall apply.

Section 35.2 Appointment of Appraisers. The party required or permitted to
request an appraisal or other determination under this ARTICLE XXXV shall,
within the applicable time

 

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period, if any, specified in this Lease, give written notice (an “Appraisal
Notice”) to the other party, which Appraisal Notice shall state the requesting
party’s desire for an appraisal or other determination under this ARTICLE XXXV,
and identify which matters are to be appraised or determined. Within thirty (30)
days after receipt of any such Appraisal Notice by the party to which such
Appraisal Notice is directed, each party shall, by written notice to the other
party, appoint an appraiser meeting the qualifications set forth below selected
by such party to act as appraiser on its behalf. If either party fails so to
appoint an appraiser within the aforesaid thirty (30) day period, the appraiser
selected by the other party shall act as the “Final Appraiser” hereinafter
described. If both parties appoint an appraiser as aforesaid in a timely manner,
within ten (10) days after such two appraisers are appointed, such two
appraisers shall meet and agree upon a third appraiser meeting the
qualifications set forth below (herein, the “Final Appraiser”). The two
appraisers selected by the parties shall, promptly following their agreement
upon a Final Appraiser, provide written notice of the identity of the aforesaid
Final Appraiser to each of Lessor and Tenant. Such appointment shall be binding
on the parties. If the two appraisers selected by the parties are unable to
agree upon a Final Appraiser within the aforesaid ten (10) day period, then
either party may request that the American Arbitration Association or any
successor organization thereto appoint a Final Appraiser meeting the
qualifications set forth below within twenty (20) days of such request, and both
parties shall be bound by any appointment so made within such twenty (20) day
period. If no such Final Appraiser shall have been appointed in such manner
within such twenty (20) day period or within ninety (90) days after issuance of
the original Appraisal Notice, either Lessor or Tenant may apply to any court
having jurisdiction to have such appointment made by such court.

Section 35.3 Qualifications of Appraisers. Each of the two appraisers selected
by the parties, and the Final Appraiser, must (a) be a member of the Appraisal
Institute (or any successor organization thereto) and/or a person employed by an
accounting firm that, at the time of such appointment, is one of the five (5)
largest public accounting firms in the United States and (b) have not less than
five (5) years experience, and substantial expertise, in valuing hospitals and
nursing centers and/or determining the fair market rental of hospitals and
nursing centers.

Section 35.4 Appraisal Process. The Final Appraiser appointed in accordance with
the foregoing procedures shall complete the appraisals, and make any other
determinations, submitted to him or her in accordance with the terms of this
Lease within sixty (60) days after his or her appointment and shall notify each
of Lessor and Tenant of his or her appraisals and other determinations. In
performing such appraisals, and making such other determinations, the Final
Appraiser shall make the assumptions, and follow any other directives or
instructions, contained in this Lease relative to the subject matter of the
Final Appraiser’s appointment, and, without limitation of the foregoing, in the
case of any appraisal of Fair Market Rental applicable to the Leased Properties
or any thereof or any allocation of Base Rent among the Leased Properties or any
thereof (and any related amendment of Exhibit C hereto and allocation of
Transferred Property Percentages among the Leased Properties or any thereof),
the Final Appraiser shall not allocate an amount of Base Rent to any particular
Leased Property that would result in this Lease, as it applies to such Leased
Property, being treated as a capital lease, rather than an operating lease,
under GAAP or under the applicable rules of the Financial Accounting

 

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Standards Board and, in making determinations of the amount of Base Rent that
will be allocated to particular Leased Properties for purposes of Exhibit C,
shall consider the effect of his or her allocation of Base Rent to a particular
Leased Property upon Tenant’s ability to obtain reimbursements at such Facility
under third party payor programs, but in all events without increasing or
decreasing the aggregate amount of Base Rent payable under this Lease with
respect to the Leased Properties as a whole.

Section 35.5 Binding Nature. The provisions of this ARTICLE XXXV, and related
provisions of this Lease, providing for determination of certain values,
allocations, percentages and other matters by the Final Appraiser 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.

Section 35.6 Costs. Lessor and Tenant shall each pay the fees and expenses of
the appraiser appointed by it, and each shall pay one-half of the fees and
expenses of the Final Appraiser, and one-half of all other costs and expenses,
incurred in connection with each appraisal.

ARTICLE XXXVI

Section 36.1 General REIT Provisions.

Section 36.1.1 Tenant understands that, in order for Ventas, Inc., Lessor’s
Affiliate, to qualify as a real estate investment trust (“REIT”), the following
requirements (the “REIT Requirements”) must be satisfied:

(i) Rent allocable for purposes of Section 856 of the Code to Lessor’s personal
property that is leased to Tenant under a lease at the beginning and end of a
calendar year cannot exceed 15% of the total Rent under such lease.

(ii) Tenant cannot sublet the property that is leased to it by Lessor, or enter
into any similar arrangement, on any basis such that the rental or other amounts
paid by the sublessee thereunder would be based, in whole or in part, on either
(i) the net income or profits derived by the business activities of the
sublessee or (ii) any other formula such that any portion of the rent paid by
Tenant to Lessor would fail to qualify as “rents from real property” within the
meaning of Section 856(d) of the Code.

(iii) Tenant cannot transfer or assign Tenant’s rights under the Lease to, or
sublease the property leased to it by Lessor to, or enter into any similar
arrangement with, any person in which Lessor has provided written notice to
Tenant that it owns, directly or indirectly, a 10% or more interest, within the
meaning of Section 856(d)(2)(B) of the Code.

Section 36.1.2 Notwithstanding any other provisions of this Lease to the
contrary, Tenant agrees, and agrees to use reasonable efforts to cause its
Affiliates, to cooperate in good faith with Lessor to ensure that the REIT
Requirements are satisfied, including, but not

 

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limited to, providing Lessor with information about the ownership of Tenant, and
its Affiliates to the extent that such information is reasonably
available. Tenant agrees, and agrees to use reasonable efforts to cause its
Affiliates, upon request by Lessor to take reasonable action necessary to ensure
compliance with the REIT Requirements. Immediately after becoming aware that the
REIT Requirements are not, or will not be, satisfied, Tenant shall notify, or
use reasonable efforts to cause its Affiliates to notify, Lessor of such
noncompliance.

Lessor agrees to reimburse Tenant for the reasonable amount of any out of pocket
expenses incurred by Tenant or its Affiliates in satisfying the requirements of
this Section 36.1.2.

Section 36.1.3 Neither Lessor nor Tenant shall treat this Lease as subject to
rent leveling (or constant rental accrual) under the disqualified rental
agreement rules of Section 467 of the Code.

ARTICLE XXXVII

Section 37.1 Intentionally Omitted.

Section 37.2 Lessor’s Option to Purchase Tenant’s Personal Property. Effective
on not less than ninety (90) days prior written notice given at any time within
one hundred eighty (180) days prior to the expiration of the Term, but not later
than ninety (90) days prior to such expiration, or such shorter notice as shall
be appropriate if this Lease is terminated in whole or in part or Tenant is
dispossessed of any of the Leased Properties prior to the expiration of the
Term, subject to the rights of any Leasehold Mortgagee in respect of Tenant’s
Personal Property, Lessor or its designee shall have the option to purchase all
(but not less than all) of Tenant’s Personal Property located at the Leased
Property(ies) in question, if any, at any expiration or termination of the Term,
for a purchase price equal to the unamortized portion of the original cost based
upon the economic useful life, as defined by the American Hospital Association
Guide (or, if such guide ceases to be published by the American Hospital
Association, a substitute guide or other economic useful life reference book
mutually agreed upon by Lessor and Tenant, each acting reasonably), subject to,
and with appropriate price adjustments for, all equipment leases, conditional
sale contracts, UCC-1 financing statements (including those financing statements
filed in connection with the Leasehold Mortgages) and other encumbrances to
which such Personal Property is subject. Promptly following demand by Lessor
(but in any event within thirty (30) days following such demand), Tenant shall
deliver to Lessor a computation and statement, in form, content and detail
reasonably satisfactory to Lessor, of the purchase price described above as of
the date of such expiration, termination or dispossession, as the case may be,
for all of Tenant’s Personal Property located at the Leased Property(ies) in
question.

ARTICLE XXXVIII

Section 38.1 Lessor May Grant Liens. Without the consent of Tenant, Lessor may,
subject to the terms and conditions set forth below in this Section 38.1, from
time to time, directly or indirectly, create or otherwise cause to exist any
lien, encumbrance or title retention agreement (“Encumbrance”) upon any Leased
Property or any portion thereof or interest therein,

 

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whether to secure any borrowing or other means of financing or refinancing. Any
lender, which takes an interest in the applicable Leased Property pursuant to
this ARTICLE XXXVIII, (a) shall agree to give Tenant the same notice, if any,
given to Lessor of any default or acceleration of any obligation underlying any
such mortgage or any sale in foreclosure under such mortgage, (b) shall agree to
permit Tenant to cure any such default on Lessor’s behalf within any applicable
cure period, and Tenant shall be reimbursed by Lessor for any and all
out-of-pocket costs incurred to effect any such cure (including reasonable
attorneys’ fees), (c) shall agree to permit Tenant to appear by its
representative and to bid at any sale in foreclosure made with respect to any
such mortgage and (d) shall agree not to disturb Tenant’s possession so long as
Tenant is not in default in performing its obligations hereunder.

ARTICLE XXXIX

Section 39.1 Environmental Indemnity. Tenant hereby agrees to hold harmless
Lessor, any successors to Lessor’s interest in this Lease and in any Leased
Property, and Lessor’s and such successors’ directors, officers, partners,
members, employees and agents from and against any losses, claims, damages
(including consequential damages), penalties, fines, liabilities (including
strict liability), costs (including cleanup and recovery costs), and expenses
(including expenses of litigation and reasonable attorneys’ fees) incurred by
Lessor or any other indemnitee or assessed against the Leased Property by virtue
of any claim or lien by any governmental or quasi-governmental unit, body, or
agency, or any third party, for cleanup costs or other costs pursuant to the
Comprehensive Environmental Response Compensation and Liability Act of 1980, the
Hazardous Materials Transportation Act, the Resource Conservation and Recovery
Act, all as amended from time to time, and all state laws and federal and state
regulations pursuant to the foregoing (collectively “Environmental
Laws”). Tenant’s indemnity shall survive the expiration or any termination of
this Lease. Provided, however, Tenant shall have no indemnity obligation with
respect to (i) Hazardous Materials first introduced to the Leased Property
subsequent to the date that Tenant’s occupancy of the applicable Leased Property
shall have fully terminated or (ii) Hazardous Materials first introduced to the
Leased Property prior to the Existing Lease Effective Date, except to the extent
arising from any deterioration on or after the Existing Lease Effective Date in
any condition existing prior to April 30, 1998. “Hazardous Materials” means any
substance the presence of which poses a hazard to the health or safety of
persons on or about the Leased Property or which requires removal or remediation
under any Environmental Law, including without limitation, any substance which
is toxic, explosive, flammable, radioactive, or otherwise hazardous or is
included within the meaning of “hazardous substance”, “hazardous waste”, “toxic
substance”, or “pollutant” as defined in any Environmental Law. At any time
during the Term of this Lease, Lessor may require one or more environmental
audits of the Leased Properties, in such form, scope and substance as specified
by Lessor, at Tenant’s expense. Tenant shall, within thirty (30) days after
receipt of an invoice from Lessor, reimburse Lessor for all costs and expenses
incurred in reviewing any environmental audit, including, without limitation,
reasonable attorneys’ fees and costs.

ARTICLE XL

Section 40.1 Miscellaneous. Anything contained in this Lease to the contrary
notwithstanding, all claims against, and liabilities of, Tenant or Lessor
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of termination or expiration of this Lease shall survive such termination or
expiration. If any term or provision of this Lease or any application hereof
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. Neither this Lease
nor any provision hereof may be changed, waived, discharged or terminated except
by an instrument in writing and in recordable form signed by Lessor and
Tenant. All the terms and provisions of this Lease shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. The headings in this Lease are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

Section 40.2 Non-Recourse. Tenant specifically agrees to look solely to Lessor’s
and any successor owner’s interest in the Leased Properties for recovery of any
judgment from Lessor, it being specifically agreed that neither Lessor, any such
successor owner, nor any officer, director, employee, lender, agent or Affiliate
of Lessor or any such successor owner shall ever be personally liable for any
such judgment or for the payment of any monetary obligation to Tenant. Tenant
shall have no recourse against any other property or assets of Lessor or any
successor owner, or against any property or assets of any officer, director,
shareholder, partner, lender, agent or Affiliate of Lessor or any successor
owner. The provision contained in the foregoing sentence is not intended to, and
shall not, limit any right that Tenant might otherwise have to obtain injunctive
relief against Lessor or Lessor’s successors in interest, or any action not
involving the personal liability of Lessor (original or successor). Furthermore,
except as otherwise expressly provided herein, in no event shall Lessor
(original or successor) ever be liable to Tenant for any special, indirect or
consequential damages suffered by Tenant from whatever cause.

Section 40.3 Transition of Operations.

(a) Upon the expiration or earlier termination of the Term as to any Leased
Property, or any dispossession of Tenant as to any Leased Property, Tenant
shall, to the maximum extent permitted by applicable law, transfer to Lessor or
Lessor’s designee and/or cooperate in all reasonable respects with Lessor or
Lessor’s designee to enable Lessor or Lessor’s designee to apply for and obtain
all licenses, operating permits, provider agreements, provider status,
certificates of need, certificates of exemption, approvals, waivers, variances
and other governmental, quasi-governmental and private authorizations necessary
for the operation of the Leased Property as to which the Term is expired or
terminated or as to which Tenant has been dispossessed and the Facilities
located thereon, or any of them, for their respective Primary Intended Uses
(collectively “Authorizations”); provided that the costs and expenses of any
such transfer or obtaining of Authorizations shall be paid by Lessor or Lessor’s
designee unless such termination or dispossession results from an Event of
Default, in which event the costs and expenses of any such transfer or obtaining
of Authorizations shall be paid by Tenant. It is the express intention of the
parties that at the expiration or earlier termination of the Term as to any
Leased Property, and upon any dispossession of Tenant in connection with any
Event of Default as to any Leased Property, any and all Authorizations needed to
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Property as to which the Term is expired or terminated, or as to which Tenant
has been dispossessed, for its Primary Intended Use shall, to the maximum extent
permitted by applicable law, remain with such Leased Property and shall be
transferred into the name of Lessor or Lessor’s designee, regardless of whether
such Authorization is in the name of Tenant at any time during the Term. Without
limiting the generality of the foregoing, Tenant shall furnish to Lessor or its
designee complete and accurate documents and information in Tenant’s possession,
custody or control necessary or reasonably requested by Lessor or its designee
in connection with any such transfer or the completion and processing of any
applications for Authorizations.

(b) In anticipation of the expiration of this Lease as to any Leased Property,
upon the earlier termination of this Lease as to any Leased Property, and/or
upon any dispossession of Tenant in connection with any Event of Default as to
any Leased Property, Tenant shall cooperate with Lessor in all reasonable
respects to facilitate and effectuate the orderly transfer of operations at the
affected Facility(ies) as a going concern; provided, however, that, unless such
termination or dispossession results from an Event of Default by Tenant,
notwithstanding anything to the contrary contained in this subsection (b),
Tenant shall not be required to incur any out-of-pocket operating losses or
costs in so cooperating. Such cooperation shall include, without limitation: (i)
furnishing to Lessor or any prospective successor operator of a Facility
designated by Lessor complete and accurate books, records, files, documents and
information in Tenant’s possession, custody or control necessary or reasonably
requested by Lessor or its designee in connection with the assessment and/or
assumption of the operations of such Facility(ies); (ii) facilitating the
evaluation and employment by Lessor or its designee of such employees of Tenant
as Lessor or its designee may elect to evaluate or employ, including, without
limitation, to the extent permitted by law, affording Lessor or its designee
access to all relevant personnel files, records, documents and information in
Tenant’s possession, custody or control; and (iii) assigning to Lessor or its
designee such assignable patient, vendor, service provider and other contracts
relating to the Facility(ies) in question as Lessor or its designee may request;
provided, however, that Tenant’s cooperation obligation shall not include
undertaking primary responsibility for such transfer of operations.

(c) Notwithstanding anything to the contrary contained in this Lease, Tenant
shall not, prior to the ninetieth (90th) day preceding the expiration of this
Lease as to any Leased Property, commence to wind up and terminate the
operations of the Facility operated thereon by relocating the patients or
occupants thereof to other health care facilities (a “Facility Termination”). If
Lessor has not notified Tenant in writing prior to the ninetieth (90th) day
preceding the expiration of this Lease as to a Leased Property and the Facility
thereon that Lessor has procured a successor operator for such Facility who has
submitted applications for the Authorizations required to assume the operations
of such Facility (a “Qualified Successor”), then Tenant may commence the
Facility Termination and, upon the expiration of this Lease as to such Leased
Property and Facility, Tenant shall vacate such Leased Property and surrender
possession thereof to Lessor in accordance with all of the applicable
requirements of this Lease. If, prior to the ninetieth (90th) day preceding the
expiration of this Lease as to a Leased Property and the Facility thereon,
Lessor notifies Tenant in writing that Lessor has procured a Qualified Successor
for such Facility, Tenant shall not commence the

 

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Facility Termination (any notice of the nature referenced in this sentence is
herein referred to as a “Section 40.3 Notice”). In such event, Tenant shall
thereafter operate such Facility in accordance with all of the requirements of
this Lease until the earliest to occur of (i) the date (on or after the
expiration of this Lease as to such Leased Property and Facility) on which such
Qualified Successor will assume the operation of such Facility, as specified in
a written notice from Lessor to Tenant given not less than thirty (30) days
prior to the date of such assumption, (ii) the date that is ninety (90) days
after the expiration of this Lease as to such Leased Property and Facility, and
(iii) the date (on or after the expiration of this Lease as to such Leased
Property and Facility) which is ninety (90) days after Tenant receives written
notice from Lessor that, notwithstanding the foregoing, Tenant may commence the
Facility Termination, on which earliest date, Tenant shall vacate the Leased
Property in question and surrender possession thereof to Lessor in accordance
with all of the applicable requirements of this Lease. In the event Lessor sends
Tenant a Section 40.3 Notice and, as a result thereof, Tenant operates a
Facility beyond the aforesaid expiration date applicable thereto, then, from and
after the expiration of this Lease as to such Facility and until the earliest to
occur of the dates described in clauses (i), (ii) and (iii) above (the
“Reimbursement Period”), Lessor shall reimburse Tenant for any operating
deficits of such Facility that Tenant may be required to fund out-of-pocket on
account of operating losses and expenses of such Facility incurred by Tenant
with respect to the Reimbursement Period. Any such reimbursement shall be due
from Lessor to Tenant within thirty (30) days after written request by Tenant,
provided that Tenant shall furnish such documentation of such operating
deficits, losses and expenses as Lessor may reasonably request. For purposes of
determining the amount of any operating deficits, or operating losses and
expenses, so incurred by Tenant with respect to the Reimbursement Period, Lessor
and Tenant agree that (1) there shall be included therein, without limitation,
(x) Rent, which shall continue to be due and payable or accrue, as the case may
be, at the same rates as are in effect prior to the expiration of the Term, and
(y) any increase in employee severance, and all costs and liabilities, that may
be incurred by Tenant in connection with Tenant’s employees’ employment by
virtue of Tenant’s delayed compliance with the Worker Adjustment and Retraining
Notification Act, or any similar State law, due to Tenant’s cooperation and
other obligations under this subsection (c), and (2) Tenant shall serve upon its
employees any notice required under the Worker Adjustment and Retraining
Notification Act, or any similar State law, as soon as reasonably practicable
after it becomes clear when the Reimbursement Period will end, whether due to
Tenant’s receipt of a written notice under subsection (i) or (iii) above or due
to the terms of subsection (ii) above which provides that, in all events, the
Reimbursement Period shall end no later than the date referenced in such
subsection (ii). In lieu of the aforesaid reimbursement from Lessor, Tenant may
instead elect to continue to be responsible for payment of all costs and
expenses of continuing to comply with this Lease as to such Facility during the
Reimbursement Period, provided and on the condition that Tenant provides written
notice to Lessor of such election within fifteen (15) days after Tenant’s
receipt of Lessor’s Section 40.3 Notice. In the event Tenant so elects to forego
its aforesaid reimbursement from Lessor, during the Reimbursement Period, Base
Rent allocable to such Facility shall be payable in the manner set forth in
Section 3.1 of this Lease, but with Base Rent being reduced to one-half ( 1⁄2)
of the amount thereof that was allocable to such Facility as of the expiration
of the Term as to such Facility. In the event Lessor sends Tenant a Section 40.3
Notice and, as a result thereof, Tenant operates a Facility beyond the

 

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expiration date applicable thereto, any Facility Default that occurs with
respect to such Facility and Leased Property during the Reimbursement Period
shall in no event give rise to any right in favor of Lessor to exercise any
rights or remedies under ARTICLE XVI hereof with respect to any other Facility
or Leased Property.

Section 40.4 Right to Enter. Lessor and Lessor’s agent shall have the right to
enter the applicable Leased Property at all reasonable times for the purpose of
exhibiting the Leased Property to others (i) if Tenant has not exercised its
right with respect to any applicable Extended Term within the time period set
forth in this Lease, or (ii) during the last eighteen (18) months of the Term
(if all available options for Extended Terms have previously been exercised).

Section 40.5 Integration. This Lease contains the entire agreement between
Lessor and Tenant with respect to the subject matter hereof. No representations,
warranties or agreements have been made by Lessor except as set forth in this
Lease.

Section 40.6 Severability. If any term or provision of this Lease is held or
deemed by Lessor to be invalid or unenforceable, such term or provision shall be
modified as slightly as possible so as to render it valid and enforceable; if
such term or provision, as modified, shall be held or deemed invalid or
unenforceable, such holding shall not affect the remainder of this Lease and
same shall remain in full force and effect, unless such holding substantially
deprives Tenant of the use of the Leased Property(ies) or Lessor of the rents
herein reserved, in which event this Lease shall forthwith terminate as if by
expiration of the Term.

Section 40.7 Subject to Law.

(a) All rights, powers and remedies provided herein may be exercised only to the
extent that the exercise thereof, including those which do not require the
giving of notice, does not violate any applicable law, and are intended to be
limited to the extent necessary so that they will not render this Lease invalid
or unenforceable under any applicable law. All waivers, consents, confessions
and releases provided for in this Lease are effective only to the extent
permitted by applicable law.

(b) This Lease was negotiated in the State of New York, which State the parties
agree has a substantial relationship to the parties and to the underlying
transaction embodied hereby. In all respects, the law of the State of New York
shall govern the validity of and enforceability of the obligations of the
parties set forth herein, but all provisions hereof relating to the creation of
the leasehold estate and remedies set forth in ARTICLE XVI shall be governed by
the laws of the State in which each applicable Leased Property that is the
subject of dispute is located and the parties hereto will submit to jurisdiction
and the laying of venue for any suit on this Lease in the Commonwealth of
Kentucky.

Section 40.8 Waivers. No waiver of any condition or covenant herein contained,
or of any breach of any such condition or covenant, shall be held or taken to be
a waiver of any subsequent breach of such covenant or condition, or to permit or
excuse its continuance or any future breach thereof or of any condition or
covenant herein construed as a waiver of such default, or of Lessor’s right to
terminate this Lease or exercise any other remedy granted herein on account of
such existing default.

 

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Section 40.9 Binding Character. This Lease shall be binding upon and shall inure
to the benefit of the heirs, successors, personal representatives, and permitted
assigns of Lessor and Tenant.

Section 40.10 Modification. This Lease may be only be modified by a writing
signed by both Lessor and Tenant.

Section 40.11 Forbearance. No delay or omission by either party hereto to
exercise any right or power accruing upon any noncompliance or default by the
other party with respect to any of the terms hereof shall impair any such right
or power or be construed to be a waiver thereof.

Section 40.12 Lease Guaranty. In the event of any sublease of any Leased
Property(ies) or any portion thereof to an Affiliate of any Tenant pursuant to
the terms of this Lease, regardless of whether Lessor’s prior consent is
required therefor, such subtenant shall execute and deliver a Lease Guaranty
relative to the Leased Property(ies) or portion thereof subleased by it. Tenant
represents and warrants to Lessor that Schedule 40.12 attached hereto and made a
part hereof reflects the identities of all Affiliates of any Tenant from whom a
Lease Guaranty is required hereunder as of the Effective Date and the respective
Leased Properties (or parts thereof) subleased by each of such
Affiliates. Tenant agrees, from time to time within fifteen (15) days after
receipt of a written request therefor from Lessor, to deliver to Lessor an
Officer’s Certificate which updates all of the information contained in Schedule
40.12. A Lease Guaranty shall terminate at the expiration of the term of the
sublease to which such Lease Guaranty applies but, following any such
termination, the applicable guarantor thereunder shall remain liable for certain
“Liabilities” as described in the Lease Guaranty.

Section 40.13 Intentionally omitted.

Section 40.14 Confidentiality.

(a) Each of Lessor and Tenant agrees that, except as otherwise explicitly
provided in this Section 40.14, all Information (as defined below) provided by
Lessor to Tenant and by Tenant to Lessor (the party providing such Information
being referred to as “Disclosing Party” and the party receiving the Information
being referred to as “Recipient”) will be kept confidential and will not,
without Disclosing Party’s prior written consent, be disclosed by Recipient, in
whole or in part, to any person, in any manner whatsoever.

(b) Recipient may disclose Information:

(i) to those of Recipient’s officers, directors and employees who are informed
by Recipient of the confidential nature of the Information and who agree, for
Disclosing Party’s benefit, to act in accordance with the terms and conditions
of this Section 40.14; Recipient will be responsible for any breach of this
Section 40.14 by such persons.

 

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(ii) in the case where Lessor is the Recipient

(A) to the extent the Information is both (x) of a financial, operating,
regulatory, business or similar nature, and (y) has been aggregated to relate to
any or all of the Leases, a jurisdiction or jurisdictions (such as a state or
region), a class or classes of asset (e.g. nursing facilities or hospitals) or
any other category, in each case so long as such disclosure is not on a per
Leased Property basis; or

(B) if Lessor is a Ventas Lessor, to the extent the Information relates to a
particular Master Lease Leased Property(ies), and either

(w) is provided to Facility Mortgagees, prospective Facility Mortgagees,
Superior Lessors, prospective Superior Lessors, purchasers, prospective
purchasers, tenants or prospective tenants of such Master Lease Leased
Property(ies); provided that any such party listed in this clause (w) who
receives such Information is informed by Lessor or the Ventas Lessor(s) of the
applicable Master Lease Leased Property(ies) of the confidential nature of the
Information and agrees with Lessor or the Ventas Lessor(s) of the applicable
Master Lease Leased Property(ies) to keep such Information confidential pursuant
to a standard confidentiality agreement; and provided further that such
Information may be disclosed to tenants or prospective tenants only if either
(i) Tenant has not, at least seventeen (17) months prior to the then current
Term applicable to the related Renewal Group, given to the Ventas Lessor of the
applicable Master Lease Leased Property written notice of Tenant’s intention to
renew the applicable lease with respect to the Master Lease Leased Properties
within such Renewal Group, or (ii) an Event of Default has occurred under the
applicable lease of such Master Lease Leased Property(ies); or

(x) is disclosed in connection with or following a sale, closure, material
casualty, default or prospective default with respect to such Master Lease
Leased Property; or

(y) relates to the location or size of, or the number of licensed beds at, such
Master Lease Leased Property or the rent for such Master Lease Leased Property;
or

(z) is of the type customarily disclosed by a public healthcare real estate
investment trust; or

(C) if Lessor is not a Ventas Lessor, to the extent the Information relates to a
particular Leased Property(ies), and either

 

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(w) is provided to Facility Mortgagees, prospective Facility Mortgagees,
Superior Lessors, prospective Superior Lessors, purchasers, prospective
purchasers, tenants or prospective tenants of such Leased Property(ies);
provided that any such party listed in this clause (w) who receives such
Information is informed by Lessor of the confidential nature of the Information
and agrees with Lessor to keep such Information confidential pursuant to a
standard confidentiality agreement; and provided further that such Information
may be disclosed to tenants or prospective tenants only if either (i) Tenant has
not, at least seventeen (17) months prior to the then current Term applicable to
the related Renewal Group, given to Lessor written notice of Tenant’s intention
to renew this Lease with respect to the Leased Properties within such Renewal
Group, or (ii) an Event of Default has occurred under the Lease of such Leased
Property(ies); or

(x) is disclosed in connection with or following a sale, closure, material
casualty, default or prospective default with respect to such Leased Property;
or

(y) relates to the location or size of, or the number of licensed beds at, such
Leased Property or the rent for such Leased Property; or

(z) is of the type customarily disclosed by a public healthcare real estate
investment trust.

(iii) to the extent Recipient reasonably determines that disclosure of the
Information is required by any Legal Requirement applicable to Recipient or any
applicable rule, regulation, or requirement of any securities exchange on which
the Recipient’s securities are listed or admitted for trading (a “Disclosure
Law”) pursuant to the procedures set forth in Section 40.14(h) below.

(iv) in connection with any proceeding in which Recipient is attempting to
protect or enforce any rights and/or remedies in connection with this Lease or
any of the other Leases, but only to the extent necessary to protect or enforce
such rights and/or remedies.

(v) to any person in a confidential relationship with the Recipient, including
Recipient’s auditors, advisors, consultants, lawyers, and others who agree with
Recipient to be bound by a standard confidentiality agreement, such as lenders,
prospective lenders, purchasers, potential purchasers, tenants and prospective
tenants; provided, however, that Recipient shall not be liable to Disclosing
Party for any breach by such persons of such confidential relationship or
confidentiality arrangements; provided further, however, that Recipient shall
assign to Disclosing Party (or enforce on Disclosing Party’s behalf and at
Disclosing Party’s cost) the Recipient’s rights under such confidentiality
agreement or obligations.

(vi) to the extent legally compelled to disclose any of the Information pursuant
to a subpoena or other legal process having the force of law. Recipient will
provide Disclosing Party with prompt notice so that Disclosing Party or any of
its representatives may seek a protective order or other appropriate remedy. In
the event that such protective order or other remedy is not obtained, Recipient
will furnish only that portion of the Information which Recipient has been
advised is legally required and Recipient will exercise its reasonable efforts
to attempt to obtain reliable assurance that confidential treatment will be
accorded the Information so to be furnished. In any event, Recipient will
cooperate with (and not oppose) any reasonable action by Disclosing Party to
obtain an appropriate protective order or other reliable assurance that
confidential treatment will be accorded such Information.

 

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(c) Information means (i) all and any data, reports, including any survey
deficiency reports or summaries thereof, forecasts, records, agreements and
other information (whether written, magnetic, digital or in any other form)
furnished after the Existing Lease Effective Date by Disclosing Party or by any
of its representatives or advisors to Recipient that is both (x) material and
proprietary, and (y) in the case where Tenant is the Disclosing Party, that is
required to be furnished pursuant to Section 8.1; Section 8.2;
Section 26.1(b)(ii) (but only to the extent furnished on a per Master Lease
Leased Property basis (if Lessor is a Ventas Lessor) or on a per Leased Property
basis (if Lessor is not a Ventas Lessor)); Section 26.1(c); Section 26.1(d);
Section 26.1(e)(iii), (iv), (v) or (vii); Section 26.1(h); and Section 26.1(i),
and (ii) EBITDAR, profitability, census and regulatory deficiency data for each
Master Lease Leased Property (if Lessor is a Ventas Lessor) or for each Leased
Property (if Lessor is not a Ventas Lessor). For purposes of this Section 40.14,
information and other materials will be deemed furnished or prepared by, or
furnished to, a person if furnished or prepared by, or if furnished to, such
person or an affiliate of such person, or any employee, agent, partner,
representative or advisor of such person. As used in this Section 40.14, person
means any natural person and any corporation, partnership, association, firm or
other entity or organization of any kind whatsoever, and all references to
Recipient in this Section 40.14 shall include its affiliates, and an affiliate
of a designated person means a second person which (directly or indirectly)
controls, is controlled by, or is under common control with, such designated
person; provided, however, that Lessor and Tenant shall not be deemed to be
affiliates.

