ex10_251.htm


    
      

    

    Exhibit
      10.25.1



    AMENDED
      AND RESTATED MASTER LEASE AGREEMENT

     

    AMONG

     

    HEALTH
      CARE REIT, INC.,

     

    HCRI
      LOUISIANA PROPERTIES, L.P.

     

    AND

     

    SENIOR
      LIVING PROPERTIES, LLC

     

    March
      1,
      2007


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      TABLE
        OF CONTENTS

    

    
      


    

    
      	
              
                SECTION

              

            	
              
                PAGE

              

            
	
              
                ARTICLE
                  1: LEASED PROPERTY, TERM AND DEFINITIONS

              

            	
              
                1

              

            
	
              
                1.1

              

            	
              
                Leased
                  Property

              

            	
              
                1

              

            
	
              
                1.2

              

            	
              
                Indivisible
                  Lease

              

            	
              
                1

              

            
	
              
                1.3

              

            	
              
                Term

              

            	
              
                2

              

            
	
              
                1.4

              

            	
              
                Definitions

              

            	
              
                2

              

            
	
              
                1.5

              

            	
              
                Landlord
                  as Agent

              

            	
              
                12

              

            
	
              
                ARTICLE
                  2: RENT

              

            	
              
                13

              

            
	
              
                2.1

              

            	
              
                Base
                  Rent

              

            	
              
                13

              

            
	
              
                2.2

              

            	
              
                Base
                  Rent Adjustments

              

            	
              
                13

              

            
	
              
                2.3

              

            	
              
                2.2.1
                  Annual Increase of Base Rent

              

            	
              
                13

              

            
	 	
              
                2.2.2
                  Additional Landlord Payments

              

            	
              
                13

              

            
	 	
              
                Additional
                  Rent

              

            	
              
                13

              

            
	
              
                2.4

              

            	
              
                Place
                  of Payment of Rent

              

            	
              
                14

              

            
	
              
                2.5

              

            	
              
                Net
                  Lease

              

            	
              
                14

              

            
	
              
                2.6

              

            	
              
                No
                  Termination, Abatement, Etc.

              

            	
              
                14

              

            
	
              
                ARTICLE
                  3:IMPOSITIONS AND
                  UTILITIES

              

            	
              
                14

              

            
	
              
                3.1

              

            	
              
                Payment
                  of Impositions

              

            	
              
                14

              

            
	
              
                3.2

              

            	
              
                Definition
                  of Impositions

              

            	
              
                15

              

            
	
              
                3.3

              

            	
              
                Escrow
                  of Impositions

              

            	
              
                16

              

            
	
              
                3.4

              

            	
              
                Utilities

              

            	
              
                16

              

            
	
              
                3.5

              

            	
              
                Discontinuance
                  of utilities

              

            	
              
                16

              

            
	
              
                3.6

              

            	
              
                Business
                  Expenses

              

            	
              
                17

              

            
	
              
                3.7

              

            	
              
                Permitted
                  Contests

              

            	
              
                17

              

            
	
              
                ARTICLE
                  4: INSURANCE

              

            	
              
                17

              

            
	
              
                4.1

              

            	
              
                Property
                  Insurance

              

            	
              
                17

              

            
	
              
                4.2

              

            	
              
                Liability
                  Insurance

              

            	
              
                18

              

            
	
              
                4.3

              

            	
              
                Builder’s
                  Risk Insurance

              

            	
              
                19

              

            
	
              
                4.4

              

            	
              
                Insurance
                  Requirements

              

            	
              
                19

              

            
	
              
                4.5

              

            	
              
                Replacement
                  Value

              

            	
              
                20

              

            
	
              
                4.6

              

            	
              
                Blanket
                  Policy

              

            	
              
                20

              

            
	
              
                4.7

              

            	
              
                No
                  Separate Insurance

              

            	
              
                20

              

            
	
              
                4.8

              

            	
              
                Waiver
                  of Subrogation

              

            	
              
                20

              

            
	
              
                4.9

              

            	
              
                Mortgages.

              

            	
              
                21

              

            
	
              
                4.10

              

            	
              
                Escrows

              

            	
              
                21

              

            
	
              
                ARTICLE
                  5: INDEMNITY,

              

            	
              
                21

              

            
	
              
                5.1

              

            	
              
                Tenant’s
                  Indemnification,

              

            	
              
                21

              

            
	 	
              
                5.1.1
                  Notice of Claim

              

            	
              
                21

              

            
	 	
              
                5.1.2
                  Survival of Covenants

              

            	
              
                22

              

            


    


    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

    


    
      	
              
                SECTION

              

            	
              
                PAGE

              

            
	 	 	 
	 	 	 
	 	
              
                5.1.3
                  Reimbursement of Expenses

              

            	
              
                22

              

            
	
              
                5.2

              

            	
              
                Environmental
                  Indemnity; Audits

              

            	
              
                22

              

            
	
              
                5.3

              

            	
              
                Limitation
                  of Landlord’s Liability

              

            	
              
                22

              

            
	
              
                ARTICLE
                  6: USE AND ACCEPTANCE OF PREMISES

              

            	
              
                23

              

            
	
              
                6.1

              

            	
              
                Use
                  of Leased Property

              

            	
              
                23

              

            
	
              
                6.2

              

            	
              
                Acceptance
                  of Leased Property

              

            	
              
                23

              

            
	
              
                6.3

              

            	
              
                Conditions
                  of Use and Occupancy

              

            	
              
                23

              

            
	
              
                ARTICLE
                  7: MAINTENANCE AND MECHANICS’ LIENS

              

            	
              
                24

              

            
	
              
                7.1

              

            	
              
                Maintenance

              

            	
              
                24

              

            
	
              
                7.2

              

            	
              
                Required
                  Alterations

              

            	
              
                24

              

            
	
              
                7.3

              

            	
              
                Mechanic’s
                  Liens

              

            	
              
                24

              

            
	
              
                7.4

              

            	
              
                Replacements
                  of Fixtures and Landlord’s Personal Property

              

            	
              
                25

              

            
	
              
                ARTICLE
                  8:DEFAULTS AND REMEDIES

              

            	
              
                25

              

            
	
              
                8.1

              

            	
              
                Events
                  of Default

              

            	
              
                25

              

            
	
              
                8.2

              

            	
              
                Remedies

              

            	
              
                27

              

            
	
              
                8.3

              

            	
              
                Right
                  of Setoff

              

            	
              
                30

              

            
	
              
                8.4

              

            	
              
                Performance
                  of Tenant’s Covenants

              

            	
              
                30

              

            
	
              
                8.5

              

            	
              
                Late
                  Payment Charge

              

            	
              
                30

              

            
	
              
                8.6

              

            	
              
                Default
                  Rent

              

            	
              
                31

              

            
	
              
                8.7

              

            	
              
                Attorneys’
                  Fees

              

            	
              
                31

              

            
	
              
                8.8

              

            	
              
                Escrows
                  and Application of Payments

              

            	
              
                31

              

            
	
              
                8.9

              

            	
              
                Remedies
                  Cumulative

              

            	
              
                31

              

            
	
              
                8.10

              

            	
              
                Waivers

              

            	
              
                31

              

            
	
              
                ARTICLE
                  9:DAMAGE AND DESTRUCTION

              

            	
              
                32

              

            
	
              
                9.1

              

            	
              
                Notice
                  of Casualty

              

            	
              
                32

              

            
	
              
                9.2

              

            	
              
                Substantial
                  Destruction

              

            	
              
                32

              

            
	
              
                9.3

              

            	
              
                Partial
                  Destruction

              

            	
              
                33

              

            
	
              
                9.4

              

            	
              
                Restoration

              

            	
              
                33

              

            
	
              
                9.5

              

            	
              
                Insufficient
                  Proceeds

              

            	
              
                34

              

            
	
              
                9.6

              

            	
              
                Not
                  Trust Funds

              

            	
              
                34

              

            
	
              
                9.7

              

            	
              
                Landlord’s
                  Inspection

              

            	
              
                34

              

            
	
              
                9.8

              

            	
              
                Landlord’s
                  Costs

              

            	
              
                35

              

            
	
              
                9.9

              

            	
              
                No
                  Rent Abatement

              

            	
              
                35

              

            
	
              
                ARTICLE
                  10.3: : CONDEMNATION

              

            	
              
                35

              

            
	
              
                10.1

              

            	
              
                Total
                  Taking

              

            	
              
                35

              

            
	
              
                10.2

              

            	
              
                Partial
                  Taking

              

            	
              
                35

              

            
	
              
                10.3

              

            	
              
                Condemnation
                  Proceeds Not Trust Funds

              

            	
              
                36

              

            
	
              
                ARTICLE
                  11 : TENANT’S PROPERTY

              

            	
              
                36

              

            
	
              
                11.1

              

            	
              
                Tenant’s
                  Property

              

            	
              
                36

              

            
	
              
                11.2

              

            	
              
                Requirements
                  for Tenant’s Property

              

            	
              
                36

              

            


    


    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    


    
      	
              
                ARTICLE
                  12: RENEWAL OPTIONS

              

            	
              
                37

              

            
	
              
                12.1

              

            	
              
                Renewal
                  Options

              

            	
              
                37

              

            
	
              
                12.2

              

            	
              
                Effect
                  of Renewal

              

            	
              
                37

              

            
	
              
                ARTICLE
                  13: OPTION TO PURCHASE

              

            	
              
                38

              

            
	
              
                13.1

              

            	
              
                Option
                  to Purchase

              

            	
              
                38

              

            
	
              
                13.2

              

            	
              
                Option
                  Price

              

            	
              
                39

              

            
	
              
                13.3

              

            	
              
                Fair
                  Market Value

              

            	
              
                39

              

            
	
              
                13.4

              

            	
              
                Closing

              

            	
              
                40

              

            
	
              
                13.5

              

            	
              
                Failure
                  to Close Option

              

            	
              
                41

              

            
	
              
                13.6

              

            	
              
                Failure
                  to Exercise Option to Purchase and Renewal Option

              

            	
              
                41

              

            
	
              
                13.7

              

            	
              
                Early
                  Option to Purchase Dayton Facility

              

            	
              
                41

              

            
	
              
                ARTICLE
                  14:NEGATIVE COVENANTS

              

            	
              
                41

              

            
	
              
                14.1

              

            	
              
                No
                  Debt

              

            	
              
                42

              

            
	
              
                14.2

              

            	
              
                No
                  Liens

              

            	
              
                42

              

            
	
              
                14.3

              

            	
              
                No
                  Guaranties

              

            	
              
                42

              

            
	
              
                14.4

              

            	
              
                No
                  Transfer

              

            	
              
                42

              

            
	
              
                14.5

              

            	
              
                No
                  Dissolution

              

            	
              
                42

              

            
	
              
                14.6

              

            	
              
                No
                  Change in Management or Operation

              

            	
              
                42

              

            
	
              
                14.7

              

            	
              
                No
                  Investments

              

            	
              
                42

              

            
	
              
                14.8

              

            	
              
                Contracts

              

            	
              
                42

              

            
	
              
                14.9

              

            	
              
                Subordination
                  of Payments to Affiliates

              

            	
              
                42

              

            
	
              
                14.10

              

            	
              
                Change
                  of Location or Name

              

            	
              
                42

              

            
	
              
                ARTICLE
                  15:AFFIRMATIVE COVENANTS

              

            	
              
                43

              

            
	
              
                15.1

              

            	
              
                Perform
                  Obligations

              

            	
              
                43

              

            
	
              
                15.2

              

            	
              
                Proceedings
                  to Enjoin or Prevent Construction

              

            	
              
                43

              

            
	
              
                15.3

              

            	
              
                Documents
                  and Information

              

            	
              
                43

              

            
	 	
              
                15.3.1
                  Furnish Documents

              

            	
              
                43

              

            
	 	
              
                15.3.2
                  Furnish Information

              

            	
              
                43

              

            
	 	
              
                15.3.3
                  Further Assurances and Information

              

            	
              
                44

              

            
	 	
              
                15.3.4
                  Material Communications

              

            	
              
                44

              

            
	 	
              
                15.3.5
                  Requirements for Financial Statements

              

            	
              
                44

              

            
	
              
                15.4

              

            	
              
                Compliance
                  With Laws

              

            	
              
                44

              

            
	
              
                15.5

              

            	
              
                Broker’s
                  Commission

              

            	
              
                44

              

            
	
              
                15.6

              

            	
              
                Existence
                  and Change in Ownership

              

            	
              
                45

              

            
	
              
                15.7

              

            	
              
                Financial
                  Covenants

              

            	
              
                45

              

            
	 	
              
                15.7.1    Definitions

              

            	
              
                45

              

            
	 	
              
                15.7.2    Coverage
                  Ratio

              

            	
              
                46

              

            
	 	
              
                15.7.3    Net
                  Worth

              

            	
              
                46

              

            
	 	
              
                15.7.4    Accounts
                  Payable Days Sales Outstanding

              

            	
              
                46

              

            
	
              
                15.8

              

            	
              
                Facility
                  Licensure and Certification

              

            	
              
                46

              

            
	
              
                15.9

              

            	
              
                Transfer
                  of License and Facility Operations

              

            	
              
                46

              

            
	 	
              
                15.9.1    Licensure

              

            	
              
                46

              

            
	 	
              
                15.9.2    Facility
                  Operations

              

            	
              
                46

              

            
	
              
                15.10

              

            	
              
                Bed
                  Operating Rights

              

            	
              
                47

              

            


    


    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

    


    
      	
              
                SECTION

              

            	
              
                PAGE

              

            
	 	 	 
	 	 	 
	
              
                15.11

              

            	
              
                Power
                  of Attorney

              

            	
              
                47

              

            
	
              
                ARTICLE
                  16: ALTERATIONS, CAPITAL IMPROVEMENTS, AND
                  SIGNS

              

            	
              
                47

              

            
	
              
                16.1

              

            	
              
                Prohibition
                  on Alterations and Improvements

              

            	
              
                47

              

            
	
              
                16.2

              

            	
              
                Approval
                  of Alterations

              

            	
              
                47

              

            
	
              
                16.3

              

            	
              
                Permitted
                  Alterations

              

            	
              
                48

              

            
	
              
                16.4

              

            	
              
                Requirements
                  for Permitted Alterations

              

            	
              
                48

              

            
	
              
                16.5

              

            	
              
                Ownership
                  and Removal of Permitted Alterations

              

            	
              
                49

              

            
	
              
                16.6

              

            	
              
                Minimum
                  Qualified Capital Expenditures

              

            	
              
                49

              

            
	
              
                16.7

              

            	
              
                Signs

              

            	
              
                49

              

            
	
              
                ARTICLE
                  17: RESERVED

              

            	
              
                49

              

            
	
              
                ARTICLE
                  18:ASSIGNMENT AND SALE OF LEASED
                  PROPERTY

              

            	
              
                49

              

            
	
              
                18.1

              

            	
              
                Prohibition
                  on Assignment and Subletting

              

            	
              
                49

              

            
	
              
                18.2

              

            	
              
                Requests
                  for Landlord’s Consent to Assignment, Sublease or Management
                  Agreement

              

            	
              
                50

              

            
	
              
                18.3

              

            	
              
                Agreements
                  with Residents

              

            	
              
                51

              

            
	
              
                18.4

              

            	
              
                Sale
                  of Leased Property

              

            	
              
                51

              

            
	
              
                18.5

              

            	
              
                Assignment
                  by Landlord

              

            	
              
                51

              

            
	
              
                ARTICLE
                  19: HOLDOVER AND SURRENDER

              

            	
              
                51

              

            
	
              
                19.1

              

            	
              
                Holding
                  Over

              

            	
              
                51

              

            
	
              
                19.2

              

            	
              
                Surrender

              

            	
              
                52

              

            
	
              
                ARTICLE
                  20: LETTER OF CREDIT

              

            	
              
                52

              

            
	
              
                20.1

              

            	
              
                Terms
                  of Letter of Credit

              

            	
              
                52

              

            
	
              
                20.2

              

            	
              
                Replacement
                  Letter of Credit

              

            	
              
                52

              

            
	
              
                20.3

              

            	
              
                Draws.

              

            	
              
                53

              

            
	
              
                20.4

              

            	
              
                Partial
                  Draws

              

            	
              
                53

              

            
	
              
                20.5

              

            	
              
                Substitute
                  Letter of Credit

              

            	
              
                53

              

            
	
              
                20.6

              

            	
              
                Retention
                  of Letter of Credit

              

            	
              
                53

              

            
	
              
                ARTICLE
                  21: : QUIET ENJOYMENT, SUBORDINATION, ATTORNMENT AND ESTOPPEL
                  CERTIFICATES

              

            	
              
                54

              

            
	
              
                21.1

              

            	
              
                Quiet
                  Enjoyment

              

            	
              
                54

              

            
	
              
                21.2

              

            	
              
                Subordination

              

            	
              
                54

              

            
	
              
                21.3

              

            	
              
                Attornment.....

              

            	
              
                54

              

            
	
              
                21.4

              

            	
              
                Estoppel
                  Certificates

              

            	
              
                55

              

            
	
              
                ARTICLE
                  22: : CONTINGENT PAYMENTS

              

            	
              
                55

              

            
	
              
                22.1

              

            	
              
                Contingent
                  Payments

              

            	
              
                55

              

            
	
              
                22.2

              

            	
              
                Contingent
                  Payments for Capital Expenditures

              

            	
              
                55

              

            
	 	
              
                22.2.1    Conditions

              

            	
              
                55

              

            
	 	
              
                22.2.2    No
                  Commitment

              

            	
              
                55

              

            
	
              
                22.3

              

            	
              
                Contingent
                  Payments for Project Improvements

              

            	
              
                56

              

            
	 	
              
                22.3.1    Conditions

              

            	
              
                56

              

            


    


    
      
        
        

      

      
        v

        
          

        

      

      
        
        

      

    

    


    
      	 	
              
                22.3.2    No
                  Commitment

              

            	
              
                56

              

            
	
              
                ARTICLE
                  23: SECURITY INTEREST

              

            	
              
                56

              

            
	
              
                23.1

              

            	
              
                Collateral

              

            	
              
                56

              

            
	
              
                23.2

              

            	
              
                Additional
                  Documents

              

            	
              
                57

              

            
	
              
                23.3

              

            	
              
                Notice
                  of Sale

              

            	
              
                57

              

            
	
              
                23.4

              

            	
              
                Recharacterization

              

            	
              
                57

              

            
	
              
                23.5

              

            	
              
                Confession
                  of Judgment

              

            	
              
                57

              

            
	
              
                23.6

              

            	
              
                Additional
                  Remedies Upon Default.,

              

            	
              
                57

              

            
	
              
                23.7

              

            	
              
                Waiver

              

            	
              
                58

              

            
	
              
                23.8

              

            	
              
                Appointment
                  of Receiver or Keeper

              

            	
              
                58

              

            
	
              
                ARTICLE
                  24: MISCELLANEOUS

              

            	
              
                58

              

            
	
              
                24.1

              

            	
              
                Notices

              

            	
              
                58

              

            
	
              
                24.2

              

            	
              
                Advertisement
                  of Leased Property

              

            	
              
                58

              

            
	
              
                24.3

              

            	
              
                Entire
                  Agreement

              

            	
              
                59

              

            
	
              
                24.4

              

            	
              
                Severability

              

            	
              
                59

              

            
	
              
                24.5

              

            	
              
                Captions
                  and Headings

              

            	
              
                59

              

            
	
              
                24.6

              

            	
              
                Governing
                  Law

              

            	
              
                59

              

            
	
              
                24.7

              

            	
              
                Memorandum
                  of Lease

              

            	
              
                59

              

            
	
              
                24.8

              

            	
              
                Waiver

              

            	
              
                59

              

            
	
              
                24.9

              

            	
              
                Binding
                  Effect

              

            	
              
                59

              

            
	
              
                24.10

              

            	
              
                No
                  Offer

              

            	
              
                59

              

            
	
              
                24.11

              

            	
              
                Modification

              

            	
              
                60

              

            
	
              
                24.12

              

            	
              
                Landlord’s
                  Modification

              

            	
              
                60

              

            
	
              
                24.13

              

            	
              
                No
                  Merger

              

            	
              
                60

              

            
	
              
                24.14

              

            	
              
                Laches

              

            	
              
                60

              

            
	
              
                24.15

              

            	
              
                Limitation
                  on Tenant’s Recourse

              

            	
              
                60

              

            
	
              
                24.16

              

            	
              
                Construction
                  of Lease

              

            	
              
                60

              

            
	
              
                24.17

              

            	
              
                Counterparts

              

            	
              
                61

              

            
	
              
                24.18

              

            	
              
                Landlord’s
                  Consent

              

            	
              
                61

              

            
	
              
                24.19

              

            	
              
                Custody
                  of Escrow Funds

              

            	
              
                61

              

            
	
              
                24.20

              

            	
              
                Landlord’s
                  Status as a REIT

              

            	
              
                61

              

            
	
              
                24.21

              

            	
              
                Exhibits

              

            	
              
                61

              

            
	
              
                24.22

              

            	
              
                Waiver
                  of Jury Trial

              

            	
              
                61

              

            
	
              
                24.23

              

            	
              
                Consent
                  to Jurisdiction

              

            	
              
                61

              

            
	
              
                24.24

              

            	
              
                Attorney’s
                  Fees and Expenses

              

            	
              
                62

              

            
	
              
                24.25

              

            	
              
                Survival

              

            	
              
                62

              

            
	
              
                24.26

              

            	
              
                Time

              

            	
              
                62

              

            
	
              
                24.27

              

            	
              
                Subtenant

              

            	
              
                62

              

            


    

     

    
      
        
        

      

      
        vi

        
          

        

      

      
        
        

      

    

    


    
      	
              
                SECTION

              

            	
              
                PAGE

              

            


    

    


    
      	 	 
	
              
                SCHEDULE
                  1:

              

            	
              
                INITIAL
                  RENT SCHEDULE

              

            
	
              
                EXHIBIT
                  A:

              

            	
              
                LEGAL
                  DESCRIPTIONS

              

            
	
              
                EXHIBIT
                  B:

              

            	
              
                PERMITTED
                  EXCEPTIONS

              

            
	
              
                EXHIBIT
                  C:

              

            	
              
                FACILITY
                  INFORMATION

              

            
	
              
                EXHIBIT
                  D:

              

            	
              
                WIRE
                  TRANSFER
                  INSTRUCTIONS

              

            
	
              
                EXHIBIT
                  E:

              

            	
              
                DOCUMENTS
                  TO BE
                  DELIVERED

              

            
	
              
                EXHIBIT
                  F:

              

            	
              
                FINANCIAL
                  CERTIFICATION

              

            
	
              
                EXHIBIT
                  G:

              

            	
              
                ANNUAL
                  CAPITAL EXPENDITURE
                  CERTIFICATE

              

            
	
              
                EXHIBIT
                  H:

              

            	
              
                CONTINGENT
                  PAYMENT
                  REQUEST

              

            
	
              
                EXHIBIT
                  I:

              

            	
              
                COMMITMENT

              

            


    

     

    
      
        
        

      

      
        vii

        
          

        

      

      
        
        

      

    

     

    AMENDED
      AND RESTATED MASTER LEASE AGREEMENT

     

     

    This
      Amended and Restated Master Lease Agreement ("Lease") is made effective as
      of
      March 1, 2007 (the "Effective Date") among HEALTH CARE REIT, INC.,
a corporation organized under the laws of the State of Delaware
      ("HCN"
      and a "Landlord" as further defined in §1.4 below), having its principal office
      located at One SeaGate, Suite 1500, P. 0. Box 1475, Toledo, Ohio 43603-1475,
      HCRI LOUISIANA PROPERTIES, L.P., a limited partnership
      organized under the laws of the State of Delaware ("HCN-LA" and a "Landlord"
      as
      further defined in §1.4 below), having its principal office located at One
      SeaGate, Suite 1500, P. 0. Box 1475, Toledo, Ohio 43603-1475, and SENIOR
      LIVING PROPERTIES, LLC, a limited liability company organized under the
      laws of the State of Delaware ("Tenant"), having its chief executive office
      located at 3000 Executive Parkway, Suite 530, San Ramon, California
      94583.

     

    RECITALS

     

    A.            HCN-LA
      entered into a Lease Agreement dated as of July 29, 1998, as amended ("Original
      Lease") with Summerville at Kenner, L.L.C., a Delaware limited liability company
      ("Kenner") for a property located in Kenner, Louisiana, as more particularly
      described therein ("Kenner Property"). As of the Effective Date, Kenner shall
      assign its interest in the Original Lease to Tenant pursuant to an Assignment
      of
      Lease of even date herewith, and Kenner shall enter into a new sublease with
      Tenant for the Kenner Property.

     

    B.            In
      addition, Tenant has agreed to assume the operation of facilities located in
      Westerville, Ohio and Dayton, Ohio that are owned by HCN and were previously
      leased to another tenant (collectively called "Additional
      Properties").

     

    C.            Landlord
      and Tenant desire to amend and restate the Original Lease to modify certain
      terms and conditions, to include the Additional Properties, and to add HCN
      as a
      Landlord. This Lease amends, restates, and replaces the Original Lease in
      its_entirety.

     

    D.            Landlord
      desires to lease the Leased Property to Tenant and Tenant desires to lease
      the
      Leased Property from Landlord upon the terms set forth in this
      Lease.

     

    NOW,
      THEREFORE, Landlord and Tenant agree as follows: 

     

    ARTICLE
      1: LEASED PROPERTY, TERM AND DEFINITIONS

     

    1.1
      Leased Property. Landlord hereby leases to Tenant and Tenant hereby
      leases from Landlord the Leased Property, subject, however, to the Permitted
      Exceptions and subject to the terms and conditions of this Lease.

