GUARANTY OF LEASE
[ (______________) ]
This GUARANTY OF LEASE (this “Guaranty”), is made and entered into as of
February 2, 2015 (the “Effective Date”) by GENESIS HEALTHCARE, INC., a Delaware
corporation (f/k/a Skilled Healthcare Group, Inc.) (“PublicCo”), and FC-GEN
OPERATIONS INVESTMENT, LLC, a Delaware limited liability company (“FC-Gen”, and
together with PublicCo, jointly and severally, “Guarantor”), in favor of [
________________________ ] (“Landlord”). Landlord hereby executes this Guaranty
solely for the purpose of acknowledging and agreeing to the terms and conditions
of Section 15.
RECITALS
A.    WHEREAS, reference is hereby made to (i) that certain Lease dated as of
[ ______________ ], as amended by [ ______________ and ] that certain [ ________
] Amendment to Lease dated of even date herewith (as amended, modified, revised
or restated, the “Lease”) pursuant to which Landlord leases that certain
facility (the “Facility”) to [ ________________________ ] (“Tenant”), and (ii)
that certain Guaranty of Lease dated as of [ ______________ ] (the “Released
Guaranty”), pursuant to which GENESIS HEALTHCARE LLC, a Delaware limited
liability company (“Released Guarantor”), guarantees the obligations of Tenant
under the Lease for the benefit of Landlord. All initially-capitalized terms
used and not otherwise defined herein shall have the same meanings given such
terms in the Lease.
B.    WHEREAS, Guarantor and Landlord acknowledge and agree that: (i) this
Guaranty is given in connection with that certain Second Consent and Amendment
Agreement dated August 18, 2014 (the “Consent”), between the landlords described
therein (including Landlord) and Released Guarantor; (ii) contemporaneously with
the execution of this Guaranty, the businesses, assets and liabilities of FC-Gen
and PublicCo will be combined; and (iii) PublicCo and FC-Gen have agreed to
execute this Guaranty in exchange for Landlord’s willingness to execute and
deliver the Consent and release Released Guarantor from its obligations under
the Released Guaranty.
AGREEMENTS
NOW, THEREFORE, in consideration for the execution and delivery of the Consent
by Landlord, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Guarantor agrees as follows:
1.    Guaranty. In consideration of the benefit derived or to be derived by it
therefrom, as to the Lease, effective as of the date hereof with respect to
Obligations (as hereinafter defined) arising from and after the Commencement
Date, Guarantor hereby jointly and severally, unconditionally, and irrevocably
guarantees (i) the payment when due of all rent and all other sums payable by
Tenant under the Lease, and (ii) the faithful and prompt performance when due of
each and every one of the terms, conditions and covenants to be kept and
performed by Tenant under the Lease, and any and all amendments, modifications,
extensions and renewals of the

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Lease, including without limitation all indemnification obligations, insurance
obligations, and all obligations to operate, rebuild, restore or replace any
facilities or improvements now or hereafter located at the Facility
(collectively, the “Obligations”). In the event of the failure of Tenant to pay
any such rent or other sums, or to render any other performance required of
Tenant under the Lease, when due or within any applicable cure period, Guarantor
shall forthwith perform or cause to be performed all provisions of the Lease to
be performed by Tenant thereunder, and pay all reasonable costs of collection or
enforcement and other damages that may result from the non-performance thereof
to the full extent provided under the Lease. As to the Obligations, Guarantor's
liability under this Guaranty is without limit.
2.    Survival of Obligations. The obligations of Guarantor under this Guaranty
shall survive and continue in full force and effect notwithstanding:
(a)    any amendment, modification, or extension of the Lease;
(b)    any compromise, release, consent, extension, indulgence or other action
or inaction in respect of any terms of the Lease;
(c)    any substitution or release, in whole or in part, of any security for
this Guaranty which Landlord may hold at any time;
(d)    any exercise or non-exercise by Landlord of any right, power or remedy
under or in respect of the Lease or any security held by Landlord with respect
thereto, or any waiver of any such right, power or remedy;
(e)    any bankruptcy, insolvency, reorganization, arrangement, adjustment,
composition, liquidation, or the like of Tenant or any other guarantor;
(f)    any limitation of Tenant's liability under the Lease or any limitation of
Tenant's liability thereunder which may now or hereafter be imposed by any
statute, regulation or rule of law, or any illegality, irregularity, invalidity
or unenforceability, in whole or in part, of the Lease or any term thereof;
(g)    any sale, lease, or transfer of all or any part of any interest in the
Facility or any or all of the assets of Tenant to any other person, firm or
entity other than to Landlord;
(h)    any act or omission by Landlord with respect to any of the security
instruments or any failure to file, record or otherwise perfect any of the same;
(i)    any extensions of time for performance under the Lease, whether prior to
or after the expiration of the Term;
(j)    the release of Tenant from performance or observation of any of the
agreements, covenants, terms or conditions contained in the Lease by operation
of law or otherwise;

