Second Amended and Restated Master Lease Agreement No. 2



 Exhibit 10.4 
 SECOND AMENDED AND RESTATED 
 M A S T E R    L E A S
E    A G R E E M E N T    NO. 2 
 DATED AS OF APRIL 27, 2007 
 FOR LEASE EXECUTED BY 
 VENTAS
REALTY, LIMITED PARTNERSHIP, 
 AS LESSOR 
 AND 
 KINDRED HEALTHCARE, INC. 
 AND 
 KINDRED HEALTHCARE OPERATING, INC., 
 AS TENANT 







 TABLE OF CONTENTS 
  


					
	 ARTICLE I
	  		  	1
	 Section 1.1
	  	Leased Property	  	1
	 Section 1.2
	  	Term	  	2
	 Section 1.3
	  	Amended and Restated Lease	  	2
			
	 ARTICLE II
	  		  	4
	 Section 2.1
	  	Definitions	  	4
			
	 ARTICLE III
	  		  	19
	 Section 3.1
	  	Rent	  	19
	 Section 3.2
	  	Intentionally omitted	  	19
	 Section 3.3
	  	Additional Charges	  	19
	 Section 3.4
	  	Survival	  	20
	 Section 3.5
	  	Net Lease	  	21
			
	 ARTICLE IV
	  		  	21
	 Section 4.1
	  	Payment of Impositions	  	21
	 Section 4.2
	  	Notice of Impositions	  	22
	 Section 4.3
	  	Adjustment of Impositions	  	22
			
	 ARTICLE V
	  		  	22
	 Section 5.1
	  	No Termination, Abatement, etc.	  	22
			
	 ARTICLE VI
	  		  	23
	 Section 6.1
	  	Ownership of the Leased Properties	  	23
	 Section 6.2
	  	Tenant’s Personal Property	  	23
			
	 ARTICLE VII
	  		  	24
	 Section 7.1
	  	Condition of the Leased Property	  	24
	 Section 7.2
	  	Use of the Leased Property	  	24
	 Section 7.3
	  	Granting of Easements, etc.	  	34
			
	 ARTICLE VIII
	  		  	35
	 Section 8.1
	  	Compliance with Legal and Insurance Requirements, Instruments, etc.	  	35
	 Section 8.2
	  	Legal Requirement Covenants	  	36
	 Section 8.3
	  	Permitted Encumbrances	  	37
			
	 ARTICLE IX
	  		  	38
	 Section 9.1
	  	Maintenance and Repair	  	38
	 Section 9.2
	  	Encroachments	  	39
			
	 ARTICLE X
	  		  	39
	 Section 10.1
	  	Construction of Capital Alterations to the Leased Property(ies)	  	39
	 Section 10.2
	  	Capital Alterations Financed by Tenant	  	40
	 Section 10.3
	  	Capital Alterations Financed by Lessor	  	40
	 Section 10.4
	  	Non-Capital Alterations	  	42

  

 i 









					
	 Section 10.5
	  	Salvage	  	42
	 Section 10.6
	  	Additional Requirements for Capital Alterations and Non-Capital Alterations	  	42
	 Section 10.7
	  	Mortgagee’s Consent	  	43
			
	 ARTICLE XI
	  		  	44
	 Section 11.1
	  	Liens	  	44
			
	 ARTICLE XII
	  		  	44
	 Section 12.1
	  	Permitted Contests	  	44
			
	 ARTICLE XIII
	  		  	45
	 Section 13.1
	  	General Insurance Requirements	  	45
	 Section 13.2
	  	Replacement Cost	  	48
	 Section 13.3
	  	Additional Insurance	  	49
	 Section 13.4
	  	Waiver of Subrogation	  	49
	 Section 13.5
	  	Form Satisfactory, etc.	  	49
	 Section 13.6
	  	Limits; Deductibles	  	50
	 Section 13.7
	  	Blanket Policy	  	50
	 Section 13.8
	  	No Separate Insurance	  	50
	 Section 13.9
	  	Survival	  	50
	 Section 13.10
	  	Insurance Company Ratings	  	51
	 Section 13.11
	  	Commutation of Certain Insurance Policies	  	51
			
	 ARTICLE XIV
	  		  	52
	 Section 14.1
	  	Insurance Proceeds	  	52
	 Section 14.2
	  	Reconstruction in the Event of Damage or Destruction Covered by Insurance	  	52
	 Section 14.3
	  	Reconstruction in the Event of Damage or Destruction Not Covered by Insurance	  	53
	 Section 14.4
	  	Tenant’s Property	  	54
	 Section 14.5
	  	Restoration of Tenant’s Property	  	54
	 Section 14.6
	  	No Abatement of Rent	  	54
	 Section 14.7
	  	Restoration	  	54
	 Section 14.8
	  	Notice	  	55
	 Section 14.9
	  	Waiver	  	55
			
	 ARTICLE XV
	  		  	55
	 Section 15.1
	  	Definitions	  	55
	 Section 15.2
	  	Parties’ Rights and Obligations	  	56
	 Section 15.3
	  	Total Taking	  	56
	 Section 15.4
	  	Partial Taking	  	56
	 Section 15.5
	  	Restoration	  	56
	 Section 15.6
	  	Award-Distribution	  	56
	 Section 15.7
	  	Temporary Taking	  	57
			
	 ARTICLE XVI
	  		  	57
	 Section 16.1
	  	Events of Default	  	57

  

 ii 









					
	 Section 16.2
	  	Certain Remedies	  	64
	 Section 16.3
	  	Damages	  	64
	 Section 16.4
	  	Certain Effects of Separate Lease	  	65
	 Section 16.5
	  	Waiver	  	65
	 Section 16.6
	  	Application of Funds	  	65
	 Section 16.7
	  	Notice to Lessor	  	65
	 Section 16.8
	  	Nature of Remedies	  	66
	 Section 16.9
	  	Allocable Rent	  	66
	 Section 16.10
	  	Special Remedies Provisions	  	66
	 Section 16.11
	  	No Mediation or Arbitration	  	76
	 Section 16.12
	  	Special Purchase Provisions	  	76
			
	 ARTICLE XVII
	  		  	82
	 Section 17.1
	  	Lessor’s Right to Cure Tenant’s Default	  	82
			
	 ARTICLE XVIII
	  		  	82
	 Section 18.1
	  	Provisions Relating to Purchase of the Leased Property	  	82
			
	 ARTICLE XIX
	  		  	83
	 Section 19.1
	  	Exercise of Renewal Options	  	83
	 Section 19.2
	  	Renewal Terms	  	84
	 Section 19.3
	  	Fair Market Rental Determination	  	85
	 Section 19.4
	  	Extended Period New Lease	  	85
	 Section 19.5
	  	Revocation of Renewal Option Exercise	  	85
			
	 ARTICLE XX
	  		  	86
	 Section 20.1
	  	Holding Over	  	86
			
	 ARTICLE XXI
	  		  	86
	 Section 21.1
	  	Subordination	  	86
	 Section 21.2
	  	Attornment	  	87
	 Section 21.3
	  	Mortgagee Cure Rights	  	87
	 Section 21.4
	  	Modifications	  	88
	 Section 21.5
	  	Existing Ground Leases	  	88
			
	 ARTICLE XXII
	  		  	89
	 Section 22.1
	  	Notice to Lessor	  	89
	 Section 22.2
	  	Definitions	  	90
	 Section 22.3
	  	Consent of Leasehold Mortgagee Required	  	90
	 Section 22.4
	  	Default Notice	  	90
	 Section 22.5
	  	Procedure for Foreclosure on Default	  	90
	 Section 22.6
	  	Assignment or Transfer in Lieu of Foreclosure	  	91
	 Section 22.7
	  	Separate Lease	  	93
	 Section 22.8
	  	Separate Lease Properties	  	95
	 Section 22.9
	  	Legal Proceedings	  	95
	 Section 22.10
	  	Future Amendments	  	95
	 Section 22.11
	  	Estoppel Certificate	  	95
	 Section 22.12
	  	Notices	  	95

  

 iii 









					
	 Section 22.13
	  	Erroneous Payments	  	96
	 Section 22.14
	  	Exercise by Leasehold Mortgagee of Remedies Against One or More Leased Properties	  	96
			
	 ARTICLE XXIII
	  		  	96
	 Section 23.1
	  	Risk of Loss	  	96
			
	 ARTICLE XXIV
	  		  	96
	 Section 24.1
	  	Indemnification	  	96
			
	 ARTICLE XXV
	  		  	98
	 Section 25.1
	  	Subletting and Assignment	  	98
	 Section 25.2
	  	Attornment	  	105
	 Section 25.3
	  	Sublease Limitation	  	106
	 Section 25.4
	  	Leasehold Mortgagee Rights	  	106
			
	 ARTICLE XXVI
	  		  	106
	 Section 26.1
	  	Financial Statements and Reporting	  	106
	 Section 26.2
	  	Furnishing Notice	  	111
	 Section 26.3
	  	Quarterly Meetings; Facility Level Meetings and Reviews	  	111
	 Section 26.4
	  	Non-Ventas Lessors	  	112
	 Section 26.5
	  	Additional Tenant Assistance	  	112
	 Section 26.6
	  	Electronic Format	  	112
	 Section 26.7
	  	Similar Reports	  	112
	 Section 26.8
	  	Audit and Investigation Rights	  	113
			
	 ARTICLE XXVII
	  		  	114
	 Section 27.1
	  	Lessor’s Right to Inspect	  	114
			
	 ARTICLE XXVIII
	  		  	114
	 Section 28.1
	  	No Waiver	  	114
			
	 ARTICLE XXIX
	  		  	114
			
	 ARTICLE XXX
	  		  	114
	 Section 30.1
	  	Acceptance of Surrender	  	114
			
	 ARTICLE XXXI
	  		  	115
	 Section 31.1
	  	No Merger of Title	  	115
			
	 ARTICLE XXXII
	  		  	115
	 Section 32.1
	  	Conveyance by Lessor	  	115
			
	 ARTICLE XXXIII
	  		  	115
	 Section 33.1
	  	Quiet Enjoyment	  	115
			
	 ARTICLE XXXIV
	  		  	116
	 Section 34.1
	  	Notices	  	116
			
	 ARTICLE XXXV
	  		  	117
	 Section 35.1
	  	Appraisals	  	117
	 Section 35.2
	  	Appointment of Appraisers	  	117

  

 iv 









					
	 Section 35.3
	  	Qualifications of Appraisers	  	117
	 Section 35.4
	  	Appraisal Process	  	118
	 Section 35.5
	  	Binding Nature	  	118
	 Section 35.6
	  	Costs	  	118
			
	 ARTICLE XXXVI
	  		  	118
	 Section 36.1
	  	General REIT Provisions	  	118
			
	 ARTICLE XXXVII
	  		  	119
	 Section 37.1
	  	Intentionally Omitted	  	119
	 Section 37.2
	  	Lessor’s Option to Purchase the Tenant’s Personal Property	  	119
			
	 ARTICLE XXXVIII
	  		  	120
	 Section 38.1
	  	Lessor May Grant Liens	  	120
			
	 ARTICLE XXXIX
	  		  	120
	 Section 39.1
	  	Environmental Indemnity	  	120
			
	 ARTICLE XL
	  		  	121
	 Section 40.1
	  	Miscellaneous	  	121
	 Section 40.2
	  	Non-Recourse	  	121
	 Section 40.3
	  	Transition of Operations	  	122
	 Section 40.4
	  	Right to Enter	  	124
	 Section 40.5
	  	Integration	  	124
	 Section 40.6
	  	Severability	  	124
	 Section 40.7
	  	Subject to Law	  	124
	 Section 40.8
	  	Waivers	  	125
	 Section 40.9
	  	Binding Character	  	125
	 Section 40.10
	  	Modification	  	125
	 Section 40.11
	  	Forbearance	  	125
	 Section 40.12
	  	Lease Guaranty	  	125
	 Section 40.13
	  	Louisiana Provisions	  	125
	 Section 40.14
	  	Confidentiality	  	126
	 Section 40.15
	  	New Lease	  	130
	 Section 40.16
	  	Partial Expiration/Termination	  	134
	 Section 40.17
	  	Intentionally omitted	  	135
	 Section 40.18
	  	Combination of Leases	  	135
	 Section 40.19
	  	Unified Commercial Operating Lease	  	138
	 Section 40.20
	  	Intentionally omitted	  	138
	 Section 40.21
	  	No Credits	  	138
			
	 ARTICLE XLI
	  		  	138
	 Section 41.1
	  	Memorandums of Lease	  	138

  

 v 








 LIST OF EXHIBITS AND SCHEDULES 
 Exhibit A – Legal Descriptions of the Land 
 Exhibit B – Term/Commencement Date/Expiration Date 
 Exhibit C – Allocation Schedule-Applicable Transferred Property Percentage 
 Exhibit D – Renewal Groups 
 Exhibit E – Leases 
 Exhibit F – Intentionally Omitted 
 Exhibit G – Form of Lease Guaranty 
 Schedule 2.1A – Base Patient Revenues 
 Schedule 2.1B – Intentionally omitted 
 Schedule 2.1C – Existing Ground Leases 
 Schedule 7.2.7
– Minimum Number of Hospital Care Beds 
 Schedule 7.2.8 – Minimum Number of Non-Banked Skilled Nursing Care Beds at Certain Facilities

 Schedule 13.7 – Insurance Summary 
 Schedule 16.1(m)A – Licensed Beds as of the Commencement Date 
 Schedule 16.1(m)B – Minimum Licensed Beds at Certain Facilities
Due to Involuntary Reduction 
 Schedule 25.1.7 – Certain Existing Subleases 
 Schedule 40.12 – Tenant – Affiliate Sublessees 
  

 vi 








 SECOND AMENDED AND RESTATED 
 MASTER LEASE AGREEMENT NO. 2 
 THIS SECOND AMENDED AND RESTATED MASTER LEASE
AGREEMENT NO. 2 (hereinafter this “Lease”) is dated as of the 27th day of April, 2007, and is between VENTAS REALTY, LIMITED PARTNERSHIP, a Delaware limited partnership (together with its successors and assigns,
“Lessor”), and KINDRED HEALTHCARE, INC., a Delaware corporation formerly known as Vencor, Inc. (“Kindred”), and KINDRED HEALTHCARE OPERATING, INC., a Delaware corporation formerly known as Vencor Operating, Inc.
(“Operator”; Operator, jointly and severally with Kindred and permitted successors and assignees of Operator and Kindred, “Tenant”). 
 RECITALS 
 A. Pursuant to the Bankruptcy Plan (as defined in Section 2.1 below), Lessor and
Tenant entered into that certain Amended and Restated Master Lease Agreement No. 2 (such agreement, as heretofore amended, is herein referred to as the “Existing Master Lease”) dated as of April 20, 2001 (As used in this
Lease, the terms “Ventas Subsidiaries”, “Original Lessor”, “Original Tenant” and “Original Master Lease” shall have the same meaning herein as in the Existing Master Lease).

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

 NOW, THEREFORE, in consideration of the foregoing, and of other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Lessor and Tenant hereby amend and restate the Existing Master Lease in its entirety as follows: 
 ARTICLE I

 Section 1.1 Leased Property. Effective as of the Commencement Date for each Leased Property, upon and subject to
the terms and conditions hereinafter set forth, Lessor leased, and hereby leases, to Tenant and Tenant leased, and hereby leases, from Lessor all of Lessor’s rights and interest in and to each of the following: 
 (i) the tracts, pieces and parcels of land, as more particularly described in Exhibit A attached hereto (collectively, the
“Land”; each parcel of Land described in Exhibit A, as amended from time to time, excluding those parcels which have been transferred to a New Lease pursuant to Section 40.15 (including, without limitation, a New
Lease created pursuant to Section 22.7 hereof), together with the related property described in clauses (ii) through (iv) below, being referred to herein as a “Leased Property” and all of such parcels of Land,
together with all of such related property, being referred to herein collectively as the “Leased Properties”), 
  

 1 








 (ii) all buildings, structures, Fixtures (as hereinafter defined) and other improvements
of every kind including, but not limited to, alleyways and connecting tunnels, sidewalks, utility pipes, conduits and lines (on-site and off-site), parking areas and roadways appurtenant to such buildings and structures presently situated upon the
Land and Capital Alterations (collectively, the “Leased Improvements”), 
 (iii) all easements, rights and
appurtenances relating to the Land and the Leased Improvements, and 
 (iv) all permanently affixed equipment, machinery,
fixtures, and other items of real and/or personal property, including all components thereof, now and hereafter located in, on or used in connection with, and permanently affixed to or incorporated into the Leased Improvements, including, without
limitation, all furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting, ventilating, refrigerating, incineration, air and water pollution control, waste disposal, air-cooling and air-conditioning systems and apparatus,
sprinkler systems and fire and theft protection equipment, and built-in oxygen and vacuum systems, all of which to the greatest extent permitted by law, are hereby deemed by the parties hereto to constitute real estate, together with all
replacements, modifications, alterations and additions thereto, but specifically excluding all items included within the category of Tenant’s Personal Property as defined in ARTICLE II below (collectively the
“Fixtures”), 
 SUBJECT, HOWEVER, to the Permitted Encumbrances (as defined in Section 2.1 hereof). 

Section 1.2 Term. To have and to hold for (1) a fixed term (the “Fixed Term”) commencing on the Commencement
Date set forth in Exhibit B opposite the applicable Leased Property and ending at midnight on the Expiration Date so set forth in Exhibit B, and (2) the Extended Terms provided for in ARTICLE XIX, unless this Lease is
sooner terminated as hereinafter provided. 
 Section 1.3 Amended and Restated Lease. 
 Section 1.3.1 Lessor and Tenant hereby amend and restate the Existing Master Lease in its entirety in accordance with the
terms of this Lease as of the Effective Date (as defined in Section 2.1 below) by executing this Lease. This Lease shall govern and control as to all events, acts, omissions, liabilities and obligations first occurring, arising or
accruing from and after the Effective Date (as defined in Section 2.1 below). 
 Section 1.3.2 Without
limitation of the other provisions of this Section 1.3, the terms of the Existing Master Lease (and the Original Master Lease as provided in the Existing Master Lease) shall continue to govern and control as to all events, acts,
omissions, liabilities and obligations occurring, arising and accruing prior to the Effective Date, provided that, in the event that (1) prior to the Effective Date, (a) a default or breach of the terms of the Existing Master Lease shall
have occurred, (b) any act, event or omission to act shall have 

  

 2 








 
occurred, or circumstance shall have arisen, relative to any Legal Requirement, Authorization, Permitted Encumbrance or Superior Lease (each as defined in
Section 2.1 below) affecting any of the Leased Properties that is or is potentially adverse to Lessor or Tenant, or (c) any casualty or condemnation shall have occurred relative to any of the Leased Properties and (2) as of the
Effective Date, such default or breach remains uncured or such act, event, omission to act or circumstance continues to be adverse or potentially adverse to Lessor or Tenant or such casualty or condemnation has not been fully repaired and restored
with all claims on account thereof finally settled and paid and with the affected Leased Property re-opened for use in accordance with its Primary Intended Use (as defined in Section 7.2.2 hereof) and the other provisions of this Lease,
the provisions of this Lease relative to cure periods, whether and when an Event of Default shall be deemed to have occurred, rights and remedies on account of any breach or default or Event of Default, contest rights, Lease enforcement rights,
casualty, condemnation, insurance and indemnification shall govern and control. Subject to the foregoing, (x) any breach or default that occurs, arises or accrues under the Existing Master Lease prior to the Effective Date and is not cured
prior to such date is, and shall be deemed to be, a breach or default under this Lease, to which the cure periods, rights and remedies and other provisions of this Lease referenced in the preceding sentence shall be applicable, and (y) with
respect to any breach or default described in subsection (x) above, although the cure periods, rights and remedies and other provisions of this Lease referenced in the preceding sentence shall be applicable, the portion of any cure period under
the Existing Master Lease that has elapsed as of the Effective Date shall be counted in determining whether and when the applicable cure period under this Lease has expired (for example, if (A) a breach or default occurs under the Existing
Master Lease prior to the Effective Date, (B) such breach or default remains uncured as of the Effective Date, (C) Tenant receives from Lessor a written notice of default relative thereto prior to the Effective Date, and (D) by the
terms of this Lease, for a breach or default of the nature assumed in this example a cure period of thirty (30) days following Tenant’s receipt of written notice of default is allowed prior to such breach or default becoming an Event of
Default under this Lease, then, as to such breach or default, an Event of Default shall occur if such breach or default is not cured on or prior to the thirtieth (30th) day following Tenant’s receipt of the aforesaid notice of default,
notwithstanding that such notice was received prior to the Effective Date). 
 Section 1.3.2.1 In the event that
(1) prior to the Effective Date, (a) a default or breach of the terms of the Existing Master Lease shall have occurred, (b) any act, event or omission to act shall have occurred, or circumstances shall have arisen, relative to any
Legal Requirements, Authorization, Permitted Encumbrances or Superior Lease (each as defined in Section 2.1 below) affecting any of the Leased Properties that is or is potentially adverse to Lessor or Tenant, or (c) any casualty or
condemnation shall have occurred relative to any of the Leased Properties and (2) prior to the Effective Date, such default or breach has been cured or such act, event, omission to act or circumstance is no longer adverse or potentially adverse
to Lessor or Tenant or such casualty or condemnation has been fully repaired and restored with all claims on account thereof finally settled and paid and with the affected Leased Property re-opened for use in accordance with its Primary Intended Use
and the other provisions of this Lease, then no such default or breach or other circumstance or matter described in the foregoing subsections (a), (b) and (c) shall constitute an Event of Default under this Lease, and 

  

 3 








 
neither party shall bring a claim against the other in respect of any such default, breach, circumstance or matter, whether hereunder or under the Existing
Master Lease. Notwithstanding the foregoing, subject to Section 1.3.2 above, neither party waives or releases, and neither party shall be precluded from exercising, any rights or remedies (including, without limitation, default rights
and remedies) that it may have hereunder or under the Existing Master Lease (i) on account of any non-performance by the other party of indemnification obligations that such other party has hereunder or under the Existing Master Lease relative
to any default, breach, act, event, omission to act, circumstance, casualty or condemnation referenced in subsection (a), (b), or (c) above or (ii) if, and insofar as, the condition described in subsection (2) above is not, or by
reason of events occurring after the Effective Date is shown to have not been, cured, repaired, restored, re-opened or otherwise satisfied. 
 Section 1.3.3 Intentionally Omitted. 
 Section 1.3.4 Intentionally
Omitted. 
 Section 1.3.5 Nothing contained in this Section 1.3 shall limit or impair Ventas
Inc.’s or Tenant’s rights, duties and obligations under the Indemnity Agreement (as defined in Section 2.1 below). 
 Section 1.3.6 Lessor and Tenant acknowledge that they have heretofore entered into that certain Master Lease No. 2 Amendment Agreement (the “Burlingame Amendment”) dated
            , 2005 relating to the Facility commonly known as Magnolia Gardens Care Center, Burlingame, California (CA-320), and agree that this Lease is not intended to supercede
the provisions of such Burlingame Amendment (which instrument remains in full force and effect). 
 ARTICLE II 
 Section 2.1 Definitions. For all purposes of this Lease, except as otherwise expressly provided or unless the context otherwise
requires, (i) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular, (ii) all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles as at the time applicable, (iii) all references in this Lease to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and
other subdivisions of this Lease and (iv) the words “herein,” hereof” and “hereunder” and other words of similar import refer to this Lease as a whole and not to any particular Article, Section or other subdivision:

 “Additional Charges”: As defined in ARTICLE III. 
 “Adjusted Base Patient Revenues”: Base Patient Revenues from the Leased Properties, adjusted as follows. Without limitation of
Section 7.2.3 hereof, if a particular Facility or Facilities within the Leased Properties, for any period after December 31, 1999, for any reason is closed, the Base Patient Revenues that correspond to any such closed Facility or
Facilities (and, 

  

 4 








 
in the case of a partial year closure, the Base Patient Revenues that correspond to any such closed Facility or Facilities for the days or months such
Facility or Facilities were closed) shall be excluded from Base Patient Revenues in order to arrive at “Adjusted Base Patient Revenues.” 
 “Affiliate”: Shall mean, with respect to any Person, any other Person directly or indirectly controlling (including, but not limited to, all partners, directors, officers and members of such Person), controlled by or under
direct or indirect common control with any such Person. A Person shall be deemed to control a corporation, a partnership, a trust, or a limited liability company if such Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such person, through the ownership of voting securities, partnership interests or other equity interests. 
 “Ancillary Agreement”: As defined in Section 25.1.7. 
 “Applicable
Required Number of Beds”: As defined in Section 7.2.7(b). 
 “Appraisal Notice”: As defined in
Section 35.2. 
 “Arbitration Question”: As defined in Section 22.6(c). 
 “Authorizations”: As defined in Section 40.3. 
 “Award”: As defined in ARTICLE XV. 
 “Bankruptcy Plan”: That
certain Fourth Amended Joint Plan Of Reorganization of Vencor, Inc. And Affiliated Debtors Under Chapter 11 Of The Bankruptcy Code dated as of December 14, 2000, filed on December 14, 2000 at docket no. 4031 in the United States Bankruptcy
Court for the District of Delaware in the cases known as In re: Vencor, Inc., et al., Case Nos. 99-3199 (MFW) through 99-3327 (MFW), as confirmed by such Bankruptcy Court by Order dated March 16, 2001, filed on March 16, 2001 at docket no.
5975. 
 “Base Patient Revenues”: Patient Revenues from the Leased Properties (adjusted, in amounts agreed upon by Lessor
and Tenant, relative to so-called “Vencare programs”, but which adjustment shall not otherwise be made in the calculation of “Patient Revenues”) for the twelve (12) month period ending on December 31, 1999, as set forth
on Schedule 2.1A attached hereto and incorporated herein. 
 “Base Rent”: (a) For the period from the
Existing Lease Effective Date through the day preceding the Effective Date, rent at the annual rate applicable under the Existing Master Lease, (b) for the period from the Effective Date through April 30, 2007, rent at an annual rate equal
to Fifty Five Million Eight Hundred Forty Seven Thousand Seven Hundred Thirty Dollars ($55,847,730.00) per annum, (c) for the period from May 1, 2007 through April 30, 2008, rent at an annual rate equal to Fifty Seven Million One
Hundred Ninety Six Thousand Four Hundred Fifty Two and 68/100 Dollars ($57,196,452.68) per annum, and (d) 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 

  

 5 








 
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. 
 “BLS”: The
Bureau of Labor Statistics, U.S. Department of Labor or any successor thereto. 
 “Business Day”: Each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which national banks in the City of New York, New York are authorized, or obligated, by law or executive order, to close. 
 “Capital Alterations”: With respect to any Leased Property: (i) the addition of one or more new buildings, or (ii) the
annexation of one or more additional structures to any portion of any of the Leased Improvements on such Leased Property, or (iii) the material expansion or contraction of the existing improvements on such Leased Property, or (iv) any
alteration or modification affecting the foundation, floor slab, roof or roof structure, curtain wall, structural columns, beams or shafts or other structural components of any of the Leased Improvements on such Leased Property (other than any
alterations or modifications affecting any of such components that do not in any material respect adversely affect the design, efficacy and/or quality of any such component), or (v) any alteration or modification affecting any of the
electrical, plumbing, life safety, heating, ventilating, air conditioning or other operating systems serving any of the Leased Improvements on such Leased Property (other than any alterations or modifications affecting any of such systems that do
not in any material respect adversely affect the design, operating capacity, efficiency and/or quality of any such system), or (vi) any alterations or modifications to a Leased Property, the cost of which (excluding cosmetic refurbishing
alterations or modifications, such as painting, wallpapering or carpeting), when taken together with all other alterations and modifications (excluding cosmetic refurbishing alterations or modifications) performed on such Leased Property in the
twelve (12) month period immediately preceding the subject alterations or modifications, would exceed One Million Dollars ($1,000,000) (in the case of alterations or modifications to hospital facilities) or Five Hundred Thousand Dollars
($500,000) (in the case of alterations or modifications to nursing center facilities or any other facility not operated as a hospital). “Capital Alterations” shall include, without limitation, (1) the construction of a new wing or new
story on a Leased Property, (2) the repair, replacement, restoration, remodeling or rebuilding of the existing improvements on a Leased Property or any portion thereof, where the purpose and effect of such work is to provide a functionally new
facility needed to provide services not previously offered, and (3) any expansion, construction, renovation or conversion in order to increase the bed capacity of the Facility located on a Leased Property, to change the purpose for which such
beds are utilized or to improve materially the quality of such Facility. 
  

 6 








 “Capital Alterations Cost”: The term “Capital Alterations Cost” shall mean the
cost of any Capital Alteration proposed to be made by Tenant at a Leased Property, whether or not paid for by Tenant or Lessor. Such cost shall include (a) the cost of construction of the Capital Alterations (including site preparation and
improvement, materials, labor, supervision, and certain related design, engineering and architectural services), the cost of any fixtures, the cost of construction financing and miscellaneous costs approved by Lessor, (b) if agreed to by Lessor
in writing, in advance, the cost of any land contiguous to a Leased Property that is (1) to become part of such Leased Property and (2) is purchased for the purpose of placing thereon the Capital Alterations or any portion thereof or of
providing means of access to such Capital Alterations or any existing improvements on such Leased Property or of providing parking facilities for such Capital Alterations or such existing improvements, including the cost of surveying the same,
(c) the cost of insurance, real estate taxes, water and sewage charges and other carrying charges for such Capital Alterations during construction, (d) the cost of title insurance, (e) reasonable fees and expenses of legal counsel,
(f) filing, registration and recording taxes and fees, (g) documentary stamp taxes, if any, and (h) all reasonable costs and expenses of Lessor and Tenant and, if agreed to in advance by Lessor, any Lending Institution which has
committed to finance the Capital Alterations, including, but not limited to, (i) the reasonable fees and expenses of their respective legal counsel, (ii) all printing expenses, (iii) the amount of any filing, registration and
recording taxes and fees, (iv) documentary stamp or transfer taxes, if any, (v) title insurance charges and appraisal fees, if any, (vi) rating agency fees, if any, and (vii) commitment fees, if any, charged by any Lending
Institution advancing or offering to advance any portion of the financing for such Capital Alterations. 
 “Code”: The
Internal Revenue Code of 1986, as amended. 
 “Combined Leased Properties”: The Leased Properties from time to time under
this Lease, together with the leased properties from time to time under the other Combined Leases. 
 “Combined Leases”: The
following that are from time to time in existence: the Second Amended and Restated Lease, the other Leases and any other lease that derives from the Second Amended and Restated Lease or the other Leases (e.g. any New Lease entered into pursuant to
Section 40.15 of this Lease (including, without limitation, any Separate Lease entered into pursuant to the terms of Section 22.7 hereof) or the corresponding sections of the Second Amended and Restated Lease or any of the
other Leases or of any such New Lease). 
 “Commencement Date”: As to the applicable Leased Property, the date set forth
opposite such Leased Property in the column “Commencement Date” on Exhibit B attached hereto. 
 “Condemnation,
Condemnor”: As defined in ARTICLE XV. 
 “Cost of Living Index”: The Consumer Price Index for All Urban
Consumers, U.S. City Average (1982-1984 = 100), published by the BLS, or such other renamed index. If the BLS changes the publication frequency of the Cost of Living Index so that a Cost of Living Index is not available to make a Base Rent
adjustment as specified in this Lease, the Base Rent adjustment shall be based on the percentage difference between the Cost of Living Index for the 

  

 7 








 
closest preceding month for which a Cost of Living Index is available and the Cost of Living Index for the same month of the preceding year as required by
this Lease. If the BLS changes the base reference period for the Cost of Living Index from 1982-84 = 100, the Base Rent adjustment shall be determined with the use of such conversion formula or table as may be published by the BLS. If the BLS
otherwise substantially revises, or ceases publication of, the Cost of Living Index, then a substitute index for determining Base Rent adjustments, issued by the BLS or by a reliable governmental or other nonpartisan publication, shall be reasonably
selected by Lessor and Tenant. 
 “Coverage Ratio”: As to any one or more of the Combined Leased Properties, the ratio of
the EBITDARM generated by such Combined Leased Property(ies) to Base Rent allocable thereto under the applicable Combined Leases, in each case for the four (4) full calendar quarters ending not less than sixty (60) days prior to the
occurrence of a Section 16.10.3.1 New Lease Transaction, in the case of Section 16.10.3.1, or prior to the date as of which the Coverage Ratio is being measured, in all other cases. 
 “CPI Increase”: For a particular Rent Calculation Year, the percentage increase (rounded to two (2) decimal places), if any, in
(a) the Cost of Living Index published for the February immediately preceding the commencement of such Rent Calculation Year, over (b) the Cost of Living Index published for the same month of the year preceding the year during which the
month referenced in subsection (a) above occurs. 
 “Date of Taking”: As defined in ARTICLE XV. 

“Disclosing Party”: As defined in Section 40.14. 
 “Disclosure Date”: As defined in Section 40.14. 
 “Disclosure Law”: As defined in Section 40.14. 
 “Disclosure Notice”: As defined in Section 40.14. 
 “Disclosure Notification Period”: As defined in Section 40.14. 
 “EBITDAR”: As to any particular Leased Property or Leased Properties, or any hospital, nursing center or other facility not covered by
this Lease (regardless of the identity of the landlord or tenant of any such other facility) for a particular period, the earnings before interest, taxes, depreciation, amortization and rent, attributable to such Leased Property or Leased Properties
or such other facility, as applicable, for such period, as determined in accordance with the customary methods, procedures and accounting principles from time to time used in the health care industry. 
 “EBITDARM”: As to any particular Leased Property or Leased Properties, or any hospital, nursing center or other facility not covered by
this Lease (regardless of the identity of the landlord or tenant of any such other facility) for a particular period, the earnings before interest, taxes, depreciation, amortization, rent and management fees, attributable to such Leased 

Property or Leased Properties or such other facility, as applicable, for such period, as determined in accordance with the customary methods, procedures and accounting
principles from time to time used in the health care industry. 
  

 8 








 “Effective Date”: Shall mean April 27, 2007. 
 “Encumbrance”: As defined in Section 38.1. 
 “Event of Default”: As defined in Section 16.1. 
 “Excess CGL/PL
Policies”: As defined in Section 13.11. 
 “Existing Ground Leases”: Those ground leases listed on
Schedule 2.1C attached hereto and made a part hereof, as the same may have been amended or modified in writing after the Existing Lease Effective Date with the written consent of Lessor and Tenant, each acting in its sole discretion.

 “Existing Lease Effective Date”: Shall mean April 20, 2001. 
 “Existing Master Lease”: As defined in the recitals hereto. 
 “Expired/Terminated Properties”: As defined in Section 40.16. 
 “Extended Term”: As defined in Section 19.1. 
 “Facility”: The facility being operated or proposed to be operated on the applicable Leased Property. 
 “Facility Default”: An Event of Default that relates directly to one or more of the Leased Properties and/or the Facilities operated thereon (such as, for example only and without limitation, an Event
of Default arising from a failure to maintain or repair, or to operate for the Primary Intended Use, or to maintain the required Authorizations for, one or more of the Facilities), as opposed to an Event of Default that, by its nature, does not
relate directly to any of the Leased Properties or Facilities (such as, for example only and without limitation, an Event of Default arising from a breach of Section 3.1(a)). 
 “Facility Mortgage”: As defined in Section 13.1. 
 “Facility Mortgagee”: As defined in Section 13.1. 
 “Facility Termination”: As defined in Section 40.3. 
 “Fair Market Added Value: The Fair Market Value (as hereinafter defined) of the applicable Leased Property (including all Capital
Alterations), less, if Tenant has performed and financed a Capital Alteration to add a new building(s) to such Leased Property, the Fair Market Value of such Leased Property determined as if any such new building(s) had not been constructed.

  

 9 








 “Fair Market Rental”: The annual amount per annum that a willing tenant would pay, and a
willing landlord would accept, at arm’s length, for leasing of the Leased Properties (or, if applicable, any one or more, but less than all, of the Leased Properties) for the period of the Term (including, without limitation, any Extended
Terms) remaining from and after the date as of which the Fair Market Rental is being determined (e.g. as of the commencement of an Extended Term, in the case of Section 19.2 and Section 19.3). The Fair Market Rental may
include therein such escalations of rent as would be paid by such a tenant, and accepted by such a landlord, as part of an arm’s length transaction entered into as of the aforesaid Fair Market Rental determination date; provided,
however, that, in addition to such other market factors as may be applicable in determining the Fair Market Rental, the Fair Market Rental shall be determined on the basis, and on the assumptions, that (a) the Fair Market Rental may not
include therein any rent, or method of rent calculation, that would adversely affect any landlord by virtue of it being a real estate investment trust or the ability of any such landlord to satisfy the requirements for maintaining its status as a
real estate investment trust (and, without limitation of the foregoing, the Fair Market Rental shall not include any rent that would fail to qualify as “rents from real property” for purposes of Section 856(d) of the Code),
(b) the Fair Market Rental amount is to be paid absolutely net to the aforesaid landlord, without any rights of deduction, set-off or abatement, (c) all of the Leased Properties as to which the Fair Market Rental is being determined are in
good condition and repair (given their respective ages and prevailing health care industry standards with respect to what is considered good condition and repair), without any deferred maintenance (but allowing for ordinary wear and tear), are in
material compliance with any and all applicable laws, codes, ordinances and regulations and have in full force and effect, for the benefit of the aforesaid tenant, the Facilities and the Leased Properties, any and all necessary or appropriate
material Authorizations for use thereof in accordance with the respective Primary Intended Uses applicable thereto, (d) the aforesaid tenant has complied, and shall be required to comply, with the requirements of this Lease, including, without
limitation, ARTICLE XXXVI hereof, (e) the respective replacement costs of the Leased Properties as to which Fair Market Rental is being determined are not determinative of the Fair Market Rental of such Leased Properties, and
(f) the aforesaid tenant shall have available to it, with respect to each Leased Property as to which the Fair Market Rental is being determined, such remaining Term as then remains, and such number of Extended Terms as then remain unexercised,
with respect to such Leased Property under the terms of this Lease. Notwithstanding anything to the contrary contained in this Lease, “Fair Market Rental” shall take into account, for each of the applicable Leased Properties, the market
conditions, market levels of EBITDARM, the ratio of market levels of EBITDARM to market levels of rent, and the actual levels of EBITDARM at the applicable Leased Properties, in each case that are prevailing or measured, as applicable, as of the
date as of which the Fair Market Rental is being determined, as well as historical levels of EBITDARM at the applicable Leased Properties (including the EBITDARM of the Leased Properties measured as of the Effective Date). 
  

 10 








 “Fair Market Value”: The price that a willing buyer not compelled to buy would pay a
willing seller not compelled to sell for the applicable Leased Property, including all Capital Alterations, and (a) assuming the same is unencumbered by this Lease, (b) determined in accordance with the appraisal procedures set forth in
ARTICLE XXXV or in such other manner as shall be mutually acceptable to Lessor and Tenant, and (c) not taking into account any reduction in value resulting from any indebtedness to which such Leased Property is subject except as
expressly provided hereinbelow. In determining such Fair Market Value the positive or negative effect on the value of the Leased Property attributable to the interest rate, amortization schedule, maturity date, prepayment penalty and other terms and
conditions of any encumbrance which is not removed at or prior to the closing of the transaction as to which such Fair Market Value determination is being made shall be taken into account. 
 “Fair Market Value Purchase Price”: The Fair Market Value of the Leased Property less the Fair Market Added Value. 
 “Fiscal Year”: The twelve (12) month period from January 1 to December 31. 
 “Final Appraiser”: As defined in Section 35.2. 
 “Fixed Term”: As defined in Section 1.2. 
 “Fixtures”: As defined in Section 1.1. 
 “Guarantor”: Each
subtenant that is an Affiliate of Tenant to which a Leased Property or any portion thereof is subleased, including, without limitation, as of the Effective Date, the Affiliates of Tenant that are referenced on Schedule 40.12 attached
hereto and incorporated herein. 
 “Hospital Competitor”: As defined in Section 7.2.7. 
 “Hospital Facility”: As defined in Section 7.2.7. 
 “IBNR claims”: As defined in Section 13.11. 
 “Impositions”: Shall mean for each applicable Leased Property, collectively, all taxes (including, without limitation, all taxes imposed under the laws of the State, as such laws may be amended from
time to time, and all ad valorem, sales and use, single business, gross receipts, transaction privilege, rent or similar taxes as the same relate to or are imposed upon any rents from the applicable Leased Property or upon Tenant or its business
conducted upon the applicable Leased Property, but excluding any tax based on the net income or net profit of Lessor derived from any such rents), assessments (including, without limitation, all assessments for public improvements or benefits,
whether or not commenced or completed prior to the Existing Lease Effective Date and whether or not to be completed within the Term), ground rents arising under any of the Existing Ground Leases, water, sewer or other rents and charges, excises, tax
levies, fees (including, without limitation, license, permit, inspection, authorization and similar fees), and all other governmental charges, in each case whether general or special, ordinary or extraordinary, or foreseen or unforeseen, of every
character in respect of the applicable Leased Property or any rents therefrom or the business conducted thereon by Tenant (including all 
  

 11 








 
interest and penalties thereon due to any failure in payment by Tenant), which at any time prior to, during or in respect of the Term hereof may be assessed
or imposed on or in respect of or be a lien upon (a) Lessor or Lessor’s interest in such Leased Property, (b) such Leased Property or any part thereof or any rent therefrom or any estate, right, title or interest therein, or
(c) any occupancy, operation, use or possession of, or sales from, an activity conducted on, or in connection with such Leased Property or the leasing or use of such Leased Property or any part thereof by Tenant; provided, however, nothing
contained in this Lease shall be construed to require Tenant to pay (1) any tax based on net income (whether denominated as a franchise or capital stock or other tax) imposed on Lessor or any other person or (2) any transfer, or net
revenue tax of Lessor or any other person or (3) any tax imposed with respect to the sale, exchange or other disposition by Lessor of the applicable Leased Property or the proceeds thereof, except to the extent that any tax, assessment, tax
levy or charge, which Tenant is obligated to pay pursuant to the preceding provisions of this definition and which is in effect at any time during the Term hereof is totally or partially repealed, and a tax, assessment, tax levy or charge set forth
in clause (1) or (2) is levied, assessed or imposed expressly in lieu thereof. 
 “Indemnity Agreement”: That
certain Agreement of Indemnity-Third Party Leases, dated as of April 30, 1998, from Tenant and its Affiliates to Ventas, Inc., which Indemnity Agreement remains in full force and effect in accordance with its terms and is hereby reaffirmed and
ratified. 
 “Insurance Requirements”: All terms of any insurance policy required by this Lease with respect to the
applicable Leased Property and all requirements of the issuer of any such policy. 
 “Kindred”: As defined in the preamble
hereof. 
 “known claim”: As defined in Section 13.11. 
 “Land”: As defined in Section 1.1. 
 “Lease”: As defined in the preamble hereof. 
 “Lease Guaranty”: A guaranty
of certain obligations of Tenant under this Lease executed and delivered by each Guarantor substantially in the form of Exhibit G annexed hereto. 
 “Lease Year”: Shall mean May 1 through April 30 of each year of the Term. 
 “Leased Improvements”; “Leased Property”; “Leased Properties”: Each as defined in Section 1.1. 
 “Leasehold Mortgage”: As defined in Section 22.2(a). 
 “Leasehold
Mortgagee”: As defined in Section 22.2(b). 
 “Leases”: Collectively, this Lease and all of those
certain leases listed in Exhibit E attached hereto. 
  

 12 








 “Legal Requirements”: As to the applicable Leased Property, all federal, state, county,
parish, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions affecting such Leased Property or the maintenance, construction, use, operation or alteration thereof, whether now or
hereafter enacted and in force, including, without limitation, (i) any licensure requirements, certification requirements under applicable federal and/or state cost reimbursement programs, including Medicare and Medicaid (provided the
applicable Facility participates in such reimbursement), building codes and zoning regulations, (ii) any which may (x) require repairs, modifications or alterations in or to such Leased Property or (y) in any way adversely affect the
use and enjoyment thereof, and (iii) all permits, licenses, certificates of need, authorizations and regulations necessary to operate such Leased Property for its Primary Intended Use. 
 “Lending Institution”: Any insurance company, federally insured commercial or savings bank, national banking association, savings and
loan association, credit union, employees’ welfare, pension or retirement fund or system, corporate profit sharing or pension trust, college or university, endowment fund, real estate investment trust, or other institutional lender or financial
enterprise, including, without limitation, any corporation qualified to be treated for federal tax purposes as a real estate investment trust, having a net worth of at least $50,000,000 acting on its own behalf or as agent on behalf of other Lending
Institutions. 
 “Lessor”: Ventas Realty, Limited Partnership, a Delaware limited partnership and its successors and
assigns. 
 “Lessor’s Management Group”: Shall mean Debra A. Cafaro, T. Richard Riney, Timothy A. Doman and Christian
Cummings. 
 “LIBO Rate”: On any day, the offered rate per annum for Dollar deposits in the London Interbank Offered Market
for contracts with a three-month term, as reported in The Wall Street Journal on the last Business Day of the calendar month immediately preceding such day. If The Wall Street Journal shall cease to report such offered rate, then the
LIBO Rate, on any day, shall be the aforesaid offered rate per annum as of the last Business Day of the calendar month immediately preceding such day, determined by Citibank, N.A., or any successor thereof, as the aforesaid offered rate per annum as
of such last Business Day. If the aforesaid offered rate is determined by reference to The Wall Street Journal, the same shall be based upon the effective rate per annum for the aforesaid contracts entered into such number of days prior to
the day for which the aforesaid offered rate is being reported by The Wall Street Journal as is used by The Wall Street Journal. If the aforesaid offered rate is determined based upon the rate determined by Citibank, N.A., or any
successor thereof, the same shall be based upon the effective rate per annum for the aforesaid contracts entered into as of approximately 11:00 a.m. (London time) two (2) Business Days prior to the day for which the aforesaid offered rate is
being determined by Citibank, N.A., or any successor thereof. 
 “Litigation Costs”: All costs reasonably incurred by Lessor
in connection with the enforcement of any provision of this Lease and/or in connection with any third-party claim against Lessor or any Leased Property arising on account of or in connection with any default or 

  

 13 








 
Event of Default hereunder by Tenant, including, without limitation, costs reasonably incurred by Lessor in investigating, settling and/or prosecuting claims
and for attorney’s and legal assistant fees and expenses, court costs and fees and consultant and witness fees and expenses. 
 “Master Lease Leased Properties”: The properties that, as of the Effective Date, were Leased Properties under the Second Amended and Restated Lease. 
 “Medicaid”: A state program of medical aid established under Title XIX of the Social Security Act of 1965, as amended, and any successor
statute thereto and any successor programs. 
 “Medicare”: The program of medical care benefits provided under Title XVIII
of the Social Security Act of 1965, as amended, and any successor statute thereto and any successor programs thereto. 
 “ML
Leases”: The following that are from time to time in existence: the Second Amended and Restated Lease and any other lease of any Master Lease Leased Property(ies) that derives from the Second Amended and Restated Lease (e.g. any New Lease
entered into pursuant to Section 40.15 of this Lease (including, without limitation, any Separate Lease entered into pursuant to the terms of Section 22.7 hereof) or the corresponding sections of the Second Amended and
Restated Lease or of any such New Lease). 
 “New Lease”: As defined in Section 40.15. 
 “1998 Plan of Reorganization”: As defined in Section 16.11. 
 “Non-Capital Alterations”: As defined in Section 10.4. 
 “Officer’s Certificate”: A certificate of Tenant signed by the chairman of the board of directors, the president, any vice
president, the secretary, the treasurer, the chief operating officer, the chief financial officer, the general counsel or any other officer authorized to so sign by the board of directors or by-laws of Tenant, or the general partner of Tenant or the
managing member of Tenant, as applicable, or any other person whose power and authority to act has been authorized by delegation in writing by any person duly authorized to make such delegation of authority. 
 “Operator”: As defined in the preamble hereof. 
 “Overdue Rate”: On any date, a rate equal to 2% per annum above the Prime Rate, but in no event greater than the maximum rate then permitted under applicable law, provided, however, that, upon
the occurrence of any Event of Default, the Overdue Rate, when applied to any Accrued Rent, Accrued Rent Interest or Unpaid Accrued Rent, shall equal, on any date, a rate equal to the LIBO Rate plus 700 basis points per annum, but in no event
greater than the maximum rate then permitted under applicable law. Interest at the aforesaid rates shall be determined for actual days elapsed based upon a 360 day year. 
 “Paragraph Seven Notification Period”: As defined in Section 40.14. 
  

 14 








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

 “Partial Expiration/Termination Days”: As defined in Section 40.16. 
 “Patient Revenues”: Revenues generated from the sale of goods or services at or through the Leased Properties, whether by Tenant or any
subtenant or licensee of Tenant, or any other party, which revenues are primarily derived from services provided to patients (including, without limitation, revenues received or receivable for the use of or otherwise by reason of all rooms, beds and
other facilities provided, meals served, services performed or goods sold at the Leased Properties, but excluding revenues received by Tenant as rent or other consideration from a permitted assignment of this Lease or any part thereof or a permitted
sublease of any Leased Property(ies) or any part thereof), and which revenues shall be measured and computed using substantially the same methodology as during the period between April 30, 1998 and the Existing Lease Effective Date and net of
contractual adjustments of governmental and other third party payors. 
 “Payment Date”: Any due date for the payment of the
installments of any component of Rent payable under this Lease. 
 “Permissible Reduction Percentage”: As defined in
Section 16.1. 
 “Permitted Alteration”: Any Capital Alteration or Non-Capital Alteration to a Facility or
Leased Property that is permitted pursuant to the terms of this Lease. 
 “Permitted Encumbrances”: (a) all easements,
covenants, conditions, restrictions, agreements and other matters with respect to the Leased Properties that are of record as of the Commencement Date; (b) all easements, covenants, conditions, restrictions, agreements and other matters with
respect to the Leased Properties, whether or not of record, that are executed by Tenant or approved or consented to in writing by Tenant; (c) any easement or utility agreement entered into by Lessor with respect to a Leased Property(ies) after
the Existing Lease Effective Date, subject to Tenant’s consent, in its sole discretion; (d) any agreement required pursuant to any Legal Requirement entered into by Lessor with respect to a Leased Property(ies) after the Existing Lease
Effective Date, subject to Tenant’s consent, not to be unreasonably withheld, conditioned or delayed; (e) any matter affecting title to the Leased Properties or any portion thereof that is permitted under Section 7.3 or
Section 9.2; and (f) any other matters affecting title to the Leased Properties or any portion thereof caused by Tenant or its assignees or sublessees or their respective agents or employees, provided, however, that,
for purposes of Section 24.1 below, “Permitted Encumbrances” shall not include any Superior Lease (other than the Existing Ground Leases), any Facility Mortgage or other lien created by Lessor or its agents or employees or any
Leasehold Mortgage and, for purposes of Section 8.3 below, “Permitted Encumbrances” shall not include any Superior Lease, any Facility Mortgage or other lien created by Lessor or its agents or employees or any Leasehold
Mortgage. 
  

 15 








 “Person”: Any individual, sole proprietorship, corporation, general partnership, limited
partnership, limited liability company or partnership, joint venture, association, joint stock company, bank, trust, estate, unincorporated organization, any federal, state, county, or municipal government (or agency or political subdivision
thereof), endowment fund or other form of entity. 
 “Plans and Specifications”: As defined in Section 10.1.

 “Previous Period Unreported Claims”: As defined in Section 13.1.4. 
 “Primary Intended Use”: As defined in Section 7.2.2. 
 “Prime Rate”: On any date, a rate equal to the annual rate on such date announced by Citibank, N.A., or any successor thereof, to be its
prime rate. 
 “Prior Period Base Rent”: As of any date after April 30, 2002, the Base Rent that was in effect
immediately prior to the commencement of the Rent Calculation Year containing such date. 
 “Property Transfer Date”: As
defined in Section 40.15. 
 “Purchase Option EBITDAR”: As defined in Section 16.12.5. 

“Qualified Arbitrator”: As defined in Section 22.6(c). 
 “Qualified Successor”: As defined in Section 40.3. 
 “Recipient”: As defined in Section 40.14. 
 “Reimbursement Period”: As defined in Section 40.3. 
 “REIT”:
As defined in Section 36.1.1. 
 “REIT Requirements”: As defined in Section 36.1.1. 
 “Renewal Group”: As defined in Section 19.1 hereof. 
 “Rent”: Collectively, Base Rent and Additional Charges (as defined in Section 3.3 hereof). 
 “Rent Calculation Year”: A period from May 1 of any year through April 30 of the following year. 
 “Second Amended and Restated Lease”: That certain Second Amended and Restated Master Lease Agreement No. 2 dated as of the
Effective Date by and among Ventas Realty, Limited Partnership, Kindred and Operator. 
 “Second Lease”: As defined in
Section 40.18. 
  

 16 








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

 “Section 16.10.1 Number”: As defined in Section 16.10.1. 
 “Section 16.10.2.3 Proviso”: As defined in Section 16.10.2.3. 
 “Section 16.10.3.2 Number”: As defined in Section 16.10.3.2. 
 “Section 16.10.3.3 Lease”: As defined in Section 16.10.3.3. 
 “Section 16.12 Notice”: As defined in Section 16.12.2. 
 “Section 40.3 Notice”: As defined in Section 40.3. 
 “Section 40.18 Date”: As defined in Section 40.18. 
 “Section 40.18 Lease”: As defined in Section 40.18. 
 “Senior Lender”: The lender(s) under the Tenant Credit Agreement from time to time. 
 “Senior Officer’s Certificate”: An Officer’s Certificate of Tenant signed by the chairman of the board of directors, the
president, the chief operating officer or the general counsel of Tenant, or a Person having such title or the equivalent thereof in the general partner or the managing member of Tenant. 
 “Separate Lease”: As defined in Section 22.7. 
 “SN Competitor”: As defined in Section 7.2.8. 
 “SN Facility”:
As defined in Section 7.2.8. 
 “State”: The State or Commonwealth in which the applicable Leased Property is
located. 
 “Sublease Rent Payments”: As defined in Section 25.1.7. 
 “Subsidiaries”: The corporations or other entities of which securities or similar ownership interests representing (i) ordinary
voting power to elect a majority of the board of directors or other persons performing similar functions or (ii) a majority of the economic interest therein, are at the time directly or indirectly owned by Tenant or any Guarantor (individually,
a “Subsidiary”). 
 “Superior Lease”: Any ground lease or other lease to which the applicable Leased Property is
subject. 
 “Superior Lessor”: The lessor under any ground lease or other lease to which the applicable Leased Property is
subject. 
  

 17 








 “Superior Mortgage”: As defined in Section 21.1. 
 “Superior Mortgagee”: As defined in Section 21.1. 
 “Suspension Period”: As defined in Section 40.14. 
 “Taking”: A taking or voluntary conveyance during the Term of all or part of the applicable Leased Property, or any interest therein or
right accruing thereto or use thereof, as the result of, or in settlement of any condemnation or other eminent domain proceeding affecting such Leased Property whether or not the same shall have actually been commenced. 
 “Tax Refund Escrow Agreement”: The Tax Refund Escrow Agreement referenced in the Bankruptcy Plan, as the same is hereafter amended,
modified or supplemented, in each case with the written consent of Lessor, in its sole discretion. 
 “Tenant”: As defined
in the preamble hereof. 
 “Tenant Credit Agreement”: That certain Amended and Restated Credit Agreement providing for the
issuance of $400,000,000 of indebtedness dated as of June 28, 2004 between Tenant and the lenders party thereto and Morgan Guaranty Trust Company of New York, as Collateral Agent and Administrative Agent, and any amendment thereof. 

“Tenant’s Personal Property”: All motor vehicles, machinery, equipment, furniture, furnishings, movable walls or partitions,
computers or trade fixtures or all other personal property, and consumable inventory and supplies, now owned or hereafter acquired by Tenant and located on the applicable Leased Property or used or useful in Tenant’s business on such Leased
Property, including without limitation all modifications, replacements, alterations and additions to such personal property installed at the expense of Tenant, except items, if any, included within the definition of Fixtures. 
 “Term”: Collectively for each applicable Leased Property, the Fixed Term and any Extended Terms, to the extent properly exercised
pursuant to the provisions of ARTICLE XIX, unless earlier terminated pursuant to the provisions of this Lease. 
 “Transferred Property(ies)”: As defined in Section 40.15. 
 “Transferred Property
Percentage(s)”: As defined in Section 40.15. 
 “Unavoidable Delays”: Delays due to strikes, lockouts,
inability to procure materials, power failure, acts of God, governmental restrictions, enemy action, civil commotion, fire, unavoidable casualty or other causes beyond the control of the party responsible for performing an obligation hereunder,
provided that lack of funds shall not be deemed a cause beyond the control of either party hereto unless such lack of funds is caused by the failure of the other party hereto to perform any obligations of such party, under this Lease, or any
guaranty of this Lease, including any obligation to provide financing undertaken by Lessor pursuant to ARTICLE X below. 
  