     

    1.2
      Indivisible Lease. This Lease constitutes one indivisible lease of the
      entire Leased Property. The Leased Property constitutes one economic unit and
      the Base Rent and all other provisions have been negotiated and agreed to based
      on a lease of all of the Leased Property as a single,
      composite,
      inseparable transaction. This Lease would not have been made on these terms
      if
      it was not a single indivisible lease. Except as expressly provided herein
      for
      specific, isolated purposes (and then only to the extent expressly otherwise
      stated), all provisions of
      this
      Lease shall apply equally and uniformly to all the Leased Property as one unit
      and any Event of Default under this Lease is an Event of Default as to the
      entire Leased Property. The parties intend that the provisions of this Lease
      shall at all times be construed, interpreted and applied so as to carry out
      their mutual objective to create a single indivisible lease of all the Leased
      Property and, in particular but without limitation, that for purposes of any
      assumption, rejection or assignment of this Lease under the Bankruptcy Code,
      this is
      one indivisible and nonseverable lease and executory contract
      dealing with one legal and economic unit which must be assumed, rejected or
      assigned as
      a whole with respect to all (and only all) the Leased Property
      covered hereby. The parties agree that the existence of more than one Landlord
      under this Lease does not affect the indivisible, nonseverable nature of this
      Lease. The parties may amend this Lease from time to time to include one or
      more
      additional Facility Properties as part of the Leased Property and such future
      addition to the Leased Property shall not in any way change the indivisible
      and
      nonseverable nature of this Lease and all of the foregoing provisions shall
      continue to apply in full force.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     1.3
      Term. The initial term ("Initial Term") of this Lease commences on the Effective
      Date and expires at 12:00 Midnight Eastern Time on February 28, 2018 (the
      "Expiration Date"); provided, however, that [i] Tenant has one or more options
      to renew the Lease pursuant to Article 12, and [ii] that any addition to the
      Leased Property pursuant to amendment of this Lease shall extend the Initial
      Term so that the Initial Term shall expire on the day before the eleventh
      anniversary of the Amendment Commencement Date as set forth in such amendment.
      In addition, if Landlord or any Landlord Affiliate enters into a lease
      transaction with Tenant or any Affiliate, the Initial Term shall automatically
      be extended to be coterminous with the most recently closed lease
      transaction.

     

     1.4
      Definitions. Except as otherwise expressly provided, [i] the terms
      defined in this section have the meanings assigned to them in this section
      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 of the time applicable; and [iii]
      the words "herein", "hereof' and "hereunder" and similar words refer to this
      Lease as a whole and not to any particular section.

     

    "Accounts
      Payable Days Sales Outstanding" has the meaning set forth in §
15.7.1.

     

    "Acquisition
      Payment" means any payment by Landlord to acquire Leased Property.

     

    "Actual
      Rate of Return" means, as of any Rent Adjustment Date, the Initial Rate of
      Return plus the sum of the annual Increaser Rates before that Rent Adjustment
      Date.

     

    "ADA"
      means the federal statute
      entitled Americans with Disabilities Act, 42 U.S.C. §12101, et
      seq.

     

    "Additional
      Properties" has the meaning set forth in Recital A. "Additional Rent" has the
      meaning set forth in §2.3.

    "Adjusted
      Accounts Payable" has the meaning set forth in §15.7.1.


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    "Affiliate"
      means any person, corporation, partnership, limited liability company, trust,
      or
      other legal entity that, directly or indirectly, controls, or is controlled
      by,
      or is under common control with Tenant or Guarantor. "Control" (and the
      correlative meanings of the terms "controlled by" and "under common control
      with") means the possession, directly or indirectly, of the power to direct
      or
      cause the direction of the management and policies of such entity. "Affiliate"
      includes, without limitation, each Guarantor.

     

    "Affiliate
      Facility" means each facility that is leased under an Affiliate Lease, whether
      now or hereafter existing.

     

    "Affiliate
      Lease" means each lease now or hereafter made between Landlord or any Landlord
      Affiliate and Tenant or any Affiliate (except this Lease), as amended, modified,
      extended or renewed from time to time.

     

    "Affiliate
      Tenant" means each tenant under an Affiliate Lease.

     

    "Amendment
      Commencement Date" means the Amendment Effective Date if such date is the first
      day of a month, and if it is not, the first day of the first month following
      the
      Amendment Effective Date.

     

    "Amendment
      Effective Date" means the Amendment Effective Date set forth in the introductory
      paragraph of an amendment to this Lease.

     

    "Annual
      Budget" means such entity's projection of its financial statement for the next
      fiscal year (or the 12-month rolling forward period, if applicable), which
      shall
      include the balance sheet, statement of income, statement of cash flows,
      statement of shareholders' equity and statement of capital expenditures for
      the
      applicable period.

     

    "Annual
      Facility Budget" means Tenant's projection of the Facility Financial Statement
      for the next fiscal year (or the 12-month rolling forward period, if
      applicable).

     

    "Annual
      Financial Statements" means [1] for Tenant and Subtenant, an unaudited balance
      sheet and statement of income for the most recent fiscal year on an individual
      facility and consolidated basis; [ii] for each Facility, an unaudited Facility
      Financial Statement for the most recent fiscal year; and [iii] for Company,
      an
      audited balance sheet and statement of income for the most recent fiscal
      year.

     

    "Annual
      Rate Shortfall" means the difference between [i] the Target Rate of Return
      and
      [ii] the Actual Rate of Return.

     

    "Annual
      Rent Increase" means, as of any Rent Adjustment Date, the product of [i] the
      Investment Amount as of the Rent Adjustment Date times [ii] the applicable
      Increaser Rate; provided, however, that for any Lease Year in which the
      Increaser Rate is .27%, the Annual Rent Increase means the foregoing amount
      plus
      the product of [a] the Investment Amount as of the Rent Adjustment Date times
      [ii] the applicable Rate Shortfall up to the amount of the CPI Rate Change
      as of
      the Rent Adjustment Date. In no event will the Annual Rent Increase be
      negative.

     

    "Average
      Quarterly Accounts Payable" has the meaning set forth in §
15.7.1.


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    "Bankruptcy
      Code" means the United States Bankruptcy Code set forth in 11 U.S.C. §101, et seq., as amended
      from time to time.

     

    "Base
      Rent" has the meaning set forth in §2.1, as increased from time to time pursuant
      to §2.2.

     

    "Business
      Day" means any day other than a Saturday, Sunday, or national

    holiday.

     

    "CERCLA"
      means the Comprehensive Environmental Response, Compensation and Liability
      Act
      of 1980, as amended from time to time.

     

    "Closing"
      means the closing of the lease of the Leased Property to Tenant. "Collateral"
      has the meaning set forth in §23.1.

    "Commencement
      Date" means the Effective Date if such date is the first day of a month, and
      if
      it is not, the first day of the first month following the Effective
      Date.

     

    "Commitment"
      means the Summerville Term Sheet dated February 15, 2007, a copy of which is
      attached as Exhibit I.

     

    "Company"
      means Summerville Senior Living, Inc., a corporation organized under the laws
      of
      the State of Delaware.

     

    "Contingent
      Payment" means any payment by Landlord (excluding Acquisition Payments) made
      pursuant to a Contingent Payment Request from Tenant and the applicable terms
      of
      Article 22.

     

    "Contingent
      Payment Request" means Tenant's written request for a Contingent Payment on
      the
      form attached as
Exhibit H.

     

    "CPI"
      means the Consumer Price Index for Urban Wage Earners and Clerical Workers,
      U.S.
      Cities Average, All Items (1982-84 = 100) published by the Bureau of Labor
      Statistics of the U.S. Department of Labor; provided that if compilation of
      the
      CPI in its present form and calculated on its present basis is discontinued
      or
      transferred to any other governmental department or bureau, then the index
      most
      nearly the same as the CPI published by the Bureau of Labor Statistics shall
      be
      used. If there is no such similar index, a substitute index which is then
      generally recognized as being similar to the CPI shall be used, such substitute
      index to be reasonably selected by Landlord.

     

    "CPI
      Change" shall be determined by dividing [i] the most recently available CPI
      as
      of the applicable Rent Adjustment Date minus the CPI used to calculate the
      Increaser Rate for the preceding Rent Adjustment Date by [ii] the CPI used
      for
      the preceding Rent Adjustment Date. For the second Lease Year, the Commencement
      Date shall serve as the preceding Rent Adjustment Date.


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    "CPI
      Rate
      Change" means an amount equal to the CPI Change divided by 10 and stated as
      a
      percentage. For example, if the CPI Change is .02, the CPI Rate Change is .20%
      (.02 divided by 10 = .002 = .20%).

     

    "Daily
      Non-Payroll Operating Expenses" has the meaning set forth in §15.7.1. "Default
      Rent" has the meaning set forth in §8.6.

    "Disbursing
      Agreement" means any Disbursing Agreement between Landlord and Tenant setting
      forth the terms and conditions pursuant to which Landlord shall make Contingent
      Payments to Tenant for certain Project Improvements and any amendments thereto
      or substitutions and replacements therefor.

     

    "Early
      Option" has the meaning set forth in § 13.7. "Effective Date" means the date of
      this Lease.

    "Environmental
      Laws" means all federal, state, and local laws, ordinances and policies the
      purpose of which is to protect human health and the environment, as amended from
      time to
      time, including, but not limited to, [i] CERCLA; [ii] the Resource Conservation
      and Recovery Act; [iii] the Hazardous Materials Transportation Act; [iv] the
      Clean Air Act; [v] Clean Water Act; [vi] the Toxic Substances Control Act;
      [vii]
      the Occupational Safety and Health Act; [viii] the Safe Drinking Water Act;
      and
      [ix] analogous state laws and regulations.

     

    "Event
      of
      Default" has the meaning set forth in §8.1. "Expiration Date" has the meaning
      set forth in § 1.3.

    "Facility"
      means each facility located on a portion of the Land, including the Facility
      Property associated with such Facility. References in this Lease to "the
      Facility" shall mean each Facility individually unless expressly stated
      otherwise.

     

    "Facility
      Financial Statement" means a financial statement for each Facility which shall
      include the balance sheet, statement of income, statement of cash flows,
      statement of shareholders' equity, occupancy census data (including payor mix),
      statement of capital expenditures and a comparison of the actual financial
      data
      versus the Annual Facility Budget for the applicable period.

     

    "Facility
      Name" means the name under which a Facility has done business during the Term.
      The Facility Name in use by each Facility on the Effective Date is set forth
      on
      the attached Exhibit C.

     

    "Facility
      Property" means the portion of the Land on which a Facility is located, the
      legal description of which is set forth beneath the applicable Facility Name
      on
      Exhibit A, the Improvements on such portion of the Land, the Related Rights
      with
      respect to such portion of the Land, and Landlord's Personal Property with
      respect to such Facility.

     

    "Facility
      State" means the State in which a respective Facility is
      located.


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    "Facility
      States" means, collectively, the States in which the Leased Property is
      located.

     

    "Facility
      Uses" means the uses relating to the operation of a Facility as a facility
      of
      the type and operating the number of beds and units set forth on Exhibit C
      with
      respect to such Facility.

     

    "Fair
      Market Value" has the meaning set forth in §13.3.

     

    "Fixtures"
      means all permanently affixed equipment, machinery, fixtures and other items
      of
      real and/or personal property (excluding Landlord's 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
      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, built-in oxygen and vacuum systems, towers and other
      devices for the transmission of radio, television and other signals, 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.

     

    "Government
      Authorizations" means all permits, licenses, approvals, consents, and
      authorizations required to comply with all Legal Requirements, including, but
      not limited to, [i] zoning permits, variances, exceptions, special use permits,
      conditional use permits, and consents; [ii] the permits, licenses, provider
      agreements and approvals required for licensure and operation of each Facility
      in accordance with its respective Facility Uses and certified as a provider
      under the federal Medicare and state Medicaid programs to the extent
      applicable;

    [iii] 
      environmental, ecological, coastal, wetlands, air, and water permits, licenses,
      and consents;

    [iv] 
      curb cut, subdivision, land use, and planning permits, licenses, approvals
      and
      consents;

    [v]  
      building, sign, fire, health, and safety permits, licenses, approvals, and
      consents; and

    [vi] 
      architectural reviews, approvals, and consents required under restrictive
      covenants.

     

    "Guarantor"
      means Company and Subtenant, individually and collectively.

     

    "Guaranty"
      means each Unconditional and Continuing Lease Guaranty entered into by a
      Guarantor to guarantee payment and performance of the Obligor Group Obligations
      and any amendments thereto or substitutions or replacements
      therefor.

     

    "Hazardous
      Materials" means any substance [i] the presence of which poses a hazard to
      the
      health or safety of persons on or about the Land, including, but not limited
      to,
      asbestos containing materials; [ii] which requires removal or remediation under
      any Environmental Law, including, without limitation, any substance which is
      toxic, explosive, flammable, radioactive, or otherwise hazardous; or [iii]
      which
      is regulated under or classified under any Environmental Law as hazardous or
      toxic, including, but not limited to, any substance within the meaning of
      "hazardous substance", "hazardous material", "hazardous waste", "toxic
      substance", "regulated substance", "solid waste" or "pollutant" as defined in
      any
      Environmental Law.


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    "HCN"
      means Health Care REIT, Inc., a corporation organized under the laws of the
      State of Delaware.

     

    "HCN-LA"
      means HCRI Louisiana Properties, L.P., a limited partnership organized under
      the
      laws of the State of Delaware.

     

    "HIPDB"
      means the Healthcare Integrity and Protection Data Bank maintained by the
      Department of Health and Human Services.

     

    "Impositions"
      has the meaning set forth in §3.2.

     

    "Improvements"
      means all buildings, structures, Fixtures and other improvements of every kind
      on any portion of the Land, including, but not limited to, alleys, sidewalks,
      utility pipes, conduits and lines (on-site and off-site), parking areas and
      roadways appurtenant to such buildings and structures, now or hereafter situated
      upon any portion of the Land.

     

    "Increaser
      Rate" means, as of the applicable Rent Adjustment Date, the lesser of the CPI
      Rate Change and .27%.

     

    "Initial
      Rate of Return" means 10.17%.

     

    "Initial
      Term" has the meaning set forth in § 1.3.

     

    "Investment
      Amount" is an aggregate concept and means the sum of all Landlord Payments
      outstanding at the applicable time. On the Effective Date, the Investment Amount
      is $27,019,834.76.

     

    "Issuer"
      means a financial institution satisfactory to Landlord issuing the Letter of
      Credit and such Issuer's successors and assigns. Any "Issuer" shall have a
      Lace
      Financial Service Rating of "C+" or higher at all times throughout the
      Term.

     

    "Kenner"
      has the meaning set forth in Recital A.

     

    "Kenner
      Property" has the meaning set forth in Recital A.

     

    "Land"
      means the real property described in Exhibit A attached hereto.

     

    "Landlord"
      means HCN and HCN-LA, individually and collectively.

    "Landlord
      Affiliate" means any person, corporation, partnership, limited liability
      company, trust, or other legal entity that, directly or indirectly, controls,
      or
      is controlled by, or is under common control with Landlord. "Control" (and
      the
      correlative meanings of the terms "controlled by" and "under common control
      with") means the possession, directly or indirectly, of the power to direct
      or
      cause the direction of the management and policies of such entity.

    


    "Landlord
      Payment" means any Acquisition Payment or Contingent Payment.

     

    "Landlord's
      Personal Property" means all Personal Property owned by Landlord on the
      Effective Date and located at the Facility, including, without limitation,
      all
      personal property listed on any bills of sale delivered to Landlord in
      connection with the Facility, together with any and all replacements thereof,
      and all Personal Property that pursuant to the terms of this Lease becomes
      the
      property of Landlord during the Term.


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    "LC
      Proceeds" has the meaning set forth in §20.3.

     

    "Lease"
      means this Amended and Restated Master Lease Agreement, as amended from time
      to
      time.

     

    "Lease
      Documents" means this Lease and all documents executed by Landlord and Tenant
      relating to this Lease or the Facility.

     

    "Lease
      Payments" means the sum of the Base Rent payments (as increased from time to
      time) for the applicable period.

     

    "Lease
      Year" means each consecutive period of 365 or 366 days throughout the Term.
      The
      first Lease Year commences on the Commencement Date and expires on the day
      before the first anniversary of the Commencement Date.

     

    "Leased
      Property" means all of the Land, Improvements, Related Rights and Landlord's
      Personal Property.

     

    "Legal
      Requirements" means all laws, regulations, rules, orders, writs, injunctions,
      decrees, certificates, requirements, agreements, conditions of participation
      and
      standards of any federal, state, county, municipal or other governmental entity,
      administrative agency, insurance underwriting board, architectural control
      board, private third-party payor, accreditation organization, or any restrictive
      covenants applicable to the development, construction, condition and operation
      of the Facility by Tenant, including, but not limited to, [i] zoning,
      building, fire, health, safety, sign, and subdivision regulations and codes;
      [ii] certificate
      of need laws (if applicable); [iii] licensure to operate as each Facility in
      accordance with its respective Facility Uses; [iv] Medicare and Medicaid
      certification—requirements (if applicable); [v] the ADA; [vi] any Environmental
      Laws; and [vii] requirements, conditions and standards for participation in
      third-party payor insurance programs.

     

    "Letter
      of Credit" means an irrevocable and transferable Letter of Credit in an amount
      required by the Commitment, issued by Issuer in favor of Landlord as security
      for the Lease and in form acceptable to Landlord, and any amendments thereto
      or
      replacements or substitutions therefor. Since no Letter of Credit is required
      under the Commitment, all references and provisions relating to "Letter of
      Credit" shall have no force or effect, including without limitation, the
      provisions of Article 20.

     

    "Loan"
      means the term loan extended to Tenant by HCN on this date in the
      Loan

    Amount.

     

    "Loan
      Amount" means $12,864,874.24.

     

    "Louisiana
      Leased Property" means any Leased Property situated within the State of
      Louisiana.


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    "Manager"
      means Summerville Management, LLC, a limited liability company organized under
      the laws of the State of Delaware.

     

    "Material
      Obligation" means [i] any indebtedness secured by a security interest in the
      accounts receivable of Tenant, Subtenant or Guarantor or any Personal Property;
      [ii] any indebtedness or lease of Tenant, Subtenant or Guarantor or of any
      other
      party that has been guaranteed by Tenant, Subtenant or Guarantor that has an
      outstanding principal balance or obligation in an amount not less than
      $500,000.00; [iii] any obligation to or agreement with the Issuer relating
      to
      the Letter of Credit, if any; and [iv] any sublease of the Leased
      Property.

     

    "Net
      Operating Income" means the pre-tax net income of Tenant or Subtenant plus
      [i]
      the amount of the provision for depreciation and amortization; plus [ii] the
      amount of the provision for interest and lease payments, if any; plus [iii]
      the
      amount of the provision for Rent payments; plus [iv] the amount of the provision
      for management fees.

     

    "Net
      Worth" has the meaning set forth in § 15.7.1.

     

    "Non-Payroll
      Operating Expenses" has the meaning set forth in §15.7.1.

     

    "Obligor
      Group Obligations" means all payment and performance obligations of Tenant,
      Subtenant and Guarantor to Landlord or any Landlord Affiliate, including, but
      not limited to, all obligations under this Lease, any loans extended to Tenant,
      Subtenant or Guarantor by Landlord or any Landlord Affiliate and all documents
      executed by Tenant, Subtenant or Guarantor in connection with this Lease, any
      loan or any other obligation.

     

    "Option
      Price" has the meaning set forth in § 13.2.

     

    "Option
      to Purchase" has the meaning set forth in § 13.1.

     

    "Organization
      State" means the State in which an entity is organized.

     

    "Organizational
      Documents" means [i] for a corporation, its Articles of Incorporation certified
      by the Secretary of State of the Organization State, as amended to date, and
      its
      Bylaws certified by such entity, as amended to date; [ii] for a partnership,
      its
      Partnership Agreement certified by such entity, as amended to date, and the
      Partnership Certificate, certified by the appropriate authority, as amended
      to
      date; and [iii] for a limited liability company, its Articles of Organization
      certified by the Secretary of State of the Organization State, as amended to
      date, and
      its Operating Agreement certified by such entity, as amended to
      date.

     

    "Original
      Lease" has the meaning set forth in Recital A.

     

    "Payment
      Amount" means the amount of any Landlord Payment. The first Landlord Payment
      is
      the Acquisition Payment made on the Effective Date.

     

    "Payment
      Date" means the date on which Landlord makes a Landlord Payment.

     

    "Periodic
      Financial Statements" means [i] for Tenant and Subtenant, an unaudited balance
      sheet and statement of income for the most recent quarter; [ii] for the
      Facility, an unaudited Facility Financial Statement for the most recent month;
      and [iii] for each Guarantor, an unaudited balance sheet and statement of income
      of Guarantor for the most recent quarter.


    
      
        
        

      

      
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    "Permitted
      Exceptions" means all easements, liens, encumbrances, restrictions, agreements
      set forth on Exhibit B attached hereto and such other matters approved in
      writing by Landlord and Tenant in the future, and any sublease of any portion
      of
      the Leased Property made in complete accordance with Article 18.

     

    "Permitted
      Liens" means [i] liens granted to Landlord; [ii] liens customarily incurred
      by
      Tenant or Subtenant in the ordinary course of business for items not delinquent,
      including mechanic's liens and deposits and charges under workers' compensation
      laws; [iii] liens for taxes and assessments not yet due and payable; [iv] any
      lien, charge, or encumbrance which is being contested in good faith pursuant
      to
      this Lease; [v] the Permitted Exceptions; and [vi] purchase money financing
      and
      capitalized equipment leases for the acquisition of personal property provided,
      however, that Landlord obtains a nondisturbance agreement from the purchase
      money lender or equipment lessor in form and substance as may be satisfactory
      to
      Landlord if the original cost of the equipment exceeds $50,000.00.

     

    "Personal
      Property" means all machinery, equipment, furniture, furnishings, movable walls
      or partitions, computers (and all associated software), trade fixtures and
      other
      personal property (but excluding consumable inventory and supplies owned by
      Tenant) used in connection with the Leased Property, together with all
      replacements and alterations thereof and additions thereto, except items, if
      any, included within the definition of Fixtures or Improvements.

     

    "Portfolio
      Cash Flow" has the meaning set forth in §15.7.1. "Portfolio Coverage Ratio" has
      the meaning set forth in § 15.7.1.

    "Pro
      Forma Statement" means a financial forecast for the Facility for the next
      five-year period prepared in accordance with the standards for forecasts
      established by the American Institute of Certified Public
      Accountants.

     

    "Project
      Improvements" means any addition to or major renovation of a Facility for which
      Contingent Payments are made by Landlord pursuant to §22.3.

     

    "Purchase
      Notice" has the meaning set forth in § 13.1.

     

    "Qualified
      Capital Expenditures" means the expenditures capitalized on the books of Tenant
      or Subtenant for any of the following: replacement of furniture, fixtures and
      equipment, including refrigerators, ranges, major appliances, bathroom fixtures,
      doors (exterior and interior), central air conditioning and heating systems
      (including cooling towers, water chilling units, furnaces, boilers and fuel
      storage tanks) and major replacement of siding; major roof replacements,
      including major replacements of gutters, downspouts, eaves and soffits; major
      repairs and replacements of plumbing and sanitary systems; overhaul of elevator
      systems; major repaving, resurfacing and sealcoating of sidewalks, parking
      lots
      and driveways; repainting of entire building exterior; but excluding major
      alterations, renovations, additions and normal maintenance and
      repairs.


    
      
        
        

      

      
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    "Rate
      Shortfall" means, as of the applicable Rent Adjustment Date, a percentage amount
      equal to the aggregate of the Annual Rate Shortfalls, but excluding any Annual
      Rate Shortfall (or portion thereof) that was taken into account for the
      calculation of an Annual Rent Increase for a prior Lease Year.

     

    "Receivables"
      means [i] all of Tenant's or Subtenant's rights to receive payment for providing
      resident care and services as set forth in any accounts, contract rights, and
      instruments, and [ii] those documents, chattel paper, inventory proceeds,
      provider agreements, participation agreements, ledger sheets, files, records,
      computer programs, tapes, and agreements relating to Tenant's or Subtenant's
      rights to receive payment for providing resident care services.

     

    "Related
      Rights" means all easements, rights (including bed operating rights) and
      appurtenances relating to the Land and the Improvements.

     

    "Renewal
      Date" means the first day of each Renewal Term. "Renewal Option" has the meaning
      set forth in § 12.1. "Renewal Term" has the meaning set forth in
§12.1.

    "Rent"
      means Base Rent, Additional Rent and Default Rent.

     

    "Rent
      Adjustment Date" means November 1, 2007 and November 1 of each year

    thereafter.

     

    "Rent
      Schedule" means the schedule issued by Landlord to Tenant showing the Base
      Rent
      to be paid by Tenant pursuant to the terms of this Lease, as such schedule
      is
      amended from time to time by Landlord. The initial Rent Schedule is attached
      to
      this Lease as
Schedule 1
      or will be attached within 5 Business Days following
      Closing if the Rent Schedule cannot be determined until the day of
      Closing.

     

    "Replacement
      Operator" has the meaning set forth in §15.9.1.

     

    "Secured
      Party" has the meaning set forth in §23.1.

    "Subtenant"
      means the entity identified on Exhibit C that subleases the Facility from Tenant
      and is the licensed operator (or is operating through an interim management
      agreement with the licensed operator) of its respective Facility as shown on Exhibit
      C,
      individually and collectively. References in this Lease to "Subtenant" shall
      mean each Subtenant individually and shall relate to such Subtenant's respective
      Facility unless expressly stated otherwise.

     

    "Substitute
      Facility" has the meaning set forth in § 13.7.

     

    "Target
      Rate of Return" means, as of the relevant Rent Adjustment Date or measurement
      date, the Initial Rate of Return plus .27% for each Lease Year after the first
      Lease Year.


    
      
        
        

      

      
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    "Tenant"
      has the meaning set forth in the introductory paragraph of this
      Lease.

     

    "Tenant's
      Property" has the meaning set forth in § 11.1.

    "Term"
      means the Initial Term and each Renewal Term.

     

    "Third-Party
      Sale" has the meaning set forth in §13.7.

     

    1.4.1
      Louisiana Leased Property Definitions. When used in connection with the
      Louisiana Leased Property, the following defined terms shall have the following
      additional meanings:

     

    "Article
      9 of the Uniform Commercial
      Code" shall also be understood to include, without exclusion, Chapter
      9 of the
      Louisiana Commercial Laws, La. R.S. 10:9-101, et
      seq.

     

    "Condemnation"
      includes "expropriation", as
that term
      is used in the Louisiana

    Civil
      Code.

     

    "Easement"
      includes "servitude", as that term is used in the Louisiana Civil
      Code.

     

    "Land"
      whether used in isolation or incorporated into any other defined terms, shall
      also be understood to mean and refer to "immovable property", as that term
      is
      used in the Louisiana Civil Code.

     

    "Landlord"
      whether used in isolation or incorporated into any other defined terms, shall
      also be understood to mean and refer to "lessor", as that term is used in the
      Louisiana Civil Code.