(d) The obligations under Section 40.14(a) will not apply to any Information
which (i) was known to Recipient prior to Disclosing Party’s disclosure of such
Information to Recipient (unless Recipient’s knowledge was obtained
confidentially or from a source which to Recipient’s knowledge was not permitted
to disclose such Information to Recipient) or (ii) becomes available to
Recipient on a nonconfidential basis from a source (other than Disclosing Party
or any of its employees, agents, representatives or advisors) who to the
knowledge of the Recipient is not prohibited from disclosing such Information to
Recipient by any legal, contractual or fiduciary obligation.

(e) Recipient acknowledges that remedies at law may be inadequate to protect
against breach of the provisions of this Section 40.14, and Recipient hereby in
advance agrees that Disclosing Party shall not be obligated to establish actual
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monetary damages in seeking an injunction. Such injunctive relief will not be
deemed to be the exclusive remedy for a breach by Recipient of the provisions of
this Section, but will be in addition to all other remedies available at law or
equity to Disclosing Party.

(f) Lessor shall have the right to temporarily suspend Tenant’s obligation to
provide it with Information pursuant to the terms of this Lease or otherwise for
a specified period of time or for a period of time terminating upon the
occurrence of a specified event, including notice from Lessor (the “Suspension
Period”). During the Suspension Period, Tenant shall, if requested by Lessor,
deliver such Information to a third party in a confidential relationship with
Lessor. Upon expiration or termination of the Suspension Period, Tenant will
deliver to Lessor within three Business Days all Information that Tenant
otherwise would have been required to deliver during the Suspension Period and
shall immediately, once again, be subject to all of the information delivery
requirements set forth in this Lease.

(g) Recipient acknowledges that no failure or delay in exercising any right
under this Section 40.14 shall operate as a waiver thereof, nor will any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right hereunder.

(h) In connection with any proposed disclosure pursuant to
Section 40.14(b)(iii), the Recipient shall provide the Disclosing Party with
advance written notice of the proposed disclosure shall set forth the
Information to be disclosed, the proposed date of disclosure (the “Disclosure
Date”), the basis for such disclosure as well as the manner of such disclosure
(the “Disclosure Notice”). The Disclosure Notice shall be delivered to the
Disclosing Party no later than the Disclosure Notification Date (as defined
below). The Recipient and the Disclosing Party shall cooperate with one another
and negotiate in good faith to seek a mutually satisfactory resolution with
respect to such proposed disclosure. In the event the Disclosing Party has not,
prior to the Disclosure Date, either (A) consented to the proposed disclosure
(or such modified disclosure as the Recipient and Disclosing Party may mutually
agree) or (B) itself made disclosure of the Information contained in such
Disclosure Notice (or such modified disclosure as the Recipient and Disclosing
Party may mutually agree) the Recipient may disclose such Information to the
extent and in the manner set forth in such Disclosure Notice.

(i) Disclosure Notification Date shall mean the latest of the dates set forth
below:

(A) five (5) Business Days prior to the Disclosure Date; and

(B) in the case of Section 40.14(b)(iii), such shorter period of time prior to
the Disclosure Date which is reasonable (in light of the nature of the
Information to be disclosed and the Disclosure Law applicable thereto).

Section 40.15 New Lease. Lessor shall have the right, at any time and from time
to time during the Term for a legitimate business purpose, by written notice to
Tenant, to require Tenant to execute an amendment to this Lease whereby one or
more Leased Properties (individually, a “Transferred Property” or collectively,
“Transferred Properties”) is separated and removed from this Lease, and to
simultaneously execute a substitute lease with respect to such Transferred
Property(ies), in which case:

(a) Lessor and Tenant shall execute a new lease (the “New Lease”) for such
Transferred Property(ies), effective as of the date specified in subsection (c)
below (the “Property Transfer Date”), in the same form and substance as this
Lease, but with the following changes thereto:

(i) The initial Base Rent for such Transferred Property(ies) shall be an amount
equal to the product (or the sum of the products, if there is more than one
Transferred Property) of (x) the respective Transferred Property Percentage(s)
for such Transferred Property(ies), and (y) aggregate Base Rent in effect under
this Lease, in each case as of the date immediately preceding the Property
Transfer Date;

 

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(ii) Intentionally omitted;

(iii) Intentionally omitted;

(iv) Any rental escalations required under the New Lease to be made on the May 1
immediately following the Property Transfer Date (or, if applicable, on the
May 1 that is simultaneous with the Property Transfer Date) shall be made under
the New Lease on such May 1, in the full amount required as if such Transferred
Property(ies) had been under the New Lease for a full year, notwithstanding that
the period from the Property Transfer Date to such succeeding May 1 may be less
than one full year (or, if applicable, notwithstanding that the Property
Transfer Date is simultaneous with such May 1);

(v) “Base Patient Revenues” as defined in Section 2.1 of the New Lease shall
mean the Base Patient Revenues from the Transferred Property(ies) for the
calendar year ending December 31, 1999 as set forth in Schedule 2.1A;

(vi) Intentionally omitted;

(vii) If and for so long as the lessor under any New Lease is not a Ventas
Lessor, Tenant (A) shall not be required under such New Lease to provide to such
new lessor Facility-specific information related to Facilities or Leased
Properties which are not included in such New Lease, (B) shall exclude from
consolidated facility information that is required under Section 26.1 of such
New Lease facility information which relates to Facilities or Leased Properties
not included in such New Lease and (C) shall continue to be required to provide
information relative to Tenant, as opposed to Leased Properties and Facilities,
on the same basis as such information is provided to Ventas Lessors;

(viii) If a New Lease is entered into in connection with the transfer by Lessor
of three or fewer Leased Properties in a single transaction to any Entity with
respect to which Ventas, Inc. and/or Ventas Realty Limited Partnership and/or
any successor to either of them (by merger or otherwise) and/or any Affiliate of
any of the foregoing does not hold a direct or indirect equity or pecuniary
interest (such Entity, an “Unaffiliated

 

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Entity”), then such New Lease shall be modified to (1) exclude from such New
Lease, and the Lessor thereunder shall not be bound by, Sections 8.4, 8.5, 8.6,
8.7, 25.1.12 and 25.1.13 of this Lease and (2) revise Section 25.1.1 of such New
Lease for the removal of any express restrictions on direct or indirect changes
of control of the Seniormost Parent.

(ix) Exhibit C to such New Lease shall include (A) Base Rent only for the
Transferred Property(ies) covered by such New Lease; and (B) a Transferred
Property Percentage for each such Transferred Property, equal to the percentage
that the Base Rent allocated to such Transferred Property, as of the date
immediately preceding the Property Transfer Date, comprises of the aggregate
Base Rent for all Transferred Properties under such New Lease (and the aggregate
of all Transferred Property Percentages under such New Lease shall equal 100%);

(x) Subject to Section 22.7(g) hereof and without limitation and subject to the
provisions of Section 7.2.7, Section 16.10, Section 19.1, Section 25.1.11 and
Section 40.18 of this Lease and all other leases demising any of the Master
Lease Leased Properties, the New Lease shall provide that the tenant thereunder
shall be responsible for the payment, performance and satisfaction of all
duties, obligations and liabilities arising under this Lease, insofar as they
relate to the Transferred Property(ies) subject to the New Lease, that were not
paid, performed and satisfied in full prior to the effective date of the New
Lease (and Tenant, in its capacity as the tenant under this Lease, shall also be
responsible for the payment, performance and satisfaction of the aforesaid
duties, obligations and liabilities not paid, performed and satisfied in full
prior to the effective date of such New Lease), and shall further provide that
the tenant thereunder, in its capacity as the tenant under such New Lease, shall
not be responsible for the payment, performance or satisfaction of any duties,
obligations and liabilities of Tenant, in its capacity as the tenant under this
Lease, arising after the Property Transfer Date (except that, because the tenant
under such New Lease shall be the same as Tenant under this Lease, such New
Lease will clarify that the tenant under such New Lease, as a legal entity, is
responsible for such duties, obligations and liabilities under this Lease);

(xi) If the New Lease relates to a single Leased Property, the New Lease shall
provide that (1) because, for example, such New Lease may thereafter be amended
by agreement of Lessor and Tenant to include one or more other leased properties
or such New Lease may thereafter be combined with a Second Lease pursuant to
Section 40.18 of such New Lease, with such New Lease as the Section 40.18 Lease,
Lessor and Tenant under such New Lease have, in creating such New Lease as a
“New Lease” under Section 40.15 of one of the other Combined Leases,
nevertheless retained in such New Lease references to multiple Leased Properties
and provisions and terms that apply to multiple Leased Properties and (2)
without limitation of and subject to Section 7.2.7, Section 16.10, Section 19.1,
Section 25.1.11 and Section 40.18 of such New Lease and all other leases
demising any of the Master Lease Leased Properties, for so long as such New
Lease relates to a single Leased Property, the aforesaid references to multiple
Leased Properties, and the aforesaid provisions and terms applicable to multiple
Leased Properties, shall, if the context so requires in light of such New Lease
relating to only a single Leased Property, be treated as references to a single
Leased Property or as provisions and terms applicable to a single Leased
Property;

 

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(xii) The New Lease shall not include any cross-default provisions that would
make Tenant’s default under this Lease or under any other New Lease entered into
in accordance with this Lease or under any of the other Leases or under any New
Lease entered into in accordance with any of such other Leases an event of
default under such New Lease; provided, however, the foregoing portion of this
clause (xii) is without limitation of and subject to the provisions of
Section 7.2.7, Section 16.10, Section 19.1, Section 25.1.11 and Section 40.18 of
this Lease and all other leases demising any of the Master Lease Leased
Properties; and

(xiii) At the election of Lessor, any one or more of the provisions of the New
Lease pertaining to Ventas, Inc.’s REIT status shall be deleted, including,
without limitation, Section 25.3 and ARTICLE XXXVI hereof.

(b) Upon execution of such New Lease, and effective as of the Property Transfer
Date, this Lease shall be deemed to be modified and amended as follows:

(i) The Transferred Property(ies) shall be excluded from the Leased Properties
hereunder;

(ii) Base Rent hereunder shall be reduced by the amount set forth in
Section 40.15(a)(i) above;

(iii) Intentionally omitted;

(iv) Intentionally omitted;

(v) “Base Patient Revenues”, as defined in Section 2.1 hereof, shall be deemed
reduced by the amount set forth in Section 40.15(a)(v) above;

(vi) Intentionally omitted;

(vii) Intentionally omitted; and

(viii) Exhibit C shall be modified so as to remove the allocation of Base Rent
and the Transferred Property Percentage(s) for the Transferred Property(ies),
and the Transferred Property Percentages of the Leased Properties remaining
under this Lease shall be recalculated so that each such Leased Property shall
have a Transferred Property Percentage equal to the percentage that the Base
Rent allocated to such Leased Property, as of the date immediately preceding the
Property Transfer Date, comprises of the aggregate Base Rent for all Leased
Properties remaining under this Lease, and so that the aggregate of all
Transferred Property Percentages for Leased Properties remaining under this
Lease equals 100%.

 

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(c) In the case of any New Lease that is entered into in accordance with
Section 22.7 hereof, such New Lease shall be effective as of the date of
termination of this Lease with respect to the applicable Leased
Property(ies). In the case of any New Lease that is entered into in accordance
with Section 19.4 hereof, such New Lease shall be effective as of the effective
date therefor specified in such Section 19.4. In the case of all other New
Leases, such New Lease shall be effective on the date which is the earlier of
(i) the date the New Lease is fully executed and delivered by the parties
thereto and (ii) the date specified in the written notice from Lessor to Tenant
requiring a New Lease as described above, which date shall be no sooner than ten
(10) days, nor later than sixty (60) days, after the date such notice is issued.

(d) Tenant shall take such actions and execute and deliver such documents,
including without limitation the New Lease and new or amended Memorandum(s) of
Lease and, if requested by Lessor, an amendment to this Lease, as are reasonably
necessary and appropriate to fully effectuate the provisions and intent of this
Section 40.15 and Lessor shall execute and deliver such new or amended
Memorandum(s) of Lease as are reasonably necessary and appropriate to fully
effectuate the provisions and intent of this Section 40.15 and an amendment of
this Lease in accordance with Section 40.15(b) above.

(e) Each Leasehold Mortgagee, Superior Lessor and Superior Mortgagee hereby
consents to the provisions of this Section 40.15 and agrees, upon request of
Lessor, to execute an instrument consenting to the execution and delivery of the
New Lease and of an amendment to this Lease, consistent with the foregoing
provisions.

(f) Each party shall bear its own costs and expenses in connection with any New
Lease entered into in accordance with Section 19.4 hereof. In all other cases,
the party requesting a New Lease under this Section 40.15 (and, for such
purpose, Tenant shall be deemed to be the requesting party in the case of any
New Lease entered into in accordance with Section 22.7 hereof) shall, promptly
following receipt of a written demand therefor and reasonable supporting
documentation, reimburse the other party hereto for its out-of-pocket costs and
expenses incurred in connection with such New Lease, including, without
limitation, reasonable attorneys’ fees and any recording fees incurred by such
other party in connection with the recording of new or amended Memorandum(s) of
Lease.

Section 40.15.1 Kindred Hospital- Fort Worth. Lessor and Tenant acknowledge that
Lessor has entered into a contract to sell the Facility commonly known as
Kindred Hospital- Fort Worth (Facility No. 4668) and agree that, if such
Facility is sold pursuant to such contract, the New Lease required in connection
with such sale with the buyer of such Facility shall be on the terms and
conditions described in Section 40.15 hereof.

Section 40.16 Partial Expiration/Termination. In the event this Lease expires or
terminates as to one or more, but less than all, of the Leased Properties
(herein, the “Expired/Terminated Properties”), but no Separate Lease pursuant to
Section 22.7 or New Lease in accordance with the terms of Section 40.15 (e.g.
pursuant to the terms of Section 19.4 or Section 40.15) is entered into on
account thereof, effective as of the date of such expiration or termination (the
“Partial Expiration/Termination Date”), the following provisions shall be
applicable:

(a) The Expired/Terminated Properties shall be excluded from the Leased
Properties hereunder (but without limitation and subject to the provisions of
Section 7.2.7, Section 16.10, Section 19.1, Section 25.1.11 and Section 40.18 of
this Lease and all other leases demising any of the Master Lease Leased
Properties);

 

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(b) All Base Rent attributable to the Expired/Terminated Properties (determined
based upon the aggregate of the Transferred Property Percentages applicable to
the Expired/Terminated Properties), and all Additional Charges attributable to
the Expired/Terminated Properties, shall be due and payable as of the Partial
Expiration/ Termination Date. The amount of the Base Rent attributable to the
Leased Properties other than the Expired/Termination Properties as of the
Partial Expiration/Termination Date shall equal the amount thereof immediately
prior to such Partial Expiration/Termination Date less the amount of Base Rent
allocated to the Expired/Terminated Properties as aforesaid;

(c) “Base Patient Revenues”, as defined in Section 2.1 hereof, shall have
excluded therefrom all Base Patient Revenues attributable to Expired/Terminated
Properties, as set forth in Schedule 2.1A;

(d) “Patient Revenues”, as defined in Section 2.1 hereof, shall have excluded
therefrom all Patient Revenues attributable to the Expired/Terminated
Properties;

(e) Intentionally omitted;

(f) Intentionally omitted;

(g) Exhibit C shall be modified so as to remove the allocation of Base Rent to
the Expired/Terminated Properties, and the Transferred Property Percentages of
the Leased Properties remaining under this Lease shall be recalculated so that
each such Leased Property shall have a Transferred Property Percentage equal to
the percentage that the Base Rent allocated to such Leased Property, as of the
date immediately preceding such Partial Expiration/Termination Date, comprises
of the aggregate Base Rent for all Leased Properties remaining under this Lease,
and so that the aggregate of all Transferred Property Percentages for the Leased
Properties remaining under this Lease equals 100%;

(h) Nothing in this Section 40.16 shall be deemed to limit or impair any of
Lessor’s or Tenant’s rights and remedies at law, in equity, under this Lease or
otherwise relative to the Expired/Terminated Properties or the Leased Properties
that remain subject to this Lease;

(i) Tenant shall take such actions and execute and deliver such documents,
including, without limitation, if requested by Lessor, an amendment to this
Lease, as are reasonably necessary and appropriate to fully effectuate the
provisions and intent of this Section 40.16; and

(j) Each Leasehold Mortgagee, Superior Lessor and Superior Mortgagee hereby
consents to the provisions of this Section 40.16 and agrees, upon request of
Lessor, to execute an instrument consenting to the execution and delivery of an
amendment to this Lease, consistent with the foregoing provisions.

 

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Section 40.17 Intentionally omitted.

Section 40.18 Combination of Leases. If Lessor is the lessor under both this
Lease and another lease demising a Master Lease Leased Property(ies) (the
“Second Lease”), Lessor shall have the right, at any time during the Term, by
written notice to Tenant, to require that this Lease and the Second Lease be
combined and to require Tenant to execute an amendment to this Lease whereby (a)
if this Lease is the Section 40.18 Lease (as hereinafter defined), the Master
Lease Leased Properties covered by the Second Lease are added as Leased
Properties under this Lease and otherwise merged into this Lease or (b) if the
Second Lease is the Section 40.18 Lease, the Leased Properties covered by this
Lease are added as Leased Properties under the Second Lease and otherwise merged
into the Second Lease, in each case subject to the following terms and
conditions:

(i) References in this Lease to the “Section 40.18 Lease” shall mean and refer
to whichever of this Lease or the Second Lease is chosen by Lessor to be the
Section 40.18 Lease.

(ii) If this Lease is the Section 40.18 Lease, effective as of the date
specified in subsection (iv) below (the “Section 40.18 Date”), this Lease shall
be deemed to be modified and amended as follows:

(1) The Master Lease Leased Properties included in the Second Lease shall be
included as the Leased Properties under this Lease;

(2) Base Rent under this Lease shall be the combination of the respective
amounts of the Base Rent under this Lease and the Second Lease;

(3) Intentionally omitted;

(4) Intentionally omitted;

(5) Any rental escalations that would otherwise have been required to be made
under the Second Lease on the May 1 immediately following the Section 40.18 Date
(or, if applicable, on the May 1 that is simultaneous with the Section 40.18
Date) shall be made under this Lease on such May 1, in the full amount required
as if the Master Lease Leased Properties referenced in subsection (1) above had
been under this Lease for a full year, notwithstanding that the period from the
Section 40.18 Date to such succeeding May 1 may be less than one full year (or,
if applicable, notwithstanding that the Section 10.18 Date is simultaneous with
such May 1);

(6) “Base Patient Revenues”, as defined in Section 2.1 of this Lease, shall be
increased by the amount of the Base Patient Revenues from the Master Lease
Leased Properties included in the Second Lease (excluding any of the Leased
Properties identified in

 

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Exhibit B hereto as Portfolio #5 facilities that were demised under Existing ML5
as of the day preceding the Effective Date) for the calendar year ending on
December 31, 1999 as set forth in Schedule 2.1A of the Second Lease, and
Schedule 2.1A of this Lease shall be deemed modified and amended accordingly;

(7) If and for so long as the lessor under this Lease is not Ventas, Inc. or
Ventas Realty, Limited Partnership or any successor to either of them (by merger
or otherwise) or any Affiliate of Ventas, Inc. or Ventas Realty, Limited
Partnership or any such successor, Tenant (A) shall not be required under this
Lease to provide to such lessor Facility-specific information related to
Facilities or Leased Properties which are not included in this Lease, (B) shall
exclude from consolidated facility information that is required under
Section 26.1 of this Lease facility information which relates to Facilities or
Leased Properties not included in this Lease and (C) shall continue to be
required to provide information relative to Tenant, as opposed to Leased
Properties and Facilities, on the same basis as such information is provided to
Ventas-related lessors;

(8) Intentionally omitted;

(9) Exhibit C to this Lease shall be modified and amended so as to add thereto
the allocations of Base Rent relative to the Master Lease Leased Properties
included in the Second Lease that were previously included in Exhibit C to the
Second Lease, and the Transferred Properties Percentages of the Leased
Properties included in this Lease (including, without limitation, the additional
Master Lease Leased Properties referenced in subsection (1) above) shall be
recalculated so that each such Leased Property shall have a Transferred Property
Percentage equal to the percentage that the Base Rent allocated to such Leased
Property comprises of the aggregate Base Rent for all Leased Properties included
in this Lease and so that the aggregate of all Transferred Property Percentages
for Leased Properties included in this Lease equals 100%;

(10) Tenant under this Lease shall be responsible for the payment, performance
and satisfaction of all duties, obligations and liabilities arising under the
Second Lease, insofar as they relate to the Master Lease Leased Properties
subject to the Second Lease, that were not paid, performed and satisfied in full
prior to the Section 40.18 Date, and, without limitation of the foregoing, (x)
any Event of Default that had occurred, arisen or accrued under the Second Lease
prior to the Section 40.18 Date shall be, and shall be deemed to be, an Event of
Default under this Lease, as to which the rights and remedies and other
provisions of this Lease shall be applicable, (y) any breach or default that had
occurred, arisen or accrued under the Second Lease prior to the Section 40.18
Date but had not yet become an Event of Default under the Second Lease as of the
Section 40.18 Date shall be, and be deemed to be, a breach or default under this
Lease, as to which the cure periods, rights and remedies and other provisions of
this Lease shall be applicable, and (z) with respect to any breach or default
described in subsection (y) above, although the cure periods, rights and
remedies and other provisions of this Lease shall be applicable, the portion of
any cure period under the Second Lease that had elapsed as of the Section 40.18
Date shall be counted in determining whether and when the applicable cure period
under this Lease has expired; and

 

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(11) The Master Lease Leased Properties referenced in subsection (1) above shall
otherwise be incorporated into this Lease as Leased Properties included under
this Lease the same as if this Lease, from the inception of the Second Lease,
had included the aforesaid Master Lease Leased Properties as Leased Properties
hereunder on the rent, lease terms and other economic terms described in the
Second Lease.

(iii) If this Lease is not the Section 40.18 Lease, effective as of the
Section 40.18 Date, this Lease shall be modified and amended as necessary (x) to
incorporate into the Second Lease as Leased Properties thereunder the Leased
Properties covered by this Lease the same as if the Leased Properties covered by
this Lease had, from the inception of this Lease, been included in the Second
Lease as Leased Properties thereunder on the rent, lease terms and other
economic terms described in this Lease and (y) otherwise to comply with the
requirements of Section 40.18 of the Second Lease, as the Section 40.18 Lease
thereunder. Tenant acknowledges and agrees that, without limitation of
Section 40.18(ii)(10) above, the modification and amendment referenced in this
subsection (iii) shall not result in Tenant being released from any duties,
liabilities or obligations that had accrued under this Lease through the
Section 40.18 Date.

(iv) In the case of any combination of leases pursuant to this Section 40.18,
such combination shall be effective on the date which is the earlier of (x) the
date the required modifications and amendments to the Lease and Second Lease are
fully executed and delivered by the parties thereto and (y) the date specified
in the written notice from Lessor to Tenant requiring a combination of this
Lease and the Second Lease as described above, which date shall be no sooner
than ten (10) days, nor later than sixty (60) days, after the date such notice
is issued.

(v) Each of Lessor and Tenant shall take such actions and execute and deliver
such documents, including, without limitation, required modifications and
amendments to this Lease and the Second Lease and new or amended Memorandum(s)
of Lease, as are reasonably necessary and appropriate to effectuate fully the
provisions and intent of this Section 40.18.

(vi) Each Leasehold Mortgagee, Superior Lessor and Superior Mortgagee hereby
consents to the provisions of this Section 40.18 and agrees, upon request of
Lessor, to execute an instrument consenting to the execution and delivery of the
required modifications and amendments to this Lease and the Second Lease,
consistent with the foregoing provisions.

(vii) Lessor shall, promptly following receipt of a written demand therefor and
reasonable supporting documentation, reimburse Tenant for its out-of-pocket
costs and expenses incurred in connection with the required modifications and
amendments to this Lease and the Second Lease, including, without limitation,
reasonable attorneys’ fees and any recording fees incurred by Tenant in
connection with the recording of new or amended Memorandum(s) of Lease.

 

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Section 40.18.1 If this Lease is combined pursuant to Section 40.18 with any
other lease of any Master Lease Leased Property(ies), and this Lease is the
Section 40.18 Lease, each Master Lease Leased Property included in the Second
Lease shall, following such combination, be a part of, and re-join, the Renewal
Group of the same number as was applicable to such Master Lease Leased Property
as of the Effective Date under ML5, as set forth in Exhibit D to such instrument
(provided, however, that, if such Renewal Group no longer exists as of such
combination date due to the combination of such Renewal Group with another
Renewal Group, then such Master Lease Leased Property shall be a part of, and
join, the Renewal Group into which such original Renewal Group was combined).

Section 40.19 Unified Commercial Operating Lease. It is acknowledged and agreed
that, except as otherwise expressly provided herein, the inclusion of each of
the Leased Properties on a continuing basis in the leasing transaction provided
for herein is an essential element of such transaction for Lessor, and that,
except as otherwise expressly provided herein, Lessor shall not be obligated and
may not be required to lease less than all of the Leased Properties to Tenant
pursuant to this Lease. It is further acknowledged and agreed that this Lease is
not a residential lease within the meaning of the U.S. Bankruptcy Code, as
amended, and that this Lease is an operating lease, and not a capital lease, for
all accounting, tax and legal purposes.

Section 40.20 Intentionally omitted.

Section 40.21 No Credits. Notwithstanding anything to the contrary set forth in
this Lease or otherwise, except as otherwise expressly provided in the
Bankruptcy Plan relative to the Tax Refund Escrow Agreement, Lessor shall not be
required to pay, make or give to Tenant, and Tenant shall not be entitled to,
any credits, offsets, prorations or payments of any kind or nature whatsoever on
account of any payment, nonpayment or other event occurring prior to the
Existing Lease Effective Date.

ARTICLE XLI

Section 41.1 Memorandums of Lease. Lessor and Tenant shall, promptly upon the
request of either made on or following the Effective Date, enter into short form
memorandums of this Lease, in form suitable for recording under the laws of the
State in which each Leased Property is located, in which reference to this
Lease, and all extension options contained herein, shall be made. Such
Memorandums of Lease shall also reference that, in limited circumstances
following the occurrence of certain limited types of Events of Default by
Tenant, Tenant may have an option to purchase in certain circumstances one (1)
Leased Property covered by this Lease as to which the aforesaid types of Events
of Default have occurred and are continuing. Thereafter, when and if any such
option to purchase under Section 16.12 of this Lease has ceased to be available
to and exercisable by Tenant for any reason (e.g. due to Tenant’s exercise of
its available option to purchase under Section 16.12 or on account of this Lease
being involved in a Section 40.18 lease combination transaction where the
resulting Section 40.18 Lease covers in excess of forty (40) Leased Properties
or otherwise provides to Tenant no available and exercisable option(s) to
purchase under Section 16.12), upon the request of Lessor, any existing
Memorandum(s) of Lease that reference any option to purchase in favor of Tenant
shall be amended to delete any such reference. Without limitation of Lessor’s
obligations under and

 

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except as otherwise provided in Section 40.15(f) and Section 40.18(vii), Tenant
shall pay all costs and expenses of recording any such Memorandums of Lease or
amendments thereto and for releasing any such Memorandums of Lease that relate
to a particular Leased Property(ies) upon any expiration or termination of this
Lease as it relates to any such Leased Property(ies).

[The remainder of this page is intentionally left blank]

 

169

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IN WITNESS WHEREOF, the parties have caused this Lease to be executed and their
respective corporate seals to be hereunto affixed and attested by their
respective officers hereunto duly authorized.

 

Witness     KINDRED HEALTHCARE, INC.

/S/ BRANDY BRIDGES

      Name:     By:  

/S/ CRISTINA E. O’BRIEN

      Name:  

Cristina E. O’Brien

/S/ LISA ADAMS

      Title:  

Vice President, Real Estate Counsel

Name:         KINDRED HEALTHCARE OPERATING, INC.

/S/ BRANDY BRIDGES

      Name:           By:  

/S/ CRISTINA E. O’BRIEN

/S/ LISA ADAMS

      Name:  

Cristina E. O’Brien

Name:       Title:  

Vice President, Real Estate Counsel

    VENTAS REALTY, LIMITED PARTNERSHIP

/S/ HEATHER [ILLEGIBLE]

      Name:     By:   Ventas, Inc., its general partner

/S/ [ILLEGIBLE]

        Name:     By:  

/S/ BRIAN K. WOOD

      Name:  

Brian K. Wood

      Title:  

Sr. Vice President & Chief Tax Officer

 

170

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JOINDER

The undersigned, VENTAS, INC., a Delaware corporation, hereby joins in the
foregoing Second Amended and Restated Master Lease Agreement No. 5 solely for
the purpose of, subject to Section 40.2 of the aforesaid Lease, joining with
Ventas Realty, Limited Partnership, on a joint and several basis, as Lessor
under the aforesaid Lease with respect to, and only with respect to, the Leased
Property commonly known as Kindred Hospital – Philadelphia (Facility No. 4614),
and for no other purposes. Notwithstanding anything to the contrary contained in
the aforesaid Lease, the aforesaid Tenant acknowledges and agrees, by the
acceptance of this Joinder, that Ventas, Inc. shall have no liability or
obligations under the aforesaid Lease, as lessor or otherwise, with respect to
any Leased Property other than the aforesaid Kindred Hospital - Philadelphia
Leased Property.

 

Witness     VENTAS, INC.

/S/ HEATHER [ILLEGIBLE]

    By:  

/S/ BRIAN K. WOOD

Name:       Name:  

Brian K. Wood

      Title:  

Sr. Vice President & Chief Tax Officer

/S/ [ILLEGIBLE]

        Name:        

 

171

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ALL PURPOSE ACKNOWLEDGMENT

 

STATE OF Kentucky    )    ) COUNTY OF Jefferson    ) On November 11, 2016 before
me, a notary public, personally appeared Cristina E. O’ Brien

 

¨ personally known to me-OR-

 

¨ proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

Witness my hand and official seal.

 

/S/ MICHELE JACOBUS

  SIGNATURE OF NOTARY  

IMPRESS NOTARY SEAL:

 

CAPACITY CLAIMED BY SIGNER:    SIGNER IS REPRESENTING

¨

x

 

  

INDIVIDUALS(S)

CORPORATE OFFICER(S)

 

TITLE –                                         

TITLE

   Kindred Healthcare, Inc., a Delaware corporation                  

 

¨

  

 

PARTNER(S)

   ¨    ATTORNEY-IN-FACT    ¨    TRUSTEE(S)    ¨    OTHER
                                           

 

172

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STATE OF Kentucky    )

  )

COUNTY OF Jefferson    ) On November 11, 2016 before me, a notary public,
personally appeared Cristina E. O’Brien,

 

¨ personally known to me-OR-

 

¨ proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

Witness my hand and official seal.