 18 








 “Unsuitable For Its Primary Intended Use”: A state or condition of the Facility located
at the applicable Leased Property such that, by reason of damage or destruction, or a partial taking by condemnation, in the good faith judgment of Tenant, the Facility cannot be operated on a commercially practicable basis for its Primary Intended
Use taking into account, among other relevant factors, the number of usable beds affected by such damage or destruction or partial taking; provided, however that such Facility shall not be deemed to be “Unsuitable For Its Primary
Intended Use” if such Leased Property can, within one (1) year after the occurrence of such damage, destruction or taking, be restored to substantially the same state and condition as existed immediately prior to such damage, destruction
or taking. 
 “Ventas Lessor”: A lessor that is Ventas, Inc. and/or Ventas Realty, Limited Partnership and/or any successor
to either of them (by merger or otherwise) and/or any Affiliate of Ventas, Inc. or Ventas Realty, Limited Partnership or any such successor. 
 ARTICLE III 
 Section 3.1 Rent. Tenant shall pay to Lessor, in lawful money of the United States of
America which shall be legal tender for the payment of public and private debts, at Lessor’s address set forth in Section 34.1 below or at such other place or to such other person(s), firm(s) or corporation(s) as Lessor from time to
time may designate in writing, Base Rent and Additional Charges during the Term, including, without limitation, any Extended Terms, as hereinafter provided. Lessor may, by written notice to Tenant at any time and from time to time, elect to require
that Rent (or portions thereof designated by Lessor) that is payable to Lessor hereunder be paid by wire transfer of immediately available funds to such wire transfer account(s) as Lessor may specify in writing. 
 (a) Base Rent. Base Rent shall be payable, in the manner provided in Section 3.1 above, in advance in equal, consecutive monthly
installments, on the first day of each calendar month of the Term, including, without limitation, any Extended Terms; provided, however, that the first and last monthly payments of Base Rent shall be prorated as to any partial month
(subject to adjustment as provided in Section 10.3(b)(iv) below). 
 (b) Intentionally omitted. 
 Section 3.2 Intentionally omitted. 
 Section 3.3 Additional Charges. In addition to Base Rent payable with respect to the Leased Properties, Tenant shall pay and discharge as and when due and payable the following (collectively “Additional
Charges”): 
 (1) Impositions. Tenant shall pay all Impositions before any fine, penalty, interest or cost may
be added for non-payment, such payments to be made directly to the taxing authorities where feasible or, if otherwise required by law, to Lessor, and shall promptly upon request, furnish to Lessor copies of official receipts or other satisfactory
proof evidencing such payments. If any such Imposition may, at the option of the taxpayer, lawfully be paid in installments 

  

 19 








 
(whether or not interest shall accrue on the unpaid balance of such Imposition), subject to the terms of any applicable Facility Mortgage, Tenant may
exercise the option to pay same (and any accrued interest on the unpaid balance of such Imposition) in installments and, in such event, shall pay such installments during the Term as the same may become due and before any fine, penalty, premium,
further interest or cost may be added thereto. 
 (2) Utility Charges. Tenant shall pay all charges for electricity,
power, gas, oil, water, sanitary and storm sewer, refuse collection, medical waste disposal and other utilities used or consumed in connection with each Leased Property during the Term. 
 (3) Insurance Premiums. Tenant shall pay all premiums for the insurance coverage required to be maintained pursuant to
ARTICLE XIII hereof. 
 (4) Other Charges. Tenant shall pay all other amounts, liabilities and obligations
that Tenant assumes or agrees to pay under this Lease, including, without limitation, all agreements to indemnify Lessor under Section 12.1 and Section 24.1 and any and all fees, costs and expenses incurred by Tenant in the
operation of its business at the Facility. 
 (5) Late Payment of Rent. If any installment of Base Rent or Additional
Charges (but only as to those Additional Charges which are payable directly to Lessor or Lessor’s agent or assignee) shall not be paid within five (5) Business Days after its due date, Tenant will pay to Lessor on demand a late charge (to
the extent permitted by law) computed at the Overdue Rate (or at the maximum rate permitted by law, whichever is the lesser) on the amount of such installment, from the due date of such installment to the date of payment thereof. 
 To the extent that Tenant pays any Additional Charges to Lessor pursuant to any requirement of this Lease, Tenant shall be relieved of its obligation to
pay such Additional Charges to the entity to which they would otherwise be due. If any Facility Mortgagee shall so require, or if any Additional Charges shall not be paid to a third party payee within five (5) Business Days after its due date,
Lessor may at any time thereafter, at Lessor’s option, require Tenant to deposit into an escrow account under the sole dominion and control of Lessor (or the applicable Facility Mortgagee), on the first day of each and every month, an amount
sufficient to insure that such escrow account shall contain an amount sufficient to make such payment on its next due date, in which event Lessor shall make all future payments for such expense from the escrow account. In the event of any failure by
Tenant to pay any Additional Charges when due, Tenant shall promptly pay and discharge, as Additional Charges, every fine, penalty, interest and cost that may be added for non-payment or late payment of such items. Lessor shall have all legal,
equitable and contractual rights, powers and remedies provided either in this Lease or by statute or otherwise in the case of non-payment of Rent. 
 Section 3.4 Survival. Tenant’s obligation to pay any Rent owing hereunder with respect to any period on or prior to the expiration or termination of this Lease (including, without limitation, any Extended Terms), as
this Lease applies to any or all of the Leased Properties, shall survive any such expiration or termination. 
  

 20 








 Section 3.5 Net Lease. The Rent shall be paid absolutely net to Lessor, without any
rights of deduction, set-off or abatement, so that this Lease shall yield to Lessor the full amount of the installments of Base Rent and Additional Charges, throughout the Term, including, without limitation, any Extended Terms. This Lease is
intended to be and shall be construed as an absolutely net lease pursuant to which Lessor shall not, under any circumstances or conditions, whether presently existing or hereafter arising, and whether foreseen or unforeseen by the parties, be
required to make any payment or expenditure of any kind whatsoever or be under any other obligation or liability whatsoever, except as expressly set forth herein. 
 ARTICLE IV 
 Section 4.1 Payment of Impositions. Subject to
ARTICLE XII relating to permitted contests, Tenant shall pay all Impositions as set forth in Section 3.3. Tenant’s obligation to pay such Impositions shall be deemed absolutely fixed upon the date such Impositions become
a lien upon the Leased Property or any part thereof. Lessor, at its expense, shall, to the extent permitted by applicable law, prepare and file all tax returns and reports as may be required by governmental authorities in respect of Lessor’s
net income, gross receipts, franchise taxes and taxes on its capital stock, and Tenant, at its expense, shall, to the extent permitted by applicable laws and regulations, prepare and file all other tax returns and reports in respect of any
Imposition as may be required by governmental authorities. If any refund shall be due from any taxing authority in respect of any Imposition paid by Tenant, the same shall be paid over to or retained by Tenant if no Event of Default shall have
occurred hereunder and be continuing. Any such funds retained by Lessor due to an Event of Default shall be applied as provided in ARTICLE XVI. Lessor and Tenant shall, upon request of the other, provide such data as is maintained by the
party to whom the request is made with respect to the Leased Property as may be necessary to prepare any required returns and reports. In the event governmental authorities classify any property covered by this Lease as personal property, Tenant
shall file all personal property tax returns in such jurisdictions where it may legally so file. Lessor, to the extent it possesses the same, and Tenant, to the extent it possesses the same, will provide the other party, upon request, with cost and
depreciation records necessary for filing returns for any property so classified as personal property. Where Lessor is legally required to file personal property tax returns, Tenant will be provided with copies of assessment notices indicating a
value in excess of the reported value in sufficient time for Tenant to file a protest. Tenant may, upon notice to Lessor, at Tenant’s option and at Tenant’s sole cost and expense, protest, appeal, or institute such other proceedings as
Tenant may deem appropriate to effect a reduction of real estate or personal property assessments and Lessor, at Tenant’s expense as aforesaid, shall fully cooperate with Tenant in such protest, appeal, or other action (including, without
limitation, signing all required forms and documents reasonably necessary for Tenant to file and prosecute such appeal, protest or other action), provided that Tenant shall indemnify Lessor from and against all losses, claims, damages, costs and
expenses (including, without limitation, reasonable attorneys’ fees) arising after the Existing Lease Effective Date suffered or incurred by Lessor and caused by such cooperation, including, without limitation, signing or providing any such
forms and documents). Billings for reimbursement by Tenant to Lessor of personal property taxes shall be accompanied by copies of a bill therefor and payments thereof which identify the personal property with respect to which such payments are made.

  

 21 








 Section 4.2 Notice of Impositions. Lessor shall give prompt notice to Tenant of all
Impositions payable by Tenant hereunder of which Lessor at any time has knowledge, but Lessor’s failure to give any such notice shall in no way diminish Tenant’s obligations hereunder to pay such Impositions. 
 Section 4.3 Adjustment of Impositions. Impositions imposed in respect of the tax-fiscal period during which the Term terminates or
expires shall be adjusted and prorated between Lessor and Tenant, whether or not such Imposition is imposed before or after such termination or expiration, and Tenant’s obligation to pay its prorated share thereof shall survive such termination
or expiration. 
 ARTICLE V 
 Section 5.1 No Termination, Abatement, etc. Except as otherwise specifically provided in this Lease, Tenant, to the extent permitted by law, shall remain bound by this Lease in accordance with its terms and shall neither
take any action without the consent of Lessor to modify, surrender or terminate the same, nor seek nor be entitled to any abatement, deduction, deferment or reduction of Rent, or set-off against the Rent, nor shall the respective obligations of
Lessor and Tenant be otherwise affected by reason of (a) any damage to, or destruction of, any Leased Property or any portion thereof from whatever cause or any Taking of any Leased Property or any portion thereof, (b) the interruption or
discontinuance of any service or utility servicing any Leased Property, (c) the lawful or unlawful prohibition of, or restriction upon, Tenant’s use of any Leased Property, or any portion thereof, the interference with such use by any
person, corporation, partnership or other entity, or by reason of eviction by paramount title, (d) any claim which Tenant has or might have against Lessor or by reason of any default or breach of any warranty by Lessor under this Lease or any
other agreement between Lessor and Tenant, or to which Lessor and Tenant are parties, (e) any bankruptcy, insolvency, reorganization, composition, readjustment, liquidation, dissolution, winding up or other proceedings affecting Lessor or any
assignee or transferee of Lessor, (f) any revocation, suspension or non-renewal of any license, permit, approval or other Authorization necessary to operate any Facility, (g) any withholding, non-payment, reduction or other adverse change
respecting any Medicare, Medicaid or other reimbursements due or available to Tenant with respect to any Facility, or (h) for any other cause whether similar or dissimilar to any of the foregoing other than a discharge of Tenant from any such
obligations as a matter of law. Tenant hereby specifically waives all rights, arising from any occurrence whatsoever, which may now or hereafter be conferred upon it by law to (i) modify, surrender or terminate this Lease or quit or surrender
the Leased Property or any portion thereof, or (ii) entitle Tenant to any abatement, reduction, suspension or deferment of the Rent or other sums payable by Tenant hereunder. The obligations of Lessor and Tenant hereunder shall be separate and
independent covenants and agreements and the Rent and all other sums payable by Tenant hereunder shall continue to be payable in all events unless the obligations to pay the same shall be terminated by termination of this Lease as to any Leased
Property other than by reason of an Event of Default. 
  

 22 








 ARTICLE VI 
 Section 6.1 Ownership of the Leased Properties. Tenant acknowledges that the Leased Properties are the property of Lessor and that Tenant has only the right to the exclusive possession and use of
the Leased Properties upon and subject to the terms and conditions of this Lease. Notwithstanding anything to the contrary contained in this Lease, in the case of any easement or other rights that are appurtenant to any property owned by Lessor,
Tenant agrees that Lessor does not make any representation or warranty relative to Lessor’s title thereto or whether such appurtenances are encumbered, and Lessor shall not be obligated to discharge any liens or encumbrances with respect to, or
otherwise to defend, Lessor’s right, title and interest, if any, in any such appurtenances. Tenant agrees that such appurtenances shall constitute Permitted Encumbrances, as to which Tenant shall have the obligations set forth in
Section 8.3 and Section 24.1 of this Lease, provided that Tenant shall not be obligated to defend or preserve any such appurtenances against any mortgages or other liens created by the owner of the property burdened by the
aforesaid appurtenances that are senior in priority to Lessor’s aforesaid appurtenant rights. 
 Section 6.2
Tenant’s Personal Property. Tenant may (and shall as provided hereinbelow), at its expense, install, affix or assemble or place on any parcels of the Land or in any of the Leased Improvements, any items of Tenant’s Personal
Property and Tenant shall, subject to the conditions set forth below and except for any Tenant’s Personal Property that is purchased by Lessor pursuant to Section 37.2 below, remove the same upon the expiration or any prior
termination of the Term. Tenant shall provide and maintain during the entire Term all such Tenant’s Personal Property as shall be necessary in order to operate each Facility in compliance with all licensure and certification requirements, in
compliance with all applicable Legal Requirements and Insurance Requirements and otherwise in accordance with customary practice in the industry for the Primary Intended Use. Lessor acknowledges that Leasehold Mortgagee has a security interest in
Tenant’s Personal Property and, upon the expiration or earlier termination of this Lease as it relates to a Leased Property, Lessor agrees to permit Leasehold Mortgagee to enter on such Leased Property in order to remove such Tenant’s
Personal Property, so long as Leasehold Mortgagee, at no expense to Lessor, repairs or causes to be repaired, any damage to such Leased Property caused by any such removal, and further agrees to subordinate, and hereby subordinates, to the lien of
Leasehold Mortgagee on such Tenant’s Personal Property any lien Lessor has thereon. All of Tenant’s Personal Property not removed by Tenant or Leasehold Mortgagee within twenty-one days following the expiration or earlier termination of
this Lease with respect to the applicable Leased Property where such Tenant’s Personal Property is located or sold to Lessor pursuant to Section 37.2 below shall be considered abandoned by Tenant and Leasehold Mortgagee and may be
appropriated, sold, destroyed or otherwise disposed of by Lessor without first giving notice thereof to Tenant or Leasehold Mortgagee and without any payment to Tenant or Leasehold Mortgagee and without any obligation to account therefor or
otherwise dispose of the same in accordance with applicable law. Tenant will, at its expense, restore such Leased Property to the condition required by Section 9.1(d), including repair of all damage to the Leased Property caused by the
removal of Tenant’s Personal Property, whether effected by Tenant, Leasehold Mortgagee or Lessor. 
  

 23 








 ARTICLE VII 
 Section 7.1 Condition of the Leased Property. Tenant acknowledges receipt and delivery of possession of each Leased Property and that Tenant has examined and otherwise has knowledge of the condition
of the Leased Property prior to the execution and delivery of this Lease and has found the same to be in good order and repair and satisfactory for its purposes hereunder. Tenant is leasing the Leased Property “as is” in its present
condition. Tenant waives any claim or action against Lessor in respect of the condition of the Leased Property. LESSOR MAKES NO WARRANTY OR REPRESENTATION EXPRESS OR IMPLIED, IN RESPECT OF THE LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS
FITNESS FOR USE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY TENANT. TENANT ACKNOWLEDGES THAT
THE LEASED PROPERTY HAS BEEN INSPECTED BY TENANT AND IS SATISFACTORY TO IT. 
 Section 7.2 Use of the Leased Property.

 Section 7.2.1 Tenant shall maintain or cause to be maintained all licenses, permits, approvals and other
Authorizations needed to use and operate for its Primary Intended Use (or any other use permitted under the terms of this Lease) each Leased Property and the Facility located at each such Leased Property under and in accordance with all applicable
local, state and federal laws and all applicable state and federal programs including but not limited to appropriate certifications for reimbursement and licensure. All of such Authorizations shall, to the maximum extent permitted by law, relate and
apply exclusively to one or more of the Leased Properties and/or the Facilities operated thereon. Tenant acknowledges and agrees that, subject to applicable law, the certificates of need issued for the Facilities are appurtenant to such Facilities,
both during and following the termination or expiration of the Term. In jurisdictions where the certificate of need is issued to Tenant or its subtenant, as the Facility operator, Tenant agrees that it shall cooperate with Lessor, in accordance with
Section 40.3 hereof, to turn over all of Tenant’s rights in connection with such certificate of need to Lessor or its designee. 
 Section 7.2.2 After the Commencement Date and during the entire Term, Tenant shall use each Leased Property and the Leased Improvements thereof as a hospital or a nursing center and each Facility that is
being used as a hospital on the Commencement Date shall continue to be used as a hospital during the entire Term and each Facility being used as a nursing center on the Commencement Date shall continue to be used as a nursing center during the
entire Term (such use being the applicable Leased Property’s “Primary Intended Use”). Tenant shall not use the applicable Leased Property or any portion thereof for any other use without the prior written consent of Lessor,
which consent shall not be unreasonably withheld, delayed or conditioned. No use shall be made or permitted to be made of the applicable Leased Property, and no acts shall be done, that will cause the cancellation of any insurance policy covering
such Leased Property or any part thereof, nor shall Tenant sell or otherwise provide to occupants or patients therein, or permit to be kept, used or sold in or about such Leased Property any article which may be prohibited by law or by the standard
form of fire insurance policies, or any other 

  

 24 








 
insurance policies required to be carried hereunder, or fire underwriters regulations. Tenant shall, at its sole cost, comply with all of the requirements
pertaining to the applicable Leased Property or other improvements of any insurance board, association, organization or company necessary for the maintenance of insurance, as herein provided, covering such Leased Property and Tenant’s Personal
Property. 
 Section 7.2.3 Tenant shall during the Term operate continuously each Leased Property in accordance
with all applicable federal, state and local laws as a provider of health care services in accordance with its Primary Intended Use and maintain its certifications for reimbursement and licensure and its accreditation, if compliance with
accreditation standards is required to maintain the operations of the Facility and if a failure to comply would adversely affect operations of the Facility. 
 Section 7.2.4 Tenant shall not commit or suffer to be committed any waste on any Leased Property, or in any Facility, nor
shall Tenant cause or permit any nuisance thereon. Tenant shall not take or omit to take any action, the taking or omission of which may materially impair the value or the usefulness of such Leased Property or any part thereof for its Primary
Intended Use. Without limitation of the foregoing provisions, Tenant shall not (a) enter into any contract, agreement or other instrument, or establish any other arrangement, relating to the operation, repair, maintenance, replacement,
construction, alteration, insuring, assignment or subletting, or otherwise affecting the value or usefulness, of any Leased Property or any part thereof, whether with Affiliates of Tenant or any other Person, that is on non-market or non-arm’s
length terms and conditions (provided, however, that, notwithstanding the foregoing, Tenant may enter into contracts, agreements or other instruments, or enter into other arrangements, that are on non-market or non-arm’s length terms and
conditions relative to a particular Facility provided and on the condition that the same will, in the reasonable business judgment of Tenant, have a de minimus impact on the value, usefulness, operations, EBITDAR and EBITDARM of such Facility) or
(b) require any Leased Property to bear or pay, or allocate to any Leased Property for accounting or other purposes (including, without limitation, the determination of EBITDAR or EBITDARM for any Leased Property), a share of any costs or
expenses that relate to such Leased Property and any other property (including, without limitation, other Combined Leased Properties) that is non-market or otherwise constitutes a disproportionate share of such costs and expenses under the
applicable facts and circumstances. 
 Section 7.2.5 Tenant shall neither suffer nor permit any Leased Property or
any portion thereof, including any Capital Alteration whether or not financed by Lessor, or Tenant’s Personal Property, to be used in such a manner as (i) might reasonably tend to impair Lessor’s (or Tenant’s, as the case may be)
title thereto or to any portion thereof, or (ii) may reasonably make possible a claim or claims of adverse usage or adverse possession by the public, as such, or of implied dedication of the applicable Leased Property or any portion thereof.

 Section 7.2.6 Nothing contained in this Section 7.2 shall be deemed to prevent Tenant from
(i) voluntarily withdrawing from the Medicaid program, and voluntarily de-activating its certification for participation therein, as the same apply to a Facility(ies), or (ii) voluntarily reducing the number of beds at a Facility(ies) as
to which a certification for 

  

 25 








 
reimbursement under the Medicaid program is applicable (but without affecting Tenant’s certification for participation in the Medicaid program as to any
such Facility(ies) and without reducing the number of beds at any Facility(ies) as to which a certification for participation in the Medicaid program is applicable below any legally required minimum number of beds), or (iii) voluntarily
reducing the number of beds at a Facility(ies) as to which a certification for reimbursement under the Medicare program is applicable (but without affecting Tenant’s certification for participation in the Medicare program as to any such
Facility(ies) and without reducing the number of beds at any Facility(ies) as to which a certification for participation in the Medicare program is applicable below any legally required minimum number of beds), in each case if and so long as, in
accordance with any and all laws, statutes, rules, regulations and orders applicable to the Medicaid and Medicare programs and certifications for participation therein and to any such Facility(ies), Tenant or any successor operator of such
Facility(ies) may at any time at its election, without the necessity of any governmental approval or additional Authorization (other than routine governmental re-inspections of such Facility(ies) and any ministerial approvals and other
Authorizations), as applicable depending upon whether subsection (i), (ii) and/or (iii) above is applicable, (a) promptly rejoin the Medicaid program, and re-activate its certification for participation in the Medicaid program, at any
such Facility(ies) and/or (b) promptly re-activate its certification for participation in the Medicaid program and/or Medicare program, as applicable, as to any beds as to which a voluntary reduction under subsection (ii) and/or
(iii) above is applicable. At the time, and as a condition, of any such voluntary withdrawal and de-activation, or voluntary reduction, by Tenant and thereafter within twenty (20) days after receipt of a written request therefor from
Lessor from time to time (but not more often than twice in any calendar year, unless, after Lessor has made two (2) such requests in a calendar year, a change(s) in Legal Requirements becomes effective, or Lessor obtains knowledge of other
facts or circumstances, suggesting a possible violation of this Section 7.2.6), Tenant shall deliver to Lessor a Senior Officer’s Certificate, in form and substance reasonably satisfactory to Lessor, certifying that Tenant has made
diligent inquiry relative to the applicable Legal Requirements and has consulted with its legal counsel and, based on the foregoing, certifies that Tenant has complied, and continues to comply, with the provisions of this Section 7.2.6
in connection with such voluntary withdrawal and de-activation and/or voluntary reduction. 
 Section 7.2.7
Notwithstanding anything to the contrary contained in this Section 7.2, in the case of each Facility that is operated as a hospital as the Primary Intended Use (a “Hospital Facility”), Lessor agrees that, subject to
the requirements of this Section 7.2.7, a portion of the licensed beds at such Hospital Facility may be converted from being beds that are licensed for the delivery of hospital care into beds that are licensed for the delivery of skilled
nursing care. Conversion of licensed beds as aforesaid shall be permitted at a particular Hospital Facility provided and on the condition that all of the following requirements are satisfied: 
 (a) If Tenant desires to convert licensed beds at a Hospital Facility as permitted in this Section 7.2.7, not less than thirty
(30) days prior to commencing to seek any necessary Authorizations therefor and/or making any Alterations required in connection therewith, Tenant shall so notify Lessor in writing, and such notice shall include therein, or have delivered
therewith, (i) detailed descriptions of (w) (1) the licensed bed changes and conversions proposed 

  

 26 








 
by Tenant, including, without limitation, Tenant’s projected timetable, and projected completion date, for such licensed bed changes and conversions,
(2) the number of beds licensed for the delivery of hospital care that are to be converted to beds licensed for the delivery of skilled nursing care, (3) Tenant’s plans for obtaining the necessary Authorizations for such conversions
(including, without limitation, whether and to what extent Tenant intends and expects to accomplish such conversions through the voluntary removal from service (“banking”) of the aforesaid hospital care beds as described below and, if not,
why such banking will not be utilized by Tenant), (4) which specific Authorizations Tenant expects it will need (e.g. new Medicare and/or Medicaid certifications, new licenses for skilled nursing care beds, etc.), (5) Tenant’s
projected timetable for obtaining all necessary Authorizations and (6) whether and to what extent Tenant intends and expects to sell any such hospital care beds as described below, (x) the Permitted Alterations to the affected Hospital
Facility that Tenant intends to make in connection with such conversions, and (y) Tenant’s projections, budgets and/or other estimates of the cost of the aforesaid Permitted Alterations and of all other costs of implementing such changes
and conversions and of the projected impact of such changes and conversions upon the EBITDAR of the affected Hospital Facility (broken down by line item) and upon Tenant’s earnings per share, (ii) evidence reasonably satisfactory to Lessor
establishing and demonstrating that the proposed changes and conversions will satisfy all of the requirements of this Section 7.2.7, and (iii) a Senior Officer’s Certificate certifying that Tenant has made diligent inquiry and
has consulted with its legal counsel and, based upon the foregoing, certifying that the licensed bed changes and conversions proposed by Tenant will satisfy all of the requirements of this Section 7.2.7, that Tenant expects to accomplish
such licensed bed changes and conversions without relying upon the proviso contained in subsection (b)(i) below (or, if Tenant expects to rely upon such proviso, so certifying and further certifying that the requirements of such proviso shall
be satisfied by Tenant in a timely manner) and that the information contained in the aforesaid notice or delivered therewith is true and correct in all material respects. Tenant shall further submit and deliver to Lessor, promptly following
Lessor’s request therefor, such supplemental information and documentation relative to the proposed licensed bed changes and conversions as Lessor may reasonably request from time to time; 
 (b)(i) The aggregate number of beds that are licensed at such Hospital Facility for the delivery of hospital care and, as and to the
extent permitted by this Section 7.2.7, skilled nursing care must at all times be equal to or greater than (x) the number of licensed beds that, if not for the provisions of this subsection (b)(i), Tenant would be obligated to
maintain at such Hospital Facility in order to avoid causing an Event of Default to arise under Section 16.1(m) hereof (exclusive of Section 16.1(m)(v) hereof) (the “Applicable Required Number of Beds”),
minus (y) twenty percent (20%) of the amount, if any, by which the Applicable Required Number of Beds at such Hospital Facility exceeds the number of beds that are licensed at such Hospital Facility for the delivery of hospital care
(provided, however, that, for purposes of this subsection (b)(i) and Section 16.1(m) hereof, no Event of Default shall be deemed to exist under such Section 16.1(m) if (1) the aforesaid aggregate number of licensed
beds at such Hospital Facility (A) falls below the required number of licensed beds calculated as provided in subsections (x) and (y) above and (B) is restored and returned to, and thereafter maintained at, an aggregate number of
licensed beds at such Hospital Facility that is equal to or greater than the 

  

 27 








 
required number of licensed beds calculated as provided in subsections (x) and (y) above within one hundred-eighty (180) days after the
condition referenced in subsection (x) first arises and (2) during any period that the condition referenced in subsection (i)(1)(A) above exists with respect to such Hospital Facility, the condition referenced in such
subsection (i)(1)(A) of this Lease, or in the corresponding Section 7.2.7(b)(i)(1)(A) of any other ML Lease, exists with respect to not more than one (1) other Hospital Facility that is included within the Master Lease Leased
Properties that remain subject to any of the ML Leases) (For example, assume that (W) a particular Hospital Facility has 100 beds licensed for the delivery of hospital care, (X) the Applicable Required Number of Beds for such Hospital
Facility is 90 licensed beds, (Y) Tenant delicenses or sells 30 beds licensed for the delivery of hospital care in compliance with all of the requirements of this Section 7.2.7 (other than this subsection (b)(i)) and
(Z) the condition referenced in subsection (i)(1)(A) of this Lease, and in the corresponding Section 7.2.7(b)(i)(1)(A) of all other ML Leases, exists with respect to no other Hospital Facility included within the Master Lease
Leased Properties that remain subject to any of the ML Leases, then, pursuant to this Section 7.2.7(b)(i), the aggregate number of licensed beds at such Hospital Facility must at all times (or, if the above-described proviso is
applicable, then, before the expiration of the time frame referenced in subsection (B) above) be equal to or greater than 86 licensed beds (90 beds – (20% x (90 beds – 70 beds)) = 90 beds – (20% x 20 beds) = (90 beds – 4
beds) = 86 licensed beds), so that such Hospital Facility would need to obtain licensure for 16 beds licensed for the delivery of skilled nursing care, to go with the remaining 70 beds licensed for the delivery of hospital care, in order to comply
with this subsection (b)(i)), and (ii) no other Event of Default shall exist under this Lease; 
 (c) The number of beds
that are licensed for the delivery of hospital care at such Hospital Facility must at all times be equal to or greater than the minimum number of hospital care beds that is required at such Hospital Facility as set forth on
Schedule 7.2.7 attached hereto and made a part hereof; 
 (d) The aggregate number of beds at such Hospital
Facility, and at all other Hospital Facilities that are included within the Master Lease Leased Properties and remain subject to any of the ML Leases, that are licensed for the delivery of hospital care must at all times be equal to or greater than
ninety percent (90%) of the aggregate number of licensed beds, as of the Commencement Date as shown on Schedule 16.1(m)(A) of the applicable ML Lease(s) of such Hospital Facilities, at all such Hospital Facilities; 
 (e) The requirements of subsection (m) hereof must at all times be satisfied; 
 (f) Any conversion of licensed beds that occurs with respect to a Hospital Facility pursuant to the terms of this
Section 7.2.7 must be completed (i.e. in accordance with the requirements of this Section 7.2.7, (i) beds licensed for the delivery of hospital care have been sold or delicensed, (ii) new licensure for beds licensed
for the delivery of skilled nursing care has been obtained (and, if the proviso set forth in subsection (b) (i) above has been relied upon by Tenant, the number of licensed beds must have been restored and returned to the number of
licensed beds required as provided in subsection (b)(i)(1)(B) above), and (iii) the capital expenditures, alterations, modifications and other improvements required pursuant to subsection (j) hereof have been completed) not later than
eighteen (18) months prior to the then applicable Expiration Date for such Hospital Facility; 
  

 28 








 (g) To the extent reasonably practicable, Tenant shall accomplish any conversion
permitted under this Section 7.2.7, and Tenant shall use commercially reasonable efforts to accomplish any such conversion, by (i) obtaining new licensure for the beds that are to be licensed for the delivery of skilled nursing care
in accordance with all applicable Legal Requirements and (ii) voluntarily removing from service (“banking”) hospital care beds in accordance with the requirements of Section 16.1(m)(i) hereof; 
 (h) Insofar as Tenant is unable, despite its commercially reasonable efforts, to accomplish any conversion permitted under this
Section 7.2.7 in accordance with subsection (g) above, then, prior to delicensing hospital care beds in compliance with this Section 7.2.7, Tenant may sell that number of beds that are licensed for the delivery of
hospital care as will not cause a violation of subsections (c), (d), (e), (f) and (g) above (with eighty percent (80%) of the net proceeds after out-of-pocket expenses received by Tenant from any such sale to be shared with, and paid
to, Lessor within ten (10) Business Days after the date that any such proceeds are received by Tenant), and, in such regard, Tenant agrees that it shall not directly or indirectly cause any such hospital care beds to be sold or otherwise
transferred to any entity in which Tenant has any direct or indirect financial interest, except with Lessor’s prior written consent, in its sole discretion. At Tenant’s option, Tenant may elect not to attempt to sell the aforesaid beds or
to cease its efforts to sell the aforesaid beds, and, in such event, Tenant shall promptly so notify Lessor and Lessor shall thereafter be entitled, at its option for a period of sixty (60) Business Days from receipt of Tenant’s aforesaid
notice (and, in addition to such sixty (60) Business Days, such additional time period as may be necessary to obtain any necessary regulatory approvals for any proposed sale, so long as Lessor demonstrates reasonably diligent efforts to obtain
such regulatory approvals), to attempt to sell any or all of the aforesaid beds, and, if it succeeds in gaining such regulatory approvals and in making any such sale, Lessor shall be entitled to retain all proceeds from any such sale, subject, in
the case of any such sale of beds by Lessor to a person or entity (a “Hospital Competitor”) that intends to license and use the purchased beds at a hospital that competes locally with the Hospital Facility from which such purchased
beds arose or another hospital facility of Tenant or its Affiliates, to the following additional requirements and conditions: (w) before completing any such sale, Lessor shall first notify Tenant in writing of the material terms of the Hospital
Competitor’s purchase offer for such beds, including a copy of any letter of intent; (x) Tenant shall have ten (10) Business Days following receipt of such notice to notify Lessor in writing that Tenant desires to purchase such beds
on the purchase offer terms specified in Lessor’s aforesaid notice; (y) if Tenant so notifies Lessor of its desire to purchase such beds, Lessor shall (1) notify Tenant in writing that (A) it has decided not to sell such beds, in
which event Tenant shall immediately cause the delicensure of such beds, or (B) it has decided to continue its efforts to sell such beds, in which event Lessor shall have an additional five (5) Business Days after receipt of Tenant’s
aforesaid notice of its desire to purchase such beds within which to sell such beds to a person or entity that is not a Hospital Competitor or to deliver to Tenant another notice of a Hospital Competitor’s purchase offer pursuant to subsection
(w) above (and, thereupon, subsections (x), (y) and (z) of this subsection (h) shall again apply (except that the time frame for Tenant’s response pursuant to 

  

 29 








 
any reapplication of such subsection (x) shall be shortened from ten (10) Business Days to five (5) Business Days (the time frame for any
reapplication of subsection (y)(1)(B) above shall remain five (5) Business Days))), or (2) notify Tenant in writing that Lessor will sell such beds to Tenant, in which event (A) Lessor shall sell, and Tenant shall purchase, such
beds on the purchase offer terms specified in Lessor’s aforesaid notice, (B) Lessor shall be entitled to retain all proceeds from such sale and (C) Tenant shall immediately cause the delicensure of such beds (and, if Lessor does not
provide a notice to Tenant pursuant to subsection (1) or (2) above within five (5) Business Days following Lessor’s receipt of Tenant’s notice evidencing its desire to purchase such beds, Lessor shall be deemed to have
elected to sell such beds as provided in subsection (2) above); and (z) if Tenant does not notify Lessor in writing of its desire to purchase such beds as provided in subsection (x) above within ten (10) Business Days following
Tenant’s receipt of Lessor’s notice described in subsection (w) above, Lessor shall be free to consummate the sale of such beds to the aforesaid Hospital Competitor on the same terms, in all material respects, as were described in its
aforesaid notice pursuant to subsection (w) above; 
 (i) In connection with any sale of beds that is contemplated
pursuant to this Section 7.2.7, each of Lessor and Tenant agrees to cooperate with the other party in such manner, and to execute such documents, as may be reasonably necessary or appropriate in order to facilitate or implement any sale
of such beds by such other party; 
 (j) All alterations, modifications or other improvements to an affected Hospital Facility
that Tenant makes in connection with any conversion of licensed beds that is permitted by the terms of this Section 7.2.7 must qualify as Permitted Alterations under, and must be conducted in compliance with the requirements of,
ARTICLE X hereof, and Tenant agrees to make such capital expenditures, and to make such alterations, modifications and other improvements to an affected Hospital Facility, as are reasonable and necessary in connection with any such
conversion; 
 (k) Following any conversion of licensed beds that is permitted by the terms of this Section 7.2.7,
without limitation of its other information and reporting requirements set forth in ARTICLE XXVI hereof and elsewhere in this Lease, Tenant shall thereafter, as to each Hospital Facility affected by any such conversion, include in its
financial reports for such Hospital Facility reports that separately breakdown the Patient Revenues and other revenues (itemized by payor type), and the operating expenses with necessary allocation as reasonably determined by Tenant, attributable to
beds licensed for the delivery of hospital care, and beds licensed for the delivery of skilled nursing care, at such Hospital Facility; 
 (l) Tenant shall, as Additional Rent, reimburse Lessor for all reasonable out-of-pocket costs or expenses paid or incurred by Lessor, including, without limitation, costs or expenses paid or incurred by Lessor to
professional consultants or advisors, in connection with Lessor’s review or evaluation of any notice, proposal, Authorizations, or other information supplied by Tenant to Lessor pursuant to this Section 7.2.7 and/or monitoring of
Tenant’s compliance with this Section 7.2.7. Tenant shall reimburse Lessor for any such costs or expenses within ten (10) Business Days after the presentation by Lessor to Tenant of invoices therefor; and 
  

 30 








 (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-three (73) such beds. 
 Section 7.2.8 Notwithstanding anything to the contrary contained in this Section 7.2, Lessor agrees that licensed
beds at each Facility that is referenced on Schedule 7.2.8 hereof (a “SN Facility”) may be voluntarily removed from service (“banked”) or de-licensed, provided and on the condition that all of the
following requirements are complied with and satisfied: 
 (a) If Tenant desires to voluntarily remove from service or
de-license beds at a Facility referenced on Schedule 7.2.8 as permitted in this Section 7.2.8, not less than thirty (30) days prior to commencing to voluntarily remove from service or de-license any such beds, Tenant
shall so notify Lessor in writing, and such notice shall include therein, or have delivered therewith, (i) detailed descriptions of (x) the voluntary removals from service and/or de-licensing of beds at such Facility that are proposed by
Tenant, including, without limitation, whether and to what extent Tenant intends and expects to accomplish such bed changes through the voluntary removal from service of beds as described below (and, if not, why such voluntary removals from service
will not be utilized by Tenant) and whether and to what extent Tenant intends and expects to sell any licensed beds as described below, and (y) Tenant’s projections, budgets and/or other estimates of the cost of implementing such bed
changes and of the projected impact of such bed changes upon the EBITDAR of the affected Facility (broken down by line item) and upon Tenant’s earnings per share, (ii) evidence reasonably satisfactory to Lessor establishing and
demonstrating that the proposed bed changes will comply with and satisfy all of the requirements of this Section 7.2.8, and (iii) a Senior Officer’s Certificate certifying that Tenant has made diligent inquiry and has consulted
with its legal counsel and, based upon the foregoing, certifying that the bed changes proposed by Tenant will comply with and satisfy all of the requirements of this Section 7.2.8 and that the information contained in the aforesaid
notice or delivered therewith is true and correct in all material respects. Tenant shall further submit and deliver to Lessor, promptly following Lessor’s request therefor, such supplemental information and documentation relative to the
proposed bed changes as Lessor may reasonably request from time to time; 
 (b)(i) Subject to, and without limitation of,
Section 16.1(m)(iv) hereof, the number of licensed beds at such Facility must at all times be equal to or greater than the number of licensed beds that must be maintained by Tenant at such Facility in order to avoid causing an Event of
Default to arise under Section 16.1(m) hereof and (ii) no other Event of Default shall exist under this Lease; 
  

 31 








 (c) The number of beds at such Facility that are licensed for the delivery of skilled
nursing care, and not voluntarily removed from service (“banked”) as described in Section 16.1(m)(i) hereof, must at all times be equal to or greater than the minimum number of non-banked skilled nursing care beds that is
required at such SN Facility as set forth on Schedule 7.2.8 attached hereto and made a part hereof; 
 (d) To the
extent reasonably practicable, Tenant shall accomplish any bed changes permitted under this Section 7.2.8, and Tenant shall use commercially reasonable efforts to accomplish any such bed changes, by voluntarily removing from service,
rather than de-licensing, licensed beds at such Facility (and, for such purpose, although the requirements of subsections (a), (b), (c) and (d) of Section 16.1(m)(i)(3) shall apply, and continue to apply, to any such voluntary
removal from service, the twenty-five percent (25%) limitation set forth in such Section 16.1(m)(i)(3) shall not apply if all of the other requirements of this Section 7.2.8 are met), and, following any such voluntary
removal from service, Tenant shall continue to comply with the requirements of such subsections (a), (b), (c) and (d) of such Section 16.1(m)(i)(3); 
 (e) Insofar as Tenant is unable, despite its commercially reasonable efforts, to accomplish any bed changes permitted under this
Section 7.2.8 in accordance with subsection (d) above, then, prior to delicensing skilled nursing care beds in compliance with this Section 7.2.8, Tenant may sell the licensed beds that are not voluntarily removed from
service as described in subsection (d) above (with fifty percent (50%) of the net proceeds after out-of-pocket expenses received by Tenant from any such sale to be shared with, and paid to, Lessor within ten (10) Business Days after
the date that any such proceeds are received by Tenant), and, in such regard, Tenant agrees that it shall not directly or indirectly cause any such licensed beds to be sold or otherwise transferred to any entity in which Tenant has any direct or
indirect financial interest, except with Lessor’s prior written consent, in its sole discretion. At Tenant’s option, Tenant may elect not to attempt to sell the aforesaid licensed beds or to cease its efforts to sell the aforesaid licensed
beds, and, in such event, Tenant shall promptly so notify Lessor and Lessor shall thereafter be entitled, at its option for a period of sixty (60) Business Days from receipt of Tenant’s aforesaid notice (and, in addition to such sixty
(60) Business Days, such additional time period as may be necessary to obtain any necessary regulatory approvals for any proposed sale, so long as Lessor demonstrates reasonably diligent efforts to obtain such regulatory approvals), to attempt
to sell any or all of the aforesaid beds, and, if it succeeds in gaining such regulatory approvals and in making any such sale, Lessor shall be entitled to retain all proceeds from any such sale, subject, in the case of any such sale of beds by
Lessor to a person or entity (a “SN Competitor”) that intends to license and use the purchased beds at a skilled nursing facility that competes locally with the SN Facility from which such purchased beds arose or another
skilled nursing facility of Tenant or its Affililates, to the following additional requirements and conditions: (w) before completing any such sale, Lessor shall first notify Tenant in writing of the material terms of the SN Competitor’s
purchase offer for such beds, including a copy of any letter of intent; (x) Tenant shall have ten (10) Business Days following receipt of such notice to notify Lessor in writing that Tenant desires to purchase such beds on the purchase
offer terms specified in Lessor’s aforesaid notice; (y) if Tenant so notifies Lessor of its desire to purchase such beds, Lessor shall (1) notify Tenant in writing that (A) it has decided not to sell such beds, in which event
Tenant shall immediately cause the delicensure of beds, or (B) it has decided to 

  

 32 








 
continue its efforts to sell such beds, in which event Lessor shall have an additional five (5) Business Days after receipt of Tenant’s aforesaid
notice of its desire to purchase such beds within which to sell such beds to a person or entity that is not a SN Competitor or to deliver to Tenant another notice of a SN Competitor’s purchase offer pursuant to subsection (w) above (and,
thereupon, subsections (x), (y) and (z) of this subsection (e) shall again apply (except that the time frame for Tenant’s response pursuant to any reapplication of such subsection (x) shall be shortened from ten
(10) Business Days to five (5) Business Days (the time frame for any reapplication of subsection (y)(1)(B) above shall remain five (5) Business Days))), or (2) notify Tenant in writing that Lessor will sell such beds to Tenant,
in which event (A) Lessor shall sell, and Tenant shall purchase, such beds on the purchase offer terms specified in Lessor’s aforesaid notice, (B) Lessor shall be entitled to retain all proceeds from such sale and (C) Tenant
shall immediately cause the delicensure of such beds (and, if Lessor does not provide a notice to Tenant pursuant to subsection (1) or (2) above within five (5) Business Days following Lessor’s receipt of Tenant’s notice
evidencing its desire to purchase such beds, Lessor shall be deemed to have elected to sell such beds as provided in subsection (2) above); and (z) if Tenant does not notify Lessor in writing of its desire to purchase such beds as provided
in subsection (x) above within ten (10) Business Days following Tenant’s receipt of Lessor’s notice described in subsection (w) above, Lessor shall be free to consummate the sale of such beds to the aforesaid
SN Competitor on the same terms, in all material respects, as were described in its aforesaid notice pursuant to subsection (w) above; 
 (f) In connection with any sale of beds that is contemplated pursuant to this Section 7.2.8, each of Lessor and Tenant agrees to cooperate with the other party in such manner, and to execute such
documents, as may be reasonably necessary or appropriate in order to facilitate or implement any sale of such beds by such other party; 
 (g) All alterations, modifications or other improvements to an affected Facility that Tenant makes in connection with any bed change that is permitted by the terms of this Section 7.2.8 must qualify as
Permitted Alterations under, and must be conducted in compliance with the requirements of, ARTICLE X hereof, and Tenant agrees to make such capital expenditures, and to make such alterations, modifications and other improvements to an
affected Facility, as are reasonable and necessary in connection with any such bed change; and 
 (h) Tenant shall, as
Additional Rent, reimburse Lessor for all reasonable out-of-pocket costs or expenses paid or incurred by Lessor, including, without limitation, costs or expenses paid or incurred by Lessor to professional consultants or advisors, in connection with
Lessor’s review or evaluation of any notice, proposal, Authorizations, or other information supplied by Tenant to Lessor pursuant to this Section 7.2.8 and/or monitoring of Tenant’s compliance with this
Section 7.2.8. Tenant shall reimburse Lessor for any such costs or expenses within ten (10) Business Days after the presentation by Lessor to Tenant of invoices therefor. 
 Section 7.2.9 With reference to Section 7.2.7 and Section 7.2.8 hereof, Lessor agrees that
Tenant’s rights to convert licensed beds on the terms set forth in Section 7.2.7 hereof and/or voluntary remove from service or delicense beds on the terms set forth in 

  

 33 








 
Section 7.2.8 hereof do not replace Tenant’s rights to delicense beds as and to the extent permitted by Section 16.1(m) hereof.
For example, assume that a particular SN Facility had 100 licensed beds as of the Commencement Date, that, for purposes of this example, at all times the Permissible Reduction Percentage applicable to such Facility is 10% (so that, pursuant to
Section 16.1(m) hereof, a reduction in the number of licensed beds to 90 beds would not cause a default under Section 16.1(m)), that such SN Facility is not listed on Schedule 16.1(m)B hereof and that the minimum
number of non-banked skilled nursing care beds that is required at such SN Facility as set forth on Schedule 7.2.8 is 95 beds. If, in accordance with the terms of Section 7.2.8 hereof, the number of licensed beds at such SN
Facility is reduced to 95 beds, neither Section 7.2.7 nor Section 7.2.8 hereof would prohibit Tenant, pursuant to Section 16.1(m) hereof, from thereafter allowing an additional 5 beds to be delicensed. On the
other hand, if Tenant first allowed 5 beds to be delicensed pursuant to Section 16.1(m) hereof, Tenant could not thereafter proceed under Section 7.2.8 hereof if such proceeding would result in the loss of licensure of any
bed, as 95 beds is the minimum as described above (but Tenant could still allow the number of beds to be further reduced from 95 beds to 90 beds pursuant to Section 16.1(m), without causing a default under such
Section 16.1(m)). 
 Section 7.3 Granting of Easements, etc. 
 Section 7.3.1 Lessor and Tenant will, from time to time so long as no Event of Default has occurred and is continuing, at the
request of the other party and at such requesting party’s cost and expense (but subject to the approval of the non-requesting party, which approval shall not be unreasonably withheld, delayed or conditioned, and provided, however,
that if the non-requesting party has not responded to any such request of the requesting party within 30 days after receipt thereof, such request shall be deemed approved), (i) grant easements and other rights in the nature of easements,
(ii) release existing easements or other rights in the nature of easements which are for the benefit of the applicable Leased Property, (iii) dedicate or transfer unimproved portions of the applicable Leased Property for road, highway or
other public purposes, (iv) execute petitions to have the applicable Leased Property annexed to any municipal corporation or utility district, (v) execute amendments to any covenants and restrictions affecting the applicable Leased
Property and (vi) execute and deliver to any person any instrument appropriate to confirm or effect such grants, releases, dedications and transfers (to the extent of its interests in the applicable Leased Property), but only upon delivery of
all documentation the non-requesting party reasonably shall deem necessary and, if Lessor is the requesting party, only if such grant, release, dedication, transfer, petition or amendment (a) is not detrimental to the proper conduct of the
business of Tenant on the applicable Leased Property and (b) does not materially reduce the value of the Leased Property, as reasonably determined by Tenant, and, if Tenant is the requesting party, only if such grant, release, dedication,
transfer, petition or amendment does not materially reduce the value of the Leased Property, as reasonably determined by Lessor. 
 Section 7.3.2 Notwithstanding anything to the contrary contained in Section 7.3.1, Section 8.3 and Section 24.1 or elsewhere in this Lease, in the case of any easement or license for a cell
tower, antenna, satellite dish or other telecommunications equipment, a parking lot or a billboard or other signage (a) that is entered into pursuant to 

  

 34 








 
Section 7.3.1 hereof at the written request of Lessor and (b) from which profit is generated and all of such profit, and any reimbursements
of out of pocket costs and expenses incurred by Lessor in connection therewith, are payable to Lessor, without any obligation of Lessor to pay, or credit, any of the same to Tenant, (i) Tenant shall be obligated under this
Section 7.3, Section 8.3 and Section 24.1 and the other provisions of this Lease only to refrain from taking, and to prevent its assignees and sublessees, and the agents, employees, contractors, invitees,
licensees and concessionaires of Tenant and its assignees and sublessees, from taking, any action that would cause or result in a breach, default, violation or termination of any such easement or license and (ii) Lessor shall protect,
indemnify, save harmless and defend Tenant from and against all out of pocket costs and expenses (including, without limitation, Litigation Costs), to the maximum extent permitted by law, incurred by Tenant due to any liabilities, obligations,
claims, damages, penalties or causes of action asserted against Tenant primarily by reason of any such easement or license and not arising due to any breach by Tenant of its obligations under subsection (i) above. 
 ARTICLE VIII 
 Section 8.1 Compliance with Legal and Insurance Requirements, Instruments, etc. Subject to ARTICLE XII relating to permitted contests, Tenant, at its expense, will promptly (a) comply with all material
Legal Requirements and Insurance Requirements in respect of the use, operation, maintenance, repair and restoration of the applicable Leased Property, whether or not compliance therewith shall require structural changes in any of the Leased
Improvements or interfere with the use and enjoyment of such Leased Property, and (b) procure, maintain and comply with all licenses, certificates of need and other Authorizations required for any use of the applicable Leased Property and
Tenant’s Personal Property then being made, and for the proper erection, installation, operation and maintenance of the applicable Leased Property or any part thereof, including without limitation any Capital Alterations. In addition, Tenant
shall promptly send to Lessor any material deficiency report Tenant receives from any federal, state or local licensure board or certification agency or authority with respect to any Facility if Tenant has not cured such deficiency within the
applicable cure period. 
 Section 8.1.1 Authorization Non-Compliance. In the event that Tenant shall
receive notice from any federal, state or local agency or authority that Tenant is not in compliance with any material Legal Requirement, license, permit, approval, certificate of need, certification for reimbursement under Medicare or Medicaid
(with respect to any Facility that participates in such programs) or other Authorization, Tenant shall promptly send notice to Lessor and Tenant shall either (a) remedy any condition causing such noncompliance within any cure period allowed
therefor by the applicable agency or authority (or, if no such cure period shall be allowed or specified by the applicable agency or authority, promptly and diligently following Tenant’s receipt of such notice and, in any event, prior to the
final unappealable revocation of any license, permit, approval, certificate of need, certification for reimbursement or other Authorization) or (b) prior to the expiration of such cure period (or if no such cure period shall be allowed or
specified by the applicable agency or authority, promptly following receipt of such notice and, in any event, prior to the final unappealable revocation of any license, permit, approval, certificate of need, certification for reimbursement or other
Authorization), commence appropriate proceedings to contest such notice, and, thereafter, diligently pursue such contest until there is a final unappealable determination, all in accordance with the provisions of Section 8.2 and
Section 12.1 hereof. 
  

 35 








 Section 8.2 Legal Requirement Covenants. Subject to the provisions of
ARTICLE XII relating to permitted contests, Tenant covenants and agrees that none of the Leased Properties nor any of Tenant’s Personal Property shall be used for any unlawful purpose, and Tenant shall acquire and maintain, or cause
to be acquired and maintained, all licenses, certificates, permits, provider agreements, approvals and other Authorizations needed to operate the applicable Leased Property in its customary manner for the Primary Intended Use, and any other use
conducted on such Leased Property as may be permitted from time to time hereunder. Subject to ARTICLE XII, Tenant further covenants and agrees that Tenant’s use of each Leased Property and maintenance, alteration, and operation of
the same, and all parts thereof, shall at all times conform to all applicable local, state, and federal laws, ordinances, rules and regulations unless the same are held by a court of competent jurisdiction to be unlawful. Tenant may, however, upon
prior written notice to Lessor, contest the legality or applicability of any law, ordinance, rule or regulation, or any other Legal Requirement or any licensure, certification or other Authorization decision (including, without limitation, any
notice of non-compliance referred to in Section 8.1.1 hereof) or other Authorization if Tenant, at Tenant’s own expense, maintains such action in good faith, by appropriate proceedings and with due diligence, and on a regular basis
fully informs Lessor of the status of, and material developments in, any such contest and furnishes Lessor with such additional documents and information concerning such contest as Lessor may reasonably request from time to time. If, by the terms of
any such law, ordinance, rule or regulation or any Legal Requirement or any such licensure, certification or other Authorization decision or any applicable court order or stay, compliance therewith pending the prosecution of any such proceeding may
legally be delayed (a) without the incurrence of any lien, charge or liability of any kind against the applicable Facility or Lessor’s interest therein, (b) without any loss of licensure, certification or other Authorization that
would materially and adversely impair Tenant’s ability to continue to operate the affected Facility in accordance with its Primary Intended Use during Tenant’s contest, and (c) without subjecting Lessor to any liability, civil or
criminal, for failure so to comply therewith, Tenant may delay compliance therewith until the final unappealable determination of such proceeding, provided, however, if any such lien, charge or civil or criminal liability would be
incurred by reason of any such delay, Tenant may nonetheless contest as aforesaid and delay as aforesaid provided that such delay would not subject Lessor to criminal liability and Tenant (i) furnishes to Lessor security reasonably satisfactory
to Lessor against any loss or injury by reason of such contest or delay, (ii) prosecutes the contest with due diligence and in good faith, and (iii) keeps Lessor informed, and provides additional documentation and information, relative to
such contest as described above. Following the final unappealable determination of any such proceeding adversely to Lessor or Tenant, Tenant shall comply with all requirements of such determination in accordance with Section 12.1(g).

  

 36 








 Section 8.3 Permitted Encumbrances. 
 Section 8.3.1 Subject to Section 7.3.2 hereof, Tenant shall, at its own cost and expense, fully observe, perform
and comply with all Permitted Encumbrances as the same apply to or bind Lessor or any of the Leased Properties. Subject to Section 7.3.2 hereof, Tenant shall not cause, or permit its respective agents, employees, contractors, invitees,
subtenants, licensees, concessionaires or assigns (whether or not permitted hereunder) to cause, whether by act or omission, any breach of, default under or termination of any Permitted Encumbrance applicable to or binding upon Lessor or any of the
Leased Properties. Notwithstanding anything to the contrary contained in Section 16.1 or elsewhere in this Lease but subject to Section 7.3.2 hereof, an Event of Default shall be deemed to have occurred under this Lease on account
of Tenant’s breach of this Section 8.3.1, when, but only if, (a) Tenant’s breach of this Section 8.3.1 also results in a breach or default of an obligation under a Permitted Encumbrance, (b) such Permitted
Encumbrance breach or default is not cured by Tenant on or prior to the expiration of the cure period, if any, applicable to such breach or default by the terms of the instrument creating such Permitted Encumbrance (or such longer cure period as may
be expressly authorized by an order of a court of competent jurisdiction), and (c) on account of such Permitted Encumbrance breach or default, a real property interest, or a covenant, condition, restriction, license or other beneficial right,
created under such Permitted Encumbrance and benefiting Lessor or a Leased Property is terminated or otherwise lost or at material risk of being terminated or otherwise lost. Lessor agrees that, in the event Lessor receives any written notice of
default from a party to a Permitted Encumbrance, Lessor shall promptly forward a copy thereof to Tenant. Tenant agrees that, if Lessor, at its option, elects to cure an Event of Default by Tenant under this Section 8.3.1, such cure shall
not excuse Tenant from, or be deemed a cure of, such Event of Default, nor shall Tenant’s reimbursement to Lessor of any costs and expenses incurred by Lessor in effecting any such cure be deemed a cure of any such Event of Default,
provided, however, that, notwithstanding the foregoing, even after the occurrence of such an Event of Default by Tenant and/or Lessor’s cure thereof, Lessor agrees to accept Tenant’s cure thereof, or reimbursement of
Lessor’s costs and expenses to effect such cure, provided, and on the condition, that Lessor has not, prior thereto, terminated this Lease as it affects the Leased Property to which such Permitted Encumbrance relates or dispossessed Tenant from
such Leased Property. Nothing contained in this Section 8.3 shall limit or impair Lessor’s indemnification rights under Section 24.1 below. 
 Section 8.3.2 If (a) a Permitted Encumbrance breach or default of the nature described in Section 8.3.1(a)
above occurs, and (b) on account thereof, if the same is not cured, the condition referenced in Section 8.3.1(c) above would, or is likely to, be satisfied, Tenant agrees that, notwithstanding anything to the contrary contained in
Section 17.1 below or elsewhere in this Lease, Lessor may, but shall not be obligated to, in its discretion and regardless of whether Tenant is proceeding to cure, or attempting to cure, the Permitted Encumbrance breach or default referenced in
Section 8.3.1(a) above or whether the cure period referenced in Section 8.3.1(b) above has expired or is likely to expire before completion of necessary cure efforts, take such actions as it deems necessary or appropriate to
attempt to cure such Permitted Encumbrance breach or default, provided, however, that, if the breach or default referenced in subsection (a) above has applicable thereto, by the express terms of the applicable Permitted 

  

 37 








 
Encumbrance, a stated period to cure the same, Lessor agrees not to commence to cure such breach or default unless and until one-half (1/2) of the
aforesaid stated cure period has elapsed. If Lessor so proceeds to attempt to cure any such Permitted Encumbrance breach or default, Tenant agrees, within fifteen (15) days following receipt of a written demand therefor and reasonable
supporting documentation, to reimburse Lessor for the reasonable amount of all costs and expenses incurred by Lessor in curing, or attempting to cure, any such Permitted Encumbrance breach or default. 
 ARTICLE IX 
 Section 9.1
Maintenance and Repair. 
 (a) Tenant, at its expense, shall keep each Leased Property and all private roadways, sidewalks and
curbs appurtenant thereto and which are under Tenant’s control (and Tenant’s Personal Property) in good order and repair, reasonable wear and tear excepted (whether or not the need for such repairs occurs as a result of Tenant’s use,
any prior use, the elements or the age of such Leased Property, Tenant’s Personal Property, or any portion thereof), and, except as otherwise provided in ARTICLE XIV, shall promptly make all necessary and appropriate repairs and
replacements thereto, of every kind and nature, whether interior or exterior, structural or non-structural, ordinary or extraordinary, foreseen or unforeseen or arising by reason of a condition existing prior to the commencement of the Term
(concealed or otherwise). All repairs shall, to the extent reasonably achievable, be made in good, workmanlike and first-class manner, in accordance with all applicable federal, state and local statutes, ordinances, by-laws, codes, rules and
regulations relating to such work. Tenant will not take or omit to take any action the taking or omission of which might materially impair the value or usefulness of the applicable Leased Property or any part thereof for its Primary Intended Use.

