Exhibit 10.10

 

LOGO [g369369g72i53.jpg]

Ventas Realty, Limited Partnership

  

10350 Ormsby Park Place

Suite 300

Louisville, KY 40223

T 502.357-9000

F 502.357-9029

May 23, 2012

Kindred Healthcare, Inc.

Kindred Healthcare Operating, Inc.

680 South Fourth Street

Louisville, KY 40202-2612

 

  Re: Second Amended and Restated Master Lease Agreement Nos. 1, 2, 3 and 4,
each dated April 27, 2007 and each by and among Ventas Realty, Limited
Partnership, as lessor, and Kindred Healthcare, Inc. and Kindred Healthcare
Operating, Inc., as tenant (as heretofore amended or modified, individually a
“Master Lease” and collectively, the “Master Leases”)

Dear Ladies and Gentlemen:

Reference is made to the Master Leases. Capitalized terms that are used herein
and not otherwise defined shall have the same meanings herein as in the Master
Leases.

Pursuant to this letter, Lessor and Tenant hereby agree as follows:

 

  1. Attached hereto as Exhibit A is a list of fifty-four (54) skilled nursing
facilities (each, a “Terminating Leased Property”), as to which the Master Lease
applicable thereto is terminating as to such Terminating Leased Property as of
April 30, 2013 (or such earlier date as specified below). Notwithstanding
anything to the contrary in the Master Leases, Lessor and Tenant hereby amend
each of the Master Leases as follows:

 

  (a) To facilitate the transfers and transitions described below in this
Section 1, Lessor and Tenant hereby agree to amend the Master Leases as follows,
effective as of the date of this letter:

 

  i. In the case of Second Amended and Restated Master Lease Agreement No. 1:

 

       (x) The definition of "Base Rent" contained in such Master Lease is
hereby amended and restated in its entirety to read as follows:

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Kindred Healthcare, Inc.

Kindred Healthcare Operating, Inc.

May 23, 2012

Page 2

 

“"Base Rent": (a) For any period prior to May 23, 2012, rent at the annual rate
applicable for such period under this Lease prior to its amendment by that
certain letter agreement dated May 23, 2012 between Lessor and Tenant, (b) for
the period from May 23, 2012 to April 30, 2013, rent at an annual rate equal to
One Hundred Nine Million Five Hundred Eighty-Seven Thousand Forty-Two and 56/100
Dollars ($109,587,042.56) per annum, and (c) for a particular Rent Calculation
Year thereafter, an annual rental amount equal to the sum of (i) the Prior
Period Base Rent, plus (ii) if the Patient Revenues for the calendar year
preceding the commencement of such Rent Calculation Year equaled or exceeded
seventy-five percent (75%) of the Adjusted Base Patient Revenues, two and
seven-tenths percent (2.7%) of the Prior Period Base Rent. Notwithstanding the
foregoing, nothing contained in this definition shall limit the applicability of
Section 19.2 and Section 19.3 hereof.”

 

  (y) Exhibit C to such Master Lease is hereby amended and restated in its
entirety to read as set forth in Exhibit A-1 attached to and made a part of this
letter.

 

  ii. In the case of Second Amended and Restated Master Lease Agreement No. 2:

 

  (x) The definition of "Base Rent" contained in such Master Lease is hereby
amended and restated in its entirety to read as follows:

“"Base Rent": (a) For any period prior to May 23, 2012, rent at the annual rate
applicable for such period under this Lease prior to its amendment by that
certain letter agreement dated May 23, 2012 between Lessor and Tenant, (b) for
the period from May 23, 2012 to April 30, 2013, rent at an annual rate equal to
Sixty-Four Million Nine Hundred Seventy-One Thousand One Hundred Thirty-Eight
and 90/100 Dollars ($64,971,138.90) per annum, and (c) for a particular Rent
Calculation Year thereafter, an annual rental amount equal to the sum of (i) the
Prior Period Base Rent, plus (ii) if the Patient Revenues for the calendar year
preceding the commencement of such Rent Calculation Year equaled or exceeded
seventy-five percent (75%) of the Adjusted Base Patient Revenues, the product of
(x) the Prior Period Base Rent times (y)(1) two and twenty-five hundredths
percent (2.25%), if the CPI Increase, expressed as a percentage, applicable to
such Rent Calculation Year is less than 2.25%, (2) four percent (4%), if the CPI
Increase, expressed as a percentage, applicable to such Rent Calculation Year is
greater than 4%, or (3) the CPI Increase, expressed as a percentage, applicable
to such Rent Calculation Year, in all other cases. Notwithstanding the
foregoing, nothing contained in this definition shall limit the applicability of
Section 19.2 and Section 19.3 hereof.”

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Kindred Healthcare, Inc.

Kindred Healthcare Operating, Inc.

May 23, 2012

Page 3

 

  (y) Exhibit C to such Master Lease is hereby amended and restated in its
entirety to read as set forth in Exhibit A-2 attached to and made a part of this
letter.

 

  iii. In the case of Second Amended and Restated Master Lease Agreement No. 3:

 

  (x) The definition of "Base Rent" contained in such Master Lease is hereby
amended and restated in its entirety to read as follows:

“"Base Rent": For any period prior to May 23, 2012, rent at the annual rate
applicable for such period under this Lease prior to its amendment by that
certain letter agreement dated May 23, 2012 between Lessor and Tenant, (b) for
the period from May 23, 2012 to April 30, 2013, rent at an annual rate equal to
Forty Million Three Hundred Thirty-Two Thousand Two Hundred Sixty-Nine and
81/100 Dollars ($40,332,269.81) per annum, and (c) for a particular Rent
Calculation Year thereafter, an annual rental amount equal to the sum of (i) the
Prior Period Base Rent, plus (ii) if the Patient Revenues for the calendar year
preceding the commencement of such Rent Calculation Year equaled or exceeded
seventy-five percent (75%) of the Adjusted Base Patient Revenues, two and
seven-tenths percent (2.7%) of the Prior Period Base Rent. Notwithstanding the
foregoing, nothing contained in this definition shall limit the applicability of
Section 19.2 and Section 19.3 hereof.”