 

/s/ MICHELE JACOBUS

  SIGNATURE OF NOTARY  

IMPRESS NOTARY SEAL:

 

CAPACITY CLAIMED BY SIGNER:    SIGNER IS REPRESENTING ¨    INDIVIDUALS(S)   
Kindred Healthcare Operating, Inc., a x    CORPORATE OFFICER(S)    Delaware
corporation   

TITLE –                                         

     

TITLE

   ¨    PARTNER(S)    ¨    ATTORNEY-IN-FACT    ¨    TRUSTEE(S)    ¨    OTHER
                                           

 

173

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STATE OF    Kentucky)                   ) COUNTY OF    Jefferson) On November
10, 2016 before me, a notary public, personally appeared Brian K Wood,

personally known to me-OR-

proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

Witness my hand and official seal.

 

/S/ ROBIN R. CHERRY

   SIGNATURE OF NOTARY   

IMPRESS NOTARY SEAL:

 

CAPACITY CLAIMED BY SIGNER:    SIGNER IS REPRESENTING

¨

x

  

INDIVIDUALS(S)

CORPORATE OFFICER(S)

 

TITLE – Sr. V.P. & Chief Tax Officer

 

TITLE

   Ventas, Inc., a Delaware corporation, in its capacity as the general partner
of Ventas Realty, Limited Partnership, a Delaware limited partnership         
               ¨    PARTNER(S)    ¨    ATTORNEY-IN-FACT    ¨    TRUSTEE(S)    ¨
   OTHER                                            

 

174

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STATE OF    Kentucky)                   ) COUNTY OF    Jefferson) On November
10, 2016 before me, a notary public, personally appeared Brian K Wood,

personally known to me-OR-

proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

Witness my hand and official seal.

 

/S/ ROBIN R. CHERRY

   SIGNATURE OF NOTARY   

IMPRESS NOTARY SEAL:

 

CAPACITY CLAIMED BY SIGNER:    SIGNER IS REPRESENTING

¨

x

  

INDIVIDUALS(S)

CORPORATE OFFICER(S)

 

TITLE – Sr. V.P. & Chief Tax Officer

 

TITLE

   Ventas, Inc., a Delaware corporation                   ¨    PARTNER(S)    ¨
   ATTORNEY-IN-FACT    ¨    TRUSTEE(S)    ¨    OTHER
                                           

 

175

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Exhibit A

Legal Descriptions

(see attached)

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

CA Facility 4822

SCHEDULE A

THE LAND

PARCEL ONE:

Real Property in the City of San Leandro, County of Alameda, State of
California, described as follows:

Beginning at a point on the Southern line of Lot 131 of Tract 1734, filed
February 28, 1957, in Book 38 of Maps, at Pages 11 through 13, records of said
County, distant along said line, North 68°09’31” East, 106.17 feet from the
Southwestern line of said Lot; thence South 23°34’13” East, 953.46 feet; thence
South 57°49’20” East, 148.90 feet to a point on the Northwestern line of
Hillcrest Knolls, filed January 13, 1925, in Book 4 of Maps, at Page 56, records
of said County; thence along the last named line, North 74°59’01” East, 781.24
feet; thence leaving said line, North 25°26’ West, 256.26 feet to a point on the
exterior boundary of said Tract 1734; thence along said boundary, the ten
following courses: South 64°34’ West, 180 feet; thence North 37°35’ West, 308
feet; thence North 57°18’ East, 122.94 feet; thence North 16°08’ West, 263.44
feet; thence South 76°44’ West, 140.59 feet; thence North 38°30’ West, 175.01
feet; thence South 85°11’32” West, 404.34 feet; thence South 68°09’31” West, 170
feet; thence North 21°50’29” West, 33.06 feet; thence South 68°09’31” West,
13.83 feet to the point of beginning.

Excepting therefrom, that portion conveyed to the City of San Leandro, by Deed
dated March 29, 1984, and recorded March 30, 1984, Instrument No. 84-61105.
Alameda County Records.

 

A.P. Nos.:    079-0015-001-83    079-0015-001-86    079-0015-001-85

PARCEL TWO:

Real Property in the unincorporated area of the County of Alameda, State of
California, described as follows:

Lot 1, Block F, of Hillcrest Knolls, filed January 13, 1925, Map Book 4, Pages
56 and 57, Alameda County Records.

 

A.P. No.:    079-0005-016

PARCEL THREE:

Real Property in the City of San Leandro, County of Alameda, State of
California, described as follows:

Beginning at the intersection of the Northwestern line of Lot 39, of the Map of
Tract 1734, filed February 28, 1957, in Book 38 of Maps, at Pages 11 through 13,
in the Office of the County Recorder of Alameda County, with the Eastern line of
land designated as Parcel 2 in the Deed to East Bay Lutheran Hospital
Association, dated March 10, 1960, on Reel 40, Image 655, Official Records
(AR-30181), Alameda County Records; running thence along the last named line,
North 16°08’ West, 263.44 feet to a point on the Southern line of Lot 51, as
said Lot is shown on said Map; distant thereon North 76°44’ East, 140.59 feet
from the Southwestern line thereof; thence along the exterior boundary of said
Tract 1734, as follows: North 76°44’ East 27.41 feet; South 87° East, 105 feet;
South 16°08’ East, 190 feet to said Northwestern line of Lot 39; and thence
along the last named line, South 57°18’ West, 132.06 feet to the point of
beginning.

 

A.P. No.:    079-0015-001-47

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

#4633

KY

EXHIBIT A

 

BEGINNING at a point in the east line of the first alley east of Barrel Avenue
North 32° 31 minutes 52 seconds West 130.63 feet as measured along said east
line from its intersection with the north line of Breckinridge Street; thence
with said east line North 32º 31 minutes 52 seconds West 69.48 feet to an “X”
cut at its intersection with the south line of an alley 12 feet wide; thence
with said south line North 57º 02 minutes 58 seconds East 25.00 feet to a nail
in same; thence with leaving said south line and with a line parallel with the
east line of the first mentioned alley South 32º 31 minutes 52 seconds East
69.48 feet to a “T” cut, said point being 130.63 feet north of Breckinridge
Street; thence with a line parallel with the north line of Breckinridge Street,
South 57º 02 minutes 58 seconds West 25.00 feet to the point of beginning,
containing 1.737 square feet.

BEGINNING at a point in the south right-of-way line of DeBarr Street, said point
being south 57º 01 minutes 46 seconds West 25.00 feet from the intersection of
said south right-of-way line of DeBarr Street and the west right-of-way line of
Edward Street; thence south 32º 35 minutes 26 seconds East 99.99 feet to a steel
bar in the north right-of-way line of a 12’ wide public alley; thence with the
right-of-way line of said alley, South 57º 02 minutes 58 seconds West 20.00 feet
in a steel bar; thence North 32º 35 minutes 26 seconds West 99.98 feet to a
steel bar in the south right-of-way line of DeBarr Street, aforesaid; thence
with said right-of-way line, North 57º 01 minutes 46 seconds East 20.00 to the
point of beginning, passing an iron pipe at 19.82 feet and containing 2000
square feet.

BEGINNING at a point in the south right-of-way line of DeBarr Street, said point
being the intersection said south right-of-way line of DeBarr Street and the
west right-of-way line of Edward Street, thence with said right-of-way line of
Edward Street, South 32° 35 minutes 26 seconds East 100.00 feet to a point in
the north right-of-way line of a 12” wide public alley; thence with the
right-of-way line of said alley, South 57° 02 minutes 58 seconds West 25.00 feet
to a steel bar; thence North 32° 35 minutes 26 seconds West 99.99 feet to a
point in the south right-of-way line of DeBarr Street, aforesaid; thence with
said right-of-way line, North 57° 01 minutes 46 seconds East 25.00 to the point
of beginning, passing a “x” cut in the sidewalk at 24.94 feet and containing
2500 square feet.

BEING the same properly acquired by Ventas Realty, Limited Partnership a
Delaware Limited Partnership, by Deed dated September 25, 1998 and recorded
January 15, 1999 in Deed Book 7170, Page 644 in the Office of the Clerk of
Jefferson County, Kentucky, excepting therefrom so much of said property
conveyed to Concordia Lutheran Church by Deed dated August 8, 1996 and recorded
in Deed Book 6772, Page 561 in the office aforesaid.

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

#4633

KY

EXHIBIT A

 

TRACT 1:

BEGINNING at the intersection of the center line of St. Anthony Place with the
East line of Barret Avenue; thence with said East line North 32° 31 minutes 52
seconds West 25.00 feet to its intersection with the North line of St. Anthony
Place aforesaid; thence continuing with said East line, North 32° 34 minutes 01
seconds West 604.88 feet to its intersection with the South line of an alley, as
widened; thence with said South line, South 85° 15 minutes 48 seconds East
182.67 feet and North 72° 07 minutes 52 seconds East 34.30 feet to its
intersection with the original South line of said alley; thence with said South
line, South 85° 35 minutes 48 seconds East 796.85 feet to its intersection with
the North line of St. Anthony Place aforesaid; thence with said North line,
South 56° 56 minutes 05 seconds West 312.68 feet to its intersection with the
West line and same, if extended, of Edward Street; thence with said West line
and its extension, South 32° 29 minutes 07 seconds East 25.00 feet to its
intersection with the center line of St. Anthony Place aforesaid; thence with
said center line South 56° 56 minutes 05 seconds West 503.10 feet to the point
of beginning, containing 263,291 square feet.

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

#4633

KY

EXHIBIT A

 

TRACT 2:

BEGINNING at the intersection of the center line of St. Anthony Place with the
East line of Barret Avenue; thence with said center line. North 56° 56 minutes
05 seconds East 503.10 feet to its intersection with the West line of Edward
Street and same, if extended.; Thence with said West line and its extension,
South 32° 29 minutes 07 seconds East 276.74 feet to its intersection with the
North line of DeBarr Street; thence with said North line South 56° 56 minutes 25
seconds West 502.97 feet to its intersection with the East line of Barret
Avenue, aforesaid; thence with said East line, North 32° 31 minutes 52 seconds
West 276.69 feet to the point of beginning, containing 139,175 square feet.

TRACT 3:

BEGINNING at the intersection of the East line of the tract conveyed to
Jefferson County, Kentucky, by Deed of record in Deed Book 5272, Page 780, in
the Office of the Clerk of Jefferson County, Kentucky, with the South line of
Broadway, said point also being South 85° 35 minutes 48 seconds East 577.10 feet
as measured along said South line from its intersection with the original East
line of Barret Avenue; thence with said South line, South 85° 35 minutes 48
seconds East 283.75 feet to a point, said point being North 85° 35 minutes 48
seconds West 377.08 feet as measured along said South line from its intersection
with the West line of St. Anthony Place; thence leaving said South line, South
04° 24 minutes 12 seconds West 247.50 feet to its intersection with the North
line of an alley, 15 feet wide; thence with said North line, North 85° 35
minutes 48 seconds West 283.75 feet to its intersection with the East line of
the Jefferson County, Kentucky, tract aforesaid; thence with said East line,
North 04° 24 minutes 12 seconds East 247.50 feet to the point of beginning,
containing 70,228 square feet.

TRACT 4:

BEGINNING at the intersection of the East line of Edward Street with the South
line of St. Anthony Place; thence with said South line North 56° 56 minutes 35
seconds East 62.00 feet to its intersection with the West line of the tract
conveyed to Leland B. and Jeanne A. Longstreth, by Deed of record in Deed Book
5753, Page 671, in the Office of the Clerk of Jefferson County, Kentucky; thence
with said West line, South 32° 27 minutes 25 seconds East 120.00 feet to its
intersection with the North line of an alley, 12 feet wide; thence with said
North line, South 56° 56 minutes 35 seconds West 62.00 feet to its intersection
with the East line of Edward Street, aforesaid; thence with said East line,
North 32° 27 minutes 25 seconds West 120.00 feet to the point of beginning,
containing 7,440 square feet.

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

#4633

KY

EXHIBIT A

 

TRACT 5-6:

BEGINNING at the intersection of the North line of Breckinridge Street with the
West line of Edward Street; thence with said North line, South 57o 02 minutes 58
seconds West 275.00 feet to its intersection with the East line of the tract
conveyed to Vincent J. and Kathleen Lombardo, by Deed of record in Deed Book
4784, Page 288, in the Office of the Clerk of Jefferson County, Kentucky; thence
with said East line and same, if extended, North 32° 31 minutes 52 seconds West
200.11 feet to its intersection with the South line of an alley, 12 feet wide;
thence 274.79 feet to its intersection with the West line of Edward Street,
aforesaid; thence with said West line, South 32° 35 minutes 26 seconds East
64.10 feet to its intersection with a line common to the tract conveyed to
Richard L. and Betty Ann Starks, by Deed of record in Deed Book 3627, Page 538,
in the Office aforesaid; thence with lines common to said Starks tract, South
57° 02 minutes 58 seconds West 25.00 feet, South 32° 35 minutes 26 seconds East
49.00 feet and North 57° 02 minutes 58 seconds East 25.00 feet to its
intersection with the West line of Edward Street aforesaid; thence with said
West line, South 32° 35 minutes 26 seconds East 87.00 feet to the point of
beginning, containing 53,782 square feet.

TRACT 8-13:

BEGINNING at the intersection of the West line of the tract conveyed to Alva
Clay and Marie Ashcraft, by Deed of record in Deed Book 5575, Page 712, in the
Office of the Clerk of Jefferson County, Kentucky, with South line of DeBarr
Street, said point being South 57° 01 minutes 46 seconds West 45.00 feet as
measured along said South line from its intersection with the West line of
Edward Street; thence with said West line of the Clay and Ashcraft tract, South
32° 35 minutes 26 seconds East 99.98 feet to its intersection with the North
line of an alley, 12 feet wide; thence with said North line, South 57° 02
minutes 58 seconds West 144.68 feet to its intersection with the East line of
the tract conveyed to Ronalda and James Denham, by Deed of record in Deed Book
5653, Page 586, in the Office aforesaid; thence with said East line, North 32°
35 minutes 26 seconds West 99.93 feet to its intersection with the South line of
DeBarr Street aforesaid; thence with said South line, North 57° 01 minutes 46
seconds East 144.68 feet to the point of beginning, containing 14,461 square
feet.

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

#4633

KY

EXHIBIT A

 

TRACT 14:

BEGINNING at the Intersection of the North line of the first alley South of
Broadway with the East line of Barret Avenue; thence with said East line North
32° 34 minutes 01 seconds West 59.45 feet to its intersection with the South
line of the tract conveyed to Eton Service, Inc., by Deed of record in Deed Book
6317, Page 801. In the office of the Clerk of Jefferson County, Kentucky; thence
with said South line, South 85° 35 minutes 48 seconds East 89.38 feet to a point
in same; thence leaving said South line, South 04° 24 minutes 12 seconds West
47.50 feet to its intersection with the North line of the alley aforesaid;
thence with said North line, North 85° 35 minutes 48 seconds West 53.63 feet to
the point of beginning, containing 3,397 square feet.

TAX DATA FOR INFORMATION PURPOSES ONLY:

 

TAX DATA:    District 09, Block 021E, Lots 0066, 0067, 0068 and 0069, Sublot
0000 each (Tract 1). TAX DATA:    District 09, Block 021E, Lots 0001 through
0031 and Lot 0108, Sublot 0000 each (Tract 2). TAX DATA:    District 09, Block
021E, Lot 0081, Sublot 0000 (Tract 3). TAX DATA:    District 09, Block 031E,
Lots 0051 and 0052, Sublot 0000 (Tract 4). TAX DATA:    District 09, Block 031K,
Lots 0207 and 0110, Sublot 0000 each (Tracts 5-6). TAX DATA:    District 09,
Block 021K, Lots 0126, 0127, 0128, 0129, 0130 and 0209, Sublot 0000 each (Tracts
8-13). TAX DATA:    District 09, Block 068B, Lots 0002, Sublot 0000 (Tract 14).

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

Facility # 4638

SCHEDULE A

THE LAND

PARCEL I

Being all of lots 696 to 706 both inclusive; all lots 788 to 800, both
inclusive; all of lots 813 to 831, both inclusive; all of lots 841 to 850, both
inclusive and portions of lots No. 848, 851, and 852 in Stout’s Tenth Street
Addition, now in the City of Indianapolis, as per plat thereof recorded in Plat
Book 12, page 52 of the Recorder’s records of Marion County, Indiana; together
with adjacent streets and alleys heretofore vacated, more particularly as
follows:

A part of Stout’s Tenths Street Addition as per plat thereof recorded in Plat
Book 12, page 52 in the Office of the Recorder of Marion County, Indiana, being
more particularly described as follows:

Commencing at the Southwest corner of lot No. 708 in said addition; thence South
89 degrees 56 minutes 43 seconds East along the south line of lot No. 708 and
707 a distance of 82.00 feet to the southeast corner of said Lot No. 707; thence
North 00 degrees 00 minutes 00 seconds East along the east line of said lot No.
707 a distance of 5.00 feet to the Northwest corner of a tract of land described
in Instrument NO. 78-016282, said corner also being the point of beginning;
thence continuing North 00 degrees 00 minutes 00 seconds East a distance of
115.00 feet to the northwest corner of lot 706; thence South 89 degrees 56
minutes 43 seconds East along the North line of lot No. 706 and 705 a distance
of 50.00 feet to the Southerly extension of the east line of a 12 foot alley;
thence North 00 degrees 00 minutes 00 seconds East along said extension and
along the west line of lots No. 788 thru 800 and along the northerly extension
thereof a distance of 513.13 feet to a point in the centerline of vacated 11th
Street; thence South 89 degrees 26 minutes 03 seconds East along said centerline
a distance of 145.01 feet to the centerline of vacated Cable Street; thence
South 00 degrees 00 minutes 00 seconds West along said centerline a distance of
61.20 feet to a point in the centerline of a vacated 15 foot alley; thence South
89 degrees 56 minutes 43 seconds East along said centerline a distance of 519.00
feet to the southerly extension of the west line of lot No. 840 in said
addition; thence North 54 degrees 26 minutes 53 seconds East a distance of
287.69 feet to the intersection of the westerly right of way line of the
Baltimore Railroad with the easterly extension of the north line of vacated 11th
Street; thence Southwesterly along said right of way line a distance of 861.00
feet to the northeast corner of a tract of land described in Instrument No.
78-016282, said point being on a curve having a radius of 691.62 feet, the
radius point of which bears South 12 degrees 41 minutes 59 seconds West; thence
westerly along the north line of said tract and along said curve an arc distance
of 153.60 feet to a point lying North 00 degrees 01 minutes 29 seconds West from
said radius point; thence South 85 degrees 43 minutes 31 seconds West along said
North line a distance of 335.39 feet to the point of beginning.

PARCEL II

Lots No. 775, 776, 777, 778, 779, 780, 781, 782, 783, 784, 785, 786, and 787 in
Stout’s Tenth Street Addition as per plat thereof recorded in Plat Book 12, page
52 in the Office of the Recorder of Marion County, Indiana.

PARCEL III

Lot No. 707 and 708 in Stout’s Tenth Street Addition as per plat thereof
recorded in Plat Book 12; page 52, in the Office of the Recorder of Marion
County, Indiana.

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

Facility # 4611

FL

SCHEDULE A

THE LAND

 

PARCEL I:

Lots 1, 2 and 3, Block 1, APOLLO SUBDIVISION, according to the map or plat
thereof, recorded in Plat Book 79, Page 96, Public Records of Pinellas County,
Florida.

PARCEL II:

(a) Lot 2, BIDEAWEE ESTATE SECOND PARTIAL REPLAT, according to the plat thereof,
recorded in Plat Book 52, Page 71, Public Records of Pinellas County, Florida;

LESS the following described:

Begin at the Southwest corner of said Lot 2; thence run North 100 feet along the
Westerly line of said Lot 2 to the Northwest corner; thence run East 38.22 feet
along the Northerly line of said Lot; thence Southwesterly along a curve concave
to the Southeast having a radius of 637.07 feet, tangent bearing South 19°
25’06” West, run 103.19 feet along the arc of said curve through a central angle
of 9°16’51” to a point on the Southerly line of said Lot, 13.20 feet from the
Point of Beginning; thence Westerly 13.20 feet to the Point of Beginning.

AND

(b) Lot 1, BIDEAWEE ESTATE SECOND PARTIAL REPLAT, according to the plat thereof,
recorded in Plat Book 52, Page 71, Public Records of Pinellas County, Florida;

LESS the following:

That part of Lot 1, BIDEAWEE ESTATE SECOND PARTIAL REPLAT, according to the plat
thereof, recorded in Plat Book 52, Page 71, Public Records of Pinellas County,
Florida, being further described as follows: Begin at the Southwest corner of
said Lot 1; thence run Northerly 96.87 feet along the Westerly line of said Lot
1 to the beginning of a curve concave to the Southeast having a radius of 30.00
feet; thence run Northeasterly 47.15 feet along the arc of said curve through a
central angle of 90° 03’00” to the end of said curve; thence run Easterly 67.38
feet (67.33 feet, calculated) along the Northerly line of said Lot 1 to a point
on a curve concave to the Southeast having a radius of 637.07 feet; thence from
a tangent bearing South

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

FL #4611

SCHEDULE A

THE LAND

 

32°02’10” West, (South 31°15’08” West, calculated), run Southwesterly 140.30
feet (140.24 feet, calculated) along the arc of curve through a central angle of
12°37’04” (12°36’46”, calculated) to a point on the Southerly line of said Lot
1; thence from a tangent bearing South 19°25’06” West, (South 18°38’22” West
calculated), run Westerly 38.22 feet along said Southerly line of Lot 1 to the
Point of Beginning.

PARCEL III:

(a) That part of Lot 1 of J.C. WILLIAMS’ SUBDIVISION of Lot 2 of Benson’s
Subdivision, recorded in Deed Book “O”, Page 555, Public Records of Hillsborough
County, Florida, of which Pinellas County was formerly a part, and recorded in
Plat Book 3, Page 23, Public Records of Pinellas County, Florida, described as
follows: the North 45 feet of Lot 1 lying East of 6th Street South;

LESS that part lying more than 323.3 feet East of the West line of said Lot 1.

AND

(b) That part of Lot 1 of J.C. Williams’ Subdivision of Lot 2 of Benson’s
Subdivision, according to plat of J.C. Williams Subdivision, recorded in Deed
Book “O”, Page 555, Public Records of Hillsborough County, Florida, of which
Pinellas County was formerly a part and described as follows:

Commence at the Northwest corner of said Lot 1; run thence East along the North
boundary of said Lot 1, 215.3 feet to the East boundary of 6th Street South as
established by monuments found; thence South along said East boundary of 6th
Street South, 45 feet to a Point of Beginning; thence East, 108 feet; thence
South 80 feet; thence West 108 feet; thence North 80 feet to the Point of
Beginning.

PARCEL IV:

(a) A portion of Lot 4, LEISTER AND SEAS SUBDIVISION, as recorded in Plat Book
6, Page 43, Public Records of Pinellas County, Florida, described as follows:

Commencing at the Southeast corner of said Lot 4, for a Point of Beginning;
proceed North 89°08’13” West, 32.24 feet; thence

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

FL #4611

SCHEDULE A

THE LAND

 

50.58 feet along the arc of a curve to the right; radius 637.07 feet, chord
North 41°28’08” East, 50.57 feet; thence South 01°51’47” West, 38.40 feet to the
Point of Beginning.

AND

(b) A portion of Lot 5, LEISTER AND SEAS SUBDIVISION, recorded in Plat Book 6,
Page 43, Public Records of Pinellas County, Florida, described as follows:

Commencing at the Southeast corner of said Lot 5 for a Point of Beginning;
proceed North 89°08’13” West, 45.00 feet; thence North 01°51’47” East, 38.40
feet; thence 63.93 feet along the arc of a curve to the right, radius 637.07
feet, chord North 46°37’05” East, 63.90 feet; thence South 01°51’47” West, 82.99
feet to the Point of Beginning.

AND

(c) A portion of Lot 6, LEISTER AND SEAS SUBDIVISION, as recorded in Plat Book
6, Page 43, Public Records of Pinellas County, Florida, described as follows:

Commencing at the Southeast corner of said Lot 6 for a Point of Beginning;
proceed North 89°08’13” West, 45.00 feet; thence North 01°51’47” East, 82.99
feet; thence 58.53 feet along the arc of a curve to the right, radius 637.07
feet, chord North 52°07’30” East, 58.51 feet; thence South 01°51’47” West,
119.61 feet to the Point of Beginning.

AND

(d) A portion of Lot 77, TAYLOR’S SUBDIVISION, as recorded in Plat Book 3, Page
84, Public Records of Hillsborough County, Florida of which Pinellas County was
formerly a part, described as follows:

Commencing at the Southeast corner of said Lot 77, for a Point of Beginning;
proceed North 89°08’13” West, 56.52 feet; thence North 58°17’56” East, 49.19
feet; thence 21.56 feet along the arc of a curve to the right, radius 10.00
feet; thence South 59°55’09” East, 17.62 feet; thence South 01°51’47” West,
17.88 feet to the Point of Beginning.

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

FL #4611

SCHEDULE A

THE LAND

 

(e) Lots 7 and 8, LEISTER AND SEAS SUBDIVISION, according to the map or plat
thereof, recorded in Plat Book 6, Page 43, Public Records of Pinellas County,
Florida;

LESS AND EXCEPT that portion of land being described in O.R. Book 5098, Page
1653.

All lying Southeast of road for realignment of 4th Street South and 6th Street
South and LESS road right-of-way, all lying and being in Pinellas County,
Florida.

PARCEL V:

Lot 1, Block 1, TAYLOR’S HUMANA SUBDIVISION, according to the map or plat
thereof, recorded in Plat Book 96, Page 67, Public Records of Pinellas County,
Florida.

PARCEL VI:

Lots 18, 19 and 20, TAYLOR’S SUBDIVISION, according to the map or plat thereof,
recorded in Plat Book 3, Page 84, Public Records of Hillsborough County,
Florida, of which Pinellas County was formerly a part.

PARCEL VII:

(a) Lot 16, and the South 5 feet of Lot 15, TAYLOR’S SUBDIVISION, according to
the plat thereof, recorded in Plat Book 3, Page 84, Public Records of
Hillsborough County, Florida, of which Pinellas County was formerly a part.

AND

(b) Lot 17, TAYLOR’S SUBDIVISION, according to the map or plat thereof, recorded
in Plat Book 3, Page 834, Public Records of Hillsborough County, Florida, of
which Pinellas County was formerly a part, as also filed in Pinellas County Plat
Book 3, Page 13.

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

#4644

CA

SCHEDULE A

THE LAND

 

ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE,
CITY OF BREA, DESCRIBED AS FOLLOWS:

PARCEL 2 AND PARCEL A OF PARCEL MAP NO. 87-241, AS PER MAP FILED IN BOOK 285,
PAGES 18 TO 21 INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY.

EXCEPTING THEREFROM ALL MINERAL RIGHTS, TOGETHER WITH THE RIGHT TO ENTER UPON
SAID LAND FOR THE PURPOSE OF EXPLORING, DRILLING, DEVELOPING AND PRODUCING OIL,
GAS, GASOLINE OR OTHER HYDROCARBONS FROM SAID LAND TO DO ANY AND ALL THINGS
NECESSARY OR PROPER FOR THE PROTECTION OF SAID MINERALS, AS RESERVED IN THE DEED
FROM GENERAL PETROLEUM CORPORATION OF CALIFORNIA TO LAWRENCE L. MCCREA AND WIFE,
RECORDED MARCH 16, 1939 IN BOOK 985, PAGE 398 OF OFFICIAL RECORDS.

BY AN INSTRUMENT RECORDED FEBRUARY 16, 1965 IN BOOK 7415, PAGE 287 OF OFFICIAL
RECORDS, SOCONY MOBIL OIL COMPANY, INC., SUCCESSOR IN INTEREST TO GENERAL
PETROLEUM CORPORATION, QUITCLAIMED ALL RIGHT, TITLE AND INTEREST IN AND TO THE
SURFACE AND 500 FEET BELOW THE SURFACE OF SAID LAND.

ALSO EXCEPTING THEREFROM ALL MINERAL RIGHTS, TOGETHER WITH THE RIGHT TO ENTER
UPON SAID LAND FOR THE PURPOSE OF EXPLORING, DRILLING, DEVELOPING AND PRODUCING
OIL, GAS, GASOLINE OR OTHER HYDROCARBONS FROM SAID LAND TO DO ANY AND ALL THINGS
NECESSARY OR PROPER FOR THE PRODUCTION OF SAID MINERALS, AS RESERVED IN THE DEED
FROM GENERAL PETROLEUM CORPORATION OF CALIFORNIA, TO WAYNE BROOKSHIRE, RECORDED
JULY 13, 1956 IN BOOK 3576, PAGE 591 OF OFFICIAL RECORDS.

BY AN INSTRUMENT RECORDED FEBRUARY 2, 1966 IN BOOK 7826, PAGE 772 OF OFFICIAL
RECORDS, SOCONY MOBIL OIL COMPANY, INC., SUCCESSOR IN INTEREST TO GENERAL
PETROLEUM CORPORATION, QUITCLAIMED ALL RIGHT, TITLE AND INTEREST IN AND TO THE
SURFACE AND 500 FEET BELOW THE SURFACE OF THE LAND.

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

Facility # 4876

FL

SCHEDULE A

THE LAND

 

PARCEL I:

Lots 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10, Block 39 of “Town of Hollywood” according
to the Plat thereof, as recorded in Plat Book 1, Page 21 of the Public Records
of Broward County, Florida.

PARCEL II:

Lots 27, 28 and 29, Block 38 of “Hollywood” according to the Plat thereof, as
recorded in Plat Book 1, Page 21 of the Public Records of Broward County,
Florida.

PARCEL III:

Lot 30, Block 38 of “Hollywood” according to the Plat thereof, as recorded in
Plat Book 1, Page 21 of the Public Records of Broward County, Florida.

PARCEL IV:

Lots 16, 17, 18, 19, 20 and 21, Block 28 of “Hollywood Original Town” according
to the Plat thereof, as recorded in Plat Book 1, Page 21 of the Public Records
of Broward County, Florida.

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

Facility # 4628

TN

SCHEDULE A

THE LAND

 

TRACT ONE (1):

ALL THAT TRACT OR PARCEL OF LAND LYING AND BEING IN THE CITY OF CHATTANOOGA,
HAMILTON COUNTY, TENNESSEE, AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT A CHISELED CROSS at the intersection of the Western right-of-way of
Walnut Street and the Southern right-of-way of East 7th Street; thence along the
Western right-of-way of Walnut Street and in part along the face of the building
situated on the herein described property, South, No (00) degrees 36 minutes 06
seconds West, 67.88 feet to a PK nail; thence, leaving said right-of-way, North,
89 degrees 46 minutes 40 seconds West, 115.25 feet in part along the face of the
above mentioned building and along a common line with the Vencor, Inc.,
property, recorded in Deed Book 4126, Page 461, in the Register’s Office of
Hamilton County, Tennessee, to the corner of the above mentioned building;
thence North, No (00) degrees 50 minutes 15 seconds East, 67.06 feet along a
common line with the above mentioned Vencor, Inc. property, and along the
Easterly line of a private joint driveway easement, shown on that plat recorded
in Plat Book 26, Page 199, as Parcel 5, and described in deed Book C, Volume 7,
Page 644, in the above mentioned Register’s Office, to a PK nail at the
Northwest corner of the above mentioned building; thence North, 89 degrees 48
minutes 41 seconds East, 114.98 feet along the Southerly right-of-way of East
7th Street, to THE POINT OF BEGINNING.