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(k)    the fact that Tenant may or may not be personally liable, in whole or in
part, under the terms of the Lease to pay any money judgment;
(l)    the failure to give any Guarantor any notice of acceptance, default or
otherwise;
(m)    any other guaranty now or hereafter executed by any Guarantor or anyone
else in connection with the Lease;
(n)    any rights, powers or privileges Landlord may now or hereafter have
against any other person, entity or collateral; or
(o)    any other circumstances, whether or not Guarantor had notice or knowledge
thereof.
3.    Primary Liability. The liability of Guarantor with respect to the Lease
shall be primary, direct and immediate, and Landlord may proceed against any
Guarantor: (a) prior to or in lieu of proceeding against Tenant, its assets, any
security deposit, or any other guarantor; and (b) prior to or in lieu of
pursuing any other rights or remedies available to Landlord. All rights and
remedies afforded to Landlord by reason of this Guaranty or by law are separate,
independent and cumulative, and the exercise of any rights or remedies shall not
in any way limit, restrict or prejudice the exercise of any other rights or
remedies.
In the event of any default under the Lease, a separate action or actions may be
brought and prosecuted against Guarantor whether or not the Tenant is joined
therein or a separate action or actions are brought against Tenant. Landlord may
maintain successive actions for other defaults. Landlord’s rights hereunder
shall not be exhausted by its exercise of any of its rights or remedies or by
any such action or by any number of successive actions until and unless all
indebtedness and Obligations the payment and performance of which are hereby
guaranteed have been paid and fully performed.
4.    Obligations Not Affected. Subject to the terms of the Lease, Landlord may,
without notice to any Guarantor: (a) amend, alter, compromise, accelerate,
extend or change the time or manner for the payment or the performance of any
Obligation hereby guaranteed; (b) extend, amend or terminate the Lease; or (c)
release Tenant by consent to any assignment (or otherwise) as to all or any
portion of the Obligations hereby guaranteed. Any exercise or non-exercise by
Landlord of any right hereby given Landlord, dealing by Landlord with Guarantor
or any other guarantor, Tenant or any other person, or change, impairment,
release or suspension of any right or remedy of Landlord against any person
including the Tenant's and any other guarantor will not affect any of the
Obligations of Guarantor hereunder or give Guarantor any recourse or offset
against Landlord.
5.    Waiver. With respect to the Lease, Guarantor hereby waives and
relinquishes all rights and remedies accorded by applicable law to sureties
and/or guarantors or any other accommodation parties, under any statutory
provisions, common law or any other provision of

