Third Amendment to Master Lease Agreement



 Exhibit 10.1 
 THIRD AMENDMENT TO MASTER LEASE AGREEMENT 
 THIS THIRD AMENDMENT TO MASTER LEASE AGREEMENT
(“Amendment”) is dated as of September 26, 2008 (“Amendment Effective Date”) among HCRI MASSACHUSETTS PROPERTIES TRUST, a Massachusetts business trust organized under the laws of the Commonwealth of Massachusetts
(“HCN-MA” and a “Landlord”), having its principal office located at One SeaGate, Suite 1500, P. O. Box 1475, Toledo, Ohio 43603-1475, HCRI MASSACHUSETTS PROPERTIES TRUST II, a Massachusetts
business trust organized under the laws of the Commonwealth of Massachusetts (“HCN-MA II” and a “Landlord”), having its principal office located at One SeaGate, Suite 1500, P. O. Box 1475, Toledo,
Ohio 43603-1475, and KINDRED HOSPITALS EAST, L.L.C., a Delaware limited liability company organized under the laws of the State of Delaware (“Tenant”), having its chief executive office located at 680 South Fourth Avenue,
Louisville, Kentucky 40202. 
 R E C I T A L S 
 A. Landlord has leased to Tenant property located in Massachusetts (collectively called “Property”) pursuant to a Master Lease Agreement dated as of February 28, 2006, as amended from time to time
(“Lease”). 
 B. As of the Amendment Effective Date of this Amendment, HCN-MA is selling the Braintree Facility to an affiliate of
Tenant. 
 C. Landlord and Tenant desire to amend the Lease to remove the Braintree Facility and to modify certain terms and conditions.

 NOW, THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows. 
 1. Definitions. Any capitalized terms not defined in this
Amendment shall have the meaning set forth in the Lease. 
 2. Amended Definitions. The definition of “Rent Schedule”
in §1.4 of the Lease is hereby amended to read in its entirety as follows (added language in italics): 
 “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 following Closing if the Rent Schedule cannot be determined until the day of Closing. The Rent Schedule to be in effect upon the Amendment Effective Date of the First Amendment to Master Lease Agreement is
attached as Schedule 1-A. The Rent Schedule to be in effect upon the Amendment Effective Date of the Third Amendment to Master Lease Agreement is attached as Schedule 1-B. 







 3. Early Option to Purchase. Section 13.7 of the Lease is hereby amended to read in its
entirety as follows (added language in italics): 
 13.7 Early Option to Purchase. Notwithstanding any provision to the contrary
contained in this Article 13, Tenant may exercise the Option to Purchase all of the Leased Property by giving notice of such exercise and closing on the purchase of the Leased Property on or before March 31, 2009 (“Early Option
Period”) subject to the same terms and conditions of this Article 13 except for §13.3 and except that [i] the required Purchase Notice may be given at any time during the Early Option Period; [ii] the Option Price for the
Leased Property shall be $49,949,000.00; [iii] the purchase of the Leased Property shall close no later than March 31, 2009; and [iv] no Event of Default shall have occurred and be continuing. The Option to Purchase
pursuant to this §13.7 shall be referred to as the “Early Option”. 
 4. Amendment Rent Schedule. The Lease is hereby
amended to add a new Schedule 1-B in the form of Schedule 1-B attached hereto and made a part hereof. 
 5. Legal Description. The
Lease is hereby amended to delete Exhibit A-1 in its entirety. 
 6. Permitted Exceptions. The Lease is hereby amended to delete
Exhibit B-1 in its entirety. 
 7. Facility Information. Exhibit C of the Lease is hereby amended to read in its entirety as set
forth on Exhibit C attached hereto and made a part hereof. 
 8. Affirmation. Except as specifically modified by this Amendment,
the terms and provisions of the Lease are hereby affirmed and shall remain in full force and effect. 
 9. Binding Effect. This
Amendment will be binding upon and inure to the benefit of the successors and permitted assigns of Landlord and Tenant. 
 10. Further
Modification. The Lease may be further modified only by writing signed by Landlord and Tenant. 
 11. Counterparts. This Amendment
may be executed in multiple counterparts, each of which shall be deemed an original hereof, but all of which will constitute one and the same document. 
  

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 12. Consent of Guarantor. This Amendment shall have no force or effect unless and until each
Guarantor has executed the Consent of Guarantor set forth below. 
 [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

  

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 IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the date first set forth
above. 
  