All as shown on that International ALTA/ACSM Land Title Survey prepared by
Samuel W. Clemons, Sr., R.L.S. Tennessee Number 1639, with CLEMONS SURVEYING,
383 Ellis Cove Road, South Pittsburg, TN 37380, entitled “Vencor (TN) Project”,
dated as of October 30, 1997, and last revised on December 23, 1997, designated
as Job Order No. 97-10-34, (Drawing Number HT-145-D-L-4. 1-1.0).

The Grantor’s source of interest in the property is a Warranty Deed recorded in
Book 5138, Page 812, in the Register’s Office of Hamilton County, Tennessee.

The Legal Description herein is the same as that contained in the deed of Prior
Title.

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

#4628

SCHEDULE A

THE LAND

 

TRACT TWO (2):

ALL THAT TRACT OR PARCEL OF LAND LYING AND BEING IN THE CITY OF CHATTANOOGA,
HAMILTON COUNTY, TENNESSEE, AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING at the intersection of the western right-of-way of Georgia Avenue and
the northern right-of-way of East 8th Street; thence along said northern
right-of-way of East 8th Street North 89 degrees 56 minutes 30 seconds West
115.75 feet to a point; thence North 00 degrees 10 minutes West 55.34 feet to a
point; thence North 89 degrees 44 minutes East 9.5 feet to a point; thence North
00 degrees 10 minutes West 205 feet to a point at the northwest corner of the
property conveyed from Hospital Affiliates International, Inc. to the Caldsted
Foundation by Deed recorded in Book 2288, Page 399, Register’s Office, Hamilton
County, Tennessee (said point being the northeast corner of Parcel 5 shown on
plat recorded in Plat Book 26, Page 199, said Register’s Office); thence South
89 degrees 44 minutes West along the north line of Parcel 5 as shown on plat
recorded in Plat Book 26, Page 199, said Register’s Office 11.5 feet to a point;
thence North 00 degrees 10 minutes West 48.64 feet to a point; thence South 89
degrees 44 minutes West 99.88 feet to a point on the eastern right-of-way of
Cherry Street; thence along said right-of-way North 00 degrees 10 minutes West
1.0 feet to a point; thence North 89 degrees 44 minutes East 117.65 feet to a
point; thence North 00 degrees 10 minutes West 34.5 feet to a point; thence
North 89 degrees 44 minutes East 5.0 feet to a point; thence 00 degrees 10
minutes West 35.5 feet to a point; thence South 89 degrees 44 minutes West 11.5
feet to a point; thence North 00 degrees 10 minutes West 11.5 feet to a point;
thence North 89 degrees 44 minutes East 5.0 feet to a point; thence North 00
degrees 10 minutes West 28.5 feet to a point on the southern right-of-way of
East 7th Street; thence along said right-of-way North 89 degrees 44 minutes East
11.97 feet to a point; thence leaving said right-of-way South 00 degrees 43
minutes 30 seconds West 66.76 feet to a point; thence North 89 degrees 46
minutes 40 seconds. West 115.38 feet to a point on the western right-of-way of
Walnut Street; thence along said right-of-way due South 302.79 feet to the
intersection with the western right-of-way Georgia Avenue; thence along the
western right-of-way of Georgia Avenue South 25 degrees 33 minutes 30 seconds
West 55.52 feet to the point of beginning, being shown as Parcel 2 on survey
drawing 1093-238-2, dated March 18, 1993 by David L. Hopkins, Jr., Tennessee
Registered Land Surveyor No. 120, 900 Manufactures Road, Chattanooga, Tennessee.

TOGETHER WITH such rights as are appurtenant to the subject property under (1)
the alley agreement dated August 15, 1901, recorded in Book 159, Page 644, in
the Register’s Office of Hamilton County, Tennessee; and (2) easement from The
Caldsted Foundation dated October 28, 1975, recorded in Book 2288, Page 404,
said Register’s Office; and (3) easement across a portion of Parcel 5 as shown
on plat recorded in Plat Book 26, Page 199, said Register’s Office, as reserved
in Deed from Hospital Affiliates International, Inc. to The Caldsted Foundation,
dated October 29, 1975, recorded in Book 2288, Page 399, said Register’s Office.

The Grantor’s source of interest in the property is a Warranty Deed recorded in
Book 5138, Page 812, in the Register’s Office of Hamilton County, Tennessee.

The Legal description herein is the same as that contained in the Deed of Prior
Title.

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

MO 4680

Exhibit A

 

The land herein described is situated in the State of Missouri, City of St.
Louis and is described as follows:

PARCEL 1: A lot in Block 3883 of the City of St. Louis, fronting 100 feet on the
South line of Lindell Boulevard by a depth Southwardly of 212 feet 1-1/2 inches,
more or less, on its West line, which line is a right angles to Lindell
Boulevard and of 215 feet 4-1/4 inches on its East line being the West line of
Euclid Avenue, to an alley on which it has a width 130 feet 5 inches.

PARCEL 2: A parcel of land in Block 3883 of the City of St. Louis, beginning at
a point in the South line of Lindell Boulevard 100 feet West of the West line of
Euclid Avenue, being also the West line of property, now or formerly of Frank H.
Gerhart; thence Westwardly along the South line of Lindell Boulevard 140 feet;
thence Southwardly 213 feet, more or less to an alley; thence Eastwardly along
the North line of said alley 140 feet to a point. 130 feet 5 inches West of the
West line of Euclid Avenue, being also the west line of property, now or
formerly of Frank H. Gerhart; thence Northwardly along the West line of
property, now or formerly of Frank H. Gerhart, 214 feet more or less, to the
South line of Lindell Boulevard being the point of beginning

Commonly known as 4900 Lindell Blvd.

PARCEL 3: A Lot in Block 3883 of the City of St. Louis beginning in the South
line of Lindell Boulevard, 240 feet West of the West line of Euclid Avenue;
thence Westwardly along the South line of Lindell Boulevard 89 feet 2-3/4 inches
to a point; thence Southwardly 213 feet 2-1/4 inches, more or less, to an alley;
thence Eastwardly along the North line of said alley 89 feet 2-3/4 inches to a
point; thence Northwardly 213 feet 2-1/4 inches, more or less, to the point of
beginning.

PARCEL 4: A Lot in Block 3883 of the City of St. Louis, fronting 75 feet on the
South line of Lindell Boulevard by a depth Southwardly at right angles to
Lindell Boulevard of 213 feet 2-1/4 inches, more or less, to an alley, the
Northwest corner of said Lot being 443 feet 3/4 inches East of the East line of
Kingshighway Boulevard; bounded west by property now or formerly of
International Life Insurance Co., and East by property now or formerly of Park
Lane Memorial Hospital Association.

Commonly known as 4936 Lindell Blvd.

 

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Facility # 4653

TX

SCHEDULE A

THE LAND

 

A tract of land situated in the Nathan Proctor Survey, Abstract No. 1230,
Tarrant County, Texas, and being a portion of that certain tract of land
conveyed to Haydn Catler as recorded in Volume 7888, page 1854, Deed Records of
Tarrant County, Texas, and being more particularly described by metes and bounds
as follows:

BEGINNING at a 1/2 inch iron rod at a point which bears North 00 degrees 28
minutes 38 seconds West, 2239.20 feet from the southeast corner of the Nathan
Proctor Survey, said iron also being in the south right-of-way line of the
proposed Oak Bend Trail, a 68 foot proposed right-of-way;

THENCE south 00 degrees 28 minutes 38 seconds East, leaving said South
right-of-way line, 782.07 feet to a 1/2 inch iron rod;

THENCE North 81 degrees 01 minutes 30 seconds West, 762.53 feet to a 1/2 inch
iron rod in the east right-of-way line of the proposed Oakmont Blvd, said iron
being the beginning of a non-tangent curve to the right whose radius is 884.00
feet and whose long chord bears North 10 degrees 36 minutes 50 seconds East,
50.57 feet;

THENCE along said curve and said East right-of-way line, through a central angle
of 03 degrees 16 minutes 41 seconds a distance of 50.58 feet to a 1/2 inch iron
rod;

THENCE North 12 degrees 15 minutes 11 seconds East, continuing along said East
right-of-way line, 352.40 feet to a 1/2 inch iron rod at the beginning of a
curve to the left whose radius is 884.00 feet and whose long chord bears North
09 degrees 43 minutes 21 seconds East 78.06 feet;

THENCE along said curve, and continuing along said East right-of-way line,
through a central angle of 05 degrees 03 minutes 40 seconds a distance of 78.09
feet to a 1/2 inch iron rod at the intersection of said East right-of-way line
with the aforementioned south right-of-way line of Oak Bend Trail, said iron
also being the beginning of a curve to the left whose radius is 535.75 feet and
whose long chord bears North 74 degrees 28 minutes 52 seconds East, 340.17 feet;

THENCE along said curve, and said south right-of-way line, through a central
angle of 23 degrees 23 minutes 58 seconds a distance of 342.55 feet to a 1/2
inch iron rod;

THENCE North 62 degrees 51 minutes 31 seconds East continuing along said south
right-of-way line, 50.00 feet to a 11/2 inch iron rod set at the beginning of a
curve to the right whose radius is 730.05 feet and whose long chord bears North
74 degrees 14 minutes 00 seconds East, 287.97 feet;

THENCE along said curve and continuing along said south right-of-way line,
through a central angle of 22 degrees 44 minutes 58 seconds a distance of 289.87
feet to the Point of Beginning, and containing approximately 10,000 acres of
land.

Said tract now being platted and known as Lot 1, Block C, River Hills Phase II
Addition, an Addition to the City of Fort Worth, Tarrant County, Texas,
according to the plat recorded in volume 388-195, Page 19, Plat Records, Tarrant
County, Texas.

Note: The Company is prohibited from insuring the area or quantity of the land
described herein. Any statement in the above legal description of the area or
quantity of land is not a representation that such area or quantity is correct,
but is made only for informational and/or identification purposes and does not
override Item 2 of Schedule B hereof.

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Facility # 4668

TX

SCHEDULE A

THE LAND

 

Being 2.605 acres of land, and being all of Lot 30-R, Block 9, Grandview
Addition to the City of Fort Worth, Tarrant County, Texas, according to the plat
recorded in Volume 388-204, page 8 of the Plat Records of Tarrant County, Texas,
and all of Lots 11 through 16, block 9, Grandview Addition to the City of Fort
Worth, Tarrant County, Texas, according to the plat recorded in Volume 63, page
39 through 30 of the Plat Records of Tarrant County, Texas, and all of Lots 9
and 10, Block 9, Jennings & Cooper Subdivision to the City of Fort Worth,
Tarrant County, Texas, according to the plat recorded in Volume 63, page 106 of
the Plat Records of Tarrant County, Texas. Sold 2.605 acres being more
particularly described by metes and bounds as follows:

BEGINNING at a 1/2” Iron rod found at the Northwest corner of the aforesaid Lot
30-R, block 9, Grandview Addition, said point lying at the intersection of the
East right-of-way line of 8th Avenue (a 68 foot right-of-way) with the South
right-of-way line of Cooper Street (a 60 foot right-of-way);

THENCE East 391.12 feet, along the South right-of-way line of said Cooper Street
to a 1/2” iron rod found for a corner at the Northeast corner of Lot 16, Block
9, Grandview Addition;

THENCE S 00°01’15” W 140.00 feet along the East line of said Lot 16, Block 9,
also being the West line of Lot 17, Block 9, to a 1/2” iron rod found for a
corner in the North line of a 10-foot alley;

THENCE West 199.98 feet along the North line of said 10 foot alley to a 1/2”
iron rod set in the East line of the aforesaid Lot 30-R, Block 9;

THENCE S 00°01’15” W 10.00 feet along the East side of said Lot 30-R to a 1/2”
iron rod set for a corner in the South line of said alley;

THENCE East 224.98 feet along the South line of said 10 foot alley to a point in
an existing power pole at the most Easterly northeast corner of the aforesaid
Lot 30-R, and being the Northwest corner of Lot 37, Block 9, Grandview Addition;

THENCE S 00°01’15” W 140.00 feet along the East line of said Lot 30-R and the
West line of Lot 37 to a Pop Rivet in concrete at the Southeast corner of Lot
30-R, and lying in the North right-of-way line of Terrell Avenue (a 60 foot
right-of-way at this point);

THENCE along the North right-of-way line of said Terrell Avenue, as follows:

1. West 55.00 feet to an “X” cut in concrete for a corner;

2. N00°01’15” E 4.00 feet to an “X” cut in concrete for a corner;

3. West 361.12 feet to a 1/2” Iron rod set at the Southwest corner of the
aforesaid Lot 30-R, said point lying at the intersection of the North
right-of-way line of said Terrell Avenue with the East right-of-way line of the
aforesaid 8th Avenue;

THENCE N 00°01’15” E 286.00 feet along the East right-of-way line of 8th Avenue
to the Place of Beginning, containing 2.605 acres (113,481 square feet) of land.

NOTE: The Company is prohibited from Insuring the area or quantity of the land
described herein. Any statement in the above legal description of the area or
quantity of land is not a representation that such area or quantity is correct,
but is made only for informational and/or identification purposes and does not
override Item 2 of Schedule B hereof.

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Facility # 4674

SCHEDULE A

THE LAND

 

Situate, lying and being in the County of HILLSBOROUGH, State of Florida,
to-wit:

The East 1/2 of the Southwest 1/4 of the Northwest 1/4 of Section 2, Township 29
South, Range 18 East, HILLSBOROUGH County, Florida, LESS the North 645 feet
thereof and LESS the West 25 feet thereof.

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Facility # 4635

TX

SCHEDULE A

THE LAND

 

Tract No. 1:

Lot 1, Block 1, New City Block 16358, MEDIC-CORP. SUBDIVISION, City of San
Antonio, Bexar County, Texas, according to map or plat thereof recorded in
Volume 9100, Page(s) 110, Deed and Plat Records of Bexar County, Texas.

Tract No. 2:

Lot 1, Block 3, New City Block 16353, VENCOR UNIT-1, City of San Antonio, Bexar
County, Texas, according to map or plat thereof recorded in Volume 9535, Page(s)
88, Deed and Plat Records of Bexar County, Texas.

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Facility # 4647

NV

SCHEDULE A

THE LAND

 

That portion of the Southeast Quarter (SE  1⁄4) of the Southeast Quarter (SE
 1⁄4) of Section 1, Township 21 South, Range 60 East, M.D.M., described as
follows:

Parcel One (1) of Parcel Map in File 86, Page 18, in the Office of the County
Recorder of Clark County, Nevada and recorded July 18, 1996 in Book 960718 as
Document No. 01095, Official Records.

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Facility # 4660

TX

SCHEDULE A

THE LAND

 

Lot 1, Block 1, Mansfield Hospital, City of Mansfield, according to map or plat
thereof recorded in Cabinet A, Slide 309, of the Plat Records of Tarrant County,
Texas.

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Facility # 4662

NC

SCHEDULE A

THE LAND

 

Lying and being in Guilford County, North Carolina and being more particularly
described as follows:

Beginning at an existing iron pipe in the northern right of way line of
Southside Boulevard (50’ right of way) and being the southernmost point in Lot
1, Block D, Section 1, of the Benbow Park Subdivision as shown and described in
Plat Book 27, Page 75 in the Guilford County Registry; thence with said Lot 37°
36’ 09” East 36.66 feet to a corner; thence North 81° 55’ 34” East 45.10 feet to
an existing iron pipe and corner with Lot 3, Block D, Section 5 of Benbow Park
Subdivision as shown and described in Plat Book 31, Page 89 in the Guilford
County Registry, thence with said subdivision the following five (5) courses and
distances: North 81° 55’ 34” East 562.84 feet; North 82° 01’ 51” East 62.73
feet; thence North 01° 08’ 41” West 126.89 feet to the southern right of way
line of Lakeland Road (50’ right of way); thence South B6° 43’ 51” East 178.48
feet to an existing iron pipe in the eastern right of way line of Carlton Avenue
(50’ right of way) and corner with Lot 1, Block J of said plat; and thence South
86° 40’ 55” East 118.01 feet to a pont in the line of said Lot and being the
western right of way line of O. Henry Boulevard (U.S. Highway 29 North); thence
with the western right of way line of O. Henry Boulevard South 04° 38’ 30” West
200.00 feet; thence South 10° 06’ 50” West 13.58 feet to a corner with the City
of Greensboro as described by a deed in Book 3650, Page 1517 in the Guilford
County Registry; thence with said City property the following six (6) courses
and distances: South 71° 57’ 27” West 45.39 feet; thence South 81° 46’ 40” West
112.14 feet to a point; thence South 07° 19’ 49” east 17.00 feet to a point;
thence South 37° 37’ 14” East 37.88 feet to a point; thence North 81° 46’ 40”
East 93.81 feet to a point; thence North 77° 39’ 22” East 26.28 feet to a point
in the western right of way line of O. Henry Boulevard; thence with said right
of way the following five (5) courses and distances: South 10° 06’ 50” West
127.58 feet to a point; thence South 16° 12’ 38” West 200.00 feet to a point;
thence South 18° 59’ 23” West 200.00 feet to a point; thence South 26° 01’ 48”
West 200.00 feet to a point and South 30° 11’ 37” West 40.66 feet to a new iron
pipe in the northern right of way line of Bothwell Street (50’ right of way);
thence with the northen right of way line of Bothwell Street South 77° 41’ 13”
West 126.18 feet to a corner and intersection with the eastern right of way line
of Southside Boulevard (50’ right of way); thence along a curve to the left with
a radius of 374.43 feet and a chord bearing and distance of North 25° 15’ 19”
West 156.09 feet to a point; thence along the northern right of way lien of
Southside Boulevard North 37° 17’ 10” West 361.09 feet to a point; thence along
said right of way line North 39° 06’ 41” West 461.02 feet to the point and place
of Beginning containing 12.241 acres more or less as shown and described by plat
of property for Prince Hall Grand Lodge Free and Accepted Masons of North
Carolina, Incorporated, per survey thereof by Technical Consultants of
Kernersville, North Carolina and dated July 6, 1992, job number 92-047, Clay V.
Fulton, Surveyor.

Subject to:

Rights of The Prince Hall Grand Lodge Free and Accepted Masons of North
Carolina, Inc. pursuant to Lease of Real Property With an Option to Purchase
recorded in Book 3984, Page 973, as supplemented and amended by Assignment
recorded in Book 4103, Page 2091.

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Facility # 4614

PA

SCHEDULE A

THE LAND

 

ALL THAT CERTAIN lot or piece of ground.

SITUATE in the 35th Ward of the City of Philadelphia and described according to
an “As Built Plan” made for Vencor Hospitals East, Inc., by VPH Associates dated
July 15, 1994, as follows, to wit:

BEGINNING at a point formed by the intersection of the Southwesterly side of
Devereaux Avenue (100 feet wide) with the Southeasterly side of Palmetto Street
(60 feet wide); thence extending South 52 degrees 18 minutes 07 seconds East,
along the Southwesterly side of Devereaux Avenue, the distance of 190 feet to a
point; thence extending South 37 degrees 41 minutes 53 seconds West, the
distance of 100 feet to a point; thence extending South 52 degrees 18 minutes 07
seconds East the distance of 90 feet to a point on the Northwesterly side of
Bingham Street (60 feet wide); thence extending South 37 degrees 41 minutes 53
seconds West, along the said Northwesterly side of Bingham Street, the distance
of 45 feet to a point; thence extending North 52 degrees 18 minutes 07 seconds
West, the distance of 140 feet to a point; thence extending South 37 degrees 41
minutes 53 seconds West, the distance of 95 feet to a point; thence extending
North 52 degrees 18 minutes 07 seconds West the distance of 140 feet to a point
on the Southeasterly side of Palmetto Street; thence extending North 37 degrees
41 minutes 53 seconds East along the said Southeasterly side of Palmetto Street,
the distance of 240 feet to a point on the said Southwesterly side of Devereaux
Avenue, being the first mentioned point and place of BEGINNING.

BEING known as No. 530 to 534 Devereaux Avenue.

BEING the same premises which Allegheny United Hospitals Inc., a Pennsylvania
nonprofit corporation by Deed dated 3/20/1995 and recorded in the County of
Philadelphia on 5/1/1995 in Deed Book VCS 860 page 533, granted and conveyed
unto Vencor Hospitals East, Inc., a Delaware corporation, in fee.

 

BRT Tax #   77-8-305-10; 77-8-0305-00; 35-2-2980-10; 88-6-0356-02;  
88-6-0356-00 & 88-6-0357-00

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Facility # 4871

IL

SCHEDULE A

THE LAND

 

PARCEL 1:

LOTS 21, 23, 24 AND 25 IN BLOCK 10 OF COCHRAN’S SECOND ADDITION TO EDGEWATER IN
THE EAST FRACTIONAL 1/2 OF SECTION 5, TOWNSHIP 40 NORTH, RANGE 14 EAST OF THE
THIRD PRINCIPAL MERIDIAN, IN COOK COUNTY, ILLINOIS

PARCEL 2:

LOTS 4, 5, 6, 7, 8, 9, 10 AND THE NORTH 22 FEET OF LOT 11 IN BLOCK 10 IN
COCHRAN’S SECOND ADDITION TO EDGEWATER IN THE EAST FRACTIONAL 1/2 OF SECTION 5,
TOWNSHIP 40 NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN, IN COOK COUNTY
ILLINOIS.

 

#4671   ILLINOIS   6130 North Sheridan Road, Chicago   PIN:  
14-05-210-015/016/022/008/006/005/004

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Facility # 4664

NM

EXHIBIT A

 

Leasehold interest in the following property:

Tract 2C, of Plat of Tracts 1A, 2A, 2B & 2C of the ST. JOSEPH HOSPITAL COMPLEX
situate in Sections 16 & 17, T.10N., R.3E., N.M.P.M., Albuquerque, Bernalillo
County, New Mexico, as the same is shown and designated on said Plat filed in
the Office of the County Clerk of Bernalillo County, New Mexico, on August 5,
1998, in Plat Book 98C, folio 229.

EXCEPTING FROM THE AFORESAID PROPERTY THE FOLLOWING:

A certain tract of land situate within the southwest one-quarter (SW1/4) of
Section 16, Township 10 North, Range 3 East, New Mexico Principal Meridian,
within the City of Albuquerque, Bernalillo County, New Mexico, being and
comprising an easterly portion of Tract 2C of the PLAT OF TRACTS 1A, 2A, 2B and
2C, ST. JOSEPH HOSPITAL COMPLEX, Albuquerque, New Mexico, as the same is shown
and designated on the plat thereof, recorded in the office of the County Clerk
of Bernalillo County, New Mexico on August 5, 1998 in Book 98C, Page 229 as
Document No. 1998098402 and being more particularly described by New Mexico
State Plane Grid Bearings (Central Zone NAD 1927) and ground distances as
follows:

BEGINNING at the northeast corner of said Tract 2C, a point on the westerly
right-of-way line of Interstate 25 (I-25), thence running along the easterly
boundary line of said Tract 2C and also along said right-of-way line,
S09°12’55”W, a distance of 171.71 feet to the southeast corner of said Tract 2C,
thence leaving said right-of-way line and running thence along the southerly
boundary line of said Tract 2C,

N84°52’31”W, a distance of 144.42 feet to the southwest corner of the tract
herein described, thence running along the westerly boundary line of the tract
herein described,

N02°57’26”E, a distance of 170.79 feet to the northwest corner of the tract
herein described, a point on the northerly boundary line of said Tract 2C,
thence running along the northerly boundary line of said Tract 2C,

S87°41’24”E, a distance of 103.16 feet to a point; thence,

S80°37’32”E, a distance of 60.25 feet to the point and place of beginning

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

Facility # 4665

CO

SCHEDULE A

THE LAND

 

Lots 1 to 15, Block 35,

McCullough Hill Amended Map,

City and County of Denver,

State of Colorado.

(for informational purposes only) 1920 High Street

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Facility # 4637

IL

SCHEDULE A

THE LAND

 

PARCEL 1:

LOTS 16 TO 25 IN BLOCK 16 IN NORTHWEST LAND ASSOCIATION SUBDIVISION OF THAT PART
OF THE WEST 1/2 OF THE EAST 1/2 OF THE NORTHEAST 1/4 (EXCEPT THE EAST 33 FEET
LYING SOUTH OF THE NORTHWESTERN ELEVATED RAILROAD CO’S RIGHT OF WAY) OF SECTION
13, TOWNSHIP 40 NORTH, RANGE 13, EAST OF THE THIRD PRINCIPAL MERIDIAN, IN COOK
COUNTY, ILLINOIS.

PARCEL 2:

LOTS 16 TO 25 IN BLOCK 17 IN NORTHWEST LAND ASSOCIATION SUBDIVISION OF THAT PART
OF THE WEST 1/2 OF THE EAST 1/2 OF THE NORTHEAST 1/4 (EXCEPT THE EAST 33 FEET
LYING SOUTH OF THE NORTHWESTERN ELEVATED RAILROAD CO’S RIGHT OF WAY) OF SECTION
13, TOWNSHIP 40 NORTH, RANGE 13, EAST OF THE THIRD PRINCIPAL MERIDIAN, IN COOK
COUNTY, ILLINOIS.

PARCEL 3:

LOTS 5, 7, 8, 9, 10, 11, 12, 13, 14 AND 15 IN A. S. TERRILL’S SUBDIVISION OF
BLOCK 6 IN SUPERIOR COURT PARTITION OF THE NORTH 1/2 OF THE SOUTHEAST 1/4 OF
SECTION 13, TOWNSHIP 40 NORTH, RANGE 13, EAST OF THE THIRD PRINCIPAL MERIDIAN,
IN COOK COUNTY, ILLINOIS.

 

#4637   ILLINOIS   2544 Montrose Avenue, Chicago   PIN:  
13-13-232-027/028/029/032     13-13-231-030/031/032/033     13-13-401-010/012  
  13-13-401-041/005/006

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Facility # 4690

IL

SCHEDULE A

THE LAND

 

LOTS 5, 6, 7, 8 (EXCEPT THE EAST 26 FEET THEREOF) IN BLOCK 1; ALSO LOTS 1, 2, 3,
4 AND 15 IN BLOCK 2, IN TOWN MANOR, A SUBDIVISION OF THE NORTH 100 ACRES OF THE
NORTH EAST 1/4 OF SECTION 5, TOWNSHIP 39 NORTH, RANGE 12 EAST OF THE THIRD
PRINCIPAL MERIDIAN, IN COOK COUNTY, ILLINOIS.

PARCEL 2:

EASEMENT FOR INGRESS AND EGRESS FOR THE BENEFIT OF PARCEL 1 OVER THE FOLLOWING:

A STRIP OF LAND OF VARIOUS WIDTHS OVER THAT PART OF LOT 14 IN BLOCK 2 IN TOWN
MANOR, A SUBDIVISION OF THE NORTH 100 ACRES OF THE NORTH EAST 1/4 OF SECTION 5,
TOWNSHIP 39 NORTH, RANGE 12

EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTH WEST CORNER OF SAID LOT 14; THENCE NORTH 0 DEGREES 00
MINUTES 00 SECONDS EAST ALONG THE WEST LINE OF SAID LOT 133.57 FEET TO THE NORTH
WEST CORNER OF SAID LOT; THENCE NORTH 83 DEGREES 15 MINUTES 38 SECONDS EAST
ALONG THE NORTH LINE OF SAID LOT 42.02 FEET TO A LINE 42.00 FEET EAST OF AND
PARALLEL WITH THE WEST LINE OF SAID LOT; THENCE SOUTH 0 DEGREES 00 MINUTES 00
SECONDS EAST ALONG SAID PARALLEL LINE A DISTANCE OF 32.00 FEET; THENCE SOUTH 35
DEGREES 19 MINUTES 49 SECONDS WEST 20.76 FEET TO A POINT ON A LINE 30.00 FEET
EAST OF AND PARALLEL WITH THE WEST LINE OF SAID LOT; THENCE SOUTH 0 DEGREES 00
MINUTES SECONDS EAST ALONG SAID PARALLEL LINE A DISTANCE OF 85.00 FEET TO THE
POINT OF INTERSECTION WITH THE SOUTH LINE OF SAID LOT; THENCE SOUTH 88 DEGREES
15 MINUTES 37 SECONDS WEST ALONG THE SOUTH LINE OF SAID LOT 30.01 FEET TO THE
POINT OF BEGINNING OF THE STRIP OF LAND HEREIN DESCRIBED, IN COOK COUNTY,
ILLINOIS.

PARCEL 3:

EASEMENT FOR INGRESS AND EGRESS FOR THE BENEFIT OF PARCEL 1 OVER THE FOLLOWING:

THE NORTH 30.00 FEET OF LOT 9 IN BLOCK 1, (AS MEASURED PERPENDICULARLY TO THE
NORTH LINE OF SAID LOT) IN TOWN MANOR, A SUBDIVISION OF THE NORTH 100 ACRES OF
THE NORTH EAST 1/4 OF SECTION 5, TOWNSHIP 39 NORTH, RANGE 12 EAST OF THE THIRD
PRINCIPAL MERIDIAN, IN COOK COUNTY, ILLINOIS.

 

#4690    ILLINOIS    365 East North Avenue, Northlake    PIN:   
15-05-211-006/007/008/005       15-05-212-001/002/003/004/008

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

Facility # 4602

EXHIBIT A

THE LAND

 

(except the South 5.00 feet of the East 100.08 feet thereof)

Tracts A, B, C and E of Vencor Hospitals South, according to the Plat thereof
recorded in Plat Book 146, Page 90, Dade County,

Florida, Public Records.

Leasehold interest in the following parcel pursuant to that certain Lease/Use
Agreement and Declaration of Restrictive Covenant and First Amendment by and
between the City of Coral Gables, Florida and Ventas Realty, Limited
Partnership.

North 105.00 feet of the 30 foot wide right-of-way of Wallace Street, as shown
on the recorded Plat of Tamiami Place, Plan No. 3, Coral Gables, according to
the plat thereof, as recorded in Plat Book 146, at Page 90 of the Public Records
of Miami-Dade County,

Florida, being bounded as follows: Bounded on the North by the South
right-of-way line of S.W. 8th Street (also being the North Line of Tracts B and
C of said recorded plat of “Vencor Hospitals South”); Bounded on the South by
the Easterly extension of the South Line of said Tract B, to its intersection
with the Westerly Line of said Tract C; Bounded on the West by the Easterly Line
of said Tract B.

Property Appraiser’s Parcel Identification Nos.:

03-4107-024-0010

03-4107-024-0020

03-4107-024-0030

03-4107-024-0040

03-4107-024-0050

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Facility # 4652

FL

SCHEDULE A

THE LAND

 

PARCEL A:

Lots 1, 5, 6, 7 and 8 of GOLFAIR, according to plat thereof recorded in Plat
Book 6, Page 23 of the Public Records of Clay County, Florida.

PARCEL B:

Lots 2, 3, 4 and 9, GOLFAIR, according to plat thereof recorded in Plat Book 6,
Page 23 of the Public Records of Clay County, Florida

PARCEL C:

A portion of Block 54, PALMER AND FERRIS TRACT, Green Cove Springs, Clay County,
Florida, according to Plat Book 2, Page 1, Public Records of said county, being
more particularly described as follows:

For a Point of Beginning commence at a point where the West line of Claude
Street intersects the South line of Golfair Street according to Plat Book 6,
Page 23 of the Public Records of Clay County; and run thence North 72°45’ East
246.0 feet; run thence South 17°15’ East 124.0 feet to a point; thence North
72°45’ East 420.0 feet to a point; thence South 17°15’ East 56 feet to a point;
thence South 72°45’ West 1282.94 feet to a point; thence South 19°42’36” East
40.04 feet to a point; thence South 70°17’24” West 273.50 feet to a point on the
Easterly line of the Railroad right-of-way as per Deed Book 68, Page 217, Public
Records of Clay County, Florida; thence North along the Easterly right-of-way of
said Railroad right-of-way to a point which intersects the Southerly
right-of-way of Oak Street; thence North 72°45’ East 698.91 feet along the
Southerly right-of-way of Oak Street to a point; thence South 17°15’ East 420.0
feet along the Westerly right-of-way line of Claude Street to the Point of
Beginning, EXCEPTING THEREFROM that portion conveyed to Green Cove Springs
Public Health Authority in O.R. Volume 350, Page 627.