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law, custom or practice, and agrees not to assert or take advantage of any such
rights or remedies including, but not limited to:
(a)    any right to require Landlord to proceed against Tenant or any other
person or to proceed against or exhaust any security held by Landlord at any
time or to pursue any other remedy in Landlord's power before proceeding against
any Guarantor or to require that Landlord cause a marshaling of Tenant's assets
or the assets, if any, given as collateral for this Guaranty or to proceed
against Tenant and/or any collateral, including collateral, if any, given to
secure Guarantor's obligation under this Guaranty, held by Landlord at any time
or in any particular order;
(b)    any defense that may arise by reason of the incapacity or lack of
authority of any other person or persons;
(c)    notice of the existence, creation or incurring of any new or additional
indebtedness or obligation or of any action or non-action on the part of Tenant,
Landlord, any creditor of Tenant or Guarantor or on the part of any other person
whomsoever under this or any other instrument in connection with any obligation
or evidence of indebtedness held by Landlord or in connection with any
obligation hereby guaranteed;
(d)    any defense based upon an election of remedies by Landlord which destroys
or otherwise impairs the subrogation rights of Guarantor or the right of
Guarantor to proceed against Tenant for reimbursement, or both;
(e)    any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in other respects
more burdensome than that of the principal;
(f)    any duty on the part of Landlord to disclose to Guarantor any facts
Landlord may now or hereafter know about Tenant, regardless of whether Landlord
has reason to believe that any such facts materially increase the risk beyond
that which Guarantor intends to assume or has reason to believe that such facts
are unknown to Guarantor or has a reasonable opportunity to communicate such
facts to Guarantor, it being understood and agreed that Guarantor is fully
responsible for being and keeping informed of the financial condition of Tenant
and of all circumstances bearing on the risk of non-payment or non-performance
of any Obligations or indebtedness hereby guaranteed;
(g)    any defense arising because of Landlord's election, in any proceeding
instituted under the federal Bankruptcy Code, of the application of Section
1111(b)(2) of the federal Bankruptcy Code;
(h)    any defense based on any borrowing or grant of a security interest under
Section 364 of the federal Bankruptcy Code; and

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(i)    all rights and remedies accorded by applicable law to guarantors,
including without limitation, any extension of time conferred by any law now or
hereafter in effect and any requirement or notice of acceptance of this Guaranty
or any other notice to which the undersigned may now or hereafter be entitled to
the extent such waiver of notice is permitted by applicable law.
6.    Warranties. With respect to the Lease, Guarantor warrants that: (a) this
Guaranty is executed at the Tenant’s request; and (b) Guarantor has established
adequate means of obtaining from each Tenant on a continuing basis financial and
other information pertaining to Tenant’s financial condition. Guarantor agrees
to keep adequately informed from such means of any facts, events or
circumstances which might in any way affect Guarantor's risks hereunder, and
Guarantor further agrees that the Landlord shall have no obligation to disclose
to Guarantor information or material acquired in the course of the Landlord's
relationships with Tenant.
7.    No-Subrogation. Until all Obligations of Tenant under the Lease have been
satisfied and discharged in full for six (6) months, Guarantor shall have no
right of subrogation and waives any right to enforce any remedy which the
Landlord now has or may hereafter have against Tenant and any benefit of, and
any right to participate in, any security now or hereafter held by Landlord with
respect to the Lease.
8.    Subordination. If for any reason whatsoever Tenant now or hereafter
becomes indebted to Guarantor or any Affiliate of any Guarantor, such
indebtedness and all interest thereon shall at all times be subordinate to
Tenant's obligation to Landlord to pay as and when due in accordance with the
terms of the Lease the guaranteed Obligations. During any time in which an Event
of Default has occurred and is continuing under the Lease and not been cured
within any cure period provided for therein (and provided that Guarantor has
received written notice thereof), Guarantor agrees to make no claim for such
indebtedness that does not recite that such claim is expressly subordinate to
Landlord's rights and remedies under the Lease.
9.    No Delay. Any payments required to be made by Guarantor hereunder shall
become due within ten (10) days of written demand therefor following the
occurrence and during the continuance of an Event of Default under the Lease.
10.    Application of Payments. With respect to the Lease, and with or without
notice to Guarantor, Landlord, in its sole discretion and at any time and from
time to time and in such manner and upon such terms as Landlord deems
appropriate, may (a) apply any or all payments or recoveries from Tenant or from
any other guarantor under any other instrument or realized from any security, in
such manner and order of priority as Landlord may determine, to any indebtedness
or other obligation of Tenant with respect to the Lease and whether or not such
indebtedness or other obligation is guaranteed hereby or is otherwise secured or
is due at the time of such application, and (b) refund to Tenant any payment
received by Landlord under the Lease.
11.    Guaranty Default.
(a)    As used herein, the term “Guaranty Default” shall mean one or more of the
following events (subject to applicable cure periods):

