Exhibit 10.2

AMENDED AND RESTATED

MASTER LEASE AGREEMENT NO. 5

DATED AS OF SEPTEMBER 30, 2013

EXECUTED BY

VENTAS REALTY, LIMITED PARTNERSHIP,

AS LESSOR

AND

KINDRED HEALTHCARE, INC.

AND

KINDRED HEALTHCARE OPERATING, INC.,

AS TENANT

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TABLE OF CONTENTS

 

ARTICLE I

     2   

Section 1.1 Leased Property

     2   

Section 1.2 Term

     3   

Section 1.3 Successor Lease

     3   

ARTICLE II

     6   

Section 2.1 Definitions

     6   

ARTICLE III

     29   

Section 3.1 Rent

     29   

Section 3.2 Intentionally omitted

     30   

Section 3.3 Additional Charges

     30   

Section 3.4 Survival

     31   

Section 3.5 Net Lease

     31   

ARTICLE IV

     31   

Section 4.1 Payment of Impositions

     31   

Section 4.2 Notice of Impositions

     32   

Section 4.3 Adjustment of Impositions

     32   

ARTICLE V

     33   

Section 5.1 No Termination, Abatement, etc.

     33   

ARTICLE VI

     33   

Section 6.1 Ownership of the Leased Properties

     33   

Section 6.2 Tenant’s Personal Property

     34   

ARTICLE VII

     34   

Section 7.1 Condition of the Leased Property

     34   

Section 7.2 Use of the Leased Property

     35   

Section 7.3 Granting of Easements, etc.

     45   

Section 7.4 Restrictive Covenant

     46   

ARTICLE VIII

     46   

Section 8.1 Compliance with Legal and Insurance Requirements, Instruments, etc.

     46   

Section 8.2 Legal Requirement Covenants

     47   

Section 8.3 Permitted Encumbrances

     48   

Section 8.4 Financial Covenants

     49   

Section 8.5 Measurement Transactions

     49   

Section 8.6 Liability for Losses

     50   

ARTICLE IX

     50   

Section 9.1 Maintenance and Repair

     50   

Section 9.2 Encroachments

     51   

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ARTICLE X

     52   

Section 10.1 Construction of Capital Alterations to the Leased Property(ies)

     52   

Section 10.2 Capital Alterations Financed by Tenant

     53   

Section 10.3 Capital Alterations Financed by Lessor

     53   

Section 10.4 Non-Capital Alterations

     55   

Section 10.5 Salvage

     55   

Section 10.6 Additional Requirements for Capital Alterations and Non-Capital
Alterations

     55   

Section 10.7 Mortgagee’s Consent

     56   

ARTICLE XI

     57   

Section 11.1 Liens

     57   

ARTICLE XII

     57   

Section 12.1 Permitted Contests

     57   

ARTICLE XIII

     58   

Section 13.1 General Insurance Requirements

     58   

Section 13.2 Replacement Cost

     61   

Section 13.3 Additional Insurance

     62   

Section 13.4 Waiver of Subrogation

     62   

Section 13.5 Form Satisfactory, etc.

     62   

Section 13.6 Limits; Deductibles

     62   

Section 13.7 Blanket Policy

     63   

Section 13.8 No Separate Insurance

     63   

Section 13.9 Survival

     63   

Section 13.10 Insurance Company Ratings

     63   

Section 13.11 Commutation of Certain Insurance Policies

     64   

ARTICLE XIV

     65   

Section 14.1 Insurance Proceeds

     65   

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

     65   

Section 14.3 Reconstruction in the Event of Damage or Destruction Not Covered by
Insurance

     66   

Section 14.4 Tenant’s Property

     67   

Section 14.5 Restoration of Tenant’s Property

     67   

Section 14.6 No Abatement of Rent

     67   

Section 14.7 Restoration

     67   

Section 14.8 Notice

     68   

Section 14.9 Waiver

     68   

ARTICLE XV

     68   

Section 15.1 Definitions

     68   

Section 15.2 Parties’ Rights and Obligations

     69   

Section 15.3 Total Taking

     69   

Section 15.4 Partial Taking

     69   

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Section 15.5 Restoration

     69   

Section 15.6 Award-Distribution

     69   

Section 15.7 Temporary Taking

     70   

ARTICLE XVI

     70   

Section 16.1 Events of Default

     70   

Section 16.2 Certain Remedies

     77   

Section 16.3 Damages

     77   

Section 16.4 Certain Effects of Separate Lease

     78   

Section 16.5 Waiver

     79   

Section 16.6 Application of Funds

     79   

Section 16.7 Notice to Lessor

     79   

Section 16.8 Nature of Remedies

     79   

Section 16.9 Allocable Rent

     79   

Section 16.10 Special Remedies Provisions

     79   

Section 16.11 No Mediation or Arbitration

     90   

Section 16.12 Special Purchase Provisions

     90   

ARTICLE XVII

     95   

Section 17.1 Lessor’s Right to Cure Tenant’s Default

     95   

ARTICLE XVIII

     96   

Section 18.1 Provisions Relating to Purchase of the Leased Property

     96   

ARTICLE XIX

     96   

Section 19.1 Exercise of Renewal Options

     96   

Section 19.2 Renewal Terms

     98   

Section 19.3 Fair Market Rental Determination

     98   

Section 19.4 Extended Period New Lease

     99   

Section 19.5 Revocation of Renewal Option Exercise

     99   

ARTICLE XX

     99   

Section 20.1 Holding Over

     99   

ARTICLE XXI

     100   

Section 21.1 Subordination

     100   

Section 21.2 Attornment

     100   

Section 21.3 Mortgagee Cure Rights

     101   

Section 21.4 Modifications

     101   

Section 21.5 Existing Ground Leases

     102   

ARTICLE XXII

     103   

Section 22.1 Notice to Lessor

     103   

Section 22.2 Definitions

     103   

Section 22.3 Consent of Leasehold Mortgagee Required

     104   

Section 22.4 Default Notice

     104   

Section 22.5 Procedure for Foreclosure on Default

     104   

Section 22.6 Assignment or Transfer in Lieu of Foreclosure

     105   

Section 22.7 Separate Lease

     107   

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Section 22.8 Separate Lease Properties

     108   

Section 22.9 Legal Proceedings

     109   

Section 22.10 Future Amendments

     109   

Section 22.11 Estoppel Certificate

     109   

Section 22.12 Notices

     109   

Section 22.13 Erroneous Payments

     109   

Section 22.14 Exercise by Leasehold Mortgagee of Remedies Against One or More
Leased Properties

     110   

ARTICLE XXIII

     110   

Section 23.1 Risk of Loss

     110   

ARTICLE XXIV

     110   

Section 24.1 Indemnification

     110   

Section 24.2 New Mexico Limitation on Indemnification

     112   

ARTICLE XXV

     112   

Section 25.1 Subletting and Assignment

     112   

Section 25.2 Attornment

     121   

Section 25.3 Sublease Limitation

     122   

Section 25.4 Leasehold Mortgagee Rights

     122   

ARTICLE XXVI

     122   

Section 26.1 Financial Statements and Reporting

     122   

Section 26.2 Furnishing Notice

     128   

Section 26.3 Quarterly Meetings; Facility Level Meetings and Reviews

     128   

Section 26.4 Non-Ventas Lessors

     129   

Section 26.5 Additional Tenant Assistance

     129   

Section 26.6 Electronic Format

     130   

Section 26.7 Similar Reports

     130   

Section 26.8 Audit and Investigation Rights

     130   

ARTICLE XXVII

     131   

Section 27.1 Lessor’s Right to Inspect

     131   

ARTICLE XXVIII

     132   

Section 28.1 No Waiver

     132   

ARTICLE XXIX

     132   

ARTICLE XXX

     132   

Section 30.1 Acceptance of Surrender

     132   

ARTICLE XXXI

     132   

Section 31.1 No Merger of Title

     132   

ARTICLE XXXII

     132   

Section 32.1 Conveyance by Lessor

     132   

ARTICLE XXXIII

     133   

Section 33.1 Quiet Enjoyment

     133   

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ARTICLE XXXIV

     133   

Section 34.1 Notices

     133   

ARTICLE XXXV

     134   

Section 35.1 Appraisals

     134   

Section 35.2 Appointment of Appraisers

     135   

Section 35.3 Qualifications of Appraisers

     135   

Section 35.4 Appraisal Process

     135   

Section 35.5 Binding Nature

     136   

Section 35.6 Costs

     136   

ARTICLE XXXVI

     136   

Section 36.1 General REIT Provisions

     136   

ARTICLE XXXVII

     137   

Section 37.1 Intentionally Omitted

     137   

Section 37.2 Lessor’s Option to Purchase the Tenant’s Personal Property

     137   

ARTICLE XXXVIII

     138   

Section 38.1 Lessor May Grant Liens

     138   

ARTICLE XXXIX

     138   

Section 39.1 Environmental Indemnity

     138   

ARTICLE XL

     139   

Section 40.1 Miscellaneous

     139   

Section 40.2 Non-Recourse

     139   

Section 40.3 Transition of Operations

     140   

Section 40.4 Right to Enter

     142   

Section 40.5 Integration

     142   

Section 40.6 Severability

     142   

Section 40.7 Subject to Law

     143   

Section 40.8 Waivers

     143   

Section 40.9 Binding Character

     143   

Section 40.10 Modification

     143   

Section 40.11 Forbearance

     143   

Section 40.12 Lease Guaranty

     143   

Section 40.13 Louisiana Provisions

     144   

Section 40.14 Confidentiality

     144   

Section 40.15 New Lease

     148   

Section 40.16 Partial Expiration/Termination

     152   

Section 40.17 Intentionally omitted

     153   

Section 40.18 Combination of Leases

     153   

Section 40.19 Unified Commercial Operating Lease

     156   

Section 40.20 Intentionally omitted

     156   

Section 40.21 No Credits

     156   

ARTICLE XLI

     156   

Section 41.1 Memorandums of Lease

     156   

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LIST OF EXHIBITS AND SCHEDULES

Exhibit A – Legal Descriptions of the Land

Exhibit B – Term/Commencement Date/Expiration Date

Exhibit C – Allocation Schedule-Applicable Transferred Property Percentage

Exhibit D – Renewal Groups

Exhibit E – Leases

Exhibit F – Intentionally Omitted

Exhibit G – Form of Lease Guaranty

Exhibit H – Restrictive Covenants

Exhibit I – Form of Section 25.1.12(f) Guaranty

Schedule 2.1A – Intentionally omitted

Schedule 2.1B – Intentionally omitted

Schedule 2.1C – Existing Ground Leases

Schedule 7.2.7 – Minimum Number of Hospital Care Beds

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

Schedule 13.7 – Insurance Summary

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

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

Schedule 25.1.7 – Certain Existing Subleases

Schedule 40.12 – Tenant – Affiliate Sublessees

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AMENDED AND RESTATED MASTER LEASE AGREEMENT NO. 5

THIS AMENDED AND RESTATED MASTER LEASE AGREEMENT NO. 5 (hereinafter this
“Lease”) is dated as of the 30th day of September, 2013 (the “Execution Date”),
and is between VENTAS REALTY, LIMITED PARTNERSHIP, a Delaware limited
partnership (together with its successors and assigns, “Lessor”), and KINDRED
HEALTHCARE, INC., a Delaware corporation formerly known as Vencor, Inc.
(“Kindred”), and KINDRED HEALTHCARE OPERATING, INC., a Delaware corporation
formerly known as Vencor Operating, Inc. (“Operator”; Operator, jointly and
severally with Kindred and permitted successors and assignees of Operator and
Kindred, “Tenant”).

RECITALS

A. Lessor and Tenant have heretofore entered into that certain Master Lease
Agreement No. 5 (such agreement, as heretofore amended, is herein referred to as
“Existing ML5”), and Ventas, Inc. executed a Joinder to such Existing ML5 with
respect to one (1) leased property which was formerly demised thereunder
(Facility No. 4619).

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

C. Lessor and Tenant have heretofore entered into (1) that certain Second
Amended and Restated Master Lease Agreement No. 1 (such agreement, as heretofore
amended, is herein referred to as “ML1”) dated as of April 27, 2007, and Ventas,
Inc. executed a Joinder to such ML1 with respect to one (1) leased property
which was formerly demised thereunder (Facility No. 4619), (2) that certain
Second Amended and Restated Master Lease Agreement No. 2 (such agreement, as
heretofore amended, is herein referred to as “ML2”) dated as of April 27, 2007,
(3) that certain Second Amended and Restated Master Lease Agreement No. 3 (such
agreement, as heretofore amended, is herein referred to as “ML3”) dated as of
April 27, 2007, and (4) that certain Second Amended and Restated Master Lease
Agreement No. 4 (such agreement, as heretofore amended, is herein referred to as
“ML4”) dated as of April 27, 2007, and Ventas, Inc. executed a Joinder to such
ML4 with respect to one (1) leased property thereunder (Facility No. 4614) (ML1,
ML2, ML3 and ML4 are sometimes collectively referred to herein as “ML1-4”) (as
used in this Lease, (a) relative to a particular Added Leased Property (as
defined in the recitals below), the term “Existing Master Lease” shall mean the
lease (ML1, ML2, ML3 or ML4) under which such Added Leased Property was leased
by Lessor to Tenant immediately prior to the Effective Date and (b) relative to
a particular Leased Property, the terms “Ventas Subsidiaries”, “Original
Lessor”, “Original Tenant” and “Original Master Lease” shall have the same
respective meanings in Existing ML5, as amended and restated hereby, as in the
applicable Existing Master Lease for such Leased Property (in the case of an
Added Leased Property) or in Existing ML5 (in the case of the other Leased
Properties; such other Leased Properties under Existing ML5 are herein referred
to as the “Original ML5 Leased Properties”).

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D. Included within ML1-4, as leased properties thereunder, are the nineteen
(19) long term acute care hospitals referenced in Recital Exhibit 1 attached
hereto and made a part hereof.

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

F. Included within ML1-4, as leased properties thereunder, are the eleven
(11) skilled nursing facilities referenced in Recital Exhibit 2 attached hereto
and made a part hereof.

G. Effective as of the Effective Date, Lessor desires to continue to lease the
aforesaid skilled nursing facilities to Tenant, and Tenant desires to continue
to lease the aforesaid skilled nursing facilities from Lessor, but as Leased
Properties under the terms and conditions of Existing ML5, as amended and
restated hereby (the Leased Properties referenced in Recital Exhibit 1 and
Recital Exhibit 2 are herein referred to as the “Added Leased Properties”).

H. Contemporaneously herewith, Lessor and Tenant are entering into that certain
Agreement Regarding Master Leases (the “Agreement Regarding Master Leases”)
dated as of the Execution Date, and this Lease is subject to the terms of such
Agreement Regarding Master Leases.

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

ARTICLE I

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

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

 

2

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(ii) all buildings, structures, Fixtures (as hereinafter defined) and other
improvements of every kind including, but not limited to, alleyways and
connecting tunnels, sidewalks, utility pipes, conduits and lines (on-site and
off-site), parking areas and roadways appurtenant to such buildings and
structures presently situated upon the Land and Capital Alterations
(collectively, the “Leased Improvements”),

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

(iv) all permanently affixed equipment, machinery, fixtures, and other items of
real and/or personal property, including all components thereof, now and
hereafter located in, on or used in connection with, and permanently affixed to
or incorporated into the Leased Improvements, including, without limitation, all
furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting,
ventilating, refrigerating, incineration, air and water pollution control, waste
disposal, air-cooling and air-conditioning systems and apparatus, sprinkler
systems and fire and theft protection equipment, and built-in oxygen and vacuum
systems, all of which to the greatest extent permitted by law, are hereby deemed
by the parties hereto to constitute real estate, together with all replacements,
modifications, alterations and additions thereto, but specifically excluding all
items included within the category of Tenant’s Personal Property as defined in
ARTICLE II below (collectively the “Fixtures”),

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

Section 1.2 Term. To have and to hold for (1) a fixed term (the “Fixed Term”)
commencing on the Effective Date and ending at midnight on (x) with respect to
the Original ML5 Leased Properties, April 30, 2023, and (y) with respect to the
Added Leased Properties, April 30, 2025, and (2) the Extended Terms provided for
in ARTICLE XIX, unless this Lease is sooner terminated as hereinafter provided.

Section 1.3 Successor Lease

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

Section 1.3.2 Without limitation of the other provisions of this Section 1.3, as
to each Leased Property hereunder, the terms of the applicable Existing Master
Lease (and the applicable Original Master Lease as provided in such Existing
Master Lease) (in the case of the Added Leased Properties), and the terms of
Existing ML5 (and the applicable Original Master Lease and the applicable
Existing Master Lease, as such terms were used in Existing

 

3

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

Section 1.3.2.1 In the event that (1) prior to the Effective Date, (a) a default
or breach of the terms of any Existing Master Lease or Existing ML5, as
applicable, as to a Leased Property hereunder shall have occurred, (b) any act,
event or omission to act shall have occurred, or circumstances shall have
arisen, relative to any Legal Requirements, Authorization, Permitted
Encumbrances or Superior Lease (each as defined in Section 2.1 below) affecting
any of the Leased Properties that is or is potentially adverse to

 

4

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

Section 1.3.3 Lessor and Tenant agree that, notwithstanding anything to the
contrary contained in Section 1.3.1, Section 1.3.2 or elsewhere in this Lease,
if an Existing Master Lease or Existing ML5 terminates as it relates to a
particular Leased Property prior to the Effective Date, such Leased Property
shall not be included in this Lease as a Leased Property hereunder in the same
manner as if such Leased Property had been excluded from this Lease pursuant to
Section 40.16 hereof on the Effective Date, provided, however, that, if the
aforesaid termination under an Existing Master Lease or Existing ML5 occurred as
the result of an Event of Default by Tenant under such Existing Master Lease or
Existing ML5, Lessor shall have the same rights and remedies hereunder relative
to such Event of Default, such Leased Property and such termination as if, on
the Effective Date, this Lease had included such Leased Property and demised
such Leased Property to Tenant for the Term and this Lease had been terminated
as it relates to such Leased Property on the Effective Date due to an Event of
Default by Tenant hereunder.

Section 1.3.4 Intentionally Omitted.

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

Section 1.3.6 Lessor and Tenant acknowledge that they have heretofore entered
into that certain Second Specific Property Lease Amendment (the “Walpole
Amendment”) dated December 19, 2002 relating to the Facility commonly known as
Harrington House Nursing and Rehabilitation Center, Walpole, Massachusetts
(MA-198; sometimes also referred to as MA-985), and agree that this Lease is not
intended to supercede

 

5

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the provisions of such Walpole Amendment (which instrument remains in full force
and effect), except that, insofar as the provisions of ML1 have been amended
since such Walpole Amendment was entered into (including amendments to such
provisions resulting from the incorporation of such Facility as a Leased
Property under this Lease as provided herein) and such provisions are
cross-referenced in such Walpole Amendment, the aforesaid amended provisions, in
the form they are set forth in this Lease in connection with the incorporation
of such Facility as a Leased Property under this Lease as of the Effective Date,
shall apply for purposes of such Walpole Amendment (e.g. Section 7 of the
Walpole Amendment cross-references Section 8.3, Section 8.3.1 and Section 24.1
of ML1 and Section 14 of the Walpole Amendment cross-references Section 14.1 of
ML1; insofar as the provisions of such Sections of ML1 have been amended since
December 19, 2002 (including, as aforesaid, pursuant to amendments resulting
from the aforesaid incorporation of such Facility under this Lease), such
amended provisions, in the form set forth in this Lease, shall apply).

ARTICLE II

Section 2.1 Definitions. For all purposes of this Lease, except as otherwise
expressly provided or unless the context otherwise requires, (i) the terms
defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular, (ii) all accounting terms not
otherwise defined herein have the meanings assigned to them in accordance with
GAAP as at the time applicable; provided that, (x) all leases (including,
without limitation, this Lease) of Tenant or of the Seniormost Parent and their
respective Consolidated Subsidiaries that are or would be treated as operating
leases for purposes of GAAP as in effect on the Execution Date, shall continue
to be accounted for as operating leases for all purposes hereunder (other than,
for the avoidance of doubt, financial statements delivered pursuant to
Section 26.1 hereof (other than Section 26.1(w) hereof), including with respect
to calculations of financial covenant compliance (for example pursuant to
Section 8.4, Section 8.5, Section 25.1.12(b) and Section 26.1(w) hereof) and
subject to subsections (ii)(y) and (iii) below, regardless of any change to GAAP
following the Execution Date which would otherwise require such leases to be
treated as Capital Leases, and (y) in addition to the foregoing clause (x), if
Tenant notifies Lessor that Tenant requests an amendment to any provision hereof
to eliminate the effect of any change occurring after the Execution Date in GAAP
or in the application of GAAP on the operation of such provision (or if Lessor
notifies Tenant that Lessor requests an amendment to any provision hereof for
such purpose), regardless of whether any such notice is given before or after
such change in GAAP or in the application of GAAP, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision is amended by an amendment to this Lease that is
satisfactory to Lessor and Tenant, each in its sole discretion (with regard to
this subsection (ii) and subsection (iii) below, if any provision of this Lease
is interpreted or applied, or any covenants, computations, certifications,
accounting definitions or financial information is or are prepared, calculated
or otherwise presented, on the basis of GAAP as in effect on a date other than
the then current date (“not-current GAAP”) or if any assets, Indebtedness or
liabilities are valued at “fair value” (as described in subsection (iii) below),
such interpretations, applications, preparations, calculations, presentations
and valuations shall

 

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also be prepared, calculated and presented by Tenant and/or the Seniormost
Parent, as applicable, based upon then-current GAAP and as if the election
referenced in subsection (iii) below was in effect, and shall be accompanied by
a reconciliation(s) certified by the Chief Financial Officer of Tenant or the
Seniormost Parent, as applicable, evidencing and explaining the differences
between the then-current GAAP/election in effect results and the aforesaid
not-current GAAP/no election in effect results and any differences between the
results reflected in any financial statements delivered pursuant to Section 26.1
hereof and any calculations, presentations, valuations or other results or
materials delivered by Tenant and/or the Seniormost Parent with respect to
its/their financial covenant compliance), (iii) notwithstanding any other
provision contained herein, all terms of an accounting or financial nature used
herein shall be construed, and all computations of amounts and ratios referred
to herein shall be made, without giving effect to any election under Financial
Accounting Standards Board Accounting Standards Codification 820 (or any other
Financial Accounting Standard having a similar result or effect) to value any
assets, or any Indebtedness or other liabilities, of Tenant, the Seniormost
Parent or any of its Consolidated Subsidiaries at “fair value,” as defined
therein, (iv) all references in this Lease to designated “Articles,” “Sections”
and other subdivisions are to the designated Articles, Sections and other
subdivisions of this Lease and (v) the words “herein,” hereof” and “hereunder”
and other words of similar import refer to this Lease as a whole and not to any
particular Article, Section or other subdivision:

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

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

“Additional Charges”: As defined in ARTICLE III.

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

“Adjusted Consolidated Net Income”: For any period, Consolidated Net Income for
such period, adjusted to exclude therefrom, without duplication (x) gains or
losses from Asset Sales net of related tax effects, (y) any after-tax effect of
income (loss) from disposed or discontinued operations and any net after-tax
gains or losses on disposal of disposed, abandoned or discontinued operations
pursuant to Financial Accounting Standards Board Accounting Standards
Codification 205-20 and (z) any non-cash impairment charge or asset-write off in
connection with any Kindred Change of Control Transaction or any Acquisition or
Investment pursuant to Financial Accounting Standards Board Accounting Standards
Codification 350, 360 or 805, as applicable.

 

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

“Agreement Regarding Master Leases”: As defined in the recitals hereto.

“Ancillary Agreement”: As defined in Section 25.1.7.

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

“Appraisal Notice”: As defined in Section 35.2.

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

“Asset Sale”: Any sale, lease or other transfer (including any such transaction
effected by way of merger or consolidation) of any asset by the Seniormost
Parent or any Consolidated Subsidiary, including, without limitation, any Sale
and Leaseback Transaction, whether or not involving a Capital Lease, and any
sale or issuance of the Equity Interests of any Consolidated Subsidiary, but
excluding (i) any sale or other transfer of inventory, cash, cash equivalents
and other cash management investments and obsolete, unused or unnecessary
equipment, in each case in the ordinary course of business, (ii) any transfer of
assets by the Seniormost Parent to any Consolidated Subsidiary or by any
Consolidated Subsidiary to the Seniormost Parent or another Consolidated
Subsidiary, (iii) the sale or issuance by the Seniormost Parent or any
Consolidated Subsidiary of any Equity Interests of any Consolidated Subsidiary
to the Seniormost Parent or any Consolidated Subsidiary, (iv) any transfer of
assets or related series of transfers of assets involving cash proceeds of (or
non-cash consideration with a fair value of) less than $2,000,000, (v) with
respect to a lease of any property, surrender to or repossession by the lessor
of such property, or the termination or expiration of the lease relating to such
property, (vi) a Sale Leaseback Transaction that is permitted under applicable
covenants of the Existing Credit Facilities, (vii) an unwinding of any Interest
Rate Agreement, (viii) a sale, transfer or other disposition of any asset to the
extent such asset is exchanged for credit against the purchase price of such
similar replacement asset or the proceeds therefrom are promptly applied to the
purchase price of such replacement property, (ix) a sale, transfer or other
disposition of Investments in joint ventures to the extent required by, or made
pursuant to customary buy/sell arrangements between, the joint venture parties
set forth in joint venture agreements or similar binding arrangements, (x) a
transfer or disposition of assets subject to a condemnation or casualty event,
and (xi) a transfer or other disposition of assets constituting an Investment or
a dividend or other distribution of any kind with respect to any Equity Interest
of the Seniormost Parent or any Consolidated Subsidiary that is permitted under
the Existing Credit Facilities.

“Authorizations”: As defined in Section 40.3.

 

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“Award”: As defined in ARTICLE XV.

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

“Base Rent”: (a) For the period from the Existing Lease Effective Date through
the day preceding the Effective Date, rent at the aggregate annual rate
applicable under the Existing Master Leases or Existing ML5, as applicable,
relative to the Leased Properties (which rent, for the avoidance of doubt, shall
be payable under the applicable Existing Master Leases and not payable under
this Lease in the case of the Added Leased Properties and shall be escalated, as
of May 1, 2014, pursuant to the terms of the Existing Master Leases or Existing
ML5, as applicable), (b) for the period from the Effective Date through
April 30, 2015, rent at an annual rate calculated as provided in Exhibit C
hereto (including, without limitation, taking into account the Base Rent
increases with respect to certain of the Leased Properties pursuant to the
Agreement Regarding Master Leases which take effect on the Effective Date), and
(c) for a particular Rent Calculation Year thereafter, an annual rental amount
equal to the sum of (i) the Prior Period Base Rent, plus (ii) (x) if the CPI
Increase, expressed as a percentage, applicable to such Rent Calculation Year is
0.00% or less, zero, (y) if the CPI Increase, expressed as a percentage,
applicable to such Rent Calculation Year, is greater than 4.00%, the product of
4% times the Prior Period Base Rent, and (z) in all other cases, the product of
the CPI Increase, expressed as a percentage, applicable to such Rent Calculation
Year times the Prior Period Base Rent. Notwithstanding the foregoing, nothing
contained in this definition shall limit the applicability of Section 19.2 and
Section 19.3 hereof.

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

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

“Capital Alterations”: With respect to any Leased Property: (i) the addition of
one or more new buildings, or (ii) the annexation of one or more additional
structures to any portion of any of the Leased Improvements on such Leased
Property, or (iii) the material expansion or contraction of the existing
improvements on such Leased Property, or (iv) any alteration or modification
affecting the foundation, floor slab, roof or roof structure, curtain wall,
structural columns, beams or shafts or other structural components of any of the
Leased Improvements on such Leased Property (other than any

 

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alterations or modifications affecting any of such components that do not in any
material respect adversely affect the design, efficacy and/or quality of any
such component), or (v) any alteration or modification affecting any of the
electrical, plumbing, life safety, heating, ventilating, air conditioning or
other operating systems serving any of the Leased Improvements on such Leased
Property (other than any alterations or modifications affecting any of such
systems that do not in any material respect adversely affect the design,
operating capacity, efficiency and/or quality of any such system), or (vi) any
alterations or modifications to a Leased Property, the cost of which (excluding
cosmetic refurbishing alterations or modifications, such as painting,
wallpapering or carpeting), when taken together with all other alterations and
modifications (excluding cosmetic refurbishing alterations or modifications)
performed on such Leased Property in the twelve (12) month period immediately
preceding the subject alterations or modifications, would exceed One Million
Dollars ($1,000,000) (in the case of alterations or modifications to hospital
facilities) or Five Hundred Thousand Dollars ($500,000) (in the case of
alterations or modifications to nursing center facilities or any other facility
not operated as a hospital). “Capital Alterations” shall include, without
limitation, (1) the construction of a new wing or new story on a Leased
Property, (2) the repair, replacement, restoration, remodeling or rebuilding of
the existing improvements on a Leased Property or any portion thereof, where the
purpose and effect of such work is to provide a functionally new facility needed
to provide services not previously offered, and (3) any expansion, construction,
renovation or conversion in order to increase the bed capacity of the Facility
located on a Leased Property, to change the purpose for which such beds are
utilized or to improve materially the quality of such Facility.

“Capital Alterations Cost”: The term “Capital Alterations Cost” shall mean the
cost of any Capital Alteration proposed to be made by Tenant at a Leased
Property, whether or not paid for by Tenant or Lessor. Such cost shall include
(a) the cost of construction of the Capital Alterations (including site
preparation and improvement, materials, labor, supervision, and certain related
design, engineering and architectural services), the cost of any fixtures, the
cost of construction financing and miscellaneous costs approved by Lessor,
(b) if agreed to by Lessor in writing, in advance, the cost of any land
contiguous to a Leased Property that is (1) to become part of such Leased
Property and (2) is purchased for the purpose of placing thereon the Capital
Alterations or any portion thereof or of providing means of access to such
Capital Alterations or any existing improvements on such Leased Property or of
providing parking facilities for such Capital Alterations or such existing
improvements, including the cost of surveying the same, (c) the cost of
insurance, real estate taxes, water and sewage charges and other carrying
charges for such Capital Alterations during construction, (d) the cost of title
insurance, (e) reasonable fees and expenses of legal counsel, (f) filing,
registration and recording taxes and fees, (g) documentary stamp taxes, if any,
and (h) all reasonable costs and expenses of Lessor and Tenant and, if agreed to
in advance by Lessor, any Lending Institution which has committed to finance the
Capital Alterations, including, but not limited to, (i) the reasonable fees and
expenses of their respective legal counsel, (ii) all printing expenses,
(iii) the amount of any filing, registration and recording taxes and fees,
(iv) documentary stamp or transfer taxes, if any, (v) title insurance charges
and appraisal fees, if any, (vi) rating agency fees, if any, and
(vii) commitment fees, if any, charged by any Lending Institution advancing or
offering to advance any portion of the financing for such Capital Alterations.

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

 

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

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

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

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

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

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

“Consolidated EBITDA”: For any period, Adjusted Consolidated Net Income for such
period plus, to the extent deducted in determining Adjusted Consolidated Net
Income for such period, the sum of (i) Consolidated Interest Expense,
(ii) income tax expense, (iii) depreciation, amortization and other similar
non-cash charges, (iv) non-cash compensation expense (less any cash paid during
such period in respect of non-cash compensation expense accrued during any prior
period), (v) expenses for deferred compensation and bonuses, deferred purchase
price or earn-out obligations payable in connection with any Kindred Change of
Control Transaction or any Acquisition or Investment (less any cash paid during
such period in respect of deferred compensation and bonuses, deferred purchase
price or earn-out obligations accrued during any prior period), (vi) any fees,
costs and expenses paid or payable by the Seniormost Parent and its Consolidated
Subsidiaries in connection with any Kindred Change of Control Transaction or any
Acquisition or Investment (including amounts payable to agents and/or lenders in
connection with any related financing transactions), in each case, expensed or
amortized in such period and including fees, expenses or charges triggered by
change of control provisions and (vii) the amount of “run-rate” cost savings
projected by the Seniormost Parent in good faith and certified by the chief
financial officer of the Seniormost Parent in writing to the Lessor to result
from actions either taken or initiated prior to or during such period (which
cost savings shall be calculated on a Pro Forma Basis as though such cost
savings had been realized on the first day of such period), net of the amount of
actual benefits realized prior to or during such period from such actions
(provided that (A) the chief financial officer of the Seniormost Parent shall
have certified to Lessor that (x) such cost savings are reasonably quantifiable
and reasonably anticipated to result from such actions and (y) such actions have
been taken or initiated and the benefits resulting therefrom are anticipated by
the Seniormost Parent to be realized within 12 months, (B) no cost savings shall
be added pursuant to this clause (vii) to the extent duplicative of any expenses
or charges relating to such cost savings that are included in clause (v) above
with respect to such period and (C) the aggregate amount of cost savings added
pursuant to this clause (vii), together with

 

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any such amounts added back in respect of Acquisitions or Investments pursuant
to clause (v) above, shall not exceed 10% of Consolidated EBITDA for any period
of four consecutive Fiscal Quarters prior to giving effect to such amounts added
back pursuant to this clause (vii) and/or such clause (v)); provided, that
Consolidated EBITDA shall be calculated so as to exclude the effect of any
income or expense that (x) is classified as extraordinary, (y) is disclosed
separately as an unusual or non-recurring item or (z) represents the effect of
an accounting change on prior periods, in each case in accordance with GAAP.

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

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

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

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

“Consolidated Rental Expense”: For any period, the total rental expense for
operating leases of the Seniormost Parent and its Consolidated Subsidiaries,
determined on a consolidated basis for such period; provided that Consolidated
Rental Expense shall not be reduced by any rental income.

“Consolidated Subsidiary”: With respect to any Person (the “parent”) at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date; provided, that
Cornerstone Insurance Company, a Cayman Islands corporation, shall not be
considered a Consolidated Subsidiary for purposes of this Agreement. Unless
otherwise specified, “Consolidated Subsidiary” means a Consolidated Subsidiary
of the Seniormost Parent.

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

 

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“Consolidated Total Indebtedness”: As of any date of determination, the
aggregate amount of Indebtedness of the Seniormost Parent and its Consolidated
Subsidiaries outstanding on such date, determined on a consolidated basis in
accordance with GAAP (but excluding the effects of any discounting of
Indebtedness resulting from the application of acquisition method accounting in
connection with any Kindred Change of Control Transaction or any Acquisition or
other Investment permitted under the Existing Credit Facilities) consisting only
of Indebtedness for borrowed money, unreimbursed obligations under letters of
credit, obligations in respect of Capital Leases and debt obligations evidenced
by promissory notes or similar instruments, less the cash and cash equivalents
(in each case, free and clear of all Liens) of the Seniormost Parent and its
Consolidated Subsidiaries in an amount not to exceed $50,000,000 as of such date
that would be required to be reflected on a consolidated balance sheet in
accordance with GAAP.

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

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

Transaction, in the case of Section 16.10.3.1, or prior to the date as of which
the Coverage Ratio is being measured, in all other cases.

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

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

“Disclosing Party”: As defined in Section 40.14.

“Disclosure Date”: As defined in Section 40.14.

“Disclosure Law”: As defined in Section 40.14.

 

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“Disclosure Notice”: As defined in Section 40.14.

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

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

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

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

“Effective Date”: Shall mean October 1, 2014.

“Encumbrance”: As defined in Section 38.1.

“Entity”: Any Person other than an individual.

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

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

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

“Existing Credit Facilities”: The Tenant Credit Agreements as they existed as of
May 23, 2012, without giving effect to any subsequent amendment, supplement or
modification thereto.

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

 

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

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

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

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

“Extended Term”: As defined in Section 19.1.

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

“Facility Default”: An Event of Default that relates directly to one or more of
the Leased Properties and/or the Facilities operated thereon (such as, for
example only and without limitation, an Event of Default arising from a failure
to maintain or repair, or to operate for the Primary Intended Use, or to
maintain the required Authorizations for, one or more of the Facilities), as
opposed to an Event of Default that, by its nature, does not relate directly to
any of the Leased Properties or Facilities (such as, for example only and
without limitation, an Event of Default arising from a breach of
Section 3.1(a)).

“Facility Mortgage”: As defined in Section 13.1.

“Facility Mortgagee”: As defined in Section 13.1.

“Facility Termination”: As defined in Section 40.3.

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

“Fair Market Rental”: The annual amount per annum that a willing tenant would
pay, and a willing landlord would accept, at arm’s length, for leasing of the
Leased Properties (or, if applicable, any one or more, but less than all, of the
Leased Properties) for the period of the Term (including, without limitation,
any Extended Terms) remaining from and after the date as of which the Fair
Market Rental is being determined (e.g. as of the commencement of an Extended
Term, in the case of Section 19.2 and Section 19.3). The Fair Market Rental may
include therein such escalations of rent as would be paid by such a tenant, and
accepted by such a landlord, as part of an arm’s length transaction entered into
as of the aforesaid Fair Market Rental determination date; provided, however,
that, in addition to such other market factors as may be applicable in
determining the Fair Market Rental, the Fair Market Rental shall be determined
on the basis, and on the assumptions, that (a) the Fair Market Rental may not
include therein any rent, or method of rent calculation, that would adversely
affect any landlord by virtue of it being a real estate investment trust or the
ability of any such landlord to satisfy the requirements for maintaining its
status as a real estate investment trust (and,

 

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without limitation of the foregoing, the Fair Market Rental shall not include
any rent that would fail to qualify as “rents from real property” for purposes
of Section 856(d) of the Code), (b) the Fair Market Rental amount is to be paid
absolutely net to the aforesaid landlord, without any rights of deduction,
set-off or abatement, (c) all of the Leased Properties as to which the Fair
Market Rental is being determined are in good condition and repair (given their
respective ages and prevailing health care industry standards with respect to
what is considered good condition and repair), without any deferred maintenance
(but allowing for ordinary wear and tear), are in material compliance with any
and all applicable laws, codes, ordinances and regulations and have in full
force and effect, for the benefit of the aforesaid tenant, the Facilities and
the Leased Properties, any and all necessary or appropriate material
Authorizations for use thereof in accordance with the respective Primary
Intended Uses applicable thereto, (d) the aforesaid tenant has complied, and
shall be required to comply, with the requirements of this Lease, including,
without limitation, ARTICLE XXXVI hereof, (e) the respective replacement costs
of the Leased Properties as to which Fair Market Rental is being determined are
not determinative of the Fair Market Rental of such Leased Properties, and
(f) the aforesaid tenant shall have available to it, with respect to each Leased
Property as to which the Fair Market Rental is being determined, such remaining
Term as then remains, and such number of Extended Terms as then remain
unexercised, with respect to such Leased Property under the terms of this Lease.
Notwithstanding anything to the contrary contained in this Lease, “Fair Market
Rental” shall take into account, for each of the applicable Leased Properties,
the market conditions, market levels of EBITDARM, the ratio of market levels of
EBITDARM to market levels of rent, and the actual levels of EBITDARM at the
applicable Leased Properties, in each case that are prevailing or measured, as
applicable, as of the date as of which the Fair Market Rental is being
determined, as well as historical levels of EBITDARM at the applicable Leased
Properties (including the EBITDARM of the Leased Properties measured as of the
Effective Date).

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

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

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

“Final Appraiser”: As defined in Section 35.2.

 

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

“Financial Covenant Default”: A failure to comply with the covenants in
Section 8.4.1 or Section 8.4.2 at each Financial Covenant Compliance Date or a
failure to comply with the covenant in Section 8.5 at any time and such failure
with respect to such Section 8.5 is not cured within five (5) Business Days.

“Fixed Charge Coverage Ratio”: At any Financial Covenant Compliance Date, the
ratio of (x) Consolidated EBITDAR for the four consecutive fiscal quarters ended
on or immediately prior to such Financial Covenant Compliance Date (the
“Reference Period”) to (y) Consolidated Fixed Charges for the Reference Period.
The foregoing calculation shall be made on a Pro Forma Basis.

“Fixed Term”: As defined in Section 1.2.

“Fixtures”: As defined in Section 1.1.

“Fund”: As defined in the definition of Seniormost Parent.

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

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

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

 

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“Hospital Competitor”: As defined in Section 7.2.7.

“Hospital Facility”: As defined in Section 7.2.7.

“IBNR claims”: As defined in Section 13.11.

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

“Indebtedness”: For any Person, without duplication, (i) all obligations of such
Person for borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person to pay the deferred purchase price of property or services, (iv) all
Capital Lease Obligations of such Person, (v) all obligations of such Person to
purchase securities which arise out of or in connection with the sale of the
same or substantially similar securities, (vi) all obligations of such Person
(whether

 

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contingent or non-contingent) to reimburse any Lending Institution or other
Person in respect of amounts paid under a letter of credit, banker’s acceptance
or similar instrument, (vii) all obligations secured by a Lien on any asset of
such Person, whether or not such Indebtedness is otherwise an obligation of such
Person, and (viii) all Guarantees by such Person of obligations of another
Person (each such Guarantee to constitute Indebtedness in an amount equal to the
maximum amount of such other Person’s obligations Guaranteed thereby); provided
that neither (a) trade accounts payable nor (b) amounts owed to patients or
residents arising in the ordinary course of business nor (c) obligations arising
in respect of insurance policies or performance or surety bonds which are not
themselves Guarantees of Indebtedness (nor drafts, acceptances or similar
instruments evidencing the same nor obligations in respect of letters of credit
supporting the payment of the same) nor (d) guarantees of any obligation of such
Person or a Consolidated Subsidiary pursuant to an operating lease shall
constitute Indebtedness.

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

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

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

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

“Kindred”: As defined in the preamble hereof.

“Kindred Change of Control Transaction”: The consummation of any acquisition of
all or substantially all of the voting securities of (i) Kindred or any Entity
of which Kindred is a direct or indirect subsidiary, provided that any
transaction under this clause (i) that does not result in the change of the
Seniormost Parent Control Person shall not be deemed a Kindred Change of Control
Transaction or a change of control (by way of example, a transfer of

 

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Kindred from one wholly-owned subsidiary of the Seniormost Parent to another
wholly-owned subsidiary of the Seniormost Parent shall not be deemed a Kindred
Change of Control Transaction or a change of control) or (ii) the then
applicable Seniormost Parent Control Person, in each case whether the
consideration consists of securities or cash and whether the structure is a
merger, transfer of stock or a tender or exchange offer followed by a second
step merger; it being understood that, if the acquiror in a tender or exchange
offer commits, at the time of such tender or exchange offer, to conduct a second
step merger upon completion of such tender or exchange offer (subject to the
conditions that a shareholders meeting shall have occurred at which the acquiror
may vote such voting securities to adopt the merger and the absence of any
order, legal restraint or law prohibiting the merger), then each of the
consummation of such tender or exchange offer and the consummation of the second
step merger shall also be deemed a Kindred Change of Control Transaction (but
the transaction fee payable in accordance with Section 25.1.12(d) shall be
payable on or before the consummation of the tender or exchange offer and shall
not be payable in connection with the second step merger). For the avoidance of
doubt, no sale of any or all of the assets of Kindred, any Entity of which
Kindred is a direct or indirect subsidiary or any Seniormost Parent (other than
the sale of all or substantially all of the voting securities of Kindred, any
Entity of which Kindred is a direct or indirect subsidiary or any Seniormost
Parent in accordance with the terms of this Lease) shall constitute a Kindred
Change of Control Transaction.

“known claim”: As defined in Section 13.11.

“Land”: As defined in Section 1.1.

“Lease”: As defined in the preamble hereof.

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

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

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

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

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

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

“Legal Requirements”: As to the applicable Leased Property, all federal, state,
county, parish, municipal and other governmental statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions affecting such
Leased Property or the maintenance, construction, use, operation or alteration
thereof, whether now or hereafter enacted and in force, including, without
limitation, (i) any licensure requirements, certification

 

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requirements under applicable federal and/or state cost reimbursement programs,
including Medicare and Medicaid (provided the applicable Facility participates
in such reimbursement), building codes and zoning regulations, (ii) any which
may (x) require repairs, modifications or alterations in or to such Leased
Property or (y) in any way adversely affect the use and enjoyment thereof, and
(iii) all permits, licenses, certificates of need, authorizations and
regulations necessary to operate such Leased Property for its Primary Intended
Use.

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

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

“Lessor’s Management Group”: Shall mean Debra A. Cafaro, T. Richard Riney,
Timothy A. Doman and Christian Cummings.

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

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

 

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

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

“Measurement Transaction”: As defined in Section 8.5.

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

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

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

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

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

“New Lease”: As defined in Section 40.15.

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

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

“Officer’s Certificate”: A certificate of Tenant (or the Seniormost Parent or a
Guarantor, if so provided in this Lease) signed by the chairman of the board of
directors, the president, any vice president, the secretary, the treasurer, the
chief operating officer, the chief financial officer, the general counsel or any
other officer authorized to so sign by the board of

 

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directors or by-laws of Tenant (or of the Seniormost Parent or a Guarantor, if
applicable as described above), or the general partner or managing member of
Tenant (or of the Seniormost Parent or a Guarantor, if applicable as described
above), as applicable, or any other person whose power and authority to act has
been authorized by delegation in writing by any person duly authorized to make
such delegation of authority.

“Operator”: As defined in the preamble hereof.

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

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

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

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

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

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

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

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

“Permitted Encumbrances”: (a) all easements, covenants, conditions,
restrictions, agreements and other matters with respect to the Leased Properties
that were of record as of the Commencement Date; (b) all easements, covenants,
conditions, restrictions, agreements and other matters with respect to the
Leased Properties, whether or not of record, that are executed by Tenant or
approved or consented to in writing by Tenant; (c) any easement or

 

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

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

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

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

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

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

“Prior Period Base Rent”: As of any date, the annual rate of Base Rent that was
in effect immediately prior to the commencement of the Rent Calculation Year
containing such date. For example, for the Rent Calculation Year commencing
May 1, 2015, the Prior Period Base Rent shall be the annual rate of Base Rent
that was in effect on April 30, 2015.

“Pro Forma Basis”: For purposes of making calculations, reporting and
determining compliance with any financial covenant hereunder:

(a) pro forma effect will be given to any Indebtedness incurred during or after
the Reference Period to the extent the Indebtedness is outstanding on the
Financial Covenant Compliance Date or is, as of the Financial Covenant
Compliance Date, irrevocably committed by the borrower thereof to be incurred
following the Financial Covenant Compliance Date, in each case as if the
Indebtedness had been incurred on the first day of the Reference Period;

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

 

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

(d) pro forma effect will be given to (1) the creation of any Consolidated
Subsidiary and (2) the acquisition or disposition of Entities, properties,
divisions or lines of businesses by the Seniormost Parent and its Consolidated
Subsidiaries, in each of the foregoing cases that have occurred since the
beginning of the Reference Period as if such events had occurred, and, in the
case of any disposition, the proceeds thereof applied, on the first day of such
Reference Period. For purposes of determining Consolidated Interest Expense,
Consolidated Rental Expense and Consolidated Total Indebtedness, any
discontinuation of discontinued operations as defined under Financial Accounting
Standards Board Accounting Standards Codification 205-20 occurring during the
Reference Period shall be given effect in accordance with that standard. To the
extent that pro forma effect is to be given to an acquisition or disposition of
an Entity, property, division or line of business, the pro forma calculation
will be based upon the most recent four full fiscal quarters for which the
relevant financial information is available (including cost savings to the
extent such cost savings would be consistent with the definition of
“Consolidated EBITDA”); and

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

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

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

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

“Qualified Successor”: As defined in Section 40.3.

“Quarterly Covenant Compliance Date”: The last day of each fiscal quarter of the
Seniormost Parent ending after the consummation of any Kindred Change of Control
Transaction.

“Recipient”: As defined in Section 40.14.

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

“Reimbursement Period”: As defined in Section 40.3.

 

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“REIT”: As defined in Section 36.1.1.

“REIT Requirements”: As defined in Section 36.1.1.

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

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

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

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

“Second Lease”: As defined in Section 40.18.

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

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

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

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

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

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

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

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

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

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

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

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

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

“Senior Officer’s Certificate”: An Officer’s Certificate of Tenant (or of the
Seniormost Parent or a Guarantor, if so provided in this Lease) signed by the
chairman of the board of directors, the president, the chief operating officer
or the general counsel of Tenant

 

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(or of the Seniormost Parent or a Guarantor, if applicable as described above),
or a Person having such title or the equivalent thereof in the general partner
or the managing member of Tenant (or of the Seniormost Parent or a Guarantor, if
applicable as described above).

“Seniormost Parent”: The Seniormost Parent Control Person; provided, however,
that if the Seniormost Parent Control Person is a Fund or the general partner(s)
thereof, the Seniormost Parent shall instead be, individually or collectively,
the Subsidiary Entity(ies) directly owned by such Fund that directly or
indirectly controls Tenant or, if there is no such Subsidiary Entity, the
Seniormost Parent shall be Tenant. As of the Effective Date, the Seniormost
Parent is Kindred. “Fund” means one or more institutional and multi-investment
investment funds or private equity funds (in each case, as such terms are used
in the investment community) or any similar Entity or Entities (whether or not
regulated as such).

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

“Separate Lease”: As defined in Section 22.7.

“SN Competitor”: As defined in Section 7.2.8.