PARCEL D:

A parcel of land located in Block 54 (said Block being known as the “Golf
Course”), Green Cove springs, Florida, according to plat recorded in Plat Book
2, Page 1, Public Records of Clay

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

# 4652

SCHEDULE A

THE LAND

 

County, Florida, more particularly described as follows:

Commence at the intersection of the Southern terminus of the center line of
Green Street and the South line of Oak Street; run thence East along the
Southerly boundary line of Oak Street 210 feet; thence turn at right angle and
run South 544 feet; thence turn at right angle and run West 420 feet; thence
turn at right angle and run North 544 feet; thence turn at right angle and run
East along the Southerly line of Oak Street 210 feet to the Point of Beginning.

PARCEL E:

A parcel of land situated in Block 54, Palmer Ferris Tract, Green Cove Springs,
Clay County, Florida, according to Plat Book 2, Page 1 of the Public Records of
said county, said parcel being more particularly described as follows:

Begin at the intersection of the Westerly line of Palmetto Avenue with the
Southerly line of Golfair Street according to Plat Book 6, Page 2 of said Public
Records; thence on last said line run South 72°45’ West 747.70 feet; thence
South 17°15’ East 300.00 feet; thence North 72°45’ East 748.40 feet to the
Westerly line of said Palmetto Avenue; thence on last said line North 17°23’
West 37.00 feet; thence South 72°45’ West 210.00 feet; thence North 17°23’ West
210.00 feet; thence North 72°45’ East 210.00 feet to the Westerly line of said
Palmetto Avenue; thence on last said line North 17°23’ West 53.00 feet to the
Point of Beginning.

PARCEL F:

Lots 2, 3, 4, 5, 6, 7 and 8, a Replat of Borden Oaks Subdivision as recorded in
Plat Book 6, Page 2 of the Public Records of Clay

County, Florida.

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168

WA

SCHEDULE A

 

COUNTY OF PIERCE    STATE OF WASHINGTON,

PARCEL “A”:

LOT 4 OF PIERCE COUNTY SHORT PLAT NO. 8801290168, ACCORDING TO SHORT PLAT
RECORDED JANUARY 29, 1988, AND AMENDED BY “AFFIDAVIT OF MINOR CORRECTION OF
SURVEY” RECORDED UNDER RECORDING NO. 8802190266, WHICH AMENDS PIERCE COUNTY
SHORT PLAT NO. 8606270303, ACCORDING TO PLAT RECORDED JUNE 27, 1986, IN PIERCE
COUNTY, WASHINGTON.

PARCEL “B”:

A NON-EXCLUSIVE EASEMENT FOR INGRESS AND EGRESS AS DELINEATED ON PIERCE COUNTY
SHORT PLAT NO.

8801290168, ACCORDING TO SHORT PLAT RECORDED JANUARY 29, 1988, AND AMENDED BY
“AFFIDAVIT OF

MINOR CORRECTION OF SURVEY” RECORDED UNDER RECORDING NO. 8802190266, WHICH
AMENDS PIERCE

COUNTY SHORT PLAT NO. 8606270303, ACCORDING TO PLAT RECORDED JUNE 27, 1986, IN
PIERCE COUNTY,

WASHINGTON.

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Facility # 1228

GA

SCHEDULE A

THE LAND

 

All that tract or parcel of land lying and being in Land Lot 126 of the 5th
District, Fayette County, Georgia, being more particularly described as follows:

TO FIND THE TRUE POINT OF BEGINNING, commence at the intersection of the cast
right of way line of Ginger Cake Road (80 foot right of way) with the northern
right of way line of Brandywine Boulevard (variable width right of way); run
thence southeasterly along said right of way line of Brandywine Boulevard 84.71
feet along the arc of a 60,00 foot radius curve to the left (said are being
subtended by a chord lying to the northeast having a bearing and distance of S
49 degrees 52 minutes 31 seconds E 77.85 feet to a point; N 89 degrees 40
minutes 44 seconds E 386.97 feet to a point; 197.94 feet along the arc of 580.00
foot radius curve to the right (said arc being subtended by a chord lying to the
southwest having a bearing and distance of S 80 degrees 32 minutes 39 seconds E
196.98 feet) to the TRUE POINT OF BEGINNING; FROM SAID TRUE POINT OF BEGINNING
AS THUS ESTABLISHED, leave said right of way line and run N 24 degrees 30
minutes 00 seconds E 146.10 feet to a point; run thence N 89 degrees 32 minutes
56 seconds E 139.19 feet to a point; run thence N 47 degrees 00 minutes 00
seconds E 133.09 feet to a point; run thence N 89 degrees 32 minutes 56 seconds
E 374.85 feet to a point; run thence S 05 degrees 27 minutes 03 seconds E 416.84
feet to a point on the northern right of way line of Brandywine Boulevard
(variable width right of way); run thence westerly along said right of way line
the following courses and distances: N 87 degrees 35 minutes 16 seconds W 110.03
feet to a point; N 76 degrees 16 minutes 40 seconds W 50.99 feet to a point; N
87 degrees 35 minutes 16 seconds W 125.00 feet to a point; 68.88 feet along the
arc of 450.00 foot radius curve to the left (said arc being subtended by a chord
lying to the south having a bearing and distance of N 83 degrees 12 minutes 07
seconds W 68.81 feet) to a point; S 88 degrees 17 minutes 50 seconds W 47.47
feet) to a point; 117.22 feet along the arc of a 460.00 foot radius curve to the
right (said arc being subtended by a chord lying to the northeast having a
bearing and distance of N 65 degrees 40 minutes 19 seconds W 116.90 feet) to a
point; N 58 degrees 22 minutes 16 seconds W 107.80 feet to a point; 125.48 feet
along the arc of a 580.00 foot radius curve to the left (said arc being
subtended by a chord lying to the southwest having a bearing’ and distance of N
64 degrees 34 minutes 09 seconds W 125.24 feet) TO THE TRUE POINT OF BEGINNING;
said metes and bounds, courses and distances being more particularly shown on
that certain survey for PersonaCare, Inc. & Lawyers Title Insurance Corporation,
bearing the seal and certification of Cleveland S. Boutwell, Jr., GRLS #1704,
dated February 1, 1995, being designated as Tract II and containing 5.0288 acres
according to said survey, said survey being Incorporated herein by this
reference.

TOGETHER WITH rights appurtenant to the above-described property created and
described in that certain Easement Agreement by and between LAFAYETTE Health
Care Center, Inc., a Georgia corporation and Jerry Ballard Homes, Inc., dated
February 3, 1995, filed for record February 13, 1995, recorded in Deed Book 967,
Page 595, Fayette County, Georgia, Records.

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# 1228

GA

SCHEDULE A

THE LAND

 

TOGETHER WITH:

All that tract or pared of land lying and being in Land Lots 125 and 126 of the
5th District, Fayette County, Georgia, and being more particularly described as
follows:

Beginning at a point on the eastern line of the 80 foot right of way of Ginger
Cake Road, said point lying at the northwestern end of that curved portion of
right of way line which is common to Ginger Cake Road and Brandywine Boulevard,
connecting the northern line of the 60 foot right of way of Brandywine Boulevard
with said eastern line of Ginger Cake Road; from said POINT OF BEGINNING proceed
north 09 degrees 25 minutes 45 seconds west along said right of way of Ginger
Cake Road a distance of 148.89 feet to an iron pin found; thence leave said
right of way line and run north 89 degrees 32 minutes 28 seconds east a distance
of 1,567.34 feet to an iron pin found on the land lot line common to Land Lots
125 and 126; run thence along said land lot line north 00 degrees 16 minutes 38
seconds west a distance of 152.55 feet to a point; thence leave said land lot
line and run south 89 degrees 52 minutes 00 seconds east a distance of 333.07
feet to a point; thence south 34 degrees 11 minutes 43 seconds west a distance
of 487.38 feet to a point; thence south 00 degrees 00 minutes 00 seconds east a
distance of 239.53 feet to a point located on the northerly right of way line of
Brandywine Boulevard; thence along said right of way line the following courses
and distances: north 68 degrees 45 minutes 16 seconds west a distance of 63.38
feet to a point; 175.86 feet along the arc of a curve to the left having a
radius of 535.00 feet (said are being subtended by a chord having a bearing and
distance of north 78 degrees 10 minutes 16 seconds west 175.07 feet) to a point;
north 87 degrees 35 minutes 16 seconds west a distance of 21.38 feet to a point;
thence leave said right of way line and run north 05 degrees 27 minutes 03
seconds west a distance of 416.84 feet to a point; thence south 89 degrees 32
minutes 56 seconds west a distance of 374.85 feet to a point; thence south 47
degrees 00 minutes 00 seconds west a distance of 133.09 feet to a point; thence
south 89 degrees 32 minutes 56 seconds west a distance of 139.19 feet to a
point; thence south 24 degrees 30 minutes 00 seconds west a distance of 146.10
feet to a point located on the northerly right of way line of Brandywine
Boulevard; thence along said right of way line the following courses and
distances; 197.94 feet along the arc of a curve to the left having a radius of
[Illegible] feet (said are being subtended by a chord having a bearing and
distance of north 80 degrees 32 minutes 39 seconds west 196.98 feet) to a point;
south 89 degrees 40 minutes 44 seconds west a distance of 386.97 feet to a
point; 84.71 feet along the arc of a curve to the right having a radius of 60.00
feet (said are being subtended by a chord having a bearing and distance of north
49 degrees 52 minutes 31 seconds west 77.85 feet) to the point of beginning.

Said property being more particularly shown on that survey for Personacare, Inc.
& Lawyers Title Insurance Corporation bearing the seal and certification of
Cleveland S. Boutwell, Jr. of Boutwell & Associates. Inc., GRLS No. 1704, dated
February 1, 1995, revised February 2, 1995, and being designated as Tract I and
containing 7.9955 acres according to said survey, said survey being incorporated
herein by this reference.

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Facility # 559

DT

SCHEDULE A

THE LAND

 

A Leasehold Estate:

Parcel 2: (leased land) Tract 1: A parcel of land located on the southerly side
of Starr Farm Road and on the westerly side of North Avenue in the City of
Burlington, Vermont and more particularly described as follows:

Beginning at a point which marks the intersection of the westerly sideline of
North Avenue with the southerly sideline of Starr Farm Road; thence S 26° 30’ E
a distance of 203.28 feet in and along the westerly sideline of North Avenue to
a point; thence S 69° 09’ W a distance of 250 feet to a point; thence N 26° 30’
W a distance of 203.28 feet to a point located in the southerly line of Starr
Farm Road; thence N 69° 09’ E a distance of 250 feet in and along the southerly
line of Starr Farm Road to the point and place of beginning.

Tract 2: A parcel of land located on the southerly side of Starr Farm Road in
the City of Burlington, Vermont, and more particularly described as follows:

Beginning at a point which is located in the southerly line of Starr Farm Road,
said point being 700 feet westerly of the intersection of the southerly sideline
of Starr Farm Road with the westerly sideline of North Avenue; thence S 26° 30’
E a distance of 203.28 feet to a point; thence S 69° 09’ W a distance of 600
feet to a point; thence N 26° 30’ W a distance of 203.28 feet to a point located
in the southerly line of Starr Farm Road; thence N 69° 09’ E in and along the
southerly line of Starr Farm Road a distance of 600 feet to the point and place
of beginning.

It is the intent of this description to exclude a uniform strip of land on the
west side of the Flynn Estate property, said strip of land having a frontage of
32.15 feet on Starr Farm Road.

The parcel of land herein described is shown on a plan identified as “Property
Plan John J. Flynn Estate, Burlington, Vermont” prepared by Webster-Martin, Inc.
dated June 14, 1963.

Tract 3: A parcel of land located on the southerly side of Starr Farm Road and
westerly of North Avenue in the City of Burlington, County of Chittenden and
State of Vermont, belonging to the Estate of John J. Flynn and as shown on a
plan of Webster-Martin, Inc. dated June 14, 1963 and more particularly described
as follows:

Beginning at a point which is located in the southerly line of Starr Farm Road,
said point being 250 feet westerly of the intersection of the southerly sideline
of Starr Farm Road with the westerly sideline of North Avenue; thence S 26° 30’
E a distance of 203.28 feet to a point; thence S 69° 09’ W a distance of 450
feet to a point; thence N 26° 30’ W a distance of 203.28 feet to a point in the
southerly sideline of Starr Farm Road; thence N 69° 09’ E in and along said
southerly sideline of Starr Farm Road a distance of 450 feet to the point or
place of beginning.

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

Facility # 694

IN

SCHEDULE A

THE LAND

 

COUNTY OF CLARK, STATE OF INDIANA

A PART OF SURVEY NO. 45 OF THE ILLINOIS GRANT IN JEFFERSONVILLE TOWNSHIP OF
CLARK COUNTY, INDIANA, BEING A PART OF THE SAME LAND CONVEYED TO WALTER W. AND
ELIZABETH MEYER AT DEED RECORD 136, PAGE 37 AND BOUNDED AS FOLLOWS:

COMMENCING AT A LIMESTONE MONUMENT IN THE NORTHWESTERLY LINE OF SURVEY NO. 32,
ILLINOIS GRANT WHICH MARKS THE EAST CORNER OF SAID SURVEY NO. 45, THENCE THE
FOLLOWING COURSES: NORTH 35 DEGREES 47 MINUTES 16 SECONDS WEST 1148.21 FEET WITH
THE LINE DIVIDING SURVEYS NO. 45 AND 46 OF THE ILLINOIS GRANT TO AN IRON PIPE;
SOUTH .55 DEGREES 06 MINUTES 27 SECONDS WEST, 1688.86 FEET LEAVING SAID DIVIDING
LINE TO AN IRON PIN; NORTH 36 DEGREES 02 MINUTES 17 SECONDS WEST, 1086.51 FEET
TO AN IRON SPIKE IN POTTER’S LANE; SOUTH 54 DEGREES 47 MINUTES 33 SECONDS WEST,
514.05 FEET WITH THE CENTER OF POTTER’S LANE TO AN IRON SPIKE, THE EAST CORNER
OF THE FALLS LODGE LOT (DD 9, INSTR. 8177); SOUTH 54 DEGREES 47 MINUTES 33
SECONDS WEST, 125.0 FEET WITH THE CENTER OF POTTER’S LANE TO AN IRON SPIKE; THE
SOUTH CORNER OF SAID FALLS LODGE LOT AND WHICH IS THE TRUE PLACE OF BEGINNING.

THENCE THE FOLLOWING COURSES OF THE BOUNDARY: SOUTH 54 DEGREES 49 MINUTES 47
SECONDS WEST, 442.62 FEET WITH THE CENTER OF POTTER’S LANE TO AN IRON SPIKE;
NORTH 30 DEGREES 00 MINUTES 33 SECONDS WEST, 126.26 FEET WITH LLOYD MYERS LOT
(DD 9, INSTR. 10422) TO AN IRON

PIPE; NORTH 30 DEGREES 14 MINUTES 02 SECONDS WEST, 168.33 FEET WITH ANOTHER LOT
OWNED BY LLOYD MYERS (DD 10, INSTR. 397) TO AN IRON PIPE; NORTH 30 DEGREES 19
MINUTES 48 SECONDS WEST, 85.98 FEET WITH RICHARD SAWYER’S LOT (DD 3, INSTR.
6569) TO AN IRON PIPE; NORTH 30 DEGREES 19 MINUTES 48 SECONDS WEST, 85.93 FEET
WITH CHARLES RICHARD’S LOT (DR 208, PAGE 289) TO AN IRON ROD; NORTH 28 DEGREES
41 MINUTES 41 SECONDS WEST, 203.80 FEET WITH CHARLES LENFERT’S LOT (DR 183, PAGE
121) AND CLAUDE BLAKE’S LOT (DR 222, PAGE 111) TO AN IRON AXLE; NORTH 28 DEGREES
49 MINUTES 32 SECONDS WEST, 104.73 FEET WITH DANIEL SMITH’S LOT (DR 290, PAGE
331) TO AN IRON PIPE; NORTH 29 DEGREES 03 MINUTES 47 SECONDS WEST, 114.67 FEET
WITH ZANE SHRADER’S LOT (DR 219, PAGE 216) TO AN IRON ROD; NORTH 29 DEGREES 45
MINUTES 04 SECONDS WEST, 75.70 FEET WITH JAMES SMITH’S LOT (DD 11, INSTR. 8683)
TO AN IRON PIPE, THE SOUTH CORNER OF CLETUS RECEVEUR’S LOT (DR 279, PAGE 176);
NORTH 54 DEGREES 34 MINUTES 06 SECONDS EAST, 137.53 FEET WITH THE SOUTHERLY LINE
OF SAID RECEVEUR’S LOT TO AN IRON ROD; THE EAST CORNER THEREOF; SOUTH 51 DEGREES
16 MINUTES 32 SECONDS EAST, 689.21 FEET, SEVERING THE LAND OF THE GRANTOR TO AN
IRON PIPE, THE WEST CORNER OF SAID FALLS LODGE LOT; SOUTH 38 DEGREES 55 MINUTES
37 SECONDS EAST, 299.83 FEET WITH THE WESTERLY LINE OF SAID FALLS LODGE LOT TO
THE TRUE PLACE OF BEGINNING AND CONTAINING 6.953 ACRES OF LAND.

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Facility #131

IN

SCHEDULE A

THE LAND

 

A part of the southeast quarter of the southwest quarter of Section 31, township
3 south, range 4 east, Harrison Township, Harrison County, Indiana, described as
follows: Beginning at a spike found at the intersection of Beechmont Drive and
Country Club Road at the southeast corner of the southwest quarter of Section
31, thence north 00 degrees 00 minutes 00 seconds east a distance of 611.06 feet
along the quarter section line to an EX nail in the centerline of Beechmont
Drive, the True Point of Beginning, thence north 00 degrees 00 minutes 00
seconds east a distance of 442.60 feet along the quarter section line to an EX
iron pin, thence south 89 degrees 39 minutes 04 seconds west a distance of
673.20 feet to an EX nail in the centerline of Beechmont Drive, thence south 28
degrees 41 minutes 22 seconds east a distance of 189.30 feet along said
centerline to an existing nail, thence south 33 degrees 53 minutes 04 seconds
east a distance of 71.60 feet along said centerline to an EX nail, thence south
43 degrees 01 minutes 58 seconds east a distance of 79.29 feet along said
centerline to an EX nail, thence south 50 degrees 22 minutes 58 seconds east a
distance of 100.69 feet along said centerline to an EX nail, thence south 59
degrees 34 minutes 48 seconds east a distance of 58.22 feet along said
centerline to an EX nail, thence south 74 degrees 11 minutes 14 seconds east a
distance of 56.89 feet along said centerline to an EX nail, thence south 87
degrees 01 minutes 06 seconds east a distance of 82.13 feet along said
centerline to an EX nail, thence north 88 degrees 11 minutes 44 seconds east a
distance of 137.99 feet along said centerline to an EX nail, thence south 81
degrees 48 minutes 47 seconds east a distance of 35.57 feet along said
centerline to an EX nail, thence south 62 degrees 21 minutes 05 seconds east a
distance of 38.10 feet along said centerline to an EX nail, thence south 36
degrees 03 minutes 52 seconds east a distance of 28.68 feet along said
centerline to an EX nail the True Point of Beginning, containing 4.957 acres.

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

Facility # 213

IN

SCHEDULE A

THE LAND

 

Lots Numbered 30, 45, 46, 47, 48 and 49 in Warren Terrace, an addition to the
City of Indianapolis, the plat of which is recorded in Plat Book 22, page 28, in
the Office of the Recorder of Marion County, Indiana.

Except, however, 65 feet by parallel lines off the entire East side of said Lot
Number 30.

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

Facility # 113

IN

SCHEDULE A

THE LAND

 

State of Indiana, County of Vigo

A part of 14 acres off the East side of 45 acres off the West end of the South
Half of the Southwest Quarter of Section 35, Township 12 North, Range 9 West,
Harrison Township, Vigo County, Indiana, and described as follows, to-wit:
Commencing at the Southwest corner of the Southwest Quarter of Section 35,
Township 12 North, Range 9 West; East along and with the south line of Section
35, One Thousand twenty-two and Eight Tenths (1022.8) feet to the place of
beginning; North 0 degrees 04 minutes West 700 feet; East Three Hundred
Ninety-six (396) feet; South 0 degrees 04 minutes East Seven Hundred (700) feet;
West Three Hundred Ninety-six (396) feet to the place of beginning.

 

Page 5 of 5

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EXHIBIT A

The Nursing Home Unit of New Pond Village Condominium, together with all
appurtenant easements and an undivided percentage of the common elements as
established by Master Deed executed by Ventas Realty, Limited Partnership, dated
December 19, 2002, and recorded with the Norfolk County Registry of Deeds on
December 20, 2002 as document no. 236752.

(Facility MA-198

(formerly MA-985))

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Facility # 825

VA

SCHEDULE A

THE LAND

 

ALL THAT certain tract, piece or parcel of land, lying, situate and being in the
City of Suffolk, Virginia, and being more particularly described as follows,
to-wit:

BEGINNING at the northwest corner of the intersection of the right of way of
Constance Road with the right of way of Western Avenue, in the City of Suffolk,
Virginia, and running from said point of intersection westwardly along the
northern boundary of the right of way of Western Avenue, fifty-seven (57) feet,
more or less, to a point at a culvert running under Western Avenue, a corner,
which corner is thirty (30) feet east of the property of Allie H. Norfleet;
thence running in a northwardly direction, in a line parallel to the eastern
property line of the property of Allie H. Norfleet, two hundred seventy-five
(275) feet, more or less, to a point near the center of a pond, a corner; thence
running in a westwardly direction, in a line perpendicular to Lexington Avenue,
one hundred seventy-five (175) feet, more or less, to a point in the eastern
boundary line of Lexington Avenue, which point is two hundred ninety-six (296)
feet north of Western Avenue, a corner; thence running in a northwardly
direction in a line that would be the eastern line of Lexington Avenue, if
extended, and parallel to and three hundred (300) feet distant eastwardly from
the eastern boundary line of East Riverview Drive, seven hundred twenty (720)
feet, more or less, to a point, a corner; thence running westwardly in a line
perpendicular to East Riverview Drive three hundred (300) feet to a point on the
eastern boundary line of said East, Riverview Drive, a corner; thence running
northwardly along the eastern boundary of East Riverview Drive fifty (50) feet
to a point on the eastern boundary of East Riverview Drive, a corner; thence
running eastwardly in a line that would be an extension of the northern boundary
line of Fort Street, if extended, nine hundred seventy (970) feet, more or less
to a point in the center line of a cove near the southwestern edge of the
Nansemond River, a corner; thence running in a southwardly direction along the
center line of said cove, and along the center line of the ditch loading from
said cove, its various meanderings, six hundred forty (640) feet, more or less,
to a point in the northern boundary of the right of way of Constance Road, a
corner; thence running in a southwesterly direction along the northwestern
boundary of the right of way of Constance Road five hundred forty (540) feet,
more or less, to a point where said right of way intersects the northern
boundary of Western Avenue, and the point of beginning. The above property is
more particularly shown and described on a plat thereof entitled “PLAT SHOWING
PART OF LAND OF R. RAWLES & JOHN E. WOODWARD AND THE H. W. CAMPBELL EST. LOCATED
ON THE NORTH SIDE OF WESTERN AVE., SUFFOLK, VA.”, and labeled “copies form plat
made by J. O. Causey, Jr., Civil Eng., by L. D. Fletcher”, which is recorded in
the Clerk’s Office of the Circuit Court of the City of Suffolk, Virginia, in
Plat Book 3, at page 111, reference thereto being hereby specifically made for a
more particular description thereof.

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Facility # 829

VA

SCHEDULE A

THE LAND

 

PARCEL ONE:

ALL THOSE certain lots, pieces or parcel of land, situate in the Borough of
Kempsville, in the City of Virginia beach, State of Virginia, being known,
numbered and designated as Lots 17 to 24, inclusive, Block 3, on the plat of G.
W. Deal #2, which plat is recorded in the Clerk’s Office of the Circuit Court of
the City of Virginia Beach, Virginia, in Deed Book 63, at page 424, a copy of
which is recorded in the Clerk” Office aforesaid in Map Book 70, at pages 6 and
7, and also shown on “A Part of Deal No. 1 and Deal No. 2, located near
Jacksondale in Princess Anne Co., Va.”, which plat is recorded in the aforesaid
Clerk’s Office in Map Book 41, at page 9; said property fronting 175 feet by
scale on the western side of Corwood Avenue, formerly Poplar Avenue; and
extending back between dividing lines to the center line of block; its northern
side being 120 feet; its southern side being 120 feet by scale and being the
northern side of Romney Road; its rear or western side being 190 feet by scale.

PARCEL TWO:

ALL THAT certain portion of a 60’ street called Ash Avenue lying immediately
adjacent and contiguous to, but north of Bonney Road, in Kempsville Borough, in
the City of Virginia beach, Virginia, and shown as a 60’ street on that certain
plat entitled “PLAT SHOWING A PROTION OF ASH AVENUE TO BE VACATED LYING BETWEEN
BLOCK 3 AND block 4, G. W. Deal Plat No. 2, KEMPSVILLE BOROUGH, VIRGINIA BEACH,
VIRGINIA SCALE: 1”-50’ DECEMBER 1967, MADE BY FRANK D. TARRELL, JR., AND
ASSOCIATES, SURVEYORS AND ENGINEERS, VIRGINIA BEACH, VIRGINIA”, recorded March
15, 1968 in Deed Book 1048, at page 321, said 60’ street being more particularly
bounded and described as follows:

BEGINNING at a point where the eastern line of said 60’ Ash Avenue intersects
the northern line of Bonney Road and from said point of beginning running thence
westerly along the northern line of Bonney Road N 89º20’00” W a distance of
60.39 feet to a point at which the western line of said 60’ street intersects
the northern line of Bonney Road, said point marking the southeastern corner of
Lot 18, Block 4; thence turning and running northerly along the western edge of
said 60’ street N 07º10’00” E a distance of 274.08 feet to a point marking the
southeastern corner of Lot 26, Block 4, thence turning and running southeasterly
S 82º50’00” E a distance of 60’ to a point marking the southwestern corner of
Lot 8, Block 3; thence turning and running southerly along the eastern line of
Ash Avenue S 07º10’00” W a distance of 267.24 feet to the point of beginning,
which said point of beginning is the southwestern corner of Lot 1, Block 3.

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#829

SCHEDULE A

THE LAND

 

PARCEL THREE:

ALL THOSE certain lots, pieces of parcels of land, together with all
improvements thereon situated in the City of Virginia Beach, Virginia, and
known, numbered and designated as Lots 1 through 16 (both inclusive) and Lots 22
through 31 (both inclusive), in Block 3, and Lots 1 through 8 (both inclusive),
and Lots 18 through 25 (both inclusive) in Block 4, as shown on the plat of
property of “G. W. Deal, near Jacksondale, Map No. 2”, recorded in the Clerk’s
Office of the Circuit Court if the City of Virginia Beach, Virginia, in Deed
Book 63, at page 424, and as shown on a plat entitled “A PART OF DEAL NO. 1 AND
DEAL NO. 2, LOCATED NEAR JACKSONDALE, IN PRINCESS ANNE COUNTY, VIRGINIA”, dated
July 19, 1948, made by W. B. Gallup, County Surveyor, and recorded in the
aforesaid Clerk’s Office in Map Book 41, at page 9; reference being made to said
plat for a more particular description of the aforesaid property; together with
all grantors right, title and interest, if any, in Ash Street as shown on said
plat.

PARCEL FOUR:

ALL THAT eastern one-half of a certain portion of a 60’ street called Ash Avenue
lying immediately adjacent to and contiguous to, but west of Lots 8 through 16,
Block 3, G. W. Deal Plat No. 2, in Kempsville Borough, City of Virginia Beach,
Virginia, shown on Plat recorded December 7, 1978, in Map Book 130, page 46, to
which plat reference is made for a more particular description of said property.

LESS AND EXCEPT those portions conveyed to the City of Virginia beach, Virginia
for the widening of Bonney Road on Plats recorded in Map Book 90, at page 51,
Map Book 130, at page 17, Map Book 130 at page 46, and Map Book 146, at page 50,
and as described in Agreement recorded in Deed Book 1129, at page 175.

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MA 573

SCHEDULE A

THE LAND

 

Property: One Love Lane, South Dennis, MA

Facility Name: Eagle Pond Rehab & Living Center

Facility Number: 573

PARCEL ONE:

Shown as Lot 2 and a 40’ wide way on a plan entitled “Subdivision Plan of Land
in Dennis; Mass.” dated November 29, 1982, drawn by Low & Weller, Inc.,
Yarmouth, Mass., prepared for Allen J. White et al, Trustees, Eagle Pond Realty
Trust, which plan is recorded with Barnstable County Registry of Deeds in Plan
Book 372, Page 46, to which plan reference is hereby made for a more particular
description and containing 225,442 and 28,583 square feet of land, respectively,
according to said plan.

PARCEL TWO:

The land together with the buildings thereon, if any, being a certain piece of
cranberry bog and adjoining upland situated in Dennis, Barnstable County,
Massachusetts, near the Harwich Line and bounded and described as follows:

Beginning at the Westerly end of the premises by a pond called James Bassett’s
pond and at a point four (4) rods from the cranberry bog;

Thence following around the line of cranberry bog Northerly and Easterly in a
line four (4) rods from the cranberry bog to the land of said heirs of Miller
Nickerson, deceased;

Thence Southerly and Westerly around by the edge of the upland in range of said
heirs to the pond aforesaid;

Thence Northerly four (4) rods to the first mentioned bound;

Containing two hundred and twenty and one-half (220 1/2) rods of cranberry bog
and one-half acre of upland, be the same more or less.

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Facility # 573

SCHEDULE A

THE LAND

 

PARCEL/THREE:

A certain parcel of land with all the buildings and structures now or hereafter
standing or placed thereon, situated in Dennis, in the County of Barnstable, and
Commonwealth of Massachusetts, bounded and described as follows:

Beginning at a point on the southerly side of a private way in said Dennis,
50.82 feet S14° 26’ 04” E and 32.25 feet S85° 51’ 21”W from a Commonwealth of
Massachusetts Highway bound opposite baseline station 106 + 52.83 on Route 6,
the Mid-Cape Highway, thence running by land now or formerly owners unknown S14°
26’ 04” E a distance of 500.01 feet; thence turning and running by land now or
formerly of Rolf V. Robsham and land now or formerly of Marshall Siebenmann, Jr.
N87° 44’ 16” W a distance of 577.00 feet; thence turning and running by land now
or formerly of Allen J. White also known as Lot 2 on the plan hereinafter
mentioned N04° 08’ 39”W a distance of 357.59 feet; thence turning and running
along three courses of said private way Northeasterly on said sideline by a
curve to the left having a radius of 55.00 feet, 79.50 feet, by a curve to the
right having a radius of 25.00 feet, 36.14 feet and N85° 31’ 21”E 404.71 feet to
the point of beginning.

Said lot is shown as Lot 1 on a plan entitled “Compiled Plan of Land, Old
Chatham Road, Dennis, Barnstable County, Mass.”, dated November 13, 1984,
prepared by Yunits Engineering Company, Inc. and recorded with Barnstable County
Registry of Deeds in Plan Book 390, Page 21, and contains 238, 345 square feet
more or less according to said plan.

