Exhibit 10.33

 

LEASE

(2160 Colonial Blvd., Ft. Myers, FL)

 

This “Lease” is entered into as of September    , 2015 (the “Effective Date”)
between JRE — CBO 3, LLC, a Florida limited liability company, whose business
address is 6321 Daniels Pkwy., Suite 200, Fort Myers, Florida 33912
(“Landlord”), and 21st Century Oncology, LLC, a Florida limited liability
company, whose corporate address is 2270 Colonial Blvd., Fort Myers Florida
33907 (“Tenant”), for the approximately 46,356 square foot building with a
street address of 2160 Colonial Blvd, Ft. Myers, FL 33907 (the “Building” or
“Premises”) located on the real property more particularly described on attached
Exhibit A (the “Property”). The improvements within the Premises, which are used
as a corporate and business office and administration facility (the “Permitted
Use”, as such use may be changed pursuant to Section 7.1(a) ), are referred to
as the “Facility” and collectively with the Permitted Use, the “Business”.
Pursuant to its concurrent Guaranty, 21st Century Oncology, Inc., a Florida
corporation (“Guarantor”) has guaranteed Tenant’s obligations hereunder. In
consideration of the mutual covenants, conditions and agreements set forth
herein, Landlord hereby leases the Premises to Tenant for the Term upon the
terms and conditions provided below. Certain capitalized terms used in this
Lease are defined on Exhibit D.

 

RECOGNITION OF LEASE;

IRREVOCABLE WAIVER OF CERTAIN RIGHTS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1.                                      Term. The “Term” of this Master Lease is
the Initial Term plus all Renewal Terms, and a “Lease Year” is the twelve (12)
month period commencing on the “Commencement Date” as defined below. The
“Initial Term” will begin on the Commencement Date and will continue for fifteen
(15) years thereafter, and may be extended for four (4) separate “Renewal Terms”
of five (5) years each if: (a) at least twelve (12), but not more than fifteen
(15) months prior to the end of the then current Term, Tenant delivers to
Landlord a “Renewal Notice” that it desires to exercise its right to extend this
Master Lease for one (1) Renewal Term; and (b) there is no Event of Default on
the date Landlord receives the Renewal Notice (the “Exercise Date”) or on the
last day of the then current Term. The “Commencement Date” will be September 15,
2015.

 

2.                                      Rent. During the Term, Tenant shall pay
Landlord “Rent” consisting of “Minimum Rent” and “Additional Rent” determined as
provided in this Section 2. The Rent for any month that begins or ends on other
than the first or last day of a calendar month shall be prorated based on actual
days elapsed.

 

2.1                               Minimum Rent; Annual Increases. The “Minimum
Rent” as of the Effective Date of this Master Lease is $322,500.00 annually,
plus all applicable sales and use taxes, payable in advance in twelve (12) equal
monthly installments. On each anniversary of the Commencement Date during the
Term (including any renewal Terms(s)) Minimum Rent shall be increased by two
percent (2%).

 

2.2                               Additional Rent. As “Additional Rent” during
the Initial Term, Tenant will reimburse Landlord on a monthly basis for the cost
of Tenant Improvements (as defined in Section 25) estimated to be approximately
$3,583,510.00, amortized at an annual amortization rate of 7.5% over the period
commencing on i) the date a Certificate of Occupancy for the Premises (including
the Tenant Improvements) is issued by the local municipality (the “CO Date”);
and ending on ii) the last day of the 15-year Initial Term. For example, if the
CO Date is a date which is six (6) months after the Commencement Date, monthly
Additional Rent will be calculated by amortizing the actual costs of the Tenant
Improvements over 174 months at 7.5%. Minimum Rent and Additional Rent will be
referred to collectively in this Lease as “Rent”.

 

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

 

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

 

3.                                      Late Charges. The late payment of Rent
or other amounts due will cause Landlord to

 

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

 

4.                                      Intentionally Omitted.

 

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

 

5.1                               Protests. Each party has the right, but not
the obligation, in good faith to protest or contest (a “Protest”) in whole or in
part (i) the amount or payment of any Taxes or Other Charges and (ii) the
existence, amount or validity of any Lien (as defined in Section 8.1) by
appropriate proceedings sufficient to prevent its collection or other
realization and the sale, forfeiture or loss of any portion of the Premises or
Rent to satisfy it (so long as, in the case of any Protest or contest by Tenant,
Tenant provides Landlord with reasonable security to assure the foregoing, which
security may take the form of a title indemnity (in a form reasonably acceptable
to Landlord and from a national title insurance company reasonably acceptable to
Landlord) or payment of the amount due the lien claimant), provided that if as a
result of any Protest initiated by Landlord, such Taxes, Other Charges or the
amount of any Lien increases above the protested amount, such increase shall be
borne exclusively by Landlord. Each party shall diligently prosecute any such
Protest initiated by it at its sole cost and expense. In connection with any
Protest that Tenant is diligently pursuing regarding Taxes, subject to
Landlord’s obligation to make