 (b) Lessor shall not under any circumstances be required to build or rebuild any improvements on any Leased Property, or to make any
repairs, replacements, alterations, restorations or renewals of any nature or description to the applicable Leased Property, whether ordinary or extraordinary, structural or non-structural, foreseen or unforeseen, or to make any expenditure
whatsoever with respect thereto, in connection with this Lease, or to maintain any Leased Property in any way, except as expressly provided herein. Tenant hereby waives, to the extent permitted by law, the right to make repairs at the expense of
Lessor pursuant to any law in effect at the time of the execution of this Lease or thereafter enacted. 
 (c) Except as expressly set forth
in this Lease, nothing contained in this Lease and no action or inaction by Lessor shall be construed as (i) constituting the consent or request of Lessor, express or implied, to any contractor, subcontractor, laborer, materialman or vendor to
or for the performance of any labor or services or the furnishing of any materials or other property for the construction, alteration, addition, repair or demolition of or to any Leased Property or any part thereof, or (ii) giving Tenant any
right, power or permission to contract for or permit the performance of any labor or services or the furnishing of any materials or other property in such fashion as would permit the making of any claim against Lessor in respect thereof or to make
any agreement that may create, or in any way be the basis for, any right, title, interest, lien, claim or other encumbrance upon the estate of Lessor in any Leased Property, or any portion thereof. 
  

 38 








 (d) Tenant will, upon the expiration or prior termination of the Term, vacate and surrender the
applicable Leased Property to Lessor in the condition in which such Leased Property was originally received from Lessor, except as repaired, rebuilt, restored, altered or added to as permitted or required by the provisions of this Lease and except
for ordinary wear and tear (subject to the obligation of Tenant to maintain the Leased Property in good order and repair during the entire Term). 
 (e) Tenant shall establish and maintain any reserve accounts reasonably required by a Superior Mortgagee for deferred maintenance conditions and for capital expenditures at the Leased Property. 
 Section 9.2 Encroachments. If any of the Leased Improvements on any Leased Property shall, at any time, encroach upon any property,
street or right-of-way adjacent to such Leased Property, then, promptly upon the request of Lessor or at the behest of any person affected by any such encroachment, Tenant shall, at its expense, subject to its right to contest the existence of any
encroachment and, in such case, in the event of any adverse final determination, either (i) obtain valid and effective waivers or settlements of all claims, liabilities and damages resulting from each such encroachment, whether the same shall
affect Lessor or Tenant, or (ii) make such changes in the Leased Improvements, and take such other actions, as Tenant, in good faith exercise of its judgment deems reasonably practicable, to remove such encroachment, including, if necessary,
the alteration of any of the Leased Improvements, and in any event take all such actions as may be necessary in order to be able to continue the operation of the Leased Improvements for the Primary Intended Use substantially in the manner and to the
extent the Leased Improvements were operated prior to the assertion of such encroachment. Any such alteration shall be made in conformity with the applicable requirements of ARTICLE X. Tenant’s obligations under this
Section 9.2 shall be in addition to and shall in no way discharge or diminish any obligation of any insurer under any policy of title or other insurance and Tenant shall not be entitled to a credit for any sums recovered by Lessor under
any such policy of title or other insurance. 
 ARTICLE X 
 Section 10.1 Construction of Capital Alterations to the Leased Property(ies). Tenant shall not, without the prior written consent of
Lessor, which consent, except as expressly set forth below relative to tie in/connecting Capital Alterations of the nature described below, shall not be unreasonably withheld, delayed or conditioned, construct or install Capital Alterations on any
Leased Property. In the event that Tenant wishes to construct or install any Capital Alteration, Tenant shall submit to Lessor in writing a proposal setting forth in reasonable detail such Capital Alteration and shall provide to Lessor for approval
such plans and specifications, permits, licenses, contracts, construction schedules, construction budgets and other information concerning the proposed Capital Alteration as Lessor may reasonably request showing in reasonable detail the scope and
nature of the Capital Alteration that Tenant desires to construct 

  

 39 








 
(collectively the “Plans and Specifications”). It is the intent of the parties hereto that the level of detail shall be comparable to that
which is referred to in the architectural profession as “design development drawings” as opposed to working or biddable drawings. Without limiting the generality of the foregoing, such proposal shall indicate the approximate projected cost
of constructing such Capital Alteration and the use or uses to which it will be put. In the event that Lessor consents in writing to any Capital Alteration, prior to commencing construction of any Capital Alteration, Tenant shall first request
Lessor to provide funds to pay for such Capital Alteration in accordance with the provisions of Section 10.3. If Lessor declines or is unable to provide such financing on terms acceptable to Tenant, Tenant shall provide to Lessor, prior
to commencement of any construction, proof reasonably acceptable to Lessor that Tenant has sufficient capital to complete the construction. Furthermore, no Capital Alteration shall be made which would tie in or connect any Leased Improvements on a
Leased Property with any other improvements on property adjacent to such Leased Property (and not part of the Land covered by this Lease) including, without limitation, tie-ins of buildings or other structures or utilities, unless Tenant shall have
obtained the prior written approval of Lessor, which approval in Lessor’s sole discretion may be granted, withheld, delayed or conditioned. Tenant shall reimburse Lessor for all reasonable costs and expenses incurred by Lessor in reviewing the
proposal and the Plans and Specifications for a Capital Alteration and for inspecting the applicable Leased Property and otherwise monitoring the construction of the Capital Alteration, including, without limitation, the reasonable cost of engaging
consultants to assist Lessor in connection with any or all of the foregoing. 
 Section 10.2 Capital Alterations Financed by
Tenant. If Tenant provides or arranges such financing, there shall be no adjustment in Base Rent by reason of any such Capital Alteration. 
 Section 10.3 Capital Alterations Financed by Lessor. 
 (a) Tenant shall request that Lessor provide or arrange
financing for a Capital Alteration by providing to Lessor such information about the Capital Alteration as Lessor may reasonably request including without limitation all information referred to in Section 10.1 above. Lessor may, but
shall be under no obligation to, obtain the funds necessary to meet the request. Within sixty (60) days after receipt of a request, Lessor shall notify Tenant as to whether it will finance the proposed Capital Alteration and, if so, the terms
and conditions upon which it would do so, including the terms of any amendment to this Lease. In no event shall the portion of the projected Capital Alterations Cost comprised of land, if any, materials, labor charges and fixtures be less than
ninety percent (90%) of the total amount of such cost. Tenant may withdraw its request by notice to Lessor at any time before or after receipt of Lessor’s terms and conditions. If Tenant desires to accept Lessor’s offer to finance the
proposed Capital Alteration, Tenant shall notify Lessor within thirty (30) days after Tenant’s receipt of Lessor’s offer. 
 (b) If Lessor agrees to finance the proposed Capital Alteration, Tenant shall provide Lessor with the following prior to any advance of funds: 
 (i) all customary or other reasonably required loan documentation; 
  

 40 








 (ii) any information, certificates, licenses, permits or documents requested by either
Lessor or any third party lender with whom Lessor has agreed or may agree to provide financing which are necessary to confirm that Tenant will be able to use the Capital Alteration upon completion thereof in accordance with the Primary Intended Use,
including all required federal, state or local government licenses and approvals; 
 (iii) an Officer’s Certificate and,
if requested, a certificate from Tenant’s architect, setting forth in reasonable detail the projected (or actual, if available) cost of the proposed Capital Alteration; 
 (iv) an amendment to this Lease, duly executed and acknowledged, in form and substance reasonably satisfactory to Lessor and Tenant,
providing for (1) any change in the Rent that is set forth in Lessor’s offer to finance and accepted by Tenant, any change in the legal description of the Land, and any change in Exhibit C hereof (including any and all allocations
of Rent and Transferred Property Percentages contained therein) that is appropriate on account of any change in the Rent as aforesaid (specifically, Lessor’s and Tenant’s agreed upon changes to the Base Rent allocable to the affected
Leased Property(ies), if any, shall be incorporated into an amended Exhibit C, and the Transferred Property Percentages allocable to all of the Leased Properties shall then be recalculated and incorporated into such amended Exhibit C)
and (2) any other Lease amendments as may be necessary or appropriate; 
 (v) a deed (in the customary form used to
convey commercial properties within the relevant jurisdiction) conveying title to Lessor to any land acquired for the purpose of constructing the Capital Alterations free and clear of any liens or encumbrances except those approved by Lessor,
accompanied by a final as-built survey thereof satisfactory to Lessor if reasonably required by Lessor; 
 (vi) endorsements
to any outstanding policy of title insurance, if any, covering the applicable Leased Property or commitments therefor satisfactory in form and substance to Lessor (A) updating the same without any additional exception except as may be permitted
by Lessor; and (B) increasing the coverage thereof by an amount equal to the Fair Market Value of the Capital Alteration (except to the extent covered by the owner’s policy of title insurance referred to in subsection (vii) below);

 (vii) if appropriate, (A) an owner’s policy of title insurance insuring fee simple title to any land conveyed to
Lessor pursuant to subsection (v) free and clear of all liens and encumbrances except those approved by Lessor and (B) a lender’s policy of title insurance satisfactory in form and substance to Lessor and the lending institution
advancing any portion of the Capital Alterations Cost; 
 (viii) if deemed necessary by Lessor, an M.A.I. appraisal of the
Leased Property indicating that the value of the applicable Leased Property upon completion of the Capital Alteration exceeds the Fair Market Value thereof prior thereto by an amount not less than 95% of the Capital Alterations Cost; and 

 

 41 








 (ix) such other certificates (including, but not limited to, endorsements increasing the
insurance coverage, if any, at the time required by Section 13.1), documents, opinions of counsel, appraisals, surveys, certified copies of duly adopted resolutions of the Board of Directors of Tenant authorizing the execution and
delivery of the lease amendment and any other instruments as may be reasonably required by Lessor and any lending institution advancing or reimbursing Tenant for any portion of the Capital Alterations Cost. 
 (c) Upon making a request to finance a Capital Alteration, if and when such financing is actually consummated, Tenant shall pay or agree to pay all
reasonable costs and expenses of Lessor and any Lending Institution which has committed to finance such Capital Alteration paid or incurred by them in connection with the financing of the Capital Alterations, including, but not limited to,
(i) the reasonable fees and expenses of their respective counsel, (ii) all printing expenses, (iii) the amount of any filing, registration and recording taxes and fees, (iv) documentary stamp taxes, if any, (v) title
insurance and survey charges, appraisal fees, if any, and rating agency fees, if any, (vi) any other applicable consulting fees (including without limitation engineering and environmental), and (vii) commitment fees, if any. 
 Section 10.4 Non-Capital Alterations. Tenant shall have the right to make additions, modifications or improvements to any Leased
Property which are not Capital Alterations (“Non-Capital Alterations”) from time to time as it, in its discretion, may deem to be desirable for its uses and purposes, provided that such action will not alter the character or purpose
or detract from the value or operating efficiency thereof and will not impair the revenue producing capability of the affected Leased Property or adversely affect the ability of Tenant to comply with the provisions of this Lease. The cost of such
Non-Capital Alterations, modifications or improvements to a Leased Property shall be paid by Tenant. 
 Section 10.5
Salvage. All materials which are scrapped or removed in connection with the making of either Capital Alterations permitted by Section 10.1 or Non-Capital Alterations permitted by Section 10.4 or repairs required by
ARTICLE IX shall be or become the property of Lessor or Tenant depending on which party is paying for, or providing the financing for, such work. 
 Section 10.6 Additional Requirements for Capital Alterations and Non-Capital Alterations. Tenant shall comply with the following requirements in connection with Permitted Alterations: 
 (a) In the case of Capital Alterations, the Permitted Alteration shall be made substantially in accordance with the Plans and
Specifications submitted to Lessor, to the extent applicable. 
 (b) The Permitted Alterations and the installation thereof
shall comply with all applicable Legal Requirements and all Insurance Requirements. 
  

 42 








 (c) The Permitted Alterations shall be performed in a good and workmanlike manner, shall
not impair the value or the structural integrity of the applicable Leased Property, and shall be free and clear of mechanic’s liens. 
 (d) Intentionally omitted. 
 (e) Tenant shall, at Tenant’s expense, obtain a
builder’s completed value risk policy of insurance insuring against the risks of physical loss, including collapse and transit coverage, in a nonreporting form, covering the total value of the work performed, and equipment, supplies and
materials, and insuring initial occupancy. Lessor and any Facility Mortgagee shall be additional named insureds of such policy. Lessor shall have the right to approve the form and substance of such policy, which approval shall not be unreasonably
withheld, delayed or conditioned. 
 (f) Tenant shall pay the premiums required to increase the amount of insurance coverages
required by ARTICLE XIII to reflect the increased value of the applicable Leased Property resulting from the Permitted Alterations, and shall deliver to Lessor a certificate evidencing the increase in coverage. 
 (g) In the case of Capital Alterations, Tenant shall, not less than sixty (60) days after completion of the Capital Alterations,
deliver to Lessor a revised “as-built” set of Plans and Specifications for the Capital Alterations in form and substance reasonably satisfactory to Lessor. 
 (h) In the case of Capital Alterations, Tenant shall, not later than thirty (30) days after Lessor sends an invoice, reimburse Lessor
for any reasonable costs and expenses, including attorneys’ fees and architects’ and engineers’ fees, incurred in connection with reviewing proposed Capital Alterations and ensuring Tenant’s compliance with the terms of this
ARTICLE X. 
 (i) All Capital Alterations and Non-Capital Alterations shall, without payment by Lessor at any time
(other than as expressly agreed by Lessor pursuant to Section 10.3 above), be included under the terms of this Lease and upon expiration or earlier termination of this Lease shall pass to and become the property of Lessor free and clear
of all encumbrances, other than Permitted Encumbrances. 
 (j) Except as expressly agreed by Lessor and Tenant pursuant to
Section 10.3(b)(iv) above, (1) there shall be no adjustment in Base Rent by reason of any Capital Alteration or Non-Capital Alteration and (2) no Capital Alteration or Non-Capital Alteration shall be treated by Lessor or Tenant
as rent, or amounts in lieu of rent, paid by Tenant, or any other kind of gross income to Lessor, for income tax purposes. 
 Section 10.7 Mortgagee’s Consent. Tenant shall not commence construction of any Capital Alteration until Lessor shall have obtained the consent of any applicable Facility Mortgagee or Superior Lessor, if such consent
is required. Lessor agrees to use commercially reasonable efforts to obtain promptly any such consent, if such consent is necessary. 
  

 43 








 ARTICLE XI 
 Section 11.1 Liens. Subject to the provisions of ARTICLE XII relating to permitted contests, Tenant will not directly or indirectly create or allow to remain and will promptly discharge
at its expense any lien, encumbrance, attachment, title retention agreement or claim upon any Leased Property or any attachment, levy, claim or encumbrance in respect of the Rent, not including, however, (a) Permitted Encumbrances,
(b) restrictions, liens and other encumbrances which are consented to in writing by Lessor, or any easements granted pursuant to the provisions of this Lease, (c) liens for those taxes of Lessor which Tenant is not required to pay
hereunder, (d) subleases permitted by ARTICLE XXV, (e) liens for Impositions or for sums resulting from noncompliance with Legal Requirements so long as (1) the same are not yet payable or are payable without the addition
of any fine or penalty or (2) such liens are in the process of being contested as permitted by ARTICLE XII, (f) liens of mechanics, laborers, materialmen, suppliers or vendors for sums either disputed in good faith or not yet
due, provided that (1) the payment of such sums shall not be postponed under any related contract for more than sixty (60) days after the completion of the action giving rise to such lien and such reserve or other appropriate provisions as
shall be required by law or generally accepted accounting principles shall have been made therefor or (2) any such liens are in the process of being contested as permitted by ARTICLE XII, and (g) any liens which are the
responsibility of Lessor pursuant to the provisions of ARTICLE XXXVIII. Notwithstanding the foregoing, Tenant shall bond over any lien affecting the applicable Leased Property if Lessor shall reasonably request, or if any applicable
Facility Mortgagee shall so require. 
 ARTICLE XII 
 Section 12.1 Permitted Contests. Tenant, on its own or on Lessor’s behalf (or in Lessor’s name), but at Tenant’s expense, may contest, by appropriate legal proceedings conducted in
good faith and with due diligence, the amount or validity or application, in whole or in part, of any Imposition or any Legal Requirement or any lien, attachment, levy, encumbrance, charge or claim not otherwise permitted by ARTICLE XI,
provided that (a) in the case of an unpaid Imposition, lien, attachment, levy, encumbrance, charge, or claim, the commencement and continuation of such proceedings shall suspend the collection thereof from Lessor and from the applicable Leased
Property, (b) neither the applicable Leased Property nor any Rent therefrom nor any part thereof or interest therein would be reasonably likely to be in danger of being sold, forfeited, attached or lost, (c) in the case of a Legal
Requirement, Lessor would not be in any immediate danger of criminal liability for failure to comply therewith pending the outcome of such proceedings and the contest provisions of Section 8.2 have been satisfied, (d) Tenant shall
indemnify and hold harmless Lessor from and against any cost, claim, damage, penalty or reasonable expense, including reasonable attorneys’ fees, incurred by Lessor in connection therewith or as a result thereof, (e) in the case of a Legal
Requirement and/or Imposition, lien, encumbrance or charge, Tenant shall give such reasonable security as may be demanded by Lessor to insure ultimate payment of or compliance with the same and to prevent 

  

 44 








 
any sale or forfeiture of the affected Leased Property or the Rent by reason of such non-payment or non-compliance, provided, however, the
provisions of this ARTICLE XII shall not be construed to permit Tenant to contest the payment of Rent (except as to contests concerning the method of computation or the basis of levy of any Imposition or the basis for the assertion of
any other claim) or any other sums payable by Tenant to Lessor hereunder, (f) in the case of an Insurance Requirement, the coverage required by ARTICLE XIII shall be maintained, and (g) if such contest is resolved against
Lessor or Tenant by a final unappealable determination, Tenant shall, as Additional Charges due hereunder, pay to the appropriate payee the amount required to be paid, together with all interest and penalties accrued thereon, within ten
(10) days after such determination (or within such shorter period as may be required by the terms of such determination), and comply, within any cure period allowed therefor by the applicable agency or authority (or if no such cure period shall
be allowed or specified by the applicable agency or authority, promptly and diligently following the effective date of such determination and, in any event, prior to the final unappealable revocation of any license, permit, approval, certificate of
need, certificate for reimbursement or other Authorization), with the applicable Legal Requirement, Insurance Requirement, plan of correction or other remedial requirements of the applicable agency or authority; provided, however, that
this subsection (g) is not intended, and shall not be construed, to afford Tenant any cure or grace period beyond the effective date of any final unappealable determination, unless and only to the extent that (i) such determination
specifically conditions the imposition or taking effect of the adverse legal, regulatory or other consequences in issue upon Tenant’s failure to make a specified payment or to take specified compliance, curative or remedial action following the
effective date of such determination or (ii) Tenant is proceeding diligently and in good faith to effect an assignment or sublet under Section 25.1.11 hereof and the applicable agency(ies) or authority(ies) is not enforcing such
final order, pending consummation of such assignment or sublet. Lessor, at Tenant’s expense, shall execute and deliver to Tenant such authorizations and other documents as may reasonably be required in any such contest, and, if reasonably
requested by Tenant or if Lessor so desires, Lessor shall join as a party therein. Tenant shall indemnify and save Lessor harmless against any liability, cost or expense of any kind that may be imposed upon Lessor in connection with any such contest
and any loss resulting therefrom. 
 ARTICLE XIII 
 Section 13.1 General Insurance Requirements. During the Term, Tenant shall at all times keep each Leased Property, and all property located in or on any Leased Property, including Leasehold
Improvements, Fixtures and Tenant’s Personal Property, insured with the kinds and amounts of insurance described below. This insurance shall be written by companies authorized to do insurance business in the State in which the applicable Leased
Property is located, provided, however, that the insurers or reinsurers issuing policies covering general liability and/or professional liability claims (or providing reinsurance coverage with respect to such claims) need only to have such
authorizations to do insurance business as are required by applicable law. All companies providing insurance required by the terms of this ARTICLE XIII (including, without limitation, any Captive Insurance Company) must have a rating at
least as high as the rating required by any applicable Facility Mortgagee. The policies must name as loss payee (i) the holder of any mortgage, deed of trust or other security agreement (“Facility  

  

 45 








 
Mortgagee”) securing any Encumbrance placed on the applicable Leased Property in accordance with the provisions of ARTICLE XXXVIII
(“Facility Mortgage”) by way of a standard form of mortgagee’s loss payable endorsement or (ii) if no such Facility Mortgage encumbers the applicable Leased Property, Lessor and, in the case of any commercial general
liability and/or umbrella liability insurance coverages, must name Lessor and any Superior Mortgagee(s) as additional insureds. Losses shall be payable to Lessor and/or Superior Mortgagee as provided in ARTICLE XIV. Any loss adjustment
shall require the written consent of Lessor, Tenant, Leasehold Mortgagee and Facility Mortgagee whenever the loss exceeds twenty percent (20%) of the Facility’s Fair Market Value. Evidence of insurance shall be deposited with Lessor and,
if requested, with any Superior Lessor, Leasehold Mortgagee and Facility Mortgagee(s). If any provision of any Facility Mortgage requires deposits of insurance premiums to be made with such Facility Mortgagee, Tenant shall either pay to Lessor
monthly the amounts required and Lessor shall transfer such amounts to each Facility Mortgagee, or, pursuant to written direction by Lessor, Tenant shall make such deposits directly with such Facility Mortgagee. The policies on each Leased Property,
including the Leasehold Improvements, and Fixtures and Tenant’s Personal Property, shall insure against the following risks: 
 Section 13.1.1 Loss or damage by fire, vandalism and malicious mischief, extended coverage perils commonly known as “All Risk”, including flood, the backup of sewers and drains, earthquake, breakage of plate glass and
all physical loss perils including but not limited to sprinkler leakage, in an amount not less than one hundred percent (100%) of the then full replacement cost thereof (as defined below in Section 13.2), subject to no coinsurance
requirement or on an agreed amount basis; 
 Section 13.1.2 Broad form comprehensive boiler and machinery
insurance, on a blanket repair and replace basis, with limits for each accident in an amount not less than one hundred percent (100%) of the then full replacement cost (as defined in Section 13.2) of the Leased Property; 

Section 13.1.3 Business Interruption insurance on a Business Interruption, Gross Profits or Gross Rents form, including all
standing charges, with a period of indemnity of no less than twelve (12) months, resulting from loss or damage as described in Section 13.1.1 or Section 13.1.2, subject to no coinsurance requirement or on an agreed
amount basis; 
 Section 13.1.4 Claims for bodily injury, including death resulting therefrom, personal injury and
property damage on an occurrence basis, under a policy of commercial general liability (“CGL”) insurance (including, without limitation, broad form property damage and broad form contractual liability) for a limit of not less than
Fifty Million and No/100 Dollars ($50,000,000.00) per occurrence, combined single limit. Relative to the insurance referenced in this Section 13.1.4, Tenant shall be permitted to use a claims made policy form rather than an occurrence
based policy form for its primary, and/or its excess liability, CGL insurance, only if: 
 (a) an occurrence based form of
primary or excess liability, as applicable, CGL insurance policy cannot be obtained solely because occurrence based forms of primary or excess liability, as applicable, CGL insurance are not offered in the insurance market place for for-profit
hospital and/or nursing center companies or 
  

 46 








 (b) a majority of the five (5) largest (determined by revenue) companies (exclusive
of Tenant) in the for-profit hospital and/or nursing center industry maintain claims made forms of primary or excess liability, as applicable, CGL insurance for their primary or excess liability, as applicable, CGL insurance policies. 
 (For example, relative to the foregoing conditions, if occurrence based forms of primary CGL insurance are offered in the insurance market place for
for-profit hospital and/or nursing center companies, but Tenant is unable to obtain an occurrence based form of excess liability CGL insurance solely because occurrence based forms of excess liability CGL insurance are not offered in the insurance
market place for for-profit hospital and/or nursing center companies, and a majority of the aforesaid five largest companies maintain occurrence based forms of primary CGL insurance and claims made forms of excess liability CGL insurance, a claims
made form of excess liability CGL insurance would be permitted subject to compliance with the other requirements of this Section 13.1.4, but a claims made form of primary CGL insurance would not be permitted). Prior to making any such
switch to or renewing any claims made policy, Tenant shall be obligated to provide to Lessor supporting evidence demonstrating the existence of condition (a) or (b), and the sufficiency of such evidence shall be subject to the advance written
approval of Lessor, in its reasonable discretion. If Tenant so switches to a claims made form of policy, in addition to complying with the requirements referenced below in this Section 13.1.4, Tenant shall be obligated to switch back to
occurrence based coverage at the end of the then current claims made policy term unless condition (a) or (b) exists as demonstrated by supporting evidence reasonably approved in advance and in writing by Lessor. If Tenant satisfies the
above referenced tests for switching to, or continuing to maintain, a claims made form of policy, any claims made policy that it purchases must include therein the right to purchase a “tail” that insures against so called “incurred
but not reported claims” for a period of at least three (3) years following the expiration of such claims made policy. In addition, from and after any such switch to a claims made form of policy, Tenant must, after the expiration of each
claims made policy that Tenant obtains, as to each such expiring claims made policy, either: 
 (i) continue to insure Lessor
and all Facility Mortgagees and Superior Lessors with the required amount of primary and/or excess liability, as applicable depending upon the nature of such expiring claims made policy, CGL insurance coverage, on a claims made policy form that
includes coverage against all so-called “incurred but not reported claims” relating to any period on or prior to the expiration of the expiring policy (“Previous Period Unreported Claims”), an additional ten
(10) years following the expiration of such expiring claims made policy (which coverage may be obtained, for example, (A) through the renewal or rolling-over of a claims made based CGL policy providing the required amounts of coverage and
including coverage against Previous Period Unreported Claims for consecutive 1-year periods for such ten (10) year period, or (B) through the purchase of a three (3) year claims made based CGL “tail” policy providing the
required amounts of coverage and including coverage against Previous Period Unreported Claims followed by purchases of claims made based CGL policies 

  

 47 








 
providing the required amounts of coverage and including coverage against all Previous Period Unreported Claims for consecutive 1-year periods for the
remaining seven (7) years of such ten (10) year period) (in connection with the purchase of claims made CGL insurance coverage pursuant to this subsection (i), any claims made CGL insurance coverage that is obtained by Tenant may exclude
therefrom any claims incurred during any period that an occurrence based form of primary or excess liability, as applicable depending on the nature of the expiring claims made policy, CGL insurance policy providing the required amounts of coverage
and insuring Lessor and all Facility Mortgagees and Superior Lessors was in effect), or 
 (ii) insure Lessor and all Facility
Mortgagees and Superior Lessors by obtaining the required amount of primary and/or excess liability, as applicable, CGL insurance on an occurrence based policy form that includes therein as insured claims all claims (x) incurred prior to the
inception of such occurrence based CGL insurance policy and after the latest of (1) the Effective Date, (2) the date that is ten (10) years prior to the inception of such occurrence based CGL insurance policy or (3) the day
preceding the date that Tenant, pursuant to the terms of this Section 13.1.4, first switched to a claims made form of primary or excess liability, as applicable depending on the nature of such expiring claims made policy, CGL insurance
policy (relative to the period described in this subsection (ii)(x), any occurrence based CGL policy that is obtained by Tenant pursuant to this subsection (ii) may exclude therefrom any claims incurred during any period that an occurrence
based form of primary or excess liability, as applicable depending on the nature of the expiring claims made policy, CGL insurance policy providing the required amounts of coverage and insuring Lessor and all Facility Mortgagees and Superior Lessors
was in effect) and (y) not yet reported prior to such inception; 
 Section 13.1.5 Claims arising out of
malpractice in an amount not less than Twenty Five Million and No/100 Dollars ($25,000,000.00) for each person and for each claim in the aggregate; 
 Section 13.1.6 Intentionally Omitted; 
 Section 13.1.7 Intentionally
Omitted; 
 Section 13.1.8 Loss or damage commonly covered by blanket crime insurance including employee
dishonesty, loss of money orders or paper currency, depositor’s forgery, in commercially reasonable amounts acceptable to Lessor for a limit of not less than Five Million and No/100 Dollars ($5,000,000.00). 
 Section 13.2 Replacement Cost. The term “full replacement cost,” as used herein, shall mean the actual replacement cost of
the property requiring replacement from time to time including an increased cost of construction endorsement, without reduction or deduction for depreciation. Tenant shall have the full replacement cost redetermined by an accredited appraiser
approved by Lessor (which approval shall not be unreasonably withheld, delayed or 

  

 48 








 
conditioned), hereinafter referred to as “impartial appraiser”, every five years during the Term, and at such other times that either party
believes that full replacement cost has increased or decreased. Tenant shall forthwith, on receipt of such determination by such impartial appraiser, give written notice thereof to Lessor. The determination of such impartial appraiser shall be final
and binding on the parties hereto, and Tenant shall forthwith increase, or may decrease, the amount of the insurance carried pursuant to this Section, as the case may be, to the amount so determined by the impartial appraiser. Each party shall pay
one-half ( 1/2) of the fee, if any, of the impartial appraiser. 
 Section 13.3 Additional Insurance. In addition to the insurance described above, Tenant shall maintain such additional insurance as
may reasonably be required from time to time by any Facility Mortgagee and, further, shall at all times maintain adequate worker’s compensation insurance coverage for all persons employed by Tenant on each Leased Property. Such worker’s
compensation insurance shall be in accordance with the requirements of applicable local, state and federal law. 
 Section 13.4
Waiver of Subrogation. Lessor and Tenant agree that (insofar as and to the extent that such agreement may be effective without invalidating or making it impossible to secure insurance coverage from responsible insurance companies doing
business in the State) with respect to any property loss that is covered by insurance then being carried by Lessor or Tenant, respectively, the party carrying such insurance and suffering said loss releases the other of and from any and all claims
with respect to such loss where such insurance is valid and collectible respecting any such loss; and they further agree that their respective insurance companies shall have no right of subrogation against the other on account thereof, even though
extra premium may result therefrom. Nothing contained herein is intended, nor shall it be construed, to require that Lessor maintain any insurance coverage. 
 Section 13.5 Form Satisfactory, etc. All of the policies of insurance referred to in this Section shall be written in form satisfactory to Lessor and any Superior Lessor and Facility Mortgagee and
by insurance companies satisfactory to Lessor and any Superior Lessor and Facility Mortgagee. Lessor agrees that it will not unreasonably withhold, delay or condition its approval as to the form of the policies of insurance or as to the insurance
companies selected by Tenant. Tenant shall pay all of the premiums therefor not later than the earlier of the date which is thirty (30) days after Tenant’s receipt of an invoice therefor or the due date of the applicable premium, and shall
deliver such policies or certificates thereof to Lessor prior to their effective date (and, with respect to any renewal policy, prior to the expiration of the existing policy), and in the event of the failure of Tenant either to effect such
insurance in the names herein called for or to pay the premiums therefor, or to deliver such policies or certificates thereof to Lessor and each Superior Lessor and Facility Mortgagee at the times required, Lessor shall be entitled, but shall have
no obligation, to effect such insurance and pay the premiums therefor, which premiums shall be repayable to Lessor upon written demand therefor, and failure to repay the same shall constitute an Event of Default within the meaning of
Section 16.1(c). Each insurer mentioned in this Section shall agree, by endorsement on the policy or policies issued by it, or by independent instrument furnished to Lessor and any Superior Lessor and Facility Mortgagee, that it will
give to Lessor thirty (30) days’ written notice before the policy or policies in question shall be materially altered, allowed to expire or canceled. 
  

 49 








 Section 13.6 Limits; Deductibles. In the event that either party shall at any time
deem the limits of the personal injury or property damage public liability insurance then carried to be either excessive or insufficient or in the event that Lessor shall at any time deem the deductible amount under any insurance then carried by
Tenant pursuant to this ARTICLE XIII to be excessive, the parties shall endeavor to agree on the proper and reasonable limits or deductible amount, as applicable, for such insurance to be carried; and such insurance shall thereafter be
carried with the limits or deductible amount, as applicable, thus agreed on until further change pursuant to the provisions of this Section. If the parties shall be unable to agree thereon, the proper and reasonable limits or deductible amount, as
applicable, for such insurance to be carried shall be determined by an impartial third party selected by the parties. Nothing herein shall permit the amount of insurance to be reduced below, or the deductible amount under any insurance carried by
Tenant pursuant to this ARTICLE XIII to be increased above, the amount or amounts required by any of the Facility Mortgages or by any Superior Lessor. 
 Section 13.7 Blanket Policy. Notwithstanding anything to the contrary contained in this Section but subject to any requirements of any applicable Facility Mortgagee, Tenant’s obligations to
carry the insurance provided for herein may be brought within the coverage of a so-called blanket policy or policies of insurance carried and maintained by Tenant; provided, however, that the coverage afforded Lessor will not be
reduced or diminished or otherwise be different from that which would exist under a separate policy meeting all other requirements of this Lease by reason of the use of such blanket policy of insurance, and provided further that the requirements of
this ARTICLE XIII are otherwise satisfied. Lessor agrees that the blanket coverage described in Schedule 13.7 attached hereto and incorporated herein satisfied the requirements of Section 13.1 as of
February 23, 2001. 
 Section 13.8 No Separate Insurance. Tenant shall not on Tenant’s own initiative or
pursuant to the request or requirement of any third party, take out separate insurance concurrent in form or contributing in the event of loss with that required in this Article, or increase the amounts of any then existing insurance by securing an
additional policy or additional policies, unless all parties having an insurable interest in the subject matter of the insurance, including in all cases Lessor and all Superior Lessors and Facility Mortgagees, are included therein as additional
insureds, and the loss is payable under said insurance in the same manner as losses are payable under this Lease. Tenant shall immediately notify Lessor of the taking out of any such separate insurance or of the increasing of any of the amounts of
the then existing insurance by securing an additional policy or additional policies. 
 Section 13.9 Survival. All of
Tenant’s obligations under this ARTICLE XIII or otherwise relating to obtaining, and maintaining, claims made coverages, and/or switching back to occurrence based coverage, shall survive the expiration or termination of this Lease
as it applies to any or all of the Leased Properties. 
  

 50 








 Section 13.10 Insurance Company Ratings. Notwithstanding anything to the contrary
contained in this ARTICLE XIII, but without limitation of (a) any rights of any Facility Mortgagee and/or Superior Lessor and/or (b) any provisions of this ARTICLE XIII, or any other provisions of this Lease, that
require Tenant to comply with any requirements of, or satisfy, or obtain the approval or consent of, any Facility Mortgagee and/or Superior Lessor, Lessor agrees that (i) subject to subsection (ii) below, Lessor shall not require that any
insurance company that is providing general liability and/or professional liability insurance required by this ARTICLE XIII have a financial strength rating higher than A-, or a financial size category rating higher than IX, as such
ratings are set forth from time to time in the most current ratings of A. M. Best Company, provided, however, that, if A.M. Best Company materially lowers its criteria for financial strength and/or financial size category ratings, this
Section 13.10 shall no longer apply, and (ii) Lessor shall permit general liability and/or professional liability insurance required by this ARTICLE XIII to be provided by a Captive Insurance Company, but only if and to
the extent that such Captive Insurance Company, and the amount, form and all other matters relating to such insurance, fully comply with all of the requirements of this ARTICLE XIII (other than this Section 13.10).

 Section 13.11 Commutation of Certain Insurance Policies. Notwithstanding anything to the contrary contained in this
ARTICLE XIII, Lessor agrees that: 
 (a) With respect to Tenant’s excess liability policies covering general
liability and professional liability claims (“Excess CGL/PL Policies”) for (i) the period from January 1, 2003 through January 1, 2004 for claims of up to $7,000,000.00 in excess of $3,000,000.00 (i.e. claims in
excess of $3,000,000.00 and less than $10,000,000.00), (ii) the period from January 1, 2004 through January 1, 2006 for claims of up to $8,000,000.00 in excess of $2,000,000.00, and (iii) the period from January 1, 2006
through January 1, 2008 for claims of up to $9,000,000.00 in excess of $1,000,000.00, Tenant shall be entitled to obtain commutation return premiums from the insurer(s) under such policies, provided and on the conditions that: (1) in the
case of any claim that, if not for the commutation referenced above, would have been covered by such policies and that is (or has been) reported, or otherwise is (or becomes) known, to Tenant (sometimes referred to herein as a “known
claim”), Tenant shall establish and maintain cash reserves with respect to any such known claim in a manner and at a monetary level that is consistent with the most stringent of (x) generally accepted accounting principles (to the
extent the same are applicable), (y) generally accepted actuarial principles and practices and (z) the estimated liability principles and practices employed by Tenant and/or any Captive Insurance Company(ies) of Tenant with respect to
known claims not covered by insurance during the period from January 1, 2006 to December 31, 2006, and (2) in the case all claims (other than known claims) (sometimes referred to herein as “incurred but not reported
claims” or “IBNR claims”) that, if not for the commutation referenced above, would have been covered by such policies, Tenant shall establish and maintain accrued liability reserves in its books and records for the
estimated amount of such IBNR claims in a manner and at a monetary level that is consistent with the most stringent of (x) subsection (1)(x) above, (y) subsection (1)(y) above and (z) the estimated liability principles and
practices employed by Tenant and/or any Captive Insurance Company(ies) of Tenant with respect to IBNR claims not covered by insurance during the period from January 1, 2006 to December 31, 2006; and 
  

 51 








 (b) With respect to Tenant’s Excess CGL/PL Policies (i) for the period from
January 1, 2003 through January 1, 2006 for claims of up to $90,000,000.00 in excess of $10,000,000.00, Tenant shall be entitled to obtain commutation return premiums from the insurer(s) under such policies, provided and on the conditions
that, in the case of any claims, whether known claims or IBNR claims, that, if not for the commutation referenced above, would have been covered by such policies, Tenant shall establish and maintain cash reserves with respect to all such claims in a
manner and at a monetary level that is consistent with the most stringent of (i) subsection (a)(1)(x) above, (ii) subsection (a)(1)(y) above and (iii) the estimated liability principles and practices employed by Tenant and/or any
Captive Insurance Company(ies) of Tenant with respect to known claims, and IBNR claims, not covered by insurance during the period from January 1, 2006 to December 31, 2006. 
 ARTICLE XIV 
 Section 14.1 Insurance Proceeds. All
proceeds payable by reason of any loss or damage to the applicable Leased Property, or any portion thereof, and insured under any policy of insurance required by ARTICLE XIII (excluding Business Interruption Insurance, as described in
Section 13.1.3, covering Tenant’s obligations under this Lease for the payment of Rent, the disposition of the proceeds of which is described below) shall be paid to Lessor or a third party designated by Lessor and held by Lessor or
such third party in trust and shall be made available for reconstruction or repair, as the case may be, of any damage to or destruction of the Leased Property, or any portion thereof, and shall be paid out by Lessor or such third party from time to
time for the reasonable costs of such reconstruction or repair. Any excess proceeds of insurance remaining after the completion of the restoration or reconstruction shall be paid to Tenant upon completion of any such repair and restoration, except
that, in the event neither Lessor nor Tenant is required or elects to repair and restore as aforesaid, all such insurance proceeds shall be retained by Lessor free and clear (except as otherwise provided in Section 14.2.4). All salvage
resulting from any risk covered by insurance shall belong to Lessor except that any salvage relating to Tenant’s Personal Property shall belong to Tenant. All proceeds of the aforesaid Business Interruption Insurance shall be paid to Lessor or
a third party designated by Lessor and held by Lessor or such third party in trust. Business Interruption Insurance proceeds shall be applied first towards payment of any Rent that is due to Lessor as of the date such proceeds are received by Lessor
or such third party, and the balance of such proceeds shall be immediately paid to Tenant, except if and to the extent that the same have been paid by the insurer as a prepayment on account of Rent to become due under this Lease in which event
Lessor or such third party shall hold any such funds in trust and apply such funds to such Rent as the same becomes due. 
 Section 14.2 Reconstruction in the Event of Damage or Destruction Covered by Insurance. 
 Section 14.2.1 If, during the Term, any Leased Property is totally or partially destroyed from a risk covered by the insurance described in ARTICLE XIII and the Facility located thereon is rendered Unsuitable for Its
Primary Intended Use, Tenant shall either (A) restore the Facility to substantially the same condition as existed immediately before the damage 

  

 52 








 
or destruction, or (B) offer to acquire the applicable Leased Property from Lessor for a purchase price equal to the Fair Market Value Purchase Price of
the Leased Property immediately prior to such damage or destruction. In the event Lessor does not accept Tenant’s aforesaid offer to purchase, Tenant may (i) withdraw its offer to purchase the Leased Property and proceed to restore the
Facility to substantially the same condition as existed immediately before the damage or destruction or (ii) provided and on the conditions that, at the time of such damage or destruction, Tenant had in full force and effect the insurance
required under Section 13.1.1 and Section 13.1.2 above, there exists no defense to, or limitation upon, the insurer’s coverage of such damage or destruction under such insurance, and Tenant pays to Lessor, on or prior to the
hereinafter described termination, the amount of any deductible or other uninsured portion of the loss resulting from any such damage or destruction, terminate this Lease as to such Leased Property, in which event Lessor shall be entitled to retain
the insurance proceeds. 
 Section 14.2.2 If, during the Term, any Leased Property is totally or partially
destroyed from a risk covered by the insurance described in ARTICLE XIII, but the Facility located thereon is not thereby rendered Unsuitable for its Primary Intended Use, Tenant shall restore such Facility to substantially the same
condition as existed immediately before the damage or destruction. Such damage or destruction shall not terminate this Lease as to such Leased Property. 
 Section 14.2.3 If the cost of the repair or restoration of any Leased Property exceeds the amount of proceeds received by Lessor from the insurance required under ARTICLE XIII, Tenant shall be
obligated to contribute any excess amounts needed to restore such Leased Property. Prior to commencement of construction, Tenant shall either (a) provide Lessor with an irrevocable, unconditional, freely transferable letter of credit issued by
a Lending Institution, in the full amount of such difference and in form and substance acceptable to Lessor (and Lessor shall be entitled to draw thereon if Tenant fails to proceed diligently with such construction or to pay its contractors for such
construction in a timely manner or to renew or extend such letter of credit at any time the same is scheduled to expire within forty-five (45) days, and the funds from any such draw shall be held in trust and be disbursed by Lessor as provided
in subsection (b) below and elsewhere in this ARTICLE XIV), or (b) pay such difference to Lessor, to be held in trust by Lessor, together with any other insurance proceeds, for application to the cost of repair and restoration.

 Section 14.2.4 In the event Lessor accepts Tenant’s offer to purchase the applicable Leased Property as
provided above, this Lease shall terminate as to the applicable Leased Property upon payment of the purchase price and the provisions of Section 40.16 hereof shall apply. Upon receipt of the purchase price from Tenant, Lessor shall remit
to Tenant all insurance proceeds pertaining to such Leased Property then held in trust by Lessor or any third party designated by Lessor and shall assign to Tenant all of Lessor’s rights in and to any insurance proceeds payable on account of
such damage or destruction. 
 Section 14.3 Reconstruction in the Event of Damage or Destruction Not Covered by Insurance.
If during the Term any Leased Property and the Facility located thereon is totally or partially destroyed from a risk not covered by the insurance described in ARTICLE XIII, 

  

 53 








 
whether or not such damage or destruction renders the Facility Unsuitable for Its Primary Intended Use, Tenant shall restore the Facility to substantially
the same condition it was in immediately before such damage or destruction and such damage or destruction shall not terminate this Lease as to such Leased Property. 
 Section 14.4 Tenant’s Property. All insurance proceeds payable by reason of any loss of or damage to any of the Tenant’s Personal Property or Permitted Alterations financed by Tenant shall
be paid to Tenant and Tenant shall hold such insurance proceeds in trust to pay the cost of repairing or replacing damaged Tenant’s Personal Property or Permitted Alterations financed by Tenant. 
 Section 14.5 Restoration of Tenant’s Property. If Tenant is required or elects to restore the applicable Leased Property as
provided in Section 14.2 or Section 14.3, Tenant shall also restore all alterations and improvements made by Tenant, Tenant’s Personal Property and all Capital Alterations financed by Tenant. 
 Section 14.6 No Abatement of Rent. This Lease shall remain in full force and effect and Tenant’s obligation to make payments of
Rent and to pay all other charges required under this Lease shall remain unabated during the Term notwithstanding any damage involving any Leased Property (provided that Lessor shall credit against such payments any amounts paid to Lessor as a
consequence of such damage under any business interruption insurance obtained by Tenant); provided, however, that, effective upon the purchase of any Leased Property or termination of this Lease as to the applicable Leased Property
pursuant to and in accordance with Section 14.2, this Lease shall terminate as to such Leased Property and the provisions of Section 40.16 hereof shall apply. The provisions of this ARTICLE XIV shall be considered
an express agreement governing any cause of damage or destruction to the applicable Leased Property and, to the maximum extent permitted by law, no local or state statute, law, rule, regulation or ordinance in effect during the Term which provides
for such a contingency shall have any application in such case. 
 Section 14.7 Restoration. If Tenant is required or
elects to restore the applicable Leased Property as provided in Section 14.2 or Section 14.3, Tenant shall promptly repair, rebuild, or restore the applicable Leased Property, so as to make such Leased Property at least equal
in value to such Leased Property as it existed immediately prior to such occurrence and as nearly similar to it in character as is practicable and reasonable. Prior to commencing such repairs or rebuilding, Tenant shall submit to Lessor for
Lessor’s approval, which approval shall not be unreasonably withheld, delayed or conditioned, Plans and Specifications pursuant to Section 10.1. Promptly after receiving Lessor’s approval of the Plans and Specifications, Tenant
shall commence repairs and rebuilding and will prosecute the repairs and rebuilding to completion with diligence, subject, however, to strikes, lockouts, acts of God, embargoes, governmental restrictions, and other causes beyond Tenant’s
reasonable control. Subject to the provisions of any applicable Facility Mortgage, Lessor shall make available to Tenant the insurance proceeds (net of all administrative and collection costs, including reasonable attorneys’ fees) paid to
Lessor for such repair and rebuilding as it progresses. Payments shall be made against certification of the architect approved by Lessor (which approval shall not be 

  

 54 








 
unreasonably withheld. delayed or conditioned) responsible for the supervision of the repairs and rebuilding that the work had been performed substantially
in conformance with the Plans and Specifications and the value of the work in place is equal to not less than 110% of the aggregate amount advanced by Lessor for the payment of such work. Prior to commencing the repairing and rebuilding, Tenant
shall deliver to Lessor for Lessor’s approval a schedule setting forth the estimated monthly draws for such work. Subject to the provisions of any applicable Facility Mortgage, Lessor shall contribute to such payments out of the insurance
proceeds being held in trust by Lessor an amount equal to the proportion that the total net amount so held by Lessor bears to the total estimated cost of repairing and rebuilding, multiplied by the payment by Tenant on account of such work. Lessor
may, however, withhold ten percent (10%) from each payment until the work has been completed and proof has been furnished to Lessor that no lien or liability has attached or will attach to the applicable Leased Property or to Lessor in
connection with repairing and rebuilding. 
 Section 14.8 Notice. If during the Term any Leased Property and/or the
Facility located thereon is totally or partially damaged or destroyed, and the restoration and repair of such damage or destruction is in Tenant’s reasonable estimation likely to cost in excess of $200,000.00 in the aggregate, then Tenant shall
provide Lessor with written notice of such damage or destruction within fifteen (15) days after Tenant’s discovery thereof. The notice requirement of this Section 14.8 shall apply regardless of whether such damage or
destruction is from a risk covered by the insurance described in ARTICLE XIII, and regardless of whether such damage or destruction renders the Facility Unsuitable for Its Primary Intended Use. 
 Section 14.9 Waiver. Tenant hereby waives any statutory rights of termination which may arise by reason of any damage or destruction
of the applicable Leased Property which Tenant is obligated to restore or may restore under any of the provisions of this Lease. 
 ARTICLE XV 
 Section 15.1 Definitions. 
 Section 15.1.1 “Condemnation” means, as to any Leased Property, (a) the exercise of any governmental
power, whether by legal proceedings or otherwise, by a Condemnor, (b) a voluntary sale or transfer by Lessor to any Condemnor, either under threat of condemnation or while legal proceedings for condemnation are pending and (c) a taking or
voluntary conveyance of all or part of such Leased Property, or any interest therein, or right accruing thereto or use thereof, as the result or in settlement of any condemnation or other eminent domain proceeding affecting such Leased Property.

 Section 15.1.2 “Date of Taking” means, as to the applicable Leased Property, the date the
Condemnor has the right to possession of such Leased Property, or any portion thereof, in connection with a Condemnation. 
 Section 15.1.3 “Award” means all compensation, sums or anything of value awarded, paid or received on a total or partial condemnation. 
  

 55 








 Section 15.1.4 “Condemnor” means any public or quasi-public
authority, or private corporation or individual, having the power of condemnation. 
 Section 15.2 Parties’ Rights and
Obligations. If during the Term there is any taking of all or any part of the applicable Leased Property by Condemnation, the rights and obligations of the parties shall be determined by this ARTICLE XV. 
 Section 15.3 Total Taking. If any Leased Property is totally taken by condemnation, this Lease shall terminate as to such Leased
Property on the Date of Taking, in which event the provisions of Section 40.16 hereof shall apply. 
 Section 15.4
Partial Taking. If a portion of any Leased Property is taken by Condemnation, this Lease shall remain in effect as to such Leased Property if the Facility located thereon is not thereby rendered Unsuitable for Its Primary Intended Use,
but if the Facility is thereby rendered Unsuitable for its Primary Intended Use, this Lease shall terminate as to such Leased Property on the Date of Taking, in which event the provisions of Section 40.16 hereof shall apply. 

If as a result of any such partial taking by Condemnation, this Lease is not terminated as provided above, Tenant’s obligation to make payments
of Rent and to pay all other charges required under this Lease shall remain unabated during the Term notwithstanding such Condemnation (provided that Lessor shall credit against such payments any amount of any Award attributable to Tenant’s
business interruption). 
 Section 15.5 Restoration. If there is a partial taking of the applicable Leased Property and
this Lease remains in full force and effect pursuant to Section 15.4, Tenant at its cost shall accomplish all necessary restoration. 
 Section 15.6 Award-Distribution. 
 (a) In the event of any partial taking of any Leased Property, the entire
Award shall belong to and be paid to Lessor, except that, subject to the rights of the Facility Mortgagees, Tenant shall be entitled to receive from the Award, if and to the extent such Award specifically includes such item, the following:

 (i) A sum attributable to the Capital Alterations paid for by Tenant; and 
 (ii) A sum specifically attributable to Tenant’s Personal Property and any reasonable removal and relocation costs included in the
Award; and 
 (iii) A sum specifically attributable to the cost of restoring the Leased Property in accordance with
Section 15.5 hereof. 
 (b) In the event of a total taking of any Leased Property, the Award shall be divided between Lessor and
Tenant in such proportions relative to the appraised values of their relative estates determined in accordance with Section 35.1 taking into account the value of improvements owned by Lessor and Permitted Alterations paid for by Tenant.
Tenant shall also receive a sum specifically attributable to Tenant’s Personal Property and any reasonable removal and relocation costs included in the Award. 
  