 

  (y) Exhibit C to such Master Lease is hereby amended and restated in its
entirety to read as set forth in Exhibit A-3 attached to and made a part of this
letter.

 

  iv. In the case of Second Amended and Restated Master Lease Agreement No. 4:

 

  (x) The definition of "Base Rent" contained in such Master Lease is hereby
amended and restated in its entirety to read as follows:

“"Base Rent": (a) For any period prior to May 23, 2012, rent at the annual rate
applicable for such period under this Lease prior to its amendment by that
certain letter agreement dated May 23, 2012 between Lessor and Tenant, (b) for
the period from May 23, 2012 to April 30, 2013, rent at an annual rate equal to
Forty-Seven Million Sixteen Thousand Two Hundred Twenty-Four and 69/100 Dollars
($47,016,224.69) per annum, and (c) for a particular Rent

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Kindred Healthcare, Inc.

Kindred Healthcare Operating, Inc.

May 23, 2012

Page 4

 

Calculation Year thereafter, an annual rental amount equal to the sum of (i) the
Prior Period Base Rent, plus (ii) if the Patient Revenues for the calendar year
preceding the commencement of such Rent Calculation Year equaled or exceeded
seventy-five percent (75%) of the Adjusted Base Patient Revenues, two and
seven-tenths percent (2.7%) of the Prior Period Base Rent. Notwithstanding the
foregoing, nothing contained in this definition shall limit the applicability of
Section 19.2 and Section 19.3 hereof”

 

  (y) Exhibit C to such Master Lease is hereby amended and restated in its
entirety to read as set forth in Exhibit A-4 attached to and made a part of this
letter.

 

       (b) At Lessor’s request, from time to time from and after the date of
this letter, Lessor may notify Tenant of its election to require that a
Terminating Leased Property or Terminating Leased Properties identified by
Lessor in its notice (each, a “Transfer Notice”) be transferred and transitioned
as provided in this letter;

 

      

(c) Each Transfer Notice shall specify the date (subject to extension as
described below, the applicable “Transfer Date”) on which such transfer and
transition is to occur with respect to the identified Terminating Leased
Property(ies), which Transfer Date shall be not less than forty-five (45) days
after Tenant’s receipt of the applicable Transfer Notice (provided, however,
that (i) if the Transfer Date specified by Lessor in its Transfer Notice is less
than ninety (90) days after Tenant’s receipt of such Transfer Notice, then, if
Tenant shall reasonably and in good faith determine (which determination shall
be made as soon as practicable) that an extension of the specified Transfer Date
is required due to the requirements of the Worker Adjustment and Retraining
Notification Act, then, as soon as practicable, but in any event within fifteen
(15) days of such determination by Tenant, Tenant shall so notify Lessor in
writing, and the Transfer Date that was specified in Lessor’s Transfer Notice
shall be extended to such later date set forth in such notice by Tenant by which
the requirements of the Worker Adjustment and Retraining Notification Act shall
be satisfied (which date shall not, in any event, be later than the ninetieth
(90th) day after Tenant’s receipt of such Transfer Notice) and (ii) Lessor shall
have the right, at its option by written notice to Tenant from time to time, to
extend the Transfer Date (but not beyond April 30, 2013));

 

       (d) The expiration date of the Term for the Terminating Leased
Property(ies) identified in Lessor’s applicable Transfer Notice shall be the
Transfer Date with respect thereto, as established pursuant to subsection
(c) above;

 

      

(e) Each of Lessor and Tenant shall comply with the provisions of Section 40.3
of the Master Leases, and any other applicable provisions of the Master Leases
relating to transfer of operations, in connection with any such early transition
and transfer of any Terminating Leased Property(ies) identified from time to
time by Lessor (and, in

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Kindred Healthcare, Inc.

Kindred Healthcare Operating, Inc.

May 23, 2012

Page 5

 

  addition, as of the applicable Transfer Date with respect to each Terminating
Leased Property, Tenant and the applicable replacement operator identified by
Lessor shall enter into an Operations Transfer Agreement that is usual and
customary for facilities comparable to the Terminating Leased Property(ies) and
otherwise in a form mutually and reasonably agreed upon by Tenant and such
replacement operator); and

 

       (f) Unless Lessor otherwise notifies Tenant in writing that Tenant may
commence a “Facility Termination” (as defined in the Master Leases) with respect
to a Terminating Leased Property, Tenant shall continue to operate such
Terminating Leased Property, and Lessor shall have obligations relating to
reimbursement of operating deficits (or, if Tenant elects to forego its rights
to reimbursement of operating deficits, Lessor shall be obligated to allow
Tenant to pay reduced Base Rent with respect to such Terminating Leased Property
as provided in Section 40.3 (and the parties hereby agree that Tenant may make
such an election with respect to a Terminating Leased Property by written notice
to Lessor delivered at any time within fifteen (15) days following the
termination of the applicable Master Lease with respect to such Terminating
Leased Property)), as if Lessor had procured a “Qualified Successor” and issued
a timely “Section 40.3 Notice” (as defined in the Master Leases) with respect
thereto (it being agreed that, if Lessor has issued a Transfer Notice with
respect to a particular Terminating Leased Property but, as of the Transfer Date
applicable thereto, Lessor is not prepared to complete a transfer and transition
of such Terminating Leased Property to a replacement operator, from and after
such Transfer Date Lessor and Tenant shall continue to have the post-expiration
and other obligations referenced in Section 40.3 of the applicable Master Lease,
as amended by this subsection (f), relating to such Terminating Leased
Property).

 

  2.