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

Facility 4842

CA

SCHEDULE A

THE LAND

 

ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE,
CITY OF WESTMINSTER, DESCRIBED AS FOLLOWS:

THAT PORTION OF THE SOUTHEAST QUARTER OF SECTION 2, TOWNSHIP 5 SOUTH, RANGE 11
WEST, AS SHOWN ON A RECORD OF SURVEY MAP FILED IN RECORD OF SURVEY BOOK 73, PAGE
9 IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY.

COMMENCING AT THE SOUTHEAST CORNER OF THE NORTHWEST ONE QUARTER OF THE SOUTHEAST
ONE QUARTER OF SECTION 2, AS SHOWN ON THE SECTIONALIZED SURVEY MAP RECORDED IN
BOOK 51, PAGE 13 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA,
BEING A PORTION OF THE RANCHO LAS BOLSAS; THENCE NORTH 0° 40’ 20” WEST 3.18 FEET
TO THE INTERSECTION OF THE EAST LINE OF THE NORTHWEST ONE QUARTER WITH THE
CENTERLINE OF TWENTY-FIRST STREET AS IS SHOWN ON A MAP OF TRACT NO. 1754,
RECORDED IN BOOK 60, PAGES 1, 2 AND 3 OF MISCELLANEOUS MAPS OF SAID COUNTY,
THENCE SOUTH 89° 09’ 55” WEST A DISTANCE OF 100 FEET; THENCE NORTH 0° 10’ 20”
WEST; 180 FEET; THENCE SOUTH 89° 19’ 40” WEST, 30.00 FEET TO THE TRUE POINT OF
BEGINNING; THENCE NORTH 0° 40’ 20” WEST 256.04 FEET TO THE BEGINNING OF A
TANGENT CURVE CONCAVE TO THE SOUTHWEST AND HAVING A RADIUS OF 23 FEET; THENCE
NORTH AND WEST ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 50° 08’ 28” AN ARC
DISTANCE OF 36.16 FEET TO THE END OF SAID CURVE; THENCE SOUTH 89° 11’ 12” WEST,
309.59 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE TO THE SOUTHEAST AND
HAVING A RADIUS OF 15.00 FEET; THENCE SOUTH AND WEST ALONG SAID CURVE THROUGH A
CENTRAL ANGLE OF 79° 19’ 10” NORTH ARC DISTANCE OF 20.77 FEET TO THE END OF SAID
CURVE AND THE BEGINNING OF A REVERSE CURVE HAVING A RADIUS OF 230 FEET AND BEING
CONCAVE TO THE NORTHWEST; THENCE SOUTH AND WEST ALONG SAID CURVE THROUGH A
CENTRAL ANGLE OF 11° 46’ 06” NORTH ARC DISTANCE OF 47.24 FEET TO THE BEGINNING
OF A REVERSE CURVE CONCAVE TO THE SOUTHEAST AND HAVING A RADIUS OF 170.00 FEET;
THENCE SOUTHWEST AND SOUTH ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 22° 19’
56” NORTH ARC DISTANCE OF 66.26 FEET TO THE END OF SAID CURVE; THENCE SOUTH 0°
14’ 48” EAST, 450.27 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE TO THE
NORTHEAST AND HAVING A RADIUS OF 23.00 FEET; THENCE ALONG SAID CURVE THROUGH A
CENTRAL ANGLE OF 90° 04’ 02” IN A SOUTH AND EAST DIRECTION ANY ARC DISTANCE OF
36.16 FEET TO THE END OF SAID CURVE; THENCE NORTH 89° 14’ 10” EAST, 327.21 FEET
TO THE BEGINNING OF A TANGENT CURVE CONCAVE TO THE NORTHWEST AND HAVING A RADIUS
OF 23.00 FEET; THENCE EAST AND NORTH ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF
89° 54’ 30” AN ARC DISTANCE OF 36.09 FEET TO THE END OF SAID CURVE; THENCE NORTH
0° 40’ 20” WEST A FINAL DISTANCE OF 293.54 FEET TO THE TRUE POINT OF BEGINNING.

EXCEPT ALL UNDERGROUND WATER LYING BENEATH THE HEREIN DESCRIBED LAND, BUT
WITHOUT THE RIGHT OF ENTRY TO THE SURFACE THEREOF FOR THE PURPOSES OF PROCURING
WATER.

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

CA

Facility 4848

4848

SCHEDULE A

THE LAND

 

THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
SAN DIEGO, AND IS DESCRIBED AS FOLLOWS:

PARCEL 1:

LOT 4 OF HILLSIDE HOSPITAL, IN THE CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE
OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 6108, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY ON MAY 20, 1968.

PARCEL 2:

THE WEST 30 FEET OF LOTS 46, 47 AND 48 IN BLOCK 99 OF UNIVERSITY HEIGHTS, IN THE
CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP
THEREOF MADE BY G.A. D’HEMECOURT IN BOOK 8, PAGE 36 ET SEQ. OF LIS PENDENS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY.

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

Facility # 4612

MO

SCHEDULE A

THE LAND

 

Lot 1 and Tract A, LAKESIDE HOSPITAL CAMPUS, a subdivision of land in Kansas
City, Jackson County, Missouri, according to the recorded plat thereof.

Commonly known as 8625 Troost, Kansas City, MO

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

Facility # 4615

IL

SCHEDULE A

THE LAND

 

PARCEL 1

LOTS 1, 2, 3, 4, 5, 6, AND THE EAST 13 FEET OF LOT 7, IN BLOCK 1 OF THE HENRY L.
BOIES ADDITION TO THE VILLAGE (NOW CITY) OF SYCAMORE, ACCORDING TO THE PLAT
THEREOF RECORDED IN BOOK “A” OF PLATS, PAGE 39, TOGETHER WITH LOT 2 OF M.E.
CHURCH ADDITION TO SYCAMORE ACCORDING TO THE PLAT THEREOF RECORDED IN BOOK “B”
OF PLATS, PAGE 3, ON JUNE 7, 1876, ALL IN THE CITY OF SYCAMORE, DEKALB COUNTY,
ILLINOIS.

PARCEL 2

LOT 1 (EXCEPT WESTERLY 10 FEET THEREOF) IN BLOCK 2 OF HENRY L. BOIES ADDITION TO
THE VILLAGE (NOW CITY) OF SYCAMORE ACCORDING TO THE PLAT THEREOF RECORDED IN
BOOK “A” OF PLATS, PAGE 39, ALL IN THE CITY OF SYCAMORE, DEKALB COUNTY,
ILLINOIS.

 

#4615    ILLINOIS    225 Edward Street, Sycamore    PIN:   06-32-452-009     
06-32-377-011/012      06-32-451-003/004

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

Facility # 4654

TX

SCHEDULE A

THE LAND

 

C.P.C. Houston Psychiatric Hospital recorded in Volume 337, Page 2, of the Map
Records of Harris County, Texas, being more particularly described as a tract or
parcel of land containing 6.12 acres (266,645 square feet) of land, more or
less, located in the Finley McNaughton Survey, Abstract No. 553, Harris County,
Texas being a portion of Steeplechase Corner, a subdivision recorded in Volume
300, Page 83, of the Harris County Map Records, said 6.12-acre tract being more
particularly described as follows:

COMMENCING at an intersection of the West line of the Jones Road 100-foot wide
right-of-way with the South line of the Fallbrook Drive 100-foot wide
right-of-way as recorded in the said Steeplechase Corner, being the Northeast
corner of Unrestricted Reserve “D” of the said Steeplechase Corner;

THENCE North 89 deg. 58 min. 15 sec. West 200.00 feet along the said South line
of Fallbrook Drive to a point of curvature;

THENCE Westerly 410.51 feet along the said South line of Fallbrook Drive and the
arc of a curve to the right through a central angle of 19 deg. 36 min. 02 sec.
to a 5/8-inch iron rod found at the East corner and the POINT OF BEGINNING, of
the herein described tract with said curve having a radius of 1,200.00 feet and
a chord distance of 408.51 feet which bears North 80 deg. 10 min. 14 sec. west;

THENCE South 37 deg. 01 min. 17 sec. West 495.22 feet to a 5/8-inch iron rod
found at the South corner lying in the North line of the Harris County Flood
Control District (H.C.F.C.D.) 230-foot wide right-of-way for White Oak Bayou as
recorded in Volume 4235, Page 488, of the Harris County Deed Records;

THENCE North 40 deg. 10 min. 42 sec. West 87.97 feet along the said North line
of the H.C.F.C.D. Easement to a 5/8-inch iron rod set at a southerly corner of
the herein described tract;

THENCE North 62 deg. 41 min. 42 sec. West 434.23 feet along the said North line
of the H.C.F.C.D. Easement to a 5/8-inch iron rod set at the West corner of the
herein described tract and the South corner of the plat of Steeplechase Corner
Professional Building of record in Volume 322, Page 11, of the Harris County Map
Records;

THENCE North 19 deg. 42 min. 07 sec. East 449.68 feet along the line common to
the westerly line of the herein described tract and the easterly line of the
said plat of Steeplechase Corner Professional Building to a 5/8-inch iron rod
found at the Northwest corner lying in the said South line of Fallbrook Drive;

THENCE Southeasterly 281.46 feet along the said South line of Fallbrook Drive
and a curve to the right through a central angle of 08 deg. 16 min. 12 sec. to a
5/8-inch iron rod set at the point of tangency and a northerly corner said curve
having a radius of 1,950.00 feet and a chord distance of 281.22 feet which bears
South 64 deg. 06 min. 21 sec. East;

THENCE South 59 deg. 58 min. 15 sec. East 160.31 feet along the said South line
of Fallbrook Drive to a 5/8-inch iron rod set at the point of curvature and a
northeasterly corner;

THENCE Southeasterly 217.81 feet along the South line of Fallbrook Drive and the
arc of a curve to the left through a central angle of 10 deg. 23 min. 58 sec. to
the POINT OF BEGINNING, said curve having a radius of 1,200.00 feet and a chord
distance of 217.51 feet which bears South 65 deg. 10 min. 14 sec. East, and
containing 6.12 acres (266,645 square feet) of land, more or less.

NOTE: The Company is prohibited from insuring the area or quantity of the land
described herein. Any statement in the above legal description of the area or
quantity of land is not a representation that such area or quantity is correct,
but is made only for informational and/or identification purposes and does not
override Item 2 of Schedule B hereof.

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

Facility #

CA 4807

SCHEDULE A

THE LAND

 

PARCEL NO. 1:

LOTS 3 AND 4, BLOCK 937, AS SHOWN ON PLAT OF THE TOWN OF ONTARIO, IN THE CITY OF
ONTARIO, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN
BOOK 9 OF MAPS, PAGE(S) 43, RECORDS OF SAID COUNTY.

TOGETHER WITH THAT PORTION OF ORION STREET, NOW VACATED AND DESCRIBED AS
FOLLOWS:

BEGINNING AT THE SOUTHWEST CORNER OF SAID LOT 3; RUNNING THENCE SOUTH TO A POINT
10 FEET NORTH OF THE CENTER LINE OF SAID STREET, AS PLATTED; THENCE EAST AND
PARALLEL WITH THE CENTER LINE OF SAID STREET AND 10 FEET NORTHERLY THEREFROM TO
A POINT ON THE WEST LINE OF CAMPUS AVENUE; THENCE NORTH TO THE SOUHTEAST CORNER
OF SAID LOT 4; THENCE WEST ALONG THE SOUTHERLY LINE OF LOTS 3 AND 4 TO THE POINT
OF BEGINNING.

EXCEPTING THEREFROM THE WESTERLY 33 FEET AS CONVEYED TO THE CITY OF ONTARIO, A
MUNICIPAL CORPORATION, BY DEED RECORDED JULY 6, 1959, IN BOOK 4867, PAGE 21,
OFFICIAL RECORDS.

ALSO EXCEPTING THEREFROM THE NORTHERLY 20 FEET LYING WEST OF THE EASTERLY 268.10
FEET AS CONVEYED TO THE CITY OF ONTARIO. A MUNICIPAL CORPORATION. BY DEED
RECORDED AUGUST 1, 1960, IN BOOK 5201, PAGE 390, OFFICIAL RECORDS.

ALSO EXCEPTING THEREFROM THE EASTERLY 11 FEET, AS CONVEYED TO THE CITY OF
ONTARIO, A MUNICIPAL CORPORATION. BY DEED RECORDED FEBRUARY 1, 1962, IN BOOK
5640, PAGE 403, OFFICIAL RECORDS.

PARCEL NO. 2:

LOTS 5 AND 6, TRACT NO. 3722, IN THE CITY OF ONTARIO, COUNTY OF SAN BERNARDINO,
STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 50 OF MAPS, PAGE(S) 1, RECORDS
OF SAID COUNTY.

PARCEL NO. 3:

LOTS 14 AND 15, TRACT NO. 2725, IN THE CITY OF ONTARIO, COUNTY OF SAN
BERNARDINO, STATE OF CALIFORNIA, AS PER PLAT RECORDED IN BOOK 38 OF MAPS,
PAGE(S) 32, RECORDS OF SAID COUNTY.

EXCEPTING THEREFROM THE EAST 11 FEET AS CONVEYED TO THE CITY OF ONTARIO, A
MUNICIPAL CORPORATION, BY DEED RECORDED AUGUST 26, 1968, IN BOOK 7083, PAGE 442,
OFFICIAL RECORDS.

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

4645

Facility # 4645 / Facility # 464

FL

SCHEDULE A

THE LAND

 

PARCEL I:

Lots 3 and 4 and the West 12.77 feet of Lot 2, all LESS the North 10.00 feet and
all of Lots 13 and 14 and the East 17 feet of Lot 12, Block 39, COLEE HAMMOCK,
according to the Plat thereof, as recorded in Plat Book 1, Page 17 of the Public
Records of Broward County, Florida.

PARCEL II:

Lots 15 and 16, Block 39, COLEE HAMMOCK, according to the Plat thereof, as
recorded in Plat Book 1, Page 17 of the Public Records of BROWARD County,
Florida.

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

Facility # 4685

TX

SCHEDULE A

THE LAND

 

A LEASEHOLD ESTATE:

DESCRIPTION OF A TRACT OF LAND CONTAINING 0.856 OF ONE ACRE IN THE P.W. ROSE
SURVEY, ABSTRACT NO. 645, IN THE CITY OF HOUSTON, HARRIS COUNTY, TEXAS. SAID
0.856 OF ONE ACRE OF LAND BEING ALL OF THAT CERTAIN TRACT OF LAND DESCRIBED IN
ASSIGNMENT OF LESSEE’S INTEREST IN A LEASE, RECORDED IN CLERK’S FILE NO. M784089
OF THE REAL PROPERTY RECORDS, HARRIS COUNTY, TEXAS. SAID 0.856 OF ONE ACRE OF
LAND BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS:

BEGINNING at a 5/8 inch iron rod found at the west corner of the herein
described tract; said point also being in the southeast line of Main Street, and
once called to be the centerline of Harris Bayou;

THENCE, with the northwest line of the herein described tract, being the
southeast line of Main Street, North 35°00’00” East 153.82 feet to an “X” found
cut in the top of a brick column for the north corner of the herein described
tract;

THENCE, with the northeast line of the herein described tract, South 54°16’49”
East 245.46 feet to an “X” found cut in concrete for the east corner of the
herein described tract, same being in the northwest line of Fannin Street;

THENCE, with the southeast line of the herein described tract, same being the
northwest line of Fannin Street, South 35°00’00” West 100.90 feet to a
calculated point on top of a plastic water line for a southerly corner of the
herein described tract;

THENCE, with the southerly and southwesterly lines of the herein described
tract, (at one time called to be the centerline of Harris Bayou), and in
conflict with the apparent northerly line of the adjoining property as described
in a Subordination Agreement of record in Volume 2189, Page 612, Deed Records of
Harris County, Texas; the conflict, as found monumented, which creates small
overlaps and gaps along the southerly boundary line of this subject tract is
further documented on a survey plat issued coincident with this legal
description; the subject property line is more particularly described by the
following nine (9) courses:

1) North 75°29’46” West 11.43 feet to a 5/8” iron rod found,

2) South 74°11’15” West 13.25 feet to a 5/8” iron rod found,

3) South 62°25’53” West 16.15 feet to a 5/8” iron rod found,

4) South 77°07’58” West 27.84 feet to a 5/8” iron rod found,

5) North 65°44’24” West 25.07 feet to a “V” cut in concrete,

6) North 63°54’08” West 16.41 feet to an “X” found cut in concrete,

7) North 57°23’15” West 50.61 feet to an “X” found cut in concrete,

8) North 54°02’23” West 51.17 feet to an “X” found cut in concrete, and

9) North 47°13’07” West 58.22 feet to the POINT OF BEGINNING and containing
0.856 of one acre of land within these mates and bounds.

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

EXHIBIT B

Term Commencement/Expiration Dates/Portfolio #

Master Lease Agreement No. 5

* See the Original Master Lease for the Commencement Date of the Lease relative
to each Facility

 

   

Facility

ID

 

Name

 

City

  

State

 

Commencement

Date

  

Lease Expiration

Date**

  

Portfolio #

1   4822   Kindred Hospital San Francisco Bay Area   San Leandro    CA   *   
April 30, 2023    5 2   4633   Kindred Hospital Louisville   Louisville    KY  
*    April 30, 2023    5 3   4638   Kindred Hospital Indianapolis   Indianapolis
   IN   *    April 30, 2023    5 4   4611   Kindred Hospital Bay Area St.
Petersburg   St. Petersburg    FL   *    April 30, 2023    5 5   4644   Kindred
Hospital Brea   Brea    CA   *    April 30, 2023    5 6   4876   Kindred
Hospital South Florida Hollywood   Hollywood    FL   *    April 30, 2023    5 7
  4628   Kindred Hospital - Chattanooga   Chattanooga    TN   *    April 30,
2025    5 8   4680   Kindred Hospital – St. Louis   St. Louis    MO   *    April
30, 2025    5 9   4653   Kindred Hospital - Tarrant County (Fort Worth
Southwest)   Fort Worth    TX   *    April 30, 2025    5 10   4668   Kindred
Hospital - Fort Worth   Fort Worth    TX   *    April 30, 2025    5 11   4674  
Kindred Hospital - Central Tampa   Tampa    FL   *    April 30, 2025    5 12  
4635   Kindred Hospital - San Antonio   San Antonio    TX   *    April 30, 2025
   5 13   4647   Kindred Hospital - Las Vegas (Sahara)   Las Vegas    NV   *   
April 30, 2025    5 14   4660   Kindred Hospital - Mansfield   Mansfield    TX  
*    April 30, 2025    5 15   4662   Kindred Hospital - Greensboro   Greensboro
   NC   *    April 30, 2025    5 16   4614   Kindred Hospital - Philadelphia  
Philadelphia    PA   *    April 30, 2025    5 17   4871   Kindred Hospital -
Chicago – Lakeshore   Chicago    IL   *    April 30, 2025    5 18   4664  
Kindred Hospital - Albuquerque   Albuquerque    NM   *    April 30, 2025    5 19
  4665   Kindred Hospital - Denver   Denver    CO   *    April 30, 2025    5 20
  4637   Kindred Hospital - Chicago (North Campus)   Chicago    IL   *    April
30, 2025    5 21   4690   Kindred Hospital - Chicago (Northlake Campus)  
Northlake    IL   *    April 30, 2025    5 22   4602   Kindred Hospital - South
Florida – Coral Gables   Coral Gables    FL   *    April 30, 2025    5 23   4652
  Kindred Hospital - North Florida   Green Cove Springs    FL   *    April 30,
2025    5 24   168   Kindred Transitional Care and Rehabilitation - Lakewood  
Tacoma    WA   *    April 30, 2025    5 25   1228   Kindred Transitional Care
and Rehabilitation - Lafayette   Fayetteville    GA   *    April 30, 2025    5
26   559   Kindred Transitional Care and Rehabilitation - Birchwood   Burlington
   VT   *    April 30, 2025    5 27   694   Kindred Transitional Care and
Rehabilitation – Wedgewood (IN)   Clarksville    IN   *    April 30, 2025    5
28   131   Kindred Transitional Care and Rehabilitation – Harrison (IN)  
Corydon    IN   *    April 30, 2025    5 29   213   Kindred Transitional Care
and Rehabilitation – Wildwood (IN)   Indianapolis    IN   *    April 30, 2025   
5 30   113   Kindred Transitional Care and Rehabilitation - Southwood   Terre
Haute    IN   *    April 30, 2025    5 31   198   Kindred Transitional Care and
Rehabilitation – Harrington (MA)   Walpole    MA   *    April 30, 2025    5 32  
825   Kindred Transitional Care and Rehabilitation - Nansemond Pointe   Suffolk
   VA   *    April 30, 2025    5 33   829   Kindred Transitional Care and
Rehabilitation - River Pointe   Virginia Beach    VA   *    April 30, 2025    5
34   573   Kindred Transitional Care and Rehabilitation - Eagle Pond   South
Dennis    MA   *    April 30, 2025    5 35   4842   Kindred Hospital Westminster
  Westminster    CA   *    April 30, 2025    1 36   4848   Kindred Hospital San
Diego   San Diego    CA   *    April 30, 2025    1 37   4612   Kindred Hospital
Kansas City   Kansas City    MO   *    April 30, 2025    2 38   4615   Kindred
Hospital Sycamore   Sycamore    IL   *    April 30, 2025    2 39   4654  
Kindred Hospital Houston NW Campus   Houston    TX   *    April 30, 2025    2 40
  4807   Kindred Hospital Ontario   Ontario    CA   *    April 30, 2025    2 41
  4645   Kindred Hospital So. Florida Ft. Lauderdale   Ft. Lauderdale    FL   *
   April 30, 2025    4 42   4685   Kindred Hospital Houston   Houston    TX   *
   April 30, 2025    4

 

** Subject to Section 19.6 of this Lease

 

Exhibit B

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

EXHIBIT C

Allocation Schedule – Applicable Transferred Property Percentages

Master Lease Agreement No. 5

 

     Facility
ID   

Name

   Base Rent as of
11/11/2016      Transferred
Property
Percentage as of
11/11/2016   1    113   

Southwood Health & Rehabilitation Center

     2,193,065.28         1.59115 %  2    131   

Harrison Health and Rehabilitation Centre

     1,782,863.16         1.29353 %  3    168   

Lakewood Healthcare Center

     521,844.97         0.37862 %  4    198   

Harrington House Nursing and Rehabilitation Center

     1,283,401.92         0.93115 %  5    213   

Wildwood Health Care Center

     2,170,549.32         1.57481 %  6    559   

Birchwood Terrace Healthcare

     1,083,986.96         0.78647 %  7    573   

Eagle Pond Rehabilitation and Living Center

     1,252,484.12         0.90872 %  8    694   

Wedgewood Healthcare Center

     1,532,389.56         1.11180 %  9    825   

Nansemond Pointe Rehabilitation and Healthcare Center

     2,202,770.76         1.59819 %  10    829   

River Pointe Rehabilitation and Healthcare Center

     1,385,872.20         1.00550 %  11    1228   

Lafayette Nursing and Rehab Center

     1,627,021.52         1.18046 %  12    4602   

Kindred Hospital - South Florida - Coral Gables

     2,593,243.80         1.88149 %  13    4628   

Kindred Hospital - Chattanooga

     2,709,385.80         1.96575 %  14    4637   

Kindred Hospital - Chicago (North Campus)

     8,606,162.76         6.24407 %  15    4652   

Kindred Hospital - North Florida

     3,193,788.72         2.31721 %  16    4680   

Kindred Hospital - St. Louis

     1,308,161.76         0.94912 %  17    4690   

Kindred Hospital - Chicago (Northlake Campus)

     4,370,075.64         3.17064 %  18    4653   

Kindred Hospital - Tarrant County (Fort Worth Southwest)

     4,701,367.44         3.41101 %  19    4668   

Kindred Hospital - Fort Worth

     3,563,781.72         2.58565 %  20    4674   

Kindred Hospital - Central Tampa

     4,511,082.00         3.27295 %  21    4635   

Kindred Hospital - San Antonio

     2,247,297.48         1.63049 % 

 

Exhibit C

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

22    4647    Kindred Hospital - Las Vegas (Sahara)      2,677,644.12        
1.94273 %  23    4660    Kindred Hospital - Mansfield      1,340,703.12        
0.97273 %  24    4662    Kindred Hospital - Greensboro      2,640,728.76        
1.91594 %  25    4614    Kindred Hospital - Philadelphia      2,303,438.28      
  1.67123 %  26    4664    Kindred Hospital - Albuquerque      1,794,782.28   
     1.30218 %  27    4665    Kindred Hospital - Denver      1,684,354.68      
  1.22206 %  28    4871    Kindred Hospital - Chicago - Lakeshore     
3,041,177.52         2.20648 %  29    4611   
Kindred Hospital - Bay Area St. Petersburg      4,146,282.00         3.00827 % 
30    4633    Kindred Hospital - Louisville      8,375,123.04         6.07645 % 
31    4638    Kindred Hospital - Indianapolis      2,226,992.40         1.61576
%  32    4644    Kindred Hospital - Brea      4,576,983.24         3.32076 %  33
   4822    Kindred Hospital - San Francisco Bay Area      5,447,355.60        
3.95225 %  34    4876    Kindred Hospital - South Florida - Hollywood     
3,830,835.48         2.77941 %  35    4842    Kindred Hospital - Westminster   
  8,244,094.68         5.98138 %  36    4848    Kindred Hospital - San Diego   
  2,920,001.76         2.11856 %  37    4612    Kindred Hospital - Kansas City
     4,770,072.36         3.46086 %  38    4615    Kindred Hospital - Sycamore
     3,522,629.50         2.55579 %  39    4654   
Kindred Hospital (Houston Northwest)      3,146,339.92         2.28278 %  40   
4807    Kindred Hospital - Ontario      9,439,449.94         6.84865 %  41   
4645    Kindred Hospital - South Florida Ft. Lauderdale      2,512,262.28      
  1.82273 %  42    4685    Kindred Hospital - Houston      4,347,442.32        
3.15422 %          

 

 

    

 

 

 

        Total

      $ 137,829,290.17         100.00000 %          

 

 

    

 

 

 

 

Exhibit C

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

EXHIBIT D

Renewal Groups

Master Lease Agreement No. 5

 

    

Facility

ID

  

Name

  

City

  

State

  

Lease

Expiration

Date*

  

Renewal

Group

1    4822    Kindred Hospital San Francisco Bay Area    San Leandro    CA   
April 30, 2023    1 2    4633    Kindred Hospital Louisville    Louisville    KY
   April 30, 2023    1 3    4638    Kindred Hospital Indianapolis   
Indianapolis    IN    April 30, 2023    1 4    4611    Kindred Hospital Bay Area
St. Petersburg    St. Petersburg    FL    April 30, 2023    1 5    4644   
Kindred Hospital Brea    Brea    CA    April 30, 2023    1 6    4876    Kindred
Hospital South Florida Hollywood    Hollywood    FL    April 30, 2023    1 7   
4628    Kindred Hospital - Chattanooga    Chattanooga    TN    April 30, 2025   
2 8    4680    Kindred Hospital – St. Louis    St. Louis    MO    April 30, 2025
   2 9    4653    Kindred Hospital - Tarrant County (Fort Worth Southwest)   
Fort Worth    TX    April 30, 2025    2 10    4668    Kindred Hospital - Fort
Worth    Fort Worth    TX    April 30, 2025    2 11    4674    Kindred Hospital
- Central Tampa    Tampa    FL    April 30, 2025    2 12    4635    Kindred
Hospital - San Antonio    San Antonio    TX    April 30, 2025    2 13    4647   
Kindred Hospital - Las Vegas (Sahara)    Las Vegas    NV    April 30, 2025    2
14    4660    Kindred Hospital - Mansfield    Mansfield    TX    April 30, 2025
   2 15    4662    Kindred Hospital - Greensboro    Greensboro    NC    April
30, 2025    2 16    4614    Kindred Hospital - Philadelphia    Philadelphia   
PA    April 30, 2025    2 17    4871    Kindred Hospital - Chicago – Lakeshore
   Chicago    IL    April 30, 2025    2 18    4664    Kindred Hospital -
Albuquerque    Albuquerque    NM    April 30, 2025    2 19    4665    Kindred
Hospital - Denver    Denver    CO    April 30, 2025    2 20    4637    Kindred
Hospital - Chicago (North Campus)    Chicago    IL    April 30, 2025    2 21   
4690    Kindred Hospital - Chicago (Northlake Campus)    Northlake    IL   
April 30, 2025    2 22    4602    Kindred Hospital - South Florida – Coral
Gables    Coral Gables    FL    April 30, 2025    2 23    4652    Kindred
Hospital - North Florida    Green Cove Springs    FL    April 30, 2025    2 24
   168    Kindred Transitional Care and Rehabilitation - Lakewood    Tacoma   
WA    April 30, 2025    3* 25    1228    Kindred Transitional Care and
Rehabilitation - Lafayette    Fayetteville    GA    April 30, 2025    3* 26   
559    Kindred Transitional Care and Rehabilitation - Birchwood    Burlington   
VT    April 30, 2025    3* 27    694    Kindred Transitional Care and
Rehabilitation – Wedgewood (IN)    Clarksville    IN    April 30, 2025    3* 28
   131    Kindred Transitional Care and Rehabilitation – Harrison (IN)   
Corydon    IN    April 30, 2025    3* 29    213    Kindred Transitional Care and
Rehabilitation – Wildwood (IN)    Indianapolis    IN    April 30, 2025    3* 30
   113    Kindred Transitional Care and Rehabilitation - Southwood    Terre
Haute    IN    April 30, 2025    3* 31    198    Kindred Transitional Care and
Rehabilitation – Harrington (MA)    Walpole    MA    April 30, 2025    3* 32   
825    Kindred Transitional Care and Rehabilitation - Nansemond Pointe   
Suffolk    VA    April 30, 2025    3* 33    829    Kindred Transitional Care and
Rehabilitation - River Pointe    Virginia Beach    VA    April 30, 2025    3* 34
   573    Kindred Transitional Care and Rehabilitation - Eagle Pond    South
Dennis    MA    April 30, 2025    3* 35    4842    Kindred Hospital Westminster
   Westminster    CA    April 30, 2025    2 36    4848    Kindred Hospital San
Diego    San Diego    CA    April 30, 2025    2 37    4612    Kindred Hospital
Kansas City    Kansas City    MO    April 30, 2025    2 38    4615    Kindred
Hospital Sycamore    Sycamore    IL    April 30, 2025    2 39    4807    Kindred
Hospital Ontario    Ontario    CA    April 30, 2025    2 40    4654    Kindred
Hospital Houston NW Campus    Houston    TX    April 30, 2025    2 41    4645   
Kindred Hospital So. Florida Ft. Lauderdale    Ft. Lauderdale    FL    April 30,
2025    2 42    4685    Kindred Hospital Houston    Houston    TX    April 30,
2025    2

 

* Subject to Section 19.6 of this Lease

 

Exhibit D

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

Exhibit E

Leases

As used in this Lease, the term “Leases” means this Lease and the following
leases:

 

1. Second Amended and Restated Master Lease Agreement No. 1 dated as of April
27, 2007 by and between Ventas Realty, Limited Partnership, as lessor, and
Kindred Healthcare, Inc. and Kindred Healthcare Operating, Inc., as tenant, as
amended from time to time.

 

2. Second Amended and Restated Master Lease Agreement No. 2 dated as of April
27, 2007 by and between Ventas Realty, Limited Partnership, as lessor, and
Kindred Healthcare, Inc. and Kindred Healthcare Operating, Inc., as tenant, as
amended from time to time.