 

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payments from the Tax Impound pursuant to Section 5.2, Tenant shall pay the
Taxes that are the subject of such Protest before the imposition of any Penalty.
In connection with any Protest that Tenant is diligently pursuing regarding any
Other Charges or Liens, Tenant shall pay such Other Charges or pay such Liens
(or otherwise cause them to be removed) before any part of the Premises or any
Rent therefrom or interest therein is in any danger of being sold, forfeited,
attached or lost. At Tenant’s sole cost and expense, Landlord will cooperate
fully in any Protest that involves an amount assessed against it and, at
Tenant’s request, in the case of any Protest in which Tenant is prohibited from
solely prosecuting such proceedings by applicable law.

 

5.2                               Impound. Upon Landlord’s written request,
Tenant shall include with each Minimum Rent payment a deposit of one-twelfth
(1/12th) of the amount required to discharge the annual amount of real property
Taxes secured by a Lien encumbering any portion of the Premises (“Real Property
Taxes”) as and when they become due (the “Tax Impound”). The amounts held by
Landlord in the Tax Impound shall be applied by Landlord directly to the payment
of the Taxes in a timely fashion and prior to the imposition of any Penalty,
and, except if resulting from insufficient funds in the Tax Impound, if any
Penalty results from Landlord’s failure to timely make any such payment, such
Penalty shall be paid by Landlord. The Tax Impound shall be calculated on the
basis of the most recent available levy applied to the most recent available
assessment of Real Property Taxes. The Tax Impound shall not be held by Landlord
in trust or as an agent of Tenant, but rather shall be applied by Landlord to
the Taxes. The Tax Impound shall earn interest on an annual basis based upon the
average interest earned during such year by Landlord on its cash deposits.
Interest earned on the Tax Impound for a given Lease Year shall, at Tenant’s
election either (a) be paid to Tenant within thirty (30) days after the end of
the Lease Year, or (b) in the case of (i) a Lease Year that is not the final
Lease Year, be credited against the amount of Tax Impound due from Tenant to
Landlord for the first month (or additional month(s) if such credit exceeds the
amount of Tax Impound due for such first month) of the subsequent Lease Year, or
in the case of (ii) the final Lease Year, paid to Tenant within thirty (30) days
after the expiration of the Term or earlier termination of this Lease. If at any
time within thirty (30) days prior to the due date the Tax Impound shall be
insufficient for the payment of the obligation in full, Tenant shall within ten
(10) days after demand deposit the deficiency with Landlord. If the Tax Impound
is in excess of the actual obligation, at Tenant’s election any excess funds
shall either (x) be paid to Tenant within thirty (30) days after the end of the
Lease Year, or (y) in the case of (1) a Lease Year that is not the final Lease
Year, be credited against the amount of Tax Impound due from Tenant to Landlord
for the first month (or additional month(s) if such credit exceeds the amount of
the Tax Impound due for such first month) of the subsequent Lease Year, or in
the case of (2) the final Lease Year, paid to Tenant within thirty (30) days
after the expiration of the Term or earlier termination of this Lease. Tenant
shall forward to Landlord or its designee all Tax bills, bond and assessment
statements as soon as they are received and receipts for payment of all Taxes
required to be paid by Tenant. If Landlord transfers this Lease, it shall
transfer the Tax Impound, and all interest earned thereon, to the transferee,
and Landlord shall thereafter have no liability of any kind with respect
thereto.

 

6.                                      Insurance. All insurance provided for in
this Lease shall (i) be maintained under valid and enforceable policies issued
by insurers licensed and approved to do business in the state(s) where the
Facility or portion of the Premises is located and having general policyholders
and financial ratings of not less than “A-” and “X”, respectively, in the then
current Best’s Insurance Report, (ii) except for insurance referenced in
Section 6(c), 6(d) and Section 6(e), name Landlord (and, if required, pursuant
to the terms of any mortgage encumbering the Premises, or any part hereof,
Landlord’s mortgagee) as an additional insured and, for the casualty policy
referenced in Section 6(a), as the owner and loss payable beneficiary, (iii) be
on an “occurrence” basis, (iv) cover all of Tenant’s operations at the Facility
or portion of the

 

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Premises, (v) provide that the policy may not be canceled except upon not less
than thirty (30) days prior written notice to Landlord and (vi) be primary and
provide that any insurance with respect to any portion of the Premises
maintained by Landlord is excess and noncontributing with Tenant’s insurance.
The parties hereby waive as to each other all rights of subrogation (other than
with respect to Worker’s Compensation Coverage described below) which any
insurance carrier, or either of them, may have by reason of any provision in any
policy issued to them, provided such waiver does not thereby invalidate such
policy. Original policies or satisfactory insurer certificates evidencing the
existence of the insurance required by this Lease and showing the interest of
Landlord shall be provided to it prior to the commencement of the Term or, for a
renewal policy, not less than five (5) days prior to the expiration date of the
policy being renewed. If Landlord is provided with a certificate, it may demand
that Tenant provide a complete copy of the related policy within fifteen (15)
days. Tenant may satisfy the insurance requirements hereunder through coverage
under a so-called blanket policy or policies of insurance carried and maintained
by Tenant; provided, however, that the coverage afforded Landlord will not be
reduced or diminished or otherwise be different from that which would exist
under a separate policy meeting all other requirements of this Lease by reason
of the use of such blanket policy of insurance. During the Term, Tenant shall
maintain the following insurance and any claims thereunder shall be adjudicated
by and at the expense of it or its insurance carrier:

 

(a)                                 Fire and Extended Coverage with respect to
the Facility against loss or damage from all causes under standard “all risk”
property insurance coverage with an agreed amount endorsement (such that the
insurance carrier has accepted the amount of coverage and has agreed that there
will be no co-insurance penalty), without exclusion for fire, lightning,
windstorm, explosion, smoke damage, vehicle damage, sprinkler leakage, flood,
vandalism, earthquake, malicious mischief or any other risks normally covered
under an extended coverage endorsement, in amounts that are not less than the
actual replacement value of the Facility and all Tenant Personal Property
associated therewith (including the cost of compliance with changes in zoning
and building codes and other laws and regulations, demolition and debris removal
and increased cost of construction). Additionally, if the Facility contains
steam boilers, steam pipes, steam engines, steam turbines or other high pressure
vessels, insurance with an agreed amount endorsement (such that the insurance
carrier has accepted the amount of coverage and has agreed that there will be no
co-insurance penalty), covering the major components of the central heating, air
conditioning and ventilating systems, boilers, other pressure vessels, high
pressure piping and machinery, elevators and escalators, if any, and other
similar equipment installed in the Facility, in an amount equal to one hundred
percent (100%) of the full replacement cost of the Facility, which policies
shall insure against physical damage to and loss of occupancy and use of the
Facility arising out of an accident or breakdown covered thereunder.
Notwithstanding any provision to the contrary herein, insurance coverage for
earthquake shall be limited to One Million Dollars ($1,000,000.00) in the
aggregate for the entire Premises.

 

(b)                                 Commercial General Public Liability Coverage
with respect to the Facility (including products liability and broad form
coverage) against claims for bodily injury, death or property damage occurring
on, in or about the Facility, affording the parties protection of not less than
One Million Dollars ($1,000,000.00) per occurrence and Three Million Dollars
($3,000,000.00) in the aggregate, which maximum aggregate limit may be satisfied
with the combination of commercial general public liability coverage and excess
and/or umbrella coverage;

 

(c)                                  Professional Liability Coverage with
respect to the Facility for damages for injury, death, loss of service or
otherwise on account of professional services rendered or which should

 

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have been rendered, in a minimum amount of One Million Dollars ($1,000,000.00)
per occurrence and Three Million Dollars ($3,000,000.00) in the aggregate;

 

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

 

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

 

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

 

(g)                                 Landlord may waive any or all of the
insurance requirements under this Section 6 upon Tenant’s written request, such
request not to be unreasonably withheld.

 

7.                                      Use, Regulatory Compliance and
Preservation of Business.

 

7.1                               Permitted Use.

 

(a)                                 Tenant shall use, operate and occupy each
Facility for a corporate and business office and administration facility;
provided, however, that Tenant may, with the written approval of Landlord
(subject to the succeeding sentence, to be granted or withheld in the exercise
of its sole and absolute discretion) change the use of the Facility to a
different use so long as Tenant shall continue to use, operate and occupy the
Facility for a use in the medical services industry. Landlord, upon the written
request of Tenant, shall approve a change in the use of the Facility if the
following conditions are met: (i) the proposed change in use is for a use in the
medical services industry, (ii) Tenant has obtained and provided to Landlord
appraisals (prepared by an appraiser reasonably acceptable to Landlord) that
take into account the proposed change in use and that demonstrate to Landlord’s
reasonable satisfaction that the fair market value of the Facility after the
change in use will not result in a material reduction of the fair market value
of the Facility, and (iii) Tenant has obtained or agrees to obtain prior to such
change in use all licenses, certificates, permits and all other approvals
required by law in connection with operating

 

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the Facility for the proposed new use. Tenant shall operate the Facility and the
Business conducted thereon in a manner consistent with all applicable laws.

 

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

 

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

 

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

 

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

 

8.1                               Acceptance “AS IS”; No Liens. Tenant
acknowledges that it or an Affiliate has been in possession of and operating the
Premises prior to the date of this Lease and is presently engaged in operations
like the Business conducted at the Facility in the state where the Facility is
located and has expertise in such industry and, in deciding to enter into this
Lease, has not relied on any representations or warranties, express or implied,
of any kind from Landlord with respect to the Premises. Except for the Tenant
Improvements (as defined below) to be constructed by Landlord at the Premises,
Tenant has examined the condition of title to and thoroughly investigated the
Premises, has selected the Premises to its own specifications, has concluded
that, as of the date hereof, no improvements or modifications are required to be
made by Landlord in order to conduct the Business thereon, and accepts them on
an “AS IS” basis and assumes all responsibility and cost for the correction of
any observed or unobserved deficiencies or violations. It is expressly
understood and agreed that any inspection by or on behalf of the Landlord of the
business conducted at the Premises or of the Premises is for Landlord’s sole

 

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and exclusive benefit and is not directly or indirectly for the benefit of, nor
should be relied in any manner upon by, Tenant, its subtenants or any other
third party. Subject to its right to Protest set forth in Section 5.1, Tenant
shall not cause or permit any lien, levy or attachment to be placed or assessed
against any portion of the Premises or the operation thereof (a “Lien”) other
than “Permitted Exceptions” as described on Exhibit C and any mortgage, lien,
encumbrance, or other charge created by or resulting solely from any act or
omission of Landlord.

 

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

 

8.3                               Upgrade Expenditures. On or before the date
that is thirty (30) days after the expiration of each Lease Year, Tenant shall
provide to Landlord documentation and other evidence demonstrating to Landlord’s
reasonable satisfaction that Tenant has, during the preceding Lease Year, for
all the Facilities in total (and not necessarily individually) expended an
amount equal to or exceeding the CapEx Amount, multiplied by the aggregate
rentable square footage of the Facilities on the last day of the preceding Lease
Year, for Upgrade Expenditures relating to the Premises. As used herein the
“CapEx Amount” shall mean an amount equal to One Dollar ($1.00) (as adjusted at
the end of each Lease Year for increases since the Effective Date in the CPI).
“Upgrade Expenditures” means expenditures in commercially reasonable amounts to
Persons not affiliated with Tenant for (i) upgrades or improvements to each
Facility that have the effect of maintaining or improving such Facility,
including new or replacement wallpaper, tiles, window coverings, lighting
fixtures, painting, upgraded landscaping, carpeting, architectural adornments,
common area amenities and the like, including, without limitation, capital
improvements or repairs (including repairs or replacements of the roof,
structural elements of the walls, parking area or the electrical, plumbing, HVAC
or other mechanical or structural systems), and (ii) other improvements to each
Facility as reasonably approved by Landlord, which shall include those matters,
if any, that Landlord has approved in writing as of the Effective Date based on
descriptions and budgets that Tenant has provided prior thereto. If Tenant
expends an amount in any Lease Year that exceeds the CapEx Amount for that Lease
Year (the “CapEx Surplus”), the CapEx Amount required for the immediately
following Lease Year will be reduced by the CapEx Surplus for the preceding
Lease Year.

 

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

 

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same and upon delivery of such notice, and Schedule 1 shall be deemed amended to
reflect such revised rentable square footage for the Facility.

 

8.5                               Hazardous Materials. Tenant’s use of the
Premises shall comply in all material respects with all Hazardous Materials
Laws. If any Environmental Activities occur or are suspected to have occurred in
material violation of any Hazardous Materials Laws or if Tenant has received
written notice of any Hazardous Materials Claim against any portion of the
Premises, Tenant shall promptly remedy any such violation or claim to the
reasonable satisfaction of Landlord and in accordance in all material respects
with all applicable governmental authorities, as required by Hazardous Materials
Laws. Tenant and Landlord shall promptly advise one another in writing upon
receiving written notice of (a) any Environmental Activities in material
violation of any Hazardous Materials Laws; (b) any Hazardous Materials Claims
against Tenant or Landlord in connection with the Premises (or any portion of
the Premises); (c) any remedial action taken by Tenant or Landlord in response
to any Hazardous Materials Claims or any Hazardous Materials on, under or about
any portion of the Premises in material violation of any Hazardous Materials
Laws; (d) any occurrence or condition on or in the vicinity of any portion of
the Premises of which Tenant or Landlord, as applicable, has actual knowledge
and that materially increases the risk that any portion of the Premises will be
exposed to Hazardous Materials; and (e) all material communications to or from
Tenant, any governmental authority or any other Person relating to Hazardous
Materials Laws or Hazardous Materials Claims with respect to any portion of the
Premises, including copies thereof. Notwithstanding any other provision of this
Lease, if any Hazardous Materials are discovered on or under any portion of the
Facility in violation of any Hazardous Materials Law, the Term shall be
automatically extended with respect to the Facility only and this Lease shall
remain in full force and effect with respect to the Facility only until the
earlier to occur of (i) the completion of all remedial action or monitoring, as
reasonably approved by Landlord, in accordance with all Hazardous Materials
Laws, or (ii) the date specified in a written notice from Landlord to Tenant
terminating this Lease (which date may be subsequent to the date upon which the
Term was to have expired). Notwithstanding the foregoing, unless the Initial
Term of this Lease is renewed pursuant to Section 1, above, in no event shall
the provisions of this Section 8.4 extend the Term for the Facility beyond
June 30, 2050 as to the Facility; provided, however, that Tenant’s obligations
to complete all remedial action or monitoring pursuant to this Section 8.4 shall
survive any such termination of the Term. Landlord shall have the right, at
Tenant’s sole cost and expense (including, without limitation, Landlord’s
reasonable attorneys’ fees and costs) and with counsel chosen by Landlord, to
join and participate in, as a party if it so elects, any legal proceedings or
actions initiated in connection with any Hazardous Materials Claims.

 

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

 

9.                                      Tenant Property.

 

9.1                               Tenant Property. Tenant may obtain and install
all items of furniture, fixtures, trade fixtures, supplies and equipment as
Tenant determines are reasonably necessary or reasonably appropriate to operate
the Premises (“Tenant Personal Property”). As used herein, “Tenant Intangible
Property” means all the following at any time owned by Tenant in connection with
its use of any portion of the Premises: Medicare, Medicaid and other accounts
and proceeds thereof; rents, profits, income or revenue derived from such
operation or use; all documents, chattel paper, instruments, contract rights

 

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(including all leases with subtenants and contracts with employees and third
parties), deposit accounts, general intangibles and choses in action; refunds of
any Taxes or Other Charges; if applicable, licenses and permits necessary or
desirable for Tenant’s use of any portion of the Premises, any applicable
certificate of need, occupancy or other similar certificate, and the exclusive
right to transfer, move or apply for the foregoing and manage the business
conducted at any portion of the Premises; and the right to use the name and any
other trade or other name now or hereafter associated with its operation of the
Premises.

 

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

 

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

 

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

 

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or extract the subject data therefrom) created using Microsoft Excel (2003 or
newer editions). In the event Tenant fails to provide Landlord with the reports
listed in Exhibit E within the time periods specified therein, Tenant shall have
a grace period of five (5) Business Days after receipt of written notice of such
failure from Landlord to provide such reports, after which Tenant will be
assessed with a $500.00 administrative fee, which administrative fee shall be
immediately due and payable to Landlord.

 

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

 

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

 

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

 

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

 

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

 

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

 

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default is to cause, or permit any Person to cause, such obligation to become
due prior to its stated maturity;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

14.                               Provisions on Termination.

 

14.1                        Surrender of Possession. On the expiration of the
Term or earlier termination or cancellation of this Lease (the “Termination
Date”), Tenant shall deliver to Landlord or its designee

 

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

 

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

 

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

 

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

 

15.                               Certain Landlord Rights.

 

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

 

15.2                        Grant Liens. Any Lien or other encumbrance now
existing and securing any borrowing or other means of financing or refinancing
or otherwise shall provide for the recognition of this

 

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

 

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

 

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

 

16.                               Assignment and Subletting.

 

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

 

15

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16.2                        Permitted Assignments and Sublets.

 

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

 

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

 

(c)                                  Notwithstanding Section 16.1 above, Tenant
may, (i) without Landlord’s prior written consent, sublet portions of the
Facility in the ordinary course of Tenant’s business to subtenants of the
Facility for customary uses ancillary to Tenant’s permitted use including,
pharmacy, physical therapy, and sundry providers, and (ii) subject to Landlord’s
prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed, sublet all or any portion of the Premises, in each case
using a form of sublease reasonably approved by Landlord.

 

16

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

 

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

 

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

 

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

 

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

 

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

 

17

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

 

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

 

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

 

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

 

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

 

18.                               Condemnation. Except as provided to the
contrary in this Section 18, this Lease shall not terminate and shall remain in
full force and effect in the event of a taking or condemnation of the Premises,
or any portion thereof, and Tenant hereby waives all rights under applicable law
to abate, reduce or offset Rent by reason of such taking. If during the Term all
or substantially all (a “Complete Taking”) or a smaller portion (a “Partial
Taking”) of the Facility is taken or condemned by any competent public or
quasi-public authority, then (a) in the case of a Complete Taking, Tenant may at
its election made within thirty (30) days after the effective date of such
Taking, terminate this Lease with respect to the Facility and the current Rent
shall be equitably abated as of the effective date of such termination, or
(b) in the case of a Partial Taking, the Rent shall be abated to the same extent
as the resulting diminution in Fair Market Value of the applicable portion of
the Premises. The resulting

 

18

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

 

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

 

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

 

19

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

 

If to Tenant:

 

If to Landlord:

 

 

 

 

 

21st Century Oncology, LLC

 

JRE — CBO 3, LLC

 

2270 Colonial Blvd.

 

6321 Daniels Parkway, Suite 200

 

Ft. Myers, Florida 33907

 

Ft. Myers, Florida 33907

 

Attn: Richard Lewis

 

Attn: Jay Bunnell

 

 

 

Facsimile: (239) 936-5485

 

 

 

 

 

If to Guarantor:

 

With a copy to:

 

 

 

 

 

21st Century Oncology, Inc.

 

Henderson Franklin Law Firm

 

2270 Colonial Blvd.

 

P.O. Box 280

 

Ft. Myers, Florida 33907

 

1715 Monroe Street

 

Attn: Richard Lewis

 

Ft. Myers, FL 33901

 

 

 

Attn: Bruce E. Sands, Esq.

 

 

 

Facsimile: (239)344-1546

 

 

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

 

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

 

20

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“Exhibit” or “Schedule” mean an exhibit or schedule attached hereto or to
“Medicare” or “Medicaid” mean such programs and shall include any successor
program. If more than one Person is Tenant hereunder, their liability and
obligations hereunder shall be joint and several. Promptly upon the request of
either party and at its expense, the parties shall prepare, enter into and
record a suitable short form memorandum of this Lease. This Lease (a) contains
the entire agreement of the parties as to the subject matter hereof and
supersedes all prior or contemporaneous verbal or written agreements or
understandings, (b) may be executed in one or more facsimile or electronic
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document, (c) may only be amended by a writing
executed by the parties, (d) shall inure to the benefit of and be binding upon
the successors and permitted assigns of the parties, (e) shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Florida, without regard to the conflict of laws rules thereof, provided that the
law of the State in which the Facility is located (each a “Situs State”) shall
govern procedures for enforcing, in the respective Situs State, provisional and
other remedies directly related to the Facility and related personal property as
may be required pursuant to the law of such Situs State, including without
limitation the appointment of a receiver; and, further provided that the law of
the Situs State also applies to the extent, but only to the extent, necessary to
create, perfect and foreclose the security interests and liens created under
this Lease, and (f) incorporates by this reference any Exhibits and Schedules
attached hereto.

 

23.                               Right of First Refusal.

 

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

 

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

 

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

 

(d)                                 Landlord and Tenant shall have a period of
thirty (30) days after Landlord’s receipt of the Purchase Notice (the “Purchase
Agreement Period”) to negotiate in good faith a purchase and sale agreement and
related documentation necessary to complete the disposition of the Facility (the
“Purchase Documentation”). The Purchase Documentation shall contain the purchase
price, earnest money deposit, and other material terms and conditions contained
in the Third Party Offer. In the event Landlord and Tenant enter into the
Purchase Documentation within the Purchase Agreement Period, then the
transaction that is the subject of such Purchase Documentation shall be
consummated within thirty (30) days after the execution thereof (the “Closing
Date”).

 

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

 

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

 

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

 

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

 

25.                               Tenant Improvements. Landlord will construct
or install in the Premises the improvements required by Tenant to operate its
business in the Premises, at Landlord’s sole cost and expense, including the
improvements referenced in Exhibit G hereto (the “Tenant Improvements”). Tenant
will have no legal or financial obligations whatsoever for the build out of the
Premises and Tenant will not be required to perform any construction work within
the Premises. Prior to commencement of the Tenant Improvements, Landlord will
post in a prominent place within the Premises all applicable building permits,
licenses, approvals, waivers, etc. Landlord warrants that all of its work will
be done in accordance with all local laws and building codes, will utilize new,
good quality construction materials

 

22

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and will be undertaken and completed in a good and workmanlike manner. The
Tenant Improvements will comply with all applicable Landlord insurance
requirements. Upon Tenant’s request, Landlord will promptly furnish to Tenant
all drawings, specifications, schematics and other information relating to the
Tenant Improvements. Tenant may utilize Tenant’s own contractor and architect
for the Tenant Improvements, subject to Landlord’s approval thereof, not to be
unreasonably withheld. Tenant and Tenant’s representatives will have the right
to inspect the Tenant Improvements and object to any Tenant Improvements that
are not in compliance with applicable building codes and ordinances or that
would adversely affect the Building. Landlord will promptly correct any
commercially reasonable deficiencies in the Tenant Improvements identified by
Tenant, at Landlord’s expense. The Tenant Improvements will not be deemed
completed until Tenant has received a final CO from the applicable municipal
department and Tenant has approved the Tenant Improvements, such approval not to
be unreasonably withheld. Once the construction work has been substantially
completed, Landlord shall permit Tenant to enter the Premises for the
installation of telephone and telecommunications equipment, office furniture and
trade fixtures and performing such other work as Tenant deems necessary.

 

26.                               Option to Purchase. Landlord hereby grants to
Tenant or Tenant’s assignee, an option to purchase the Premises, including the
Building and all common areas (the “Option to Purchase”), within the initial
four (4) years of the Initial Term (the “Option Period”). Tenant may exercise
its Option to Purchase via written notice delivered to Landlord (the “Option
Notice”) at any time during the Option Period. If Tenant exercises the Option to
Purchase, the Purchase Price for the Premises will be the Fair Market Value
(“FMV”) of the Premises (as determined pursuant to Exhibit B), valuing the FMV
of the physical real estate only and not the value of this Lease or any other
leases. In no event will the FMV be less than i) Four Million Three Hundred
Thousand Dollars ($4,300,000.00), plus ii) the amount of the unamortized Tenant
Improvements referenced in Section 2.3 above. If the parties proceed to a
closing on the Option purchase (a “Closing”), Tenant will pay the first
$100,000.00 of the ordinary, commercially reasonable Closing Costs (e.g., title
insurance premiums, transfer taxes, professional fees, title company fees, etc.,
but not including attorneys’ fees and costs); Landlord will pay for any Closing
Costs that exceed $100,000.00. If Tenant exercises the Option to Purchase, the
parties will work diligently and in good faith to conduct a Closing on the
transaction applying the standards used in Lee County, Florida on commercial
transactions.

 

23

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

 

Signed, sealed and delivered in the presence of:

 

 

 

TENANT:

 

 

 

 

 

21ST CENTURY ONCOLOGY, LLC, a Florida

 

 

limited liability company

 

 

 

/s/ Karen B. Ankeny

 

By:

/s/ Richard Lewis

Witness #1 Signature

 

 

Richard Lewis, Vice President

 

 

 

Karen B. Ankeny

 

 

Witness #1 Typed/Printed Name

 

 

 

 

 

/s/ Christine A. Hobot

 

 

Witness #2 Signature

 

 

 

 

 

Christine A. Hobot

 

 

Witness #2 Typed/Printed Name

 

 

 

 

 

 

 

 

 

 

LANDLORD:

 

 

 

 

 

JRE —CBO 3, LLC, a Florida limited liability company

 

 

 

 

 

By:

TEM, LLC, a Florida limited liability company, its Manager

Witness #1 Signature

 

 

 

 

 

(FL Document # L06000088324)

 

 

 

Witness #1 Typed/Printed Name

 

 

 

 

 

 

 

 

By:

 

Witness #2 Signature

 

 

 

Daniel E. Dosoretz, Managing Member

 

 

 

 

 

 

Witness #2 Typed/Printed Name

 

 

 

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GUARANTY

 

THE GUARANTOR IS MADE A PARTY HERETO SOLELY AS TO ITS ACKNOWLEDGMENTS AND
OBLIGATIONS UNDER THE INTRODUCTORY PARAGRAPHS TO THIS MASTER LEASE. BY ITS
EXECUTION HEREOF, THE GUARANTOR HEREBY (a) RATIFIES AND CONFIRMS ITS GUARANTY OF
ALL THE OBLIGATIONS OF TENANT UNDER THE LEASE, (b) AGREES TO PERFORM ALL OF ITS
OBLIGATIONS UNDER THE GUARANTY, INCLUDING WITHOUT LIMITATION THE FINANCIAL
COVENANTS THEREIN, AND (c) ACKNOWLEDGES THAT (i) LANDLORD MAY ENFORCE ANY OR ALL
OF THE TENANT’S OBLIGATIONS DIRECTLY AGAINST GUARANTOR, AND (ii) GUARANTOR HAS
IRREVOCABLY ACCEPTED ITS APPOINTMENT AS THE AGENT OF TENANT UNDER THE PREAMBLE
TO THIS MASTER LEASE.

 

Signed, sealed and delivered in the presence of:

 

GUARANTOR:

 

 

 

 

 

21ST CENTURY ONCOLOGY, INC., a Florida corporation

 

 

 

/s/ Karen B. Ankeny

 

By:

/s/ Richard Lewis

Witness #1 Signature

 

 

Richard Lewis, Vice President

 

 

 

Karen B. Ankeny

 

 

Witness #1 Typed/Printed Name

 

 

 

 

 

/s/ Christine A. Hobot

 

 

Witness #2 Signature

 

 

 

 

 

Christine A. Hobot

 

 

Witness #2 Typed/Printed Name

 

 

 

25

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EXHIBIT A

 

LEGAL DESCRIPTION

 

A parcel of land lying in the Northeast 1/4 of the Northwest 1/4 of the
Northwest 1/4 of Section 1, Township 45 South, Range 24 East, Lee County,
Florida, being more particularly described as follows:

 

Begin at the Northeast comer of said Northeast 1/4 of the Northwest 1/4 of the
Northwest 1/4; thence South S00°15’02” East along the East line of said
Northeast 1/4, a distance of 618.08 feet; thence South 88°51’20” West and
parallel to the North line of said Northeast 1/4 a distance of 369.14 feet;
thence North 01°08’40” West 103.00 feet; thence North 88°51’20” East 100.00
feet; thence North 01°08’40” West 166.00 feet; thence North 88°51’20” East 38.00
feet; thence North 01°08’40” West 349.00 feet to a point on the north line of
said Northeast 1/4 of the Northwest 1/4 of the Northwest 1/4; thence North
88’51’20” East along said North line 240.78 feet to the Point of Beginning.

 

LESS AND EXCEPT Right of Way of Colonial Boulevard (State Road S-82-B) as
described in deed to City of Fort Myers, Florida recorded in Official Records
Book 88, Page 436 and in Stipulated Order of Taking recorded in Official Records
Book 2742, Page 1887, in the Public Records of Lee County, Florida.

 

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EXHIBIT B

 

FAIR MARKET VALUE

 

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

 

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

 

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

 

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

 

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EXHIBIT C

 

PERMITTED EXCEPTIONS

 

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

 

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

 

3.                                      Real property taxes and assessments.

 

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

 

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

 

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EXHIBIT D

 

CERTAIN DEFINITIONS

 

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

 

ENVIRONMENTAL DEFINITIONS

 

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

 

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

 

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

 

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

 

OTHER DEFINITIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

“Medical Waste” shall mean all medical waste as defined by applicable federal
and Florida state law, as amended or supplemented. If a Situs State has a
comparable statute that defines “medical waste”, Medical Waste for purposes of
all Facility in such Situs State shall have the meaning set forth in such
statute.

 

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

 

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

 

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

 

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

 

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

 

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EXHIBIT E

 

FINANCIAL, MANAGEMENT AND REGULATORY REPORTS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

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EXHIBIT F

 

LANDLORD’S INVESTMENT

 

 

 

 

 

 

 

 

 

Landlord’s

 

#

 

Location

 

Street Address

 

State

 

Investment

 

 

 

 

 

 

 

 

 

 

 

1

 

Ft. Myers

 

2160 Colonial Blvd

 

FL

 

$

4,300,000.00

 

 

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