     

    "Liens"
      shall also be understood to mean and refer to "privileges" created under the
      Louisiana Civil Code.

     

    "Personal
      Property" whether used in isolation or incorporated into any other defined
      terms, shall also be understood to mean and refer to "movable property", as
      that
      term is used in the Louisiana Civil Code.

     

    "Tenant"
      whether used in isolation or incorporated into any other defined terms, shall
      also be understood to mean and refer to "lessee", as that term is used in the
      Louisiana Civil Code.

     

    1.5
      Landlord as Agent. With respect to its respective Facility, each Landlord
      appoints HCN as
the agent
      and lawful attorney-in-fact of such Landlord to act for
      such Landlord for all purposes and actions of Landlord under this Lease and
      the
      other Lease Documents. All notices, consents, waivers and all other documents
      and instruments executed by HCN pursuant to the Lease Documents from time to
      time and all other actions of HCN as Landlord under the Lease Documents shall
      be
      binding upon such Landlord. All Rent payable under this Lease shall be paid
      to
      HCN.


    
      
        
        

      

      
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    ARTICLE
      2: RENT

     

    2.1
      Base Rent. Tenant shall pay Landlord base rent ("Base Rent") in advance
      in consecutive monthly installments payable on the first day of each month
      during the Term commencing on the Commencement Date. If the Effective Date
      is
      not the first day of a month, Tenant shall pay Landlord Base Rent on the
      Effective Date for the partial month, i.e., for the period commencing on the
      Effective Date and ending on the day before the Commencement Date. The Base
      Rent
      payable for the first Lease Year is as shown on the Rent Schedule, subject
      to
      adjustment pursuant to §2.2.2 if applicable. For the second and each subsequent
      Lease Year of the Initial Term, the Base Rent shall be paid in accordance with
      the most recent revised Rent Schedule provided by Landlord pursuant to §2.2, as
      applicable. The Base Rent for each Renewal Term will be determined in accordance
      with § 12.2.

     

    2.2
      Base Rent Adjustments.

     

    2.2.1
      Annual Increase of Base Rent. Commencing on the first Rent Adjustment
      Date and on each Rent Adjustment Date thereafter, the annual Base Rent shall
      increase by the Annual Rent Increase. If the CPI Change is zero or negative
      as
      of any Rent Adjustment Date, the Annual Rent Increase for such Lease Year is
      $28,101.24. Notwithstanding the foregoing, the aggregate Base Rent paid by
      Tenant for any particular Lease Year and all preceding Lease Years will not
      exceed the Base Rent that Tenant would have paid if the Landlord had received
      Base Rent based on the Target Rate of Return during the Lease Year in question
      and all preceding Lease Years. As of each Rent Adjustment Date, Landlord shall
      calculate the Annual Rent Increase and shall deliver the revised Rent Schedule
      to Tenant no later than 30 days after the Rent Adjustment Date. Until the
      revised Rent Schedule is delivered to Tenant, Tenant shall pay the monthly
      Base
      Rent with the Annual Rent Increase (paid in equal monthly installments)
      calculated based upon an Increaser Rate of .27%. After the revised Rent Schedule
      is delivered to Tenant, if the actual monthly Base Rent is more or less than
      the
      monthly Base Rent paid pursuant to the preceding sentence, the difference shall
      be added to or deducted from (as applicable) the monthly Base Rent payment
      made
      for the following month. Thereafter, Tenant-shall make monthly Base Rent
      payments in accordance with the revised Rent Schedule.

     

    2.2.2
      Additional Landlord Payments. If Landlord makes a Landlord Payment other
      than the initial Acquisition Payment, the Base Rent will be increased effective
      on the Payment Date based upon the applicable rate of return to Landlord as
      set
      forth in the Commitment. Until Tenant receives a revised Rent Schedule from
      Landlord, Tenant shall for each month [i] continue to make installments of
      Base
      Rent according to the Rent Schedule in effect on the day before the Payment
      Date; and [ii] within 10 days following Landlord's issuance of an invoice,
      pay
      the difference between the installment of Base Rent that Tenant paid to Landlord
      for such month and the installment of Base Rent actually due to Landlord for
      such month as a result of the Landlord Payment. On the first day of the month
      following receipt of the revised Rent Schedule, Tenant shall pay the monthly
      installment of Base Rent specified in the revised Rent Schedule.

     

    2.3
      Additional Rent. In addition to Base Rent, Tenant shall pay all other
      amounts, liabilities, obligations and Impositions which Tenant assumes or agrees
      to pay under this Lease including any fine, penalty, interest, charge and cost
      which may be added for nonpayment or late payment of such items (collectively
      the "Additional Rent").


    
      
        
        

      

      
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    2.4
      Place of Payment of Rent. Tenant shall make all payments of Rent to
      Landlord by electronic wire transfer in accordance with the wiring instructions
      set forth in Exhibit H attached
      hereto,
      subject to change in accordance with other written instructions provided by
      Landlord to Tenant from time to time.

     

    2.5
      Net Lease. This Lease shall be deemed and construed to be an "absolute
      net lease", and Tenant shall pay all Rent and other charges and expenses in
      connection with the Leased Property throughout the Term, without abatement,
      deduction, recoupment or setoff. Landlord 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 nonpayment of the Rent.

     

    2.6
No
      Termination, Abatement, Etc. Except as otherwise specifically provided in
      this Lease, Tenant shall remain bound by this Lease in accordance with its
      terms. Tenant shall not, without the consent of Landlord, modify, surrender
      or
      terminate the Lease, nor seek nor be entitled to any abatement, deduction,
      deferment or reduction of Rent, or setoff or recoupment against the Rent. Except
      as expressly
      provided in this Lease, the obligations of Landlord and Tenant shall not be
      affected by reason of [i] any damage to, or destruction of, the Leased Property
      or any part thereof from whatever cause or any Taking (as hereinafter defined)
      of the Leased Property or any part thereof; [ii] the lawful or unlawful
      prohibition of, or restriction upon, Tenant's use of the Leased Property, or
      any
      part thereof, the interference with such use by any person, corporation,
      partnership or other entity, or by reason of eviction by paramount title; [iii]
      any claim which Tenant has or might have against Landlord or by reason of any
      default or breach of any warranty by Landlord under this Lease or any other
      agreement between Landlord and Tenant, or to which Landlord and Tenant are
      parties; [iv] any bankruptcy, insolvency, reorganization, composition,
      readjustment, liquidation, dissolution, winding up or other proceeding affecting
      Landlord or any assignee or transferee of Landlord; or [v] 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. Except as otherwise
      specifically provided in this Lease, Tenant hereby specifically waives all
      rights, arising from any occurrence whatsoever, which may now or hereafter
      be
      conferred upon it by law [a] to modify, surrender or terminate this Lease or
      quit or surrender the Leased Property or any portion thereof; or [b] entitling
      Tenant to any abatement, reduction, suspension or deferment of the Rent or
      other
      sums payable by Tenant hereunder. The obligations of Landlord 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
      pursuant to the express provisions of this Lease or by termination of this
      Lease
      other than by reason of an Event of Default.

     

    ARTICLE
      3: IMPOSITIONS AND UTILITIES

     

     3.1
      Payment of Impositions. Tenant shall pay, as Additional Rent, all
      Impositions that may be levied or become a lien on the Leased Property or any
      part thereof at any time (whether prior to or during the Term), without regard
      to prior ownership of said Leased Property, before any fine, penalty, interest,
      or cost is incurred; provided, however, Tenant may contest any Imposition in
      accordance with §3.7. Tenant shall deliver to Landlord [i] not more than five
      days after the due date of each Imposition, copies of the invoice for such
      Imposition and the check delivered for payment thereof; and [ii] not more than
      30 days after the due date of each Imposition, a copy of the official receipt
      evidencing such payment or other proof of payment satisfactory to Landlord.
      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. Tenant, at its expense, shall prepare and file all tax returns
      and
      reports in respect of any Imposition as may be required by governmental
      authorities. Tenant shall be entitled to any refund due from any taxing
      authority if no Event of Default shall have occurred hereunder and be continuing
      and if Tenant shall have paid to Escrow Agent all Impositions due and payable
      to
      such taxing authority as
      of the date of the refund. Landlord shall be entitled to any refund
      from any taxing authority if an Event of Default has occurred and is continuing.
      Any refunds retained by Landlord due to an Event of Default shall be applied
      as
      provided in §8.8. Landlord 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. Landlord, 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 Landlord 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 Landlord, 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 Landlord, at Tenant's expense as
      aforesaid, shall fully cooperate with Tenant in such protest,
      appeal, or other action. Tenant shall reimburse Landlord for all personal
      property taxes paid by Landlord within 30 days after receipt of billings
      accompanied by copies of a bill therefor and payments thereof which identify
      the
      personal property with respect to which such payments are made. Impositions
      imposed in respect to the tax-fiscal period during which the Term terminates
      shall be adjusted and prorated between Landlord and Tenant, whether or not
      such
      Imposition is imposed before or after such termination, and Tenant's obligation
      to pay its prorated share thereof shall survive such
      termination.


    
      
        
        

      

      
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    3.2
Definition
      of
      Impositions. "Impositions" means, collectively, [i] taxes (including,
      without limitation, all capital stock and franchise taxes of Landlord imposed
      by
      the Facility State or any governmental entity in the Facility State due to
      this
      lease transaction or Landlord's ownership of the Leased Property and the income
      arising therefrom, or due to Landlord being considered as doing business in
      the
      Facility State because of Landlord's ownership of the Leased Property or lease
      thereof to Tenant), all real estate and personal property ad valorem, sales
      and
      use, business or occupation, single business, gross receipts, commercial
      activity, transaction privilege, rent or similar taxes; [ii] assessments
      (including, without limitation, all assessments for public improvements or
      benefits, whether or not commenced or completed prior to the date hereof and
      whether or not to be completed within the Term); [iii] ground rents, water,
      sewer or other rents and charges, excises, tax levies, and fees (including,
      without limitation, license, permit, inspection, authorization and similar
      fees); [iv] all taxes imposed on Tenant's operations of the Leased Property,
      including, without limitation, employee withholding taxes, income taxes and
      intangible taxes; [v] all taxes imposed by the Facility State or any
      governmental entity in the Facility State with respect to the conveyance of
      the
      Leased Property by Landlord to Tenant or Tenant's designee, including, without
      limitation, conveyance taxes, capital gains taxes, and commercial activity
      taxes; and [vi] 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 Leased Property or any part thereof and/or the
      Rent
      (including all interest and penalties thereon due to any failure in payment
      by
      Tenant), which at any time prior to, during or in respect of the Term hereof
      may
      be assessed or imposed on or in respect of or be a lien upon [a] Landlord or
      Landlord's interest in the Leased Property or any part thereof; [b] the 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, or activity conducted on, or in connection with the Leased Property
      or the leasing or use of the Leased Property or any part thereof. Tenant shall
      not, however, be required to pay any tax based on net income imposed on Landlord
      by any governmental entity other than the capital stock and franchise taxes
      described in clause [i] above.


    
      
        
        

      

      
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    3.3
      Escrow of Impositions. Tenant shall deposit with Landlord on the first
      day of each month a sum equal to 1/12th of the Impositions assessed against
      the
      Leased Property for the preceding tax year for real estate taxes, which sums
      shall be used by Landlord toward payment of such real estate taxes. In addition,
      if an Event of Default occurs and while it remains uncured, Tenant shall, at
      Landlord's election, deposit with Landlord on the first day of each month a
      sum
      equal to 1/12th of the Impositions assessed against the Leased Property for
      the
      preceding tax year other than for real estate taxes, which sums shall be used
      by
      Landlord toward payment of such Impositions. Tenant, on demand, shall pay to
      Landlord any additional funds necessary to pay and discharge the obligations
      of
      Tenant pursuant to the provisions of this section. The receipt by Landlord
      of
      the payment of such Impositions by and from Tenant shall only be as an
      accommodation to Tenant, the mortgagees, and the taxing authorities, and shall
      not be construed as rent or income to Landlord, Landlord serving, if at all,
      only as a conduit
      for delivery purposes.

     

    3.4
      Utilities. Tenant shall pay, as Additional Rent, all taxes, assessments,
      charges, deposits, and bills for utilities, including, without limitation,
      charges for water, gas, oil, sanitary and storm sewer, electricity, telephone
      service, and trash collection, which may be charged against the occupant of
      the
      Improvements during the Term. If an Event of Default occurs and while it remains
      uncured, Tenant shall, at Landlord's election, deposit with Landlord on the
      first day of each month a sum equal to 1/12th of the amount of the annual
      utility expenses for the preceding Lease Year, which sums shall be used by
      Landlord to pay such utilities. Tenant shall, on demand, pay to Landlord any
      additional amount needed to pay such utilities. Landlord's receipt of such
      payments shall only be an accommodation to Tenant and the utility companies
      and
      shall not constitute rent or income to Landlord. Tenant shall at all times
      maintain that amount of heat necessary to ensure against the freezing of water
      lines. Tenant hereby agrees to indemnify and hold Landlord harmless from and
      against any liability or damages to the utility systems and the Leased Property
      that may result from Tenant's failure to maintain sufficient heat in the
      Improvements.

     

    3.5 
      Discontinuance of Utilities. Landlord will not be liable for damages to
      person or property or for injury to, or interruption of, business for any
      discontinuance of utilities nor will such discontinuance in any way be construed
      as an eviction of Tenant or cause an abatement of rent or operate to release
      Tenant from any of Tenant's obligations under this Lease.


    
      
        
        

      

      
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    3.6
      Business Expenses. Tenant acknowledges that it is solely responsible for
      all expenses and costs incurred in connection with the operation of the Facility
      on the Leased Property, including, without limitation, employee benefits,
      employee vacation and sick pay, consulting fees, and expenses for inventory
      and
      supplies.

     

     3.7
      Permitted Contests. Tenant, on its own or on Landlord's behalf (or in
      Landlord'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 insurance requirement or any lien, attachment, levy, encumbrance,
      charge or claim provided that [i] 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
      Landlord and from the Leased Property; [ii] neither the Leased Property nor
      any
      Rent therefrom nor any part thereof or interest therein would be in any
      immediate danger of being sold, forfeited, attached or lost; [iii] in
      the case of a Legal Requirement, Landlord would not be in any immediate danger
      of civil or criminal liability for failure to comply therewith pending the
      outcome of such proceedings; [iv] in
      the event that any such contest shall involve a sum of money or potential loss
      in excess of $75,000.00, Tenant shall deliver to Landlord and its counsel an
      opinion of Tenant's counsel to the effect set forth in clauses [i], [ii] and
      [iii], to the extent applicable; [v] in the case of a Legal Requirement and/or
      an Imposition, lien, encumbrance or charge, Tenant shall give such reasonable
      security as may be demanded by Landlord to insure ultimate payment of the same
      and to prevent any sale or forfeiture of the affected Leased Property or the
      Rent by reason of such nonpayment or noncompliance; provided, however, the
      provisions of this section 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 Landlord hereunder; [vi]
      in
      the case of an insurance requirement, the coverage required by Article 4 shall
      be maintained; and [vii] if such contest be finally resolved against Landlord
      or
      Tenant, Tenant shall, as Additional Rent due hereunder, promptly pay the amount
      required to be paid, together with all interest and penalties accrued thereon,
      or comply with the applicable Legal Requirement or insurance requirement.
      Landlord, at Tenant's expense, shall execute and deliver to Tenant such
      authorizations and other documents as may be reasonably required in any such
      contest, and, if reasonably requested by Tenant or if Landlord so desires,
      Landlord shall join as
a party therein.
      Tenant hereby agrees to indemnify and save Landlord
      harmless from and against any liability, cost or expense of any kind that may
      be
      imposed upon Landlord in connection with any such contest and any loss resulting
      therefrom.

     

    ARTICLE
      4: INSURANCE

     

     4.1
      Property Insurance. At Tenant's expense, Tenant shall maintain in full
      force and effect a property insurance policy or policies insuring the Leased
      Property against the following:


    
      
        
        

      

      
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    (a)            Loss
      or damage commonly covered by a "Special Form" policy insuring against physical
      loss or damage to the Improvements and Personal Property, including, but not
      limited to, risk of loss from fire, windstorm and other hazards, collapse,
      transit coverage, vandalism, malicious mischief, theft, earthquake (if the
      Leased Property is in a higher risk earthquake zone as determined by Landlord)
      and sinkholes (if usually recommended in the area of the Leased Property).
      The
      policy shall be in the amount of the full replacement value (as defined in
§4.5)
      of the Improvements and Personal Property and shall contain a deductible amount
      acceptable to Landlord. Landlord shall be named as an additional insured. The
      policy shall include a stipulated value endorsement or agreed amount endorsement
      and endorsements for ordinance or law including demolition costs and increased
      cost of construction.

     

    (b)            If
      applicable, loss or damage by explosion of steam boilers, pressure vessels,
      or
      similar apparatus, now or hereafter installed on the Leased Property, in
      commercially reasonable amounts acceptable to Landlord.

     

    (c)            Consequential
      loss of rents and income coverage insuring against all "Special Form" risk
      of
      physical loss or damage with limits and deductible amounts acceptable to
      Landlord covering risk of loss during the first nine months of reconstruction,
      and containing an endorsement for extended period of indemnity of at least
      six
      months, and shall be written with a stipulated amount of coverage if available
      at a reasonable premium.

     

    (d)            If
      the Leased Property is located, in whole or in part, in a federally designated
      100-year flood plain area, flood insurance for the Improvements in an amount
      equal to the lesser of [i] the full replacement value of the Improvements;
      or
      [ii] the maximum amount of insurance available for the Improvements under all
      federal and private flood insurance programs.

     

    (e)            Loss
      or damage caused by the breakage of plate glass in commercially reasonable
      amounts acceptable to Landlord.

     

    (f)            Loss
      or damage commonly covered by blanket crime insurance, including employee
      dishonesty, loss of money orders or paper currency, depositor's forgery, and
      loss of property of patients accepted by Tenant for safekeeping, in commercially
      reasonable amounts acceptable to Landlord.

     

    4.2 Liability
      Insurance. At Tenant's expense, Tenant shall maintain liability insurance
      against the following:

     

    (a)           Claims
      for personal injury or property damage commonly covered by comprehensive general
      liability insurance with endorsements for incidental malpractice, contractual,
      personal injury, voluntary medical payments, products and completed operations,
      broad form property damage, and extended bodily injury, with commercially
      reasonable amounts for bodily injury, property damage, and voluntary medical
      payments acceptable to Landlord, but with a combined single limit of not less
      than $3,000,000.00 per occurrence.

     

    (b)           Claims
      for personal injury and property damage commonly covered by comprehensive
      automobile liability insurance, covering all owned and non-owned automobiles,
      with commercially reasonable amounts for bodily injury, property damage, and
      for
      automobile medical payments acceptable to Landlord, but with a combined single
      limit of not less than $3,000,000.00 per occurrence.


    
      
        
        

      

      
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    (c)           Claims
      for personal injury commonly covered by medical malpractice and professional
      liability insurance in commercially reasonable amounts acceptable to
      Landlord.

     

    (d)           Claims
      commonly covered by workers' compensation insurance for all persons employed
      by
      Tenant on the Leased Property. Such workers' compensation insurance shall be
      in
      accordance with the requirements of all applicable local, state, and federal
      law.

     

    


    4.3
      Builder's Risk Insurance. In connection with any construction, Tenant
      shall maintain in full force and effect a builder's completed value risk policy
      ("Builder's Risk Policy") of insurance in a nonreporting form insuring against
      all "Special Form" risk of physical loss or damage to the Improvements,
      including, but not limited to, risk of loss from fire, windstorm and other
      hazards, collapse, transit coverage, vandalism, malicious mischief, theft,
      earthquake (if Leased Property is in a higher risk earthquake zone as determined
      by Landlord) and sinkholes (if usually recommended in the area of the Leased
      Property). The Builder's Risk Policy shall include endorsements providing
      coverage for building materials and supplies and temporary premises. The
      Builder's Risk Policy shall be in the amount of the full replacement value
      of
      the Improvements and shall contain a deductible amount acceptable to Landlord.
      Landlord shall be named as an additional insured. The Builder's Risk Policy
      shall include an endorsement permitting initial occupancy.

     

    4.4
      Insurance Requirements. The following provisions shall apply to all
      insurance coverages required hereunder:

     

    (a)           The
      form and substance of all policies shall be subject to the approval of Landlord,
      which approval will not be unreasonably withheld.

     

    (b)           The
      carriers of all policies shall have a Best's Rating of "A" or better and a
      Best's Financial Category of X or higher and shall be authorized to do insurance
      business in the Facility State.

     

    (c)           Tenant
      shall be the "named insured" and Landlord shall be an "additional insured"
      on
      each policy.

     

    (d)           Tenant
      shall deliver to Landlord certificates or policies showing the required
      coverages and endorsements. The policies of insurance shall provide that the
      policy may not be canceled or not renewed, and no material change or reduction
      in coverage may be made, without at least 30 days' prior written notice to
      Landlord.

     

    (e)   
         The policies
      shall contain a severability of interest and/or cross-liability endorsement,
      provide that the acts or omissions of Tenant or Landlord will not invalidate
      the
      coverage of the other party, and provide that Landlord shall not be responsible
      for payment of premiums.


    
      
        
        

      

      
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    (1)            All
      loss adjustment shall require the written consent of Landlord and Tenant, as
      their interests may appear.

     

    (g)    At
      least 30
      days prior to the expiration of each insurance policy, Tenant shall deliver
      to
      Landlord a certificate showing renewal of such policy and payment of the annual
      premium therefor and a current Certificate of Compliance (in the form delivered
      at the time of Closing) completed and signed by Tenant's insurance
      agent.

     

    4.5
      Replacement Value. The term "full replacement value" means the actual
      replacement cost thereof from time to time, including increased cost of
      construction endorsement, with no reductions or deductions. Tenant shall, in
      connection with each annual policy renewal, deliver to Landlord a
      redetermination of the full replacement value by the insurer or an endorsement
      indicating that the Leased Property is insured for its full replacement value.
      If Tenant makes any Permitted Alterations (as hereinafter defined) to the Leased
      Property, Landlord may have such full replacement value redetermined at any
      time
      after such Permitted Alterations are made, regardless of when the full
      replacement value was last determined.

     

    4.6
      Blanket Policy. Notwithstanding anything to the contrary contained in
      this Article 4, Tenant may carry the insurance required by this Article under
      a
      blanket policy of insurance, provided that the coverage afforded Tenant will
      not
      be reduced or diminished or otherwise be different from that which would exist
      under a separate policy meeting all of the requirements of this
      Lease.

     

    4.7
No
      Separate Insurance. Tenant shall not 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 Landlord and any
      mortgagees, are included therein as additional insureds or loss payees, the
      loss
      is payable under said insurance in the same manner as losses are payable under
      this Lease, and such additional insurance is not prohibited by the existing
      policies of insurance. Tenant shall immediately notify Landlord of the taking
      out of such separate insurance or the increasing of any of the amounts of the
      existing insurance by securing an additional policy or additional
      policies.

     

    4.8
      Waiver of Subrogation. Each party hereto hereby waives any and every
      claim which arises or may arise in its favor and against the other party hereto
      during the Term for any and all loss of, or damage to, any of its property
      located within or upon, or constituting a part of the Leased Property, which
      loss or damage is covered by valid and collectible insurance policies, to the
      extent that such loss or damage is recoverable under such policies. Said mutual
      waiver shall be in addition to, and not in limitation or derogation of, any
      other waiver or release contained in this Lease with respect to any loss or
      damage to property of the parties hereto. Inasmuch as the said waivers will
      preclude the assignment of any aforesaid claim by way of subrogation (or
      otherwise) to an insurance company (or any other person), each party hereto
      agrees immediately to give each insurance company which has issued to it
      policies of insurance, written notice of the terms of said mutual waivers,
      and
      to have such insurance policies properly endorsed, if necessary, to prevent
      the
      invalidation of said insurance coverage by reason of said waivers, so long
      as
      such endorsement is available at a reasonable cost.


    
      
        
        

      

      
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    4.9
      Mortgages. The following provisions shall apply if Landlord now or
      hereafter places a mortgage on the Leased Property or any part thereof: [i]
      Tenant shall obtain a standard form of lender's loss payable clause insuring
      the
      interest of the mortgagee; [ii] Tenant shall deliver evidence of insurance
      to
      such mortgagee; [iii] loss adjustment shall require the consent of the
      mortgagee; and [iv] Tenant shall provide such other information and documents
      as
      may be required by the mortgagee.

     

    4.10
      Escrows. After an Event of Default occurs hereunder, Tenant shall make
      such periodic payments of insurance premiums in accordance with Landlord's
      requirements after receipt of notice thereof from Landlord.

     

    ARTICLE
      5: INDEMNITY

     

    5.1
      Tenant's Indemnification. Tenant hereby indemnifies and agrees to hold
      harmless Landlord, any successors or assigns of Landlord, and Landlord's and
      such successor's and assign's directors, officers, employees and agents from
      and
      against any and all demands, claims, causes of action, fines, penalties, damages
      (including consequential damages), losses, liabilities (including strict
      liability), judgments, and expenses (including, without limitation, reasonable
      attorneys' fees, court costs, and the costs set forth in §8.7) incurred in
      connection with or arising from: [i] the use or occupancy of the Leased Property
      by Tenant or any persons claiming under Tenant; [ii] any activity, work, or
      thing done, or permitted or suffered by Tenant in or about the Leased Property;
      [iii] any acts, omissions, or negligence of Tenant or any person claiming under
      Tenant, or the contractors, agents, employees, invitees, or visitors of Tenant
      or any such person; [iv] any breach, violation, or nonperformance by Tenant
      or
      any person claiming under Tenant or the employees, agents, contractors,
      invitees, or visitors of Tenant or of any such person, of any term, covenant,
      or
      provision of this Lease or any law, ordinance, or governmental requirement
      of
      any kind, including, without limitation, any failure to comply with any
      applicable requirements under the ADA; [v] any injury or damage to the person,
      property or business of Tenant, its employees, agents, contractors, invitees,
      visitors, or any other person entering upon the Leased Property; [vi] any
      construction, alterations, changes or demolition of the Facility performed
      by or
      contracted for by Tenant or its employees, agents or contractors; and [vii]
      any
      obligations, costs or expenses arising under any matters shown on Exhibit B
      or
      any other Permitted Encumbrances consented to in writing by Landlord and Tenant
      but excluding obligations, costs or expenses arising from [a] Landlord's gross
      negligence or willful misconduct, or [b] matters covered by Landlord's title
      insurance policy. If any action or proceeding is brought against Landlord,
      its
      employees, or agents by reason of any such claim, Tenant, upon notice from
      Landlord, will defend the claim at Tenant's expense with counsel reasonably
      satisfactory to Landlord. All amounts payable to Landlord under this section
      shall be payable on written demand and any such amounts which are not paid
      within 10 days after demand therefor by Landlord shall bear interest at
      Landlord's rate of return as provided in the Commitment. In case any action,
      suit or proceeding is brought against Tenant by reason of any such occurrence,
      Tenant shall use its commercially reasonable efforts to defend such action,
      suit
      or proceeding.