“SN Facility”: As defined in Section 7.2.8.

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

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

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

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

 

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

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

“Superior Mortgage”: As defined in Section 21.1.

“Superior Mortgagee”: As defined in Section 21.1.

“Suspension Period”: As defined in Section 40.14.

“Taking”: A taking or voluntary conveyance during the Term of all or part of the
applicable Leased Property, or any interest therein or right accruing thereto or
use thereof, as the result of, or in settlement of any condemnation or other
eminent domain proceeding affecting such Leased Property whether or not the same
shall have actually been commenced.

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

“Tenant”: As defined in the preamble hereof.

“Tenant Credit Agreements”: Each of (i) that certain ABL Credit Agreement, dated
as of June 1, 2011, among Kindred, the lenders party thereto, JPMorgan Chase
Bank, N.A. as administrative agent and collateral agent and the arrangers and
agents party thereto, and (ii) that certain Term Loan Credit Agreement, dated as
of June 1, 2011, among Kindred, the lenders party thereto, JPMorgan Chase Bank,
N.A. as administrative agent and collateral agent and the arrangers and other
agents party thereto, and, in each case, any similar or replacement credit
agreement that Kindred or Operator may enter into from time to time after the
Effective Date.

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

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

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

 

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

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

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

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

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

ARTICLE III

Section 3.1 Rent. Tenant shall pay to Lessor, in lawful money of the United
States of America which shall be legal tender for the payment of public and
private debts, at Lessor’s address set forth in Section 34.1 below or at such
other place or to such other person(s), firm(s) or corporation(s) as Lessor from
time to time may designate in writing, Base Rent and Additional Charges during
the Term, including, without limitation, any Extended Terms, as hereinafter
provided. Lessor may, by written notice to Tenant at any time and from time to
time, elect to require that Rent (or portions thereof designated by Lessor) that
is payable to Lessor hereunder be paid by wire transfer of immediately available
funds to such wire transfer account(s) as Lessor may specify in writing.

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

 

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

Section 3.2 Intentionally omitted.

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

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

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

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

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

 

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

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

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

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

ARTICLE IV

Section 4.1 Payment of Impositions. Subject to ARTICLE XII relating to permitted
contests, Tenant shall pay all Impositions as set forth in Section 3.3. Tenant’s
obligation to pay such Impositions shall be deemed absolutely fixed upon the
date such Impositions become a lien upon the Leased Property or any part
thereof. Lessor, at its expense, shall, to the extent permitted by applicable
law, prepare and file all tax returns and reports as may be required by
governmental

 

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authorities in respect of Lessor’s net income, gross receipts, franchise taxes
and taxes on its capital stock, and Tenant, at its expense, shall, to the extent
permitted by applicable laws and regulations, prepare and file all other tax
returns and reports in respect of any Imposition as may be required by
governmental authorities. If any refund shall be due from any taxing authority
in respect of any Imposition paid by Tenant, the same shall be paid over to or
retained by Tenant if no Event of Default shall have occurred hereunder and be
continuing. Any such funds retained by Lessor due to an Event of Default shall
be applied as provided in ARTICLE XVI. Lessor and Tenant shall, upon request of
the other, provide such data as is maintained by the party to whom the request
is made with respect to the Leased Property as may be necessary to prepare any
required returns and reports. In the event governmental authorities classify any
property covered by this Lease as personal property, Tenant shall file all
personal property tax returns in such jurisdictions where it may legally so
file. Lessor, to the extent it possesses the same, and Tenant, to the extent it
possesses the same, will provide the other party, upon request, with cost and
depreciation records necessary for filing returns for any property so classified
as personal property. Where Lessor is legally required to file personal property
tax returns, Tenant will be provided with copies of assessment notices
indicating a value in excess of the reported value in sufficient time for Tenant
to file a protest. Tenant may, upon notice to Lessor, at Tenant’s option and at
Tenant’s sole cost and expense, protest, appeal, or institute such other
proceedings as Tenant may deem appropriate to effect a reduction of real estate
or personal property assessments and Lessor, at Tenant’s expense as aforesaid,
shall fully cooperate with Tenant in such protest, appeal, or other action
(including, without limitation, signing all required forms and documents
reasonably necessary for Tenant to file and prosecute such appeal, protest or
other action), provided that Tenant shall indemnify Lessor from and against all
losses, claims, damages, costs and expenses (including, without limitation,
reasonable attorneys’ fees) arising after the Existing Lease Effective Date
suffered or incurred by Lessor and caused by such cooperation, including,
without limitation, signing or providing any such forms and documents). Billings
for reimbursement by Tenant to Lessor of personal property taxes shall be
accompanied by copies of a bill therefor and payments thereof which identify the
personal property with respect to which such payments are made.

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

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

 

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ARTICLE V

Section 5.1 No Termination, Abatement, etc. Except as otherwise specifically
provided in this Lease, Tenant, to the extent permitted by law, shall remain
bound by this Lease in accordance with its terms and shall neither take any
action without the consent of Lessor to modify, surrender or terminate the same,
nor seek nor be entitled to any abatement, deduction, deferment or reduction of
Rent, or set-off against the Rent, nor shall the respective obligations of
Lessor and Tenant be otherwise affected by reason of (a) any damage to, or
destruction of, any Leased Property or any portion thereof from whatever cause
or any Taking of any Leased Property or any portion thereof, (b) the
interruption or discontinuance of any service or utility servicing any Leased
Property, (c) the lawful or unlawful prohibition of, or restriction upon,
Tenant’s use of any Leased Property, or any portion thereof, the interference
with such use by any person, corporation, partnership or other entity, or by
reason of eviction by paramount title, (d) any claim which Tenant has or might
have against Lessor or by reason of any default or breach of any warranty by
Lessor under this Lease or any other agreement between Lessor and Tenant, or to
which Lessor and Tenant are parties, (e) any bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution, winding up
or other proceedings affecting Lessor or any assignee or transferee of Lessor,
(f) any revocation, suspension or non-renewal of any license, permit, approval
or other Authorization necessary to operate any Facility, (g) any withholding,
non-payment, reduction or other adverse change respecting any Medicare, Medicaid
or other reimbursements due or available to Tenant with respect to any Facility,
or (h) for any other cause whether similar or dissimilar to any of the foregoing
other than a discharge of Tenant from any such obligations as a matter of law.
Tenant hereby specifically waives all rights, arising from any occurrence
whatsoever, which may now or hereafter be conferred upon it by law to
(i) modify, surrender or terminate this Lease or quit or surrender the Leased
Property or any portion thereof, or (ii) entitle Tenant to any abatement,
reduction, suspension or deferment of the Rent or other sums payable by Tenant
hereunder. The obligations of Lessor and Tenant hereunder shall be separate and
independent covenants and agreements and the Rent and all other sums payable by
Tenant hereunder shall continue to be payable in all events unless the
obligations to pay the same shall be terminated by termination of this Lease as
to any Leased Property other than by reason of an Event of Default.

ARTICLE VI

Section 6.1 Ownership of the Leased Properties. Tenant acknowledges that the
Leased Properties are the property of Lessor and that Tenant has only the right
to the exclusive possession and use of the Leased Properties upon and subject to
the terms and conditions of this Lease. Notwithstanding anything to the contrary
contained in this Lease or the Joinder hereto by Ventas, Inc., in the case of
any easement or other rights that are appurtenant to any property owned by
Lessor, Tenant agrees that neither Lessor nor Ventas, Inc. makes any
representation or warranty relative to Lessor’s title thereto or whether such
appurtenances are encumbered, and neither Lessor nor Ventas, Inc. shall be
obligated to discharge any liens or encumbrances with respect to, or otherwise
to defend, Lessor’s right, title and interest, if any, in any such
appurtenances. Tenant agrees that such appurtenances shall constitute Permitted
Encumbrances, as to which Tenant shall have the obligations set forth in
Section 8.3 and Section 24.1 of this Lease, provided that Tenant shall not be
obligated to defend or preserve any such appurtenances against any mortgages or
other liens created by the owner of the property burdened by the aforesaid
appurtenances that are senior in priority to Lessor’s aforesaid appurtenant
rights.

 

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

ARTICLE VII

Section 7.1 Condition of the Leased Property. Tenant acknowledges receipt and
delivery of possession of each Leased Property and that Tenant has examined and
otherwise has knowledge of the condition of the Leased Property prior to the
execution and delivery of this Lease and has found the same to be in good order
and repair and satisfactory for its purposes hereunder. Tenant is leasing the
Leased Property “as is” in its present condition. Tenant waives any claim or
action against Lessor in respect of the condition of the Leased Property. LESSOR
MAKES NO WARRANTY OR REPRESENTATION EXPRESS OR IMPLIED, IN RESPECT OF THE LEASED
PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR
CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE AS TO THE QUALITY OF
THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL
SUCH RISKS ARE TO BE BORNE BY TENANT. TENANT ACKNOWLEDGES THAT THE LEASED
PROPERTY HAS BEEN INSPECTED BY TENANT AND IS SATISFACTORY TO IT.

 

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Section 7.2 Use of the Leased Property.

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

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

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

 

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

Section 7.2.5 Tenant shall neither suffer nor permit any Leased Property or any
portion thereof, including any Capital Alteration whether or not financed by
Lessor, or Tenant’s Personal Property, to be used in such a manner as (i) might
reasonably tend to impair Lessor’s (or Tenant’s, as the case may be) title
thereto or to any portion thereof, or (ii) may reasonably make possible a claim
or claims of adverse usage or adverse possession by the public, as such, or of
implied dedication of the applicable Leased Property or any portion thereof.

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

 

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participation therein and to any such Facility(ies), Tenant or any successor
operator of such Facility(ies) may at any time at its election, without the
necessity of any governmental approval or additional Authorization (other than
routine governmental re-inspections of such Facility(ies) and any ministerial
approvals and other Authorizations), as applicable depending upon whether
subsection (i), (ii) and/or (iii) above is applicable, (a) promptly rejoin the
Medicaid program, and re-activate its certification for participation in the
Medicaid program, at any such Facility(ies) and/or (b) promptly re-activate its
certification for participation in the Medicaid program and/or Medicare program,
as applicable, as to any beds as to which a voluntary reduction under subsection
(ii) and/or (iii) above is applicable. At the time, and as a condition, of any
such voluntary withdrawal and de-activation, or voluntary reduction, by Tenant
and thereafter within twenty (20) days after receipt of a written request
therefor from Lessor from time to time (but not more often than twice in any
calendar year, unless, after Lessor has made two (2) such requests in a calendar
year, a change(s) in Legal Requirements becomes effective, or Lessor obtains
knowledge of other facts or circumstances, suggesting a possible violation of
this Section 7.2.6), Tenant shall deliver to Lessor a Senior Officer’s
Certificate, in form and substance reasonably satisfactory to Lessor, certifying
that Tenant has made diligent inquiry relative to the applicable Legal
Requirements and has consulted with its legal counsel and, based on the
foregoing, certifies that Tenant has complied, and continues to comply, with the
provisions of this Section 7.2.6 in connection with such voluntary withdrawal
and de-activation and/or voluntary reduction.

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

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

 

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Authorizations and (6) whether and to what extent Tenant intends and expects to
sell any such hospital care beds as described below, (x) the Permitted
Alterations to the affected Hospital Facility that Tenant intends to make in
connection with such conversions, and (y) Tenant’s projections, budgets and/or
other estimates of the cost of the aforesaid Permitted Alterations and of all
other costs of implementing such changes and conversions and of the projected
impact of such changes and conversions upon the EBITDAR of the affected Hospital
Facility (broken down by line item) and upon Tenant’s earnings per share,
(ii) evidence reasonably satisfactory to Lessor establishing and demonstrating
that the proposed changes and conversions will satisfy all of the requirements
of this Section 7.2.7, and (iii) a Senior Officer’s Certificate certifying that
Tenant has made diligent inquiry and has consulted with its legal counsel and,
based upon the foregoing, certifying that the licensed bed changes and
conversions proposed by Tenant will satisfy all of the requirements of this
Section 7.2.7, that Tenant expects to accomplish such licensed bed changes and
conversions without relying upon the proviso contained in subsection (b)(i)
below (or, if Tenant expects to rely upon such proviso, so certifying and
further certifying that the requirements of such proviso shall be satisfied by
Tenant in a timely manner) and that the information contained in the aforesaid
notice or delivered therewith is true and correct in all material respects.
Tenant shall further submit and deliver to Lessor, promptly following Lessor’s
request therefor, such supplemental information and documentation relative to
the proposed licensed bed changes and conversions as Lessor may reasonably
request from time to time;

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

 

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in compliance with all of the requirements of this Section 7.2.7 (other than
this subsection (b)(i)) and (Z) the condition referenced in subsection (i)(1)(A)
of this Lease, and in the corresponding Section 7.2.7(b)(i)(1)(A) of all other
ML Leases, exists with respect to no other Hospital Facility included within the
Master Lease Leased Properties that remain subject to any of the ML Leases,
then, pursuant to this Section 7.2.7(b)(i), the aggregate number of licensed
beds at such Hospital Facility must at all times (or, if the above-described
proviso is applicable, then, before the expiration of the time frame referenced
in subsection (B) above) be equal to or greater than 86 licensed beds (90 beds –
(20% x (90 beds – 70 beds)) = 90 beds – (20% x 20 beds) = (90 beds – 4 beds) =
86 licensed beds), so that such Hospital Facility would need to obtain licensure
for 16 beds licensed for the delivery of skilled nursing care, to go with the
remaining 70 beds licensed for the delivery of hospital care, in order to comply
with this subsection (b)(i)), and (ii) no other Event of Default shall exist
under this Lease;

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

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

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

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

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

 

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(h) Insofar as Tenant is unable, despite its commercially reasonable efforts, to
accomplish any conversion permitted under this Section 7.2.7 in accordance with
subsection (g) above, then, prior to delicensing hospital care beds in
compliance with this Section 7.2.7, Tenant may sell that number of beds that are
licensed for the delivery of hospital care as will not cause a violation of
subsections (c), (d), (e), (f) and (g) above (with eighty percent (80%) of the
net proceeds after out-of-pocket expenses received by Tenant from any such sale
to be shared with, and paid to, Lessor within ten (10) Business Days after the
date that any such proceeds are received by Tenant), and, in such regard, Tenant
agrees that it shall not directly or indirectly cause any such hospital care
beds to be sold or otherwise transferred to any entity in which Tenant has any
direct or indirect financial interest, except with Lessor’s prior written
consent, in its sole discretion. At Tenant’s option, Tenant may elect not to
attempt to sell the aforesaid beds or to cease its efforts to sell the aforesaid
beds, and, in such event, Tenant shall promptly so notify Lessor and Lessor
shall thereafter be entitled, at its option for a period of sixty (60) Business
Days from receipt of Tenant’s aforesaid notice (and, in addition to such sixty
(60) Business Days, such additional time period as may be necessary to obtain
any necessary regulatory approvals for any proposed sale, so long as Lessor
demonstrates reasonably diligent efforts to obtain such regulatory approvals),
to attempt to sell any or all of the aforesaid beds, and, if it succeeds in
gaining such regulatory approvals and in making any such sale, Lessor shall be
entitled to retain all proceeds from any such sale, subject, in the case of any
such sale of beds by Lessor to a person or entity (a “Hospital Competitor”) that
intends to license and use the purchased beds at a hospital that competes
locally with the Hospital Facility from which such purchased beds arose or
another hospital facility of Tenant or its Affiliates, to the following
additional requirements and conditions: (w) before completing any such sale,
Lessor shall first notify Tenant in writing of the material terms of the
Hospital Competitor’s purchase offer for such beds, including a copy of any
letter of intent; (x) Tenant shall have ten (10) Business Days following receipt
of such notice to notify Lessor in writing that Tenant desires to purchase such
beds on the purchase offer terms specified in Lessor’s aforesaid notice; (y) if
Tenant so notifies Lessor of its desire to purchase such beds, Lessor shall
(1) notify Tenant in writing that (A) it has decided not to sell such beds, in
which event Tenant shall immediately cause the delicensure of such beds, or
(B) it has decided to continue its efforts to sell such beds, in which event
Lessor shall have an additional five (5) Business Days after receipt of Tenant’s
aforesaid notice of its desire to purchase such beds within which to sell such
beds to a person or entity that is not a Hospital Competitor or to deliver to
Tenant another notice of a Hospital Competitor’s purchase offer pursuant to
subsection (w) above (and, thereupon, subsections (x), (y) and (z) of this
subsection (h) shall again apply (except that the time frame for Tenant’s
response pursuant to any reapplication of such subsection (x) shall be shortened
from ten (10) Business Days to five (5) Business Days (the time frame for any
reapplication of subsection (y)(1)(B) above shall remain five (5) Business
Days))), or (2) notify Tenant in writing that Lessor will sell such beds to
Tenant, in which event (A) Lessor shall sell, and Tenant shall purchase, such
beds on the purchase offer terms specified in Lessor’s aforesaid notice,
(B) Lessor shall be entitled to retain all proceeds from such sale and
(C) Tenant shall immediately cause the delicensure of such beds (and, if Lessor
does not provide a notice to Tenant pursuant to subsection (1) or (2) above
within five (5) Business Days following Lessor’s receipt of Tenant’s notice
evidencing its desire to purchase such beds, Lessor shall be deemed to have
elected to sell such beds as provided in

 

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

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

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

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

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

(m) Notwithstanding anything to the contrary contained in this Section 7.2 or
elsewhere in this Lease, Tenant agrees that, from and after the Effective Date,
the aggregate number of beds licensed for the delivery of hospital care that
(i) are sold or delicensed pursuant to Section 7.2.7 of any ML Lease or (ii) are
otherwise sold or delicensed in any manner or for any reason, in the case of
either of subsection (i) or (ii) at any time while the Hospital Facility(ies) to
which such licensed beds relate are or were leased pursuant to any ML Lease
(even if any such Hospital Facility ceases to be leased pursuant to any ML
Lease), must at all times be equal to or less than 250 such beds (the “Section
7.2.7(m) Number”); provided,

 

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however, that if, prior to the Effective Date, beds at the Hospital Facilities
that are licensed for the delivery of hospital care are sold or delicensed as
described in Section 7.2.7(m)(i) or (ii) of any Existing Master Lease or
Existing ML5, then as of the Effective Date the Section 7.2.7(m) Number shall be
reduced by the number of such sold or delicensed beds.

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

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

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

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

 

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

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

 

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subsections (x), (y) and (z) of this subsection (e) shall again apply (except
that the time frame for Tenant’s response pursuant to any reapplication of such
subsection (x) shall be shortened from ten (10) Business Days to five
(5) Business Days (the time frame for any reapplication of subsection (y)(1)(B)
above shall remain five (5) Business Days))), or (2) notify Tenant in writing
that Lessor will sell such beds to Tenant, in which event (A) Lessor shall sell,
and Tenant shall purchase, such beds on the purchase offer terms specified in
Lessor’s aforesaid notice, (B) Lessor shall be entitled to retain all proceeds
from such sale and (C) Tenant shall immediately cause the delicensure of such
beds (and, if Lessor does not provide a notice to Tenant pursuant to subsection
(1) or (2) above within five (5) Business Days following Lessor’s receipt of
Tenant’s notice evidencing its desire to purchase such beds, Lessor shall be
deemed to have elected to sell such beds as provided in subsection (2) above);
and (z) if Tenant does not notify Lessor in writing of its desire to purchase
such beds as provided in subsection (x) above within ten (10) Business Days
following Tenant’s receipt of Lessor’s notice described in subsection (w) above,
Lessor shall be free to consummate the sale of such beds to the aforesaid SN
Competitor on the same terms, in all material respects, as were described in its
aforesaid notice pursuant to subsection (w) above;

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

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

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

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

Section 7.2.9 With reference to Section 7.2.7 and Section 7.2.8 hereof, Lessor
agrees that Tenant’s rights to convert licensed beds on the terms set forth in
Section 7.2.7 hereof and/or voluntary remove from service or delicense beds on
the terms set

 

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forth in Section 7.2.8 hereof do not replace Tenant’s rights to delicense beds
as and to the extent permitted by Section 16.1(m) hereof. For example, assume
that a particular SN Facility had 100 licensed beds as of the Commencement Date,
that, for purposes of this example, at all times the Permissible Reduction
Percentage applicable to such Facility is 10% (so that, pursuant to
Section 16.1(m) hereof, a reduction in the number of licensed beds to 90 beds
would not cause a default under Section 16.1(m)), that such SN Facility is not
listed on Schedule 16.1(m)B hereof and that the minimum number of non-banked
skilled nursing care beds that is required at such SN Facility as set forth on
Schedule 7.2.8 is 95 beds. If, in accordance with the terms of Section 7.2.8
hereof, the number of licensed beds at such SN Facility is reduced to 95 beds,
neither Section 7.2.7 nor Section 7.2.8 hereof would prohibit Tenant, pursuant
to Section 16.1(m) hereof, from thereafter allowing an additional 5 beds to be
delicensed. On the other hand, if Tenant first allowed 5 beds to be delicensed
pursuant to Section 16.1(m) hereof, Tenant could not thereafter proceed under
Section 7.2.8 hereof if such proceeding would result in the loss of licensure of
any bed, as 95 beds is the minimum as described above (but Tenant could still
allow the number of beds to be further reduced from 95 beds to 90 beds pursuant
to Section 16.1(m), without causing a default under such Section 16.1(m)).

Section 7.3 Granting of Easements, etc.

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

 

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Section 7.3.2 Notwithstanding anything to the contrary contained in
Section 7.3.1, Section 8.3 and Section 24.1 or elsewhere in this Lease, in the
case of any easement or license for a cell tower, antenna, satellite dish or
other telecommunications equipment, a parking lot or a billboard or other
signage (a) that is entered into pursuant to Section 7.3.1 hereof at the written
request of Lessor and (b) from which profit is generated and all of such profit,
and any reimbursements of out of pocket costs and expenses incurred by Lessor in
connection therewith, are payable to Lessor, without any obligation of Lessor to
pay, or credit, any of the same to Tenant, (i) Tenant shall be obligated under
this Section 7.3, Section 8.3 and Section 24.1 and the other provisions of this
Lease only to refrain from taking, and to prevent its assignees and sublessees,
and the agents, employees, contractors, invitees, licensees and concessionaires
of Tenant and its assignees and sublessees, from taking, any action that would
cause or result in a breach, default, violation or termination of any such
easement or license and (ii) Lessor shall protect, indemnify, save harmless and
defend Tenant from and against all out of pocket costs and expenses (including,
without limitation, Litigation Costs), to the maximum extent permitted by law,
incurred by Tenant due to any liabilities, obligations, claims, damages,
penalties or causes of action asserted against Tenant primarily by reason of any
such easement or license and not arising due to any breach by Tenant of its
obligations under subsection (i) above.

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

ARTICLE VIII

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

Section 8.1.1 Authorization Non-Compliance. In the event that Tenant shall
receive notice from any federal, state or local agency or authority that Tenant
is not in compliance with any material Legal Requirement, license, permit,
approval, certificate of need, certification for reimbursement under Medicare or
Medicaid (with respect to any Facility that participates in such programs) or
other Authorization, Tenant shall promptly send notice to Lessor and Tenant
shall either (a) remedy any condition causing such noncompliance within any cure
period allowed therefor by the applicable agency or authority (or, if no such

 

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cure period shall be allowed or specified by the applicable agency or authority,
promptly and diligently following Tenant’s receipt of such notice and, in any
event, prior to the final unappealable revocation of any license, permit,
approval, certificate of need, certification for reimbursement or other
Authorization) or (b) prior to the expiration of such cure period (or if no such
cure period shall be allowed or specified by the applicable agency or authority,
promptly following receipt of such notice and, in any event, prior to the final
unappealable revocation of any license, permit, approval, certificate of need,
certification for reimbursement or other Authorization), commence appropriate
proceedings to contest such notice, and, thereafter, diligently pursue such
contest until there is a final unappealable determination, all in accordance
with the provisions of Section 8.2 and Section 12.1 hereof.

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

 

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keeps Lessor informed, and provides additional documentation and information,
relative to such contest as described above. Following the final unappealable
determination of any such proceeding adversely to Lessor or Tenant, Tenant shall
comply with all requirements of such determination in accordance with
Section 12.1(g).

Section 8.3 Permitted Encumbrances.

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

Section 8.3.2 If (a) a Permitted Encumbrance breach or default of the nature
described in Section 8.3.1(a) above occurs, and (b) on account thereof, if the
same is not cured, the condition referenced in Section 8.3.1(c) above would, or
is likely to, be satisfied, Tenant agrees that, notwithstanding anything to the
contrary contained in Section 17.1 below or elsewhere in this Lease, Lessor may,
but shall not be obligated to, in its

 

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discretion and regardless of whether Tenant is proceeding to cure, or attempting
to cure, the Permitted Encumbrance breach or default referenced in
Section 8.3.1(a) above or whether the cure period referenced in Section 8.3.1(b)
above has expired or is likely to expire before completion of necessary cure
efforts, take such actions as it deems necessary or appropriate to attempt to
cure such Permitted Encumbrance breach or default, provided, however, that, if
the breach or default referenced in subsection (a) above has applicable thereto,
by the express terms of the applicable Permitted Encumbrance, a stated period to
cure the same, Lessor agrees not to commence to cure such breach or default
unless and until one-half (1/2) of the aforesaid stated cure period has elapsed.
If Lessor so proceeds to attempt to cure any such Permitted Encumbrance breach
or default, Tenant agrees, within fifteen (15) days following receipt of a
written demand therefor and reasonable supporting documentation, to reimburse
Lessor for the reasonable amount of all costs and expenses incurred by Lessor in
curing, or attempting to cure, any such Permitted Encumbrance breach or default.

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

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

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

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

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

 

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

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

Section 8.6 Liability for Losses. Notwithstanding anything to the contrary
contained herein or in the Section 25.1.12(f) Guaranty to the contrary, Lessor
and its Affiliates may not collect any direct, consequential, punitive or other
type of damages from Tenant or any Section 25.1.12(f) Guarantor solely due to
any breach of Section 8.4 or Section 8.5, provided, that, notwithstanding such
damages limitation, Tenant hereby acknowledges that any breach of Section 8.4 or
Section 8.5 shall constitute an Event of Default hereunder to the extent and at
the times provided for herein, and, upon the occurrence of any such Event of
Default, Lessor shall have and retain all rights and remedies under this Lease,
including, without limitation, damages claims, on account of any such Event of
Default (exclusive of any right to collect damages solely due to a breach of
Section 8.4 or Section 8.5). For example, if a breach occurs under Section 8.4
or Section 8.5 hereof and an Event of Default occurs on account thereof,
although Lessor may not collect damages from Tenant or a Section 25.1.12(f)
Guarantor solely on account thereof as described above, because of the
occurrence of an Event of Default, Lessor shall have, and retain, all rights and
remedies relative to acceleration of rent, collection of rental deficiencies,
dispossession of Tenant, termination of the Lease as it relates to a Leased
Property(ies), collection of Litigation Costs and collection of damages due to,
for example, the termination of this Lease as it relates to a Leased
Property(ies) or the condition of a Leased Property(ies) upon any such
termination or a breach of a surviving indemnification obligation following any
such termination, and all other rights and remedies (exclusive of any right to
collect damages solely due to a breach of Section 8.4 or Section 8.5 hereof),
that would be available to Lessor if the breach that resulted in an Event of
Default arose other than due to a breach of Section 8.4 or Section 8.5.

ARTICLE IX

Section 9.1 Maintenance and Repair.

(a) Tenant, at its expense, shall keep each Leased Property and all private
roadways, sidewalks and curbs appurtenant thereto and which are under Tenant’s
control (and Tenant’s Personal Property) in good order and repair, reasonable
wear and tear excepted (whether or not the need for such repairs occurs as a
result of Tenant’s use, any prior use, the elements or the age of such Leased
Property, Tenant’s Personal Property, or any portion thereof), and, except as
otherwise provided in ARTICLE XIV, shall promptly make all

 

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necessary and appropriate repairs and replacements thereto, of every kind and
nature, whether interior or exterior, structural or non-structural, ordinary or
extraordinary, foreseen or unforeseen or arising by reason of a condition
existing prior to the commencement of the Term (concealed or otherwise). All
repairs shall, to the extent reasonably achievable, be made in good, workmanlike
and first-class manner, in accordance with all applicable federal, state and
local statutes, ordinances, by-laws, codes, rules and regulations relating to
such work. Tenant will not take or omit to take any action the taking or
omission of which might materially impair the value or usefulness of the
applicable Leased Property or any part thereof for its Primary Intended Use.

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

(c) Except as expressly set forth in this Lease, nothing contained in this Lease
and no action or inaction by Lessor shall be construed as (i) constituting the
consent or request of Lessor, express or implied, to any contractor,
subcontractor, laborer, materialman or vendor to or for the performance of any
labor or services or the furnishing of any materials or other property for the
construction, alteration, addition, repair or demolition of or to any Leased
Property or any part thereof, or (ii) giving Tenant any right, power or
permission to contract for or permit the performance of any labor or services or
the furnishing of any materials or other property in such fashion as would
permit the making of any claim against Lessor in respect thereof or to make any
agreement that may create, or in any way be the basis for, any right, title,
interest, lien, claim or other encumbrance upon the estate of Lessor in any
Leased Property, or any portion thereof.

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

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

Section 9.2 Encroachments. If any of the Leased Improvements on any Leased
Property shall, at any time, encroach upon any property, street or right-of-way
adjacent to such Leased Property, then, promptly upon the request of Lessor or
at the behest of any person affected by any such encroachment, Tenant

 

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

ARTICLE X

Section 10.1 Construction of Capital Alterations to the Leased Property(ies).
Tenant shall not, without the prior written consent of Lessor, which consent,
except as expressly set forth below relative to tie in/connecting Capital
Alterations of the nature described below, shall not be unreasonably withheld,
delayed or conditioned, construct or install Capital Alterations on any Leased
Property. In the event that Tenant wishes to construct or install any Capital
Alteration, Tenant shall submit to Lessor in writing a proposal setting forth in
reasonable detail such Capital Alteration and shall provide to Lessor for
approval such plans and specifications, permits, licenses, contracts,
construction schedules, construction budgets and other information concerning
the proposed Capital Alteration as Lessor may reasonably request showing in
reasonable detail the scope and nature of the Capital Alteration that Tenant
desires to construct (collectively the “Plans and Specifications”). It is the
intent of the parties hereto that the level of detail shall be comparable to
that which is referred to in the architectural profession as “design development
drawings” as opposed to working or biddable drawings. Without limiting the
generality of the foregoing, such proposal shall indicate the approximate
projected cost of constructing such Capital Alteration and the use or uses to
which it will be put. In the event that Lessor consents in writing to any
Capital Alteration, prior to commencing construction of any Capital Alteration,
Tenant shall first request Lessor to provide funds to pay for such Capital
Alteration in accordance with the provisions of Section 10.3. If Lessor declines
or is unable to provide such financing on terms acceptable to Tenant, Tenant
shall provide to Lessor, prior to commencement of any construction, proof
reasonably acceptable to Lessor that Tenant has sufficient capital to complete
the construction. Furthermore, no Capital Alteration shall be made which would
tie in or connect any Leased Improvements on a Leased Property with any other
improvements on property adjacent to such Leased Property (and not part of the
Land covered by this Lease) including, without limitation, tie-ins of buildings
or other structures or utilities, unless Tenant shall have obtained the prior
written approval of Lessor, which

 

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approval in Lessor’s sole discretion may be granted, withheld, delayed or
conditioned. Tenant shall reimburse Lessor for all reasonable costs and expenses
incurred by Lessor in reviewing the proposal and the Plans and Specifications
for a Capital Alteration and for inspecting the applicable Leased Property and
otherwise monitoring the construction of the Capital Alteration, including,
without limitation, the reasonable cost of engaging consultants to assist Lessor
in connection with any or all of the foregoing.

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

Section 10.3 Capital Alterations Financed by Lessor.

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

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

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

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

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

(iv) an amendment to this Lease, duly executed and acknowledged, in form and
substance reasonably satisfactory to Lessor and Tenant, providing for (1) any
change in the Rent that is set forth in Lessor’s offer to finance and accepted
by Tenant,

 

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any change in the legal description of the Land, and any change in Exhibit C
hereof (including any and all allocations of Rent and Transferred Property
Percentages contained therein) that is appropriate on account of any change in
the Rent as aforesaid (specifically, Lessor’s and Tenant’s agreed upon changes
to the Base Rent allocable to the affected Leased Property(ies), if any, shall
be incorporated into an amended Exhibit C, and the Transferred Property
Percentages allocable to all of the Leased Properties shall then be recalculated
and incorporated into such amended Exhibit C) and (2) any other Lease amendments
as may be necessary or appropriate;

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

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

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

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

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

(c) Upon making a request to finance a Capital Alteration, if and when such
financing is actually consummated, Tenant shall pay or agree to pay all
reasonable costs and expenses of Lessor and any Lending Institution which has
committed to finance such Capital Alteration paid or incurred by them in
connection with the financing of the Capital Alterations, including, but not
limited to, (i) the reasonable fees and expenses of their respective counsel,

 

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(ii) all printing expenses, (iii) the amount of any filing, registration and
recording taxes and fees, (iv) documentary stamp taxes, if any, (v) title
insurance and survey charges, appraisal fees, if any, and rating agency fees, if
any, (vi) any other applicable consulting fees (including without limitation
engineering and environmental), and (vii) commitment fees, if any.

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

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

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

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

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

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

(d) Intentionally omitted.

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

 

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

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

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

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

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

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

ARTICLE XI

Section 11.1 Liens. Subject to the provisions of ARTICLE XII relating to
permitted contests, Tenant will not directly or indirectly create or allow to
remain and will promptly discharge at its expense any lien, encumbrance,
attachment, title retention agreement or claim upon any Leased Property or any
attachment, levy, claim or encumbrance in respect of the Rent, not including,
however, (a) Permitted Encumbrances, (b) restrictions, liens and other
encumbrances which are consented to in writing by Lessor, or any easements
granted pursuant to the provisions of this Lease, (c) liens for those taxes of
Lessor which Tenant is not required to pay hereunder, (d) subleases permitted by
ARTICLE XXV, (e) liens for Impositions or for sums resulting from noncompliance
with Legal Requirements so long as (1) the same are not yet payable or are
payable without the addition of any fine or

 

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penalty or (2) such liens are in the process of being contested as permitted by
ARTICLE XII, (f) liens of mechanics, laborers, materialmen, suppliers or vendors
for sums either disputed in good faith or not yet due, provided that (1) the
payment of such sums shall not be postponed under any related contract for more
than sixty (60) days after the completion of the action giving rise to such lien
and such reserve or other appropriate provisions as shall be required by law or
GAAP shall have been made therefor or (2) any such liens are in the process of
being contested as permitted by ARTICLE XII, and (g) any liens which are the
responsibility of Lessor pursuant to the provisions of ARTICLE XXXVIII.
Notwithstanding the foregoing, Tenant shall bond over any lien affecting the
applicable Leased Property if Lessor shall reasonably request, or if any
applicable Facility Mortgagee shall so require.

ARTICLE XII

Section 12.1 Permitted Contests. Tenant, on its own or on Lessor’s behalf (or in
Lessor’s name), but at Tenant’s expense, may contest, by appropriate legal
proceedings conducted in good faith and with due diligence, the amount or
validity or application, in whole or in part, of any Imposition or any Legal
Requirement or any lien, attachment, levy, encumbrance, charge or claim not
otherwise permitted by ARTICLE XI, provided that (a) in the case of an unpaid
Imposition, lien, attachment, levy, encumbrance, charge, or claim, the
commencement and continuation of such proceedings shall suspend the collection
thereof from Lessor and from the applicable Leased Property, (b) neither the
applicable Leased Property nor any Rent therefrom nor any part thereof or
interest therein would be reasonably likely to be in danger of being sold,
forfeited, attached or lost, (c) in the case of a Legal Requirement, Lessor
would not be in any immediate danger of criminal liability for failure to comply
therewith pending the outcome of such proceedings and the contest provisions of
Section 8.2 have been satisfied, (d) Tenant shall indemnify and hold harmless
Lessor from and against any cost, claim, damage, penalty or reasonable expense,
including reasonable attorneys’ fees, incurred by Lessor in connection therewith
or as a result thereof, (e) in the case of a Legal Requirement and/or
Imposition, lien, encumbrance or charge, Tenant shall give such reasonable
security as may be demanded by Lessor to insure ultimate payment of or
compliance with the same and to prevent any sale or forfeiture of the affected
Leased Property or the Rent by reason of such non-payment or non-compliance,
provided, however, the provisions of this ARTICLE XII shall not be construed to
permit Tenant to contest the payment of Rent (except as to contests concerning
the method of computation or the basis of levy of any Imposition or the basis
for the assertion of any other claim) or any other sums payable by Tenant to
Lessor hereunder, (f) in the case of an Insurance Requirement, the coverage
required by ARTICLE XIII shall be maintained, and (g) if such contest is
resolved against Lessor or Tenant by a final unappealable determination, Tenant
shall, as Additional Charges due hereunder, pay to the appropriate payee the
amount required to be paid, together with all interest and penalties accrued
thereon, within ten (10) days after such determination (or within such shorter
period as may be required by the terms of such determination), and comply,
within any cure period allowed therefor by the applicable agency or authority
(or if no such cure period shall be allowed or specified by the applicable
agency or authority, promptly and diligently following the effective date of
such determination and, in any event, prior to the final unappealable revocation
of any license, permit, approval,

 

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certificate of need, certificate for reimbursement or other Authorization), with
the applicable Legal Requirement, Insurance Requirement, plan of correction or
other remedial requirements of the applicable agency or authority; provided,
however, that this subsection (g) is not intended, and shall not be construed,
to afford Tenant any cure or grace period beyond the effective date of any final
unappealable determination, unless and only to the extent that (i) such
determination specifically conditions the imposition or taking effect of the
adverse legal, regulatory or other consequences in issue upon Tenant’s failure
to make a specified payment or to take specified compliance, curative or
remedial action following the effective date of such determination or
(ii) Tenant is proceeding diligently and in good faith to effect an assignment
or sublet under Section 25.1.11 hereof and the applicable agency(ies) or
authority(ies) is not enforcing such final order, pending consummation of such
assignment or sublet. Lessor, at Tenant’s expense, shall execute and deliver to
Tenant such authorizations and other documents as may reasonably be required in
any such contest, and, if reasonably requested by Tenant or if Lessor so
desires, Lessor shall join as a party therein. Tenant shall indemnify and save
Lessor harmless against any liability, cost or expense of any kind that may be
imposed upon Lessor in connection with any such contest and any loss resulting
therefrom.

ARTICLE XIII

Section 13.1 General Insurance Requirements. During the Term, Tenant shall at
all times keep each Leased Property, and all property located in or on any
Leased Property, including Leasehold Improvements, Fixtures and Tenant’s
Personal Property, insured with the kinds and amounts of insurance described
below. This insurance shall be written by companies authorized to do insurance
business in the State in which the applicable Leased Property is located,
provided, however, that the insurers or reinsurers issuing policies covering
general liability and/or professional liability claims (or providing reinsurance
coverage with respect to such claims) need only to have such authorizations to
do insurance business as are required by applicable law. All companies providing
insurance required by the terms of this ARTICLE XIII (including, without
limitation, any Captive Insurance Company) must have a rating at least as high
as the rating required by any applicable Facility Mortgagee. The policies must
name as loss payee (i) the holder of any mortgage, deed of trust or other
security agreement (“Facility Mortgagee”) securing any Encumbrance placed on the
applicable Leased Property in accordance with the provisions of ARTICLE XXXVIII
(“Facility Mortgage”) by way of a standard form of mortgagee’s loss payable
endorsement or (ii) if no such Facility Mortgage encumbers the applicable Leased
Property, Lessor and, in the case of any commercial general liability and/or
umbrella liability insurance coverages, must name Lessor and any Superior
Mortgagee(s) as additional insureds. Losses shall be payable to Lessor and/or
Superior Mortgagee as provided in ARTICLE XIV. Any loss adjustment shall require
the written consent of Lessor, Tenant, Leasehold Mortgagee and Facility
Mortgagee whenever the loss exceeds twenty percent (20%) of the Facility’s Fair
Market Value. Evidence of insurance shall be deposited with Lessor and, if
requested, with any Superior Lessor, Leasehold Mortgagee and Facility
Mortgagee(s). If any provision of any Facility Mortgage requires deposits of
insurance premiums to be made with such Facility Mortgagee, Tenant shall either
pay to Lessor monthly the amounts required and Lessor shall transfer such
amounts to each

 

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Facility Mortgagee, or, pursuant to written direction by Lessor, Tenant shall
make such deposits directly with such Facility Mortgagee. The policies on each
Leased Property, including the Leasehold Improvements, and Fixtures and Tenant’s
Personal Property, shall insure against the following risks:

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

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

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

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

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

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

(For example, relative to the foregoing conditions, if occurrence based forms of
primary CGL insurance are offered in the insurance market place for for-profit
hospital and/or nursing center companies, but Tenant is unable to obtain an
occurrence based form of excess liability CGL insurance solely because
occurrence based forms of excess liability CGL

 

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

(i) continue to insure Lessor and all Facility Mortgagees and Superior Lessors
with the required amount of primary and/or excess liability, as applicable
depending upon the nature of such expiring claims made policy, CGL insurance
coverage, on a claims made policy form that includes coverage against all
so-called “incurred but not reported claims” relating to any period on or prior
to the expiration of the expiring policy (“Previous Period Unreported Claims”),
an additional ten (10) years following the expiration of such expiring claims
made policy (which coverage may be obtained, for example, (A) through the
renewal or rolling-over of a claims made based CGL policy providing the required
amounts of coverage and including coverage against Previous Period Unreported
Claims for consecutive 1-year periods for such ten (10) year period, or
(B) through the purchase of a three (3) year claims made based CGL “tail” policy
providing the required amounts of coverage and including coverage against
Previous Period Unreported Claims followed by purchases of claims made based CGL
policies providing the required amounts of coverage and including coverage
against all Previous Period Unreported Claims for consecutive 1-year periods for
the remaining seven (7) years of such ten (10) year period) (in connection with
the purchase of claims made CGL insurance coverage pursuant to this subsection
(i), any claims made CGL insurance coverage that is obtained by Tenant may
exclude therefrom any claims incurred during any period that an occurrence based
form of primary or excess liability, as applicable depending on the nature of
the expiring claims made policy, CGL insurance policy providing the required
amounts of coverage and insuring Lessor and all Facility Mortgagees and Superior
Lessors was in effect), or

 

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

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

Section 13.1.6 Intentionally Omitted;

Section 13.1.7 Intentionally Omitted;

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

Section 13.2 Replacement Cost. The term “full replacement cost,” as used herein,
shall mean the actual replacement cost of the property requiring replacement
from time to time including an increased cost of construction endorsement,
without reduction or deduction for depreciation. Tenant shall have the full
replacement cost redetermined by an accredited appraiser approved by Lessor
(which approval shall not be unreasonably withheld, delayed or conditioned),
hereinafter referred to as “impartial appraiser”, every five years during the
Term, and at such other times that either party believes that full replacement
cost has increased or decreased. Tenant shall forthwith, on receipt of such
determination by such impartial appraiser, give written notice thereof to
Lessor. The determination of such impartial appraiser shall be final and binding
on the parties hereto, and Tenant shall forthwith increase, or may decrease, the
amount of the insurance carried pursuant to this Section, as the case may be, to
the amount so determined by the impartial appraiser. Each party shall pay
one-half ( 1⁄2) of the fee, if any, of the impartial appraiser.

 

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

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

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

Section 13.6 Limits; Deductibles. In the event that either party shall at any
time deem the limits of the personal injury or property damage public liability
insurance then carried to be either excessive or insufficient or in the event
that Lessor shall at any time deem the deductible amount under any insurance
then carried by Tenant pursuant to this ARTICLE XIII to be excessive, the
parties shall endeavor to agree on the proper and reasonable limits or
deductible amount, as applicable, for such

 

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insurance to be carried; and such insurance shall thereafter be carried with the
limits or deductible amount, as applicable, thus agreed on until further change
pursuant to the provisions of this Section. If the parties shall be unable to
agree thereon, the proper and reasonable limits or deductible amount, as
applicable, for such insurance to be carried shall be determined by an impartial
third party selected by the parties. Nothing herein shall permit the amount of
insurance to be reduced below, or the deductible amount under any insurance
carried by Tenant pursuant to this ARTICLE XIII to be increased above, the
amount or amounts required by any of the Facility Mortgages or by any Superior
Lessor.

Section 13.7 Blanket Policy. Notwithstanding anything to the contrary contained
in this Section but subject to any requirements of any applicable Facility
Mortgagee, Tenant’s obligations to carry the insurance provided for herein may
be brought within the coverage of a so-called blanket policy or policies of
insurance carried and maintained by Tenant; provided, however, that the coverage
afforded Lessor will not be reduced or diminished or otherwise be different from
that which would exist under a separate policy meeting all other requirements of
this Lease by reason of the use of such blanket policy of insurance, and
provided further that the requirements of this ARTICLE XIII are otherwise
satisfied. Lessor agrees that the blanket coverage described in Schedule 13.7
attached hereto and incorporated herein will satisfy the requirements of
Section 13.1 if such coverage is in effect as of the Effective Date.

Section 13.8 No Separate Insurance. Tenant shall not on Tenant’s own initiative
or pursuant to the request or requirement of any third party, take out separate
insurance concurrent in form or contributing in the event of loss with that
required in this Article, or increase the amounts of any then existing insurance
by securing an additional policy or additional policies, unless all parties
having an insurable interest in the subject matter of the insurance, including
in all cases Lessor and all Superior Lessors and Facility Mortgagees, are
included therein as additional insureds, and the loss is payable under said
insurance in the same manner as losses are payable under this Lease. Tenant
shall immediately notify Lessor of the taking out of any such separate insurance
or of the increasing of any of the amounts of the then existing insurance by
securing an additional policy or additional policies.

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

Section 13.10 Insurance Company Ratings. Notwithstanding anything to the
contrary contained in this ARTICLE XIII, but without limitation of (a) any
rights of any Facility Mortgagee and/or Superior Lessor and/or (b) any
provisions of this ARTICLE XIII, or any other provisions of this Lease, that
require Tenant to comply with any requirements of, or satisfy, or obtain the
approval or consent of, any Facility Mortgagee and/or Superior Lessor, Lessor
agrees that (i) subject to subsection (ii) below, Lessor shall not require that
any insurance company that is providing general liability and/or professional
liability insurance required by this

 

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ARTICLE XIII have a financial strength rating higher than A-, or a financial
size category rating higher than IX, as such ratings are set forth from time to
time in the most current ratings of A. M. Best Company, provided, however, that,
if A.M. Best Company materially lowers its criteria for financial strength
and/or financial size category ratings, this Section 13.10 shall no longer
apply, and (ii) Lessor shall permit general liability and/or professional
liability insurance required by this ARTICLE XIII to be provided by a Captive
Insurance Company, but only if and to the extent that such Captive Insurance
Company, and the amount, form and all other matters relating to such insurance,
fully comply with all of the requirements of this ARTICLE XIII (other than this
Section 13.10).

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

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

(b) With respect to Tenant’s Excess CGL/PL Policies (i) for the period from
January 1, 2003 through January 1, 2006 for claims of up to $90,000,000.00 in
excess of $10,000,000.00, Tenant shall be entitled to obtain commutation return
premiums from the insurer(s) under such policies, provided and on the conditions
that, in the case of any claims, whether known claims or IBNR claims, that, if
not for the commutation referenced above, would have been covered by such
policies, Tenant shall establish and maintain cash reserves

 

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with respect to all such claims in a manner and at a monetary level that is
consistent with the most stringent of (i) subsection (a)(1)(x) above,
(ii) subsection (a)(1)(y) above and (iii) the estimated liability principles and
practices employed by Tenant and/or any Captive Insurance Company(ies) of Tenant
with respect to known claims, and IBNR claims, not covered by insurance during
the period from January 1, 2006 to December 31, 2006.

ARTICLE XIV

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

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

Section 14.2.1 If, during the Term, any Leased Property is totally or partially
destroyed from a risk covered by the insurance described in ARTICLE XIII and the
Facility located thereon is rendered Unsuitable for Its Primary Intended Use,
Tenant shall either (A) restore the Facility to substantially the same condition
as existed immediately before the damage or destruction, or (B) offer to acquire
the applicable Leased Property from Lessor for a purchase price equal to the
Fair Market Value Purchase Price of the Leased Property immediately prior to
such damage or destruction. In the event Lessor does not accept Tenant’s
aforesaid offer to purchase, Tenant may (i) withdraw its offer to purchase the
Leased Property and proceed to restore the Facility to substantially the same
condition as existed immediately

 

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before the damage or destruction or (ii) provided and on the conditions that, at
the time of such damage or destruction, Tenant had in full force and effect the
insurance required under Section 13.1.1 and Section 13.1.2 above, there exists
no defense to, or limitation upon, the insurer’s coverage of such damage or
destruction under such insurance, and Tenant pays to Lessor, on or prior to the
hereinafter described termination, the amount of any deductible or other
uninsured portion of the loss resulting from any such damage or destruction,
terminate this Lease as to such Leased Property, in which event Lessor shall be
entitled to retain the insurance proceeds.