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(i)    the failure of Guarantor to pay the amounts required to be paid hereunder
within ten (10) days of written demand therefor following the occurrence and
during the continuance of an Event of Default under the Lease; and
(ii)    the failure of Guarantor to observe and perform any covenant, condition
or agreement on its part to be observed or performed, other than as referred to
in subsection (i) above, for a period of thirty (30) days after written notice
of such failure has been given to Guarantor by Landlord, unless Landlord agrees
in writing to an extension of such time prior to its expiration.
(b)    Upon the occurrence of a Guaranty Default, Landlord shall have the right
to bring such actions at law or in equity, including appropriate injunctive
relief, as it deems appropriate to compel compliance, payment or deposit, and
among other remedies to recover its reasonable attorneys' fees in any
proceeding, including any appeal therefrom and any post judgment proceedings.
12.    Guarantor Covenants.
(a)    Within ninety (90) days after the end of Guarantor’s fiscal years, the
entities then comprising Guarantor shall deliver to Landlord a copy of their
(consolidated) Financial Statements, prepared in accordance with GAAP,
consistently applied, and certified by an officer of Guarantor and reported on
by a “Big Four” certified public accounting firm or other certified public
accounting firm approved by Landlord, which approval will not be unreasonably
withheld. Together with Guarantor's Financial Statements furnished in accordance
with the preceding sentence, Guarantor shall deliver (a) an Officer's
Certificate of Guarantor stating that Guarantor is not in default in the
performance or observance of any of the terms of this Guaranty, or if Guarantor
is in default, specifying all such defaults, the nature thereof, and the steps
being taken to remedy the same, and (b) a report with respect to the financial
statements from Guarantor's accountants, which report shall be unqualified as to
going concern and scope of audit of Guarantor and its subsidiaries and shall
provide in substance that (i) such consolidated financial statements present
fairly the consolidated financial position of Guarantor and its subsidiaries as
at the dates indicated and the results of their operations and cash flow for the
periods indicated in conformity with GAAP, and (ii) that the examination by
Guarantor's accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards.
(b)    The entities that comprise Guarantor shall collectively maintain, without
duplication, a Net Worth (as defined below) as follows:
(i)    as of March 31, 2015 and June 30, 2015, no less than the greater of (A)
One Hundred Million Dollars ($100,000,000) and (B) 75% of the combined Net Worth
of Guarantor as of the Effective Date (the “Closing Date TNW”). In no event
shall the Closing Date TNW be less than One Hundred Million Dollars
($100,000,000);

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(ii)    as of the last day of each fiscal quarter thereafter, commencing
September 30, 2015, no less than the Net Worth required as of the last day of
the prior fiscal quarter plus the TNW Increment (as defined below), increasing
until the required Net Worth of Guarantor equals Three Hundred Million Dollars
($300,000,000);
(iii)    “TNW Increment” means (A) Three Hundred Million Dollars ($300,000,000)
minus the Closing Date TNW, divided by (B) eleven (11); and
(iv)    as of the last day of each fiscal quarter for the remainder of the term
of the Lease, no less than Three Hundred Million Dollars ($300,000,000).
“Net Worth” means an amount equal to the total consolidated net book value of
the tangible assets of Guarantor (excluding goodwill and other intangible
assets) minus the total consolidated liabilities of such Guarantor. For purposes
of this calculation, the book value of tangible net assets will exclude the
unamortized balance of capitalized assets associated with capital lease or
similar financing obligations and the total liabilities will exclude the
unamortized balance of capital lease or similar financing obligation
liabilities.
13.    Intentionally Omitted.
14.    Notices. Any notice, request or other communication to be given by any
party hereunder shall be in writing and shall be sent by registered or certified
mail, postage prepaid and return receipt requested, by hand delivery or express
courier service, by email or by an overnight express service to the following
address:

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To Guarantor:
101 East State Street
Kennett Square, Pennsylvania 19348
Telephone: 610-444-6350
Attention: Chief Executive Officer
 