An affiliate of Tenant, Kindred Hospitals West, LLC (“Scottsdale Tenant”), and
an affiliate of Lessor, Nationwide Health Properties, LLC (as the successor by
merger to Nationwide Health Properties, Inc.) (“Scottsdale Landlord”), are
parties to that certain Lease dated as of November 15, 2001 (the “Scottsdale
Lease”), pursuant to which Scottsdale Tenant leases a hospital facility in
Scottsdale, Arizona (the “Scottsdale Facility”). Notwithstanding anything to the
contrary in the Master Leases or in the Scottsdale Lease, Tenant hereby agrees
that, if Scottsdale Tenant elects to terminate the Scottsdale Lease pursuant to,
and in accordance with the terms of, Section 2.3.2 and any other applicable
provisions of the Scottsdale Lease, then, in addition to causing Scottsdale
Tenant to comply with such Section 2.3.2, and such other applicable provisions,
of the Scottsdale Lease, Tenant shall cause Scottsdale Tenant to shut down and
close, remove and relocate all patients/residents, terminate all subleases,
vendor and service contracts and other agreements that Scottsdale Tenant may
have entered into with respect to the Scottsdale Facility and fully vacate the
Scottsdale Facility, within 90 days of Scottsdale Tenant’s issuance of its
notice of such election, in compliance with all laws and regulatory requirements
relating thereto. In connection with such termination, Tenant shall cause
Scottsdale Tenant and Lessor shall cause Scottsdale Landlord to execute and
deliver a termination agreement in the form of Exhibit B hereto, which agreement
shall be dated as of the

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Kindred Healthcare, Inc.

Kindred Healthcare Operating, Inc.

May 23, 2012

Page 6

 

  effective date of the termination of the Scottsdale Lease (the “Termination of
Lease Agreement”; such effective date, the “Termination Date”), and Tenant shall
cause Operator to execute and deliver the Guarantor Consent that is part of such
agreement. Prior to the Termination Date, Tenant shall cooperate, and shall
cause Scottsdale Tenant to cooperate, and Lessor shall cooperate, and shall
cause Scottsdale Landlord to cooperate, in determining the “Security Deposit
Amount”, the “Interest”, “Tax Escrow Amount”, the amount of the tax escrow held
by Scottsdale Landlord as of the Termination Date and the amount of the
“Termination Payment” (as each such term is defined in the Termination of Lease
Agreement), and such parties shall insert such amounts into the Termination of
Lease Agreement prior to execution thereof.

 

  3. Contemporaneously herewith, Lessor and Tenant are entering into a certain
Master Lease Agreement No. 5 bearing even date herewith, relating to ten
(10) hospitals which are currently Leased Properties under the Master Leases and
which will, as of May 1, 2013, result in the demising of such Leased Properties
under such Master Lease Agreement No. 5, rather than the Master Leases. Lessor
and Tenant agree that, when such change of lease takes effect, each such Leased
Property shall be excluded from the Leased Properties under the applicable
Master Lease in accordance with the provisions of Section 40.16 of such
applicable Master Lease.

 

  4. Section 7.2.7(m) of each of the Master Leases is hereby amended and
restated in its entirety to read as follows effective as of May 23, 2012:

 

  (a) In the case of Second Amended and Restated Master Lease Agreement No. 1:

 

       “(m) Notwithstanding anything to the contrary contained in this
Section 7.2 or elsewhere in this Lease, Tenant agrees that, from and after the
Effective Date, the aggregate number of beds licensed for the delivery of
hospital care that (i) are sold or delicensed pursuant to Section 7.2.7 of any
ML Lease or (ii) are otherwise sold or delicensed in any manner or for any
reason, in the case of either of subsection (i) or (ii) at any time while the
Hospital Facility(ies) to which such licensed beds relate are or were leased
pursuant to any ML Lease (even if any such Hospital Facility ceases to be leased
pursuant to any ML Lease), must at all times be equal to or less than
seventy-one (71) such beds.”

 

  (b) In the case of Second Amended and Restated Master Lease Agreement No. 2:

 

       “(m) Notwithstanding anything to the contrary contained in this
Section 7.2 or elsewhere in this Lease, Tenant agrees that, from and after the
Effective Date, the aggregate number of beds licensed for the delivery of
hospital care that (i) are sold or delicensed pursuant to Section 7.2.7 of any
ML Lease or (ii) are otherwise sold or delicensed in any manner or for any
reason, in the case of either of subsection (i) or (ii) at any time while the
Hospital Facility(ies) to which such licensed beds relate are or were leased
pursuant to any ML Lease (even if any such Hospital Facility ceases to be leased
pursuant to any ML Lease), must at all times be equal to or less than
sixty-seven (67) such beds.”

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Kindred Healthcare, Inc.

Kindred Healthcare Operating, Inc.

May 23, 2012

Page 7

 

  (c) In the case of Second Amended and Restated Master Lease Agreement No. 3:

 

       “(m) Notwithstanding anything to the contrary contained in this
Section 7.2 or elsewhere in this Lease, Tenant agrees that, from and after the
Effective Date, the aggregate number of beds licensed for the delivery of
hospital care that (i) are sold or delicensed pursuant to Section 7.2.7 of any
ML Lease or (ii) are otherwise sold or delicensed in any manner or for any
reason, in the case of either of subsection (i) or (ii) at any time while the
Hospital Facility(ies) to which such licensed beds relate are or were leased
pursuant to any ML Lease (even if any such Hospital Facility ceases to be leased
pursuant to any ML Lease), must at all times be equal to or less than
thirty-four (34) such beds.”

 

  (d) In the case of Second Amended and Restated Master Lease Agreement No. 4:

 

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

 

  5. In the case of each Master Lease, the term “Leases” shall mean and refer to
the leases listed in Exhibit E to such Master Lease and Master Lease Agreement
No. 5 referenced above in this letter.

 

  6. In the case of each Master Lease, the notice address for Lessor is amended
to read as follows:

“Ventas Realty, Limited Partnership

c/o Ventas, Inc.

353 N. Clark Street, Suite 300

Chicago, Illinois 60654

Attention: Legal Department

with a copy to:

Ventas Realty, Limited Partnership

c/o Ventas, Inc.

353 N. Clark Street, Suite 3300

Chicago, Illinois 60654

Attention: Asset Management”

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Kindred Healthcare, Inc.

Kindred Healthcare Operating, Inc.