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

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

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

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

 

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

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

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

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

 

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

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

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

ARTICLE XV

Section 15.1 Definitions.

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

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

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

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

 

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

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

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

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

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

Section 15.6 Award-Distribution.

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

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

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

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

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

 

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Section 15.7 Temporary Taking. The taking of any Leased Property, or any part
thereof, by military or other public authority shall constitute a taking by
condemnation only when the use and occupancy by the taking authority has
continued for longer than six (6) months. During any such six (6) month period
all the provisions of this Lease shall remain in full force and effect and Base
Rent shall not be abated or reduced during such period of taking.

ARTICLE XVI

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

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

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

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

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

(e) any Guarantor shall fail to observe or perform any term, covenant or
agreement on its part to be performed or observed pursuant to any Lease
Guaranty, and such failure shall not be cured within any applicable cure period
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(f) there shall occur a final unappealable determination by applicable federal,
state or local authorities of Tenant’s non-compliance with Legal Requirements
applicable to a Facility located on any Leased Property, or of the revocation of
any license, permit, approval or other Authorization (including, without
limitation, any certificate of need) required for the lawful operation of the
Facility located on any Leased Property in accordance with its Primary Intended
Use, or any other circumstances under which Tenant is required by a final
unappealable determination of any such authority to cease operations of such
Facility in accordance with its Primary Intended Use as currently operated
(provided, however, that, without limitation of Section 12.1(g) hereof, before
any such determination becomes final and unappealable, Tenant shall have the
right to contest the same in accordance with Section 8.1.1, Section 8.2 and
Section 12.1(a)-(f) hereof), or

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

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

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

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

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

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

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

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

 

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any of the actions set forth above in this subsection (i) (this subsection
(i) shall not apply to the appointment of a receiver, trustee, custodian or
other similar official in any proceeding(s) other than bankruptcy,
reorganization, insolvency and other creditors’ rights proceedings of the nature
referenced in this subsection (i)), or

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

(k) if the estate or interest of Tenant in any Leased Property or any part
thereof shall be levied upon or attached in any proceeding and the same shall
not be vacated or discharged within the later of ninety (90) days after
commencement thereof or 30 days after receipt by Tenant of notice thereof from
Lessor, (unless Tenant shall be contesting such lien or attachment in good faith
in accordance with ARTICLE XII hereof), or

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

(m) Subject to Section 16.10 hereof:

(i) Subject to subsection (iv) below, an Event of Default shall occur hereunder
if the number of licensed beds for any Facility is reduced by more than the
Permissible Reduction Percentage (as hereinafter defined) applicable to such
Facility of the number of licensed beds in such Facility on the Commencement
Date (which number of licensed beds, as of the Commencement Date and after
adjusting for the effect of subsection (m)(i)(1) below, Tenant represents and
warrants to Lessor is as set forth in Schedule 16.1(m)A attached hereto and made
a part hereof) (provided, however, that, (1) for purposes of this subsection
(m), in the case of the Leased Property known as Kindred Hospital – Chicago
North (Facility No. 4637), the number of licensed beds in the Facility at such
Leased Property on the Commencement Date shall be deemed to equal one hundred
sixty five (165), (2) intentionally omitted, and (3) the voluntary removal from
service (so called “bed banking” or “banking”) of not more than twenty-five
percent (25%) of the number of licensed beds in a particular Facility on the
Commencement Date shall not constitute a reduction of licensed beds for purposes
of this subsection (m), if and for so long as, for purposes of this subsection
(3), (a) any such beds that are voluntarily removed from service by Tenant are
removed from service with the approval of all applicable governmental
authorities, (b) such beds continue to be considered “licensed beds” by the
applicable governmental

 

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authorities, (c) after diligent inquiry relative to the applicable Legal
Requirements and after consultation with its legal counsel, Tenant is not aware
of any reason why the applicable regulatory authorities would not authorize such
reintroduction by Tenant or any successor operator at the end of the bed banking
period, in the discretion of Tenant or such successor operator, as applicable,
and without the necessity of any governmental approval or reapproval or
additional Authorization (other than routine governmental re-inspections of such
Facility(ies) and any ministerial approvals, re-approvals or other
Authorizations), and (d) at the time, and as a condition, of any such voluntary
removal and thereafter within twenty (20) days after receipt of a written
request therefor from Lessor from time to time (but not more often than twice in
any calendar year, unless, after Lessor has made two (2) such requests in a
calendar year, a change(s) in Legal Requirements becomes effective, or Lessor
obtains knowledge of other facts or circumstances, suggesting a possible
violation of subsection (a), (b) or (c) above or of the other provisions of this
Section 16.1(m)), Tenant shall deliver to Lessor a Senior Officer’s Certificate,
in form and substance reasonably satisfactory to Lessor, certifying that Tenant
has made diligent inquiry relative to the applicable Legal Requirements and has
consulted with its legal counsel and, based on the foregoing, certifies that
Tenant has complied, and continues to be in compliance, with the provisions of
subsections (a), (b) and (c) above and the other provisions of this
Section 16.1(m)); and

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

 

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licensed beds at such Facility, the “Permissible Reduction Percentage”
applicable to such Facility would equal five percent (5%) (i.e., under
subsection (m)(ii)(2) above, 25%-20%=5%). Also, for example, if a particular
Facility listed on Schedule 16.1(m)B had, as of the Commencement Date, 120
licensed beds, such Facility had not lost any licensed beds other than 38
licensed beds lost through an involuntary reduction that complies with
subsection (m)(iii) below (so that, as of a particular date, such Facility has
82 licensed beds), and Schedule 16.1(m)B sets forth 80 licensed beds in the
“Minimum Number of Licensed Beds” column as it applies to such Facility and 76
licensed beds in the “95% of Minimum” column as it applies to such Facility, the
percentage referenced in the foregoing subsection (m)(ii)(z) would equal 7.317%
(82 licensed beds minus 76 licensed beds equals 6 licensed beds and 6 licensed
beds divided by 82 licensed beds equals 7.317%, which is greater than the 5.0%
referenced in subsection (m)(ii)(z)(A) above); and

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

 

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

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

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

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

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

(q) subject to Section 16.10 hereof, there shall occur a revocation of
certification for reimbursement under Medicare or Medicaid with respect to any
Facility that participates in such programs and, within one hundred twenty
(120) days following such revocation, Tenant fails to have its aforesaid
certification fully restored (provided, however, that Tenant shall be given an
additional sixty (60) days beyond the aforesaid one hundred twenty (120) day
period to have its aforesaid certification fully restored if, on or prior to the
aforesaid one hundred

 

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twentieth (120th) day, Tenant delivers to Lessor a Senior Officer’s Certificate,
in form and substance reasonably satisfactory to Lessor, certifying that (i) the
only requirement that remains unsatisfied in order for Tenant to have its
aforesaid certification fully restored is a re-inspection of the applicable
Facility by the applicable regulatory authority, and (ii) Tenant has made
diligent inquiry relative to the applicable Legal Requirements and has consulted
with its legal counsel and, based on the foregoing, certifies that Tenant is not
aware of any reason why Tenant will not pass its aforesaid re-inspection, or why
Tenant’s aforesaid certification will not be fully restored, in each case within
the aforesaid additional sixty (60) day period), or

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

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

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

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

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

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

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

(y) a Financial Covenant Default shall have occurred, or

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

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

 

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Upon the occurrence of any Event of Default, Lessor may, at its option,
terminate this Lease (i) in the case of any Event of Default, as to all Leased
Properties and/or (ii) if such Event of Default is a Facility Default, as to any
of the Leased Property(ies) to which such Event of Default relates, by giving
not less than ten (10) days’ notice of such termination and upon the expiration
of such 10-day period or other time period fixed in such notice, if any, during
which 10-day or other time period Tenant shall have no right to cure the Event
of Default in question, the Term shall terminate as to all Leased Properties or
as to the Leased Property(ies) to which such Event of Default relates, as
specified in such notice, all rights of Tenant under this Lease shall cease as
to the Leased Property(ies) so specified, and, if the Leased Property(ies) so
specified are less than all of the Leased Properties, the provisions of
Section 40.16 hereof shall apply. Lessor shall have all rights at law and in
equity available to Lessor as a result of Tenant’s breach of this Lease, subject
to Section 16.10.

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

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

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

(A) the sum of:

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

 

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

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

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

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

 

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

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

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

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

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

Section 16.10 Special Remedies Provisions. The intention of this Section 16.10
is to set forth certain special provisions applicable to Events of Default under
Section 16.1(m) and/or Section 16.1(q) of this Lease and to Lessor’s rights and
remedies upon the occurrence of such Events of Default.

 

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This Section 16.10 has no application to other Events of Default under this
Lease and is not intended to alter or limit Lessor’s rights and remedies with
respect to such other Events of Default or, except as specifically set forth in
this Section 16.10, for any other purpose. Subject to the foregoing, Lessor and
Tenant agree that, notwithstanding anything to the contrary contained in this
Lease:

Section 16.10.1 For purposes of this Lease, subject to Section 16.10.3.1 and
Section 16.10.3.2 below, references to the “Section 16.10.1 Number” shall, as of
a particular date, mean and refer to (a) the number 1 (if the number of Leased
Properties as to which this Lease remains in full force and effect as of such
date equals twenty (20) or less), (b) the number 2 (if the number of Leased
Properties as to which this Lease remains in full force and effect as of such
date equals between twenty-one (21) and forty (40), both inclusive), or (c) the
number 3 (if the number of Leased Properties as to which this Lease remains in
full force and effect as of such date equals forty-one (41) or more).

Section 16.10.2

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

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

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

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

 

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more Leased Properties, Lessor shall be entitled to exercise all rights and
remedies available to it under this Lease on account of any then continuing
Event of Default under Section 16.1(m) and/or Section 16.1(q), provided that
Lessor may only exercise termination and/or dispossession rights and remedies on
account of such Section 16.1(m) and/or Section 16.1(q) Event(s) of Default
against either (i) any one or more of the Leased Properties to which such
Event(s) of Default relate or (ii) all Leased Properties covered by this Lease.

Section 16.10.2.3 For purposes of Section 4.1, Section 16.1(m), Section 16.1(q),
Section 16.10, Section 17.1, Section 19.1, Section 25.1.1, Section 25.1.2 and
Section 25.1.3 of this Lease, if an Event of Default shall occur under
Section 16.1(m) and/or Section 16.1(q) of this Lease, except as otherwise agreed
in writing by Lessor, in its sole and absolute discretion, the same shall be
deemed to be “continuing” at all times from and after the date that such Event
of Default first arises (including, without limitation, at all times from and
after the date that Lessor terminates this Lease as it applies to the Leased
Property to which the aforesaid Event of Default relates or dispossesses Tenant
from such Leased Property), unless, prior to the date that Lessor terminates
this Lease as it applies to the Leased Property to which the aforesaid Event of
Default relates or dispossesses Tenant from such Leased Property, such Event of
Default is cured “in-kind” by rectifying and reversing the particular event,
circumstance or condition that constitutes or causes such Event of Default;
provided (the “Section 16.10.2.3 Proviso”), however, that, if the applicable
Section 16.10.1 Number, as determined pursuant to Section 16.10.1 above, equals
two or more, if (a) an Event of Default of the nature referenced in
Section 16.1(m) and/or Section 16.1(q) of this Lease has occurred and is
continuing (as described above) with respect to fewer than the Section 16.10.1
Number of the Leased Properties and (b) Lessor has terminated this Lease as it
applies to a Leased Property to which an aforesaid Event of Default relates or
has dispossessed Tenant from such Leased Property, then, for purposes of
Section 4.1, Section 17.1, Section 25.1.1, Section 25.1.2 and Section 25.1.3,
the aforesaid Event of Default relating to such Leased Property shall not be
deemed to be “continuing” as to Leased Properties other than such terminated or
dispossessed Leased Property; in such event, the rights and remedies available
to Lessor or the limitation of Tenant’s rights under such sections which arise
in the case of a continuing Event of Default shall apply only to the Leased
Property on which the Event of Default under Section 16.1(m) and/or
Section 16.1(q) has occurred, as illustrated by Examples 5, 6 and 7 of
Section 16.10.5 below.

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

 

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

Section 16.10.3.1 Notwithstanding Section 16.10.1 above, if (a)(i) a New Lease
under Section 40.15 hereof (other than a New Lease that is a Separate Lease
created under Section 22.7 hereof) is created from this Lease or (ii) this Lease
constitutes a New Lease created under Section 40.15 of another lease demising
any of the Master Lease Leased Properties (other than a New Lease that is a
Separate Lease created under Section 22.7 of such other lease) and (b) as of the
date immediately prior to such New Lease creation transaction (a
“Section 16.10.3.1 New Lease Transaction”), under this Lease (if subsection
(a)(i) above is applicable) or the other lease referenced in subsection (a)(ii)
above (if subsection (a)(ii) above is applicable) one or more Events of Default
of the nature referenced in Section 16.1(m) and/or Section 16.1(q) of such lease
had occurred and were continuing (as described in Section 16.10.2.3 hereof or of
such other lease, as applicable) with respect to any of the Master Lease Leased
Properties covered hereby or thereby, as applicable, then, the Section 16.10.1
Number that would otherwise apply to this Lease, but for the terms of this
Section 16.10.3.1, shall be increased by one (1) if and only if all of the
following conditions are met relative to this Lease:

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

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

 

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

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

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

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

 

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

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

 

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Properties, if any, as to which, following such lease combination transaction,
Tenant will continue to have an available and exercisable purchase option under
Section 16.12 exceeds one (1), then the Section 16.10.1 Number applicable to
this Lease shall be adjusted to equal the Subsection Z Number plus one (1)).

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

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

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

 

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

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

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

 

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Property A will, for all purposes of Section 16.10 and Section 19.1(b) of such
remaining lease, be counted as a leased property as to which a Section 16.1(m)
Event of Default had occurred and was continuing the same as if a
Section 16.1(m) Event of Default had occurred and was continuing under such
remaining lease relative to a Master Lease Leased Property included in such
remaining lease.

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

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

 

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

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

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

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

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

 

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

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

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

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

 

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

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

Section 16.12.1

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

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

 

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

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

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

Section 16.12.2 If (a) an Event of Default under Section 16.1(m) and/or
Section 16.1(q) of this Lease has occurred and is continuing (as described in
Section 16.10.2.3 hereof) with respect to a number of the Leased Properties
covered by this Lease that equals or exceeds the Section 16.10.1 Number that is
applicable to this Lease and (b) Lessor intends to exercise termination and/or
dispossession rights and remedies against all Leased Properties covered by this
Lease on account of such Event(s) of Default and (c) no Events of Default (other
than Section 16.1(m) and/or Section 16.1(q) Events of Default) have occurred and
are continuing under this Lease, then, unless (i) Tenant has previously
exhausted its available purchase option(s) (as described in Section 16.12.1.1 or
Section 16.12.1.2, as applicable, above) or (ii) if Tenant has any remaining
purchase option(s), by exercising the same Tenant would not be able to reduce
the number of Leased Properties as to which an Event of Default under
Section 16.1(m) and/or Section 16.1(q) of this Lease has occurred and is
continuing (as described in Section 16.10.2.3 hereof) to a number fewer than the
Section 16.10.1 Number that is applicable to this Lease:

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

 

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

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

Section 16.12.3 If Tenant exercises a purchase option relative to a particular
Leased Property(ies), the closing with respect thereto will occur within
forty-five (45) days of Tenant’s receipt of the applicable Section 16.12 Notice.
At such closing, Lessor will, by special warranty deed (or, if a particular
Leased Property is subject to an Existing Ground Lease, by a special warranty
assignment, rather than a special warranty deed), convey to Tenant or its
designee all of Lessor’s right, title and interest in the subject Leased
Property(ies) (or, if a particular Leased Property is subject to an Existing
Ground Lease, in the subject Existing Ground Lease), subject to the Permitted
Encumbrances, and will cause to be released any Facility Mortgage(s) or other
liens created by Lessor or its agents or employees relative to the subject
Leased Property(ies) (and, if Lessor is unable to cause such release(s) as of
the initially scheduled closing date, the closing date shall be extended as
necessary to allow Lessor additional time to cause such release(s)), and Tenant
will pay in cash, to or as directed by Lessor, the purchase price therefor, as
described in Section 16.12.5 below, subject, if applicable as described below,
to a credit against the purchase price in favor of Tenant and in the amount, if
any, described below. Such conveyance will be on an “AS IS”, “WITH ALL FAULTS”
basis and without any representation or warranty (except as set forth in the
aforesaid special warranty deed (or, if applicable as described above, the
aforesaid special warranty assignment)). If consummation of any such conveyance
would result in a violation or breach of any Existing Ground Lease or other
Permitted Encumbrance, or of the terms or conditions of any applicable
Authorization or reimbursement or provider agreement, Tenant shall be obligated,
at its expense and as a condition to Lessor’s obligation to close, to obtain, in
form and substance reasonably satisfactory to Lessor, any consents or approvals
as may be necessary to avoid any such violation or breach. At such closing,
Tenant shall execute and deliver to Lessor an instrument pursuant to which
Tenant shall represent and warrant to, and covenant with, Lessor that (a) Tenant
is purchasing the subject Leased Property(ies) with the

 

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intention of selling the same and (b) Tenant’s acquisition from Lessor will
qualify as an acquisition of assets “solely for rental or investment purposes”
that is exempt from the notification and waiting period requirements of the
Hart-Scott-Rodino Act, as amended (15 U.S.C. §18a et. seq.) under (16 C.F.R.
§802.5). Upon the occurrence of such closing, this Lease will terminate, in
accordance with Section 40.16, insofar as it applies to the purchased Leased
Property(ies), but all accrued obligations, or obligations that survive
termination, with respect to the purchased Leased Property(ies) shall survive
such termination. Relative to the foregoing, if Tenant closes with respect to a
particular Leased Property strictly in accordance with the terms and conditions
provided in this Section 16.12, and, prior to such closing, Lessor has sued, and
collected damages from, Tenant on account of a Section 16.1(m) and/or
Section 16.1(q) Event of Default relative to such Leased Property, Tenant shall
be entitled to a credit against the purchase price for such Leased Property
equal to a sum, not to exceed the purchase price, equal to (a) the amount of the
damages so collected by Lessor from Tenant in the aforesaid lawsuit, less
(b) the amount of all attorneys’ fees, court costs, witness fees and other costs
and expenses incurred by Lessor in connection with such lawsuit or
Section 16.1(m) and/or Section 16.1(q) Event of Default.

Section 16.12.4 If Tenant exercises a purchase option relative to a Leased
Property(ies), and closes with respect thereto strictly in accordance with the
terms and conditions provided in this Section 16.12, then, for purposes of
Section 16.1 and Section 16.10 of this Lease, the Section 16.1(m) and/or
Section 16.1(q) Event of Default relative to the purchased Leased Property(ies)
will be deemed to have been cured (but without limitation of Lessor’s indemnity
rights under Section 24.1 hereof and other rights and remedies that survive the
applicable termination of this Lease that results from Tenant’s purchase of such
Leased Property(ies)), but, for purposes of Section 16.12.1.1 and
Section 16.12.1.2, Tenant will have exhausted that number of its available
purchase options as equals the number of Leased Properties as to which it has so
exercised its purchase option. If, as a result of such cure, the number of the
Leased Properties as to which an Event of Default under Section 16.1(m) and/or
Section 16.1(q) of this Lease is reduced to a number fewer than the
Section 16.10.1 Number that is applicable to this Lease, Lessor will, for so
long as such condition continues to exist, be precluded from exercising
termination and/or dispossession rights and remedies against all Leased
Properties covered by this Lease on account of the then remaining Event(s) of
Default under Section 16.1(m) and/or Section 16.1(q) of this Lease, but not on
account of any other Event of Default under this Lease.

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

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

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

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

Example 1: Assume that, within a lease of 25 Master Lease Leased Properties, no
Events of Default exist other than Events of Default under Section 16.1(m)
and/or Section 16.1(q) that have occurred and are continuing relative to
Property A and Property B and that Lessor provides a Section 16.12 Notice on
account thereof, which notice specifies Property A as the property as to which
Tenant’s one (1) available purchase option (pursuant to the number limitation
set forth in Section 16.12.1.2) shall be available. Assume further that Tenant
exercises its purchase option relative to Property A and closes its purchase of
Property A in strict accordance with the terms and conditions provided in this
Section 16.12. On account of such exercise, Tenant would have exhausted its
purchase option rights under such lease, and, on account of such purchase,
(a) the Section 16.1(m) and/or Section 16.1(q) Event of Default relative to
Property A would have been cured, leaving Property B as the only leased property
as to which a continuing Section 16.1(m) and/or Section 16.1(q) Event of Default
continues, and (b) because the Section 16.10.1 Number applicable to such lease
would equal 2, the continuation of a Section 16.1(m) and/or Section 16.1(q)
Event of Default with respect to Property B and no other leased properties would
not, pursuant to the terms of Section 16.10.2.2, be sufficient to permit Lessor
to exercise termination and/or dispossession rights and remedies against any
leased property other than Property B.

 

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

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

ARTICLE XVII

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

 

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ARTICLE XVIII

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

ARTICLE XIX

Section 19.1 Exercise of Renewal Options. Tenant is hereby granted the right to
renew this Lease, with respect to all, but not less than all, of those Leased
Properties within the applicable group as shown on Exhibit D annexed hereto
(herein, a “Renewal Group”) for three (3), 5-year option renewal terms
(collectively, the “Extended Terms” and each an “Extended Term”) upon giving
written notice to Lessor of each such renewal at least one (1) year but not more
than eighteen (18) months prior to the termination of the then current Term
applicable to such Renewal Group, provided and on the conditions that, at the
time Tenant gives a renewal notice as set forth above relative to a Renewal
Group and at the time of the commencement of the applicable Extended Term for
such Renewal Group, (a) an Event of Default (other than any Facility Defaults of
the nature referenced in Section 16.1(m) and/or Section 16.1(q) of this Lease)
shall not have occurred and be continuing (as described in Section 16.10.2.3
above) under this Lease and (b) Facility Defaults of the nature referenced in
Section 16.1(m) and/or Section 16.1(q) of this Lease shall not have occurred and
be continuing (as described in Section 16.10.2.3 above) with respect to the
Section 16.10.1 Number or more Leased Properties. Tenant may not exercise its
option for more than one Extended Term at a time. If Tenant exercises a renewal
option as aforesaid relative to a Renewal Group, Tenant may nevertheless revoke
such exercise, if and so long as the requirements of Section 19.5 below are
strictly complied with. For purposes of this Section 19.1, if an Event of
Default shall occur under Section 16.1(m) and/or Section 16.1(q) of this Lease,
whether the same is, or is deemed to be, “continuing” shall be determined as
provided in Section 16.10 above.

 

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

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

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

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

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

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

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

 

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

Section 19.5 Revocation of Renewal Option Exercise. In the event (a) Tenant
exercises a renewal option relative to a Renewal Group in accordance with
Section 19.1 above, (b) such renewal option relates to an Extended Term for such
Renewal Group other than the first Extended Term applicable to such Renewal
Group, and (c) Lessor, in accordance with Section 19.3 above, requests that Fair
Market Rental of the applicable Renewal Group, and Fair Market Rental of each
Leased Property within such Renewal Group, be determined by appraisal under the
procedures of ARTICLE XXXV hereof, Tenant may revoke its aforesaid exercise,
provided and on the condition that, whether or not the Fair Market Rental
determinations referenced in subsection (c) above have been completed, Tenant
must notify Lessor of its revocation of its aforesaid exercise not less than one
(1) year prior to the termination of the then current Term applicable to such
Renewal Group; provided, however, if Tenant gives its written renewal notice to
Lessor in accordance with Section 19.1 above on or before the date which is
seventeen (17) months prior to the termination of the then current Term
applicable to such Renewal Group, then Tenant shall have until the earlier of
(i) nine (9) months prior to the termination of the then current Term applicable
to such Renewal Group and (ii) fifteen (15) days after the date upon which the
Fair Market Rental determinations referenced in subsection (c) above have been
completed to notify Lessor of its revocation. In the event Tenant so revokes its
aforesaid exercise relative to a Renewal Group, Tenant’s remaining renewal
option(s) relative to such Renewal Group shall be deemed to have been
irrevocably waived and terminated.

ARTICLE XX

Section 20.1 Holding Over. If Tenant shall for any reason remain in possession
of any Leased Property after the expiration of the Term or earlier termination
of the Term (other than solely due to Lessor’s failure, on or prior to (a) the
ninetieth (90th) day preceding the expiration of the Term as to such Leased
Property or (b) if this Lease is terminated prior to such expiration due to
Lessor’s default, the earlier termination of the Term as to such Leased
Property, to have notified Tenant that Lessor has procured a Qualified Successor
for such Leased Property), such possession shall, at the option of Lessor in its
sole discretion as to each such Leased Property, be as a month-to-month tenant
during which time Tenant shall pay as rental each month (which rental
constitutes liquidated damages with respect to Rent, and not a penalty for the
period to which it relates), one and one-half times the aggregate of
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the end of the preceding Term and, in the case of a month-to-month tenancy as to
less than all of the Leased Properties, allocable to the Leased Property(ies) in
question in accordance with Section 16.9 hereof; (ii) all Additional Charges
accruing during the month and (iii) all other sums, if any, payable by Tenant
pursuant to the provisions of this Lease with respect to the Leased
Property(ies) in question. During such period of month-to-month tenancy, Tenant
shall be obligated to perform and observe all of the terms, covenants and
conditions of this Lease with respect to the Leased Property(ies) in question,
but shall have no rights hereunder other than the right, to the extent given by
law to month-to-month tenancies to continue its occupancy and use of the
applicable Leased Property. Subject to Section 40.3, nothing contained herein
shall constitute the consent, express or implied, of Lessor to the holding over
of Tenant after the expiration or earlier termination of this Lease.

ARTICLE XXI

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

Section 21.2 Attornment. If the interests of Lessor under this Lease are
transferred by reason of, or assigned in lieu of, foreclosure or other
proceedings for enforcement of any such Superior Mortgage, or if any Superior
Lease shall be terminated then Tenant shall, at the option of such purchaser,
assignee or any Superior Lessor, as the case may be, (x) attorn to such party
and perform for its benefit all the terms, covenants and conditions of this
Lease on Tenant’s part to be performed with the same force and effect as if such
party were the landlord originally named in this Lease, or (y) enter into a New
Lease with such party, as landlord, pursuant to Section 40.15 hereof for the
remaining Term and otherwise on the same terms and conditions of this Lease
except that such successor landlord shall not be (i) liable for any previous
act, omission or negligence of Lessor under this Lease; (ii) subject to any
counterclaim, defense or offset which theretofore shall have accrued to Tenant
against Lessor; (iii) bound by any previous modification or amendment of this
Lease or by any previous prepayment of more than one month’s rent, unless such

 

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modification, amendment or prepayment shall have been approved in writing by the
Superior Lessor or the Superior Mortgagee through or by reason of which such
successor landlord shall have succeeded to the rights of Lessor under this Lease
or, in case of any such prepayment, such prepayment of rent has actually been
delivered to such successor landlord; or (iv) liable for any security deposited
pursuant to this Lease unless such security has actually been delivered to such
successor landlord. Nothing contained in this Section shall be construed to
impair any right otherwise exercisable by any such owner, holder or lessee.

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

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

 

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Section 21.5 Existing Ground Leases.

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

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

ARTICLE XXII

Section 22.1 Notice to Lessor. If Tenant shall mortgage Tenant’s interest in one
or more Leased Properties to a Lending Institution in accordance with the terms
of this Lease, and if the holder of the Leasehold Mortgage shall provide Lessor
with a true copy of the Leasehold Mortgage and the name and address of the
Leasehold Mortgagee (as hereinafter defined) and Lessor shall approve the
Leasehold Mortgage, Lessor and Tenant agree that the provisions of this Section
shall apply in respect to the Leasehold Mortgage. Lessor has heretofore approved
the Leasehold Mortgages securing the Tenant Credit Agreements, provided that
such approval shall not constitute an agreement by Lessor to be bound by the
terms of any such Leasehold Mortgage. In the event of any assignment of a
Leasehold Mortgage or in the event of a change of address of a Leasehold
Mortgagee or of an assignee of a Leasehold Mortgage, notice of the new name and
address shall be provided to Lessor.

Section 22.2 Definitions.

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

(b) The term “Leasehold Mortgagee” as used in this Section shall refer to any
and all holders of a Leasehold Mortgage approved by Lessor pursuant to the terms
hereof. Lessor hereby approves of JPMorgan Chase Bank, N.A., as collateral
agent, as the initial Leasehold Mortgagee, and any agent for any credit
facilities secured by Tenant’s leasehold interest hereunder that are entered
into by Tenant pursuant to the Tenant Credit Agreements.

 

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

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

Section 22.5 Procedure for Foreclosure on Default.

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

(b) Following Lessor’s receipt of such notice and so long as the Leasehold
Mortgagee continues to prosecute to completion with due diligence such
foreclosure or other means of acquiring or selling Tenant’s interest in this
Lease, and provided that the Leasehold Mortgagee complies with its obligations
under subsection (c) below, this Lease shall not then terminate, and the time
for completion by such Leasehold Mortgagee of its proceedings shall continue so
long as such Leasehold Mortgagee is enjoined or stayed and thereafter for so
long as such Leasehold Mortgagee proceeds to complete steps to acquire or sell
Tenant’s interest in this Lease by foreclosure of the Leasehold Mortgage or by
other appropriate means with reasonable diligence and continuity. Nothing in
this Section 22.5, however, shall be construed

 

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to extend this Lease beyond the original term thereof, as extended by any
options to extend the term of this Lease properly exercised by Tenant or a
Leasehold Mortgagee in accordance with ARTICLE XIX nor to require a Leasehold
Mortgagee to continue such foreclosure proceedings after the default by Tenant
has been cured. If the default by Tenant shall be cured and the Leasehold
Mortgagee shall discontinue such foreclosure proceedings, this Lease shall
continue in full force and effect as if Tenant had not defaulted under the
Lease.

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

Section 22.6 Assignment or Transfer in Lieu of Foreclosure.

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

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

 

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

Section 22.13 Erroneous Payments. No payment made to Lessor by a Leasehold
Mortgagee shall constitute agreement that such payment was, in fact, due under
the terms of this Lease; and a Leasehold Mortgagee

 

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having made any payment to Lessor pursuant to Lessor’s wrongful, improper or
mistaken notice or demand shall be entitled to the return of any such payment or
portion thereof provided such Leasehold Mortgagee shall have made demand
therefor not later than one year after the date of its payment.

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

ARTICLE XXIII

Section 23.1 Risk of Loss. During the Term of this Lease, the risk of loss or of
decrease in the enjoyment and beneficial use of each Leased Property in
consequence of the damage or destruction thereof by fire, the elements,
casualties, thefts, riots, wars or otherwise, or in consequence of foreclosures,
attachments, levies or executions (other than by Lessor and those claiming from,
through or under Lessor) is assumed by Tenant, and, in the absence of gross
negligence, willful misconduct or breach of this Lease by Lessor pursuant to
Section 38.1, Lessor shall in no event be answerable or accountable therefor nor
shall any of the events mentioned in this Section entitle Tenant to any
abatement of Rent.

ARTICLE XXIV

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

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

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

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

ARTICLE XXV

Section 25.1 Subletting and Assignment.

Section 25.1.1 Notwithstanding anything to the contrary contained in this Lease
but subject to Section 25.1.2, Section 25.1.11, Section 25.1.12 and Section 25.4
below, Tenant shall have no right, directly or indirectly, to assign this Lease
in part under any circumstances. Subject to the foregoing, except as expressly
provided herein, Tenant shall not, without the prior written consent of Lessor,
which consent shall not be unreasonably withheld, delayed or conditioned so long
as no Event of Default has occurred and is continuing hereunder, assign this
Lease in its entirety or mortgage, pledge, hypothecate, encumber or otherwise
transfer any interest in this Lease in whole or in part or sublease all or any
part of any Leased Property or suffer or permit this Lease or the leasehold
estate created hereby or thereby or any other rights arising under this Lease to
be assigned in its entirety or to be transferred, mortgaged, pledged,
hypothecated or encumbered, in whole or in part, whether voluntarily or
involuntarily or by operation of law, or permit the use or occupancy of any
Leased Property to be offered or advertised for assignment or subletting except
as hereinafter provided. For purposes of this Section 25.1, an assignment of
this Lease shall be deemed to include any change in control of any Tenant (other
than in a Kindred Change of Control Transaction), as if such change in control
or transaction were an assignment of this Lease. Changes in control of any
Tenant shall include, without limitation, (a) a change in the Seniormost Parent
Control Person, (b) a change in the composition of the board of directors (or,
for any Entity that is not a corporation, any comparable governing body) of any
Tenant, any Guarantor, any Section 25.1.12(f) Guarantor or any Fund or any
direct or indirect subsidiary of any Fund of which any Section 25.1.12(f)
Guarantor is a direct or indirect subsidiary such that at the end of any period
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majority of such board of directors are not the same as the persons constituting
a majority at the start of such period (or persons appointed by such majority),
(c) the sale or other disposition by (i) any Fund or any direct or indirect
subsidiary of any Fund of which any Section 25.1.12(f) Guarantor is a direct or
indirect subsidiary of its direct or indirect controlling interest in such
Section 25.1.12(f) Guarantor if such sale or other disposition results in a
change of the Seniormost Parent Control Person, (ii) any Section 25.1.12(f)
Guarantor of its direct or indirect controlling interest in Tenant if such sale
or other disposition results in a change of the Seniormost Parent Control
Person, or (iii) Tenant of all or any part of its interest in any Guarantor if
such sale or other disposition results in a change of the Seniormost Parent
Control Person that directly or indirectly controls such Guarantor, (d) the sale
or other disposition of all or substantially all of the assets of the Seniormost
Parent Control Person, any Section 25.1.12(f) Guarantor, any Guarantor or any
Tenant (other than a bona fide pledge in connection with a financing approved by
Lessor), and (e) a merger or consolidation involving any Guarantor, any Tenant,
any Section 25.1.12(f) Guarantor or any Fund or any direct or indirect
subsidiary of any Fund of which any Section 25.1.12(f) Guarantor is a direct or
indirect subsidiary which results in the stockholders of the Seniormost Parent
Control Person immediately prior to such event owning less (directly or
indirectly) than 50% of the capital stock of the surviving entity or any public
parent of the surviving entity. For purposes of this Section 25.1 (and, for the
avoidance of doubt, all of the subsections of this Section 25.1), a Kindred
Change of Control Transaction shall not constitute an assignment or subletting
of this Lease, and, subject to the provisions set forth in Section 25.1.12,
Lessor’s consent shall not be required for the consummation of a Kindred Change
of Control Transaction. For purposes of this Section 25.1, a sublease of all or
any part of any Leased Property shall be deemed to include any concessionaire
agreement, license agreement or other agreement involving use or possession of
all or any part of any Leased Property.

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

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

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

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

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

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

(x) any rents, additional charges, or other consideration (including, without
limitation, capital stock, stock options or warrants, license fees and all other
forms of remuneration) payable to Tenant under any sublease, after deducting
therefrom brokerage commissions and legal fees paid by Tenant in connection with
such subletting, over (y) the sum of (1) a share of the Base Rent, real estate
taxes and assessments, insurance premiums and charges for utility usage that, on
a monthly basis, are owing with respect, or otherwise allocable, to the
applicable Leased Property (with such share to be equal to (A) if the applicable
sublease relates primarily to use of areas within the Facility(ies) located on
the applicable Leased Property, the product of the total of the aforesaid Base
Rent, real estate taxes and assessments, insurance premiums and utility usage
charges owing with respect, or allocable, to the applicable Leased Property for
a particular month times a fraction, the numerator of which is the number of
rentable square feet under the applicable sublease and the denominator of which
is the aggregate

 

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

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

(cc) within sixty (60) days after the end of each calendar year, Tenant shall
deliver to Lessor a Senior Officer’s Certificate certifying the amount of
Lessor’s share of Sublease Rent Payments for the preceding calendar year and
setting forth how such amount was calculated and containing a detailed breakdown
of the revenues and expenses used in making such calculation, and, within thirty
(30) days after Lessor’s receipt of such certificate, if the aggregate amount
paid by Tenant to Lessor during such preceding calendar year on

 

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account of Lessor’s share of Sublease Rent Payments for such year exceeds the
amount of Lessor’s share as shown in such certificate, then, subject to
subsection (dd) below, Lessor shall pay the overage to Tenant, and, if the
aggregate amount paid by Tenant to Lessor during such preceding calendar year on
account of Lessor’s share of Sublease Rent Payments for such year is less than
the amount of Lessor’s share as shown in such certificate, Tenant shall pay such
deficiency to Lessor. Lessor shall be entitled, upon three (3) Business Days
prior written notice and within normal business hours, to review, and make
abstracts from and copies of, Tenant’s books, accounts and records relative to
Tenant’s subleases of any Leased Property and the calculation of Lessor’s share
of Sublease Rent Payments for any period; and

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

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

 

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

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

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

 

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

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

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

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

(b) Lessor shall give such assignee or subtenant assurances of quiet enjoyment,
in accordance with a mutually satisfactory non-disturbance and attornment
agreement, such that so long as such assignee or subtenant pays Rent allocable
to such Leased Property and otherwise complies with all covenants and
obligations of the Tenant under this Lease with respect to such Leased Property,
no other default under this Lease shall affect or give rise to any right to
terminate its leasehold of such Leased Property; and

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

 

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

Section 25.1.12 Notwithstanding any provision of this Lease to the contrary, no
Kindred Change of Control Transaction shall be permitted under this Lease unless
each of the following conditions has first been satisfied in full:

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

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

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

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

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

 

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

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

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

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

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

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

Section 25.2 Attornment. Tenant shall insert in each sublease permitted under
Section 25.1 provisions to the effect that (a) such sublease is subject and
subordinate to all of the terms and provisions of this Lease and to the rights
of Lessor hereunder (except to the extent such subtenant is entitled to quiet
enjoyment assurances under Section 25.1.11 above), (b) in the event this Lease
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of such sublease, the subtenant thereunder will, at Lessor’s option, attorn to
Lessor and waive any right the subtenant may have to terminate the sublease or
to surrender possession thereunder, as a result of the termination of this
Lease, and (c) in the event the subtenant receives a written notice from Lessor
or Lessor’s assignees, if any, stating that an Event of Default has occurred,
the subtenant shall thereafter be obligated to pay all rentals accruing under
said sublease directly to the party giving such notice, or as such party may
direct. All rentals received from the subtenant by Lessor or Lessor’s assignees,
if any, as the case may be, shall be credited against the amounts owing by
Tenant under this Lease.

Section 25.3 Sublease Limitation. Anything contained in this Lease to the
contrary notwithstanding, Tenant shall not sublet the Leased Property on any
basis such that the rental to be paid by the subtenant thereunder would be
based, in whole or in part, on either (i) the income or profits derived by the
business activities of the subtenant, or (ii) any other formula such that any
portion of the sublease rental received by Lessor would fail to qualify as
“rents from real property” within the meaning of Section 856(d) of the Code, or
any similar or successor provision thereto.

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

Section 25.5 Kindred Change of Control Transaction. Nothing in this Lease shall
prevent multiple Kindred Change of Control Transactions, so long as each such
Kindred Change of Control Transaction complies with the requirements set forth
in this Lease.

ARTICLE XXVI

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

(a) As soon as available but in no event later than forty-five (45) days after
the close of each fiscal month and within fifty (50) days after the close each
of the first three fiscal quarters, for Tenant, an unaudited consolidated
balance sheet and statement of operations as of the close of each such period
and the related unaudited consolidated statements of income, cash flows and
stockholders equity for such period and for the year to date of Tenant and its
Subsidiaries, and, for the Seniormost Parent, an unaudited consolidated balance
sheet and statement of operations as of the close of each such period and the
related unaudited consolidated statements of income, cash flows and stockholders
equity for such period and for the year to date of the Seniormost Parent and its
Consolidated Subsidiaries (collectively,

 

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“Financial Statements”), setting forth in each case in comparative form the
corresponding figures for the previous year, all prepared in accordance with
GAAP and all certified in an Officer’s Certificate of Tenant or the Seniormost
Parent, as applicable, to Lessor as being complete and accurate to the best of
Tenant’s or the Seniormost Parent’s knowledge, as applicable, subject to normal
year end adjustments;

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

 

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

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

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

(o) Within sixty (60) days following the end of each quarter during the Term, if
and to the extent relating to the Leased Properties, reports, as of such
quarter-end, (i) indicating the amount of the then current “total loss pick” set
for professional negligence and malpractice claims against the Seniormost
Parent, Tenant and their respective Subsidiaries and Affiliates and the then
current breakdown of such “total loss pick” (x) between claims incurred and
reported and claims incurred but not yet reported and (y) among claims incurred,
whether or not reported, that are (1) insured by the Captive Insurance
Company(ies), (2) insured by insurers other than a Captive Insurance Company,
and (3) not insured by a Captive Insurance Company or another insurer,
(ii) indicating the amount to be reserved by the Seniormost Parent and Tenant at
the aforesaid then current “total loss pick” for claims, whether or not
reported, that are uninsured or that are insured by the Captive Insurance
Company(ies) and a reasonably detailed explanation of how such reserved amount
was calculated and determined, (iii) identifying the portion of the reserve
amount referenced in subsection (ii) above that will be funded, and the portion
of such reserve that will not be funded, to the Captive Insurance Company(ies)
by the Seniormost Parent or Tenant, and (iv) confirming that the amount to be
funded to the Captive Insurance Company(ies) by the Seniormost Parent or Tenant
is being funded on budget or, if there is a shortfall in the funding of the
amount to be funded, detailing the Seniormost Parent’s or Tenant’s plan for
funding such shortfall to the Captive Insurance Company(ies), and, in addition,
in each monthly Officer’s Certificate delivered by Tenant pursuant to subsection
(a) above, Tenant shall include therein a certification that each of the
Seniormost Parent and Tenant is recording general and professional liability
costs, on a monthly basis, in a manner consistent with the most recent actuarial
valuations;

 

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

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

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

(s) Within thirty (30) days following the end of each month during the Term, a
“QA Management Activity Report”, as of such month-end, prepared by Tenant for
each Facility under this Lease, and under each of the Leases, in the form
delivered to Lessor on May 14, 2003 or another form reasonably acceptable to
Lessor, and, relative thereto, promptly following Tenant’s receipt of a written
request therefor from Lessor, true, correct and complete copies of any survey
deficiency reports and/or plans of correction relative to any of the aforesaid
Facilities designated by Lessor;

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

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

 

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

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

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

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

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

Section 26.3 Quarterly Meetings; Facility Level Meetings and Reviews. On a
quarterly basis, Tenant shall permit, and cause the Seniormost Parent to permit,
and upon request by Lessor shall make, and cause the Seniormost Parent to make,
appropriate arrangements for, Lessor and/or its representatives to discuss the
affairs, operations, finances and accounts of Tenant, any Seniormost Parent and
their respective Subsidiaries and Affiliates with, and be advised as to the same
by, senior officers of Tenant and the Seniormost Parent (and such of Tenant’s
and the Seniormost Parent’s independent accountants and other financial advisors
as would be relevant to the topic of the particular meeting), all as Lessor may
deem appropriate for the purpose of verifying any report(s) delivered by Tenant
to Lessor under this Lease or for otherwise ascertaining compliance with this
Lease by Tenant or the business, operational or financial condition of Tenant,
any Seniormost Parent and/or their respective Subsidiaries and Affiliates (to
the extent relevant for ascertaining compliance with this Lease or to the extent
relevant to the operations of any Leased Property(ies)) and/or any of their
respective Facilities. Without limitation of the foregoing, from time to time
promptly following receipt of written notice from Lessor to Tenant (and in any
event within ten (10) Business Days of such receipt), Tenant shall permit, and
cause the Seniormost Parent to permit, and shall make, and cause the Seniormost
Parent to make, appropriate arrangements for, Lessor and/or its representatives
or designees to discuss the business, operational and financial condition of

 

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specific Facility(ies) designated by Lessor with, and be advised as to the same
by, appropriate personnel of Tenant, the Seniormost Parent and their respective
Subsidiaries and Affiliates having operational and accounting responsibilities
for the Facility(ies) so specified by Lessor and to review, and make abstracts
from and copies of, the books, accounts and records of Tenant, the Seniormost
Parent and their respective Subsidiaries and Affiliates relative to any such
Facility(ies), in each case provided, and on the condition, that any such
discussions or reviews, abstracting or copying shall not materially interfere
with Tenant’s or the Seniormost Parent’s business operations relative to any
affected Facility(ies). Unless otherwise agreed in writing by Lessor and Tenant
or the Seniormost Parent, as applicable, all of the discussions, reviews,
abstracting and copying referenced in this Section 26.3 shall occur during
normal business hours. Relative to the foregoing matters, (a) Tenant agrees that
those officers and managerial-level employees of Tenant, the Seniormost Parent
and their respective Subsidiaries and Affiliates as are reasonably designated by
Lessor shall attend the above described quarterly and/or Facility level meetings
and reviews, (b) each of the aforesaid quarterly meetings and reviews shall,
unless otherwise agreed by Lessor and Tenant, occur on the first Tuesday that is
more than fifteen (15) days following the earlier of (x) the date of filing or
(y) the filing due date of the Form 10Q or 10K, as applicable, that Tenant or
the Seniormost Parent is required to file (if both Tenant and the Seniormost
Parent are publicly traded Entities, then Tenant and the Seniormost Parent, as
applicable, shall have the filing due date that is required in order to comply
with the requirements of the Securities and Exchange Commission or any other
governmental authority, and the later of such filing due dates shall apply under
this clause (y)) following the close of the quarter-to-be-reviewed (or, if
neither Tenant nor the Seniormost Parent is a publicly traded Entity, on or
before the seventy-fifth (75th) day following the close of the
quarter-to-be-reviewed), and (c) the aforesaid Facility level meetings and
reviews shall, unless otherwise agreed by Lessor and Tenant, occur
simultaneously with the aforesaid quarterly meetings and reviews and, in
addition, from time to time at other times designated by Lessor upon ten
(10) Business Days written notice to Tenant.

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

Section 26.5 Additional Tenant Assistance. Tenant agrees that Tenant’s and the
Seniormost Parent’s chief executive officer and chief financial officer shall be
made available by Tenant, upon two (2) Business Days (five (5) Business Days, if
an in-person meeting is required) prior verbal and electronic notice from
Lessor, to hold meetings with, make presentations to and/or answer

 

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questions and inquiries by investment advisers, analysts, underwriters, bankers
and other lenders, rating agencies and other persons and organizations
designated by Lessor in connection with transactions conducted by Lessor from
time to time. Tenant and the Seniormost Parent shall not be required to incur
any out-of-pocket expenses (other than nominal expenses) in connection with any
such request by Lessor.

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

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

Section 26.8 Audit and Investigation Rights. Without limitation of Tenant’s
other obligations as set forth in this ARTICLE XXVI, Lessor shall have the
right, at its expense and upon delivery of ten (10) Business Days written notice
to Tenant from time to time, to audit, and/or prepare or perform such other
operational, accounting or financial reviews, abstracts, reports and other
investigations (including, without limitation, investigations of Tenant’s
compliance with Section 7.2.4 hereof) as Lessor chooses of or relating to, the
books, records and accounts of Tenant, any Seniormost Parent and Tenant’s
Subsidiaries (and, to the extent relevant for verifying any report(s) delivered
to Lessor under this Lease or for otherwise ascertaining compliance with this
Lease or to the extent relevant to the operations of any Leased Property(ies),
Tenant’s and the Seniormost Parent’s Affiliates and the Seniormost Parent’s
Subsidiaries) and/or relative to any Facility(ies) designated by Lessor from
time to time (including, without limitation, appraisals), provided, however,
without limitation of Lessor’s rights pursuant to ARTICLE XXVI (other than this
Section 26.8) or other provisions of this Lease and solely for purposes of this
Section 26.8, Lessor’s right to audit or review materials pursuant to this
Section 26.8 shall not require Tenant or the Seniormost Parent to provide to
Lessor (a) that portion of any confidential materials prepared internally by
Tenant or the Seniormost Parent or by a third party on behalf of Tenant or the
Seniormost Parent regarding whether to exercise renewal rights under this Lease
or analyzing the Fair Market Value or Fair Market Rental of the Leased
Properties, including analyses of appraisals or documents similar thereto (but
Tenant agrees that, notwithstanding the foregoing or anything to the contrary in
this Section 26.8, Lessor shall have the right pursuant to this Section 26.8 to
obtain copies of, and to review and investigate, any appraisals or documents
similar thereto prepared by appraisers or other third parties), (b) employment
and/or employee records, (c) that portion of any litigation files that
constitutes privileged material that is protected by the attorney-client
privilege, and (d) confidential and proprietary analysis of the above referenced
books, records and accounts prepared (i) for a bona fide business purpose,
(ii) in the ordinary course of

 

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business, (iii) not for the purpose of evading Lessor’s rights under this
Section 26.8, and (iv) solely for use by Tenant’s or the Seniormost Parent’s
Board of Directors or officers of Tenant or the Seniormost Parent having a title
of Senior Vice President or higher (except, in the case of each of the foregoing
subsections (b) through (d), if Lessor would otherwise have a right to obtain
such materials pursuant to the provisions of this Lease (other than this
Section 26.8)). Lessor shall not require or perform any act that would cause
Tenant, any Seniormost Parent or any of their respective Subsidiaries or
Affiliates to violate any laws, regulations or ordinances relating to employment
records or intended to protect the privacy rights of Tenant’s or the Seniormost
Parent’s employees or healthcare patients, including, but not limited to, the
Health Insurance Portability and Accountability Act of 1996, as amended. Any
such investigation instituted by Lessor shall commence promptly ten
(10) Business Days after Tenant’s receipt of Lessor’s aforesaid written notice
(unless Lessor otherwise agrees in writing). The foregoing activities shall be
conducted by Lessor through agents, employees, representatives or designees of
its choosing, and Tenant shall reasonably cooperate (and shall cause the
Seniormost Parent and its and the Seniormost Parent’s independent accountants
and other financial advisors to reasonably cooperate) with all of such
activities. Such activities shall be conducted in a manner that does not
materially interfere with Tenant’s or the Seniormost Parent’s business
operations or the business operations relative to any affected Facility(ies).
Lessor shall be obligated to reimburse Tenant and the Seniormost Parent and
their aforesaid independent accountants and other financial advisors for any
out-of-pocket expenses incurred by Tenant or the Seniormost Parent or on
Tenant’s or the Seniormost Parent’s behalf in connection with providing any such
cooperation. Tenant may provide Lessor with a monthly statement of the expenses
to be reimbursed by Lessor pursuant to this Section 26.8, and Lessor shall
reimburse such expenses to Tenant or the Seniormost Parent, as applicable,
within ten (10) Business Days after receipt of such written demand accompanied
by reasonable supporting documentation. Unless otherwise agreed in writing by
Lessor and Tenant, Lessor’s aforesaid activities shall occur during normal
business hours. Lessor’s aforesaid activities may include, without limitation,
performing audits of, or other operational, accounting or financial reviews or
reports relating to, the EBITDAR and/or EBITDARM of a particular Facility(ies)
for a particular past or future period(s) and the terms and conditions of
contracts with Tenant’s and the Seniormost Parent’s Affiliates and Subsidiaries
and/or other Persons for the provision of particular goods and services to a
particular Facility(ies).