											
	 Signed and acknowledged in the presence of:
	 		 	HCRI MASSACHUSETTS PROPERTIES TRUST
					
	 Signature
	 	 /s/ Rita J. Rogge
	 		 	By:	 	HCRI Massachusetts Properties, Inc., as Trustee, and not individually, and subject to the provisions of the Declaration of Trust of HCRI Massachusetts Properties Trust
filed with the Secretary of the Commonwealth of Massachusetts and the City Clerk of Boston
	 Print Name
  
	 	 Rita J. Rogge
  
	 		 	 
	Signature	 	 /s/ Donna J.
Lunsford                    
	 		 	 
	Print Name	 	 Donna J. Lunsford
	 		 	 
						
		 		 		 		 	By:	 	 /s/ Erin C. Ibele
 Erin C. Ibele
 Senior Vice President – Administration and
 Corporate Secretary

						
		 		 		 		 	By:	 	 /s/ Michael A. Crabtree
 Michael A. Crabtree
 Vice President and Treasurer


  

											
		 		 	HCRI MASSACHUSETTS PROPERTIES TRUST II
					
	 Signature
	 	 /s/ Rita J. Rogge
	 		 	By:	 	HCRI Massachusetts Properties, Inc., as Trustee, and not individually, and subject to the provisions of the Declaration of Trust of HCRI Massachusetts Properties Trust II
filed with the Secretary of the Commonwealth of Massachusetts and the City Clerk of Boston
	 Print Name
  
	 	 Rita J. Rogge
  
	 		 	 
	Signature	 	 /s/ Donna J.
Lunsford                    
	 		 	 
	Print Name	 	 Donna J. Lunsford
	 		 	 
						
		 		 		 		 	By:	 	 /s/ Erin C. Ibele
 Erin C. Ibele
 Senior Vice President – Administration and
 Corporate Secretary

						
		 		 		 		 	By:	 	 /s/ Michael A. Crabtree
 Michael A. Crabtree
 Vice President and Treasurer


  

 S-1 









											
		 		 		 	KINDRED HOSPITALS EAST, L.L.C.
						
	 Signature
	 	 /s/ Richard Myers
	 		 		 	By:	 	 /s/ Douglas L. Curnutte

	 Print Name
	 	 Richard Myers
  
	 		 		 		 	 Douglas L. Curnutte
 Vice President of
Facilities and
 Real Estate Development

	 Signature
	 	 /s/ Marilyn A.
Weaver                    
	 		 		 		 
	  
 Print Name
	 	Marilyn A. Weaver	 		 		 		 

  

							
	 STATE OF OHIO
	 	)	  		  	
		 	)	  	SS:	  	
	 COUNTY OF LUCAS
	 	)	  		  	

 The foregoing instrument was acknowledged before me this 25 day of Sept., 2008 by Erin C. Ibele,
the Senior Vice President-Administration and Corporate Secretary, and Michael A. Crabtree, the Vice President and Treasurer of HCRI Massachusetts Properties, Inc., a Delaware corporation, as Trustee, on behalf of and as the free act and deed of HCRI
Massachusetts Properties Trust, a Massachusetts business trust. 
  

									
	 My Commission Expires:
	 	  
	 		 		  	 /s/ Rita J. Rogge
 Notary Public
  
 [SEAL]


  

							
	 STATE OF OHIO
	 	)	  		  	
		 	)	  	SS:	  	
	 COUNTY OF LUCAS
	 	)	  		  	

 The foregoing instrument was acknowledged before me this 25 day of Sept., 2008 by Erin C. Ibele,
the Senior Vice President-Administration and Corporate Secretary, and Michael A. Crabtree, the Vice President and Treasurer of HCRI Massachusetts Properties, Inc., a Delaware corporation, as Trustee, on behalf of and as the free act and deed of HCRI
Massachusetts Properties Trust II, a Massachusetts business trust. 
  

									
	 My Commission Expires:
	 	  
	 		 		  	 /s/ Rita J. Rogge
 Notary Public
  
 [SEAL]


  

 S-2 









							
	 STATE OF KENTUCKY
	 	)	 		 	
		 	)	 	SS:	 	
	 COUNTY OF JEFFERSON
	 	)	 		 	

 On this 25th day of September, 2008, before me, the undersigned notary public, personally appeared
Douglas L. Curnutte, the Vice President of Facilities and Real Estate Development of KINDRED HOSPITALS EAST, L.L.C. and proved to me through satisfactory evidence of identification, which was a Kentucky Driver’s License, to be the person whose
name is signed on this document, and acknowledged to me that he signed it voluntarily in his capacity as Vice President of Facilities and Real Estate Development, for its stated purpose, as his free act and deed and the free act and deed of KINDRED
HOSPITALS EAST, L.L.C. 
  

	
	 /s/ Jenny McGarry
 Notary
Public
 My commission expires: 2/16/2012



 THIS INSTRUMENT PREPARED BY: 
 Cynthia L. Rerucha, Esq. 
 Shumaker, Loop & Kendrick, LLP 
 1000 Jackson Street 
 Toledo, Ohio 43604 
  

 S-3 








 CONSENT OF GUARANTOR 
 In connection with the Unconditional and Continuing Lease Guaranty (“Guaranty”) made by the undersigned Guarantors in favor of Landlord dated as of February 28, 2006, the undersigned Guarantors hereby
[i] consent to the foregoing First Amendment to Master Lease Agreement (“Amendment”), [ii] affirm the Guaranty which shall remain in full force and effect and secure the Guaranteed Obligations, as defined in the Guaranty, and
[iii] waive any suretyship defenses arising in connection with the Amendment. All capitalized terms not defined herein shall have the meaning set forth in the foregoing Amendment. 
  

			
	 KINDRED HEALTHCARE OPERATING, INC.

		
	 By:
	 	 /s/ Douglas L. Curnutte
 Douglas L. Curnutte
 Vice President of Facilities and
 Real Estate Development

	
	 GODDARD NURSING, L.L.C.

		
	 By:
	 	 /s/ Douglas L. Curnutte
 Douglas L. Curnutte
 Vice President of Facilities and
 Real Estate Development

	
	SPRINGFIELD PARK VIEW HOSPITAL, L.L.C.
		
	 By:
	 	 /s/ Douglas L. Curnutte
 Douglas L. Curnutte
 Vice President of Facilities and
 Real Estate Development

	
	 MEADOWS NURSING, L.L.C.

		
	 By:
	 	 /s/ Douglas L. Curnutte
 Douglas L. Curnutte
 Vice President of Facilities and
 Real Estate Development










 SCHEDULE 1-B: THIRD AMENDMENT RENT SCHEDULE 







 KINDRED HEALTHCARE OPERATING, INC. - MASTER LEASE 
 HEALTH CARE REIT, INC. 
  

													
	 EFFECTIVE DATE
	  		  	03/01/06	 		 		  		  	
					 	
	 INITIAL TERM COMMENCEMENT DATE
	  		  	03/01/06	 		 	FINAL	  	
	 INITIAL TERM
	  		  	15	 	Yrs	 	  	
	 INITIAL TERM EXPIRATION DATE
	  		  	02/28/21	 		 	 	  	 	  	
	 INITIAL INVESTMENT AMOUNT
	  		  	72,450,000	 		 		  		  	
	 AMENDED INVESTMENT AMOUNT EFFECTIVE 7/25/07
	  		  	72,575,000	 		 		  		  	
	 AMENDED INVESTMENT AMOUNT EFFECTIVE 9/26/08
	  		  	50,299,000	 		 		  		  	
							
	 RATE OF RETURN
	  		  	N/A	 		 		  		  	
	 (365/360 BASIS)
	  		  	N/A	 		 		  		  	
	 INITIAL RATE OF RETURN
	  		  	8.75%	 		 		  		  	
			
	 INCREASER
	  	As defined within the Master Lease Agreement	  	

  

																			
	  	  	 DATES
	  	REVENUE
CONDITION MET
(YES/NO)	  	INCREASER
(BP)	  	BEGINNING
RENT RATE
OF RETURN
(ROUNDED)	  	PERCENTAGE
RATE
SHORTFALL	  	ADJUSTED
RENT RATE
OF RETURN
(ROUNDED)	  	 MONTHLY
RENT
AMOUNT
	  	ANNUAL
RENT
AMOUNT
	 LEASE YEAR
	  	 FROM
	  	TO	  	  	  	  	  	  	  
	 1
	  	03/01/06	  	02/28/07	  	YES	  	N/A	  	8.75%	  	N/A	  	N/A	  	528,281.25	  	6,339,375.00
	 2
	  	03/01/07	  	06/30/07	  	TBD	  	2.5%	  	8.97%	  	N/A	  	N/A	  	541,488.28	  	2,165,953.12
	 2A
	  	07/01/07	  	07/24/07	  	N/A	  	N/A	  	8.97%	  	N/A	  	N/A	  	419,216.73	  	419,216.73
	 2B
	  	07/25/07	  	07/31/07	  	N/A	  	N/A	  	8.97%	  	N/A	  	N/A	  	122,499.58	  	122,499.58
	 2C
	  	08/01/07	  	02/29/08	  	YES	  	N/A	  	8.97%	  	N/A	  	N/A	  	542,498.13	  	3,797,486.91
	 3
	  	03/01/08	  	08/31/08	  	N/A	  	2.5%	  	9.19%	  	N/A	  	N/A	  	556,060.58	  	3,336,363.48
	 3A
	  	09/01/08	  	09/25/08	  	N/A	  	N/A	  	9.19%	  	N/A	  	N/A	  	463,383.82	  	
	 3B
	  	09/26/08	  	09/30/08	  	N/A	  	N/A	  	9.19%	  	N/A	  	N/A	  	64,230.78	  	527,614.60
	 3C
	  	10/01/08	  	02/28/09	  	TBD	  	N/A	  	9.19%	  	N/A	  	N/A	  	385,384.65	  	1,926,923.25
	 4
	  	03/01/09	  	02/28/10	  	TBD	  	TBD	  	9.19%	  	N/A	  	N/A	  	385,384.65	  	4,624,615.80
	 5
	  	03/01/10	  	02/28/11	  	TBD	  	TBD	  	9.19%	  	TBD	  	TBD	  	385,384.65	  	4,624,615.80
	 6
	  	03/01/11	  	02/29/12	  	TBD	  	TBD	  	9.19%	  	TBD	  	TBD	  	385,384.65	  	4,624,615.80
	 7
	  	03/01/12	  	02/28/13	  	TBD	  	TBD	  	9.19%	  	TBD	  	TBD	  	385,384.65	  	4,624,615.80
	 8
	  	03/01/13	  	02/28/14	  	TBD	  	TBD	  	9.19%	  	TBD	  	TBD	  	385,384.65	  	4,624,615.80
	 9
	  	03/01/14	  	02/28/15	  	TBD	  	TBD	  	9.19%	  	TBD	  	TBD	  	385,384.65	  	4,624,615.80
	 10
	  	03/01/15	  	02/29/16	  	TBD	  	TBD	  	9.19%	  	TBD	  	TBD	  	385,384.65	  	4,624,615.80
	 11
	  	03/01/16	  	02/28/17	  	TBD	  	TBD	  	9.19%	  	TBD	  	TBD	  	385,384.65	  	4,624,615.80
	 12
	  	03/01/17	  	02/28/18	  	TBD	  	TBD	  	9.19%	  	TBD	  	TBD	  	385,384.65	  	4,624,615.80
	 13
	  	03/01/18	  	02/28/19	  	TBD	  	TBD	  	9.19%	  	TBD	  	TBD	  	385,384.65	  	4,624,615.80
	 14
	  	03/01/19	  	02/29/20	  	TBD	  	TBD	  	9.19%	  	TBD	  	TBD	  	385,384.65	  	4,624,615.80
	 15
	  	03/01/20	  	02/28/21	  	TBD	  	TBD	  	9.19%	  	TBD	  	TBD	  	385,384.65	  	4,624,615.80








 EXHIBIT C: FACILITY INFORMATION 
  

					
	 Facility Name
 Affiliate Subtenant
	  	 Street Address
 County
	  	 Facility Type
(per license)
Beds/Units

			
	 Goddard Rehabilitation and Nursing Center, Kindred Hospital Northeast-Stoughton, and Goddard Medical Office Building
 (“Stoughton Facility”)
  
 Kindred Braintree Hospital, L.L.C.
  
 Goddard Nursing, L.L.C. (SNF sub-subtenant)
	  	 909 Sumner Street,
 Stoughton, MA 02072

Norfolk County
	  	 Hospital (Satellite of Braintree)
   88
licensed beds
   88 operating beds
 Nursing
Home
 115 licensed beds
   60 operating
beds

			
	 Kindred Hospital Park View and Park View Rehabilitation and Nursing Center
 (“Springfield Facility”)
  
 Springfield Park
View Hospital, L.L.C.
	  	 1400-1414 State Street
 Springfield, MA 01109

Hampden County
	  	 Hospital
 127 licensed beds
 107 operating beds
 Nursing Home
 172 licensed beds
   26 operating beds

			
	 The Meadows Rehabilitation and Nursing Center and Kindred Hospital Park View – Central Mass.
 (“Rochdale Facility”)
  
 Springfield Park View Hospital, L.L.C.
  
 Meadows Nursing, L.L.C. (SNF sub-subtenant)
	  	 111 Huntoon Memorial
 Highway
 Rochdale, MA 01542
 Worcester County
	  	 Hospital (Satellite of Springfield)
   47
licensed beds
   47 operating beds
 Nursing
Home
 135 licensed beds
   82 operating
beds