May 23, 2012

Page 8

 

  7. In order to induce Lessor to enter into this letter and Master Lease
Agreement No. 5 referenced above, Tenant hereby represents and warrants to
Lessor that Tenant’s entry into this letter and the aforesaid Master Lease
Agreement No. 5 does not require that any consent or approval first be obtained
from any lender or other third party. In order to induce Tenant to enter into
this letter and Master Lease Agreement No. 5 referenced above, Lessor hereby
represents and warrants to Tenant that Lessor’s entry into this letter and the
aforesaid Master Lease Agreement No. 5 does not require that any consent or
approval first be obtained from any lender or other third party.

 

  8. Lessor hereby represents and warrants that, as of the date hereof,
Scottsdale Landlord is not aware of any default by Scottsdale Tenant under the
Scottsdale Lease or any event that, but for the passage of time or the giving of
notice, would result in a default by Scottsdale Tenant under the Scottsdale
Lease.

*****

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Kindred Healthcare, Inc.

Kindred Healthcare Operating, Inc.

May 23, 2012

Page 9

 

If you are in agreement with the foregoing matters, please execute and return to
the undersigned the enclosed copy of this letter.

 

Very truly yours,

 

VENTAS REALTY, LIMITED PARTNERSHIP,

a Delaware limited partnership

By:

 

Ventas, Inc., a Delaware corporation,

its general partner

  By:   /s/ T. Richard Riney    

T. Richard Riney,

Executive Vice President, Chief Administrative

Officer, General Counsel and Secretary

AGREED AND ACCEPTED:

KINDRED HEALTHCARE, INC.,

a Delaware corporation

 

By:   /s/ Gregory C. Miller

Name: Gregory C. Miller

Its: Chief Development Officer

KINDRED HEALTHCARE OPERATING, INC.,

a Delaware corporation

 

By:   /s/ Gregory C. Miller

Name: Gregory C. Miller

Its: Chief Development Officer

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Kindred Healthcare, Inc.

Kindred Healthcare Operating, Inc.

May 23, 2012

Page 10

 

JOINDER

For the avoidance of doubt and although it is not required to do so, the
undersigned, as the joint and several Lessor with Ventas Realty, Limited
Partnership under certain of the Master Leases (with respect to Facilities 4614
and 4619), hereby joins in this letter for the purpose of evidencing its consent
thereto, joinder therein and agreement to be bound thereby.

 

VENTAS, INC., a Delaware corporation By:   /s/ T. Richard Riney  

T. Richard Riney, Executive Vice President,

Chief Administrative Officer, General Counsel and Secretary

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EXHIBIT A

 

112   

Royal Oaks Health Care and Rehab

132   

Madison Healthcare and Rehab

155   

Savannah Rehab and Nursing

158   

Bellingham Health Care and Rehab Services

216   

Boise Health and Rehab

230   

Crosslands Rehab and Healthcare

278   

Oakview Nursing and Rehab

280   

Fountain Circle Health and Rehab

327   

Laurel Ridge Rehab and Nursing

406   

Muncie Health and Rehab

407   

Parkwood Health Care

453   

Medford Rehab and Healthcare

462   

Queen Anne Healthcare

483   

Sage View Care

506   

Presentation Nursing and Rehab

507   

Country Rehab and Nursing

514   

Sachem Skilled Nursing and Rehab

526   

The Eliot Healthcare

529   

Bolton Manor Nursing and Rehab

539   

Newton and Wellesley Alzheimer

544   

Augusta Rehab

545   

Eastside Rehab and Living

546   

Winship Green Nursing

547   

Brewer Rehab and Living

549   

Kennebunk Nursing and Rehab

550   

Norway Rehab and Living

555   

Brentwood Rehab and Nursing

562   

Andrew House Healthcare

569   

Chillicothe Nursing and Rehab

577   

Minerva Park Nursing and Rehab

582   

Colony House Nursing and Rehab

591   

Dover Rehab and Living

635   

Coshocton Health and Rehab

640   

Las Vegas Healthcare and Rehab

641   

Torrey Pines Care

645   

Specialty Care of Marietta

655   

Federal Heights Rehab and Nursing

704   

Guardian Care of Roanoke Rapids

711   

Kinston Rehab and Healthcare

724   

Rehab and Health of Gastonia

738   

Bay View Nursing and Rehab

767   

Colony Oaks Care

770   

Vallhaven Care

771   

Kennedy Park Medical and Rehab

784   

Northfield Centre for Health and Rehab

806   

Chapel Hill Rehab and Healthcare

822   

Primacy Healthcare and Rehab

824   

Specialty Healthcare and Rehab of Mobile

826   

Harbour Pointe Medical and Rehab

851   

Villa Campana Health Care

853   

Kachina Point Health Care and Rehab

859   

Malley Healthcare and Rehab

873   

Brighton Care

1224   

Chestnut Terrace Nursing and Rehab

    

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EXHIBIT A-1

Exhibit C for Second Amended and Restated Master Lease Agreement No. 1

 