ARTICLE XXVII

Section 27.1 Lessor’s Right to Inspect. Tenant shall permit Lessor, any then
current or prospective Superior Mortgagee or other lender to Lessor, any then
current or prospective investment banker, mortgage broker or other professional
engaged by Lessor, any prospective purchaser of any Leased Property or any
interest in Lessor or any Affiliate of Lessor and/or, only during any permitted
exhibition period under Section 40.4 below, any prospective lessee, and its and
their respective authorized representatives, to enter upon and conduct a
physical inspection of any Leased Property during usual business hours and,
except in an emergency, upon not less than three (3) Business Days prior notice,
subject to any security, health, safety or confidentiality requirements of any
governmental agency or insurance requirement relating to the Leased

 

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Properties, or imposed by law or applicable regulations and provided that no
such entry or inspection shall materially interfere with Tenant’s business
operations within the affected Leased Property(ies). Nothing contained in this
Section 27.1 shall limit or impair Lessor’s right to enter upon and inspect the
Leased Properties, or any of Lessor’s other rights or remedies, upon the
occurrence of any Event of Default by Tenant.

ARTICLE XXVIII

Section 28.1 No Waiver. No failure by Lessor or Tenant to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach thereof, and no acceptance of full or partial payment
of Rent during the continuance of any such breach, shall constitute a waiver of
any such breach or of any such term. To the extent permitted by law, no waiver
of any breach shall affect or alter this Lease, which shall continue in full
force and effect with respect to any other then existing or subsequent breach.

ARTICLE XXIX

Intentionally omitted.

ARTICLE XXX

Section 30.1 Acceptance of Surrender. No surrender to Lessor of this Lease or of
any Leased Property or any part of any thereof, or of any interest herein or
therein, shall be valid or effective unless agreed to and accepted in writing by
Lessor and no act by Lessor or any representative or agent of Lessor, other than
such a written acceptance by Lessor, shall constitute an acceptance of any such
surrender.

ARTICLE XXXI

Section 31.1 No Merger of Title. There shall be no merger of this Lease or of
the leasehold estate created thereby by reason of the fact that the same person,
firm, corporation or other entity may acquire, own or hold, directly or
indirectly, (a) this Lease or the leasehold estate created hereby or any
interest in this Lease or such leasehold estate and (b) the fee estate in any
Leased Property.

ARTICLE XXXII

Section 32.1 Conveyance by Lessor. Lessor may, without the consent or approval
of Tenant, sell, transfer, assign, convey or otherwise dispose of any or all of
the Leased Properties. If Lessor or any successor owner of any Leased Property
shall sell, transfer, assign, convey or otherwise dispose of any Leased Property
in accordance with the terms hereof other than as security for a debt, and the
purchaser, grantee, assignee or transferee of the Leased Property shall
expressly assume all obligations of Lessor hereunder with respect to such Leased
Property arising or accruing from and after the date of such sale, conveyance,
transfer, assignment or other disposition and shall

 

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be reasonably capable of performing the obligations of Lessor hereunder, Lessor
or such successor owner, as the case may be, shall thereupon be released from
all future liabilities and obligations of Lessor under this Lease with respect
to such Leased Property arising or accruing from and after the date of such
sale, conveyance, transfer, assignment or other disposition as to such Leased
Property and all such future liabilities and obligations with respect to such
Leased Property shall thereupon be binding upon such purchaser, grantee,
assignee or transferee. Lessor agrees to deliver to Tenant and any Leasehold
Mortgagee, promptly following the consummation of any such sale, conveyance,
transfer, assignment or other disposition (other than as security for a debt),
written notice of such sale, conveyance, transfer, assignment or other
disposition and, if applicable, a copy of the aforesaid assumption agreement. In
the event of any such sale, transfer, assignment, conveyance or other
disposition (other than as security for a debt) of less than all of the Leased
Properties, the provisions of Section 40.15 hereof shall apply.

ARTICLE XXXIII

Section 33.1 Quiet Enjoyment. So long as Tenant shall pay all Rent as the same
becomes due and shall fully comply with all of the terms of this Lease and fully
perform its obligations hereunder and thereunder, Tenant shall peaceably and
quietly have, hold and enjoy each Leased Property for the Term hereof, free of
any claim or other action by Lessor or anyone claiming by, through or under
Lessor, but subject to all Permitted Encumbrances, including, without
limitation, liens and encumbrances of record as of the Existing Lease Effective
Date or otherwise permitted to be created by Lessor hereunder, liens as to the
obligations of Lessor that are either not yet due or which are being contested
in good faith and by proper proceedings, and liens hereafter consented to by
Tenant. No failure by Lessor to comply with the foregoing covenant shall give
Tenant any right to cancel or terminate this Lease or abate, reduce or make a
deduction from or offset against the Rent or any other sum payable under this
Lease, or to fail to perform any other obligation of Tenant hereunder.
Notwithstanding the foregoing, Tenant shall have the right, by separate and
independent action, to pursue any claim it may have against Lessor as a result
of a breach by Lessor of the covenant of quiet enjoyment contained in this
Section.

ARTICLE XXXIV

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

 

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  (a) if to either Tenant:

Kindred Healthcare, Inc.

Kindred Healthcare Operating, Inc.

680 South 4th Avenue

Louisville, Kentucky 40202-2612

Attention: Chief Financial Officer

with copies to:

Kindred Healthcare, Inc.

Kindred Healthcare Operating, Inc.

680 South 4th Avenue

Louisville, Kentucky 40202-2612

Attention: General Counsel

and

JPMorgan Chase Bank

270 Park Avenue, 4th Floor

New York, New York 10017

Attention: Dawn Lee Lum, Vice President

 

  (b) if to Lessor:

Ventas Realty, Limited Partnership

c/o Ventas, Inc.

353 N. Clark Street, Suite 3300

Chicago, Illinois 60654

Attention: Legal Department

with a copy to:

Ventas Realty, Limited Partnership

c/o Ventas, Inc.

353 N. Clark Street, Suite 3300

Chicago, Illinois 60654

Attention: Asset Management

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

ARTICLE XXXV

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

 

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Section 35.2 Appointment of Appraisers. The party required or permitted to
request an appraisal or other determination under this ARTICLE XXXV shall,
within the applicable time period, if any, specified in this Lease, give written
notice (an “Appraisal Notice”) to the other party, which Appraisal Notice shall
state the requesting party’s desire for an appraisal or other determination
under this ARTICLE XXXV, and identify which matters are to be appraised or
determined. Within thirty (30) days after receipt of any such Appraisal Notice
by the party to which such Appraisal Notice is directed, each party shall, by
written notice to the other party, appoint an appraiser meeting the
qualifications set forth below selected by such party to act as appraiser on its
behalf. If either party fails so to appoint an appraiser within the aforesaid
thirty (30) day period, the appraiser selected by the other party shall act as
the “Final Appraiser” hereinafter described. If both parties appoint an
appraiser as aforesaid in a timely manner, within ten (10) days after such two
appraisers are appointed, such two appraisers shall meet and agree upon a third
appraiser meeting the qualifications set forth below (herein, the “Final
Appraiser”). The two appraisers selected by the parties shall, promptly
following their agreement upon a Final Appraiser, provide written notice of the
identity of the aforesaid Final Appraiser to each of Lessor and Tenant. Such
appointment shall be binding on the parties. If the two appraisers selected by
the parties are unable to agree upon a Final Appraiser within the aforesaid ten
(10) day period, then either party may request that the American Arbitration
Association or any successor organization thereto appoint a Final Appraiser
meeting the qualifications set forth below within twenty (20) days of such
request, and both parties shall be bound by any appointment so made within such
twenty (20) day period. If no such Final Appraiser shall have been appointed in
such manner within such twenty (20) day period or within ninety (90) days after
issuance of the original Appraisal Notice, either Lessor or Tenant may apply to
any court having jurisdiction to have such appointment made by such court.

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

Section 35.4 Appraisal Process. The Final Appraiser appointed in accordance with
the foregoing procedures shall complete the appraisals, and make any other
determinations, submitted to him or her in accordance with the terms of this
Lease within sixty (60) days after his or her appointment and shall notify each
of Lessor and Tenant of his or her appraisals and other determinations. In
performing such appraisals, and making such other determinations, the Final
Appraiser shall make the assumptions, and follow any other directives or
instructions, contained in this Lease relative to

 

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the subject matter of the Final Appraiser’s appointment, and, without limitation
of the foregoing, in the case of any appraisal of Fair Market Rental applicable
to the Leased Properties or any thereof or any allocation of Base Rent among the
Leased Properties or any thereof (and any related amendment of Exhibit C hereto
and allocation of Transferred Property Percentages among the Leased Properties
or any thereof), the Final Appraiser shall not allocate an amount of Base Rent
to any particular Leased Property that would result in this Lease, as it applies
to such Leased Property, being treated as a capital lease, rather than an
operating lease, under GAAP or under the applicable rules of the Financial
Accounting Standards Board and, in making determinations of the amount of Base
Rent that will be allocated to particular Leased Properties for purposes of
Exhibit C, shall consider the effect of his or her allocation of Base Rent to a
particular Leased Property upon Tenant’s ability to obtain reimbursements at
such Facility under third party payor programs, but in all events without
increasing or decreasing the aggregate amount of Base Rent payable under this
Lease with respect to the Leased Properties as a whole.

Section 35.5 Binding Nature. The provisions of this ARTICLE XXXV, and related
provisions of this Lease, providing for determination of certain values,
allocations, percentages and other matters by the Final Appraiser shall be
specifically enforceable to the extent such remedy is available under applicable
law, and any determination hereunder shall be final and binding upon the parties
except as otherwise provided by applicable law.

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

ARTICLE XXXVI

Section 36.1 General REIT Provisions.

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

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

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

 

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

Section 36.1.2 Notwithstanding any other provisions of this Lease to the
contrary, Tenant agrees, and agrees to use reasonable efforts to cause its
Affiliates, to cooperate in good faith with Lessor to ensure that the REIT
Requirements are satisfied, including, but not limited to, providing Lessor with
information about the ownership of Tenant, and its Affiliates to the extent that
such information is reasonably available. Tenant agrees, and agrees to use
reasonable efforts to cause its Affiliates, upon request by Lessor to take
reasonable action necessary to ensure compliance with the REIT Requirements.
Immediately after becoming aware that the REIT Requirements are not, or will not
be, satisfied, Tenant shall notify, or use reasonable efforts to cause its
Affiliates to notify, Lessor of such noncompliance.

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

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

ARTICLE XXXVII

Section 37.1 Intentionally Omitted.

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

 

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other encumbrances to which such Personal Property is subject. Promptly
following demand by Lessor (but in any event within thirty (30) days following
such demand), Tenant shall deliver to Lessor a computation and statement, in
form, content and detail reasonably satisfactory to Lessor, of the purchase
price described above as of the date of such expiration, termination or
dispossession, as the case may be, for all of Tenant’s Personal Property located
at the Leased Property(ies) in question.

ARTICLE XXXVIII

Section 38.1 Lessor May Grant Liens. Without the consent of Tenant, Lessor may,
subject to the terms and conditions set forth below in this Section 38.1, from
time to time, directly or indirectly, create or otherwise cause to exist any
lien, encumbrance or title retention agreement (“Encumbrance”) upon any Leased
Property or any portion thereof or interest therein, whether to secure any
borrowing or other means of financing or refinancing. Any lender, which takes an
interest in the applicable Leased Property pursuant to this ARTICLE XXXVIII,
(a) shall agree to give Tenant the same notice, if any, given to Lessor of any
default or acceleration of any obligation underlying any such mortgage or any
sale in foreclosure under such mortgage, (b) shall agree to permit Tenant to
cure any such default on Lessor’s behalf within any applicable cure period, and
Tenant shall be reimbursed by Lessor for any and all out-of-pocket costs
incurred to effect any such cure (including reasonable attorneys’ fees),
(c) shall agree to permit Tenant to appear by its representative and to bid at
any sale in foreclosure made with respect to any such mortgage and (d) shall
agree not to disturb Tenant’s possession so long as Tenant is not in default in
performing its obligations hereunder.

ARTICLE XXXIX

Section 39.1 Environmental Indemnity. Tenant hereby agrees to hold harmless
Lessor, any successors to Lessor’s interest in this Lease and in any Leased
Property, and Lessor’s and such successors’ directors, officers, partners,
members, employees and agents from and against any losses, claims, damages
(including consequential damages), penalties, fines, liabilities (including
strict liability), costs (including cleanup and recovery costs), and expenses
(including expenses of litigation and reasonable attorneys’ fees) incurred by
Lessor or any other indemnitee or assessed against the Leased Property by virtue
of any claim or lien by any governmental or quasi-governmental unit, body, or
agency, or any third party, for cleanup costs or other costs pursuant to the
Comprehensive Environmental Response Compensation and Liability Act of 1980, the
Hazardous Materials Transportation Act, the Resource Conservation and Recovery
Act, all as amended from time to time, and all state laws and federal and state
regulations pursuant to the foregoing (collectively “Environmental Laws”).
Tenant’s indemnity shall survive the expiration or any termination of this
Lease. Provided, however, Tenant shall have no indemnity obligation with respect
to (i) Hazardous Materials first introduced to the Leased Property subsequent to
the date that Tenant’s occupancy of the applicable Leased Property shall have
fully terminated or (ii) Hazardous Materials first introduced to the Leased
Property prior to the Existing Lease Effective Date, except to the extent
arising from any deterioration on or after the Existing Lease Effective Date in
any condition existing prior to April 30, 1998.

 

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“Hazardous Materials” means any substance the presence of which poses a hazard
to the health or safety of persons on or about the Leased Property or which
requires removal or remediation under any Environmental Law, including without
limitation, any substance which is toxic, explosive, flammable, radioactive, or
otherwise hazardous or is included within the meaning of “hazardous substance”,
“hazardous waste”, “toxic substance”, or “pollutant” as defined in any
Environmental Law. At any time during the Term of this Lease, Lessor may require
one or more environmental audits of the Leased Properties, in such form, scope
and substance as specified by Lessor, at Tenant’s expense. Tenant shall, within
thirty (30) days after receipt of an invoice from Lessor, reimburse Lessor for
all costs and expenses incurred in reviewing any environmental audit, including,
without limitation, reasonable attorneys’ fees and costs.

ARTICLE XL

Section 40.1 Miscellaneous. Anything contained in this Lease to the contrary
notwithstanding, all claims against, and liabilities of, Tenant or Lessor
arising prior to any date of termination or expiration of this Lease shall
survive such termination or expiration. If any term or provision of this Lease
or any application hereof shall be invalid or unenforceable, the remainder of
this Lease and any other application of such term or provision shall not be
affected thereby. If any late charges provided for in any provision of this
Lease are based upon a rate in excess of the maximum rate permitted by
applicable law, the parties agree that such charges shall be fixed at the
maximum permissible rate. Neither this Lease nor any provision hereof may be
changed, waived, discharged or terminated except by an instrument in writing and
in recordable form signed by Lessor and Tenant. All the terms and provisions of
this Lease shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. The headings in this Lease are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

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

 

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Section 40.3 Transition of Operations.

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

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

(c) Notwithstanding anything to the contrary contained in this Lease, Tenant
shall not, prior to the ninetieth (90th) day preceding the expiration of this
Lease as to any Leased Property, commence to wind up and terminate the
operations of the Facility operated thereon by relocating the patients or
occupants thereof to other health care facilities (a “Facility Termination”). If
Lessor has not notified Tenant in writing prior to the ninetieth (90th) day
preceding the expiration of this Lease as to a Leased Property and the Facility
thereon that Lessor has procured a successor operator for such Facility who has
submitted applications for the Authorizations required to assume the operations
of such Facility (a “Qualified Successor”), then Tenant may commence the
Facility Termination and, upon the expiration of this Lease as to such Leased
Property and Facility, Tenant shall vacate such Leased Property and surrender
possession thereof to Lessor in accordance with all of the applicable
requirements of this Lease. If, prior to the ninetieth (90th) day preceding the
expiration of this Lease as to a Leased Property and the Facility thereon,
Lessor notifies Tenant in writing that Lessor has procured a Qualified Successor
for such Facility, Tenant shall not commence the Facility Termination (any
notice of the nature referenced in this sentence is herein referred to as a
“Section 40.3 Notice”). In such event, Tenant shall thereafter operate such
Facility in accordance with all of the requirements of this Lease until the
earliest to occur of (i) the date (on or after the expiration of this Lease as
to such Leased Property and Facility) on which such Qualified Successor will
assume the operation of such Facility, as specified in a written notice from
Lessor to Tenant given not less than thirty (30) days prior to the date of such
assumption, (ii) the date that is ninety (90) days after the expiration of this
Lease as to such Leased Property and Facility, and (iii) the date (on or after
the expiration of this Lease as to such Leased Property and Facility) which is
ninety (90) days after Tenant receives written notice from Lessor that,
notwithstanding the foregoing, Tenant may commence the Facility Termination, on
which earliest date, Tenant shall vacate the Leased Property in question and
surrender possession thereof to Lessor in accordance with all of the applicable
requirements of this Lease. In the event Lessor sends Tenant a Section 40.3
Notice and, as a result thereof, Tenant operates a Facility beyond the aforesaid
expiration date applicable thereto, then, from and after the expiration of this
Lease as to such Facility and until the earliest to occur of the dates described
in clauses (i), (ii) and (iii) above (the “Reimbursement Period”), Lessor shall
reimburse Tenant for any operating deficits of such Facility that Tenant may be
required to fund out-of-pocket on account of operating losses and expenses of
such Facility incurred by Tenant with respect to the Reimbursement Period. Any
such reimbursement shall be due from Lessor to Tenant within thirty (30) days
after written request by Tenant, provided that Tenant shall furnish such
documentation of such operating deficits, losses and expenses as Lessor may
reasonably request. For purposes of determining the amount of any operating
deficits, or operating losses and expenses, so incurred by Tenant with respect
to the Reimbursement Period, Lessor and Tenant agree that (1) there shall be
included therein, without limitation, (x) Rent, which shall continue to be due
and payable or accrue, as the case may be, at the same rates as are in effect
prior to the expiration of the Term, and (y) any increase in employee

 

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severance, and all costs and liabilities, that may be incurred by Tenant in
connection with Tenant’s employees’ employment by virtue of Tenant’s delayed
compliance with the Worker Adjustment and Retraining Notification Act, or any
similar State law, due to Tenant’s cooperation and other obligations under this
subsection (c), and (2) Tenant shall serve upon its employees any notice
required under the Worker Adjustment and Retraining Notification Act, or any
similar State law, as soon as reasonably practicable after it becomes clear when
the Reimbursement Period will end, whether due to Tenant’s receipt of a written
notice under subsection (i) or (iii) above or due to the terms of subsection
(ii) above which provides that, in all events, the Reimbursement Period shall
end no later than the date referenced in such subsection (ii). In lieu of the
aforesaid reimbursement from Lessor, Tenant may instead elect to continue to be
responsible for payment of all costs and expenses of continuing to comply with
this Lease as to such Facility during the Reimbursement Period, provided and on
the condition that Tenant provides written notice to Lessor of such election
within fifteen (15) days after Tenant’s receipt of Lessor’s Section 40.3 Notice.
In the event Tenant so elects to forego its aforesaid reimbursement from Lessor,
during the Reimbursement Period, Base Rent allocable to such Facility shall be
payable in the manner set forth in Section 3.1 of this Lease, but with Base Rent
being reduced to one-half ( 1⁄2) of the amount thereof that was allocable to
such Facility as of the expiration of the Term as to such Facility. In the event
Lessor sends Tenant a Section 40.3 Notice and, as a result thereof, Tenant
operates a Facility beyond the expiration date applicable thereto, any Facility
Default that occurs with respect to such Facility and Leased Property during the
Reimbursement Period shall in no event give rise to any right in favor of Lessor
to exercise any rights or remedies under ARTICLE XVI hereof with respect to any
other Facility or Leased Property.

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

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

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

 

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Section 40.7 Subject to Law.

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

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

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

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

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

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

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

Section 40.13 Louisiana Provisions. Notwithstanding anything to the contrary
contained herein, with respect to any Leased Property located in Louisiana, for
all purposes of this Lease the word “servitude” shall be substituted for the
word “easement,” the word “servitudes” shall be substituted for the word
“easements,” the term “immovable property” shall be substituted for the terms
“real property” and “real estate” and the term “movable property” shall be
substituted for the term “personal property” wherever such terms appear in this
Lease.

Section 40.14 Confidentiality.

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

(b) Recipient may disclose Information:

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

(ii) in the case where Lessor is the Recipient

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

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

(w) is provided to Facility Mortgagees, prospective Facility Mortgagees,
Superior Lessors, prospective Superior Lessors, purchasers, prospective
purchasers, tenants or prospective tenants of such Master Lease Leased
Property(ies); provided that any such party

 

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

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

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

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

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

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

 

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

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

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

(iii) to the extent Recipient reasonably determines that disclosure of the
Information is required by any Legal Requirement applicable to Recipient or any
applicable rule, regulation, or requirement of any securities exchange on which
the Recipient’s securities are listed or admitted for trading (a “Disclosure
Law”) pursuant to the procedures set forth in Section 40.14(h) below.

(iv) in connection with any proceeding in which Recipient is attempting to
protect or enforce any rights and/or remedies in connection with this Lease or
any of the other Leases, but only to the extent necessary to protect or enforce
such rights and/or remedies.

(v) to any person in a confidential relationship with the Recipient, including
Recipient’s auditors, advisors, consultants, lawyers, and others who agree with
Recipient to be bound by a standard confidentiality agreement, such as lenders,
prospective lenders, purchasers, potential purchasers, tenants and prospective
tenants; provided, however, that Recipient shall not be liable to Disclosing
Party for any breach by such persons of such confidential relationship or
confidentiality arrangements; provided further, however, that Recipient shall
assign to Disclosing Party (or enforce on Disclosing Party’s behalf and at
Disclosing Party’s cost) the Recipient’s rights under such confidentiality
agreement or obligations.

(vi) to the extent legally compelled to disclose any of the Information pursuant
to a subpoena or other legal process having the force of law. Recipient will
provide Disclosing Party with prompt notice so that Disclosing Party or any of
its representatives may seek a protective order or other appropriate remedy. In
the event that such protective order or other remedy is not obtained, Recipient
will furnish only that portion of the Information which Recipient has been
advised is legally required and Recipient will exercise its reasonable efforts
to attempt to obtain reliable assurance that confidential treatment will be
accorded the Information so to be furnished. In any event, Recipient will
cooperate with (and not oppose) any reasonable action by Disclosing Party to
obtain an appropriate protective order or other reliable assurance that
confidential treatment will be accorded such Information.

 

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(c) Information means (i) all and any data, reports, including any survey
deficiency reports or summaries thereof, forecasts, records, agreements and
other information (whether written, magnetic, digital or in any other form)
furnished after the Existing Lease Effective Date by Disclosing Party or by any
of its representatives or advisors to Recipient that is both (x) material and
proprietary, and (y) in the case where Tenant is the Disclosing Party, that is
required to be furnished pursuant to Section 8.1; Section 8.2;
Section 26.1(b)(ii) (but only to the extent furnished on a per Master Lease
Leased Property basis (if Lessor is a Ventas Lessor) or on a per Leased Property
basis (if Lessor is not a Ventas Lessor)); Section 26.1(c); Section 26.1(d);
Section 26.1(e)(iii), (iv), (v) or (vii); Section 26.1(h); and Section 26.1(i),
and (ii) EBITDAR, profitability, census and regulatory deficiency data for each
Master Lease Leased Property (if Lessor is a Ventas Lessor) or for each Leased
Property (if Lessor is not a Ventas Lessor). For purposes of this Section 40.14,
information and other materials will be deemed furnished or prepared by, or
furnished to, a person if furnished or prepared by, or if furnished to, such
person or an affiliate of such person, or any employee, agent, partner,
representative or advisor of such person. As used in this Section 40.14, person
means any natural person and any corporation, partnership, association, firm or
other entity or organization of any kind whatsoever, and all references to
Recipient in this Section 40.14 shall include its affiliates, and an affiliate
of a designated person means a second person which (directly or indirectly)
controls, is controlled by, or is under common control with, such designated
person; provided, however, that Lessor and Tenant shall not be deemed to be
affiliates.

(d) The obligations under Section 40.14(a) will not apply to any Information
which (i) was known to Recipient prior to Disclosing Party’s disclosure of such
Information to Recipient (unless Recipient’s knowledge was obtained
confidentially or from a source which to Recipient’s knowledge was not permitted
to disclose such Information to Recipient) or (ii) becomes available to
Recipient on a nonconfidential basis from a source (other than Disclosing Party
or any of its employees, agents, representatives or advisors) who to the
knowledge of the Recipient is not prohibited from disclosing such Information to
Recipient by any legal, contractual or fiduciary obligation.

(e) Recipient acknowledges that remedies at law may be inadequate to protect
against breach of the provisions of this Section 40.14, and Recipient hereby in
advance agrees that Disclosing Party shall not be obligated to establish actual
damages or the inadequacy of monetary damages in seeking an injunction. Such
injunctive relief will not be deemed to be the exclusive remedy for a breach by
Recipient of the provisions of this Section, but will be in addition to all
other remedies available at law or equity to Disclosing Party.

(f) Lessor shall have the right to temporarily suspend Tenant’s obligation to
provide it with Information pursuant to the terms of this Lease or otherwise for
a specified period of time or for a period of time terminating upon the
occurrence of a specified event, including notice from Lessor (the “Suspension
Period”). During the Suspension Period, Tenant shall, if requested by Lessor,
deliver such Information to a third party in a confidential relationship with
Lessor. Upon expiration or termination of the Suspension Period, Tenant will
deliver to Lessor within three Business Days all Information that Tenant
otherwise would have been required to deliver during the Suspension Period and
shall immediately, once again, be subject to all of the information delivery
requirements set forth in this Lease.

 

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(g) Recipient acknowledges that no failure or delay in exercising any right
under this Section 40.14 shall operate as a waiver thereof, nor will any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right hereunder.

(h) In connection with any proposed disclosure pursuant to
Section 40.14(b)(iii), the Recipient shall provide the Disclosing Party with
advance written notice of the proposed disclosure shall set forth the
Information to be disclosed, the proposed date of disclosure (the “Disclosure
Date”), the basis for such disclosure as well as the manner of such disclosure
(the “Disclosure Notice”). The Disclosure Notice shall be delivered to the
Disclosing Party no later than the Disclosure Notification Date (as defined
below). The Recipient and the Disclosing Party shall cooperate with one another
and negotiate in good faith to seek a mutually satisfactory resolution with
respect to such proposed disclosure. In the event the Disclosing Party has not,
prior to the Disclosure Date, either (A) consented to the proposed disclosure
(or such modified disclosure as the Recipient and Disclosing Party may mutually
agree) or (B) itself made disclosure of the Information contained in such
Disclosure Notice (or such modified disclosure as the Recipient and Disclosing
Party may mutually agree) the Recipient may disclose such Information to the
extent and in the manner set forth in such Disclosure Notice.

(i) Disclosure Notification Date shall mean the latest of the dates set forth
below:

(A) five (5) Business Days prior to the Disclosure Date; and

(B) in the case of Section 40.14(b)(iii), such shorter period of time prior to
the Disclosure Date which is reasonable (in light of the nature of the
Information to be disclosed and the Disclosure Law applicable thereto).

Section 40.15 New Lease. Lessor shall have the right, at any time and from time
to time during the Term for a legitimate business purpose, by written notice to
Tenant, to require Tenant to execute an amendment to this Lease whereby one or
more Leased Properties (individually, a “Transferred Property” or collectively,
“Transferred Properties”) is separated and removed from this Lease, and to
simultaneously execute a substitute lease with respect to such Transferred
Property(ies), in which case:

(a) Lessor and Tenant shall execute a new lease (the “New Lease”) for such
Transferred Property(ies), effective as of the date specified in subsection
(c) below (the “Property Transfer Date”), in the same form and substance as this
Lease, but with the following changes thereto:

(i) The initial Base Rent for such Transferred Property(ies) shall be an amount
equal to the product of (x) the percentage(s) set forth opposite the Transferred
Property(ies) on Exhibit C attached hereto and made a part hereof (the
“Transferred Property Percentage(s)”), and (y) aggregate Base Rent in effect
under this Lease on the Property Transfer Date;

 

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(ii) Intentionally omitted;

(iii) Intentionally omitted;

(iv) Any rental escalations required under the New Lease to be made on the May 1
immediately following the Property Transfer Date shall be made under the New
Lease on such May 1, in the full amount required as if such Transferred
Property(ies) had been under the New Lease for a full year, notwithstanding that
the period from the Property Transfer Date to such succeeding May 1 may be less
than one full year;

(v) Intentionally omitted;

(vi) Intentionally omitted;

(vii) If and for so long as the lessor under any New Lease is not a Ventas
Lessor, Tenant (A) shall not be required under such New Lease to provide to such
new lessor Facility-specific information related to Facilities or Leased
Properties which are not included in such New Lease, (B) shall exclude from
consolidated facility information that is required under Section 26.1 of such
New Lease facility information which relates to Facilities or Leased Properties
not included in such New Lease and (C) shall continue to be required to provide
information relative to Tenant, as opposed to Leased Properties and Facilities,
on the same basis as such information is provided to Ventas Lessors;

(viii) Intentionally omitted;

(ix) Exhibit C to such New Lease shall include (A) Base Rent only for the
Transferred Property(ies) covered by such New Lease; and (B) a Transferred
Property Percentage for each such Transferred Property, equal to the percentage
that the Base Rent allocated to such Transferred Property comprises of the
aggregate Base Rent for all Transferred Properties under such New Lease (and the
aggregate of all Transferred Property Percentages under such New Lease shall
equal 100%);

(x) Subject to Section 22.7(g) hereof and without limitation and subject to the
provisions of Section 7.2.7, Section 16.10, Section 19.1, Section 25.1.11 and
Section 40.18 of this Lease and all other leases demising any of the Master
Lease Leased Properties, the New Lease shall provide that the tenant thereunder
shall be responsible for the payment, performance and satisfaction of all
duties, obligations and liabilities arising under this Lease, insofar as they
relate to the Transferred Property(ies) subject to the New Lease, that were not
paid, performed and satisfied in full prior to the effective date of the New
Lease (and Tenant under this Lease shall also be responsible for the payment,
performance and satisfaction of the aforesaid duties, obligations and
liabilities not paid, performed and satisfied in full prior to the effective
date of such New Lease), and shall further provide that the tenant thereunder
shall not be responsible for the payment, performance or satisfaction of any
duties, obligations and liabilities of Tenant under this Lease arising after the
Property Transfer Date;

 

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(xi) If the New Lease relates to a single Leased Property, the New Lease shall
provide that (1) because, for example, such New Lease may thereafter be amended
by agreement of Lessor and Tenant to include one or more other leased properties
or such New Lease may thereafter be combined with a Second Lease pursuant to
Section 40.18 of such New Lease, with such New Lease as the Section 40.18 Lease,
Lessor and Tenant under such New Lease have, in creating such New Lease as a
“New Lease” under Section 40.15 of one of the other Combined Leases,
nevertheless retained in such New Lease references to multiple Leased Properties
and provisions and terms that apply to multiple Leased Properties and
(2) without limitation of and subject to Section 7.2.7, Section 16.10,
Section 19.1, Section 25.1.11 and Section 40.18 of such New Lease and all other
leases demising any of the Master Lease Leased Properties, for so long as such
New Lease relates to a single Leased Property, the aforesaid references to
multiple Leased Properties, and the aforesaid provisions and terms applicable to
multiple Leased Properties, shall, if the context so requires in light of such
New Lease relating to only a single Leased Property, be treated as references to
a single Leased Property or as provisions and terms applicable to a single
Leased Property;

(xii) The New Lease shall not include any cross-default provisions that would
make Tenant’s default under this Lease or under any other New Lease entered into
in accordance with this Lease or under any of the other Leases or under any New
Lease entered into in accordance with any of such other Leases an event of
default under such New Lease; provided, however, the foregoing portion of this
clause (xii) is without limitation of and subject to the provisions of
Section 7.2.7, Section 16.10, Section 19.1, Section 25.1.11 and Section 40.18 of
this Lease and all other leases demising any of the Master Lease Leased
Properties; and

(xiii) At the election of Lessor, any one or more of the provisions of the New
Lease pertaining to Ventas, Inc.’s REIT status shall be deleted, including,
without limitation, Section 25.3 and ARTICLE XXXVI hereof.

(b) Upon execution of such New Lease, and effective as of the Property Transfer
Date, this Lease shall be deemed to be modified and amended as follows:

(i) The Transferred Property(ies) shall be excluded from the Leased Properties
hereunder;

(ii) Base Rent hereunder shall be reduced by the amount set forth in
Section 40.15(a)(i) above;

(iii) Intentionally omitted;

(iv) Intentionally omitted;

(v) Intentionally omitted;

(vi) Intentionally omitted;

 

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(vii) Intentionally omitted; and

(viii) Exhibit C shall be modified so as to remove the allocation of Base Rent
and the Transferred Property Percentage(s) for the Transferred Property(ies),
and the Transferred Property Percentages of the Leased Properties remaining
under this Lease shall be recalculated so that each such Leased Property shall
have a Transferred Property Percentage equal to the percentage that the Base
Rent allocated to such Leased Property comprises of the aggregate Base Rent for
all Leased Properties remaining under this Lease, and so that the aggregate of
all Transferred Property Percentages for Leased Properties remaining under this
Lease equals 100%.

(c) In the case of any New Lease that is entered into in accordance with
Section 22.7 hereof, such New Lease shall be effective as of the date of
termination of this Lease with respect to the applicable Leased Property(ies).
In the case of any New Lease that is entered into in accordance with
Section 19.4 hereof, such New Lease shall be effective as of the effective date
therefor specified in such Section 19.4. In the case of all other New Leases,
such New Lease shall be effective on the date which is the earlier of (i) the
date the New Lease is fully executed and delivered by the parties thereto and
(ii) the date specified in the written notice from Lessor to Tenant requiring a
New Lease as described above, which date shall be no sooner than ten (10) days,
nor later than sixty (60) days, after the date such notice is issued.

(d) Tenant shall take such actions and execute and deliver such documents,
including without limitation the New Lease and new or amended Memorandum(s) of
Lease and, if requested by Lessor, an amendment to this Lease, as are reasonably
necessary and appropriate to fully effectuate the provisions and intent of this
Section 40.15 and Lessor shall execute and deliver such new or amended
Memorandum(s) of Lease as are reasonably necessary and appropriate to fully
effectuate the provisions and intent of this Section 40.15 and an amendment of
this Lease in accordance with Section 40.15(b) above.

(e) Each Leasehold Mortgagee, Superior Lessor and Superior Mortgagee hereby
consents to the provisions of this Section 40.15 and agrees, upon request of
Lessor, to execute an instrument consenting to the execution and delivery of the
New Lease and of an amendment to this Lease, consistent with the foregoing
provisions.

(f) Each party shall bear its own costs and expenses in connection with any New
Lease entered into in accordance with Section 19.4 hereof. In all other cases,
the party requesting a New Lease under this Section 40.15 (and, for such
purpose, Tenant shall be deemed to be the requesting party in the case of any
New Lease entered into in accordance with Section 22.7 hereof) shall, promptly
following receipt of a written demand therefor and reasonable supporting
documentation, reimburse the other party hereto for its out-of-pocket costs and
expenses incurred in connection with such New Lease, including, without
limitation, reasonable attorneys’ fees and any recording fees incurred by such
other party in connection with the recording of new or amended Memorandum(s) of
Lease.

 

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Section 40.16 Partial Expiration/Termination. In the event this Lease expires or
terminates as to one or more, but less than all, of the Leased Properties
(herein, the “Expired/Terminated Properties”), but no Separate Lease pursuant to
Section 22.7 or New Lease in accordance with the terms of Section 40.15 (e.g.
pursuant to the terms of Section 19.4 or Section 40.15) is entered into on
account thereof, effective as of the date of such expiration or termination (the
“Partial Expiration/Termination Date”), the following provisions shall be
applicable:

(a) The Expired/Terminated Properties shall be excluded from the Leased
Properties hereunder (but without limitation and subject to the provisions of
Section 7.2.7, Section 16.10, Section 19.1, Section 25.1.11 and Section 40.18 of
this Lease and all other leases demising any of the Master Lease Leased
Properties);

(b) All Base Rent attributable to the Expired/Terminated Properties (determined
based upon the aggregate of the Transferred Property Percentages applicable to
the Expired/Terminated Properties), and all Additional Charges attributable to
the Expired/Terminated Properties, shall be due and payable as of the Partial
Expiration/ Termination Date. The amount of the Base Rent attributable to the
Leased Properties other than the Expired/Termination Properties as of the
Partial Expiration/Termination Date shall equal the amount thereof immediately
prior to such Partial Expiration/Termination Date less the amount of Base Rent
allocated to the Expired/Terminated Properties as aforesaid;

(c) Intentionally omitted;

(d) “Patient Revenues”, as defined in Section 2.1 hereof, shall have excluded
therefrom all Patient Revenues attributable to the Expired/Terminated
Properties;

(e) Intentionally omitted;

(f) Intentionally omitted;

(g) Exhibit C shall be modified so as to remove the allocation of Base Rent to
the Expired/Terminated Properties, and the Transferred Property Percentages of
the Leased Properties remaining under this Lease shall be recalculated so that
each such Leased Property shall have a Transferred Property Percentage equal to
the percentage that the Base Rent allocated to such Leased Property comprises of
the aggregate Base Rent for all Leased Properties remaining under this Lease,
and so that the aggregate of all Transferred Property Percentages for the Leased
Properties remaining under this Lease equals 100%;

(h) Nothing in this Section 40.16 shall be deemed to limit or impair any of
Lessor’s or Tenant’s rights and remedies at law, in equity, under this Lease or
otherwise relative to the Expired/Terminated Properties or the Leased Properties
that remain subject to this Lease;

(i) Tenant shall take such actions and execute and deliver such documents,
including, without limitation, if requested by Lessor, an amendment to this
Lease, as are reasonably necessary and appropriate to fully effectuate the
provisions and intent of this Section 40.16; and

 

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(j) Each Leasehold Mortgagee, Superior Lessor and Superior Mortgagee hereby
consents to the provisions of this Section 40.16 and agrees, upon request of
Lessor, to execute an instrument consenting to the execution and delivery of an
amendment to this Lease, consistent with the foregoing provisions.

Section 40.17 Intentionally omitted.

Section 40.18 Combination of Leases. If Lessor is the lessor under both this
Lease and another lease demising a Master Lease Leased Property(ies) (the
“Second Lease”), Lessor shall have the right, at any time during the Term, by
written notice to Tenant, to require that this Lease and the Second Lease be
combined and to require Tenant to execute an amendment to this Lease whereby
(a) if this Lease is the Section 40.18 Lease (as hereinafter defined), the
Master Lease Leased Properties covered by the Second Lease are added as Leased
Properties under this Lease and otherwise merged into this Lease or (b) if the
Second Lease is the Section 40.18 Lease, the Leased Properties covered by this
Lease are added as Leased Properties under the Second Lease and otherwise merged
into the Second Lease, in each case subject to the following terms and
conditions:

(i) References in this Lease to the “Section 40.18 Lease” shall mean and refer
to whichever of this Lease or the Second Lease is chosen by Lessor to be the
Section 40.18 Lease.

(ii) If this Lease is the Section 40.18 Lease, effective as of the date
specified in subsection (iv) below (the “Section 40.18 Date”), this Lease shall
be deemed to be modified and amended as follows:

(1) The Master Lease Leased Properties included in the Second Lease shall be
included as the Leased Properties under this Lease;

(2) Base Rent under this Lease shall be the combination of the respective
amounts of the Base Rent under this Lease and the Second Lease;

(3) Intentionally omitted;

(4) Intentionally omitted;

(5) Any rental escalations that would otherwise have been required to be made
under the Second Lease on the May 1 immediately following the Section 40.18 Date
shall be made under this Lease on such May 1, in the full amount required as if
the Master Lease Leased Properties referenced in subsection (1) above had been
under this Lease for a full year, notwithstanding that the period from the
Section 40.18 Date to such succeeding May 1 may be less than one full year;

(6) Intentionally omitted;

 

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(7) If and for so long as the lessor under this Lease is not Ventas, Inc. or
Ventas Realty, Limited Partnership or any successor to either of them (by merger
or otherwise) or any Affiliate of Ventas, Inc. or Ventas Realty, Limited
Partnership or any such successor, Tenant (A) shall not be required under this
Lease to provide to such lessor Facility-specific information related to
Facilities or Leased Properties which are not included in this Lease, (B) shall
exclude from consolidated facility information that is required under
Section 26.1 of this Lease facility information which relates to Facilities or
Leased Properties not included in this Lease and (C) shall continue to be
required to provide information relative to Tenant, as opposed to Leased
Properties and Facilities, on the same basis as such information is provided to
Ventas-related lessors;

(8) Intentionally omitted;

(9) Exhibit C to this Lease shall be modified and amended so as to add thereto
the allocations of Base Rent relative to the Master Lease Leased Properties
included in the Second Lease that were previously included in Exhibit C to the
Second Lease, and the Transferred Properties Percentages of the Leased
Properties included in this Lease (including, without limitation, the additional
Master Lease Leased Properties referenced in subsection (1) above) shall be
recalculated so that each such Leased Property shall have a Transferred Property
Percentage equal to the percentage that the Base Rent allocated to such Leased
Property comprises of the aggregate Base Rent for all Leased Properties included
in this Lease and so that the aggregate of all Transferred Property Percentages
for Leased Properties included in this Lease equals 100%;

(10) Tenant under this Lease shall be responsible for the payment, performance
and satisfaction of all duties, obligations and liabilities arising under the
Second Lease, insofar as they relate to the Master Lease Leased Properties
subject to the Second Lease, that were not paid, performed and satisfied in full
prior to the Section 40.18 Date, and, without limitation of the foregoing,
(x) any Event of Default that had occurred, arisen or accrued under the Second
Lease prior to the Section 40.18 Date shall be, and shall be deemed to be, an
Event of Default under this Lease, as to which the rights and remedies and other
provisions of this Lease shall be applicable, (y) any breach or default that had
occurred, arisen or accrued under the Second Lease prior to the Section 40.18
Date but had not yet become an Event of Default under the Second Lease as of the
Section 40.18 Date shall be, and be deemed to be, a breach or default under this
Lease, as to which the cure periods, rights and remedies and other provisions of
this Lease shall be applicable, and (z) with respect to any breach or default
described in subsection (y) above, although the cure periods, rights and
remedies and other provisions of this Lease shall be applicable, the portion of
any cure period under the Second Lease that had elapsed as of the Section 40.18
Date shall be counted in determining whether and when the applicable cure period
under this Lease has expired; and

(11) The Master Lease Leased Properties referenced in subsection (1) above shall
otherwise be incorporated into this Lease as Leased Properties included under
this Lease the same as if this Lease, from the inception of the Second Lease,
had included the aforesaid Master Lease Leased Properties as Leased Properties
hereunder on the rent, lease terms and other economic terms described in the
Second Lease.

 

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(iii) If this Lease is not the Section 40.18 Lease, effective as of the
Section 40.18 Date, this Lease shall be modified and amended as necessary (x) to
incorporate into the Second Lease as Leased Properties thereunder the Leased
Properties covered by this Lease the same as if the Leased Properties covered by
this Lease had, from the inception of this Lease, been included in the Second
Lease as Leased Properties thereunder on the rent, lease terms and other
economic terms described in this Lease and (y) otherwise to comply with the
requirements of Section 40.18 of the Second Lease, as the Section 40.18 Lease
thereunder. Tenant acknowledges and agrees that, without limitation of
Section 40.18(ii)(10) above, the modification and amendment referenced in this
subsection (iii) shall not result in Tenant being released from any duties,
liabilities or obligations that had accrued under this Lease through the
Section 40.18 Date.

(iv) In the case of any combination of leases pursuant to this Section 40.18,
such combination shall be effective on the date which is the earlier of (x) the
date the required modifications and amendments to the Lease and Second Lease are
fully executed and delivered by the parties thereto and (y) the date specified
in the written notice from Lessor to Tenant requiring a combination of this
Lease and the Second Lease as described above, which date shall be no sooner
than ten (10) days, nor later than sixty (60) days, after the date such notice
is issued.

(v) Each of Lessor and Tenant shall take such actions and execute and deliver
such documents, including, without limitation, required modifications and
amendments to this Lease and the Second Lease and new or amended Memorandum(s)
of Lease, as are reasonably necessary and appropriate to effectuate fully the
provisions and intent of this Section 40.18.

(vi) Each Leasehold Mortgagee, Superior Lessor and Superior Mortgagee hereby
consents to the provisions of this Section 40.18 and agrees, upon request of
Lessor, to execute an instrument consenting to the execution and delivery of the
required modifications and amendments to this Lease and the Second Lease,
consistent with the foregoing provisions.

(vii) Lessor shall, promptly following receipt of a written demand therefor and
reasonable supporting documentation, reimburse Tenant for its out-of-pocket
costs and expenses incurred in connection with the required modifications and
amendments to this Lease and the Second Lease, including, without limitation,
reasonable attorneys’ fees and any recording fees incurred by Tenant in
connection with the recording of new or amended Memorandum(s) of Lease.

Section 40.18.1 If this Lease is combined pursuant to Section 40.18 with any
other lease of any Master Lease Leased Property(ies), and this Lease is the
Section 40.18 Lease, each Master Lease Leased Property included in the Second
Lease shall, following such combination, be a part of, and re-join, the Renewal
Group of the same number as was applicable to such Master Lease Leased Property
as of the Effective Date under ML5, as set forth in Exhibit D to such instrument
(provided, however, that, if such Renewal Group no longer exists as of such
combination date due to the combination of such Renewal Group with another
Renewal Group, then such Master Lease Leased Property shall be a part of, and
join, the Renewal Group into which such original Renewal Group was combined).

 

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Section 40.19 Unified Commercial Operating Lease. It is acknowledged and agreed
that, except as otherwise expressly provided herein, the inclusion of each of
the Leased Properties on a continuing basis in the leasing transaction provided
for herein is an essential element of such transaction for Lessor, and that,
except as otherwise expressly provided herein, Lessor shall not be obligated and
may not be required to lease less than all of the Leased Properties to Tenant
pursuant to this Lease. It is further acknowledged and agreed that this Lease is
not a residential lease within the meaning of the U.S. Bankruptcy Code, as
amended, and that this Lease is an operating lease, and not a capital lease, for
all accounting, tax and legal purposes.

Section 40.20 Intentionally omitted.

Section 40.21 No Credits. Notwithstanding anything to the contrary set forth in
this Lease or otherwise, except as otherwise expressly provided in the
Bankruptcy Plan relative to the Tax Refund Escrow Agreement, Lessor shall not be
required to pay, make or give to Tenant, and Tenant shall not be entitled to,
any credits, offsets, prorations or payments of any kind or nature whatsoever on
account of any payment, nonpayment or other event occurring prior to the
Existing Lease Effective Date.