 
With a copy to:
(that shall not
constitute notice)
101 East State Street
Kennett Square, Pennsylvania 19348
Attention: Law Department
 
 
With a copy to:
(that shall not
constitute notice)
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attn: Neil L. Rock
Phone: +1 212 735 3787
 
 
To Landlord:
c/o Sabra Health Care REIT, Inc.
18500 Von Karman Avenue, Suite 550
Irvine, CA 92612
Attention: Chief Executive Officer
 
 
With a copy to:
(that shall not
constitute notice)
Sherry Meyerhoff Hanson & Crance LLP
610 Newport Center Drive, Suite 1200
Newport Beach, CA 92660-6445
Attention: Kevin L. Sherry, Esq.

or to such other address as either party may hereafter designate. Notice shall
be deemed to have been given on the date of delivery if such delivery is made on
a Business Day, or if not, on the first Business Day after delivery. If delivery
is refused, Notice shall be deemed to have been given on the date delivery was
first attempted. Notice sent by email shall be deemed given (i) if sent by email
before 5:00 p.m. (Eastern time) on a Business Day, when transmitted; (ii) if
sent by email on a day other than a Business Day or after 5:00 p.m. (Eastern
time) on a Business Day, on the following Business Day.
15.    Miscellaneous.
(a)    No term, condition or provision of this Guaranty may be waived except by
an express written instrument to that effect signed by Landlord. No waiver of
any term, condition or provision of this Guaranty will be deemed a waiver of any
other term, condition or provision, irrespective of similarity, or constitute a
continuing waiver of the same term, condition or provision, unless otherwise
expressly provided.
(b)    If any one or more of the terms, conditions or provisions contained in
this Guaranty is found in a final award or judgment rendered by any court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining terms, conditions and
provisions of this Guaranty shall not in any way be affected or impaired
thereby, and this Guaranty shall be interpreted and

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construed as if the invalid, illegal, or unenforceable term, condition or
provision had never been contained in this Guaranty.
(c)    THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF CALIFORNIA, EXCEPT THAT THE LAWS OF THE STATE WHERE THE
FACILITY IS LOCATED SHALL GOVERN THIS AGREEMENT TO THE EXTENT NECESSARY (I) TO
OBTAIN THE BENEFIT OF THE RIGHTS AND REMEDIES SET FORTH HEREIN WITH RESPECT TO
THE FACILITY AND (II) FOR PROCEDURAL REQUIREMENTS WHICH MUST BE GOVERNED BY THE
LAWS OF SUCH STATE. GUARANTOR CONSENTS TO IN PERSONAM JURISDICTION BEFORE THE
STATE AND FEDERAL COURTS OF CALIFORNIA AND AGREES THAT ALL DISPUTES CONCERNING
THIS GUARANTY SHALL BE HEARD IN THE STATE AND FEDERAL COURTS LOCATED IN THE
STATE OF CALIFORNIA. GUARANTOR FURTHER CONSENTS TO IN PERSONAM JURISDICTION
BEFORE THE STATE AND FEDERAL COURTS OF EACH STATE WITH RESPECT TO ANY ACTION
COMMENCED BY LANDLORD SEEKING TO RETAKE POSSESSION OF ANY OR ALL OF THE LEASED
PROPERTY IN WHICH GUARANTOR IS REQUIRED TO BE NAMED AS A NECESSARY PARTY.
GUARANTOR AGREES THAT SERVICE OF PROCESS MAY BE EFFECTED UPON IT UNDER ANY
METHOD PERMISSIBLE UNDER THE LAWS OF THE STATE OF CALIFORNIA AND IRREVOCABLY
WAIVES ANY OBJECTION TO VENUE IN THE STATE AND FEDERAL COURTS LOCATED IN THE
STATE OF CALIFORNIA OR, TO THE EXTENT APPLICABLE IN ACCORDANCE WITH THE TERMS
HEREOF, LOCATED IN THE STATE WHERE THE FACILITY IS LOCATED.
(d)    EACH OF THE GUARANTOR, BY ITS EXECUTION OF THIS GUARANTY, AND THE
LANDLORD, BY THEIR ACCEPTANCE OF THIS GUARANTY, HEREBY WAIVE TRIAL BY JURY AND
THE RIGHT THERETO IN ANY ACTION OR PROCEEDING OF ANY KIND ARISING ON, UNDER, OUT
OF, BY REASON OF OR RELATING IN ANY WAY TO THIS GUARANTY OR THE INTERPRETATION,
BREACH OR ENFORCEMENT THEREOF.
(e)    In the event of any suit, action, arbitration or other proceeding to
interpret this Guaranty, or to determine or enforce any right or obligation
created hereby, the prevailing party in the action shall recover such party's
reasonable costs and expenses incurred in connection therewith, including, but
not limited to, reasonable attorneys' fees and costs of appeal, post judgment
enforcement proceedings (if any) and bankruptcy proceedings (if any). Any court,
arbitrator or panel of arbitrators shall, in entering any judgment or making any
award in any such suit, action, arbitration or other proceeding, in addition to
any and all other relief awarded to such prevailing party, include in
such-judgment or award such party's reasonable costs and expenses as provided in
this paragraph.