ID    Name   

Annual

Base Rent
Commencing
May 23, 2012

     Percentage of
Master Lease
Commencing
May 23, 2012   112   

Royal Oaks Health Care and Rehabilitation Center

     2,744,033.94         2.5040 %  113   

Southwood Health & Rehabilitation Center

     1,187,760.60         1.0839 %  114   

Arden Rehabilitation and Healthcare Center

     1,036,871.76         0.9462 %  127   

Northwest Continuum Care Center

     532,092.96         0.4855 %  132   

Madison Healthcare and Rehabilitation Center

     503,006.22         0.4590 %  137   

Sunnybrook Healthcare and Rehabilitation Specialists

     991,690.20         0.9049 %  140   

Wasatch Care Center

     543,530.64         0.4960 %  150   

The Tunnell Center for Rehabilitation & Heathcare

     3,209,172.00         2.9284 %  165   

Rainier Vista Care Center

     1,801,094.04         1.6435 %  167   

Canyonwood Nursing and Rehab Center

     1,321,101.00         1.2055 %  180   

Vancouver Health & Rehabilitation Center

     746,292.60         0.6810 %  188   

Cypress Pointe Rehabilitation and Health Care Centre

     1,075,052.04         0.9810 %  191   

Silas Creek Manor

     637,415.28         0.5817 %  198   

Harrington House Nursing and Rehabilitation Center

     1,633,093.56         1.4902 %  218   

Canyon West Health and Rehabilitation Center

     785,639.28         0.7169 %  221   

Lewiston Rehabilitation & Care Center

     685,534.92         0.6256 %  247   

St. George Care and Rehabilitation Center

     1,242,238.44         1.1336 %  280   

Fountain Circle Health and Rehabilitation

     358,004.43         0.3267 %  327   

Laurel Ridge Rehabilitation and Nursing Center

     476,005.89         0.4344 %  335   

Lawton Healthcare Center

     1,561,528.08         1.4249 %  406   

Muncie Health & Rehabilitation Center

     1,871,023.14         1.7073 %  409   

Mountain Valley Care & Rehabilitation Center

     435,496.80         0.3974 %  416   

Park Place Health Care Center

     1,419,088.56         1.2949 %  433   

Parkview Acres Care and Rehabilitation Center

     664,399.56         0.6063 %  441   

Mountain Towers Healthcare and Rehabilitation Center

     844,473.84         0.7706 %  452   

Sunnyside Care Center

     554,374.68         0.5059 %  462   

Queen Anne Healthcare

     1,705,021.09         1.5559 %  482   

Wind River Healthcare and Rehabilitation Center

     835,537.80         0.7624 %  483   

Sage View Care Center

     796,009.85         0.7264 %  501   

Blue Hills Alzheimer’s Care Center

     1,380,531.60         1.2598 %  507   

Country Rehabilitation and Nursing Center

     1,313,016.24         1.1981 %  516   

Hammersmith House Nursing Care Center

     864,190.56         0.7886 %  518   

Timberlyn Heights Nursing and Rehabilitation Center

     716,085.00         0.6534 %  529   

Bolton Manor Nursing and Rehabilitation Center

     1,769,021.88         1.6143 %  537   

Quincy Rehabilitation and Nursing Center

     824,101.08         0.7520 %  550   

Norway Rehabilitation & Living Center

     356,004.40         0.3249 %  555   

Brentwood Rehabilitation and Nursing Center

     281,003.48         0.2564 %  560   

Franklin Woods Nursing and Rehabilitation Center

     524,610.60         0.4787 %  562   

Andrew House Healthcare

     299,003.70         0.2728 %  567   

The Crossings East Campus

     722,356.44         0.6592 %  572   

Winchester Place Nursing and Rehabilitation Center

     974,448.00         0.8892 %  573   

Eagle Pond Rehabilitation and Living Center

     1,676,246.40         1.5296 %  577   

Minerva Park Nursing and Rehabilitation Center

     855,010.58         0.7802 %  581   

Blueberry Hill Skilled Nursing & Rehabilitation Center

     1,491,028.20         1.3606 %  582   

Colony House Nursing and Rehabilitation Center

     1,490,018.43         1.3597 % 

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

ID    Name   

Annual

Base Rent
Commencing
May 23, 2012

     Percentage of
Master Lease
Commencing
May 23, 2012   588   

Walden Rehabilitation and Nursing Center

     1,255,450.32         1.1456 %  591   

Dover Rehabilitation and Living Center

     1,020,012.62         0.9308 %  593   

Hanover Terrace Healthcare

     1,257,231.48         1.1472 %  635   

Coshocton Health & Rehabilitation Center

     737,009.12         0.6725 %  640   

Las Vegas Healthcare and Rehabilitation Center

     1,406,017.39         1.2830 %  655   

Federal Heights Rehabilitation and Nursing Center

     669,008.27         0.6105 %  660   

Savannah Specialty Care Center

     669,988.20         0.6114 %  704   

Guardian Care of Roanoke Rapids

     2,054,025.41         1.8743 %  707   

Rehabilitation and Nursing Center of Monroe

     1,024,038.96         0.9345 %  724   

Rehabilitation and Health Center of Gastonia

     1,497,018.52         1.3661 %  738   

Bay View Nursing and Rehabilitation Center

     1,872,023.15         1.7083 %  745   

Aurora Care Center

     666,964.56         0.6086 %  767   

Colony Oaks Care Center

     184,002.28         0.1679 %  769   

North Ridge Medical and Rehabilitation Center

     961,245.60         0.8772 %  775   

Sheridan Medical Complex

     492,720.60         0.4496 %  776   

Woodstock Health and Rehabilitation Center

     765,636.12         0.6987 %  784   

Northfield Centre for Health and Rehabilitation

     988,012.22         0.9016 %  806   

Chapel Hill Rehabilitation and Healthcare Center

     599,007.41         0.5466 %  825   

Nansemond Pointe Rehabilitation and Healthcare Center

     1,823,764.08         1.6642 %  829   

River Pointe Rehabilitation and Healthcare Center

     805,807.80         0.7353 %  868   

Lebanon Country Manor

     587,854.56         0.5364 %  884   

Masters Health Care Center

     1,193,823.12         1.0894 %  4602   

Kindred Hospital - South Florida - Coral Gables

     2,063,198.88         1.8827 %  4618   

Kindred Hospital - Oklahoma City

     1,182,121.44         1.0787 %  4619   

Kindred Hospital - Pittsburgh

     1,483,785.12         1.3540 %  4628   

Kindred Hospital - Chattanooga

     1,328,386.20         1.2122 %  4633   

Kindred Hospital - Louisville

     4,264,385.64         3.8913 %  4637   

Kindred Hospital - Chicago (North Campus)

     4,299,151.44         3.9230 %  4638   

Kindred Hospital - Indianapolis

     1,853,981.16         1.6918 %  4652   

Kindred Hospital - North Florida

     4,373,265.36         3.9907 %  4656   

Kindred Hospital - Arizona - Phoenix

     1,709,292.24         1.5598 %  4680   

Kindred Hospital - St. Louis

     1,901,976.48         1.7356 %  4690   

Kindred Hospital - Chicago (Northlake Campus)