ARTICLE XLI

Section 41.1 Memorandums of Lease. Lessor and Tenant shall, promptly upon the
request of either made on or following the Effective Date, enter into short form
memorandums of this Lease, in form suitable for recording under the laws of the
State in which each Leased Property is located, in which reference to this
Lease, and all extension options contained herein, shall be made. Such
Memorandums of Lease shall also reference that, in limited circumstances
following the occurrence of certain limited types of Events of Default by
Tenant, Tenant may have an option to purchase in certain circumstances one
(1) Leased Property covered by this Lease as to which the aforesaid types of
Events of Default have occurred and are continuing. Thereafter, when and if any
such option to purchase under Section 16.12 of this Lease has ceased to be
available to and exercisable by Tenant for any reason (e.g. due to Tenant’s
exercise of its available option to purchase under Section 16.12 or on account
of this Lease being involved in a Section 40.18 lease combination transaction
where the resulting Section 40.18 Lease covers in excess of forty (40) Leased
Properties or otherwise provides to Tenant no available and exercisable
option(s) to purchase under Section 16.12), upon the request of Lessor, any
existing Memorandum(s) of Lease that reference any option to purchase in favor
of Tenant shall be amended to delete any such reference. Without limitation of
Lessor’s obligations under and except as otherwise provided in Section 40.15(f)
and Section 40.18(vii), Tenant shall pay all costs and expenses of recording any
such Memorandums of Lease or amendments

 

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thereto and for releasing any such Memorandums of Lease that relate to a
particular Leased Property(ies) upon any expiration or termination of this Lease
as it relates to any such Leased Property(ies).

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IN WITNESS WHEREOF, the parties have caused this Lease to be executed and their
respective corporate seals to be hereunto affixed and attested by their
respective officers hereunto duly authorized.

 

Witness     KINDRED HEALTHCARE, INC. /s/ Cristina E. O’Brien      
Name:  Cristina E. O’Brien     By:   /s/ Gregory C. Miller       Name: Gregory
C. Miller /s/ Douglas C. Curnutte       Title: Chief Development Officer
Name:  Douglas C. Curnutte           KINDRED HEALTHCARE OPERATING, INC. /s/
Cristina E. O’Brien       Name:  Cristina E. O’Brien     By:   /s/ Gregory C.
Miller       Name: Gregory C. Miller       Title: Chief Development Officer /s/
Douglas C. Curnutte       Name:  Douglas C. Curnutte    

 

VENTAS REALTY, LIMITED PARTNERSHIP

/s/ Dana J. Baker       Name:  Dana J. Baker     By:   Ventas, Inc., its general
partner     By:   /s/ T. Richard Riney /s/ Kristin M. Ashley       Name: T.
Richard Riney Name:  Kristin M. Ashley       Title: Executive Vice President

 

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JOINDER

The undersigned, VENTAS, INC., a Delaware corporation, hereby joins in the
foregoing Amended and Restated Master Lease Agreement No. 5 solely for the
purpose of, subject to Section 40.2 of the aforesaid Lease, joining with Ventas
Realty, Limited Partnership, on a joint and several basis, as Lessor under the
aforesaid Lease with respect to, and only with respect to, the Leased Property
commonly known as Kindred Hospital – Pittsburgh (Facility No. 4619) and the
Leased Property commonly known as Kindred Hospital – Philadelphia (Facility
No. 4614), and for no other purposes. Notwithstanding anything to the contrary
contained in the aforesaid Lease, the aforesaid Tenant acknowledges and agrees,
by the acceptance of this Joinder, that Ventas, Inc. shall have no liability or
obligations under the aforesaid Lease, as lessor or otherwise, with respect to
any Leased Property other than the aforesaid Kindred Hospital – Pittsburgh and
Kindred Hospital – Philadelphia Leased Properties.

 

Witness     VENTAS, INC. /s/ Dana J. Baker       Name:  Dana J. Baker     By:  
/s/ T. Richard Riney       Name: T. Richard Riney /s/ Kristin M. Ashley      
Title: Executive Vice President Name:  Kristin M. Ashley      

 

159

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ALL PURPOSE ACKNOWLEDGMENT

STATE OF Kentucky    )

                                        )

COUNTY OF Jefferson)

On Sept. 30, 2013 before me, a notary public, personally appeared Gregory C.
Miller,

 

¨ personally known to me-OR-

 

¨ proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

Witness my hand and official seal.

/s/ Diane Williams                        

SIGNATURE OF NOTARY

IMPRESS NOTARY SEAL:

 

CAPACITY CLAIMED BY SIGNER:

 

¨        INDIVIDUALS(S)

x       CORPORATE OFFICER(S)

 

TITLE - Chief Development Officer

 

TITLE

 

¨        PARTNER(S)

¨        ATTORNEY-IN-FACT

¨        TRUSTEE(S)

¨        OTHER                                         

  

SIGNER IS REPRESENTING

 

Kindred Healthcare, Inc., a Delaware corporation

 

160

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

STATE OF Kentucky   )

                                        )

COUNTY OF Jefferson)

On Sept. 30, 2013 before me, a notary public, personally appeared Gregory C.
Miller,

 

¨ personally known to me-OR-

 

¨ proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

Witness my hand and official seal.

/s/ Diane Williams                        

SIGNATURE OF NOTARY

IMPRESS NOTARY SEAL:

 

CAPACITY CLAIMED BY SIGNER:

 

¨        INDIVIDUALS(S)

x       CORPORATE OFFICER(S)

 

TITLE - Chief Development Officer

 

TITLE

 

¨        PARTNER(S)

¨        ATTORNEY-IN-FACT

¨        TRUSTEE(S)

¨        OTHER                                         

  

SIGNER IS REPRESENTING

 

Kindred Healthcare Operating, Inc., a Delaware corporation

 

161

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

STATE OF Kentucky   )

                                        )

COUNTY OF Jefferson)

On Sept. 30, 2013 before me, a notary public, personally appeared T. Richard
Riney,

personally known to me-OR-

proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

Witness my hand and official seal.

/s/ Terri Parker                    

SIGNATURE OF NOTARY

IMPRESS NOTARY SEAL:

 

CAPACITY CLAIMED BY SIGNER:

 

¨        INDIVIDUALS(S)

x       CORPORATE OFFICER(S)

 

TITLE - Executive Vice President

 

TITLE

 

¨        PARTNER(S)

¨        ATTORNEY-IN-FACT

¨        TRUSTEE(S)

¨        OTHER                                         

  

SIGNER IS REPRESENTING

 

Ventas, Inc., a Delaware corporation, in its capacity as the general partner of
Ventas Realty, Limited Partnership, a Delaware limited partnership

 

162

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

STATE OF Kentucky   )

                                        )

COUNTY OF Jefferson)

On Sept. 30, 2013 before me, a notary public, personally appeared T. Richard
Riney,

personally known to me-OR-

proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

Witness my hand and official seal.

/s/ Terri Parker                                    

SIGNATURE OF NOTARY

IMPRESS NOTARY SEAL:

 

CAPACITY CLAIMED BY SIGNER:

 

¨        INDIVIDUALS(S)

x       CORPORATE OFFICER(S)

 

TITLE - Executive Vice President

 

TITLE

 

¨        PARTNER(S)

¨        ATTORNEY-IN-FACT

¨        TRUSTEE(S)

¨        OTHER                                         

  

SIGNER IS REPRESENTING

 

Ventas, Inc., a Delaware corporation

 

163

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

Recital Exhibit 1

 

     Facility ID    Name                City    State 1.    4628    Kindred
Hospital—Chattanooga    Chattanooga    TN 2.    4680    Kindred Hospital—St.
Louis    St. Louis    MO 3.    4653    Kindred Hospital—Tarrant County (Fort
Worth Southwest)    Fort Worth    TX 4.    4668    Kindred Hospital—Forth Worth
   Fort Worth    TX 5.    4674    Kindred Hospital—Central Tampa    Tampa    FL
6.    4635    Kindred Hospital—San Antonio    San Antonio    TX 7.    4647   
Kindred Hospital—Las Vegas (Sahara)    Las Vegas    NV 8.    4660    Kindred
Hospital—Mansfield    Mansfield    TX 9.    4662    Kindred Hospital—Greensboro
   Greensboro    NC 10.    4673    Kindred Hospital—Boston North Shore   
Peabody    MA 11.    4614    Kindred Hospital—Philadelphia    Philadelphia    PA
12.    4666    Kindred Hospital—New Orleans    New Orleans    LA 13.    4871   
Kindred Hospital—Chicago – Lakeshore    Chicago    IL 14.    4664    Kindred
Hospital—Albuquerque    Albuquerque    NM 15.    4665    Kindred Hospital—Denver
   Denver    CO 16.    4637    Kindred Hospital—Chicago (North Campus)   
Chicago    IL 17.    4690    Kindred Hospital—Chicago (Northlake Campus)   
Northlake    IL 18.    4602    Kindred Hospital—South Florida – Coral Gables   
Coral Gables    FL 19.    4652    Kindred Hospital—North Florida    Green Cove
Springs    FL

 

Recital Exhibit 1

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

Recital Exhibit 2

 

     Facility ID    Name    City    State 1.    168   
Kindred Transitional Care and Rehabilitation - Lakewood    Lakewood    WA 2.   
1228    Kindred Transitional Care and Rehabilitation - Lafayette    Fayetteville
   GA 3.    559    Kindred Transitional Care and Rehabilitation - Birchwood   
Burlington    VT 4.    694    Kindred Transitional Care and Rehabilitation -
Wedgewood (IN)    Clarksville    IN 5.    131    Kindred Transitional Care and
Rehabilitation - Harrison (IN)    Corydon    IN 6.    213    Kindred
Transitional Care and Rehabilitation - Wildwood (IN)    Indianapolis    IN 7.   
113    Kindred Transitional Care and Rehabilitation - Southwood    Terre Haute
   IN 8.    198    Kindred Transitional Care and Rehabilitation – Harrington
(MA)    Walpole    MA 9.    825    Kindred Transitional Care and Rehabilitation
- Nansemond Pointe    Suffolk    VA 10.    829    Kindred Transitional Care and
Rehabilitation - River Pointe    Virginia Beach    VA 11.    573    Kindred
Transitional Care and Rehabilitation - Eagle Pond    South Dennis    MA

 

Recital Exhibit 2

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

Exhibit A

Legal Descriptions

(see attached)

 

Exhibit A

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

Facility # 4618

OK

SCHEDULE A

THE LAND

Lots One (1), Five (5), Six (6), Seven (7), and Eight (8) in Block Three (3) of
CLASSEN’S HIGHLAND PARKED ADDITION to Oklahoma City, Oklahoma County, Oklahoma,
according to the recorded plat thereof

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

CA

Facility 4822

SCHEDULE A

THE LAND

PARCEL ONE:

Real Property in the City of San Leandro, County of Alameda, State of
California, described as follows:

Beginning at a point on the Southern line of Lot 131 of Tract 1734, filed
February 28, 1957, in book 38 of Maps, at Pages 11 through 13, records of said
County, distant along said line, North 68°09’31” East, 106.17 feet from the
Southwestern line of said Lot; thence South 23°34’13” East, 953.46 feet; thence
South 57°49’20” East, 148.90 feet to a point on the Northwestern line of
Hillerest Knolls, filed January 13, 1925, in Book 4 of Maps, at Page 56, records
of said County; thence along the last named line, North 74°59’01” East, 781.24
feet; thence leaving said line, North 25°26’ East, 256.26 feet to a point on the
exterior boundary of said Tract 1734; thence along said boundary, the ten
following courses: South 64°34’ West, 180 feet; thence 37°35’ West, 308 feet;
thence North
57°18’ East, thence North 16°08’ West, 263.44 feet; thence South 76°44’ West,
140.59 feet; thence North 38°30’ West, 175.01 feet; thence South 85°11’32” West,
404.34 feet; thence South 68°09’31” West, 170 feet; thence North 21°50’29” West,
33.06 feet; thence South 68°09’31” West, 13.83 feet to the point of beginning.

Excepting therefrom, that portion conveyed to the City of San Leandro, by Deed
dated March 29, 1984, and recorded March 30, 1984, Instrument No. 84-61105.
Alameda County Records.

 

A.P. Nos.: 079-0015-001-83

     079-0015-001-86

     079-0015-001-85

PARCEL TWO:

Real Property in the unincorporated area of the County of Alameda, State of
California, described as follows:

Lot I, Block F, of Hillcrest Knolls, filed January 13, 1925, Map Book 4, Pages
56 and 57, Alameda County Records.

 

A.P. No.: 079-0005-016

PARCEL THREE:

Real Property in the City of San Leandro, County of Alameda, State of
California, described as follows:

Beginning at the intersection of the Northwestern line of Lot 39, of the Map of
Tract 1734, filed February 28, 1957, in Book 38 of Maps, at Pages 11 through 13,
in the Office of the County Recorder of Alameda County, with the Eastern line of
land designated as Parcel 2 in the Deed to East Bay Lutheran Hospital
Association, dated March 10, 1960, on Reel 40, Image 655 Official Records
(AR-30181), Alameda County Records; running thence along the last named line,
North 16°08’ West, 263.44 feet to a point on the Southern line of Lot 51, as
said Lot is shown on said Map; distant thereon North 76°44’ East, 140.59 feet
from the Southwestern line thereof; thence along the exterior boundary of said
Tract 1734, as follows: North 76°44’ East 27.41 feet; South 87” East, 105 feet;
South 16°08’ East, 190 feet to said Northwestern line of Lot 39; and thence
along the last named line, South 57°18’ West, 132.06 feet to the point of
beginning.

 

A.P. No.: 079-0015-001-47

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

Facility # 4619

PA

SCHEDULE A

THE LAND

ALL THAT CERTAIN lot or parcel of property, being Parcel A in the Fort Steuben
Plan of Lots No. 2, Situate in the Township of North Fayette, County of
Allegheny and Commonwealth of Pennsylvania, more particularly bounded and
described as follows:

BEGINNING at a point on the Southerly right-of-way line of Steubenville Pike,
also known as Old Route 22 or State Route 3066, of variable width, common to Lot
No. 276 in the Hankey Farms Plan No. 2 as recorded in the Office of the Recorder
of Deeds of Allegheny County, Pennsylvania in Plan Book Volume 68 pages 98
through 101, inclusive, and Parcel A in the Fort Steuben Plan of Lots No. 2 as
recorded in said Recorder’s Office in Plan Book Volume 195 pages 119 to 122;
thence from said point of beginning by the line dividing Lot Nos. 276, 277 and
f278 in the Hankey Farms Plan No. 2 and Parcel A in the Fort Steuben Plan of
Lots No. 2, South 14 degrees 23 minutes 10 seconds East a distance of 220.15
feet to a point common to said Parcel A and Lot Nos. 278 and 279 in the Hankey
Farms Plan No. 2; thence by the line dividing said Parcel A and Lot Nos. 279,
280 and 281 in the Hankey Farms Plan No. 2 South 02 degrees 30 minutes 00
seconds West a distance of 227.235 feet to a point common to Parcel A in the
Fort Steuben Plan of Lots No. 2 and Lot No. 282 in the Hankey Farms Plan No. 2;
thence by the line dividing said Parcel a and lot No. 282 in the Hankey Farms
Plan No. 2 South 12 degrees 30 minutes 10 seconds East a distance of 105.38 feet
to a point common to said Parcel A and Lot No. 283 in the Hankey Farms Plan No.
2; thence by the line dividing said Parcel A and Lot Nos. 283 in the Hankey
Farms Plan No. 2 South 27 degrees 59 minutes 00 seconds East a distance of 91.28
feet to a point common to Parcel A and Lot No. 284 in the Hankey Farms Plan No.
2; thence by the line dividing said Parcel A and Lot No. 284 in the Hankey Farms
Plan No. 2 South 43 degrees 28 minutes 00 seconds East, a distance of 105.38
feet to a point common to Parcel A in the Fort Steuben Plan of Lots No. 2 Lot
Nos. 284 and 285 in the Hankey Farms Plan No. 2 and lands now or formerly of
Gavlick Construction Company; thence by the line dividing Parcel a in the Fort
Steuben Plan of Lots No. 2 and lands now or formerly of Gavlick Construction
Company South 51 degrees 39 minutes 00 seconds West a distance of 496.67 feet;
thence by the same in a Southwesterly direction by a curve bearing to the right
having a radius of 550.00 feet through an arc distance of 338.36 feet to a point
of tangency; thence by the same south 40 degrees 41 minutes 00 seconds West, a
distance of 12.81 feet to a point on the Easterly right-of-way line of Route 257
Section 12-A – State Route 0022-Ramp “R.”; thence by the Easterly right-of-way
line of said road, the following fourteen courses and distances:

North 55°, 40’, 37” West a distance of 9.26 feet;

North 49°, 17, 48” West a distance of 37.63 feet;

North 40°, 41’, 32” West a distance of 44.28 feet;

North 37°, 14’, 05” West a distance of 51.92 feet;

North 39°, 22’, 52” West a distance of 51.42 feet;

North 44°, 54’, 26” West a distance of 50.49 feet;

North 49°, 26’, 36” West a distance of 50.09 feet;

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

#4619

PA

SCHEDULE A

THE LAND

North 51°, 43’, 52” West a distance of 50.01 feet;

North 55°, 20’, 31” West a distance of 33.25 feet;

North 55°, 46’, 18” West a distance of 30.71 feet;

North 73°, 00’, 13” West a distance of 45.84 feet;

North 75°, 28’, 20” West a distance of 44.41 feet;

North 66°, 30’, 52” West a distance of 46.23 feet;

South 81°, 06’, 35” West a distance of 38.74 feet to a point common to the line
dividing Parcel A in the Fort Steuben Plan of Lots No. 2 and lands now or
formerly of Pascoe Farm Supply Company;

Thence by said dividing line North 40°, 29 minutes 00 seconds East a distance of
117.86 feet to a point; thence by same North 49°, 58 minutes 00 seconds West a
distance of 79.40 feet to a point common to the line dividing Parcels A and B in
the Fort Steuben Plan of Lots No. 2; thence by said dividing line the following
four (4) courses and distances:

North 48°, 09’, 03” East a distance of 112.92 feet;

South 41°, 50’, 57” East a distance of 50.14 feet;

North 48°, 04’, 41” East a distance of 354.35 feet;

North 49°, 44’, 57” West a distance of 43203 feet to a point on the Southerly
right-of-way line of Steubenville Pike;

Thence by the Southerly right-of-way line of Steubenville Pike the following
four (4) courses and distances:

In an Easterly direction by a curve bearing to the right having a radius of
1,121.18 feet through an arc distance of 492.79 feet;

South 16°, 58’, 07” East a distance of 10.00 feet;

In an Easterly direction by a curve bearing to the right having a radius of
1,111.28 feet through an arc distance of 50.54 feet to a point of tangency;

North 75°, 36’, 50” East a distance of 272.31 feet to the line dividing Parcel A
in the Fort Steuben Plan of Lots No. 2 and Lot No. 276 in the Hankey Farms Plan
No. 2 at the point of BEGINNING.

BEING designated as part of Tax Parcel Number 9929-X-50413 and 9929-X-50414 in
the Deed Registry Office of Allegheny County, Pennsylvania.

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

#4619

PA

SCHEDULE A

THE LAND

BEING the same premises which Allegheny General Hospital, a Pennsylvania
nonprofit corporation and successor by merger to Allegheny Neuropsychiatric
Institute, a Pennsylvania nonprofit corporation by Deed dated 12/14/1995 and
recorded in the County of Allegheny on 12/15/1995 in Deed Book 9600 page 239,
granted and conveyed unto Vencor Hospitals East, Inc., a Delaware corporation,
in fee.

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

#4633

KY

 

EXHIBIT A

BEGINNING at a point in the east line of the first alley east of Barrel Avenue
North 32” 31 minutes 52 seconds West 130.63 feet as measured along said east
line from its intersection with the north line of Breckinridge Street; thence
with said east line North 32º 31 minutes 52 seconds West 69.48 feet to an “X”
cut at its intersection with the south line of an alley 12 feet wide; thence
with said south line North 57º 02 minutes 58 seconds East 25.00 feet to a nail
in same; thence with leaving said south line and with a line parallel with the
east line of the first mentioned alley South 32º 31 minutes 52 seconds East
69.48 feet to a “L” cut, said point being 130.63 feet north of Breckinridge
Street; thence with a line parallel with the north line of Breckinridge Street,
South 57º 02 minutes 58 seconds West 25.00 feet to the point of beginning,
containing 1.737 square feet.

BEGINNING at a point in the south right-of-way line of DeBarr Street, said point
being south 57º 01 minutes 46 seconds West 25.00 feet from the intersection of
said south right-of-way line of DeBarr Street and the west right-of-way line of
Edward Street; thence south 32º 35 minutes 26 seconds East 99.99 feet to a steel
bar in the north right-of-way line of a 12’ wide public alley; thence with the
right-of-way line of said alley, South 57º 02 minutes 58 seconds West 20.00 feet
in a steel bar; thence North 32º 35 minutes 26 seconds West 99.98 feet to a
steel bar in the south right-of-way line of DeBarr Street, aforesaid; thence
with said right-of-way line, North 57º 01 minutes 46 seconds East 20.00 to the
point of beginning, passing an iron pipe at 19.62 feet and containing 2000
square feet.

BEGINNING at a point in the south right-of-way line of DeBarr Street, said point
being the intersection said south right-of-way line of DeBarr Street and the
west right-of-way line of Edward Street, thence with said right-of-way line of
Edward Street, South 32° 35 minutes 26 seconds East 100.00 feet to a point in
the north right-of-way line of a 12” wide public alley; thence with the
right-of-way line of said alley, South 57° 02 minutes 58 seconds West 25.00 feet
to a steel bar, thence North 32° 35 minutes 26 seconds West 99.99 feet to a
point in the south right-of-way line of DeBarr Street, aforesaid; thence with
said right-of-way line, North 57° 01 minutes 46 seconds East 25.00 to the point
of beginning, passing a “x” cut in the sidewalk at 24.94 feet and containing
2500 square feet.

BEING the same properly acquired by Ventas Realty, Limited Partnership a
Delaware Limited Partnership, by Deed dated September 25, 1998 and recorded
January 15, 1999 in Deed Book 7170, Page 644 in the Office of the Clerk of
Jefferson County, Kentucky, excepting therefrom so much of said property
conveyed to Concordia Lutheran Church by Deed dated August 8, 1996 and recorded
in Deed Book 6772, Page 561 in the office aforesaid.

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

#4633

KY

EXHIBIT A

TRACT 1:

BEGINNING at the intersection of the center line of St. Anthony Place with the
East line of Barret Avenue; thence with said East line North 32° 31 minutes 52
seconds West 25.00 feet to its intersection with the North line of St. Anthony
Place aforesaid; thence continuing with said East line, North 32° 34 minutes 01
seconds West 604.88 feet to its intersection with the South line of an alley, as
widened; thence with said South line, South 85° 15 minutes 48 seconds East
182.67 feet and North 72° 07 minutes 52 seconds East 34,30 feet to its
intersection with the original South line of said alley; thence with said South
line, South 85° 35 minutes 48 seconds East 796.85 feet to its intersection with
the North line of St. Anthony Place aforesaid; thence with said North line,
South 56° 56 minutes 05 seconds. West 312.68 feet to its intersection with the
West line and same, if extended, of Edward Street; thence with said West line
and its extension, South 32° 29 minutes 07 seconds East 25.00 feet to its
intersection with the center line of St. Anthony Place aforesaid; thence with
said center line South 56° 56 minutes 05 seconds West 503.10 feet to the point
of beginning, containing 263,291 square feet.

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

#4633

KY

EXHIBIT A

TRACT 2:

BEGINNING at the intersection of the center line of St. Anthony Place with the
East line of Barret Avenue; thence with said center line North 56° 56 minutes 05
seconds East 503.10 feet to its intersection with the West line of Edward Street
and same, if extended.; Thence with said West line and its extension, South 32°
29 minutes 07 seconds East 276.74 feet to its intersection with the North line
of DeBarr Street; thence with said North line South 56° 56 minutes 25 seconds
West 502.97 feet to its intersection with the East line of Barret Avenue,
aforesaid; thence with said East line, North 32° 31 minutes 52 seconds West
276,69 feet to the point of beginning, containing 139,175 square feet.

TRACT 3:

BEGINNING at the intersection of the East line of the tract conveyed to
Jefferson County, Kentucky, by Deed of record in Deed Book 5272, Page 780, in
the Office of the Clerk of Jefferson County, Kentucky, with the South line of
Broadway, said point also being South 85° 35 minutes 48 seconds East 577.10 feet
as measured along said South line from its intersection with the original East
line of Barret Avenue; thence with said South line, South 85° 35 minutes 48
seconds East 283,75 feet to a point, said point being North 85° 35 minutes 48
seconds West 377.08 feet as measured along said South line from its intersection
with the West line of St. Anthony Place; thence leaving said South line, South
04° 24 minutes 12 seconds West 247.50 feet to its intersection with the North
line of an alley, 15 feet wide; thence with said North line, North 85° 35
minutes 48 seconds West 283.75 feet to its intersection with the East line of
the Jefferson County, Kentucky, tract aforesaid; thence with said East line,
North 04° 24 minutes 13 seconds East 247.50 feet to the point of beginning,
containing 70,228 square feet.

TRACT 4:

BEGINNING at the intersection of the East line of Edward Street with the South
line of St. Anthony Place; thence with said South line North 56° 56 minutes 35
seconds East 62.00 feet to its intersection with the West line of the tract
conveyed to Leland B. and Jeanne A. Longstreth, by Deed of record in Deed Book
5753, Page 671, in the Office of the Clerk of Jefferson County, Kentucky; thence
with said West line, South 32° 27 minutes 25 seconds East 120.00 feet to its
intersection with the North line of an alley, 12 feet wide; thence with said
North line, South 56° 56 minutes 35 seconds West 62.00 feet to its intersection
with the East line of Edward Street, aforesaid; thence with said East line,
North 32° 27 minutes 25 seconds West 120.00 feet to the point of beginning,
containing 7,440 square feet.

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

#4633

KY

EXHIBIT A

TRACT 5-6:

BEGINNING at the intersection of the North line of Breckinridge Street with the
West line of Edward Street: thence with said North line, South 57° 02 minutes 58
seconds West 275.00 feet to its intersection with the East line of the tract
conveyed to Vincent J. and Kathleen Lombardo, by Deed of record in Deed Book
4784, Page 288, in the Office of the Clerk of Jefferson County, Kentucky; thence
with said East line and same, if extended, North 32° 31 minutes 52 seconds West
200.11 feet to its intersection with the South line of an alley, 12 feet wide;
thence 274.79 feet to its intersection with the West line of Edward Street,
aforesaid; thence with said West line, South 32° 35 minutes 26 seconds East
64.10 feet to its intersection with a line opinion to the tract conveyed to
Richard L. and Belly Ann Starks, by Deed of record in Deed Book 3627, Page 538,
in the Office aforesaid; thence with lines common to said Starks tract South 57°
02 minutes 58 seconds West 25.00 feet, South 32° 35 minutes 26 seconds East
49.00 feet and North 57° 02 minutes 58 seconds East 25.00 feet to its
intersection with the West line of Edward Street aforesaid; thence with said
West line, South 32° 35 minutes 26 seconds East 87.00 feet to the point of
beginning, containing 53,782 square feet.

TRACT 8-13:

BEGINNING at the intersection of the West line of the tract conveyed to Alva
Clay and Marie Ashcraft, by Deed of record in Deed Book 5575, Page 712, in the
Office of the Clerk of Jefferson County, Kentucky, with South line of DeBarr
Street, said point being South 57° 01 minutes 46 seconds West 45.00 feet as
measured along said South line from its intersection with the West line of
Edward Street; thence with said West line of the Clay and Ashcraft tract, South
32° 35 minutes 20 seconds East 99.98 feet to its intersection with the North
line of an alley, 12 feet wide; thence with said North line, South 57° 02
minutes 58 seconds West 144.68 feet to its intersection with the East line of
the tract conveyed to Ronalda and James Denham, by Deed of record in Deed Book
5653, Page 586, in the Office aforesaid; thence with said East line, North 32°
35 minutes 26 seconds West 99.93 feet to its intersection with the South line of
DeBarr Street aforesaid; thence with said South line, North 57° 01 minutes 46
seconds East 144.68 feet to the point of beginning, containing 14,461 square
feet.

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

#4633

KY

EXHIBIT A

TRACT 14:

BEGINNING at the Intersection of the North line of the first alley South of
Broadway with the East line of Barret Avenue; thence with said East line North
32° 34 minutes 01 seconds West 59.45 feet to its intersection with the South
line of the tract conveyed to Eton Service, Inc., by Deed of record in Deed Book
6317, Page 801, in the office of the Clerk of Jefferson County, Kentucky; thence
with said South line, South 85° 35 minutes 48 seconds East 89.38 feet to a point
in same; thence leaving said South line, South 04° 24 minutes 12 seconds West
47.50 feet to its intersection with the North line of the alley aforesaid;
thence with said North line, North 85° 35 minutes 48 seconds West 53.63 feet to
the point of beginning, containing 3,397 square feet.

TAX DATA FOR INFORMATION PURPOSES ONLY:

TAX DATA: District 09, Block 021E, Lots 0066, 0067, 0068 and 0069, Sublot 0000
each (Tract 1).

TAX DATA: District 09, Block 021E, Lots 0001 through 0031 and Lot 0106, Sublot
0000 each (Tract 2).

TAX DATA: District 09, Block 031E, Lot 0031, Sublot 0000 (Tract 3).

TAX DATA: District 09, Block 021E, Lots 0051 and 0052, Sublot 0000 (Tract 4).

TAX DATA: District 09, Block 021K, Lots 0307 and 0110, Sublot 0000 each (Tracts
5-6).

TAX DATA: District 09, Block 031K, Lots 0126, 0127, 0128, 0129, 0130 and 0209,
Sublot 0000 each (Tracts 8-13).

TAX DATA: District 09, Block 068B, Lots 0002, Sublot 0000 (Tract 14).

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

Facility # 4638

SCHEDULE A

THE LAND

PARCEL I

Being all of lots 696 to 706 both inclusive; all lots 788 to 800, both
inclusive; all of lots 813 to 831, both inclusive; all of lots 841 to 850, both
inclusive and portions of lots No. 848, 851, and 852 in Stout’s Tenth Street
Addition, now in the City of Indianapolis, as per plat thereof recorded in Plat
Book 12, page 52 of the Recorder’s records of Marion County, Indiana; together
with adjacent streets and alleys heretofore vacated, more particularly as
follows:

A part of Stout’s Tenths Street Addition as per Plat thereof recorded in plat
Book 12, page 52 in the Office of the Recorder of Marion County, Indiana, being
more particularly described as follows:

Commencing at the Southwest corner of lot No. 708 in said addition; thence South
89 degrees 56 minutes 43 seconds East along the south line of lot No. 708 and
707 a distance of 82.00 feet to the southeast corner of said Lot No. 707; thence
North 00 degrees 00 minutes 00 seconds East along the east line of said lot No.
707 a distance of 5.00 feet to the Northwest corner of a tract of land described
in Instrument NO. 78-016282, said corner also being the point of beginning;
thence continuing North 00 degrees 00 minutes 00 seconds East a distance of
115.00 feet to the northwest corner of lot 706; thence South 89 degrees 56
minutes 43 seconds East along the North line of lot No. 706 and 705 a distance
of 50.00 feet to the Southerly extension of the east line of a 12 foot alley;
thence North 00 degrees 00 minutes 00 seconds East along said extension and
along the west line of lots No. 788 thru 800 and along the northerly extension
thereof a distance of 513.13 feet to a point in the centerline of vacated 11th
Street; thence South 89 degrees 26 minutes 03 seconds East along said centerline
a distance of 145.01 feet to the centerline of vacated Cable Street; thence
South 00 degrees 00 minutes 00 seconds West along said centerline a distance of
61.20 feet to a point in the centerline of a vacated 15 foot alley; thence South
89 degrees 56 minutes 43 seconds East along said centerline a distance of 519.00
feet to the southerly extension of the west line of lot No. 840 in said
addition; thence North 54 degrees 26 minutes 53 seconds East a distance 287.69
feet to the intersection of the westerly right of way line of the Baltimore
Railroad with the easterly extension of the north line of vacated 11th Street;
thence Southwesterly along said right of way line a distance of 861.00 feet to
the northeast corner of a tract of land described in Instrument No. 78-016282,
said point being on a curve having a radius of 691.62 feet, the radius point of
which bears South 12 degrees 41 minutes 59 seconds West; thence westerly along
the north line of said tract and along said curve an arc distance of 153.60 feet
to a point lying North 00 degrees 01 minutes 29 seconds West from said radius
point; thence South 85 degrees 43 minutes 31 seconds West along said North line
a distance of 335.39 feet to the point of beginning.

PARCEL II

Lots No. 775, 776, 777, 778, 779, 780, 781, 782, 783, 784, 785, 786, and 787 in
Stout’s Tenth Street Addition as per plat thereof recorded in Plat Book 12, page
52 in the Office of the Recorder of Marion County, Indiana.

PARCEL III

Lot No. 707 and 708 in Stout’s Tenth Street Addition as per plat thereof
recorded in Plat Book 12; page 52, in the Office of the Recorder of Marion
County, Indiana.

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Facility # 4611

FL

SCHEDULE A

THE LAND

PARCEL I:

Lots 1, 2 and 3, Block 1, APOLLO SUBDIVISION, according to the map or plat
thereof, recorded in Plat Book 79, Page 96, Public Records of Pinellas County,
Florida.

PARCEL II:

(a) Lot 2, BIDEAWEE ESTATE SECOND PARTIAL REPLAT, according to the plat thereof,
recorded in Plat Book 52, Page 71, Public Records of Pinellas County, Florida;

LESS the following described:

Begin at the Southwest corner of said Lot 2; thence run North 100 feet along the
Westerly line of said Lot 2 to the Northwest corner; thence run East 38.22 feet
along the Northerly line of said Lot; thence Southwesterly along a curve concave
to the Southeast having a radius of 637.07 feet, tangent bearing South 19°
25’06” West, run 103.19 feet along the arc of said curve through a central angle
of

9°16’51” to a point on the Southerly line of said Lot, 13.20 feet from the Point
of Beginning; thence Westerly 13.20 feet to the Point of Beginning.

AND

(b) Lot 1, BIDEAWEE ESTATE SECOND PARTIAL REPLAT, according to the plat thereof,
recorded in Plat Book 52, Page 71, Public Records of Pinellas County, Florida;

LESS the following:

That part of Lot 1, BIDEAWEE ESTATE SECOND PARTIAL REPLAT, according to the plat
thereof, recorded in Plat Book 52, Page 71, Public Records of Pinellas County,
Florida, being further described as follows: Begin at the Southwest corner of
said Lot 1; thence run Northerly 96.87 feet along the Westerly line of said Lot
1 to the beginning of a curve concave to the Southeast having a radius of 30.00
feet; thence run Northeasterly 47.15 feet along the arc of said curve through a
central angle of 90° 03’00” to the end of said curve; thence run Easterly 67.38
feet (67.33 feet, calculated) along the Northerly line of said Lot 1 to a point
on a curve concave to the Southeast having a radius of 637.07 feet; thence from
a tangent bearing South

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FL # 4611

SCHEDULE A

THE LAND

32°02’10” West, (South 31°15’08” West, calculated), run Southwesterly 140.30
feet (140.24 feet, calculated) along the arc of curve through a central angle of
12°37’04” (12°36’46”, calculated) to a point on the Southerly line of said Lot
1; thence from a tangent bearing South 19°25’06” West, (South 18°38’22” West
calculated), run Westerly 38.22 feet along said Southerly line of Lot 1 to the
Point of Beginning.

PARCEL III:

(a) That part of Lot 1 of J.C. WILLIAMS’ SUBDIVISION of Lot 2 of Benson’s
Subdivision, recorded in Deed Book “O”, Page 555, Public Records of Hillsborough
County, Florida, of which Pinellas County was formaly a part, and recorded in
Plat Book 3, Page 23, Public Records of Pinellas County, Florida, described as
follows: the North 45 feet of Lot 1 lying East of 6th Street South;

LESS that part lying more than 323.3 feet East of the West line of said Lot 1.

AND

(b) That part of Lot 1 of J.C. Williams’ Subdivision of Lot 2 of Benson’s
subdivision, according to plat of J.C. Williams Subdivision, recorded in Deed
Book “O” Page 555, Public Records of Hillsborough County, Florida, of which
Pinellas County was formerly a part and described as follows:

Commence at the Northwest corner of said Lot 1; run thence East along the North
boundary of said Lot 1, 215.3 feet to the East boundary of 6th Street South as
established by monuments found; thence South along said East boundary of 6th
Street South, 45 feet to a Point of Beginning; thence East, 108 feet; thence
South 80 feet; thence West 108 feet; thence North 80 feet to the Point of
Beginning.

PARCEL IV:

(a) A portion of Lot 4, LEISTER AND SEAS SUBDIVISION, as recorded in Plat Book
6, Page 43, Public Records of Pinellas County, Florida, described as follows:

Commencing at the Southeast corner of said Lot 4, for a Point of Beginning;
proceed North 89°08’13” West, 32.24 feet; thence

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FL #4611

SCHEDULE A

THE LAND

50.58 feet along the arc of a curve to the right, radius 637.07 feet, chord
North 41°28’08” East, 50.57 feet; thence South 01°51’47” West, 38.40 feet to the
Point of Beginning.

AND

(b) A portion of Lot 5, LEISTER AND SEAS SUBDIVISION, recorded in Plat Book 6,
Page 43, Public Records of Pinellas County, Florida, described as follows:

Commencing at the Southeast corner of said Lot 5 for a Point of Beginning;
proceed North 89°08’13” West, 45.00 feet; thence North 01°51’47” East, 38.40
feet; thence 63.93 feet along the arc of a curve to the right, radius 637.07
feet, chord North 46°37’05” East, 63.90 feet; thence South 01°51’47” West, 82.99
feet to the Point of Beginning.

AND

(c) A portion of Lot 6, LEISTER AND SEAS SUBDIVISION, as recorded in Plat Book
6, Page 43, Public Records of Pinellas County, Florida, described as follows:

Commencing at the Southeast corner of said Lot 6 for a Point of Beginning;
proceed North 89°08’13” West, 45.00 feet; thence North 01°51’47” East, 82.99
feet; thence 58.53 feet along the arc of a curve to the right, radius 637.07
feet, chord North 52°07’30” East, 58.51 feet; thence South 01°51’47” West,
119.61 feet to the Point of Beginning.

AND

(d) A portion of Lot 77, TAYLOR’S SUBDIVISION, as recorded in Plat Book 3, Page
84, Public Records of Hillsborough County, Florida of which Pinellas County was
formerly a part, described as follows:

Commencing at the Southeast corner of said Lot 77, for a Point of Beginning;
proceed North 89°08’13” West, 56.52 feet; thence North 58°17’56” East, 49.19
feet; thence 21.56 feet along the arc of a curve to the right, radius 10.00
feet; thence South 59°55’09” East, 17.62 feet; thence South 01°51’47” West,
17.88 feet to the Point of Beginning.

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FL #4611

SCHEDULE A

THE LAND

(e) Lots 7 and 8, LEISTER AND SEAS SUBDIVISION, according to the map or plat
thereof, recorded in Plat Book 6, Page 43, Public Records of Pinellas County,
Florida;

LESS AND EXCEPT that portion of land being described in O.R. Book 5098, Page
1653.

All lying Southeast of road for realignment of 4th Street South and 6th Street
South and LESS road right-of-way, all lying and being in Pinellas County;
Florida.

PARCEL V:

Lot 1, Block 1, TAYLOR’S HUMANA SUBDIVISION, according to the map or plat
thereof, recorded in Plat Book 96, Page 67, Public Records of Pinellas County,
Florida.

PARCEL VI:

Lots 18, 19 and 20, TAYLOR’S SUBDIVISION, according to the map or plat thereof,
recorded in Plat Book 3,
Page 84, Public Records of Hillsborough County, Florida, of which Pinellas
County was formerly a part.

PARCEL VII:

(a) Lot 16, and the South 5 feet of Lot 15, TAYLOR’S SUBDIVISION, according to
the plat thereof, recorded in Plat Book 3, Page 84, Public Records of
Hillsborough County, Florida, of which Pinellas County was formerly a part.

AND

(b) Lot 17, TAYLOR’S SUBDIVISION, according to the map or plat thereof, recorded
in Plat Book 3, Page 834, Public Records of Hillsborough County, Florida; of
which Pinellas County was formerly a part, as also filed in Pinellas County Plat
Book 3, Page 13.

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#4644

CA

SCHEDULE A

THE LAND

ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE,
CITY OF BREA, DESCRIBED AS FOLLOWS:

PARCEL 2 AND PARCEL A OF PARCEL MAP NO. 87-241, AS PER MAP FILED IN BOOK 285,
PAGES 18 TO 21 INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY.

EXCEPTING THEREFROM ALL MINERAL RIGHTS, TOGETHER WITH THE RIGHT TO ENTER UPON
SAID LAND FOR THE PURPOSE OF EXPLORING, DRILLING, DEVELOPING AND PRODUCING OIL,
GAS, GASOLINE OR OTHER HYDROCARBONS FROM SAID LAND TO DO ANY AND ALL THINGS
NECESSARY OR PROPER FOR THE PROTECTION OF SAID MINERALS, AS RESERVED IN THE DEED
FROM GENERAL PETROLEUM CORPORATION OF CALIFORNIA TO LAWRENCE L. MCCREA AND WIFE,
RECORDED MARCH 16, 1939 IN BOOK 985, PAGE 398 OF OFFICIAL RECORDS.

BY AN INSTRUMENT RECORDED FEBRUARY 16, 1965 IN BOOK 7415, PAGE 287 OF OFFICIAL
RECORDS, SOCONY MOBIL OIL COMPANY, INC., SUCCESSOR IN INTEREST TO GENERAL
PETROLEUM CORPORATION. QUITCLAIMED ALL RIGHT, TITLE AND INTEREST IN AND TO THE
SURFACE AND 500 FEET BELOW THE SURFACE OF SAID LAND.

ALSO EXCEPTING THEREFROM ALL MINERAL RIGHTS, TOGETHER WITH THE RIGHT TO ENTER
UPON SAID LAND FOR THE PURPOSE OF EXPLORING, DRILLING, DEVELOPING AND PRODUCING
OIL, GAS, GASOLINE OR OTHER HYDROCARBONS FROM SAID LAND TO DO ANY AND ALL THINGS
NECESSARY OR PROPER FOR THE PRODUCTION OF SAID MINERALS, AS RESERVED IN THE DEED
FROM GENERAL PETROLEUM CORPORATION OF CALIFORNIA, TO WAYNE BROOKSHIRE, RECORDED
JULY 13, 1956 IN BOOK 3576, PAGE 591 OF OFFICIAL RECORDS.

BY AN INSTRUMENT RECORDED FEBRUARY 2, 1966 IN BOOK 7828, PAGE 772 OF OFFICIAL
RECORDS, SOCONY MOBIL OIL COMPANY, INC., SUCCESSOR IN INTEREST TO GENERAL
PETROLEUM CORPORATION, QUITCLAIMED ALL RIGHT, TITLE AND INTEREST IN AND TO THE
SURFACE AND 500 FEET BELOW THE SURFACE OF THE LAND.

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Facility # 4876

FL

SCHEDULE A

THE LAND

PARCEL I:

Lots 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10, Block 39 of “Town of Hollywood” according
to the Plat thereof, as recorded in Plat Book 1, Page 21 of the Public Records
of Broward County, Florida.

PARCEL II:

Lots 27, 28 and 29, Block 38 of “Hollywood” according to the Plat thereof, as
recorded in Plat Book 1, Page 21 of the Public Records of Broward County,
Florida.

PARCEL III:

Lot 30, Block 38 of “Hollywood” according to the Plat thereof, as recorded in
Plat Book 1, Page 21 of the Public Records of Broward County, Florida.

PARCEL IV:

Lots 16, 17, 18, 19, 20 and 21, Block 28 of “Hollywood Original Town” according
to the Plat thereof, as recorded in Plat Book 1, Page 21 of the Public Records
of Broward County, Florida.

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MA 4688

SCHEDULE A

THE LAND

Property: 1515 Commonwealth Avenue, Boston, MA

Facility Name: Vencor Hospital - Boston

Facility Number: 4688

A certain parcel of land with the buildings thereon, situated in the Brighton
District of Bosten, Suffolk County, Massachusetts, now known and numbered as
1515 Commonwealth Avenue, and being shown as Hahnemann Hospital, Loc B and
Hospital Road, containing 92,289 square feet, on a plan entitled “Plan of Land
of Hahnemann Hospital Boston-Mass., (Brighton District)”, dated January 31,
1940, recorded with Suffolk County Registry of Deeds in Book 5846, Page 229,
bounded and described as follows:

 

SOUTHEASTERLY    by Commonwealth Avenue, by three lines measuring fifty and
02/100 (50.02) feet, three hundred twenty-eight and 77/100 (328.77) feet, and
eighty and 63/100 (80.63) feet, respectively; SOUTHWESTERLY    by Right of Way,
as shown on said plan, two hundred thirteen and 11/100 (213.11) feet;
NORTHEASTERLY    by Loc A and by land of Massachusetts Memorial Hospital, as
shown on said plan, by two lines measuring two hundred nineteen 11/100 (219.11)
feet and one hundred sixty-nine and 84/100 (163.84) feet, respectively;
NORTHEASTERLY    and NORTHEASTERLY    again, by land of Massachusetts Memorial
Hospital, as shown on said plan, how Hospital Road, by two lines measuring
twelve and 70/100 (12.70) feet, and fifty and 80/100 (50.80) feet, respectively;
and NORTHEASTERLY    again, by land now or formerly of Sophie M. Friedman, one
hundred eighty-nine and 36/100 (189/36) feet.

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Facility #4658

AZ

SCHEDULE A

THE LAND

The East 360 feet of the South 250 feet of Lot 2, of DOVE-WILMOT ADDITION,
according to the plat of record in the office of the County Recorder of Pima
County, Arizona, recorded in Book 18 of Maps, Page 33; TOGETHER WITH all of
Grantor’s right, if any, to use in common with others for ingress, egress and
parking purposes, the easement as set forth in Easement Agreement recorded in
Docket 7162, Page 328, in the Pima County, Arizona Records.

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Facility # 4628

TN

SCHEDULE A

THE LAND

TRACT ONE (1):

ALL THAT TRACT OR PARCEL OF LAND LYING AND BEING IN THE CITY OF CHATTANOOGA,
HAMILTON COUNTY, TENNESSEE, AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT A CHISELED CROSS at the intersection of the Western right-of-way of
Walnut Street and the Southern right-of-way of East 7th Street; thence along the
Western right-of-way of Walnut Street and in part along the face of the building
situated on the herein described property, South, No (00) degrees 36 minutes 06
seconds West, 67.88 feet to a PK nail; thence, leaving said right- of-way,
North, 89 degrees 48 minutes 40 seconds West, 115.25 feet in part along the face
of the above mentioned building and along a common line with the Vencor, Inc.,
property, recorded in Deed Book 4126, Page 461, in the Register’s Office of
Hamilton County, Tennessee, to the corner of the above mentioned building;
thence North, No (00) degrees 50 minutes 15 seconds East, 67.06 feet along a
common line with the above mentioned Vencor, Inc. property, and along the
Easterly line of a private joint driveway easement, shown on that plat recorded
in Plat Book 26, Page 199, as Parcel 5, and described in deed Book C, Volume 7,
Page 644, in the above mentioned Register’s Office, to a PK nail at the
Northwest corner of the above mentioned building; thence North, 89 degrees 48
minutes 41 seconds East, 114.98 feet along the Southerly right-of-way of East
7th Street, to THE POINT OF BEGINNING.

All as shown on that International ALTA/ACSM Land Title Survey prepared by
Samuel W. Clemons, Sr., R.L.S. Tennessee Number 1639, with CLEMONS SURVEYING,
383 Ellis Cove Road, South Pittsburg, TN 37380, entitled “Vencor (TN) Project”,
dated as of October 30, 1997, and last revised on December 23, 1997, designated
as Job Order No. 97-10-34, (Drawing Number HT-145-D-L-4.1-1.0).

The Grantor’s source of interest in the property is a Warranty Deed recorded in
Book 5138, Page 812, in the Register’s Office of Hamilton County, Tennessee.

The Legal Description herein is the same as that contained in the deed of Prior
Title.

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#4628

SCHEDULE A

THE LAND

TRACT TWO (2):

ALL THAT TRACT OR PARCEL OF LAND LYING AND BEING IN THE CITY OF CHATTANOOGA,
HAMILTON COUNTY, TENNESSEE, AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING at the intersection of the western right-of-way of Georgia Avenue and
the northern right-of-way of East 8th Street; thence along said northern
right-of-way of East 8th Street North 89 degrees 56 minutes 30 seconds West
115.75 feet to a point; thence North 00 degrees 10 minutes West 55.34 feet to a
point; thence North 89 degrees 44 minutes East 9.5 feet to a point; thence North
00 degrees 10 minutes West 205 feet to a point at the northwest corner of the
property conveyed from Hospital Affiliates International, Inc. to the Caldsted
Foundation by Deed recorded in Book 2288, Page 399, Register’s Office, Hamilton
County, Tennessee (said point being the northeast corner of Parcel 5 shown on
plat recorded in Plat Book 26, Page 199, said Register’s Office); thence South
89 degrees 44 minutes West along the north line of Parcel 5 as shown on plat
recorded in Plat Book 26, Page 199, said Register’s Office 11.5 feet to a point;
thence North 00 degrees 10 minutes West 48.64 feet to a point; thence South 89
degrees 44 minutes West 99.88 feet to a point on the eastern right-of-way of
Cherry Street; thence along said right-of-way North 00 degrees 10 minutes West
1.0 feet to a point; thence North 89 degrees 44 minutes East 117.65 feet to a
point; thence North 00 degrees 10 minutes West 34.5 feet to a point; thence
North 89 degrees 44 minutes East 5.0 feet to a point; thence 00 degrees 10
minutes West 35.5 feet to a point; thence South 89 degrees 44 minutes West 11.5
feet to a point; thence North 00 degrees 10 minutes West 11.5 feet to a point;
thence North 89 degrees 44 minutes East 5.0 feet to a point; thence North 00
degrees 10 minutes West 28.5 feet to a point on the southern right-of-way of
East 7th Street; thence along said right-of-way North 89 degrees 44 minutes East
11.97 feet to a point; thence leaving said right-of-way South 00 degrees 43
minutes 30 seconds West 66.76 feet to a point; thence North 89 degrees 46
minutes 40 seconds. West 115.38 feet to a point on the western right-of-way of
Walnut Street; thence along said right-of-way due South 302.79 feet to the
intersection with the western right-of-way of Georgia Avenue; thence along the
western right-of-way of Georgia Avenue South 25 degrees 33 minutes 30 seconds
West 55.52 feet to the point of beginning, being shown as Parcel 2 on survey
drawing 1093-238-2, dated March 18, 1993 by David L. Hopkins, Jr., Tennessee
Registered Land Surveyor No. 120, 900 Manufactures Road, Chattanooga, Tennessee.

TOGETHER WITH such rights as are appurtenant to the subject property under (1)
the alley agreement dated August 15, 1901, recorded in Book 159, Page 644, in
the Register’s Office of Hamilton County, Tennessee; and (2) easement from The
Caldsted Foundation dated October 28, 1975, recorded in Book 2288, Page 404,
said Register’s Office; and (3) easement across a portion of Parcel 5 as shown
on plat recorded in Plat Book 26, Page 199, said Register’s Office, as reserved
in Deed from Hospital Affiliates International, Inc. to The Caldsted Foundation,
dated October 29, 1975, recorded in Book 2288, Page 399, said Register’s Office.

The Grantor’s source of interest in the property is a Warranty Deed recorded in
Book 5138, Page 812, in the Register’s Office of Hamilton County, Tennessee.

The Legal description herein is the same as that contained in the Deed of Prior
Title.

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MO 4680

Exhibit A

The land herein described is situated in the State of Missouri, City of St.
Louis and is described as follows:

PARCEL 1: A lot in Block 3883 of the City of St. Louis, fronting 100 feet on the
South line of Lindell Boulevard by a depth Southwardly of 212 feet 1-1/2 inches,
more or less, on its West line, which line is a right angles to Lindell
Boulevard and of 215 feet 4-1/4 inches on its East line being the West line of
Euclid Avenue, to an alley on which it has a width 130 feet 5 inches.

PARCEL 2: A parcel of land in Block 3883 of the City of St. Louis, beginning at
a point in the South line of Lindell Boulevard 100 feet West of the West line of
Euclid Avenue, being also the West line of property, now or formerly of Frank H.
Gerhart; thence Westwardly along the South line of Lindell Boulevard 140 feet;
thence Southwardly 213 feet, more or less to an alley; thence Eastwardly along
the North line of said alley 140 feet to a point. 130 feet 5 inches West of the
West line of Euclid Avenue, being also the west line of property, now or
formerly of Frank H. Gerhart, 214 feet more or less, to the South line of
Lindell Boulevard being the point of beginning

Commonly known as 4900 Lindell Blvd.

PARCEL 3: A Lot in Block 3883 of the City of St. Louis beginning in the South
line of Lindell Boulevard, 240 feet West of the West line of Euclid Avenue;
thence Westwardly along the South line of Lindell Boulevard 89 feet 2-3/4 inches
to a point; thence Southwardly 213 feet 2-1/4 inches, more or less, to an alley;
thence Eastwardly along the North line of said alley 89 feet 2-3/4 inches to a
point; thence Northwardly 213 feet 2-1/4 inches, more or less, to the point of
beginning.

PARCEL 4: A Lot in Block 3883 of the City of St. Louis, fronting 75 feet on the
South line of Lindell Boulevard by a depth Southwardly at right angles to
Lindell Boulevard of 213 feet 2-1/4 inches, more or less, to an alley, the
Northwest corner of said Lot being 443 feet 3/4 inches East of the East line of
Kingshighway Boulevard; bounded west by property now or formerly of
International Life Insurance Co., and East by property now or formerly of Park
Lane Memorial Hospital Association.

Commonly known as 4936 Lindell Blvd.

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Facility # 4653

TX

SCHEDULE A

THE LAND

A tract of land situated in the Nathan Proctor Survey, Abstract No. 1230,
Tarrant County, Texas, and being a portion of that certain tract of land
conveyed to Haydn Catler as recorded in Volume 7888, page 1854, Deed Records of
Tarrant County, Texas, and being more particularly described by metes and bounds
as follows:

BEGINNING at a 1/2 inch iron rod at a point which bears North 00 degrees 28
minutes 38 seconds West, 2239.20 feet from the southeast corner of the Nathan
Proctor Survey, said iron also being in the south right-of-way line of the
proposed Oak Bend Trail, a 68 foot proposed right-of-way;

THENCE south 00 degrees 28 minutes 38 seconds East, leaving said South
right-of-way line, 782.07 feet to a 1/2 inch iron rod;

THENCE North 81 degrees 01 minutes 30 seconds West, 762.53 feet to a 1/2 inch
iron rod in the east right-of-way line of the proposed Oakmont Blvd, said iron
being the beginning of a non-tangent curve to the right whose radius is 884.00
feet and whose long chord bears North 10 degrees 36 minutes 50 seconds East,
50.57 feet;

THENCE along said curve and said East right-of-way line, through a central angle
of 03 degrees 16 minutes 41 seconds a distance of 50.58 feet to a 1/2 inch iron
rod;

THENCE North 12 degrees 15 minutes 11 seconds East, continuing along said East
right-of-way line, 352.40 feet to a 1/2 inch iron rod at the beginning of a
curve to the left whose radius is 884.00 feet and whose long chord bears North
09 degrees 43 minutes 21 seconds East 78.06 feet;

THENCE along said curve, and continuing along said East right-of-way line,
through a central angle of 05 degrees 03 minutes 40 seconds a distance of 78.09
feet to a 1/2 inch iron rod at the intersection of said East right-of-way line
with the aforementioned south right-of-way line of Oak Bend Trail, said iron
also being the beginning of a curve to the left whose radius is 535.75 feet and
whose long chord bears North 74 degrees 28 minutes 52 seconds East, 340.17 feet;

THENCE along said curve, and said south right-of-way line, through a central
angle of 23 degrees 23 minutes 58 seconds a distance of 342.55 feet to a 1/2
inch iron rod;

THENCE North 62 degrees 51 minutes 31 seconds East continuing along said south
right-of-way line, 50.00 feet to a 11/2 inch iron rod set at the beginning of a
curve to the right whose radius is 730.05 feet and whose long chord bears North
74 degrees 14 minutes 00 seconds East, 287.97 feet;

THENCE along said curve and continuing along said south right-of-way line,
through a central angle of 22 degrees 44 minutes 58 seconds a distance of 289.87
feet to the Point of Beginning, and containing approximately 10,000 acres of
land.

Said tract now being platted and known as Lot 1, Block C, River Hills Phase II
Addition, an Addition to the City of Fort Worth, Tarrant County, Texas,
according to the plat recorded in volume 388-195, Page 19, Plat Records, Tarrant
County, Texas.

Note: The Company is prohibited from insuring the area or quantity of the land
described herein. Any statement in the above legal description of the area or
quantity of land is not a representation that such area or quantity is correct,
but is made only for informational and/or identification purposes and does not
override Item 2 of Schedule B hereof.

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

Facility # 4668

TX

SCHEDULE A

THE LAND

Being 2.605 acres of land, and being all of Lot 30-R, Block 9, Grandview
Addition to the City of Fort Worth, Tarrant County, Texas, according to the plat
recorded in Volume 388-204, page 8 of the Plat Records of Tarrant County, Texas,
and all of Lots 11 through 16, block 9, Grandview Addition to the City of Fort
Worth, Tarrant County, Texas, according to the plat recorded in Volume 63, page
39 through 30 of the Plat Records of Tarrant County, Texas, and all of Lots 9
and 10, Block 9, Jennings & Cooper Subdivision to the City of Fort Worth,
Tarrant County, Texas, according to the plat recorded in Volume 63, page 106 of
the Plat Records of Tarrant County, Texas. Sold 2.605 acres being more
particularly described by metes and bounds as follows:

BEGINNING at a 1/2” Iron rod found at the Northwest corner of the aforesaid Lot
30-R, block 9, Grandview Addition, said point lying at the intersection of the
East right-of-way line of 8th Avenue (a 68 foot right-of-way) with the South
right-of-way line of Cooper Street (a 60 foot right-of-way);

THENCE East 391.12 feet, along the South right-of-way line of said Cooper Street
to a 1/2” iron rod found for a corner at the Northeast corner of Lot 16, Block
9, Grandview Addition;

THENCE S 00°01’15” W 140.00 feet along the East line of said Lot 16, Block 9,
also being the West line of Lot 17, Block 9, to a 1/2” Iron rod found for a
corner in the North line of a 10-foot alley;

THENCE West 199.98 feet along the North line of said 10 foot alley to a 1/2”
iron rod set in the East line of the aforesaid Lot 30-R, Block 9;

THENCE S 00°01’15” W 10.00 feet along the East side of said Lot 30-R to a 1/2”
iron rod set for a corner in the South line of said alley;

THENCE East 224.98 feet along the South line of said 10 foot alley to a point in
an existing power pole at the most Easterly northeast corner of the aforesaid
Lot 30-R, and being the Northwest corner of Lot 37, Block 9, Grandview Addition;

THENCE S 00°01’15” W 140.00 feet along the East line of said Lot 30-R and the
West line of Lot 37 to a Pop Rivet in concrete at the Southeast corner of Lot
30-R, and lying in the North right-of-way line of Terrell Avenue (a 60 foot
right-of-way at this point);

THENCE along the North right-of-way line of said Terrell Avenue, as follows:

 

  1. West 55.00 feet to an “X” cut in concrete for a corner;

 

  2. N00°01’15” E 4.00 feet to an “X” cut in concrete for a corner;

 

  3. West 361.12 feet to a 1/2” Iron rod set at the Southwest corner of the
aforesaid Lot 30-R, said point lying at the intersection of the North
right-of-way line of said Terrell Avenue with the East right-of-way line of the
aforesaid 8th Avenue;

THENCE N 00°01’15’ E 286.00 feet along the East right-of-way line of 8th Avenue
to the Place of Beginning, containing 2.605 acres (113,481 square feet) of land.

NOTE: The Company is prohibited from Insuring the area or quantity of the land
described herein. Any statement in the above legal description of the area or
quantity of land is not a representation that such area or quantity is correct,
but is made only for informational and/or identification purposes and does not
override Item 2 of Schedule B hereof.

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Facility # 4674

SCHEDULE A

THE LAND

Situate, lying and being in the County of HILLSBOROUGH, State of Florida,
to-wit:

The East 1/2 of the Southwest 1/4 of the Northwest 1/4 of Section 2, Township 29
South, Range 18 East, HILLSBOROUGH County, Florida, LESS the North 645 feet
thereof and LESS the West 25 feet thereof.

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Facility # 4635

TX

SCHEDULE A

THE LAND

Tract No. 1:

Lot 1, Block 1, New City Block 16358, MEDIC-CORP. SUBDIVISION, City of San
Antonio, Bexar County, Texas, according to map or plat thereof recorded in
Volume 9100, Page(s) 110, Deed and Plat Records of Bexar County, Texas.

Tract No. 2:

Lot 1, Block 3, New City Block 16353, VENCOR UNIT-1, City of San Antonio, Bexar
County, Texas, according to map or plat thereof recorded in Volume 9535, Page(s)
88, Deed and Plat Records of Bexar County, Texas.

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Facility # 4647

NV

SCHEDULE A

THE LAND

That portion of the Southeast Quarter (SE1/4) of the Southeast Quarter (SE1/4)
of Section 1, Township 21 South, Range 60 East, M.D.M., described as follows:

Parcel One (1) of Parcel Map in File 86, Page 18, in the Office of the County
Recorder of Clark County, Nevada and recorded July 18, 1996 in Book 960718 as
Document No. 01095, Official Records.

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Facility # 4660

TX

SCHEDULE A

THE LAND

Lot 1, Block 1, Mansfield Hospital, City of Mansfield, according to map or plat
thereof recorded in Cabinet A, Slide 309, of the Plat Records of Tarrant County,
Texas.

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Facility # 4662

NC

SCHEDULE A

THE LAND

Lying and being in Guilford County, North Carolina and being more particularly
described as follows:

Beginning at an existing iron pipe in the northern right of way line of
Southside Boulevard (50’ right of way) and being the southernmost point in Lot
1, Block D, Section 1, of the Benbow Park Subdivision as shown and described in
Plat Book 27, Page 75 in the Guilford County Registry; thence with said Lot 37°
36’ 09” East 36.66 feet to a corner; thence North 81° 55’ 34” East 45.10 feet to
an existing iron pipe and corner with Lot 3, Block D, Section 5 of Benbow Park
Subdivision as shown and described in Plat Book 31, Page 89 in the Guilford
County Registry, thence with said subdivision the following five (5) courses and
distances: North 81° 55’ 34” East 562.84 feet; North 82° 01’ 51” East 62.73
feet; thence North 01° 08’ 41” West 126.89 feet to the southern right of way
line of Lakeland Road (50’ right of way); thence South B6° 43’ 51” East 178.48
feet to an existing iron pipe in the eastern right of way line of Carlton Avenue
(50’ right of way) and corner with Lot 1, Block J of said plat; and thence South
86° 40’ 55” East 118.01 feet to a pont in the line of said Lot and being the
western right of way line of O. Henry Boulevard (U.S. Highway 29 North); thence
with the western right of way line of O. Henry Boulevard South 04° 38’ 30” West
200.00 feet; thence South 10° 06’ 50” west 13.58 feet to a corner with the City
of Greensboro as described by a deed in Book 3650, Page 1517 in the Guilford
County Registry; thence with said City property the following six (6) courses
and distances: South 71° 57’ 27” West 45.39 feet; thence South 81° 46’ 40” West
112.14 feet to a point; thence South 07° 19’ 49” east 17.00 feet to a point;
thence South 37° 37’ 14” East 37.88 feet to a point; thence North 81° 46’ 40”
East 93.81 feet to a point; thence North 77° 39’ 22” East 26.28 feet to a point
in the western right of way line of O. Henry Boulevard; thence with said right
of way the following five (5) courses and distances: South 10° 06’ 50” West
127.58 feet to a point; thence South 16° 12’ 38” West 200.00 feet to a point;
thence South 18° 59’ 23” West 200.00 feet to a point; thence South 26° 01’ 48”
West 200.00 feet to a point and South 30° 11’ 37” West 40.66 feet to a new iron
pipe in the northern right of way line of Bothwell Street (50’ right of way);
thence with the northen right of way line of Bothwell Street South 77° 41’ 13”
West 126.18 feet to a corner and intersection with the eastern right of way line
of Southside Boulevard (50’ right of way); thence along a curve to the left with
a radius of 374.43 feet and a chord bearing and distance of North 25° 15’ 19”
West 156.09 feet to a point; thence along the northern right of way lien of
Southside Boulevard North 37° 17’ 10” West 361.09 feet to a point; thence along
said right of way line North 39° 06’ 41” West 461.02 feet to the point and place
of Beginning containing 12.241 acres more or less as shown and described by plat
of property for Prince Hall Grand Lodge Free and Accepted Masons of North
Carolina, Incorporated, per survey thereof by Technical Consultants of
Kernersville, North Carolina and dated July 6, 1992, job number 92-047, Clay V.
Fulton, Surveyor.

Subject to:

Rights of The Prince Hall Grand Lodge Free and Accepted Masons of North
Carolina, Inc. pursuant to Lease of Real Property With an Option to Purchase
recorded in Book 3984, Page 973, as supplemented and amended by Assignment
recorded in Book 4103, Page 2091.

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MA 4673

SCHEDULE A

THE LAND

Property: 15 King Street, Peabody, MA

Facility Name: Vencor Hospital

Facility Number: 4673

PARCEL ONE:

A certain parcel of land situated in the rear of Lowell Street in said Peabody,
containing 114,500 square feet shown on a plan made by Putnam and Ricker Dec.
99, bounded and described as follows.

Beginning at a stake, at land now or late of Samuel A. Fowler on the
Northwesterly side of a way 50 feet wide, said way being an extension of
Endicott Street extension, so called, and named Endicott Street on said plan,
said stake being about 190 feet from Lowell Street; and thence running

Northwesterly by said Fowler land 165.5 feet to a stake at another way shown on
said plan known as Southwick’s Lane, thence running

by said Southwick’s Lane 516.7 feet this course being Southwesterly, then
running

Southerly by the wall by other land now or formerly of Janice A. King 227.5 feet
to a stake at said 50 foot way called Endicott Street then running

by said last named way Northeasterly 604.7 feet to the point began at.

PARCEL TWO:

A certain parcel of land situate in the rear of Lowell Street, in said Peabody,
being lots numbered 1 and 2 on a plan of “House Lots at the King Estate,
Peabody, surveyed by Putnam and Ricker, Surveyors, 1899.” Said parcel is more
particularly bounded and described as follows.

Beginning on a way, known as Endicott Street Extension, said way being 50 feet
wide, leading in a southwesterly direction from said Lowell Street, at land now
or formerly of Walter C. Merrill, and thence running

Northwesterly by said land of Merrill 155 feet to a stake at Southwick’s Lane
(so called), thence turning and running

Southwesterly by said Southwick’s Lane, 60 feet to lot numbered 4 on said plan,
thence turning and running

Southeasterly by said lot numbered 4 and lot 3 on said plan 165.5 feet, to said
way 50 thence turning and running

Northeasterly on said way 60 feet to the above named land of Merrill and point
of beginning.

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Facility # 4673

SCHEDULE A

THE LAND

THIRD PARCEL:

A certain lot of land situated on King Street in said Peabody and bounded and
described thus, viz:

Beginning at the southerly corner of said lot on King Street and thence running

on said King Street, Easterly 34 feet to other land of The Inhabitants of the
Town of Peabody; thence

Northwesterly by said other land of the Inhabitants of the Town of Peabody 217
feet to Southwick’s Lane so called; thence

Southwesterly by said Southwick’s Lane so called 137 feet to Ellsworth Avenue,
so called; thence

Southwesterly by said Ellsworth Avenue so called 164 feet to said King Street
and point begun at.

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Facility # 4614

PA

SCHEDULE A

THE LAND

ALL THAT CERTAIN lot or piece of ground.

SITUATE in the 35th Ward of the City of Philadelphia and described according to
an “As Built Plan” made for Vencor Hospitals East, Inc., by VPH Associates dated
July 15, 1994, as follows, to wit:

BEGINNING at a point formed by the intersection of the Southwesterly side of
Devereaux Avenue (100 feet wide) with the Southeasterly side of Palmetto Street
(60 feet wide); thence extending South 52 degrees 18 minutes 07 seconds East,
along the Southwesterly side of Devereaux Avenue, the distance of 190 feet to a
point; thence extending South 37 degrees 41 minutes 53 seconds West, the
distance of 100 feet to a point; thence extending South 52 degrees 18 minutes 07
seconds East the distance of 90 feet to a point on the Northwesterly side of
Bingham Street (60 feet wide); thence extending South 37 degrees 41 minutes 53
seconds West, along the said Northwesterly side of Bingham Street, the distance
of 45 feet to a point; thence extending North 52 degrees 18 minutes 07 seconds
West, the distance of 140 feet to a point; thence extending South 37 degrees 41
minutes 53 seconds West, the distance of 95 feet to a point; thence extending
North 52 degrees 18 minutes 07 seconds West the distance of 140 feet to a point
on the Southeasterly side of Palmetto Street; thence extending North 37 degrees
41 minutes 53 seconds East along the said Southeasterly side of Palmetto Street,
the distance of 240 feet to a point on the said Southwesterly side of Devereaux
Avenue, being the first mentioned point and place of BEGINNING.

BEING known as No. 530 to 534 Devereaux Avenue.

BEING the same premises which Allegheny United Hospitals Inc., a Pennsylvania
nonprofit corporation by Deed dated 3/20/1995 and recorded in the County of
Philadelphia on 5/1/1995 in Deed Book VCS 860 page 533, granted and conveyed
unto Vencor Hospitals East, Inc., a Delaware corporation, in fee.

BRT Tax #   77-8-305-10; 77-8-0305-00; 35-2-2980-10; 88-6-0356-02;

     88-6-0356-00 & 88-6-0357-00

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Facility # 4666

LA

SCHEDULE A

THE LAND

A CERTAIN PIECE OR PORTION OF GROUND, together with all the buildings and
improvements thereon, situated in the Sixth District of the City of New Orleans,
State of Louisiana, in Square 329, bounded by Coliseum, Antonine, Prytania and
Foucher Street, designated as Lot “A” on plan of resubdivision by J. J. Krebs &
Sons, Inc., dated March 2, 1959, last revised August 12, 1959, approved by the
City Planning commission on September 3, 1959, registered as Declaration of
Title Change on October 2, 1959, registered as COB 629, folio 519 and according
to which Lot A is more particularly described as follows:

Lot “A” forms the southern portion of said square and measures 250 feet front on
Coliseum Street, 126 feet, 4 inches, 7 lines front on Antonine Street, 126 feet,
4 inches 7 lines front on Foucher Street, and 250 feet in width in the rear
(Prytania Street side) along a line parallel with Coliseum and running through
the square from Foucher to Antonine along a line parallel with Coliseum and
running through the square from Foucher to Antonine Street.

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Facility # 4871

IL

SCHEDULE A

THE LAND

PARCEL 1:

LOTS 21, 23, 24 AND 25 IN BLOCK 10 OF COCHRAN’S SECOND ADDITION TO EDGEWATER IN
THE EAST FRACTIONAL 1/2 OF SECTION 5, TOWNSHIP 40 NORTH, RANGE 14 EAST OF THE
THIRD PRINCIPAL MERIDIAN, IN COOK COUNTY, ILLINOIS

PARCEL 2:

LOTS 4, 5, 6, 7, 8, 9, 10 AND THE NORTH 22 FEET OF LOT 11 IN BLOCK 10 IN
COCHRAN’S SECOND ADDITION TO EDGEWATER IN THE EAST FRACTIONAL 1/2 OF SECTION 5,
TOWNSHIP 40 NORTH, RANGE 14 EAST OF THE THIRD PRINCIPAL MERIDIAN, IN COOK COUNTY
ILLINOIS.

#4671     ILLINOIS

     6130 North Sheridan Road, Chicago

     PIN: 14-05-210-015/016/022/008/006/005/004

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Facility # 4664

NM

EXHIBIT A

Leasehold interest in the following property:

Tract 2C, of Plat of Tracts 1A, 2A, 2B & 2C of the ST. JOSEPH HOSPITAL COMPLEX
situate in Sections 16 & 17, T.10N., R.3E., N.M.P.M., Albuquerque, Bernalillo
County, New Mexico, as the same is shown and designated on said Plat filed in
the Office of the County Clerk of Bernalillo County, New Mexico, on August 5,
1998, in Plat Book 98C, folio 229.

EXCEPTING FROM THE AFORESAID PROPERTY THE FOLLOWING:

A certain tract of land situate within the southwest one-quarter (SW1/4) of
Section 16, Township 10 North, Range 3 East, New Mexico Principal Meridian,
within the City of Albuquerque, Bernalillo County, New Mexico, being and
comprising an easterly portion of Tract 2C of the PLAT OF TRACTS 1A, 2A, 2B and
2C, ST. JOSEPH HOSPITAL COMPLEX, Albuquerque, New Mexico, as the same is shown
and designated on the plat thereof, recorded in the office of the County Clerk
of Bernalillo County, New Mexico on August 5, 1998 in Book 98C, Page 229 as
Document No 1998098402 and being more particularly described by New Mexico State
Plane Grid Bearings (Central Zone NAD 1927) and ground distances as follows:

BEGINNING at the northeast corner of said Tract 2C, a point on the westerly
right-of-way line of Interstate 25 (I-25), thence running along the easterly
boundary line of said Tract 2C and also along said right-of-way line,
S09°12'55"W, a distance of 171.71 feet to the southeast corner of said Tract 2C,
thence leaving said right-of-way line and running thence along the southerly
boundary line of said Tract 2C,

N84°52'31"W, a distance of 144.42 feet to the southwest corner of the tract
herein described, thence running along the westerly boundary line of the tract
herein described,

N02°57'26"E, a distance of 170.79 feet to the northwest corner of the tract
herein described, a point on the northerly boundary line of said Tract 2C,

thence running along the northerly boundary line of said Tract 2C,

S87°41'24"E, a distance of 103.16 feet to a point; thence,

S80°37'32"E, a distance of 60.25 feet to the point and place of beginning

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Facility # 4665

CO

SCHEDULE A

THE LAND

Lots 1 to 15, Block 35,

McCullough Hill Amended Map,

City and County of Denver,

State of Colorado.

(for informational purposes only) 1920 High Street

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Facility # 4637

IL

SCHEDULE A

THE LAND

PARCEL 1:

LOTS 16 TO 25 IN BLOCK 16 IN NORTHWEST LAND ASSOCIATION SUBDIVISION OF THAT PART
OF THE WEST 1/2 OF THE EAST 1/2 OF THE NORTHEAST 1/4 (EXCEPT THE EAST 33 FEET
LYING SOUTH OF THE NORTHWESTERN ELEVATED RAILROAD CO’S RIGHT OF WAY) OF SECTION
13, TOWNSHIP 40 NORTH, RANGE 13, EAST OF THE THIRD PRINCIPAL MERIDIAN, IN COOK
COUNTY, ILLINOIS.

PARCEL 2:

LOTS 16 TO 25 IN BLOCK 17 IN NORTHWEST LAND ASSOCIATION SUBDIVISION OF THAT PART
OF THE WEST 1/2 OF THE EAST 1/2 OF THE NORTHEAST 1/4 (EXCEPT THE EAST 33 FEET
LYING SOUTH OF THE NORTHWESTERN ELEVATED RAILROAD CO’S RIGHT OF WAY) OF SECTION
13, TOWNSHIP 40 NORTH, RANGE 13, EAST OF THE THIRD PRINCIPAL MERIDIAN, IN COOK
COUNTY, ILLINOIS.

PARCEL 3:

LOTS 5, 7, 8, 9, 10, 11, 12, 13, 14 AND 15 IN A. S. TERRILL’S SUBDIVISION OF
BLOCK 6 IN SUPERIOR COURT PARTITION OF THE NORTH 1/2 OF THE SOUTHEAST 1/4 OF
SECTION 13, TOWNSHIP 40 NORTH, RANGE 13, EAST OF THE THIRD PRINCIPAL MERIDIAN,
IN COOK COUNTY, ILLINOIS.

 

  #4637 ILLINOIS

       2544 Montrose Avenue, Chicago

       PIN: 13-13-232-027/028/029/032

        13-13-231-030/031/032/033

        13-13-401-010/012

        13-13-401-041/005/006

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Facility # 4690

IL

SCHEDULE A

THE LAND

LOTS 5, 6, 7, 8 (EXCEPT THE EAST 26 FEET THEREOF) IN BLOCK 1; ALSO LOTS 1, 2, 3,
4 AND 15 IN BLOCK 2, IN TOWN MANOR, A SUBDIVISION OF THE NORTH 100 ACRES OF THE
NORTH EAST 1/4 OF SECTION 5, TOWNSHIP 39 NORTH, RANGE 12 EAST OF THE THIRD
PRINCIPAL MERIDIAN, IN COOK COUNTY, ILLINOIS.

PARCEL 2:

EASEMENT FOR INGRESS AND EGRESS FOR THE BENEFIT OF PARCEL 1 OVER THE FOLLOWING:

A STRIP OF LAND OF VARIOUS WIDTHS OVER THAT PART OF LOT 14 IN BLOCK 2 IN TOWN
MANOR, A SUBDIVISION OF THE NORTH 100 ACRES OF THE NORTH EAST 1/4 OF SECTION 5,
TOWNSHIP 39 NORTH, RANGE 12 EAST OF THE THIRD PRINCIPAL MERIDIAN, DESCRIBED AS
FOLLOWS:

BEGINNING AT THE SOUTH WEST CORNER OF SAID LOT 14; THENCE NORTH 0 DEGREES 00
MINUTES 00 SECONDS EAST ALONG THE WEST LINE OF SAID LOT 133.57 FEET TO THE NORTH
WEST CORNER OF SAID LOT; THENCE NORTH 83 DEGREES 15 MINUTES 38 SECONDS EAST
ALONG THE NORTH LINE OF SAID LOT 42.02 FEET TO A LINE 42.00 FEET EAST OF AND
PARALLEL WITH THE WEST LINE OF SAID LOT; THENCE SOUTH 0 DEGREES 00 MINUTES 00
SECONDS EAST ALONG SAID PARALLEL LINE A DISTANCE OF 32.00 FEET; THENCE SOUTH 35
DEGREES 19 MINUTES 49 SECONDS WEST 20.76 FEET TO A POINT ON A LINE 30.00 FEET
EAST OF AND PARALLEL WITH THE WEST LINE OF SAID LOT; THENCE SOUTH 0 DEGREES 00
MINUTES SECONDS EAST ALONG SAID PARALLEL LINE A DISTANCE OF 85.00 FEET TO THE
POINT OF INTERSECTION WITH THE SOUTH LINE OF SAID LOT; THENCE SOUTH 88 DEGREES
15 MINUTES 37 SECONDS WEST ALONG THE SOUTH LINE OF SAID LOT 30.01 FEET TO THE
POINT OF BEGINNING OF THE STRIP OF LAND HEREIN DESCRIBED, IN COOK COUNTY,
ILLINOIS.

PARCEL 3:

EASEMENT FOR INGRESS AND EGRESS FOR THE BENEFIT OF PARCEL 1 OVER THE FOLLOWING:

THE NORTH 30.00 FEET OF LOT 9 IN BLOCK 1, (AS MEASURED PERPENDICULARLY TO THE
NORTH LINE OF SAID LOT) IN TOWN MANOR, A SUBDIVISION OF THE NORTH 100 ACRES OF
THE NORTH EAST 1/4 OF SECTION 5, TOWNSHIP 39 NORTH, RANGE 12 EAST OF THE THIRD
PRINCIPAL MERIDIAN, IN COOK COUNTY, ILLINOIS.

 

  #4690 ILLINOIS

       365 East North Avenue, Northlake

       PIN: 15-05-211-006/007/008/005

        15-05-212-001/002/003/004/008

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Facility # 4602

EXHIBIT A

THE LAND

(except the South 5.00 feet of the East 100.08 feet thereof)

Tracts A, B, C and E of Vencor Hospitals South, according to the Plat thereof
recorded in Plat Book 146, Page 90, Dade County, Florida, Public Records.

Leasehold interest in the following parcel pursuant to that certain Lease/Use
Agreement and Declaration of Restrictive Covenant and First Amendment by and
between the City of Coral Gables, Florida and Ventas Realty, Limited
Partnership.

North 105.00 feet of the 30 foot wide right-of-way of Wallace Street, as shown
on the recorded Plat of Tamiami Place, Plan No. 3, Coral Gables, according to
the plat thereof, as recorded in Plat Book 146, at Page 90 of the Public Records
of Miami-Dade County, Florida, being bounded as follows: Bounded on the North by
the South right-of-way line of S.W. 8th Street (also being the North Line of
Tracts B and C of said recorded plat of “Vencor Hospitals South”); Bounded on
the South by the Easterly extension of the South Line of said Tract B, to its
intersection with the Westerly Line of said Tract C; Bounded on the West by the
Easterly Line of said Tract B.

Property Appraiser’s Parcel Identification Nos.:

03-4107-024-0010

03-4107-024-0020

03-4107-024-0030

03-4107-024-0040

03-4107-024-0050

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Facility # 4652

FL

SCHEDULE A

THE LAND

PARCEL A:

Lots 1, 5, 6, 7 and 8 of GOLFAIR, according to plat thereof recorded in Plat
Book 6, Page 23 of the Public Records of Clay County, Florida.

PARCEL B:

Lots 2, 3, 4 and 9, GOLFAIR, according to plat thereof recorded in Plat Book 6,
Page 23 of the Public Records of Clay County, Florida.

PARCEL C:

A portion of Block 54, PALMER AND FERRIS TRACT, Green Cove Springs, Clay County,
Florida, according to Plat Book 2, Page 1, Public Records of said county, being
more particularly described as follows:

For a Point of Beginning commence at a point where the West line of Claude
Street intersects the South line of Golfair Street according to Plat Book 6,
Page 23 of the Public Records of Clay County; and run thence North 72°45' East
246.0 feet; run thence South 17°15' East 124.0 feet to a point; thence North
72°45' East 420.0 feet to a point; thence South 17°15' East 56 feet to a point;
thence South 72°45' West 1282.94 feet to a point; thence South 19°42'36" East
40.04 feet to a point; thence South 70°17'24" West 273.50 feet to a point on the
Easterly line of the Railroad right-of-way as per Deed Book 68, Page 217, Public
Records of Clay County, Florida; thence North along the Easterly right-of-way of
said Railroad right-of-way to a point which intersects the Southerly
right-of-way of Oak Street; thence North 72°45' East 698.91 feet along the
Southerly right-of-way of Oak Street to a point; thence South 17°15' East 420.0
feet along the Westerly right-of-way line of Claude Street to the Point of
Beginning, EXCEPTING THEREFROM that portion conveyed to Green Cove Springs
Public Health Authority in O.R. Volume 350, Page 627.

PARCEL D:

A parcel of land located in Block 54 (said Block being known as the “Golf
Course”), Green Cove springs, Florida, according to plat recorded in Plat Book
2, Page 1, Public Records of Clay

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

# 4652

SCHEDULE A

THE LAND

County, Florida, more particularly described as follows:

Commence at the intersection of the Southern terminus of the center line of
Green Street and the South line of Oak Street; run thence East along the
Southerly boundary line of Oak Street 210 feet; thence turn at right angle and
run South 544 feet; thence turn at right angle and run West 420 feet; thence
turn at right angle and run North 544 feet; thence turn at right angle and run
East along the Southerly line of Oak Street 210 feet to the Point of Beginning.

PARCEL E:

A parcel of land situated in Block 54, Palmer Ferris Tract, Green Cove Springs,
Clay County, Florida, according to Plat Book 2, Page 1 of the Public Records of
said county, said parcel being more particularly described as follows:

Begin at the intersection of the Westerly line of Palmetto Avenue with the
Southerly line of Golfair Street according to Plat Book 6, Page 2 of said Public
Records; thence on last said line run South 72°45' West 747.70 feet; thence
South 17°15' East 300.00 feet; thence North 72°45' East 748.40 feet to the
Westerly line of said Palmetto Avenue; thence on last said line North 17°23'
West 37.00 feet; thence South 72°45' West 210.00 feet; thence North 17°23' West
210.00 feet; thence North 72°45' East 210.00 feet to the Westerly line of said
Palmetto Avenue; thence on last said line North 17°23' West 53.00 feet to the
Point of Beginning.

PARCEL F:

Lots 2, 3, 4, 5, 6, 7 and 8, a Replat of Borden Oaks Subdivision as recorded in
Plat Book 6, Page 2 of the Public Records of Clay County, Florida.

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

168

WA

SCHEDULE A

 

COUNTY OF PIERCE    STATE OF WASHINGTON,

PARCEL “A”:

LOT 4 OF PIERCE COUNTY SHORT PLAT NO. 8801290168, ACCORDING TO SHORT PLAT
RECORDED JANUARY 29, 1988, AND AMENDED BY “AFFIDAVIT OF MINOR CORRECTION OF
SURVEY” RECORDED UNDER RECORDING NO. 8802190266, WHICH AMENDS PIERCE COUNTY
SHORT PLAT NO. 8606270303, ACCORDING TO PLAT RECORDED JUNE 27, 1986, IN PIERCE
COUNTY, WASHINGTON.

PARCEL “B”:

A NON-EXCLUSIVE EASEMENT FOR INGRESS AND EGRESS AS DELINEATED ON PIERCE COUNTY
SHORT PLAT NO. 8801290168, ACCORDING TO SHORT PLAT RECORDED JANUARY 29, 1988,
AND AMENDED BY “AFFIDAVIT OF MINOR CORRECTION OF SURVEY” RECORDED UNDER
RECORDING NO. 8802190266, WHICH AMENDS PIERCE COUNTY SHORT PLAT NO. 8606270303,
ACCORDING TO PLAT RECORDED JUNE 27, 1986, IN PIERCE COUNTY, WASHINGTON.

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Facility # 1228

GA

SCHEDULE A

THE LAND

All that tract or parcel of land lying and being in Land Lot 126 of the 5th
District, Fayette County, Georgia, being more particularly described as follows:

TO FIND THE TRUE POINT OF BEGINNING, commence at the intersection of the cast
right of way line of Ginger Cake Road (80 foot right of way) with the northern
right of way line of Brandywine Boulevard (variable width right of way); run
thence southeasterly along said right of way line of Brandywine Boulevard 84.71
Feet along the arc of a 60,00 foot radius curve to the left (said are being
subtended by a chord lying to the northeast having a bearing and distance of S
49 degrees 52 minutes 31 seconds E 77.85 Feet to a point; N 89 degrees 40
minutes 44 seconds E 386.97 Feet to a point; 197.94 feet along the arc of 580.00
foot radius curve to the right (said arc being subtended by a chord lying to the
southwest having a bearing and distance of S 80 degrees 32 minutes 39 seconds E
196.98 feet) to the TRUE POINT OF BEGINNING; FROM SAID TRUE POINT OF BEGINNING
AS THUS ESTABLISHED, leave said right of way line and run N 24 degrees 30
minutes 00 seconds E 146.10 feet to a point; run thence N 89 degrees 32 minutes
56 seconds E 139.19 feet to a point; run thence N 47 degrees 00 minutes 00
seconds E 133.09 feet to a point; run thence N 89 degrees 32 minutes 56 seconds
E 374.85 feet to a point; run thence S 05 degrees 27 minutes 03 seconds E 416.84
feet to a point on the northern right of way line of Brandywine Boulevard
(variable width right of way); run thence westerly along said right of way line
the following courses and distances: N 87 degrees 35 minutes 16 seconds W 110.03
feet to a point; N 76 degrees 16 minutes 40 seconds W 50.99 feet to a point; N
87 degrees 35 minutes 16 seconds W 125.00 feet to a point; 68.88 feet along the
are of 450.00 foot radius curve to the left (said arc being subtended by a chord
lying to the south having a bearing and distance of N 83 degrees 12 minutes 07
seconds W 68.81 feet) to a point; S 88 degrees 17 minutes 50 seconds W 47.47
feet) to a point; 117.22 feet along the are of a 460.00 foot radius curve to the
right (said arc being subtended by a chord lying to the northeast having a
bearing and distance of N 65 degrees 40 minutes 19 seconds W 116.90 feet) to a
point; N 58 degrees 22 minutes 16 seconds W 107.80 feet to a point; 125.48 feet
along the arc of a 580.00 foot radius curve to the left (said arc being
subtended by a chord lying to the southwest having a bearing’ and distance of N
64 degrees 34 minutes 09 seconds W 125.24 feet) TO THE TRUE POINT OF BEGINNING;
said metes and bounds, courses and distances being more particularly shown on
that certain survey for PersonaCare, Inc. & Lawyers Title Insurance Corporation,
bearing the seal and certification of Cleveland S. Boutwell, Jr., GRLS #1704,
dated February 1, 1995, being designated as Tract II and containing 5.0288 acres
according to said survey, said survey being Incorporated herein by this
reference.

TOGETHER WITH rights appurtenant to the above-described property created and
described in that certain Easement Agreement by and between LAFAYETTE Health
Care Center, Inc., a Georgia corporation and Jerry Ballard Homes, Inc., dated
February 3, 1995, filed For record February 13, 1995, recorded in Deed Book 967,
Page 595, Fayette County, Georgia, Records.

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#1228

GA

SCHEDULE A

THE LAND

TOGETHER WITH:

All that tract or pared of land lying and being in Land Lots 125 and 126 of the
5th District, Fayette County, Georgia, and being more particularly described as
follows;

Beginning at a point an the eastern line of the 80 foot right of way of Ginger
Cake Road, said point lying at the northwestern end of that carved portion of
right of way line which is common to Ginger Cake Road and Brandywine Boulevard,
connecting the northern line of the 60 foot right of way of Brandywine Boulevard
with said eastern line of Ginger Cake Road; from said POINT OF BEGINNING proceed
north 09 degrees 25 minutes 45 seconds west along said right of way of Ginger
Cake Road a distance of 148.89 feet to an iron pin found; thence leave said
right of way line and run north 89 degrees 32 minutes 28 seconds east a distance
of 1,567.34 feet to an iron pin found on the land lot line common to Land Lots
125 and 126; run thence along said land lot line north 00 degrees 16 minutes 38
seconds west a distance of 152.55 feet to a point; thence leave said land lot
line and ran south 89 degrees 52 minutes 00 seconds east a distance of 333.07
feet to a point; thence south 34 degrees 11 minutes 43 seconds west a distance
of 487.38 feet to a point; thence south 00 degrees 00 minutes 00 seconds east a
distance of 239.53 feet to a point located on the northerly right of way line of
Brandywine Boulevard; thence along said right of way line the following courses
and distances: north 68 degrees 45 minutes 16 seconds west a distance of 63.38
feet to a point; 175.86 feet along the arc of a curve to the left having a
radius of 535.00 feet (said are being subtended by a chard having a bearing and
distance of north 78 degrees 10 minutes 16 seconds west 175.07 feet) to a point;
north 87 degrees 35 minutes 16 seconds west a distance of 21.38 feet to a point;
thence leave said right of way line and run north 05 degrees 27 minutes 03
seconds west a distance of 416.84 feet to a point; thence south 89 degrees 32
minutes 56 seconds west a distance of 374.85 feet to a point; thence south 47
degrees 00 minutes 00 seconds west a distance of 133.09 feet to a point; thence
south 89 degrees 32 minutes 56 seconds west a distance of 139.19 feet to a
point; thence south 24 degrees 30 minutes 00 seconds west a distance of 146.10
feet to a point located on the northerly right of way line of Brandywine
Boulevard; thence along said right of way line the following courses and
distances; 197.94 feet along the arc of a curve to the left having a radius of
530 feet (said are being subtended by a chord having a bearing and distance of
north 80 degrees 32 minutes 39 seconds west 196.98 feet) to a point; south 89
degrees 40 minutes 44 seconds west a distance of 386.97 feet to a point; 84.71
feet along the are of a curve to the right having a radius of 60.00 feet (said
are being subtended by a chord having a bearing and distance of north 49 degrees
52 minutes 31 seconds west 77.85 feet) to the point of beginning.

Said property being more particularly shown on that survey for Personacare, Inc.
& Lawyers Title Insurance Corporation bearing the seal and certification of
Cleveland S. Boutwell, Jr. of Boutwell & Associates. Inc., GRLS No. 1704, dated
February 1, 1995. revised February 2, 1995, and being designated as Tract I and
containing 7.9955 acres according to said survey, said survey being incorporated
herein by this reference.

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Facility # 559

DT

SCHEDULE A

THE LAND

A Leasehold Estate:

Parcel 2: (leased land) Tract 1: A parcel of land located on the southerly side
of Starr Farm Road and on the westerly side of North Avenue in the City of
Burlington, Vermont and more particularly described as follows:

Beginning at a point which marks the intersection of the westerly sideline of
North Avenue with the southerly sideline of Starr Farm Road; thence S 26° 30' E
a distance of 203.28 feet in and along the westerly sideline of North Avenue to
a point; thence S 69° 09' W a distance of 250 feet to a point; thence N 26° 30'
W a distance of 203.28 feet to a point located in the southerly line of Starr
Farm Road; thence N 69° 09' E a distance of 250 feet in and along the southerly
line of Starr Farm Road to the point and place of beginning.

Tract 2: A parcel of land located on the southerly side of Starr Farm Road in
the City of Burlington, Vermont, and more particularly described as follows:

Beginning at a point which is located in the southerly line of Starr Farm Road,
said point being 700 feet westerly of the intersection of the southerly sideline
of Starr Farm Road with the westerly sideline of North Avenue; thence S 26° 30'
E a distance of 203.28 feet to a point; thence S 69° 09' W a distance of 600
feet to a point; thence N 26° 30' W a distance of 203.28 feet to a point located
in the southerly line of Starr Farm Road; thence N 69° 09' E in and along the
southerly line of Starr Farm Road a distance of 600 feet to the point and place
of beginning.

It is the intent of this description to exclude a uniform strip of land on the
west side of the Flynn Estate property, said strip of land having a frontage of
32.15 feet on Starr Farm Road.

The parcel of land herein described is shown on a plan identified as “Property
Plan John J. Flynn Estate, Burlington, Vermont” prepared by Webster-Martin, Inc.
dated June 14, 1963.

Tract 3: A parcel of land located on the southerly side of Starr Farm Road and
westerly of North Avenue in the City of Burlington, County of Chittenden and
State of Vermont, belonging to the Estate of John J. Flynn and as shown on a
plan of Webster-Martin, Inc. dated June 14, 1963 and more particularly described
as follows:

Beginning at a point which is located in the southerly line of Starr Farm Road,
said point being 250 feet westerly of the intersection of the southerly sideline
of Starr Farm Road with the westerly sideline of North Avenue; thence S 26° 30'
E a distance of 203.28 feet to a point; thence S 69° 09' W a distance of 450
feet to a point; thence N 26° 30' W a distance of 203.28 feet to a point in the
southerly sideline of Starr Farm Road; thence N 69° 09' E in and along said
southerly sideline of Starr Farm Road a distance of 450 feet to the point or
place of beginning.

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Facility # 694

IN

SCHEDULE A

THE LAND

COUNTY OF CLARK, STATE OF INDIANA

A PART OF SURVEY NO. 45 OF THE ILLINOIS GRANT IN JEFFERSONVILLE TOWNSHIP OF
CLARK COUNTY, INDIANA, BEING A PART OF THE SAME LAND CONVEYED TO WALTER W. AND
ELIZABETH MEYER AT DEED RECORD 136, PAGE 37 AND BOUNDED AS FOLLOWS:

COMMENCING AT A LIMESTONE MONUMENT IN THE NORTHWESTERLY LINE OF SURVEY NO. 32,
ILLINOIS GRANT WHICH MARKS THE EAST CORNER OF SAID SURVEY NO. 45, THENCE THE
FOLLOWING COURSES: NORTH 35 DEGREES 47 MINUTES 16 SECONDS WEST 1148.21 FEET WITH
THE LINE DIVIDING SURVEYS NO. 45 AND 46 OF THE ILLINOIS GRANT TO AN IRON PIPE;
SOUTH .55 DEGREES 06 MINUTES 27 SECONDS WEST, 1688.86 FEET LEAVING SAID DIVIDING
LINE TO AN IRON PIN; NORTH 3 6 DEGREES 02 MINUTES 17 SECONDS WEST, 1086.51 FEET
TO AN IRON SPIKE IN POTTER’S LANE; SOUTH 54 DEGREES 47 MINUTES 33 SECONDS WEST,
514.05 FEET WITH THE CENTER OF POTTER’S LANE TO AN IRON SPIKE, THE EAST CORNER
OF THE FALLS LODGE LOT (DD 9, INSTR. 8177); SOUTH 54 DEGREES 47 MINUTES 33
SECONDS WEST, 125.0 FEET WITH THE CENTER OF POTTER’S LANE TO AN IRON SPIKE; THE
SOUTH CORNER OF SAID FALLS LODGE LOT AND WHICH IS THE TRUE PLACE OF BEGINNING.