     

    5.1.1
      Notice of Claim. Landlord shall notify Tenant in writing of any claim or
      action brought against Landlord in which indemnity may be sought against Tenant
      pursuant to this section. Such notice shall be given in sufficient time to
      allow
      Tenant to defend or participate in such claim or action, but the failure to
      give-such notice in sufficient time shall not constitute a defense hereunder
      nor
      in any way impair the obligations of Tenant under this section unless the
      failure to give such notice precludes Tenant's defense of any such
      action.


    
      
        
        

      

      
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    5.1.2
      Survival of Covenants. The covenants of Tenant contained in this section
      shall remain in full force and effect after the termination of this Lease until
      the expiration of the period stated in the applicable statute of limitations
      during which a claim or cause of action may be brought and payment in full
      or
      the satisfaction of such claim or cause of action and of all expenses and
      charges incurred by Landlord relating to the enforcement of the provisions
      herein specified.

     

    5.1.3
      Reimbursement of Expenses. Unless prohibited by law, Tenant hereby agrees
      to pay to Landlord all of the reasonable fees, charges and reasonable
      out-of-pocket expenses related to the Facility and required hereby, or incurred
      by Landlord in enforcing the provisions of this Lease.

     

    5.2
      Environmental Indemnity; Audits. Tenant hereby indemnifies and agrees to
      hold harmless Landlord, any successors to Landlord's interest in this Lease,
      and
      Landlord's and such successors' directors, officers, 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 consultants' and attorneys' fees) incurred by Landlord or any other
      indemnitee or assessed against any portion of 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 any
      Environmental Law. Tenant's indemnity shall survive the 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 Leased Property shall have fully
      terminated; or [ii] Hazardous Materials introduced to the Leased Property by
      Landlord, its agent, employees, successors or assigns. If at any time during
      the
      Term of this Lease any governmental authority notifies Landlord or Tenant of
      a
      violation of any Environmental Law or Landlord reasonably believes that a
      Facility may violate any Environmental Law, Landlord may require one or more
      environmental audits of such portion of the Leased Property, in such form,
      scope
      and substance as specified by Landlord, at Tenant's expense. Tenant shall,
      within 30 days after receipt of an invoice from Landlord, reimburse Landlord
      for
      all reasonable out of pocket costs and expenses incurred in reviewing any
      environmental audit, including, without limitation, reasonable attorneys' fees
      and costs.

     

    5.3
      Limitation of Landlord's Liability. Except for Landlord's gross
      negligence or willful misconduct, Landlord, its agents, and employees, will
      not
      be liable for any loss, injury, death, or damage (including consequential
      damages) to persons, property, or Tenant's business occasioned by theft, act
      of
      God, public enemy, injunction, riot, strike, insurrection, war, court order,
      requisition, order of governmental body or authority, fire, explosion, falling
      objects, steam, water, rain or snow, leak or flow of water (including water
      from
      the elevator system), rain or snow from the Leased Property or into the Leased
      Property or from the roof, street, subsurface or from any other place, or by
      dampness or from the breakage, leakage, obstruction, or other defects of the
      pipes, sprinklers, wires, appliances, plumbing, air conditioning, or lighting
      fixtures of the Leased Property, or from construction, repair, or alteration
      of
      the Leased Property or from any acts or omissions of any other occupant or
      visitor of the Leased Property, or from any other cause beyond Landlord's
      control.


    
      
        
        

      

      
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    ARTICLE
      6: USE AND ACCEPTANCE OF PREMISES

     

     6.1
      Use of Leased Property. Tenant shall use and occupy the Leased Property
      exclusively for the Facility Uses specified for each Facility and for all lawful
      and licensed ancillary uses, and for no other purpose without the prior written
      consent of Landlord. Tenant shall obtain and maintain all approvals, licenses,
      and consents needed to use and operate the Leased Property as herein permitted.
      Tenant shall deliver to Landlord complete copies of surveys, examinations,
      certification and licensure inspections, compliance certificates, and other
      similar reports issued to Tenant by any governmental agency within 10 days
      after
      Tenant's receipt of each item.

     

     6.2
      Acceptance of Leased Property. Tenant acknowledges that [i] Tenant and
      its agents have had an opportunity to inspect the Leased Property; [ii] Tenant
      has found the Leased Property fit for Tenant's use; [iii] Landlord will deliver
      the Leased Property to Tenant in "as-is" condition; [iv] Landlord is not
      obligated to make any improvements or repairs to the Leased Property; and [v]
      the roof, walls, foundation, heating, ventilating, air conditioning, telephone,
      sewer, electrical, mechanical, elevator, utility, plumbing, and other portions
      of the Leased Property are in good working order. Tenant waives any claim or
      action against Landlord with respect to the condition of the Leased Property.
      LANDLORD 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, OR AS TO
      QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING
      AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY TENANT.

     

     6.3
      Conditions of Use and Occupancy. Tenant agrees that during the Term it
      shall use and keep the Leased Property in a careful, safe and proper manner;
      not
      commit or suffer waste thereon; not use or occupy the Leased Property for any
      unlawful purposes; not use or occupy the Leased Property or permit the same
      to
      be used or occupied, for any purpose or business deemed extra-hazardous on
      account of fire or otherwise; keep the Leased Property in such repair and
      condition as may be required by the Board of Health, or other city, state or
      federal authorities, free of all cost to Landlord; not permit any acts to be
      done which will cause the cancellation, invalidation, or suspension of any
      insurance policy; and permit Landlord and its agents to enter upon the Leased
      Property at all reasonable times to examine the condition thereof. Landlord
      shall have the right to have an annual inspection of the Leased Property
      performed and Tenant shall pay an inspection fee of $1,500.00 per Facility
      plus
      Landlord's reasonable out-of-pocket expenses within 30 days after receipt of
      Landlord's invoice.

     

     6.4
      Tenant Solely Responsible. Tenant specifically acknowledges that it is
      solely responsible for the operation and maintenance of the Louisiana Leased
      Property, and that Landlord, its agents and employees, have no responsibility
      therefore.


    
      
        
        

      

      
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     6.5
      Opportunity to Inspect. TENANT ACKNOWLEDGES THAT IT HAS
HAD THE OPPORTUNITY TO INSPECT THE PREMISES
      OF ALL LOUISIANA
LEASED PROPERTY AND, IN ACCORDANCE WITH THE PROVISIONS OF
      LA.
      C.C. ARTICLE 2699, HEREBY SPECIFICALLY WAIVES ANY AND ALL WARRANTIES
PROVIDED BY THE PROVISIONS OF THE LOUISIANA CIVIL CODE TO
      THE
      FULLEST EXTENT PERMITTED BY LAW.

     

    ARTICLE
      7: MAINTENANCE AND MECHANICS' LIENS

     

     7.1
      Maintenance. Tenant shall maintain, repair, and replace the Leased
      Property, including, without limitation, all structural and nonstructural
      repairs and replacements to the roof, foundations, exterior walls, HVAC systems,
      equipment, parking areas, sidewalks, water, sewer and gas connections, pipes
      and
      mains. Tenant shall pay, as Additional Rent, the full cost of maintenance,
      repairs, and replacements. Tenant shall maintain all drives, sidewalks, parking
      areas, and lawns on or about the Leased Property in a clean and orderly
      condition, free of accumulations of dirt, rubbish, snow and ice. Tenant shall
      at
      all times maintain, operate and otherwise manage the Leased Property on a basis
      and in a manner consistent with the standards of the highest quality competing
      facilities in the market areas served by the Leased Property. All repairs shall,
      to the extent reasonably achievable, be at least equivalent in quality to the
      original work or the property to be repaired shall be replaced. Tenant will
      not
      take or omit to take any action the taking or omission of which might materially
      impair the value or the usefulness of the Leased Property or any parts thereof
      for the Facility Uses. Tenant shall permit Landlord to inspect the Leased
      Property at all reasonable times, and if Landlord gives Tenant notice of
      maintenance problem areas, Tenant shall deliver to Landlord a plan of correction
      within 20 Business Days after receipt of the notice. Tenant shall diligently
      pursue correction of all problem areas within 75 days after receipt of the
      notice and, upon expiration of the 75-day period, shall deliver evidence of
      completion to Landlord or an interim report evidencing Tenant's diligent
      progress towards completion and, at the end of the next 75-day period, evidence
      of satisfactory completion. Upon completion, Landlord shall have the right
      to
      re-inspect the Facility and Tenant shall pay a re-inspection fee of $750.00
      per
      Facility plus Landlord's reasonable out-of-pocket expenses within 30 days after
      receipt of Landlord's invoice. At each inspection of the Leased Property by
      Landlord, made upon at least 2 Business Days notice to Tenant, the Facility
      employee in charge of maintenance shall be available to tour the Facility with
      Landlord and answer questions.

     

     7.2
      Required Alterations. Tenant shall, at Tenant's sole cost and expense,
      make any additions, changes, improvements or alterations to the Leased Property,
      including structural alterations, which may be required by any governmental
      authorities, including those required to maintain licensure or certification
      under the Medicare and Medicaid programs (if so certified), whether such changes
      are required by Tenant's use, changes in the law, ordinances, or governmental
      regulations, defects existing as of the date of this Lease, or any other cause
      whatsoever. All such additions, changes, improvements or alterations shall
      be
      deemed to be Permitted Alterations and shall comply with all laws requiring
      such
      alterations and with the provisions of § 16.4.

     

    7.3
      Mechanic's Liens. Tenant shall have no authority to permit or create a
      lien against Landlord's interest in the Leased Property, and Tenant shall post
      notices or file such documents as may be required to protect Landlord's interest
      in the Leased Property against liens. Tenant hereby agrees to defend, indemnify,
      and hold Landlord harmless from and against any mechanic's liens against the
      Leased Property by reason of work, labor, services or materials supplied or
      claimed to have been supplied on or to the Leased Property. Tenant shall remove,
      bond-off, or otherwise obtain the release of any mechanic's lien filed against
      the Leased Property within 10 days after notice of the filing thereof. Tenant
      shall pay all expenses in connection therewith, including, without limitation,
      damages, interest, court costs and reasonable attorneys' fees.


    
      
        
        

      

      
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     7.4
      Replacements of Fixtures and Landlord's Personal Property. Tenant shall
      not remove Fixtures and Landlord's Personal Property from the Leased Property
      except to replace the Fixtures and Landlord's Personal Property by other similar
      items of equal quality and value. Items being replaced by Tenant may be removed
      and shall become the property of Tenant and items replacing the same shall
      be
      and remain the property of Landlord. Tenant shall execute, upon written request
      from Landlord, any and all documents necessary to evidence Landlord's ownership
      of Landlord's Personal Property and replacements therefor. Tenant may finance
      replacements for the Fixtures and Landlord's Personal Property by equipment
      lease or by a security agreement and financing statement if [i] Landlord has
      consented to the terms and conditions of the equipment lease or security
      agreement; and [ii] the equipment lessor or lender has entered into a
      nondisturbance agreement with Landlord upon terms and conditions reasonably
      acceptable to Landlord, including, without limitation, the following: [a]
      Landlord shall have the right (but not the obligation) to assume such security
      agreement or equipment lease upon the occurrence of an Event of Default under
      this Lease; [b] the equipment lessor or lender shall notify Landlord of any
      default by Tenant under the equipment lease or security agreement and give
      Landlord a reasonable opportunity to cure such default; and [c] Landlord shall
      have the right to assign its rights under the equipment lease, security
      agreement, or

    nondisturbance
      agreement. Tenant shall, within 30 days after receipt of an invoice from
      Landlord, reimburse Landlord for all costs and expenses incurred in reviewing
      and approving the equipment lease, security agreement, and nondisturbance
      agreement, including, without limitation, reasonable attorneys' fees and
      costs.

     

    ARTICLE
      8: DEFAULTS AND REMEDIES

     

     8.1
      Events of Default. The occurrence of any one or more of the following
      shall be an event of default ("Event of Default") hereunder without any advance
      notice to Tenant unless specified herein:

     

    (a)           Tenant
      fails to pay in full any installment of Base Rent, any Additional Rent or any
      other monetary obligation payable by Tenant under this Lease (including the
      Option Price), when such payment is due, provided, however, Tenant shall not
      be
      in default hereunder if Tenant makes such payment within 10 days after written
      notice from Landlord that such payment is due.

     

    (b)           Landlord
      gives Tenant three or more notices of non-payment of Rent (after expiration
      of
      the 10-day grace period) in any Lease Year.


    
      
        
        

      

      
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    (c)            Tenant,
      Subtenant or Guarantor (where applicable) fails to comply with any covenant
      set
      forth in Article 14, § 15.6, § 15.7, §15.8- or Article 20 (if applicable) of
      this Lease.

     

    (d)            Tenant
      fails to observe and perform any other covenant, condition or agreement under
      this Lease to be performed by Tenant and [i] such failure continues for a period
      of 30 days after written notice thereof is given to Tenant by Landlord; or
      [ii]
      if, by reason of the nature of such default it cannot be remedied within 30
      days, Tenant fails to proceed with diligence reasonably satisfactory to Landlord
      after receipt of the notice to cure the default or, in any event, fails to
      cure
      such default within 90 days after receipt of the notice. The foregoing notice
      and cure provisions do not apply to any Event of Default otherwise specifically
      described in any other subsection of §8.1.

     

    (e)            Tenant
      or Subtenant abandons or vacates any Facility Property or any material part
      thereof, ceases to operate any Facility, ceases to do business or ceases to
      exist for any reason for any three or more days.

     

    (f)            [i]
      The filing by Tenant, Subtenant or Guarantor of a petition under the Bankruptcy
      Code or the commencement of a bankruptcy or similar proceeding by Tenant,
      Subtenant or Guarantor; [ii] the failure by Tenant, Subtenant or Guarantor
      within 60 days to dismiss an involuntary bankruptcy petition or other
      commencement of a bankruptcy, reorganization or similar proceeding against
      such
      party, or to lift or stay any execution, garnishment or attachment of such
      consequence as will impair its ability to carry on its operation at the Leased
      Property; [iii] the entry of an order for relief under the Bankruptcy Code
      in
      respect of Tenant, Subtenant or Guarantor; [iv] any assignment by Tenant,
      Subtenant or Guarantor for the benefit of its creditors; [v] the entry by
      Tenant, Subtenant or Guarantor into an agreement of composition with its
      creditors; [vi] the approval by a court of competent jurisdiction of a petition
      applicable to Tenant, Subtenant or Guarantor in any proceeding for its
      reorganization instituted under the provisions of any state or federal
      bankruptcy, insolvency, or similar laws; [vii] appointment by final order,
      judgment, or decree of a court of competent jurisdiction of a receiver of a
      whole or any substantial part of the properties of Tenant, Subtenant or
      Guarantor (provided such receiver shall not have been removed or discharged
      within 60 days of the date of his qualification).

     

    (g)         
       [i] Any receiver, administrator, custodian or other person takes
      possession or control of any of the Leased Property and continues in possession
      for 60 days; [ii] any writ against any of the Leased Property is not released
      within 60 days; [iii] any judgment is rendered or proceedings are instituted
      against the Leased Property, Tenant or Subtenant which affect the Leased
      Property or any part thereof, which is not dismissed for 60 days (except as
      otherwise provided in this section); [iv] all or a substantial part of the
      assets of Tenant, Subtenant or Guarantor are attached, seized, subjected to
      a
      writ or distress warrant, or are levied upon, or come into the possession of
      any
      receiver, trustee, custodian, or assignee for the benefit of creditors; [v]
      Tenant, Subtenant or Guarantor is enjoined, restrained, or in any way prevented
      by court order, or any proceeding is filed or commenced seeking to enjoin,
      restrain or in any way prevent Tenant, Subtenant or Guarantor from conducting
      all or a substantial part of its business or affairs; or [vi] except as
      otherwise permitted hereunder, a final notice of lien, levy or assessment is
      filed of record with respect to all or any part of the Leased Property or any
      property of Tenant or Subtenant located at the Leased Property and is not
      dismissed, discharged, or bonded-off within 30 days.


    
      
        
        

      

      
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    (h)            Any
      representation or warranty made by Tenant, Subtenant or Guarantor in this Lease
      or any other document executed in connection with this Lease, any guaranty
      of or
      other security for this Lease, or any report, certificate, application,
      financial statement or other instrument furnished by Tenant, Subtenant or
      Guarantor pursuant hereto or thereto shall prove to be false, misleading or
      incorrect in any material respect as of the date made.

     

    (i)            Tenant,
      any Subtenant, any Guarantor, or any Affiliate defaults on any indebtedness
      or
      obligation to Landlord or any Landlord Affiliate, any Obligor Group Obligation
      or any agreement with Landlord or any Landlord Affiliate, including, without
      limitation, any lease with Landlord or any Landlord Affiliate, or the occurrence
      of a default under any Material Obligation, and any applicable grace or cure
      period with respect to default under such indebtedness or obligation expires
      without such default having been cured. This provision applies to all such
      indebtedness, obligations and agreements as they may be amended, modified,
      extended, or renewed from time to time.

     

    (j)            Any
      guarantor of this Lease dies, dissolves, terminates, is adjudicated incompetent,
      files a petition in bankruptcy, or is adjudicated insolvent under the Bankruptcy
      Code or any other insolvency law, or fails to comply with any covenant or
      requirement of such guarantor set forth in this Lease or in the guaranty of
      such
      guarantor.

     

    (k)            The
      license for the Facility or any other Government Authorization is canceled,
      suspended, reduced to provisional or temporary, or otherwise invalidated and
      not
      reinstated within 60 days thereafter, or license revocation or decertification
      proceedings are commenced against Tenant or Subtenant and not dismissed within
      60 days, or any reduction occurs in the number of licensed beds or units at
      the
      Facility and such original number of beds is not reinstated within 60 days,
      or
      an admissions ban is issued for the Facility and not dismissed within 60
      days.

     

    8.2
      Remedies. Upon the occurrence of an Event of Default under this Lease or
      any Lease Document, at Landlord's option, Landlord may exercise any one or
      more
      of the following remedies:

     

    (a)            Landlord
      may re-enter and take possession of the Leased Property without terminating
      this
      Lease, and lease the Leased Property for the account of Tenant, holding Tenant
      liable for all costs of Landlord in reletting the Leased Property and for the
      difference in the amount received by such reletting and the amounts payable
      by
      Tenant under the Lease.

     

    (b)            Landlord
      may terminate this Lease by written notice to Tenant, exclude Tenant from
      possession of the Leased Property and use efforts to lease the Leased Property
      to others, holding Tenant liable for the difference in the amounts received
      from
      such reletting and the amounts payable by Tenant under this Lease.

     

    (c)            Landlord
      may re-enter the Leased Property and have, repossess and enjoy the Leased
      Property as if this Lease had not been made, and in such event, Tenant and
      its
      successors and assigns shall remain liable for any contingent or unliquidated
      obligations or sums owing at the time of such repossession.


    
      
        
        

      

      
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    (d)            Landlord
      may have access to and inspect, examine and make copies of the books and records
      and any and all accounts, data and income tax and other returns of Tenant
      insofar as they pertain to the Leased Property.

     

    (e)            Landlord
      may accelerate all of the unpaid Rent hereunder based on the then current Rent
      Schedule and Tenant shall be liable for the present value of the aggregate
      Rent
      for the unexpired term of this Lease assuming the Target Rate of Return,
      discounted at an annual rate equal to the then-current U.S. Treasury Note rate
      for the closest comparable term, and subject to Landlord's obligations under
      law, if any, concerning Tenant's continued possession of the Leased
      Property.

     

    (f)            [Intentionally
      Deleted.]

     

    (g)            Landlord
      may take whatever action at law or in equity as may appear necessary or
      desirable to collect the Rent and other amounts payable under this Lease then
      due and thereafter to become due, or to enforce performance and observance
      of
      any obligations, agreements or covenants of Tenant under this
      Lease.

     

    (h)            With
      respect to the Collateral or any portion thereof and Secured Party's security
      interest therein, Secured Party may exercise all of its rights as secured party
      under Article 9 of the Uniform Commercial Code. Secured Party may sell the
      Collateral by public or private sale upon five days' notice to Tenant or
      Subtenant. Tenant and Subtenant agree that a commercially reasonable manner
      of
      disposition of the Collateral shall include, without limitation and at the
      option of Secured Party, a sale of the Collateral, in whole or in part,
      concurrently with the sale of the Leased Property.

     

    (i)            Secured
      Party may obtain control over and collect the Receivables and apply the proceeds
      of the collections to satisfaction of the Obligor Group Obligations unless
      prohibited by law. Tenant and Subtenant appoint HCN or its designee as attorney
      for Tenant and Subtenant, respectively, with powers [i] to receive, to endorse,
      to sign and/or to deliver, in Tenant's or Subtenant's name or Secured Party's
      name, any and all checks, drafts, and other instruments for the payment of
      money
      relating to the Receivables, and to waive demand, presentment, notice of
      dishonor, protest, and any other notice with respect to any such instrument;
      [ii] to sign Tenant's or Subtenant's name on any invoice or bill of lading
      relating to any Receivable, drafts against account debtors, assignments and
      verifications of Receivables, and notices to account debtors; [iii] to send
      verifications of Receivables to any account debtor; and [iv] to do all other
      acts and things necessary to carry out this Lease. Secured Party shall not
      be
      liable for any omissions, commissions, errors of judgment, or mistakes in fact
      or law made in the exercise of any such powers. At Secured Party's option,
      Tenant and Subtenant shall [i] provide Secured Party a full accounting of all
      amounts received on account of Receivables with such frequency and in such
      form
      as Secured Party may require, either with or without applying all collections
      on
      Receivables in payment of the Obligor Group Obligations or [ii] deliver to
      Secured Party on the day of receipt all such collections in the form received
      and duly endorsed by Tenant or Subtenant, as applicable. At Secured Party's
      request, Tenant and Subtenant shall institute any action or enter into any
      settlement determined by Secured Party to be necessary to obtain recovery or
      redress from any account debtor in default of Receivables. Secured Party may
      give notice of its security interest in the Receivables to any or all account
      debtors with instructions to make all payments on Receivables directly to
      Secured Party, thereby terminating Tenant's and Subtenant's authority to collect
      Receivables. After terminating Tenant's and Subtenant's authority to enforce
      or
      collect Receivables, Secured Party shall have the right to take possession
      of
      any or all Receivables and records thereof and is hereby authorized
      to
      do so, and only Secured Party shall have the right to collect and enforce the
      Receivables. Prior to the occurrence of an Event of Default, at Tenant's and
      Subtenant's cost and expense, but on behalf of Secured Party and for Secured
      Party's account, Tenant and Subtenant shall collect or otherwise enforce all
      amounts unpaid on Receivables and hold all such collections in trust for Secured
      Party, but Tenant and Subtenant may commingle such collections with Tenant's
      and
      Subtenant's own funds, until Tenant's and Subtenant's authority to do so has
      been terminated, which may be done only after an Event of Default.
      Notwithstanding any other provision hereof, Secured Party does not assume any
      of
      Tenant's or Subtenant's obligations under any Receivable, and Secured Party
      shall not be responsible in any way for the performance of any of the terms
      and
      conditions thereof by Tenant or Subtenant.


    
      
        
        

      

      
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    Without
      waiving any prior or subsequent Event of Default, Landlord may waive any Event
      of Default or, with or without waiving any Event of Default, remedy any
      default.

     

    (k)    Landlord
      may
      terminate its obligation, if any, to disburse any Landlord
      Payments.

     

    (1)           
      Landlord may enter and take possession of the Land or any portion thereof and
      any one or more Facilities without terminating this Lease and complete
      construction and renovation of the Improvements (or any part thereof) and
      perform the obligations of Tenant under the Lease Documents. Without limiting
      the generality of the foregoing and for the purposes aforesaid, Tenant hereby
      appoints HCN its lawful attorney-in-fact with full power to do any of the
      following: [i] complete construction, renovation and equipping of the
      Improvements in the name of Tenant; [ii] use unadvanced funds remaining under
      the Investment Amount, or funds that may be reserved, escrowed, or set aside
      for
      any purposes hereunder at any time, or to advance funds in excess of the
      Investment Amount, to complete .the Improvements; [iii] make changes in the
      plans and specifications that shall be necessary or desirable to complete the
      Improvements in substantially the manner contemplated by the plans and
      specifications; [iv] retain or employ new general contractors, subcontractors,
      architects, engineers, and inspectors as shall be required
      for said purposes; [v] pay, settle, or compromise all existing bills and claims,
      which may be liens or security interests, or to avoid such bills and claims
      becoming liens against the Facility or security interest against fixtures or
      equipment, or as may be necessary or desirable for the completion of the
      construction and equipping of the Improvements or for the clearance of title;
      [vi] execute all applications and certificates, in the name of Tenant, that
      may
      be required in connection with any construction; [vii] do any and every act
      that
      Tenant might do in its own behalf, to prosecute and defend all actions or
      proceedings in connection with the Improvements; and [viii] to execute, deliver
      and file all applications and other documents and take any and all actions
      necessary to transfer the operations of the Facility to Secured Party or Secured
      Party's designee. This power of attorney is a power coupled with an interest
      and
      cannot be revoked.