     2,752,408.56         2.5116 %  4822   

Kindred Hospital - San Francisco Bay Area

     3,296,502.36         3.0081 %  4842   

Kindred Hospital - Westminster

     7,410,733.56         6.7624 %  4848   

Kindred Hospital - San Diego

     1,403,932.56         1.2811 %       

 

 

    

 

 

          109,587,042.56         100.0000 % 

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

EXHIBIT A-2

Exhibit C for Second Amended and Restated Master Lease Agreement No. 2

 

ID    Name    Annual
Base Rent
Commencing
May 23, 2012      Percentage of
Master Lease
Commencing
May 23, 2012   111   

Rolling Hills Health Care Center

     387,289.92         0.5961 %  168   

Lakewood Healthcare Center

     1,138,605.12         1.7525 %  216   

Boise Health and Rehabilitation Center

     745,009.21         1.1467 %  222   

Nampa Care Center

     472,181.40         0.7268 %  223   

Weiser Rehabilitation & Care Center

     748,874.16         1.1526 %  278   

Oakview Nursing and Rehabilitation Center

     628,007.77         0.9666 %  282   

Maple Manor Health Care Center

     776,544.12         1.1952 %  289   

San Luis Medical and Rehabilitation Center

     1,190,707.92         1.8327 %  294   

Windsor Estates Health & Rehab Center

     611,784.00         0.9416 %  407   

Parkwood Health Care Center

     1,228,015.19         1.8901 %  508   

Crawford Skilled Nursing and Rehabilitation Center

     956,859.60         1.4727 %  513   

Hallmark Nursing and Rehabilitation Center

     1,320,451.44         2.0324 %  532   

Hillcrest Nursing and Rehabilitation Center

     1,240,907.16         1.9099 %  534   

Country Gardens Skilled Nursing & Rehabilitation Center

     916,898.88         1.4112 %  545   

Eastside Rehabilitation and Living Center

     341,004.22         0.5249 %  549   

Kennebunk Nursing and Rehabilitation Center

     156,001.93         0.2401 %  584   

Franklin Skilled Nursing and Rehabilitation Center

     787,200.96         1.2116 %  592   

Greenbriar Terrace Healthcare

     2,681,790.00         4.1277 %  634   

Cambridge Health & Rehabilitation Center

     1,599,621.48         2.4620 %  641   

Torrey Pines Care Center

     2,606,032.23         4.0111 %  706   

Guardian Care of Henderson

     744,006.12         1.1451 %  711   

Kinston Rehabilitation and Healthcare Center

     1,712,021.18         2.6350 %  726   

Guardian Care of Elizabeth City

     1,127,511.60         1.7354 %  743   

Desert Life Rehabilitation and Care Center

     1,363,664.88         2.0989 %  744   

Cherry Hills Health Care Center

     543,446.88         0.8364 %  766   

Colonial Manor Medical and Rehabilitation Center

     1,856,356.08         2.8572 %  780   

Columbus Health and Rehabilitation Center

     427,469.76         0.6579 %  822   

Primacy Healthcare and Rehabilitation Center

     357,004.42         0.5495 %  826   

Harbour Pointe Medical and Rehabilitation Center

     1,750,021.65         2.6935 %  842   

Bay Pointe Medical and Rehabilitation Center

     332,590.44         0.5119 %  1224   

Chestnut Terrace Nursing and Rehabilitation Center

     116,001.43         0.1785 %  1228   

Lafayette Nursing and Rehab Center

     2,446,277.40         3.7652 %  4611   

Kindred Hospital - Bay Area St. Petersburg

     3,882,292.56         5.9754 %  4612   

Kindred Hospital - Kansas City

     4,363,869.00         6.7166 %  4615   

Kindred Hospital - Sycamore

     3,860,443.80         5.9418 %  4653   

Kindred Hospital - Tarrant County (Fort Worth Southwest)

     2,688,806.28         4.1385 %  4654   

Kindred Hospital (Houston Northwest)

     3,230,741.04         4.9726 %  4668   

Kindred Hospital - Fort Worth

     2,294,462.52         3.5315 %  4674   

Kindred Hospital - Central Tampa

     4,886,625.60         7.5212 %  4807   

Kindred Hospital - Ontario

     6,453,739.56         9.9332 %       

 

 

    

 

 

          64,971,138.90         100.0000 % 

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

EXHIBIT A-3

Exhibit C for Second Amended and Restated Master Lease Agreement No. 3

 

ID    Name    Annual
Base Rent
Commencing
May 23, 2012      Percentage of
Master Lease
Commencing
May 23, 2012   116   