 

3. Intentionally omitted.

 

4. Second Amended and Restated Master Lease Agreement No. 4 dated as of April
27, 2007 by and between Ventas Realty, Limited Partnership, as lessor, and
Kindred Healthcare, Inc. and Kindred Healthcare Operating, Inc., as tenant, as
amended from time to time.

 

Exhibit E

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

Exhibit F

INTENTIONALLY OMITTED

 

Exhibit F

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

Exhibit G

Form of Lease Guaranty

GUARANTY OF LEASE

THIS GUARANTY OF LEASE, dated as of                     , by and from
                    , a                                          having an
address at                                          (“Guarantor”), with respect
to that certain Second Amended and Restated Master Lease Agreement No. 5, dated
as of [            , 2016] (the “Lease”), between Ventas Realty, Limited
Partnership, a Delaware limited partnership (“Lessor”), and Kindred Healthcare,
Inc., a Delaware corporation and Kindred Healthcare Operating, Inc., a Delaware
corporation (collectively, “Tenant”), covering the Leased Properties (as defined
in the Lease) identified therein, including, without limitation, that certain
Leased Property more particularly described on Exhibit A attached hereto (the
“Premises”), all or a portion of which is subleased by Tenant to Guarantor.

WHEREAS, Guarantor desires, and Lessor requires, that this agreement be
furnished so that Guarantor, being obligated to do so, can fulfill the terms and
conditions of the Lease with respect to the Premises with the same effect as if
the Lease had been entered into with Guarantor as the tenant with respect to the
Premises thereunder.

NOW, THEREFORE, in consideration and recognition of the execution of the Lease,
and other good and valuable consideration and intending to be legally bound
hereby, Guarantor hereby unconditionally guarantees, and unconditionally becomes
surety to Lessor, its successors and assigns for, the payment of all rent,
additional charges and other sums owing under the Lease with respect to, or
allocable to, the Premises (and Guarantor acknowledges and agrees that, in the
event any delinquency exists under the Lease in the payment of Base Rent, Lessor
shall, for purposes of the foregoing clause, allocate such delinquency pro rata
among the Leased Properties based upon the respective Transferred Property
Percentages applicable to the Leased Properties) and the full, faithful and
punctual performance of each and all of the covenants, agreements and conditions
of the Lease to be kept and performed by Tenant with respect to the Premises, in
accordance with and within the times prescribed by the Lease, as well as all
other liabilities now or hereafter contracted by Tenant with Lessor pursuant to
the Lease with respect to the Premises and together, to the extent the same are
chargeable to Tenant under the Lease, with all costs and expenses (including,
without limitation, reasonable attorneys fees) incurred by Lessor with respect
to the Premises in connection with any of the foregoing and/or in connection
with the enforcement of Lessor’s rights against Tenant or Guarantor with respect
to the Premises (all of the foregoing being hereinafter collectively referred to
as the “Liabilities”). In the event Tenant fails to pay, perform or observe, as
applicable, any of the Liabilities, and such failure is not cured within the
cure period, if any, provided to Tenant by the terms of the Lease, an Event of
Default shall be deemed to have occurred under this Guaranty. Guarantor agrees
that it shall be obligated to keep itself informed as to the status of Tenant’s
payment, performance and observance of the Liabilities and that Lessor shall not
be obligated to give Guarantor, and Guarantor shall not be entitled to, notice
of any failure by Tenant to pay, perform or observe, as applicable, any of the
Liabilities, provided, however, that Lessor agrees to accept the cure of any
such failure, on or prior to the expiration of the cure period, if any, provided
to Tenant by the terms of the Lease, by either Tenant or Guarantor.

 

Exhibit G

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

Guarantor further agrees as follows:

1. Lessor shall have the right from time to time, and at any time in its sole
discretion, without notice to or consent from Guarantor, and without affecting,
impairing, or discharging in whole or in part, the Liabilities of Guarantor
hereunder: to modify, change, extend, alter, amend or supplement in any respect
whatever, any agreement or transaction between Lessor and Tenant or between
Lessor and any other party liable for the Liabilities, or any portion or
provision thereof; to grant extensions of time and other indulgences of any kind
to Tenant; to compromise, release, substitute, exercise, enforce or fail or
refuse to exercise or enforce any claims, rights or remedies of any kind which
Lessor may have at any time against Tenant or any other party liable for the
Liabilities, or any thereof, or with respect to any security of any kind held by
Lessor at any time under any agreement or otherwise. The Liabilities of
Guarantor shall not be affected, impaired or discharged, in whole or in part, by
reason of payments by Tenant of all or a portion of the Liabilities, to the
extent such payments shall be turned over as “voidable preferences” or otherwise
required to be refunded or disgorged, or by reason of any action whatsoever
taken by Lessor with respect to any security in which Lessor may at any time
have any interest or against any other party liable for all or any part of the
Liabilities.

2. Guarantor waives: (a) all notices, including but not limited to (i) notice of
acceptance of this Guaranty, (ii) notice of presentment, demand for payment, or
protest of any of the Liabilities, or the obligation of any person, firm or
corporation held by Lessor as collateral security, and (iii) notice of any
failure by Tenant to pay, perform or observe, as applicable, any of the
Liabilities or of any Event of Default (as defined in the Lease); (b) all
defenses, offsets and counterclaims which Guarantor may at any time have to any
of the Liabilities, except to the extent the same is a valid defense, offset or
counterclaim on the part of Tenant; and (c) all notices of the financial
condition or of any adverse or other change in the financial condition of
Tenant.

3. Lessor may, without notice, assign this Guaranty in whole or in part, and no
assignment or transfer of the Lease or subletting of the Premises shall operate
to extinguish or diminish the liability of Guarantor hereunder.

4. The liability of Guarantor under this Guaranty shall be primary with respect
to any right of action which shall accrue to Lessor under the Lease, and Lessor
may, at its option, proceed against Guarantor without having to commence any
action, or having obtained any judgment, against Tenant.

5. The Liabilities of Guarantor shall not be affected, impaired or discharged,
in whole or in part, by reason of: (a) the entry of an order for relief pursuant
to the United States Bankruptcy Code by or against Tenant; (b) the proposal of
or the consummation of a plan of reorganization concerning Tenant; (c) the
assignment of Tenant’s obligations under the Lease or any other or further
sublease of any portion of

 

Exhibit G

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

the Premises, whether or not any such assignment or sublease is permitted under
the Lease; or (d) except by reason of actual payment and performance of Tenant’s
obligations under the Lease, the discharge of the obligations of Tenant to
Lessor, provided, however, if Tenant, in accordance with the requirements of the
Lease, assigns the Lease (including, without limitation, if and to the extent
permitted under Section 25.1.11 or Section 25.4 of the Lease, by virtue of a
partial assignment of the Lease with respect to the Premises) to a Person (as
defined in the Lease) that is not an Affiliate (as defined in the Lease) of
Tenant, Tenant shall not be released from any of its duties, liabilities or
obligations under the Lease on account of any such assignment, but Guarantor
shall be released from this Guaranty insofar as it relates to any Liabilities of
Tenant assumed by the assignee and arising on account of any breach or default
of the Lease occurring after the date of such assignment. Notwithstanding
anything contained in this Guaranty to the contrary, this Guaranty shall
terminate on the expiration date or earlier termination of the sublease of the
Premises by Tenant to Guarantor, but, following such termination, Guarantor
shall remain liable for the payment and performance of any and all Liabilities
that arose or accrued on or prior to such termination.

6. The waiver of any right by Lessor or its failure to exercise promptly any
right shall not be construed as the waiver of any other right including the
right to exercise the same at any time thereafter. No waiver or modification of
any of the terms or conditions of this Guaranty shall be binding against Lessor
unless such waiver or modification is in a writing signed by Lessor.

7. The liability of Guarantor shall bind the respective representatives,
successors and assigns of Guarantor and shall inure to the benefit of Lessor,
its successors and assigns.

8. This Guaranty shall be governed by, and construed in accordance with, the
laws of the State of New York without reference to the choice of law principles
thereof. Guarantor hereby agrees to submit to the jurisdiction of any court of
general jurisdiction sitting in the State of New York and designates any officer
or supervisory employee of Lessor located at the Premises as its agent and
attorney in fact for the purpose of accepting service and making an appearance
on its behalf in such proceeding and taking all such acts as may be necessary or
appropriate in order to confer jurisdiction on it upon such court, provided such
agent and attorney in fact shall promptly send a true copy of all materials so
served to Guarantor at the address and in the manner specified in Section 9
below, and Guarantor stipulates that such consent and appointment is irrevocable
and coupled with an interest.

9. All notices, demands, requests, consents, approvals and other communications
hereunder shall be in writing and delivered or mailed (by registered or
certified mail, return receipt requested, or reputable nationally recognized
overnight courier service and postage prepaid), addressed to the respective
parties, as follows:

 

Exhibit G

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

  (a) if to Guarantor:

 

 

 

   

 

   

 

   

 

    Attention:  

 

 

with a copy to:

 

 

 

   

 

   

 

   

 

    Attention:  

 

 

 

  (b) if to Lessor:

Ventas Realty, Limited Partnership

c/o Ventas, Inc.

353 N. Clark Street, Suite 3300

Chicago, Illinois 60654

Attention: Lease Administration

with a copy to:

Ventas Realty, Limited Partnership

c/o Ventas, Inc.

353 N. Clark Street, Suite 3300

Chicago, Illinois 60654

Attention: Legal Department

or to such other address as either party may hereunder designate, and shall be
effective upon receipt.

 

Exhibit G

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

IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed and sealed
as of the day and year first above written.

 

 

  , a

 

  By:  

 

  Name:  

 

  Title:  

 

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

Exhibit H

Restrictive Covenants

1. Noncompetition. During the Restricted Period with respect to each Facility
(as the term “Facility” is used for purposes of this Exhibit H, as described in
the definition of “Restricted Period” which is set forth below), the Restricted
Parties shall not, either directly or indirectly, engage in any Restricted
Activities. For the avoidance of doubt, nothing herein shall prohibit any
Restricted Party from providing ancillary services (such as, without limitation,
rehabilitation, pharmacy, home health, geriatric or hospice services) to a
Competing Facility (or any other facility) or, so long as no Restricted
Activities are engaged in or permitted by any Restricted Party, providing
services at any facility that may compete with the services provided at the
Facilities.

2. Rights and Remedies Upon Breach. If any Restricted Party breaches, or
commences any activity that would, if completed, constitute a breach of, any of
the obligations of the Restricted Parties, and/or any other provisions, set
forth in this Exhibit H (the “Restrictive Covenants”), then Lessor shall have
the right and remedy to have the Restrictive Covenants enforced by injunctive
relief or otherwise specifically and/or equitably enforced by any court of
competent jurisdiction, without the necessity of posting bond and without being
required to wait until the expiration of any applicable cure or grace period
under the Lease, it being agreed that any breach or threatened breach of the
Restrictive Covenants would cause irreparable injury to Lessor and that money
damages would not provide an adequate remedy to Lessor, which right and remedy
is in addition to, and not in lieu of, any other rights and remedies available
to Lessor under law or in equity.

3. Severability of Covenants. The Restricted Parties acknowledge and agree that
the Restrictive Covenants are reasonable, necessary and valid in duration and
geographical scope and in all other respects. If any court determines that any
of the Restrictive Covenants, or any part thereof, is invalid or unenforceable,
the remainder of the Restrictive Covenants shall not be affected thereby and
shall be given full effect without regard to the invalid portions.

4. Blue-Penciling. If any court determines that any of the Restrictive
Covenants, or any part thereof, is unenforceable because of the duration or
geographical scope of such provision, such court shall have the power to reduce
the duration or scope of such provision, as the case may be, and, in its reduced
form, such provision shall then be enforceable.

5. Information. Tenant shall promptly provide Lessor with such information
evidencing Tenant’s compliance with the provisions of this Exhibit H as Lessor
may reasonably request from time to time.

6. Definitions.

“Competing Facility” means (a) with respect to any Facility as to which the
Primary Intended Use is operation as a hospital and as to which the Restricted
Period remains in effect, any long term acute care hospital (“LTACH”) that is
located within a ten (10) mile radius of any

 

Exhibit H

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

such Facility and (b) with respect to any Facility as to which the Primary
Intended Use is operation as a nursing center and as to which the Restricted
Period remains in effect, any licensed nursing center or other property
containing one or more licensed nursing center beds (referred to herein as a
“SNF”) that is located within a five (5) mile radius of any such Facility.

“Existing Restricted Radius LTACHs” means the LTACHs listed on Exhibit H-1, each
having not more than the respective permitted number of licensed long-term acute
care beds, and/or other beds, that meet the requirements for participation in
Medicare for payment under LTACH PPS or any successor federal payment program
(such beds, “LTAC Beds”) set forth on Exhibit H-1.

“Existing Restricted Radius SNFs” means the SNFs listed on Exhibit H-2, each
having not more than the respective permitted number of licensed skilled nursing
beds (such beds, “SNF Beds”) set forth on Exhibit H-2.

“Restricted Activities” means to own, lease, occupy, operate, finance, manage,
invest in, build, develop or expand any Competing Facility; provided, however,
that Restricted Activities shall not include (a) the ownership, operation and
management of the Leased Properties, the Existing Restricted Radius LTACHs or
the Existing Restricted Radius SNFs (except that, notwithstanding the foregoing,
it is agreed that any activity engaged in or permitted by any Restricted Party
in connection with which the number of LTAC Beds at any Existing Restricted
Radius LTACH or the number of SNF Beds at any Existing Restricted Radius SNF is
increased to a number that exceeds the permitted number of LTAC Beds or SNF
Beds, as applicable, thereat as set forth above in the definitions of “Existing
Restricted Radius LTACHs” and “Existing Restricted Radius SNFs” shall constitute
a Restricted Activity), and (b) the purchase (and ownership, operation and
management thereof) by a Restricted Party, either singly or as part of a
portfolio transaction, of any open and fully operational Competing Facility from
a Person (including by acquisition of such Person) that is not an Affiliate of a
Restricted Party (except that, notwithstanding the foregoing, it is agreed that
any activity engaged in or permitted by any Restricted Party in connection with
which the number of LTAC Beds or SNF Beds, as applicable, at any such Competing
Facility is increased to a number that exceeds the number of LTAC Beds or SNF
Beds, as applicable, at such Competing Facility as of the date of the aforesaid
purchase or as of the date any Restricted Party entered into a contract for such
purchase, whichever number is lower, shall constitute a Restricted Activity).

“Restricted Parties” means the Seniormost Parent, Tenant, each Guarantor and
each of their respective controlled Affiliates.

“Restricted Period” means, as to a particular Facility, the period commencing on
the Effective Date and expiring, as to such Facility (and, for purposes of this
Exhibit H, the term “Facility” shall include any Facility as to which this Lease
has terminated or expired), on the later of (a) (x) with respect to the Leased
Properties in Renewal Group 1 shown on Exhibit D to this Lease, April 30, 2023,
and (y) with respect to the other Leased Properties, April 30, 2025, or (b) if
the term of this Lease with respect to any such Facility has been extended in
accordance with the provisions of this Lease, the expiration date of such
Extended Term for such Facility (or the expiration date of any subsequent
Extended Term following renewal of an initial or

 

Exhibit H

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

subsequent Extended Term, as applicable, for such Facility). Notwithstanding the
foregoing, in the case of any Subject Facility as to which this Lease terminates
on account of the sale thereof on or prior to October 31, 2018 and pursuant to
the terms and conditions of ARML No. 3, the “Restricted Period” relative to any
such Subject Facility shall terminate as of the date of such sale and
termination.

 

Exhibit H

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

Exhibit H-1

Existing Restricted Radius LTACHs

 

Name

 

Address

 

LTACH Beds

KH Chicago Lakeshore   6130 North Sheridan Road, Chicago, IL 60660   103 KH
Chicago Central   4058 West Melrose Street, Chicago, IL 60641   95 KH Bay Area
Tampa   4555 South Manhattan Avenue, Tampa, FL 33611   73 KH Chicago North  
2544 West Montrose Avenue, Chicago, IL 60618   164 KH Aurora   700 Potomac St,
2nd Floor, Aurora, CO 80011   37 KH Tarrant County Southwest   7800 Oakmont
Blvd, Fort Worth, TX 76132   80 KH Las Vegas Flamingo   2250 East Flamingo Road,
Las Vegas, NV 89119   142 KH Philadelphia South   1930 South Broad Street,
Philadelphia, PA 19145   58 KH St Louis Mercy   615 South New Ballas Road, 7th
Floor, St. Louis, MO 63141   54 KH Fort Worth   815 Eighth Avenue, Fort Worth,
TX 76104   67 KH Rancho   10841 White Oak Ave, Rancho Cucamonga, CA 91730   55
KH Santa Ana   1901 N College Ave, Santa Ana, CA 92706   54 KH Heights   1800 W
26th St, Houston, TX 77008   68 KH Town & Country   1120 Business Center Dr,
Houston, TX 77043   66 TBD No. 1 Union Village   At or around 1050 Galleria Dr,
Henderson, NV   Not in excess of 100 TBD No. 2 (Denver-Aurora-Lakewood, CO Area)
    Not in excess of 100 TBD No. 3 (Dallas-Ft Worth-Arlington, TX Area)     Not
in excess of 100

 

Exhibit H-1

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

Exhibit H-2

Existing Restricted Radius SNFs

 

Name

 

Address

 

SNF Beds

Starr Farm Nursing   98 Starr Farm Road, Burlington, VT 05408   150 Clark House
Nursing   30 Longwood Drive, Westwood, MA 02090-1132   70 Kindred TC&R Indian
Creek   240 Beechmont Drive NE, Corydon, IN 47112   135 Kindred TC&R Highgate  
10 Carematrix Drive, Dedham, MA 02026-6149   142 Kindred TC&R Rolling Hills  
3625 St. Joseph Road, New Albany, IN 47150-9745   115 Kindred TC&R Sellersburg  
7823 Old Highway #60, Sellersburg, IN 47172-9283   110 Kindred N&R Nineteenth
Ave   2043 19th Ave., San Francisco, CA 94116   140 Kindred N&R Golden Gate  
2707 Pine St., San Francisco, CA 94115   120 Kindred N&HC Victorian   2121 Pine
St., San Francisco, CA 94115   90 Kindred N&R Caldwell   210 Cleveland Blvd.,
Caldwell, ID 83605   71 Kindred Hospital Seattle Northgate SAU   10631 8th Ave
NE, Seattle, WA 98125   30 Kindred Hospital Aurora SAU   700 Potomac St, 2nd
Floor, Aurora, CO 80011   Not in excess of 180 TBD No. 2
(Boston-Cambridge-Peabody, MA area)     Not in excess of 180 TBD No. 3
(Boston-Cambridge-Peabody, MA area)     Not in excess of 180 TBD No. 4
(Seattle-Bellevue-Everett, WA area)     Not in excess of 180

 

Exhibit H-2

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

Exhibit I

Form of Section 25.1.12(f) Guaranty

GUARANTY OF LEASE

This Guaranty of Lease (this “Guaranty”), dated as of                  , 20    ,
is made by                                         , a
                                         (together with any entity succeeding
thereto by consolidation, merger or acquisition of its assets substantially as
an entirety, “Guarantor”) for the benefit of VENTAS REALTY, LIMITED PARTNERSHIP,
a Delaware limited partnership (herein together with its respective successors
and assigns as owners of the property hereinafter described, called “Landlord”).

Landlord, [Kindred Healthcare, Inc., a Delaware corporation formerly known as
Vencor, Inc. (“Kindred”), and Kindred Healthcare Operating, Inc., a Delaware
corporation formerly known as Vencor Operating, Inc. (“Operator” and, together
with Kindred, “Tenant”)]1 are parties to that certain Second Amended and
Restated Master Lease Agreement No. 5 dated as of [            , 2016] (as may
have been or may be amended from time to time, the “Lease”), pursuant to which,
effective as of the Effective Date (as defined therein), Tenant has leased or
has agreed to lease from Landlord the Land described in the Lease, the
improvements located on said Land and the other components of the Leased
Properties (collectively, the “Property”). Initially capitalized terms used but
not defined herein shall have the respective meanings ascribed to such terms in
the Lease. In accordance with the provisions of the Lease, Tenant wishes to
engage in a Kindred Change of Control Transaction whereby Guarantor shall become
the Seniormost Parent and, as a condition to the consummation of such Kindred
Change of Control Transaction, Guarantor has agreed to enter into this Guaranty.
The lease of the Property to Tenant is of direct benefit to Guarantor. This
Guaranty reasonably may be expected to benefit, directly or indirectly,
Guarantor.

NOW, THEREFORE, in consideration of $10 and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Guarantor, intending to be legally bound, covenants and agrees with Landlord as
follows:

1. Guaranty. Guarantor unconditionally and irrevocably guarantees to Landlord
that (a) all Rent and all other sums due under the Lease and payable by Tenant,
whether due by acceleration or otherwise, including costs and expenses of
collection (collectively, the “Monetary Obligations”) will be promptly and
indefeasibly paid in full when due, in accordance with the provisions thereof
and (b) Tenant will perform and observe each and every covenant, agreement, term
and condition of Tenant in the Lease as required thereunder (the “Performance
Obligations” and together with the Monetary Obligations, the “Guaranteed
Obligations”). If for any reason any Monetary Obligations shall not be paid
promptly when due after receipt of required notice to Tenant under the Lease, if
any, and after the expiration of any

 

1 

To be updated to reflect intervening permitted assignments or Kindred Change of
Control Transactions.

 

Exhibit I

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

applicable grace period therefore, if any, Guarantor shall, immediately upon
demand, pay the same to Landlord with interest and penalty due thereon, if any,
as stated in the Lease. In addition to the foregoing, Guarantor hereby becomes
surety to Landlord for the due and punctual payment and performance of the
Guaranteed Obligations, and Guarantor hereby waives all defenses that may be
available to Guarantor as a surety and guarantor other than the defenses of
payment of the Monetary Obligations and performance of the Performance
Obligations.

2. Nature of Guaranty. Landlord may enforce this Guaranty without first having
recourse against Tenant or exhausting its rights or remedies under the Lease;
provided, that nothing herein shall prohibit Landlord from exercising its rights
against each of Guarantor and Tenant simultaneously. This Guaranty and the
obligations of Guarantor hereunder are present, primary, direct, continuing,
unconditional, irrevocable and absolute and independent of any obligations of
Tenant. This Guaranty is a guaranty of payment and performance and not of
collection.

3. Guarantor Representations, Warranties and Covenants. Guarantor represents,
warrants and covenants to Landlord that (a) all written reports, written
statements (financial or otherwise), certificates and other data furnished in
writing by or on behalf of Guarantor to Landlord in connection with this
Guaranty or the Lease, are true and correct in all material respects, do not
omit to state any material fact or circumstance necessary to make the statement
contained therein not misleading and fairly represent the financial condition of
Guarantor as of the respective date thereof, and no material adverse change has
occurred in the financial condition of Guarantor since the date of the most
recent of such financial statements; (b) Guarantor has derived or expects to
derive financial and other advantages and benefits, directly or indirectly, from
the making of this Guaranty and the Guaranteed Obligations; (c) no
representations or agreements of any kind have been made to Guarantor that would
limit or qualify in any way the terms of this Guaranty; (d) Landlord has made no
representation to Guarantor as to the creditworthiness of Tenant; (e) Guarantor
has established adequate means of obtaining from Tenant information regarding
Tenant’s financial condition; (f) Guarantor will keep adequately informed of any
facts, events or circumstances that might in any way affect Guarantor’s risks
under this Guaranty; (g) Landlord shall have no obligation to disclose to
Guarantor any information or documents (financial or otherwise) heretofore or
hereafter acquired by Landlord in the course of its relationship with Tenant;
(h) Guarantor is a [corporation], duly organized, validly existing and in good
standing under the laws of the State of Guarantor’s organization; (i) Guarantor
has the power and authority to execute, deliver and perform this Guaranty and to
incur the obligations herein provided for; (j) Guarantor has taken all requisite
actions necessary to authorize the execution, delivery and performance of this
Guaranty; (k) this Guaranty constitutes a legal, valid and binding obligation of
Guarantor enforceable in accordance with its terms; (l) the execution, delivery
and performance of this Guaranty will not require any consent, approval,
authorization, order or declaration of or filing or registration with any court,
any Governmental Authority or any other Person; (m) the execution, delivery and
performance of this Guaranty do not and will not conflict with, and do not and
will not result in a breach of, any organizational document of Guarantor or any
order, writ, injunction, decree, statute, rule or regulation applicable to
Guarantor; and (n) Guarantor is an Affiliate of Tenant.

 

Exhibit I

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

4. Matters Not Affecting Guarantor Obligations. The obligations, covenants,
agreements and duties of Guarantor under this Guaranty shall in no way be
discharged, affected or impaired by any of the following and Landlord may at any
time and from time to time, with or without consideration, without prejudice to
any claim against Guarantor hereunder, without in any way changing, releasing or
discharging Guarantor from its liabilities and obligations hereunder and without
notice to or the consent of Guarantor, waive, release or consent to any of the
following:

4.1. the waiver by Landlord of the performance or observance by Tenant or any
other party of any of the agreements, covenants, terms or conditions contained
in the Lease;

4.2. the extension, in whole or in part, of the time for payment by Tenant of
any sums owing or payable under the Lease, or of any other sums or obligations
under or arising out of or on account of the Lease, or the renewal or extension
of the Lease, all in accordance with its terms;

4.3. any sublease of any or all of the Property by Tenant to any other person;

4.4. any assumption by any person of any or all of Tenant’s obligations under,
or Tenant’s assignment of any or all of its interest in the Lease;

4.5. the waiver or release or modification or amendment (whether material or
otherwise) of any provision of the Lease;

4.6. any failure, omission or delay on the part of Landlord to enforce, assert
or exercise any right, power or remedy conferred on or available to Landlord in
or by the Leases or this Guaranty, or any action on the part of Landlord
granting indulgence or extension in any form whatsoever;

4.7. the voluntary or involuntary liquidation, dissolution, sale of all or
substantially all of the assets, marshaling of assets and liabilities,
receivership, conservatorship, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization or other similar proceeding affecting
Landlord, Tenant or Guarantor or any of their assets or any impairment,
modification, release or limitation of liability of Landlord, Tenant or
Guarantor or any of their estates in bankruptcy or of any remedy for the
enforcement of such liability resulting from the operation of any present or
future provision of the U.S. Bankruptcy Code or other similar statute of any
other state or nation or from the decision of any court;

4.8. the release of Tenant from the performance or observance of any of the
agreements, covenants, terms or conditions contained in the Lease by operation
of law;

4.9. the power or authority or lack thereof of Tenant to execute, acknowledge or
deliver the Lease

4.10. the legality, validity or invalidity of the Lease;

 

Exhibit I

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

4.11. the existence or non-existence of Tenant as a legal entity or the
existence or non-existence of any corporate or other business relationship
between Tenant and Guarantor;

4.12. any sale or assignment by a Landlord of this Guaranty and/or the Lease
(including any assignment by Landlord to any mortgagee);

4.13. any default by Guarantor under this Guaranty or any right of setoff,
counterclaim or defense (other than payment in full of the Monetary Obligations,
or full performance of any applicable Performance Obligations, as applicable, in
accordance with the terms of the Lease) that Guarantor may or might have to its
undertakings, liabilities and obligations hereunder, each and every such defense
being hereby waived by Guarantor; or

4.14. any other cause, whether similar or dissimilar to any of the foregoing,
that might constitute a legal or equitable discharge of Guarantor (whether or
not Guarantor shall have knowledge or notice thereof) other than payment in full
of the Monetary Obligations or full performance of any applicable Performance
Obligations, as applicable.

Without in any way limiting the generality of the foregoing, Guarantor
specifically agrees that if Tenant’s obligations under the Lease are modified or
amended with the express written consent of Landlord, this Guaranty shall extend
to such obligations as so amended or modified. Notwithstanding anything
contained herein to the contrary, Guarantor shall be released from all
Guaranteed Obligations that arise from and after the date of any Kindred Change
of Control Transaction that is consummated after the date hereof and in
accordance with the terms of the Lease, with such release to become effective,
and to be conditioned, upon the execution contemporaneously with such subsequent
Kindred Change of Control Transaction by the Seniormost Parent (as such exists
immediately following such subsequent Kindred Change of Control Transaction) of
a joinder or a Section 25.1.12(f) Guaranty in accordance with the provisions of
Section 25.1.12(f) of the Lease.

5. Waivers of Notice. Guarantor hereby waives notice of (a) Landlord’s
acceptance of this Guaranty or its intention to act or its actions in reliance
hereon; (b) the present existence or future incurring of any Guaranteed
Obligations or any terms or amounts thereof or any change therein; (c) any
default by Tenant or any surety or guarantor; (d) the obtaining of any guaranty
or surety agreement (in addition to this Guaranty); (e) the obtaining of any
pledge, assignment or other security for any Guaranteed Obligations; (f) the
release of Tenant or any surety or guarantor; (g) the release of any collateral;
(h) any other demands or notices whatsoever with respect to the Guaranteed
Obligations or this Guaranty; (i) presentment, demand, protest, nonpayment,
intent to accelerate, and protest in relation to any instrument or agreement
evidencing any Guaranteed Obligation. Guarantor hereby further waives (j)
promptness and diligence; (k) all other notices, demands and protests, and all
other formalities of every kind, in connection with the enforcement of the Lease
or of the obligations of Guarantor hereunder, the omission of or delay in which,
but for the provisions of this Section, might constitute grounds for relieving
Guarantor of its obligations hereunder; and (l) any requirement that Landlord
protect, secure, perfect or insure any lien or security interest or other
encumbrance or any property subject thereto or pursue or exhaust any right or
take any action against or with respect to Tenant or any other person or entity
or any collateral (including any rights relating to marshalling of assets).

 

Exhibit I

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

6. Waivers of Defenses. Guarantor expressly waives any and all rights to
defenses arising by reason of (a) any “one-action” or “anti-deficiency” law or
any other law that may prevent Landlord from bringing any action, including a
claim for deficiency against Guarantor, before or after Landlord’s commencement
or completion of any action against Tenant; (b) ANY ELECTION OF REMEDIES BY
LANDLORD (INCLUDING WITHOUT LIMITATION ANY TERMINATION OF THE LEASE) THAT
DESTROYS OR OTHERWISE ADVERSELY AFFECTS GUARANTOR’S SUBROGATION RIGHTS OR
GUARANTOR’S RIGHTS TO PROCEED AGAINST TENANT FOR REIMBURSEMENT; (c) any
disability or other defense of Tenant, of any other guarantor, or of any other
Person, or by reason of the cessation of Tenant’s liability from any cause
whatsoever, other than full and final payment in legal tender of the Guaranteed
Obligations; (d) any right to claim discharge of the Guaranteed Obligations on
the basis of unjustified impairment of any collateral for the Guaranteed
Obligations; (e) any change in the corporate relationship between Guarantor and
Tenant or any termination of such relationship; (f) any irregularity, defect or
unauthorized action by Landlord, Tenant or any other guarantor or surety or any
of their respective officers, directors or other agents in executing and
delivering any instrument or agreements relating to the Guaranteed Obligations
or in carrying out or attempting to carry out the terms of any such agreements;
(g) any receivership, insolvency, bankruptcy, reorganization or similar
proceeding by or against Tenant, Landlord, Guarantor or any other surety or
guarantor; (h) any setoff, counterclaim, recoupment, deduction, defense or other
right that Guarantor may have against Landlord, Tenant or any other Person for
any reason whatsoever whether related to the Guaranteed Obligations or
otherwise; (i) any assignment, endorsement or transfer, in whole or in part, of
the Guaranteed Obligations, whether made with or without notice to or consent of
Guarantor; (j) if the recovery from Tenant or any other Person (including
without limitation any other guarantor) becomes barred by any statute of
limitations or is otherwise prevented; or (k) any neglect, delay, omission,
failure or refusal of Landlord to take or prosecute any action for the
collection of any of the Guaranteed Obligations or to foreclose or take or
prosecute any action in connection with any lien or right of security (including
perfection thereof) existing or to exist in connection with, or as security for,
any of the Guaranteed Obligations, it being the intention hereof that Guarantor
shall remain liable as a principal on the Guaranteed Obligations notwithstanding
any act, omission or event that might, but for the provisions hereof, otherwise
operate as a legal or equitable discharge of Guarantor. Guarantor hereby waives
all defenses of a surety to which they may be entitled by statute or otherwise.

7. Rejection of Lease Document. Guarantor agrees that, in the event of the
rejection or disaffirmance of the Lease by Tenant or Tenant’s trustee in
bankruptcy pursuant to bankruptcy law or any other law affecting creditors
rights, Guarantor will, if Landlord so requests, assume all obligations and
liabilities of Tenant under the Lease, to the same extent as if Guarantor was a
party to such document and there had been no such rejection or disaffirmance;
and Guarantor will confirm such assumption in writing at the request of Landlord
upon or after such rejection or disaffirmance and such assumption will be
without limitation upon Guarantor’s obligations under this Guaranty. Guarantor,
upon such assumption, shall have all rights of Tenant under the Lease to the
fullest extent permitted by law.

 

Exhibit I

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

8. Events of Default. The following events following the expiration of the
applicable cure periods, in this Section are sometimes referred to as an “Event
of Default”:

8.1. If default shall be made in the payment of any sum required to be paid by
Guarantor under this Guaranty;

8.2. If default shall be made in the observance or performance of any of the
other covenants in this Guaranty which Guarantor is required to observe and
perform and such default is not cured within a period of thirty (30) days after
receipt of notice from Landlord, unless such failure cannot with due diligence
be cured within a period of thirty (30) days, in which case such period of time
shall be extended to such period of time (not to exceed 180 days) as may be
necessary to cure such default with all due diligence provided that such cure is
completed within 180 days;

8.3. If any representation or warranty made by Guarantor herein or in any
certificate, demand or request proves to be incorrect in any material respect
when made;

8.4. If Guarantor (i) admits in writing its inability to pay its debts generally
as they become due; (ii) files a petition in bankruptcy or a petition to take
advantage of any bankruptcy, reorganization or insolvency act; (iii) makes an
assignment for the benefit of its creditors; (iv) consents to the appointment of
a receiver for itself or for the whole or any substantial part of its property;
or (v) files a petition or answer seeking reorganization or arrangement under
federal bankruptcy laws or any other applicable law or statute of the united
States of America or any state thereof;

8.5. If any petition is filed by or against Guarantor either under federal
bankruptcy laws, or any other proceeding is instituted by or against Guarantor
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
reorganization, arrangement, adjustment or composition of its or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for Guarantor, and such
proceeding is not dismissed within 60 days after institution thereof, or
Guarantor or any Affiliate of Guarantor shall take any action to authorize or
effect any of the actions set forth in this Section 8.5;

8.6. An event of default arising from the failure to pay principal or interest
with respect to any indebtedness for borrowed money of Guarantor with an
aggregate outstanding principal amount equal to or exceeding $50 million, shall
have occurred, or the acceleration of the maturity of any indebtedness for
borrowed money of Guarantor with an aggregate outstanding principal amount equal
to or exceeding $50 million shall have occurred, provided, however, that
Landlord is not acting at the time of such acceleration as the agent bank or its
equivalent with respect to such indebtedness;

 

Exhibit I

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

8.7. If any receiver, trustee, custodian or other similar official shall be
appointed for Guarantor and any such appointment is not dismissed within 60 days
after the date of such appointment and prior to the entry of a final,
unappealable order approving such appointment; or

8.8. If an Event of Default occurs under the Lease.

Upon the occurrence of any such Event of Default, Landlord shall have whatever
rights at law or equity it might have to enforce this Guaranty.

9. Subordination. Guarantor agrees that any claim or claims or liens or security
interests it may now have or may in the future have against Tenant are or shall
be subordinate to Tenant’s obligations to Landlord under the Lease until
Tenant’s obligations under the Lease have been fully performed and any payments
thereunder are not subject to recovery by a trustee in bankruptcy. Guarantor
waives all rights of subrogation against Tenant for any amounts expended by
Guarantor under this Guaranty until Tenant’s obligations under the Lease have
been fully performed and any payments thereunder are not subject to recovery by
a trustee in bankruptcy.

10. Reimbursement of Landlord. If Landlord incurs any expenses in the
enforcement of this Guaranty, including reasonable attorneys’ fees and
disbursements, whether or not legal action be instituted, Guarantor shall pay
the same immediately upon demand by Landlord which shall be accompanied by
evidence of such expenses.

11. Waiver in Writing. Landlord shall not by any act of omission or commission
be deemed to waive any of its rights or remedies hereunder unless such waiver be
in writing and signed by Landlord, and then only to the extent specifically set
forth therein; a waiver of one event shall not be construed as continuing or as
a bar to or waiver of such right or remedy on a subsequent event.

12. Financial Covenants. Guarantor shall, and shall cause Tenant to, comply with
the financial covenants set forth in Section 8.4 and, subject to Section
25.1.13(c) of the Lease, Section 8.5 of the Lease.

13. Financial Reporting. Guarantor shall, and shall cause Tenant to, comply with
the financial reporting obligations set forth in Article XXVI of the Lease.

14. Restrictive Covenants. Guarantor shall, and shall cause Tenant to, comply,
and to cause each Restricted Party (as defined in Exhibit H attached to the
Lease and made a part thereof) to comply, with the terms and conditions set
forth in Exhibit H.

15. Miscellaneous.

15.1. Confidentiality. Except as and to the extent required by law or the rules
of any applicable stock exchange, without the prior written consent of Landlord,
Guarantor will not, and Guarantor will direct its agents and representatives not
to, make any public statement or otherwise disclose to any person or party any
of the contents or terms of this Guaranty or the

 

Exhibit I

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

transaction contemplated hereunder or the identities of the parties. If
Guarantor is required by law to make any such disclosure, it must first provide
to Landlord the content of the proposed disclosure, the reasons such disclosure
is required by law or the rules of any applicable stock exchange and the time
and place that the disclosure will be made.

15.2. Notice. All notices, demands, requests, consents, approvals and other
communications hereunder shall be in writing and delivered or mailed (by
registered or certified mail, return receipt requested or reputable nationally
recognized overnight courier service and postage prepaid), addressed to the
respective parties, as follows:

 

  To Guarantor:    

 

   

 

   

 

    Attention:  

 

    To Landlord:     Ventas Realty, Limited Partnership     c/o Ventas, Inc.    
353 N. Clark Street, Suite 3300     Chicago, Illinois 60654     Attention: Legal
Department     With a copy to:     Ventas Realty, Limited Partnership     c/o
Ventas, Inc.     353 N. Clark Street, Suite 3300     Chicago, Illinois 60654    
Attention: Asset Management  

or to such other address as either party may hereunder designate, and shall be
effective upon receipt.

15.3. Termination and Reinstatement. The obligations of Guarantor under this
Guaranty shall automatically terminate 366 days after Landlord has received, and
not been required to disgorge any part of, payment of all Monetary Obligations
and all other sums due and owing under this Guaranty. If payment is made by
Tenant, whether voluntarily or otherwise, or by any third party, on the
Guaranteed Obligations and thereafter Landlord is forced to remit, rescind or
restore the amount of that payment under any federal or state bankruptcy law or
law for the relief of debtors or for any other reason, (a) the amount of such
payment shall be considered to have been unpaid at all times for the purposes of
enforcement of this Guaranty and (b) the obligations of Tenant guaranteed herein
shall be automatically reinstated to the extent of such payment.

 

Exhibit I

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

15.4. Mortgages of Properties. If Landlord proposes to grant a mortgage on or
refinance any mortgage of its Property, Guarantor shall cooperate in the
process, and shall permit Landlord and the proposed mortgagee, at its expense,
to meet with officers of Guarantor at Guarantor’s offices and to discuss the
Guarantor’s business and finances. On request of Landlord, Guarantor agrees to
provide any such prospective mortgagee the information to which Landlord is
entitled hereunder, provided that if any such information is not publicly
available, such nonpublic information shall be made available on a confidential
basis. Guarantor agrees to execute, acknowledge and deliver documents requested
by the prospective mortgagee (such as a consent to the financing (without
encumbering Guarantor’s or Tenant’s assets), a consent to assignment of lease
and of this Guaranty, estoppel certificate, and a subordination, non-disturbance
and attornment agreement), customary for tenants and their guarantors to sign in
connection with mortgage loans to landlords, so long as such documents are in
form then customary among institutional lenders (provided the same do not
materially or adversely change Tenant’s rights or obligations under the Lease or
materially or adversely change Guarantor’s rights and obligations under this
Guaranty).

15.5. Choice of Law and Venue. This Guaranty shall be governed by and construed
in accordance with the laws of the State of New York, other than its doctrine
regarding conflicts of laws. Guarantor irrevocably submits to the personal
jurisdiction of any federal or state court sitting in the Commonwealth of
Kentucky with respect to any matter arising under this Guaranty and hereby
appoints                     , having an address at                     ,
Kentucky as its agent for service of process. Guarantor consents to jurisdiction
of the courts of the Commonwealth of Kentucky and of the Federal courts sitting
in the Commonwealth of Kentucky, and consents to venue in the Commonwealth of
Kentucky, and Guarantor waives any right to stay, remove, or otherwise directly
or indirectly interfere with such action based on such jurisdiction.

15.6. Modification and Invalidity. This Guaranty may not be modified or amended
except by a written agreement duly executed by Guarantor and Landlord and
Landlord’s mortgagee of the Property from time to time, if any. This Guaranty
shall be binding upon the Guarantor and shall inure to the benefit of Landlord
and its successors and assigns as permitted hereunder, including, without
limitation, any mortgagee of Landlord’s interest in the Property. In the event
any one or more of the provisions contained in this Guaranty shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Guaranty, but this Guaranty shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. As used
herein the term “Tenant” includes its successors and assigns with respect to the
Lease.

15.7. Landlord Transfer of Properties. The rights of Landlord under this
Guaranty may be assigned in whole or in part by Landlord, its successors and
assigns, whether directly or by way of a grant of a security interest herein,
without the consent of Guarantor.

15.8. Certificate of Confirmation. Within 10 Business Days after request by
Landlord, Guarantor shall deliver a certificate confirming that this Guaranty is
in full force and effect and unamended (or, if amended, specifying such
amendment), and whether, to the actual knowledge of Guarantor, any default
exists under the Lease or under this Guaranty.

 

Exhibit I

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

[SIGNATURE PAGE FOLLOWS]

 

Exhibit I

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

IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed and its
corporate seals to be hereunto affixed and attested by its officers thereunto
duly authorized.

 

                    , a                      By:  

 

  Name:   Title:

 

Exhibit I

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

SCHEDULE 2.1A

Base Patient Revenues- Certain Leased Properties

 

     Facility
ID   

Name

  

City

  

State

   Base Patient
Revenues for
1999  

1

   4842    Kindred Hospital Westminster    Westminster    CA      19,773,858   

2

   4848    Kindred Hospital San Diego    San Diego    CA      13,972,633   

3

   4612    Kindred Hospital Kansas City    Kansas City    MO      18,379,801   

4

   4615    Kindred Hospital Sycamore    Sycamore    IL      9,946,355   

5

   4654    Kindred Hospital Houston NW Campus    Houston    TX      12,963,221
  

6

   4807    Kindred Hospital Ontario    Ontario    CA      28,892,830   

7

   4645    Kindred Hospital So. Florida Ft. Lauderdale    Ft. Lauderdale    FL
     18,239,852   

8

   4685    Kindred Hospital Houston    Houston    TX      17,694,274            
     

 

 

    

Total Base Patient Revenues for 1999 for these Leased Properties

     $139,862,824                  

 

 

 

 

Schedule 2.1A

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

Schedule 2.1B

Intentionally omitted

 

Schedule 2.1B

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

Schedule 2.1C

Existing Ground Leases

Master Lease No. 5

 

  1. Facility 4602: Lease/Use Agreement and Declaration of Restrictive Covenant
and First Amendment dated February 1, 2001 between the City of Coral Gables and
Ventas Realty, Limited Partnership and recorded on May 21, 2001 in Book 19676,
Page 3216 et. seq., as instrument no. 01R260439, of the Public Records of
Miami-Dade County, Florida; Consent and Estoppel Certificate dated April 2, 2001
executed by the City of Coral Gables and recorded on May 21, 2001 in Book 19676,
Page 3228 et. seq., as instrument no. 01R260440, in the aforesaid public
records; Consent and Estoppel Certificate dated April 15, 2002 executed by the
City of Coral Gables.

 

  2. Facility 559: Lease dated June 17, 1964 between Henry H. Riordan and
Charles M. Jones, as Trustees of the Will of John J. Flynn, and Birchwood
Development Corporation and recorded at Volume 188, Page 583 of the land records
of the City of Burlington, Vermont; First Amendment to Indenture of Lease dated
October 13, 1978 and recorded in Volume 252, Page 691 of the aforesaid land
records; Second Amendment to Lease dated December 6, 1990 and recorded in Volume
592, Page 1 of the aforesaid land records; Lease dated June 17, 1964 between
Henry H. Riordan and Charles M. Jones, as Trustees under the Will of John J.
Flynn, and Birchwood Nursing Home, Inc.; Lease (Short Form for Recording) dated
June 17, 1964 and recorded in Volume 163, Page 526 of the land records of the
City of Burlington, Vermont; Lease (Short Form for Recording) dated June 17,
1964 and recorded in Volume 188, Page 602 of the aforesaid land records; First
Amendment to Indenture of Lease dated October 13, 1978 and recorded in Volume
252, Page 681 of the aforesaid land records; Second Amendment to Lease dated as
of April 30, 1998 and recorded in Volume 592, Page 9 of the aforesaid land
records; Assignment and Assumption of Lease dated January 25, 1990 between First
Healthcare Corporation and Hillhaven, Inc. and recorded in Volume 414, Page 72
of the aforesaid land records; Assignment and Assumption of Lease dated October
23, 1990 between NME Properties, Inc. (formerly known as Hillhaven, Inc.) and
First Healthcare Corporation and recorded in Volume 424, Page 168; Lessor’s
Acknowledgment to Assignment and Assumption of Leases dated October 19, 1990 and
recorded in Volume 424, Page 174 of the aforesaid land records; Assignment and
Assumption of Leases dated June 26, 2000 between Ventas, Inc. (successor by
merger to First Healthcare Corporation) and Ventas Realty, Limited Partnership
and recorded in Volume 657, Page 37 of the aforesaid land records; Lessor’s
Acknowledgment to Assignment and Assumption of Leases dated June 29, 2000 and
recorded in Volume 657, Page 41 of the aforesaid land records; Consent and
Estoppel Certificate dated June 29, 2000 recorded in Volume 657, Page 59 of the
aforesaid land records.

 

Schedule 2.1C

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

  3. Facility 4664: Ground Lease dated June 25, 1993 between St. Joseph
Development Corporation and Transitional Hospitals Corporation; Memorandum of
Ground Lease between St. Joseph Development Corporation and Transitional
Hospitals Corporation and recorded on July 1, 1993 in Book BCR 93-17, Page 6123,
as document no. 93070217 of the records of Bernalillo County, New Mexico;
Amendment to Ground Lease dated April 17, 1997 between St. Joseph Development
Corporation and Transitional Hospitals Corporation; Amendment to Ground Lease
dated June     , 1998 between St. Joseph Development Corporation and Vencor,
Inc.; Assignment of Tenant’s Interest in Ground Lease (With Consent of Landlord
Attached) dated March 27, 2001, effective as of April 30, 1998, between
Transitional Hospitals Corporation and Ventas Realty, Limited Partnership and
recorded on May 2, 2001 in Book A18, Page 8781, as document no. 2001050344 in
the aforesaid records; Supplement to Ground Lease Documents dated as of March
27, 2001 by and among St. Joseph Development Corporation, Transitional Hospitals
Corporation and Ventas Realty, Limited Partnership and recorded on May 2, 2001
in Book A18, Page 8780, as document no. 2001050343 in the aforesaid records;
Consent and Estoppel Certificate dated March 27, 2001 executed by St. Joseph
Development Corporation and recorded on May 2, 2001 in Book A18, Page 8782, as
document no. 2001050345 in the aforesaid records; Consent and Estoppel
Certificate dated May 4, 2001 executed by St. Joseph Development Corporation;
Third Amendment to Ground Lease dated as of July 1, 2003 between Lovelace Sandia
Health System, Inc. and Ventas Realty, Limited Partnership; Fourth Amendment to
Ground Lease effective as of July 1, 2008, by and between Lovelace Health
System, Inc. and Ventas Realty, Limited Partnership; Fifth Amendment to Ground
Lease effective as of June 26, 2013, by and between Lovelace Health System, Inc.
and Ventas Realty, Limited Partnership; letter agreement dated July 31, 2015
between Lessor and other parties, which refers to itself, in part, as the Sixth
Amendment to this ground lease.

 

  4. Facility 4685: Lease Agreement dated December 8, 1970 between Pearl C.
Wingate and W. Thomas Arnold, Trustee, and recorded on July 2, 1971 in Contract
Records Volume 2388, Page 528, as County Clerk’s file no. D362007 in the public
records of Harris County, Texas; Amendment to Lease Agreement dated July 27,
1971 between Pearl C. Wingate and W. Thomas Arnold, Trustee, and recorded on
August 2, 1971 in Contract Records Volume 2397, Page 33, as County Clerk’s file
no. D383212 in the aforesaid public records; Amendment to Lease Agreement dated
January 4, 1973 between Pearl C. Wingate and W. Thomas Arnold, Trustee, and
recorded on January 19, 1973 as County Clerk’s file no. D784813 on the aforesaid
public records; Assignment and Assumption of Land Lease and Quit Claim Deed for
Improvements dated as of August 5, 1994 between Dr. W. Thomas Arnold, Trustee,
and Vencor Hospitals Texas, Ltd. and recorded on August 12 1994 as County
Clerk’s file no. R008461 in the aforesaid public records; Assignment and
Assumption of Land Lease and Quit Claim Deed for Improvements dated as of April
30, 1998 between Ventas, Inc. (successor by merger to Vencor Hospitals Texas,
Ltd.) and Ventas Realty, Limited Partnership and recorded on August 9, 1999 as
County Clerk’s file no. T895645 in the aforesaid public records.

 

Schedule 2.1C

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SCHEDULE 7.2.7

Minimum Licensed Beds for Hospital Care

Master Lease Agreement No. 5

 

    

Facility
ID

  

Name

  

Minimum
Number of Beds
Licensed for
Hospital  Care

1    4822    Kindred Hospital San Francisco Bay Area    65   2    4633   
Kindred Hospital Louisville    244 3    4638    Kindred Hospital Indianapolis   
30   4    4611    Kindred Hospital Bay Area St. Petersburg    39   5    4644   
Kindred Hospital Brea    32   6    4876    Kindred Hospital South Florida
Hollywood    81   7    4628    Kindred Hospital – Chattanooga    32   8    4680
   Kindred Hospital – St. Louis    39   9    4653    Kindred Hospital – Tarrant
County (Fort Worth Southwest)    52   10    4668    Kindred Hospital – Fort
Worth    44   11    4674    Kindred Hospital – Central Tampa    67   12    4635
   Kindred Hospital – San Antonio    39   13    4647    Kindred Hospital – Las
Vegas (Sahara)    34   14    4660    Kindred Hospital - Mansfield    36   15   
4662    Kindred Hospital – Greensboro    81   16    4614    Kindred Hospital –
Philadelphia    34   17    4871    Kindred Hospital – Chicago – Lakeshore   
67   18    4664    Kindred Hospital – Albuquerque    40   19    4665    Kindred
Hospital – Denver    45   20    4637    Kindred Hospital – Chicago (North
Campus)    108 21    4690    Kindred Hospital – Chicago (Northlake Campus)   
62   22    4602    Kindred Hospital – South Florida – Coral Gables    35   23   
4652    Kindred Hospital – North Florida    39   24    4842   
Kindred Hospital Westminster    65   25    4848    Kindred Hospital San Diego   
46   26    4612    Kindred Hospital Kansas City    109 27    4615   
Kindred Hospital Sycamore    51   28    4654   
Kindred Hospital Houston NW Campus    55   29    4807   
Kindred Hospital Ontario    60   30    4645   
Kindred Hospital So. Florida Ft. Lauderdale    42   31    4685   
Kindred Hospital Houston    62  

 

Schedule 7.2.7

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SCHEDULE 7.2.8

Minimum Number of Non-Banked Skilled Nursing Care Beds at Certain Facilities

 

    

Facility
ID

  

Name

  

Minimum Number of  Non-Banked
Skilled Nursing Care Beds at Certain
Facilities

1    113    Southwood Health and Rehabilitation Center (IN)    142 2    829   
River Pointe Rehabilitation and Healthcare Center (VA)    140 3    1228   
Lafayette Nursing and Rehab Center (GA)    178 4    213    Kindred Transitional
Care and Rehabilitation – Wildwood (IN)    170

 

Schedule 7.2.8

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SCHEDULE 16.1(m)A

Licensed Beds as of the Commencement Date

Master Lease Agreement No. 5

 

* Deemed number of licensed beds as of the Commencement Date per Section
16.1(m)(i)

 

    

Facility
ID

  

Name

  

City

  

State

  

No. Licensed Beds at
Commencement Date

1    4822    Kindred Hospital San Francisco Bay Area    San Leandro    CA    99
2    4633    Kindred Hospital Louisville    Louisville    KY    374 3    4638   
Kindred Hospital Indianapolis    Indianapolis    IN    59 4    4611    Kindred
Hospital Bay Area St. Petersburg    St. Petersburg    FL    60 5    4644   
Kindred Hospital Brea    Brea    CA    48 6    4876    Kindred Hospital South
Florida Hollywood    Hollywood    FL    124 7    4628    Kindred Hospital -
Chattanooga    Chattanooga    TN    49 8    4680    Kindred Hospital – St. Louis
   St. Louis    MO    60 9    4653    Kindred Hospital - Tarrant County (Fort
Worth Southwest)    Fort Worth    TX    80 10    4668    Kindred Hospital - Fort
Worth    Fort Worth    TX    67 11    4674    Kindred Hospital - Central Tampa
   Tampa    FL    102 12    4635    Kindred Hospital - San Antonio    San
Antonio    TX    59 13    4647    Kindred Hospital - Las Vegas (Sahara)    Las
Vegas    NV    52 14    4660    Kindred Hospital - Mansfield    Mansfield    TX
   55 15    4662    Kindred Hospital - Greensboro    Greensboro    NC    124 16
   4614    Kindred Hospital - Philadelphia    Philadelphia    PA    52 17   
4871    Kindred Hospital - Chicago – Lakeshore    Chicago    IL    103 18   
4664    Kindred Hospital - Albuquerque    Albuquerque    NM    61 19    4665   
Kindred Hospital - Denver    Denver    CO    68 20    4637    Kindred Hospital -
Chicago (North Campus)    Chicago    IL    205 (165*) 21    4690    Kindred
Hospital - Chicago (Northlake Campus)    Northlake    IL    94 22    4602   
Kindred Hospital - South Florida – Coral Gables    Coral Gables    FL    53 23
   4652    Kindred Hospital - North Florida    Green Cove Springs    FL    60 24
   168    Kindred Transitional Care and Rehabilitation - Lakewood    Tacoma   
WA    80 25    1228    Kindred Transitional Care and Rehabilitation - Lafayette
   Fayetteville    GA    179 26    559    Kindred Transitional Care and
Rehabilitation - Birchwood    Burlington    VT    160 27    694    Kindred
Transitional Care and Rehabilitation – Wedgewood (IN)    Clarksville    IN   
124 28    131    Kindred Transitional Care and Rehabilitation – Harrison (IN)   
Corydon    IN    92 29    213    Kindred Transitional Care and Rehabilitation –
Wildwood (IN)    Indianapolis    IN    173 30    113    Kindred Transitional
Care and Rehabilitation - Southwood    Terre Haute    IN    149 31    198   
Kindred Transitional Care and Rehabilitation – Harrington (MA)    Walpole    MA
   90 32    825    Kindred Transitional Care and Rehabilitation - Nansemond
Pointe    Suffolk    VA    194 33    829    Kindred Transitional Care and
Rehabilitation - River Pointe    Virginia Beach    VA    148 34    573   
Kindred Transitional Care and Rehabilitation - Eagle Pond    South Dennis    MA
   142 35    4842    Kindred Hospital Westminster    Westminster    CA    99 36
   4848    Kindred Hospital San Diego    San Diego    CA    70 37    4612   
Kindred Hospital Kansas City    Kansas City    MO    167 38    4615    Kindred
Hospital Sycamore    Sycamore    IL    77 39    4654    Kindred Hospital Houston
NW Campus    Houston    TX    84 40    4807    Kindred Hospital Ontario   
Ontario    CA    91 41    4645    Kindred Hospital So. Florida Ft. Lauderdale   
Ft. Lauderdale    FL    64 42    4685    Kindred Hospital Houston    Houston   
TX    94

 

Schedule 16.1(m)A

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

Schedule 16.1(m)B

Minimum Licensed Beds at Certain Facilities Due to Involuntary Reduction

Master Lease No. 5

 

Facility #

  

Facility Name

  

Minimum Number of
Licensed Beds

  

95% of Minimum

4633    Kindred Hospital - Louisville    133    127 4628    Kindred Hospital –
Chattanooga    44    42 4690    Kindred Hospital – Chicago (Northlake Campus)   
78    75 4660    Kindred Hospital - Mansfield    47    45 433    Parkview Acres
Care & Rehab Center    95    91 4612    Kindred Hospital – Kansas City    120   
114 4615    Kindred Hospital – Sycamore    69    66

The parties agree that the licensed beds number that appears in the “95% of
Minimum” column for a particular Facility shall equal 95% of the number of
licensed beds shown in the “Minimum Number of Licensed Beds” column for such
Facility, in each case rounded up to the closest whole number of licensed beds.

 

Schedule 16.1(m)B

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Schedule 25.1.7

Certain Existing Subleases

 

Facility Number – Name

  

Subtenant

  

Date of Sublease

  

Square Footage

4822 – Kindred Hospital San Francisco Bay Area    Sprint    3/30/98    972

 

Schedule 25.1.7

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

Schedule 40.12

Tenant – Affiliate Sublessees

Master Lease #5

 

Facility
ID

  

Name

  

City

  

State

  

Tenant-Affiliate

4822    Kindred Hospital San Francisco Bay Area    San Leandro    CA   
THC-Orange County, Inc. 4633    Kindred Hospital Louisville    Louisville    KY
   KHLP 4638    Kindred Hospital Indianapolis    Indianapolis    IN    KHLP 4611
   Kindred Hospital Bay Area St. Petersburg    St. Petersburg    FL    KHE 4644
   Kindred Hospital Brea    Brea    CA    THC-Orange County, Inc. 4876   
Kindred Hospital South Florida Hollywood    Hollywood    FL    KHE 4628   
Kindred Hospital - Chattanooga    Chattanooga    TN    KHLP 4680    Kindred
Hospital – St. Louis    St. Louis    MO    KHE 4653    Kindred Hospital -
Tarrant County (Fort Worth Southwest)    Fort Worth    TX    THC Texas 4668   
Kindred Hospital - Fort Worth    Fort Worth    TX    KHLP 4674    Kindred
Hospital - Central Tampa    Tampa    FL    THC Tampa 4635    Kindred Hospital -
San Antonio    San Antonio    TX    KHLP 4647    Kindred Hospital - Las Vegas
(Sahara)    Las Vegas    NV    THCN 4660    Kindred Hospital - Mansfield   
Mansfield    TX    KHLP 4662    Kindred Hospital - Greensboro    Greensboro   
NC    KHE 4614    Kindred Hospital - Philadelphia    Philadelphia    PA    KHE
4871    Kindred Hospital - Chicago – Lakeshore    Chicago    IL   
THC-North Shore, Inc. 4664    Kindred Hospital - Albuquerque    Albuquerque   
NM    THCNM 4665    Kindred Hospital - Denver    Denver    CO    KHW 4637   
Kindred Hospital - Chicago (North Campus)    Chicago    IL    THC – Chicago,
Inc. 4690    Kindred Hospital - Chicago (Northlake Campus)    Northlake    IL   
THC – Chicago, Inc. 4602    Kindred Hospital - South Florida – Coral Gables   
Coral Gables    FL    KHE 4652    Kindred Hospital - North Florida   
Green Cove Springs    FL    KHE 168    Kindred Transitional Care and
Rehabilitation - Lakewood    Tacoma    WA    KNCW 1228    Kindred Transitional
Care and Rehabilitation - Lafayette    Fayetteville    GA    LHCC 559    Kindred
Transitional Care and Rehabilitation - Birchwood    Burlington    VT    KNCE 694
   Kindred Transitional Care and Rehabilitation – Wedgewood (IN)    Clarksville
   IN    KNCLP 131    Kindred Transitional Care and Rehabilitation – Harrison
(IN)    Corydon    IN    KNCLP 213    Kindred Transitional Care and
Rehabilitation – Wildwood (IN)    Indianapolis    IN    KNCLP 113    Kindred
Transitional Care and Rehabilitation - Southwood    Terre Haute    IN    KNCLP
198    Kindred Transitional Care and Rehabilitation – Harrington (MA)    Walpole
   MA    KNCE 825    Kindred Transitional Care and Rehabilitation - Nansemond
Pointe    Suffolk    VA    KNCE 829    Kindred Transitional Care and
Rehabilitation - River Pointe    Virginia Beach    VA    KNCE 573    Kindred
Transitional Care and Rehabilitation - Eagle Pond    South Dennis    MA    KNCE
4842    Kindred Hospital - Westminster    Westminster    CA   
THC-Orange County, Inc. 4848    Kindred Hospital - San Diego    San Diego    CA
   THC-Orange County, Inc. 4807    Kindred Hospital – Ontario    Ontario    CA
   THC-Orange County, Inc. 4615    Kindred Hospital – Sycamore    Sycamore    IL
   THC – Chicago, Inc. 4612    Kindred Hospital - Kansas City    Kansas City   
MO    KHE 4654    Kindred Hospital (Houston Northwest Campus)    Houston    TX
   THC – Houston, Inc. 4645    Kindred Hospital –South Florida Ft. Lauderdale   
Ft. Lauderdale    FL    KHE 4685    Kindred Hospital – Houston    Houston    TX
   KHLP

LEGEND

LHCC – Lafayette Health Care Center, Inc.

KHE – Kindred Hospitals East, L.L.C.

KHW – Kindred Hospitals West, L.L.C.

KHLP – Kindred Hospitals Limited Partnership

KNCE – Kindred Nursing Centers East, L.L.C.

KNCLP – Kindred Nursing Centers Limited Partnership

KNCW – Kindred Nursing Centers West, L.L.C.

THCNM – Transitional Hospitals Corporation of New Mexico, Inc.

THC Texas – Transitional Hospitals Corporation of Texas, Inc.

THC Tampa – Transitional Hospitals Corporation of Tampa, Inc.

THCN – Transitional Hospitals Corporation of Nevada, Inc.

 

Schedule 40.12