    
      
        
        

      

      
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    (m)           Landlord
      may apply, with or without notice to Tenant, for the appointment of a receiver
      ("Receiver") for Tenant or Tenant's business or for the Leased Property. Unless
      prohibited by law, such appointment may be made either before or after
      termination of Tenant's possession of the Leased Property, without regard to
      the
      solvency or insolvency of Tenant at the time of application for such Receiver
      and without regard to the then value of the Leased Property, and Secured Party
      may be appointed as Receiver. During the continuance of an Event of Default,
      Landlord shall be entitled to appointment of a receiver as a matter of right
      and
      without the need to make any showing other than the continuance of an Event
      of
      Default. The Receiver shall have the power to collect the rents, income, profits
      and Receivables of the Leased Property during the pendency of the receivership
      and all other powers which may be necessary or are usual in such cases for
      the
      protection, possession, control, management and operation of the Leased Property
      during the whole of said proceeding. All sums of money received by the Receiver
      from such rents and income, after deducting therefrom the reasonable actual
      out
      of pocket charges and expenses paid or incurred in connection with the
      collection and disbursement thereof, shall be applied to the payment of the
      Rent
      or any other monetary obligation of Tenant under this Lease, including, without
      limitation, any losses or damages incurred by Landlord under this Lease. Tenant,
      if requested to do so, will consent to the appointment of any such Receiver
      as
aforesaid.

     

    (n)            Landlord
      may terminate any management agreement with respect to any of the Leased
      Property and shall have the right to retain one or more managers for the Leased
      Property at a commercially reasonable costs at the expense of Tenant, such
      manager(s) to serve for such term and at such compensation as Landlord
      reasonably determines is necessary under the circumstances.

     

     8.3
      Right of Setoff. Landlord may, and is hereby authorized by Tenant to, at
      any time and from time to time without advance notice to Tenant (any such—notice
      being expressly waived by Tenant), setoff or recoup and apply any and all sums
      held by Landlord, any indebtedness of Landlord to Tenant, and any claims by
      Tenant against Landlord, against any obligations of Tenant hereunder and against
      any claims by Landlord against Tenant, whether or not such obligations or claims
      of Tenant are matured and whether or not Landlord has exercised any other
      remedies hereunder. The rights of Landlord under this section are in addition
      to
      any other rights and remedies Landlord may have against Tenant.

     

     8.4
      Performance of Tenant's Covenants. Landlord may perform any obligation of
      Tenant which Tenant has failed to perform within 10 days after Landlord has
      sent
      a written notice to Tenant informing it of its specific failure. Tenant shall
      reimburse Landlord on demand, as Additional
      Rent, for
      any expenditures thus incurred by Landlord and shall pay interest thereon at
      Landlord's rate of return as provided in the Commitment.

     

     8.5
      Late Payment Charge. Tenant acknowledges that any default in the payment
      of any installment of Rent payable hereunder will result in loss and additional
      expense to Landlord in servicing any indebtedness of Landlord secured by the
      Leased Property, handling such delinquent payments, and meeting its other
      financial obligations, and because such loss and additional expense is extremely
      difficult and impractical to ascertain, Tenant agrees that in the event any
      Rent
      payable to Landlord hereunder is not paid within 10 days after the due date,
      Tenant shall pay a late charge of 5% of the amount of the overdue payment as
      a
      reasonable estimate of such loss and expenses, unless applicable law requires
      a
      lesser charge, in which event the maximum rate permitted by such law may be
      Charged by Landlord. The 10-day grace period set forth in this section shall
      not
      extend the time for payment of Rent or the period for curing any default or
      constitute a waiver of such default.


    
      
        
        

      

      
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     8.6
      Default Rent. At Landlord's option at any time after the occurrence of an
      Event of Default and while such Event of Default remains uncured, the Base
      Rent
      payable under this Lease shall be increased to reflect Landlord's rate of return
      of the greater of [i] 18.5% per annum
      or [ii] 2.5% per
annum
      above Landlord's rate of return then in effect ("Default
      Rent"); provided, however, that if a court of competent jurisdiction determines
      that any other amounts payable under this Lease are deemed to be interest,
      the
      Default Rent shall be adjusted to ensure that the aggregate interest payable
      under this Lease does not accrue at a rate in excess of the maximum legal
      rate.

     

     8.7
      Attorneys' Fees. Tenant shall pay all reasonable costs and expenses
      incurred by Landlord in enforcing or preserving Landlord's rights under this
      Lease, whether or not an Event of Default has actually occurred or has been
      declared and thereafter cured, including, without limitation, [i] the reasonable
      fees, expenses, and costs of any litigation, appellate, receivership,
      administrative, bankruptcy, insolvency or other similar proceeding; [ii]
      reasonable attorney, paralegal, consulting and witness fees and disbursements,
      whether in-house counsel or outside counsel; and [iii] the reasonable expenses,
      including, without limitation, lodging, meals, and transportation, of Landlord
      and its employees, agents, attorneys, and witnesses in preparing for litigation,
      administrative, bankruptcy, insolvency or other similar proceedings and
      attendance at hearings, depositions, and trials in connection therewith. All
      such reasonable costs, expenses, charges and fees payable by Tenant shall be
      deemed to be Additional Rent under this Lease.

     

     8.8
      Escrows and Application of Payments. As security for the performance of
      the Obligor Group Obligations, Tenant hereby assigns to Landlord all its right,
      title, and interest in and to all monies escrowed with Landlord under this
      Lease
      and all deposits with utility companies, taxing authorities and insurance
      companies; provided, however, that Landlord shall not exercise its rights
      hereunder until an Event of Default has occurred. Any payments received by
      Landlord under any provisions of this Lease during the existence or continuance
      of an Event of Default shall be applied to the Obligor Group Obligations in
      the
      order which Landlord may determine.

     

     8.9
      Remedies Cumulative. The remedies of Landlord herein are cumulative to
      and not in lieu of any other remedies available to Landlord at law or in equity.
      The use of any one remedy shall not be taken to exclude or waive the right
      to
      use any other remedy.

     

     8.10
      Waivers. Tenant waives [i] any objections, defenses, claims or rights
      with respect to summary proceedings initiated by Landlord, [ii] any right of
      redemption whether pursuant to statute, at law or in equity, [iii] except as
      specifically provided hereunder, all presentments, demands for performance,
      notices of nonperformance, protest, notices of protest, notices of dishonor,
      notices to quit and any other notice or demand of any kind, and [iv] except
      as
      specifically provided hereunder, all notices of the existence, creation or
      incurring of any obligation or advance under this Lease before or after this
      date.


    
      
        
        

      

      
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    ARTICLE
      9: DAMAGE AND DESTRUCTION

     

    9.1
Notice
      of Casualty.
If the Leased Property shall be destroyed, in whole or in part,
      or
      damaged by fire, flood, windstorm or other casualty in excess of $50,000.00
      (a
      "Casualty"), Tenant shall give written notice thereof to Landlord within one
      Business Day after the occurrence of the Casualty. Within 15 days after the
      occurrence of the Casualty or as soon thereafter as such information is
      reasonably available to Tenant, Tenant shall provide the following information
      to Landlord: [i] the date of the Casualty; [ii] the nature of the Casualty;
      [iii] a description of the damage or destruction caused by the Casualty,
      including the type of Leased Property damaged and the area of the Improvements
      damaged; [iv] a preliminary estimate of the cost to repair, rebuild, restore
      or
      replace the Leased Property; [v] a preliminary estimate of the schedule to
      complete the repair, rebuilding, restoration or replacement of the Leased
      Property; [vi] a description of the anticipated property insurance claim,
      including the name of the insurer, the insurance coverage limits, the deductible
      amount, the expected settlement amount, and the expected settlement date; and
      [vii] a description of the business interruption claim, including the name
      of
      the insurer, the insurance coverage limits, the deductible amount, the expected
      settlement amount, and the expected settlement date. Within five days after
      request from Landlord, Tenant will provide Landlord with copies of all
      correspondence to the insurer and any other information reasonably requested
      by
      Landlord.

     

    9.2
      Substantial Destruction.

     

    9.2.1
      If
      any Facility's Improvements are substantially destroyed at any time other than
      during the final 18 months of the Initial Term or any Renewal Term, Tenant
      shall
      promptly rebuild and restore such Improvements in accordance with §9.4 and
      Landlord shall make the insurance proceeds available to Tenant for such
      restoration. The term "substantially destroyed" means any casualty resulting
      in
      the loss of use of 50% or more of the licensed beds at any one
      Facility.

     

    9.2.2
      If
      any Facility's Improvements are substantially destroyed during the final 18
      months of the Initial Term or any Renewal Term, Landlord may elect to terminate
      this Lease with respect to the entire Leased Property or terminate this Lease
      and all Affiliate Leases, at Landlord's option, and retain the insurance
      proceeds unless Tenant exercises its option to renew as set forth in §9.2.3 or
      exercises its option to purchase as set forth in §9.2.4. If Landlord elects to
      terminate, Landlord shall give notice ("Termination Notice") of its election
      to
      terminate this Lease (or this Lease and all Affiliate Leases, if elected by
      Landlord) within 30 days after receipt of Tenant's notice of the damage. If
      Tenant does not exercise its option to renew under §9.2.3 or its option to
      purchase under §9.2.4 within 15 days after delivery of the Termination Notice,
      this Lease (or this Lease and all Affiliate Leases, if elected by Landlord)
      shall terminate on the 15th day after delivery of the Termination Notice. If
      this Lease (or this Lease and all Affiliate Leases, if elected by Landlord)
      is
      so terminated, Tenant shall be liable to Landlord for all Rent and all other
      obligations accrued under this Lease through the effective date of termination
      and each Affiliate shall be liable to Landlord for all Rent and all other
      obligations accrued under its respective Affiliate Lease through the effective
      date of termination.


    
      
        
        

      

      
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    9.2.3
      If
      any Facility's Improvements are substantially destroyed during the final 18
      months of the Initial Term or the Renewal Term and Landlord gives the
      Termination Notice, Tenant shall have the option to renew this Lease with
      respect to the entire Leased Property (but not any part thereof). Tenant shall
      give Landlord irrevocable notice of Tenant's election to renew, and each
      Affiliate Tenant shall give irrevocable notice of renewal, within 15 days after
      delivery of the Termination Notice. If Tenant and each Affiliate Tenant elect
      to
      renew, the Renewal Term will be in effect for the balance of the then current
      Term plus a 10-year period. The Renewal Term will commence on the third day
      following Landlord's receipt of Tenant's and each Affiliate Tenant's notice
      of
      renewal. All other terms of this Lease for the Renewal Term shall be in
      accordance with Article 12. The Improvements will be restored by Tenant in
      accordance with the provisions of this Article 9 regarding partial
      destruction.

     

    9.2.4
      If
      any Facility's Improvements are substantially destroyed during the final 18
      months of the Initial Term or any Renewal Term and Landlord gives the
      Termination Notice, Tenant shall have the option to purchase the entire Leased
      Property (but not any part thereof). Tenant shall give Landlord notice of
      Tenant's election to purchase, and if required by Landlord, each Affiliate
      Tenant shall give notice of its election to purchase its respective Affiliate
      Facility, within 15 days after delivery of the Termination Notice. If Tenant
      and
      each Affiliate Tenant elect to purchase their respective Leased Property, the
      Option Price will be determined in accordance with § 13.2 and the Fair Market
      Value will be determined in accordance with § 13.3 except as otherwise provided
      in this section. For purposes of determining the Fair Market Value, the Leased
      Property will be valued as if it had been restored to be equal in value to
      the
      Leased Property existing immediately prior to the occurrence of the damage.
      All
      other terms of the option to purchase shall be in accordance with Article 13.
      Landlord shall hold the insurance proceeds until the closing of the purchase
      of
      the Leased Property and at closing shall deliver the proceeds to
      Tenant.

     

    9.3
      Partial Destruction. If any Facility's Improvements are not substantially
      destroyed, then Tenant shall comply with the provisions of §9.4 and Landlord
      shall make the insurance proceeds available to Tenant for such
      restoration.

     

    9.4
      Restoration. Tenant shall promptly repair, rebuild, or restore the
      damaged Leased Property, at Tenant's expense, so as to make the
      Leased
      Property at least equal in value to the Leased Property existing immediately
      prior to such occurrence and as nearly similar
      to it
      in character as is practicable and reasonable. Before beginning such repairs
      or
      rebuilding, or letting any contracts in connection with such repairs or
      rebuilding, Tenant will submit for Landlord's approval, which approval Landlord
      will not unreasonably withhold or delay, plans and specifications meeting the
      requirements of § 16.2 for such repairs or rebuilding. Promptly after receiving
      Landlord's approval of the plans and specifications and receiving the proceeds
      of insurance, Tenant will begin such repairs or 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. Landlord will make available to
      Tenant the net proceeds of any fire or other casualty insurance paid to Landlord
      for such repair or rebuilding as the same progresses, after deduction of any
      costs of collection, including reasonable out of pocket attorneys' fees.
      Payments will be made against properly certified vouchers of a competent
      architect in charge of the work and approved by Landlord. Payments for deposits
      for the repairing or rebuilding or delivery of materials to the Facility will
      be
      made upon Landlord's receipt of evidence satisfactory to Landlord that such
      payments are required in advance. Prior to commencing the repairing or
      rebuilding, Tenant shall deliver to Landlord for Landlord's approval a schedule
      setting forth the estimated monthly draws for such work. Landlord will
      contribute to such payments out of the insurance proceeds an amount equal to
      the
      proportion that the total net amount received by Landlord from insurers bears
      to
      the total estimated cost of the rebuilding or repairing, multiplied by the
      payment by Tenant on account of such work. Landlord may, however, withhold
      10%
      from each payment until the work is completed and proof has been furnished
      to
      Landlord that no lien or liability has attached or will attach to the Leased
      Property or to Landlord in connection with such repairing or rebuilding. Upon
      the completion of rebuilding and the furnishing of such proof, the balance
      of
      the net proceeds of such insurance payable to Tenant on account of such
      repairing or rebuilding will be paid to Tenant. Tenant will obtain and deliver
      to Landlord a temporary or final certificate of occupancy before the damaged
      Leased Property is reoccupied for any purpose. Tenant shall complete such
      repairs or rebuilding free and clear of mechanic's or other liens, and in
      accordance with the building codes and all applicable laws, ordinances,
      regulations, or orders of any state, municipal, or other public authority
      affecting the repairs or rebuilding, and also in accordance with all
      requirements of the insurance rating organization, or similar body. Any
      remaining proceeds of insurance after such restoration will be Tenant's
      property.


    
      
        
        

      

      
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     9.5
      Insufficient Proceeds. If the proceeds of any insurance settlement are
      not sufficient to pay the costs of Tenant's repair, rebuilding or restoration
      under §9.4 in full, Tenant shall deposit with Landlord at Landlord's option, and
      within 10 days of Landlord's request, an amount sufficient in Landlord's
      reasonable judgment to complete such repair, rebuilding or restoration. Tenant
      shall not, by reason of the deposit or payment, be entitled to any reimbursement
      from Landlord or diminution in or postponement of the payment of the
      Rent.

     

     9.6
      Not Trust Funds. Notwithstanding anything herein or at law or equity to
      the contrary, none of the insurance proceeds paid to Landlord as herein provided
      shall be deemed trust funds, and Landlord shall be entitled to dispose of such
      proceeds as provided in this Article 9. Tenant expressly assumes all risk of
      loss, including a decrease in the use, enjoyment or value, of the Leased
      Property from any casualty whatsoever, whether or not insurable or insured
      against.

     

     9.7
      Landlord's Inspection. During the progress of such repairs or rebuilding,
      Landlord and its architects and engineers may, from time to time, inspect the
      Leased Property and will be furnished, if required by them, with copies of
      all
      plans, shop drawings, and specifications relating to such repairs or rebuilding.
      Tenant will keep all plans, shop drawings, and specifications at the building,
      and Landlord and its architects and engineers may examine them at all reasonable
      times. If, during such repairs or rebuilding, Landlord and its architects and
      engineers determine that the repairs or rebuilding are not being done in
      accordance with the approved plans and specifications, Landlord will give prompt
      notice in writing to Tenant, specifying in detail the particular deficiency,
      omission, or other respect in which Landlord claims such repairs or rebuilding
      do not accord with the approved plans and specifications. Upon the receipt
      of
      any such notice, Tenant will cause corrections to be made to any deficiencies,
      omissions, or such other respect. Tenant's obligations to supply insurance,
      according to Article 4, will be applicable to any repairs or rebuilding under
      this section.


    
      
        
        

      

      
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    9.8
      Landlord's Costs. Tenant shall, within 30 days after receipt of an
      invoice from Landlord, pay the reasonable costs, expenses, and fees of any
      architect or engineer employed by Landlord to review any plans and
      specifications and to supervise and approve any construction, or for any
      services rendered by such architect or engineer to Landlord as contemplated
      by
      any of the provisions of this Lease, or for any services performed by Landlord's
      attorneys in connection therewith.

     

    9.9 
      No Rent Abatement. Rent will not abate pending the repairs or rebuilding
of
      the
      Leased Property.

     

    ARTICLE
      10: CONDEMNATION

     

    10.1
      Total Taking. If, by exercise of the right of eminent domain or by
      conveyance made in response to the threat of the exercise of such right
      ("Taking"), any entire Facility Property is taken, or so much of any Facility
      Property is taken that the Facility Property cannot be used by Tenant for the
      purposes for which it was used immediately before the Taking, then this Lease
      will end with respect to such Facility Property only on the earlier of the
      vesting of title to the Facility Property in the condemning authority or the
      taking of possession of the Facility Property by the condemning authority.
      Upon
      such termination, the Investment Amount shall be reduced by the actual net
      award
      for such Taking received by Landlord and Rent hereunder shall be reduced
      accordingly unless there is only one Facility Property subject to this Lease
      at
      the time of the Taking in which case the Lease will terminate. The termination
      of this Lease as to one Facility Property due to a taking is the result of
      circumstances beyond the control of Landlord and Tenant and the parties affirm
      that, except for such specific isolated situation, this Lease is intended to be
      a single indivisible lease. All damages awarded for such Taking under the power
      of eminent domain shall be the property of Landlord, whether such damages shall
      be awarded as compensation for diminution in value of the leasehold or the
      fee
      of the Facility Property.

     

    10.2
      Partial Taking. If, after a Taking, so much of the Facility Property
      remains that the Facility Property can be used for substantially the same
      purposes for which it was used immediately before the Taking, then [i] this
      Lease will end as
to the part
      taken on the earlier of the vesting of title to such
      Leased Property in the condemning authority or the taking of possession of
      such
      Leased Property by the condemning authority and the Rent will be adjusted
      accordingly; [ii] at its cost, Tenant shall restore so much of the Facility
      Property as remains to a sound architectural unit substantially suitable for
      the
      purposes for which it was used immediately before the Taking, using good
      workmanship and new, first-class materials; [iii] upon completion of the
      restoration, Landlord will pay Tenant the lesser of the net award made to
      Landlord on the account of the Taking (after deducting from the total award,
      attorneys', appraisers', and other fees and costs incurred in connection with
      the obtaining of the award and amounts paid to the holders of mortgages secured
      by the Facility Property), or Tenant's actual out-of-pocket costs of restoring
      the Facility Property; and [iv] Landlord shall be entitled to the balance of
      the
      net award. The restoration shall be completed in accordance with §§9.4, 9.5,
      9.7, 9.8 and 9.9 with such provisions deemed to apply to condemnation instead
      of
      casualty.


    
      
        
        

      

      
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    10.3
      Condemnation Proceeds Not Trust Funds. Notwithstanding anything in this
      Lease or at law or equity to the contrary, none of the condemnation award paid
      to Landlord shall be deemed trust funds, and Landlord shall be entitled to
      dispose of such proceeds as provided in this Article 10. Tenant expressly
      assumes all risk of loss, including a decrease in the use, enjoyment, or value,
      of the Leased Property from any Condemnation.

     

    ARTICLE
      11: TENANT'S PROPERTY

     

    11.1
      Tenant's Property. Tenant shall install, place, and use on the Leased
      Property such fixtures, furniture, equipment, inventory and other personal
      property in addition to Landlord's Personal Property as may be required or
      as
      Tenant may, from time to time, deem necessary or useful to operate the Leased
      Property for its permitted purposes. All fixtures, furniture, equipment,
      inventory, and other personal property installed, placed, or used on the Leased
      Property which is owned by Tenant or leased by Tenant from third parties is
      hereinafter referred to as "Tenant's Property".

     

    11.2
      Requirements for Tenant's Property. Tenant shall comply with all of the
      following requirements in connection with Tenant's Property:

     

    (a)            Tenant
      shall, at Tenant's sole cost and expense, maintain, repair, and replace Tenant's
      Property.

     

    (b)            Tenant
      shall, at Tenant's sole cost and expense, keep Tenant's Property insured against
      loss or damage by fire, vandalism and malicious mischief, sprinkler leakage,
      earthquake, and other physical loss perils commonly covered by fire and extended
      coverage, boiler and machinery, and difference in conditions insurance in an
      amount not less than 90% of the then full replacement cost thereof. Tenant
      shall
      use the proceeds from any such policy for the repair and replacement of Tenant's
      Property. The insurance shall meet the requirements of §4.3.

     

    (c)            Tenant
      shall pay all taxes applicable to Tenant's Property.

     

    (d)            If
      Tenant's Property is damaged or destroyed by fire or any other cause, Tenant
      shall promptly repair or replace Tenant's Property unless Landlord elects to
      terminate this Lease pursuant to §9.2.2.

     

    (e)            Unless
      an Event of Default or any event which, with the giving of notice or lapse
      of
      time, or both, would constitute an Event of Default has occurred, Tenant may
      remove Tenant's Property from the Leased Property from time to time provided
      that [i] the items removed are not required to operate the Leased Property
      for
      the Facility Uses (unless such items are being replaced by Tenant); and [ii]
      Tenant repairs any damage to the Leased Property resulting from the removal
      of
      Tenant's Property.

     

    (f)            Tenant
      shall not, without the prior written consent of Landlord or as otherwise
      provided in this Lease, remove any Tenant's Property or Leased Property
      provided, however, Tenant may transfer to any Affiliate Facility items of
      Tenant's Property or Leased Property that are not necessary for the Operation
      of
      the Facility in compliance with this Lease. Tenant shall, at Landlord's option,
      remove Tenant's Property upon the termination or expiration of this Lease and
      shall repair any damage to the Leased Property resulting from the removal of
      Tenant's Property. If Tenant fails to remove Tenant's Property within 30 days
      after request by Landlord, then Tenant shall be deemed to have abandoned
      Tenant's Property, Tenant's Property shall become the property of Landlord,
      and
      Landlord may remove, store and dispose of Tenant's Property. In such event,
      Tenant shall have no claim or right against Landlord for such property or the
      value thereof regardless of the disposition thereof by Landlord. Tenant shall
      pay Landlord, upon demand, all expenses incurred by Landlord in removing,
      storing, and disposing of Tenant's Property and repairing any damage caused
      by
      such removal. Tenant's obligations hereunder shall survive the termination
      or
      expiration of this Lease.


    
      
        
        

      

      
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    (g)    Tenant
      shall
      perform its obligations under any equipment lease or security agreement for
      Tenant's Property. For equipment loans or leases for equipment having an
      original cost in excess of $50,000.00, Tenant shall cause such equipment lessor
      or lender to enter into a nondisturbance agreement with Landlord upon terms
      and
      conditions acceptable to Landlord, including, without limitation, the following:
      [i] Landlord shall have the right (but not the obligation) to assume such
      equipment lease or security agreement upon the occurrence of an Event of Default
      by Tenant hereunder; [ii] such equipment lessor or lender shall notify Landlord
      of any default by Tenant under the equipment lease or security agreement and
      give Landlord a reasonable opportunity to cure such default; and [iii] Landlord
      shall have the right to assign its interest in the equipment lease or security
      agreement and nondisturbance agreement. Tenant shall, within 30 days after
      receipt of an invoice from Landlord, reimburse Landlord for all costs and
      expenses incurred in reviewing and approving the equipment lease, security
      agreement and nondisturbance agreement, including, without limitation,
      reasonable attorneys' fees and costs.

     

    ARTICLE
      12: RENEWAL OPTIONS

     

    12.1
      Renewal Options.
      Tenant has the option to renew ("Renewal Option") this Lease for
      one
      10-year renewal term ("Renewal Term"). Tenant can exercise the Renewal Option
      only upon satisfaction of the following conditions:

     

    (a)           There
      shall be no uncured Event of Default, or any event which with the passage of
      time or giving of notice would constitute an Event of Default, at the time
      Tenant exercises its Renewal Option nor on the date the Renewal Term is to
      commence.

     

    (b)           Tenant
      shall give Landlord irrevocable written notice of renewal no later than the
      date
      which is [i] 90 days prior to the expiration date of the then current Term;
      or
      [ii] 15 days after Landlord's delivery of the Termination Notice as set forth
      in
§9.2.3.

     

    (c)           Each
      Affiliate Tenant shall concurrently give irrevocable notice of

     

    (d)           renewal
      for each Affiliate Lease (if applicable).

     

    (e)           Tenant
      shall pay all amounts, costs, expenses, charges, Rent and other items then
      due
      and payable by Tenant to Landlord, including, but not limited to, enforcement
      costs as set forth in §8.7.

     

    12.2
      Effect of
      Renewal. The following terms and conditions will be applicable if
      Tenant renews the Lease:


    
      
        
        

      

      
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    (a)           Effective
      Date. Except as otherwise provided in §9.2.3, the effective date of any
      Renewal Term will be the first day after the expiration date of the then current
      Term. The first day of each Renewal Term is also referred to as the Renewal
      Date.

     

    (b)           Investment
      Amount. Effective as of the Renewal Date, a single Investment Amount will be
      computed by summing all Landlord Payments made to date.

     

    (c)           Rent
      Adjustment. Effective as of the Renewal Date, Landlord shall calculate Base
      Rent for the Renewal Term based upon the applicable rate of return to Landlord
      as set forth in the Commitment and shall issue a new Rent Schedule reflecting
      the Base Rent adjustment. Until Tenant receives a revised Rent Schedule from
      Landlord, Tenant shall for each month [i] continue to make installments of
      Base
      Rent according to the Rent Schedule in effect on the day before the Renewal
      Date; and [ii] within 10 days following Landlord's issuance of an invoice,
      pay
      the difference between the installment of Base Rent paid to Landlord for such
      month and the installment of Base. Rent actually due for such month as a result
      of the renewal of the Lease.

     

    (d)           Other
      Terms and Conditions. Except for the modifications set forth in this § 12.2,
      all other terms and conditions of the Lease will remain the same for the Renewal
      Term.

     

    ARTICLE
      13: OPTION TO PURCHASE

     

    13.1
      Option to Purchase. Landlord hereby grants to Tenant an option to
      purchase ("Option to Purchase") all of the Leased Property (but not any part
      thereof except as specifically permitted herein) in accordance with the
      terms and conditions of this Article 13. Tenant may exercise its Option to
      Purchase only by giving an irrevocable notice of Tenant's election to purchase
      the Leased Property ("Purchase Notice") in accordance with the
      following:

     

    (a)           During
      the Initial Term or any Renewal Term, Tenant and each Affiliate Tenant (if
      any)
      must give a Purchase Notice no earlier than the date which is 180 days, and
      no
      later than the date which is 90 days, prior to the expiration date of the then
      current Term of this Lease and each Affiliate Lease (if any).

     

    (b)           If
      any Facility's Improvements are substantially destroyed during the final 18
      months of the Initial Term or any Renewal Term, Tenant (and each Affiliate
      Tenant if required by Landlord) must give a Purchase Notice within 15 days
      after
      Landlord gives the Termination Notice pursuant to §9.2.4.

     

    (c)    If
      any
      Facility Property is taken during the final 18 months of the Initial Term or
      any
      Renewal Term by exercise of the right of eminent domain or by conveyance made
      in
      response to the threat of the exercise of such right, Tenant must give a
      Purchase Notice within 30 days after delivery of the notice of Landlord's intent
      to terminate pursuant to §10.1.1.

     

    Tenant
      shall have no right to exercise the Option to Purchase other than in accordance
      with the terms of this Article 13.


    
      
        
        

      

      
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    13.2
      Option Price. The option price ("Option Price") will be an amount equal
      to the sum of [a] the Investment Amount plus [b] 50% of the amount by which
      the
      Fair Market Value at the time of the option exercise exceeds the sum of the
      Investment Amount and the Loan Amount. In addition to the Option Price, Tenant
      shall pay all reasonable closing costs and expenses in connection with the
      transfer of the Leased Property to Tenant, including, but not limited to, the
      following: [a] real property conveyance or transfer fees or deed stamps;
[b] reasonable
      title search fees, title insurance commitment fees, and title insurance
      premiums; [c] reasonable
      survey fees; [d] reasonable environmental assessment fees; [e] recording fees;
      [f] reasonable attorneys' fees of Landlord's counsel; and [g] reasonable fees
      of
      any escrow agent. Tenant shall also pay all reasonable amounts, costs, expenses,
      charges, Rent and other items payable by Tenant to Landlord, including, but
      not
      limited to, enforcement costs as set forth in §8.7.

     

    13.3
      Fair Market Value. The fair market value (the "Fair Market Value") of the
      Leased Property shall be determined as follows.

     

    13.3.1
      The parties shall attempt to determine the Fair Market Value by mutual agreement
      within 15 days after giving the Purchase Notice. However, if the parties do
      not
      agree on the Fair Market Value within such 15-day period, the following
      provisions shall apply.

     

    13.3.2
      Landlord and Tenant shall each give the other party notice of the name of an
      acceptable appraiser 15 days after giving of the Purchase Notice. The two
      appraisers will then select a third appraiser within an additional five days.
      Each appraiser must demonstrate to the reasonable satisfaction of both Landlord
      and Tenant that it has significant experience in appraising properties similar
      to the Leased Property. Within five days after designation, each appraiser
      shall
      submit a resume to Landlord and Tenant setting forth such appraiser's
      qualifications, including education and experience with similar properties.
      A
      notice of objections to the qualifications of any appraiser shall be given
      within 10 days after receipt of such resume. If a party fails to timely object
      to the qualifications of an appraiser, then the appraiser shall be conclusively
      deemed satisfactory. If a party gives a timely notice of objection to the
      qualifications of an appraiser, then the disqualified appraiser shall be
      replaced by an appraiser selected by the qualified appraisers or, if all
      appraisers are disqualified, then by an appraiser selected by a commercial
      arbitrator acceptable to Landlord and Tenant.

     

    13.3.3
      The Fair Market Value shall be determined by the appraisers within 60 days
      thereafter as follows. Each of the appraisers shall be instructed to prepare
      an
      appraisal of the Leased Property in accordance with the following
      instructions:

     

    The
      Leased Property is to be valued upon the three conventional approaches to
      estimate value known as the Income, Sales Comparison and Cost Approaches. Once
      the approaches are completed, the appraiser correlates the individual approaches
      into a final value conclusion.


    
      
        
        

      

      
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    The
      three
      approaches to estimate value are summarized as follows:

     

    Income
      Approach: This valuation approach recognizes that the value of the
      operating tangible and intangible assets can be represented by the expected
      economic viability of the business giving returns on and of the
      assets.

     

    Sales
      Comparison Approach: This valuation approach is based upon the
      principle of substitution. When a facility is replaceable in the market, the
      market approach assumes that value tends to be set at the price of acquiring
      an
      equally desirable substitute facility. Since healthcare market conditions change
      and frequently are subject to regulatory and financing environments, adjustments
      need to be considered. These adjustments also consider the operating differences
      such as services and demographics.

     

    Cost
      Approach: This valuation approach estimates the value of the tangible
      assets only. Value is represented by the market value of the land plus the
      depreciated reproduction cost of all improvements and equipment.

     

    In
      general, the Income and Sales Comparison Approaches are considered the best
      representation of value because they cover both tangibles and intangible assets,
      consider the operating characteristics of the business and have the most
      significant influence on attracting potential investors.

     

    The
      appraised values submitted by the three appraisers shall be ranked from highest
      value to middle value to lowest value, the appraised value (highest or lowest)
      which is furthest from the middle appraised value shall be discarded, and the
      remaining two appraised values shall be averaged to arrive at the Fair Market
      Value.

     

    13.3.4
      In
      the event of any condemnation, similar taking or threat thereof with respect
      to
      any part of the Leased Property or any insured or partially insured casualty
      loss to any part of the Leased Property after Tenant has exercised an Option
      to
      Purchase, but before settlement, the Fair Market Value of the Leased Property
      shall be redetermined as provided in this §13.3 to give effect to such
      condemnation, taking or loss and shall take into account all available
      condemnation awards and insurance proceeds.

     

    13.3.5
      Tenant shall pay, or reimburse Landlord for, all costs and expenses in
      connection with the appraisals.

     

    13.4
      Closing. The purchase of the Leased Property by Tenant shall close on a
      date agreed to by Landlord and Tenant which shall be not less than 60 days
      after
      Landlord's receipt of the Purchase Notice and not more than 60 days after the
      Fair Market Value of the Leased Property has been determined. At the closing,
      Tenant shall pay the Option Price and all amounts payable under § 13.2 in
      immediately available funds and Landlord shall convey title to the Leased
      Property to Tenant by a transferable and recordable limited warranty deed and
      limited warranty bill of sale.


    
      
        
        

      

      
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    13.5
      Failure to Close Option. If Tenant for any reason fails to purchase the
      Leased Property after Tenant has given the Purchase Notice, then Tenant shall
      pay Landlord all costs and expenses actually incurred by Landlord as a result
      of
      the failure to close, including costs of unwinding swap transactions or other
      interest rate protection devices and preparing for the closing. Tenant shall
      continue to be obligated as lessee hereunder for the remainder of the
      Term.

     

    13.6
      Failure to Exercise Option to Purchase and Renewal Option. If Tenant for
      any reason does not exercise its Option to Purchase or Renewal Option in
      accordance with the terms and conditions of this Lease before the expiration
      of
      the then current Term, Tenant shall be deemed to have forfeited all of Tenant's
      rights to exercise the Option to Purchase and Renewal Option.

     

    13.7
      Early Option to Purchase Dayton Facility. Notwithstanding any provision
      to the contrary contained in this Article 13, Tenant may exercise the Option
      to
      Purchase the Dayton Facility prior to the end of the Lease Term ("Early Option")
      subject to the same terms and conditions of this Article 13 except that [i]
      the
      required Purchase Notice may be given at any time during the first 21 months
      of
      the Lease Term; [ii] at the time that the Purchase Notice is given or in no
      event later than 18 months after the Lease Term begins, Tenant shall deliver
      to
      Landlord a signed letter of intent from an unaffiliated third party to purchase
      the Dayton Facility from Tenant ("Third-Party Sale"); [iii] prior to the closing
      of the Early Option, Tenant shall add to this Lease a facility or facilities
      (collectively called "Substitute Facility") with an acquisition price greater
      than $10,100,000.00 at the then current rate of return to Landlord; [iv] the
      Option Price shall be the Investment Amount allocated to the Dayton Facility
      (as
      set forth in Landlord's books and records) plus 50% of the positive difference
      between the Fair Market Value for the Dayton Facility and the sum of the
      Investment Amount allocated to the Dayton Facility and 29.8% of the Loan Amount;
      [v] at the time the Purchase Notice for the Early Option is given, no Event
      of
      Default has occurred and is continuing; [vi] the purchase of the Dayton Property
      shall close on a date agreed to by Landlord and Tenant which shall be not later
      than 90 days after Landlord's receipt of the Purchase Notice; and [vii] Tenant
      shall make a prepayment of the Loan as set forth in § 13.8. The addition of the
      Substitute Facility will be conditioned upon [a]
      satisfaction of Landlord's ordinary and customary due diligence and
      underwriting, and [b] Tenant's
      payment all of Landlord's closing costs for the acquisition of the Substitute
      Facility and amendment of this Lease.

     

    13.8
      Partial Prepayment of Loan. Tenant's right to close on the purchase of
      the Early Option is expressly conditioned upon Tenant making a partial
      prepayment of the Loan equal to Tenant's proceeds from the Third-Party Sale
      after payment of reasonable closing costs approved by HCN.

     

    ARTICLE
      14: NEGATIVE COVENANTS

     

    Until
      the
      Obligor Group Obligations shall have been performed in full, Tenant, Subtenant
      and Guarantor covenant and agree that Tenant and Subtenant (and Guarantor where
      applicable) shall not do any of the following without the prior written consent
      of Landlord:


    
      
        
        

      

      
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    14.1
      No Debt. Tenant and Subtenant shall not create, incur, assume, or permit
      to exist any indebtedness other than [i] trade debt incurred in the ordinary
      course of business; and [ii] indebtedness that is secured by any Permitted
      Lien.

     

    14.2
      No Liens. Tenant and Subtenant shall not create, incur, or permit to
      exist any lien, charge, encumbrance, easement or restriction upon the Leased
      Property or any lien upon or pledge of any interest in Tenant or Subtenant,
      except for Permitted Liens.

     

    14.3
      No Guaranties. Tenant and Subtenant shall not create, incur, assume, or
      permit to exist any guarantee of any loan or other indebtedness except for
      the
      endorsement of negotiable instruments for collection in the ordinary course
      of
      business.

     

    14.4
      No Transfer. Tenant and Subtenant shall not sell, lease, sublease,
      mortgage, convey, assign or otherwise transfer any legal or equitable interest
      in the Leased Property or any part thereof, except for transfers made in
      connection with any Permitted Lien.

     

    14.5
      No Dissolution. Tenant, Subtenant, Manager (if applicable) or Guarantor
      shall not dissolve, liquidate, merge, consolidate or terminate its existence
      or
      sell, assign, lease, or otherwise transfer (whether in one transaction or in
      a
      series of transactions) all or substantially all of its assets (whether now
      owned or hereafter acquired).

     

    14.6
      No Change in Management or Operation. No material change shall occur in
      the management or licensed operation of the Facility. Manager (as defined
      herein) shall remain the Manager of the Facility. Each Subtenant shall remain
      the licensed operator of the Facility as specified on Exhibit C.

     

    14.7
      No Investments. Tenant and Subtenant shall not purchase or otherwise
      acquire, hold, or invest in securities (whether capital stock or instruments
      evidencing indebtedness) of or make loans or advances to any person, including,
      without limitation, any Guarantor, any Affiliate, or any shareholder, member
      or
      partner of Tenant, Guarantor or any Affiliate, except for cash balances
      temporarily invested in short-term or money market securities.

     

    14.8
      Contracts. Tenant and Subtenant shall not execute or modify any material
      contracts or agreements with respect to the Facility except for contracts and
      modifications approved by Landlord. Contracts made in the ordinary course of
      business and in an amount less than $75,000.00 shall not be considered
      "material" for purposes of this paragraph.

     

    14.9
      Subordination of Payments to Affiliates. After the occurrence of an Event
      of Default and until such Event of Default is cured, Tenant, Subtenant and
      Guarantor shall not make any payments or distributions (including, without
      limitation, salary, bonuses, fees, principal, interest, dividends, liquidating
      distributions, management fees, cash flow distributions or lease payments)
      to
      Guarantor, Manager (if applicable), any Affiliate, or any shareholder, member
      or
      partner of Tenant, Guarantor, Manager (if applicable) or any
      Affiliate.

     

    14.10
      Change of Location or Name. Tenant and Subtenant shall not change any of
      the following: [i] the location of the principal place of business or chief
      executive office of Tenant or Subtenant, or any office where any of Tenant's
      or
      Subtenant's books and records are maintained; [ii] the name under which Tenant
      or Subtenant conducts any of its business or operations; or [iii] reorganize
      or
      otherwise change its respective Organization State.


    
      
        
        

      

      
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    ARTICLE
      15: AFFIRMATIVE COVENANTS

     

    15.1
      Perform Obligations. Tenant and Subtenant shall each perform all of its
      obligations under this Lease, the Government Authorizations, the Permitted
      Exceptions, and all Legal Requirements. If applicable, Tenant and each Subtenant
      shall take all necessary action to obtain all Government Authorizations required
      for the operation of the Facility as soon as possible after
      the
      Effective Date.

     

    15.2
      Proceedings to Enjoin or Prevent Construction. If any proceedings are
      filed seeking to enjoin or otherwise prevent or declare invalid or unlawful
      Tenant's construction, occupancy, maintenance, or operation of the Facility
      or
      any portion thereof, Tenant will cause such proceedings to be vigorously
      contested in good faith, and in the event of an adverse ruling or decision,
      prosecute all allowable appeals therefrom, and will, without limiting the
      generality of the foregoing, resist the entry or seek the stay of any temporary
      or permanent injunction that may be entered, and use its best efforts to bring
      about a favorable and speedy disposition of all such proceedings and any other
      proceedings.

     

    15.3
      Documents and Information,

     

    15.3.1
      Furnish Documents. Tenant and each Subtenant shall periodically during
      the term of the Lease deliver to Landlord the Annual Financial Statements,
      Periodic Financial Statements, Annual Facility Budget, Annual Budget and all
      other documents, reports, schedules and copies described on Exhibit E within
      the
      specified time periods. With each delivery of Annual Financial Statements and
      Periodic Financial Statements (other than the monthly Facility Financial
      Statement) to Landlord, Tenant and each Subtenant shall also deliver to Landlord
      a certificate signed by the Chief Financial Officer, Vice President of
      Accounting, general partner or managing member (as applicable) of Tenant and
      each Subtenant, and Quarterly Facility Accounts Receivable and Accounts Payable
      Aging Reports all in the form of Exhibit F (or in the case of the Receivable
      and
      Payable Reports, a similar format). After the occurrence of an Event of Default
      and receipt of Landlord's written request, Tenant shall deliver to Landlord
      an
      updated Annual Facility Budget and Annual Budget (based on a 12-month rolling
      forward period) within 10 Business Days after receipt of Landlord's
      request.

     

    15.3.2
      Furnish Information. Tenant and each Subtenant shall [i] promptly supply
      Landlord with such information concerning its financial condition, affairs
      and
      property, as Landlord may reasonably request from time to time hereafter; [ii]
      promptly notify Landlord in writing of any condition or event that constitutes
      a
      breach or event of default of any term, condition, warranty, representation,
      or
      provisions of this Lease or any other agreement, and of any material adverse
      change in its financial condition; [iii] maintain a standard and modem system
      of
      accounting; [iv] permit Landlord or any of its agent or representatives to
      have
      access to and to examine all of its books and records regarding the financial
      condition of the Facility at any time or times hereafter during business hours
      and after reasonable oral or written notice; and [v] permit Landlord to copy
      and
      make abstracts from any and all of said books and records.


    
      
        
        

      

      
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    15.3.3
      Further Assurances and Information. Tenant shall, on request of Landlord
      from time to time, execute, deliver, and furnish documents as may be necessary
      to fully consummate the transactions contemplated under this Lease. Within
      15
      days after a request from Landlord, Tenant and each Subtenant shall provide
      to
      Landlord such additional information regarding Tenant, Tenant's financial
      condition, Subtenant, each Subtenant's financial condition or the Facility
      as
      Landlord, or any existing or proposed creditor of Landlord, or any auditor
      or
      underwriter of Landlord, may require from time to time, including, without
      limitation, a current Tenant's Certificate and Facility Financial Report in
      the
      form of Exhibit F. Upon Landlord's request, but not more than once every three
      years, Tenant shall provide to Landlord, at Tenant's expense, an appraisal
      prepared by an MAI appraiser setting forth the current fair market value of
      the
      Leased Property.

     

    15.3.4
      Material Communications. Tenant and each Subtenant shall transmit to
      Landlord, within 5 Business Days after receipt thereof, any material
      communication affecting a Facility, this Lease, the Legal Requirements or the
      Government Authorizations, and Tenant and each Subtenant will promptly respond
      to Landlord's inquiry with respect to such information. Tenant and each
      Subtenant shall notify Landlord in writing within 5 Business Days after Tenant
      or any Subtenant has knowledge of any potential, threatened or existing
      litigation or proceeding against, or investigation of, Tenant, Subtenant,
      Guarantor, or the Facility that may affect the right to operate the Facility
      or
      Landlord's title to the Facility or Tenant's interest therein.

     

    15.3.5
      Requirements for Financial Statements. Tenant shall meet the following
      requirements in connection with the preparation of the financial statements:
      [i]
      all audited financial statements shall be prepared in accordance with generally
      accepted accounting principles consistently applied; [ii] all unaudited
      financial statements shall be prepared in a manner substantially consistent
      with
      prior audited and unaudited financial statements submitted to Landlord; [iii]
      all financial statements shall fairly present the financial condition and
      performance for the relevant period in all material respects; [iv] the financial
      statements shall include all notes to the financial statements and a complete
      schedule of contingent liabilities and transactions with Affiliates; and [v]
      the
      audited financial statements shall contain an unqualified opinion.

     

    15.4
      Compliance With Laws. Tenant and each Subtenant shall comply with all
      Legal Requirements and keep all Government Authorizations in full force and
      effect. Tenant and each Subtenant shall pay when due all taxes and governmental
      charges of every kind and nature that are assessed or imposed upon Tenant and
      each Subtenant, respectively, at any time during the term of the Lease,
      including, without limitation, all income, franchise, capital stock, property,
      sales and use, business, intangible, employee withholding, and all taxes and
      charges relating to Tenant's and each Subtenant's respective business and
      operations. Tenant and each Subtenant shall be solely responsible for compliance
      with all Legal Requirements, including the ADA, and Landlord shall have no
      responsibility for such compliance.

     

    15.5
      Broker's Commission. Tenant shall indemnify Landlord from claims of
      brokers arising by the execution hereof or the consummation of the transactions
      contemplated hereby and from expenses incurred by Landlord in connection with
      any such claims (including attorneys' fees).


    
      
        
        

      

      
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    15.6
      Existence and Change in Ownership. Tenant, Subtenant, Manager (if
      applicable) and each Guarantor shall maintain its existence throughout the
      term
      of this Lease. Any change in the equity ownership of Tenant, Subtenant, Manager
      (if applicable) or any Guarantor, directly or indirectly, that results in a
      change in Control (as defined within the definition of "Affiliate" in § 1.4
      hereof) of such entity, shall require Landlord's prior written
      consent.

     

    15.7
      Financial Covenants. The defined terms used in this section are defined
      in § 15.7.1. The method of calculating Net Worth and valuing assets shall be
      consistent with the Financial Statements. The following financial covenants
      shall be met throughout the term of this Lease:

     

    15.7.1
      Definitions.

     

    (a)           "Accounts
      Payable Days Sales Outstanding" is equal to the amount of the Average Quarterly
      Accounts Payable divided by the amount of the Daily Non-Payroll
      Expenses.

     

    (b)           "Adjusted
      Accounts Payable" means the amount of the accounts payable per Company's
      Financial Statements excluding any amounts for capital
      improvements.

     

    (c)           "Average
      Quarterly Accounts Payable" is equal to [i] the sum of the Adjusted Accounts
      Payable for the current fiscal quarter plus the amount of the Adjusted Accounts
      Payable for the previous fiscal quarter; divided by [ii] two.

     

    (d)           "Daily
      Non-Payroll Expenses" is the amount equal to Non-Payroll Operating Expenses
      for
      the fiscal quarter divided by the number of days within the fiscal
      quarter.

     

    (e)           "Net
      Worth" means an amount equal to the total consolidated fair market value of
      the
      tangible assets of the person (excluding good will and other intangible assets)
      minus the total consolidated liabilities of-such
      person.

     

    (f)           
      "Non-Payroll Operating Expenses" means the aggregate net income of Company
      plus
      [i] the amount of all payroll expenses, benefits, and payroll taxes; plus [ii]
      all non-operating expenses including, but not limited to, all capital
      improvements, rents, interest, straight-line rent adjustments, depreciation,
      amortization, development expenses, restructuring expenses, litigation
      settlements, gain or loss on disposal of assets, and income taxes.

     

    (g)  
"Portfolio
      Cash Flow"
      means the aggregate net income arising from all Facilities under this Lease
      as
      reflected on the Facility Financial Statement of each Facility plus [i] the
      amount of the provision for depreciation and amortization; plus [ii] the amount
      of the provision for management fees; plus [iii] the amount of the provision
      for
      income taxes; plus [iv] the amount of the provision for Base Rent payments
      and
      interest and equipment lease payments, if any, relating to the Facilities;
      minus
      [v] an imputed management fee equal to 5% of gross revenues of the Facilities
      (net of contractual allowances); and minus [vi] an imputed replacement reserve
      of $400.00 per licensed unit at all the Facilities per year.


    
      
        
        

      

      
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    (h)   "Portfolio
      Coverage
      Ratio" is the ratio. of [i] Portfolio Cash Flow for each applicable period;
      to
      [ii] the Base Rent payments under this Lease for the applicable
      period.

     

    15.7.2
      Coverage Ratio. Tenant shall maintain for each fiscal quarter a Portfolio
      Coverage Ratio of not less than 1.25 to 1.00.

     

    15.7.3
      Net Worth. Commencing on the Effective Date, Company shall maintain for
      each fiscal quarter cash and cash equivalents of at least $3,000,000.00.
      Commencing March 1, 2010, Company shall also maintain for each fiscal quarter
      a
      Net Worth of at least $3,000,000.00.

     

    15.7.4
      Accounts Payable Days Sales Outstanding. Company shall maintain for each
      fiscal quarter an Accounts Payable Days Sales Outstanding less than 50
      days.

     

    15.8
      Facility Licensure and Certification. Tenant and each Subtenant, as
      applicable, shall deliver the documents listed under item no. 16 of Exhibit
      E
      within 5 Business Days after receipt thereof. Tenant and Subtenant acknowledge
      that each has reviewed Exhibit E and agrees to the foregoing obligation. If
      Tenant or Subtenant receives a Facility survey or inspection report with
      material deficiencies, notice of failure to comply with a plan of correction
      or
      an HIPDB adverse action report, Tenant and the respective Subtenant shall cure
      all deficiencies and implement all corrective actions by the date required
      by
      the regulatory authority.

     

    15.9
      Transfer of License and Facility Operations. If this Lease is terminated
      due to expiration of the Term, due to an Event of Default or for any reason
      other than Tenant's purchase of the Leased Property, or if Tenant or Subtenant
      vacates the Leased Property (or any part thereof) without termination of this
      Lease, the following provisions shall be immediately effective:

     

    15.9.1
      Licensure. Tenant and each Subtenant shall execute, deliver and file all
      documents and statements reasonably requested by Landlord to effect the transfer
      of the Facility license and Government Authorizations to a replacement operator
      designated by Landlord ("Replacement Operator"), subject to any required
      approval of governmental regulatory authorities, and Tenant and each Subtenant
      shall provide to Landlord all information and records required by Landlord
      in
      connection with the transfer of the license and Government
      Authorizations.

     

    15.9.2
      Facility Operations. In order to facilitate a responsible and efficient
      transfer of the operations of the Facility, Tenant and Subtenant shall, if
      and
      to the extent requested by Landlord and subject to all applicable law, [i]
      deliver to Landlord the most recent updated reports, notices, schedules and
      documents listed under item nos. 15, 16 17, 18 and 19 of Exhibit E; [ii]
      continue and maintain the operation of the Facility in the ordinary course
      of
      business, including retention of all residents at the Facility to the fullest
      extent practicable and consistent with applicable laws and regulations, until
      transfer of the Facility operations to the Replacement Operator is completed;
      [iii] enter into such management agreements, operations transfer agreements
      and
      other types of agreements that may be reasonably requested by Landlord or the
      Replacement Operator; and [iv] provide reasonable access for Landlord and its
      agents to show the Facility to potential replacement operators. Tenant and
      Subtenant consent to the distribution by Landlord to potential replacement
      operators of Facility financial statements, licensure reports, financial and
      property due diligence materials and other documents, materials and information
      relating to the Facility to the extent such documents are not deemed
      confidential or subject to attorney-client privilege. The provisions of this
      section do not create or establish any rights in Tenant, Subtenant or any third
      party and Landlord reserves all rights and remedies relating to termination
      of
      this Lease.


    
      
        
        

      

      
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    15.10
      Bed Operating Rights. Tenant and Subtenant acknowledge and agree that the
      rights to operate the beds located at the Facility as long term care beds under
      the law of the applicable Facility State [i] affect the value of the Leased
      Property, and [ii] the grant of this Lease is conditioned upon the existence
      of
      such rights. Tenant and Subtenant shall not relocate any licensed bed at any
      Facility that Tenant and Subtenant are currently operating pursuant to this
      Lease to any other location and shall not transfer any bed operating rights
      to
      any other party without the prior written consent of Landlord.

     

    15.11
      Power of Attorney. Effective upon [i] the occurrence and during the
      continuance of an Event of Default, or [ii] termination of this Lease for any
      reason other than Tenant's purchase of the Leased Property, Tenant and Subtenant
      hereby irrevocably and unconditionally appoint Landlord, or Landlord's
      authorized officer, agent, employee or designee, as Tenant's and
      Subtenant's true and lawful attorney-in-fact, to act for Tenant and Subtenant
      in
      Tenant's and Subtenant's respective name, place, and stead, to execute, deliver
      and file all applications and any and all other necessary documents and
      statements to effect the issuance, transfer, reinstatement, renewal and/or
      extension of the Facility license and all Governmental Authorizations issued
      to
      Tenant and Subtenant or applied for by Tenant and Subtenant in connection with
      Tenant's and Subtenant's operation of the Facility, to permit any designee
      of
      Landlord or any other transferee to operate the Facility under the Governmental
      Authorizations, and to do any and all other acts incidental to any of the
      foregoing. Tenant and Subtenant irrevocably and unconditionally grant to
      Landlord as their respective attorney-in-fact full power and authority to do
      and
      perform every act necessary and proper to be done in the exercise of any of
      the
      foregoing powers as fully as Tenant and Subtenant might or could do if
      personally present or acting, with full power of substitution, hereby ratifying
      and confirming all that said attorney shall lawfully do or cause to be done
      by
      virtue hereof. This power of attorney is coupled with an interest and is
      irrevocable prior to Tenant's purchase of the Leased Property.

     

    ARTICLE
      16: ALTERATIONS, CAPITAL IMPROVEMENTS, AND SIGNS

     

    16.1
      Prohibition on Alterations and Improvements. Except for Permitted
      Alterations (as hereinafter defined), Tenant shall not make any structural
      or
      nonstructural changes, alterations, additions and/or improvements (hereinafter
      collectively referred to as
"Alterations")
      to the Leased Property.

     

    16.2
      Approval of Alterations. If Tenant desires to perform any Permitted
      Alterations, Tenant shall deliver to Landlord plans, specifications, drawings,
      and such other information as may be reasonably requested by Landlord
      (collectively the "Plans and Specifications") showing in reasonable detail
      the
      scope and nature of the Alterations that Tenant desires to perform. 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. Landlord agrees not to
      unreasonably delay its review of the Plans and Specifications. Within 30 days
      after receipt of an invoice, Tenant shall reimburse Landlord for all costs
      and
      expenses incurred by Landlord in reviewing and, if required, approving or
      disapproving the Plans and Specifications, inspecting the Leased Property,
      and
      otherwise monitoring compliance with the terms of this Article 16. Tenant shall
      comply with the requirements of §16.4 in making any Permitted
      Alterations.


    
      
        
        

      

      
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    16.3
      Permitted Alterations. Permitted Alterations means any one of the
      following:  [i] Alterations approved by Landlord; [ii] Alterations
      required under §7.2;

    [iii]           Alterations
      having a total cost of less than $100,000.00; provided, however, that any change
      in the number or configuration of units in a Facility shall require Landlord's
      prior approval; or

    [iv]           repairs,
      rebuilding and restoration required or undertaken pursuant to §9.4.

     

    16.4
      Requirements for Permitted Alterations. Tenant shall comply with all of
      the following requirements in connection with any Permitted
      Alterations:

     

    (a)            The
      Permitted Alterations shall be made in accordance with the

     

    (b)            approved
      Plans and Specifications.

     

    (c)            The
      Permitted Alterations and the installation thereof shall comply

     

    (d)            with
      all applicable legal requirements and insurance requirements.

     

    (e)            The
      Permitted Alterations shall be done in a good and workmanlike manner, shall
      not
      impair the value or the structural integrity of the Leased Property, and shall
      be free and clear of all mechanic's liens.

     

    (f)           
      For any Permitted Alterations having a total cost of $100,000.00 or more, Tenant
      shall deliver to Landlord a payment and performance bond, with a surety
      acceptable to Landlord, in an amount equal to the estimated cost of the
      Permitted Alterations, guaranteeing the completion of the work free and clear
      of
      liens and in accordance with the approved Plans and Specifications, and naming
      Landlord and any mortgagee of Landlord as joint obligees on such
      bond.

     

    (e)            Tenant
      shall, at Tenant's expense, obtain a builder's completed value risk policy
      of
      insurance insuring against all 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. Landlord and any mortgagee of Landlord shall be additional insureds
      of such policy. Landlord shall have the right to approve the form and substance
      of such policy.

     

    (f)            
      Tenant shall pay the premiums required to increase the amount of the insurance
      coverages required by Article 4 to reflect the increased value of the
      Improvements resulting from installation of the Permitted Alterations, and
      shall
      deliver to Landlord a certificate evidencing the increase in
      coverage.

     

     (g)   Tenant
      shall, not
      later than 60 days after completion of the Permitted Alterations, deliver to
      Landlord a revised "as-built" survey of the respective Facility if the Permitted
      Alterations altered the Land or "footprint" of the Improvements and an
      "as-built" set of Plans and Specifications for the Permitted Alterations in
      form
      and substance satisfactory to Landlord.


    
      
        
        

      

      
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    (h)    Tenant
      shall,
      not later than 30 days after Landlord sends an invoice, reimburse Landlord
      for
      any reasonable costs and expenses, including attorneys' fees and architects'
      and
      engineers' fees, incurred in connection with reviewing and approving the
      Permitted Alterations and ensuring Tenant's compliance with the requirements
      of
      this section. The daily fee for Landlord's consulting engineer is
      $750.00.

     

    16.5
      Ownership and Removal of Permitted Alterations. The Permitted Alterations
      shall become a part of the Leased Property, owned by Landlord, and leased to
      Tenant subject to the terms and conditions of this Lease. Tenant shall not
      be
      required or permitted to remove any Permitted Alterations.

     

    16.6
      Minimum Qualified Capital Expenditures. During each calendar year of the
      Term, Tenant shall expend or escrow at least $400.00 per unit for Qualified
      Capital Expenditures to improve the Facilities (provided that as to any Facility
      with respect to which a certificate of occupancy was not issued prior to the
      end
      of the first calendar year, the minimum qualified capital expenditures required
      by this section shall be waived until the calendar year immediately following
      the year in which such certificate of occupancy is issued). Thereafter
      throughout the Term, Tenant shall expend or escrow such minimum amount each
      calendar year, increased annually in proportion to increases in the CPI. Within
      60 days after the end of each fiscal year, Tenant shall deliver to Landlord
      a
      certificate in the form of Exhibit G listing the Qualified Capital Expenditures
      made in the prior year. If the entire minimum amount was not expended in such
      year, the certificate will include certification that the balance of the current
      minimum amount has been deposited in a reserve account to be used solely for
      Qualified Capital Expenditures for the Facilities. At least annually, at the
      request of Landlord, Landlord and Tenant shall review capital expenditures
      budgets and agree on modifications, if any, required by changed circumstances
      and the changed conditions of the Leased Property.

     

    16.7
      Signs. Tenant may, at its own expense, erect and maintain identification
      signs at the Leased Property, provided such signs comply with all laws,
      ordinances, and regulations. Upon the termination or expiration of this Lease,
      Tenant shall, within 30 days after notice from Landlord, remove the signs and
      restore the Leased Property to its original condition.

     

    ARTICLE
      17: RESERVED

     

    ARTICLE
      18: ASSIGNMENT AND SALE OF LEASED PROPERTY

     

    18.1
      Prohibition on Assignment and Subletting. Tenant acknowledges that
      Landlord has entered into this Lease in reliance on the personal services and
      business expertise of Tenant. Except as provided in
§
18.1.1, Tenant
      may not assign, sublet, mortgage, hypothecate, pledge, grant a
      right of first refusal or transfer any interest in this Lease, or in the Leased
      Property, in whole or in part, without the prior written consent of Landlord,
      which Landlord may withhold in its sole and absolute discretion. The following
      transactions will be deemed an assignment or sublease requiring Landlord's
      prior
      written consent: [i] an assignment by operation of law; [ii] an imposition
      (whether or not consensual) of a lien, mortgage, or encumbrance upon Tenant's
      interest in the Lease; [iii] an arrangement (including, but not limited to,
      management agreements, concessions, licenses, and easements) which allows the
      use or occupancy of all or part of the Leased Property by anyone other than
      Tenant; and [iv] a change of ownership of Tenant. Landlord's consent to any
      assignment, right of first refusal or sublease will not release Tenant (or
      any
      guarantor) from its payment and performance obligations under this Lease, but
      rather Tenant, any guarantor, and Tenant's assignee or sublessee will be jointly
      and severally liable for such payment and performance. Except as provided in
      §18.1.1, an assignment, right of first refusal or sublease without the prior
      written consent of Landlord will be void at Landlord's option. Landlord's
      consent to one assignment, right of first refusal or sublease will not waive
      the
      requirement of its consent to any subsequent assignment or sublease.
      Notwithstanding the foregoing, Tenant may enter into a Sublease with each
      Subtenant for each Facility provided that each Sublease complies with §
18.2.


    
      
        
        

      

      
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    18.1.1
      Notwithstanding § 18.1 or other terms of this Lease or the Lease Documents to
      the contrary, [i] Tenant may [a] sublease a portion of the Facility not
      exceeding 5% of the square footage of any building for resident services such
      as
      a beauty salon; and [ii] Landlord shall not unreasonably withhold, condition
      or
      delay its consent to an assignment or sublease to an Affiliate provided that
      such assignee or sublessee assumes Tenant's obligations under this Lease and
      the
      requirements of this Article are satisfied. Any subleases entered into pursuant
      to clause [i] above may not extend beyond the Term of this Lease without the
      prior written consent of Landlord, which consent shall not be unreasonably
      withheld, conditioned or delayed.

     

    18.2
      Requests for Landlord's Consent to Assignment, Sublease or Management
Agreement. If Tenant is required to obtain Landlord's consent to a
      specific assignment, sublease, or management agreement, Tenant shall give
      Landlord [i] the name and address of the proposed assignee, subtenant or
      manager; [ii] a copy of the proposed assignment, sublease or management
      agreement; [iii] reasonably satisfactory information about the nature, business
      and business history of the proposed assignee, subtenant, or manager and its
      proposed use of the Leased Property; and [iv] banking, financial, and other
      credit inforthation, and references about the proposed assignee, subtenant
      or
      manager sufficient to enable Landlord to determine the financial responsibility
      and character of the proposed assignee, subtenant or manager. Any assignment,
      sublease or management agreement shall contain provisions to the effect that
      [a]
      such assignment, sublease or management agreement is subject and subordinate
      to
      all of the terms and provisions of this Lease and to the rights of Landlord
      and
      that the assignee, subtenant or manager shall comply with all applicable
      provisions of this Lease; [b] such assignment, sublease or management agreement
      may not be modified without the prior written consent of Landlord not to be
      unreasonably withheld or delayed; [c] if this Lease shall terminate before
      the
      expiration of such assignment, sublease or management agreement, the assignee,
      subtenant or manager thereunder will, solely at Landlord's option and only
      upon
      the express written notice of attomment from Landlord, attom to Landlord and
      waive any right the assignee, subtenant or manager may have to terminate the
      assignment, sublease or management agreement or surrender possession thereunder
      as a result of the termination of this Lease; and [d] if the assignee, subtenant
      or manager receives a written notice from Landlord stating that Tenant is in
      default under this Lease, the assignee, subtenant or manager shall thereafter
      pay all rentals or payments under the assignment, sublease or management
      agreement directly to Landlord until such default has been cured. Any attempt
      or
      offer by an assignee, subtenant or manager to attorn to Landlord shall not
      be
      binding or effective without the express written consent of Landlord. Tenant
      hereby collaterally assigns to Landlord, as security for the performance of
      its
      obligations hereunder, all of Tenant's right, title, and interest in and to
      any
      assignment, sublease or management agreement noW or hereafter existing for
      all
      or part of the Leased Property. Tenant shall, at the request of Landlord,
      execute such other instruments or documents as Landlord may request to evidence
      this collateral assignment. If Landlord, in its sole and absolute discretion,
      consents to such assignment, sublease, or management agreement, such consent
      shall not be effective until [i] a fully executed copy of the instrument of
      assignment, sublease or management agreement has been delivered to Landlord;
      [ii] in the case of an assignment, Landlord has received a written instrument
      in
      which the assignee has assumed and agreed to perform all of Tenant's obligations
      under the Lease; and [iii] Tenant has paid to Landlord a fee in the amount
      of
      $2,500.00 (applies only to consent requests after the Closing); and [iv]
      Landlord has received reimbursement from Tenant or the assignee for all
      attorneys' fees and expenses and all other reasonable out-of-pocket expenses
      incurred in connection with determining whether to give its consent, giving
      its
      consent and all matters relating to the assignment (applies only to consent
      requests after the Closing).


    
      
        
        

      

      
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    18.3
      Agreements with Residents. Notwithstanding §18.1, Tenant and Subtenant
      may enter into an occupancy agreement with residents of the Leased Property
      without the prior written consent of Landlord provided that [i] the agreement
      does not provide for lifecare services; [ii] the agreement does not contain
      any
      type of rate lock provision or rate guaranty for more than one calendar year;
      [iii] the agreement does not provide for any rent reduction or waiver other
      than
      for an introductory period not to exceed six months; [iv] Tenant and Subtenant
      may not collect rent for more than one month in advance; and [v] all residents
      of the Leased Property are accurately shown in accounting records for the
      Facility. Without the prior written consent of Landlord, Tenant and Subtenant
      shall not change the form of resident occupancy agreement that was submitted
      to
      Landlord prior to the Effective Date.

     

    18.4
      Sale of Leased Property. If Landlord or any subsequent owner of the
      Leased Property sells the Leased Property, its liability for the performance
      of
      its agreements in this Lease will end on the date of the sale of the Leased
      Property, and Tenant will look solely to the purchaser for the performance
      of
      those agreements. For purposes of this section, any holder of a mortgage or
      security agreement which affects the Leased Property at any time, and any
      landlord under any lease to which this Lease is subordinate at any time, will
      be
      a subsequent owner of the Leased Property when it succeeds to the interest
      of
      Landlord or any subsequent owner of the Leased Property.

     

    18.5
      Assignment by Landlord. Landlord may transfer, assign, mortgage,
      collaterally assign, or otherwise dispose of Landlord's interest in this Lease
      or the Leased Property. Landlord shall not assign the Loan separate from the
      Lease except for an assignment to a Landlord Affiliate.

     

    ARTICLE
      19: HOLDOVER AND SURRENDER

     

    19.1
      Holding Over. If Tenant, with or without the express or implied consent
      of Landlord, continues to hold and occupy the Leased Property (or any part
      thereof) after the expiration of the Term or earlier termination of this Lease
      (other than pursuant to Tenant's purchase of the Leased Property), such holding
      over beyond the Term and the acceptance or collection of Rent in the amount
      specified below by Landlord shall operate and be construed as creating a tenancy
      from month to month and not for any other term whatsoever. Said month-to-month
      tenancy may be terminated by Landlord by giving Tenant five days' written
      notice, and at any time thereafter Landlord may re-enter and take possession
      of
      the Leased Property. If Tenant continues after the expiration of the Term or
      earlier termination of this Lease to hold and occupy the Leased Property whether
      as a month-to-month tenant or a tenant at sufferance or otherwise, Tenant shall
      pay [i] Default Rent for each month, plus [ii] all Additional Rent accruing
      during the month, plus [iii] any and all other sums payable by Tenant pursuant
      to this Lease. During any continued tenancy after the expiration of the Term
      or
      earlier termination of this Lease, Tenant shall be obligated to perform and
      observe all of the terms, covenants and conditions of this Lease, but shall
      have
      no rights hereunder other than the right, to the extent given by applicable
      law,
      to continue its occupancy and use of the Leased Property until the tenancy
      is
      terminated. Nothing contained herein shall constitute the consent, express
      or
      implied, of Landlord to the holding over of Tenant after the expiration or
      earlier termination of this Lease.


    
      
        
        

      

      
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    19.2
      Surrender. Except for [i] Permitted Alterations; [ii] normal and
      reasonable wear and tear (subject to the obligation of Tenant to maintain the
      Leased Property in good order and repair during the Term); and [iii] damage
      and
      destruction not required to be repaired by Tenant, Tenant shall surrender and
      deliver up the Leased Property at the expiration or termination of the Term
      in
      as good order and condition as of the Commencement Date.

     

    ARTICLE
      20: LETTER OF CREDIT

     

    20.1
      Terms of Letter of Credit. If required under the Commitment, Tenant shall
      provide Landlord with the Letter of Credit at the Closing. Tenant shall maintain
      the Letter of Credit in favor of Landlord until the Obligor Group Obligations
      are performed in full. The Letter of Credit shall permit partial and full draws
      and shall permit drawing upon presentation of a draft drawn on the Issuer and
      a
      certificate signed by Landlord stating that an Event of Default has occurred
      under this Lease. The Letter of Credit shall be for an initial term of one
      year
      and shall be automatically renewed annually for successive terms of at least
      one
      year unless Landlord receives notice from the Issuer, by certified mail, at
      least 60 days prior to the expiry date then in effect that the Letter of Credit
      will not be extended for an additional one-year period.

     

    20.2
      Replacement Letter of Credit. Tenant shall provide a replacement Letter
      of Credit which satisfies the requirements of §20.1 from an Issuer acceptable to
      Landlord within 30 days after the occurrence of any of the following: [i]
      Landlord's receipt of notice from the Issuer that the Letter of Credit will
      not
      be extended for an additional one-year period; [ii] Landlord gives notice to
      Tenant that the Lace Financial Service Rating (or rating of a comparable rating
      service) of the Issuer is less than a "C+" (or the comparable rating of such
      other rating service); [iii] Landlord gives notice to Tenant of the admission
      by
      Issuer in writing of its inability to pay its debts generally as they become
      due, or Issuer's filing of a petition in bankruptcy or petitions to take
      advantage of any insolvency act, making an assignment for the benefit of its
      creditors, consenting to the appointment of a receiver of itself or of the
      whole
      or any substantial part of its property, or filing a petition or answer seeking
      reorganization or arrangement under the federal bankruptcy laws or any other
      applicable law, regulation, or statute of the United States of America or any
      state thereof or [iv] Issuer is at any time determined not to be at least
      "adequately capitalized", as that term is defined and used in the "Prompt
      Corrective Action" statute, 12 U.S.C. §1831, and implementing regulations.
      Tenant's failure to comply with the requirements of this section shall be an
      immediate Event of Default without any notice (other than as provided for in
      this section), cure or grace period. Upon such Event of Default, Landlord shall
      be entitled to draw Upon the Letter of Credit and Landlord may, solely at its
      option and without any obligation to do so, require Tenant to obtain a
      replacement Letter of Credit satisfactory to Landlord with the Letter of Credit
      proceeds made available to Tenant solely to secure Tenant's reimbursement
      obligation for the replacement Letter of Credit.


    
      
        
        

      

      
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    20.3
      Draws. Landlord may draw under the Letter of Credit upon the occurrence
      of an Event of Default hereunder. Any such draw shall not cure an Event of
      Default. The proceeds from the Letter of Credit ("LC Proceeds") shall be the
      sole property of Landlord and may be used, retained and invested by Landlord
      without restriction or limitation. Landlord shall have no obligation to account
      for its use of the LC Proceeds and Tenant shall have no interest in or claim
      against the LC Proceeds. Landlord shall have the right and option, but not
      the
      obligation, to apply all or any portion of the LC Proceeds to pay all or any
      portion of [i] the Obligor Group Obligations; plus [ii] all reasonable expenses
      and costs incurred by Landlord in enforcing or preserving Landlord's rights
      under this Lease or any security for the Obligor Group Obligations, including,
      without limitation, [a] the fees, expenses, and costs of any litigation,
      appellate, receivership, administrative, bankruptcy, insolvency, or other
      similar proceeding; [b] attorney, paralegal, consulting and witness fees and
      disbursements; and [c] the expenses, including, without limitation, lodging,
      meals and transportation of Landlord and its employees, agents, attorneys,
      and
      witnesses in preparing for litigation, administrative, bankruptcy, insolvency,
      or similar proceedings and attendance at hearings, depositions, and trials
      in
      connection therewith.

     

    20.4
      Partial Draws. Upon the occurrence of a monetary Event of Default under
      the Obligor Group Obligations, Landlord may, at its option, make a partial
      draw
      on the Letter of Credit in an amount not to exceed the amount of the Obligor
      Group Obligations then past due. If Landlord then applies the proceeds from
      such
      partial draw on the Letter of Credit to payment of all or any portion of the
      Obligor Group Obligations then past due, Tenant shall, within 10 days after
      notice from Landlord of such partial draw and payment, cause the amount of
      the
      Letter of Credit to be reinstated to the amount in effect prior to such partial
      draw. Tenant's failure to comply with the requirements of this section shall
      be
      an immediate Event of Default under the Lease Documents without any notice
      (other than as provided for in this section), cure or grace period. Landlord's
      rights under this §20.4 are in addition to, and not in limitation of, Landlord's
      rights under §20.3.

     

    20.5
      Substitute Letter of Credit. Tenant may, from time to time, deliver to
      Landlord a substitute Letter of Credit meeting the requirements of this Lease
      and issued by an Issuer acceptable to Landlord. Upon Landlord's approval of
      the
      substitute Letter of Credit, Landlord shall release the previous Letter of
      Credit to Tenant.

     

    20.6
      Retention of Letter of Credit. Upon termination of this Lease due to
      expiration of the Term, pursuant to an Event of Default or for any reason other
      than Tenant's purchase of the Leased Property, Landlord shall be entitled to
      hold the Letter of Credit until the Obligor Group Obligations are performed
      in
      full or are released by Landlord.


    
      
        
        

      

      
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    ARTICLE
      21: QUIET ENJOYMENT, SUBORDINATION, ATTORNMENT AND

    ESTOPPEL
      CERTIFICATES

     

    21.1
      Quiet Enjoyment. So long as Tenant performs all of its obligations under
      this Lease, Tenant's possession of the Leased Property will not be disturbed
      by
      Landlord or any party claiming by, through or under Landlord.

     

    21.2
      Subordination. Subject to the terms and conditions of this section, this
      Lease and Tenant's rights under this Lease are subordinate to any ground lease
      or underlying lease, first mortgage, first deed of trust, or other first lien
      against the Leased Property, together with any renewal, consolidation,
      extension, modification or replacement thereof, which now or at any subsequent
      time affects the Leased Property or any interest of Landlord in the Leased
      Property, except to the extent that any such instrument expressly provides
      that
      this Lease is superior. The foregoing subordination provision is expressly
      conditioned upon any lessor or mortgagee being obligated and bound to recognize
      Tenant as the tenant under this Lease, and such lessor or mortgagee shall have
      no right to disturb Tenant's possession, use and occupancy of the Leased
      Property or Tenant's enjoyment of its rights under this Lease unless and until
      an Event of Default occurs hereunder. Any foreclosure action or proceeding
      by
      any mortgagee with respect to the Leased Property shall not affect Tenant's
      rights under this Lease and shall not terminate this Lease unless and until
      an
      Event of Default occurs hereunder. The foregoing provisions will be
      self-operative, and no further instrument will be required in order to effect
      them. However, Tenant shall execute, acknowledge and deliver to Landlord, at
      any
      time and from time to time upon demand by Landlord, such documents as may be
      requested by Landlord or any mortgagee or any holder of any mortgage or other
      instrument described in this section, to confirm or effect any such
      subordination, provided that any such document shall include a nondisturbance
      provision as set forth in this section satisfactory to Tenant. Any mortgagee
      of
      the Leased Property shall be deemed to be bound by the nondisturbance provision
      set forth in this section. If Tenant fails or refuses to execute, acknowledge,
      and deliver any such document within 20 days after written demand, Tenant shall
      be deemed to have affirmed that this Lease and Tenant's rights hereunder are
      subordinate to any ground lease or underlying lease, first mortgage, first
      deed
      of trust, or other first lien or privilege against the Leased Property. Landlord
      may execute acknowledge and deliver any such document on behalf of Tenant as
      Tenant's attorney-in-fact.

     

    21.3
      Attomment. If any holder of any mortgage, indenture, deed of trust, or
      other similar instrument described in §21.2 succeeds to Landlord's interest in
      the Leased Property, Tenant will pay to such holder all Rent subsequently
      payable under this Lease. Tenant shall, upon request of anyone succeeding to
      the
      interest of Landlord, automatically become the tenant of, and attorn to, such
      successor in interest without changing this Lease. The successor in interest
      will not be bound by [i] any payment of Rent for more than one month in advance;
      [ii] any amendment or modification of this Lease thereafter made without its
      consent as provided in this Lease; [iii] any claim against Landlord arising
      prior to the date on which the successor succeeded to Landlord's interest;
      or
      [iv] any claim or offset of Rent against Landlord. Upon request by Landlord
      or
      such successor in interest and without cost to Landlord or such successor in
      interest, Tenant will execute, acknowledge and deliver an instrument or
      instruments confirming the attornment. If Tenant fails or refuses to execute,
      acknowledge, and deliver any such instrument within 20 days after written
      demand, Tenant shall be deemed to have attomed to any successor to the Interest
      of Landlord.


    
      
        
        

      

      
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    21.4
      Estoppel Certificates. At the request of Landlord or any mortgagee or
      purchaser of the Leased Property, Tenant shall execute, acknowledge, and deliver
      an estoppel certificate, in recordable form, in favor of Landlord or any
      mortgagee or purchaser of the Leased Property certifying the following: [i]
      that
      the Lease is unmodified and in full force and effect, or if there have been
      modifications that the same is in full force and effect as modified and stating
      the modifications; [ii] the date to which Rent and other charges have been
      paid;
      [iii] whether Tenant or Landlord is in default or whether there is any fact
      or
      condition which, with notice or lapse of time, or both, would constitute a
      default, and specifying any existing default, if any; [iv] that Tenant has
      accepted and occupies the Leased Property; [v] that Tenant has no defenses,
      setoffs, deductions, credits, or counterclaims against Landlord, if that be
      the
      case, or specifying such that exist; and [vi] such other information as may
      reasonably be requested by Landlord or any mortgagee or purchaser. Any purchaser
      or mortgagee may rely on this estoppel certificate. If Tenant fails to deliver
      the estoppel certificates to Landlord within 10 days after the request of
      Landlord, then Tenant shall be deemed to have certified that [a] the Lease
      is in
      full force and effect and has not been modified, or that the Lease has been
      modified as set forth in the certificate delivered to Tenant; [b] Tenant has
      not
      prepaid any Rent or other charges except for the current month; [c] Tenant
      has
      accepted and occupies the Leased Property; [d] neither Tenant nor Landlord
      is in
      default nor is there any fact or condition which, with notice or lapse of time,
      or both, would constitute a default; and [e] Tenant has no defenses, setoffs,
      deductions, credits, or counterclaims against Landlord.

     

    ARTICLE
      22: CONTINGENT PAYMENTS

     

    22.1
      Contingent Payments. Landlord shall make Contingent Payments to the
      extent set forth in this section. Tenant shall request each Contingent Payment
      by submitting a Contingent Payment Request to Landlord or in the case of
      Contingent Payments for Project Improvements, a Disbursement Voucher pursuant
      to
      the Disbursirig Agreement. Landlord shall make the Contingent Payment provided
      that [i] no Event of Default has occurred and is continuing, and [ii] Landlord
      has determined that all requirements for the Contingent Payment have been
      satisfied. Contingent Payments will be made not less than eight Business Days
      and not more than twelve Business Days following Tenant's delivery of the
      Contingent Payment Request.

     

    22.2
      Contingent Payments for Capital Expenditures.

     

    22.2.1
      Conditions. In addition to any other requirements set forth in this
      section, Landlord's obligation to make Contingent Payments for capital
      expenditures is subject to Landlord's reasonable approval of the scope of work
      and budget, construction and disbursement schedules (if applicable), and
      contractor and construction agreements (if applicable). Tenant shall also
      provide a collateral assignment of any construction contract to Landlord and
      the
      contractor shall consent to the assignment.

     

    22.2.2
      No Commitment. Landlord has no current commitment to make Contingent
      Payments for capital expenditures pursuant to §22.2.


    
      
        
        

      

      
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    22.3
      Contingent Payments for Project Improvements.

     

    22.3.1
      Conditions. In addition to any other requirements set forth in this
      section, Landlord's obligation to make Contingent Payments for Project
      Improvements is subject to the conditions set forth in the Disbursing Agreement
      related to the Project Improvements.

     

    22.3.2
      No Commitment. Landlord has no current commitment to make Contingent
      Payments for Project Improvements pursuant to §22.3.


     

    ARTICLE
      23: SECURITY INTEREST

    


    23.1
      Collateral. Tenant and each Subtenant hereby grant to each Landlord and
      HCN (if not a Landlord) (individually and collectively called "Secured Party")
      a
      security interest in all of Tenant's and Subtenant's right, title, and interest
      in and to the following described property, whether now owned or hereafter
      acquired by Tenant or any Subtenant (the "Collateral"), to secure the payment
      and performance of the Obligor Group Obligations:

     

    (a)           All
      machinery, furniture, equipment, trade fixtures, appliances, inventory and
      all
      other goods (as "equipment", "inventory" and "goods" are defined for purposes
      of
      Article 9 ("Article 9") of the Uniform Commercial Code as adopted in Ohio)
      and
      any leasehold interest of Tenant or any Subtenant in any of the foregoing,
      including, without limitation, those items which are to become fixtures or
      which
      are building supplies and materials to be incorporated into any improvement
      or
      fixture.

     

    (b)           All
      accounts, contract rights, general intangibles, instruments, documents, and
      chattel paper [as "accounts", "contract rights", "general intangibles",
      "instruments", "documents" and "chattel paper" are defined for purposes of
      Article 9] now or hereafter arising.

     

    (c)           All
      franchises, permits, licenses, operating rights, certifications, approvals,
      consents, authorizations and other general intangibles, including, without
      limitation, certificates of need, state health care facility licenses, and
      Medicare and Medicaid provider agreements, to the extent permitted by
      law.

     

    (d)           Unless
      expressly prohibited by the terms thereof, all contracts, agreements, contract
      rights and materials relating to the design, construction, operation or
      management of any improvements, including, but not limited to, management
      agreements, plans, specifications, drawings, blueprints, models, mock-ups,
      brochures, flyers, advertising and promotional materials and mailing
      lists.

     

    (e)    All
      subleases, occupancy agreements, license agreements and concession agreements,
      written or unwritten, of any nature, now or hereafter entered into, and all
      right, title and interest thereunder, including, without limitation, the right,
      if any, to cash or securities deposited thereunder whether or not the same
      was
      deposited to secure performance by the subtenants, occupants, licensees and
      concessionaires of their obligations thereunder, including the right to receive
      and collect the rents, revenues, and other charges thereunder.


    
      
        
        

      

      
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    (f)            All
      ledger sheets, files, records, computer programs, tapes, other electronic data
      processing materials, and other documentation relating to the preceding listed
      property.

     

    (g)            The
      products and proceeds of the preceding listed property, including, without
      limitation, cash and non-cash proceeds, proceeds of proceeds, and insurance
      proceeds.

     

    23.2
      Additional Documents. At the request of Landlord, Tenant and each
      Subtenant shall execute additional security agreements, financing statements,
      and such other documents as may be requested by Landlord to maintain and perfect
      such security interest. Tenant and each Subtenant authorize Landlord to file
      financing statements describing the Collateral to perfect and maintain the
      security interest granted hereunder without the signature or any further
      authorization of Tenant or any Subtenant.

     

    23.3
      Notice of Sale. With respect to any sale or other disposition of any of
      the Collateral after the occurrence of an Event of Default, Landlord, Tenant
      and
      each Subtenant agree that the giving of five days' notice by Landlord, sent
      by
      overnight delivery, postage prepaid, to Tenant's or Subtenant's notice address
      designating the time and place of any public sale or the time after which any
      private sale or other intended disposition of such Collateral is to be made,
      shall be deemed to be reasonable notice thereof and Tenant and each Subtenant
      waive any other notice with respect thereto.

     

    23.4
      Recharacterization. Landlord and Tenant intend this Lease to be a true
      lease. However, if despite the parties' intent, it is determined or adjudged
      by
      a court for any reason that this Lease is not a true lease or if this Lease
      is recharacterized as a financing arrangement, then this Lease shall
      be
      considered a secured financing agreement and Landlord's title to the Leased
      Property shall constitute a perfected first priority lien in Landlord's favor
      on
      the Leased Property to secure the payment and performance of all the Obligor
      Group Obligations.

     

    23.5
      Confession of Judgment. Tenant hereby confesses judgment upon the Obligor
      Group Obligations solely for purposes of executory process concerning any
      Louisiana Leased Property, specifically consenting that executory process be
      issued thereon to enforce the same.

     

    23.6
      Additional Remedies Upon Default. Upon the occurrence of any Event of
      Default hereunder, in addition to any other rights and remedies available to
      Secured Party:

     

    (a)            Secured
      Party may cause the Collateral to be seized and sold under executory or other
      legal process issued by any competent court, either with or without appraisement
      (the benefits of all laws relative to appraisement being hereby expressly
      waived), as an entirety or in lots or parcels as Secured Party may
      determine, to the highest bidder for cash, or on such terms as the
      plaintiff in such proceedings may direct; and

     

    (b)            Secured
      Party shall have and may exercise all of the rights, remedies, and powers of
      a
      secured party under the Uniform Commercial Code, including, without limitation,
      the right and power to sell, at one or more public or private sales, or
      otherwise dispose of or utilize the Collateral or any part thereof in any manner
      authorized or permitted under the Uniform Codunercial Code, or to apply the
      proceeds thereof toward payment of any reasonable costs and expenses and
      attorneys' fees and legal expenses thereby incurred by Secured Party, as secured party,
      toward payment of the Obligor Group Obligations, in such order or manner as
      Secured Party shall elect.


    
      
        
        

      

      
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    23.7
      Waiver. To the extent permitted, Tenant hereby expressly
      waives:

     

    (a)            The
      benefit of appraisement, as provided in Article 2332, 2336, 2723, and 2724,
      Louisiana Code of Civil Procedure, and all other laws conferring the
      same;

     

    (b)            The
      demand and three days' delay afforded by Articles 2639 and 2721, Louisiana
      Code
      of Civil Procedure;

     

    (c)            The
      three days' delay provided by Articles 2639 and 2721, Louisiana Code of Civil
      Procedure;

     

    (d)            The
      three days' delay provided by Articles 2331 and 2722, Louisiana Code of Civil
      Procedure;

     

    (e)    The
      benefit
      of the other provisions of Article 2331, 2722, and 2723, Louisiana Code of
      Civil
      Procedure, and any other notices or conditions prescribed by law as a
      prerequisite to the institution of a suit or sale of the Collateral. Tenant
      expressly agrees to the immediate seizure of the Collateral.

     

    23.8
      Appointment of Receiver or Keeper. Secured Party may cause a receiver or
      keeper to the appointed to take possession of the Collateral to manage,
      administer, operate, and conserve the value thereof and collect the rents,
      issues, revenues, proceeds, and profits thereof. Secured Party may designate
      any
      firm, person, or corporation to be the receiver or keeper of the Collateral
      as provided by
      La. R.S. 9:5132 and similar statutes.


     

    ARTICLE
      24: MISCELLANEOUS


     

    24.1
      Notices. Landlord, Tenant and Subtenant hereby agree that all notices,
      demands, requests, and consents (hereinafter "notices") required to be given
      pursuant to the terms of this Lease shall be in writing, shall be addressed
      to
      the addresses set forth in the introductory paragraph of this Lease, and shall
      be served by [i] personal delivery; [ii] certified mail, return receipt
      requested, postage prepaid; or [iii] nationally recognized overnight courier.
      Notices to any Subtenant should be sent do Tenant at Tenant's address set forth
      in the introductory paragraph. All notices shall be deemed to be given upon
      the
      earlier of actual receipt or three days after mailing, or one Business Day
      after
      deposit with the overnight courier. Any notices meeting the requirements of
      this
      section shall be effective, regardless of whether or not actually received.
      Landlord or Tenant may change its notice address at any time by giving the
      other
      party notice of such change.

     

    24.2
      Advertisement of Leased Property. In the event the parties hereto have
      not executed a renewal Lease within 120 days prior to the expiration of this
      Lease, or Tenant has not exercised its Option to Purchase, then Landlord or
      its
      agent shall have the right to enter the Leased Property at all reasonable times
      for the purpose of exhibiting the Leased Property to others and to place upon
      the Leased Property for and during the period commencing 120 days prior to
      the
      expiration of this Lease, "for sale" or "for rent" notices or
      signs.


    
      
        
        

      

      
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    24.3
      Entire Agreement. This Lease contains the entire agreement between
      Landlord and Tenant with respect to the subject matter hereof. No
      representations, warranties, and agreements have been made by Landlord except
      as
      set forth in this Lease. No oral agreements or understandings between Landlord
      and Tenant shall survive execution of this Lease.

     

    24.4
      Severability. If any term or provision of this Lease is held or deemed by
      Landlord to be invalid or unenforceable, such holding shall not affect the
      remainder of this Lease and the same shall remain in full force and effect,
      unless such holding substantially deprives Tenant of the use of the Leased
      Property or Landlord of the rents herein reserved, in which event this Lease
      shall forthwith terminate as
      if by expiration of the Term.

     

    24.5
      Captions and Headings. The captions and headings are inserted only as a
      matter of convenience and for reference and in no way define, limit or describe
      the scope of this Lease or the intent of any provision hereof.

     

    24.6
      Governing Law. This Lease shall be governed by and construed in
      accordance with the laws of the State of Ohio, except as to matters under which
      the laws of a State in which a respective Facility is located, or under
      applicable procedural conflicts of laws rules, require the application of laws
      of such other State, in which case the laws or conflicts of laws rules, as
      the
      case may be, of such State shall govern to the extent required.

     

    24.7
      Memorandum of Lease. Tenant shall not record this Lease. Tenant shall,
      however, record a memorandum of lease approved by Landlord upon Landlord's
      request.

     

    24.8
      Waiver. No waiver by Landlord 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, nor shall the acceptance of Rent by Landlord at any
      time
      when Tenant or Subtenant is in default in the performance or observance of
      any
      condition or covenant herein be construed as a waiver of
      such
      default, or of Landlord's right to terminate this Lease or exercise any other
      remedy granted herein on account of such existing default.

     

    24.9
      Binding Effect. This Lease will be binding upon and inure to the benefit
      of the heirs, successors, personal representatives, and permitted assigns of
      Landlord, Tenant and Subtenant.

     

    24.10
      No Offer. Landlord's submission of this Lease to Tenant is not
      an offer to
      lease the Leased Property, or an agreement by Landlord to reserve the Leased
      Property for Tenant. Landlord will not be bound to Tenant until Tenant has
      duly
      executed and delivered duplicate original leases to Landlord, and Landlord
      has
      duly executed and delivered one of these duplicate original leases to
      Tenant.


    
      
        
        

      

      
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    24.11
      Modification. This Lease may only be modified by a writing signed by both
      Landlord and Tenant. All references to this Lease, whether in this Lease or
      in
      any other document or instrument, shall be deemed to incorporate all amendments,
      modifications and renewals of this Lease, made after the date hereof. If Tenant
      requests Landlord's consent to any change in ownership, merger or consolidation
      of Tenant, Subtenant or Guarantor, any assumption of the Lease, or any
      modification of the Lease, Tenant shall provide Landlord all relevant
      information and documents sufficient to enable Landlord to evaluate the request.
      In connection with any such request, Tenant shall pay to Landlord a fee in
      the
      amount of $2,500.00 and shall pay all of Landlord's reasonable attorney's fees
      and expenses and other reasonable out-of-pocket expenses incurred in connection
      with Landlord's evaluation of Tenant's request, the preparation of any documents
      and amendments, the subsequent amendment of any documents between Landlord
      and
      its collateral pool lenders (if applicable), and all related
      matters.

     

    24.12
      Landlord's Modification. Tenant acknowledges that Landlord may mortgage
      the Leased Property or use the Leased Property as collateral for collateralized
      mortgage obligations or Real Estate Mortgage Investment Companies (REMICS).
      If
      any mortgage lender of Landlord desires any modification of this Lease, Tenant
      agrees to consider such modification in good faith and to execute an amendment
      of this Lease if Tenant finds such modification acceptable and Landlord will
      pay
      Tenant's reasonable attorney's fees for reviewing such amendment.

     

    24.13
      No Merger. The surrender of this Lease by Tenant or the cancellation of
      this Lease by agreement of Tenant and Landlord or the termination of this Lease
      on account of Tenant's default will not work a merger, and will, at Landlord's
      option, terminate any subleases or operate as an assignment to Landlord of
      any
      subleases. Landlord's option under this paragraph will be exercised by notice
      to
      Tenant and all known subtenants of the Leased Property.

     

    24.14
      Laches. 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.

     

    24.15
      Limitation on Tenant's Recourse. Tenant's sole recourse against Landlord,
      and any successor to the interest of Landlord in the Leased Property, is to
      the
      interest of Landlord, and any such successor, in the Leased Property. Tenant
      will not have any right to satisfy any judgment which it may have against
      Landlord, or any such successor, from any other assets of Landlord, or any
      such
      successor. In this section, the terms "Landlord" and "successor" include the
      shareholders, venturers, and partners of "Landlord" and "successor" and the
      officers, directors, and employees of the same. The provisions of this section
      are not intended to limit Tenant's right to seek injunctive relief or specific
      performance.

     

    24.16
      Construction of Lease. This Lease has been prepared by Landlord and its
      professional advisors and reviewed by Tenant and its professional advisors.
      Landlord, Tenant, and their advisors believe that this Le.nw is the
      product of all their efforts, that it expresses their agreement, and agree
      that
      it shall not be interpreted in favor of either Landlord or Tenant or against
      either Landlord or Tenant merely because of their efforts in preparing
      it.


    
      
        
        

      

      
        S-60

        
          

        

      

      
        
        

      

    


    24.17
      Counterparts. This Lease may be executed in multiple counterparts, each
      of which shall be deemed an original hereof.

     

    24.18
      Landlord's Consent. Whenever Landlord's consent is required under this
      Lease, such consent shall be in writing and shall not be unreasonably withheld
      or delayed.

     

    24.19
      Custody of Escrow Funds. Any funds paid to Landlord in escrow hereunder
      may be held by Landlord or, at Landlord's election, by a financial institution,
      the deposits or accounts of which are insured or guaranteed by a federal or
      state agency. The funds shall not be deemed to be held in trust, may be
      commingled with the general funds of Landlord or such other institution, and
      shall not bear interest.

     

    24.20
      Landlord's Status as a REIT. Tenant acknowledges that Landlord (or a
      Landlord Affiliate) has elected and may hereafter elect to be taxed as a real
      estate investment trust ("REIT") under the Internal Revenue Code.

     

    24.21
      Exhibits. All of the exhibits referenced in this Lease are attached
      hereto and incorporated herein.

     

    24.22
      Waiver of Jury Trial. LANDLORD, TENANT AND SUBTENANT WAIVE TRIAL BY JURY
      IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OF THEM AGAINST THE
      OTHER ON ALL MATTERS ARISING OUT OF THIS LEASE OR THE USE AND OCCUPANCY OF
      THE
      LEASED PROPERTY (EXCEPT CLAIMS FOR PERSONAL INJURY OR PROPERTY DAMAGE). IF
      LANDLORD COMMENCES ANY SUMMARY PROCEEDING FOR NONPAYMENT OF RENT, TENANT AND
      SUBTENANT WILL NOT INTERPOSE, AND WAIVES THE RIGHT TO INTERPOSE, ANY
      COUNTERCLAIM IN ANY SUCH PROCEEDING.

     

    24.23
      Consent to Jurisdiction. TENANT AND SUBTENANT HEREBY IRREVOCABLY SUBMIT
      AND CONSENT TO THE NONEXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL
      COURT HAVING JURISDICTION OVER LUCAS COUNTY, OHIO OR ANY COUNTY IN WHICH A
      FACILITY IS LOCATED FOR ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY MATTER
      ARISING FROM OR RELATED TO [I] THE COMMITMENT; [11] THIS LEASE; OR [III] ANY
      DOCUMENT EXECUTED BY TENANT OR SUBTENANT IN CONNECTION WITH THIS LEASE. TENANT
      AND SUBTENANT HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT TENANT AND
      SUBTENANT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
      MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING. TENANT AND SUBTENANT AGREE THAT
      A
      FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY
      BE
      ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER
      MANNER PROVIDED BY LAW.

     

    TENANT
      AND SUBTENANT AGREE NOT TO INSTITUTE ANY LEGAL ACTION OR PROCEEDING AGAINST
      LANDLORD OR ANY DIRECTOR, OFFICER, EMPLOYEE, AGENT OR PROPERTY OF LANDLORD,
      CONCERNING ANY MATTER ARISING OUT OF OR RELATING TO THE COMMITMENT, THIS LEASE
      OR ANY RELATED DOCUMENT IN ANY COURT OTHER THAN A STATE OR FEDERAL COURT HAVING
      JURISDICTION OVER LUCAS COUNTY, OHIO.


    
      
        
        

      

      
        S-61

        
          

        

      

      
        
        

      

    

     

    TENANT
      AND SUBTENANT HEREBY CONSENT TO SERVICE OF PROCESS BY LANDLORD IN ANY MANNER
      AND
      IN ANY JURISDICTION PERMITTED BY LAW. NOTHING HEREIN SHALL AFFECT OR IMPAIR
      LANDLORD'S RIGHT TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW,
OR LANDLORD'S RIGHT TO BRING ANY ACTION OR
      PROCEEDING AGAINST TENANT, SUBTENANT OR THE PROPERTY OF TENANT OR SUBTENANT
      IN
      THE COURTS OF ANY OTHER JURISDICTION.

     

    24.24
      Attorney's Fees and Expenses. Tenant shall pay to Landlord all reasonable
      costs and expenses incurred by Landlord in administering this Lease and the
      security for this Lease, enforcing or preserving Landlord's rights under this
      Lease and the security for this Lease, and in all matters of collection, whether
      or not an Event of Default has actually occurred or has been declared and
      thereafter cured, including, but not limited to, [a] reasonable attorney's
      and
      paralegal's fees and disbursements; [b] the reasonable fees and expenses of
      any
      litigation, administrative, bankruptcy, insolvency, receivership and any other
      similar proceeding; [c] court costs; [d] the reasonable expenses of Landlord,
      its employees, agents, attorneys and witnesses in preparing for litigation,
      administrative, bankruptcy, insolvency and other proceedings and for lodging,
      travel, and attendance at meetings, hearings, depositions, and trials; and
      [e]
      reasonable consulting and witness fees and expenses incurred by Landlord in
      connection with any litigation or other proceeding; provided, however,
      Landlord's internal bookkeeping and routine lease servicing costs are not
      payable by Tenant.

     

    24.25
      Survival. The following provisions shall survive termination of the
      Lease: Article 8 (Defaults and Remedies); Article 9 (Damage and Destruction);
      Article 10 (Condemnation); § 15.9 (Transfer of License and Facility Operations);
§ 15.10 (Bed Operating Rights); Article 19 (Holdover and Surrender); §20.6
      (Retention of Letter of Credit); Article 23 (Security Interest) and §24.25
      (Survival).

     

    24.26
      Time. Time is of the essence in the performance of this
      Lease.

     

    24.27
      Subtenant. Each Subtenant has joined in the execution of this Lease to
      acknowledge that Subtenant is subject to and bound by the terms of the Lease
      applicable to Subtenant, including, without limitation, the grant of a security
      interest under Article 23.

     

    [THE
      REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

     

    
      
        
          
          

        

        
          S-62

          
            

          

        

        
          
          

        

      

    

    


    
      IN
        WITNESS WHEREOF, the parties hereto have executed this Lease or caused the
        same
        to be executed by their respective duly authorized officers as of the date
        first
        set forth above.

    

    
      


    

    
      	
              Signed
                and acknowledged in the presence of: 

            	 	
               HEALTH
                CARE REIT, INC.

            
	 	 	 	 	 	 	 
	
              Signature

            	
              /s
                / Rita J. Rogge

            	 	
              By:

            	
              /s/
                Erin C. Ibele

            
	
              Print Name 
                

            	
              Rita
                J. Rogge

            	 	 	
              Title:

            	
              Erin
                C. Ibele

            
	 	 	 	 	 	
              Senior
                Vice President-

            
	
              Signature

            	
              /s
                / Kathleena Sullivan

            	 	 	 	
              Administration
                and Corporate Secretary

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	
              Print
                Name

            	
              Kathleena
                Sullivan

            	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	
              HCRI
                LOUISIANA PROPERTIES, L.P.

            
	 	 	 	 	 	 	 
	
              Signature

            	
              /s/
                Rita J. Rogge

            	 	
              By:

            	
              HCRI
                Southern Investments I, Inc.

            
	 	 	 	 	
              General
                Partner

            
	
              Print
                Name

            	
              Rita
                J. Rogge

            	 	 	 	 	 
	 	 	 	 	 	 	 
	
              Signature  

            	/s/
              Kathleena Sullivan	 	
               By:

            	
              /s/
                Erin C. Ibele

            
	 	 	 	 	 	 	 
	
              Print
                Name

            	
              Kathleena
                Sullivan

            	 	 	
               Title:

            	
              Erin
                C. Ibele

            
	 	 	 	 	
               Senior
                Vice President-

            
	 	 	 	 	
               Administration
                and Corporate Secretary

            
	 	 	 	 	 	 	 
	 	 	 	
              SENIOR
                LIVING PROPERTIES,
                LLC.

            
	
              Signature

            	
              /s/
                Carol Phillips

            	 	
              By:

            	
              /s/
                Granger Cobb

            
	 	 	 	 	 	 	 
	
              Print
                Name

            	
              Carol
                Phillips

            	 	 	
               Granger
                Cobb

            
	 	 	 	 	 	 	 
	 	 	 	
              Title:

            	
              President

            
	
              Signature

            	
              /s
                / Melanie Werdel

            	 	
              Tax
                I.D.No.: 20-5896699

            
	 	 	 	 	 	 	 
	
              Print
                Name

            	
              Melanie
                Werdel

            	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	
              SUMMERVILLE  AT
                KENNER, L.L.C.

            
	
              Signature

            	
              /s/
                Carol Phillips

            	 	
              By:

            	
              /s/
                Granger Cobb

            
	 	 	 	 	 	 	 
	
              Print
                Name

            	
              Carol
                Phillips

            	 	 	
              Granger
                Cobb

            
	 	 	 	 	 	 	 
	 	 	 	
              Title:

            	
              President

            
	
              Signature

            	
              /s/
                Melanie Werdel

            	 	
              Tax
                I.D.No.: 52-2091291

            
	 	 	 	 	 	 	 
	
              Print
                Name

            	
               Melanie
                Werdel

            	 	 	 	 	 


    

     

    
      
        
        

      

      
        S-63

        
          

        

      

      
        
        

      

    

    


    
      	 	 	 	
              SUMMERVILLE
                AT DAYTON LLC

            
	 	 	 	 	 	 
	
              Signature.

            	
              /s/
                Carol Phillips

            	 	
              By:

            	
              /s/
                Granger Cobb

            
	
              Print Name 
                

            	
              Carol
                Phillips

            	 	 	
              Granger
                Cobb

            
	 	 	 	 	
              Title:

            	
              President

            
	
              Signature

            	
              /s/
                Melanie Werdel

            	 	 	 	 
	
              Print

            	
              NameMelanie
                Werdel

            	 	
              Tax
                I. D. No.: 20-8434151

            
	 	 	 	 	 	 
	 	 	 	
              SUMMERVILLE
                ATOUTLOOK

            
	
               

            	 	MANOR
              LLC  
	
              Signature

            	
              /s/
                Carol Phillips

            	 	 	 	 
	
              Print
                Name

            	
              Carol
                Phillips

            	 	
              By:

            	
              /s/
                Granger Cobb 

            
	 	
              Granger
                Cobb

            	 	 	 	 
	
              Signature

            	
              /s/
                Melanie Werdel

            	 	 	
              Title:

            	
              President

            
	
              Print
                Name

            	
              Melanie
                Werdel

            	 	 	
              Tax
                I. D. No.:  20-8434209

            


    

    
       

      


    

    
      STATE
        OF
        OHIO                                
)

    

    
      )SS:

    

    
      COUNTY
        OF
        LUCAS       
)

    

    
      


    

    
       

      The
        foregoing instrument was
        acknowledged before me this  5  day of March, 2007 by Erin
        C. Ibele, the Senior Vice President-Administration and Corporate Secretary
        of
        Health Care REIT, Inc., a Delaware corporation, on behalf of the
        corporation

    

    
       

      


    

    
      	 	 	
              /s/
                RITA J. ROGGE

            	 
	 	 	
              Notary
                Public

            	 
	
              My
                Commission Expires:

            	
              [SEAL]

            	 	 
	 	 	 	 
	 	 	
              RITA
                J. ROGGE

            	 
	 	 	
              Notary
                Public, State of Ohio

            	 
	 	 	
              My
                Commission Expires 08-26-2010

            	 


    

    
       

       

    

    S-64