 56 








 Section 15.7 Temporary Taking. The taking of any Leased Property, or any part thereof,
by military or other public authority shall constitute a taking by condemnation only when the use and occupancy by the taking authority has continued for longer than six (6) months. During any such six (6) month period all the provisions
of this Lease shall remain in full force and effect and Base Rent shall not be abated or reduced during such period of taking. 
 ARTICLE XVI 
 Section 16.1 Events of Default. The occurrence of any one or more of the following
events shall constitute an “Event of Default” under this Lease: 
 (a) if a default by Tenant shall occur
under the Indemnity Agreement and, in the case of a monetary default, such default is not cured within a period of five (5) days after receipt of notice from Lessor or, in the case of a non-monetary default, such default is not cured within a
period of thirty (30) days after receipt of notice from Lessor, unless such default cannot with due diligence be cured within a period of thirty (30) days, in which case such period of time shall be extended to such period of time (not to
exceed 180 days) as may be necessary to cure such default with all due diligence, provided that such cure is completed within 180 days (this subsection (a) shall not apply if and for so long as Lessor is neither Ventas Realty, Limited
Partnership, nor Ventas, Inc. nor an Affiliate of either of such entities), or 
 (b) if Tenant shall fail to make payment of
the Rent or any other sum payable under or pursuant to the terms of this Lease when the same becomes due and payable and such failure is not cured within a period of five (5) days after receipt of notice from Lessor, or 
 (c) if Tenant shall fail to observe or perform any term, covenant or condition of this Lease not specifically provided for in this
Section 16.1 and such failure is not cured within a period of thirty (30) days after receipt of notice from Lessor, unless such failure cannot with due diligence be cured within a period of thirty (30) days, in which case such
period of time shall be extended to such period of time (not to exceed 180 days) as may be necessary to cure such default with all due diligence provided that such cure is completed within 180 days, or 
 (d) if Tenant shall fail to observe or perform any term, covenant or agreement on its part to be performed or observed pursuant to
Section 8.1.1, Section 11.1, the last sentence of Section 8.2, Section 12.1(g) or Section 13.1, or 
 (e) any Guarantor shall fail to observe or perform any term, covenant or agreement on its part to be performed or observed pursuant to any
Lease Guaranty and such failure shall not be cured within any applicable cure period provided in such Lease Guaranty, or 
  

 57 








 (f) there shall occur a final unappealable determination by applicable federal, state or
local authorities of Tenant’s non-compliance with Legal Requirements applicable to a Facility located on any Leased Property, or of the revocation of any license, permit, approval or other Authorization (including, without limitation, any
certificate of need) required for the lawful operation of the Facility located on any Leased Property in accordance with its Primary Intended Use, or any other circumstances under which Tenant is required by a final unappealable determination of any
such authority to cease operations of such Facility in accordance with its Primary Intended Use as currently operated (provided, however, that, without limitation of Section 12.1(g) hereof, before any such determination becomes final and
unappealable, Tenant shall have the right to contest the same in accordance with Section 8.1.1, Section 8.2 and Section 12.1(a)-(f) hereof), or 
 (g) any material representation or warranty made by or on behalf of Tenant or any Guarantor under or in connection with this Lease or any
document, certificate or agreement delivered in connection with this Lease shall prove to have been false or misleading in any material respect on the day when made or deemed made, or 
 (h) if any Tenant or any Guarantor shall: 
 (i) admit in writing its inability to pay its debts generally as they become due, 
 (ii) file
a petition in bankruptcy or a petition to take advantage of any insolvency act, 
 (iii) make an assignment for the benefit of
its creditors, 
 (iv) consent to the appointment of a receiver of itself or of the whole or any substantial part of its
property, or 
 (v) file a petition or answer seeking reorganization or arrangement under the Federal bankruptcy laws or any
other applicable law or statute of the United States of America or any State thereof, or 
 (i) any petition shall be filed by
or against any Tenant or any Guarantor or any subsidiary of either under Federal bankruptcy laws, or any other proceeding shall be instituted by or against any Tenant or any Guarantor or such subsidiary seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for any Tenant or any Guarantor or such subsidiary, or for any substantial part of the property of any Tenant or any Guarantor or such subsidiary, and such proceeding is not
dismissed within ninety (90) days after institution thereof, or any Tenant or any Guarantor or such subsidiary shall take any action to authorize or effect any of the actions set forth above in this subsection (i) (this subsection
(i) shall not apply to the appointment of a receiver, trustee, custodian or other similar official in any proceeding(s) other than bankruptcy, reorganization, insolvency and other creditors’ rights proceedings of the nature referenced in
this subsection (i)), or 
  

 58 








 (j) if any Tenant or any Guarantor shall be liquidated or dissolved, or shall begin
proceedings toward such liquidation or dissolution, or 
 (k) if the estate or interest of Tenant in any Leased Property or
any part thereof shall be levied upon or attached in any proceeding and the same shall not be vacated or discharged within the later of ninety (90) days after commencement thereof or 30 days after receipt by Tenant of notice thereof from
Lessor, (unless Tenant shall be contesting such lien or attachment in good faith in accordance with ARTICLE XII hereof), or 
 (l) if any receiver, trustee, custodian or other similar official is appointed for any Tenant, any Guarantor or any of the Facilities and any such appointment is not dismissed prior to the entry of a final,
unappealable order approving such appointment (provided, however, that this subsection (l) shall not apply to any such official appointed in bankruptcy, reorganization, insolvency or other creditors’ rights proceedings of the nature
referenced in subsection (i) above), and, in the case of the appointment of any such official as to whom this subsection (l) does apply, prior to the entry of a final unappealable order approving the appointment of such official and
denying any requested dismissal thereof, without limitation of Section 12.1(g) hereof, no Event of Default shall be deemed to have occurred under this subsection (l) so long as Tenant is contesting such appointment in accordance
with Section 8.2 and Section 12.1(a)-(f) hereof), or 
 (m) Subject to Section 16.10
hereof: 
 (i) Subject to subsection (iv) below, an Event of Default shall occur hereunder if the number of licensed beds
for any Facility is reduced by more than the Permissible Reduction Percentage (as hereinafter defined) applicable to such Facility of the number of licensed beds in such Facility on the Commencement Date (which number of licensed beds, as of the
Commencement Date, Tenant represents and warrants to Lessor is as set forth in Schedule 16.1(m)A attached hereto and made a part hereof) (provided, however, that, (1) intentionally omitted, (2) intentionally
omitted, and (3) the voluntary removal from service (so called “bed banking” or “banking”) of not more than twenty-five percent (25%) of the number of licensed beds in a particular Facility on the Commencement Date
shall not constitute a reduction of licensed beds for purposes of this subsection (m), if and for so long as, for purposes of this subsection (3), (a) any such beds that are voluntarily removed from service by Tenant are removed from service
with the approval of all applicable governmental authorities, (b) such beds continue to be considered “licensed beds” by the applicable governmental authorities, (c) after diligent inquiry relative to the applicable Legal
Requirements and after consultation with its legal counsel, Tenant is not aware of any reason why the applicable regulatory authorities would not authorize such reintroduction by Tenant or any successor operator at the end of the bed banking period,
in the discretion of Tenant or such successor operator, as applicable, and without the necessity of any governmental approval or reapproval or 

  

 59 








 
additional Authorization (other than routine governmental re-inspections of such Facility(ies) and any ministerial approvals, re-approvals or other
Authorizations), and (d) at the time, and as a condition, of any such voluntary removal and thereafter within twenty (20) days after receipt of a written request therefor from Lessor from time to time (but not more often than twice in any
calendar year, unless, after Lessor has made two (2) such requests in a calendar year, a change(s) in Legal Requirements becomes effective, or Lessor obtains knowledge of other facts or circumstances, suggesting a possible violation of
subsection (a), (b) or (c) above or of the other provisions of this Section 16.1(m)), Tenant shall deliver to Lessor a Senior Officer’s Certificate, in form and substance reasonably satisfactory to Lessor, certifying that
Tenant has made diligent inquiry relative to the applicable Legal Requirements and has consulted with its legal counsel and, based on the foregoing, certifies that Tenant has complied, and continues to be in compliance, with the provisions of
subsections (a), (b) and (c) above and the other provisions of this Section 16.1(m)); and 
 (ii) As
used in this subsection (m), the “Permissible Reduction Percentage” for a particular Facility shall equal the lesser of (1) ten percent (10%) or (2) the difference between twenty-five percent (25%) and the percentage of
licensed beds at such Facility on the Commencement Date that, as of the calculation date, have been voluntarily removed from service by Tenant in accordance with subsection (m)(i)(3) above, provided, however, that
(x) intentionally omitted, (y) intentionally omitted, and (z) in the case of any Facilities listed on Schedule 16.1(m)B attached hereto and made a part hereof as to which any involuntary reduction in the number of licensed
beds has occurred in compliance with subsection (m)(iii) below, the reference in subsection (m)(ii)(1) above shall equal, as of any date, subject to subsection (m)(iii)(5) below, the greater of (A) five percent (5%) or (B) that
percentage, not greater than ten percent (10%), calculated by subtracting from the number of licensed beds at such Facility as of such date the number of licensed beds set forth in the “95% of Minimum” column of
Schedule 16.1(m)B as it applies to such Facility and then dividing the result of such subtraction by the number of licensed beds at such Facility as of such date. (For example, if Tenant voluntarily removes from service, in accordance
with the requirements of subsection (m)(i)(3) above, fifteen percent (15%) or less of the aforesaid licensed beds at a particular Facility as to which neither subsection (m)(ii)(x) nor (m)(ii)(y) nor (m)(ii)(z) above applies, the
“Permissible Reduction Percentage” would equal ten percent (10%) for such Facility, but if, for example, Tenant voluntarily removes from service, in accordance with the requirements of subsection (m)(i)(3) above, twenty percent
(20%) of the aforesaid licensed beds at such Facility, the “Permissible Reduction Percentage” applicable to such Facility would equal five percent (5%) (i.e., under subsection (m)(ii)(2) above, 25%-20%=5%). Also, for example, if
a particular Facility listed on Schedule 16.1(m)B had, as of the Commencement Date, 120 licensed beds, such Facility had not lost any licensed beds other than 38 licensed beds lost through an involuntary reduction that complies with
subsection (m)(iii) below (so that, as of a particular date, such Facility has 82 licensed beds), and Schedule 16.1(m)B sets forth 80 licensed beds in the “Minimum Number of Licensed Beds” column as it applies to such Facility
and 76 licensed beds in the “95% of 

  

 60 








 
Minimum” column as it applies to such Facility, the percentage referenced in the foregoing subsection (m)(ii)(z) would equal 7.317% (82 licensed beds
minus 76 licensed beds equals 6 licensed beds and 6 licensed beds divided by 82 licensed beds equals 7.317%, which is greater than the 5.0% referenced in subsection (m)(ii)(z)(A) above); and 
 (iii) The provisions of this subsection (m)(iii) shall not apply to any of the Leased Properties other than the five (5) Leased
Properties referenced on Schedule 16.1(m)B: An involuntary reduction of the nature referenced in subsection (m)(iii)(1) below in the number of licensed beds for any Facility listed on Schedule 16.1(m)B below the minimum
number of licensed beds set forth in the “Minimum Number of Licensed Beds” column of Schedule 16.1(m)B as it applies to such Facility shall constitute an Event of Default under this Section 16.1(m)), but,
notwithstanding any voluntary removal from service of licensed beds, an involuntary reduction in the number of licensed beds for any of the five (5) Facilities listed on Schedule 16.1(m)B down to, but not below, the minimum number
of licensed beds set forth in the “Minimum Number of Licensed Beds” column of Schedule 16.1(m)B as it applies to such Facility shall not constitute an Event of Default under this Section 16.1(m)) provided and on the
conditions that (1) the involuntary reduction is required by the applicable state regulatory authority primarily because of physical space limitations at the applicable Facility and any such physical space limitations are not the result of any
alterations to the Facility made after the Existing Lease Effective Date; (2) Tenant uses its best efforts and due diligence to contest through all available processes (but not including any obligation on Tenant’s part to make physical
alterations to the affected Facility) the involuntary reduction and, in regular and timely consultation with Lessor, explores other alternatives (e.g. sale or banking of the licensed beds that are the subject of such involuntary reduction, with any
such sale of beds to be subject to the prior written approval of Lessor, in its sole discretion, and with all proceeds from any such sale to be paid, and belong, to Lessor); (3) Tenant provides written notice to Lessor of such involuntary
reduction within two (2) Business Days of Tenant’s receipt of notice of the involuntary reduction and allows Lessor, if it so desires in its sole discretion, to participate in the contest of such involuntary reduction and, if it so desires
in its sole discretion, to require that Tenant allow Lessor, at Tenant’s cost, to control such contest (including, without limitation, prosecuting legal proceedings in Lessor’s and/or Tenant’s name); (4) Tenant shall not settle
any contest of any such involuntary reduction without Lessor’s prior written consent, in its sole discretion; and (5) following any such involuntary reduction as to a particular Facility listed on Schedule 16.1(m)B and whether
or not Tenant has complied with the preceding conditions (1), (2), (3) and (4), Tenant shall in no event voluntarily reduce the number of licensed beds at such Facility by any amount, and 
 (iv) Notwithstanding anything to the contrary contained in this subsection (m), if and to the extent that Tenant voluntarily removes from
service and/or de-licenses beds at a Facility referenced on Schedule 7.2.8 hereof in accordance with Section 7.2.8 hereof and, in the case of any such beds that are voluntarily removed from service, provided 

  

 61 








 
further that the requirements of subsections (a), (b), (c) and (d) of subsection (m)(i)(3) above are, and at all times continue to be, met, such
voluntary removal from service and/or de-licensing, as applicable, shall not constitute, or be treated as, a breach of this subsection (m) or an Event of Default under this Lease, and 
 (v) Notwithstanding anything to the contrary contained in this subsection (m), if to the extent that the aggregate number of beds at
a particular Hospital Facility that are licensed for the delivery of hospital care or skilled nursing care is reduced below the Applicable Required Number of Beds for such Hospital Facility in accordance with Section 7.2.7 hereof, such
reduction shall not constitute, or be treated as, a breach of this subsection (m) or an Event of Default under this Lease (and, in such regard, if the proviso included in Section 7.2.7(b)(i) hereof is applicable, no breach of this
subsection (m), and no Event of Default, shall be deemed to exist under this subsection (m) if the requirements of subsections (1) and (2) included in such proviso are complied with and satisfied), or 
 (n) if Tenant shall become subject to regulatory sanctions and Tenant has failed to cure or satisfy such regulatory sanctions (including,
without limitation, through payment of any such sanctions, if the same are monetary in nature) within its specified regulatory cure period in any material respect with respect to any Facility (provided, however, that, without
limitation of Section 12.1(g) hereof, prior to the imposition of such sanctions on Tenant by final unappealable order of any governmental agency or authority, no Event of Default shall be deemed to have occurred under this subsection
(n) so long as Tenant is contesting the imposition of such sanctions in accordance with Section 8.2 and Section 12.1(a)-(f) hereof), or 
 (o) if, except pursuant to the terms hereof, Tenant voluntarily ceases operations on any Leased Property, or 
 (p) if Tenant shall fail to observe or perform any term, covenant or other obligation of Tenant set forth in ARTICLE XXVI
hereof and such failure is not cured within a period of ten (10) days after receipt of notice thereof from Lessor, or 
 (q) subject to Section 16.10 hereof, there shall occur a revocation of certification for reimbursement under Medicare or Medicaid with respect to any Facility that participates in such programs and, within one hundred twenty
(120) days following such revocation, Tenant fails to have its aforesaid certification fully restored (provided, however, that Tenant shall be given an additional sixty (60) days beyond the aforesaid one hundred twenty
(120) day period to have its aforesaid certification fully restored if, on or prior to the aforesaid one hundred twentieth (120th) day, Tenant delivers to Lessor a Senior Officer’s Certificate, in form and substance reasonably
satisfactory to Lessor, certifying that (i) the only requirement that remains unsatisfied in order for Tenant to have its aforesaid certification fully restored is a re-inspection of the applicable Facility by the applicable regulatory
authority, and (ii) Tenant has made diligent inquiry relative to the applicable Legal Requirements and has consulted with its legal counsel and, based on the foregoing, certifies that Tenant is not aware of any reason why Tenant will not pass
its aforesaid re-inspection, or why Tenant’s aforesaid certification will not be fully restored, in each case within the aforesaid additional sixty (60) day period), or 
  

 62 








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

 (s) an Event of Default shall occur as described in Section 21.5.1 below, or 
 (t) if Tenant shall exercise a purchase option relative to a Leased Property(ies) in accordance with Section 16.12 hereof and
thereafter fail to purchase the subject Leased Property(ies), and otherwise perform and discharge its duties, liabilities and obligations on account of such exercise, strictly in accordance with the terms and conditions of Section 16.12
hereof, or 
 (u) an Event of Default (as defined in the Tenant Credit Agreement) arising from the failure to pay
principal or interest with respect to any indebtedness owing under or pursuant to the Tenant Credit Agreement, or any other event of default arising from the failure to pay principal or interest with respect to any other indebtedness for borrowed
money of Tenant with an aggregate outstanding principal amount equal to or exceeding $50 million, shall have occurred, or 
 (v) the acceleration of the maturity of any indebtedness for borrowed money of Tenant with an aggregate outstanding principal amount equal to or exceeding $50 million, shall have occurred, or 
 (w) if Tenant shall fail to observe or perform any term, covenant or other obligation of Tenant set forth in Section 7.2.7 or
Section 7.2.8 hereof. 
 Upon the occurrence of any Event of Default, Lessor may, at its option, terminate this Lease (i) in
the case of any Event of Default, as to all Leased Properties and/or (ii) if such Event of Default is a Facility Default, as to any of the Leased Property(ies) to which such Event of Default relates, by giving not less than ten
(10) days’ notice of such termination and upon the expiration of such 10-day period or other time period fixed in such notice, if any, during which 10-day or other time period Tenant shall have no right to cure the Event of Default in
question, the Term shall terminate as to all Leased Properties or as to the Leased Property(ies) to which such Event of Default relates, as specified in such notice, all rights of Tenant under this Lease shall cease as to the Leased Property(ies) so
specified, and, if the Leased Property(ies) so specified are less than all of the Leased Properties, the provisions of Section 40.16 hereof shall apply. Lessor shall have all rights at law and in equity available to Lessor as a result of
Tenant’s breach of this Lease, subject to Section 16.10. 
 Tenant shall pay, to the maximum extent permitted by law, as
Additional Charges all Litigation Costs as a result of any Event of Default hereunder. 
  

 63 








 Section 16.2 Certain Remedies. If an Event of Default shall have occurred (and the
event giving rise to such Event of Default has not been cured within the curative period relating thereto, if any, as set forth in the applicable subsection of Section 16.1 above or elsewhere herein), whether or not this Lease has been
terminated pursuant to Section 16.1, Tenant shall, to the maximum extent permitted by law, if and to the extent required by Lessor so to do, immediately surrender to Lessor the Leased Property(ies) as to which the Lease has been or may
be terminated pursuant to Section 16.1 and quit the same, and Lessor may enter upon and repossess the Leased Properties by reasonable force, summary proceedings, ejectment or otherwise, and may remove Tenant and all other persons and any
and all personal property from the Leased Properties subject to rights of any occupants or patients and to any requirement of law. 
 Section 16.3 Damages. To the extent permitted by law, neither (a) the termination of this Lease pursuant to Section 16.1, (b) the repossession of any or all of the Leased Properties or any portion
thereof, (c) the failure of Lessor to relet any or all of the Leased Properties or any portion thereof, (d) the reletting of any or all of the Leased Properties or any portion thereof, nor (e) the failure of Lessor to collect or
receive any rentals due upon any such reletting, shall relieve Tenant of any of its liability and obligations hereunder, all of which shall survive any such termination, repossession or reletting. In the event of any such termination, subject to
Section 16.4 below, Tenant shall forthwith pay to Lessor, at Lessor’s option, as liquidated damages with respect to Rent for each Leased Property as to which such termination has occurred, either: 
 (A) the sum of: 
 (i) the unpaid Rent allocable to each such Leased Property in accordance with Section 16.9 hereof which had been earned at the time of termination, which Rent and other sums shall bear interest at the lesser of the Overdue Rate
and the maximum annual rate permitted by law from the date when due until paid; and 
 (ii) whether or not Lessor previously
collected any amounts pursuant to clause (B) below, the then net present value (computed using a discount rate equal to the Prime Rate) of the amount of unpaid Rent allocable to each such Leased Property in accordance with
Section 16.9 hereof for the balance of the Term following the date of termination (excluding, however, any period following termination on account of which Lessor previously collected Rent pursuant to clause (B) below) without any
obligation or deemed obligation on the part of Lessor to mitigate damages, or 
 (B) each installment of Rent allocable to
each such Leased Property in accordance with Section 16.9 hereof and other sums payable with respect to each such Leased Property by Tenant to Lessor under this Lease as the same becomes due and payable, which Rent and other sums shall
bear interest at the lesser of the Overdue Rate and the maximum annual rate permitted by law from the date when due until paid, to the extent that such Rent and other sums exceed the rent and other sums actually collected by Lessor for the
corresponding period pursuant to any reletting of each such Leased Property (without any obligation or deemed obligation on the part of Lessor to mitigate damages). 
  

 64 








 In case of any Event of Default, re-entry, expiration and dispossession by summary proceedings or
otherwise, Lessor may, with or without terminating this Lease, (a) relet any or all of the Leased Properties or any part or parts thereof, either in the name of Lessor or otherwise, for a term or terms which may, at Lessor’s option, be
equal to, less than or exceed the period which would otherwise have constituted the balance of the Term and may grant concessions or free rent to the extent that Lessor considers advisable and necessary to relet the same, and (b) make such
reasonable alterations, repairs and decorations in the applicable Leased Property or any portion thereof as Lessor, in its sole judgment, considers advisable and necessary for the purpose of reletting the applicable Leased Property; and such
reletting and the making of such alterations, repairs and decorations shall not operate or be construed to release Tenant from liability hereunder as aforesaid (subject to Section 16.3(B) above if and to the extent the same is
applicable). Lessor shall in no event be liable in any way whatsoever for failure to relet any Leased Property, or, in the event that any Leased Property is relet, for failure to collect the rent under such reletting. To the fullest extent permitted
by law, Tenant hereby expressly waives any and all rights of redemption granted under any present or future laws in the event of Tenant’s being evicted or dispossessed, or in the event of Lessor’s obtaining possession of any Leased
Property, by reason of the violation by Tenant of any of the covenants and conditions of this Lease. 
 Section 16.4 Certain
Effects of Separate Lease. Lessor agrees that, in the event this Lease is terminated as to a particular Leased Property and immediately thereafter a Separate Lease is entered into with respect to such Leased Property pursuant to
Section 22.7 below, (a) Lessor shall not proceed against Tenant under Section 16.3(A) above relative to such Leased Property unless and until an Event of Default shall occur under such Separate Lease and (b) Rent
collected by Lessor under any such Separate Lease relative to such Leased Property shall be credited by Lessor against the amounts owing to Lessor under Section 16.3(B) above relative to such Leased Property. Nothing contained in this
Section 16.4 shall affect or impair Lessor’s rights under Section 16.3(A) and Section 16.3 (B) above relative to other Leased Properties. 
 Section 16.5 Waiver. If this Lease is terminated pursuant to Section 16.1, whether in whole or, in the case of any
Facility Default, in part, Tenant waives, to the maximum extent permitted by applicable law, (a) any right of redemption, re-entry or repossession, (b) any right to a trial by jury in the event of summary proceedings to enforce the
remedies set forth in this ARTICLE XVI, and (c) the benefit of any moratorium laws or any laws now or hereafter in force exempting property from liability for rent or for debt. 
 Section 16.6 Application of Funds. Any payments received by Lessor under any of the provisions of this Lease during the existence or
continuance of any Event of Default (and such payment is made to Lessor rather than Tenant due to the existence of an Event of Default) shall be applied to Tenant’s obligations in the order which Lessor may determine or as may be prescribed by
the laws of the State where the applicable Leased Property is located. 
 Section 16.7 Notice to Lessor. If Tenant or any
subtenant receives a notice of any material regulatory deficiency from any regulatory agency, Tenant shall deliver a copy of such notice to Lessor in accordance with Section 34.1. 
  

 65 








 Section 16.8 Nature of Remedies. To the maximum extent permitted by law, the rights
and remedies of Lessor and Tenant under this Lease, at law and in equity shall be cumulative and may be exercised concurrently or successively, on one or more occasions, as Lessor or Tenant, as applicable, deems appropriate in its sole discretion,
as often as occasion therefor arises. To the maximum extent permitted by law, each such right and remedy shall be in addition to all other such rights and remedies, and the exercise by Lessor or Tenant, as applicable, of any one or more of such
rights and remedies shall not preclude the simultaneous or subsequent exercise of any or all other such rights and remedies. Without limiting the generality of the foregoing, liquidated damages in respect of Rent provided for in clauses (A) and
(B) of Section 16.3 hereof, and in Section 20.1 hereof, shall be payable by Tenant in addition to, and not in lieu of, any other damages suffered by Lessor in connection with any default or Event of Default by Tenant
(including, without limitation, Litigation Costs and costs of reletting). 
 Section 16.9 Allocable Rent. For purposes of
this Lease, without limitation of Section 40.15 or Section 40.16 hereof, (a) the Additional Charges allocable to a Leased Property shall be the Additional Charges with respect to such Leased Property, and (b) the
Base Rent allocable to a Leased Property shall be the product of (i) the amount of the Base Rent, multiplied by (ii) the Transferred Property Percentage for such Leased Property as set forth in Exhibit C (as modified from time to
time in accordance herewith). 
 Section 16.10 Special Remedies Provisions. The intention of this
Section 16.10 is to set forth certain special provisions applicable to Events of Default under Section 16.1(m) and/or Section 16.1(q) of this Lease and to Lessor’s rights and remedies upon the occurrence of
such Events of Default. This Section 16.10 has no application to other Events of Default under this Lease and is not intended to alter or limit Lessor’s rights and remedies with respect to such other Events of Default or, except as
specifically set forth in this Section 16.10, for any other purpose. Subject to the foregoing, Lessor and Tenant agree that, notwithstanding anything to the contrary contained in this Lease: 
 Section 16.10.1 For purposes of this Lease, subject to Section 16.10.3.1 and Section 16.10.3.2 below,
references to the “Section 16.10.1 Number” shall, as of a particular date, mean and refer to (a) the number 1 (if the number of Leased Properties as to which this Lease remains in full force and effect as of such date
equals twenty (20) or less), (b) the number 2 (if the number of Leased Properties as to which this Lease remains in full force and effect as of such date equals between twenty-one (21) and forty (40), both inclusive), or (c) the
number 3 (if the number of Leased Properties as to which this Lease remains in full force and effect as of such date equals forty-one (41) or more). 
  

 66 








 Section 16.10.2 
 Section 16.10.2.1 If the Section 16.10.1 Number applicable to this Lease, as determined pursuant to
Section 16.10.1 above, equals one (1), the following provisions shall apply: 
 If, and for so long as, one or more Events of
Default of the nature referenced in Section 16.1(m) and/or Section 16.1(q) of this Lease has occurred and is continuing (as described below), Lessor shall be entitled to exercise all rights and remedies available to it under
this Lease on account of any then continuing Event of Default under Section 16.1(m) and/or Section 16.1(q) provided that Lessor may only exercise termination and/or dispossession rights and remedies on account of such
Section 16.1(m) and/or Section 16.1(q) Event(s) of Default against either (i) any one or more of the Leased Properties to which such Event(s) of Default relate or (ii) all Leased Properties covered by this Lease.

 Section 16.10.2.2 If the Section 16.10.1 Number applicable to this Lease, as determined pursuant to
Section 16.10.1 above, equals two (2) or more, the following provisions shall apply: 
 If, and for so long as, an Event of
Default of the nature referenced in Section 16.1(m) and/or Section 16.1(q) of this Lease has occurred and is continuing (as described below) with respect to fewer than the Section 16.10.1 Number (as determined
pursuant to Section 16.10.1 hereof) of the Leased Properties, then, on account of any Event of Default under Section 16.1(m) and/or Section 16.1(q) of this Lease, Lessor may not exercise any termination and/or
dispossession rights and remedies available to it under this Lease on account of such Section 16.1(m) and/or Section 16.1(q) Event(s) of Default against any Leased Property other than the Leased Property to which the
aforesaid Event of Default relates. If, however, an Event of Default of the nature referenced in such Section 16.1(m) and/or Section 16.1(q) of this Lease has occurred and is continuing (as described below) with respect to
the Section 16.10.1 Number or more Leased Properties, Lessor shall be entitled to exercise all rights and remedies available to it under this Lease on account of any then continuing Event of Default under Section 16.1(m)
and/or Section 16.1(q), provided that Lessor may only exercise termination and/or dispossession rights and remedies on account of such Section 16.1(m) and/or Section 16.1(q) Event(s) of Default against either
(i) any one or more of the Leased Properties to which such Event(s) of Default relate or (ii) all Leased Properties covered by this Lease. 
 Section 16.10.2.3 For purposes of Section 4.1, Section 16.1(m), Section 16.1(q), Section 16.10, Section 17.1, Section 19.1,
Section 25.1.1, Section 25.1.2 and Section 25.1.3 of this Lease, if an Event of Default shall occur under Section 16.1(m) and/or Section 16.1(q) of this Lease, except as otherwise agreed in
writing by Lessor, in its sole and absolute discretion, the same shall be deemed to be “continuing” at all times from and after the date that such Event of Default first arises (including, without limitation, at all times from and after
the date that Lessor terminates this Lease as it applies to the Leased Property to which the aforesaid Event of Default relates or dispossesses Tenant from such Leased Property), unless, prior to the date that Lessor terminates this Lease as it
applies to the Leased Property to which the aforesaid Event of Default relates or dispossesses Tenant from such Leased Property, such Event of Default is cured “in-kind” by rectifying and reversing the particular event, circumstance or
condition that constitutes or causes such Event of Default; provided (the “Section 16.10.2.3 Proviso”), however, that, if the applicable Section 16.10.1 Number, as determined pursuant to 

  

 67 








 
Section 16.10.1 above, equals two or more, if (a) an Event of Default of the nature referenced in Section 16.1(m) and/or
Section 16.1(q) of this Lease has occurred and is continuing (as described above) with respect to fewer than the Section 16.10.1 Number of the Leased Properties and (b) Lessor has terminated this Lease as it applies to a
Leased Property to which an aforesaid Event of Default relates or has dispossessed Tenant from such Leased Property, then, for purposes of Section 4.1, Section 17.1, Section 25.1.1, Section 25.1.2 and
Section 25.1.3, the aforesaid Event of Default relating to such Leased Property shall not be deemed to be “continuing” as to Leased Properties other than such terminated or dispossessed Leased Property; in such event, the
rights and remedies available to Lessor or the limitation of Tenant’s rights under such sections which arise in the case of a continuing Event of Default shall apply only to the Leased Property on which the Event of Default under
Section 16.1(m) and/or Section 16.1(q) has occurred, as illustrated by Examples 5, 6 and 7 of Section 16.10.5 below. 
 Section 16.10.2.4 The limitations on Lessor’s rights and remedies set forth in this Section 16.10.2:
(a) apply only to Events of Default under Section 16.1(m) and/or Section 16.1(q) of this Lease and not to any other Events of Default under this Lease, (b) apply only to Lessor’s termination and dispossession
rights and remedies on account of Events of Default under Section 16.1(m) and/or Section 16.1(q) of this Lease and, subject to the terms of the Section 16.10.2.3 Proviso, not to any other rights and remedies
available to Lessor on account of any such Events of Default, and (c) do not change any of the other provisions of this Lease as they may relate to Events of Default under Section 16.1(m) and/or Section 16.1(q) of this
Lease (e.g. pursuant to Section 24.1(d) of this Lease, Tenant shall remain obligated to indemnify Lessor with respect to any such Section 16.1(m) and/or Section 16.1(q) Event of Default). 
 Section 16.10.3 The intention of this Section 16.10.3 is to set forth special rules regarding the calculation of
the Section 16.10.1 Number and thereby to limit the ability of Lessor and Tenant, through transactions of the specified nature described in this Section 16.10.3, to evade certain of the intended goals of this
Section 16.10. 
 Section 16.10.3.1 Notwithstanding Section 16.10.1 above, if (a)(i) a New
Lease under Section 40.15 hereof (other than a New Lease that is a Separate Lease created under Section 22.7 hereof) is created from this Lease or (ii) this Lease constitutes a New Lease created under
Section 40.15 of another lease demising any of the Master Lease Leased Properties (other than a New Lease that is a Separate Lease created under Section 22.7 of such other lease) and (b) as of the date immediately prior
to such New Lease creation transaction (a “Section 16.10.3.1 New Lease Transaction”), under this Lease (if subsection (a)(i) above is applicable) or the other lease referenced in subsection (a)(ii) above (if subsection (a)(ii)
above is applicable) one or more Events of Default of the nature referenced in Section 16.1(m) and/or Section 16.1(q) of such lease had occurred and were continuing (as described in Section 16.10.2.3 hereof or of
such other lease, as applicable) with respect to any of the Master Lease Leased Properties covered hereby or thereby, as applicable, then, the Section 16.10.1 Number that would otherwise apply to this Lease, but for the terms of this
Section 16.10.3.1, shall be increased by one (1) if and only if all of the following conditions are met relative to this Lease: 
  

 68 








 (x) As of the date immediately following the aforesaid Section 16.10.3.1 New
Lease Transaction, an Event of Default of the nature referenced in Section 16.1(m) and/or Section 16.1(q) of this Lease (whether this Lease is the New Lease, or the lease from which a New Lease is created, involved in the
aforesaid Section 16.10.3.1 New Lease Transaction) has occurred and is continuing (as described in Section 16.10.2.3 hereof) with respect to a number of the Leased Properties then covered by this Lease that equals or exceeds
the Section 16.10.1 Number that would be applicable to this Lease as of such date (assuming, for purposes of this subsection (x), that this Section 16.10.3.1 is not applicable); and 
 (y) For the four (4) full calendar quarters ending not less than sixty (60) days prior to the aforesaid
Section 16.10.3.1 New Lease Transaction, (1) the Leased Properties, if any, that continue to be covered by this Lease (whether this Lease is the New Lease, or the lease from which a New Lease is created, involved in the aforesaid
Section 16.10.3.1 New Lease Transaction) and have as their Primary Intended Use use as a hospital have a Coverage Ratio that is fifteen percent (15%) or more higher than the Coverage Ratio of all of the Master Lease Leased
Properties that are covered by this Lease and the other lease involved in the aforesaid Section 16.10.3.1 New Lease Transaction or (2) the Leased Properties, if any, that continue to be covered by this Lease and have as their
Primary Intended Use use as a nursing center have a Coverage Ratio that is ten percent (10%) or more higher than the Coverage Ratio of all of the Master Lease Leased Properties that are covered by this Lease and the other lease involved in the
aforesaid Section 16.10.3.1 New Lease Transaction; and 
 (z) No Event(s) of Default (other than
Section 16.1(m) and/or Section 16.1(q) Events of Default) have occurred and are continuing under this Lease. 
 Example 1: Assume this Lease covers 25 Leased Properties and that no Event of Default under Section 16.1(m) and/or Section 16.1(q) or any other provision of this Lease has occurred or is continuing. Assume
further that a New Lease covering 10 Leased Properties and not constituting a Separate Lease under Section 22.7 is created from this Lease pursuant to Section 40.15 hereof. This Section 16.10.3.1 would not apply,
and the Section 16.10.1 Number applicable to this Lease would be determined pursuant to Section 16.10.1(a) hereof (because this Lease would then cover 15 Leased Properties), without any adjustment pursuant to this
Section 16.10.3.1, because requirement (b) above is not met. The Section 16.10.1 Number for this Lease would equal one (1). For the aforesaid New Lease (because such New Lease would cover 10 Leased Properties), the
Section 16.10.1 Number would also equal one (1). 
 Example 2: Same assumed facts as in Example 1, except that, as
of the date immediately prior to the Section 16.10.3.1 New Lease Transaction referenced in Example 1, an Event of Default under Section 16.1(m) and/or Section 16.1(q) had occurred and was continuing with
respect to one (1) Leased Property and such Leased Property remains a part of this Lease (thus satisfying requirement (b) above). Requirement (x) above would be met as to this Lease, because, immediately following the assumed
Section 16.10.3.1 New Lease Transaction, an Event of Default under Section 16.1(m) and/or Section 16.1(q) would exist under this Lease with respect to one (1) Leased Property, and such number of Leased
Properties equals the Section 16.10.1 Number that would be applicable to this Lease as a 15 Leased Properties lease, 

  

 69 








 
assuming, for purposes of requirement (x) above, that this Section 16.10.3.1 is not applicable. Also, requirement (z) above would be
met, as assumed in Example 1. Accordingly, in the circumstances of Example 2, a review of Coverage Ratios pursuant to subsection (y) above would be needed in order to determine whether a change in the Section 16.10.1
Number applicable to this Lease is mandated by this Section 16.10.3.1. On the other hand, for the aforesaid New Lease (because such New Lease would cover 10 Leased Properties and because requirement (x) above is not met), the
Section 16.10.1 Number would equal one (1). 
 Example 3: Same assumed facts as in Example 2. Assume further that
the Coverage Ratios of the hospitals and nursing centers that remain subject to this Lease, determined for the four (4) full calendar quarters ending not less than sixty (60) days prior to the assumed Section 16.10.3.1 New Lease
Transaction, equal, respectively, 1.575:1 and 1.500:1 and that the Coverage Ratios of the hospitals and nursing centers included in the 25 Leased Properties that were covered by this Lease immediately prior to the aforesaid transaction, for the
same period, equal, respectively, 1.500:1 and 1.450:1. In the circumstances of this Example 3, this Section 16.10.3.1 would not apply, and the Section 16.10.1 Number applicable to this Lease would be determined
pursuant to Section 16.10.1(a) hereof (because this Lease would then cover 15 Leased Properties), without any adjustment pursuant to this Section 16.10.3.1, because requirement (y) above is not met. The
Section 16.10.1 Number for this Lease would equal one (1). For the aforesaid New Lease, for the reasons stated in Example 2, the Section 16.10.1 Number would also equal one (1). 
 Example 4: Same assumed facts as in Example 2. Assume further that the Coverage Ratios of the hospitals and nursing centers that remain
subject to this Lease, determined for the four (4) full calendar quarters ending not less than sixty (60) days prior to the assumed Section 16.10.3.1 New Lease Transaction, equal, respectively, 1.575:1 and 1.653:1 and that the
Coverage Ratios of the hospitals and nursing centers included in the 25 Leased Properties that were covered by this Lease immediately prior to the aforesaid transaction, for the same period, equal, respectively, 1.500:1 and 1.450:1. In the
circumstances of this Example 4, the Section 16.10.1 Number that is applicable to this Lease immediately following the assumed Section 16.10.3.1 New Lease Transaction, would, pursuant to this
Section 16.10.3.1, be increased from one (1) to two (2), because both requirement (a) and requirement (b) above are met, and all of requirement (x) (as described in Example 2), requirement
(y) (because the Coverage Ratio for nursing centers covered by this Lease is fourteen percent (14%) higher (1.45 x. 1.14 = 1.653) than the Coverage Ratio for all nursing centers covered by the pre-transaction 25 Leased Properties lease)
and requirement (z) (as described in Example 2) above are met. For the aforesaid New Lease, for the reasons stated in Example 2, the Section 16.10.1 Number would equal one (1). 
 Section 16.10.3.2 Notwithstanding Section 16.10.1 above, if (a) this Lease is, pursuant to
Section 40.18 hereof, the Section 40.18 Lease (as defined in Section 40.18) and (b) as a result of Section 16.1(m) and/or Section 16.1(q) Events of Default that had occurred and were
continuing under this Lease and the other lease(s) involved in the Section 40.18 lease combination transaction immediately prior to such transaction, immediately following the transaction pursuant to which this Lease became a
Section 40.18 Lease, an Event of Default of 

  

 70 








 
the nature referenced in Section 16.1(m) and/or Section 16.1(q) of this Lease has occurred and is continuing (as described in
Section 16.10.2.3 hereof) with respect to a number of the Leased Properties then covered by this Lease (the “Section 16.10.3.2 Number”) that equals or exceeds the Section 16.10.1 Number that would be
applicable to this Lease as of such date (assuming, for purposes of this subsection (b), that this Section 16.10.3.2 is not applicable), and (c) immediately following the transaction pursuant to which this Lease became a
Section 40.18 Lease, no Event of Default (other than Section 16.1(m) and/or Section 16.1(q) Events of Default) has occurred and is continuing under this Lease, then, the Section 16.10.1 Number that
would otherwise apply to this Lease, but for the terms of this Section 16.10.3.2, shall be increased by one (1) (and provided further that, if requirements (a), (b) and (c) above are met and this Lease, as the
Section 40.18 Lease, (X) covers forty-one (41) or more Leased Properties and the Section 16.10.3.2 Number for this Lease, as the Section 40.18 Lease, exceeds three (3), then the
Section 16.10.1 Number applicable to this Lease shall be adjusted to equal the aforesaid Section 16.10.3.2 Number plus one (1) or (Y) covers twenty-one (21) to forty (40), both inclusive, Leased
Properties and the number (the “Subsection Y Number”) equal to the Section 16.10.3.2 Number for this Lease, as the Section 40.18 Lease, minus the number of Leased Properties, if any, as to which, following
such lease combination transaction, Tenant will continue to have an available and exercisable purchase option under Section 16.12 exceeds two (2), then the Section 16.10.1 Number applicable to this Lease shall be adjusted to
equal the Subsection Y Number plus one (1) or (Z) covers twenty (20) or less Leased Properties and the number (the “Subsection Z Number”) equal to the Section 16.10.3.2 Number for this Lease, as the
Section 40.18 Lease, minus the number of Leased Properties, if any, as to which, following such lease combination transaction, Tenant will continue to have an available and exercisable purchase option under Section 16.12
exceeds one (1), then the Section 16.10.1 Number applicable to this Lease shall be adjusted to equal the Subsection Z Number plus one (1)). 
 Example 1: Assume that a lease covering 50 Master Lease Leased Properties is subdivided into Lease A covering 35 Master Lease Leased Properties and Lease B covering 15 Master Lease Leased Properties and that no
Event of Default under Section 16.1(m) and/or Section 16.1(q) or any other provision has occurred or is continuing under either of such leases. Assume further that, pursuant to Section 40.18, such two
(2) leases are combined and that Lease A is the Section 40.18 Lease. This Section 16.10.3.2 would not apply, and the Section 16.10.1 Number applicable to Lease A would be determined pursuant to
Section 16.10.1(c) hereof (because Lease A would then cover 50 Master Lease Leased Properties), without any adjustment pursuant to this Section 16.10.3.2, because, although requirements (a) and (c) above are met
relative to Lease A, requirement (b) above is not met as to Lease A. 
 Example 2: Same assumed facts as in Example 1,
except assume three (3) Master Lease Leased Properties are subject to continuing Section 16.1(m) and/or Section 16.1(q) Events of Default immediately prior to the assumed Section 40.18 transaction, 2 of which
are within the 35 Master Lease Leased Properties Lease A and 1 of which is within the 15 Master Lease Leased Properties Lease B. Immediately following the assumed Section 40.18 transaction, the recombined 50 Master Lease Leased
Properties Lease A would have included therein 3 Master Lease Leased Properties that are subject to continuing Section 16.1(m) and/or Section 16.1(q) Events of Default, which number equals the Section 16.10.1
Number that would be applicable to 

  

 71 








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

 Section 16.10.3.3 If a Separate Lease is created under Section 22.7 of any lease of any of the
Master Lease Leased Properties and, at the time such lease is created an Event of Default under Section 16.1(m) and/or Section 16.1(q) has occurred and is continuing with respect to any Master Lease Leased Property(ies)
included in such Separate Lease or, within two (2) years thereafter, such an Event of Default arises under such Separate Lease with respect to any Master Lease Leased Property(ies) included in such Separate Lease, then, for all purposes of each
Section 16.10.3.3 Lease (as hereinafter defined), (a) any such Event of Default under such Separate Lease shall also be considered an Event of Default under Section 16.1(m) and/or Section 16.1(q) of any lease
(a “Section 16.10.3.3 Lease”) that, or that derives from a lease that, at any time during the two (2) years that preceded the creation of such Separate Lease, included any Master Lease Leased Property included in such
Separate Lease and as to which such a Section 16.1(m) and/or Section 16.1(q) Event of Default has occurred and is continuing under such Separate Lease and (b) each Master Lease Leased Property as to which such a
Section 16.1(m) and/or Section 16.1(q) Event of Default has occurred and is continuing under such Separate Lease shall, for all purposes of Section 16.10 and Section 19.1(b) of each
Section 16.10.3.3 Lease, be counted as a leased property as to which a Section 16.1(m) and/or Section 16.1(q) Event of Default had occurred and was continuing the same as if a Section 16.1(m) and/or
Section 16.1(q) Event of Default had occurred and was continuing under such Section 16.10.3.3 Lease relative to a Master Lease Leased Property included in such Section 16.10.3.3 Lease. 
 Example 1: Assume that a lease of 15 Master Lease Leased Properties includes Property A as to which a Section 16.1(m) Event of Default
has occurred and is continuing and that, on account of an Event of Default under such lease, Lessor terminates such lease as it applies to Property A, so that the remaining lease covers 14 Master Lease Leased Properties. Assume further that,
pursuant to Section 22.7 of such lease, a Separate Lease under Section 22.7 is entered into with a leasehold mortgagee or its designee relative to Property A. As a result of 

  

 72 








 
Section 16.10.3.3, the Section 16.1(m) Event of Default relative to Property A will also be considered an Event of Default under
Section 16.1(m) of the aforesaid remaining lease of 14 Master Lease Leased Properties and Property A will, for all purposes of Section 16.10 and Section 19.1(b) of such remaining lease, be counted as a leased
property as to which a Section 16.1(m) Event of Default had occurred and was continuing the same as if a Section 16.1(m) Event of Default had occurred and was continuing under such remaining lease relative to a Master Lease
Leased Property included in such remaining lease. 
 Example 2: Assume that a lease of 15 Master Lease Leased Properties includes no
properties as to which a Section 16.1(m) and/or Section 16.1(q) Event of Default has occurred and is continuing and that, on account of an Event of Default under such lease, Lessor terminates such lease as it applies to
Property A, so that the remaining lease covers 14 Master Lease Leased Properties. Assume further that, pursuant to Section 22.7 of such lease, a Separate Lease under Section 22.7 is entered into with a leasehold mortgagee or
its designee relative to Property A. Assume further that several months later a Section 16.1(m) Event of Default arises relative to Property A. As a result of Section 16.10.3.3, the Section 16.1(m) Event of
Default relative to Property A will also be considered an Event of Default under Section 16.1(m) of the aforesaid remaining lease of 14 Master Lease Leased Properties and Property A will, for all purposes of Section 16.10 and
Section 19.1(b) of such remaining lease, be counted as a leased property as to which a Section 16.1(m) Event of Default had occurred and was continuing the same as if a Section 16.1(m) Event of Default had
occurred and was continuing under such remaining lease relative to a Master Lease Leased Property included in such remaining lease. 
 Example 3: Same assumed facts as in Example 2, except assume further that the 15 Master Lease Leased Properties lease referenced in such example was formed several months prior to the creation of the Separate Lease as the
result of the division of a 60 Master Lease Leased Properties lease into two leases, the aforesaid 15 Master Lease Leased Properties lease and a 45 Master Lease Leased Properties lease. As a result of Section 16.10.3.3, the
Section 16.1(m) Event of Default relative to Property A will also be considered an Event of Default under Section 16.1(m) of both the remaining lease of 14 Master Lease Leased Properties and the aforesaid 45 Master Lease
Leased Properties lease and Property A will, for all purposes of Section 16.10 and Section 19.1(b) of such remaining lease and such 45 Master Lease Leased Properties lease, be counted as a leased property as to which a
Section 16.1(m) Event of Default had occurred and was continuing the same as if a Section 16.1(m) Event of Default had occurred and was continuing under such remaining lease relative to a Master Lease Leased Property included
therein and under such 45 Master Lease Leased Properties lease relative to a Master Lease Leased Property included therein. This is because, several months prior to the creation of the Separate Lease, Property A was included in the aforesaid 60
Master Lease Leased Properties lease and both the 14 Master Lease Leased Properties lease and the 45 Master Lease Leased Properties lease derive from such 60 Master Lease Leased Properties lease. 
 Section 16.10.4 Lessor shall have no obligation of any kind or nature to accept, or to treat as a default cure, any monetary
or other form of cure in lieu of the mandated “in-kind”, Facility-specific cure. For example, even if Lessor, in its sole and absolute discretion, receives, and accepts, full monetary compensation from Tenant on account of all damages


  

 73 








 
suffered by Lessor due to the loss of certification for reimbursement under Medicaid at a particular Facility and whether such receipt occurs through a
voluntary arrangement or through the exercise of any remedy hereunder, the Section 16.1(q) Event of Default arising from such loss of certification shall, unless Lessor otherwise agrees in writing, in its sole and absolute discretion,
for purposes of Section 4.1, Section 16.1(q), Section 16.10, Section 17.1, Section 19.1, Section 25.1.1, Section 25.1.2 and Section 25.1.3 of this Lease,
subject, if the Section 16.10.1 Number is 2 or greater, to the Section 16.10.2.3 Proviso, be considered to be “continuing” unless, prior to termination of this Lease as it applies to such Facility, or dispossession
of Tenant from such Facility, as described in Section 16.10.2.3 above, such certification for such Facility is fully restored. Nothing contained in this Section 16.10 shall limit or affect the provisions of this
ARTICLE XVI providing that Lessor has no obligation or deemed obligation to mitigate damages on account of any default by Tenant. 
 Section 16.10.5 The following examples are intended to illustrate further the application of this Section 16.10: 
 Example 1: If an Event of Default occurs under Section 16.1(m) hereof because the number of licensed beds at a particular Facility has been reduced to a number below the required number of licensed
beds for such Facility, such Event of Default shall be deemed to be “continuing” for purposes of Section 4.1, Section 16.1(m), Section 16.10, Section 17.1, Section 19.1,
Section 25.1.1, Section 25.1.2 and Section 25.1.3 of this Lease, subject, if applicable, to the Section 16.10.2.3 Proviso, unless, prior to termination of this Lease as it applies to such Facility, or
dispossession of Tenant from such Facility, as described in Section 16.10.2.3 above, the number of licensed beds at such Facility is returned to the required number. 
 Example 2: If an Event of Default of the type described in Example 1 has occurred and is continuing (as described above) with respect to a
Leased Property, and Lessor has terminated this Lease as it applies to the Leased Property to which such aforesaid Event of Default relates or Lessor has dispossessed Tenant from such Leased Property, then, if the Section 16.10.1 Number
applicable to this Lease equals two (2) or more and Events of Default of the nature referenced in Section 16.1(m) and/or Section 16.1(q) of this Lease have occurred and are continuing (as described above) with respect to
fewer than the Section 16.10.1 Number of the Leased Properties, such Event of Default, for purposes of Section 4.1, Section 17.1, Section 25.1.1, Section 25.1.2 and
Section 25.1.3, shall not be deemed to be “continuing” as to any other Leased Properties; in such event, the rights and remedies available to Lessor or the limitation of Tenant’s rights under such sections which arise in
the case of a continuing Event of Default shall apply only to the Leased Property on which the Event of Default under Section 16.1(m) has occurred (as illustrated in Examples 5, 6 and 7 below). 
 Example 3: If an Event of Default occurs under Section 16.1(q) hereof due to a loss of Medicaid certification at a particular
Facility, such Event of Default shall be deemed to be “continuing” for purposes of Section 4.1, Section 16.1(q), Section 16.10, Section 17.1, Section 19.1,
Section 25.1.1, Section 25.1.2 and Section 25.1.3 of this Lease, subject, if applicable, to the Section 16.10.2.3 Proviso, unless, prior to termination of this Lease as it applies to such Facility, or
dispossession of Tenant from such Facility, as described above, such Facility’s certification for reimbursement under Medicaid is fully restored. 
  

 74 








 Example 4: If an Event of Default of the type described in Example 3 has occurred and is
continuing (as described above) with respect to a Leased Property, and Lessor has terminated this Lease as it applies to the Leased Property to which such aforesaid Event of Default relates or Lessor has dispossessed Tenant from such Leased
Property, then, if the Section 16.10.1 Number applicable to this Lease equals two (2) or more and Events of Default of the nature referenced in Section 16.1(m) and/or Section 16.1(q) of this Lease have
occurred and are continuing (as described above) with respect to fewer than the Section 16.10.1 Number of the Leased Properties, such Event of Default, for purposes of Section 4.1, Section 17.1,
Section 25.1.1, Section 25.1.2 and Section 25.1.3, shall not be deemed to be “continuing” as to any other Leased Properties; in such event, the rights and remedies available to Lessor or the limitation
of Tenant’s rights under such sections which arise in the case of a continuing Event of Default shall apply only to the Leased Property on which the Event of Default under Section 16.1(q) has occurred (as illustrated in Examples
5, 6 and 7 below). 
 Example 5: If (i) an Event of Default of the nature referenced in
Section 16.1(m) and/or Section 16.1(q) of this Lease has occurred and is continuing (as described above) with respect to Leased Property X and no other Leased Properties, (ii) Lessor has terminated this Lease as it
applies to Leased Property X or dispossessed Tenant from such Leased Property X, (iii) the Section 16.10.1 Number applicable to this Lease exceeds 1 (so that Section 16.10.2.2 is applicable and, in light of subsections
(i) and (ii) of this Example, requirements (a) and (b) of the Section 16.10.2.3 Proviso are met), and (iv) pursuant to Section 4.1, a refund shall be due from a taxing authority in respect of an
Imposition paid by Tenant relative to Leased Property X, then Tenant would not receive such refund and such refund would be retained by Lessor and applied as provided in ARTICLE XVI, but Tenant would continue to be paid or retain (as
provided in Section 4.1) any Imposition refund from Leased Properties other than Leased Property X. 
 Example 6: If
(i) an Event of Default of the nature referenced in Section 16.1(m) and/or Section 16.1(q) of this Lease has occurred and is continuing (as described above) with respect to Leased Property X and no other Leased
Properties, (ii) Lessor has terminated this Lease as it applies to Leased Property X or dispossessed Tenant from such Leased Property X, and (iii) the Section 16.10.1 Number applicable to this Lease exceeds 1 (so that
Section 16.10.2.2 is applicable and, in light of subsections (i) and (ii) of this Example, requirements (a) and (b) of the Section 16.10.2.3 Proviso are met), then, pursuant to Section 17.1,
Lessor would be entitled, to the extent permitted by law, to enter on Leased Property X for the purpose of curing such continuing Event of Default, but Lessor would not be entitled to exercise the remedies provided in Section 17.1 with
respect to any other Leased Properties. 
 Example 7: If (i) an Event of Default of the nature referenced in
Section 16.1(m) and/or Section 16.1(q) of this Lease has occurred and is continuing (as described above) with respect to Leased Property X and no other Leased Properties, (ii) Lessor has dispossessed Tenant from Leased
Property X, (iii) the Section 16.10.1 Number applicable to this Lease exceeds 1 (so that Section 16.10.2.2 is applicable and, in light of subsections (i) and (ii) of this Example, 

  

 75 








 
requirements (a) and (b) of the Section 16.10.2.3 Proviso are met), and (iv) Tenant desires to sublet, pursuant to
Section 25.1.2(ii), up to an aggregate of 20% of the rentable square footage of each of Leased Properties X and Y without obtaining the consent of Lessor, then Tenant would not be entitled to sublet any portion of Leased Property X
without the consent of Lessor, but Tenant would be entitled to sublet such portion of Leased Property Y without obtaining the consent of Lessor. 
 Example 8: Same assumed facts as in Example 7, except that the Section 16.10.1 Number applicable to this Lease equals 2, and an Event of Default of the nature referenced in Section 16.1(m) has also
occurred and is continuing relative to another of the Leased Properties. Section 16.10.2.2 would be applicable, but requirement (a) of the Section 16.10.2.3 Proviso would not be met. Tenant would not be entitled to
sublet any portion of Leased Property X or Leased Property Y without the consent of Lessor. 
 Section 16.11 No Mediation or
Arbitration. Notwithstanding anything to the contrary set forth herein or in that certain Agreement and Plan of Reorganization dated as of April 30, 1998 by and between Ventas and Vencor Healthcare, Inc. (“1998 Plan of
Reorganization”), (a) upon any Event of Default by Tenant, Lessor shall be entitled to proceed immediately to enforce its rights and remedies pursuant to this ARTICLE XVI and the other terms of this Lease, (b) neither
any Event of Default, nor the rights and obligations of Tenant and Lessor under this Lease, shall be subject to mediation or arbitration of any kind, and (c) the provisions of ARTICLE VI of the 1998 Plan of Reorganization shall not
apply to this Lease or any of the Combined Leases. 
 Section 16.12 Special Purchase Provisions. It is the intention of
this Section 16.12 to set forth specific provisions that, in limited circumstances, for a limited number of times and only in connection with the occurrence of Events of Default under Section 16.1(m) and/or
Section 16.1(q) of this Lease, allow Tenant a non-renewing right to purchase a Leased Property(ies) and thereby to reduce the number of Leased Properties as to which Section 16.1(m) and/or Section 16.1(q) Events
of Default continue to exist to below the applicable Section 16.10.1 Number, and, by doing so strictly on the terms and conditions provided in this Section 16.12, thereby to avoid the exercise by Lessor of termination and/or
dispossession rights and remedies against all Leased Properties covered hereby on account of such Section 16.1(m) and/or Section 16.1(q) Event(s) of Default. Tenant’s purchase rights as set forth in this
Section 16.12 are not applicable to any other Events of Default or in any other circumstances and are strictly limited in number and non-renewing. 
 Section 16.12.1 
 Section 16.12.1.1 If the number of Leased Properties as to which this Lease is in full force and effect equals twenty (20) or less, subject to Section 16.12.1.2 below, a purchase option
will be exercisable by Tenant on account of a Section 16.1(m) and/or Section 16.1(q) Event of Default with respect to only two (2) Leased Properties in the aggregate during the Term, after which no further purchase
option under this Section 16.12 will be available to, or exercisable by, Tenant. 
  

 76 








 Section 16.12.1.2 If the number of Leased Properties as to which this Lease
is in full force and effect equals twenty-one (21) to forty (40), both inclusive, a purchase option will be exercisable by Tenant on account of a Section 16.1(m) and/or Section 16.1(q) Event of Default with respect to
only one (1) Leased Property in the aggregate during the Term, after which no further purchase option under this Section 16.12 will be available to, or exercisable by, Tenant, and provided that, if (a) this Lease at any time
was in full force and effect with respect to twenty-one (21) to forty (40), both inclusive, Leased Properties and at such time Tenant exercised a purchase option under this Section 16.12 and on account of a
Section 16.1(m) and/or Section 16.1(q) Event of Default with respect to a Leased Property and (b) this Lease thereafter is in full force and effect with respect to less than twenty-one (21) Leased Properties due to
creation of a Separate Lease under Section 22.7, a casualty or condemnation termination relative to a Leased Property(ies) or for any other reason (other than Lessor’s unilateral creation of a New Lease under
Section 40.15), no further purchase option under this Section 16.12 will be available to, or exercisable by, Tenant. 
 Section 16.12.1.3 If the number of Leased Properties as to which this Lease is in full force and effect equals forty-one (41) or more, then, notwithstanding anything to the contrary contained in this
Section 16.12, this Section 16.12 shall not apply, and no purchase option will be available to, or exercisable by, Tenant on account of a Section 16.1(m) and/or Section 16.1(q) Event of Default.