THENCE THE FOLLOWING COURSES OF THE BOUNDARY: SOUTH 54 DEGREES 49 MINUTES 47
SECONDS WEST, 442.62 FEET WITH THE CENTER OF POTTER’S LANE TO AN IRON SPIKE;
NORTH 30 DEGREES 00 MINUTES 33 SECONDS WEST, 126.26 FEET WITH LLOYD MYERS LOT
(DD 9, INSTR. 10422) TO AN IRON

PIPE; NORTH 30 DEGREES 14 MINUTES 02 SECONDS WEST, 168.33 FEET WITH ANOTHER LOT
OWNED BY LLOYD MYERS (DD 10, INSTR. 397) TO AN IRON PIPE; NORTH 30 DEGREES 19
MINUTES 48 SECONDS WEST, 85.98 FEET WITH RICHARD SAWYER’S LOT (DD 3, INSTR.
6569) TO AN IRON PIPE; NORTH 30 DEGREES 19 MINUTES 48 SECONDS WEST, 85.93 FEET
WITH CHARLES RICHARD’S LOT (DR 208, PAGE 289) TO AN IRON ROD; NORTH 28 DEGREES
41 MINUTES 41 SECONDS WEST, 203.80 FEET WITH CHARLES LENFERT’S LOT (DR 183, PAGE
121) AND CLAUDE BLAKE’S LOT (DR 222, PAGE 111) TO AN IRON AXLE; NORTH 28 DEGREES
49 MINUTES 32 SECONDS WEST, 104.73 FEET WITH DANIEL SMITH’S LOT (DR 290, PAGE
331) TO AN IRON PIPE; NORTH 29 DEGREES 03 MINUTES 47 SECONDS WEST, 114.67 FEET
WITH ZANE SHRADER’S LOT (DR 219, PAGE 216) TO AN IRON ROD; NORTH 29 DEGREES 45
MINUTES 04 SECONDS WEST, 75.70 FEET WITH JAMES SMITH’S LOT (DD 11, INSTR. 8683)
TO AN IRON PIPE, THE SOUTH CORNER OF CLETUS RECEVEUR’S LOT (DR 279, PAGE 176);
NORTH 54 DEGREES 34 MINUTES 06 SECONDS EAST, 137.53 FEET WITH THE SOUTHERLY LINE
OF SAID RECEVEUR’S LOT TO AN IRON ROD; THE EAST CORNER THEREOF; SOUTH 51 DEGREES
16 MINUTES 32 SECONDS EAST, 689.21 FEET, SEVERING THE LAND OF THE GRANTOR TO AN
IRON PIPE, THE WEST CORNER OF SAID FALLS LODGE LOT; SOUTH 38 DEGREES 55 MINUTES
37 SECONDS EAST, 299.83 FEET WITH THE WESTERLY LINE OF SAID FALLS LODGE LOT TO
THE TRUE PLACE OF BEGINNING AND CONTAINING 6.953 ACRES OF LAND.

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Facility # 131

IN

SCHEDULE A

THE LAND

A part of the southeast quarter of the southwest quarter of Section 31, township
3 south, range 4 east, Harrison Township, Harrison County, Indiana, described as
follows: Beginning at a spike found at the intersection of Beechmont Drive and
Country Club Road at the southeast. corner of the southwest quarter of
Section 31, thence north 00 degrees 00 minutes 00 seconds east a distance of
611.06 feet along the quarter section line to an EX nail in the centerline of
Beechmont Drive, the True Point of Beginning, thence north 00 degrees 00 minutes
00 seconds east a distance of 442.60 feet along the quarter section line to an
EX iron pin, thence south 89 degrees 39 minutes 04 seconds west a distance of
673.20 feet to an EX nail in the centerline of Beechmont Drive, thence south 28
degrees 41 minutes 22 seconds east a distance of 189.30 feet along said
centerline to an existing nail, thence south 33 degrees 53 minutes 04 seconds
east a distance of 71.60 feet along said centerline to an EX nail, thence south
43 degrees 01 minutes 58 seconds east a distance of 79.29 feet along said
centerline to an EX nail, thence south 50 degrees 22 minutes 58 seconds east a
distance of 100.69 feet along said centerline to an EX nail, thence south 59
degrees 34 minutes 48 seconds east a distance of 58.22 feet along said
centerline to an EX nail, thence south 74 degrees 11 minutes 14 seconds east a
distance of 56.89 feet along said centerline to an EX nail, thence south 87
degrees 01 minutes 06 seconds east a distance of 82.13 feet along said
centerline to an EX nail, thence north 88 degrees 11 minutes 44 seconds east a
distance of 137.99 feet along said centerline to an EX nail, thence south 81
degrees 48 minutes 47 seconds east a distance of 35.57 feet along said
centerline to an EX nail, thence south 62 degrees 21 minutes 05 seconds east a
distance of 38.10 feet along said centerline to an EX nail, thence south 36
degrees 03 minutes 52 seconds east a distance of 28.68 feet along said
centerline to an EX nail the True Point of Beginning, containing 4.957 acres.

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Facility # 213

IN

SCHEDULE A

THE LAND

Lots Numbered 30, 45, 46, 47, 48 and 49 in Warren Terrace, an addition to the
City of Indianapolis, the plat of which is recorded in Plat Book 22, page 28, in
the Office of the Recorder of Marion County, Indiana.

Except, however, 65 feet by parallel lines off the entire East side of said Lot
Number 30.

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Facility # 113

IN

SCHEDULE A

THE LAND

State of Indiana, County of Vigo

A part of 14 acres off the East side of 45 acres off the West end of the South
Half of the Southwest Quarter of Section 35, Township 12 North, Range 9 West,
Harrison Township, Vigo County, Indiana, and described as follows, to-wit:
Commencing at the Southwest corner of the Southwest Quarter of Section 35,
Township 12 North, Range 9 West; East along and with the south line of
Section 35, One Thousand twenty-two and Eight Tenths (1022.8) feet to the place
of beginning; North 0 degrees 04 minutes West 700 feet; East Three Hundred
Ninety-six (396) feet; South 0 degrees 04 minutes East Seven Hundred (700) feet;
West Three Hundred Ninety-six (396) feet to the place of beginning.

 

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EXHIBIT A

The Nursing Home Unit of New Pond Village Condominium, together with all
appurtenant easements and an undivided percentage of the common elements as
established by Master Deed executed by Ventas Realty, Limited Partnership, dated
December 19, 2002, and recorded with the Norfolk County Registry of Deeds on
December 20, 2002 as document no. 236752.

(Facility MA-198

(formerly MA-985))

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Facility # 825

VA

SCHEDULE A

THE LAND

ALL THAT certain tract, piece or parcel of land, lying, situate and being in the
City of Suffolk, Virginia, and being more particularly described as follows,
to-wit:

BEGINNING at the northwest corner of the intersection of the right of way of
Constance Road with the right of way of Western Avenue, in the City of Suffolk,
Virginia, and running from said point of intersection westwardly along the
northern boundary of the right of way of Western Avenue, fifty-seven (57) feet,
more or less, to a point at a culvert running under Western Avenue, a corner,
which corner is thirty (30) feet east of the property of Allie H. Norfleet;
thence running in a northwardly direction, in a line parsllol to the eastern
property line of the property of Allie H. Norfleet, two hundred seventy-five
(275) feet, more or less, to a point near the center of a pond, a corner; thence
running in a westwardly direction, in a line perpendicular to Lexington Avenue,
one hundred seventy-five (175) feet, more or less, to a point in the eastern
boundary line of Lexington Avenue, which point is two hundred ninety-six
(296) feet north of Western Avenue, a corner; thence running in a northwardly
direction in a line that would be the eastern line of Lexington Avenue, if
extended, and parallel to and three hundred (300) feet distant eastwardly from
the eastern boundary line of East Riverview Drive, seven hundred twenty
(720) feet, more or less, to a point, a corner; thence running westwardly in a
line perpendicular to East Riverview Drive three hundred (300) feet to a point
on the eastern boundary line of said East, Riverview Drive, a corner; thence
running northwardly along the eastern boundary of East Riverview Drive fifty
(50) feet to a point on the eastern boundary of East Riverview Drive, a corner;
thence running eastwardly in a line that would be an extension of the northern
boundary line of Fort Street, if extended, nine hundred seventy (970) feet, more
or less to a point in the center line of a cove near the southwestern edge of
the Nansemond River, a corner; thence running in a southwardly direction along
the center line of said cove, and along the center line of the ditch loading
from said cove, its various meanderings, six hundred forty (640) feet, more or
less, to a point in the northern boundary of the right of way of Constance Road,
a corner; thence running in a southwesterly direction along the northwestern
boundary of the right of way of Constance Road five hundred forty (540) feet,
more or less, to a point where said right of way intersects the northern
boundary of Western Avenue, and the point of beginning. The above property is
more particularly shown and described on a plat thereof entitled “PLAT SHOWING
PART OF LAND OF R. RAWLES & JOHN E. WOODWARD AND THE H. W. CAMPBELL EST. LOCATED
ON THE NORTH SIDE OF WESTERN AVE., SUFFOLK, VA.”, and labeled “coples form plat
made by J. O. Causey, Jr., Civil Eng., by L. D. Fletcher”, which is recorded in
the Clerk’s Office of the Circuit Court of the City of Suffolk, Virginia, in
Plat Book 3, at page 111, reference thereto being hereby specifically made for a
more particular description thereof.

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Facility # 829

VA

SCHEDULE A

THE LAND

PARCEL ONE:

ALL THOSE certain lots, pieces or parcel of land, situate in the Borough of
Kempsville, in the City of Virginia beach, State of Virginia, being known,
numbered and designated as Lots 17 to 24, inclusive, Block 3, on the plat of G.
W. Deal #2, which plat is recorded in the Clerk’s Office of the Circuit Court of
the City of Virginia Beach, Virginia, in Deed Book 63, at page 424, a copy of
which is recorded in the Clerk” Office aforesaid in Map Book 70, at pages 6 and
7, and also shown on “A Part of Deal No. 1 and Deal No. 2, located near
Jacksondale in Princess Anne Co., Va.”, which plat is recorded in the aforesaid
Clerk’s Office in Map Book 41, at page 9; said property fronting 175 feet by
scale on the western side of Corwood Avenue, formerly Poplar Avenue; and
extending back between dividing lines to the center line of block; its northern
side being 120 feet; its southern side being 120 feet by scale and being the
northern side of Romney Road; its rear or western side being 190 feet by scale.

PARCEL TWO:

ALL THAT certain portion of a 60’ street called Ash Avenue lying immediately
adjacent and contiguous to, but north of Bonney Road, in Kempsville Borough, in
the City of Virginia beach, Virginia, and shown as a 60’ street on that certain
plat entitled “PLAT SHOWING A PROTION OF ASH AVENUE TO BE VACATED LYING BETWEEN
BLOCK 3 AND block 4, G. W. Deal Plat No. 2, KEMPSVILLE BOROUGH, VIRGINIA BEACH,
VIRGINIA SCALE: 1"-50' DECEMBER 1967, MADE BY FRANK D. TARRELL, JR., AND
ASSOCIATES, SURVEYORS AND ENGINEERS, VIRGINIA BEACH, VIRGINIA”, recorded
March 15,1968 in Deed Book 1048, at page 321, said 60’ street being more
particularly bounded and described as follows:

BEGINNING at a point where the eastern line of said 60’ Ash Avenue intersects
the northern line of Bonney Road and from said point of beginning running thence
westerly along the northern line of Bonney Road N 89°20'00" W a distance of
60.39 feet to a point at which the western line of said 60’ street intersects
the northern line of Bonney Road, said point marking the southeastern corner of
Lot 18, Block 4; thence turning and running northerly along the western edge of
said 60’ street N 07°10'00" E a distance of 274.08 feet to a point marking the
southeastern corner of Lot 26, Block 4, thence turning and running southeasterly
S 82°50'00" E a distance of 60’ to a point marking the southwestern corner of
Lot 8, Block 3; thence turning and running southerly along the eastern line of
Ash Avenue S 07°10'00" W a distance of 267.24 feet to the point of beginning,
which said point of beginning is the southwestern corner of Lot 1, Block 3.

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# 829

SCHEDULE A

THE LAND

PARCEL THREE:

ALL THOSE certain lots, pieces of parcels of land, together with all
improvements thereon situated in the City of Virginia Beach, Virginia, and
known, numbered and designated as Lots 1 through 16 (both inclusive) and Lots 22
through 31 (both inclusive), in Block 3, and Lots 1 through 8 (both inclusive),
and Lots 18 through 25 (both inclusive) in Block 4, as shown on the plat of
property of “G. W. Deal, near Jacksondale, Map No. 2”, recorded in the Clerk’s
Office of the Circuit Court if the City of Virginia Beach, Virginia, in Deed
Book 63, at page 424, and as shown on a plat entitled “A PART OF DEAL NO. 1 AND
DEAL NO. 2, LOCATED NEAR JACKSONDALE, IN PRINCESS ANNE COUNTY, VIRGINIA”, dated
July 19, 1948, made by W. B. Gallup, County Surveyor, and recorded in the
aforesaid Clerk’s Office in Map Book 41, at page 9; reference being made to said
plat for a more particular description of the aforesaid property; together with
all grantors right, title and interest, if any, in Ash Street as shown on said
plat.

PARCEL FOUR:

ALL THAT eastern one-half of a certain portion of a 60’ street called Ash Avenue
lying immediately adjacent to and contiguous to, but west of Lots 8 through 16,
Block 3, G. W. Deal Plat No. 2, in Kempsville Borough, City of Virginia Beach,
Virginia, shown on Plat recorded December 7, 1978, in Map Book 130, page 46, to
which plat reference is made for a more particular description of said property.

LESS AND EXCEPT those portions conveyed to the City of Virginia beach, Virginia
for the widening of Bonney Road on Plats recorded in Map Book 90, at page 51,
Map Book 130, at page 17, Map Book 130 at page 46, and Map Book 146, at page 50,
and as described in Agreement recorded in Deed Book 1129, at page 175.

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MA 573

SCHEDULE A

THE LAND

Property: One Love Lane, South Dennis, MA

Facility Name: Eagle Pond Rehab & Living Center

Facility Number: 573

PARCEL ONE:

Shown as Lot 2 and a 40’ wide way on a plan entitled “Subdivision Plan of Land
in Dennis; Mass.” dated November 29, 1982, drawn by Low & Weller, Inc.,
Yarmouth, Mass., prepared for Allen J. White et al, Trustees, Eagle Pond Realty
Trust, which plan is recorded with Barnstable County Registry of Deeds in Plan
Book 372, Page 46, to which plan reference is hereby made for a more particular
description and containing 225,442 and 28,583 square feet of land, respectively,
according to said plan.

PARCEL TWO:

The land together with the buildings thereon, if any, being a certain piece of
cranberry bog and adjoining upland situated in Dennis, Barnstable County,
Massachusetts, near the Harwich Line and bounded and described as follows:

Beginning at the Westerly end of the premises by a pond called James Bassett’s
pond and at a point four (4) rods from the cranberry bog;

Thence following around the line of cranberry bog Northerly and Easterly in a
line four (4) rods from the cranberry bog to the land of said heirs of Miller
Nickerson, deceased;

Thence Southerly and Westerly around by the edge of the upland in range of said
heirs to the pond aforesaid;

Thence Northerly four (4) rods to the first mentioned bound;

Containing two hundred and twenty and one-half (220 1/2) rods of cranberry bog
and one-half acre of upland, be the same more or less.

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Facility # 573

SCHEDULE A

THE LAND

PARCEL THREE:

A certain parcel of land with all the buildings and structures now or hereafter
standing or placed thereon, situated in Dennis, in the County of Barnstable, and
Commonwealth of Massachusetts, bounded and described as follows:

Beginning at a point on the southerly side of a private way in said Dennis,
50.82 feet S14° 26' 04" E and 32.25 feet S85° 51' 21"W from a commonwealth of
Massachusetts Highway bound opposite baseline station. 106 + 52.83 on Route 6,
the Mid-Cape Highway, thence running by land now or formerly owners unknown S14°
26' 04" E a distance of 500.01 feet; thence turning and running by land now or
formerly of Rolf V. Robsham and land now or formerly of Marshall Siebenmann, Jr.
N87° 44' 16" W a distance of 577.00 feet; thence turning and running by land now
or formerly of Allen J. White also known as Lot 2 on the plan hereinafter
mentioned N04° 08' 39"W a distance of 357.59 feet; thence turning and running
along three courses of said private way Northeasterly on said sideline by a
curve to the left having a radius of 55.00 feet, 79.50 feet, by a curve to the
right having a radius of 25.00 feet, 36.14 feet and N85° 31' 21"E 404.71 feet to
the point of beginning.

Said lot is shown as Lot 1 on a plan entitled “Compiled Plan of Land, Old
Chatham Road, Dennis, Barnstable County, Mass.”, dated November 13, 1984 ,
prepared by Yunits Engineering Company, Inc. and recorded with Barnstable County
Registry of Deeds in Plan Book 390, Page 21, and contains 238,345 square feet
more or less according to said plan.

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EXHIBIT B

Term Commencement/Expiration Dates

Master Lease Agreement No. 5

 

* See the Original Master Lease for the Commencement Date of the Lease relative
to each Facility

 

     Facility
ID   

Name

  

City

  

State

  

Commencement
Date

  

Lease

Expiration

Date

1    4618    Kindred Hospital Oklahoma City    Oklahoma City    OK    *   
April 30, 2023 2    4822    Kindred Hospital San Francisco Bay Area    San
Leandro    CA    *    April 30, 2023 3    4619    Kindred Hospital Pittsburgh   
Oakdale    PA    *    April 30, 2023 4    4633    Kindred Hospital Louisville   
Louisville    KY    *    April 30, 2023 5    4638    Kindred Hospital
Indianapolis    Indianapolis    IN    *    April 30, 2023 6    4611    Kindred
Hospital Bay Area St. Petersburg    St. Petersburg    FL    *    April 30, 2023
7    4644    Kindred Hospital Brea    Brea    CA    *    April 30, 2023 8   
4876    Kindred Hospital South Florida Hollywood    Hollywood    FL    *   
April 30, 2023 9    4688    Kindred Hospital Boston    Boston    MA    *   
April 30, 2023 10    4658    Kindred Hospital Tucson    Tucson    AZ    *   
April 30, 2023 11    4628    Kindred Hospital - Chattanooga    Chattanooga    TN
   *    April 30, 2025 12    4680    Kindred Hospital - St. Louis    St. Louis
   MO    *    April 30, 2025 13    4653    Kindred Hospital - Tarrant County
(Fort Worth Southwest)    Fort Worth    TX    *    April 30, 2025 14    4668   
Kindred Hospital - Forth Worth    Fort Worth    TX    *    April 30, 2025 15   
4674    Kindred Hospital - Central Tampa    Tampa    FL    *    April 30, 2025
16    4635    Kindred Hospital - San Antonio    San Antonio    TX    *    April
30, 2025 17    4647    Kindred Hospital - Las Vegas (Sahara)    Las Vegas    NV
   *    April 30, 2025 18    4660    Kindred Hospital - Mansfield    Mansfield
   TX    *    April 30, 2025 19    4662    Kindred Hospital - Greensboro   
Greensboro    NC    *    April 30, 2025 20    4673    Kindred Hospital - Boston
North Shore    Peabody    MA    *    April 30, 2025 21    4614    Kindred
Hospital - Philadelphia    Philadelphia    PA    *    April 30, 2025 22    4666
   Kindred Hospital - New Orleans    New Orleans    LA    *    April 30, 2025 23
   4871    Kindred Hospital - Chicago – Lakeshore    Chicago    IL    *    April
30, 2025 24    4664    Kindred Hospital - Albuquerque    Albuquerque    NM    *
   April 30, 2025 25    4665    Kindred Hospital - Denver    Denver    CO    *
   April 30, 2025 26    4637    Kindred Hospital - Chicago (North Campus)   
Chicago    IL    *    April 30, 2025 27    4690    Kindred Hospital - Chicago
(Northlake Campus)    Northlake    IL    *    April 30, 2025 28    4602   
Kindred Hospital - South Florida – Coral Gables    Coral Gables    FL    *   
April 30, 2025 29    4652    Kindred Hospital - North Florida   
Green Cove Springs    FL    *    April 30, 2025 30    168    Kindred
Transitional Care and Rehabilitation - Lakewood    Tacoma    WA    *    April
30, 2025 31    1228    Kindred Transitional Care and Rehabilitation - Lafayette
   Fayetteville    GA    *    April 30, 2025 32    559    Kindred Transitional
Care and Rehabilitation - Birchwood    Burlington    VT    *    April 30, 2025
33    694    Kindred Transitional Care and Rehabilitation - Wedgewood (IN)   
Clarksville    IN    *    April 30, 2025 34    131    Kindred Transitional Care
and Rehabilitation - Harrison (IN)    Corydon    IN    *    April 30, 2025 35   
213    Kindred Transitional Care and Rehabilitation - Wildwood (IN)   
Indianapolis    IN    *    April 30, 2025 36    113    Kindred Transitional Care
and Rehabilitation - Southwood    Terre Haute    IN    *    April 30, 2025 37   
198    Kindred Transitional Care and Rehabilitation - Harrington (MA)    Walpole
   MA    *    April 30, 2025 38    825    Kindred Transitional Care and
Rehabilitation - Nansemond Pointe    Suffolk    VA    *    April 30, 2025 39   
829    Kindred Transitional Care and Rehabilitation - River Pointe    Virginia
Beach    VA    *    April 30, 2025 40    573    Kindred Transitional Care and
Rehabilitation - Eagle Pond    South Dennis    MA    *    April 30, 2025

 

Exhibit B

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

EXHIBIT C

Allocation Schedule – Applicable Transferred Property Percentages

Master Lease Agreement No. 5

 

     Facility ID   

Name

   Base Rent as of
the Execution
Date*      Base
Rent as
of the
Effective
Date    Percentage of
Master Lease
as of the
Effective Date 1    4618    Kindred Hospital Oklahoma City    $ 1,140,000.00   
      2    4822    Kindred Hospital San Francisco Bay Area    $ 4,900,000.00   
      3    4619    Kindred Hospital Pittsburgh    $ 1,330,000.00          4   
4633    Kindred Hospital Louisville    $ 6,050,000.00          5    4638   
Kindred Hospital Indianapolis    $ 2,180,000.00          6    4611    Kindred
Hospital Bay Area St. Petersburg    $ 3,650,000.00          7    4644    Kindred
Hospital Brea    $ 3,600,000.00          8    4876    Kindred Hospital South
Florida Hollywood    $ 3,750,000.00          9    4688    Kindred Hospital
Boston    $ 700,000.00          10    4658    Kindred Hospital Tucson    $
700,000.00          11    4628    Kindred Hospital - Chattanooga    $
1,364,252.63          12    4680    Kindred Hospital - St. Louis    $
1,953,328.61          13    4653    Kindred Hospital - Tarrant County (Fort
Worth Southwest)    $ 2,749,304.42          14    4668    Kindred Hospital -
Forth Worth    $ 2,346,087.93          15    4674    Kindred Hospital - Central
Tampa    $ 4,996,574.68          16    4635    Kindred Hospital - San Antonio   
$ 2,042,507.17          17    4647    Kindred Hospital - Las Vegas (Sahara)    $
1,338,525.41          18    4660    Kindred Hospital - Mansfield    $
1,010,900.62          19    4662    Kindred Hospital - Greensboro    $
2,381,813.14          20    4673    Kindred Hospital - Boston North Shore    $
1,007,777.35          21    4614    Kindred Hospital - Philadelphia    $
1,105,384.79          22    4666    Kindred Hospital - New Orleans    $
559,480.64          23    4871    Kindred Hospital - Chicago – Lakeshore    $
1,996,625.91          24    4664    Kindred Hospital - Albuquerque    $
1,814,017.87          25    4665    Kindred Hospital - Denver    $ 2,037,161.51
         26    4637    Kindred Hospital - Chicago (North Campus)    $
4,415,228.53          27    4690    Kindred Hospital - Chicago (Northlake
Campus)    $ 2,826,723.59          28    4602    Kindred Hospital - South
Florida – Coral Gables    $ 2,118,905.25          29    4652    Kindred Hospital
- North Florida    $ 4,491,343.65          30    168    Kindred Transitional
Care and Rehabilitation - Lakewood    $ 1,164,223.74          31    1228   
Kindred Transitional Care and Rehabilitation - Lafayette    $ 2,501,318.76      
   32    559    Kindred Transitional Care and Rehabilitation - Birchwood    $
1,093,657.52          33    694    Kindred Transitional Care and Rehabilitation
– Wedgewood (IN)    $ 737,398.04          34    131    Kindred Transitional Care
and Rehabilitation - Harrison (IN)    $ 787,571.38          35    213    Kindred
Transitional Care and Rehabilitation – Wildwood (IN)    $ 2,152,561.35         
36    113    Kindred Transitional Care and Rehabilitation - Southwood    $
1,219,830.14          37    198    Kindred Transitional Care and Rehabilitation
– Harrington (MA)    $ 1,677,187.09          38    825    Kindred Transitional
Care and Rehabilitation - Nansemond Pointe    $ 1,873,005.83          39    829
   Kindred Transitional Care and Rehabilitation - River Pointe    $ 827,564.61
         40    573    Kindred Transitional Care and Rehabilitation - Eagle Pond
   $ 1,721,505.05                Total Master Lease Agreement No. 5      **   
      100.00000%

 

Exhibit C

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

* The respective Base Rent amounts for each Leased Property which are set forth
in this column are the applicable Base Rent amounts therefor under the Existing
Master Lease or Existing ML5, as applicable, as of the Execution Date, and such
amounts shall be increased by the respective Base Rent escalation amounts that
are applicable thereto under the Existing Master Lease or Existing ML5, as
applicable, as of May 1, 2014 and, in the case of certain of the Leased
Properties, shall be further adjusted, as of October 1, 2014, pursuant to the
terms of Section 3 of the Agreement Regarding Master Leases, and such respective
Base Rent amounts for each Leased Property, as so adjusted, shall constitute the
respective Base Rent amounts for each Leased Property for the “Base Rent as of
the Effective Date” column of this Exhibit, and the respective percentage
amounts for each Leased Property for the “Percentage of Master Lease as of the
Effective Date” column of this Exhibit shall be calculated, to five (5) decimal
places, by dividing the applicable Base Rent amount therefor, as of the
Effective Date, by the aggregate amount of Base Rent for all of the Leased
Properties as of the Effective Date. As soon as practicable following the
Effective Date, the parties shall, by confirmatory amendment, update this
Exhibit to reflect the “Base Rent as of the Effective Date” and the “Percentage
of Master Lease as of the Effective Date” for each Leased Property.

** The total Base Rent under Existing ML5, as of the Execution Date, is
Twenty-Eight Million Dollars ($28,000,000.00).

 

Exhibit C

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

EXHIBIT D

Renewal Groups

Master Lease Agreement No. 5

 

     Facility
ID     

Name

  

City

  

State

  

Lease Expiration
Date

   Renewal
Group 1      4618       Kindred Hospital Oklahoma City    Oklahoma City    OK   
April 30, 2023    1 2      4822       Kindred Hospital San Francisco Bay Area   
San Leandro    CA    April 30, 2023    1 3      4619       Kindred Hospital
Pittsburgh    Oakdale    PA    April 30, 2023    1 4      4633       Kindred
Hospital Louisville    Louisville    KY    April 30, 2023    1 5      4638      
Kindred Hospital Indianapolis    Indianapolis    IN    April 30, 2023    1 6   
  4611       Kindred Hospital Bay Area St. Petersburg    St. Petersburg    FL   
April 30, 2023    1 7      4644       Kindred Hospital Brea    Brea    CA   
April 30, 2023    1 8      4876       Kindred Hospital South Florida Hollywood
   Hollywood    FL    April 30, 2023    1 9      4688       Kindred Hospital
Boston    Boston    MA    April 30, 2023    1 10      4658       Kindred
Hospital Tucson    Tucson    AZ    April 30, 2023    1 11      4628      
Kindred Hospital - Chattanooga    Chattanooga    TN    April 30, 2025    2 12   
  4680       Kindred Hospital - St. Louis    St. Louis    MO    April 30, 2025
   2 13      4653       Kindred Hospital - Tarrant County (Fort Worth Southwest)
   Fort Worth    TX    April 30, 2025    2 14      4668       Kindred Hospital -
Forth Worth    Fort Worth    TX    April 30, 2025    2 15      4674      
Kindred Hospital - Central Tampa    Tampa    FL    April 30, 2025    2 16     
4635       Kindred Hospital - San Antonio    San Antonio    TX    April 30, 2025
   2 17      4647       Kindred Hospital - Las Vegas (Sahara)    Las Vegas    NV
   April 30, 2025    2 18      4660       Kindred Hospital - Mansfield   
Mansfield    TX    April 30, 2025    2 19      4662       Kindred Hospital -
Greensboro    Greensboro    NC    April 30, 2025    2 20      4673       Kindred
Hospital - Boston North Shore    Peabody    MA    April 30, 2025    2 21     
4614       Kindred Hospital - Philadelphia    Philadelphia    PA    April 30,
2025    2 22      4666       Kindred Hospital - New Orleans    New Orleans    LA
   April 30, 2025    2 23      4871       Kindred Hospital - Chicago – Lakeshore
   Chicago    IL    April 30, 2025    2 24      4664       Kindred Hospital -
Albuquerque    Albuquerque    NM    April 30, 2025    2 25      4665      
Kindred Hospital - Denver    Denver    CO    April 30, 2025    2 26      4637   
   Kindred Hospital - Chicago (North Campus)    Chicago    IL    April 30, 2025
   2 27      4690       Kindred Hospital - Chicago (Northlake Campus)   
Northlake    IL    April 30, 2025    2 28      4602       Kindred Hospital -
South Florida - Coral Gables    Coral Gables    FL    April 30, 2025    2 29   
  4652       Kindred Hospital - North Florida    Green Cove Springs    FL   
April 30, 2025    2 30      168       Kindred Transitional Care and
Rehabilitation - Lakewood    Tacoma    WA    April 30, 2025    3 31      1228   
   Kindred Transitional Care and Rehabilitation - Lafayette    Fayetteville   
GA    April 30, 2025    3 32      559       Kindred Transitional Care and
Rehabilitation - Birchwood    Burlington    VT    April 30, 2025    3 33     
694       Kindred Transitional Care and Rehabilitation - Wedgewood (IN)   
Clarksville    IN    April 30, 2025    3 34      131       Kindred Transitional
Care and Rehabilitation - Harrison (IN)    Corydon    IN    April 30, 2025    3
35      213       Kindred Transitional Care and Rehabilitation - Wildwood (IN)
   Indianapolis    IN    April 30, 2025    3 36      113       Kindred
Transitional Care and Rehabilitation - Southwood    Terre Haute    IN    April
30, 2025    3 37      198       Kindred Transitional Care and Rehabilitation -
Harrington (MA)    Walpole    MA    April 30, 2025    3 38      825      
Kindred Transitional Care and Rehabilitation - Nansemond Pointe    Suffolk    VA
   April 30, 2025    3 39      829       Kindred Transitional Care and
Rehabilitation - River Pointe    Virginia Beach    VA    April 30, 2025    3 40
     573       Kindred Transitional Care and Rehabilitation - Eagle Pond   
South Dennis    MA    April 30, 2025    3

 

Exhibit D

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

Exhibit E

Leases

As used in this Lease, the term “Leases” means this Lease and the following
leases:

 

1. Second Amended and Restated Master Lease Agreement No. 1 dated as of
April 27, 2007 by and between Ventas Realty, Limited Partnership, as lessor, and
Kindred Healthcare, Inc. and Kindred Healthcare Operating, Inc., as tenant.

 

2. Second Amended and Restated Master Lease Agreement No. 2 dated as of
April 27, 2007 by and between Ventas Realty, Limited Partnership, as lessor, and
Kindred Healthcare, Inc. and Kindred Healthcare Operating, Inc., as tenant.

 

3. Second Amended and Restated Master Lease Agreement No. 3 dated as of
April 27, 2007 by and between Ventas Realty, Limited Partnership, as lessor, and
Kindred Healthcare, Inc. and Kindred Healthcare Operating, Inc., as tenant.

 

4. Second Amended and Restated Master Lease Agreement No. 4 dated as of
April 27, 2007 by and between Ventas Realty, Limited Partnership, as lessor, and
Kindred Healthcare, Inc. and Kindred Healthcare Operating, Inc., as tenant.

 

Exhibit E

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

Exhibit F

INTENTIONALLY OMITTED

 

Exhibit F

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

Exhibit G

Form of Lease Guaranty

GUARANTY OF LEASE

THIS GUARANTY OF LEASE, dated as of                     , by and from
                    , a                     having an address at
                     (“Guarantor”), with respect to that certain Amended and
Restated Master Lease Agreement No. 5, dated as of September 30, 2013 (the
“Lease”), between Ventas Realty, Limited Partnership, a Delaware limited
partnership (“Lessor”), and Kindred Healthcare, Inc., a Delaware corporation and
Kindred Healthcare Operating, Inc., a Delaware corporation (collectively,
“Tenant”), covering the Leased Properties (as defined in the Lease) identified
therein, including, without limitation, that certain Leased Property more
particularly described on Exhibit A attached hereto (the “Premises”), all or a
portion of which is subleased by Tenant to Guarantor.

WHEREAS, Guarantor desires, and Lessor requires, that this agreement be
furnished so that Guarantor, being obligated to do so, can fulfill the terms and
conditions of the Lease with respect to the Premises with the same effect as if
the Lease had been entered into with Guarantor as the tenant with respect to the
Premises thereunder.

NOW, THEREFORE, in consideration and recognition of the execution of the Lease,
and other good and valuable consideration and intending to be legally bound
hereby, Guarantor hereby unconditionally guarantees, and unconditionally becomes
surety to Lessor, its successors and assigns for, the payment of all rent,
additional charges and other sums owing under the Lease with respect to, or
allocable to, the Premises (and Guarantor acknowledges and agrees that, in the
event any delinquency exists under the Lease in the payment of Base Rent, Lessor
shall, for purposes of the foregoing clause, allocate such delinquency pro rata
among the Leased Properties based upon the respective Transferred Property
Percentages applicable to the Leased Properties) and the full, faithful and
punctual performance of each and all of the covenants, agreements and conditions
of the Lease to be kept and performed by Tenant with respect to the Premises, in
accordance with and within the times prescribed by the Lease, as well as all
other liabilities now or hereafter contracted by Tenant with Lessor pursuant to
the Lease with respect to the Premises and together, to the extent the same are
chargeable to Tenant under the Lease, with all costs and expenses (including,
without limitation, reasonable attorneys fees) incurred by Lessor with respect
to the Premises in connection with any of the foregoing and/or in connection
with the enforcement of Lessor’s rights against Tenant or Guarantor with respect
to the Premises (all of the foregoing being hereinafter collectively referred to
as the “Liabilities”). In the event Tenant fails to pay, perform or observe, as
applicable, any of the Liabilities, and such failure is not cured within the
cure period, if any, provided to Tenant by the terms of the Lease, an Event of
Default shall be deemed to have occurred under this Guaranty. Guarantor agrees
that it shall be obligated to keep itself informed as to the status of Tenant’s
payment, performance and observance of the Liabilities and that Lessor shall not
be obligated to give Guarantor, and Guarantor shall not be entitled to, notice
of any failure by Tenant to pay, perform or observe, as applicable, any of the
Liabilities, provided, however, that Lessor agrees to accept the cure of any
such failure, on or prior to the expiration of the cure period, if any, provided
to Tenant by the terms of the Lease, by either Tenant or Guarantor.

 

Exhibit G

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

Guarantor further agrees as follows:

1. Lessor shall have the right from time to time, and at any time in its sole
discretion, without notice to or consent from Guarantor, and without affecting,
impairing, or discharging in whole or in part, the Liabilities of Guarantor
hereunder: to modify, change, extend, alter, amend or supplement in any respect
whatever, any agreement or transaction between Lessor and Tenant or between
Lessor and any other party liable for the Liabilities, or any portion or
provision thereof; to grant extensions of time and other indulgences of any kind
to Tenant; to compromise, release, substitute, exercise, enforce or fail or
refuse to exercise or enforce any claims, rights or remedies of any kind which
Lessor may have at any time against Tenant or any other party liable for the
Liabilities, or any thereof, or with respect to any security of any kind held by
Lessor at any time under any agreement or otherwise. The Liabilities of
Guarantor shall not be affected, impaired or discharged, in whole or in part, by
reason of payments by Tenant of all or a portion of the Liabilities, to the
extent such payments shall be turned over as “voidable preferences” or otherwise
required to be refunded or disgorged, or by reason of any action whatsoever
taken by Lessor with respect to any security in which Lessor may at any time
have any interest or against any other party liable for all or any part of the
Liabilities.

2. Guarantor waives: (a) all notices, including but not limited to (i) notice of
acceptance of this Guaranty, (ii) notice of presentment, demand for payment, or
protest of any of the Liabilities, or the obligation of any person, firm or
corporation held by Lessor as collateral security, and (iii) notice of any
failure by Tenant to pay, perform or observe, as applicable, any of the
Liabilities or of any Event of Default (as defined in the Lease); (b) all
defenses, offsets and counterclaims which Guarantor may at any time have to any
of the Liabilities, except to the extent the same is a valid defense, offset or
counterclaim on the part of Tenant; and (c) all notices of the financial
condition or of any adverse or other change in the financial condition of
Tenant.

3. Lessor may, without notice, assign this Guaranty in whole or in part, and no
assignment or transfer of the Lease or subletting of the Premises shall operate
to extinguish or diminish the liability of Guarantor hereunder.

4. The liability of Guarantor under this Guaranty shall be primary with respect
to any right of action which shall accrue to Lessor under the Lease, and Lessor
may, at its option, proceed against Guarantor without having to commence any
action, or having obtained any judgment, against Tenant.

 

Exhibit G

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

5. The Liabilities of Guarantor shall not be affected, impaired or discharged,
in whole or in part, by reason of: (a) the entry of an order for relief pursuant
to the United States Bankruptcy Code by or against Tenant; (b) the proposal of
or the consummation of a plan of reorganization concerning Tenant; (c) the
assignment of Tenant’s obligations under the Lease or any other or further
sublease of any portion of the Premises, whether or not any such assignment or
sublease is permitted under the Lease; or (d) except by reason of actual payment
and performance of Tenant’s obligations under the Lease, the discharge of the
obligations of Tenant to Lessor, provided, however, if Tenant, in accordance
with the requirements of the Lease, assigns the Lease (including, without
limitation, if and to the extent permitted under Section 25.1.11 or Section 25.4
of the Lease, by virtue of a partial assignment of the Lease with respect to the
Premises) to a Person (as defined in the Lease) that is not an Affiliate (as
defined in the Lease) of Tenant, Tenant shall not be released from any of its
duties, liabilities or obligations under the Lease on account of any such
assignment, but Guarantor shall be released from this Guaranty insofar as it
relates to any Liabilities of Tenant assumed by the assignee and arising on
account of any breach or default of the Lease occurring after the date of such
assignment. Notwithstanding anything contained in this Guaranty to the contrary,
this Guaranty shall terminate on the expiration date or earlier termination of
the sublease of the Premises by Tenant to Guarantor, but, following such
termination, Guarantor shall remain liable for the payment and performance of
any and all Liabilities that arose or accrued on or prior to such termination.

6. The waiver of any right by Lessor or its failure to exercise promptly any
right shall not be construed as the waiver of any other right including the
right to exercise the same at any time thereafter. No waiver or modification of
any of the terms or conditions of this Guaranty shall be binding against Lessor
unless such waiver or modification is in a writing signed by Lessor.

7. The liability of Guarantor shall bind the respective representatives,
successors and assigns of Guarantor and shall inure to the benefit of Lessor,
its successors and assigns.

8. This Guaranty shall be governed by, and construed in accordance with, the
laws of the State of New York without reference to the choice of law principles
thereof. Guarantor hereby agrees to submit to the jurisdiction of any court of
general jurisdiction sitting in the State of New York and designates any officer
or supervisory employee of Lessor located at the Premises as its agent and
attorney in fact for the purpose of accepting service and making an appearance
on its behalf in such proceeding and taking all such acts as may be necessary or
appropriate in order to confer jurisdiction on it upon such court, provided such
agent and attorney in fact shall promptly send a true copy of all materials so
served to Guarantor at the address and in the manner specified in Section 9
below, and Guarantor stipulates that such consent and appointment is irrevocable
and coupled with an interest.

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

 

Exhibit G

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

       

(a)    

   if to Guarantor:        

 

       

 

       

 

       

 

        Attention:                                                          with
a copy to:        

 

       

 

       

 

       

 

        Attention:                                                      

(b)    

   if to Lessor:   

Ventas Realty, Limited Partnership

c/o Ventas, Inc.

353 N. Clark Street, Suite 3300

Chicago, Illinois 60654

Attention: Lease Administration

with a copy to:

Ventas Realty, Limited Partnership

c/o Ventas, Inc.

353 N. Clark Street, Suite 3300

Chicago, Illinois 60654

Attention: Legal Department

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

 

Exhibit G

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

IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed and sealed
as of the day and year first above written.

 

                                                         , a       By:          
Name:           Title:        

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

Exhibit H

Restrictive Covenants

1. Noncompetition. During the Restricted Period with respect to each Facility
(as the term “Facility” is used for purposes of this Exhibit H, as described in
the definition of “Restricted Period” which is set forth below), the Restricted
Parties shall not, either directly or indirectly, engage in any Restricted
Activities. For the avoidance of doubt, nothing herein shall prohibit any
Restricted Party from providing ancillary services (such as, without limitation,
rehabilitation, pharmacy, home health, geriatric or hospice services) to a
Competing Facility (or any other facility) or, so long as no Restricted
Activities are engaged in or permitted by any Restricted Party, providing
services at any facility that may compete with the services provided at the
Facilities.

2. Rights and Remedies Upon Breach. If any Restricted Party breaches, or
commences any activity that would, if completed, constitute a breach of, any of
the obligations of the Restricted Parties, and/or any other provisions, set
forth in this Exhibit H (the “Restrictive Covenants”), then Lessor shall have
the right and remedy to have the Restrictive Covenants enforced by injunctive
relief or otherwise specifically and/or equitably enforced by any court of
competent jurisdiction, without the necessity of posting bond and without being
required to wait until the expiration of any applicable cure or grace period
under the Lease, it being agreed that any breach or threatened breach of the
Restrictive Covenants would cause irreparable injury to Lessor and that money
damages would not provide an adequate remedy to Lessor, which right and remedy
is in addition to, and not in lieu of, any other rights and remedies available
to Lessor under law or in equity.

3. Severability of Covenants. The Restricted Parties acknowledge and agree that
the Restrictive Covenants are reasonable, necessary and valid in duration and
geographical scope and in all other respects. If any court determines that any
of the Restrictive Covenants, or any part thereof, is invalid or unenforceable,
the remainder of the Restrictive Covenants shall not be affected thereby and
shall be given full effect without regard to the invalid portions.

4. Blue-Penciling. If any court determines that any of the Restrictive
Covenants, or any part thereof, is unenforceable because of the duration or
geographical scope of such provision, such court shall have the power to reduce
the duration or scope of such provision, as the case may be, and, in its reduced
form, such provision shall then be enforceable.

5. Information. Tenant shall promptly provide Lessor with such information
evidencing Tenant’s compliance with the provisions of this Exhibit H as Lessor
may reasonably request from time to time.

 

Exhibit H

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

6. Definitions.

“Competing Facility” means (a) with respect to any Facility as to which the
Primary Intended Use is operation as a hospital and as to which the Restricted
Period remains in effect, any long term acute care hospital (“LTACH”) that is
located within a ten (10) mile radius of any such Facility and (b) with respect
to any Facility as to which the Primary Intended Use is operation as a nursing
center and as to which the Restricted Period remains in effect, any licensed
nursing center or other property containing one or more licensed nursing center
beds (referred to herein as a “SNF”) that is located within a five (5) mile
radius of any such Facility.

“Existing Restricted Radius LTACHs” means the LTACHs listed on Exhibit H-1, each
having not more than the respective permitted number of licensed long-term acute
care beds, and/or other beds, that meet the requirements for participation in
Medicare for payment under LTACH PPS or any successor federal payment program
(such beds, “LTAC Beds”) set forth on Exhibit H-1.

“Existing Restricted Radius SNFs” means the SNFs listed on Exhibit H-2, each
having not more than the respective permitted number of licensed skilled nursing
beds (such beds, “SNF Beds”) set forth on Exhibit H-2.

“Restricted Activities” means to own, lease, occupy, operate, finance, manage,
invest in, build, develop or expand any Competing Facility; provided, however,
that Restricted Activities shall not include (a) the ownership, operation and
management of the Leased Properties, the Existing Restricted Radius LTACHs or
the Existing Restricted Radius SNFs (except that, notwithstanding the foregoing,
it is agreed that any activity engaged in or permitted by any Restricted Party
in connection with which the number of LTAC Beds at any Existing Restricted
Radius LTACH or the number of SNF Beds at any Existing Restricted Radius SNF is
increased to a number that exceeds the permitted number of LTAC Beds or SNF
Beds, as applicable, thereat as set forth above in the definitions of “Existing
Restricted Radius LTACHs” and “Existing Restricted Radius SNFs” shall constitute
a Restricted Activity), and (b) the purchase (and ownership, operation and
management thereof) by a Restricted Party, either singly or as part of a
portfolio transaction, of any open and fully operational Competing Facility from
a Person (including by acquisition of such Person) that is not an Affiliate of a
Restricted Party (except that, notwithstanding the foregoing, it is agreed that
any activity engaged in or permitted by any Restricted Party in connection with
which the number of LTAC Beds or SNF Beds, as applicable, at any such Competing
Facility is increased to a number that exceeds the number of LTAC Beds or SNF
Beds, as applicable, at such Competing Facility as of the date of the aforesaid
purchase or as of the date any Restricted Party entered into a contract for such
purchase, whichever number is lower, shall constitute a Restricted Activity).

“Restricted Parties” means the Seniormost Parent, Tenant, each Guarantor and
each of their respective controlled Affiliates.

“Restricted Period” means, as to a particular Facility, the period commencing on
the Effective Date and expiring, as to such Facility (and, for purposes of this
Exhibit H, the term “Facility” shall include any Facility as to which this Lease
has terminated or expired), on the later of (a) (x) with respect to the Original
ML5 Leased Properties, April 30, 2023, and (y) with respect to the Added Leased
Properties, April 30, 2025, or (b) if the term of this Lease with respect to any
such Facility has been extended in accordance with the provisions of this Lease,
the expiration date of such Extended Term for such Facility (or the expiration
date of any subsequent Extended Term following renewal of an initial or
subsequent Extended Term, as applicable, for such Facility).

 

Exhibit H

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

Exhibit H-1

Existing Restricted Radius LTACHs

 

Name

  

Address

  

LTACH Beds

KH Chicago Lakeshore    6130 North Sheridan Road, Chicago, IL 60660    103 KH
Chicago Central    4058 West Melrose Street, Chicago, IL 60641    95 KH Bay Area
Tampa    4555 South Manhattan Avenue, Tampa, FL 33611    73 KH Chicago North   
2544 West Montrose Avenue, Chicago, IL 60618    164 KH Aurora    700 Potomac St,
2nd Floor, Aurora, CO 80011    37 KH Tarrant County Southwest    7800 Oakmont
Blvd, Fort Worth, TX 76132    80 KH Las Vegas Flamingo    2250 East Flamingo
Road, Las Vegas, NV 89119    142 KH Philadelphia South    1930 South Broad
Street, Philadelphia, PA 19145    58 KH St Louis Mercy    615 South New Ballas
Road, 7th Floor, St. Louis, MO 63141    54 KH Fort Worth    815 Eighth Avenue,
Fort Worth, TX 76104    67 TBD No. 1 (Peoria Street at Montview Boulevard,
Aurora CO)      

Not in excess of

100

TBD No. 2 (East Pioneer at South Collins, Arlington TX)      

Not in excess of

100

 

Exhibit H-1

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

Exhibit H-2

Existing Restricted Radius SNFs

 

Name

  

Address

  

SNF Beds

Star Farm Nursing    98 Starr Farm Road, Burlington, VT 05401-1396    150 Clark
House Nursing    30 Longwood Drive, Westwood, MA 02090-1132    70 Kindred TC&R
Indian Creek    150 Beechmont Drive, Corydon, IN 47112-1717    135 Kindred TC&R
Highgate    10 Carematrix Drive, Dedham, MA 02026-6149    142 Kindred TC&R
Rolling Hills    3625 St. Joseph Road, New Albany, IN 47150-9745    115 Kindred
TC&R Sellersburg    7823 Old Highway #60, Sellersburg, IN 47172-9283    110 TBD
No. 1 (Boston-Cambridge-Peabody, MA area)      

Not in excess of

180

TBD No. 2 (Boston-Cambridge-Peabody, MA area)      

Not in excess of

180

TBD No. 3 (Seattle-Bellevue-Everett, WA area)      

Not in excess of

180

 

Exhibit H-2

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

Exhibit I

Form of Section 25.1.12(f) Guaranty

GUARANTY OF LEASE

This Guaranty of Lease (this “Guaranty”), dated as of                  , 20    ,
is made by                     , a                     (together with any entity
succeeding thereto by consolidation, merger or acquisition of its assets
substantially as an entirety, “Guarantor”) for the benefit of VENTAS REALTY,
LIMITED PARTNERSHIP, a Delaware limited partnership (herein together with its
respective successors and assigns as owners of the property hereinafter
described, called “Landlord”).

Landlord, [Kindred Healthcare, Inc., a Delaware corporation formerly known as
Vencor, Inc. (“Kindred”), and Kindred Healthcare Operating, Inc., a Delaware
corporation formerly known as Vencor Operating, Inc. (“Operator” and, together
with Kindred, “Tenant”)]1 are parties to that certain Amended and Restated
Master Lease Agreement No. 5 dated as of September 30, 2013 (as may have been or
may be amended from time to time, the “Lease”), pursuant to which, effective as
of the Effective Date (as defined therein), Tenant has leased or has agreed to
lease from Landlord the Land described in the Lease, the improvements located on
said Land and the other components of the Leased Properties (collectively, the
“Property”). Initially capitalized terms used but not defined herein shall have
the respective meanings ascribed to such terms in the Lease. In accordance with
the provisions of the Lease, Tenant wishes to engage in a Kindred Change of
Control Transaction whereby Guarantor shall become the Seniormost Parent and, as
a condition to the consummation of such Kindred Change of Control Transaction,
Guarantor has agreed to enter into this Guaranty. The lease of the Property to
Tenant is of direct benefit to Guarantor. This Guaranty reasonably may be
expected to benefit, directly or indirectly, Guarantor.

NOW, THEREFORE, in consideration of $10 and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Guarantor, intending to be legally bound, covenants and agrees with Landlord as
follows:

1. Guaranty. Guarantor unconditionally and irrevocably guarantees to Landlord
that (a) all Rent and all other sums due under the Lease and payable by Tenant,
whether due by acceleration or otherwise, including costs and expenses of
collection (collectively, the “Monetary Obligations”) will be promptly and
indefeasibly paid in full when due, in accordance with the provisions thereof
and (b) Tenant will perform and observe each and every covenant, agreement, term
and condition of Tenant in the Lease as required thereunder (the “Performance
Obligations” and together with the Monetary Obligations, the “Guaranteed
Obligations”). If for any reason any Monetary Obligations shall not be paid
promptly when due after receipt of required notice to Tenant under the Lease, if
any, and after the expiration of any applicable grace period therefore, if any,
Guarantor shall, immediately

 

1  To be updated to reflect intervening permitted assignments or Kindred Change
of Control Transactions.

 

Exhibit I

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

upon demand, pay the same to Landlord with interest and penalty due thereon, if
any, as stated in the Lease. In addition to the foregoing, Guarantor hereby
becomes surety to Landlord for the due and punctual payment and performance of
the Guaranteed Obligations, and Guarantor hereby waives all defenses that may be
available to Guarantor as a surety and guarantor other than the defenses of
payment of the Monetary Obligations and performance of the Performance
Obligations.

2. Nature of Guaranty. Landlord may enforce this Guaranty without first having
recourse against Tenant or exhausting its rights or remedies under the Lease;
provided, that nothing herein shall prohibit Landlord from exercising its rights
against each of Guarantor and Tenant simultaneously. This Guaranty and the
obligations of Guarantor hereunder are present, primary, direct, continuing,
unconditional, irrevocable and absolute and independent of any obligations of
Tenant. This Guaranty is a guaranty of payment and performance and not of
collection.

3. Guarantor Representations, Warranties and Covenants. Guarantor represents,
warrants and covenants to Landlord that (a) all written reports, written
statements (financial or otherwise), certificates and other data furnished in
writing by or on behalf of Guarantor to Landlord in connection with this
Guaranty or the Lease, are true and correct in all material respects, do not
omit to state any material fact or circumstance necessary to make the statement
contained therein not misleading and fairly represent the financial condition of
Guarantor as of the respective date thereof, and no material adverse change has
occurred in the financial condition of Guarantor since the date of the most
recent of such financial statements; (b) Guarantor has derived or expects to
derive financial and other advantages and benefits, directly or indirectly, from
the making of this Guaranty and the Guaranteed Obligations; (c) no
representations or agreements of any kind have been made to Guarantor that would
limit or qualify in any way the terms of this Guaranty; (d) Landlord has made no
representation to Guarantor as to the creditworthiness of Tenant; (e) Guarantor
has established adequate means of obtaining from Tenant information regarding
Tenant’s financial condition; (f) Guarantor will keep adequately informed of any
facts, events or circumstances that might in any way affect Guarantor’s risks
under this Guaranty; (g) Landlord shall have no obligation to disclose to
Guarantor any information or documents (financial or otherwise) heretofore or
hereafter acquired by Landlord in the course of its relationship with Tenant;
(h) Guarantor is a [corporation], duly organized, validly existing and in good
standing under the laws of the State of Guarantor’s organization; (i) Guarantor
has the power and authority to execute, deliver and perform this Guaranty and to
incur the obligations herein provided for; (j) Guarantor has taken all requisite
actions necessary to authorize the execution, delivery and performance of this
Guaranty; (k) this Guaranty constitutes a legal, valid and binding obligation of
Guarantor enforceable in accordance with its terms; (l) the execution, delivery
and performance of this Guaranty will not require any consent, approval,
authorization, order or declaration of or filing or registration with any court,
any Governmental Authority or any other Person; (m) the execution, delivery and
performance of this Guaranty do not and will not conflict with, and do not and
will not result in a breach of, any organizational document of Guarantor or any
order, writ, injunction, decree, statute, rule or regulation applicable to
Guarantor; and (n) Guarantor is an Affiliate of Tenant.

 

Exhibit I

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

4. Matters Not Affecting Guarantor Obligations. The obligations, covenants,
agreements and duties of Guarantor under this Guaranty shall in no way be
discharged, affected or impaired by any of the following and Landlord may at any
time and from time to time, with or without consideration, without prejudice to
any claim against Guarantor hereunder, without in any way changing, releasing or
discharging Guarantor from its liabilities and obligations hereunder and without
notice to or the consent of Guarantor, waive, release or consent to any of the
following:

4.1. the waiver by Landlord of the performance or observance by Tenant or any
other party of any of the agreements, covenants, terms or conditions contained
in the Lease;

4.2. the extension, in whole or in part, of the time for payment by Tenant of
any sums owing or payable under the Lease, or of any other sums or obligations
under or arising out of or on account of the Lease, or the renewal or extension
of the Lease, all in accordance with its terms;

4.3. any sublease of any or all of the Property by Tenant to any other person;

4.4. any assumption by any person of any or all of Tenant’s obligations under,
or Tenant’s assignment of any or all of its interest in the Lease;

4.5. the waiver or release or modification or amendment (whether material or
otherwise) of any provision of the Lease;

4.6. any failure, omission or delay on the part of Landlord to enforce, assert
or exercise any right, power or remedy conferred on or available to Landlord in
or by the Leases or this Guaranty, or any action on the part of Landlord
granting indulgence or extension in any form whatsoever;

4.7. the voluntary or involuntary liquidation, dissolution, sale of all or
substantially all of the assets, marshaling of assets and liabilities,
receivership, conservatorship, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization or other similar proceeding affecting
Landlord, Tenant or Guarantor or any of their assets or any impairment,
modification, release or limitation of liability of Landlord, Tenant or
Guarantor or any of their estates in bankruptcy or of any remedy for the
enforcement of such liability resulting from the operation of any present or
future provision of the U.S. Bankruptcy Code or other similar statute of any
other state or nation or from the decision of any court;

4.8. the release of Tenant from the performance or observance of any of the
agreements, covenants, terms or conditions contained in the Lease by operation
of law;

4.9. the power or authority or lack thereof of Tenant to execute, acknowledge or
deliver the Lease

4.10. the legality, validity or invalidity of the Lease;

 

Exhibit I

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

4.11. the existence or non-existence of Tenant as a legal entity or the
existence or non-existence of any corporate or other business relationship
between Tenant and Guarantor;

4.12. any sale or assignment by a Landlord of this Guaranty and/or the Lease
(including any assignment by Landlord to any mortgagee);

4.13. any default by Guarantor under this Guaranty or any right of setoff,
counterclaim or defense (other than payment in full of the Monetary Obligations,
or full performance of any applicable Performance Obligations, as applicable, in
accordance with the terms of the Lease) that Guarantor may or might have to its
undertakings, liabilities and obligations hereunder, each and every such defense
being hereby waived by Guarantor; or

4.14. any other cause, whether similar or dissimilar to any of the foregoing,
that might constitute a legal or equitable discharge of Guarantor (whether or
not Guarantor shall have knowledge or notice thereof) other than payment in full
of the Monetary Obligations or full performance of any applicable Performance
Obligations, as applicable.

Without in any way limiting the generality of the foregoing, Guarantor
specifically agrees that if Tenant’s obligations under the Lease are modified or
amended with the express written consent of Landlord, this Guaranty shall extend
to such obligations as so amended or modified. Notwithstanding anything
contained herein to the contrary, Guarantor shall be released from all
Guaranteed Obligations that arise from and after the date of any Kindred Change
of Control Transaction that is consummated after the date hereof and in
accordance with the terms of the Lease, with such release to become effective,
and to be conditioned, upon the execution contemporaneously with such subsequent
Kindred Change of Control Transaction by the Seniormost Parent (as such exists
immediately following such subsequent Kindred Change of Control Transaction) of
a joinder or a Section 25.1.12(f) Guaranty in accordance with the provisions of
Section 25.1.12(f) of the Lease.

5. Waivers of Notice. Guarantor hereby waives notice of (a) Landlord’s
acceptance of this Guaranty or its intention to act or its actions in reliance
hereon; (b) the present existence or future incurring of any Guaranteed
Obligations or any terms or amounts thereof or any change therein; (c) any
default by Tenant or any surety or guarantor; (d) the obtaining of any guaranty
or surety agreement (in addition to this Guaranty); (e) the obtaining of any
pledge, assignment or other security for any Guaranteed Obligations; (f) the
release of Tenant or any surety or guarantor; (g) the release of any collateral;
(h) any other demands or notices whatsoever with respect to the Guaranteed
Obligations or this Guaranty; (i) presentment, demand, protest, nonpayment,
intent to accelerate, and protest in relation to any instrument or agreement
evidencing any Guaranteed Obligation. Guarantor hereby further waives
(j) promptness and diligence; (k) all other notices, demands and protests, and
all other formalities of every kind, in connection with the enforcement of the
Lease or of the obligations of Guarantor hereunder, the omission of or delay in
which, but for the provisions of this Section, might constitute grounds for
relieving Guarantor of its obligations hereunder; and (l) any requirement that
Landlord protect, secure, perfect or insure any lien or security interest or
other encumbrance or any property subject thereto or pursue or exhaust any right
or take any action against or with respect to Tenant or any other person or
entity or any collateral (including any rights relating to marshalling of
assets).

 

Exhibit I

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

6. Waivers of Defenses. Guarantor expressly waives any and all rights to
defenses arising by reason of (a) any “one-action” or “anti-deficiency” law or
any other law that may prevent Landlord from bringing any action, including a
claim for deficiency against Guarantor, before or after Landlord’s commencement
or completion of any action against Tenant; (b) ANY ELECTION OF REMEDIES BY
LANDLORD (INCLUDING WITHOUT LIMITATION ANY TERMINATION OF THE LEASE) THAT
DESTROYS OR OTHERWISE ADVERSELY AFFECTS GUARANTOR’S SUBROGATION RIGHTS OR
GUARANTOR’S RIGHTS TO PROCEED AGAINST TENANT FOR REIMBURSEMENT; (c) any
disability or other defense of Tenant, of any other guarantor, or of any other
Person, or by reason of the cessation of Tenant’s liability from any cause
whatsoever, other than full and final payment in legal tender of the Guaranteed
Obligations; (d) any right to claim discharge of the Guaranteed Obligations on
the basis of unjustified impairment of any collateral for the Guaranteed
Obligations; (e) any change in the corporate relationship between Guarantor and
Tenant or any termination of such relationship; (f) any irregularity, defect or
unauthorized action by Landlord, Tenant or any other guarantor or surety or any
of their respective officers, directors or other agents in executing and
delivering any instrument or agreements relating to the Guaranteed Obligations
or in carrying out or attempting to carry out the terms of any such agreements;
(g) any receivership, insolvency, bankruptcy, reorganization or similar
proceeding by or against Tenant, Landlord, Guarantor or any other surety or
guarantor; (h) any setoff, counterclaim, recoupment, deduction, defense or other
right that Guarantor may have against Landlord, Tenant or any other Person for
any reason whatsoever whether related to the Guaranteed Obligations or
otherwise; (i) any assignment, endorsement or transfer, in whole or in part, of
the Guaranteed Obligations, whether made with or without notice to or consent of
Guarantor; (j) if the recovery from Tenant or any other Person (including
without limitation any other guarantor) becomes barred by any statute of
limitations or is otherwise prevented; or (k) any neglect, delay, omission,
failure or refusal of Landlord to take or prosecute any action for the
collection of any of the Guaranteed Obligations or to foreclose or take or
prosecute any action in connection with any lien or right of security (including
perfection thereof) existing or to exist in connection with, or as security for,
any of the Guaranteed Obligations, it being the intention hereof that Guarantor
shall remain liable as a principal on the Guaranteed Obligations notwithstanding
any act, omission or event that might, but for the provisions hereof, otherwise
operate as a legal or equitable discharge of Guarantor. Guarantor hereby waives
all defenses of a surety to which they may be entitled by statute or otherwise.

7. Rejection of Lease Document. Guarantor agrees that, in the event of the
rejection or disaffirmance of the Lease by Tenant or Tenant’s trustee in
bankruptcy pursuant to bankruptcy law or any other law affecting creditors
rights, Guarantor will, if Landlord so requests, assume all obligations and
liabilities of Tenant under the Lease, to the same extent as if Guarantor was a
party to such document and there had been no such rejection or disaffirmance;
and Guarantor will confirm such assumption in writing at the request of Landlord
upon or after such rejection or disaffirmance and such assumption will be
without limitation upon Guarantor’s obligations under this Guaranty. Guarantor,
upon such assumption, shall have all rights of Tenant under the Lease to the
fullest extent permitted by law.

 

Exhibit I

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

8. Events of Default. The following events following the expiration of the
applicable cure periods, in this Section are sometimes referred to as an “Event
of Default”:

8.1. If default shall be made in the payment of any sum required to be paid by
Guarantor under this Guaranty;

8.2. If default shall be made in the observance or performance of any of the
other covenants in this Guaranty which Guarantor is required to observe and
perform and such default is not cured within a period of thirty (30) days after
receipt of notice from Landlord, unless such failure cannot with due diligence
be cured within a period of thirty (30) days, in which case such period of time
shall be extended to such period of time (not to exceed 180 days) as may be
necessary to cure such default with all due diligence provided that such cure is
completed within 180 days;

8.3. If any representation or warranty made by Guarantor herein or in any
certificate, demand or request proves to be incorrect in any material respect
when made;

8.4. If Guarantor (i) admits in writing its inability to pay its debts generally
as they become due; (ii) files a petition in bankruptcy or a petition to take
advantage of any bankruptcy, reorganization or insolvency act; (iii) makes an
assignment for the benefit of its creditors; (iv) consents to the appointment of
a receiver for itself or for the whole or any substantial part of its property;
or (v) files a petition or answer seeking reorganization or arrangement under
federal bankruptcy laws or any other applicable law or statute of the united
States of America or any state thereof;

8.5. If any petition is filed by or against Guarantor either under federal
bankruptcy laws, or any other proceeding is instituted by or against Guarantor
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
reorganization, arrangement, adjustment or composition of its or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for Guarantor, and such
proceeding is not dismissed within 60 days after institution thereof, or
Guarantor or any Affiliate of Guarantor shall take any action to authorize or
effect any of the actions set forth in this Section 8.5;

8.6. An event of default arising from the failure to pay principal or interest
with respect to any indebtedness for borrowed money of Guarantor with an
aggregate outstanding principal amount equal to or exceeding $50 million, shall
have occurred, or the acceleration of the maturity of any indebtedness for
borrowed money of Guarantor with an aggregate outstanding principal amount equal
to or exceeding $50 million shall have occurred, provided, however, that
Landlord is not acting at the time of such acceleration as the agent bank or its
equivalent with respect to such indebtedness;

 

Exhibit I

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

8.7. If any receiver, trustee, custodian or other similar official shall be
appointed for Guarantor and any such appointment is not dismissed within 60 days
after the date of such appointment and prior to the entry of a final,
unappealable order approving such appointment; or

8.8. If an Event of Default occurs under the Lease.

Upon the occurrence of any such Event of Default, Landlord shall have whatever
rights at law or equity it might have to enforce this Guaranty.

9. Subordination. Guarantor agrees that any claim or claims or liens or security
interests it may now have or may in the future have against Tenant are or shall
be subordinate to Tenant’s obligations to Landlord under the Lease until
Tenant’s obligations under the Lease have been fully performed and any payments
thereunder are not subject to recovery by a trustee in bankruptcy. Guarantor
waives all rights of subrogation against Tenant for any amounts expended by
Guarantor under this Guaranty until Tenant’s obligations under the Lease have
been fully performed and any payments thereunder are not subject to recovery by
a trustee in bankruptcy.

10. Reimbursement of Landlord. If Landlord incurs any expenses in the
enforcement of this Guaranty, including reasonable attorneys’ fees and
disbursements, whether or not legal action be instituted, Guarantor shall pay
the same immediately upon demand by Landlord which shall be accompanied by
evidence of such expenses.

11. Waiver in Writing. Landlord shall not by any act of omission or commission
be deemed to waive any of its rights or remedies hereunder unless such waiver be
in writing and signed by Landlord, and then only to the extent specifically set
forth therein; a waiver of one event shall not be construed as continuing or as
a bar to or waiver of such right or remedy on a subsequent event.

12. Financial Covenants. Guarantor shall, and shall cause Tenant to, comply with
the financial covenants set forth in Sections 8.4 and 8.5 of the Lease.

13. Financial Reporting. Guarantor shall, and shall cause Tenant to, comply with
the financial reporting obligations set forth in Article XXVI of the Lease.

14. Restrictive Covenants. Guarantor shall, and shall cause Tenant to, comply,
and to cause each Restricted Party (as defined in Exhibit H attached to the
Lease and made a part thereof) to comply, with the terms and conditions set
forth in Exhibit H.

15. Miscellaneous.

15.1. Confidentiality. Except as and to the extent required by law or the rules
of any applicable stock exchange, without the prior written consent of Landlord,
Guarantor will not, and Guarantor will direct its agents and representatives not
to, make any public statement or otherwise disclose to any person or party any
of the contents or terms of this Guaranty or the transaction contemplated
hereunder or the identities of the parties. If Guarantor is required by law to
make any such disclosure, it must first provide to Landlord the content of the
proposed disclosure, the reasons such disclosure is required by law or the rules
of any applicable stock exchange and the time and place that the disclosure will
be made.

 

Exhibit I

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

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

 

   To Guarantor:      

 

     

 

     

 

      Attention:                                                                
  

 

To Landlord:

 

Ventas Realty, Limited Partnership

c/o Ventas, Inc.

353 N. Clark Street, Suite 3300

Chicago, Illinois 60654

Attention: Legal Department

 

With a copy to:

 

Ventas Realty, Limited Partnership

c/o Ventas, Inc.

353 N. Clark Street, Suite 3300

Chicago, Illinois 60654

Attention: Asset Management

  

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

15.3. Termination and Reinstatement. The obligations of Guarantor under this
Guaranty shall automatically terminate 366 days after Landlord has received, and
not been required to disgorge any part of, payment of all Monetary Obligations
and all other sums due and owing under this Guaranty. If payment is made by
Tenant, whether voluntarily or otherwise, or by any third party, on the
Guaranteed Obligations and thereafter Landlord is forced to remit, rescind or
restore the amount of that payment under any federal or state bankruptcy law or
law for the relief of debtors or for any other reason, (a) the amount of such
payment shall be considered to have been unpaid at all times for the purposes of
enforcement of this Guaranty and (b) the obligations of Tenant guaranteed herein
shall be automatically reinstated to the extent of such payment.

 

Exhibit I

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

15.4. Mortgages of Properties. If Landlord proposes to grant a mortgage on or
refinance any mortgage of its Property, Guarantor shall cooperate in the
process, and shall permit Landlord and the proposed mortgagee, at its expense,
to meet with officers of Guarantor at Guarantor’s offices and to discuss the
Guarantor’s business and finances. On request of Landlord, Guarantor agrees to
provide any such prospective mortgagee the information to which Landlord is
entitled hereunder, provided that if any such information is not publicly
available, such nonpublic information shall be made available on a confidential
basis. Guarantor agrees to execute, acknowledge and deliver documents requested
by the prospective mortgagee (such as a consent to the financing (without
encumbering Guarantor’s or Tenant’s assets), a consent to assignment of lease
and of this Guaranty, estoppel certificate, and a subordination, non-disturbance
and attornment agreement), customary for tenants and their guarantors to sign in
connection with mortgage loans to landlords, so long as such documents are in
form then customary among institutional lenders (provided the same do not
materially or adversely change Tenant’s rights or obligations under the Lease or
materially or adversely change Guarantor’s rights and obligations under this
Guaranty).

15.5. Choice of Law and Venue. This Guaranty shall be governed by and construed
in accordance with the laws of the State of New York, other than its doctrine
regarding conflicts of laws. Guarantor irrevocably submits to the personal
jurisdiction of any federal or state court sitting in the Commonwealth of
Kentucky with respect to any matter arising under this Guaranty and hereby
appoints             , having an address at                 , Kentucky as its
agent for service of process. Guarantor consents to jurisdiction of the courts
of the Commonwealth of Kentucky and of the Federal courts sitting in the
Commonwealth of Kentucky, and consents to venue in the Commonwealth of Kentucky,
and Guarantor waives any right to stay, remove, or otherwise directly or
indirectly interfere with such action based on such jurisdiction.

15.6. Modification and Invalidity. This Guaranty may not be modified or amended
except by a written agreement duly executed by Guarantor and Landlord and
Landlord’s mortgagee of the Property from time to time, if any. This Guaranty
shall be binding upon the Guarantor and shall inure to the benefit of Landlord
and its successors and assigns as permitted hereunder, including, without
limitation, any mortgagee of Landlord’s interest in the Property. In the event
any one or more of the provisions contained in this Guaranty shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Guaranty, but this Guaranty shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. As used
herein the term “Tenant” includes its successors and assigns with respect to the
Lease.

15.7. Landlord Transfer of Properties. The rights of Landlord under this
Guaranty may be assigned in whole or in part by Landlord, its successors and
assigns, whether directly or by way of a grant of a security interest herein,
without the consent of Guarantor.

 

Exhibit I

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

15.8. Certificate of Confirmation. Within 10 Business Days after request by
Landlord, Guarantor shall deliver a certificate confirming that this Guaranty is
in full force and effect and unamended (or, if amended, specifying such
amendment), and whether, to the actual knowledge of Guarantor, any default
exists under the Lease or under this Guaranty.

[SIGNATURE PAGE FOLLOWS]

 

Exhibit I

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

IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed and its
corporate seals to be hereunto affixed and attested by its officers thereunto
duly authorized.

 

                        , a                      By:  

 

  Name:   Title:

 

Exhibit I

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

SCHEDULE 2.1A

Intentionally omitted

 

Schedule 2.1A

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

Schedule 2.1B

Intentionally omitted

 

Schedule 2.1B

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

Schedule 2.1C

Existing Ground Leases

Master Lease No. 5

 

  1. Facility 4602: Lease/Use Agreement and Declaration of Restrictive Covenant
and First Amendment dated February 1, 2001 between the City of Coral Gables and
Ventas Realty, Limited Partnership and recorded on May 21, 2001 in Book 19676,
Page 3216 et. seq., as instrument no. 01R260439, of the Public Records of
Miami-Dade County, Florida; Consent and Estoppel Certificate dated May 21, 2001
executed by the City of Coral Gables and recorded on May 21, 2001 in Book 19676,
Page 3228 et. seq., as instrument no. 01R260440, in the aforesaid public
records; Consent and Estoppel Certificate dated April 15, 2002 executed by the
City of Coral Gables.

 

  2. Facility 559: Lease dated June 17, 1964 between Henry H. Riordan and
Charles M. Jones, as Trustees of the Will of John J. Flynn, and Birchwood
Development Corporation and recorded at Volume 188, Page 583 of the land records
of the City of Burlington, Vermont; First Amendment to Indenture of Lease dated
October 13, 1978 and recorded in Volume 252, Page 691 of the aforesaid land
records; Second Amendment to Lease dated December 6, 1990 and recorded in Volume
592, Page 1 of the aforesaid land records; Lease dated June 17, 1964 between
Henry H. Riordan and Charles M. Jones, as Trustees under the Will of John J.
Flynn, and Birchwood Nursing Home, Inc.; Lease (Short Form for Recording) dated
June 17, 1964 and recorded in Volume 163, Page 526 of the land records of the
City of Burlington, Vermont; Lease (Short Form for Recording) dated June 17,
1964 and recorded in Volume 188, Page 602 of the aforesaid land records; First
Amendment to Indenture of Lease dated October 13, 1978 and recorded in Volume
252, Page 681 of the aforesaid land records; Second Amendment to Lease dated as
of April 30, 1998 and recorded in Volume 592, Page 9 of the aforesaid land
records; Assignment and Assumption of Lease dated January 25, 1990 between First
Healthcare Corporation and Hillhaven, Inc. and recorded in Volume 414, Page 72
of the aforesaid land records; Assignment and Assumption of Lease dated
October 23, 1990 between NME Properties, Inc. (formerly known as Hillhaven,
Inc.) and First Healthcare Corporation and recorded in Volume 424, Page 168;
Lessor’s Acknowledgment to Assignment and Assumption of Leases dated October 19,
1990 and recorded in Volume 424, Page 174 of the aforesaid land records;
Assignment and Assumption of Leases dated June 26, 2000 between Ventas, Inc.
(successor by merger to First Healthcare Corporation) and Ventas Realty, Limited
Partnership and recorded in Volume 657, Page 37 of the aforesaid land records;
Lessor’s Acknowledgment to Assignment and Assumption of Leases dated June 29,
2000 and recorded in Volume 657, Page 41 of the aforesaid land records; Consent
and Estoppel Certificate dated June 29, 2000 recorded in Volume 657, Page 59 of
the aforesaid land records.

 

Schedule 2.1C

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

  3. Facility 4664: Ground Lease dated June 25, 1993 between St. Joseph
Development Corporation and Transitional Hospitals Corporation; Memorandum of
Ground Lease between St. Joseph Development Corporation and Transitional
Hospitals Corporation and recorded on July 1, 1993 in Book BCR 93-17, Page 6123,
as document no. 93070217 of the records of Bernalillo County, New Mexico;
Amendment to Ground Lease dated April 17, 1997 between St. Joseph Development
Corporation and Transitional Hospitals Corporation; Amendment to Ground Lease
dated June             , 1998 between St. Joseph Development Corporation and
Vencor, Inc.; Assignment of Tenant’s Interest in Ground Lease (With Consent of
Landlord Attached) dated March 27, 2001, effective as of April 30, 1998, between
Transitional Hospitals Corporation and Ventas Realty, Limited Partnership and
recorded on May 2, 2001 in Book A18, Page 8781, as document no. 2001050344 in
the aforesaid records; Supplement to Ground Lease Documents dated as of
March 27, 2001 by and among St. Joseph Development Corporation, Transitional
Hospitals Corporation and Ventas Realty, Limited Partnership and recorded on
May 2, 2001 in Book A18, Page 8780, as document no. 2001050343 in the aforesaid
records; Consent and Estoppel Certificate dated March 27, 2001 executed by St.
Joseph Development Corporation and recorded on May 2, 2001 in Book A18, Page
8782, as document no. 2001050345 in the aforesaid records; Consent and Estoppel
Certificate dated May 4, 2001 executed by St. Joseph Development Corporation;
Third Amendment to Ground Lease dated as of July 1, 2003 between Lovelace Sandia
Health System, Inc. and Ventas Realty, Limited Partnership; Fourth Amendment to
Ground Lease effective as of July 1, 2008, by and between Lovelace Health
System, Inc. and Ventas Realty, Limited Partnership; Fifth Amendment to Ground
Lease effective as of June 26, 2013, by and between Lovelace Health System, Inc.
and Ventas Realty, Limited Partnership

 

Schedule 2.1C

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

SCHEDULE 7.2.7

Minimum Licensed Beds for Hospital Care

Master Lease Agreement No. 5

 

     Facility
ID   

Name

   Minimum Number
of Beds Licensed for
Hospital Care 1    4618    Kindred Hospital Oklahoma City    39 2    4822   
Kindred Hospital San Francisco Bay Area    65 3    4619    Kindred Hospital
Pittsburgh    41 4    4633    Kindred Hospital Louisville    244 5    4638   
Kindred Hospital Indianapolis    30 6    4611    Kindred Hospital Bay Area St.
Petersburg    39 7    4644    Kindred Hospital Brea    32 8    4876    Kindred
Hospital South Florida Hollywood    81 9    4688    Kindred Hospital Boston   
24 10    4658    Kindred Hospital Tucson    34 11    4628    Kindred Hospital –
Chattanooga    32 12    4680    Kindred Hospital – St. Louis    39 13    4653   
Kindred Hospital – Tarrant County (Fort Worth Southwest)    52 14    4668   
Kindred Hospital – Fort Worth    44 15    4674    Kindred Hospital – Central
Tampa    67 16    4635    Kindred Hospital – San Antonio    39 17    4647   
Kindred Hospital – Las Vegas (Sahara)    34 18    4660    Kindred Hospital –
Mansfield    36 19    4662    Kindred Hospital – Greensboro    81 20    4673   
Kindred Hospital – Boston North Shore    33 21    4614    Kindred Hospital –
Philadelphia    34 22    4666    Kindred Hospital – New Orleans    110 23   
4871    Kindred Hospital – Chicago – Lakeshore    67 24    4664    Kindred
Hospital – Albuquerque    40 25    4665    Kindred Hospital – Denver    45 26   
4637    Kindred Hospital – Chicago (North Campus)    108 27    4690    Kindred
Hospital – Chicago (Northlake Campus)    62 28    4602    Kindred Hospital –
South Florida – Coral Gables    35 29    4652    Kindred Hospital – North
Florida    39

 

Schedule 7.2.7

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

SCHEDULE 7.2.8

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

 

     Facility
ID   

Name

   Minimum Number of
Non-Banked Skilled
Nursing Care Beds
at Certain Facilities 1    113    Southwood Health and Rehabilitation Center
(IN)    142 2    829    River Pointe Rehabilitation and Healthcare Center (VA)
   140 3    1228    Lafayette Nursing and Rehab Center (GA)    178 4    213   
Kindred Transitional Care and Rehabilitation – Wildwood (IN)    170

 

Schedule 7.2.8

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

Schedule 13.7

Insurance Summary

[See attached]

 

Schedule 13.7

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

KINDRED HEALTHCARE, INC.

INSURANCE SCHEDULE - 2013/2014

 

Coverage

  

Insurer

   Deductible     

Limits

  

Policy Type

  

Policy Period

   Retro   

Policy #

  

Broker

   Premium   General Liability    Cornerstone Ins Co       500k    Claims Made
   1/1/13-1/1/14       CIC 2013 - 1    Lockton    Professional Liability   
Cornerstone Ins Co       500k    Claims Made    1/1/13-1/1/13       CIC 2013 - 1
      Excess Liability    Hannover Re/Torus (75/25)       3.5mm/20m xs 500k   
Following Form    1/1/11-1/1/14       CIC 2013 - 1       $ 5,000,000    Excess
Liability    Torus       1mm/3mm xs 4mm *    Following Form    1/1/13-1/1/13   
   CIC 2013 - 2       $ 465,000    Excess Liability    CNA       15m/15m xs 5mm
**    Following Form    1/1/13-1/1/14       CIC 2013 - 2       $ 1,650,000   
Excess Liability    ACE       20m/20m xs 20m    Following Form    1/1/13-1/1/14
      CIC 2013 - 2       $ 701,400    Excess Liability    Ironshore      
20m/20m xs 40m    Following Form    1/1/13-1/1/14       CIC 2013 - 2       $
511,475    Excess Liability    Chaucer 25%/Beazley 25%/Swiss Re 50%      
20m/20m xs 60m    Following Form    1/1/13-1/1/14       CIC 2013 - 2       $
305,000    Excess Liability    AWAC       20m/20m xs 80m    Following Form   
1/1/13-1/1/14       CIC 2013 - 2       $ 233,700    SIR Front Policy   
Continental Casualty Company (CNA)       2mm/3mm    Matching Ded   
1/1/13-1/1/14       HAZ30117432484       $ 130,775   

 

*      Drop down to $500k

**    Drop down to $500k

         

       

Auto Liability    Arch      0       1mm    Occurrence    1/1/13-1/1/14      
11CAB4974602 (AOS)    Lockton    $ 249,704                         11CAB4974702
(MA)       Property (all risk; including flood and quake)    Lexington Insurance
Co. (AIG) (60%)    $ 100,000       25mm primary (incl DIC)    replacement cost
   12/1/12-12/1/13       017727953    Lockton    $ 2,655,695       Lloyds (20%)
      25mm primary (incl DIC)    (150mm loss limit)          PRPNA1201215      
$ 855,000       XL (10% primary $25m; 10% $125m xs $25m)       25mm primary
(incl DIC); 10% excess             US00044825PR12A       $ 569,993       ACE
(10% primary $25m; 10% $125m xs $25m)       25mm primary (incl DIC); 10% excess
            GPAD37822565       $ 594,294    (also includes $100m Boiler &
Machinery)    Zurich       20% of $125m xs $25m             XPP655859203       $
168,334       LIU       17.5% $25m xs $25m             LIUESP00310239       $
95,375       Aspen       10% $25m xs $25m             PXAAQX012       $ 62,500
      Torus       22.5% $100m xs $50m             07357A123APR       $ 112,500
      Tokio       5% $100m xs $50m             LCP648068300       $ 25,000      
Arch       20 % of $125m xs $25m             PRP004134202       $ 165,000      
Liberty Mutual       10.5% of $125m xs $25m             MQ2L9L458106012       $
84,656       Maiden Specialty       2% of $125m xs $25m            
S2LPY0247801M/901M       $ 17,200       Arrowhead (Everest Indemnity Co)      
$10m xs $50m excess CA Quake          8400000974121       $ 66,000      
American Empire (shared layer with Maxum)       $10m xs $60m excess CA Quake   
      11MP25053       $ 28,927       Maxum                   SPO601407403      
$ 25,000       Western Re (Lloyd’s)       $5m xs $70m excess CA Quake         
WRE01066       $ 30,000    National Flood (NFIP)    Fidelity National & First
Community      5,000                        

 

Wind & Hail - 5% TIV per location subject to $250k min per occ at any location
in Tier 1 counties in VA, NC, SC, GA, AL, MS, LA, TX

Wind & Hail - Florida (Named Windstorm) - 5% TIV per location subject to $250k
min per occ

Named Windstorm in Harris County, TX - 3% TIV per location subject to $250k min
per occ

Quake - 5% TIV per loc subject to $250k min for CA locations

Flood - SFHA (100 yr flooding) 5% TIV subject to $1m minimum per occ

 

  

  

  

  

  

Crime    National Union Fire Insurance Company of Pittsburgh, PA (AIG) 100,000
      10mm       1/1/13-14       015294939    Gallagher    $ 116,874       Great
American Insurance Companies       10mm xs 10mm       1/1/13-14       CRP
585-86-97-04       $ 66,633       Chubb       10mm xs 20mm       1/1/13-14      
8211-1912       $ 45,000       Travelers (St Paul Mercury)       10mm xs 30mm   
   1/1/13-14       105541169       $ 30,500       Continental Casualty Company
(CNAPro)       10mm xs 40mm       1/1/13-14       286981904       $ 28,000   
Pollution Legal Liability    ACE American Insurance Company      75,000      
1mm/2mm*    Claims Made    5/28/13-15    5/28/1999    HPI G24878648 003   
Lockton    $ 35,580   

 

*      Multiyear agg is spread over entire 2 year policy term, not annual

 

         

Storage Tank Liability    Illinois Union Insurance Company (ACE)      50,000   
   1mm/2mm    Claims Made    5/28/13-14    5/28/1999    UST G24881787 005   
Lockton    $ 4,946    Storage Tank Liability (KH Central Tampa)    Illinois
Union Insurance Company (ACE)      5,000       1mm/1mm    Claims Made   
3/22/13-14    3/22/2012    G24715905 002    Lockton    $ 368    Workers’
Compensation and Employers Liability    Cornerstone Insurance Company      
500,000    Occurrence    1/1/13-14          Lockton    $ 42,500,000       Arch
Insurance Company       W/C - statutory             11WCI4974802 (AOS)       $
3,292,897             EL - 1mm                      Arch Insurance Company      
      1/1/13-14       11WCI4979102 (P.O.R.T.)       $ 4,537       Arch Insurance
Company             1/1/13-1/1/14       11WCI4982702 (NPORT)       $ 3,998   
TPA Claims Services (AOS except WA, WY)    Sedgwick CMS             1/1/13-14   
         Excess W/C and EL for OHIO    Arch      500,000       W/C - statutory
      1/1/13-14       11WCX4975002       $ 127,863             EL - 2mm         
         Other Workers’ Compensation    Maine       Self Insurance (term’d
4/30/98)                      Nevada       Self Insurance (term’d 11/1/99)      
               North Dakota       Monopolistic                      Ohio      
Self Insurance                      Oregon       Self Insurance (term’d 8/14/99)
                     Washington       Self Insurance (term’d 5/21/99)         
            Washington       State Fund (begin 5/22/99)                     
Wyoming       Monopolistic                  

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

KINDRED HEALTHCARE, INC.

INSURANCE SCHEDULE - 2011

Coverage

Storage Tank

Property/Boiler & Machinery

Auto

Directors & Officers

Property

Professional Liability

(Colorado Hospital Only)

Property (DIC Policy)

Property

Property

Workers’ Compensation

and Employers Liability

Aviation

(policy cancelled effective 8/31/11)

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

Insurer

   Deductible  

Zurich American Insurance Company

   $ 25,000   

The Travelers Insurance Companies

     various   

Zurich American Insurance Company Of Illinois

   $ 1,000 comp/collision   

Hudson Insurance Company

     Side A DIC   

American Guarantee and Liability Insurance Company (Zurich)

     various   

Homeland Insurance Company (One Beacon)

   $ 50,000   

Liberty Mutual

   $ 10,000   

American Guarantee and Liability Insurance Company (Zurich)

     various   

American Guarantee and Liability Insurance Company (Zurich)

     various   

Liberty Mutual

Federal Insurance Company (Chubb)

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

Limits

   Policy Type   

        Policy Period        

   Retro

$1m/$1m

   Claims Made    9/1/10 - 9/1/11    various

Not to exceed $187,065,641

   Claims Made    6/1/09 - 6/1/10   

$1m liability Comp/Collision - ACV

   Claims Made    10/22/10 - 10/22/11   

$5m

   Claims Made    10/1/10 - 10/1/11    10/1/2009

$100m

   Claims Made    11/24/09 - 6/1/11   

$500k/$3m

   Claims Made    2/25/11 - 2/25/12    11/24/2009

$11,870,000

   Claims Made    11/1/10 - 11/1/11   

$50m

   Claims Made    6/1/07 - 6/1/08   

$50m

   Claims Made    8/15/06 - 8/15/07   

$350,000 Retention

   Occurrence    4/1/10 - 4/1/11   

$100m

      12/14/10 - 12/14/11   

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

Policy #

  

Broker

   Premium  

USC 9421035 03

   Gresham and Associates    $ 1,822   

KTK-CMB-5623N26-7-09

   A&B Ins Solutions    $ 651,011   

BAP 9828909-00

   International Insurance    $ 30,914   

HN-0303-1649-100110

   J.W. Terrill    $ 27,000   

ZMD 6558249 00

   International Insurance    $ 1,364,310   

MPP-3733-11

   J.W. Terrill    $ 60,000   

YU2-L9L-432204-010

   J.W. Terrill    $ 26,858   

ZMD 9139054-01

   International Insurance    $ 796,896   

ZMD 9139054-00

   International Insurance    $ 1,066,763   

WA7-64D-004888-050 (AOS)

   Lockton Companies    $ 936,979   

WC7-641-004888-060 (OR, WI)

      $ 128,410   

WA7-64D-004888-070 Named Insured: Physical and Occupational Rehabilitation
Therapy, PLLC (NY)

      $ 16,671   

9958-6118-01

   Lockton Companies    $ 25,678   

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

SCHEDULE 16.1(m)A

Licensed Beds as of the Commencement Date

Master Lease Agreement No. 5

 

* Deemed number of licensed beds as of the Commencement Date per
Section 16.1(m)(i)

 

     Facility
ID   

Name

  

City

  

State

   No. Licensed Beds
at Commencement
Date 1    4618    Kindred Hospital Oklahoma City    Oklahoma City    OK    59 2
   4822    Kindred Hospital San Francisco Bay Area    San Leandro    CA    99 3
   4619    Kindred Hospital Pittsburgh    Oakdale    PA    63 4    4633   
Kindred Hospital Louisville    Louisville    KY    374 5    4638    Kindred
Hospital Indianapolis    Indianapolis    IN    59 6    4611    Kindred Hospital
Bay Area St. Petersburg    St. Petersburg    FL    60 7    4644    Kindred
Hospital Brea    Brea    CA    48 8    4876    Kindred Hospital South Florida
Hollywood    Hollywood    FL    124 9    4688    Kindred Hospital Boston   
Boston    MA    36 10    4658    Kindred Hospital Tucson    Tucson    AZ    51
11    4628    Kindred Hospital – Chattanooga    Chattanooga    TN    49 12   
4680    Kindred Hospital – St. Louis    St. Louis    MO    60 13    4653   
Kindred Hospital – Tarrant County (Fort Worth Southwest)    Fort Worth    TX   
80 14    4668    Kindred Hospital – Forth Worth    Fort Worth    TX    67 15   
4674    Kindred Hospital – Central Tampa    Tampa    FL    102 16    4635   
Kindred Hospital – San Antonio    San Antonio    TX    59 17    4647    Kindred
Hospital – Las Vegas (Sahara)    Las Vegas    NV    52 18    4660    Kindred
Hospital – Mansfield    Mansfield    TX    55 19    4662    Kindred Hospital –
Greensboro    Greensboro    NC    124 20    4673    Kindred Hospital – Boston
North Shore    Peabody    MA    50 21    4614    Kindred Hospital – Philadelphia
   Philadelphia    PA    52 22    4666    Kindred Hospital – New Orleans    New
Orleans    LA    168 23    4871    Kindred Hospital – Chicago – Lakeshore   
Chicago    IL    103 24    4664    Kindred Hospital – Albuquerque    Albuquerque
   NM    61 25    4665    Kindred Hospital – Denver    Denver    CO    68 26   
4637    Kindred Hospital – Chicago (North Campus)    Chicago    IL    205 (165*)
27    4690    Kindred Hospital – Chicago (Northlake Campus)    Northlake    IL
   94 28    4602    Kindred Hospital – South Florida – Coral Gables    Coral
Gables    FL    53 29    4652    Kindred Hospital – North Florida   
Green Cove Springs    FL    60 30    168    Kindred Transitional Care and
Rehabilitation – Lakewood    Tacoma    WA    80 31    1228    Kindred
Transitional Care and Rehabilitation – Lafayette    Fayetteville    GA    179 32
   559    Kindred Transitional Care and Rehabilitation – Birchwood    Burlington
   VT    160 33    694    Kindred Transitional Care and Rehabilitation –
Wedgewood (IN)    Clarksville    IN    124 34    131    Kindred Transitional
Care and Rehabilitation – Harrison (IN)    Corydon    IN    92 35    213   
Kindred Transitional Care and Rehabilitation – Wildwood (IN)    Indianapolis   
IN    173 36    113    Kindred Transitional Care and Rehabilitation – Southwood
   Terre Haute    IN    149 37    198    Kindred Transitional Care and
Rehabilitation – Harrington (MA)    Walpole    MA    90 38    825    Kindred
Transitional Care and Rehabilitation – Nansemond Pointe    Suffolk    VA    194
39    829    Kindred Transitional Care and Rehabilitation – River Pointe   
Virginia Beach    VA    148 40    573    Kindred Transitional Care and
Rehabilitation – Eagle Pond    South Dennis    MA    142

 

Schedule 16.1(m)A

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

Schedule 16.1(m)B

Minimum Licensed Beds at Certain Facilities Due to Involuntary Reduction

Master Lease No. 5

 

Facility No.

  

Facility Name

   Minimum Number of
Licensed Beds      95% of
Minimum   1. 4633    Kindred Hospital – Louisville      133         127   
2. 4628    Kindred Hospital – Chattanooga      44         42    3. 4690   
Kindred Hospital – Chicago (Northlake Campus)      78         75    4. 4660   
Kindred Hospital – Mansfield      47         45   

The parties agree that the licensed beds number that appears in the “95% of
Minimum” column for a particular Facility shall equal 95% of the number of
licensed beds shown in the “Minimum Number of Licensed Beds” column for such
Facility, in each case rounded up to the closest whole number of licensed beds.

 

Schedule 16.1(m)B

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

Schedule 25.1.7

Certain Existing Subleases

 

Facility Number – Name

   Subtenant    Date of
Sublease    Square Footage

4822 – Kindred Hospital San Francisco Bay Area

   Sprint    3/30/98    972

 

Schedule 25.1.7

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

Schedule 40.12

Tenant – Affiliate Sublessees

Master Lease #5

 

Facility ID

  

Name

  

City

  

State

  

Tenant-Affiliate

4618    Kindred Hospital Oklahoma City    Oklahoma City    OK    KHE 4822   
Kindred Hospital San Francisco Bay Area    San Leandro    CA   
THC-Orange County, Inc. 4619    Kindred Hospital Pittsburgh    Oakdale    PA   
KHE 4633    Kindred Hospital Louisville    Louisville    KY    KHLP 4638   
Kindred Hospital Indianapolis    Indianapolis    IN    KHLP 4611    Kindred
Hospital Bay Area St. Petersburg    St. Petersburg    FL    KHE 4644    Kindred
Hospital Brea    Brea    CA    THC-Orange County, Inc. 4876    Kindred Hospital
South Florida Hollywood    Hollywood    FL    KHE 4688    Kindred Hospital
Boston    Boston    MA    KHE 4658    Kindred Hospital Tucson    Tucson    AZ   
KHW 4628    Kindred Hospital – Chattanooga    Chattanooga    TN    KHLP 4680   
Kindred Hospital – St. Louis    St. Louis    MO    KHE 4653    Kindred Hospital
– Tarrant County (Fort Worth Southwest)    Fort Worth    TX    THC Texas 4668   
Kindred Hospital – Forth Worth    Fort Worth    TX    KHLP 4674    Kindred
Hospital – Central Tampa    Tampa    FL    THC Tampa 4635    Kindred Hospital –
San Antonio    San Antonio    TX    KHLP 4647    Kindred Hospital – Las Vegas
(Sahara)    Las Vegas    NV    THCN 4660    Kindred Hospital – Mansfield   
Mansfield    TX    KHLP 4662    Kindred Hospital – Greensboro    Greensboro   
NC    KHE 4673    Kindred Hospital – Boston North Shore    Peabody    MA   
JB Thomas Hospital, Inc. 4614    Kindred Hospital – Philadelphia    Philadelphia
   PA    KHE 4666    Kindred Hospital – New Orleans    New Orleans    LA    THCL
4871    Kindred Hospital – Chicago – Lakeshore    Chicago    IL    THC-North
Shore, Inc. 4664    Kindred Hospital – Albuquerque    Albuquerque    NM    THCNM
4665    Kindred Hospital – Denver    Denver    CO    KHW 4637    Kindred
Hospital – Chicago (North Campus)    Chicago    IL    THC – Chicago, Inc. 4690
   Kindred Hospital – Chicago (Northlake Campus)    Northlake    IL    THC –
Chicago, Inc. 4602    Kindred Hospital – South Florida – Coral Gables    Coral
Gables    FL    KHE 4652    Kindred Hospital – North Florida   
Green Cove Springs    FL    KHE 168    Kindred Transitional Care and
Rehabilitation – Lakewood    Tacoma    WA    KNCW 1228    Kindred Transitional
Care and Rehabilitation – Lafayette    Fayetteville    GA    LHCC 559    Kindred
Transitional Care and Rehabilitation – Birchwood    Burlington    VT    KNCE 694
   Kindred Transitional Care and Rehabilitation – Wedgewood (IN)    Clarksville
   IN    KNCLP 131    Kindred Transitional Care and Rehabilitation – Harrison
(IN)    Corydon    IN    KNCLP 213    Kindred Transitional Care and
Rehabilitation – Wildwood (IN)    Indianapolis    IN    KNCLP 113    Kindred
Transitional Care and Rehabilitation – Southwood    Terre Haute    IN    KNCLP
198    Kindred Transitional Care and Rehabilitation – Harrington (MA)    Walpole
   MA    KNCE 825    Kindred Transitional Care and Rehabilitation – Nansemond
Pointe    Suffolk    VA    KNCE 829    Kindred Transitional Care and
Rehabilitation – River Pointe    Virginia Beach    VA    KNCE 573    Kindred
Transitional Care and Rehabilitation – Eagle Pond    South Dennis    MA    KNCE

 

Schedule 40.12

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

LEGEND

LHCC – Lafayette Health Care Center, Inc.

KHE – Kindred Hospitals East, L.L.C.

KHW – Kindred Hospitals West, L.L.C.

KHLP – Kindred Hospitals Limited Partnership

KNCE – Kindred Nursing Centers East, L.L.C.

KNCLP – Kindred Nursing Centers Limited Partnership

KNCW – Kindred Nursing Centers West, L.L.C.

THCL – Transitional Hospitals Corporation of Louisiana, Inc.

THCNM – Transitional Hospitals Corporation of New Mexico, Inc.

THC Texas – Transitional Hospitals Corporation of Texas, Inc.

THC Tampa – Transitional Hospitals Corporation of Tampa, Inc.

THCN – Transitional Hospitals Corporation of Nevada, Inc.

 

Schedule 40.12