Pettigrew Rehabilitation and Healthcare Center

     641,336.40         1.5901 %  143   

Raleigh Rehabilitation & Healthcare Center

     819,154.44         2.0310 %  155   

Savannah Rehabilitation & Nursing Center

     1,236,015.29         3.0646 %  230   

Crosslands Rehabilitation & Healthcare Center

     627,007.76         1.5546 %  269   

Meadowvale Health and Rehabilitation Center

     562,320.48         1.3942 %  281   

Riverside Manor Healthcare Center

     631,140.12         1.5649 %  307   

Lincoln Nursing Center

     1,028,342.76         2.5497 %  453   

Medford Rehabilitation and Healthcare Center

     1,528,018.90         3.7886 %  506   

Presentation Nursing & Rehabilitation Center

     220,002.72         0.5455 %  514   

Sachem Skilled Nursing & Rehabilitation Center

     1,105,013.67         2.7398 %  539   

Newton and Wellesley Alzheimer Center

     2,228,027.56         5.5242 %  544   

Augusta Rehabilitation Center

     702,008.68         1.7406 %  547   

Brewer Rehabilitation and Living Center

     1,773,021.93         4.3960 %  554   

Westgate Manor

     909,426.24         2.2548 %  563   

The Crossings West Campus

     662,253.60         1.6420 %  568   

Parkway Pavilion Healthcare

     1,471,178.76         3.6476 %  587   

River Terrace Healthcare

     911,166.24         2.2591 %  645   

Specialty Care of Marietta

     821,010.15         2.0356 %  694   

Wedgewood Healthcare Center

     718,011.60         1.7802 %  713   

Guardian Care of Zebulon

     660,127.44         1.6367 %  770   

Vallhaven Care Center

     874,010.81         2.1670 %  773   

Mount Carmel Medical and Rehabilitation Center

     1,188,604.20         2.9470 %  774   

Mt. Carmel Health & Rehabilitation Center

     2,425,928.88         6.0149 %  782   

Danville Centre for Health and Rehabilitation

     589,175.76         1.4608 %  824   

Specialty Healthcare & Rehabilitation Center of Mobile

     714,008.83         1.7703 %  851   

Villa Campana Health Care Center

     240,002.97         0.5951 %  873   

Brighton Care Center

     1,260,015.58         3.1241 %  1237   

Wyomissing Nursing and Rehabilitation Center

     876,689.04         2.1737 %  4635   

Kindred Hospital - San Antonio

     1,988,809.44         4.9311 %  4644   

Kindred Hospital - Brea

     2,548,531.80         6.3188 %  4647   

Kindred Hospital - Las Vegas (Sahara)

     1,303,335.36         3.2315 %  4660   

Kindred Hospital - Mansfield

     984,323.88         2.4405 %  4662   

Kindred Hospital - Greensboro

     2,319,195.00         5.7502 %  4673   

Kindred Hospital - Boston North Shore

     981,282.60         2.4330 %  4688   

Kindred Hospital - Boston

     711,645.36         1.7645 %  4876   

Kindred Hospital - South Florida - Hollywood

     2,072,125.56         5.1376 %       

 

 

    

 

 

          40,332,269.81         100.0000 % 

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

EXHIBIT A-4

Exhibit C for Second Amended and Restated Master Lease Agreement No. 4

 

ID    Name    Annual
Base Rent
Commencing
May 23, 2012      Percentage of
Master Lease
Commencing
May 23, 2012   131   

Harrison Health and Rehabilitation Centre

     766,866.12         1.6311 %  146   

Rose Manor Healthcare Center

     1,072,868.64         2.2819 %  148   

Village Square Nursing and Rehabilitation Center

     1,080,852.00         2.2989 %  158   

Bellingham Health Care and Rehabilitation Services

     797,009.86         1.6952 %  209   

Valley View Health Care Center

     688,707.60         1.4648 %  213   

Wildwood Health Care Center

     2,095,970.16         4.4580 %  225   

Aspen Park Healthcare

     403,970.40         0.8592 %  277   

Rosewood Health Care Center

     794,887.44         1.6907 %  290   

Bremen Health Care Center

     558,426.12         1.1877 %  350   

Valley Gardens Health Care & Rehabilitation Center

     1,237,197.96         2.6314 %  481   

South Central Wyoming Healthcare and Rehabilitation

     497,090.04         1.0573 %  503   

Brigham Manor Nursing and Rehabilitation Center

     974,891.52         2.0735 %  517   

Oakwood Rehabilitation and Nursing Center

     439,309.08         0.9344 %  526   

The Eliot Healthcare Center

     1,240,015.34         2.6374 %  542   

Den-Mar Rehabilitation and Nursing Center

     441,299.04         0.9386 %  546   

Winship Green Nursing Center

     504,006.23         1.0720 %  559   

Birchwood Terrace Healthcare

     1,064,905.08         2.2650 %  566   

Windsor Rehabilitation and Healthcare Center

     1,234,792.56         2.6263 %  569   

Chillicothe Nursing & Rehabilitation Center

     992,012.27         2.1099 %  570   

Pickerington Nursing & Rehabilitation Center

     646,879.20         1.3759 %  571   

Logan Health Care Center

     750,946.20         1.5972 %  585   

Great Barrington Rehabilitation and Nursing Center

     493,503.12         1.0496 %  723   

Guardian Care of Rocky Mount

     1,141,746.96         2.4284 %  765   

Eastview Medical and Rehabilitation Center

     1,209,056.64         2.5716 %  771   

Kennedy Park Medical & Rehabilitation Center

     1,337,016.54         2.8437 %  785   

Hillcrest Health Care Center

     1,956,880.44         4.1621 %  787   

Woodland Terrace Health Care Facility

     886,913.52         1.8864 %  791   

Whitesburg Gardens Health Care Center

     1,830,630.48         3.8936 %  853   

Kachina Point Health Care and Rehabilitation Center

     1,737,021.48         3.6945 %  859   

Malley Healthcare and Rehabilitation Center

     1,666,020.61         3.5435 %  864   

Harrodsburg Health Care Center

     779,302.20         1.6575 %  1231   

Oak Hill Nursing and Rehabilitation Center

     1,388,146.44         2.9525 %  4614   

Kindred Hospital - Philadelphia

     1,076,324.04         2.2893 %  4645   

Kindred Hospital - South Florida Ft. Lauderdale

     2,258,308.20         4.8033 %  4658   

Kindred Hospital - Tucson

     825,634.92         1.7561 %  4664   

Kindred Hospital - Albuquerque

     1,766,326.92         3.7568 %  4665   

Kindred Hospital - Denver

     1,983,604.32         4.2190 %  4666   

Kindred Hospital - New Orleans

     544,771.92         1.1587 %  4685   

Kindred Hospital - Houston

     3,907,977.48         8.3120 %  4871   

Kindred - Chicago - Lakeshore

     1,944,135.60         4.1350 %       

 

 

    

 

 

          47,016,224.69         100.0000 % 

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

EXHIBIT B

TERMINATION OF LEASE AGREEMENT

THIS TERMINATION OF LEASE AGREEMENT (this “Agreement”) is dated as of
[        ], 2012, by and between NATIONWIDE HEALTH PROPERTIES, LLC, a Delaware
limited liability company (“Landlord”) and KINDRED HOSPITALS WEST, LLC, a
Delaware limited liability company (“Tenant”).