 Section 16.12.1.4 For all purposes of this Section 16.12, once a purchase option is exercised
relative to a Leased Property(ies), it may not be revoked, and it shall exhaust Tenant’s available purchase options, as described in Section 16.12.1.1 and Section 16.12.1.2, as applicable, above, to the extent of the
number of Leased Properties as to which such exercise applies. 
 Section 16.12.1.5 No purchase option will be
available to, or exercisable by, Tenant on account of any Event of Default under this Lease other than Section 16.1(m) and/or Section 16.1(q) Events of Default. 
 Section 16.12.2 If (a) an Event of Default under Section 16.1(m) and/or Section 16.1(q) of this
Lease has occurred and is continuing (as described in Section 16.10.2.3 hereof) with respect to a number of the Leased Properties covered by this Lease that equals or exceeds the Section 16.10.1 Number that is applicable to
this Lease and (b) Lessor intends to exercise termination and/or dispossession rights and remedies against all Leased Properties covered by this Lease on account of such Event(s) of Default and (c) no Events of Default (other than
Section 16.1(m) and/or Section 16.1(q) Events of Default) have occurred and are continuing under this Lease, then, unless (i) Tenant has previously exhausted its available purchase option(s) (as described in
Section 16.12.1.1 or Section 16.12.1.2, as applicable, above) or (ii) if Tenant has any remaining purchase option(s), by exercising the same Tenant would not be able to reduce the number of Leased Properties as to which
an Event of Default under Section 16.1(m) and/or Section 16.1(q) of this Lease has occurred and is continuing (as described in Section 16.10.2.3 hereof) to a number fewer than the Section 16.10.1
Number that is applicable to this Lease: 
  

 77 









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

  

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

  

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

 Section 16.12.3 If Tenant exercises a purchase option relative to a particular Leased
Property(ies), the closing with respect thereto will occur within forty-five (45) days of Tenant’s receipt of the applicable Section 16.12 Notice. At such closing, Lessor will, by special warranty deed (or, if a particular
Leased Property is subject to an Existing Ground Lease, by a special warranty assignment, rather than a special warranty deed), convey to Tenant or its designee all of Lessor’s right, title and interest in the subject Leased Property(ies) (or,
if a particular Leased Property is subject to an Existing Ground Lease, in the subject Existing Ground Lease), subject to the Permitted Encumbrances, and will cause to be released any 

  

 78 








 
Facility Mortgage(s) or other liens created by Lessor or its agents or employees relative to the subject Leased Property(ies) (and, if Lessor is unable to
cause such release(s) as of the initially scheduled closing date, the closing date shall be extended as necessary to allow Lessor additional time to cause such release(s)), and Tenant will pay in cash, to or as directed by Lessor, the purchase price
therefor, as described in Section 16.12.5 below, subject, if applicable as described below, to a credit against the purchase price in favor of Tenant and in the amount, if any, described below. Such conveyance will be on an “AS
IS”, “WITH ALL FAULTS” basis and without any representation or warranty (except as set forth in the aforesaid special warranty deed (or, if applicable as described above, the aforesaid special warranty assignment)). If consummation of
any such conveyance would result in a violation or breach of any Existing Ground Lease or other Permitted Encumbrance, or of the terms or conditions of any applicable Authorization or reimbursement or provider agreement, Tenant shall be obligated,
at its expense and as a condition to Lessor’s obligation to close, to obtain, in form and substance reasonably satisfactory to Lessor, any consents or approvals as may be necessary to avoid any such violation or breach. At such closing, Tenant
shall execute and deliver to Lessor an instrument pursuant to which Tenant shall represent and warrant to, and covenant with, Lessor that (a) Tenant is purchasing the subject Leased Property(ies) with the intention of selling the same and
(b) Tenant’s acquisition from Lessor will qualify as an acquisition of assets “solely for rental or investment purposes” that is exempt from the notification and waiting period requirements of the Hart-Scott-Rodino Act, as
amended (15 U.S.C. §18a et. seq.) under (16 C.F.R. §802.5). Upon the occurrence of such closing, this Lease will terminate, in accordance with Section 40.16, insofar as it applies to the purchased Leased Property(ies), but all
accrued obligations, or obligations that survive termination, with respect to the purchased Leased Property(ies) shall survive such termination. Relative to the foregoing, if Tenant closes with respect to a particular Leased Property strictly in
accordance with the terms and conditions provided in this Section 16.12, and, prior to such closing, Lessor has sued, and collected damages from, Tenant on account of a Section 16.1(m) and/or Section 16.1(q) Event
of Default relative to such Leased Property, Tenant shall be entitled to a credit against the purchase price for such Leased Property equal to a sum, not to exceed the purchase price, equal to (a) the amount of the damages so collected by
Lessor from Tenant in the aforesaid lawsuit, less (b) the amount of all attorneys’ fees, court costs, witness fees and other costs and expenses incurred by Lessor in connection with such lawsuit or Section 16.1(m) and/or
Section 16.1(q) Event of Default. 
 Section 16.12.4 If Tenant exercises a purchase option relative to
a Leased Property(ies), and closes with respect thereto strictly in accordance with the terms and conditions provided in this Section 16.12, then, for purposes of Section 16.1 and Section 16.10 of this Lease, the
Section 16.1(m) and/or Section 16.1(q) Event of Default relative to the purchased Leased Property(ies) will be deemed to have been cured (but without limitation of Lessor’s indemnity rights under Section 24.1
hereof and other rights and remedies that survive the applicable termination of this Lease that results from Tenant’s purchase of such Leased Property(ies)), but, for purposes of Section 16.12.1.1 and Section 16.12.1.2,
Tenant will have exhausted that number of its available purchase options as equals the number of Leased Properties as to which it has so exercised its purchase option. If, as a result of such cure, the number of the Leased Properties as to which an
Event of Default under Section 16.1(m) and/or 

  

 79 








 
Section 16.1(q) of this Lease is reduced to a number fewer than the Section 16.10.1 Number that is applicable to this Lease, Lessor
will, for so long as such condition continues to exist, be precluded from exercising termination and/or dispossession rights and remedies against all Leased Properties covered by this Lease on account of the then remaining Event(s) of Default under
Section 16.1(m) and/or Section 16.1(q) of this Lease, but not on account of any other Event of Default under this Lease. 
 Section 16.12.5 The purchase price for each Leased Property as to which a purchase option is exercised by Tenant will be separately determined for each Leased Property and will equal, at Lessor’s
separate election for each Leased Property, either (a) the sum calculated by dividing the Base Rent per annum applicable to such Leased Property for the year next following the applicable closing date by nine percent (9.0%) or (b) the
product of ten (10.0) times the Purchase Option EBITDAR, as hereinafter defined, for such Leased Property. The Purchase Option EBITDAR for a particular Leased Property will equal the highest twelve (12) consecutive month EBITDAR for such
Leased Property occurring during the period commencing three (3) years prior to (i) the first day of the month during which a Section 16.1(m) Event of Default first occurred with respect to such Leased Property or (ii) the
first day of the month during which a revocation of certification for reimbursement under Medicare or Medicaid first occurred with respect to such Leased Property, whichever is earlier, and ending on the last day of the month preceding the month
during which the closing occurs with respect to such Leased Property. For example, if Tenant exercises a purchase option relative to a particular Leased Property, the closing with respect thereto occurs on April 15, 2008, a
Section 16.1(m) Event of Default arose on January 14, 2008, such Leased Property was decertified for Medicare on July 15, 2007 and a Section 16.1(q) Event of Default arose on account thereof on November 12,
2007, the period referenced above would commence on July 1, 2004 and end on March 31, 2008. 
 Section 16.12.6 If this Lease and a Second Lease are combined as provided in Section 40.18 of this Lease, for purposes of determining whether any further purchase option is available to Tenant in such combined lease
and, if so, as to how many Leased Properties such an option is available, all purchase option exercises that occurred under this Lease and the Second Lease prior to such combination shall be counted the same as if they occurred under the combined
lease. 
 Section 16.12.7 Notwithstanding anything to the contrary contained in this Section 16.12,
this Section 16.12 will be included in the Lease and be effective only if and for so long as inclusion thereof does not cause this Lease to be considered a capital lease, rather than an operating lease, for all accounting, tax and legal
purposes, as determined by the independent auditors for both Lessor and Tenant. 
  

 80 








 Section 16.12.8 The following examples are intended to illustrate further the application of
this Section 16.12: 
 Example 1: Assume that, within a lease of 25 Master Lease Leased Properties, no
Events of Default exist other than Events of Default under Section 16.1(m) and/or Section 16.1(q) that have occurred and are continuing relative to Property A and Property B and that Lessor provides a Section 16.12
Notice on account thereof, which notice specifies Property A as the property as to which Tenant’s one (1) available purchase option (pursuant to the number limitation set forth in Section 16.12.1.2) shall be available.
Assume further that Tenant exercises its purchase option relative to Property A and closes its purchase of Property A in strict accordance with the terms and conditions provided in this Section 16.12. On account of such exercise, Tenant
would have exhausted its purchase option rights under such lease, and, on account of such purchase, (a) the Section 16.1(m) and/or Section 16.1(q) Event of Default relative to Property A would have been cured, leaving
Property B as the only leased property as to which a continuing Section 16.1(m) and/or Section 16.1(q) Event of Default continues, and (b) because the Section 16.10.1 Number applicable to such lease would
equal 2, the continuation of a Section 16.1(m) and/or Section 16.1(q) Event of Default with respect to Property B and no other leased properties would not, pursuant to the terms of Section 16.10.2.2, be sufficient
to permit Lessor to exercise termination and/or dispossession rights and remedies against any leased property other than Property B. 
 Example 2: Same assumed facts as in Example 1 and assume further that an additional Section 16.1(m) Event of Default arises under such lease with respect to Property C. Lessor would be permitted to exercise
termination and/or dispossession rights and remedies against all leased properties under such lease, in accordance with Section 16.10.2.2, because the number of such Section 16.1(m) and/or Section 16.1(q) Events
of Default under such lease would equal 2 (Property B and Property C), which number equals the Section 16.10.1 Number applicable to such lease. Also, because Tenant has exhausted its purchase option rights under such lease as described
on Example 1, Section 16.12 would no longer be applicable to grant Tenant any purchase option rights and Lessor would be permitted to exercise such termination and/or dispossession rights and remedies against all leased properties
under such lease without providing any Section 16.12 Notice to Tenant or additional purchase option to Tenant. 
 Example 3: Assume that, within a lease of 10 Master Lease Leased Properties, no Events of Default exist other than Events of Default under Section 16.1(m) and/or Section 16.1(q) that have occurred and are
continuing relative to Property X, Property Y and Property Z. Lessor would not be obligated to provide a Section 16.12 Notice to Tenant prior to exercise of termination and/or dispossession rights and remedies against all leased
properties under such lease. A lease of 10 leased properties is eligible for purchase options with respect to 2 leased properties during the Term (Section 16.12.1.1). Even if Tenant exercised such 2 purchase options and closed
thereunder, a Section 16.1(m) and/or Section 16.1(q)) Event of Default would continue to exist under such lease and the precondition to an exercisable purchase option, and receipt of a Section 16.12 Notice,
referenced in Section 16.12.2(ii) would therefore not be met. 
  

 81 








 ARTICLE XVII 
 Section 17.1 Lessor’s Right to Cure Tenant’s Default. If an Event of Default shall have occurred and be continuing, Lessor, without waiving or releasing any obligation or Event of Default,
may (but shall be under no obligation to) at any time thereafter make such payment or perform such act for the account and at the expense of Tenant, and may, to the extent permitted by law, enter upon any or each Leased Property or any portion
thereof for the purpose of curing such Event of Default and take all such action thereon as, in Lessor’s opinion, may be necessary or appropriate in connection with curing such Event of Default. No such entry shall be deemed an eviction of
Tenant. All reasonable sums so paid by Lessor and all reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses, in each case, to the maximum extent permitted by law) so incurred, together with
interest thereon (to the maximum extent permitted by law) as Additional Charges hereunder at the Overdue Rate from the date on which such sums or expenses are paid or incurred by Lessor, shall be paid by Tenant to Lessor on demand. The obligations
of Tenant and rights of Lessor contained in this Article shall survive the expiration or earlier termination of this Lease. Nothing contained in this Section 17.1 shall limit or impair Lessor’s rights and remedies under
Section 8.3.2 or Section 21.5.2. 
 ARTICLE XVIII 
 Section 18.1 Provisions Relating to Purchase of the Leased Property. In the event Tenant purchases any Leased Property from Lessor
pursuant to any of the terms of ARTICLE XIV hereof, Lessor shall, upon receipt from Tenant of the applicable purchase price, together with full payment of all Rent due and payable or other charges due and payable with respect to any
period ending on or before the date of the purchase, deliver to Tenant an appropriate deed or other conveyance (in the customary form used to convey commercial properties within the relevant jurisdiction) conveying the entire interest of Lessor in
and to such Leased Property to Tenant free and clear of all encumbrances other than (i) those that Tenant has agreed hereunder to pay or discharge, (ii) those mortgage liens, if any, which Tenant has agreed in writing to accept and to take
title subject to and (iii) Permitted Encumbrances. The difference between the applicable purchase price and the total of the encumbrances assumed or taken subject to shall be paid in cash to Lessor or as Lessor may direct, in federal or other
immediately available funds except as otherwise mutually agreed by Lessor and Tenant other than as specifically provided above, such Leased Property shall be conveyed to Tenant on an “as is” basis, and in its then physical condition.
Closing of any such sale shall be contingent upon and subject to Tenant obtaining all required governmental consents and approvals for such transfer and if such sale shall fail to be consummated by reason of the inability of Tenant to obtain all
such approvals and consents, any options to extend the Term of this Lease which otherwise would have expired during the escrow period to such proposed sale shall be deemed to remain in effect for 30 days after termination of the escrow or other
arrangement covering the closing of such proposed sale. All expenses of such conveyance, including, without limitation, the cost of title examination or standard coverage title insurance, if reasonably required under the circumstances then existing,
attorneys’ fees incurred by Lessor in connection with such conveyance and release, and transfer taxes, shall be paid by Lessor. Recording fees shall be paid for by Tenant. Upon the closing of any such sale, the provisions of
Section 40.16 hereof shall apply. 
  

 82 








 ARTICLE XIX 
 Section 19.1 Exercise of Renewal Options. Tenant is hereby granted the right to renew this Lease, with respect to all, but not less than all, of those Leased Properties within the applicable group
as shown on Exhibit D annexed hereto (herein, a “Renewal Group”) for three (3), 5-year option renewal terms (collectively, the “Extended Terms” and each an “Extended Term”) upon giving
written notice to Lessor of each such renewal at least one (1) year but not more than eighteen (18) months prior to the termination of the then current Term applicable to such Renewal Group, provided and on the conditions that, at the time
Tenant gives a renewal notice as set forth above relative to a Renewal Group and at the time of the commencement of the applicable Extended Term for such Renewal Group, (a) an Event of Default (other than any Facility Defaults of the nature
referenced in Section 16.1(m) and/or Section 16.1(q) of this Lease) shall not have occurred and be continuing (as described in Section 16.10.2.3 above) under this Lease and (b) Facility Defaults of the nature
referenced in Section 16.1(m) and/or Section 16.1(q) of this Lease shall not have occurred and be continuing (as described in Section 16.10.2.3 above) with respect to the Section 16.10.1 Number or more
Leased Properties. Tenant may not exercise its option for more than one Extended Term at a time. If Tenant exercises a renewal option as aforesaid relative to a Renewal Group, Tenant may nevertheless revoke such exercise, if and so long as the
requirements of Section 19.5 below are strictly complied with. For purposes of this Section 19.1, if an Event of Default shall occur under Section 16.1(m) and/or Section 16.1(q) of this Lease, whether
the same is, or is deemed to be, “continuing” shall be determined as provided in Section 16.10 above. 
 Example
1: If (i) an Event of Default of the nature referenced in Section 16.1(m) and/or Section 16.1(q) of this Lease has occurred and is continuing (as described in Section 16.10.2.3 above) with respect to
Leased Property X and no other Leased Properties, (ii) Lessor has terminated this Lease as it applies to Leased Property X or dispossessed Tenant from such Leased Property X, (iii) the Section 16.10.1 Number applicable to this
Lease exceeds 1 (so that the condition referenced in Section 19.1(b) is met), and (iv) Tenant desires to renew this Lease, pursuant to Section 19.1, with respect to a Renewal Group which does not include Leased Property
X, then Tenant would be entitled to renew this Lease with respect to all of the Leased Properties in such Renewal Group. See the following examples for examples of Lessor’s and Tenant’s respective rights relative to renewal of the Renewal
Group that includes Leased Property X. 
 Example 2: Same assumed facts as in Example 1, except assume that Lessor has not
terminated this Lease as it applies to Leased Property X, but Lessor has dispossessed Tenant from Leased Property X, and that the Renewal Group that Tenant desires to renew includes Leased Property X. Tenant would be entitled to renew this Lease
with respect to all of the Leased Properties in such Renewal Group, but any such renewal would include renewal of Leased Property X. Section 19.1 does not create any right allowing Tenant to renew less than all of a Renewal Group as to
which this Lease remains in effect. As to Leased Property X, Tenant has been dispossessed, not terminated, and therefore any renewal would need to include Leased Property X. 
  

 83 








 Example 3: Same assumed facts as in Example 2, except assume that Lessor has terminated
this Lease as it applies to Leased Property X. Tenant would be entitled to renew this Lease with respect to all of the Leased Properties in the Renewal Group that formerly included Leased Property X, without being obligated to renew this Lease as to
Leased Property X. Due to the termination of this Lease as it applies to Leased Property X, the aforesaid Renewal Group no longer includes Leased Property X, and Tenant is entitled to renew this Lease as to all of the Renewal Group as to which this
Lease remains in effect. 
 Example 4: Same assumed facts as in Examples 1, 2, and 3, except that, in each case,
assume that the applicable Section 16.10.1 Number is 1. Tenant would not be entitled to renew this Lease as to any Renewal Group included in this Lease, as the condition referenced in Section 19.1(b) would not be met in each
of such Examples. 
 Example 5: Same assumed facts as in Example 3, except assume that the Section 16.10.1 Number
applicable to this Lease is 2 and that a Section 16.1(m) Event of Default has occurred and is continuing with respect to Master Lease Leased Property Y included in a Separate Lease as to which this Lease is a Section 16.10.3
Lease and as to which Section 16.10.3(a) and Section 16.10.3(b) are applicable. Tenant would not be entitled to renew this Lease as to any Renewal Group included in this Lease. The aforesaid Section 16.1(m)
Event of Default under such Separate Lease relative to Master Lease Leased Property Y would count as a Section 16.1(m) Event of Default under this Lease the same as if Master Lease Leased Property Y was included in this Lease, and, after
aggregating such Section 16.1(m) Event of Default relative to Master Lease Leased Property Y with the Section 16.1(m) Event of Default relative to Leased Property X, the condition referenced in Section 19.1(b)
would not be met. 
 Section 19.2 Renewal Terms. During each Extended Term, all of the terms and conditions of this Lease
shall continue in full force and effect, subject, however, to the following provisions. In the first Extended Term, Base Rent shall be calculated using the method applicable during the last year of the Fixed Term. In the case of each Extended Term
after the first Extended Term, if the portion of Base Rent applicable to the applicable Renewal Group (based upon the aggregate Transfer Property Percentages for the Leased Properties in such Renewal Group) for the first year of any such Extended
Term is less than Fair Market Rental of such Renewal Group (as determined in accordance with this Section 19.2 and Section 19.3 hereof), then Base Rent for such year for such Renewal Group shall be an amount equal to such
Fair Market Rental. If Base Rent for such first year of any such Extended Term for such Renewal Group is based upon Fair Market Rental as determined pursuant to this Section 19.2 and Section 19.3 hereof, the Base Rent in the
remaining years of such Extended Term and any subsequent Extended Terms for such Renewal Group (subject, however, to the re-application of this Section to the first year and subsequent years of any subsequent Extended Term) shall be escalated as is
determined and required by the terms of the Fair Market Rental determination for such Renewal Group. 
  

 84 








 Section 19.3 Fair Market Rental Determination. At any time within thirty
(30) days after receipt from Tenant of a notice of renewal under Section 19.1 hereof (other than a notice of renewal for the first Extended Term), Lessor may, by written notice to Tenant, request that Fair Market Rental of the
applicable Renewal Group, and Fair Market Rental of each Leased Property within such Renewal Group, be determined by appraisal under the procedures of ARTICLE XXXV hereof and in such event such Fair Market Rentals shall be so determined
in accordance with the procedures of such ARTICLE XXXV. Lessor’s failure to deliver such notice to Tenant within thirty (30) days after receiving Tenant’s notice of renewal shall preclude Lessor from any claim that Base
Rent for the first year of the Extended Term to which such notice of renewal relates for the applicable Renewal Group is less than Fair Market Rental of such Renewal Group, and thereafter Base Rent for such Renewal Group for such Extended Term (but
only for that particular Extended Term) shall be determined as set forth in the definition of “Base Rent” set forth in Section 2.1 hereof, without any application of Section 19.2. If Lessor has timely delivered such
notice to Tenant, and thereafter Fair Market Rental of the applicable Renewal Group is determined under ARTICLE XXXV hereof, the determination of whether such appraised Fair Market Rental is higher than Base Rent applicable to the
applicable Renewal Group shall be made by Lessor, in its sole and exclusive discretion, which determination shall be binding on Lessor and Tenant and not subject to further review. 
 Section 19.4 Extended Period New Lease. If Base Rent for a Renewal Group for the first year of any Extended Term after the first
Extended Term is based upon Fair Market Rental as determined pursuant to Section 19.2 and Section 19.3 hereof, then effective as of the first day of such Extended Term, such Renewal Group shall be transferred from this Lease
to a New Lease entered into pursuant to, and otherwise in compliance with, the terms and conditions of Section 40.15 hereof and this Lease shall be amended as set forth in such Section 40.15. Such New Lease shall include
therein an Exhibit C that allocates the aggregate Base Rent payable thereunder to the individual Leased Properties covered by such New Lease, and assigns Transferred Property Percentages to such Leased Properties, in a manner that is
consistent with the respective Fair Market Rentals of such Leased Properties as determined pursuant to Section 19.2 and Section 19.3 hereof. 
 Section 19.5 Revocation of Renewal Option Exercise. In the event (a) Tenant exercises a renewal option relative to a Renewal Group in accordance with Section 19.1 above,
(b) such renewal option relates to an Extended Term for such Renewal Group other than the first Extended Term applicable to such Renewal Group, and (c) Lessor, in accordance with Section 19.3 above, requests that Fair Market
Rental of the applicable Renewal Group, and Fair Market Rental of each Leased Property within such Renewal Group, be determined by appraisal under the procedures of ARTICLE XXXV hereof, Tenant may revoke its aforesaid exercise, provided
and on the condition that, whether or not the Fair Market Rental determinations referenced in subsection (c) above have been completed, Tenant must notify Lessor of its revocation of its aforesaid exercise not less than one (1) year prior
to the termination of the then current Term applicable to such Renewal Group; provided, however, if Tenant gives its written renewal notice to Lessor in accordance with Section 19.1 above on or before the date which is
seventeen (17) months prior to the termination of the then current Term applicable to such Renewal Group, then Tenant shall have until the earlier of (i) nine (9) months prior to the 

  

 85 








 
termination of the then current Term applicable to such Renewal Group and (ii) fifteen (15) days after the date upon which the Fair Market Rental
determinations referenced in subsection (c) above have been completed to notify Lessor of its revocation. In the event Tenant so revokes its aforesaid exercise relative to a Renewal Group, Tenant’s remaining renewal option(s) relative to
such Renewal Group shall be deemed to have been irrevocably waived and terminated. 
 ARTICLE XX 
 Section 20.1 Holding Over. If Tenant shall for any reason remain in possession of any Leased Property after the expiration of the Term
or earlier termination of the Term (other than solely due to Lessor’s failure, on or prior to (a) the ninetieth (90th) day preceding the expiration of the Term as to such Leased Property or (b) if this Lease is terminated prior
to such expiration due to Lessor’s default, the earlier termination of the Term as to such Leased Property, to have notified Tenant that Lessor has procured a Qualified Successor for such Leased Property), such possession shall, at the option
of Lessor in its sole discretion as to each such Leased Property, be as a month-to-month tenant during which time Tenant shall pay as rental each month (which rental constitutes liquidated damages with respect to Rent, and not a penalty for the
period to which it relates), one and one-half times the aggregate of (i) one-twelfth of the annual amount of Base Rent payable as of the end of the preceding Term and, in the case of a month-to-month tenancy as to less than all of the Leased
Properties, allocable to the Leased Property(ies) in question in accordance with Section 16.9 hereof; (ii) all Additional Charges accruing during the month and (iii) all other sums, if any, payable by Tenant pursuant to the
provisions of this Lease with respect to the Leased Property(ies) in question. During such period of month-to-month tenancy, Tenant shall be obligated to perform and observe all of the terms, covenants and conditions of this Lease with respect to
the Leased Property(ies) in question, but shall have no rights hereunder other than the right, to the extent given by law to month-to-month tenancies to continue its occupancy and use of the applicable Leased Property. Subject to
Section 40.3, nothing contained herein shall constitute the consent, express or implied, of Lessor to the holding over of Tenant after the expiration or earlier termination of this Lease. 
 ARTICLE XXI 
 Section 21.1 Subordination. This Lease and all rights of Tenant hereunder are subject and subordinate to all Facility Mortgages and all Superior Leases which may now or hereafter affect Lessor’s interest in the
applicable Leased Property and any interest of any Superior Lessor (all such leases and mortgages, collectively, the “Superior Mortgages”), and to all renewals, modifications, consolidations, replacements and extensions of the
Superior Mortgages, provided, however, that, in the case of any Superior Mortgages (other than the Existing Ground Leases), Tenant’s aforesaid subordination shall be conditioned on Tenant’s receipt of a so-called
“non-disturbance” agreement in favor of Tenant from any such Superior Lessor (other than the Superior Lessors under the Existing Ground Leases) or Superior Mortgagee (defined below) on such Superior Lessor’s or Superior
Mortgagee’s commercially reasonable standard form. This Section shall be self-operative and no further instrument of subordination shall be required. In confirmation of such subordination, Tenant agrees to execute and deliver promptly any
commercially reasonable form of instrument (in recordable form, if requested) that Lessor, any 

  

 86 








 
Superior Lessor or the holder of any Superior Mortgage (a “Superior Mortgagee”) may request to evidence such subordination. Lessor shall use
its reasonable efforts to obtain from each currently existing Facility Mortgagee, if any, a so-called “non-disturbance” agreement in favor of Tenant on such Facility Mortgagee’s standard form. 
 Section 21.2 Attornment. If the interests of Lessor under this Lease are transferred by reason of, or assigned in lieu of, foreclosure
or other proceedings for enforcement of any such Superior Mortgage, or if any Superior Lease shall be terminated then Tenant shall, at the option of such purchaser, assignee or any Superior Lessor, as the case may be, (x) attorn to such party
and perform for its benefit all the terms, covenants and conditions of this Lease on Tenant’s part to be performed with the same force and effect as if such party were the landlord originally named in this Lease, or (y) enter into a New
Lease with such party, as landlord, pursuant to Section 40.15 hereof for the remaining Term and otherwise on the same terms and conditions of this Lease except that such successor landlord shall not be (i) liable for any previous
act, omission or negligence of Lessor under this Lease; (ii) subject to any counterclaim, defense or offset which theretofore shall have accrued to Tenant against Lessor; (iii) bound by any previous modification or amendment of this Lease
or by any previous prepayment of more than one month’s rent, unless such modification, amendment or prepayment shall have been approved in writing by the Superior Lessor or the Superior Mortgagee through or by reason of which such successor
landlord shall have succeeded to the rights of Lessor under this Lease or, in case of any such prepayment, such prepayment of rent has actually been delivered to such successor landlord; or (iv) liable for any security deposited pursuant to
this Lease unless such security has actually been delivered to such successor landlord. Nothing contained in this Section shall be construed to impair any right otherwise exercisable by any such owner, holder or lessee. 
 Section 21.3 Mortgagee Cure Rights. If any act or omission by Lessor would give Tenant the right, immediately or after lapse of time,
to cancel or terminate this Lease or to claim a partial or total eviction, or abatement of rent, setoff or counterclaim not otherwise expressly permitted by the terms of this Lease, Tenant will not exercise any such right until (i) it has given
written notice of such act or omission to each Superior Mortgagee whose name and address shall have previously been furnished to Tenant, by delivering notice of such act or omission addressed to each such party at its last address so furnished,
(ii) Lessor shall have failed to cure the same within the time limits set forth in this Lease, and (iii) following the giving of such notice, no Superior Mortgagee and no Superior Lessor shall have remedied such act or omission (x) in
the case of an act or omission which is capable of being remedied without possession of this Leased Property, within the cure period available to Lessor under this Lease plus sixty (60) days and (y) in the case of any act or omission which
is incapable of being remedied without possession of the applicable Leased Property, within sixty (60) days following the date on which possession is obtained (either by such Superior Mortgagee or Superior Lessor or by a receiver in an action
commenced by such Superior Mortgagee or Superior Lessor), provided a Superior Mortgagee or Superior Lessor has promptly commenced action to obtain possession and shall diligently pursue such action to completion and provided further that such
Superior Mortgagee or Superior Lessor shall, with reasonable diligence, give Tenant notice of its intention to, and commence and continue to, remedy such act or omission or cause the same to be remedied. 
  

 87 








 Section 21.4 Modifications. Tenant shall execute any modification of this Lease
requested by any Superior Mortgagee or prospective Superior Mortgagee to cause the terms of this Lease to conform with customary and reasonable mortgage financing requirements, provided that such modifications (i) do not materially adversely
increase the obligations of Tenant hereunder or materially diminish Tenant’s rights under this Lease or materially impair the right of a Leasehold Mortgagee, (ii) do not increase Rent payable hereunder, and (iii) are requested by any
such Superior Mortgagee or prospective Superior Mortgagee only at the time of its initial loan advance or any subsequent extension of the maturity date of its loan or material modification of the terms of its loan. Tenant will not unreasonably
withhold, delay or condition its consent to such modification, provided subsections (i), (ii) and (iii) above are complied with. 
 Section 21.5 Existing Ground Leases. 
 Section 21.5.1 Tenant shall, at its own cost
and expense, fully observe, perform and comply with all of the obligations of Lessor, as lessee, under all Existing Ground Leases, including, without limitation, all obligations relating to use of the Leased Properties, payment of ground rents,
taxes, assessments and utility charges, maintenance and alterations of the Leased Properties and assignment and subletting. Tenant shall not cause, or permit its respective agents, employees, contractors, invitees, subtenants, licensees,
concessionaires or assigns (whether or not permitted hereunder) to cause, whether by act or omission, any breach of, default under or termination of any Existing Ground Lease. Notwithstanding anything to the contrary contained in
Section 16.1 or elsewhere in this Lease, an Event of Default shall be deemed to have occurred under this Lease on account of Tenant’s breach of this Section 21.5.1, when, and only if, (i) Tenant’s breach of
this Section 21.5.1 also results in a breach or default of an obligation under an Existing Ground Lease and (ii) such Existing Ground Lease breach or default is not cured by Tenant on or prior to the expiration of the cure period,
if any, applicable to such breach or default by the terms of such Existing Ground Lease (or such longer cure period as may be expressly authorized by an order of a court of competent jurisdiction), and (iii) if the Existing Ground Lease breach
or default referenced in subsection (i) above is a non-monetary, non-material breach or default of the Existing Ground Lease, on account of such Existing Ground Lease breach or default, such Existing Ground Lease is at material risk of being
terminated or has been terminated. Lessor agrees that, in the event Lessor receives any written notice of default from the ground lessor under any Existing Ground Lease, Lessor shall promptly forward a copy thereof to Tenant, and, in the event
Lessor’s Management Group obtains actual knowledge (as opposed to, and not including, constructive, imputed, assumed or other knowledge, and without any obligation to investigate or otherwise make inquiry) of any breach or default by the ground
lessee under any Existing Ground Lease, then, unless Lessor’s Management Group has the aforesaid actual knowledge that Tenant already has knowledge of such breach or default, Lessor shall promptly notify Tenant in writing of such breach or
default. Lessor further agrees that Lessor shall timely exercise any options to renew or extend contained in the Existing Ground Leases, as and to the extent necessary from time to time so that each Existing Ground Lease shall not expire prior to
the expiration or termination of this Lease as it applies to the Leased Property affected by such Existing Ground Lease (including any Extended Terms applicable to such Leased Property). Tenant agrees that, if Lessor, at its option, elects to cure
an Event of Default under this Section 21.5.1, such cure shall not excuse Tenant from, or be 

  

 88 








 
deemed a cure of, such Event of Default, nor shall Tenant’s reimbursement to Lessor of any costs and expenses incurred by Lessor in affecting any such
cure be deemed a cure of any such Event of Default, provided, however, that, notwithstanding the foregoing, even after the occurrence of such an Event of Default by Tenant and/or Lessor’s cure thereof, Lessor agrees to accept
Tenant’s cure thereof, or reimbursement of Lessor’s costs and expenses to effect such cure, provided, and on the condition, that Lessor has not, prior thereto, terminated this Lease as it affects the Leased Property to which such Existing
Ground Lease relates or dispossessed Tenant from such Leased Property. Nothing contained in this Section 21.5 shall limit or impair Lessor’s indemnification rights under Section 24.1 below. 
 Section 21.5.2 If (a) an Existing Ground Lease breach or default of the nature described in Section 21.5.1(i)
above occurs, and (b) in the case of a non-monetary, non-material Existing Ground Lease breach or default, on account thereof, if the same is not cured, the condition referenced in Section 21.5.1(iii) above would, or is likely to,
be satisfied, Tenant agrees that, notwithstanding anything to the contrary contained in Section 17.1 above or elsewhere in this Lease, Lessor may, but shall not be obligated to, in its discretion and regardless of whether Tenant is
proceeding to cure, or attempting to cure, the Existing Ground Lease breach or default referenced in Section 21.5.1(i) above or whether the cure period referenced in Section 21.5.1(ii) above has expired or is likely to expire
before completion of necessary cure efforts, take such actions as it deems necessary or appropriate to attempt to cure such Existing Ground Lease breach or default, provided, however, that, if the breach or default referenced in
subsection (a) above has applicable thereto, by the express terms of the applicable Existing Ground Lease, a stated period to cure the same, Lessor agrees not to commence to cure such breach or default unless and until one-half (1/2) of
the aforesaid stated cure period has elapsed. If Lessor so proceeds to attempt to cure any such Existing Ground Lease breach or default, Tenant agrees, within fifteen (15) days following receipt of a written demand therefor and reasonable
supporting documentation, to reimburse Lessor for the reasonable amount of all costs and expenses incurred by Lessor in curing, or attempting to cure, any such Existing Ground Lease breach or default. 
 ARTICLE XXII 
 Section 22.1 Notice to Lessor. If Tenant shall mortgage Tenant’s interest in one or more Leased Properties to a Lending Institution in accordance with the terms of this Lease, and if the holder of the Leasehold
Mortgage shall provide Lessor with a true copy of the Leasehold Mortgage and the name and address of the Leasehold Mortgagee (as hereinafter defined) and Lessor shall approve the Leasehold Mortgage, Lessor and Tenant agree that the provisions of
this Section shall apply in respect to the Leasehold Mortgage. Lessor has heretofore approved the Leasehold Mortgages securing the Tenant Credit Agreement, provided that such approval shall not constitute an agreement by Lessor to be bound by the
terms of any such Leasehold Mortgage. In the event of any assignment of a Leasehold Mortgage or in the event of a change of address of a Leasehold Mortgagee or of an assignee of a Leasehold Mortgage, notice of the new name and address shall be
provided to Lessor. 
  

 89 








 Section 22.2 Definitions. 
 (a) The term “Leasehold Mortgage” as used in this Section shall include a mortgage, a deed of trust, a deed to secure debt, or other security
instrument by which Tenant’s leasehold estate is mortgaged or otherwise transferred, to secure a debt. “Leasehold Mortgage” shall be deemed to refer to all of the Leasehold Mortgages delivered to secure a debt. 
 (b) The term “Leasehold Mortgagee” as used in this Section shall refer to any and all holders of a Leasehold Mortgage approved by Lessor
pursuant to the terms hereof. Lessor hereby approves of Morgan Guaranty Trust Company of New York, as collateral agent, as the initial Leasehold Mortgagee, and any agent for any credit facilities secured by Tenant’s leasehold interest hereunder
that are entered into by Tenant pursuant to the Tenant Credit Agreement. 
 Section 22.3 Consent of Leasehold Mortgagee
Required. No cancellation or surrender (other than a termination following the occurrence of an Event of Default) and no amendment to or modification of, this Lease shall be effective as to the Leasehold Mortgagee without the prior written
consent of such Leasehold Mortgagee, unless an amendment or modification is not reasonably likely to result in a material adverse effect on the rights of the Leasehold Mortgagee, the lien of the Leasehold Mortgages, or the value of the leasehold
interest demised hereunder. 
 Section 22.4 Default Notice. Lessor, upon providing Tenant any notice of: (a) default
under this Lease or (b) a termination of this Lease, in whole or in part, shall at the same time provide a copy of such notice to the Leasehold Mortgagee. From and after the time such notice has been given to a Leasehold Mortgagee, the
Leasehold Mortgagee shall have the same period, after the giving of such notice upon it, for remedying any default or acts or omissions which are the subject matter of such notice or causing the same to be remedied, as is given Tenant after the
giving of such notice to Tenant, plus (i) except if subsection (ii) below is applicable, thirty (30) days to remedy, commence to remedy or cause to be remedied the defaults or acts or omissions which are the subject matter of such
notice specified in any such notice, provided that such defaults are capable of being cured by the Leasehold Mortgagee or on behalf of the Leasehold Mortgagee, or (ii) fifteen (15) days to remedy any Rent defaults which are the subject
matter of such notice specified in any such notice. Lessor shall accept such performance by or at the instigation of the Leasehold Mortgagee as if the same had been done by Tenant. Tenant authorizes each Leasehold Mortgagee to take any such action
at the Leasehold Mortgagee’s option and does hereby authorize entry upon the Leased Properties by the Leasehold Mortgagee for such purpose. If Leasehold Mortgagee has failed to cure Tenant’s default within the above-mentioned time period,
Lessor may exercise its rights and remedies specified in Section 16.2, Section 16.3 and Section 17.1. 
 Section 22.5 Procedure for Foreclosure on Default. 
 (a) If the Leasehold Mortgagee has commenced taking steps
to acquire or sell Tenant’s interest in this Lease by foreclosure of the Leasehold Mortgage or other appropriate means, the Leasehold Mortgagee shall provide Lessor notice of the same and shall prosecute the same to completion with due
diligence. 
  

 90 








 (b) Following Lessor’s receipt of such notice and so long as the Leasehold Mortgagee continues to
prosecute to completion with due diligence such foreclosure or other means of acquiring or selling Tenant’s interest in this Lease, and provided that the Leasehold Mortgagee complies with its obligations under subsection (c) below, this
Lease shall not then terminate, and the time for completion by such Leasehold Mortgagee of its proceedings shall continue so long as such Leasehold Mortgagee is enjoined or stayed and thereafter for so long as such Leasehold Mortgagee proceeds to
complete steps to acquire or sell Tenant’s interest in this Lease by foreclosure of the Leasehold Mortgage or by other appropriate means with reasonable diligence and continuity. Nothing in this Section 22.5, however, shall be
construed to extend this Lease beyond the original term thereof, as extended by any options to extend the term of this Lease properly exercised by Tenant or a Leasehold Mortgagee in accordance with ARTICLE XIX nor to require a Leasehold
Mortgagee to continue such foreclosure proceedings after the default by Tenant has been cured. If the default by Tenant shall be cured and the Leasehold Mortgagee shall discontinue such foreclosure proceedings, this Lease shall continue in full
force and effect as if Tenant had not defaulted under the Lease. 
 (c) In addition, during such period, the Leasehold Mortgagee shall pay or
cause to be paid the rent, additional rent and other monetary obligations of Tenant under this Lease as the same become due, and continue its good faith efforts to perform, or cause to be performed, all of Tenant’s other obligations under this
Lease. 
 Section 22.6 Assignment or Transfer in Lieu of Foreclosure. 
 (a) For the purposes of this Section 22.6, the making of a Leasehold Mortgage shall not be deemed to constitute an assignment or transfer of
this Lease or of the leasehold estate hereby created, nor shall any Leasehold Mortgagee, as such, be deemed to be an assignee or transferee of this Lease or of the leasehold estate hereby created so as to require the Leasehold Mortgagee, as such, to
assume the performance of any of the terms, covenants or conditions on the part of Tenant to be performed hereunder, but the purchaser at any sale of this Lease and of the leasehold estate hereby created in any proceedings for the foreclosure of any
Leasehold Mortgage, or the assignee or transferee of this Lease and of the leasehold estate hereby created under any instrument of assignment or transfer in lieu of the foreclosure of any Leasehold Mortgage, shall be deemed to be an assignee or
transferee within the meaning of this Section 22.6, and shall be deemed to have agreed to perform all of the terms, covenants and conditions on the part of Tenant to be performed hereunder from and after the date of such purchase and
assignment. 
 (b) Prior to any such purchase or assignment pursuant to a foreclosure or similar proceeding, or any transaction in lieu
thereof, the Leasehold Mortgagee shall notify Lessor of the proposed transferee and obtain Lessor’s written consent to such purchase or assignment. Subject to any state or other governmental requirements, Lessor shall not unreasonably withhold,
condition or delay its consent to any sale or assignment, provided that (a) the purchaser or assignee (1) shall be a creditworthy entity with sufficient financial stability to satisfy its financial obligations under the Lease,
(2) shall have not less than four years experience in operating health care facilities for the purpose of the applicable Facility’s Primary Intended Use, (3) has a 

  

 91 








 
favorable business and operational reputation and character and (4) shall assume in writing and agree to keep and perform all of the terms of this Lease
on the part of Tenant to be performed hereunder from and after the date of such purchase and assignment and (b) an original counterpart of each such purchase and sale agreement or instrument of assignment or transfer in lieu of foreclosure of
any Leasehold Mortgage, duly executed by Tenant and such purchaser or assignee, as the case may be, in the form and substance satisfactory to Lessor, shall be delivered promptly to Lessor. Lessor’s obligation to consent to a sale or assignment
is subject to any reasonable approval rights of any Facility Mortgagee. 
 (c)(i) In the event of any dispute between Lessor and any
Leasehold Mortgagee or Tenant regarding whether Lessor has unreasonably withheld, conditioned or delayed its consent to any sale or assignment in violation of Section 22.6(b) or whether the other requirements of
Section 22.6(b) have been satisfied (the questions of whether Lessor has so violated Section 22.6(b) and/or whether the aforesaid other requirements of Section 22.6(b) have been satisfied are herein referred to
collectively as the “Arbitration Question”), as their sole remedy on account of any such dispute, Lessor may initiate an arbitration under this Section 22.6(c) by written notice to Tenant and such Leasehold Mortgagee, or
such Leasehold Mortgagee or Tenant may initiate an arbitration under this Section 22.6(c) by written notice to Lessor, in each case to decide the Arbitration Question. 
 (ii) In such event, within ten (10) days following the issuance of any such arbitration initiation notice, each of Lessor and such
Leasehold Mortgagee (for itself and Tenant) shall appoint a Qualified Arbitrator (as defined below), and, within seven (7) days following the appointment of such two (2) Qualified Arbitrators, such two (2) Qualified Arbitrators shall
appoint a third Qualified Arbitrator. If either Lessor or such Leasehold Mortgagee (for itself and Tenant) shall fail to appoint a Qualified Arbitrator within the aforesaid ten (10) day period, the Qualified Arbitrator appointed by the other
shall alone proceed to determine the Arbitration Question. If the two (2) Qualified Arbitrators appointed by Lessor and such Leasehold Mortgagee (for itself and Tenant) are unable to agree within the aforesaid seven (7) day period upon a
third Qualified Arbitrator, then either Lessor or such Leasehold Mortgagee (for itself and Tenant), upon written notice to the other, may apply for such appointment to the American Arbitration Association in New York City (or any organization
successor thereto) in accordance with the rules then prevailing of the American Arbitration Association (or such successor organization) and, if the American Arbitration Association (or such successor organization) shall fail to appoint said third
Qualified Arbitrator within fifteen (15) days after such request is made, then either Lessor or such Leasehold Mortgagee (for itself and Tenant) may apply, on notice to the other to the Supreme Court, New York County (or any other court in New
York City having jurisdiction) for the appointment of such third Qualified Arbitrator. 
 (iii) The three (3) Qualified
Arbitrators that are so appointed (or the single Qualified Arbitrator appointed by Lessor or such Leasehold Mortgagee (for itself and Tenant) in the limited circumstance referenced above) shall decide the Arbitration Question within fifteen
(15) days following their or his appointment. 
  

 92 








 (iv) Each of Lessor and such Leasehold Mortgagee (for itself and Tenant) shall be
entitled to present evidence and arguments to the arbitrator(s). If either Lessor or such Leasehold Mortgagee (for itself and Tenant) submits one or more affidavits as part of its submission, the submitting party agrees, if requested by the other
party, to produce such affiants for cross-examination under oath on the record at the hearings before the arbitrator(s). There shall be no pre-hearing discovery of any sort, unless specifically ordered by the arbitrator(s) upon a finding that such
discovery is essential to the decision-making process. The parties to the arbitration shall conduct the arbitration in a cooperative spirit, in good faith, and in a manner designed to achieve expedition and economy. 
 (v) The determination of the Arbitration Question by the three (3) Qualified Arbitrator(s) (or the single Qualified Arbitrator acting
alone as above provided) shall be conclusive upon Lessor, such Leasehold Mortgagee and Tenant and a final, unappealable judgment rendered by such arbitrator(s) relative to the Arbitration Question may be entered in any court having appropriate
jurisdiction. The arbitrator or arbitrators, as the case may be, shall be required to give written notice to Lessor, such Leasehold Mortgagee and Tenant stating his or their determination relative to the Arbitration Question, and shall furnish to
each of Lessor, such Leasehold Mortgagee and Tenant a signed copy of such determination. 
 (vi) Each of Lessor and such
Leasehold Mortgagee (for itself and Tenant) shall pay its own counsel fees and the witness fees and similar expenses of preparing for its presentation of evidence and arguments at the arbitration hearing(s) and of making such presentation. Lessor
and such Leasehold Mortgagee (for itself and Tenant) shall equally share any fees payable to the arbitrator(s), provided, however, that the three (3) Qualified Arbitrators (or the single Qualified Arbitrator acting alone as above
provided) shall have the authority to award costs to the prevailing party in the arbitration if such arbitrator(s) finds that the non-prevailing party acted in bad faith in connection with any arbitration hereunder. 
 (vii) As used in this subsection (c), the term “Qualified Arbitrator” means a person or entity that is neither an Affiliate of
Lessor, such Leasehold Mortgagee or Tenant nor interested in any financial manner in the outcome of the Arbitration Question or in Lessor, Tenant or any Leasehold Mortgagee and has at least ten (10) years experience as an owner or operator of
nursing centers or hospitals or as a senior executive officer and/or director of the American Health Care Association and/or the Federation of American Health Systems or any successor organizations thereto or as a senior executive officer of a
publicly traded healthcare real estate investment trust. 
 Section 22.7 Separate Lease. In the event of any termination
of this Lease, in whole or in part, Lessor agrees to enter into a new lease (“Separate Lease”) of the Leased Property(ies) in question with the Leasehold Mortgagee or its designee for the remainder of the term of this Lease,
effective as of the date of termination, at the rent and additional rent, and upon the terms, covenants and conditions (including all options to renew but excluding requirements which are not applicable or which have already been fulfilled)
identical to this Lease, provided: 
 (a) The Leasehold Mortgagee shall make written request upon Lessor for such Separate
Lease within sixty (60) days after the date the Leasehold Mortgagee receives Lessor’s notice of termination of this Lease given pursuant to Section 22.4. 
  

 93 








 (b) At the time of the execution and delivery of such Separate Lease, the Leasehold
Mortgagee or its designee shall pay or cause to be paid to Lessor any and all sums which would at the time of execution and delivery thereof be due pursuant to this Lease but for such termination and, in addition thereto, all reasonable expenses,
including reasonable attorneys’ fees, which Lessor shall have incurred by reason of such termination and the execution and delivery of the Separate Lease and which have not otherwise been received by Lessor from Tenant or other party in
interest under Tenant. Upon the execution of such Separate Lease, Lessor shall allow to the tenant named therein as an offset against the sums otherwise due under this Section 22.7(b) or under the Separate Lease, an amount equal to the
net income derived by Lessor from the Leased Properties during the period from the date of termination of this Lease to the date of the beginning of the lease term of such Separate Lease. In the event of a controversy as to the amount to be paid to
Lessor pursuant to this Section 22.7(b), the payment obligation shall be satisfied if Lessor shall be paid the amount not in controversy, and the Leasehold Mortgagee or its designee shall agree to pay any additional sum ultimately
determined to be due plus interest at the Overdue Rate and such obligation shall be adequately secured. 
 (c) Such Separate
Lease shall be deemed to be a New Lease and the provisions of Section 40.15 shall apply. 
 (d) The Leasehold
Mortgagee or its designee shall agree to remedy any of Tenant’s defaults of which said Leasehold Mortgagee was notified by Lessor’s notice of termination given pursuant to Section 22.4 and which are reasonably susceptible of
being so cured by Leasehold Mortgagee or its designee. 
 (e) The tenant under such Separate Lease shall have the same right,
title and interest in and to the Leased Properties to which such Separate Lease relates and the buildings and improvements thereon as Tenant had under this Lease. 
 (f) The tenant under any such Separate Lease shall be liable to perform the obligations imposed on Tenant by such Separate Lease only
during the period such tenant under such Separate Lease has ownership of such leasehold estate. 
 (g) Notwithstanding
anything to the contrary contained in this Section 22.7, in connection with obtaining a New Lease with respect to a particular Leased Property as provided herein and in Section 40.15, (i) if, prior to the effective date
of any such New Lease, Lessor has exercised its right to collect amounts from Tenant with respect to such Leased Property pursuant to Section 16.3(A)(ii) hereof, in order to cure existing monetary defaults relative to such Leased
Property, Leasehold Mortgagee or its designee shall not be obligated to pay to Lessor any amount on account of the net present value of any Rent allocable to such Leased Property for the period from and after the effective date of such New Lease,
but instead shall pay such Rent for such period at the time and in the manner set forth in such New Lease and consistent with ARTICLE III hereof; and (ii) Leasehold Mortgagee or its designee shall not be required to cure any
non-monetary defaults by Tenant that are not reasonably susceptible of being cured by Leasehold Mortgagee or its designee. 
  

