Exhibit 10.28

 

AMENDMENT TO LEASE #9

 

This is an Amendment (“Amendment”) to that certain Lease #9 dated August 1, 2014
(“Lease”) between Theriac Enterprises of Weaverville, LLC, a Florida limited
liability company (“Landlord”), and North Carolina Radiation Therapy Management
Services, Inc., a North Carolina corporation (“Tenant”). The Landlord and Tenant
agree as follows:

 

1.                                      Terms. This Amendment supplements and
modifies the terms of the Lease and shall be construed as part of that Lease,
and the term “Lease”, wherever used, shall be deemed to include the following
terms and conditions. In the event of any conflict between the terms of this
Amendment and the terms of the Lease, the terms of this Amendment shall control.

 

2.                                      Modification. The following terms of the
Lease are hereby modified:

 

a.                                    Section 1. of the Lease is hereby deleted
in its entirety and replaced with the following:

 

Term.           The “Term” of this Lease is the Initial Term plus all Renewal
Terms, and a “Lease Year” is the twelve month period commencing on January 1 of
each year of the Term; provided, however, the first Lease Year shall commence on
January 22, 2015 and end on January 31, 2016, The “Initial Term” commences on
January 22, 2015 and ends on January 31, 2030, and may be extended for four
(4) separate “Renewal Terms” of five (5) years each if: (a) at least twelve
(12), but not more than fifteen (15) months prior to the end of the then current
Term, Tenant delivers to Landlord a “Renewal Notice” that it desires to exercise
its right to extend this Lease for one (1) Renewal Term; and (b) there is no
Event of Default on the date Landlord receives the Renewal Notice (the “Exercise
Date”) or on the last day of the then current Term.

 

b.                                    Section 4, of the Lease, previously
“intentionally omitted”, now contains the following terms:

 

Subtenant; Early Possession. Tenant has requested, and Landlord has granted, the
right of Tenant to sublease approximately 3,796 square feet of the Premises to
Fletcher Hospital, Inc. d/b/a Park Ridge Health, a non-profit corporation
(“Subtenant”), and, further, to grant Subtenant the right to take possession of
such subleased premises on November 10, 2014 provided that Landlord shall
receive an early possession fee from Tenant in the amount of $21,041.96.

 

3.                                              Effect. Except as modified by
this Amendment, each and every one of the terms, conditions and provisions
contained within the Lease shall continue and remain in full force and effect.

 

1

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

 

Signed, sealed and delivered

 

in the presence of:

 

 

LANDLORD:

 

 

 

THERIAC ENTERPRISES OF

 

WEAVERVILLE, LLC, a

 

Florida limited liability company

 

 

 

 

 

/s/ James Bunnell

 

By:

TEM, LLC, a Florida limited liability

 

 

company, its Manager

Print:

James Bunnell

 

 

(FL Document # L06000088324)

 

 

 

 

 

   By:

/s/ Daniel E. Dosoretz

 

/s/ Catherine A. Newkirk

 

 

Daniel E. Dosoretz, Managing Member

 

 

 

 

 

Print:

Catherine A. Newkirk

 

 

 

 

 

Date:

1/30/15

 

 

 

 

 

TENANT:

 

 

 

NORTH CAROLINA RADIATION THERAPY

 

MANAGEMENT SERVICES, INC., a North

 

Carolina corporation.

 

 

 

/s/ Karen B. Ankney

 

By:

/s/ Frank English

 

 

 

Frank English, Treasurer

Print:

Karen B. Ankney

 

 

 

Date:

2/4/15

 

/s/ Christine A. Hobot

 

 

 

 

 

 

Print:

Christine A. Hobot

 

 

 

2

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

 

LEASE #9

 

(Weaverville, NC)

 

This “Lease #9” is entered into as of August 1, 2014 (the “Effective Date”)
between Theriac Enterprises of Weaverville, LLC, a Florida limited liability
company (“Landlord”), and North Carolina Radiation Therapy Management
Services, Inc., a North Carolina corporation (“Tenant”), for the approximately
10,696 square foot building with a street address of 179 Buncombe School Rd,
Weaverville, NC 28787 (the “Building” or “Premises”) located on the real
property more particularly described on attached Exhibit A (the “Property”). The
improvements within the Premises which are used for radiation oncology related
services are referred to as the “Facility”, as such utilization may be changed
pursuant to Section 7.1(a) and collectively, the “Business”. Pursuant to its
concurrent Guaranty, 21st Century Oncology, Inc., a Florida corporation
(“Guarantor”) has guaranteed Tenant’s obligations hereunder. In consideration of
the mutual covenants, conditions and agreements set forth herein, Landlord
hereby leases the Premises to Tenant for the Term upon the terms and conditions
provided below. Certain capitalized terms used in this Lease are defined on
Exhibit D.

 

RECOGNITION OF LEASE;

IRREVOCABLE WAIVER OF CERTAIN RIGHTS

 

Tenant and Landlord each acknowledge and agree that the terms and conditions of
this Lease shall be uniformly applied to the Facility and the Premises. The
Minimum Rent, Additional Rent, other amounts payable hereunder and all other
provisions contained herein have been negotiated and agreed upon based on the
intent to lease the entirety of the Premises as a single and inseparable
transaction pursuant to this Lease.

 

Tenant and Guarantor each acknowledge and agree that Landlord is entering into
this Lease as an accommodation to Tenant and Guarantor. Tenant and Guarantor, in
order to induce Landlord to enter into this Lease, to the extent permitted by
law:

 

A.                                    Agrees, acknowledges and is forever
estopped from asserting to the contrary that the statements set forth in the
first sentence of this Section are true, correct and complete;

 

B.                                    Agrees, acknowledges and is forever
estopped from asserting to the contrary that this Lease is a new and de novo
lease, which supersedes and replaces in its entirety any existing or prior
occupancy lease between the Tenant and the Landlord or between any of the
entities comprising Tenant and any of the entities comprising Landlord that may
have existed prior to the date hereof; and

 

C.                                    Agrees, acknowledges and is forever
estopped from asserting to the contrary that this Lease is a single lease
pursuant to which the collective Premises are demised to the Tenant pursuant to
the terms and conditions of this Lease;

 

With respect to this Lease and exercise of the rights of Tenant and discharge of
the duties and obligations of Tenant with respect to the Facility and Premises
occupied by Tenant, Tenant hereby appoints Guarantor as its agent with power of
attorney, coupled with an interest, to pay rent and to exercise all of the other
rights of Tenant and to perform and discharge any and all duties and obligations

 

1

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

 

of Tenant under this Lease with respect to the Facility and Premises. Any act of
Guarantor as agent or attorney-in-fact for Tenant may be relied upon by Landlord
as the act of Tenant.

 

1.                                      Term. The “Term” of this Lease is the
Initial Term plus all Renewal Terms, and a “Lease Year” is the twelve month
period commencing on January 1 of each year of the Term; provided, however, the
first Lease Year shall commence on August 1, 2014 and end on December 31, 2015.
The “Initial Term” commences on August 1, 2014 and ends on December 31, 2029,
and may be extended for four (4) separate “Renewal Terms” of five (5) years each
if: (a) at least twelve (12), but not more than fifteen (15) months prior to the
end of the then current Term, Tenant delivers to Landlord a “Renewal Notice”
that it desires to exercise its right to extend this Lease for one (1) Renewal
Term; and (b) there is no Event of Default on the date Landlord receives the
Renewal Notice (the “Exercise Date”) or on the last day of the then current
Term.

 

2.                                      Rent. During the Term, Tenant shall pay
Landlord “Rent” consisting of “Minimum Rent”plus “Additional Rent” determined as
provided in this Section 2; provided, the Rent for any Lease Year shall not be
less than one hundred percent (100%) of the Rent for the previous Lease Year.
The Rent for any month that begins or ends on other than the first or last day
of a calendar month shall be prorated based on actual days elapsed.

 

2.1                               Initial Term Rent. During the Initial Term,
“Minimum Rent” is $345,600.00 annually, payable in advance in twelve (12) equal
monthly installments. Commencing with the second (2nd) Lease Year and continuing
thereafter during the Term (excluding the first Lease Year of any Renewal Term),
Tenant agrees to pay “Additional Rent” to Landlord monthly in advance together
with the payment of Minimum Rent. Such Additional Rent (which shall be expressed
as an annual amount but shall be payable in equal monthly installments) shall be
equal to the sum of (A) the Additional Rent (if any) due for the immediately
preceding Lease Year and (B) the product of (i) the Minimum Rent and Additional
Rent due for the immediately preceding Lease Year and (ii) the percentage
increase, if any, in the CPI (as herein defined) from the first day of the
immediately preceding Lease Year to the last day of the immediately preceding
Lease Year. Tenant shall pay the Additional Rent to Landlord for the period of
time elapsing between the anniversary date and notice of such increase upon
request by Landlord. Thereafter the increase shall be payable equally with the
regular Minimum Rent payments. In no event shall a decrease in the CPI result in
a decrease in the Minimum Rent and Additional Rent payable under the terms of
this Lease.

 

2.2                               Renewal Term Rent. To establish a fair market
Minimum Rent for the Premises during the Renewal Terms, the Minimum Rent for the
Renewal Terms shall be reset and expressed as an annual amount equal to the
greater of: (i) one hundred three percent (103%) of the Minimum Rent due for the
immediately preceding Lease Year, or (ii) the Fair Market Rent of the Premises
on the Exercise Date as established pursuant to Exhibit B, provided, however, in
no event shall the Minimum Rent for the Premises during the first Lease Year of
such Renewal Term(s) be greater than one hundred ten percent (110%) of the
Minimum Rent and Additional Rent for the immediately preceding Lease Year. The
Minimum Rent for the Premises during the fourth Renewal Term, if any, shall be
reset and expressed as an annual amount equal to the Fair Market Rent of the
Premises on the Exercise Date. Commencing with the second (2nd) Lease Year of a
Renewal Term and continuing each Lease Year of such Renewal Term thereafter,
“Additional Rent” shall be calculated as provided in Section 2.1 and as so
calculated shall be payable in monthly installments throughout the remainder of
such Renewal Term.

 

2

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

 

2.3                               Payment Terms. All Rent and other payments to
Landlord shall be paid by wire transfer or ACH (Automated Clearing House) only.
Minimum Rent and Additional Rent shall be paid in advance in equal monthly
installments on or before the first (1st) Business Day of each calendar month.

 

2.4                               Absolute Net Lease. All Rent payments shall be
absolutely net to Landlord, free of any and all Taxes, Other Charges, and
operating or other expenses of any kind whatsoever, all of which shall be paid
by Tenant. Tenant shall continue to perform its obligations under this Lease
even if Tenant claims that it has been damaged by Landlord. Thus, Tenant shall
at all times remain obligated under this Lease without any right of setoff,
counterclaim, abatement, deduction, reduction or defense of any kind. Tenant’s
sole right to recover damages against Landlord under this Lease shall be to
prove such damages in a separate action.

 

3.                                      Late Charges. The late payment of Rent
or other amounts due will cause Landlord to lose the use of such money and incur
administrative and other expenses not contemplated under this Lease. While the
exact amount of the foregoing is extremely difficult to ascertain, the parties
agree that as a reasonable estimate of fair compensation to Landlord, if any
Rent or other amount is not paid within (i) five (5) clays after the due date
for such payment, then Tenant shall thereafter pay to Landlord on demand a late
charge equal to three percent (3%) of such delinquent amounts, and (ii) ten
(10) days after the due date for such payment, such unpaid amount shall accrue
interest from such date at the “Agreed Rate” of five percent (5%) plus the prime
rate of interest as published in the Wall Street Journal on the eleventh (11th)
day after the due date for such payment.