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(f)    Guarantor (i) represents that it has been represented and advised by
counsel in connection with the execution of this Guaranty; (ii) acknowledges
receipt of a copy of the Lease; and (iii) further represents that Guarantor has
been advised by counsel with respect thereto. This Guaranty shall be construed
and interpreted in accordance with the plain meaning of its language, and not
for or against Guarantor or Landlord, and as a whole, giving effect to all of
the terms, conditions and provisions hereof.
(g)    Except as provided in any other written agreement now or at any time
hereafter in force between the Landlord and Guarantor, this Guaranty shall
constitute the entire agreement of Guarantor with Landlord with respect to the
subject matter hereof, and no representation, understanding, promise or
condition concerning the subject matter hereof will be binding upon Landlord or
Guarantor unless expressed herein.
(h)    All stipulations, obligations, liabilities and undertakings under this
Guaranty shall be binding upon Guarantor and its respective successors and
assigns and shall inure to the benefit of Landlord and to the benefit of
Landlord's successors and assigns.
(i)    Whenever the singular shall be used hereunder, it shall be deemed to
include the plural (and vice-versa) and reference to one gender shall be
construed to include all other genders, including neuter, whenever the context
of this Guaranty so requires. Section captions or headings used in the Guaranty
are for convenience and reference only, and shall not affect the construction
thereof.
(j)    This Guaranty supersedes and replaces the Released Guaranty, which is
hereby terminated, released, waived and forever discharged; provided, however,
that the foregoing termination and release shall not be deemed or construed to
constitute a termination of the Released Guaranty or a release of the Released
Guarantor with respect to obligations arising or accruing under the Released
Guaranty prior to the Effective Date.
(k)    At such time as FC-Gen becomes a direct or indirect, wholly-owned
subsidiary of PublicCo, Landlord shall be deemed to have released, waived and
forever discharged FC-Gen from any and all claims, demands, rights, disputes,
actions, obligations, indebtedness, indemnifications and causes of action
whatsoever, at law or in equity or otherwise which Landlord may then have, may
ever have had, or may acquire in the future against FC-Gen pursuant to this
Guaranty.
[Signature Page to Follow]

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EXECUTED as of the date first set forth above.
GUARANTOR:

FC-GEN OPERATIONS INVESTMENT, LLC,
a Delaware limited liability company

By:                        
Name:    Michael S. Sherman
Title:    Secretary
GENESIS HEALTHCARE, INC.,
a Delaware corporation
(f/k/a Skilled Healthcare Group, Inc.)

By:                        
Name:    Michael S. Sherman
Title:    Secretary

RELEASED GUARANTOR:

GENESIS HEALTHCARE LLC,
a Delaware limited liability company

By:                        
Name:    Michael S. Sherman
Title:    Secretary

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LANDLORD:

[ ________________________ ]

By:                        
Name:    Harold Andrews
Title:    Chief Financial Officer

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