 94 








 Section 22.8 Separate Lease Properties. If more than one Leasehold Mortgagee shall
request a Separate Lease pursuant to Section 22.7(a) as to the same Leased Property(ies), Lessor shall enter into such Separate Lease with the Leasehold Mortgagee whose mortgage is prior in lien, or with the designee of the Leasehold
Mortgagee. Lessor, without liability to Tenant or any Leasehold Mortgagee with an adverse claim, may rely upon a mortgagee title insurance policy or policies issued by a responsible title insurance company as the basis for determining the
appropriate Leasehold Mortgagee who is entitled to such Separate Lease. 
 Section 22.9 Legal Proceedings. Lessor shall
give each Leasehold Mortgagee prompt notice of any legal proceedings between Lessor and Tenant involving obligations under this Lease. Each Leasehold Mortgagee shall have the right to intervene in any such proceedings and be made a party to such
proceedings, and the parties hereto do hereby consent to such intervention. In the event that any Leasehold Mortgagee shall not elect to intervene or become a party to any such proceedings, Lessor shall give the Leasehold Mortgagee notice of, and a
copy of any decision made in, any such proceedings, which shall be binding on all Leasehold Mortgagees not intervening after receipt of notice of such proceedings. 
 Section 22.10 Future Amendments. In the event on any occasions hereafter Tenant seeks to mortgage the leasehold estate created hereby, Lessor agrees to amend this Lease from time to time to the
extent reasonably requested by a Lending Institution proposing to make Tenant a loan secured by a first lien upon Tenant’s leasehold estate, provided that such proposed amendments do not adversely affect the rights of Lessor or its interest in
the Leased Properties. All reasonable expenses incurred by Lessor in connection with any such amendment shall be paid by Tenant. 
 Section 22.11 Estoppel Certificate. Lessor and Tenant shall, without charge, at any time and from time to time hereafter, within ten (10) days after written request of the other party to do so, certify by written
instrument duly executed and acknowledged to any mortgagee or purchaser, or proposed Leasehold Mortgagee or Superior Mortgagee or proposed purchaser, or any other person, firm or corporation specified in such request: (a) as to whether this
Lease has been supplemented or amended, and if so, the substance and manner of such supplement or amendment; (b) as to the validity and force and effect of this Lease; (c) as to the existence of any Event of Default hereunder; (d) as
to the existence of any offsets, counterclaims or defenses hereto on the part of either party; (e) as to the commencement and expiration dates of the Term of this Lease; and (f) as to any other matters as may be reasonably so requested.
Any such certificate may be relied upon by the other party and any other person, firm or corporation to whom the same may be exhibited or delivered, and the contents of such certificate shall be binding on the party so certifying. 
 Section 22.12 Notices. Notices from Lessor to the Leasehold Mortgagee shall be mailed to the address furnished Lessor pursuant to
Section 22.1 and those from the Leasehold 

  

 95 








 
Mortgagee to Lessor shall be mailed to the address designated pursuant to the provisions of Section 34.1 hereof. Such notices, demands and
requests shall be given in the manner described in Section 34.1 and shall in all respects be governed by the provisions of that section. 
 Section 22.13 Erroneous Payments. No payment made to Lessor by a Leasehold Mortgagee shall constitute agreement that such payment was, in fact, due under the terms of this Lease; and a Leasehold
Mortgagee having made any payment to Lessor pursuant to Lessor’s wrongful, improper or mistaken notice or demand shall be entitled to the return of any such payment or portion thereof provided such Leasehold Mortgagee shall have made demand
therefor not later than one year after the date of its payment. 
 Section 22.14 Exercise by Leasehold Mortgagee of Remedies
Against One or More Leased Properties. Lessor acknowledges that each of the Leased Properties is covered, and may in the future be covered, by a separate Leasehold Mortgage and that, due to the fact that the applicable law of each jurisdiction
differs as to the procedures (including, without limitation, the periods for notices of sale to be published) for the exercise by a Leasehold Mortgagee of remedies under a Leasehold Mortgage and that certain of the Leasehold Mortgages may be of
Leased Properties located in jurisdictions that are subject to anti-deficiency judgment, election of remedies and/or one-form-of-action statutes making it advisable for a Leasehold Mortgagee to exercise remedies with respect to such Leased
Properties in a certain order, the Leasehold Mortgagee may be required under applicable law to, or due to applicable remedial limitations including those described above, may reasonably elect to exercise remedies against less than all of the Leased
Properties at a particular time and/or may elect, or may be required by applicable law, to exercise remedies against the Leased Properties in a particular order. Therefore, Lessor agrees that its obligations under this ARTICLE XXII are
applicable to each Leased Property. For example, Lessor may be asked to enter into a Separate Lease with respect to less than all of the Leased Properties pursuant to Section 22.7 and/or Lessor may be asked to approve a proposed
transferee of a particular Leased Property pursuant to Section 22.6(b). 
 ARTICLE XXIII 
 Section 23.1 Risk of Loss. During the Term of this Lease, the risk of loss or of decrease in the enjoyment and beneficial use of each
Leased Property in consequence of the damage or destruction thereof by fire, the elements, casualties, thefts, riots, wars or otherwise, or in consequence of foreclosures, attachments, levies or executions (other than by Lessor and those claiming
from, through or under Lessor) is assumed by Tenant, and, in the absence of gross negligence, willful misconduct or breach of this Lease by Lessor pursuant to Section 38.1, Lessor shall in no event be answerable or accountable therefor
nor shall any of the events mentioned in this Section entitle Tenant to any abatement of Rent. 
 ARTICLE XXIV 
 Section 24.1 Indemnification. Notwithstanding the existence of any insurance provided for in ARTICLE XIII, and without
regard to the policy limits of any such insurance, Tenant will protect, indemnify, save harmless and defend Lessor from and against all liabilities, obligations, 

  

 96 








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

 97 








 Tenant’s and Lessor’s respective duties, liabilities and obligations under this Article shall
survive the expiration or termination of this Lease as to any or all of the Leased Properties. For example, if (x) John Doe is injured in a slip-and-fall accident that occurs at Leased Property A on January 1, 2008 and of which Lessor has
no notice or knowledge, (y) this Lease terminates for any reason on March 1, 2008 with respect to Leased Property A, and (z) on July 1, 2008, John Doe begins a lawsuit against Lessor on account of the aforesaid accident, then,
notwithstanding such termination, Tenant’s indemnification and other obligations with respect to such accident and lawsuit under subsection (a) above and the other provisions of this Article shall survive such termination with respect to
Leased Property A. 
 New Mexico Limitation on Indemnification. To the extent, if at all, that N.M. Stat. Ann. § 56-7-1 is
applicable to any agreement to indemnify in this Lease, or any related documents, such an agreement to indemnify will not extend to liability, claims, damages, losses or expenses, including fees of lawyers, arising out of (i) the preparation or
approval of maps, drawings, opinions, reports, surveys, change orders, designs or specifications by an indemnitee or the agents or employees of the indemnitee or (ii) the giving of or the failure to give directions or instructions by the
indemnitee, or the agents or employees of the indemnitee, where such giving or failure to give directions or instructions is the primary cause of bodily injury to persons or damage to the property. 
 ARTICLE XXV 
 Section 25.1 Subletting and Assignment. 
 Section 25.1.1 Notwithstanding anything to
the contrary contained in this Lease but subject to Section 25.4, and Section 25.1.11 below, Tenant shall have no right, directly or indirectly, to assign this Lease in part under any circumstances. Subject to the foregoing,
except as expressly provided herein, Tenant shall not, without the prior written consent of Lessor, which consent shall not be unreasonably withheld, delayed or conditioned so long as no Event of Default has occurred and is continuing hereunder,
assign this Lease in its entirety or mortgage, pledge, hypothecate, encumber or otherwise transfer any interest in this Lease in whole or in part or sublease all or any part of any Leased Property or suffer or permit this Lease or the leasehold
estate created hereby or thereby or any other rights arising under this Lease to be assigned in its entirety or to be transferred, mortgaged, pledged, hypothecated or encumbered, in whole or in part, whether voluntarily or involuntarily or by
operation of law, or permit the use or occupancy of any Leased Property to be offered or advertised for assignment or subletting except as hereinafter provided. For purposes of this Section 25.1, an assignment of this Lease shall be
deemed to include any change in control of any Tenant, as if such change in control or transaction were an assignment of this Lease. Changes in control of any Tenant shall include, without limitation, (a) a change in the composition of the
board of directors of any Tenant or any Guarantor such that at the end of any period of twelve (12) consecutive months the persons constituting a majority of such board of directors are not the same as the persons constituting a majority at the
start of such period (or persons appointed by such majority), (b) the sale or other disposition of (i) all or any part of its interest in any Guarantor or (ii) all or substantially all of the assets of any Guarantor or any Tenant
(other than a bona fide pledge in connection with a 

  

 98 








 
financing approved by Lessor), and (c) a merger or consolidation involving any Guarantor or any Tenant, which results in the stockholders of any
Guarantor or any Tenant immediately prior to such event owning less than 50% of the capital stock of the surviving entity or any public parent of the surviving entity. For purposes of this Section 25.1, a sublease of all or any part of
any Leased Property shall be deemed to include any concessionaire agreement, license agreement or other agreement involving use or possession of all or any part of any Leased Property. 
 Section 25.1.2 Subject to the provisions of Section 25.3 below and any other express conditions or limitations set
forth herein, so long as no Event of Default has occurred and is continuing hereunder, Tenant may, without the consent of Lessor, (i) assign this Lease in its entirety or sublet all or any part of any Leased Property to any Affiliate of Tenant,
or (ii) sublet up to an aggregate of 20% of the rentable square footage of any Facility (x) in the normal course of the Primary Intended Use such as but not limited to leasing of space for major moveable equipment or functional departments
such as pathology, pharmacy and radiology, or (y) to concessionaires or other third party users or operators of portions of the Leased Property, provided that, in the case of both clauses (i) and (ii) above, the assignee or subtenant
in question is duly licensed and possessed of all Authorizations necessary for the conduct of its activities and the operation of such Leased Property or portion thereof in accordance with all applicable laws. So long as no Event of Default has
occurred and is continuing hereunder, Lessor shall not unreasonably withhold, delay or condition its consent to any other subletting of the Leased Properties in whole or in part or assignment of this Lease in its entirety, provided that (a) in
the case of a subletting, (1) the subtenant shall comply with the provisions of Section 25.2, and (2) if the subtenant is an Affiliate of any Tenant, the subtenant shall execute and deliver to Lessor a Lease Guaranty in
accordance with Section 40.12 hereof, (b) the assignee or subtenant (1) shall be a creditworthy entity with sufficient financial stability to satisfy its obligations under the Lease, (2) shall have not less than four years
experience in operating health care facilities for the purpose of the applicable Facility’s Primary Intended Use, (3) has a favorable business and operational reputation and character, (4) has all licenses, permits, approvals and
other Authorizations required to operate the Leased Property(ies) in question for the Primary Intended Use (or any other use permitted under the terms of this Lease), and (5) in the case of an assignment, shall assume in writing and agree to
keep and perform all of the terms of this Lease on the part of Tenant to be kept and performed and shall be, and become, jointly and severally liable with Tenant for the performance thereof, (c) an original counterpart of each such sublease and
assignment and assumption, duly executed by Tenant and such subtenant or assignee, as the case may be, in the form and substance satisfactory to Lessor, shall be delivered promptly to Lessor, and (d) in case of either an assignment or
subletting, Tenant shall remain primarily liable, as principal rather than as surety, for the prompt payment of the Rent and for the performance and observance of all of the covenants and conditions to be performed by Tenant hereunder. Lessor’s
obligation to consent to a subletting or assignment is subject to any reasonable approval rights of any Facility Mortgagee. 
 Section 25.1.3 If this Lease is assigned or if any Leased Property or any part thereof is sublet (or occupied by any entity other than Tenant and its employees), Lessor, after an Event of Default occurs and so long as it is
continuing, may collect the rents from such assignee, subtenant or occupant, as the case may be, and apply the net amount collected to the Rent herein 

  

 99 








 
reserved, but no such collection shall be deemed a waiver of the provisions set forth in Section 25.1.1, the acceptance by Lessor of such
assignee, subtenant or occupant, as the case may be, as a tenant or release of Tenant from the future performance of its covenants, agreements or obligations contained in this Lease. 
 Section 25.1.4 No subletting or assignment shall in any way impair the continuing primary liability of Tenant hereunder, and
no consent to any subletting or assignment in any particular instance shall be deemed a waiver of the prohibition set forth in this Section 25.1. No assignment, subletting or occupancy shall affect the Primary Intended Use. Any
subletting, assignment or other transfer of Tenant’s interest in this Lease in contravention of this Section 25.1 shall be void at Lessor’s option. 
 Section 25.1.5 If Tenant shall desire to assign this Lease or sublet all (but not a portion) of any Leased Property other than
an assignment or sublease to an Affiliate, it shall first submit in writing to Lessor a notice (“Tenant’s Notice”) indicating (a) the name of the proposed assignee or subtenant, (b) the material terms of the proposed
assignment or sublease, (c) the nature and character of the business which the proposed assignee or subtenant will conduct at the applicable Leased Property, (d) reasonable financial data concerning the proposed assignee or subtenant, and
(e) the effective date of the proposed assignment or the commencement date and expiration date of the proposed sublease. Tenant shall additionally submit to Lessor any other information concerning the proposed assignment or sublease which
Lessor may reasonably request and, prior to the effective date of any assignment permitted hereunder or the commencement date of any sublease permitted hereunder, Tenant shall deliver to Lessor evidence reasonably satisfactory to Lessor that the
assignee or subtenant has all licenses, permits, approvals and other Authorizations necessary to operate each Leased Property for the Primary Intended Use (or any other use permitted under the terms of this Lease). Except to the extent such
subletting or assignment is authorized under Section 25.1.11 below, if such notice is given, Lessor may, at its option, terminate this Lease as to the applicable Leased Property, in which event, the provisions of
Section 40.16 hereof shall apply. Lessor shall exercise its option by notice to Tenant within 30 days after Tenant’s Notice (or receipt by Lessor of all information reasonably requested by Lessor pursuant to this
Section 25.1.5), and during such 30-day period, Tenant shall not have the right to assign this Lease or sublet such space. 
 Section 25.1.6 If Lessor exercises its option under Section 25.1.5 to terminate this Lease, this Lease shall terminate (either as to each Leased Property or as to the applicable Leased
Property, whichever is applicable) on the date which is 60 days following Tenant’s Notice or on such later date as may be specified in Tenant’s Notice, all Rent allocable to the Leased Property(ies) in question in accordance with
Section 16.9 hereof shall be paid and apportioned to the date of such termination and the provisions of Section 40.16 hereof shall apply in the event this Lease remains in effect as to any Leased Properties. If Lessor shall
exercise its options under Section 25.1.5, Lessor may, and shall have no liability to Tenant if Lessor shall, lease to Tenant’s prospective subtenant or assignee. 
  

 100 








 Section 25.1.7 (a) Except in the case of an assignment or sublet
pursuant to Section 25.1.2(i) hereof and subject to subsections (b) and (c) below, Tenant shall pay to Lessor, as Additional Charges, (i) as and when received by Tenant, 80% of any consideration (including, without
limitation, capital stock, stock options or warrants, license fees and all other forms of remuneration) received on account of any assignment and (ii) 80% (50%, rather than 80%, in the case of the existing subleases scheduled on
Schedule 25.1.7 attached hereto and made a part hereof, as such subleases were in effect on December 14, 2000 and only for the remaining term thereof, it being agreed that, if any such sublease was or is extended (other than
pursuant to the terms of sublease extension rights in existence as of December 14, 2000), or after December 14, 2000 was or is materially amended, for the extension term, or after any such material amendment, the applicable percentage
in this subsection (ii) shall be 80%, not 50%) of the excess of: 
 (x) any rents, additional charges, or other consideration (including,
without limitation, capital stock, stock options or warrants, license fees and all other forms of remuneration) payable to Tenant under any sublease, after deducting therefrom brokerage commissions and legal fees paid by Tenant in connection with
such subletting, over (y) the sum of (1) a share of the Base Rent, real estate taxes and assessments, insurance premiums and charges for utility usage that, on a monthly basis, are owing with respect, or otherwise allocable, to the
applicable Leased Property (with such share to be equal to (A) if the applicable sublease relates primarily to use of areas within the Facility(ies) located on the applicable Leased Property, the product of the total of the aforesaid Base Rent,
real estate taxes and assessments, insurance premiums and utility usage charges owing with respect, or allocable, to the applicable Leased Property for a particular month times a fraction, the numerator of which is the number of rentable square feet
under the applicable sublease and the denominator of which is the aggregate number of rentable square feet in the Facility(ies) located on the applicable Leased Property, and (B) if the applicable sublease relates primarily to use of areas
outside the Facility(ies) located on the applicable Leased Property, that portion of the aforesaid real estate taxes, insurance premiums and charges for utility usage as are, in the reasonable judgment of Tenant (and with supporting documentation to
be delivered to Lessor upon written request), attributable to the areas outside the Facility(ies) located on the applicable Leased Property), plus (2) the amount (amortized, if applicable, as described below) of the actual out of pocket costs,
if any, incurred by Tenant (on behalf of itself and, to the extent related to “Sublease Rent Payments” (as defined below), on behalf of Lessor’s 80% (or 50%, if applicable as described above) share thereof) from time to time during
the applicable sublease and directly attributable to (aa) extending telephone service to the portion of the applicable Leased Property that is subleased per the applicable sublease or (bb) performing repairs to the portion of the applicable Leased
Property that is subleased per the applicable sublease (and, for purposes of this subsection (2) and the calculation of “Sublease 

  

 101 








 
Rent Payments”, as hereinafter defined, (X) in the case of any costs of the nature referenced in this subsection (2) that, in accordance with
generally accepted accounting principles, are treated as capital costs, such costs shall be amortized on a straight line basis over the longer of the useful life of the improvements or repairs to which such costs relate or the initial term of the
applicable sublease, and in each month the amortized amount of such costs shall be deemed to have been incurred by Tenant, and (Y) in the case of all other costs of the nature referenced in this subsection (2), such costs shall be treated as
incurred by Tenant as and when expended), 
 (such excess of (ii)(x) over (ii)(y) is referred to herein as the “Sublease Rent Payments”).
Lessor’s share, as aforesaid, of any such Sublease Rent Payments shall be paid by Tenant to Lessor as and when the Sublease Rent Payments are received by Tenant; provided, however, that: 
 (cc) within sixty (60) days after the end of each calendar year, Tenant shall deliver to Lessor a Senior Officer’s Certificate certifying the
amount of Lessor’s share of Sublease Rent Payments for the preceding calendar year and setting forth how such amount was calculated and containing a detailed breakdown of the revenues and expenses used in making such calculation, and, within
thirty (30) days after Lessor’s receipt of such certificate, if the aggregate amount paid by Tenant to Lessor during such preceding calendar year on account of Lessor’s share of Sublease Rent Payments for such year exceeds the amount
of Lessor’s share as shown in such certificate, then, subject to subsection (dd) below, Lessor shall pay the overage to Tenant, and, if the aggregate amount paid by Tenant to Lessor during such preceding calendar year on account of
Lessor’s share of Sublease Rent Payments for such year is less than the amount of Lessor’s share as shown in such certificate, Tenant shall pay such deficiency to Lessor. Lessor shall be entitled, upon three (3) Business Days prior
written notice and within normal business hours, to review, and make abstracts from and copies of, Tenant’s books, accounts and records relative to Tenant’s subleases of any Leased Property and the calculation of Lessor’s share of
Sublease Rent Payments for any period; and 
 (dd) for purposes of subsection (cc) above and the other provisions of this
Section 25.1.7, Lessor’s share of Sublease Rent Payments shall in no event be a negative number and, for all purposes of subsection (cc) above and the other provisions of this Section 25.1.7, for any calendar year in
which the amount referenced in subsection (ii)(x) above for such year is less than the amount referenced in subsection (ii)(y) above for such year, the “Sublease Rent Payments” shall be deemed to equal zero for such year. (For example, if
Tenant subleases a portion of a Leased Property, subsection (ii) above is applicable thereto, during a particular calendar year Sublease Rent Payments are received by Tenant in the aggregate 

  

 102 








 
amount of $100.00, and during such calendar year Tenant paid to Lessor the following monthly amounts on account of Lessor’s share of Sublease Rent
Payments: for each of the months January through July, $20.00 (i.e.: $140.00 in aggregate) and for each of the months August through December, $0.00, then, within thirty (30) days after Lessor’s receipt of Tenant’s aforesaid Senior
Officer’s Certificate for such calendar year, Lessor would be obligated to pay to Tenant $60.00, representing the overage of the aggregate amount received by Lessor during such calendar year ($140.00) over Lessor’s share of the Sublease
Rent Payments for such calendar year ($80.00 or 80% of $100.00). Alternatively, if the preceding facts are assumed except that, during the subject calendar year, the amount referenced in subsection (ii)(x) above is less than the amount referenced in
subsection (ii)(y) above by $50.00, then, pursuant to subsection (dd) above, the Sublease Rent Payments for such calendar year shall be deemed to equal $0.00, and, consequently, within thirty (30) days following receipt of Tenant’s
aforesaid Senior Officer’s Certificate for such calendar year, Lessor would be obligated to pay to Tenant $140.00, representing the overage of the aggregate amount received by Lessor during such calendar year ($140.00) over Lessor’s share
of the deemed Sublease Rent Payments for such calendar year ($0.00 or 80% of $0.00)). 
 In the event of a foreclosure by a Leasehold Mortgagee as to a
particular Leased Property(ies), Lessor’s right to 80% (50%, in the circumstances described above relative to the existing subleases scheduled on Schedule 25.1.7 hereof) of such Sublease Rent Payments relating to such Leased
Property(ies) shall be subordinate to such Leasehold Mortgagee’s right of payment. In the event of an assignment or sublet pursuant to Section 25.1.2(i) hereof, the provisions of this Section 25.1.7 shall apply to any
further assignment or sublet to a person or entity that is not an Affiliate of Tenant. 
 (b) Notwithstanding anything to the
contrary provided in this Lease, in the event Tenant enters into a sublease, license agreement, easement or other agreement (an “Ancillary Agreement”) pursuant to which a third party is given the right to access, maintain or operate
on any Leased Property, any antenna, cell tower, satellite dish, cable or wire installation, or other communication or telecommunication equipment, any billboard or signage, or any facility or service not within the primary scope of Tenant’s
business as it was conducted on the Existing Lease Effective Date, Tenant shall pay Lessor, as Additional Charges as and when payable to Tenant, 80% of any consideration (including, without limitation, capital stock, stock options or warrants,
license fees and all other forms of remuneration) received on account of such Ancillary Agreement. At the request of Lessor, Tenant shall direct the third party in any Ancillary Agreement to pay Lessor’s 80% share of such consideration directly
to Lessor. No such Ancillary Agreement shall be entered into by Tenant without the prior written consent of Lessor, which consent shall not be unreasonably withheld, delayed or conditioned so long as Tenant complies with the applicable requirements
of subsections (a) through (d) of Section 25.1.2 above. 
  

 103 








 (c) Notwithstanding anything to the contrary contained in subsection (a)(ii) above,
Lessor shall not be entitled to any Sublease Rent Payments on account of any sublease of space within a Leased Property for a flower shop, beauty salon, barber shop, gift shop, restaurant, cafeteria, coffee shop, snack shop or the like or any other
concessionaires (which term shall not include, without limitation, medical offices and clinics and other providers of medical services) typically found in nursing centers or hospitals (as applicable depending upon the Primary Intended Use of the
particular Leased Property) (including those subleases of the nature referenced in this subsection (c) existing at the Leased Properties as of the Existing Lease Effective Date), so long as the aggregate square footage of such Leased Property
that is subleased for such uses does not exceed twenty percent (20%) of the rentable space within the Facility(ies) located on such Leased Property. 
 Section 25.1.8 Any assignment and/or sublease must provide that (a) it shall be subject and subordinate to all of the terms and conditions of this Lease, (b) the use of the applicable Leased
Property shall be restricted to the applicable Primary Intended Use and shall not conflict with any Legal Requirement, Insurance Requirement or any other provision of this Lease, (c) no sublessee or assignee shall be permitted to further sublet
all or any part of the applicable Leased Property or assign this Lease or its sublease except as expressly provided in this Lease and (d) in the event of cancellation or termination of this Lease for any reason whatsoever or of the surrender of
this Lease whether voluntary, involuntary or by operation of law, prior to the expiration date of such sublease, including extensions and renewals granted thereunder, at Lessor’s option, the subtenant shall make full and complete attornment to
Lessor for the balance of the term of the sublease, which attornment shall be evidenced by an agreement in form and substance reasonably satisfactory to Lessor and which the subtenant shall execute and deliver within 5 days after request by Lessor,
its successors or assigns and the subtenant shall waive the provisions of any law now or hereafter in effect which may give the subtenant any right of election to terminate the sublease or to surrender possession in the event any proceeding is
brought by Lessor to terminate this Lease. 
 Section 25.1.9 Any assignment of this Lease or sublease of the
applicable Leased Property in contravention of the express terms of this ARTICLE XXV shall be voidable at Lessor’s option and the acceptance of rent by Lessor from any such unauthorized assignee or subtenant shall not constitute a
recognition or acceptance of the tenancy of such unauthorized assignee or subtenant. 
 Section 25.1.10 Tenant
shall pay to Lessor, within ten (10) Business Days after request therefor, all costs and expenses, including without limitation reasonable attorneys’ fees, incurred by Lessor in connection with any request by Tenant to assign this Lease or
sublet the applicable Leased Property. 
 Section 25.1.11 Notwithstanding the other prohibitions and restrictions
on assignment and subletting contained in this Section 25.1, provided Tenant shall have complied with the notice and information requirements of Section 25.1.5 above, Tenant shall have the right to assign or sublet to a
non-Affiliate (x) without the consent of Lessor, not more than ten percent (10%) in the aggregate of the Master Lease Leased Properties which are nursing centers and (y)

  

 104 








 
with Lessor’s consent (which consent shall not be unreasonably withheld, delayed or conditioned), not more than two (2) Master Lease Leased
Properties which are hospitals, but only if either (i) the applicable regulatory authorities have threatened, or commenced proceedings, to revoke Tenant’s Medicaid or Medicare certification for reimbursement or other Authorizations
necessary to operate such nursing center or hospital Leased Property, as applicable, or (ii) Tenant cannot profitably operate such Leased Property, in which event: 
 (a) such assignment and/or subletting shall comply in all respects with clauses (a) through (d) of the second sentence of
Section 25.1.2 above (upon Tenant’s request, Lessor agrees to provide an estoppel certificate certifying that, to the best of Lessor’s knowledge, such clauses (a) through (d) have been satisfied or, if such is not the
case to the best of Lessor’s knowledge, certifying the manner in which such clauses have not been satisfied to the best of Lessor’s knowledge); 
 (b) Lessor shall give such assignee or subtenant assurances of quiet enjoyment, in accordance with a mutually satisfactory non-disturbance and attornment agreement, such that so long as such assignee or subtenant pays
Rent allocable to such Leased Property and otherwise complies with all covenants and obligations of the Tenant under this Lease with respect to such Leased Property, no other default under this Lease shall affect or give rise to any right to
terminate its leasehold of such Leased Property; and 
 (c) any default by such assignee or subtenant in the payment of Rent
or in complying with all other covenants and obligations of the Tenant with respect to such Leased Property shall continue to constitute a default under this Lease, entitling Lessor to all its rights and remedies hereunder. 
 To the extent that any of the Master Lease Leased Properties are the subject of a New Lease derived, directly or indirectly, from the Second Amended and Restated Lease,
Tenant shall continue to have the right to assign or sublet such Master Lease Leased Properties upon compliance with this Section 25.1.11 or the corresponding section of such New Lease, as applicable, but such right to assign or sublet,
whether under Section 25.1.11 of the Second Amended and Restated Lease or the corresponding section of any and all New Leases derived, directly or indirectly, from the Second Amended and Restated Lease, shall never exceed ten percent
(10%) in the aggregate of the nursing centers included within the Master Lease Leased Properties or two (2) hospitals included within the Master Lease Leased Properties. 
 Section 25.2 Attornment. Tenant shall insert in each sublease permitted under Section 25.1 provisions to the effect that
(a) such sublease is subject and subordinate to all of the terms and provisions of this Lease and to the rights of Lessor hereunder (except to the extent such subtenant is entitled to quiet enjoyment assurances under Section 25.1.11
above), (b) in the event this Lease shall terminate before the expiration of such sublease, the subtenant thereunder will, at Lessor’s option, attorn to Lessor and waive any right the subtenant may have to terminate the sublease or to
surrender possession thereunder, as a result of the termination of this Lease, and (c) in the event the subtenant receives a written notice from Lessor or Lessor’s assignees, if any, stating that an Event of Default has occurred, the
subtenant shall thereafter be obligated to 

  

 105 








 
pay all rentals accruing under said sublease directly to the party giving such notice, or as such party may direct. All rentals received from the subtenant
by Lessor or Lessor’s assignees, if any, as the case may be, shall be credited against the amounts owing by Tenant under this Lease. 
 Section 25.3 Sublease Limitation. Anything contained in this Lease to the contrary notwithstanding, Tenant shall not sublet the Leased Property on any basis such that the rental to be paid by the subtenant thereunder
would be based, in whole or in part, on either (i) the income or profits derived by the business activities of the subtenant, or (ii) any other formula such that any portion of the sublease rental received by Lessor would fail to qualify
as “rents from real property” within the meaning of Section 856(d) of the Code, or any similar or successor provision thereto. 
 Section 25.4 Leasehold Mortgagee Rights. Nothing contained in this ARTICLE XXV shall limit or impair any rights of the Leasehold Mortgagee under ARTICLE XXII, including, without limitation, any
such rights to obtain a Leasehold Mortgage upon less than all of the Leased Properties and, in the circumstances referenced in Section 22.7, to obtain a Separate Lease as to less than all of the Leased Properties. 
 ARTICLE XXVI 
 Section 26.1 Financial Statements and Reporting. Each Tenant shall maintain, for itself and its subsidiaries, a system of accounting established and administered in accordance with generally accepted accounting
principles, and shall provide Lessor with the following information: 
 (a) As soon as available but in no event later than
forty-five (45) days after the close of each fiscal month and within fifty (50) days after the close each of the first three fiscal quarters, for Tenant, an unaudited consolidated balance sheet and statement of operations as of the close
of each such period and the related unaudited consolidated statements of income, cash flows and stockholders equity for such period and for the year to date of Tenant and its Subsidiaries (collectively, “Financial Statements”),
setting forth in each case in comparative form the corresponding figures for the previous year, all prepared in accordance with generally accepted accounting principles and all certified in an Officer’s Certificate to Lessor as being complete
and accurate to the best of Tenant’s knowledge, subject to normal year end adjustments; 
 (b) Within one hundred
(100) days after the close of each Fiscal Year, (i) for Tenant, consolidated Financial Statements, in each case with accompanying notes and schedules, prepared in accordance with generally accepted accounting principles and audited by a
firm of independent certified public accountants of recognized standing selected by Tenant, which accountants shall have issued an audit report thereon; and (ii) an Officer’s Certificate certifying to Lessor the amount of Patient Revenues
for such Fiscal Year for each Facility, for all of the Facilities in the aggregate under this Lease and for all of the Facilities in the aggregate under all of the Leases, and attaching reasonably detailed documentation thereof; 
  

 106 








 (c) Within fifty (50) days after the close of each of the first three fiscal
quarters, and within one hundred (100) days after the close of each Fiscal Year, the following information and data for each Facility, in each case in paper format or electronic computer format: (1) income statements that include, without
limitation, a breakdown of Patient Revenues and other revenues itemized by payor type and a breakdown of operating expenses to the extent reasonably available under the then current facility operation reports, but including, at a minimum,
itemization of Facility rental expense, overhead charges or management fees, bad debt expense and any material non-recurring charges; and (2) patient census by payor type; 
 (d) As soon as available but in no event later than sixty (60) days following the commencement of each Fiscal Year, annual budgets
for the operation during such Fiscal Year of each Facility, of all Facilities in the aggregate under this Lease and of all Facilities in the aggregate under all of the Leases, and to the extent reasonably available, a breakdown of projected Patient
Revenues and other revenues itemized by payor type and a breakdown of projected operating expenses itemized to reflect, at a minimum, Facility rental expense, overhead charges or management fees, bad debt expense and any non-recurring charges;

 (e) Within one hundred (100) days after the close of each Fiscal Year, or otherwise upon request by Lessor in
connection with a proposed sale or refinancing of a Facility or Facilities by Lessor, for Tenant and each Guarantor, as applicable, an Officer’s Certificate certifying to Lessor and Lessor’s designees (which certificate may be relied upon
by Lessor and any prospective purchaser or mortgagee of any Leased Property) the following information: 
 (i) this Lease is
unmodified and is in full force and effect (or that this Lease is in full force and effect as modified and setting forth the modifications); 
 (ii) the dates to which Rent has been paid; 
 (iii) all Facilities are in good standing with
respect to all necessary federal, state and local licenses, permits and other Authorizations; 
 (iv) each Facility that
participates in the Medicare program is in compliance with the terms of its Medicare Provider Agreement and in good standing with the Medicare program; 
 (v) each Facility that participates in the Medicaid program is in compliance with the terms of its Medicaid Provider Agreement and in good standing with the Medicaid program; 
 (vi) the current number of licensed beds at each Facility; and 
 (vii) Tenant and each applicable Guarantor is not in default in the performance of this Lease or its Guaranty, as applicable, or if an
Event of Default exists, specifying the same in reasonable detail; 
  

 107 








 at the request of Lessor, together with complete and accurate copies (originals of which shall be made
available for inspection upon request by Lessor) of all licenses, permits and other Authorizations necessary to operate the Facilities in accordance with all applicable laws; 
 (f) As soon as reasonably available, copies of any Forms 10K, 10Q and 8K and any other annual, quarterly, monthly or other reports, copies
of all registration statements and any other public information which any Tenant or any of its Subsidiaries files with the Securities Exchange Commission or any other governmental authority; 
 (g) Promptly upon the furnishing thereof to the shareholders of any Tenant, copies of all statements, reports, notices and proxy
statements so furnished; 
 (h) Such supplements to the foregoing documents and such other information and reports (including,
without limitation non-financial information), as any Senior Lender, any Facility Mortgagee or any Superior Mortgagee may reasonably request, provided such supplements, and such information and reports, are consistent with the types of supplements,
reports and information generally utilized by such institutions within the financing industry; 
 (i)(i) on a monthly basis
during the Term, (x) a consolidated monthly cash flow report of Tenant and its Subsidiaries and (y) a consolidated monthly patient census report (reported separately for hospitals and nursing centers) for Tenant, (ii) all other
information, reports, materials and certificates that are from time to time delivered, pursuant to the requirements of any loan documents that are from time to time binding upon Tenant or any of its Subsidiaries or Affiliates, by Tenant or any of
its Subsidiaries or Affiliates to any of the Senior Lenders, or any of the holders of any other loan documents evidencing or securing borrowed indebtedness of Tenant or its Subsidiaries or Affiliates, or any of their respective agents,
representatives or consultants, with all such information, reports, materials and certificates to be delivered to Lessor at the same time and in the same manner as the same are delivered to any of the Senior Lenders, any of the aforesaid holders
and/or any of their respective agents, representatives or consultants, (iii) on a monthly basis during the Term, a monthly consolidated survey deficiency summary report, with such report to be in substance (but not necessarily in form)
consistent with the report dated October 2000 that was delivered to Lessor and listing each of the Master Lease Leased Properties and indicating for each Master Lease Leased Property whether any survey, citation or report alleging a deficiency that
is material in relation to such Master Lease Leased Property (using the October 2000 report as a baseline) has been issued with respect thereto during the period covered by such report and, if so, setting forth the identity of the agency or
authority that issued such citation or report, a description of the alleged material deficiency and the timetable or deadline for curing the same (and, promptly following receipt of a written request therefor from Lessor to Tenant, Tenant shall
further deliver to Lessor any Facility-specific survey reports requested by Lessor), (iv) promptly following receipt of a written request therefor from Lessor to Tenant, copies of any Facility-specific environmental, engineering or other
reports or studies that are in Tenant’s possession or control and so requested by Lessor and (v) within ten (10) Business Days following receipt of Lessor’s written request therefor, a copy, to the extent available and prepared,
of any report, study or other document that Tenant may from time to time prepare, or have prepared on its behalf, that assigns asset ratings or other grades or rankings to any or all of the Master Lease Leased Properties; 
  

 108 








 (j) If Lessor is a Ventas Lessor, within fifty (50) days following the close of each
fiscal quarter, a Senior Officer’s Certificate setting forth whether any Event(s) of Default under Section 16.1(m) and/or Section 16.1(q) of this Lease or any other lease demising any of the Master Lease Leased
Properties has occurred and is continuing (as described in Section 16.10) and, if so, specifying the Master Lease Leased Property(ies) at which such Event(s) of Default has so occurred and is continuing; 
 (k) Within three (3) Business Days following Tenant’s receipt thereof, true, correct and complete copies of all professional
negligence, malpractice and/or general liability actuarial studies, reports and/or analyses prepared from time to time for or by Tenant or at Tenant’s direction other than those prepared by its independent auditors; 
 (l) Within sixty (60) days after the close of each fiscal quarter, for any insurance company owned or controlled by Tenant (a
“Captive Insurance Company”), an unaudited balance sheet and statement of operations as of the close of each such period and the related unaudited statements of income, cash flows and stockholders equity for such period and for the
year to date of each Captive Insurance Company, setting forth in each case in comparative form the corresponding figures for the previous year, all prepared in accordance with generally accepted accounting principles and all certified in an
Officer’s Certificate to Lessor as being complete and accurate to the best of Tenant’s knowledge, subject to normal year end adjustments; 
 (m) Within one hundred eighty (180) days after the close of each Fiscal Year, for each Captive Insurance Company, a balance sheet and statement of operations as of the close of such Fiscal Year and the related
statements of income, cash flows and stockholder’s equity for such Fiscal Year, in each case with accompanying notes and schedules, prepared in accordance with generally accepted accounting principles and audited by a firm of independent
certified public accountants of recognized standing selected by Tenant, which accountants shall have issued an audit report thereon; 
 (n) Contemporaneously with the Effective Date, copies of the organizational documents, including, without limitation, any amendments thereto prior to the Effective Date, for each Captive Insurance Company, and, within five (5) Business
Days following entry into any subsequent amendment thereof, a true, correct and complete copy of any such amendment; 
 (o)
Within sixty (60) days following the end of each quarter during the Term, reports, as of such quarter-end, (i) indicating the amount of the then current “total loss pick” set for professional negligence and malpractice claims
against Tenant and its Subsidiaries and Affiliates and the then current breakdown of such “total loss pick” (x) between claims incurred and reported and claims incurred but not yet reported and (y) among claims incurred, whether
or not reported, that are (1) insured by the Captive Insurance Company(ies), (2) insured by insurers other than a Captive Insurance Company, and (3) not insured by a Captive Insurance Company 

  

 109 








 
or another insurer, (ii) indicating the amount to be reserved by Tenant at the aforesaid then current “total loss pick” for claims, whether or
not reported, that are uninsured or that are insured by the Captive Insurance Company(ies) and a reasonably detailed explanation of how such reserved amount was calculated and determined, (iii) identifying the portion of the reserve amount
referenced in subsection (ii) above that will be funded, and the portion of such reserve that will not be funded, to the Captive Insurance Company(ies) by Tenant, and (iv) confirming that the amount to be funded to the Captive Insurance
Company(ies) by Tenant is being funded on budget or, if there is a shortfall in the funding of the amount to be funded, detailing Tenant’s plan for funding such shortfall to the Captive Insurance Company(ies), and, in addition, in each monthly
Officer’s Certificate delivered by Tenant pursuant to subsection (a) above, Tenant shall include therein a certification that Tenant is recording general and professional liability costs, on a monthly basis, in a manner consistent with the
most recent actuarial valuations; 
 (p) On or prior to the date which is one hundred (100) days following the end of
each Fiscal Year, a report that allocates all professional negligence and malpractice liability expenses incurred by Tenant and its Subsidiaries and Affiliates during such preceding Fiscal Year to each Facility under this Lease, to each of the other
Facilities under the Leases and to all other healthcare-related facilities of Tenant and its Subsidiaries and Affiliates that are not leased by Tenant under the Leases and that explains the methodology of such allocation in reasonable detail;

 (q) Within thirty (30) days following the end of each month during the Term, Medicaid Rate Variance Reports, as of
such month-end, prepared by Tenant for the Facilities under this Lease, and under all of the Leases, that are skilled nursing facilities, which report shall be substantially in the form delivered by Tenant to Lessor on May 14, 2003 or another
form reasonably acceptable to Lessor, and, within forty-five (45) days following the end of each month during the Term, the “Dennis Henson Medicaid Rate Report,” or a substantially similar report reasonably acceptable to Lessor, each
as of such month-end, providing a state by state evaluation and prediction of Medicaid rates; 
 (r) Within forty-five
(45) days following the end of each month during the Term, operating reports, as of such month-end, for each Facility under this Lease, and under each of the Leases, and for all Facilities under each of the Leases, and under all of the Leases,
in the form delivered to Lessor on May 14, 2003 or another form reasonably acceptable to Lessor; 
 (s) Within thirty
(30) days following the end of each month during the Term, a “QA Management Activity Report”, as of such month-end, prepared by Tenant for each Facility under this Lease, and under each of the Leases, in the form delivered to Lessor
on May 14, 2003 or another form reasonably acceptable to Lessor, and, relative thereto, promptly following Tenant’s receipt of a written request therefor from Lessor, true, correct and complete copies of any survey deficiency reports
and/or plans of correction relative to any of the aforesaid Facilities designated by Lessor; 
  

 110 








 (t) Within sixty (60) days after the commencement of each Fiscal Year, an annual
capital expenditures budget for such Fiscal Year, relating only to the Leased Properties, in the form delivered to Lessor on May 14, 2003 or another form reasonably acceptable to Lessor and, within fifteen (15) days after any material
amendment to such annual capital expenditures budget, a true, correct and complete copy of such amendment; 
 (u) Within
forty-five (45) days following the end of each month during the Term, a capital expenditures report, as of such month-end, relative to each Facility under this Lease, and under all of the Leases, in the form delivered to Lessor on May 14,
2003 or another form reasonably acceptable to Lessor, and, including with each such report, project level expenditure detail by Facility; and 
 (v) Within thirty (30) days after the close of each of the first three fiscal quarters, and within thirty (30) days after the close of each Fiscal Year, a report, in form reasonably acceptable to Lessor,
regarding changes in the number of licensed beds and so-called “banked beds”, at each Facility, at all Facilities in the aggregate under this Lease and at all Facilities in the aggregate under all of the Leases. 
 Section 26.2 Furnishing Notice. Within five (5) days after Tenant receives notice or otherwise obtains knowledge of any of the
following occurrences, Tenant shall give written notice thereof in the form of an Officer’s Certificate to Lessor, which notice shall set forth details of the occurrence referred to therein and shall state what action Tenant has taken, and
proposes to take, with respect thereto: 
 (a) any written notice of termination or suspension of any Facility from
participation in the Medicare or Medicaid program; and 
 (b) any written notice of non-renewal of any license or other
Authorization affecting any of the Facilities or its operation (including copies thereof). 
 Section 26.3 Quarterly Meetings;
Facility Level Meetings and Reviews. On a quarterly basis, Tenant shall permit, and upon request by Lessor shall make appropriate arrangements for, Lessor and/or its representatives to discuss the affairs, operations, finances and accounts of
Tenant and its Subsidiaries and Affiliates with, and be advised as to the same by, senior officers of Tenant (and such of Tenant’s independent accountants and other financial advisors as would be relevant to the topic of the particular
meeting), all as Lessor may deem appropriate for the purpose of verifying any report(s) delivered by Tenant to Lessor under this Lease or for otherwise ascertaining compliance with this Lease by Tenant or the business, operational or financial
condition of Tenant and/or its Subsidiaries and Affiliates and/or any of their respective Facilities. Without limitation of the foregoing, from time to time promptly following receipt of written notice from Lessor to Tenant (and in any event within
ten (10) Business Days of such receipt), Tenant shall permit, and shall make appropriate arrangements for, Lessor and/or its representatives or designees to discuss the business, operational and financial condition of specific Facility(ies)
designated by Lessor with, and be advised as to the same by, appropriate personnel of Tenant and its Subsidiaries and Affiliates having operational and accounting responsibilities for the Facility(ies) so specified by Lessor and to review, and make
abstracts from and copies of, the books, accounts and records of Tenant and its Subsidiaries and Affiliates 

  

 111 








 
relative to any such Facility(ies), in each case provided, and on the condition, that any such discussions or reviews, abstracting or copying shall not
materially interfere with Tenant’s business operations relative to any affected Facility(ies). Unless otherwise agreed in writing by Lessor and Tenant, all of the discussions, reviews, abstracting and copying referenced in this
Section 26.3 shall occur during normal business hours. Relative to the foregoing matters, (a) Tenant agrees that those officers and managerial-level employees of Tenant and its Subsidiaries and Affiliates as are reasonably
designated by Lessor shall attend the above described quarterly and/or Facility level meetings and reviews, (b) each of the aforesaid quarterly meetings and reviews shall, unless otherwise agreed by Lessor and Tenant, occur on the first Tuesday
that is more than fifteen (15) days following the earlier of the date of filing or the filing due date of the Form 10Q or 10K, as applicable, that Tenant is required to file following the close of the quarter-to-be-reviewed, and (c) the
aforesaid Facility level meetings and reviews shall, unless otherwise agreed by Lessor and Tenant, occur simultaneously with the aforesaid quarterly meetings and reviews and, in addition, from time to time at other times designated by Lessor upon
ten (10) Business Days written notice to Tenant. 
 Section 26.4 Non-Ventas Lessors. Notwithstanding anything to the
contrary contained in this ARTICLE XXVI, if and for so long as the lessor under this Lease is not a Ventas Lessor, Tenant (a) shall not be required under this Lease to provide to such non-Ventas Lessor Facility-specific information
related to Facilities or Leased Properties which are not included in this Lease, (b) shall exclude from consolidated facility information that is required under Section 26.1 of this Lease facility information which relates to
Facilities or Leased Properties not included in this Lease, and (c) shall continue to be required to provide information relative to Tenant, as opposed to Leased Properties and Facilities, on the same basis as such information is provided to a
Ventas Lessor. 
 Section 26.5 Additional Tenant Assistance. Tenant agrees that Tenant’s chief executive
officer and chief financial officer shall be made available by Tenant, upon two (2) Business Days (five (5) Business Days, if an in-person meeting is required) prior verbal and electronic notice from Lessor, to hold meetings with, make
presentations to and/or answer questions and inquiries by investment advisers, analysts, underwriters, bankers and other lenders, rating agencies and other persons and organizations designated by Lessor in connection with transactions conducted by
Lessor from time to time. Tenant shall not be required to incur any out-of-pocket expenses (other than nominal expenses) in connection with any such request by Lessor. 
 Section 26.6 Electronic Format. All reports, statements and other materials delivered by or on behalf of Tenant to Lessor under this ARTICLE XXVI shall be delivered to Lessor in
electronic format, if available. 
 Section 26.7 Similar Reports. If Tenant shall at any time begin to prepare new or
additional reports, statements or other materials containing the same or similar information as is contained in any of the reports, statements or other materials that Tenant is required to deliver to Lessor by the terms of the other Sections of this
ARTICLE XXVI, Tenant shall deliver such new or additional reports, statements or other materials to Lessor, promptly following Tenant’s preparation of the same. 
  

 112 








 Section 26.8 Audit and Investigation Rights. Without limitation of Tenant’s other
obligations as set forth in this ARTICLE XXVI, Lessor shall have the right, at its expense and upon delivery of ten (10) Business Days written notice to Tenant from time to time, to audit, and/or prepare or perform such other
operational, accounting or financial reviews, abstracts, reports and other investigations (including, without limitation, investigations of Tenant’s compliance with Section 7.2.4 hereof) as Lessor chooses of or relating to, the
books, records and accounts of Tenant and its Subsidiaries and Affiliates and/or relative to any Facility(ies) designated by Lessor from time to time (including, without limitation, appraisals), provided, however, without limitation of
Lessor’s rights pursuant to ARTICLE XXVI (other than this Section 26.8) or other provisions of this Lease and solely for purposes of this Section 26.8, Lessor’s right to audit or review materials
pursuant to this Section 26.8 shall not require Tenant to provide to Lessor (a) that portion of any confidential materials prepared internally by Tenant or by a third party on behalf of Tenant regarding whether to exercise renewal
rights under this Lease or analyzing the Fair Market Value or Fair Market Rental of the Leased Properties, including analyses of appraisals or documents similar thereto (but Tenant agrees that, notwithstanding the foregoing or anything to the
contrary in this Section 26.8, Lessor shall have the right pursuant to this Section 26.8 to obtain copies of, and to review and investigate, any appraisals or documents similar thereto prepared by appraisers or other third
parties), (b) employment and/or employee records, (c) that portion of any litigation files that constitutes privileged material that is protected by the attorney-client privilege, and (d) confidential and proprietary analysis of the
above referenced books, records and accounts prepared (i) for a bona fide business purpose, (ii) in the ordinary course of business, (iii) not for the purpose of evading Lessor’s rights under this Section 26.8, and
(iv) solely for use by Tenant’s Board of Directors or officers of Tenant having a title of Senior Vice President or higher (except, in the case of each of the foregoing subsections (b) through (d), if Lessor would otherwise have a
right to obtain such materials pursuant to the provisions of this Lease (other than this Section 26.8)). Lessor shall not require or perform any act that would cause Tenant or any of its Subsidiaries or Affiliates to violate any laws,
regulations or ordinances relating to employment records or intended to protect the privacy rights of Tenant’s employees or healthcare patients, including, but not limited to, the Health Insurance Portability and Accountability Act of 1996, as
amended. Any such investigation instituted by Lessor shall commence promptly ten (10) Business Days after Tenant’s receipt of Lessor’s aforesaid written notice (unless Lessor otherwise agrees in writing). The foregoing activities
shall be conducted by Lessor through agents, employees, representatives or designees of its choosing, and Tenant shall reasonably cooperate (and shall cause its independent accountants and other financial advisors to reasonably cooperate) with all
of such activities. Such activities shall be conducted in a manner that does not materially interfere with Tenant’s business operations or the business operations relative to any affected Facility(ies). Lessor shall be obligated to reimburse
Tenant and its aforesaid independent accountants and other financial advisors for any out-of-pocket expenses incurred by Tenant or on Tenant’s behalf in connection with providing any such cooperation. Tenant may provide Lessor with a monthly
statement of the expenses to be reimbursed by Lessor pursuant to this Section 26.8, and Lessor shall reimburse such expenses to Tenant within ten (10) Business Days after receipt of such written demand accompanied by reasonable
supporting documentation. Unless otherwise agreed in writing by Lessor and Tenant, Lessor’s aforesaid activities shall occur during normal business 

  

 113 








 
hours. Lessor’s aforesaid activities may include, without limitation, performing audits of, or other operational, accounting or financial reviews or
reports relating to, the EBITDAR and/or EBITDARM of a particular Facility(ies) for a particular past or future period(s) and the terms and conditions of contracts with Tenant’s Affiliates and Subsidiaries and/or other Persons for the provision
of particular goods and services to a particular Facility(ies). 
 ARTICLE XXVII 
 Section 27.1 Lessor’s Right to Inspect. Tenant shall permit Lessor, any then current or prospective Superior Mortgagee or other
lender to Lessor, any then current or prospective investment banker, mortgage broker or other professional engaged by Lessor, any prospective purchaser of any Leased Property or any interest in Lessor or any Affiliate of Lessor and/or, only during
any permitted exhibition period under Section 40.4 below, any prospective lessee, and its and their respective authorized representatives, to enter upon and conduct a physical inspection of any Leased Property during usual business hours
and, except in an emergency, upon not less than three (3) Business Days prior notice, subject to any security, health, safety or confidentiality requirements of any governmental agency or insurance requirement relating to the Leased Properties,
or imposed by law or applicable regulations and provided that no such entry or inspection shall materially interfere with Tenant’s business operations within the affected Leased Property(ies). Nothing contained in this Section 27.1
shall limit or impair Lessor’s right to enter upon and inspect the Leased Properties, or any of Lessor’s other rights or remedies, upon the occurrence of any Event of Default by Tenant. 
 ARTICLE XXVIII 
 Section 28.1 No Waiver. No failure by Lessor or Tenant to insist upon the strict performance of any term hereof or to exercise any right, power or remedy consequent upon a breach thereof, and no acceptance of full or
partial payment of Rent during the continuance of any such breach, shall constitute a waiver of any such breach or of any such term. To the extent permitted by law, no waiver of any breach shall affect or alter this Lease, which shall continue in
full force and effect with respect to any other then existing or subsequent breach. 
 ARTICLE XXIX 
 Intentionally omitted. 
 ARTICLE XXX

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

 114 








 ARTICLE XXXI 
 Section 31.1 No Merger of Title. There shall be no merger of this Lease or of the leasehold estate created thereby by reason of the fact that the same person, firm, corporation or other entity may
acquire, own or hold, directly or indirectly, (a) this Lease or the leasehold estate created hereby or any interest in this Lease or such leasehold estate and (b) the fee estate in any Leased Property. 
 ARTICLE XXXII 
 Section 32.1 Conveyance by Lessor. Lessor may, without the consent or approval of Tenant, sell, transfer, assign, convey or otherwise dispose of any or all of the Leased Properties. If Lessor or any successor owner of any
Leased Property shall sell, transfer, assign, convey or otherwise dispose of any Leased Property in accordance with the terms hereof other than as security for a debt, and the purchaser, grantee, assignee or transferee of the Leased Property shall
expressly assume all obligations of Lessor hereunder with respect to such Leased Property arising or accruing from and after the date of such sale, conveyance, transfer, assignment or other disposition and shall be reasonably capable of performing
the obligations of Lessor hereunder, Lessor or such successor owner, as the case may be, shall thereupon be released from all future liabilities and obligations of Lessor under this Lease with respect to such Leased Property arising or accruing from
and after the date of such sale, conveyance, transfer, assignment or other disposition as to such Leased Property and all such future liabilities and obligations with respect to such Leased Property shall thereupon be binding upon such purchaser,
grantee, assignee or transferee. Lessor agrees to deliver to Tenant and any Leasehold Mortgagee, promptly following the consummation of any such sale, conveyance, transfer, assignment or other disposition (other than as security for a debt), written
notice of such sale, conveyance, transfer, assignment or other disposition and, if applicable, a copy of the aforesaid assumption agreement. In the event of any such sale, transfer, assignment, conveyance or other disposition (other than as security
for a debt) of less than all of the Leased Properties, the provisions of Section 40.15 hereof shall apply. 
 ARTICLE XXXIII 
 Section 33.1 Quiet Enjoyment. So long as Tenant shall pay all Rent as the same
becomes due and shall fully comply with all of the terms of this Lease and fully perform its obligations hereunder and thereunder, Tenant shall peaceably and quietly have, hold and enjoy each Leased Property for the Term hereof, free of any claim or
other action by Lessor or anyone claiming by, through or under Lessor, but subject to all Permitted Encumbrances, including, without limitation, liens and encumbrances of record as of the Existing Lease Effective Date or otherwise permitted to be
created by Lessor hereunder, liens as to the obligations of Lessor that are either not yet due or which are being contested in good faith and by proper proceedings, and liens hereafter consented to by Tenant. No failure by Lessor to comply with the
foregoing covenant shall give Tenant any right to cancel or terminate this Lease or abate, reduce or make a deduction from or offset against the Rent or any other sum payable under this Lease, or to fail to perform any other obligation of Tenant
hereunder. Notwithstanding the foregoing, Tenant shall have the right, by separate and independent action, to pursue any claim it may have against Lessor as a result of a breach by Lessor of the covenant of quiet enjoyment contained in this Section.

  

 115 








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

	 	(a)	if to either Tenant: 

 Kindred Healthcare, Inc.

 Kindred Healthcare Operating, Inc. 
 680 South 4th Avenue 
 Louisville, Kentucky 40202-2612 
 Attention: Chief Financial Officer 
 with
copies to: 
 Kindred Healthcare, Inc. 
 Kindred Healthcare Operating, Inc. 
 680 South 4th Avenue 
 Louisville, Kentucky 40202-2612 
 Attention:
General Counsel 
 and 
 JPMorgan
Chase Bank 
 270 Park Avenue, 4th Floor 
 New York, New York 10017 
 Attention: Dawn Lee Lum, Vice President 
  

	 	(b)	if to Lessor: 

 Ventas Realty, Limited Partnership

 c/o Ventas, Inc. 
 10350
Ormsby Park Place, Suite 300 
 Louisville, Kentucky 40223 
 Attention: Lease Administration 
 with a copy to: 
 Ventas Realty, Limited Partnership 
 c/o
Ventas, Inc. 
 10350 Ormsby Park Place, Suite 300 
 Louisville, Kentucky 40223 
 Attention: General Counsel 
 or to such other address as either party may hereunder designate, and shall be effective upon receipt. 
  

 116 








 ARTICLE XXXV 
 Section 35.1 Appraisals. In the event that it becomes necessary to determine the Fair Market Rental of the Leased Properties or any thereof or the allocation of Base Rent among the Leased Properties
or any thereof, or the Transferred Property Percentages applicable to the Leased Properties or any thereof, to be contained in Exhibit C hereto or the Fair Market Value or Fair Market Value Purchase Price of any property, in each case
for any purpose of this Lease, and the parties cannot agree amongst themselves on such values, allocations or percentages, the procedures of this ARTICLE XXXV shall apply. 
 Section 35.2 Appointment of Appraisers. The party required or permitted to request an appraisal or other determination under this
ARTICLE XXXV shall, within the applicable time period, if any, specified in this Lease, give written notice (an “Appraisal Notice”) to the other party, which Appraisal Notice shall state the requesting party’s
desire for an appraisal or other determination under this ARTICLE XXXV, and identify which matters are to be appraised or determined. Within thirty (30) days after receipt of any such Appraisal Notice by the party to which such
Appraisal Notice is directed, each party shall, by written notice to the other party, appoint an appraiser meeting the qualifications set forth below selected by such party to act as appraiser on its behalf. If either party fails so to appoint an
appraiser within the aforesaid thirty (30) day period, the appraiser selected by the other party shall act as the “Final Appraiser” hereinafter described. If both parties appoint an appraiser as aforesaid in a timely manner, within
ten (10) days after such two appraisers are appointed, such two appraisers shall meet and agree upon a third appraiser meeting the qualifications set forth below (herein, the “Final Appraiser”). The two appraisers selected by
the parties shall, promptly following their agreement upon a Final Appraiser, provide written notice of the identity of the aforesaid Final Appraiser to each of Lessor and Tenant. Such appointment shall be binding on the parties. If the two
appraisers selected by the parties are unable to agree upon a Final Appraiser within the aforesaid ten (10) day period, then either party may request that the American Arbitration Association or any successor organization thereto appoint a
Final Appraiser meeting the qualifications set forth below within twenty (20) days of such request, and both parties shall be bound by any appointment so made within such twenty (20) day period. If no such Final Appraiser shall have been
appointed in such manner within such twenty (20) day period or within ninety (90) days after issuance of the original Appraisal Notice, either Lessor or Tenant may apply to any court having jurisdiction to have such appointment made by
such court. 
 Section 35.3 Qualifications of Appraisers. Each of the two appraisers selected by the parties, and the
Final Appraiser, must (a) be a member of the Appraisal Institute (or any successor organization thereto) and/or a person employed by an accounting firm that, at the time of such appointment, is one of the five (5) largest public accounting
firms in the United States and (b) have not less than five (5) years experience, and substantial expertise, in valuing hospitals and nursing centers and/or determining the fair market rental of hospitals and nursing centers. 
  

 117 








 Section 35.4 Appraisal Process. The Final Appraiser appointed in accordance with the
foregoing procedures shall complete the appraisals, and make any other determinations, submitted to him or her in accordance with the terms of this Lease within sixty (60) days after his or her appointment and shall notify each of Lessor and
Tenant of his or her appraisals and other determinations. In performing such appraisals, and making such other determinations, the Final Appraiser shall make the assumptions, and follow any other directives or instructions, contained in this Lease
relative to the subject matter of the Final Appraiser’s appointment, and, without limitation of the foregoing, in the case of any appraisal of Fair Market Rental applicable to the Leased Properties or any thereof or any allocation of Base Rent
among the Leased Properties or any thereof (and any related amendment of Exhibit C hereto and allocation of Transferred Property Percentages among the Leased Properties or any thereof), the Final Appraiser shall not allocate an amount of Base
Rent to any particular Leased Property that would result in this Lease, as it applies to such Leased Property, being treated as a capital lease, rather than an operating lease, under generally accepted accounting principles or under the applicable
rules of the Financial Accounting Standards Board and, in making determinations of the amount of Base Rent that will be allocated to particular Leased Properties for purposes of Exhibit C, shall consider the effect of his or her allocation of
Base Rent to a particular Leased Property upon Tenant’s ability to obtain reimbursements at such Facility under third party payor programs, but in all events without increasing or decreasing the aggregate amount of Base Rent payable under this
Lease with respect to the Leased Properties as a whole. 
 Section 35.5 Binding Nature. The provisions of this
ARTICLE XXXV, and related provisions of this Lease, providing for determination of certain values, allocations, percentages and other matters by the Final Appraiser shall be specifically enforceable to the extent such remedy is available
under applicable law, and any determination hereunder shall be final and binding upon the parties except as otherwise provided by applicable law. 
 Section 35.6 Costs. Lessor and Tenant shall each pay the fees and expenses of the appraiser appointed by it, and each shall pay one-half of the fees and expenses of the Final Appraiser, and one-half of all other costs and
expenses, incurred in connection with each appraisal. 
 ARTICLE XXXVI 
 Section 36.1 General REIT Provisions. 
 Section 36.1.1 Tenant understands that, in order for Ventas, Inc., Lessor’s Affiliate, to qualify as a real estate investment trust (“REIT”), the following requirements (the
“REIT Requirements”) must be satisfied: 
 (i) Rent allocable for purposes of Section 856 of the Code to
Lessor’s personal property that is leased to Tenant under a lease at the beginning and end of a calendar year cannot exceed 15% of the total Rent under such lease. 
  


 118 








 (ii) Tenant cannot sublet the property that is leased to it by Lessor, or enter into any
similar arrangement, on any basis such that the rental or other amounts paid by the sublessee thereunder would be based, in whole or in part, on either (i) the net income or profits derived by the business activities of the sublessee or
(ii) any other formula such that any portion of the rent paid by Tenant to Lessor would fail to qualify as “rents from real property” within the meaning of Section 856(d) of the Code. 
 (iii) Tenant cannot transfer or assign Tenant’s rights under the Lease to, or sublease the property leased to it by Lessor to, or
enter into any similar arrangement with, any person in which Lessor has provided written notice to Tenant that it owns, directly or indirectly, a 10% or more interest, within the meaning of Section 856(d)(2)(B) of the Code. 
 Section 36.1.2 Notwithstanding any other provisions of this Lease to the contrary, Tenant agrees, and agrees to use reasonable
efforts to cause its Affiliates, to cooperate in good faith with Lessor to ensure that the REIT Requirements are satisfied, including, but not limited to, providing Lessor with information about the ownership of Tenant, and its Affiliates to the
extent that such information is reasonably available. Tenant agrees, and agrees to use reasonable efforts to cause its Affiliates, upon request by Lessor to take reasonable action necessary to ensure compliance with the REIT Requirements.
Immediately after becoming aware that the REIT Requirements are not, or will not be, satisfied, Tenant shall notify, or use reasonable efforts to cause its Affiliates to notify, Lessor of such noncompliance. 
 Lessor agrees to reimburse Tenant for the reasonable amount of any out of pocket expenses incurred by Tenant or its Affiliates in satisfying the
requirements of this Section 36.1.2. 
 Section 36.1.3 Neither Lessor nor Tenant shall treat this
Lease as subject to rent leveling (or constant rental accrual) under the disqualified rental agreement rules of Section 467 of the Code. 
 ARTICLE XXXVII 
 Section 37.1 Intentionally Omitted. 
 Section 37.2 Lessor’s Option to Purchase the Tenant’s Personal Property. Effective on not less than ninety (90) days
prior written notice given at any time within one hundred eighty (180) days prior to the expiration of the Term, but not later than ninety (90) days prior to such expiration, or such shorter notice as shall be appropriate if this Lease is
terminated in whole or in part or Tenant is dispossessed of any of the Leased Properties prior to the expiration of the Term, subject to the rights of any Leasehold Mortgagee in respect of Tenant’s Personal Property, Lessor or its designee
shall have the option to purchase all (but not less than all) of Tenant’s Personal Property located at the Leased Property(ies) in question, if any, at any expiration or termination of the Term, for a purchase price equal to the unamortized
portion of the original cost based upon the economic useful life, as defined by the American Hospital Association Guide (or, if such guide ceases to be published by the American Hospital Association, a 

  

 119 








 
substitute guide or other economic useful life reference book mutually agreed upon by Lessor and Tenant, each acting reasonably), subject to, and with
appropriate price adjustments for, all equipment leases, conditional sale contracts, UCC-1 financing statements (including those financing statements filed in connection with the Leasehold Mortgages) and other encumbrances to which such Personal
Property is subject. Promptly following demand by Lessor (but in any event within thirty (30) days following such demand), Tenant shall deliver to Lessor a computation and statement, in form, content and detail reasonably satisfactory to
Lessor, of the purchase price described above as of the date of such expiration, termination or dispossession, as the case may be, for all of Tenant’s Personal Property located at the Leased Property(ies) in question. 
 ARTICLE XXXVIII 
 Section 38.1 Lessor May Grant Liens. Without the consent of Tenant, Lessor may, subject to the terms and conditions set forth below in this Section 38.1, from time to time, directly or indirectly, create or
otherwise cause to exist any lien, encumbrance or title retention agreement (“Encumbrance”) upon any Leased Property or any portion thereof or interest therein, whether to secure any borrowing or other means of financing or
refinancing. Any lender, which takes an interest in the applicable Leased Property pursuant to this ARTICLE XXXVIII, (a) shall agree to give Tenant the same notice, if any, given to Lessor of any default or acceleration of any
obligation underlying any such mortgage or any sale in foreclosure under such mortgage, (b) shall agree to permit Tenant to cure any such default on Lessor’s behalf within any applicable cure period, and Tenant shall be reimbursed by
Lessor for any and all out-of-pocket costs incurred to effect any such cure (including reasonable attorneys’ fees), (c) shall agree to permit Tenant to appear by its representative and to bid at any sale in foreclosure made with respect to
any such mortgage and (d) shall agree not to disturb Tenant’s possession so long as Tenant is not in default in performing its obligations hereunder. 
 ARTICLE XXXIX 
 Section 39.1 Environmental Indemnity. Tenant hereby agrees to
hold harmless Lessor, any successors to Lessor’s interest in this Lease and in any Leased Property, and Lessor’s and such successors’ directors, officers, partners, members, employees and agents from and against any losses, claims,
damages (including consequential damages), penalties, fines, liabilities (including strict liability), costs (including cleanup and recovery costs), and expenses (including expenses of litigation and reasonable attorneys’ fees) incurred by
Lessor or any other indemnitee or assessed against the Leased Property by virtue of any claim or lien by any governmental or quasi-governmental unit, body, or agency, or any third party, for cleanup costs or other costs pursuant to the Comprehensive
Environmental Response Compensation and Liability Act of 1980, the Hazardous Materials Transportation Act, the Resource Conservation and Recovery Act, all as amended from time to time, and all state laws and federal and state regulations pursuant to
the foregoing (collectively “Environmental Laws”). Tenant’s indemnity shall survive the expiration or any termination of this Lease. Provided, however, Tenant shall have no indemnity obligation with respect to
(i) Hazardous Materials first introduced to the Leased Property subsequent to the date that Tenant’s occupancy of the applicable Leased Property shall 

  

 120 








 
have fully terminated or (ii) Hazardous Materials first introduced to the Leased Property prior to the Existing Lease Effective Date, except to the
extent arising from any deterioration on or after the Existing Lease Effective Date in any condition existing prior to the April 30, 1998. “Hazardous Materials” means any substance the presence of which poses a hazard to the health or
safety of persons on or about the Leased Property or which requires removal or remediation under any Environmental Law, including without limitation, any substance which is toxic, explosive, flammable, radioactive, or otherwise hazardous or is
included within the meaning of “hazardous substance”, “hazardous waste”, “toxic substance”, or “pollutant” as defined in any Environmental Law. At any time during the Term of this Lease, Lessor may require one
or more environmental audits of the Leased Properties, in such form, scope and substance as specified by Lessor, at Tenant’s expense. Tenant shall, within thirty (30) days after receipt of an invoice from Lessor, reimburse Lessor for all
costs and expenses incurred in reviewing any environmental audit, including, without limitation, reasonable attorneys’ fees and costs. 
 ARTICLE XL 
 Section 40.1 Miscellaneous. Anything contained in this Lease to the contrary
notwithstanding, all claims against, and liabilities of, Tenant or Lessor arising prior to any date of termination or expiration of this Lease shall survive such termination or expiration. If any term or provision of this Lease or any application
hereof shall be invalid or unenforceable, the remainder of this Lease and any other application of such term or provision shall not be affected thereby. If any late charges provided for in any provision of this Lease are based upon a rate in excess
of the maximum rate permitted by applicable law, the parties agree that such charges shall be fixed at the maximum permissible rate. Neither this Lease nor any provision hereof may be changed, waived, discharged or terminated except by an instrument
in writing and in recordable form signed by Lessor and Tenant. All the terms and provisions of this Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. The headings in this Lease
are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 
 Section 40.2
Non-Recourse. Tenant specifically agrees to look solely to Lessor’s and any successor owner’s interest in the Leased Properties for recovery of any judgment from Lessor, it being specifically agreed that neither Lessor, any such
successor owner, nor any officer, director, employee, lender, agent or Affiliate of Lessor or any such successor owner shall ever be personally liable for any such judgment or for the payment of any monetary obligation to Tenant. Tenant shall have
no recourse against any other property or assets of Lessor or any successor owner, or against any property or assets of any officer, director, shareholder, partner, lender, agent or Affiliate of Lessor or any successor owner. The provision contained
in the foregoing sentence is not intended to, and shall not, limit any right that Tenant might otherwise have to obtain injunctive relief against Lessor or Lessor’s successors in interest, or any action not involving the personal liability of
Lessor (original or successor). Furthermore, except as otherwise expressly provided herein, in no event shall Lessor (original or successor) ever be liable to Tenant for any special, indirect or consequential damages suffered by Tenant from whatever
cause. 
  

 121 








 Section 40.3 Transition of Operations. 
 (a) Upon the expiration or earlier termination of the Term as to any Leased Property, or any dispossession of Tenant as to any Leased Property, Tenant
shall, to the maximum extent permitted by applicable law, transfer to Lessor or Lessor’s designee and/or cooperate in all reasonable respects with Lessor or Lessor’s designee to enable Lessor or Lessor’s designee to apply for and
obtain all licenses, operating permits, provider agreements, provider status, certificates of need, certificates of exemption, approvals, waivers, variances and other governmental, quasi-governmental and private authorizations necessary for the
operation of the Leased Property as to which the Term is expired or terminated or as to which Tenant has been dispossessed and the Facilities located thereon, or any of them, for their respective Primary Intended Uses (collectively
“Authorizations”); provided that the costs and expenses of any such transfer or obtaining of Authorizations shall be paid by Lessor or Lessor’s designee unless such termination or dispossession results from an Event of
Default, in which event the costs and expenses of any such transfer or obtaining of Authorizations shall be paid by Tenant. It is the express intention of the parties that at the expiration or earlier termination of the Term as to any Leased
Property, and upon any dispossession of Tenant in connection with any Event of Default as to any Leased Property, any and all Authorizations needed to operate each Leased Property as to which the Term is expired or terminated, or as to which Tenant
has been dispossessed, for its Primary Intended Use shall, to the maximum extent permitted by applicable law, remain with such Leased Property and shall be transferred into the name of Lessor or Lessor’s designee, regardless of whether such
Authorization is in the name of Tenant at any time during the Term. Without limiting the generality of the foregoing, Tenant shall furnish to Lessor or its designee complete and accurate documents and information in Tenant’s possession, custody
or control necessary or reasonably requested by Lessor or its designee in connection with any such transfer or the completion and processing of any applications for Authorizations. 
 (b) In anticipation of the expiration of this Lease as to any Leased Property, upon the earlier termination of this Lease as to any Leased Property,
and/or upon any dispossession of Tenant in connection with any Event of Default as to any Leased Property, Tenant shall cooperate with Lessor in all reasonable respects to facilitate and effectuate the orderly transfer of operations at the affected
Facility(ies) as a going concern; provided, however, that, unless such termination or dispossession results from an Event of Default by Tenant, notwithstanding anything to the contrary contained in this subsection (b), Tenant shall not
be required to incur any out-of-pocket operating losses or costs in so cooperating. Such cooperation shall include, without limitation: (i) furnishing to Lessor or any prospective successor operator of a Facility designated by Lessor complete
and accurate books, records, files, documents and information in Tenant’s possession, custody or control necessary or reasonably requested by Lessor or its designee in connection with the assessment and/or assumption of the operations of such
Facility(ies); (ii) facilitating the evaluation and employment by Lessor or its designee of such employees of Tenant as Lessor or its designee may elect to evaluate or employ, including, without limitation, to the extent permitted by law,
affording Lessor or its designee access to all relevant personnel files, records, documents and information in Tenant’s possession, custody or control; and (iii) assigning to Lessor or its designee such assignable patient, vendor, service
provider and other contracts relating to the Facility(ies) in question as Lessor or its designee may request; provided, however, that Tenant’s cooperation obligation shall not include undertaking primary responsibility for such
transfer of operations. 
  

 122 








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

  

 123 








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

 Section 40.4 Right to Enter. Lessor and Lessor’s agent shall have the right to enter the applicable Leased
Property at all reasonable times for the purpose of exhibiting the Leased Property to others (i) if Tenant has not exercised its right with respect to any applicable Extended Term within the time period set forth in this Lease, or
(ii) during the last eighteen (18) months of the Term (if all available options for Extended Terms have previously been exercised). 
 Section 40.5 Integration. This Lease contains the entire agreement between Lessor and Tenant with respect to the subject matter hereof. No representations, warranties or agreements have been made by Lessor except as set
forth in this Lease. 
 Section 40.6 Severability. If any term or provision of this Lease is held or deemed by Lessor to
be invalid or unenforceable, such term or provision shall be modified as slightly as possible so as to render it valid and enforceable; if such term or provision, as modified, shall be held or deemed invalid or unenforceable, such holding shall not
affect the remainder of this Lease and same shall remain in full force and effect, unless such holding substantially deprives Tenant of the use of the Leased Property(ies) or Lessor of the rents herein reserved, in which event this Lease shall
forthwith terminate as if by expiration of the Term. 
 Section 40.7 Subject to Law. 
 (a) All rights, powers and remedies provided herein may be exercised only to the extent that the exercise thereof, including those which do not require
the giving of notice, does not violate any applicable law, and are intended to be limited to the extent necessary so that they will not render this Lease invalid or unenforceable under any applicable law. All waivers, consents, confessions and
releases provided for in this Lease are effective only to the extent permitted by applicable law. 
  

 124 








 (b) This Lease was negotiated in the State of New York, which State the parties agree has a substantial
relationship to the parties and to the underlying transaction embodied hereby. In all respects, the law of the State of New York shall govern the validity of and enforceability of the obligations of the parties set forth herein, but all provisions
hereof relating to the creation of the leasehold estate and remedies set forth in ARTICLE XVI shall be governed by the laws of the State in which each applicable Leased Property that is the subject of dispute is located and the parties
hereto will submit to jurisdiction and the laying of venue for any suit on this Lease in the Commonwealth of Kentucky. 
 Section 40.8 Waivers. No waiver of any condition or covenant herein contained, or of any breach of any such condition or covenant, shall be held or taken to be a waiver of any subsequent breach of such covenant or
condition, or to permit or excuse its continuance or any future breach thereof or of any condition or covenant herein construed as a waiver of such default, or of Lessor’s right to terminate this Lease or exercise any other remedy granted
herein on account of such existing default. 
 Section 40.9 Binding Character. This Lease shall be binding upon and shall
inure to the benefit of the heirs, successors, personal representatives, and permitted assigns of Lessor and Tenant. 
 Section 40.10
Modification. This Lease may be only be modified by a writing signed by both Lessor and Lessee. 
 Section 40.11
Forbearance. No delay or omission by either party hereto to exercise any right or power accruing upon any noncompliance or default by the other party with respect to any of the terms hereof shall impair any such right or power or be
construed to be a waiver thereof. 
 Section 40.12 Lease Guaranty. In the event of any sublease of any Leased
Property(ies) or any portion thereof to an Affiliate of any Tenant pursuant to the terms of this Lease, regardless of whether Lessor’s prior consent is required therefor, such subtenant shall execute and deliver a Lease Guaranty relative to the
Leased Property(ies) or portion thereof subleased by it. Tenant represents and warrants to Lessor that Schedule 40.12 attached hereto and made a part hereof reflects the identities of all Affiliates of any Tenant from whom a Lease
Guaranty is required hereunder as of the Effective Date and the respective Leased Properties (or parts thereof) subleased by each of such Affiliates. Tenant agrees, from time to time within fifteen (15) days after receipt of a written request
therefor from Lessor, to deliver to Lessor an Officer’s Certificate which updates all of the information contained in Schedule 40.12. 
 Section 40.13 Louisiana Provisions. Notwithstanding anything to the contrary contained herein, with respect to any Leased Property located in Louisiana, for all purposes of this Lease the word
“servitude” shall be substituted for the word “easement,” the word “servitudes” shall be 

  

 125 








 
substituted for the word “easements,” the term “immovable property” shall be substituted for the terms “real property” and
“real estate” and the term “movable property” shall be substituted for the term “personal property” wherever such terms appear in this Lease. 
 Section 40.14 Confidentiality. 
 (a) Each of Lessor and Tenant agrees that, except as otherwise explicitly provided in this Section 40.14, all Information (as defined below) provided by Lessor to Tenant and by Tenant to Lessor (the party providing such
Information being referred to as “Disclosing Party” and the party receiving the Information being referred to as “Recipient”) will be kept confidential and will not, without Disclosing Party’s prior written
consent, be disclosed by Recipient, in whole or in part, to any person, in any manner whatsoever. 
 (b) Recipient may disclose Information:

 (i) to those of Recipient’s officers, directors and employees who are informed by Recipient of the confidential nature
of the Information and who agree, for Disclosing Party’s benefit, to act in accordance with the terms and conditions of this Section 40.14; Recipient will be responsible for any breach of this Section 40.14 by such
persons. 
 (ii) in the case where Lessor is the Recipient 
 (A) to the extent the Information is both (x) of a financial, operating, regulatory, business or similar nature, and (y) has been aggregated to
relate to any or all of the Leases, a jurisdiction or jurisdictions (such as a state or region), a class or classes of asset (e.g. nursing facilities or hospitals) or any other category, in each case so long as such disclosure is not on a per Leased
Property basis; or 
 (B) if Lessor is a Ventas Lessor, to the extent the Information relates to a particular Master Lease Leased
Property(ies), and either 
 (w) is provided to Facility Mortgagees, prospective Facility Mortgagees, Superior Lessors,
prospective Superior Lessors, purchasers, prospective purchasers, tenants or prospective tenants of such Master Lease Leased Property(ies); provided that any such party listed in this clause (w) who receives such Information is informed by
Lessor or the Ventas Lessor(s) of the applicable Master Lease Leased Property(ies) of the confidential nature of the Information and agrees with Lessor or the Ventas Lessor(s) of the applicable Master Lease Leased Property(ies) to keep such
Information confidential pursuant to a standard confidentiality agreement; and provided further that such Information may be disclosed to tenants or prospective tenants only if either (i) Tenant has not, at least seventeen (17) months
prior to the then current Term applicable to the related Renewal Group, given to the Ventas Lessor of the applicable 

  

 126 








 
Master Lease Leased Property written notice of Tenant’s intention to renew the applicable lease with respect to the Master Lease Leased Properties
within such Renewal Group, or (ii) an Event of Default has occurred under the applicable lease of such Master Lease Leased Property(ies); or 
 (x) is disclosed in connection with or following a sale, closure, material casualty, default or prospective default with respect to such Master Lease Leased Property; or 
 (y) relates to the location or size of, or the number of licensed beds at, such Master Lease Leased Property or the rent for such Master
Lease Leased Property; or 
 (z) is of the type customarily disclosed by a public healthcare real estate investment trust; or

 (C) if Lessor is not a Ventas Lessor, to the extent the Information relates to a particular Leased Property(ies), and either 
 (w) is provided to Facility Mortgagees, prospective Facility Mortgagees, Superior Lessors, prospective Superior Lessors, purchasers,
prospective purchasers, tenants or prospective tenants of such Leased Property(ies); provided that any such party listed in this clause (w) who receives such Information is informed by Lessor of the confidential nature of the Information and
agrees with Lessor to keep such Information confidential pursuant to a standard confidentiality agreement; and provided further that such Information may be disclosed to tenants or prospective tenants only if either (i) Tenant has not, at least
seventeen (17) months prior to the then current Term applicable to the related Renewal Group, given to Lessor written notice of Tenant’s intention to renew this Lease with respect to the Leased Properties within such Renewal Group, or
(ii) an Event of Default has occurred under the Lease of such Leased Property(ies); or 
 (x) is disclosed in connection
with or following a sale, closure, material casualty, default or prospective default with respect to such Leased Property; or 
 (y) relates to the location or size of, or the number of licensed beds at, such Leased Property or the rent for such Leased Property; or 
 (z) is of the type customarily disclosed by a public healthcare real estate investment trust. 
  

 127 








 (iii) to the extent Recipient reasonably determines that disclosure of the Information is
required by any Legal Requirement applicable to Recipient or any applicable rule, regulation, or requirement of any securities exchange on which the Recipient’s securities are listed or admitted for trading (a “Disclosure Law”)
pursuant to the procedures set forth in Section 40.14(h) below. 
 (iv) in connection with any proceeding in which
Recipient is attempting to protect or enforce any rights and/or remedies in connection with this Lease or any of the other Leases, but only to the extent necessary to protect or enforce such rights and/or remedies. 
 (v) to any person in a confidential relationship with the Recipient, including Recipient’s auditors, advisors, consultants, lawyers,
and others who agree with Recipient to be bound by a standard confidentiality agreement, such as lenders, prospective lenders, purchasers, potential purchasers, tenants and prospective tenants; provided, however, that Recipient shall not be liable
to Disclosing Party for any breach by such persons of such confidential relationship or confidentiality arrangements; provided further, however, that Recipient shall assign to Disclosing Party (or enforce on Disclosing Party’s behalf and at
Disclosing Party’s cost) the Recipient’s rights under such confidentiality agreement or obligations. 
 (vi) to the
extent legally compelled to disclose any of the Information pursuant to a subpoena or other legal process having the force of law. Recipient will provide Disclosing Party with prompt notice so that Disclosing Party or any of its representatives may
seek a protective order or other appropriate remedy. In the event that such protective order or other remedy is not obtained, Recipient will furnish only that portion of the Information which Recipient has been advised is legally required and
Recipient will exercise its reasonable efforts to attempt to obtain reliable assurance that confidential treatment will be accorded the Information so to be furnished. In any event, Recipient will cooperate with (and not oppose) any reasonable
action by Disclosing Party to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded such Information. 
 (c) Information means (i) all and any data, reports, including any survey deficiency reports or summaries thereof, forecasts, records, agreements and other information (whether written, magnetic, digital or in
any other form) furnished after the Existing Lease Effective Date by Disclosing Party or by any of its representatives or advisors to Recipient that is both (x) material and proprietary, and (y) in the case where Tenant is the Disclosing
Party, that is required to be furnished pursuant to Section 8.1; Section 8.2; Section 26.1(b)(ii) (but only to the extent furnished on a per Master Lease Leased Property basis (if Lessor is a Ventas Lessor) or on
a per Leased Property basis (if Lessor is not a Ventas Lessor)); Section 26.1(c); Section 26.1(d); Section 26.1(e)(iii), (iv), (v) or (vii); Section 26.1(h); and
Section 26.1(i), and (ii) EBITDAR, profitability, census and regulatory deficiency data for each Master Lease Leased Property (if Lessor is a Ventas Lessor) or for each Leased Property (if Lessor is not a Ventas Lessor). For
purposes of this Section 40.14, information and other materials will be deemed furnished or 

  

 128 








 
prepared by, or furnished to, a person if furnished or prepared by, or if furnished to, such person or an affiliate of such person, or any employee, agent,
partner, representative or advisor of such person. As used in this Section 40.14, person means any natural person and any corporation, partnership, association, firm or other entity or organization of any kind whatsoever, and all
references to Recipient in this Section 40.14 shall include its affiliates, and an affiliate of a designated person means a second person which (directly or indirectly) controls, is controlled by, or is under common control with, such
designated person; provided, however, that Lessor and Tenant shall not be deemed to be affiliates. 
 (d) The obligations under
Section 40.14(a) will not apply to any Information which (i) was known to Recipient prior to Disclosing Party’s disclosure of such Information to Recipient (unless Recipient’s knowledge was obtained confidentially or from
a source which to Recipient’s knowledge was not permitted to disclose such Information to Recipient) or (ii) becomes available to Recipient on a nonconfidential basis from a source (other than Disclosing Party or any of its employees,
agents, representatives or advisors) who to the knowledge of the Recipient is not prohibited from disclosing such Information to Recipient by any legal, contractual or fiduciary obligation. 
 (e) Recipient acknowledges that remedies at law may be inadequate to protect against breach of the provisions of this Section 40.14, and
Recipient hereby in advance agrees that Disclosing Party shall not be obligated to establish actual damages or the inadequacy of monetary damages in seeking an injunction. Such injunctive relief will not be deemed to be the exclusive remedy for a
breach by Recipient of the provisions of this Section, but will be in addition to all other remedies available at law or equity to Disclosing Party. 
 (f) Lessor shall have the right to temporarily suspend Tenant’s obligation to provide it with Information pursuant to the terms of this Lease or otherwise for a specified period of time or for a period of time
terminating upon the occurrence of a specified event, including notice from Lessor (the “Suspension Period”). During the Suspension Period, Tenant shall, if requested by Lessor, deliver such Information to a third party in a
confidential relationship with Lessor. Upon expiration or termination of the Suspension Period, Tenant will deliver to Lessor within three Business Days all Information that Tenant otherwise would have been required to deliver during the Suspension
Period and shall immediately, once again, be subject to all of the information delivery requirements set forth in this Lease. 
 (g)
Recipient acknowledges that no failure or delay in exercising any right under this Section 40.14 shall operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right hereunder. 
 (h) In connection with any proposed disclosure pursuant to Section 40.14(b)(iii), the
Recipient shall provide the Disclosing Party with advance written notice of the proposed disclosure shall set forth the Information to be disclosed, the proposed date of disclosure (the “Disclosure Date”), the basis for such
disclosure as well as the manner of such disclosure (the “Disclosure Notice”). The Disclosure Notice shall be delivered to the Disclosing Party no later than the Disclosure Notification Date (as defined below). The Recipient and the
Disclosing 

  

 129 








 
Party shall cooperate with one another and negotiate in good faith to seek a mutually satisfactory resolution with respect to such proposed disclosure. In
the event the Disclosing Party has not, prior to the Disclosure Date, either (A) consented to the proposed disclosure (or such modified disclosure as the Recipient and Disclosing Party may mutually agree) or (B) itself made disclosure of
the Information contained in such Disclosure Notice (or such modified disclosure as the Recipient and Disclosing Party may mutually agree) the Recipient may disclose such Information to the extent and in the manner set forth in such Disclosure
Notice. 
 (i) Disclosure Notification Date shall mean the latest of the dates set forth below: 
 (A) five (5) Business Days prior to the Disclosure Date; and 
 (B) in the case of Section 40.14(b)(iii), such shorter period of time prior to the Disclosure Date which is reasonable (in
light of the nature of the Information to be disclosed and the Disclosure Law applicable thereto). 
 Section 40.15 New
Lease. Lessor shall have the right, at any time and from time to time during the Term for a legitimate business purpose, by written notice to Tenant, to require Tenant to execute an amendment to this Lease whereby one or more Leased Properties
(individually, a “Transferred Property” or collectively, “Transferred Properties”) is separated and removed from this Lease, and to simultaneously execute a substitute lease with respect to such Transferred
Property(ies), in which case: 
 (a) Lessor and Tenant shall execute a new lease (the “New Lease”) for such
Transferred Property(ies), effective as of the date specified in subsection (c) below (the “Property Transfer Date”), in the same form and substance as this Lease, but with the following changes thereto: 
 (i) The initial Base Rent for such Transferred Property(ies) shall be an amount equal to the product of (x) the percentage(s) set
forth opposite the Transferred Property(ies) on Exhibit C attached hereto and made a part hereof (the “Transferred Property Percentage(s)”), and (y) aggregate Base Rent in effect under this Lease on the Property Transfer
Date; 
 (ii) Intentionally omitted; 
 (iii) Intentionally omitted; 
 (iv) Any rental escalations required under the New Lease to be made on the May 1 immediately following the Property Transfer Date shall be made under the New Lease on such May 1, in the full amount required
as if such Transferred Property(ies) had been under the New Lease for a full year, notwithstanding that the period from the Property Transfer Date to such succeeding May 1 may be less than one full year; 
  

 130 








 (v) “Base Patient Revenues” as defined in Section 2.1 of the New
Lease shall mean the Base Patient Revenues from the Transferred Property(ies) for the calendar year ending on December 31, 1999 as set forth on Schedule 2.1A; 
 (vi) Intentionally omitted; 
 (vii) If and for so long as the lessor under any New Lease is not a Ventas Lessor, Tenant (A) shall not be required under such New Lease to provide to such new lessor Facility-specific information related to
Facilities or Leased Properties which are not included in such New Lease, (B) shall exclude from consolidated facility information that is required under Section 26.1 of such New Lease facility information which relates to
Facilities or Leased Properties not included in such New Lease and (C) shall continue to be required to provide information relative to Tenant, as opposed to Leased Properties and Facilities, on the same basis as such information is provided to
Ventas Lessors; 
 (viii) Intentionally omitted; 
 (ix) Exhibit C to such New Lease shall include (A) Base Rent only for the Transferred Property(ies) covered by such New Lease;
and (B) a Transferred Property Percentage for each such Transferred Property, equal to the percentage that the Base Rent allocated to such Transferred Property comprises of the aggregate Base Rent for all Transferred Properties under such New
Lease (and the aggregate of all Transferred Property Percentages under such New Lease shall equal 100%); 
 (x) Subject to
Section 22.7(g) hereof and without limitation and subject to the provisions of Section 7.2.7, Section 16.10, Section 19.1, Section 25.1.11 and Section 40.18 of this Lease and
all other leases demising any of the Master Lease Leased Properties, the New Lease shall provide that the tenant thereunder shall be responsible for the payment, performance and satisfaction of all duties, obligations and liabilities arising under
this Lease, insofar as they relate to the Transferred Property(ies) subject to the New Lease, that were not paid, performed and satisfied in full prior to the effective date of the New Lease (and Tenant under this Lease shall also be responsible for
the payment, performance and satisfaction of the aforesaid duties, obligations and liabilities not paid, performed and satisfied in full prior to the effective date of such New Lease), and shall further provide that the tenant thereunder shall not
be responsible for the payment, performance or satisfaction of any duties, obligations and liabilities of Tenant under this Lease arising after the Property Transfer Date; 
 (xi) If the New Lease relates to a single Leased Property, the New Lease shall provide that (1) because, for example, such New Lease
may thereafter be amended by agreement of Lessor and Tenant to include one or more other leased properties or such New Lease may thereafter be combined with a Second Lease pursuant to Section 40.18 of such New Lease, with such New Lease
as the Section 40.18 Lease, Lessor and Tenant under such New Lease have, in creating such New Lease as a “New Lease” under Section 40.15 of one of the other Combined Leases, nevertheless retained in such New

  

 131 








 
Lease references to multiple Leased Properties and provisions and terms that apply to multiple Leased Properties and (2) without limitation of and
subject to Section 7.2.7, Section 16.10, Section 19.1, Section 25.1.11 and Section 40.18 of such New Lease and all other leases demising any of the Master Lease Leased Properties, for so
long as such New Lease relates to a single Leased Property, the aforesaid references to multiple Leased Properties, and the aforesaid provisions and terms applicable to multiple Leased Properties, shall, if the context so requires in light of such
New Lease relating to only a single Leased Property, be treated as references to a single Leased Property or as provisions and terms applicable to a single Leased Property; 
 (xii) The New Lease shall not include any cross-default provisions that would make Tenant’s default under this Lease or under any
other New Lease entered into in accordance with this Lease or under any of the other Leases or under any New Lease entered into in accordance with any of such other Leases an event of default under such New Lease; provided, however,
the foregoing portion of this clause (xii) is without limitation of and subject to the provisions of Section 7.2.7, Section 16.10, Section 19.1, Section 25.1.11 and Section 40.18 of
this Lease and all other leases demising any of the Master Lease Leased Properties; and 
 (xiii) At the election of Lessor,
any one or more of the provisions of the New Lease pertaining to Ventas, Inc.’s REIT status shall be deleted, including, without limitation, Section 25.3 and ARTICLE XXXVI hereof. 
 (b) Upon execution of such New Lease, and effective as of the Property Transfer Date, this Lease shall be deemed to be modified and
amended as follows: 
 (i) The Transferred Property(ies) shall be excluded from the Leased Properties hereunder; 

(ii) Base Rent hereunder shall be reduced by the amount set forth in Section 40.15(a)(i) above; 
 (iii) Intentionally omitted; 
 (iv) Intentionally omitted; 
 (v) “Base Patient Revenues”, as defined in
Section 2.1 hereof, shall be deemed to be reduced by the amount set forth in Section 40.15(a)(v) above; 
 (vi) Intentionally omitted; 
 (vii) Intentionally omitted; and 
 (viii) Exhibit C shall be modified so as to remove the allocation of Base Rent and the Transferred Property Percentage(s) for the
Transferred Property(ies), and the Transferred Property Percentages of the Leased Properties remaining under this Lease 

  

 132 








 
shall be recalculated so that each such Leased Property shall have a Transferred Property Percentage equal to the percentage that the Base Rent allocated to
such Leased Property comprises of the aggregate Base Rent for all Leased Properties remaining under this Lease, and so that the aggregate of all Transferred Property Percentages for Leased Properties remaining under this Lease equals 100%.

 (c) In the case of any New Lease that is entered into in accordance with Section 22.7 hereof, such New Lease
shall be effective as of the date of termination of this Lease with respect to the applicable Leased Property(ies). In the case of any New Lease that is entered into in accordance with Section 19.4 hereof, such New Lease shall be
effective as of the effective date therefor specified in such Section 19.4. In the case of all other New Leases, such New Lease shall be effective on the date which is the earlier of (i) the date the New Lease is fully executed and
delivered by the parties thereto and (ii) the date specified in the written notice from Lessor to Tenant requiring a New Lease as described above, which date shall be no sooner than ten (10) days, nor later than sixty (60) days, after
the date such notice is issued. 
 (d) Tenant shall take such actions and execute and deliver such documents, including
without limitation the New Lease and new or amended Memorandum(s) of Lease and, if requested by Lessor, an amendment to this Lease, as are reasonably necessary and appropriate to fully effectuate the provisions and intent of this
Section 40.15 and Lessor shall execute and deliver such new or amended Memorandum(s) of Lease as are reasonably necessary and appropriate to fully effectuate the provisions and intent of this Section 40.15 and an amendment of
this Lease in accordance with Section 40.15(b) above. 
 (e) Each Leasehold Mortgagee, Superior Lessor and
Superior Mortgagee hereby consents to the provisions of this Section 40.15 and agrees, upon request of Lessor, to execute an instrument consenting to the execution and delivery of the New Lease and of an amendment to this Lease,
consistent with the foregoing provisions. 
 (f) Each party shall bear its own costs and expenses in connection with any New
Lease entered into in accordance with Section 19.4 hereof. In all other cases, the party requesting a New Lease under this Section 40.15 (and, for such purpose, Tenant shall be deemed to be the requesting party in the case of
any New Lease entered into in accordance with Section 22.7 hereof shall, promptly following receipt of a written demand therefor and reasonable supporting documentation, reimburse the other party hereto for its out-of-pocket costs and
expenses incurred in connection with such New Lease, including, without limitation, reasonable attorneys’ fees and any recording fees incurred by such other party in connection with the recording of new or amended Memorandum(s) of Lease.

  

 133 








 Section 40.16 Partial Expiration/Termination. In the event this Lease expires or
terminates as to one or more, but less than all, of the Leased Properties (herein, the “Expired/Terminated Properties”), but no Separate Lease pursuant to Section 22.7 or New Lease in accordance with the terms of
Section 40.15 (e.g. pursuant to the terms of Section 19.4 or Section 40.15) is entered into on account thereof, effective as of the date of such expiration or termination (the “Partial
Expiration/Termination Date”), the following provisions shall be applicable: 
 (a) The Expired/Terminated Properties
shall be excluded from the Leased Properties hereunder (but without limitation and subject to the provisions of Section 7.2.7, Section 16.10, Section 19.1, Section 25.1.11 and Section 40.18 of this Lease and all
other leases demising any of the Master Lease Leased Properties); 
 (b) All Base Rent attributable to the Expired/Terminated
Properties (determined based upon the aggregate of the Transferred Property Percentages applicable to the Expired/Terminated Properties), and all Additional Charges attributable to the Expired/Terminated Properties, shall be due and payable as of
the Partial Expiration/ Termination Date. The amount of the Base Rent attributable to the Leased Properties other than the Expired/Termination Properties as of the Partial Expiration/Termination Date shall equal the amount thereof immediately prior
to such Partial Expiration/Termination Date less the amount of Base Rent allocated to the Expired/Terminated Properties as aforesaid; 
 (c) “Base Patient Revenues”, as defined in Section 2.1 hereof, shall have excluded therefrom all Base Patient Revenues attributable to the Expired/Terminated Properties, as set forth on
Schedule 2.1A; 
 (d) “Patient Revenues”, as defined in Section 2.1 hereof, shall have
excluded therefrom all Patient Revenues attributable to the Expired/Terminated Properties; 
 (e) Intentionally omitted;

 (f) Intentionally omitted; 
 (g) Exhibit C shall be modified so as to remove the allocation of Base Rent to the Expired/Terminated Properties, and the Transferred Property Percentages of the Leased Properties remaining under this Lease
shall be recalculated so that each such Leased Property shall have a Transferred Property Percentage equal to the percentage that the Base Rent allocated to such Leased Property comprises of the aggregate Base Rent for all Leased Properties
remaining under this Lease, and so that the aggregate of all Transferred Property Percentages for the Leased Properties remaining under this Lease equals 100%; 
 (h) Nothing in this Section 40.16 shall be deemed to limit or impair any of Lessor’s or Tenant’s rights and remedies
at law, in equity, under this Lease or otherwise relative to the Expired/Terminated Properties or the Leased Properties that remain subject to this Lease; 
 (i) Tenant shall take such actions and execute and deliver such documents, including, without limitation, if requested by Lessor, an amendment to this Lease, as are reasonably necessary and appropriate to fully
effectuate the provisions and intent of this Section 40.16; and 
 (j) Each Leasehold Mortgagee, Superior Lessor
and Superior Mortgagee hereby consents to the provisions of this Section 40.16 and agrees, upon request of Lessor, to execute an instrument consenting to the execution and delivery of an amendment to this Lease, consistent with the
foregoing provisions. 
  

 134 








 Section 40.17 Intentionally omitted. 
 Section 40.18 Combination of Leases. If Lessor is the lessor under both this Lease and another lease demising a Master Lease Leased
Property(ies) (the “Second Lease”), Lessor shall have the right, at any time during the Term, by written notice to Tenant, to require that this Lease and the Second Lease be combined and to require Tenant to execute an amendment to
this Lease whereby (a) if this Lease is the Section 40.18 Lease (as hereinafter defined), the Master Lease Leased Properties covered by the Second Lease are added as Leased Properties under this Lease and otherwise merged into this
Lease or (b) if the Second Lease is the Section 40.18 Lease, the Leased Properties covered by this Lease are added as Leased Properties under the Second Lease and otherwise merged into the Second Lease, in each case subject to the
following terms and conditions: 
 (i) References in this Lease to the “Section 40.18 Lease” shall mean
and refer to whichever of this Lease or the Second Lease is chosen by Lessor to be the Section 40.18 Lease. 
 (ii) If this Lease is the Section 40.18 Lease, effective as of the date specified in subsection (iv) below (the “Section 40.18 Date”), this Lease shall be deemed to be modified and amended as follows:

 (1) The Master Lease Leased Properties included in the Second Lease shall be included as the Leased Properties under this
Lease; 
 (2) Base Rent under this Lease shall be the combination of the respective amounts of the Base Rent under this Lease
and the Second Lease; 
 (3) Intentionally omitted; 
 (4) Intentionally omitted; 
 (5) Any rental escalations that would otherwise have been required to be made under the Second Lease on the May 1 immediately following the Section 40.18 Date shall be made under this Lease on such
May 1, in the full amount required as if the Master Lease Leased Properties referenced in subsection (1) above had been under this Lease for a full year, notwithstanding that the period from the Section 40.18 Date to such
succeeding May 1 may be less than one full year; 
 (6) “Base Patient Revenues”, as defined in
Section 2.1 of this Lease, shall be increased by the amount of the Base Patient Revenues from the Master Lease Leased Properties included in the Second Lease for the calendar year ending on December 31, 1999 as set forth in
Schedule 2.1A of the Second Lease, and Schedule 2.1A of this Lease shall be deemed modified and amended accordingly; 
  

 135 








 (7) If and for so long as the lessor under this Lease is not Ventas, Inc. or Ventas
Realty, Limited Partnership or any successor to either of them (by merger or otherwise) or any Affiliate of Ventas, Inc. or Ventas Realty, Limited Partnership or any such successor, Tenant (A) shall not be required under this Lease to provide
to such lessor Facility-specific information related to Facilities or Leased Properties which are not included in this Lease, (B) shall exclude from consolidated facility information that is required under Section 26.1 of this Lease
facility information which relates to Facilities or Leased Properties not included in this Lease and (C) shall continue to be required to provide information relative to Tenant, as opposed to Leased Properties and Facilities, on the same basis
as such information is provided to Ventas-related lessors; 
 (8) Intentionally omitted; 
 (9) Exhibit C to this Lease shall be modified and amended so as to add thereto the allocations of Base Rent relative to the Master
Lease Leased Properties included in the Second Lease that were previously included in Exhibit C to the Second Lease, and the Transferred Properties Percentages of the Leased Properties included in this Lease (including, without limitation,
the additional Master Lease Leased Properties referenced in subsection (1) above) shall be recalculated so that each such Leased Property shall have a Transferred Property Percentage equal to the percentage that the Base Rent allocated to such
Leased Property comprises of the aggregate Base Rent for all Leased Properties included in this Lease and so that the aggregate of all Transferred Property Percentages for Leased Properties included in this Lease equals 100%; 
 (10) Tenant under this Lease shall be responsible for the payment, performance and satisfaction of all duties, obligations and liabilities
arising under the Second Lease, insofar as they relate to the Master Lease Leased Properties subject to the Second Lease, that were not paid, performed and satisfied in full prior to the Section 40.18 Date, and, without limitation of the
foregoing, (x) any Event of Default that had occurred, arisen or accrued under the Second Lease prior to the Section 40.18 Date shall be, and shall be deemed to be, an Event of Default under this Lease, as to which the rights and
remedies and other provisions of this Lease shall be applicable, (y) any breach or default that had occurred, arisen or accrued under the Second Lease prior to the Section 40.18 Date but had not yet become an Event of Default under
the Second Lease as of the Section 40.18 Date shall be, and be deemed to be, a breach or default under this Lease, as to which the cure periods, rights and remedies and other provisions of this Lease shall be applicable, and
(z) with respect to any breach or default described in subsection (y) above, although the cure periods, rights and remedies and other provisions of this Lease shall be applicable, the portion of any cure period under the Second Lease that
had elapsed as of the Section 40.18 Date shall be counted in determining whether and when the applicable cure period under this Lease has expired; and 
 (11) The Master Lease Leased Properties referenced in subsection (1) above shall otherwise be incorporated into this Lease as Leased
Properties included under this Lease the same as if this Lease, from the inception of the Second Lease, had included the aforesaid Master Lease Leased Properties as Leased Properties hereunder on the rent, lease terms and other economic terms
described in the Second Lease. 
  

 136 








 (iii) If this Lease is not the Section 40.18 Lease, effective as of the
Section 40.18 Date, this Lease shall be modified and amended as necessary (x) to incorporate into the Second Lease as Leased Properties thereunder the Leased Properties covered by this Lease the same as if the Leased Properties
covered by this Lease had, from the inception of this Lease, been included in the Second Lease as Leased Properties thereunder on the rent, lease terms and other economic terms described in this Lease and (y) otherwise to comply with the
requirements of Section 40.18 of the Second Lease, as the Section 40.18 Lease thereunder. Tenant acknowledges and agrees that, without limitation of Section 40.18(ii)(10) above, the modification and amendment
referenced in this subsection (iii) shall not result in Tenant being released from any duties, liabilities or obligations that had accrued under this Lease through the Section 40.18 Date. 
 (iv) In the case of any combination of leases pursuant to this Section 40.18, such combination shall be effective on the date
which is the earlier of (x) the date the required modifications and amendments to the Lease and Second Lease are fully executed and delivered by the parties thereto and (y) the date specified in the written notice from Lessor to Tenant
requiring a combination of this Lease and the Second Lease as described above, which date shall be no sooner than ten (10) days, nor later than sixty (60) days, after the date such notice is issued. 
 (v) Each of Lessor and Tenant shall take such actions and execute and deliver such documents, including, without limitation, required
modifications and amendments to this Lease and the Second Lease and new or amended Memorandum(s) of Lease, as are reasonably necessary and appropriate to effectuate fully the provisions and intent of this Section 40.18. 
 (vi) Each Leasehold Mortgagee, Superior Lessor and Superior Mortgagee hereby consents to the provisions of this Section 40.18
and agrees, upon request of Lessor, to execute an instrument consenting to the execution and delivery of the required modifications and amendments to this Lease and the Second Lease, consistent with the foregoing provisions. 
 (vii) Lessor shall, promptly following receipt of a written demand therefor and reasonable supporting documentation, reimburse Tenant for
its out-of-pocket costs and expenses incurred in connection with the required modifications and amendments to this Lease and the Second Lease, including, without limitation, reasonable attorneys’ fees and any recording fees incurred by Tenant
in connection with the recording of new or amended Memorandum(s) of Lease. 
 Section 40.18.1 If this Lease is combined pursuant
to Section 40.18 with any other lease of any Master Lease Leased Property(ies), and this Lease is the Section 40.18 Lease, each Master Lease Leased Property included in the Second Lease shall, following such 

  

 137 








 
combination, be a part of, and re-join, the Renewal Group of the same number as was applicable to such Master Lease Leased Property as of the Effective Date
under the Second Amended and Restated Lease, as set forth in Exhibit D to such instrument (provided, however, that, if such Renewal Group no longer exists as of such combination date due to the combination of such Renewal Group with
another Renewal Group, then such Master Lease Leased Property shall be a part of, and join, the Renewal Group into which such original Renewal Group was combined). 
 Section 40.19 Unified Commercial Operating Lease. It is acknowledged and agreed that, except as otherwise expressly provided herein, the inclusion of each of the Leased Properties on a continuing
basis in the leasing transaction provided for herein is an essential element of such transaction for Lessor, and that, except as otherwise expressly provided herein, Lessor shall not be obligated and may not be required to lease less than all of the
Leased Properties to Tenant pursuant to this Lease. It is further acknowledged and agreed that this Lease is not a residential lease within the meaning of the U.S. Bankruptcy Code, as amended, and that this Lease is an operating lease, and not a
capital lease, for all accounting, tax and legal purposes. 
 Section 40.20 Intentionally omitted. 
 Section 40.21 No Credits. Notwithstanding anything to the contrary set forth in this Lease or otherwise, except as otherwise expressly
provided in the Bankruptcy Plan relative to the Tax Refund Escrow Agreement, Lessor shall not be required to pay, make or give to Tenant, and Tenant shall not be entitled to, any credits, offsets, prorations or payments of any kind or nature
whatsoever on account of any payment, nonpayment or other event occurring prior to the Existing Lease Effective Date. 
 ARTICLE XLI

 Section 41.1 Memorandums of Lease. Lessor and Tenant shall, promptly upon the request of either, enter into short
form memorandums of this Lease, in form suitable for recording under the laws of the State in which each Leased Property is located, in which reference to this Lease, and all extension options contained herein, shall be made. Relative to the
foregoing and notwithstanding anything to the contrary contained in this Lease, any such Memorandums of Lease shall not reference the existence of any option to purchase in favor of Tenant under Section 16.12 of this Lease unless and
until the number of Leased Properties covered by this Lease equals forty (40) or less, at which time, upon the request of Tenant, any existing Memorandums of Lease shall be amended by Lessor and Tenant, or new Memorandums of Lease shall be
entered into by Lessor and Tenant (for example in the circumstance where this Lease (a) constitutes a New Lease as to which no previous Memorandums of Lease have been entered into and (b) covers forty (40) or less Leased Properties),
referencing that, in limited circumstances following the occurrence of certain limited types of Events of Default by Tenant, Tenant may have an option to purchase in certain circumstances one (1) Leased Property, and in other circumstances two
(2) Leased Properties, covered by this Lease as to which the aforesaid types of Events of Default have occurred and are continuing. Thereafter, when and if any such option(s) to purchase under Section 16.12 of this Lease have ceased
to be available to and exercisable by Tenant for any reason (e.g. due to Tenant’s exercise of all of its available options 

  

 138 








 
to purchase under Section 16.12 or on account of this Lease being involved in a Section 40.18 lease combination transaction where the
resulting Section 40.18 Lease covers in excess of forty (40) Leased Properties or otherwise provides to Tenant no available and exercisable option(s) to purchase under Section 16.12), upon the request of Lessor, any
existing Memorandum(s) of Lease that reference any option to purchase in favor of Tenant shall be amended to delete any such reference. Without limitation of Lessor’s obligations under and except as otherwise provided in
Section 40.15(f) and Section 40.18(vii), Tenant shall pay all costs and expenses of recording any such Memorandums of Lease or amendments thereto and for releasing any such Memorandums of Lease that relate to a particular
Leased Property(ies) upon any expiration or termination of this Lease as it relates to any such Leased Property(ies). 
 [The remainder of
this page is intentionally left blank] 
  

 139 








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

									
	Witness	 		 	KINDRED HEALTHCARE, INC.
				
	 /s/ Richard Myers
	 		 	By:	 	/s/ Gregory C. Miller
	Name:	 		 		 		 	Name: Gregory C. Miller
		 		 		 		 	 Title:   Senior Vice President
             Corporate Development
             and Financial Planning

				
	 /s/ Douglas Curnutte
	 		 		 	
	Name:	 		 		 		 	
			
		 		 	KINDRED HEALTHCARE OPERATING, INC.
				
	 /s/ Richard Myers
	 		 	By:	 	/s/ Gregory C. Miller
	Name:	 		 		 		 	Name: Gregory C. Miller
		 		 		 		 	 Title:   Senior Vice President
             Corporate Development
             and Financial Planning

				
	 /s/ Douglas Curnutte
	 		 		 	
	Name:	 		 		 		 	
			
		 		 	VENTAS REALTY, LIMITED PARTNERSHIP
				
		 		 	By:	 	Ventas, Inc., its general partner
				
	 /s/ Chris Cummings
	 		 	By:	 	/s/ T. Richard Riney
	Name:	 		 		 		 	Name: T. Richard Riney
		 		 		 		 	Title:   Executive Vice President
				
	 /s/ Nicholas Jacoby
	 		 		 	
	Name:	 		 		 		 	

  

 140 








 ALL PURPOSE ACKNOWLEDGMENT 
  

					
	 STATE OF KENTUCKY
	  	)	  	
		  	)	  	
	 COUNTY OF JEFFERSON
	  	)	  	

 On April 27, 2007 before me, a notary public, personally appeared Gregory C. Miller, Sr. VP Corp. Dev. & Fin.
Pl., 
  

	 ̈	personally known to me-OR- 

  

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

  

	
	Witness my hand and official seal.
	
	/s/ Patricia A. Burkhead
	SIGNATURE OF NOTARY

 IMPRESS NOTARY SEAL: 
  

			
	 CAPACITY CLAIMED BY SIGNER:
  

 ̈        INDIVIDUALS(S)
 x       CORPORATE OFFICER(S)
  
 TITLE
  
 TITLE
  
  ̈        PARTNER(S)
  ̈        ATTORNEY-IN-FACT
  ̈        TRUSTEE(S)
  ̈        OTHER                             
                       
	  	 SIGNER IS REPRESENTING
  
 Kindred Healthcare, Inc., a Delaware corporation


  

 141 









					
	 STATE OF KENTUCKY
	  	)	  	
		  	)	  	
	 COUNTY OF JEFFERSON
	  	)	  	

 On April 27, 2007 before me, a notary public, personally appeared Gregory C. Miller, Sr. VP Corp. Dev. & Fin.
Pl., 
  

	 ̈	personally known to me-OR- 

  

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

  

	
	Witness my hand and official seal.
	
	/s/ Patricia A. Burkhead
	SIGNATURE OF NOTARY

 IMPRESS NOTARY SEAL: 
  

			
	 CAPACITY CLAIMED BY SIGNER:
  

 ̈        INDIVIDUALS(S)
 x       CORPORATE OFFICER(S)
  
 TITLE
  
 TITLE
  
  ̈        PARTNER(S)
  ̈        ATTORNEY-IN-FACT
  ̈        TRUSTEE(S)
  ̈        OTHER                             
                       
	  	 SIGNER IS REPRESENTING
  
 Kindred Healthcare Operating, Inc., a Delaware corporation


  

 142 









					
	 STATE OF KENTUCKY
	  	)	  	
		  	)	  	
	 COUNTY OF JEFFERSON
	  	)	  	

 On April 27, 2007 before me, a notary public, personally appeared T. Richard Riney, 
  

	 ̈	personally known to me-OR- 

  

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

  

	
	Witness my hand and official seal.
	
	/s/ Jill F. Dessey
	SIGNATURE OF NOTARY

 IMPRESS NOTARY SEAL: 
  

			
	 CAPACITY CLAIMED BY SIGNER:
  

 ̈        INDIVIDUALS(S)
 x       CORPORATE OFFICER(S)
  
 TITLE – Executive Vice President
  
 TITLE
  
  ̈        PARTNER(S)
  ̈        ATTORNEY-IN-FACT
  ̈        TRUSTEE(S)
  ̈        OTHER                             
                       
	  	 SIGNER IS REPRESENTING
  
 Ventas, Inc., a Delaware corporation, in its capacity as the general partner of Ventas Realty, Limited Partnership, a Delaware limited partnership


  

 143 








 CONSENT 
 The undersigned hereby consents to the terms of the foregoing instrument. 
 JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
(formerly THE CHASE MANHATTAN BANK, successor by merger to MORGAN GUARANTY TRUST COMPANY OF NEW YORK), as administrative agent and Collateral Agent under that certain $400,000,000 Amended and Restated Credit Agreement, dated as of June 28,
2004, as amended by Amendment No. 1 and Consent dated as of August 2, 2005, Amendment No. 2 to Credit Agreement and Security Agreement dated as of December 22, 2005, Amendment No. 3 dated October 19, 2006, Consent
No. 3 and Waiver dated January 19, 2007 and Consent No. 4 and Waiver dated April 26, 2007. 
  

			
		
	By:	 	/s/ Dawn Lee Lum
		
	Name:	 	Dawn Lee Lum
		
	Title:	 	Executive Director

  

			
	STATE OF New York	  	)
		  	)
	COUNTY OF New York	  	)

 This 14 day of May, 2007, personally came before me Edeline C. Adderley, a
Notary Public in and for said County and State, Dawn Lee Lum, who being by me duly sworn, says that s/he is the Executive Director of JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association and that the seal affixed
to the foregoing instrument in writing is the corporate seal of said association, and that said writing was signed and sealed by him/her on behalf of such association by its authority duly given. And the said Executive Director acknowledged
the said writing to be the act and deed of said association. 
 WITNESS my hand and notarial stamp/seal this 14th day of May,
2007. 
  

	
	
	/s/ Edeline C. Adderley
	Notary Public


  

	
	My Commission Expires:
	
	September 3, 2010
	[Notarial Stamp/Seal]

  

 144 








 Exhibit A 
 Legal Descriptions 
 (see attached) 
  

 Exhibit A 








 EXHIBIT B 
 Term Commencement/Expiration Dates 
 Master Lease Agreement No. 2 
  

	*	See the Original Master Lease for the Commencement Date of the Lease relative to each Facility 

  

													
	 	  	Facility
ID	  	 Name
	  	 City
	  	State	  	Commencement
Date	  	 Lease
 Expiration Date

	 1
	  	111	  	Rolling Hills Health Care Center	  	New Albany	  	IN	  	*	  	April 30, 2010
	 2
	  	136	  	LaSalle Healthcare Center	  	Durham	  	NC	  	*	  	April 30, 2010
	 3
	  	168	  	Lakewood Healthcare Center	  	Lakewood	  	WA	  	*	  	April 30, 2010
	 4
	  	216	  	Hillcrest Rehab Care Center	  	Boise	  	ID	  	*	  	April 30, 2008
	 5
	  	222	  	Nampa Care Center	  	Nampa	  	ID	  	*	  	April 30, 2013
	 6
	  	223	  	Weiser Rehab & Care Center	  	Weiser	  	ID	  	*	  	April 30, 2010
	 7
	  	278	  	Oakview Nursing & Rehab Center	  	Calvert City	  	KY	  	*	  	April 30, 2008
	 8
	  	282	  	Maple Manor Healthcare Center	  	Greenville	  	KY	  	*	  	April 30, 2010
	 9
	  	289	  	San Luis Medical & Rehab Center	  	Green Bay	  	WI	  	*	  	April 30, 2010
	 10
	  	294	  	Windsor Estates Health & Rehab Center	  	Kokomo	  	IN	  	*	  	April 30, 2010
	 11
	  	320	  	Magnolia Gardens Care Center	  	Burlingame	  	CA	  	*	  	April 30, 2008
	 12
	  	407	  	Parkwood Health Care Center	  	Lebanon	  	IN	  	*	  	April 30, 2008
	 13
	  	420	  	Maywood Acres Healthcare Center	  	Oxnard	  	CA	  	*	  	April 30, 2010
	 14
	  	508	  	Crawford Skilled Nursing & Rehab Center	  	Fall River	  	MA	  	*	  	April 30, 2010
	 15
	  	513	  	Hallmark Nursing & Rehab Center	  	New Bedford	  	MA	  	*	  	April 30, 2013
	 16
	  	532	  	Hillcrest Nursing Center	  	Fitchburg	  	MA	  	*	  	April 30, 2010
	 17
	  	534	  	Country Gardens Skilled. Nursing & Rehab	  	Swansea	  	MA	  	*	  	April 30, 2010
	 18
	  	545	  	Eastside Rehab & Living Center	  	Bangor	  	ME	  	*	  	April 30, 2008
	 19
	  	549	  	Kennebunk Nursing Center	  	Kennebunk	  	ME	  	*	  	April 30, 2008
	 20
	  	578	  	West Lafayette Rehab & Nursing Center	  	West Lafayette	  	OH	  	*	  	April 30, 2010
	 21
	  	584	  	Franklin Skilled. Nursing & Rehab Center	  	Franklin	  	MA	  	*	  	April 30, 2010
	 22
	  	592	  	Greenbriar Terrace Healthcare	  	Nashua	  	NH	  	*	  	April 30, 2013
	 23
	  	634	  	Cambridge Health & Rehab Center	  	Cambridge	  	OH	  	*	  	April 30, 2010
	 24
	  	641	  	Torrey Pines Care Center	  	Las Vegas	  	NV	  	*	  	April 30, 2008
	 25
	  	690	  	Wasatch Valley Rehabilitation	  	Salt Lake City	  	UT	  	*	  	April 30, 2008
	 26
	  	706	  	Guardian Care of Henderson	  	Henderson	  	NC	  	*	  	April 30, 2010
	 27
	  	711	  	Kinston Rehab and Healthcare Center	  	Kinston	  	NC	  	*	  	April 30, 2008
	 28
	  	726	  	Guardian Care of Elizabeth City	  	Elizabeth City	  	NC	  	*	  	April 30, 2010
	 29
	  	743	  	Desert Life Rehab & Care Center	  	Tucson	  	AZ	  	*	  	April 30, 2010
	 30
	  	744	  	Cherry Hills Health Care Center	  	Englewood	  	CO	  	*	  	April 30, 2010
	 31
	  	766	  	Colonial Manor Medical & Rehab Center	  	Wausau	  	WI	  	*	  	April 30, 2010
	 32
	  	780	  	Columbus Health & Rehab Center	  	Columbus	  	IN	  	*	  	April 30, 2010
	 33
	  	804	  	Rehab & Health Center of Birmingham	  	Birmingham	  	AL	  	*	  	April 30, 2010
	 34
	  	822	  	Primacy Healthcare & Rehab Center	  	Memphis	  	TN	  	*	  	April 30, 2008
	 35
	  	826	  	Harbour Point Med. & Rehab Center	  	Norfolk	  	VA	  	*	  	April 30, 2008
	 36
	  	842	  	Bay Pointe Medical & Rehab Center	  	Virginia Beach	  	VA	  	*	  	April 30, 2013
	 37
	  	1224	  	Health Havens Nursing & Rehab Center	  	E. Providence	  	RI	  	*	  	April 30, 2008
	 38
	  	1228	  	Lafayette Nursing & Rehab Center	  	Fayetteville	  	GA	  	*	  	April 30, 2010
	 39
	  	4611	  	Kindred Hospital Bay Area St. Petersburg	  	St. Petersburg	  	FL	  	*	  	April 30, 2008
	 40
	  	4612	  	Kindred Hospital Kansas City	  	Kansas City	  	MO	  	*	  	April 30, 2013
	 41
	  	4615	  	Kindred Hospital Sycamore	  	Sycamore	  	IL	  	*	  	April 30, 2013
	 42
	  	4653	  	Kindred Hospital Tarrant County Ft Worth SW Campus	  	Ft. Worth	  	TX	  	*	  	April 30, 2010
	 43
	  	4654	  	Kindred Hospital Houston NW Campus	  	Houston	  	TX	  	*	  	April 30, 2010
	 44
	  	4668	  	Kindred Hospital Ft. Worth	  	Ft. Worth	  	TX	  	*	  	April 30, 2010
	 45
	  	4674	  	Kindred Hospital Central Tampa	  	Tampa	  	FL	  	*	  	April 30, 2010
	 46
	  	4807	  	Kindred Hospital Ontario	  	Ontario	  	CA	  	*	  	April 30, 2013

  

 Exhibit B 








 EXHIBIT C 
 Allocation Schedule – Applicable Transferred Property Percentages 
 Master Lease Agreement No. 2

  

														
	 	  	Facility
ID	  	 Name
	  	Base Rent
Commencing
Effective Date	  	Base Rent
Commencing
May 1, 2007	  	Percentage of
Master Lease
Commencing
Effective Date	 
	 1
	  	111	  	Rolling Hills Health Care Center	  	$	330,644.00	  	$	338,629.02	  	0.5920455	%
	 2
	  	136	  	LaSalle Healthcare Center	  	 	64,052.00	  	 	65,598.84	  	0.1146904	%
	 3
	  	168	  	Lakewood Healthcare Center	  	 	972,070.00	  	 	995,545.50	  	1.7405721	%
	 4
	  	216	  	Hillcrest Rehab Care Center	  	 	436,262.00	  	 	446,797.75	  	0.7811634	%
	 5
	  	222	  	Nampa Care Center	  	 	403,119.00	  	 	412,854.35	  	0.7218181	%
	 6
	  	223	  	Weiser Rehab & Care Center	  	 	639,342.00	  	 	654,782.13	  	1.1447950	%
	 7
	  	278	  	Oakview Nursing & Rehab Center	  	 	338,161.00	  	 	346,327.61	  	0.6055054	%
	 8
	  	282	  	Maple Manor Healthcare Center	  	 	662,965.00	  	 	678,975.60	  	1.1870939	%
	 9
	  	289	  	San Luis Medical & Rehab Center	  	 	1,016,552.00	  	 	1,041,101.73	  	1.8202208	%
	 10
	  	294	  	Windsor Estates Health & Rehab Center	  	 	522,303.00	  	 	534,916.61	  	0.9352269	%
	 11
	  	320	  	Magnolia Gardens Care Center	  	 	196,927.00	  	 	201,682.81	  	0.3526142	%
	 12
	  	407	  	Parkwood Health Care Center	  	 	391,583.00	  	 	401,039.73	  	0.7011619	%
	 13
	  	420	  	Maywood Acres Healthcare Center	  	 	66,566.00	  	 	68,173.60	  	0.1191920	%
	 14
	  	508	  	Crawford Skilled Nursing & Rehab Center	  	 	816,907.00	  	 	836,635.28	  	1.4627398	%
	 15
	  	513	  	Hallmark Nursing & Rehab Center	  	 	1,127,319.00	  	 	1,154,543.74	  	2.0185583	%
	 16
	  	532	  	Hillcrest Nursing Center	  	 	1,059,409.00	  	 	1,084,993.71	  	1.8969598	%
	 17
	  	534	  	Country Gardens Skilled. Nursing & Rehab	  	 	782,791.00	  	 	801,695.39	  	1.4016523	%
	 18
	  	545	  	Eastside Rehab & Living Center	  	 	209,459.00	  	 	214,517.41	  	0.3750537	%
	 19
	  	549	  	Kennebunk Nursing Center	  	 	706,077.00	  	 	723,128.75	  	1.2642895	%
	 20
	  	578	  	West Lafayette Rehab & Nursing Center	  	 	77,687.00	  	 	79,563.13	  	0.1391050	%
	 21
	  	584	  	Franklin Skilled. Nursing & Rehab Center	  	 	672,063.00	  	 	688,293.30	  	1.2033846	%
	 22
	  	592	  	Greenbriar Terrace Healthcare	  	 	2,289,545.00	  	 	2,344,837.50	  	4.0996205	%
	 23
	  	634	  	Cambridge Health & Rehab Center	  	 	1,365,657.00	  	 	1,398,637.61	  	2.4453223	%
	 24
	  	641	  	Torrey Pines Care Center	  	 	434,869.00	  	 	445,371.10	  	0.7786691	%
	 25
	  	690	  	Wasatch Valley Rehabilitation	  	 	613,250.00	  	 	628,060.00	  	1.0980751	%
	 26
	  	706	  	Guardian Care of Henderson	  	 	635,186.00	  	 	650,525.74	  	1.1373533	%
	 27
	  	711	  	Kinston Rehab and Healthcare Center	  	 	655,418.00	  	 	671,246.36	  	1.1735804	%
	 28
	  	726	  	Guardian Care of Elizabeth City	  	 	962,599.00	  	 	985,845.78	  	1.7236135	%
	 29
	  	743	  	Desert Life Rehab & Care Center	  	 	1,164,212.00	  	 	1,192,327.72	  	2.0846183	%
	 30
	  	744	  	Cherry Hills Health Care Center	  	 	463,961.00	  	 	475,165.65	  	0.8307607	%
	 31
	  	766	  	Colonial Manor Medical & Rehab Center	  	 	1,584,841.00	  	 	1,623,114.93	  	2.8377895	%
	 32
	  	780	  	Columbus Health & Rehab Center	  	 	364,947.00	  	 	373,760.46	  	0.6534679	%
	 33
	  	804	  	Rehab & Health Center of Birmingham	  	 	137,134.00	  	 	140,445.79	  	0.2455498	%
	 34
	  	822	  	Primacy Healthcare & Rehab Center	  	 	2,197,074.00	  	 	2,250,133.33	  	3.9340435	%
	 35
	  	826	  	Harbour Point Med. & Rehab Center	  	 	1,784,253.00	  	 	1,827,342.70	  	3.1948532	%

  

 Exhibit C 









														
	 36
	  	842	  	Bay Pointe Medical & Rehab Center	  	 	283,945.00	  	 	290,802.27	  	0.5084271	%
	 37
	  	1224	  	Health Havens Nursing & Rehab Center	  	 	299,933.00	  	 	307,176.41	  	0.5370550	%
	 38
	  	1228	  	Lafayette Nursing & Rehab Center	  	 	2,088,479.00	  	 	2,138,915.74	  	3.7395951	%
	 39
	  	4611	  	Kindred Hospital Bay Area St. Petersburg	  	 	3,314,459.00	  	 	3,394,503.20	  	5.9348142	%
	 40
	  	4612	  	Kindred Hospital Kansas City	  	 	3,725,599.00	  	 	3,815,572.21	  	6.6709945	%
	 41
	  	4615	  	Kindred Hospital Sycamore	  	 	3,295,806.00	  	 	3,375,399.69	  	5.9014144	%
	 42
	  	4653	  	Kindred Hospital Tarrant County Ft Worth SW Campus	  	 	2,295,535.00	  	 	2,350,972.16	  	4.1103461	%
	 43
	  	4654	  	Kindred Hospital Houston NW Campus	  	 	2,758,205.00	  	 	2,824,815.67	  	4.9387952	%
	 44
	  	4668	  	Kindred Hospital Ft. Worth	  	 	1,958,869.00	  	 	2,006,175.70	  	3.5075177	%
	 45
	  	4674	  	Kindred Hospital Central Tampa	  	 	4,171,896.00	  	 	4,272,647.31	  	7.4701264	%
	 46
	  	4807	  	Kindred Hospital Ontario	  	 	5,509,800.00	  	 	5,642,861.66	  	9.8657546	%
		  		  	Total Master Lease Agreement No. 2	  	$	55,847,730.00	  	$	57,196,452.68	  	100.00000	%

  

 Exhibit C 








 EXHIBIT D 
 Renewal Groups 
 Master Lease Agreement No. 2 
  

													
	 	  	Facility
ID	  	 Name
	  	 City
	  	State	  	 Lease
 Expiration
 Date
	  	Renewal
Group
	1	  	222	  	Nampa Care Center	  	Nampa	  	ID	  	April 30, 2013	  	1
	2	  	513	  	Hallmark Nursing & Rehab Center	  	New Bedford	  	MA	  	April 30, 2013	  	1
	3	  	592	  	Greenbriar Terrace Healthcare	  	Nashua	  	NH	  	April 30, 2013	  	1
	4	  	842	  	Bay Pointe Medical & Rehab Center	  	Virginia Beach	  	VA	  	April 30, 2013	  	1
	5	  	4612	  	Kindred Hospital Kansas City	  	Kansas City	  	MO	  	April 30, 2013	  	1
	6	  	4615	  	Kindred Hospital Sycamore	  	Sycamore	  	IL	  	April 30, 2013	  	1
	7	  	4807	  	Kindred Hospital Ontario	  	Ontario	  	CA	  	April 30, 2013	  	1
	8	  	216	  	Hillcrest Rehab Care Center	  	Boise	  	ID	  	April 30, 2008	  	2
	9	  	278	  	Oakview Nursing & Rehab Center	  	Calvert City	  	KY	  	April 30, 2008	  	2
	10	  	320	  	Magnolia Gardens Care Center	  	Burlingame	  	CA	  	April 30, 2008	  	2
	11	  	407	  	Parkwood Health Care Center	  	Lebanon	  	IN	  	April 30, 2008	  	2
	12	  	545	  	Eastside Rehab & Living Center	  	Bangor	  	ME	  	April 30, 2008	  	2
	13	  	549	  	Kennebunk Nursing Center	  	Kennebunk	  	ME	  	April 30, 2008	  	2
	14	  	641	  	Torrey Pines Care Center	  	Las Vegas	  	NV	  	April 30, 2008	  	2
	15	  	690	  	Wasatch Valley Rehabilitation	  	Salt Lake City	  	UT	  	April 30, 2008	  	2
	16	  	711	  	Kinston Rehab and Healthcare Center	  	Kinston	  	NC	  	April 30, 2008	  	2
	17	  	822	  	Primacy Healthcare & Rehab Center	  	Memphis	  	TN	  	April 30, 2008	  	2
	18	  	826	  	Harbour Point Med. & Rehab Center	  	Norfolk	  	VA	  	April 30, 2008	  	2
	19	  	1224	  	Health Havens Nursing & Rehab Center	  	E. Providence	  	RI	  	April 30, 2008	  	2
	20	  	4611	  	Kindred Hospital Bay Area St. Petersburg	  	St. Petersburg	  	FL	  	April 30, 2008	  	2
	21	  	111	  	Rolling Hills Health Care Center	  	New Albany	  	IN	  	April 30, 2010	  	4
	22	  	136	  	LaSalle Healthcare Center	  	Durham	  	NC	  	April 30, 2010	  	4
	23	  	223	  	Weiser Rehab & Care Center	  	Weiser	  	ID	  	April 30, 2010	  	4
	24	  	282	  	Maple Manor Healthcare Center	  	Greenville	  	KY	  	April 30, 2010	  	4
	25	  	294	  	Windsor Estates Health & Rehab Center	  	Kokomo	  	IN	  	April 30, 2010	  	4
	26	  	706	  	Guardian Care of Henderson	  	Henderson	  	NC	  	April 30, 2010	  	4
	27	  	726	  	Guardian Care of Elizabeth City	  	Elizabeth City	  	NC	  	April 30, 2010	  	4
	28	  	780	  	Columbus Health & Rehab Center	  	Columbus	  	IN	  	April 30, 2010	  	4
	29	  	4654	  	Kindred Hospital Houston NW Campus	  	Houston	  	TX	  	April 30, 2010	  	4
	30	  	168	  	Lakewood Healthcare Center	  	Lakewood	  	WA	  	April 30, 2010	  	5
	31	  	289	  	San Luis Medical & Rehab Center	  	Green Bay	  	WI	  	April 30, 2010	  	5
	32	  	420	  	Maywood Acres Healthcare Center	  	Oxnard	  	CA	  	April 30, 2010	  	5
	33	  	578	  	West Lafayette Rehab & Nursing Center	  	West Lafayette	  	OH	  	April 30, 2010	  	5
	34	  	634	  	Cambridge Health & Rehab Center	  	Cambridge	  	OH	  	April 30, 2010	  	5
	35	  	743	  	Desert Life Rehab & Care Center	  	Tucson	  	AZ	  	April 30, 2010	  	5
	36	  	744	  	Cherry Hills Health Care Center	  	Englewood	  	CO	  	April 30, 2010	  	5
	37	  	766	  	Colonial Manor Medical & Rehab Center	  	Wausau	  	WI	  	April 30, 2010	  	5
	38	  	4653	  	Kindred Hospital Tarrant County Ft Worth SW Campus	  	Ft. Worth	  	TX	  	April 30, 2010	  	5
	39	  	4668	  	Kindred Hospital Ft. Worth	  	Ft. Worth	  	TX	  	April 30, 2010	  	5
	40	  	508	  	Crawford Skilled Nursing & Rehab Center	  	Fall River	  	MA	  	April 30, 2010	  	6
	41	  	532	  	Hillcrest Nursing Center	  	Fitchburg	  	MA	  	April 30, 2010	  	6
	42	  	534	  	Country Gardens Skilled. Nursing & Rehab	  	Swansea	  	MA	  	April 30, 2010	  	6
	43	  	584	  	Franklin Skilled. Nursing & Rehab Center	  	Franklin	  	MA	  	April 30, 2010	  	6
	44	  	804	  	Rehab & Health Center of Birmingham	  	Birmingham	  	AL	  	April 30, 2010	  	6
	45	  	1228	  	Lafayette Nursing & Rehab Center	  	Fayetteville	  	GA	  	April 30, 2010	  	6
	46	  	4674	  	Kindred Hospital Central Tampa	  	Tampa	  	FL	  	April 30, 2010	  	6

  

 Exhibit D 








 Exhibit E 
 Leases 
  

	1.	Second Amended and Restated Master Lease No. 1 dated as of April 27, 2007 by and between Ventas Realty, Limited Partnership, as lessor, and Kindred Healthcare, Inc. and
Kindred Healthcare Operating, Inc., as tenant. 

  

	2.	Second Amended and Restated Master Lease No. 2 dated as of April 27, 2007 by and between Ventas Realty, Limited Partnership, as lessor, and Kindred Healthcare, Inc. and
Kindred Healthcare Operating, Inc., as tenant. 

  

	3.	Second Amended and Restated Master Lease No. 3 dated as of April 27, 2007 by and between Ventas Realty, Limited Partnership, as lessor, and Kindred Healthcare, Inc. and
Kindred Healthcare Operating, Inc., as tenant. 

  

	4.	Second Amended and Restated Master Lease No. 4 dated as of April 27, 2007 by and between Ventas Realty, Limited Partnership, as lessor, and Kindred Healthcare, Inc. and
Kindred Healthcare Operating, Inc., as tenant. 

  

 Exhibit E 








 Exhibit F 
 INTENTIONALLY OMITTED 
  

 Exhibit F 








 Exhibit G 
 Form of Lease Guaranty 
 GUARANTY OF LEASE 
 THIS GUARANTY OF LEASE, dated as of
                            , by and from
                                    , a
                                     having an address at
                                        
             (“Guarantor”), with respect to that certain Second Amended and Restated Master Lease Agreement No. 2, dated as of
                                        
     (the “Lease”), between Ventas Realty, Limited Partnership, a Delaware limited partnership (“Lessor”), and Kindred Healthcare, Inc., a Delaware corporation and Kindred Healthcare
Operating, Inc., a Delaware corporation (collectively, “Tenant”), covering the Leased Properties (as defined in the Lease) identified therein, including, without limitation, that certain Leased Property more particularly described
on Exhibit A attached hereto (the “Premises”), all or a portion of which is subleased by Tenant to Guarantor. 
 WHEREAS,
Guarantor desires, and Lessor requires, that this agreement be furnished so that Guarantor, being obligated to do so, can fulfill the terms and conditions of the Lease with respect to the Premises with the same effect as if the Lease had been
entered into with Guarantor as the tenant with respect to the Premises thereunder. 
 NOW, THEREFORE, in consideration and recognition of the
execution of the Lease, and other good and valuable consideration and intending to be legally bound hereby, Guarantor hereby unconditionally guarantees, and unconditionally becomes surety to Lessor, its successors and assigns for, the payment of all
rent, additional charges and other sums owing under the Lease with respect to, or allocable to, the Premises (and Guarantor acknowledges and agrees that, in the event any delinquency exists under the Lease in the payment of Base Rent, Lessor shall,
for purposes of the foregoing clause, allocate such delinquency pro rata among the Leased Properties based upon the respective Transferred Property Percentages applicable to the Leased Properties) and the full, faithful and punctual performance of
each and all of the covenants, agreements and conditions of the Lease to be kept and performed by Tenant with respect to the Premises, in accordance with and within the times prescribed by the Lease, as well as all other liabilities now or hereafter
contracted by Tenant with Lessor pursuant to the Lease with respect to the Premises and together, to the extent the same are chargeable to Tenant under the Lease, with all costs and expenses (including, without limitation, reasonable attorneys fees)
incurred by Lessor with respect to the Premises in connection with any of the foregoing and/or in connection with the enforcement of Lessor’s rights against Tenant or Guarantor with respect to the Premises (all of the foregoing being
hereinafter collectively referred to as the “Liabilities”). In the event Tenant fails to pay, perform or observe, as applicable, any of the Liabilities, and such failure is not cured within the cure period, if any, provided to
Tenant by the terms of the Lease, an Event of Default shall be deemed to have occurred under this Guaranty. Guarantor agrees that it shall be obligated to keep itself informed as to the status of Tenant’s payment, performance and observance of
the Liabilities and that Lessor shall not be obligated to give Guarantor, and Guarantor shall not be entitled to, notice of any failure by Tenant to pay, perform or observe, as applicable, any of the Liabilities, provided, however, that Lessor
agrees to accept the cure of any such failure, on or prior to the expiration of the cure period, if any, provided to Tenant by the terms of the Lease, by either Tenant or Guarantor. 
  

 Exhibit G 








 Guarantor further agrees as follows: 
 1. Lessor shall have the right from time to time, and at any time in its sole discretion, without notice to or consent from Guarantor, and
without affecting, impairing, or discharging in whole or in part, the Liabilities of Guarantor hereunder: to modify, change, extend, alter, amend or supplement in any respect whatever, any agreement or transaction between Lessor and Tenant or
between Lessor and any other party liable for the Liabilities, or any portion or provision thereof; to grant extensions of time and other indulgences of any kind to Tenant; to compromise, release, substitute, exercise, enforce or fail or refuse to
exercise or enforce any claims, rights or remedies of any kind which Lessor may have at any time against Tenant or any other party liable for the Liabilities, or any thereof, or with respect to any security of any kind held by Lessor at any time
under any agreement or otherwise. The Liabilities of Guarantor shall not be affected, impaired or discharged, in whole or in part, by reason of payments by Tenant of all or a portion of the Liabilities, to the extent such payments shall be turned
over as “voidable preferences” or otherwise required to be refunded or disgorged, or by reason of any action whatsoever taken by Lessor with respect to any security in which Lessor may at any time have any interest or against any other
party liable for all or any part of the Liabilities. 
 2. Guarantor waives: (a) all notices, including but not limited
to (i) notice of acceptance of this Guaranty, (ii) notice of presentment, demand for payment, or protest of any of the Liabilities, or the obligation of any person, firm or corporation held by Lessor as collateral security, and
(iii) notice of any failure by Tenant to pay, perform or observe, as applicable, any of the Liabilities or of any Event of Default (as defined in the Lease); (b) all defenses, offsets and counterclaims which Guarantor may at any time have
to any of the Liabilities, except to the extent the same is a valid defense, offset or counterclaim on the part of Tenant; and (c) all notices of the financial condition or of any adverse or other change in the financial condition of Tenant.

 3. Lessor may, without notice, assign this Guaranty in whole or in part, and no assignment or transfer of the Lease or
subletting of the Premises shall operate to extinguish or diminish the liability of Guarantor hereunder. 
 4. The liability
of Guarantor under this Guaranty shall be primary with respect to any right of action which shall accrue to Lessor under the Lease, and Lessor may, at its option, proceed against Guarantor without having to commence any action, or having obtained
any judgment, against Tenant. 
 5. The Liabilities of Guarantor shall not be affected, impaired or discharged, in whole or in
part, by reason of: (a) the entry of an order for relief pursuant to the United States Bankruptcy Code by or against Tenant; (b) the proposal of or the consummation of a plan of reorganization concerning Tenant; (c) the assignment of
Tenant’s obligations under the Lease 

  

 Exhibit G 








 
or any other or further sublease of any portion of the Premises, whether or not any such assignment or sublease is permitted under the Lease; or
(d) except by reason of actual payment and performance of Tenant’s obligations under the Lease, the discharge of the obligations of Tenant to Lessor, provided, however, if Tenant, in accordance with the requirements of the Lease, assigns
the Lease (including, without limitation, if and to the extent permitted under Section 25.1.11 or Section 25.4 of the Lease, by virtue of a partial assignment of the Lease with respect to the Premises) to a Person (as defined in the Lease)
that is not an Affiliate (as defined in the Lease) of Tenant, Tenant shall not be released from any of its duties, liabilities or obligations under the Lease on account of any such assignment, but Guarantor shall be released from this Guaranty
insofar as it relates to any Liabilities of Tenant assumed by the assignee and arising on account of any breach or default of the Lease occurring after the date of such assignment. 
 6. The waiver of any right by Lessor or its failure to exercise promptly any right shall not be construed as the waiver of any other right
including the right to exercise the same at any time thereafter. No waiver or modification of any of the terms or conditions of this Guaranty shall be binding against Lessor unless such waiver or modification is in a writing signed by Lessor.

 7. The liability of Guarantor shall bind the respective representatives, successors and assigns of Guarantor and shall
inure to the benefit of Lessor, its successors and assigns. 
 8. This Guaranty shall be governed by, and construed in
accordance with, the laws of the State of New York without reference to the choice of law principles thereof. Guarantor hereby agrees to submit to the jurisdiction of any court of general jurisdiction sitting in the State of New York and designates
any officer or supervisory employee of Lessor located at the Premises as its agent and attorney in fact for the purpose of accepting service and making an appearance on its behalf in such proceeding and taking all such acts as may be necessary or
appropriate in order to confer jurisdiction on it upon such court, provided such agent and attorney in fact shall promptly send a true copy of all materials so served to Guarantor at the address and in the manner specified in Section 9 below,
and Guarantor stipulates that such consent and appointment is irrevocable and coupled with an interest. 
  

 Exhibit G 








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

 

	 	(a)	if to Guarantor: 

 _________________________________

 _________________________________ 
 _________________________________ 
 _________________________________ 
 Attention: ________________________ 
 with a
copy to: 
 _________________________________ 
 _________________________________ 
 _________________________________ 
 _________________________________ 
 Attention: ________________________ 
  

	 	(b)	if to Lessor: 

 Ventas Realty, Limited Partnership

 c/o Ventas, Inc. 
 111 South
Wacker Drive, Suite 4800 
 Chicago, Illinois 60606 
 Attention: Lease Administration 
 with a copy to: 
 Ventas Realty, Limited Partnership 
 c/o
Ventas, Inc. 
 10350 Ormsby Park Place, Suite 300 
 Louisville, Kentucky 40223 
 Attention: General Counsel 
 or to such other address as either party may hereunder designate, and shall be effective upon receipt. 
  

 Exhibit G 








 IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed and sealed as of the day and year
first above written. 
  

					
	 ___________________________________, a
 ___________________________________

		
	By:	 	  
		 	Name:	 	  
		 	Title:	 	  


  

 Exhibit G 








 SCHEDULE 2.1A 
 Base Patient Revenues 
 Master Lease Agreement No. 2 
  

												
	 	  	Facility
ID	  	 Name
	  	 City
	  	State	  	Base Patient
Revenues for
1999
	1	  	111	  	Rolling Hills Health Care Center	  	New Albany	  	IN	  	$	4,651,650
	2	  	136	  	LaSalle Healthcare Center	  	Durham	  	NC	  	 	4,328,326
	3	  	168	  	Lakewood Healthcare Center	  	Lakewood	  	WA	  	 	4,411,320
	4	  	216	  	Hillcrest Rehab Care Center	  	Boise	  	ID	  	 	6,472,320
	5	  	222	  	Nampa Care Center	  	Nampa	  	ID	  	 	5,939,837
	6	  	223	  	Weiser Rehab & Care Center	  	Weiser	  	ID	  	 	3,161,339
	7	  	278	  	Oakview Nursing & Rehab Center	  	Calvert City	  	KY	  	 	3,881,974
	8	  	282	  	Maple Manor Healthcare Center	  	Greenville	  	KY	  	 	3,524,378
	9	  	289	  	San Luis Medical & Rehab Center	  	Green Bay	  	WI	  	 	5,511,712
	10	  	294	  	Windsor Estates Health & Rehab Center	  	Kokomo	  	IN	  	 	6,968,706
	11	  	320	  	Magnolia Gardens Care Center	  	Burlingame	  	CA	  	 	4,131,868
	12	  	407	  	Parkwood Health Care Center	  	Lebanon	  	IN	  	 	6,210,260
	13	  	420	  	Maywood Acres Healthcare Center	  	Oxnard	  	CA	  	 	3,934,290
	14	  	508	  	Crawford Skilled Nursing & Rehab Center	  	Fall River	  	MA	  	 	5,454,588
	15	  	513	  	Hallmark Nursing & Rehab Center	  	New Bedford	  	MA	  	 	4,622,542
	16	  	532	  	Hillcrest Nursing Center	  	Fitchburg	  	MA	  	 	4,683,540
	17	  	534	  	Country Gardens Skilled. Nursing & Rehab	  	Swansea	  	MA	  	 	4,732,983
	18	  	545	  	Eastside Rehab & Living Center	  	Bangor	  	ME	  	 	4,493,788
	19	  	549	  	Kennebunk Nursing Center	  	Kennebunk	  	ME	  	 	4,567,988
	20	  	578	  	West Lafayette Rehab & Nursing Center	  	West Lafayette	  	OH	  	 	3,140,575
	21	  	584	  	Franklin Skilled. Nursing & Rehab Center	  	Franklin	  	MA	  	 	3,741,967
	22	  	592	  	Greenbriar Terrace Healthcare	  	Nashua	  	NH	  	 	18,371,219
	23	  	634	  	Cambridge Health & Rehab Center	  	Cambridge	  	OH	  	 	6,321,039
	24	  	641	  	Torrey Pines Care Center	  	Las Vegas	  	NV	  	 	3,675,645
	25	  	690	  	Wasatch Valley Rehabilitation	  	Salt Lake City	  	UT	  	 	4,780,680
	26	  	706	  	Guardian Care of Henderson	  	Henderson	  	NC	  	 	2,759,674
	27	  	711	  	Kinston Rehab and Healthcare Center	  	Kinston	  	NC	  	 	4,096,682
	28	  	726	  	Guardian Care of Elizabeth City	  	Elizabeth City	  	NC	  	 	4,780,889
	29	  	743	  	Desert Life Rehab & Care Center	  	Tucson	  	AZ	  	 	8,312,254
	30	  	744	  	Cherry Hills Health Care Center	  	Englewood	  	CO	  	 	4,924,582
	31	  	766	  	Colonial Manor Medical & Rehab Center	  	Wausau	  	WI	  	 	6,634,074
	32	  	780	  	Columbus Health & Rehab Center	  	Columbus	  	IN	  	 	9,980,435
	33	  	804	  	Rehab & Health Center of Birmingham	  	Birmingham	  	AL	  	 	5,728,386
	34	  	822	  	Primacy Healthcare & Rehab Center	  	Memphis	  	TN	  	 	6,730,792
	35	  	826	  	Harbour Point Med. & Rehab Center	  	Norfolk	  	VA	  	 	8,080,424
	36	  	842	  	Bay Pointe Medical & Rehab Center	  	Virginia Beach	  	VA	  	 	5,240,877
	37	  	1224	  	Health Havens Nursing & Rehab Center	  	E. Providence	  	RI	  	 	3,356,504
	38	  	1228	  	Lafayette Nursing & Rehab Center	  	Fayetteville	  	GA	  	 	8,628,904
	39	  	4611	  	Kindred Hospital Bay Area St. Petersburg	  	St. Petersburg	  	FL	  	 	18,786,887
	40	  	4612	  	Kindred Hospital Kansas City	  	Kansas City	  	MO	  	 	18,379,801
	41	  	4615	  	Kindred Hospital Sycamore	  	Sycamore	  	IL	  	 	9,946,355
	42	  	4653	  	Kindred Hospital Tarrant County Ft Worth SW Campus	  	Ft. Worth	  	TX	  	 	12,947,604
	43	  	4654	  	Kindred Hospital Houston NW Campus	  	Houston	  	TX	  	 	12,963,221
	44	  	4668	  	Kindred Hospital Ft. Worth	  	Ft. Worth	  	TX	  	 	11,676,038
	45	  	4674	  	Kindred Hospital Central Tampa	  	Tampa	  	FL	  	 	24,027,068
	46	  	4807	  	Kindred Hospital Ontario	  	Ontario	  	CA	  	 	28,892,830
		  	Total Base Patient Revenues for 1999 for Master Lease Agreement No. 2	  	$	348,588,815

  

 Schedule 2.1A 








 Schedule 2.1B 
 Intentionally omitted 
  

 Schedule 2.1B 








 Schedule 2.1C 
 Existing Ground Leases 
 Master Lease No. 2 
  

	 	1.	Facility 592: Indenture of Lease dated as of October 1, 1972 between Samuel A. Tamposi and Gerald Q. Nash and Greenbriar Nursing Home Corp., which lease, or a memorandum
thereof, is recorded in the Office of the Hillsborough County Registry of Deeds at Book 2463, Page 402; Notice of Lease dated as of October 1, 1972 between Samuel A. Tamposi and Gerald Q. Nash and Greenbriar Nursing Home Corp.; Notice of Lease
and Exercise of Option to Renew Lease Term dated September 28, 1977 between Samuel A. Tamposi and Gerald Q. Nash and First Healthcare Corporation (successor to Greenbriar Nursing Home Corp.) and recorded at Book 2568, Page 726 in the aforesaid
office; Assignment and Assumption of Lease dated as of January 25, 1990 between First Healthcare Corporation and The Hillhaven Corporation; Letter dated November 15, 1989 from First Healthcare Corporation to Lionel A. Forest and
Landlord’s Consent to Assignment and Sublease dated November 21, 1989 executed by Lionel A. Forest, by his attorney in fact, James A. Forest; Landlord’s Consent dated July 10, 1990 executed by Zoe M. Forest; First Amendment to
Lease dated as of September 10, 1990 between NME Properties Corp. (formerly known as The Hillhaven Corporation) and Zoe M. Forest and recorded at Book 5220, Page 910 in the aforesaid office; Assignment and Assumption of Lease dated as of
October 24, 1990 between NME Properties Corp. (formerly known as The Hillhaven Corporation) and First Healthcare Corporation and recorded at Book 5220, Page 915 in the aforesaid office; Notice of Lease dated May 29, 1997 between Zoe M.
Forest and First Healthcare Corporation and recorded on November 7, 1997 at Book 5870, Page 1876 in the aforesaid office; Landlord’s Consent dated June 12, 1999 executed by Zoe M. Forest and recorded at Book 6119, Page 256
in the aforesaid office; Assignment and Assumption of Lease dated as of December 2, 1998 between Ventas, Inc. (successor by merger to First Healthcare Corporation) and Ventas Realty, Limited Partnership and recorded on March 24, 2000 at
Book 6220, Page 1440 in the aforesaid office; letter dated May 15, 2000 from Ventas Realty, Limited Partnership to Zoe M. Forest; Consent and Estoppel Certificate dated May 12, 2000 executed by Zoe M. Forest; Consent and Estoppel
Certificate dated May 22, 2001 executed by Zoe M. Forest; Notice of Lease dated September 18, 2006 executed by Carol Forest, Trustee of the Zoe M. Forest Revocable Trust, and Ventas Realty, Limited Partnership. 

  

	 	2.	Facility 804: Lease dated July 3, 1969 between St. Vincent’s Hospital and Medicenters of America, Inc.; Short Form of Lease dated July 3, 1969 between St.
Vincent’s Hospital and Medicenters of America, Inc. and recorded in Real Volume 554, Page 89 in the Probate Office for Jefferson County, Alabama; Assignment and Assumption of Lease dated November 4, 1992 between NME Properties Corp.
(formerly known as The Hillhaven Corporation and successor in interest to Medicenters of America, Inc.) and First Healthcare Corporation and recorded in 

  

 Schedule 2.1C 








 Volume 4412, Page 15 in the aforesaid office; letter dated August 24, 1995 from First Healthcare
Corporation to St. Vincent’s Hospital; Assignment and Assumption of Lease dated as of September 30, 1998 between Ventas, Inc. (successor by merger to First Healthcare Corporation) and Ventas Realty, Limited Partnership and recorded in
Volume 200009, Page 6219 in the aforesaid office; Consent and Estoppel Certificate dated May 15, 2000 executed by St. Vincent’s Hospital and recorded in Volume 200009, Page 6236 in the aforesaid office; Letter dated October 4, 2000
from T. Richard Riney to St. Vincent’s Hospital. 
  

 Schedule 2.1C 








 SCHEDULE 7.2.7 
 Minimum Licensed Beds for Hospital Care 
 Master Lease Agreement No. 2 
  

							
	 	  	Facility
ID	  	 Name
	  	Minimum Number
of Beds Licensed
for Hospital Care
	 1
	  	4611	  	Kindred Hospital Bay Area St. Petersburg	  	39
	 2
	  	4612	  	Kindred Hospital Kansas City	  	109
	 3
	  	4615	  	Kindred Hospital Sycamore	  	51
	 4
	  	4653	  	Kindred Hospital Tarrant County Ft Worth SW Campus	  	52
	 5
	  	4654	  	Kindred Hospital Houston NW Campus	  	55
	 6
	  	4668	  	Kindred Hospital Ft. Worth	  	44
	 7
	  	4674	  	Kindred Hospital Central Tampa	  	67
	 8
	  	4807	  	Kindred Hospital Ontario	  	60

  

 Schedule 7.2.7 








 SCHEDULE 7.2.8 
 Minimum Number of Non-Banked Skilled Nursing Care Beds at Certain Facilities 
 Master Lease Agreement
No. 2 
  

							
	 	  	Facility
ID	  	 Name
	  	Minimum Number of
Non-Banked Skilled
Nursing Care Beds at
Certain Facilities
	 1
	  	216	  	Hillcrest Rehab Care Center	  	115
	 2
	  	222	  	Nampa Care Center	  	78
	 3
	  	223	  	Weiser Rehab & Care Center	  	76
	 4
	  	278	  	Oakview Nursing & Rehab Center	  	109
	 5
	  	289	  	San Luis Medical & Rehab Center	  	133
	 6
	  	294	  	Windsor Estates Health & Rehab Center	  	138
	 7
	  	513	  	Hallmark Nursing & Rehab Center	  	107
	 8
	  	532	  	Hillcrest Nursing Center	  	95
	 9
	  	634	  	Cambridge Health & Rehab Center	  	150
	 10
	  	641	  	Torrey Pines Care Center	  	95
	 11
	  	690	  	Wasatch Valley Rehabilitation	  	110
	 12
	  	743	  	Desert Life Rehab & Care Center	  	221
	 13
	  	744	  	Cherry Hills Health Care Center	  	86
	 14
	  	780	  	Columbus Health & Rehab Center	  	227
	 15
	  	826	  	Harbour Point Med. & Rehab Center	  	169
	 16
	  	842	  	Bay Pointe Medical & Rehab Center	  	112
	 17
	  	1228	  	Lafayette Nursing & Rehab Center	  	178

  

 Schedule 7.2.8 








 Schedule 13.7 
 Insurance Summary 
 VENCOR, INC. 
 PROPERTY 
 INSURANCE SUMMARY 
  

					
	NAMED INSURED:	  	Vencor, Inc.
		
	ADDRESS:	  	680 South Fourth Avenue
		  	Louisville, KY 40202
		
	EFFECTIVE DATE:	  	12/1/00 to 12/1/01
		
	PERILS INSURED:	  	All Risk Property excluding Boiler & Machinery and including Flood and Earthmovement
		
	INTEREST:	  	All Real and Personal Property owned or used by the Insured and similar Property of Others for which they are legally liable or have assumed liability or agreed to
insure.
			
	VALUATION:	  	Real and Personal Property        	  	Replacement Cost
		  	Time Element	  	Actual Loss Sustained
			
	LIMITS:	  	$150,000,000 Loss Limit	  	


					
			
	COVERAGES:	  		  	
		  	Property Damage	  	Policy Limits
		  	Business Interruption	  	Policy Limits
		  	Automatic Acquisition Coverage-120 Days	  	$20,000,000
		  	Errors and Omissions	  	$20,000,000
		  	 Flood Zone A & B
	  	$10,000,000
		  	 Earthquake in California, Alaska,
	  	$10,000,000
		  	 Hawaii and Puerto Rico
	  	
		  	 Expediting Expense
	  	$ 5,000,000
		  	Service Interruption - PD/TE (II)	  	$20,000,000
		  	 Florida
	  	$15,000,000
		  	Transit	  	$2,500,000
		  	Floater/Unnamed Location	  	$2,500,000/
		  		  	Per location
		  	Leasehold Interest	  	Policy Limits
		  	Ordinary Payroll	  	180 days
		  	Property in the Course of Construction	  	Policy Limits
		  	Rental Income	  	Policy Limits
		  	Contingent Business Interruption	  	$5,000,000
		  	Valuable Papers and Records	  	$20,000,000
		  	Professional Fees	  	$500,000
		  	Radioactive Contamination	  	$3,000,000
		  	Debris Removal	  	Policy Limits

  

 Schedule 13.7 









					
			
	COVERAGES:	  		  	
		  	Decontamination Expense	  	$100,000
		  	Extra Expense	  	Policy Limits
		  	Accounts Receivable	  	$20,000,000
		  	Demolition & Increased Cost of Construction	  	Policy Limits
		  	EDP Equipment & Media Reconstruction	  	$3,000,000
		  	Extended Period of Indemnity	  	365 Days
		  	Fine Arts	  	$500,000
		  	Brands and Labels	  	Policy Limits
		  	Earthmovement (1)	  	$100,000,000
		  	California	  	$50,000,000
		  	Flood (1)	  	$100,000,000

  

	TIV:	$2,852,213,000 (III) 


	I	Limits are per occurrence and in the annual aggregate 


	II	8 hour waiting period to apply 


	III	Pro-rata additions and deletions 

  

			
	DEDUCTIBLES:	  	Deductible - $100,000 per occurrence.
		  	2% of affected TIV for Florida Named Wind Storm, subject to a $250,000 minimum.
		  	5% California Earthmovement subject to a $250,000 minimum $250,000 per occurrence Flood - Zone A and V’
		
	CONDITIONS:	  	90 Day Notice of Cancellation
		  	 •        Y2k Exclusions

		  	 •        Omnibus Named Insured Wording


  

 Schedule 13.7 








 VENCOR, INC. 
 BOILER AND MACHINERY 
 INSURANCE SUMMARY 
  

							
	NAMED INSURED:	  	Vencor, Inc.	  		  	
		
	ADDRESS:	  	680 South Fourth Avenue
		  	Louisville, KY 40202
		
	EFFECTIVE DATE:	  	12/1/00 to 12/1/01
		
	PERILS INSURED:	  	Boiler & Machinery Breakdown
		
	INTEREST:	  	All Real and Personal Property owned or used by the Insured and similar Property of Others for which they are legally liable or have assumed liability or agreed to
insure
				
	LIMITS:	  	Equipment breakdown	  	–	  	$100,000,000
		  	Property Damage	  	–	  	Included
		  	Business Income	  	–	  	Included
		  	Extra Expenses	  	–	  	Combined with Business Income
		  	Service Interruption	  	–	  	Combined with Business Income
		  	Perishable Goods	  	–	  	$100,000
		  	Computer Equipment	  	–	  	$100,000
		  	Demolition and ICC	  	–	  	$100,000
		  	Expediting Expense	  	–	  	$100,000
		  	Hazardous Substances	  	–	  	$100,000
		  	CFC Refrigerants	  	–	  	$25,000
		  	Newly Acquired locations	  	–	  	$250,000
				
	TIV:	  	$2,852,213,000	  		  	
		
	DEDUCTIBLES:	  	$25,000 Combined, All Coverages
			
	CONDITIONS:	  	Extended Business Income:	  	365 days
		  	Newly Acquired Locations:	  	120 days
		  	Absolute Seepage, pollution & Contamination Exclusions
		  	Y2k Exclusions	  		  	








 VENCOR, INC. 
 CRIME 
 INSURANCE SUMMARY 
  

			
	NAMED INSURED:	  	Vencor, Inc.
		
	ADDRESS:	  	680 South Fourth Avenue
		  	Louisville, KY 40202
		
	EFFECTIVE DATE:	  	1/1/00 to 1/1/01
		
	LIMITS:	  	$50,000,000
		
	COVERAGE:	  	Includes employee theft, depositor’s forgery, computer theft and funds transfer fraud
		
	DEDUCTIBLE:	  	$50,000

 VENCOR, INC. 
 AUTOMOBILE LIABILITY 
 INSURANCE SUMMARY 
  

			
	NAMED INSURED:	  	Vencor, Inc.
		
	ADDRESS:	  	680 South Fourth Avenue
		  	Louisville, KY 40202
		
	EFFECTIVE DATE:	  	1/1/00 to 1/1/01
		
	LIMITS:	  	$130,000,000
		
	COVERAGE:	  	Includes owned and non-owned vehicles
		
	DEDUCTIBLE:	  	None








 VENCOR, INC. 
 WORKERS COMPENSATION 
 INSURANCE SUMMARY 
  

			
	NAMED INSURED:	  	Vencor, Inc.
		
	ADDRESS:	  	680 South Fourth Avenue
		  	Louisville, KY 40202
		
	EFFECTIVE DATE:	  	1/1/00 to 1/1/01
		
	LIMITS:	  	Required statutory limits








 VENCOR, INC. 
 GENERAL LIABILITY 
 INSURANCE SUMMARY 
  

			
	NAMED INSURED:	  	Vencor, Inc.
		
	ADDRESS:	  	680 South Fourth Avenue
		  	Louisville, KY 40202
		
	EFFECTIVE DATE:	  	11/30/00 to date indicated below for particular layer
		
	LIMITS:	  	$130,000,000
		  	 $2,000,000 Primary (to 11/30/01); Deductible: None

		  	 $23,000,000 in excess of first $2,000,000 (to 1/1/03); Deductible: None

		  	 $105,000,000 in excess of first $25,000,000 (to 1/1/02)


 VENCOR, INC. 
 MALPRACTICE 
 INSURANCE SUMMARY 
  

			
	NAMED INSURED:	  	Vencor, Inc.
		
	ADDRESS:	  	680 South Fourth Avenue
		  	Louisville, KY 40202
		
	EFFECTIVE DATE:	  	11/30/00 to date indicated below for particular layer
		
	LIMITS:	  	$130,000,000
		  	$2,000,000 Primary (to 11/30/01); Deductible: None
		  	$23,000,000 in excess of first $2,000,000 (to 1/1/03); Deductible: None
		  	$105,000,000 in excess of first $25,000,000 (to 1/1/02)








 SCHEDULE 16.1(m)A 
 Licensed Beds as of the Commencement Date 
 Master Lease Agreement No. 2 
  

	*	Deemed number of licensed beds as of the Commencement Date per Section 16.1(m)(i) 

  

											
	 	  	Facility
ID	  	 Name
	  	City	  	State	  	No. Licensed Beds
at Commencement
Date
	1	  	111	  	Rolling Hills Health Care Center	  	New Albany	  	IN	  	115
	2	  	136	  	LaSalle Healthcare Center	  	Durham	  	NC	  	126
	3	  	168	  	Lakewood Healthcare Center	  	Lakewood	  	WA	  	80
	4	  	216	  	Hillcrest Rehab Care Center	  	Boise	  	ID	  	123
	5	  	222	  	Nampa Care Center	  	Nampa	  	ID	  	151
	6	  	223	  	Weiser Rehab & Care Center	  	Weiser	  	ID	  	89
	7	  	278	  	Oakview Nursing & Rehab Center	  	Calvert City	  	KY	  	114
	8	  	282	  	Maple Manor Healthcare Center	  	Greenville	  	KY	  	101
	9	  	289	  	San Luis Medical & Rehab Center	  	Green Bay	  	WI	  	164
	10	  	294	  	Windsor Estates Health & Rehab Center	  	Kokomo	  	IN	  	145
	11	  	320	  	Magnolia Gardens Care Center	  	Burlingame	  	CA	  	84
	12	  	407	  	Parkwood Health Care Center	  	Lebanon	  	IN	  	153
	13	  	420	  	Maywood Acres Healthcare Center	  	Oxnard	  	CA	  	98
	14	  	508	  	Crawford Skilled Nursing & Rehab Center	  	Fall River	  	MA	  	124
	15	  	513	  	Hallmark Nursing & Rehab Center	  	New Bedford	  	MA	  	124
	16	  	532	  	Hillcrest Nursing Center	  	Fitchburg	  	MA	  	96
	17	  	534	  	Country Gardens Skilled. Nursing & Rehab	  	Swansea	  	MA	  	86
	18	  	545	  	Eastside Rehab & Living Center	  	Bangor	  	ME	  	78
	19	  	549	  	Kennebunk Nursing Center	  	Kennebunk	  	ME	  	80
	20	  	578	  	West Lafayette Rehab & Nursing Center	  	West Lafayette	  	OH	  	96
	21	  	584	  	Franklin Skilled. Nursing & Rehab Center	  	Franklin	  	MA	  	82
	22	  	592	  	Greenbriar Terrace Healthcare	  	Nashua	  	NH	  	300
	23	  	634	  	Cambridge Health & Rehab Center	  	Cambridge	  	OH	  	159
	24	  	641	  	Torrey Pines Care Center	  	Las Vegas	  	NV	  	105
	25	  	690	  	Wasatch Valley Rehabilitation	  	Salt Lake City	  	UT	  	118
	26	  	706	  	Guardian Care of Henderson	  	Henderson	  	NC	  	80
	27	  	711	  	Kinston Rehab and Healthcare Center	  	Kinston	  	NC	  	114
	28	  	726	  	Guardian Care of Elizabeth City	  	Elizabeth City	  	NC	  	120
	29	  	743	  	Desert Life Rehab & Care Center	  	Tucson	  	AZ	  	240
	30	  	744	  	Cherry Hills Health Care Center	  	Englewood	  	CO	  	95
	31	  	766	  	Colonial Manor Medical & Rehab Center	  	Wausau	  	WI	  	152
	32	  	780	  	Columbus Health & Rehab Center	  	Columbus	  	IN	  	235
	33	  	804	  	Rehab & Health Center of Birmingham	  	Birmingham	  	AL	  	114
	34	  	822	  	Primacy Healthcare & Rehab Center	  	Memphis	  	TN	  	120
	35	  	826	  	Harbour Point Med. & Rehab Center	  	Norfolk	  	VA	  	172
	36	  	842	  	Bay Pointe Medical & Rehab Center	  	Virginia Beach	  	VA	  	118
	37	  	1224	  	Health Havens Nursing & Rehab Center	  	E. Providence	  	RI	  	58
	38	  	1228	  	Lafayette Nursing & Rehab Center	  	Fayetteville	  	GA	  	179
	39	  	4611	  	Kindred Hospital Bay Area St. Petersburg	  	St. Petersburg	  	FL	  	60
	40	  	4612	  	Kindred Hospital Kansas City	  	Kansas City	  	MO	  	167
	41	  	4615	  	Kindred Hospital Sycamore	  	Sycamore	  	IL	  	77
	42	  	4653	  	Kindred Hospital Tarrant County Ft Worth SW Campus	  	Ft. Worth	  	TX	  	80
	43	  	4654	  	Kindred Hospital Houston NW Campus	  	Houston	  	TX	  	84
	44	  	4668	  	Kindred Hospital Ft. Worth	  	Ft. Worth	  	TX	  	67
	45	  	4674	  	Kindred Hospital Central Tampa	  	Tampa	  	FL	  	102
	46	  	4807	  	Kindred Hospital Ontario	  	Ontario	  	CA	  	91

  

 Schedule 16.1(m)A 








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

							
	 Master Lease No. 2
 Facility No.
	  	 Facility Name
	  	Minimum Number
of Licensed Beds	  	95% of
Minimum
	 1.  4612
	  	Kindred Hospital – Kansas City	  	120	  	114
	 2.  4615
	  	Kindred Hospital – Sycamore	  	69	  	66
	 3.  222
	  	Nampa Care Center	  	120	  	114
	 4.  223
	  	Weiser Rehabilitation and Care Ctr.	  	79	  	76
	 5.  289
	  	Sam Luis Medical & Rehab Center	  	139	  	133

 The parties agree that the licensed beds number that appears in the “95% of Minimum” column for a
particular Facility shall equal 95% of the number of licensed beds shown in the “Minimum Number of Licensed Beds” column for such Facility, in each case rounded up to the closest whole number of licensed beds. 
  

 Schedule 16.1(m)B 








 Schedule 25.1.7 
 Certain Existing Subleases 
 None 
  

 Schedule 25.1.7 








 Schedule 40.12 
 Tenant – Affiliate Sublessees 
 Master Lease #2 
  

									
	Facility
ID	  	 Name
	  	City	  	State	  	Tenant-Affiliate
	4807	  	Kindred Hospital – Ontario	  	Ontario	  	CA	  	THC-Orange County,
Inc.
	4615	  	Kindred Hospital – Sycamore	  	Sycamore	  	IL	  	THC – Chicago, Inc.
	4612	  	Kindred Hospital – Kansas City	  	Kansas City	  	MO	  	KHE
	222	  	Nampa Care Center	  	Nampa	  	ID	  	KNCW
	513	  	Hallmark Nursing & Rehab. Ctr	  	New Bedford	  	MA	  	KNCE
	592	  	Greenbrier Terrace Healthcare	  	Nashua	  	NH	  	KNCW
	842	  	Bay Pointe Medical & Rehab. Centre	  	Virginia Beach	  	VA	  	KNCE
	4611	  	Kindred Hospital – Bay Area St. Petersburg	  	St. Petersburg	  	FL	  	KHE
	545	  	Eastside Rehab. And Living Center	  	Bangor	  	ME	  	KNCW
	549	  	Kennebunk Nursing Center	  	Kennebunk	  	ME	  	KNCW
	711	  	Guardian Care of Kinston	  	Kinston	  	NC	  	KNCE
	1224	  	Health Havens Nursing & Rehab. Ctr.	  	E. Providence	  	RI	  	KNCE
	826	  	Harbour Pointe Med. & Rehab. Ctr.	  	Norfolk	  	VA	  	KNCE
	320	  	Magnolia Gardens Care Center	  	Burlingame	  	CA	  	KNCW
	216	  	Hillcrest Rehab. Care Center	  	Boise	  	ID	  	KNCW
	407	  	Parkwood Health Care Center	  	Lebanon	  	IN	  	KNCLP
	278	  	Oakview Nursing & Rehab. Ctr.	  	Calvert City	  	KY	  	KNCLP
	822	  	Primacy Healthcare & Rehab Ctr.	  	Memphis	  	TN	  	KNCLP
	690	  	Wasatch Valley Rehabilitation	  	Salt Lake City	  	UT	  	KNCW
	641	  	Torrey Pines Care Center	  	Las Vegas	  	NV	  	Kindred Nevada, L.L.C.
	4654	  	Kindred Hospital (Houston Northwest Campus)	  	Houston	  	TX	  	THC – Houston, Inc.
	223	  	Weiser Rehabilitation and Care Ctr.	  	Weiser	  	ID	  	KNCW
	111	  	Rolling Hills Health Care Center	  	New Albany	  	IN	  	KNCLP
	294	  	Windsor Estates Health & Rehab. Ctr.	  	Kokomo	  	IN	  	KNCLP

  

 Schedule 40.12 









									
	Facility
ID	  	 Name
	  	City	  	State	  	Tenant-Affiliate
	780	  	Columbus Health & Rehab. Center	  	Columbus	  	IN	  	KNCLP
	282	  	Maple Manor Healthcare Center	  	Greenville	  	KY	  	KNCLP
	136	  	LaSalle Healthcare Center	  	Durham	  	NC	  	KNCE
	706	  	Guardian Care of Henderson	  	Henderson	  	NC	  	KNCE
	726	  	Guardian Care of Elizabeth City	  	Elizabeth City	  	NC	  	KNCE
	4653	  	Kindred Hospital – Tarrant County Ft. Worth Southwest Campus	  	Ft. Worth	  	TX	  	THC Texas
	4668	  	Kindred Hospital – Ft. Worth	  	Ft. Worth	  	TX	  	KHLP
	743	  	Desert Life Rehab. & Care Center	  	Tuscon	  	AZ	  	KNCW
	420	  	Maywood Acres Healthcare Center	  	Oxnard	  	CA	  	KNCW
	744	  	Cherry Hills Health Care Center	  	Englewood	  	CO	  	KNCW
	578	  	West Lafayette Rehab. & Nsg. Ctr.	  	West Lafayette	  	OH	  	KNCE
	634	  	Cambridge Health & Rehab. Center	  	Cambridge	  	OH	  	KNCE
	168	  	Lakewood Healthcare Center	  	Lakewood	  	WA	  	KNCW
	289	  	San Luis Medical & Rehab. Center	  	Greenbay	  	WI	  	KNCLP
	766	  	Colonial Manor Medical & Rehab. Ctr.	  	Wausau	  	WI	  	KNCLP
	4674	  	Kindred Hospital - Central Tampa	  	Tampa	  	FL	  	THC Tampa
	804	  	Rehab. & Healthc. Ctr. of Birmingham	  	Birmingham	  	AL	  	KNCE
	1228	  	Lafayette Nsg. & Rehab. Ctr.	  	Fayetteville	  	GA	  	LHCC
	508	  	Crawford Skilled Nsg. & Rehab. Ctr.	  	Fall River	  	MA	  	KNCE
	532	  	Hillcrest Nursing Home	  	Fitchburg	  	MA	  	KNCE
	534	  	Country Gardens Sk. Nsg. & Rehab.	  	Swansea	  	MA	  	KNCE
	584	  	Franklin Sk. Nsg. & Rehab. Center	  	Franklin	  	MA	  	KNCE

 LEGEND 
 CGHC – Courtland Gardens Health Center, Inc. 
 HHC – Homestead Health Center, Inc. 
 LHCC – Lafayette Health Care Center, Inc. 
 RIMP –
Recovery Inn of Menlo Park, L.P. 
 KHE – Kindred Hospitals East, L.L.C. 
 KHW – Kindred Hospitals West, L.L.C. 
 KHLP – Kindred Hospitals Limited Partnership 
 KNCE – Kindred Nursing Centers East, L.L.C. 
 KNCLP –
Kindred Nursing Centers Limited Partnership 
 KNCW – Kindred Nursing Centers West, L.L.C. 
 THC Texas – Transitional Hospital Corporation of Texas, Inc. 
 THC Tampa – Transitional Hospital Corporation of Tampa, Inc. 
  

 Schedule 40.12