 

4.                                      INTENTIONALLY OMITTED.

 

5.                                      Taxes and Other Charges. At the end of
the Term, all Taxes and Other Charges shall be prorated. If Tenant has prepaid
any Taxes or Other Charges for periods extending beyond the end of the Term,
Landlord shall, within forty-five (45) days of the expiration of the Term,
reimburse Tenant for such Taxes and Other Charges, which obligation shall
survive the expiration or earlier termination of this Lease. Landlord shall
promptly forward to Tenant copies of all bills and payment receipts for Taxes or
Other Charges received by it. At the end of the Term, Subject to Section 5.1 and
Landlord’s obligations to make payments from the Tax Impound as defined therein,
Tenant shall pay and discharge (including the filing of all required returns),
prior to delinquency or imposition of any fine, penalty, interest or other cost
(“Penalty”) the following: (i) “Taxes”, consisting of any property (real and
personal) and other taxes and assessments levied or assessed with respect to
this Lease or any portion of the Premises, including, without limitation, any
state or county occupation tax, transaction privilege, franchise taxes, business
privilege, rental tax or other excise taxes, and other assessments levied or
assessed against the Premises, Tenant’s interest therein or Landlord (with
respect to this Lease and/or the Premises, but excluding any local, state or
federal income tax based upon the net income or excess profits of Landlord, any
capital gains tax imposed on Landlord in connection with the sale of all or any
portion of the Premises to any Person and any transfer tax or stamps for
Landlord’s transfer of any interest in any portion of the Premises to any Person
other than Tenant or any of its Affiliates), which shall be borne by Landlord,
and (ii) “Other Charges”, consisting of any utilities, common area maintenance,
and other costs and expenses of the Business and operation, possession or use of
any portion of the Premises and all other charges, obligations or deposits
assessed against any portion of the Premises during the Term. Tenant may pay all
of any portion of the Taxes or the Other Charges in permitted installments
(whether or not interest accrues on the unpaid balance) when due and before any
Penalty. Tenant will furnish to

 

3

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

 

Landlord, promptly after demand therefore, proof of payment of Taxes and Other
Charges which are paid by Tenant.

 

5.1                               Protests. Each party has the right, but not
the obligation, in good faith to protest or contest (a “Protest”) in whole or in
part (i) the amount or payment of any Taxes or Other Charges and (ii) the
existence, amount or validity of any Lien (as defined in Section 8.1) by
appropriate proceedings sufficient to prevent its collection or other
realization and the sale, forfeiture or loss of any portion of the Premises or
Rent to satisfy it (so long as, in the case of any Protest or contest by Tenant,
Tenant provides Landlord with reasonable security to assure the foregoing, which
security may take the form of a title indemnity (in a form reasonably acceptable
to Landlord and from a national title insurance company reasonably acceptable to
Landlord) or payment of the amount due the lien claimant), provided that if as a
result of any Protest initiated by Landlord, such Taxes, Other Charges or the
amount of any Lien increases above the protested amount, such increase shall be
borne exclusively by Landlord. Each party shall diligently prosecute any such
Protest initiated by it at its sole cost and expense. In connection with any
Protest that Tenant is diligently pursuing regarding Taxes, subject to
Landlord’s obligation to make payments from the Tax Impound pursuant to
Section 5.2, Tenant shall pay the Taxes that are the subject of such Protest
before the imposition of any Penalty. In connection with any Protest that Tenant
is diligently pursuing regarding any Other Charges or Liens, Tenant shall pay
such Other Charges or pay such Liens (or otherwise cause them to be removed)
before any part of the Premises or any Rent therefrom or interest therein is in
any danger of being sold, forfeited, attached or lost. At Tenant’s sole cost and
expense, Landlord will cooperate fully in any Protest that involves an amount
assessed against it and, at Tenant’s request, in the case of any Protest in
which Tenant is prohibited from solely prosecuting such proceedings by
applicable law.

 

5.2                               Impound. Tenant shall include with each
Minimum Rent payment a deposit of one-twelfth (1/12th) of the amount required to
discharge the annual amount of real property Taxes secured by a Lien encumbering
any portion of the Premises (“Real Property Taxes”) as and when they become due
(the “Tax Impound”). The amounts held by Landlord in the Tax Impound shall be
applied by Landlord directly to the payment of the Taxes in a timely fashion and
prior to the imposition of any Penalty, and, except if resulting from
insufficient funds in the Tax Impound, if any Penalty results from Landlord’s
failure to timely make any such payment, such Penalty shall be paid by Landlord.
The Tax Impound shall be calculated on the basis of the most recent available
levy applied to the most recent available assessment of Real Property Taxes. The
Tax Impound shall not be held by Landlord in trust or as an agent of Tenant, but
rather shall be applied by Landlord to the Taxes. The Tax Impound shall earn
interest on an annual basis based upon the average interest earned during such
year by Landlord on its cash deposits. Interest earned on the Tax Impound for a
given Lease Year shall, at Tenant’s election either (a) be paid to Tenant within
thirty (30) days of the end of the Lease Year, or (b) in the case of (i) a Lease
Year that is not the final Lease Year, be credited against the amount of Tax
Impound due from Tenant to Landlord for the first month (or additional
month(s) if such credit exceeds the amount of Tax Impound due for such first
month) of the subsequent Lease Year, or in the case of (ii) the final Lease
Year, paid to Tenant within thirty (30) days of the expiration of the Term or
earlier termination of this Lease. If at any time within thirty (30) days prior
to the due date the Tax Impound shall be insufficient for the payment of the
obligation in full, Tenant shall within ten (10) days after demand deposit the
deficiency with Landlord. If the Tax Impound is in excess of the actual
obligation, at Tenant’s election any excess funds shall either (x) be paid to
Tenant within thirty (30) days of the end of the Lease Year, or (y) in the case
of (1) a Lease Year that is not the final Lease Year, be credited against the
amount of Tax Impound due from Tenant to Landlord for the first month (or
additional month(s) if such credit exceeds

 

4

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

 

the amount of the Tax Impound due for such first month) of the subsequent Lease
Year, or in the case of (2) the final Lease Year, paid to Tenant within thirty
(30) days of the expiration of the Term or earlier termination of this Lease.
Tenant shall forward to Landlord or its designee all Tax bills, bond and
assessment statements as soon as they are received and receipts for payment of
all Taxes required to be paid by Tenant. If Landlord transfers this Lease, it
shall transfer the Tax Impound, and all interest earned thereon, to the
transferee, and Landlord shall thereafter have no liability of any kind with
respect thereto.

 

6.                                      Insurance. All insurance provided for in
this Lease shall (i) be maintained under valid and enforceable policies issued
by insurers licensed and approved to do business in the state(s) where the
Facility or portion of the Premises is located and having general policyholders
and financial ratings of not less than “A-” and “X”, respectively, in the then
current Best’s Insurance Report, (ii) except for insurance referenced in
Section 6(c), 6(d) and Section 6(e), name Landlord (and, if required, pursuant
to the terms of any mortgage encumbering the Premises, or any part hereof,
Landlord’s mortgagee) as an additional insured and, for the casualty policy
referenced in Section 6(a), as the owner and loss payable beneficiary, (iii) be
on an “occurrence” basis, (iv) cover all of Tenant’s operations at the Facility
or portion of the Premises, (v) provide that the policy may not be canceled
except upon not less than thirty (30) days prior written notice to Landlord and
(vi) be primary and provide that any insurance with respect to any portion of
the Premises maintained by Landlord is excess and noncontributing with Tenant’s
insurance. The parties hereby waive as to each other all rights of subrogation
(other than with respect to Worker’s Compensation Coverage described below)
which any insurance carrier, or either of them, may have by reason of any
provision in any policy issued to them, provided such waiver does not thereby
invalidate such policy. Original policies or satisfactory insurer certificates
evidencing the existence of the insurance required by this Lease and showing the
interest of Landlord shall be provided to it prior to the commencement of the
Term or, for a renewal policy, not less than five (5) days prior to the
expiration date of the policy being renewed. If Landlord is provided with a
certificate, it may demand that Tenant provide a complete copy of the related
policy within fifteen (15) days. Tenant may satisfy the insurance requirements
hereunder through coverage under a so-called blanket policy or policies of
insurance carried and maintained by Tenant; provided, however, that the coverage
afforded Landlord 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. During the Term, Tenant shall maintain the following insurance and
any claims thereunder shall be adjudicated by and at the expense of it or its
insurance carrier:

 

(a)                                 Fire and Extended Coverage with respect to
the Facility against loss or damage from all causes under standard “all risk”
property insurance coverage with an agreed amount endorsement (such that the
insurance carrier has accepted the amount of coverage and has agreed that there
will be no co-insurance penalty), without exclusion for fire, lightning,
windstorm, explosion, smoke damage, vehicle damage, sprinkler leakage, flood,
vandalism, earthquake, malicious mischief or any other risks normally covered
under an extended coverage endorsement, in amounts that are not less than the
actual replacement value of the Facility and all Tenant Personal Property
associated therewith (including the cost of compliance with changes in zoning
and building codes and other laws and regulations, demolition and debris removal
and increased cost of construction). Additionally, if the Facility contains
steam boilers, steam pipes, steam engines, steam turbines or other high pressure
vessels, insurance with an agreed amount endorsement (such that the insurance
carrier has accepted the amount of coverage and has agreed that there will be no
co-insurance penalty), covering the major components of the central heating, air
conditioning and ventilating systems, boilers, other pressure vessels, high
pressure piping and machinery, elevators and escalators, if any, and other
similar equipment installed in the Facility, in an

 

5

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

 

amount equal to one hundred percent (100%) of the full replacement cost of the
Facility, which policies shall insure against physical damage to and loss of
occupancy and use of the Facility arising out of an accident or breakdown
covered thereunder. Notwithstanding any provision to the contrary herein,
insurance coverage for earthquake shall be limited to One Million Dollars
($1,000,000) in the aggregate for the entire Premises.

 

(b)                                 Commercial General Public Liability Coverage
with respect to the Facility (including products liability and broad form
coverage) against claims for bodily injury, death or property damage occurring
on, in or about the Facility, affording the parties protection of not less than
One Million Dollars ($1,000,000) per occurrence and Three Million Dollars
($3,000,000) in the aggregate, which maximum aggregate limit may be satisfied
with the combination of commercial general public liability coverage and excess
and/or umbrella coverage;

 

(c)                                  Professional Liability Coverage with
respect to the Facility for damages for injury, death, loss of service or
otherwise on account of professional services rendered or which should have been
rendered, in a minimum amount of One Million Dollars ($1,000,000) per occurrence
and Three Million Dollars ($3,000,000) in the aggregate;

 

(d)                                 Worker’s Compensation Coverage with respect
to the Facility for injuries sustained by Tenant’s employees in the course of
their employment and otherwise consistent with all applicable legal
requirements;

 

(e)                                  Business Interruption and Extra Expense
Coverage with respect to the Facility for loss of rental value for a period not
less than one (1) year, covering perils consistent with the requirements of
Section 6(a) and providing that any covered loss thereunder shall be payable to
the Landlord as its interests may appear, and (A) including either an agreed
amount endorsement or a waiver of any co-insurance provisions, so as to prevent
Tenant, Landlord and any other insured thereunder from being a co-insurer, or
(B) if such insurance contains a coinsurance provision, with a limit greater
than or equal to ten (10) times the amount of annual Minimum Rent and Additional
Rent then payable under this Lease; and

 

(f)                                   Deductibles/Self-Insured Retentions for
the above policies shall not be greater than One Hundred Twenty Five Thousand
Dollars ($125,000.00). At such times and only so long as policies of insurance
with deductibles or self-insured retentions not greater than One Hundred Twenty
Five Thousand Dollars ($125,000.00) are generally not available to operators of
businesses similar to that then being conducted at the Premises at commercially
reasonable rates, as determined by Landlord in its reasonable judgment, the
deductibles or self-insured retentions on the policies of insurance required
hereunder may be in such greater amount, as determined by Landlord in its
reasonable judgment, that would result in the applicable policies being
available at commercially reasonable rates, not to exceed Two Hundred Fifty
Thousand Dollars ($250,000.00). Notwithstanding the foregoing, with respect to
windstorm/hail coverage, the deductibles/self-insured retentions for the
Facility shall be equal to the greater of (i) such amounts permitted under the
preceding two sentences, (ii) with respect to only those Facility located in the
State of Florida, $250,000.00, and (iii) five percent (5%) of the total
insurable value of the Facility.

 

6

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

 

7.                                      Use, Regulatory Compliance and
Preservation of Business.

 

7.1                               Permitted Use.

 

(a)                                 Tenant shall use, operate and occupy the
Facility as a radiation or oncology related medical office building and
treatment center, and for ancillary services relating thereto, but for no other
purpose; provided, however, that Tenant may, with the written approval of
Landlord (subject to the succeeding sentence, to be granted or withheld in the
exercise of its sole and absolute discretion) change the use of the Facility to
a different use so long as Tenant shall continue to use, operate and occupy the
Facility for a use in the medical services industry. Landlord, upon the written
request of Tenant, shall approve a change in the use of the Facility if the
following conditions are met: (i) the proposed change in use is for a use in the
medical services industry, (ii) Tenant has obtained and provided to Landlord
appraisals (prepared by an appraiser reasonably acceptable to Landlord) that
take into account the proposed change in use and that demonstrate to Landlord’s
reasonable satisfaction that the fair market value of the Facility after the
change in use will not result in a material reduction of the fair market value
of the Facility, and (iii) Tenant has obtained or agrees to obtain prior to such
change in use all licenses, certificates, permits and all other approvals
required by law in connection with operating the Facility for the proposed new
use. Tenant shall operate the Facility and the Business conducted thereon in a
manner consistent with all applicable laws.

 

(b)                                 Tenant shall continuously and
uninterruptedly use, operate and occupy the Facility throughout the Term;
provided, however, that (i) Tenant may close down the operations of the Facility
in connection with Tenant’s refurbishing, upgrading, or changing the permitted
use of the Facility for a commercially reasonable amount of time required to
complete such refurbishment, upgrades, or change in use; but in no event shall
such period of time exceed two hundred seventy (270) days, and (ii) subject to
the Tenant’s restoration obligations contained in this Lease, Sections 17 and
18, the Facility may be temporarily closed down to the extent and for the period
of time the Facility is untenantable by reason of fire or other casualty or
condemnation.

 

7.2                               Regulatory Compliance. Tenant, the Facility
and the other portions of the Premises shall be subject to all CC&R’s
promulgated by, or for the benefit of, condominium or other such associations or
entities, as the same may be amended from time to time and Tenant, the Facility
and the other portions of the Premises shall comply in all material respects
with all of such CC&R’s, as well as all licensing and other laws and other use
or maintenance requirements applicable to the Business conducted thereon and, to
the extent applicable, all Medicare, Medicaid and other third-party payor
certification requirements, including timely filing properly completed cost and
other required reports, timely paying all expenses shown thereon, and ensuring
that the Facility, to the extent required in connection with the then permitted
use pursuant to Section 7.1(a), continues to be fully certified for
participation in Medicare and Medicaid throughout the Term. Further, Tenant
shall not commit any act or omission that would in any way violate any
certificate of occupancy affecting the Facility. All inspection fees, costs and
charges associated with a change of such licensure or certification shall be
borne solely by Tenant. In addition, Tenant shall operate the Facility in full
compliance with the applicable provisions of the Medicare Anti-Kickback Law, 42
U.S.C. 1320a-7(b), and the Stark Self-Referral Prohibition Act, 42 U.S.C.
1395nn, et. seq., as the same may be modified, supplemented or replaced from
time to time, and all regulations promulgated thereunder from time to time.

 

7.3                               Quiet Enjoyment. So long as no Event of
Default has occurred and is continuing, Landlord covenants that Tenant may
peaceably and quietly have, hold and enjoy the Premises for the Term, free of
any claim or other action not caused or created by Tenant, subject to Section 17
or Section 18.

 

7

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

 

8.                                      Acceptance, Maintenance, Upgrade,
Alteration and Environmental.

 

8.1                               Acceptance “AS IS”; No Liens. Tenant
acknowledges that it or an Affiliate has been in possession of and operating the
Premises prior to the date of this Lease and is presently engaged in operations
like the Business conducted at the Facility in the state where the Facility is
located and has expertise in such industry and, in deciding to enter into this
Lease, has not relied on any representations or warranties, express or implied,
of any kind from Landlord with respect to the Premises. Tenant has examined the
condition of title to and thoroughly investigated the Premises, has selected the
Premises to its own specifications, has concluded that, as of the date hereof,
no improvements or modifications are required to be made by Landlord in order to
conduct the Business thereon, and accepts them on an “AS IS” basis and assumes
all responsibility and cost for the correction of any observed or unobserved
deficiencies or violations. It is expressly understood and agreed that any
inspection by or on behalf of the Landlord of the business conducted at the
Premises or of the Premises is for Landlord’s sole and exclusive benefit and is
not directly or indirectly for the benefit of, nor should be relied in any
manner upon by, Tenant, its subtenants or any other third party. Subject to its
right to Protest set forth in Section 5.1, Tenant shall not cause or permit any
lien, levy or attachment to be placed or assessed against any portion of the
Premises or the operation thereof (a “Lien”) other than “Permitted Exceptions”
as described on Exhibit C and any mortgage, lien, encumbrance, or other charge
created by or resulting solely from any act or omission of Landlord.

 

8.2                               Tenant’s Maintenance Obligations. Tenant shall
(i) keep and maintain the Premises in good appearance, repair and condition and
maintain proper janitorial services, (ii) promptly make all repairs (interior
and exterior, structural and nonstructural, ordinary and extraordinary, foreseen
and unforeseen) necessary to keep the Facility in good and lawful order and
condition and in substantial compliance with all applicable requirements and
laws relating to the business conducted thereon, including, if applicable
certification for participation in Medicare and Medicaid, and (iii) keep and
maintain all Landlord and Tenant Personal Property in good condition, ordinary
wear and tear, casualty and condemnation excepted, and repair and replace such
property consistent with prudent industry practice.

 

8.3                               Alterations by Tenant. Tenant may alter,
improve, exchange, replace, modify or expand (collectively, “Alterations”) the
Premises from time to time as it may determine is desirable for the continuing
and proper use and maintenance of the Premises; provided, that any Alterations
in excess of Two Hundred Fifty Thousand Dollars ($250,000.00) with respect to
the Facility in any rolling twelve (12) month period shall require Landlord’s
prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed; provided further, that any Alterations to the Premises
must satisfy the requirements set forth in Sections 4.04 (2) and (3) of Revenue
Procedure 2001-28, 2001-19 I.R.B. 1156. All Alterations shall immediately become
a part of the Premises and the property of Landlord subject to this Lease, and
the cost of all Alterations or other purchases, whether undertaken as an
on-going licensing, Medicare, Medicaid or other regulatory requirement, or
otherwise shall be borne solely by Tenant. All Alterations shall be done in a
good and workmanlike manner in compliance in all material respects with all
applicable laws and the insurance required under this Lease. If an Alteration
changes the rentable square footage of the Facility, Tenant shall promptly
provide Landlord notice of the same and upon delivery of such notice, and
Schedule 1 shall be deemed amended to reflect such revised rentable square
footage for the Facility.

 

8

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

 

8.4                               Hazardous Materials. Tenant’s use of the
Premises shall comply in all material respects with all Hazardous Materials
Laws. If any Environmental Activities occur or are suspected to have occurred in
material violation of any Hazardous Materials Laws or if Tenant has received
written notice of any Hazardous Materials Claim against any portion of the
Premises, Tenant shall promptly remedy any such violation or claim to the
reasonable satisfaction of Landlord and in accordance in all material respects
with all applicable governmental authorities, as required by Hazardous Materials
Laws. Tenant and Landlord shall promptly advise one another in writing upon
receiving written notice of (a) any Environmental Activities in material
violation of any Hazardous Materials Laws; (b) any Hazardous Materials Claims
against Tenant or Landlord in connection with the Premises (or any portion of
the Premises); (c) any remedial action taken by Tenant or Landlord in response
to any Hazardous Materials Claims or any Hazardous Materials on, under or about
any portion of the Premises in material violation of any Hazardous Materials
Laws; (d) any occurrence or condition on or in the vicinity of any portion of
the Premises of which Tenant or Landlord, as applicable, has actual knowledge
and that materially increases the risk that any portion of the Premises will be
exposed to Hazardous Materials; and (e) all material communications to or from
Tenant, any governmental authority or any other Person relating to Hazardous
Materials Laws or Hazardous Materials Claims with respect to any portion of the
Premises, including copies thereof. Notwithstanding any other provision of this
Lease, if any Hazardous Materials are discovered on or under any portion of the
Facility in violation of any Hazardous Materials Law, the Term shall be
automatically extended with respect to the Facility only and this Lease shall
remain in full force and effect with respect to the Facility only until the
earlier to occur of (i) the completion of all remedial action or monitoring, as
reasonably approved by Landlord, in accordance with all Hazardous Materials
Laws, or (ii) the date specified in a written notice from Landlord to Tenant
terminating this Lease (which date may be subsequent to the date upon which the
Term was to have expired). Notwithstanding the foregoing, unless the Initial
Term of this Lease is renewed pursuant to Section 1, above, in no event shall
the provisions of this Section 8.4 extend the Term for the Facility beyond
December 31, 2027 as to the Facility; provided, however, that Tenant’s
obligations to complete all remedial action or monitoring pursuant to this
Section 8.4 shall survive any such termination of the Term. Landlord shall have
the right, at Tenant’s sole cost and expense (including, without limitation,
Landlord’s reasonable attorneys’ fees and costs) and with counsel chosen by
Landlord, to join and participate in, as a party if it so elects, any legal
proceedings or actions initiated in connection with any Hazardous Materials
Claims.

 

8.5                               Medical Waste. Tenant shall be responsible for
all Medical Waste disposal for the Facility, which disposal shall be provided by
a licensed medical waste hauler and shall comply in all material respects with
all applicable laws, rules, regulations and orders. If Tenant elects to provide
Medical Waste disposal services to the subtenants in the Facility, such services
shall be provided in compliance in all material respects with all applicable
laws, rules, regulations and orders.

 

9.                                      Tenant Property.

 

9.1                               Tenant Property. Tenant may obtain and install
all items of furniture, fixtures, trade fixtures, supplies and equipment as
Tenant determines are reasonably necessary or reasonably appropriate to operate
the Premises (“Tenant Personal Property”). As used herein, “Tenant Intangible
Property” means all the following at any time owned by Tenant in connection with
its use of any portion of the Premises: Medicare, Medicaid and other accounts
and proceeds thereof; rents, profits, income or revenue derived from such
operation or use; all documents, chattel paper, instruments, contract rights
(including all leases with subtenants and contracts with employees and third
parties), deposit accounts, general intangibles and choses in action; refunds of
any Taxes or Other Charges; if applicable, licenses

 

9

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

 

and permits necessary or desirable for Tenant’s use of any portion of the
Premises, any applicable certificate of need, occupancy or other similar
certificate, and the exclusive right to transfer, move or apply for the
foregoing and manage the business conducted at any portion of the Premises; and
the right to use the name and any other trade or other name now or hereafter
associated with its operation of the Premises.

 

9.2                               Schedule of Tenant Property. Upon receipt of
written request from Landlord, Tenant shall deliver to Landlord a schedule of
all lenders, purchase money equipment financiers, equipment lessors, and other
parties who, other than Tenant, have any liens, security interests, ownership
interests, or other similar interests in and to any Tenant Personal Property
within the Premises with a value of or exceeding One Hundred Thousand Dollars
($100,000.00) (the “Tenant Property Schedule”). The Tenant Property Schedule
shall be in a form reasonably acceptable to Landlord and shall include: (i) the
name, address, and other contact information for the agent or lead bank (“Agent
Bank”) in connection with Tenant’s senior credit facility, and (ii) a detailed
breakdown of each applicable item of Tenant Personal Property, its age, useful
economic life, and estimated value, and any lenders, purchase money equipment
financiers, equipment lessors, or other parties who have a lien, security
interest, ownership interest, or other similar ownership interest in such item
and the contact information for any and all such parties. Tenant shall be
required to deliver to Landlord an updated Tenant Property Schedule upon the
commencement of each Lease Year and in connection with any change or replacement
of Agent Bank.

 

9.3                               Waiver of Landlord’s Lien. Landlord hereby
waives any statutory or common law lien that may be granted or deemed to be
granted to Landlord in Tenant Personal Property or Tenant Intangible Property.
Landlord agrees that, upon the request of any Person that shall be providing
senior secured financing to Tenant, or a purchase money equipment financier or
equipment lessor of Tenant, Landlord shall, at Tenant’s sole cost and expense,
negotiate in good faith for the purpose of executing and delivering a
commercially reasonable waiver or subordination of Landlord’s statutory lien
rights, if any, and a consent and agreement with respect to the respective
rights of Landlord and such Person regarding the security interests in, and the
timing and removal of, any Tenant Personal Property or Tenant Intangible
Property which such Person has a secured interest (the “Collateral”), in form
and substance reasonably acceptable to Landlord and such Person, so long as such
waiver and agreement (i) provides for the indemnification of Landlord against
any claims by Tenant or any Person claiming through Tenant, and against any
physical damage caused to the Premises, in connection with the removal of any of
the Collateral by such Person, (ii) provides for a reasonable, but limited, time
frame for the removal of such Collateral by such Person after the expiration of
which same shall be deemed abandoned, and (iii) provides for the per diem
payment of Rent due hereunder by such Person for each day following the date of
the expiration or termination of this Lease that Landlord permits such Person’s
Collateral to remain in the Premises.

 

10.                               Financial, Management and Regulatory Reports.
Upon receipt of written request from Landlord, Tenant shall provide Landlord
with the reports listed in Exhibit E at the time described therein, and such
other information about it or the operations of the Premises and the Business as
Landlord may reasonably request from time to time, including such information
reasonably requested in connection with a financing of the Premises sought by
Landlord. All financial information provided shall be prepared in accordance
with generally accepted accounting principles consistently applied and shall be
submitted electronically in the form of unrestricted, unlocked “.xls”
spreadsheets (or, if restricted or locked, Landlord has been provided with all
necessary passwords and access keys required to fully access or extract the
subject data therefrom) created using Microsoft Excel (2003 or newer editions).
In the

 

10

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

 

event Tenant fails to provide Landlord with the reports listed in Exhibit E
within the time periods specified therein, Tenant shall have a grace period of
five (5) Business Days after receipt of written notice of such failure from
Landlord to provide such reports, after which Tenant will be assessed with a
$500.00 administrative fee, which administrative fee shall be immediately due
and payable to Landlord.

 

11.                               Representations and Warranties. Each party
represents and warrants to the other that: (i) this Lease and all other
documents executed or to be executed by it in connection herewith have been duly
authorized and shall be binding upon it; (ii) it is duly organized, validly
existing and in good standing under the laws of the state of its formation and
is duly authorized and qualified to perform this Lease within the state(s) where
any portion of the Premises is located; and (iii) neither this Lease nor any
other document executed or to be executed in connection herewith violates the
terms of any other agreement of such party.

 

12.                               Events of Default. The occurrence of any of
the following events will constitute an “Event of Default” on the part of
Tenant, and there shall be no cure period therefor except as otherwise expressly
provided:

 

(a)                                 Tenant’s failure to pay any Rent when due
within two (2) Business Days after receipt of written notice from Landlord of
such failure;

 

(b)                                 Tenant’s failure to pay when due Taxes, any
Other Charges or other payments required to be made by Tenant under this Lease,
which failure continues for ten (10) days after receipt of written notice from
Landlord of such failure;

 

(c)                                  (i) The suspension or material limitation
of any license, or, if applicable, the certification of any portion of the
Premises for provider status under Medicare or Medicaid which would have a
material adverse effect on the operation of the Facility for the then permitted
use pursuant to Section 7.1(a); provided, however, if any such suspension or
material limitation is curable by Tenant it shall not constitute an Event of
Default if Tenant promptly commences to cure such breach and thereafter
diligently pursues such cure to the completion thereof within the lesser of
(x) the time period in which the applicable governmental agency has given Tenant
to undertake corrective action or (y) one hundred eighty (180) days after the
occurrence of any such suspension or material limitation; (ii) the revocation of
any license or, if applicable, the certification of any portion of the Premises
for provider status under Medicare or Medicaid which would have a material
adverse effect on the operation of the Facility for the then permitted use
pursuant to Section 7.1(a); (iii) the discontinuance of operations at the
Facility, except as may be permitted pursuant to Sections 7.1 or 24.5; (iv) the
failure to maintain any certificate of need or other similar certificate or
license required to operate the Facility for the then permitted use in
accordance with the provisions of Section 7.1, which failure would have a
material adverse effect on the operation of the Facility; or (v) the use of any
material portion of the Premises other than as permitted pursuant to
Section 7.1;

 

(d)                                 A default beyond any applicable cure period
by Tenant (i) with respect to any obligation in excess of One Million dollars
($1,000,000.00) under any other lease, agreement or obligation between Tenant
and Landlord or any of Landlord’s Affiliates, or (ii) in any payment of
principal or interest on any obligations of borrowed money to third parties
having an aggregate principal balance of One Hundred Million dollars
($100,000,000.00) or more in the aggregate, or in the performance of any other
provision contained in any instrument under which any such obligation is created
or secured (including the breach of any covenant thereunder), (x) if such
payment is a payment at

 

11

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

 

maturity or a final payment, or (y) if an effect of such default is to cause, or
permit any Person to cause, such obligation to become due prior to its stated
maturity;

 

(e)                                  A default beyond any applicable cure period
by any Guarantor under the Guaranty;

 

(f)                                   Any material misrepresentation by Tenant
under this Lease or in any written report, notice or communication made pursuant
hereto from Tenant to Landlord with respect to Tenant, any Guarantor, or the
Premises;

 

(g)                                 The failure to perform or comply with the
provisions of Sections 6 or 16;

 

(h)                                 If (i) Tenant shall generally not pay its
debts as they become due, or shall admit in writing its inability to pay its
debts generally, or shall make an assignment of all or substantially all of its
property for the benefit of creditors; or (ii) a receiver, trustee or liquidator
shall be appointed for Tenant or the Facility if such appointment is not
discharged within sixty (60) days after the date of such appointment; (iii) the
filing by Tenant of a voluntary petition under any federal bankruptcy or state
law to be adjudicated as bankrupt or for any arrangement or other debtor’s
relief; or (iv) the involuntary filing of such a petition against Tenant by any
other party unless such petition is dismissed within ninety (90) days after
filing; or

 

(i)                                    The failure to perform or comply with any
other provision of this Lease not requiring the payment of money unless Tenant
cures it either (i) within thirty (30) days after receipt of written notice from
Landlord of such failure or (ii) if such default cannot with due diligence be so
cured because of the nature of the default or delays beyond the control of
Tenant and cure after such period will not have a materially adverse effect upon
the Facility, then such default shall not constitute an Event of Default if
Tenant uses its best efforts to cure such default by promptly commencing and
diligently pursuing such cure to the completion thereof and cures it within one
hundred eighty (180) days after such notice from Landlord.

 

13.                               Remedies. Upon the occurrence and during the
continuance of an Event of Default, Landlord may exercise all rights and
remedies under this Lease and the laws of the state(s) where the Premises are
located that are available to a lessor of real and personal property in the
event of a default by its lessee. Landlord shall have no duty to mitigate
damages unless required by applicable law and shall not be responsible or liable
for any failure to relet any of the Premises or to collect any rent due upon any
such reletting. Tenant shall pay Landlord, immediately upon demand, all expenses
incurred by it in obtaining possession and reletting any of the Premises,
including reasonable fees, commissions and costs of attorneys, architects,
agents and brokers.

 

13.1                        General. Without limiting the foregoing, Landlord
shall have the right (but not the obligation) to do any of the following upon
and during the continuance of an Event of Default: (a) sue for the specific
performance of any covenant of Tenant as to which it is in breach; (b) enter
upon any portion of the Premises, terminate this Lease, dispossess Tenant from
the Premises, by any available legal process, and/or collect money damages by
reason of Tenant’s breach, including the acceleration of (i) all Minimum Rent
and Additional Rent which would have accrued after such termination, discounted
at an annual rate equal to the then-current U.S. Treasury Note rate for the
closest comparable term and taking into account any obligation on behalf of
Landlord to mitigate its damages to the extent required by law, and (ii) all
obligations and liabilities of Tenant under this Lease which survive the
termination of the

 

12

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

 

Term; (c) elect to leave this Lease in place and sue for Rent and other money
damages as the same come due; and (d) (before or after repossession of the
Premises pursuant to clause (b) above and whether or not this Lease has been
terminated) relet any portion of the Premises to such tenant(s), for such
term(s) (which may be greater or less than the remaining balance of the Term),
rent, conditions (which may include concessions or free rent) and uses as it may
determine in its sole discretion and collect and receive any rents payable by
reason of such reletting.

 

13.2                        Remedies Cumulative; No Waiver. No right or remedy
herein conferred upon or reserved to Landlord is intended to be exclusive of any
other right or remedy, and each and every right and remedy shall be cumulative
and in addition to any other right or remedy given hereunder or now or hereafter
existing at law or in equity. Any notice or cure period provided herein shall
run concurrently with any provided by applicable law. No failure of Landlord to
insist at any time upon the strict performance of any provision of this Lease or
to exercise any option, right, power or remedy contained herein shall be
construed as a waiver, modification or relinquishment thereof as to any similar
or different breach (future or otherwise) by Tenant. Landlord’s receipt of any
rent or other sum due hereunder (including any late charge) with knowledge of
any breach shall not be deemed a waiver of such breach, and no waiver by
Landlord of any provision of this Lease shall be effective unless expressed in a
writing signed by it.

 

13.3                        Performance of Tenant’s Obligations. If Tenant at
any time shall fail to make any payment or perform any act on its part required
to be made or performed under this Lease, then Landlord may, without waiving or
releasing Tenant from any obligations or default hereunder, make such payment or
perform such act for the account and at the expense of Tenant, and enter upon
any portion of the Premises for the purpose of taking all such action as may be
reasonably necessary. No such entry shall be deemed an eviction of Tenant. All
sums so paid by Landlord and all necessary and incidental costs and expenses
(including reasonable attorneys’ fees and expenses) incurred in connection with
the performance of any such act by it, together with interest at the Agreed Rate
from the date of the making of such payment or the incurring of such costs and
expenses, shall be payable by Tenant to Landlord upon Landlord’s written demand
therefor.

 

13.4                        Limited Remedy Event of Defaults. Notwithstanding
anything to the contrary herein contained, or any other provisions of this Lease
or any other concurrent transaction document, if Landlord is exercising remedies
due solely to the Events of Default described in clauses (c), (d), (e), (f) or
(i) of Section 12 (“Limited Remedy Events of Default”), the aggregate amount
Tenant shall be required to pay to Landlord from and after the date of the
occurrence of such Limited Remedy Event of Default (the “Occurrence Date”) shall
be limited to the sum of (i) (A) 89.9% of the fair market value of the Premises
as of the commencement date less (B) the sum of the present value as of the
Effective Date (using an annual discount rate equal to Fifteen and 65/100
percent (15.65%)) of all Minimum Rent and Additional Rent received as of the
Occurrence Date, (ii) any amounts of Taxes and Other Charges which are due and
payable or have accrued under this Lease through the Occurrence Date, and
(iii) any amounts of Taxes and Other Charges which are due and payable or have
accrued under this Lease after the Occurrence Date while or so long as the
Tenant remains in possession of the Premises after any Limited Remedy Event of
Default that relates to insurance, utilities, repairs, maintenance,
environmental maintenance, remediation and compliance and other customary costs
and expenses of operating and maintaining the Premises in substantial compliance
with the terms of this Lease.

 

13

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

 

14.          Provisions on Termination.

 

14.1        Surrender of Possession. On the expiration of the Term or earlier
termination or cancellation of this Lease (the “Termination Date”), Tenant shall
deliver to Landlord or its designee possession of (a) the Premises (or portion
thereof if the expiration, termination, or cancellation of this Lease is not
with respect to the entire Premises) in broom clean condition and in as good a
condition as existed at the date of their possession and occupancy pursuant to
this Lease, except as repaired, replaced, rebuilt, restored, altered or added to
as permitted or required by the provisions of this Lease, ordinary wear and
tear, casualty and condemnation excepted, (b) all subtenant leases and security
deposits, all documentation related to the subtenants (including financials and
past correspondence) and copies of all Tenant’s books and records relating
solely to the Premises, and (c) plans, specifications, drawings or similar
materials in connection with the Facility.

 

14.2        Removal of Tenant Personal Property. Tenant may remove from the
Premises in a workmanlike manner all Tenant Personal Property, leaving the
Premises in good and presentable condition and appearance, including repair of
any damage caused by such removal. Title to any Tenant Personal Property which
is not removed by Tenant as permitted above upon the expiration of the Term
shall, at Landlord’s election, vest in Landlord; provided, however, that
Landlord may remove and store or dispose at Tenant’s expense any or all of such
Tenant Personal Property which is not so removed by Tenant without obligation or
accounting to Tenant.

 

14.3        Holding Over. If Tenant shall for any reason remain in possession of
any portion of the Premises after the Termination Date, such possession shall be
a month-to-month tenancy during which time Tenant shall pay as rental on the
first (1st) Business Day of each month one and one-half (1-1/2) times the total
of the monthly Minimum Rent payable with respect to the last Lease Year plus
Additional Rent allocable to the month, all additional charges accruing during
the month and all other sums, if any, payable by Tenant pursuant to this Lease.
Nothing contained herein shall constitute the consent, express or implied, of
Landlord to the holding over of Tenant after the Termination Date, nor shall
anything contained herein be deemed to limit Landlord’s remedies.

 

14.4        Survival. All covenants, indemnities and other obligations of Tenant
under this Lease which arise on or prior to the Termination Date or which
specifically survive the expiration or termination by their own terms shall
survive the Termination Date.

 

15.          Certain Landlord Rights.

 

15.1        Entry and Examination of Records. Landlord and its representatives
may enter any portion of the Premises at any reasonable time upon not less than
twenty-four (24) hours written notice to Tenant (which notice may be transmitted
in the form of electronic mail or other similar electronic means) to inspect the
Premises for compliance with this Lease, to exhibit the Premises for sale, lease
or mortgaging, or for any other reasonable purpose; provided that no such notice
shall be required in the event of an emergency, upon and during the continuance
of an Event of Default or to post notices of non-responsibility under any
mechanic’s or materialmen’s lien law. No such entry shall unreasonably interfere
with Tenant or any subtenants in the Facility or the business operated thereon.
During normal business hours (and upon reasonable notice), Tenant will permit
Landlord and its representatives (coordinated through Landlord) to examine and
make abstracts from any of Tenant’s books and records (other than materials
protected by the attorney-client privilege and materials which such person may
not disclose without violation of a confidentiality obligation binding upon it);
provided that, so long as no

 

14

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

 

Event of Default has occurred and is continuing, Landlord shall not be entitled
to exercise the foregoing rights more than once, in the aggregate, in any
calendar year.

 

15.2        Grant Liens. Any Lien or other encumbrance now existing and securing
any borrowing or other means of financing or refinancing or otherwise shall
provide for the recognition of this Lease and all Tenant’s rights hereunder.
Subject to the foregoing sentence and Section 7.3, without the consent of
Tenant, Landlord may from time to time, directly or indirectly, create or
otherwise cause to exist any Lien, title retention agreement or other
encumbrance upon the Premises, or any portion thereof or interest therein
(including this Lease), whether to secure any borrowing or other means of
financing or refinancing or otherwise. Upon the request of Landlord, Tenant
shall subordinate this Lease to the Lien of any such encumbrance so long as
(a) such encumbrance provides that it is subject to the rights of Tenant under
this Lease and that so long as no Event of Default shall exist beyond any
applicable cure period, Tenant’s occupancy shall not be disturbed if any Person
takes possession of the applicable portion of the Premises through foreclosure
proceedings or otherwise and (b) is otherwise in form and substance reasonably
acceptable to Tenant.

 

15.3        Estoppel Certificates. At any time upon not less than ten (10) days
prior written request by either Landlord or Tenant (the “Requesting Party”) to
the other party (the “Responding Party”), the Responding Party shall have an
authorized representative execute, acknowledge and deliver to the Requesting
Party or its designee a written statement certifying (a) that this Lease,
together with any specified modifications, is in full force and effect, (b) the
dates to which Rent and additional charges have been paid, (c) that no default
currently exists on the part of the Responding Party, and to the Responding
Party’s actual knowledge, on the part of the Requesting Party or specifying any
such default, and (d) as to such other matters as the Requesting Party may
reasonably request.

 

15.4        Conveyance Release. If Landlord or any successor owner shall
transfer any portion of the Premises in accordance with this Lease, they shall
thereupon be released from all future liabilities and obligations hereunder
arising or accruing from and after the date of such conveyance or other
transfer, which instead shall thereupon be binding upon the new owner.

 

16.          Assignment and Subletting.

 

16.1        No Assignment or Subletting. Without the prior written consent of
Landlord, which may be withheld or conditioned at its sole discretion, this
Lease shall not, nor shall any interest of Tenant herein, be assigned or
encumbered by operation of law, nor shall Tenant voluntarily or involuntarily
assign, mortgage, encumber or hypothecate any interest in this Lease or sublet
any portion of the Premises. Any foregoing acts without such consent shall be
void and shall, at Landlord’s sole option, constitute an Event of Default giving
rise to Landlord’s right, among other things, to terminate this Lease. An
assignment of this Lease by Tenant shall be deemed to include: (a) entering into
a management or similar agreement relating to the operation or control of any
portion of the Premises with a Person that is not an Affiliate of Tenant; or
(b) any change (voluntary or involuntary, by operation of law or otherwise,
including the transfer, assignment, sale, hypothecation or other disposition of
any equity interest in Tenant) in the Person that ultimately exert effective
Control over the management of the affairs of Tenant or Guarantor as of the date
hereof; provided that an initial public offering of Tenant or Guarantor shall
not be deemed to be an assignment of the Lease so long as thereafter less than
twenty five percent (25%) of the voting stock of Tenant or Guarantor, as
applicable, is held by any Person or related group that did not have such
ownership before the initial public offering.

 

15

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

 

16.2      Permitted Assignments and Sublets.

 

(a)           Notwithstanding Section 16.1 above, Tenant may, without Landlord’s
prior written consent, assign this Lease or sublet the Premises or any portion
thereof to an Affiliate of Tenant or any Guarantor if all of the following are
first satisfied: (i) such Affiliate fully assumes Tenant’s obligations
hereunder; (ii) Tenant remains fully liable hereunder and any Guarantor remains
fully liable under its guaranty; (iii) the use of the applicable portion of the
Premises shall comply with Section 7.1, above; (iv) Landlord shall be provided
the proposed form and content of all documents for such assignment or sublease
on or before the date that is twenty (20) days prior to such assignment or
sublease, and (v) Landlord shall be provided executed copies of all such
documents within fifteen (15) Business Days after such assignment or sublease.

 

(b)           Notwithstanding Section 16.1 above, Landlord’s consent shall not
be required for any assignment of this Lease or change of Control of Tenant or
Guarantor if the consolidated net worth of the successor Tenant (in the case of
an assignment) or Tenant (in the case of a change of Control of Tenant), as
applicable (such entity “Resulting Tenant”) or, successor Guarantor (in the case
of an assignment) or Guarantor (in the case of a change of Control of
Guarantor), as applicable (such entity, “Resulting Guarantor”) immediately after
the effectiveness of the assignment or change of Control is equal to or greater
than Three Hundred Million Dollars ($300,000,000.00) (such assignment or change
of Control, a “Strong Tenant/Guarantor Transfer”), and each of the following
conditions is met: (i) Resulting Tenant and/or Resulting Guarantor, or the
officers, directors or managers thereof or of the Person that controls Resulting
Tenant or Resulting Guarantor, as applicable, has sufficient operating
experience and history with respect to the Business of the Facility as had
Tenant or Guarantor, as applicable (or the officers, directors or managers
thereof or of the Person that controls Tenant or Guarantor) immediately prior to
the Strong Tenant/Guarantor Transfer, or has retained a management company with
such expertise to manage the Facility; (ii) after a Strong Tenant/Guarantor
Transfer, the Resulting Tenant and/or Resulting Guarantor, if different than the
Tenant or Guarantor immediately prior to such Strong Tenant/Guarantor Transfer,
shall assume all of the obligations of Tenant under the Lease and Guarantor
under the Guaranty accruing subsequent to the effective date of such Strong
Tenant/Guarantor Transfer by a written instrument in form and substance
reasonably satisfactory to Landlord (the “Lease/Guaranty Assumption”); and
(iii) no Event of Default shall have occurred and be continuing hereunder. A
Person shall be deemed to have “sufficient operating experience and history” if,
immediately prior to the Strong Tenant/Guarantor Transfer, such Person (together
with its Affiliates and/or officers, directors and managers) (x) operated or
managed (whether directly or through its operating subsidiary(ies)) at least
twelve (12) Facility engaged in the Business of the Facility (or the number of
such Facility operated and/or managed by Guarantor, whichever is less) and
(y) has been in the business of operating or managing such Facility for at least
three (3) years (or for such period as Guarantor has been in such business,
whichever is less). Upon delivery of the Lease/Guaranty Assumption, Landlord
shall release Tenant from any liability under the Lease and Guarantor from any
liability under the Guaranty first accruing from and after the effective date of
such Strong Tenant/Guarantor Transfer.

 

(c)           Notwithstanding Section 16.1 above, Tenant may, (i) without
Landlord’s prior written consent, sublet portions of the Facility in the
ordinary course of Tenant’s business to subtenants of the Facility for customary
uses ancillary to Tenant’s permitted use including, pharmacy, physical therapy,
and sundry providers, and (ii) subject to Landlord’s prior written consent,
which consent shall not be

 

16

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

 

unreasonably withheld, conditioned or delayed, sublet all or any portion of the
Premises, in each case using a form of sublease reasonably approved by Landlord.

 

(d)           Notwithstanding Section 16.1 above and subject to Tenant’s
obligations pursuant to Section 9.2, Tenant shall have the right from time to
time during the Term hereof and without Landlord’s further approval, written or
otherwise, to grant and assign a security interest in Tenant’s interest in all
Tenant Personal Property or other property of Tenant that is not a part of the
Premises to Tenant’s lenders. In addition, Tenant may grant and assign a
mortgage or other security interest in Tenant’s interest in this Lease to
Tenant’s lenders in connection with Tenant’s financing of Tenant’s interest in
this Lease provided that: (i) Tenant pays all reasonable costs, expenses and
charges of Landlord incident to the granting of any such mortgage or other
security interest, including Landlord’s reasonable attorneys’ fees and expenses
and (ii) Landlord has approved, in its reasonable discretion, the form of
leasehold mortgage pursuant to which Tenant is granting a leasehold mortgage or
other security interest in this Lease.

 

(e)           Tenant hereby acknowledges that an assignment, subleasing or other
transfer of the Premises or a portion thereof under this Section 16 will cause
Landlord to incur administrative and other expenses not contemplated under this
Lease. Accordingly, prior to or concurrently with an assignment, sublease or
other transfer of the Premises or a portion thereof pursuant to Section 16.1 or
Sections 16.2, Tenant shall reimburse Landlord for any and all reasonable costs
and expenses (including, without limitation, reasonable attorneys’ fees)
incurred by Landlord in connection with such assignment, sublease, or other
similar transfer.

 

(f)            In no event shall Tenant sublet any portion of the Premises on
any basis such that the rental to be paid by the sublessee would be based, in
whole or in part, on either the income or profits derived by the business
activities of the sublessee, or any other formula, such that any portion of the
sublease rental received by Landlord would fail to qualify as “rents from real
property” within the meaning of Section 856(d) of the U.S. Internal Revenue
Code, or any similar or successor provision thereto.

 

17.          Damage by Fire or Other Casualty. Tenant shall promptly notify
Landlord of any material damage or destruction of any portion of the Premises
and diligently repair or reconstruct such portion of the Premises in a good and
workman like manner to a like or better condition than existed prior to such
damage or destruction in accordance with Section 8.4. So long as no Event of
Default exists, any award of insurance proceeds up to and including One Hundred
Thousand Dollars ($100,000.00) shall be paid directly to Tenant. In the event
that any award of net insurance proceeds payable with respect to the casualty
are in excess of One Hundred Thousand Dollars ($100,000.00), such insurance
proceeds (i) shall be paid directly to Landlord, and (ii) if no Event of Default
exists, shall be made available to Tenant for the repair or reconstruction of
the applicable portion of the Premises subject to the following disbursement
requirements:

 

(a)           prior to commencement of restoration, the architects, contracts,
contractors, plans and specifications, payment and performance bond from the
general contractor for the work and a budget for the restoration shall have been
approved by Landlord, which approval shall not be unreasonably withheld,
delayed, or conditioned;

 

17

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

 

(b)           Tenant shall possess such additional funds which Landlord
reasonably determines are needed to pay all costs of the repair or restoration
and such Tenant funds shall be made available by Tenant as required to pay for
the costs of the restoration;

 

(c)           at the time of any disbursement, except as permitted pursuant to
Section 5.1, no mechanics’ or materialmen’s liens shall have been filed against
any of the Premises and remain undischarged;

 

(d)           disbursements shall be made from time to time (within reasonable
time frames to perform and complete the restoration, but not more frequently
than monthly) in an amount not exceeding the cost of the restoration completed
since the last disbursement, upon receipt of (i) satisfactory evidence,
including architects’ certificates, of the stage of completion, the estimated
total cost of completion and performance of the restoration to date in a good
and workmanlike manner in accordance with all material respects with the
contracts, plans and specifications, (ii) waivers of liens, and
(iii) contractors’ and subcontractors’ sworn statements as to completed work and
the cost thereof for which payment is requested; and

 

(e)           each request for disbursement shall be accompanied by a
certificate of Tenant, signed by an officer of Tenant, describing the
restoration for which payment is requested, stating the cost incurred in
connection therewith, stating that Tenant has not previously received payment
for such restoration and, upon completion of the restoration, also stating that
the restoration has been fully completed and complies with the applicable
requirements of this Lease.

 

If such proceeds are insufficient, Tenant shall provide the required additional
funds; if such proceeds are more than sufficient, the surplus shall belong and
be paid to Tenant upon completion of the restoration in accordance with the
requirements of this Lease. Tenant shall not have any right under this Lease,
and hereby waives all rights under applicable law, to abate, reduce or offset
rent by reason of any damage or destruction of any portion of the Premises of
any amount by reason of an insured or uninsured casualty.

 

If at any time during the last two (2) years of the Term, fire or other casualty
shall render the whole or any portion of the Facility untenantable and the
Facility (or any portion thereof) cannot reasonably be expected to be repaired
within two hundred seventy (270) days from the date of such event, then Tenant,
by notice in writing to Landlord within ninety (90) days from the date of such
damage or destruction, may terminate this Lease with respect to the Facility
effective upon a date within thirty (30) days from the date of such notice in
which event (i) the insurance proceeds payable with respect to the casualty to
the Facility (except to the extent related to Tenant Personal Property) shall be
paid to Landlord, and (ii) this Lease shall be deemed terminated as to the
Facility and Minimum Rent and Additional Rent due hereunder shall be reduced by
the product of (x) the amount of the then current Minimum Rent and Additional
Rent, and (y) a fraction, the numerator of which is the portion of Landlord’s
Investment allocated to the Facility and the denominator of which is Landlord’s
Investment.

 

18.          Condemnation. Except as provided to the contrary in this
Section 18, this Lease shall not terminate and shall remain in full force and
effect in the event of a taking or condemnation of the Premises, or any portion
thereof, and Tenant hereby waives all rights under applicable law to abate,
reduce or offset Rent by reason of such taking. If during the Term all or
substantially all (a “Complete Taking”) or a smaller portion (a “Partial
Taking”) of the Facility is taken or condemned by any competent public or
quasi-public authority, then (a) in the case of a Complete Taking, Tenant may at
its

 

18

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

 

election made within thirty (30) days of the effective date of such Taking,
terminate this Lease with respect to the Facility and the current Rent shall be
equitably abated as of the effective date of such termination, or (b) in the
case of a Partial Taking, the Rent shall be abated to the same extent as the
resulting diminution in Fair Market Value of the applicable portion of the
Premises. The resulting diminution in Fair Market Value on the effective date of
a Partial Taking shall be as established pursuant to Exhibit B. In the event
this Lease is terminated as to the Facility under this Section 18, then the
Minimum Rent and Additional Rent due hereunder shall be reduced by the product
of (i) the amount of the then current Minimum Rent and Additional Rent, and
(ii) a fraction, the numerator of which is the portion of Landlord’s Investment
allocated to the Facility and the denominator of which is Landlord’s Investment.
Landlord alone shall be entitled to receive and retain any award for a taking or
condemnation other than a temporary taking; provided, however. Tenant shall be
entitled to submit its own claim in the event of any such taking or condemnation
with respect to the value of (u) Tenant’s leasehold interest in any portion of
the Premises, (v) the relocation costs incurred by Tenant as a result thereof,
(w) Tenant Personal Property, (x) other tangible property, (y) moving expenses,
and/or (z) loss of business, if available. In the event of a temporary taking of
less than all or substantially all of the Premises, Tenant shall be entitled to
receive and retain any and all awards for the temporary taking and the Minimum
Rent and Additional Rent due under this Lease shall be not be abated during the
period of such temporary taking.

 

19.          Indemnification. Tenant agrees to protect, indemnify, defend and
save harmless Landlord, its directors, officers, shareholders, agents and
employees (each an “Indemnitee”) from and against any and all foreseeable or
unforeseeable liability, expense, loss, cost, deficiency, fine, penalty or
damage (including punitive but excluding consequential damages) of any kind or
nature, including reasonable attorneys’ fees, from any suits, claims or demands,
on account of any matter or thing, action or failure to act arising out of or in
connection with (unless caused by an Indemnitee) this Lease, the Premises or the
operations of Tenant on any portion of the Premises, including (a) the breach by
Tenant of any of its representations, warranties, covenants or other obligations
hereunder, (b) any Protest, and (c) all known and unknown Environmental
Activities on any portion of the Premises, Hazardous Materials Claims or
violations by Tenant of a Hazardous Materials Law with respect to any portion of
the Premises, except to the extent such Environmental Activities, Hazardous
Materials Claims or violations arise out of any negligent or willful act or
omission of Landlord or its affiliates, employees or agents. Upon receiving
knowledge of any suit, claim or demand asserted by a third party that Landlord
believes is covered by this indemnity, it shall promptly give Tenant written
notice of such matter. If Landlord does not elect to defend the matter with its
own counsel at Tenant’s expense, Tenant shall then defend Landlord at Tenant’s
expense (including Landlord’s reasonable attorneys’ fees and costs) with legal
counsel reasonably satisfactory to Landlord and Tenant’s insurer. The
obligations of Tenant under this Section 19 shall survive any termination,
expiration, or rejection in bankruptcy of this Lease, but only with respect to
matters that arose, occurred, or existed prior to such termination, expiration,
or rejection.

 

20.          Disputes. If any party brings any action to interpret or enforce
this Lease, or for damages for any alleged breach, the prevailing party shall be
entitled to reasonable attorneys’ fees and costs as awarded by the court in
addition to all other recovery, damages and costs. EACH PARTY HEREBY WAIVES ANY
RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY
EITHER PARTY AGAINST THE OTHER IN CONNECTION WITH ANY MATTER WHATSOEVER ARISING
OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, INCLUDING RELATIONSHIP OF THE
PARTIES, TENANT’S USE AND OCCUPANCY OF ANY PORTION OF THE PREMISES, OR ANY

 

19

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

 

CLAIM OF INJURY OR DAMAGE RELATING TO THE FOREGOING OR THE ENFORCEMENT OF ANY
REMEDY.

 

21.          Notices. All notices and demands, certificates, requests, consents,
approvals and other similar instruments under this Lease shall be in writing and
sent by personal delivery, U.S. certified or registered mail (return receipt
requested, postage prepaid) or FedEx or similar generally recognized overnight
carrier regularly providing proof of delivery, addressed as follows:

 

*If to Tenant, which has appointed

 

If to Landlord:

21st Century Oncology, Inc.

 

 

as agent/attorney-in-fact:

 

 

 

 

 

21st Century Oncology, Inc.

 

Theriac Enterprises of Weaverville, LLC

2270 Colonial Blvd.

 

6321 Daniels Parkway, Suite 200

Ft. Myers, Florida 33907

 

Ft. Myers, Florida 33907

Attn: Chief Financial Officer

 

Attn: Jay Bunnell

 

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

*Name of Tenant

 

Facsimile: (239) 936-5485

 

 

 

 

 

 

With a copy to:

 

With a copy to:

 

 

 

21st Century Oncology, Inc.

 

Henderson Franklin Law Firm

1010 Northern Blvd, Suite 314

 

P.O. Box 280

Great Neck, NY 11021

 

1715 Monroe Street

Attn: Norton Travis, Gen Counsel

 

Ft. Myers, FL 33901

Facsimile: (513)301-5778

 

Attn: Bruce E. Sands, Esq.

 

 

Facsimile: (239)344-1546

 

A party may designate a different address by notice as provided above. Any
notice or other instrument so delivered (whether accepted or refused) shall be
deemed to have been given and received on the date of delivery established by
U.S. Post Office return receipt or the carrier’s proof of delivery or, if not so
delivered, upon its receipt. Delivery to any officer, general partner or
principal of a party shall be deemed delivery to such party. Notice to any one
co-Tenant shall be deemed notice to all co-Tenants.

 

22.          Miscellaneous. Since each party has been represented by counsel and
this Lease has been freely and fairly negotiated, all provisions shall be
interpreted according to their fair meaning and shall not be strictly construed
against any party. While nothing contained in this Lease should be deemed or
construed to constitute an extension of credit by Landlord to Tenant, if a
portion of any payment made to Landlord is deemed to violate any applicable laws
regarding usury, such portion shall be held by Landlord to pay the future
obligations of Tenant as such obligations arise and if Tenant discharges and
performs all obligations hereunder, such funds will be reimbursed (without
interest) to Tenant on the Termination Date. If any part of this Lease shall be
determined to be invalid or unenforceable, the remainder shall nevertheless
continue in full force and effect. Time is of the essence, and whenever action
must be taken (including the giving of notice or the delivery of documents)
hereunder during a certain period of time or by a particular date that ends or
occurs on a Saturday, Sunday or federal holiday, then such period or date shall
be extended until the immediately following Business Day. Whenever the words
“including”, “include” or “includes” are used in this Lease, they shall be
interpreted in a non-

 

20

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

 

exclusive manner as though the words “without limitation” immediately followed.
Whenever the words day or days are used in this Lease, they shall mean “calendar
day” or “calendar days” unless expressly provided to the contrary. The titles
and headings in this Lease are for convenience of reference only and shall not
in any way affect the meaning or construction of any provision. Unless otherwise
expressly provided, references to any “Section” mean a section of this Lease
(including all subsections), to any “Exhibit” or “Schedule” mean an exhibit or
schedule attached hereto or to “Medicare” or “Medicaid” mean such programs and
shall include any successor program. If more than one Person is Tenant
hereunder, their liability and obligations hereunder shall be joint and several.
Promptly upon the request of either party and at its expense, the parties shall
prepare, enter into and record a suitable short form memorandum of this Lease.
This Lease (a) contains the entire agreement of the parties as to the subject
matter hereof and supersedes all prior or contemporaneous verbal or written
agreements or understandings, (b) may be executed in one or more facsimile or
electronic counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same document, (c) may only be amended by a
writing executed by the parties, (d) shall inure to the benefit of and be
binding upon the successors and permitted assigns of the parties, (e) shall be
governed by and construed and enforced in accordance with the internal laws of
the State of Florida, without regard to the conflict of laws rules thereof,
provided that the law of the State in which the Facility is located (each a
“Situs State”) shall govern procedures for enforcing, in the respective Situs
State, provisional and other remedies directly related to the Facility and
related personal property as may be required pursuant to the law of such Situs
State, including without limitation the appointment of a receiver; and, further
provided that the law of the Situs State also applies to the extent, but only to
the extent, necessary to create, perfect and foreclose the security interests
and liens created under this Lease, and (f) incorporates by this reference any
Exhibits and Schedules attached hereto.

 

23.          Right of First Refusal.

 

(a)           During the Term and subject to the terms and conditions and except
as otherwise expressly provided in this Section 23. Tenant shall have a right of
first refusal to purchase the entire Property subject to a Third Party Offer (as
defined below). Within five (5) Business Days of Landlord’s decision to accept a
Third Party Offer (or its acceptance of such offer subject to the right of first
refusal granted herein) Landlord shall deliver to Tenant a written notice (the
“Offer Notice”) (i) stating that Landlord is prepared to accept (or has already
accepted subject to the right of first refusal granted herein) the applicable
Third Party Offer, (ii) identifying the Facility, and (iii) describing the
material terms and conditions (including purchase price and earnest money
deposit) under which the third party proposes to purchase the Facility.

 

(b)           As used herein, “Third Party Offer” shall mean a written offer,
proposal, letter of intent or similar instrument setting forth the material
terms and conditions under which a third party which is not an Affiliate of
Landlord proposes to enter into a purchase of the Property.

 

(c)           Tenant shall have fifteen (15) Business Days from its receipt of
an Offer Notice to elect to purchase the Facility by delivery of written notice
of such election to Landlord (the “Purchase Notice”). For the avoidance of
doubt, Tenant may only elect to purchase all of the Facility and may not elect
to purchase some but not all of the Facility.

 

(d)           Landlord and Tenant shall have a period of thirty (30) days from
Landlord’s receipt of the Purchase Notice (the “Purchase Agreement Period”) to
negotiate in good faith a purchase and sale agreement and related documentation
necessary to complete the disposition of the Facility (the

 

21

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

 

“Purchase Documentation”). The Purchase Documentation shall contain the purchase
price, earnest money deposit, and other material terms and conditions contained
in the Third Party Offer. In the event Landlord and Tenant enter into the
Purchase Documentation within the Purchase Agreement Period, then the
transaction that is the subject of such Purchase Documentation shall be
consummated within thirty (30) days of the execution thereof (the “Closing
Date”).

 

(e)           In the event that (i) Tenant does not timely provide the Purchase
Notice, (ii) Landlord and Tenant are unable to agree upon the Purchase
Documentation within the Purchase Agreement Period, or (iii) following execution
of the Purchase Documentation, the transaction that is the subject thereof is
not consummated on or before the Closing Date as a result of a default by Tenant
in its obligations under the Purchase Documentation, then Landlord shall be free
to sell the Facility to the third party who submitted the Third Party Offer on
terms not materially more favorable to the acquiring party than are set forth in
the applicable Third Party Offer. If such sale is not consummated within thirty
(30) days following the Purchase Agreement Period, or if at any time Landlord
agrees with such third party to modify the terms of the proposed transaction in
a manner materially more favorable to the third party, Tenant’s right of first
refusal as granted herein shall be reinstituted and Landlord shall give Tenant
prompt written notice of the same.

 

(f)            Notwithstanding anything in this Section 23 which may be
construed or interpreted to the contrary, the terms of this Section 23
(including the right of first refusal granted herein) shall not apply to any of
the following: (i) any sale, transfer, or other disposition of the Premises or
any portion thereof to any Affiliate, parent, or subsidiary of Landlord or to a
joint venture entity, relationship, partnership or similar business arrangement
in which Landlord or any of Landlord’s Affiliates is the managing member or
general partner and holds at least a twenty five percent (25%) equity ownership
interest, (ii) to any merger, business combination, or similar transaction
involving all or substantially all of the assets of Landlord and its Affiliates;
or (iii) any judicial or non-judicial foreclosure sale or deed in lieu of
foreclosure pursuant to any mortgage or deed of trust now or hereafter
encumbering the Premises or any portion thereof in favor of an unaffiliated
third party.

 

(g)           In the event Tenant purchases the Facility pursuant to this
Section 23, this Lease shall terminate as to the Facility and the Minimum Rent
and Additional Rent due hereunder shall be reduced by the product of (i) the
amount of the then current Minimum Rent and Additional Rent, and (ii) a
fraction, the numerator of which is the portion of Landlord’s Investment
allocable to the Facility and the denominator of which is Landlord’s Investment.

 

24.          Tax Treatment; Reporting. Landlord and Tenant each acknowledge that
each shall treat this transaction as a true lease for state law purposes and
shall report this transaction as a lease for Federal income tax purposes. For
Federal income tax purposes each shall report this Lease as a true lease with
Landlord as the owner of the Premises and Tenant as the lessee of such Premises
including: (1) treating Landlord as the owner of the property eligible to claim
depreciation deductions under Section 167 or 168 of the Internal Revenue Code of
1986 (the “Code”) with respect to the Premises, (2) Tenant reporting its Rent
payments as rent expense under Section 162 of the Code, and (3) Landlord
reporting the Rent payments as rental income. For the avoidance of doubt,
nothing in this Lease shall be deemed to constitute a guaranty, warranty or
representation by either Landlord or Tenant as to the actual treatment of this
transaction for state law purposes and for federal income tax purposes.

 

22

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

 

IN WITNESS WHEREOF, this Lease has been executed by Landlord and Tenant as of
the date first written above.

 

Signed, sealed and delivered in the presence of:

 

 

 

TENANT:

 

 

 

 

 

NORTH CAROLINA RADIATION THERAPY

 

 

MANAGEMENT SERVICES, INC., a North

 

 

Carolina corporation

 

 

 

 

 

 

 

 

/s/ Karen B. Ankney

 

By:

/s/ Frank English

Witness #1 Signature

 

 

Frank English, Treasurer

 

 

 

Karen B. Ankney

 

 

Witness #1 Typed/Printed Name

 

 

 

 

 

/s/ Christine A. Hobot

 

 

Witness #2 Signature

 

 

 

 

 

Christine A. Hobot

 

 

Witness #2 Typed/Printed Name

 

 

 

 

 

 

 

 

 

 

LANDLORD:

 

 

 

 

 

THERIAC ENTERPRISES OF WEAVERVILLE,

 

 

LLC, a Florida limited liability company

 

 

 

 

 

 

/s/ James Bunnell

 

By:

TEM, LLC, a Florida limited liability

Witness #1 Signature

 

 

company, its Manager

 

 

 

(FL Document # L06000088324)

James Bunnell

 

 

 

 

Witness #1 Typed/Printed Name

 

 

 

 

 

 

 

By:

/s/ Daniel E. Dosoretz

/s/ Catherine Newkirk

 

 

 

Daniel E. Dosoretz, Managing Member

Witness #2 Signature

 

 

 

 

 

Catherine Newkirk

 

 

Witness #2 Typed/Printed Name

 

 

 

 

 

23

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

 

THE GUARANTOR IS MADE A PARTY HERETO SOLELY AS TO ITS ACKNOWLEDGMENTS AND
OBLIGATIONS UNDER THE INTRODUCTORY PARAGRAPHS TO THIS LEASE:

 

Signed, sealed and delivered in the presence of:

 

GUARANTOR:

 

 

21ST CENTURY ONCOLOGY, INC., a Florida

 

 

corporation

 

 

 

 

 

 

 

/s/ Karen B. Ankney

 

By:

/s/ Frank English

Witness #1 Signature

 

 

Frank English, Treasurer

 

 

 

Karen B. Ankney

 

 

Witness #1 Typed/Printed Name

 

 

 

 

 

/s/ Christine A. Hobot

 

 

Witness #2 Signature

 

 

 

 

 

Christine A. Hobot

 

 

Witness #2 Typed/Printed Name

 

 

 

 

 

24

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

 

EXHIBIT A

 

LEGAL DESCRIPTION

 

All that certain lot or parcel of land situated in Flat Creek Township, Buncombe
County, North Carolina, and more particularly described as follows:

 

BEING all of Lot B, containing ±1.85 acres, as shown on the plat entitled
“Recombination/Subdivision Survey For Mountain 1st Bank and Trust,” prepared by
Bankscreek Professional Land Surveying, dated January 14, 2011, and recorded in
Plat Book 128 at Page 124, in the Office of the Register of Deeds for Buncombe
County, North Carolina, reference to which is hereby made for a more particular
description.

 

LESS AND EXCEPT from the above-described property, that certain portion of Lot B
conveyed to Flat Creek Village Apartments, LLC, by Special Warranty Deed dated
August 31, 2011 and recorded on September 1, 2011 in Book 4911 at Page 1760 in
the Office of the Register of Deeds for Buncombe County, North Carolina, more
particularly described as follows:

 

Beginning at a rebar set which marks the southeasternmost corner of Lot A as
shown on that plat recorded in Plat Book 128, at Page 124 (the “Plat”) of the
Buncombe County, NC Register’s Office (the “Registry”); said rebar also marking
the southwesternmost corner of Area A as shown on the Plat; and running thence
from said Beginning Point thus established and with the southern line of said
Area A the following two (2) courses and distances: South 65° 54’ 04” East 20.10
feet to a rebar set and South 83° 58’ 27” East 106.26 feet to a rebar set in the
westernmost corner of Area B as shown on the Plat; thence with the southern line
of said Area B, South 59° 35’ 26” East 126.75 feet to a .75 inch iron pipe found
in the western line of that property now or formerly owned by Daniel Heart as
described in Record Book 2100, at Page 463 of the Registry; thence with the
western line of the Heart property, South 03° 45’ 40” West 27.83 feet to a #5
rebar set which marks the northeasternmost corner of that property now or
formerly owned by Flat Creek Village Apartments, LLC as described in Record Book
4528, at Page 978 of the Registry; thence with the northern line of the Flat
Creek Village Apartments property the following two (2) courses and distances:
South 88°07’ 01” West 171.83 feet to a rebar set and North 60° 02’ 34” West
110.19 feet to a rebar set; thence North 29° 57’ 43” East approximately 71.46
feet to the Point and Place of Beginning; containing 0.460 acres, more or less,
and being a portion of Lot B as shown on the Plat.

 

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

 

EXHIBIT B

 

FAIR MARKET VALUE

 

“Fair Market Value” or “Fair Market Rent” means the fair market value (or fair
market rent, as applicable) of the Premises or applicable portion thereof on a
specified date as agreed to by the parties, or failing such agreement within ten
(10) days of such date, as established pursuant the following appraisal process.
Each party shall within ten (10) days after written demand by the other select
one MAI Appraiser to participate in the determination of Fair Market Value or
Fair Market Rent, as applicable. For all purposes under this Lease, the Fair
Market Value shall be the fair market value of the Premises or applicable
portion thereof unencumbered by this Lease. Within ten (10) days of such
selection, the MAI Appraisers so selected by the parties shall select a third
(3rd) MAI Appraiser. The three (3) selected MAI Appraisers shall each determine
the Fair Market Value (or, as applicable, Fair Market Rent) of the Premises or
applicable portion thereof within thirty (30) days of the selection of the third
appraiser. To the extent consistent with sound appraisal practices as then
existing at the time of any such appraisal, and if requested by Landlord, such
appraisal shall be made on a basis consistent with the basis on which the
Premises or applicable portion thereof were appraised at the time of their
acquisition by Landlord. Tenant shall pay the fees and expenses of any MAI
Appraiser retained pursuant to this Exhibit.

 

If either party fails to select a MAI Appraiser within the time period set forth
in the foregoing paragraph, the MAI Appraiser selected by the other party shall
alone determine the fair market value (or, as applicable, fair market rent) of
the Premises or applicable portion thereof in accordance with the provisions of
this Exhibit and the Fair Market Value (or Fair Market Rent) so determined shall
be binding upon the parties. If the MAI Appraisers selected by the parties are
unable to agree upon a third (3rd) MAI Appraiser within the time period set
forth in the foregoing paragraph, either party shall have the right to apply at
Tenant’s expense to the presiding judge of the court of original trial
jurisdiction in the county in which the Premises or applicable portion thereof
are located to name the third (3rd) MAI Appraiser.

 

Within five (5) days after completion of the third (3rd) MAI Appraiser’s
appraisal, ail three (3) MAI Appraisers shall meet and a majority of the MAI
Appraisers shall attempt to determine the fair market value (or, as applicable,
fair market rent) of the Premises or applicable portion thereof. If a majority
are unable to determine the fair market value (or fair market rent) at such
meeting, the three (3) appraisals shall be added together and their total
divided by three (3). The resulting quotient shall be the Fair Market Value (or,
as applicable, Fair Market Rent). If, however, either or both of the low
appraisal or the high appraisal are more than ten percent (10%) lower or higher
than the middle appraisal, any such lower or higher appraisal shall be
disregarded. If only one (1) appraisal is disregarded, the remaining two
(2) appraisals shall be added together and their total divided by two (2), and
the resulting quotient shall be such Fair Market Value (or, as applicable, Fair
Market Rent). If both the lower appraisal and higher appraisal are disregarded
as provided herein, the middle appraisal shall be such Fair Market Value (or
Fair Market Rent). In any event, the result of the foregoing appraisal process
shall be final and binding.

 

“MAI Appraiser” shall mean an appraiser licensed or otherwise qualified to do
business in the state(s) where the Premises or applicable portion thereof are
located and who has substantial experience in performing appraisals of Facility
similar to the Premises or applicable portion thereof and is certified as a
member of the American Institute of Real Estate Appraisers or certified as a
SRPA by the Society of Real Estate Appraisers, or, if such organizations no
longer exist or certify appraisers, such successor organization or such other
organization as is approved by Landlord.

 

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

 

EXHIBIT C

 

PERMITTED EXCEPTIONS

 

1.                                      The standard printed exceptions,
conditions and exclusions from coverage contained in the standard coverage
owner’s title policy then prevailing in use at the title company that
consummates the sale transaction.

 

2.                                      Any matters which an accurate survey of
the Premises may show.

 

3.                                      Real property taxes and assessments.

 

4.                                      Any matters shown as title exceptions in
the ALTA Owner’s Policy of Title Insurance obtained by Landlord in connection
with its acquisition of the Premises.

 

5.                                      Such other matters burdening the
Premises which were created with the consent or knowledge of Tenant or arising
out of Tenant’s acts or omissions.

 

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

 

EXHIBIT D

 

CERTAIN DEFINITIONS

 

For purposes of this Lease, the following terms and words shall have the
specified meanings:

 

ENVIRONMENTAL DEFINITIONS

 

“Environmental Activities” shall mean the use, generation, transportation,
handling, discharge, production, treatment, storage, release or disposal of any
Hazardous Materials at any time to or from any portion of the Premises or
located on or present on or under any portion of the Premises.

 

“Hazardous Materials” shall mean (a) any petroleum products and/or by-products
(including any fraction thereof), flammable substances, explosives, radioactive
materials, hazardous or toxic wastes, substances or materials, known carcinogens
or any other materials, contaminants or pollutants as to which liability or
standards of conduct are imposed under Hazardous Materials Laws, which pose a
hazard to any portion of the Premises or to Persons on or about any portion of
the Premises or cause any portion of the Premises to be in violation of any
Hazardous Materials Laws; (b) asbestos in any form which is friable; (c) urea
formaldehyde in foam insulation or any other form; (d) transformers or other
equipment which contain dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty (50) parts per million or any other more
restrictive standard then prevailing; (e) medical wastes and biohazards;
(f) radon gas; and (g) any other chemical, material or substance, exposure to
which is prohibited, limited or regulated by any governmental authority because
of its dangerous or deleterious properties or characteristics or would pose a
hazard to the health and safety of the occupants of any portion of the Premises
or the owners and/or occupants of property adjacent to or surrounding any
portion of the Premises, including, without limitation, any materials or
substances that are listed in the United States Department of Transportation
Hazardous Materials Table (49 CFR 172.101) as amended from time to time.

 

“Hazardous Materials Claims” shall mean any and all enforcement, clean-up,
removal or other governmental or regulatory actions, claims or orders
threatened, completed or instituted pursuant to any Hazardous Material Laws,
together with all claims made or threatened by any third party against any
portion of the Premises, Landlord or Tenant relating to damage, contribution,
cost recovery compensation, loss or injury resulting from any Hazardous
Materials.

 

“Hazardous Materials Laws” shall mean any laws, ordinances, regulations,
rules having the force and effect of law, or orders relating to the environment,
health and safety, Environmental Activities, Hazardous Materials, air and water
quality, waste disposal and other environmental matters.

 

OTHER DEFINITIONS

 

“Affiliate” shall mean with respect to any Person, any other Person which
Controls, is Controlled by or is under common Control with the first Person.

 

“Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which national banks in the City of New York, New York, or
in the municipality wherein the Facility is located are closed.

 

1

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

 

“CC&R’s” shall mean covenants, conditions and restrictions or similar use,
maintenance or ownership obligations encumbering or binding upon the real
property comprising the Facility.

 

“Control” shall mean, as applied to any Person, the possession, directly or
indirectly, of the power to direct the management and policies of that Person,
whether through ownership, voting control, by contract or otherwise.

 

“Consumer Price Index or CPI” shall mean the Consumer Price Index as now
published by the U.S. Bureau of Labor Statistics under the caption: “United
States City Average for Urban Wage Earners and Clerical Workers All Items,” or
any revision or equivalent thereof hereafter published by that Bureau, or if
there ceases to be any such publication, any substantially equivalent Price
Index generally recognized as authoritative, designated by Landlord.

 

“Debt to Equity Ratio” shall mean the ratio of Total Liabilities to Net Worth.

 

“Medical Waste” shall mean all medical waste as defined by California Health and
Safety Code §117690, as amended or supplemented. If a Situs State has a
comparable statute that defines “medical waste”, Medical Waste for purposes of
all Facility in such Situs State shall have the meaning set forth in such
statute.

 

“Landlord’s Investment” shall mean, as to any particular Facility, the amount
shown for the Facility on Exhibit F hereof.

 

“Net Worth” means with respect to any Person, the amount by which such Person’s
Total Assets exceeds Total Liabilities.

 

“Person” shall mean any individual, partnership, association, corporation,
limited liability company or other entity.

 

“Total Assets” means all assets of a Person determined on a consolidated basis
in accordance with generally accepted accounting principles.

 

“Total Liabilities” means all liabilities of a Person (excluding deferred tax
liability) determined on a consolidated basis in accordance with generally
accepted accounting principles.

 

2

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

 

EXHIBIT E

 

FINANCIAL, MANAGEMENT AND REGULATORY REPORTS

 

Tenant shall keep adequate records and books of account with respect to the
finances and business of Tenant generally and with respect to the Premises, in
accordance with generally accepted accounting principles (“GAAP”) consistently
applied.

 

During the Term, Tenant shall deliver to Landlord, within thirty (30) days of
receipt of written request from Landlord, current annual audited financial
statements of Tenant, Guarantor or any Resulting Guarantor for the prior year,
certified by a nationally recognized firm of independent certified public
accountants. In addition, Tenant shall also furnish to Landlord, if requested in
writing by Landlord, unaudited financial statements and all other quarterly
reports of Tenant, Guarantor or any Resulting Guarantor prior to sixty (60) days
after the end of each of the three remaining quarters, certified by their
respective chief financial officers, and all filings, if any, of Form 10-K,
Form 10-Q and other required filings with the Securities and Exchange Commission
pursuant to the provisions of the Securities Exchange Act of 1934, as amended,
or any other law.

 

If, for whatever reason, the financial results of Tenant do not appear, or are
not included, in the consolidated financial statements required to be provided
to Landlord pursuant to the foregoing paragraph, then Tenant shall also deliver
to Landlord Tenant’s financial statements meeting the same requirements and
within the same timeframes as required for Holdings pursuant to the foregoing
paragraph.

 

All financial statements shall be prepared in accordance with GAAP consistently
applied, All annual financial statements shall be accompanied (i) by an opinion
of the accounting firm preparing such statements stating that (A) there are no
qualifications as to the scope of the audit and (B) the audit was performed in
accordance with GAAP and (ii) by the affidavit of the president or a vice
president (or officer, director or manager of a similar position) of Tenant,
dated within five (5) days of the delivery of such statement, stating that
(C) the affiant knows of no Event of Default, or event which, upon notice or the
passage of time or both, would become an Event of Default which has occurred and
is continuing hereunder or, if any such event has occurred and is continuing,
specifying the nature and period of existence thereof and what action Tenant has
taken or proposes to take with respect thereto and (D) except as otherwise
specified in such affidavit, that to affiant’s knowledge Tenant has fulfilled
all of its obligations under this Lease which are required to be fulfilled on or
prior to the date of such affidavit. All financial statements shall be sent via
email to Landlord at jay@theriacenterprises.com or to such other email address
which Landlord shall, in writing, direct.

 

Also within thirty (30) days of receipt of written request by Landlord, Tenant
shall deliver to Landlord current quarterly profit and loss reports concerning
the Business at the Facility and the combined Facility in this Lease. Such
reports shall be in substantially the same form as delivered by Tenant to
Landlord in connection with Landlord’s acquisition of the Premises and shall
contain a level of detail reasonably satisfactory to Landlord. Such reports
shall be sent via email to Landlord at jay@theriacenterprises.com or to such
other email address which Landlord shall, in writing, direct.

 

Tenant shall furnish to Landlord within ten (10) days of receipt written notice
of any of the following: (i) any material violation of any federal, state, or
local licensing or reimbursement certification statute or regulation, including
Medicare or Medicaid, (ii) any suspension, termination or

 

1

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

 

restriction placed on Tenant or any portion of the Premises or the operation of
any portion of the Business which would have a material adverse effect on the
operation of the Business at the Facility, and (iii) any material violation of
any permit, approval or certification in connection with any portion of the
Premises or any portion of the Business, by any federal, state, or local
authority, including Medicare or Medicaid, if applicable.

 

Tenant shall, within thirty (30) days of receipt of written request by Landlord,
provide Landlord with a current annual operating budget covering the operations
of Holdings for the forthcoming fiscal year. If, for whatever reason, the
operating budget of Holdings would not include and cover the operations of
Tenant for the forthcoming fiscal year, then Tenant shall deliver to Landlord,
within sixty (60) days after the beginning of Tenant’s fiscal year, an annual
operating budget covering the operations of Tenant for such fiscal year.

 

2

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

 

EXHIBIT F

 

LANDLORD’S INVESTMENT

 

 

 

 

 

 

 

 

 

Landlord’s

 

#

 

Location

 

Street Address

 

State

 

Investment

 

 

 

 

 

 

 

 

 

 

 

1

 

Weaverville

 

179 Buncombe School Rd

 

NC

 

$

3,600,000.00

 

 

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