Recitals

WHEREAS, Nationwide Health Properties, Inc., a Maryland corporation and
predecessor in interest to Landlord (“NHPI”), and Tenant entered into that
certain Lease dated as of November 15, 2001 (the “Lease”);

WHEREAS, on July 1, 2011, NHPI merged into a subsidiary of Ventas, Inc. and in
connection with such merger Landlord became the landlord under the Lease;

WHEREAS, pursuant to that certain Lease Termination Notice dated as of
[        ], 2012, Tenant exercised its right under Section 2.3.2 of the Lease to
terminate the Lease as of [        ], 2012 (the “Termination Date”), such
termination to be effective on the Termination Date; and

WHEREAS, pursuant to this Agreement, Landlord and Tenant desire to agree on
certain additional matters related to such termination, all as more particularly
hereinafter set forth.

NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) in hand paid,
the premises and mutual covenants and agreements herein contained, and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

 

  1. Recitals. The foregoing Recitals are adopted herein as if repeated in full.

 

  2. Defined Terms. Capitalized terms used and not defined herein shall have the
meanings set forth in the Lease.

 

  3. Termination Rent.

 

  a.

Landlord acknowledges and agrees that: (i) Landlord is currently holding the
Security Deposit in the amount of $450,000 [SUCH AMOUNT SHALL BE REDUCED, IF
BETWEEN THE DATE OF THE LETTER AGREEMENT AND THE TERMINATION DATE, THE
APPLICABLE AMOUNT OF THE SECURITY DEPOSIT THAT IS HELD BY LANDLORD IS REDUCED IN
ACCORDANCE WITH THE TERMS OF THE LEASE]; (ii) the amount of earned and unpaid
interest on the Security Deposit is $[        ] (the “Interest”; the Interest,
if any, together with the Security Deposit, the “Security Deposit Amount”);
(iii) Landlord is holding the Tax Escrow in the amount of $[        ] and the
amount of the Tax Escrow that applies to the period after the Termination Date
(the “Post-Termination Period”) is $[        ] (the “Tax Escrow Amount”; the Tax
Escrow Amount, together with the Security Deposit Amount, the “Credits”); and
(iv) on or prior to the date hereof, Landlord has received $[        ]1 (the
“Termination Payment”).

 

 

1 

Note to draft: this amount to be $900,000 minus the Credits.

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

  b. Landlord and Tenant acknowledge and agree that the amount of the
Termination Rent is equal to $900,000.

 

  c. Landlord acknowledges and agrees that: (i) the Credits are hereby applied
to the Termination Rent due under the Lease; (ii) the Credits, together with the
Termination Payment, constitute the full amount of Termination Rent due under
the Lease; and (iii) Tenant has satisfied its obligations under the Lease for
payment of the Termination Rent.

 

  d. Notwithstanding Section 3(c), if Landlord or Tenant reasonably determines
based on written notices, bills or invoices from the applicable taxing authority
that a discrepancy exists between the Tax Escrow Amount credited to the
Termination Rent as set forth above and the amount of the Tax Escrow Amount that
was actually owed to Landlord and/or that should have been payable by Tenant
under the Lease, then either Landlord shall promptly make a reconciling payment
to Tenant, or Tenant shall promptly make a reconciling payment to Landlord, as
applicable, so that the amount of Termination Rent received by Landlord (after
taking into account any reconciling payments required under this Section 3(d),
the Credits and the Termination Payment) is equal to, and does not exceed,
$900,000.

 

  4. Termination of Lease. Landlord and Tenant agree that the Lease shall be
terminated as of the Termination Date. Tenant’s obligations under the Lease
shall survive the termination of the Lease as provided in Section 39 of the
Lease. Landlord acknowledges that, as of the Termination Date, Landlord is not
aware of any default by Tenant under the Lease or any event that, but for the
passage of time or the giving of notice, would result in a default under the
Lease, other than [            ]. Landlord and Tenant agree that nothing
contained in this Agreement shall affect or limit the obligations of their
respective affiliates which are parties to that certain letter agreement dated
May 23, 2012 by and among Kindred Healthcare, Inc., Kindred Healthcare
Operating, Inc. and Ventas Realty, Limited Partnership.

 

  5. Transfer of Patients. Landlord acknowledges and agrees that,
notwithstanding any condition or restriction in the Lease on the transfer of
patients (including without limitation Section 15 and Section 21 of the Lease),
on or prior to the Termination Date Tenant has transferred patients that were
receiving services at the Premises (“Patients”) to another location leased and
operated by one or more affiliates of Tenant and, except as required by
applicable law, Tenant shall not be required to maintain any licensure or
certification of the facility located on the Premises beyond the date that the
last of such Patients is so transferred or is discharged from such facility.

 

  6. Further Assurances. Landlord and Tenant agree to execute, acknowledge,
deliver, file, record and publish such further instruments and documents, and do
all such other acts and things as may be required by law, or as may be
reasonably required to carry out the intent and purposes of this Agreement.

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

  7. Miscellaneous. In the event of any inconsistencies between the terms of
this Agreement and Lease, the terms of this Agreement shall govern. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto were upon the same
instrument. Any counterpart delivered by facsimile, .pdf or other electronic
means shall have the same import and effect as original counterparts and shall
be valid, enforceable and binding for the purposes of this Agreement.

[END OF PAGE – SIGNATURE PAGES FOLLOW]

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

IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Agreement as of
the date first above written.

 

Landlord: NATIONWIDE HEALTH PROPERTIES, LLC, a Delaware limited liability
company By:     Name: Title:

 

Tenant: KINDRED HOSPITALS WEST, LLC, a Delaware limited liability company By:  
  Name: Title:

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

GUARANTOR CONSENT

The undersigned Guarantor hereby joins in, agrees to and consents to the
foregoing Agreement; agrees to be bound thereby; and further agrees that its
Guaranty of Lease dated November 15, 2001 relating to the Lease includes
Tenant’s obligations under the foregoing Agreement and under the Lease, as
amended or otherwise affected by the foregoing Agreement.

 

KINDRED HEALTHCARE OPERATING, INC., a Delaware corporation By:     Name: Title: